THE RATING SYSTEM

Waipa Post, Volume 32, Issue 1929, 2 November 1926, Page 5

THE RATING SYSTEM

THE CASE FOR CAPITAL VALUES. SINGLE TAX DEPRECATED. ADDRESS BY MR SHACKLEFORD. . Interest in the rating question in Te Awamutu was further evidenced by the attendance at the Town Hall last night, when Mr J. W. Shackleford Plained the position from the point J|- view of those favouring the capital alues. Mr Shackleford, who has had life-long experience of local bodies administration, brought forward many . telling arguments in favour of the retention of the present system. The Mayor (Mr L. G. Armstrong), who presided, in introducing the speaker, said that although Mr George Fowlds was an experienced local bodies man, perhaps Mr Shackleford had a still greater experience. There was one phase worthy of mention, and that was the fact that men would come to the country towns to give the people the benefit of their years of experience in these matters. Mr Shackleford, who was enthusiastically received, said at the outset that he was convinced, after much thought, that the proposed unimproved rating system was not in the best interests of any locality wishing to expand. He personally had spent many hours in close association with Mr Fowlds, and they had had many heart-to-heart talks on that peculiar idea that Mr Fowlds had cultivated in favour of the single tax. He therefore knew the personal bearing of Mr Fowlds' arguments. Proceeding, Mr Shackleford went on to explain the methods of the three rating systems—capital, unimproved, and annual. It was assumed at the outset" that the people were guided by broad principles and actuated by the desire to secure geratest good for the greatest number. They should not take the personal basis, for some might save a little at the outset. It was an undeniable fact, that unimproved rating rebounded like a boomerang, and nobody could assume what the rates would be next year or the year after. In Te Awamutu, at the moment, £IB,OOO had been expended in improvements, and this added valuation would yield revenue to the borough. Great progress had been made in Te Awamutu under capital values—more, in* deed, than in any locality rating under unimproved values. Facts and figures could be taken, and he could challenge anybody to say that unimroved values gave a greater ratio of progress than other systems. That could be proved by reference to official records of the municipalities from one end of New Zealand to -the other. Who, Mr Shackleford asked, would benefit? Some at the moment, would score a little; but experience all along showed that the rating basis was raised until the effect came back to the same aggregate of rates from the property concerned. Answering Mr Fowlds' argument that ability to pay was not the basis for taxation, the speaker instanced the postal, hospital, and other public services as condemning the argument Mr Fowlds had used. Taxation was most equitably spread when it fell .upon those who were able to pay. Revenues to the State did not come from the working men as largely as from the more wealthy classes. That was but right, and the men who had capital to employ in various enterprises should bear their rightful share of taxation. What never seemed to have been recognised was that unimproved rating was merely the local, application of the single tax. How would that work out in a national sense? Last year, for instance, land tax had yielded the State £1,426,463, and income tax had returned £3,181,532. But under the single tax ideal, with taxation a levy on the land alone, all that revenue would have tc come from land taxation. What, he asked, wquld that mean to the farming community, whose financial burdens were heavy enough already? But it would also be wrong in principle to apply such a mode of taxation. Advocates of the unimproved rating system stressed the, growth of their system. That was easily explained, seeing that there was a live associav tion at work striving to attain the objective he had named —single tax. Given the same activity and organisation in favour of saner methods, he did not doubt that the public of New Zealand would not so readily have embraced a fallacy in their methods of taxation. It was all a matter of organisation and organised effort. Quoting from figures, the speaker proceeded to reply to Mr Fowlds' contentions that the unimproved tax plan encouraged building enterprise. Over a three-years period Cambridge building permits totalled £53,503 and Nga-

ruawahia £17,603. These were- exam-

ples of the towns which had embrace^! the ideal: expounded by Mr Fowlds. But Te Awamutu, with its capital Tallies system, had £70,333 worth of building in the same period. These figures were certainly an effective reply to those who decried the old and proved methods of the past. Mr Shackleford said it. was claimed by the advocates of unimproved rating values that the capital values system retarded progress and that unimproved rating aided civic progression. But what did experience show elsewhere? Just the very reverse. Auckland city, under annual rating (a basis on capital values) had increased by £30,819; that was the progress of one city; yet Wellington under unimproved rating showed only" £27,600 worth of progress in the whole of that province. Hamilton was quoted by Mr Fowlds as a case to favour his rating system. Hamilton had progressed naturally because of its location. But 4U was not rosy in the Hamilton garden. There were 124 empty houses—a proportion of one house in every #5. Statistics showed also that the rpopulation, had increased, by 2555> in fiye years.; but they showed also that,.there was ,'" a 'great? surplus < of women* •; What did Hhat mean? It' meant that work was not as plentiful; as< it should be for men. In support of the contention that unimproved rating must have a boomerange effect, Mr Shackleford quoted instances to show how rating had increased the burden for the men who

thought they were in for a saving. Onehunga had started off with a rate on the unimproved values of 4 3-16 d; but the rate had increased to 91d.. This and other similar instances indicated that the man who thought he was in for a saving was more likely due for an unpleasant surprise. It had been claimed that the unimproved values would attract popular tion. Taking Auckland suburban boroughs, the speaker quoted Northcote as having increased by 515 persons in five years; Birkenhead by 526, and Devonport by 1070. These were the unimproved rating boroughs, and that was their ratio of progress. They were all close to the city, and had every natural advantage. But further afield, at Takapuna, under capital values, with less natural advantages, the progress had been more than in the other three combined, its increase being 2134. That surely did not bear out the arguments used that capital values rating retarded progress and drove people away. Answering Mr Fowlds' various contentions about Auckland suburbs, the speaker quoted from statistics, and showed that the progress had not been great. It was tomfoolery to say that .unimproved rating would bring down rents, bring down the cost of commodities, and yield an increase in wages, said Mr Shackleford. That was some of the nonsensical propaganda issired. It was strange that Mr Fowlds had let many years elapse since he put forward this pet theme of his in his own borough. When he did advkace it his fellow citizens rejected it. Yet he came along to Te Awamutu. and urged it here. Mr Shackleford challenged anyone to show any district that had shown an advantage under unimproved values, and he also challenged anyone-to show that capital values had brought comparative disadvantages. It could perhaps be shown that individual ratepayers had gained a saving at the outset, but it could also be shown that ere very long the individual gain had turned out to be a loss, and that for, the district as a whole the capital values system would be the best for the greatest number. He urged'caution before the people., of Te Awamutu made a vital change in the rating system, and one which would, he was convinced, prove disadvantageous in the end. Question time was not fully availed of. One questioner, whose remarks were unduly personal, suffered a mild rebuke, and sat down in disgust. To questioners the speaker said: — To Mr L. J. Hooper: He had lived in Grey Lynn when unimproved rating was introduced; he had not lived in other districts. Dargaville was dissatisfied with the unimproved rating system, as also was Hamilton. There was an association working to introduce the single tax or the unimproved rating system, hence v its growth. To Mr T. Davis, senr.: One man paid on the ground with improvements and the other on the land alone. That was the basis of capital values. The man with the improvements had the use of those improvements, and paid for the benefits the rating system yielded. The man with the idle section used none of the benefits, such as water and sewerage, but paid a quota.' To Mr S. H. Dwen: If a wealthy man erected a very large house he. would pay the same' under unimproved rating as a neighbouring working man would pay for his cottage on land of similar value adjoining. To Mr C. G. Downes: He had not seen definite evidences of a practice or a custom* of increasing land values under unimproved rating. The vagaries of the valuer were well known. Mr S. H. Dwen proposed a hearty vote of thanks to the speaker. It was much appreciated that Mr Shackleford had come to give the ratepayers the benefit of his experience. Mr B. McGechie, seconding the resolution, said all should appreciate''Very much the valued information given. The citizens should not take a narrow point of view. The best interest of the town was the one and essential, point for the ratepayers to consider. He was wholly and heartily in support of the retention of the capital value?, and he would caution his fellow eil'io ens against any precipitate action such as was proposed in this suggested change in the rating system. The motion was carried without dissent. Acknowledging it, Mr Shackleford said that he could not too strongly urge the citizens of Te Awamutu to continue as they were.

The customary vote of thanks to t.)i,M chairman concluded the meeting.