FEILDING

Manawatu Times, Volume LIII, Issue 6664, 18 July 1928, Page 3

FEILDING

UNIMPROVED VALUE FOR RATING

Defended By Sir George Evidence Before Commission of Enquiry ■ \ ' ■’ . Farm Lands SHtiald Be Exempt The unimproved value of 1 local body rating purposes was strongly supported by Sir George Fowlds, of Auckland, who gave evidence before the Commission of Inquiry into the rating of rural lands in boroughs, at >.Tding yesterday A claim for the exemption of farm lands' from the payments of general rates was advocated by Frederick Page, farmer, Woodville, who based his evidence, in support of such exemption on the system of local body taxation proposed in in the House of Commons by the Right Hon. Winston Churchill.

On resuming yesterday the first evidence taken was that of Sir George Fowlds of Auckland, who said that his reason for wishing to give evidence was due to a fear that under the guise of remedying the problem of local body taxation a general attack was going to be made on the general system of taxation, i Sir George proceeded to state his convictions in favour of the. unimproved as the basis for local body , taxation, pointing out that ii had been in operation since 1898 and had gradually .won its way to air most universal adoption. It was in. operation in Queensland and iu New South Wales, in most of the large towns of South America, in both town and country districts of Western. Canada and in the United States. In Great Britain the movement for the opportunity of this method of taxation had been before the country for a great many years- Under the.; leadership of the City of Glasgow nearly two hundred of: the leading municipalities of Great, Britain had petitioned. Parliament to exempt improvements from taxation. The late Bang Edward when; Prince of W.ales was a member of a commission and signed a report oh the special taxation of land values for municipal purposes. The first place that adopted the unimproved value for taxation in New Zealand'was Palmerston North and that took place about 1898 or soon after the Act was passed. About ten years after it had been in operation a Swedish post .graduate student toured New Zealand and made a very considerable investigation into the benefits ofl v the operation of the Act during the preceding ten years.. Prom the evidence of that investigation it was learned that the places that had adopted rating on the unimproved value had increased' .in population during the ten years by 24 < per cent, while all the-rcst of the Dominion, continuing under the old ; system, bad only increaied by. eight per.cent. Also the rate of increase in value ■ of lands was much more rapid than iu those districts which'continued to. - tax improvements. The benefits • that had come with rating on the unimproved value had been widespread and while there are supposed to be anomalies existing it is not because there i? any inherent objection but very largely through conditions that have arisen because of the continuance of a wrong system of taxation in previous years. People pay''taxation to municipalities in return, for the services that the municipalities render to them and all the value of any municipal , service is reflected, and expressed in the values and in ■ laud values.. alone.. Public improvements to cities or to municipal services like lighting, water or sewerage, do not add a penny to; the value of the improvements on the site. Thtj value is wholly expressed in the site value. In cases, an improvement made by a local body had lowered the value of the site improvements instead of increasing them. It seemed to the speaker that there was only one sound basis for levying of local taxation and that was levying it on tho site value. It may bo that even for market garden purposes the value of land will increase because of the proximity of t a largo number of potential customers. Tho apparent hardship is not because it has boon created by the presence of the people in the neighbourhood. That has been capitalised by the increased selling value of the land. Wc - havo had in this country quite a long period of experience in various localities of capital value and some years ago when a part of tho country proposed adopting the unimproved system the majority in, favour was overwhelmingly large. Nineteen places have taken pells on the question of reverting to the old system and only six, including Wanganui, reverted to tho old system, and ho thought that three of the six had since returned to rating on the unimproved value. After years of experience the system has become growiugly nopular because of the benefits accruing to the places that had adopted it. It tended to encourage the people to build better houses and that surely was in the public interests. Right throughout the civilised world there had been brought about a shortage of houses for workers and it seemed to him the heighth of iusanity to penalise a man who provided a good home for himself or to encourage people to hold land idle.

ed taxation was that the owner was compelled to put his land to the best possible use or sell it. It was not possible to differentiate and give at the same time / justice and equity. The tendency at the present time N was to provide municipal services years ahead of their time. He did not think it humanly possible to make a classification of boroughs which required such services: (1) /at present, (2) in five years and (3) in 20 years ? time! To the chairman: It was possible that a separate enquiry into the classification of each case would result in justice being done. To Mr. Nash: His bias in favour of rating.,on unimproved values was that a persOn should not : bo taxed for improving his land.

Struggling Tor Existence. . Frederick Page farmer of Woodvillo was the next witness. He did not think it necessary for him to go into details to' show that the present, systems' of rating are unjust and cre-i ate ‘excessive hardship upon farmers' who happen to have lands within borough boundaries. There is,no doubt plenty of evidence to show that the present systems of ratings are not only unjust but impracticable and even wicked. - . • x ,

To Mr. Treadwell: He was against differentiation in tlie basing o£ rating. Eating should be based on the unimproved value. To Mr. T. Brook, witness said ho knew of boroughs which were going back while others were progressing. The underlying principle of uuimprov-

Ing to this proposed system. To keep faith with the lender of loan monies in such cases the Government to stand guarantor. The same to apply to all lands that have been severed from boroughs. If it has been proved before a Commission of Inquiry that certain lands were not suitable for municipal control, and those lands have been scvcreW from such control, no logical reason can possibly bo shown why those lands should still bo subjected to municipal rating especially rates that provide special services that cannot be extended to such lands.

Dealing with the hardships of settlers in Woodville the speaker recalled the recent exclusion of a large area of land from the borough. Evidence was given : before the exclusion commission that these lands were subject to'flooding from the Maungahia River. Practically tho whole area was subjected to flooding several times a year, and on the whole area of some 202 acres there were only three houses. This'land had been pledged time and again by the borough authorities to provide special services in the borough. They have been pledged for gas, water and sewerage and these services were not obtainable by. any of the lands except to his own property. 1 No mains cross/the railway line to servo tho property and it had been known for years that it was absolutely impossible to use any of these, lands for building purposes on account of the flooding. The only purpose and the only possible purpose of these lands was for grazing stock and that was what they were used for,-to-day. Since exclusion the farmers were still compelled to pay special'rates to Iho borough. To show how, the .system of unimproved value rating works on that particular area he would mention that the unimproved system of ’ rating bad .been in force-for years and special rates were levied on'the same basis. Now an, ad-ditional-rate, in, the form of a gas rate

In practically all cases of severance farmers' are found struggling for_ an existence and their noses on the grinding stone, paying, heavy local taxation to provide municipal services frolu which - they receive; practically no hbnefit. A commission of inquiry is 'jholclj and land severed from municipal control ;and these; farmers , are compelled; to continue to pay for something they will never get.

The unimproved system- of rating ,is not practicable with justice ! in small, towns. These farmers find a'large portion of .the money and; a . handful ■of -business people in the centre of the town where the money is spent are the' people , who get the . benefit.' ’ Those business people-are usually the persons who seek municipal honours and are the founders of the; wild cat schemes that are often the cause. of such heavy local' taxation. Incidentally in a good many, cases the rates .these people pay are insignificant compared to a farmer who may have perhaps 40 or jSO acres Within the borough boundary, land, th.it may bo useless for any purpose other than grazing stock. The country farmer is more or less in the • same position, he has to provide, roads and bridges demanded by the motor car owned' much more by the city dweller than by the farmer. He . would not take. up further time in showing the faults of a system that should have been changed years ago but with the permission of ,tho chairman he would be pleased to submit a system of rating that is now more or less in vogue in England, which he thought would form a panacea for the whole of New Zealand, on a basis of “the users pay.’' Proposed System of Eating.

has been levied upon tho farms—a rate of 1 l-9d in the £ for gas that they will never get. At the last rate striking in ' Woodville for some unknown reason the general rate was reduced

1. All residential and business premises whether 'situated in town' or country be fated on the capital value. 2. All vacant building sections half above rate. 3. All special, rates to be levied on above basis. Provided no special xato shall bo chargable on any premises that cannot participate in such special service for which such special rate is charged or levied. 4. All lands and buildings used exclusively for farming and productive purposes shall be exempt from the payment of general rates. This to include all factories and premises used exclusively in connection, with the production of any article of public utility, or food or produce. 5. The Government to reimburse all rating authorities to an amount equal to the exemptions. 6. The Government in turn to impose both a.pctrol and. tyre tax on all motor vehicles sufficient to pay these exemptions,, Thereby insure the principle of tho users pay. 7. In connection with special rating loans, the area to be served to be scheduled, and only tho ratepayers in that area to vote.

This would effectually put on the brake to public borrowing, obviate the necessity and expense of a Local Bodies Loans Board, and would again ensure that the users pay. To bridge the transition stage between the present system and the proposed system, in boroughs where farms and other lands have been pledged to provide special services that these lands cannot possibly participate in, that portion of the borough that is being served with such special service to be rated to provide for- same accord-

by Id in the £ and a gas rate of 1 l-9d in the £ imposed. The general rate was previously 5d in the £ but since the imposition of the gas rate the gonoral rate was reduced to 4d in the £. The farmers have to pay for the gas rate while the borough ratepayer is more or less where he was. To illustrate the real hardship by way of excessive rating on farm lands in the borough the witness mentioned a farm in the severed area, which paid £96 per annum rates to the borough, while across the railway line , only a stone’s throw away is an hotel, receiving all the borough services and paying on the unimproved rating system some £l6 per annum. Witness did not think it necessary to go further to show that such a state of affairs applies in practically all small boroughs where the unimproved rating system is in operation.

To Mr. Strand: A gas rate was struck many years ago when the gas work's wore first installed. The rate was only in force for one or two years ond for many years the works have paid their way and no rate was cob lected. It is only since the land was severed from the borough that the gas rate was reinstated.. ’* Mr.' Strand: No extension of the service has been carried out.

Witness: No. The gas account has been, in credit for some years £BOO. Last year it was £9OO, but the accounts now show that thss works arc a losing concern. ■ • Mr. Nashs’ Do you say that farm lands should bo entirely exempt from rates? - , • Witness: Yes I do. I think farm lands are part and parcel of stock in trade.