The Southland Times PUBLISHED EVERY MORNING “LUCEO NON URO” WEDNESDAY, DECEMBER 8, 1937. Southland County Rating System

Southland Times, Issue 23377, 8 December 1937, Page 4

The Southland Times PUBLISHED EVERY MORNING “LUCEO NON URO” WEDNESDAY, DECEMBER 8, 1937. Southland County Rating System

The Southland County Council, at a recent meeting, was urged by Mr L. A. Niederer to rate on capital instead of unimproved values, and it was apparent from the ensuing discussion that the proposal has a fair amount of support. The relative merits of the two methods of rating can, of course, be discussed endlessly and inconclusively. The truth is that there is no perfect rating system. Some 40 years ago when the influence of Henry George was at its peak in New Zealand most Liberals believed that rating on unimproved values was invariably equitable in its incidence and an unfailing method of 4 ' securing to the community the unearned increment on land. Practical experience of rating on unimproved values has shown that its effect varies with different types of land and that in its incidence it is not appreciably more equitable than other forms of taxation. If therefore it was merely a question of the relative merits of rating on unimproved value and rating on capital value, it would not be possible to advance any very strong arguments against the change which Mr Niederer proposed. But, as almost every English Royal Commission on local rating has pointed out, a system of rating should not be altered unless alteration is unavoidable. In the long run, local rates become capitalized, so that the longer a rating system has been in force the less onerous it is. To alter a rating system suddenly is to disturb land values and generally speaking to makes rates more burdensome. A further point is that such changes are expensive and involve much administrative inconvenience- It cannot be said that these disadvantages are outweighed by any of the benefits likely to result in the Southland county from a change to rating on capital values. No doubt the provision of footpaths, drainage and street lighting for urban and semi-urban areas in the county will be facilitated by capital value rating. But such areas are small in relation to the county as a whole and can in any case be provided with urban amenities otherwise than by altering the rating system. Over the greater part of the Southland county unimproved value rating is equitable and probably encourages development more than any other system would.