The Mortgage Corporation and Rating

Press, Volume LXXI, Issue 21416, 7 March 1935, Page 12

The Mortgage Corporation and Rating

The heavy fire of criticism concentrated on the clause in the National Mortgage Corporation Bill exempting from local rates Crown mortgages taken over by the corporation should show the Government, what it ought to have realised long ago, that public opinion is solidly against it in this matter. Mr Coates's reply to the criticism was a fair indication of the weakness of the case for the rating immunity of the Crown. He admitted that his original intention was to put the mortgage corporation on the same footing as the private mortgagee but said he had since discovered that the extra charge for rates would be too heavy for the corporation to bear. As the corporation is not yet in existence, that is a point which cannot be decided conclusively either way. But even if it is not practicable to make the corporation liable for rates in respect of all its mortgages, Mr Coates has still to show why the Government, either directly or through the corporation, should not admit rating liability on mortgages which have been issued by government departments. He cannot plead economy, since the £500,000 or so

involved will be charged to the taxpayers whatever happens. The only difference is that if it is paid out of government funds its burden will be more equitably distributed and an element of uncertainty w ill be removed from local body finances. The present position is that the Government is robbing the ioca. bodies with one hand and making them gifts with the other. This year, for instance, it will deprive them of £500,000 of rating revenue to which they are justly entitled and at the same time pay them about £250,000 to enable county ratepayers to receive a rebate. The transaction could with advantage be simplified. In the House of Representatives yesterday Mr Coates attempted to disarm criticism bj promises of special budgetary consideration for local bodies in financial difficulties. There seems to be little sense in such an arrangement. It is surely better to put local body finance on a sound basis than to invite local bodies to come cap-in-hand to the Government when they are in need of help.