THE OTAGO DAILY TIMES Monday, May 12, 1941. THE CITY RATES

Otago Daily Times, Issue 24604, 12 May 1941, Page 4

THE OTAGO DAILY TIMES Monday, May 12, 1941. THE CITY RATES

The practical absurdity of the pretensions of the Labour Party of its ability to reduce the municipal rates, and of the pledge which has been given on its part to effect this reduction, is exposed in the light of the figures that were presented at a special meeting of the City Council last Friday afternoon. The fact that Dr McMillan had pledged his party to reduce the rates by a penny in the pound at a time when these figures were not known to him should itself impress the ratepayers with a sense of the recklessness with which he is prepared to make votecatching promises and should warn them of the need for caution in the acceptance of electioneering propaganda. The plain conclusion that is to be drawn from an examination of the figures is that a reduction in the general rate could not be prudently or legitimately made at the present time on the basis of the revenue and expenditure for the past year and on that of the estimated revenue and expenditure for the current year. With the figures before him all that Dr McMillan, seems to have been able, at the meeting of the Council, to advance as an argument in favour of a reduction in the general rate is that, since the cost of living is rising, it would be "a welcome gesture." If, however, a reduction was made now it could only be at the price of increased rating later on. And later on, as need hardly be emphasised, the heavy demands that must be made on their pockets through the inevitable expansion of the war expenditure and the equally inevitable advance in the cost of living wili place the ratepayers'in a distinctly less favourable position than they now occupy to meet an increase in the local rates. The Labour Party seems to have learned no lesson from the unfortunate experience to which it subjected the ratepayers between 1935 and 1938 when it was in power in this city. If it is ready to follow Dr McMillan's lead, as presumably it is, a failure to balance the municipal budget is not regarded at all seriously by it. There is no housewife in the city, however, who cannot tell it that a policy under which expenditure is exceeded by income is one that, if not checked, is bound to end in disaster. A deficit might, of course, be smothered up by a recourse to the expedient of raiding reserves. A similar expedient in the case of the housewife would take the form of encroaching upon savings. The employment of such a course as that is a mark of spendthrift finance, and there must sooner or later be a day of reckoning. The day of reckoning necessitated by the prodigal finance of the Labour Party in 1935-1938 came after the party was ousted from power. The party had not itself the courage to face the position it had created and to prepare a budget in 1938. It must have realised that the production of a budget at that time would have brought the condemnation of the public down upon it. Actually it did not escape condemnation.. Its palpable fear to face the music then, and to reveal to the ratepayers the effect of its reckless management of the municipal finances, may be fittingly contrasted with the fact that the present Council did not hesitate to submit its budget last week even though this showed that it would not be justified in proposing any reduction in the general rates. It is to be commended on its frankness and on its firmness in adhering to the policy of a balanced budget and thus avoiding the risk of subsequent financial embarrassment. As it is, however, the rates for the current months will, en balance, be a penny in the pound less than they were last year.