RATING ON UNIMPROVED VALUES

Nelson Evening Mail, Volume LVI, 24 November 1924, Page 7

RATING ON UNIMPROVED VALUES

ADDRESS BY MESSRS M OFF ATT AND RUSSELL By invitation, Messrs W. J. Aloffatt and (L P. Russell adcirr'.-scd a in of ratepayers in the Hampden Street Schoolroom on Saturday evening. Some fift-v people wore present, and the .Mayor (Mr W. Lock) presided. Mr Russell said many people who were previously strongly opposed to the rating on unimproved values were now strongly in favour of it. It till vamp down to pounds, shillings and pence. By introduction of tlie new system some would lie taxed and some Jot off. The present system was injuring Nelson. The biggest hulk of the ratepayers were small men, and it was their purpose to assist, them. They were trying to make Nelson a. residential city. Men with small means had come to Nelson from other parts of Now Zealand to settle, hut what, did they find? The rates here v.qro much higher than those they had faced elsewhere. This was not the fault- of the City Council, but the fault of the rating system. The uniinproved was not in the interests of nnvone but 'file small man who owned bis home. “If you have surplus or waste land it will hit vou.” ITalf the towns in New Zealand were working under the nnimproevd system. It was no advertisement for Nelson to be working under the annual value system. Nelson was one of the heaviest taxed places in New Zealand. It. was not. the amount of rates struck but the system. The working man. was right up to bis neck, and lie would not vote progress unless the system • was altered. They were driving the working man out of the centre of the city to tho top of the bills, and it was costing pounds aiuT pounds to carry the city’s services to them. The present system was driving the working man to the outskirts. Napier’s Town Clerk ardently supported the unimproved system. He found the Nelson Town Clerk nad bad solicitors in the office in connection with bis report to throw dust in the eyes of the people. It was the small man with the small holding who would get off under the unimproved rating. In Nelson the great majority would pay less and the large residential areas more. “If you have got. a big area of land don't vote for the unimproved. The. Mail had quoted the “ability to pay.” Th© man with an acre in the centre of the town had the to pay. In regard to the Town Clerk's report, what Nelson should have done was to have obtained information from towns having experienc of the system. The system was not in operation in Dunedin either, and for this reason he placed no> value in the Town Clerk’s report. Those places that, had tried the system were most enthusiastic about it. The unimproved was an undoubted incentive to the owner to build. Napier was Nelson’s runner up for sunshine, and was .a fine place. They had to look at Nelson as a residential area. Tn Napier the/ unimproved had given universal satisfaction. He also gave a long list of places having the unimproved system, over 180 local bodies, all of whom were satisfied, and read a number of letters from town clerks of several towns in the North Island in reply to inquiries from England, all enthusiastically supporting the system.

Mr W. J. Aloffatt- said he desired to deal deal with the question from an ethical standpoint—dealing with tho taxation of a community-created value or a privately created value. The land was man’s heritage, and the most important question. Whether the question was settled or not at the poll did not alter the fact that a big principle would not he settled. Owing to being exceptionally busy he had been unable to ventilate this great question as

should have liked. Mr Moffatt proceeded to give the illustration of an island on which one'man was .shipwrecked. The land had no particular value to him until other people camp along. This man had the power to levy a tax on all the other people on the island, if his title to the same as owner was recognised. This was what went on under Nelson's system—all these values were made by the expenditure of public money anci pressure of population. Land values had increased in Nelson pretty considerably owing to these things, and also to some extent to the change in the purchasing power of money. -They frequently found some man of no particular ability or standing become possessed of wealth because he happened to passess a certain area of laud which became valuable. It was the last man on the farm who carried all the burden. i"u>. was loaded with profit and land . agents' commissions of all tho previous owners—frequently thirteen in number within a short- space of time. Inflation had occurred because the Government, would not put on sufficient tax. Sir George Grey had affirmed the principle of the unimproved, which was now in operation in some 200 towns. He quoted Mr Mnssev to the effect that it was wrong that land taxation did not discriminate enough between the man who improved his land and the man who did not. This was from remarks made in 1914. Under the present system, the more a man improved his property the more he had to pay and the more he neglected it the less he had toi pay. In Napier under the. unimproved he knew a man who made a hobby of his home with fishponds, concrete\paihs and flowers. He was a working man, and was able to do it because he was not penalised for improving it. Particularly the Conservative and Liberal Parties would tell them that thrift was a very fine principle. If they, took their advice under the present system they would be penalised for doing so. Taxes made things scarce. "Get that into your minds." They taxed Chinamen and dogs to make them scarce. "Do we tax improvements, to make them scarce. Ho instanced the case of two men, whoso wives looked after the home qually well, hut of these two men one miproved th? place and made it a very desirable place to look at. The other neglected it, and if « person vent along to look at the two places, he would give easy 10s a week more rent for the wellkept place. This was going on all over the country. No one could say that towns with the unimproved system were going back. And was it not their duty to make it as easy as possible for people to get a home of their own. Was it right they should be prevented by high prices. Prior to the war land values were increasing. For every £'lo the State spentT someone got £l4O for nothing." A voice: What about the prico of wool? Mr Moffatt said reduce tho population by half and see what became of values. There were other interjections and questions, and the chairman said it was the speaker's meeting, and that questions must bo postponed till flip speeches had been made. Referring to the Town Clerk's report, Mr Moffat* said the Town Clerk had -said he had studiously refrained from expressing an opinion. But he had expressed his opinion. With regard to tho .subdivision of land the Council had been kept busy. It. was going on all Tlie lime, but it was in the hands of a. lot of speculators. The land was being bought up and subdivided for profit.

A Voice: What about the increased rates? Mr Moffatt : They can unload that on to the buyer.

Tlie Voice: Tho Council gets the benefit.

Mr Moffatt: Yes, to some extent. IL© held that the person so getting that value should return it io the State. By the way people had been talking to him anyone would think that, unimproved rating was the freakiest proposal ever brought forward. The places where it was in operation would have*, discarded it if this were the ease. What the system did was to help to bring land into use and occupancy. If they brought tho unimproved system in it would lower land prices all round- At present the land on the flat was held, and others were driven to the hillside. A man had told him lie was going to vote against the unimproved because tho banks would get off, but The Mail had shown that the hanks would pay more. When land rose in value this drove certain industries out. He had been over the ratebook haphazardly—noj; looking for any particular thing, and he. found that a property valued at £l5O land and £l5O improvements would pay considerably more under the unimproved. With land £2OO and improvements £450 the system would show a. slight. benefit. As the improvements increased in proportion to the land value the unimproved would show the advantage. Mr Moffatt, referred to an instance quoted by the Town Clerk.

A Voice: You can’t, give it away. Mr Moffatt : Then rates should not he paid on it. Proceeding. Mr Moffatt. referring to the tomato industry. said they had been told they were driving out- -an industry that, was bringing £30.000 into the place. A Voice: Double that.

Mr Moffatt-: Right. It was rather remarkable that. Lower Hutt, which had the unimproved system, had 40 acres devoted to tomato culture in areas up to two acres. They seem to be managing all right.

A Voice: Only 40 acres: What have we ?

Mr Moffatt: I don’t- know. Proceeding. he said that on the unimproved unco they had the land thov could um ini anything they liked without being taxed. Under the. present system evidently it was a crime to improve the. property. They were penalised for it. Vacant land had to he brought into use ou sold. L was remarkable that while there was any fall in the cost- of building there was a rise fn land values. The new Government- valuation of land in Nelson would show a 40 to 50 per cent advance over the whole town. The Town Clerk said it, was doubtful if the necessary money could be secured under the unimproved system on Government valuation, which had to be used. He believed they could go beyond the Bjd jii the £ mentioned by the Town Clerk, and so did a friend with whom he had been discussing it. He had telegraphed to Mr O'Regan, asking “Is eightpence-halfpenny maximum can be struck on unimproved?” lie replied: “There is'no such limitation, letter posted.” When he got the letter he would let the public know. If thej lost, the poll the attention given to the subject would do good, lie was not going to worry himself if the people turned it down. Ho would not quarrel about it. He regretted his friend and himself had not had the assistance of other people. lie said the Town Clerk of Dunedin had stressed th© ability to pay. Would they ask a man to pay more for a ride in a ’bus because he had more money. That was the way tolook at itA Voice: What about the incomo fax?

Mr Moffatt: In the great* percentage of cases the income tax payer charged the tax on to the goods. It was provided for in the profits of trading. Land, labour, and capital.' The conditions were such that while labour and capital quarrelled, land stood off and laughed., v The Mayor said the speakers would be pleased to answer any rev elan t questions.

It. was difficult to follow the discussion. The chairman was very strict in keeping questioners from making remarks. and repeated efforts were mads* to get a few assertions as well a* questions in • Mr Moffatt asked the chairman to he less strict. He never flinched from questions.

Mr Wyllie asked, taking two sections of an acre each, one with a shanty and tomatoes, and the other with a restaurant costing £IO,OOO, deriving large revenue from travellers, which would pay the most rates under the unimproved system ? Mr Moffatt: Both would pay the same rates. ITo always understood it was our duty to encourage travellers to come here. As a matter of fact they would find that a restaurant would he in a good part of tli© town on highly valued land.

Another questioner managed I to got in the assertion that a landlord getting high rents would only pay on the land values.

Air Alf. Robinson, referring to Mr Russell’s assertions about going to places under th© unimproved system for information .aslced Air Russell was it not a fact that the Town Clerk of Dunedin did visit Christchurch and Wellington to investigate before framing his report. Air Russell said he was not sure on the* point, but iv would be better to go to the ..sourae direct: yourself. Mr Robinson: The Town Clerk of Dunedin inquired into the merits and demerits of tho system. Should you not accept- his report as impartial? Air Russell said it was just possible a man might be opposed to the system with preconceived ideas. The chairman said he knew the Town Clerk of Dunedin personally, and he was a very live man. and he did visit the places mentioned He had been commissioned to nVike an unbiassed report.

Air Wyllie: Did not certain towns go in for the unimproved system for specific purposes, to cut up big areas of land in the centre of those cit-ies? Air Russell: How do you know? Wo do not know what was in the minds of the voters. You don’t know and I don’t know. -Mr York asked how increased rates, say. on small farms, could he paid if tlmv could, not sell the land?

TTr Moffatt sa-id the sequence and corollary of the land tax was to reduce other taxes as compensation. Mr Wyllie asked whether speculators cutting up land to make a profit would disappear? Air Moffatt said they would be busier than ever, selling land for less money. In reply to a question regarding the tomato industry, Mr Russell said its value seemed to bp growing. It was £30,000 a little while ago. lie said the industry should pay its rates. He ha<l to pay rates ori his home and business premises, and it was the same with the tomato industry. They had 40 acres in Lower Hutt under the unimproved system. A Voice: They have no sea freights to pay?

Air Russell said if 5s a week or £l2 a year would drive a- man out of an industry it could not. ho much good. The chairman, said that whatever their views wore t-ho speakers were en - titled anyhow to the thanks of the meeting. On the motion of Air Forster, the sneakers were accorded a hearty vote of thanks, which was carried with hearty acclamation.

A rote, of thanks to the chairman terminated the meeting.