“DROP IN BUCKET”

Taranaki Daily News, 30 November 1932, Page 5

“DROP IN BUCKET”

RATE REMISSION SCHEME SMALL FARMERS’ POSITION. ' v * LAND VALUES THE PROBLEM. “Payment of rates by the Government will certainly* lighten the farmers’ burden, but in hundreds of cases it will not permit them to live,” said a prominent financier, who has had over 30 years’ experience in' arranging farm mortgages. “Numbers of cases which have come under my notice could be quoted to show that remission of rates would be a mere drop in the bucket,” he continued. “I know farms that have been bought at £lO an acre, and which, by good management, could carry on, pay interest and rates, and show a profit even if butterfat dropped to 6d a pound. On the other hand, I could give instances of farms established on the same class of land, but for which the owners have paid up to £5O an acre. The remission of rates in such cases would be practically no relief, although the same skill in management may be in operation as on the £lO an acre property. Even with butterfat at 9d, and his rates remitted, the man with the higher priced land would not be able to pay interest on. his mortgage, which would be probably £3O an acre. He would probably have to receive at least lid a lb for his butterfat to ‘break even.’ “Rates on the average small farm average around about £2O per annum. What the farmer wants is some guarantee that he will receive in the vicinity of Is a lb for butterfat. The small man produces anything between 10,0001 b and 20,0001 b of butterfat a year. CRUX OF THE QUESTION. “The price of land is the crux of the whole question. Land is only worth what it will produce, and the whole country is suffering the result of inflation brought about when prices for our produce were fictitious. Buying and selling took place on the presumption that high values for wool and butter would be permanent There are so many circumstances to be taken into account that the general application of any principle for alleviation is impossible. Whatever relief by way of rates is given, there will be hundreds of farmers who will find it impossible to carry on with the export market in its present state. “The proposal to waive land tax will be of no material assistance to the small farmer. In nine cases out of ten no tax is paid. It is levied at the rate. of Id in the £ on the unimproved value, after subtracting the amount owed by mortgage. If there is no mortgagesomething very rare—there is a £509 exemption. A farm of 100 acres free of mortgages, with a Government valuation of £6 an acre, would only have to pay land tax amounting to 8s 4d. If the. same farm had a mortgage of £6OO the farmer would pay nothing. The proposal is not worth a snap of the fingers to the small farmer, but it would certainly be a windfall to the owners of large unimproved blocks, who pay Id in the £ without the benefit of exemptions. Such a proposal will in no way production. WOULD HELP COUNTY COUNCILS, “The payment of rates by the Government will no doubt be widely acclaimed by county councils, whose finance will be assured. They have been in trouble on account of defaulting ratepayers for some considerable time, and in consequence have contracted bank overdrafts that are proving a disturbing factor. There have been defaulting local bodies in recent times, and there are signs of the evil growing. The payment of rates ‘ by the Government will certainly be an advantage to the banks themselves, and overdrafts will no doubt be reduced under such a system. • “Any scheme that is adopted to relieve the, farmer must be drawn up with a due appreciation of an outstanding factor, that butterfat is liable to drop still lower and to remain permanently at a low level.”.