COUNTY RATES

Southland Times, Issue 22732, 7 November 1935, Page 6

COUNTY RATES

SUBSIDY SYSTEM EXPLANATION BY MR HARGEST POWER BOARD’S POSITION Speaking at Browns night Mr James Hargest, M.P., the National Government candidate for Awarua, made some important statements regarding the system of Government subsidies to county councils and the present position of the Southland Electric Power Board in its relation to the ratepayeis of Southland. He explained that there were 123 counties in New Zealand and they received a subsidy on their rates of 5/in the pound with a maximum grant of £2500. This meant that 104 of the smaller counties received the full subsidy of 5/- in the pound, but in the other 19 the amount was reduced owing to their size and value. The Southland County was the largest county in New Zealand and had the greatest unimproved value, £26,138,000. This resulted in the subsidy amounting to only 1/2 in the pound. Naturally the councillors chafed under this inequity which had persisted for a long period,, and it stood to the credit of Southland s ratepayers that they had not split the county into smaller parts, as had been done in the north. The great need today was for larger local authorities and every encouragement should be given to the amalgamation of adjacent local bodies, said Mr Hargest. The vexed question of rate subsidies had been the subject of discussion at the recent counties’ conference and a deputation had asked Cabinet for a pound for pound subsidy on road expenditure. The huge cost' entailed, about £700,000, had made this impossible and Mr Hargest said he believed that the Southland County Council recognized this. Later it had requested that a straight-out subsidy of 5/- in the pound should be paid to all counties irrespective of size and this appeared to him to be a reasonable compromise. It would mean an additional subsidy of over £6OOO to the Southland County. The case for the county had been very ably put in writing by the local riding member, Mr W. Norman, and he (Mr Hargest) with the Hon. Adam Hamilton had had several discussions with Mr Coates on the question. The Minister was sympathetic and promised to investigate, and since returning to Southland he had received a telegram from Mr Coates stating that the Government was prepared to reconsider the basis of the 5/- subsidy next session. Mr Hargest said he was certain that an agreement could be reached which would be satisfactory to the ratepayers. He regretted that this question had been brought up just before an election and made the plaything of politics. He reminded his hearers that this year the ratepayers were again receiving a rebate of 12 J per cent, on their rates—evidence of the Government’s desire to assist them. Power Board. Referring to the Power Board he dealt with the position of that body over the past years. It had carried out an ambitious programme and was a most efficiently managed undertaking. In fact it was considered to be a model in many respects. But it had been compelled to levy the huge sum of over £500,000 in rates over about 14 years, and in addition had charged high meter rents. The loan of £1,500,000 in London paid a very high rate of interest, an average of 5J per cent., and the load had been a very heavy one; but their troubles were over now- They had the right of conversion in September of 1936, and when Mr Coates was at Home this year he had paved the way for them to obtain the new money at round about 3 per cent. To get this low rate he had given a renewal of the Government guarantee—purely to assist the ratepayers here. The Local Bodies Act provided that loans must be liquidated in the period of the loan—that was, 18 years hence from 1936—in 1954. This would have meant a sinking fund of 4J per cent.— a heavy burden—but again the Minister of Finance had been prepared to assist by allowing a smaller sinking fund. He and the Treasury had been most helpful and were endeavouring to reach a condition this year that would eliminate the necessity for a rate next year. That would mean a saving of £30,000 a year to the ratepayers, a sum six times as large as the sum involved in the county question. There was a proposal now before the Power Board that would even go further, but he was not in a position to discuss it at the moment. “Suffice it to say,” continued Mr Hargest, “that the Power Board rate is at the point of extinction and it has been brought about by Mr Coates, assisted by the Hon. Adam Hamilton and the Secretary to the Treasury. Candidate’s Chief Work. “I am not in the habit of boasting of my achievements—my bitterest political enemy will, I think, concede me that; but in view of the credit being claimed by the Democrat candidate for Wallace, I must say a word here. I am not a member of the board, but for nearly four years I have been closely connected with it in its relations with the Government and its overseas bondholders. I have made the reduction of the interest load and the rates almost my chief work. On that work I have spent much of my time and my own money in travelling and telegraph expenses, and given a good deal in health also. I have incurred the displeasure of Ministers, bankers, and departmental heads. When Mr Coates was on the point of leaving for England, I handed to him a despatch and forwarded another to him in London so that it would always be before him; and when to-day we can see an end to this oppressive rate, and a lightening of the charges, I claim some of the credit as mine. There are others—the board members, and more particularly the board’s secretary, one of the most efficient men I have ever met, one or two prominent business men in Invercargill, and the Ministers I have already mentioned. But I do claim that if I ever did anything for Southland, the best I have given with all the determination and pertinacity I possess has been given to the ratepayers of the South land Power Board.”