UNIMPROVED SYSTEM

Nelson Evening Mail, Volume LVI, 25 November 1924, Page 7

UNIMPROVED SYSTEM

1 1 (To the Editors) I Sir, —-For general information will you I kindly republish the enclosed article cn local rating published in the Liberator (Auckland), September 30ih, 1922. T'hlfe paper is issued For the assessment of ill! . rates on the unimproved value tif land. 1 ititi) ole,, \V, .). MQFFATT. | In 1896 A measure—“ The Rating On f Unimproved Values Act” —was passed, i enabling the ratepayers in cities, 1 boroughs, counties, etc., by initiative ; petition and referendum vote, to exempt 8 improvements from rating, and to rate [, land values only, except in respect of f water rates, lighting rates. Sewerage | rates, and Hospital and Charitable Aid j rates. In 1911 the Act Was extended to l apply to all local rates. Forty-three f boroughs operate under the 1896 Act j and 25 operate under flu; 1911 Act. • Places which carried Rating on IJni.ntj proved Value before this date require ! another poll to include all the rates un- , der tliis system. I] In boroughs a petition requires to be ,j signed by IS per cent, of the total otf j names oil the roll, but at the polls i J husband and wife of the ratepayer can ! vote. The Government Statistician estimates that SO per cent, of the Dominion’s inhabitants are being rated ou the unimproved value. The total local revenue being derived annually from land values alone, is therefore about £1,571,606. The total number of rating authorities levying local taxation on land values, apart from improvements, is 202. Boroughs, 68; counties, 47; land drainage district, 21; town districts, 15 (do-j pendent); town districts, ]5 (independent) ; road districts, 21; tramway dip- j trict.s, 1;* river protective district, 14:, It should be pointed out that these town districts marked dependent rate on ! unimproved values by reason of the fact ! of their inclusion in counties rating on ' Unimproved Land Values, 21 road dis- 1 i riots rate similarly by v irtue of I heir inclusioip in counties " operating under tliis system. | One remarkable feature is the number of country places having voluntarily adopted tbis so-called wedge of single tax, when it is remembered that plural voting is still in existence there. Every year additional places adopt the .exemption of improvements, most of I hem without the. knowledge and direct in-. fluence of the Land Values League. ! In 1919, prior to the carrying of a poll to adopt Rating on Unimproved Values, the Cambridge Borough Council sent a- quest innaire to a number of local bodies, and the replies wel'o as follows- ■. i 1. Is it regarded as an equitable form of taxation? —20 for, 2 against. 2. Ts it good in its general effect? — 21 for, 2 against. I 3. Has it. in normal times, been found to encourage enterprise in the. matter of new buildings, and causing qwners of unoccupied allotments to putthem to -more profitable use?—lo for, 3 against. 4. Has it- bad any marked detrimental effect in your Borough—2s for, none against. 5. Can you sav whether it discourages the holding of land for purely speculative purposes?—l6 for, 7 against. 6. Has it been found that those who opposed its introduction now advocate it?—lß for, 3 against. ; 7. In your opinion, would any movement, to change to the Annual Value System of Rating be likely to meet with success?—2o for, 3 against. 8 .Does it in practice benefit the wealthier: class at the expense of the poorer class—l 9 for, 4 against. 9- Do you in your official capacity consider it is the best system available, 1 and can you recommend *its adoption by j any young borough ?—-20 for, 4 against, j Particularly striking is the unanimous verdict on question No. 4. The increase of population in Cambridge for' the 23 years prior to the adoption of rating ou the unimproved values was at the rate of 4.25 per cent, per annum, but in the two years following the increase was at the rate of 10.34 per cent, per annum. v Some of the leading cities which have this system in operation are as under:— Population. Date of Poll. Wellington Oily 88,922 1901 Christchurch ' 71,499 1902 Two of the four largest Cities in New Zealand.

The progress of Invercargill, Hamilton and Palmerston North, after 20 and 15 years’ experience lias been particularly remarkable. Sixteen polls have been taken in 26 years on the question of recission of rating oil Unimproved Values, but only five places have gone back. The only places of any size in the Dominion which are not rating on Un- j improved Values are : Auckland 158,000 Dunedin 72,255 Wanganui 23,525 Nelson 10,632

Replying it) an .American inquirer, the late Rt Hon. R. J. Scddon, Premier, said : “The land tax, as imposed in New Zealand, has been a fiscal success, and there can be no doubt that it has been a factor in bringing about our prosperity. Tne rating on Unimproved Values for local purposes lias proved a success, and the opinion of the Government is that it should be made compulsory.” The argument has sometimes been raised that the system would compel roo much subdivision, but, as the majority of .local authorities have by-laws regulating this matter, mostly a. minimum of 50ft, frontage for residential sites, the point is worthless, 1 and in most places smaller subdivisions can be found which were mode before the adoption of the system than have been made since its adoption. As indicating that the exemption of improvements has encouraged the budding of bouses and other improvements, an analysis of the figures in the New Zealand Official Year Book show that the percentage of improvements in places rating under this system was 45J, per cent., whereas in oilier areas the rate was only 35 per cent, of (lie total valuation. In 1910, in response to an inquiry from the British Government, the then Commissioner of Taxes reported as follows : “The effect has certainly been to greatly stimulate the building trade. It has been the direct cause of much valuable suburban land being put up and placed <.u the market. The tendency of this system of taxation is not to increase the rent, but on the contrary, as the tax becomes heavier, it tends to bring into beneficial occupation land not being put to its best- use.” Further supporting testimony of the satisfactory results of rating on Unimproved Values might be nuoted from numbers of officials of rating authorities.

Palmerston North 15,649 1897 Invercargill 15.203 1901 Napier 14,346 1913 Timaru 14,058 1921 Hamilton 11,441 1901 ’ New Plymouth Gisborne „ 11,395 10,931 1919