CITY RATING SYSTEM

New Zealand Times, Volume LIII, Issue 12456, 26 May 1926, Page 7

CITY RATING SYSTEM

RATEPAYERS WILL BE GIVEN OPPORTUNITY TO CHANGE *

PLEBISCITE TO BE TAKEN

“CAPITAL VALUE” ADVOCATES IN COUNCIL GAIN A VICTORY

The City Council voted 6 to 4 in favour of a proposal to take a poll of ratepayers on the rating system. The advantages and disadvantages of the present “unimproved value” system, and of the proposal “capital value” were fully canvassed during the debate.

The system of rating which Wellington should .have was discussed by the City Council last night, on the following motion by Councillor M. F. Litckio:— "That the Wellington City Council is of opinion that the present system of rating on the unimproved value should be discontinued, and that system of rating on the annual value adopted in lieu thereof; and resolves to promote the necessary petition with a view to having a poll of the ratepayers taken upon the above proposal, as prescribed by The Rating Act, 1908." Mr Luckie said the question of rating was of very great importance to the city. While it was not intended tho council should decide, it was desirable to promote discussion so that the public could judge for itself. Before the opinion of the public could be taken, a petition* signed by 15 per cent, of the ratepayers (about 3,500) was needed. The method of changing a rating system was cumbrous There was no doubt that as taxation by the State on the person on the income was the true and democratic method of raising revenue, so rating on the annual value was equally the proper way of obtaining money for the city, for the corporation was getting money from the properties in accordance with the revenue the owners were obtaining fiom the properties. “A FALSE ANALOGY” Those who supported the rating on unimproved value system and pointed to what was done in the country districts were arguing from a false analogy. The unimproved property in the city aid not produce anytuing; it was the capital spent on it that made it productive. He instanced the cases of certain city properties. Old wooden buildings had been pulled down and huge structures erected in their places. Though these new structures would bring in far great? er revenue to the owners, the city would receive not a penny more. It was the big businesses in Wellington that were going to be hit if the change he advocated was adopted. The ordinary resident would not nay as much. A councillor: Why? * Councillor Luckie: Because it will he paid mainly by the business area. It might be paid indirectly by the people, but not directly.

There had been an enormous increase in building in the business area in Wellington, and these buildings were bringing in additional money, but an unfair share of the improvements was being borne by the residential area. Wellington was an extremely difficult city to administer, and if his suggestion was adopted the difficulties would be lessened. The people who could ill afford it were paying too much under, the present system, and big business was escaping too lightly. Auckland boasted that it got an annually-increasing revenue without increasing the rate. It was 24 years since the present system had been de-

cided on for Wellington, and the decision was made at a poll at which about 12,000 voted for the system and 9000 ugainet it. Should 3Q,0C0 ratepayers today be governed by the dead hand of 24 years ago? Councillor H. A. Huggins seconded the motion. Rating in accordance with ability to pay was the crux of the question. The present system was responsible for the pocket-handkerchief sections and for the crowding of more than one house on a small section, for people knew they could, by sticking up another building, get more revenue without increasing their rates. EVIL OF SPECULATION Mr R. Semple described Mr Luckie’s ideas as “reactionary and antiquated.” No rational thinker would endeavour to cripple a firm which endeavoured to create necessary services. Councillor Luckie’s proposal would increase the evil of land speculation. The crux of the question, according to Councillor J. Burns, was finance. This city did not get sufficient revenue to meet its requirements, and he thought the best way to get works done was to borrow and allow posterity to share the burden. As to Councillor Luckie’s motion, his attitude was: “Let the people decide." Councillor R. McKeen thought rating an the annual value was a tax on capital, and firms would be retarded from making improvements. He had authority for stating that had the annual value system been in use here to-day the Hud-dart-Parker building which recently replaced a dilapidated wooden structure would not have been built. Councillor Luckie: I don’t believe it. Councillor McKeen: This move is merely a smoke screen to transfer the burden to tlie bulk of the people who can least afford it, and to relieve tho land speculator. THE MOTION CARRIED The Mayor (Mr C. B. Norwood) said this was merely to present the ratepayers with an opportunity to say which system they would have. He believed that rating on annual value was correct for a city the size of Wellington. He thought there was something in Councillor McKeen’s point that it might result in speculators holding up laiitl, but a special provision could be inserted in the Act to allow the council to especially rate such people. Councillor F. Meadowcroft waß in favour of the motion, in order to allow the people to determine the question; and after further discussion the motion was carried by six votes to four. The voting was: For the motion: Burns, Huggins, Luckie, Meadowcroft, Thompson, Norwood.

Against the motion: Aston, McKeen, Semple, Troup.