TIMBER ROYALTIES’ REVENUE.

Hokitika Guardian, 15 February 1923, Page 4

TIMBER ROYALTIES’ REVENUE.

AFFECTING LOCAL BODIES

The following report troin tlie Spccinl Committee njipointed by the S\ t stland Comity Council was received and iidopted lit 'I uesday's meeting of the Council : INTRODUCTORY. The question affecting revenue from timber royalties '<> local bodies interested m tlie matter is a simple one of local income. 1 lie districts concerned in the matter curry forests more or less extensive. The forests have been in existence throughout and the products from llui forests produced within the districts have. created local industry and trade. The forests are regarded as a local asset and are worked by private enterprise. The local bodies bold they have an inherent right to the revenue derivable front the product within their boundaries and tile decision of Parliament following the debate on the Timber and Flax Royalties Act, 1905, established the right of the local bodies to the income. That was the I’ai lianientary decisii n and it was an equitable one. too. lot the reason that ‘lie sawmiliiug indus-

try ini poses on local b dies considerable liability in respect to the upkeep of roads :■ nd bridges and access tracks Indeed, it is the invariable rule where limber Irallic results that the stability of bridges have to lie increased ami the roads made to a superior standard to < urn the irallic. Since modern ,i,' liu.!-. of uiiickcr transport have Lccu 111 i‘.-od I ibis liability is an tie'll a-iug i.iic, till at the present time many local bodies have been bard i res .-f| to maintain the roads and midges 111 all equal to the volume of roe heavy traffic, ami tint I in several invinnecs [he cost has been beyond local means and loads and bridges have had to be closed to flic heavy timber traffic. This experience emphasises the necessity there is for local

j bodies receiving an adequate portion lof tbe royalties revenue so that witli- ! out unduly hampering the industry the ; roads and bridges may he kept in 1 order equal to requirements. ! WF.STi.AXn COFXTY CASK, j The various localities arc dilieientIv affected by the question ol inyrilities revenue. Westland County is i largely a vast forest area, possessing a ! store of timber lands which will last j for many decades. There arc. lor iu- | stance, something liki a million acres of State forest or provisional State | forest r'-cr. at ions in Westland County ! this expansive area of reserves provdj iug a store of timber praetii dly I■'r ! all fmii'. and being quite apart from j the saamilling areas in occupation and ! j lie adjacent reservation tights to lie j added to the milling; area- a» tilii'er | cutting pmi.reds. Timber cutting in 1 M.'es'T"Mil C'Oo.t- in - !(• (be i. ;l : |f. [ I.lr do Ira I lull., i 1... i ...ots 111 Its 31) I n 11' v . \‘. u l( || .1 ai id lllg tjoit i till)lter milling has been going on ed- • jaeeut to the settled | ortion of tXe I County for over 50 years, the area 1 milled i. comparatively trilling in relation to the standing hush sii|| untouched. lint tlie juncture is just being rearhcil when as a result of tlie j diie.-i means of transport: by the Hast I and West Const railway the timber ! areas of Westland more readily niill- | aide will be brought into more direct | touch xviLl l tlie markets and the o dust ry must receive a con.-id I able 'IIli;i. .\dil to this the fact that pri- ! vale enterprise o.t late doubtless in ntieipalion of the stable market opening up by rail, is extending iron fra e- ; ways in various diicriions to link .i*. I with the railway line. Tlie timber ! trade in Westland County fur lung years to eume will he assured beyond 1 all doubt and in fact must be a growing rather than a diminishing quantity. II is at ’he moment when this '■better outlook in regard to an improv- | ing milling era is in sight, and the , County revenue would lie most licne- . fitted from its h.eul natural resources, that the income is being taken from the Council by reason uf the not ion u I policy whieli is being enforced by the Forestry Department. WESTLAND '■ OL'NT Y ROYALTIES REVENUE. The revenue tlie Westland County has derived from royalties is as follows for the period 1906-1925. 17 years; Hoyultios revenue per Land Board payments £25,201 8 5 Royalties revenue (being arrears recovered on a/e .Midland Railway reserves- -three pay-

This is :m average payment over the 17 years of Cl.Ool) tier annum, and it is contended Unit this amount, from now on would materially increase for ;.u ind. iinite number of years. The Council's local -evenue last year was £12.702 of which £2.300 was derived from royalties revenue, or 18*’.'. of the total loeal ineonie.

It is contended hr the Council that the £2,107 arrears recovered, a.s detailed above, is nut an equitable sunt in relation to the revenue involved. The level position affecting the revenue was gone into by eminent counsel in years past and there is no douht in the minds of members of the Council

that the amount payable should he a much larger sum. On that firm conviction it is contended also, that full particulars of how the amount was computed should he rendered available to the Council (as also to other loeal luxli s which received adjusted payment-).

This information has been denied h.i iierto. j iA RECENT IvREOEDE>:T.l v REOEDE>:T. ■ The general 1 riueiple that local bodies are entitled to a share (at least) j of revenue from local forest products, is borne out by the legislation of last session. I'nder section 31 of the lieserves and other Lands Disrosul and | Public Bodies Empowering Act, 1022. ; there is the specific authorisation of j payments towards the upkeep of certain roads out of public revenue derivi ed from a license to mill timber granted to the Omatano Timber Coy., T.td. , The amount fixed is up to one-third of the revenue actually received, and this adjustment and allocation is a pre-

cedent which can hardly he overlooked i in other localities where a similar state ] of affairs prevails as in the case of < the North Island district. Tlie situa- i tion recognised by Parliament last < year seems to bear out the oonton- ■ tion that local bodies have a fair claim 1 to royalties revenue accruing within their districts for the purpose of applying same to administrative costs which are necessarily affected by the industry carried on within the jurisdiction of the local body. OFFICIAL RECOGNITION OF CLAIMS. It js submitted that both legally and equitably the local bodies have an undoubted claim for recognition. Eminent counsel have given opinions in Favor of the legal claims, and the equitable claims ol the local authorities have been freely admitted by Hon. Ministers on different occasions extending over the many years the matter has been under consideration. As regards the official recognition of the claims, the remarks on page 285 of ’/The Estimates of Expenditure for March I 925. (Consolidated Fuad)” is worth noting: Vote 54. item 61—Midland Railway Reserves: Refund of ! timber royalties to local authorities, . 25,850. Tile departmental note is as follows : “Owing to a misunderstanding rents, j royalties etc, derived from Midland . Railway Mining Reserves have been treated as Territorial Revenue (one--11: ilt only of which is payable to ioj cal authorities) instead of as Goldfields Revenue, the whole of which is payable to local authorities.” Then 101, , lows an analysis of the payments to , the four West Coast Counties covering , the £5.8511 7s hi involved in the I’ar- ] lianientary vote. It clearly establish- [ ed the legal position the Westland r County Council lias been pressing for | since 15 D!.

I A CONTINUOUS CLAIM. There is one important aspect of the matter relating to past or old claims, to which a reference might ho made. It has I cell said from time to time that the old el aims are not legal claims in that they are governed by the statute of limitations. That | leaks naturally subject to tlie legal lest under the common sense view ol the aetual condition of the payments, which are a continuous process and not a determining payment at any pciiud. Besides, on the. vexed question at issue the Government does not supply a clear statement of the revenue as to the actual receipt, merely stating a lump sum. so that the local bodies have not the opportunity of dote ‘mining whether (>■• not. they receive all they are entitled to. The whole matter lt’-s Ic'eM so obscured as far a> detailed information to the local bodies is concerned. tli'it the heal bodies have for many years past, pressed for an enquiry to determine evm-tly bow the itii nine v. as hidng ullcted but so lar without avail, ,• etiou 10 Fmatu c A l . !’>_’! orloM ...me C‘. p 1 u.. ..i t "lnlili-'.ioo to ennooe as < lo - 'll iv. venue surf, e-eel by local a uthoritic'. being still a. dead letter. AX IMPORTANT DISTRICT INDUSTRY. As In the extent of Hu- s.iwmiiling industry in Westland County, there must be fully forty equipped sawmills ranging through the district, which iniliciit.es that milling is an important seefioii of the local industry. t.hile there is a large ca; ital investment, and the output is capable of considerable increase as market requirements call lor increased production. It lias F, on emphasised already thai t’:e industry is de-line.l to be an iiuiea.-iug one whieli justifies (lie action of the Council in seeking that fair measure of consideration and Iren Intent til keeping with the resources and requirements of the district to deal adequately with the demands on local revenue in providing facilities for suitable transport. local taxatiox heavy. The reports of the Forestry Department have indicated that Westland l oimty contains the main store house of tlie Dominion's timber supply for tbe future, lit tlie ordinary eirroin- • lai.e the district would derive a very large income from royalties toventte lor tlie future. Fntlt i the Fore.-- : try policy that income is to be lost io ! the local body which means the pen-| raising of the people who have looked forward, always to a measure of relief from tin stored assets of timber Mention has been made earlier that j the total local revenue last, year was , £12.752. The total local rates actual- s !y collected for the same period was i £6.186.’ so that (be ratepayers found over 48}-"/. of the Council's total income by direct taxation. It is submitted that this is tt very heavy impost for any did Tibet to heat, and the fact that tiie people contribute so rcubst n-

tially to local requirements should he borne iu mind iu relation to the consideration equitably due to the local body in regard to so valuable a source of income as will le |o-t. to the ratepayers by reason of the appropriation of royalties revenue for State purposes. The revenue is being taken a- a matter of national policy to benefit the Dominion as a whole. That being conceded, the section of the people which is being penalised for the purpose, should have at the !i.lnds of the country that liberal and fair-minded measure of treatment which the circum-

stances undoubtedly warrant. The people of Westland County should not be iKsnuiised for all time as the forestry policy undoubtedly penalises the district without financial relief being provided as a quid pro quo for the legal appropriation of the resident people-’ rights.

GENERAL HISTORY OF THE CASE. Following a conference of local bodies held at Greyrnouth in Decomb; r e.i last- year, at which the question of hack revenue from Royalties and the future revenue a.s applicable to the West Coast Local Bodies interested

was concerned, it was agreed after easeful discussion that the matter Intel lvacfit-d such a stage that direct representation should be made to the Governni mt of the day as to what st'-ps should be taken, first in respect to past revenue accrued which has never been fully disclosed, and second, in regard to the future revenue whi- h is being nbsorlied by the Forestry Depa: uncut and lost to the T.oeal Bodies. For the last ten years the Westland County Council has taken an active part in bringing under the notice of the Government the disabilities from which it has suffered from failure to receive whnt it considers its fair dues from Royalties and Rents which have

aeerued to the Crown for several years prior to 1913. About that time it became known that the Council was not receiving full revenue from this source, and as tlie matter apparently involved I some question of the Council’s legal j claim, the whole position was submit- j ted to counsel with the result that i three separate opinions were received : upholding the Council’s attitude in the claim it had all along contended to be its honest due. Late in 1915 a deputation from the West Coast Counties waited on the Prime Minister in Wellington, being introduced by Mr Seddon, Mendier for the District. Mr Seddon was chief spokesman and outlined the position for the Hon. IV. F. Massey and before Air Seddon bad completed his statement to the Prime 'Minister. ATr Massey interjected that the Government did not have any intention of taking

t-he Royalties from the local bodies. This declaration was received by the Deputation with great satisfaction. Before it was possible to arrive at a satisfactory adjustment in the revenue account, war broke out and that mcessitated and caused considerable delay in regard lo the adjustments of the account, but tlie local bodies made repeated application for consideration in accordance vith the legal position and the poultices made to them. tu lie interim two payments were made to the 1.." cl bodies. but tlie hands Depart iuoiu declined to supply tbe details as to how the amount was made up. The local body has contended all along it has not received, mil is not receiving, the full revenue which it believes it i:; entitled to.

Notwithstanding the tenewed efforts of this Council to have the adjustment asked for made during the period of the war. no attempt was made by the Government to meet them in the matter until 1918, when legislation regarding State Forests was enacted, whereby the revenue of local bodies in respect to eorlain forest areas was appropriated lo the Forestry Department. Tin-. legislation was passed u:t lout any public notification or any opportunity being made for local bocli." to consider the same. In in lit For F. D. Bell as Minister in charge of the ‘Forestry Department ■. iso.il Hokitika and had a public deputation at which the district was thoroughly represented l>v—all local bodies and industries concerned. Tu reply to the Member for West land Sir Frailei> stated that in his opini m the finance of the local bodies alfeeteii by the loss of revenue from Royalties should he adjusted. It is to he regretted that it)) to now no attempt has been m.ob mi the direction of giving redress i the local bodies mil n il list muling lII’ promises Ihnt have been definite!,' made in regard lo the representationTIIE ('DM MISSION REQUIRED. I Tider the Finance Act in 11)21 S ' noil 10 >e eve inti a: mad'- lor Do .tutor Of . I,:.".I f'"!iom lon toiiq tills; into I'm qii.o-Mim ot i’‘V”U"i to he a! loea 1, 1 <1 to tile local lies No al tempi has made to set tin (' ‘inmis ion up. nl tbe I ’rime A! i nistor w hen aj p'-al il to La excused (1. inaction on the grounds that luii"> nr; not av.'dlnhlt to cover I he cost ol th ('ommisHon. What i- ile-ired m I hi connection, ate facilities to the In-;;' bodies ill their respe t i Ve < 1 if f i- 'ts tI'lieek or peruse the ligures whieli tin 1 iepartment may ' "tnpih . lit I tie ptr" t *'e Depart mein has from time to titin anirod at certain ligures lo adjust t hr allocation of reel into to the local bodies front the Aliilland Railway I’i’stV"-:, These figures have had to ho accepted bill v .il along 't lias la on f It that they are not ill accordance with tie complete inferpiel.ation o! the law as held b v the local bodies, especially 111 regard to rents on rosenaliens being treated ultimately as goMli hL revenue | when brought to credit as part payment- for Royalties. It is believed a I large sum is involved in this legal is- | sue. but t be Depart incut lias novel given tlie local bodies satisfaction on i he point. The compiled statement has had to be accepted as a lump sum and ail applications for details lor the compilation are refused. A I*l*ol XT AI EXT OF ADVISORY BOARD. There i- a. provision under the Forestry Act also for setting up an Advisory Board upon which local bodies were t,o have representation. This Board has never been set up, ami in the opinion of the local bodies whieli have so much at stake with regard to the Forestry policy it is highly essential to have the Board set up as soon as :

possible with provision for periodical meetings. THE REQUEST TO GOVERNMENT. 1 It is desired therefore that steps be j taken to set up : (1) The Commission under section 40 of the Finance Act, 1921, to determine particulars (a) as to past royalties and the claim that the local bodies have not received the amount legally and equitably due. and (b) as to the future revenue lost by reason of the Forests Act. and the provision to be made to replace same. ■2) The Forest Advisory Board under section 14-17 of tlie Forests Act, 1921. W. ,] EFFEIES’. County Chairman. ; Hokitika, February stb. 1925.

lUPUt-v JSor’lMill in') 1 M i.y 2i>th i ifi'i id 0 !i)15 i Vc’r i.-iiii 116 ■1 11 1922 IDS IS 2,1 or is £27.099 I !'