THE CITY FINANCES.

New Zealand Herald, Volume LXV, Issue 19976, 19 June 1928, Page 12

THE CITY FINANCES.

Sir, —In your sub-leader of Friday, inadvertently, no doubt, you appear to have given the public quite a wrong view of the city's budget. " The council's desperate efforts to avoid the heavy increase in rating that appeared inevitable last year " is surely a matter for congratulation rather than stricture, since both local and general taxation is at this time a stifling burden upon the country.' That the general rate is reduced by 4d in the pound, to balance a corresponding increase in special rate, is a signal achievement. Of course, the present council is only in small part responsible for special rate, which has been accumulating for many years. With regard to " the enormous accretion to the bill for interest," it should be pointed out that this is in no small measure a reflection of the hard times this Dominion has been suffering, and it is evidence of genuine effort by the present council to assist many citizens and their families in a time of great distress, for which the general Government, and not tho council, must assume major responsibility. Some three years or more ago, a loan of £700,000 for a programme of major works, over a period of five to seven years, was inaugurated. Over the last 18 months, to meet unemployment distress, the council felt compelled to speed up the works programme, so that it has been practically completed in half the allotted time. This means, of course, that interest charges have accrued with corresponding prematurity. Included in the interest bill, too, is a heavy payment for waterfront road to Orakei, a work inaugurated years ago. Further, your castigation of council for " using a sinking fund of £15,875 (electricity account) to balance interest account" is based on error, with grave injustice to council. You state that " this device involves the renewal of tho debt, although the asset has long since disappeared." The facts, as given to me, are: (1) The " debt " or liability was taken over by the Auckland Electric-Power Board at formation, while the accumulated sinking fund remained with council; (2) the £15,875 includes a payment by power board, in addition to accrued sinking funds, and was kept as a " reserve " against contingency, the original loan or debt being no longer existent. Since, in present economic difficulty generally, any increase in rates would be a serious matter, the use of this " reserve " to avoid same cannot fairly be said to be frenzied finance. My main point, however, is that the facts re the alleged " debt " should be publicly known. The added burden put upon the council by increased hospital levy, as a result of relief to unemployment, is again an evidence of the great difficulty falling upon local authorities as a result of unfavourable Dominion conditions. I will frankly admit that perhaps in using the budget as a key to economy it will lose some potency as an instrument of democracy. I am disappointed, too, that the budget is a complex document of figures, and not a more humanised one, telling a story of services to be rendered, and benefits bestowed upon citizens as a result of spending taxes. The council has yet to learn tho value of up-to-date publicity. A. J. Staliavorthy.