Manawatu Herald. FRIDAY, APRIL 9, 1880. SUBSIDIES TO LOCAL BODIES.

Manawatu Herald, Volume II, Issue 65, 9 April 1880, Page 2

Manawatu Herald. FRIDAY, APRIL 9, 1880. SUBSIDIES TO LOCAL BODIES.

As will be seen by the report of the County Council proceedings in another column, that body has passed an important resolution formally protesting against the intended withdrawal of the subsidies. The resolution was called forth by a warning from Government that Parliament had approved the Government proposal that the subsidies were to be withdrawn, and that therefore the Council were not to expect any further instalments of them. This naturally alarmed the Council, and they therefore passed a resolution in which members expressed their opinion that " the magnitude and importance of County works urgently required in opening up land for settlement is such as to claim the continued assistance of the Government by special grants, as well as the usual £ for £ on rates raised in the various Counties, to enable these works to be carried out with success." We heartily agree with the views embodied in the above sentence, as to the necessity of aid being imparted to prosecute "works urgently required in opening up land for settlement ;" nevertheless, we do not believe the Government will accede to the desire of the Council and propose a renewal of the subsidies, nor do we think a renewal of the subsidies in their present form desirable, speaking from a Colonial point of view. As to the intentions of the Government we will quote the views expressed by the Colonial Treasurer on the subject in his Financial Statement delivered on November 17. He said : — I will first ask the Committee to turn f o a moment to the table of the estimated expenditure (Table E), which, upon examination, will be seen to contain one very large item of £275,620 for subsidies to local bodies. MaDy honourable members think this contribution in aid of rates wrong in principle, and many more think that, considering our present financial condition, payment of it should cease at the end of the year. lam one of tho3e who think it fair and reasonable that the State, as the State, should contribute towards the coßtof keeping open and improving the means of communication throughout the country, and that it is altogether a mistake to suppose that by striking this item out of the Estimates the people of the colony will be relieved to that extent from taxation. To all those who have given any attention to local subjects it is well known that an amount equal to this large sum must be raised for local works ; striking this item out of the Estimates will therefore be no real relief to the country at large, nor will it leave more money in the pockets of the settlers ; but the question as to the fairest and easiest means by which the necessary amount can be raised is no doubt open to discussion, and is well worthy of the serious attention of this House. The Government, however, have come to the conclusion, after careful consideration, that a better means than the present of raising this money can be devised, and they will therefore recommend that the subsidies next year should be discontinued. Should the House deter--mine to retain them, taxation will have to be proportionately increased. The important question of local finance is far too large to go into this session, therefore I will say no more upon the subject now, except, Sir, that the Government fully recognise the fact that it is their duty to submit to this House, upon its first meeting next session, a scheme which shall place local finance on a, satisfactory and something like a permanent basis; and, by satisfactory, the Government understand' placing local bodies in such a position as will enable them to obtain as far as is possible sufficient funds for all neoeßsary woi ks,while drawing a broad and distinct line between local and general finance ; and such a scheme the Government will endeavour to mature before the next meeting of Parliament. The above quotation should reassure Councillors and settlers on this important matter. It is not the intention of the Government to deprive the local bodies of State aid, but merely to change the manner of raising the money and alter the form in which it is paid over. Major Atkinson distinctly recognises that " the State, as the State, should contribute towards the cost of keeping open and improving the means of communication throughout the country," and expresses the opinion of the Government that " a better means than the present of raising this money can be devised." This will of course be known when Parliament meets. The withdrawal of the present subsidies will probably pave the way for a better and more equitable distribution of the State aid to local bodies. The present method of distribution is unjust and impolitic, for it starves the weak, and fattensthe strong. By a provision of " The Financial Arrangements Act, 1877," it is not actually necessary for a County Council to strike a rate, in order to obtain a subsidy. Sub-section 1, section 5, of the Act quoted, provides that there shall be paid as subsidy " To each County Council a sum equal to one pound for every pound of general i rates so received by such Council, or equal to one pound for every pound on the total of the sums so received by all the Road Boards or parts of Eoadßoards within thecounty, whichever of such two sums is the greater." It will therefore be seen that should

the County Council strike no rate, it would still tinder the old system, receive a subsidy of £ for £ upon the rates received by the Road Boards within its boundaries. This was actually done, and led to what we can only characterise as monstrous injustice. A brief examination of statistics will prove our assertions. The County of Selwyn during the year ended March 31, 1879, did not raise a single penny from rates. Nevertheless during that period it received from Government the sum of £17,710 10s 6d. In addition to this £17,710, the Road Boards in the same County received during the year £51,063, so that £68,778, went into the single County of Selwyn during the year ended March 81st, 1879. This sum of course was partly for subsidies on rates received during the last half of previous year, when, with an eye to the future, the Road Boards rated themselves heavily. At the same time, during the period in which this sum of £68,778 was paid over by Government, the district ieself— including both County and Road Boards — raised in rates only the small sum of £8,309 11s 8d ! What was the result ? At the close of the year the Selwyn County Council had a credit balance of £28,262, without raising a penny from rates ; whilst deducting the liabilities at date of balancing from the assets at same date of the Road Boards included in the Selwyn County, we find they possessed at March 31 the round balance of £158,158 ; so that adding the balances of the Road Boards in Selwyn to the County Council's balance, we have the credit balance on 31st March, 1879, of £186,420 ! During the year referred to none of the following Counties received a penny in rates — Taranaki, Wanganui, Hutt, Wairarapa East and West, Akaroa, Selwyn, Waikouaiti, Taieri, Bruce, Hobson, Rodney, Eden, Manukau, Corojaandel, and Waipa, notwithstanding the fact that they all received large subsidies, amounting in the aggregate to £ 184,945. The fact has been that in the Counties mentioned the subsidies on Road Board rates have been made to keep the works going which should have been paid for by County rates. No one can honestly say such a state of things is just, and we would fain hope that the Government will in their new scheme propose some method by which a fair and equitable distribution of public funds will be made. , There is another aspect of this question. Any Colonial scheme for subsidising local bodies must be of a general character, embracing every County and Road Board. But it is evident in this connection that all districts are not alike. In the North Island, the Crown still retains vast tracts of country in its hands, and roads are few and far between ; whereas in the South Island, under the Provincial system, the land was sold and the money used in making roads. Then, again, whilst in the North Island there are long lengths of County road lines, causing a large expenditure for maintenance, the South Island Counties are in many instances enjoying lines of railway, thus saving them heavy expenses for maintenance. Hence those Counties need no rate to carry on their public works. Their Road Boards levy a rate of say one shilling in the £, and the subsidy the County received on this rate kept things going. In view of these abuses, and of the promises contained in the Treasurer's statement, we think the protest of the Manawatu County Council was uncalled for. Although in their present form the subsidies may be abolished, we believe good will result. To quote Mr Sanson's resolution, " The magnitude and importance of County works urgently required in opening up land for settlement " is an argument sufficiently strong to ensure assistance from Government. The Government recognise this, and have lately given large grants to the Manawatu Council for road work in Kiwitea, Fitzherbert, &c, and whilst our Council would have done perfectly right in pressing its own claims on the Government, we think that the higher ground it took of protesting against the withdrawal of subsidies from all local bodies was rash and impolitic. The withdrawal of the subsidies from the rich Counties in the South Island, which have railwaysjand roads that were formed by the Colony or out of the land fund, will probably enable larger amounts to be handed over to such districts as Manawatu, which are thinly populated, and contain a large area of unsold Crown land.