HOSPITAL RATING

Matamata Record, Volume XIX, Issue 1693, 6 January 1936, Page 5

HOSPITAL RATING

INCIDENCE OF TAXATION Interesting Comparative Figure?,. •\ ;i "' (No. I.)mi The incidence of ; hospital rating has provided a bone for contention in New Zealand internal politics for decades and the latest contribution to the discussion is a comprehensive brochure just issued by the New Zealand Counties’ Association. The pamphlet is crammed full of interesting data which should prove of great interest, and is also valuable for reference purposes, while a proposal to substitute , a National Health Scheme in place of the present system is put forward in detail. The report reads; — Hospital Rating

Owing to v the incompleteness of lecords, the early history of our hospitals is obscure. The Hospitals Bill of 1885 throws little light upon the system prevailing prior to the Act, or in what manner the institutions were supported. There seems to have been no basic, principle upon winch our hospitals were maintained, as in 1884 15 institutions were maintained entirely by the Government, some received a £ for £ subsidy on contributions from the public or local bodies, while others received a £2" for £1 subsidy, and one a subsidy of £3 for £l.

' T& Act of 1907 set up 47 hospital districts, with a Hospital and Charitable Aid Board for each district.

Hospital Expenditure

According to the latest available statistics, expenditure on hospitals and Government institutions for the past three years has been:. — Maintenance^ —£1,^31,216; £1,471,620; £l/462,166*. Capital.—£242,3Bo; £247,206; £177,133. - : T0ta1.—£1,873,596;. £1,718,826; £l.639,299. The principal avenues ©£ expenditure .on maintenance for the; three years have been.: — Hospital Maintenance. —£1,041,696; £970,593; £995/4QOi. Charitable Relief- £369,320; £294,671; £276,008. The main items -in. capital expenditure. for the past, three years have been:— .

Laud, Buildings aaad Equipment..— £139,216; Repaymerft of. Loans. £139,075; £126,2:751,

In order to. meet this heavy expenditure hospital, boards have no po\ver to strike a levy themselves", but make a. levy oft . the variouscontributory local autlforities in' \ their districts. This system. of levies has been in vogue since the first Act of 1885. Revenue of Hospitals and Government Institutions During the past three years, the total revenue, less loans, received by hospitals has. been: —1931-32, £1,641,845; 1932-33, . £1,653,587; 19,33-34. £1,623,021. On comparing these figures with those for expenditure, it is. readily seen that hospital boards have a difficult problem to make both ends meet. The two main sources of revenue are (last year’s figures): Government, £640,274; local bodies, £586,315.

Generally speaking, the Government pays half of the deficit in the hospital boards’ budget before voluntary contributions are taken into account, while the ratepayers pay half the deficit after voluntary contributions and subsidy thereon are taken into account. Hence the slight excess in ,the Government's contributions. For every £1 levied by a hospital board from local authorities the Government pays £1 to meet capital expenditure, and to meet expenditure other than capital expenditure a subsidy running from 14s ’in the £ to boards with light rating, to 26s in the £ to boards with the heaviest rate burden. As our hospitals are being con-

ducted for the benefit of the general public, the following figures for last year are worthy of notice:—Total received by hospitals, £273,495; total fees receivable, £954,319.

As only 21 per cent, of their fees are recovered, the finances of many hospitals are unduly strained. The following’ table sets out the total revenue from each source: —Government contributions,. 39.5 per cent.; levies on local bodies, 36.0 per cent.; recoveries from patients, 20.8 per cent.; rents, interest, etc., 1.5 per cent.; miscellaneous revenue, 1.4 per cent.; voluntary contributions, 0.8 per cent. Present System of Levies on Local Bodies

The basis of levies on local bodies is the rateable capital value of properties within each hospital district.

This levy is about Id in the £ of rateable value.

According to the 1935 Local Authorities Handbook, the rateable capital of counties and road districts is £329,165,763, whereas that of boroughsi etc., is £287,092,053. In other .words, rural ratepayers contribute 53 '.per. cent. of hospital levies, whereas qjty , and town dwellers find 47 pej; cent. vFrom time to time protests against the* system have been made by various rural interests;, they maintain that the population factor should be taken into account, as urban dwellers must make more use of our hospitals than do rural ratepayers.

The Commissioner of Taxes reported in the following terms in July, 1923:—“1 have looked into the matter of the incidence and computation of hospital levies,, and I am of opinion that the present system of rating* on the capital valae should be adhered to. Certainly the rating on capital value should, by reason of the’ greater proportion of improvements on Urban lands, give sufficient differentation between urban and rural lands. To adopt the population as a factor for rating < purposes would, I think, be wholly indefensible.”

Suggested Amendments Proposed by Rural Organisations

(a) That the present system embodied in the Hospitals and Charitable Institutions Act, 1926',. of ■ making levies on local authorities be abolished; that the maintenance of hospitals be paid out of the Consolidated Fund. —Comment: Seeing; that the Government pays about £7OOyOQO every year towards the upkeep) of our hospitals, it is not likely 1 that it would eretertairi such ' a 'proposal- at present; moreover, as, the urban-population-forms the main source" o£ revenue far the Consolidated Fund;, a strong protest would be made by city ratepayers against further in--crease in taxation. (b) That: the levy cn each local body be assessed on a population basis.—Comment:. According to the latest statistics, the population of counties is 612,26®;, and that of urban areas 939,430* This means that 39 per cent, of the people live in rural districts, and 61 per cent, in cities and towns. The levies on. local bodies for 1933-34 totalled £586y315. If this amount were apportioned' on population only, the results would be: Counties: At present on capital value, £304,884; on population basis only, £223,668. Boroughs,: etc.: At, present"on capital value, £281,431; on population basis only,. £357,652. "On a capital valine basis, rural ratepayers contribute £23,453 more, whereas .cities and towns would have to pay £128,989 -more on a population basis. DD'Generally speaking* this proposal ’’s based on a sound, assumption, viz., that the greater the .population, in aplace the more hospital treatment will be needed. But. the taxable capacity of a population would be too uncertain, and those able to pay would have to make up, the deficiencies of those unable to d© so. The hospital districts of Wellington and South Canterbury have been selected to ascertain how this proposal would afl'ect the existing incidence of levy..

JL • • •»* ■ * i,', ~ w J The total capital value of the hospital district is £67,323,843. Of this, amount, 93 per cent, is urban. As the total hospital levies in this district on local bodies for the year 1933-34 were £70,000, 93 per cent., or £65,100, was paid by urban ratepayers, leaving 7 per cent., or £4900, to be paid by counties. On a population basis only, urban ratepayers would pay 91 per cent, of £70,000, or £63,700, leaving £6300 to be found by counties.

South Canterbury Hospital District

The capital value of this hospital district is £21,576,646 and the population 44,690. The urban areas contain 30 per cent, of the capital value and 52 per cent, of the population.

The total levies in this hospital district for 1933-34 amounted to £16,911, and the subdivision would work out thus:—

Wellington Hospital District Boroughs. Capital Value. £. Population^ Wellington 52,383,765 114,100 Lower Hutt . 5,119,632 14,650 Petone 3,117,568 ll,19:o. Eastbourne • 750,255 2,110 Upper Hutt . 809,308 3,760 JohnsonviUe 361,641 1,63,0 Totals . 62,542,169 147,440 Counties. Hutt .. . 3,509,235 8,870 Makar a 1,272,439 4,490 Totals 4,781,674 13,360

Boroughs. Capital Value. £. Population. Timaru 5,205,112 494,590 * 17,450 Waimate 2,330 Temuka 382,390 1,940 Geraldine 187,333 1,020 680 Pleasant Point 102,815 Totals 6,372,204 23,320 Counties. Geraldine 3,440,379 5,860 Levels 3,422,222 5,090 Mackenzie 2,426,056 3,070 Waimate 5,915,749 7,350 Totals . 15,204,406 21,370

Capital PopuValue. lation. £. £. Counties .. 11,838 8,117. Boroughs, etc.. . . .. 5,073 8,794 (To be Continued.)