RATING SYSTEMS.

Evening Star, Issue 21819, 7 September 1934, Page 3

RATING SYSTEMS.

TO TIM EDITOR. Sir, —There arc several letters in tonight's issue that require some recognition. Mr L. J. Ireland, who is opposed to a change over to unimproved rating, uses more than half of his space in severely criticising our present system and exposing some of its most serious defects, and suggests alteration and amendments that could not be made without destroying it entirely, Still, ho fails to see that a changeover would remove tho evils he exposes. This is unfortunate for Mr Ireland. “ J.N.N.” agrees that inflated land values are the cause of many of our economic troubles, and asks Mr Shaddock and myself to use our efforts in tho direction of removing the evil. This is just what wo are doing. A tax on land tends to keep in check inflation of land values. Adam Smith says “ Both ground rents and the ordinary rent of land are a species of revenue which the owner in many cases enjoys without any car? or attention of his own. . . .” Ground rents and

the ordinary rent of land are. therefore, perhaps the species of revenue which can best bear to have a peculiar tax imposed upon them.” Sir George Grey was the first Prime Minister to use land taxation with beneficial results. The first paragraph of “J.N.H.’s” letter proves that his knowledge of rating in general is very primary indeed. In his second paragraph ‘he says that on his property in Christchurch capital value, he pays over £B. This would give _ a land value of £3OO, leaving £2OO as tho value of the house on tho land. So much for “ J.M.M.” Your correspondent “ Fairplay ” I will leave to Mr P. Shacklock, who I have no doubt will deal with him effectively. “Unemployed” asks my help. I am only too pleased to help anyone to the best of my ability. A “ competent valuer ” has been pulling not one, but both his legs. Seeing that he has time on his hands, let him come along, and I will enlighten him on the question of unimproved rating. Will he accept my invitation?

Much has been made of the St. Kilda position. Look at St. Kilda; they have unimproved rating, and see how their rates have gone. Those who make this statement are either ignorant or wilfully misleading. ' The increase or decrease in rates is quite independent of the system of rating in vogue. The determining factors are the needs and requirements of the district. Improvements in reading, drainage, lighting, and other civic services tend to send the total amount of rates required upwards. Mr Ireland says that the reason why two properties at St. Kilda have not been sold is liecause of the high rates. One property is for sale for £750, rates £lB 9s lid. This gives a land value of £2BO, value of sixroomed house £470. The second property was disposed of by tho_ mortgagees for £550. Rates on this property are £l9 17s. This gives a land value of* £3OO, leaving £250 for a “ splendidly-built house of six rooms.” Some peoples’ ideas of “ splendidlybuilt houses ” are peculiar. The combined land value of these two properties amounted to £SBO, and the houses to £720. No wonder they were hard to sell! No doubt the buyers must have been older than nine days and had their eyes open. Judging by the complaints aired in your journal by St. Kilda ratepayers, one would almost believe that the vast majority of ratepayers in that district are dissatisfied. They have the remedy in their own hands. I would suggest to the dissatisfied ones to get a demand signed and presented to the St. Kilda Council for a poll to be taken to revert to the annual or rental system of rating. It is worth trying, even if they don’t succeed. Would St. Kilda be better off under the annual or rental value? What are the facts? This year this borough is raising the sum of £24,288 0s sd. This necessitates a rate of Is 2gcl in the £ on the unimproved value of £395,318.. To raise the same amount on the system that operates in the city the result would be as follows: —The total capital value of St. Kilda is £1,833,616. The rateable value at 5 per cent, would be, in round figures, £90,000. This would necessitate a rate of 5s 4d in the £. Any St. Kilda ratepayer who knows the capital value of his property can now see for himself how much better off he will he if the system is changed. In conclusion. I will give two examples:—Within 100 yards of the St. Kilda Council Chambers there are ’ two_ properties. The capital value of one is £1,500. the other £1,300, the land value in both oases £2OO, rates £l3 2s 6d. Under the city system the rates in one case would bo £2O, and in the other £l6. Of course, Mr Ireland would in all probability not call these houses “ splendidly built ” houses, since his idea of a “ splendidly built ” house is one which is worth £250 standing on a section worth £3OO. —I am, etc., iff. SILVBKSTOXE. September 5. / TO THE EDITOR. Sir, —In a recent issue of the ‘ Star ’ I noticed- a letter signed “ Unemployed,” imploring his follow ratepayers not to ruin him by voting for rating on unimproved value. As a widow with a limited income, I also implore the ratepayers not to ruin me. I have a section on which is an old house in which I live. For sentimental reasons connected with my late husband 1 would not like to leave the old home. At present my rates are about £l2 10s. 1 am told by experienced people that my section is worth £BOO. I notice that the rate in St. Kilda is Is 4d in tho £. On £BOO this would make,my rates £53 6s 8d; and as 1 could not possibly pay this, I would be compelled to suffer the heartbreak of leaving my home.—l am, etc., Widow. September 6.

TO THE EDITOR. Sir, —In several letters on our rating system were instances of a man having a, humble home on a large section not being rated as high as the man on the next section who had built a palatial residence. I know positively that the humble house does not always mean humble circumstances. The owner sometimes has more money to spare for rates than his neighbour has. the neighbour may have spent all he had’ on a handsome house, depleting his bank account, and thereby making it difficult for him to pay increased rates. He has in the meantime given work to many men. The humble man may have plenty of money, but refuse to’ distribute it. Appearances are very deceptive. Let the councillors find out the bank account of all and the number of shares in profitable investments which some poor-looking people own, before being foolish enough to decide as to who can pay extra rates and who cannot. I can quote more than one case, but one will suffice. This man was the owner of a shabby house on a large section, but owned a good-sized fortune. He, after a few years, was surrounded by very handsome houses; still, he would not improve his own property, although he had a large family of girls. I feel quite sure that he was richer than any of his neighbours, although he was always shabbily dressed. He once required the services of a noted doctor—an expensive one—and expected a reduction in charges because of his humble appearance and surroundings. He was presented with a hill for the full_ amount, and his pleadings were in vain. The doctor was wise and clover in more ways than in medicine. He said: “Mr , I am charging vou the fullest amount I am entitled to, as I happen to know you can pay for it. I can then give my services free to those who cannot pay.’’ There are many similar cases. I could quote many where the man who could ease unemployment refuses to do so, and manages to look as if he were unable to do anything at all to help others. Make those people spend; or at least encourage them to do so by withdrawing the yearly fine for improvements to one’s property.—l am, ’ Ratepayer. September G. TO THE EDITOR. Sir, —After reading Mr Shaddock's letters, I have come to the conclusion that his rambling statements are valueless. First of all he tells of some ratepayer of Wellington (possibly Island Hay or Kaiwarra) who only pays a certain amount in rates, and then he comes to Maori Hill (outskirts) and a ratepayer is paying £l4; but nnder unimproved value would only pay £4 10s. Well, I should say he is guessing. He continues thus: “Some friends in South Dunedin, owning full quarter-acre sections, imagine that under unimproved value their rates ■would be increased. This is not so.” I challenge that statement. First of all, there would be a Government valuation, and South Dunedin and Caversham, being a great business area, all land would be rated very high. Therefore his statement that South Dunedin and Caversham would have their rates reduced is a myth. If Mr Shaddock s storv is correct that rates could be reduced from £l4 to £4 10s, I should like to ask him who is to make up the deficiency of the £109,000 and over m rates to be collected?—l am. etc., September 6. Sappho. TO THE EDITOB. Sir, —As an ex-ratepayer of Invercargill, now residing in Dunedin, and having paid rates here for some years, I would just like to express how the two systems have worked out in my own case, and also how they have operated for some of iny friends in Dunedin and Invercargill. Invercargill, 1 think, if not the first town to adopt the system of rating on unimproved value, was one of the first to do so. 1 happened to lie living in Invercargill when the poll was carried, and the same bogey cry from the 'city area was that they would be ruined. Now this same cry comes from the city area Mu Dunedin. All nonsense! Invercargill has never looked back and • has prospered. I intend to quote three examples of the rates levied in Invercar’gill and three levied in Dunedin. 1 sold my house for just under £BOO, full quarter acre, about one mile from the Post office; rates, £5. On coming to Dunedin, sixteen years ago, I . purchased a house for £750, one-eighth acre, two miles from the Post Office, situated top of Caltou Hill, Caversham ; rates, £11; no gas, and low water pressure every Monday. At the present time I have a relation who owns a quarter-acre section situated a little more tjian a mile from the Ppst Umca with a house valued at £9OO in Invercargill ; rates, £5. Having left Caltou Hill, 1 bought a property situated m Caversham for £750, one-eighth acre; rates, £ls. Now for the third case: A friend of mine has just recently completed a brick bungalow valued at £I,OOO, with a bare quarter acre, in the fashionable part of Invercargill (Gladstone); rates, £O. Compare this with my friend living in Duudonald street, Anderson s my; house valued £I,OOO, one-eighth acre; rates, £l2 15s. This reference to St. Kilda (a borough, not a town) for comparison is most misleading. I like to compare town for town with their trading concerns for comparing rates’. Why don’t you take the towns like Timaru. Christchurch, Wellington, Hastings, Napier, Wanganui, and Invercargill with their trading concerns for comparing rates levied? Just recently I sold a quarter-acre section in Invercargill. My highest rates for tins section were £3 19s 6d. Half-water and half-sewerage rate were imposed on this section. A five-roomed bungalow has just been erected. I presume the rates now will be about £5 to £Q not more, I am sure. You are not penalised much for building a home there. The case is different in Dunedin. One is just afraid to build an additional room or sun porch. From a progress point of view Dunedin is very unwise in not adopting rating on the unimproved value. This system would help to stimulate the building activity which is sadly lacking to-day. By the way, there are other ratepayers in my blocK who pay £ls. It is time we had a change-over. Wake up, Dunedin, and don’t let some of the small towns get ahead of you. —I am, etc.. Progress. September 6.