Mr Gray defends ‘rates burden’

Press, 11 April 1979, Page 6

Mr Gray defends ‘rates burden’

The “burden of rates” was) »n overworked phrase that; distorted the real situation.' the Town Clerk (Mr J. H.L Gray) told the Christchurch;' Rotary Club yesterday. “It is one greatly beloved; of leader writers." he said. I “and a phrase into which) tome elected Councillors; regrettably lapse, as if from; force of habit. "With the greatest respect, I believe they should; know better." The only incredible thing about domestic rates was) that they “are as low as! they are." said Mr Gray. Even though the local' government financial system was inequitable — leaning, too heavily on property rates and not getting reve-) nue-sharing support from[ central Government — the average Christchurch resi- 1 dentia! rate this year was only $247. Compared with the cost of two glasses of beer a day: ($248) and a daily packet of cigarettes ($248). that annual: rates bill was a reasonable; price to pay for such services as water, sewerage,; stormwater drainage, parks, libraries, rubbish collection/ and city streets. But New Zealand needed a system of revenue sharing l similar to Australia’s, where 1.52 oer cent of ail personal • federal income tax since

11977 had gone into a grants! ifund for lower government; ; levels. That would be inlcreased to 2 per cent over) ;the next few’ years. I “What is certain is that if) b r o a d e r-based revenue! I sources are not made availi able to us. either there will ! be larger increases in rate ; levels each year, or a I marked lowering in the level) i of local services.” Mr Gravi (said. Some rates reformers) were saying that rates must [ not increase at all. but "how) ;can any one item of ex-1 penditure be static” in times jof inflation? “What did these rates reformers have to say about < this months’s 50 per cent i rise in the price of milk, or) ■ the 10c added to the price of) butter? Or the extra cost of electricity? 1 didn’t hear a) word.” At the new electricity prices, the average city; household would pay $293 a) year for electric power, almost $5O more than the ; rates bill. ; “Many so-called rates re- 1 ; formers are using no facts, [but mere emotion,” Mr Gray said. “There is no logic, iusitice or sense at all in singling out rates.” A “Proposition 13” kind of ! tax revolt was unlikely in 1 New Zealand and unjusti- i fied, he said. Incomes in the t

,1 United States were considerably higher, but the relative scale of State and local: ) taxes was higher again. i ; “On average, we pay less) | than $5 a week per house-1 !hold” for services in Christ-: church, Mr Gray said, “and I'll wager we would think; the sew’erage system alone | worth this, were it dis-1 (connected and reconnection [had to be paid for.” ) Local body rating as a) percentage of private disposable income — money) (available after taxation — i “had varied little over the 'last 25 years. It was 2.671 per cent'in 1955. rose to a high of 3.23 per cent in 1970 and was down to 2.97 per) cent in 1976. ) "This consistency is really) (proof of the effectiveness of' I local government manage-1 I ment,” Mr Gray said. Spend-) ling levels had been conjtained in real terms. That did not mean that) (those out of work and on low incomes did not need) help in meeting rates bills; and other expenses. He could appreciate that; local taxation, closer to the) people than central taxation,; was a more politically sensitive and emotional issue “However, emotion which) has no regard for fact is an) insubstantial basis for argu-; ment,” Mr Gray said.