LIABILITY FOR RATES

Press, Volume LXXI, Issue 21416, 7 March 1935, Page 14

LIABILITY FOR RATES

clause in bill retained UNF AIRN ESS ALLEGED EMDAUItASS-'H-NT OF IX)CAL DODIES [Fr-m Oi;r Parliamentary Reporter.] WELLINGTON. March G. The (Government's intention to tile Morten ye Corporation from i. rul' body rates was subjected to criticism in the House of Repiey.cnfati\cs to-day. The clause in the Mortgage Corporation Bill giving to tiie corporation the same immunity to rating as that enjoyed by the Crown vas attacked, and the Minister for Finance (the Rt. Hon. J". G. Coates) was asked to delete it. A discussion developed on the subject of Crown liability for rates, and several Government members joined the Opposition in criticism of the Minister's attitude. Mr V/. J. Jordan 'Lab, Manukau) claimed that the clause was unfair, as the same benefit was denied to buildsccicties unci other inslitutions in which private money was invested. Tee exemption of the corporation from j-jics <--n properties reverted to and M t;- the corporation for the full r mount of rent imposed further derr.ands on other ratepayers in the dis--frjrt. New Zealand was most unfair declaring that the Government Should nut pay rates to local bodies, f-pecioHv on rent-producing piopcrt Ti-.o British Government had i-ureed I" pay boioughs, urban and rural districts, a sum equal to_ what ■would be assessed as rates if the Crown were liable Tax Trading Departments? Mr H. S. S. Kyle <C., Riccarton) said •fnat Iho bill would bring some relief to local brc'.i'f.. Once a property had iallen into !i>.- ' ds of the corporation it appeared 'li;.t rates would take priority over ether charges. Mr Kyle suggested tint in order to assist their finances local authorities, such as borough and city councils, should tax their trading departments, which were :iol paying rates, but were competing V/ith oilier concerns that were rated. Mr P. Fraser (Lab.. Wellington Would you apply that to tower boards throughout the DoMinion"

Mr Kyle: Yes. to any trading department in competition with other trading concerns. I believe it is the V.-.y out.

Mr C. A. Wilkinson i Ind., Egmont) urged the Minister to make some compromise. The bulk of the local bodies in the Dominion were opposed to the present system, whereby the Government escaped its just liability 2or rates, rod he even knew of one 3ocai authority that had advertised dwelling sites for sale at low prices po long as no Government loans were obtained on any buildings that might erected on those sites. A voice: What local body was that? Mr Wilkinson: The borough of

Patea. The leader of the Opposition (Mr 2VI. J. Savage) urged members to vote against the clause. The Minister for Finance had said that he always made tale landings, but he thought that this time he was going to land in a Bwamp.

Mr Coates: It is possible to make B .safe landing in a swamp, you know. Mr Savage: Yes, but it might be chi'ficult to get out of it. Mr H. M. Campbell (C., Hawke's fiayj said that revenue had to be tollected from one source or another, End if the corporation were made liable for rates it would save demands being made on taxpayers. ''Why not get on to trading departments?" he said. "A considerable amount of revenue could be collected from them. They are in competition "with local traders, and besides not paying rates they are underselling those who do." A Minister in Defence The Postmaster-General, the Hon. 'A. Hamilton, said that the discussion had centred on whether the State ivas liable for the payment of rates, but the whole point was whether the clause in the bill was just or unjust. He thought it was a perfectly fair proposal. It was a step forward as it '■would aid local bodies in that the corporation would pay rates on all mortgages for which it assumed full liability. Mr J. N. Massty tC., Franklin) said that when these mortgages were handed to the corporation they should at least be classed as private mortgages and carry rates. "I would assume," he said, "that the Government is not desirous of taking over all mortgages in New Zealand. At the Same time, when you take into consideration that State securities are exempt from rates, while the private Investor has to find rates, it will be jseen that the position is all in favour pf the State departments. Consequently the private investor is not jgetting the same rate for his money g.s the State. All securities handed to the corporation should be liable for ■yates."

Mr Coates: Then what would happen would be this: All mortgages in Etrrears to-day would remain with the State departments. That would be alternative. Mr Massey: All we are asking for Is that these securities should be liable fcr current rates. IVIr Coatcs's Undertaking An undertaking to review the whole problem of local body rating, and to Investigate the possibility of including j.n ihe next Budget some provision for the assistance of local authorities in serious difficulties was later given by Mr Coates. For a whole afternoon memßers had been urging the Minister to subject the Mortgage Corporation to responsibility for rates; but the J.linistcr was unable to comply with their requests. "All I can do at the moment." said JUr Coates, "is to propose discussions with the local authorities, with a view to dealing with the most difficult instances in the next Budget. I am prepared to go closely into the matter, End to see how far it will be practicable to assist those local authorities finding difhculty with mortgages reVerting to the Crown, or where prior )<=ases are involved: but at the present Etage it is just making it difficult to demand that the Government should jeccept this or that liability." Mr Coates referred to a statement be had made some time ago, that the Mortgage Corporation would become responsible, but he said he had since been advised that the cost to the Crown would fail so heavily on the Budget that it would not be possible to give the relief asked for by certain eections of the community, either in taxation or through other channels. Bone sections were certainly down to 6 point from which they must be relieved sooner or later. Mr Jordan: But would not our proposals relieve the ratepayers? Mr Walter Nash (Lab., Hutt): The Crown is morally liable. Mr Coates: Legally, the Crown is laot liable.

Mr Jordan: In Great Britain Ihe Pr>own recognises its moral obligation. . Mr Coates: This legislation brings a \|preat improvement to the position of