ROYALTIES QUESTION

Hokitika Guardian, 10 February 1928, Page 4

ROYALTIES QUESTION

AIR SEDDOX’S REVIEW IX PARLIAMENT.

(Hansard Report)

Air Setldon (Westland). —Sir, I desire to refer to clause 29 of the Bill, 'rite effect of the first paragraph after the preamble is ns follows: “In respect of standing trees cut in titty county and converted from the log into sawn timber there shall be payable in each financial year commencing with the year ending on the thirty-first day of Alarch. nineteen hundred and twenty-eight, to . the County Council a levy of such amount as is fixed bv the Council, but not exceeding the sum of one penny per hundred feet hoard measure on timber so converted in that year.’

The -Minister of Lands, when speaking on this particular clause intimated that the amount would he reduced to }d per 100 ft. That is an amount which I think, is more reasonable than the original amount. I was very much surprised when I heard the Minister of Lands discussing this proposition to find tat lie omitted entirely any reference to another problem which is inseparably connected with the provisions of this clause. The Minister knows, probably better than any other honourable member in this House, that the whole question of the payment ol royalties to local bodies, especially the County Councils on f lie West Coast, lias been a burning one for a long time, and that the matter has not yet' reached finality. The provision in this clause seems to be and I tliink the Minister o! Ei„u,ii:e will realise il wav out of the ditto ulty. and we contend on the West Coast that it is a very tinlair way out of the difficulty in which the Government has landed the local bodies. To he perfectly fair and just, it would he only rigid that the whole history of the ease he outlined so that the Government may. even at thL late date, take some notice of the position in which the local bodies l.nd themselves. As far hack as 1905. by the Timber and Elax Royalties .Ul, four County Councils on the Most Const enjoyed royalties in respect ol timber. Royalties were given to. the Councils in order that they might: construct roads amt bridges whie.'i would be used in connection with the sawmilling industry. That prevailed from I9OA to 1021-22. In 1021-22 legislation was in trod need in the Forest Bill which considerably reduced these privileges. The Minister of Lands and the .Minister of Finance know, I think, the reason why these privileges ' ito in the first place granted. These pirticiilar local bodies were in such a position that they could not raise from their rateable areas sufficient moneys to construct the roads which were necessary to assist the timber industry. It is admitted that the (.rev County 10-da.v lias only one-th.rl <1 its area rateable. It was right and just that these moneys should he granted to the local bodies to help them to construct the roads, a ieview of the legislation in connection with the matter is necessary before the Government ran review the whole position. The statute governing the payment of what are commonly known as ‘■halves” is section 111(1 ol the Land Act. BIOS, which provides that.— “Due-half of the revenue received by the Receiver-of Land Revenue in respect: of royalty under any license for cutting timber or tlax. and payable into the Consolidated Fund, shall 1,0 pay, -rble to the local authority within' whose district the timber 'or llax is obtained and the revenue v.as derived, and shall he applied by such local authority exclusively in constructing, repairing and maintaining roads. Provided that any revenue received under the provisions of this section from any district where no local authority exists shall he placed in a separate account, and shall he applied fur Hie purposes alore.said under the direction of Ihe Minister or of sin h persons ;is Ik* ns«:y <ippuii,t. This section was held to apply to the national endowment lands by section l(i2 of the Land Act, 1908. now superseded by section 1. oi tin* Land Laws Amendment Art, told. That is in reference to the lands which were under the jurisdiction of the Lands "Department. To regard to this amendment, reference should be made to section 1-17 of the Alining Act, 1908. which provides lor the setting-apart of Warden’s timber areas and Land Board’s timber areas. Section 148 ol that Act reads as follows: — “All rents, royalties, and tees received in respect of tiniber-eu tt ing lights shall be deemed tci be goldfields revenue in the ease of rights granted within the "Warden's timberareas. and territorial revenue in the ease of rights granted within the Land Board’s timber areas:

“Provided nevertheless as follows: “(a) In the case of 'timber-cutting rights granted in respect of land which, pursuant to the contract lietween Her late Majesty and the Xew Zealand Midland Haiway Company (Limited), was set apart as reserves for mining purposes, the rents, royalties, and fees shall be deemed to he goldfields revenue, notwithstanding that the land may be within the Land Board’s timber-areas. “(b) In every case where, under any provision of this Act or any other Act, any Harbour Board or person is entitled to the rents, royalties, and received for mining privileges in respect of any land, such Board or person shall also he entitled to the rents, royalties, and fees received for timber-cutting rights granted in respect of such land and the same shall, in the prescribed manner, be paid over to such Board or person accordingly, and shall not lie deemed to be territorial revenue. ” Under these particular Acts that 1 have quoted the local bodies, ever since 1905 have enjoyed the privileges of this revenue. The goldsfields revenue is payable to the local bodies under section 409 of the Alining Act. 19!iS. Subsections (1) and (‘2) of that section are as follows: “(1) All fees, rents, royalties, and other moneys received under this Act or any former Alining Act in respect of Crown lands open for mining (not being moneys received for the sale of land or the leasing of land for agricultural purposes) shall lie paid into the Public Account as goldfields re- \ enue.

“(2) All such goldfields revenue shall, subject to any lawful charges connected therewith other than the cost of colleeton. be paid by the Alin:ster of Finance, in accordance with ;egalations. to the Council or Board of the county, borough, or town district in which the same was received.” From the statutes I have quoted it. -----i 11 be seen that local bodies were entitled. subject to special exceptions referred to in paragraphs (b) of section 1-1 S of the Alining Act. 1908. and subsection (2) of section 409 of that Act. to the whole of the timber revenue from Warden's timber-areas and Midland Bailwav Alining Reserves.

and to one-half of the royalties received from Land Board’s timber areas and other licenses for the cutting of timber and flax on Crown lands or national-endowment lands and payable to territorial revenue or National endowment Account. Let us now refer to a special point in regard to section 319 of the Land Act, 1908:

“It will be observed that this section’’—says Air Strauelion in his Timber Royalties Commission—“which was originally enacted in the Timber and Flax Royalties Act, 1905, uses the word ‘royalty;’ and the legal interpretation laid down for departmental guidance is to the effect that where standing timber is sold for a lump sum and not on a royalty basis local bodies are not entitled to ‘halves.’ ” That is the whole position; and I wish to draw the attention of the Almister of Finance to the point that it was not until the interpretation was given in connection with the word

“royalty’’ that these revenues were reduced. "When the Forests Bill was introduced and timber was bought in bulk the interpretation of the word “royalty,” such as I have just referred to, was such that the bulk of royalties went into the Forestry Department and were taken away from the local bodies. The whole matter was submitted in 192-1 to a Commission consisting of Air John Strauelion flint was under the jurisdiction ol the Minister of Lands—and the difficulty in connection with the interpretation of the word “royalty” was pointed out by Mr Strauelion, who, in his report, says,—

“It has been contended in the course of evidence before the Commission that this interpretation is open to doubt. and opposite opinions by legal counsel have been quoted ill suppoi t of ibis contention.”

Further on in Mr Sirauelion’s report lie states, - “|r. is not. however, for me to attempt to decide the issue- that is a matter for the Courts.”

That explains the whole ease of the local bodies. It was stated by one particular local body that in connection with the royalties it intended to light the Government. Tt is an utterly boneless and useless proposition to light, the Government oil the interpretation of the word “royalty which has been accepted lor departmental guidance; and I think the Got eminent should have the whole mattei studied very carefully. and should state what is going to he the position in the future of these local bodies. The report of Air •Strauelion goes on to state :

“"Whatever may have been the intention of the Legislature when passing the Timber and Flax Royalties Act. 1905. in regard to the basis to be adopted in computing ‘halves’ of timber and flax royalties from licenses where moneys are payable into the Consolidated Fund, it is quite clear that it was never intended that any portion of the moneys accruing from the disposal of timber in State lorests and payable to the State Lorests Account was to be paid to local bodies. ’ I contend that the Commissioner bad no authority to make such a statement as Unit, because tile whole history of this particular ease is Unit when it was contemplated that there should he a Forestry Department the then Commissioner of State Forests. Sir Francis Bell, called a meeting of the local bodies concerned, and at that particular Conference, held in Hokitika in 1920. he made the statement that the local bodies would be in no worse position under the proposed legislation, namely, the Forests Act--tban they were at that particular time. But now we find that, although the statement lias been made by Air Strauelion, be was apparently unaware of the statement made by Sir Francis Bell. Sir. these moneys have been libbed by the forestry Department from the local bodies; and. in addition to that, the obligation <>t maintaining these roads in a good state uf repair lms fallen not on the forestry Department, which is getting this revenue, but upon the sawmillers who are producing timber. I think that the right, and proper thing to do and the Commissioner of State Forests in this House has had this matter submitted to hint—is to place the whole matter before a .lodge, who would go into the position and have fbc whole question settled. ’I here is no one. either in the Forestry Department or in any other Department of State- and I even think in the office of the Alinistcr of Finance who clearly understands the problem. The timber areas are being perfectly well administered under the Alining Act and the Lands Act. but by the interpretation put on the forestry Act of 1921-22 there lias been this doubt and indecision. I do not want to make admissions, but I desire to state that 1 have been going into this question with many officers ol the ■Government ’Departments conversant with the operation ot these Acts, and 1 have gone into the matter with several .Ministers of the Crown, and I know that the matter is at the present time under the consideration of the Government. In my opinion it is unfair and unjust that where previous Administrations decided that the moneys coming from these particular lands should he county revenue they should now he diverted, not entirely, from tlie local bodies to the forestry Department, and that the obligation for keeping up the roads should be practically handed over to the snwniillers under this particular clause. Tile Alinistcr of "Lanils is quite conversant with the matter, and, as T. said before. I was astonished that lie did not make any reference to Air Strauehon’s report, a great deal of which I have endeavoured to put on record. I was not aware that that report was ever considered ; but T want to stress this particular point and draw the attention of the Alinistcr of finance to tile fact that his question of the filching of the revenue —for that is the resentful way in which the local bodies concerned refer to this question —will have to be settled finally. '1 be mere interpretation by the officers of the Government that “royalty” means one thing, while others think it means another, is not likely to lead to very amicable working between the Forestry Department and the local bodies.

The Hon. AD Downie Stewart.—Did not the Royal Commission go into that question ?

AD Seddon.—The Commission which i have referred to is Air Straiichon’s Royal Commission of 1924. In that report, in summing up these local questions, he says. “It is not, however, for me to attempt to decide the issue—that is a matter for the Courts.” There the matter has rested since 1921. and T say the matter should be settled one way or the other. From 19l)o the intention was perfectly clear that the local bodies should enjoy these privileges. The local bodies concerned are the counties of Inaiigahua. (trey. Bttller. and AVesthmd. and those indirectly concerned are the counties of Clutha, Wallace and Stewart Island. The problem has not been tackled yet. and T submit the question is one which could easily be submitted to a Judge of the Supreme Court when visiting the West Coast on circuit. 1 think nil the local bodies interested would, when Air Justice Adams is visiting Greymouth on circuit. be pleased to state their case there, and. in my opinion. Judge Adams would he a man who would finially decide the question once and for all. I think it is a pity the matter was not settled before the Minister brought down this legislation, because, as I have said, this clause practically hands over to the sawmillers the burden of maintaining the roads the cast of which should have come out of the moneys which the Forestry Department is claiming today. If the Minister will refer to that particular report and study justa few paragraphs of it he must ad-

mit that the question is one that should be cleared up at the earliest possible moment. T know, because I have represented this matter on behalf of the local bodies just recently to .Ministers, that the Government is on the point of making a decision, so T think the time is opportune for pressing the ease briefly on behalf of those four counties. 1 hope that the Alinister will take this into consideration, and that some decision will he arrived at shortly.