CORRESPONDENCE

Evening Star, Issue 20138, 1 April 1929, Page 11

CORRESPONDENCE

CITY FINANCES TO THE EDITOB. Sir, —In your issue of the 28th ult. von publish" a, report on the above by the town clerk, and you head the same with tho following:—* Reduction ol rates recommended.” ‘ Illuminating report by town clerk. ‘‘Dunedin s favourable position.” Reading through the report very carefully, 1 ail to see wherein you can justily the above headlines, for it is evident that tho collective rate is an increase on last year, and wc must take the city collcctneh. It is no doubt true that a lew individuals who have not had the capital value of their property increased will pay a reduced rate if the recommendation of the town clerk is adopted, but the rate as n whole is being increased, as the figures submitted will prove. A rate of 2s Id on last year’s valuation equalled £126,500, while a V ,tc this year’s valuation equals £129,it0, a difference of £3,297. Jt is true that the amount per £1 has been reduced, but the capital value has been increased more than proportionately, therefore there is a slight increase “An dlaminating reportshoukl liavo reau “ Dunedin’s serious position,” for it is obvious, reading the report and going back ten years, that wc arc in a most unfavourable position, due to a great extent to the policy adopted by our council. To prove this contention allow me to deal as briefly as possible with our finance, and the policy of tho council. Taking the general account for the vear 1919 and 1920 (ten years ago), wo find that Hie total revenue for was £120.996; expenditure, £120,744; excess of revenue, £252. Tho amount paid for interest and sinking fund was £16.126. The loan capital of our four trading companies was £1.208,738, ami the gross profit on the above _ (alter allowing for renewal and depreciation) was 9.13 per cent. For tho year 1927 28 wo find Hurt the total expenditure was £230.632: revenue £223,443; excess of expenditure over revenue, £7,189. Tlio amount paid for interest and sinking fund was £51,469, or 22.32 per cent, of our total expenditure. The loan capital was £1,794.900, and tho gross profit on loan capital was 8.98 after allowing for renewals and depreciation. For tho year 1929-30, according to the report, wo find that we shall he” paying the grand sum of £57.360 for interest and sinking fund. This, sir, appears to the writer a very serious matter, for wc sec Hurt in 19f9 and 1920 the amount tor interest and sinking fund was £16,126, or approximately 13.33 of our expenditure, while in 192930 it is £57,360, being 23.44 of our approximate expenditure, .showing a percentage rise of 15.11 per cent, for interest. It is obvious that, as tho amount paid for interest increases, tho percentage' amount left for public work decreases, leaving the city at this juncture in a serious position. A Jew words at this juncture on the method adopted by our council to raise its revenue will not be out of place. What is called the general account fund is composed of monies derived from direct rates, transfers from trading concerns (trams, water, gas, and electric), rents, fees, and incidentals, licenses, etc. The amount got by direct' rate is approximately G 5 per cent., and 35 per cent, by indirect method. Tho policy of the council is to charge tecs for services rendered by our trading concerns, licenses, rents, etc., at as high a rate as possible, allowing the council to raise a big amount. This, in effect, means Hurt Hie users of_ these services are charged a higher price for services rendered by the council than they ought to be charged. This allows the council to transfer a part of its increased profit to tho rates. As the various trading concerns are not utilised by all the people, it is obvious that those not using those services pay for those flint do. This is quite unjust, and it is more or less this policy that has brought about the condition of our town to-dav.

Tho writer, when sfanding for the City Council in pointed nut the injustice of raising tram faros, etc., and applying them in tho manner to help tho rates, shotting that sooner or later we should roach a, stage where u’c should suffer as tho result. The tott’a elerk tells us that we are now paying in loan interest 8s 1)J<1 out of every £T contributed to the general fund by direct rate; further, that this year we shall not he able to carry over from tins trannvay account the same amount as previously; and In.; informs us that this must be made up from the gas and water account, or by an addition to the general rate, or by curbing the expenditure side. This means that if the gas and water cannot bear the burden and the general rate is not raised necessary public work tt’ill have to lie left undone, and a. fruv more men thrown out of employment. Sir, the prospects at this juncture for tho tt'orking people of this city are. anything hut bright, unless the council adopts a sound and fair system of rating. There is much necessary work to ho done. We have our drainage system that must Vie attended to at once; further, our water supply is in a had way: and it behoves us to dual immediately with this question in the interest of our citizens’ health. This, of course, will mean money to ho found, and it can only he, found by borrowing or rates, and the former, in its last analysis, means rating. If it is done by the same policy as lias been carried out during the last ten years it means that those persons who arc now receiving the benefits of an unjust system of rating will lend that whieh they receive indirectly from the council ami be made a present of interest, thereby augmenting the amount of interest to be, paid annually. It behoves tho council, at its next meeting, if it has tho interest of tho city at heart, not. to adopt the recommendation of the town clerk, but to refer it back for further consideration and to revise its policy in such a manner that the application of our rating system will be based on tho principle of payment _by the individual or individuals according to the service rendered by the, city.

lu conclusion, may 1 say that this means a revision ol' chorees for our gas, electricity, water, and train fares. .At the present juncture these concerns are making big profits, and if _ prices are reduced to the users it will_ enable the council to raise the direct rate and enable those that benefit from reduced charges to pay a bigger direct rate, in effect bringing about a just and moral principle—-paying for services rendered—and further placing the burden on the hack of those able

to bear it. I realise that taxation.has always been a difficult matter for any body of men to deal with, but it behoves the council to deal with the matter, for there are people suffering as tlie result of the policy adopted. I appeal to the council as men to try and picture a prosperous city, composed of citizens well fed, well housed, and well clothed. This can result by taxation being applied fairly and equitably.—l am, etc., C. M. Moss. March 30.