TE AWAMUTU COURIER Printed on Mondays, Wednesdays, and Fridays FRIDAY, 15th SEPTEMBER, 1950 DISORDERED PUBLIC FINANCE

Te Awamutu Courier, Volume 81, Issue 7252, 15 September 1950, Page 4

TE AWAMUTU COURIER Printed on Mondays, Wednesdays, and Fridays FRIDAY, 15th SEPTEMBER, 1950 DISORDERED PUBLIC FINANCE

THE ANNUAL ISSUE of the rate demand notice is a periodic reminder of the citizen’s direct part in the scheme of local government, but there can also be the claim for more general realisation of the administrative problems and responsibilities. At this time the notice of individual liability is stated in the demands just issued, and there is natural concern. Over a period of years the administrative charges in Te Awamutu have steadily increased in nominal amount, but it is questionable whether the local authority has any really improved spending power. That, indeed, can be the immediate concern when the rating demand is considered—its nominal amount in relation to the actual cost of maintaining the serices and appointments which the borough must have. That, .in turn, leads to the deferred works programme and the many amenities and services which are not yet provided, and which ere long must be financed. In the round of administration the responsible Council realises the extent of needs which multiply as development proceeds, but the ability to finance both capital works and maintenance regulates directly in accordance with the revenue estimate against which the rating levy must be calculated, and there very soon arises a limit to which any Council may go, particularly when cost and value can become so widely disproportionate as they are to-day. But if the total of the rating demand could be viewed in its incidence there would be discovered a great and serious disparity in its spread over the borough as a whole. Actually it traces to unbalance in the valuation system, and it would be discovered, for instance, that a much higher rating levy falls on one side of a street than on the other; that areas which are comparable in location and desirability are very disproportionately valued. The truth is that valuations w*ere tied to recorded 1942 sales values, with disastrous resul’ts. It is possible to find instances where within a radius of a few chains more than 100 per cent variation is recorded in the valuation register. But even greater vagaries than that have arisen since the restrictive influence of the Land Sales Court vras removed, and it is not uncommon to find properties offered and selling at figures which multiply by four or five the official valuation, and in rare instances even eight and ten times the valuation figure are being asked. The effect is that the ruling system of public finance is adversely affected; the borough is impoverished and the individual contribution is and unequal. The rating system on the basis of unimproved values is certain y open to question, and in many respects is no longer operating in the manner intended; but any rating system relies on the just and equa< assessment of valuation on which the rates become leviable; and, very definitely, there are grave defects in the existing valuation register. So grave are these defects that one of the press.ng claims on a new Council will be to move for the early—even immediate—re-valuation of the borough. Very certainly no Council will be able to effectively administer even ex sting services, and much less overtake increasing demands which arise in w’ider development, until the basis of finance is restored on a more equitable basis. The theory of 1942 values and the aftermath of restricted sale transactions which could apply only n some locations have created a va.uation basis w’hich makes rating demands disproportionate and even absurd- it becomes bad finance, and ends in a poor economy which undoubtedly is operating contrary to every consideration t)f public interest in Te Awamutu.