THE WITHDRAWAL OF THE SUBSIDIES.

Manawatu Herald, Volume II, Issue 108, 20 August 1880, Page 2

THE WITHDRAWAL OF THE SUBSIDIES.

♦ Subjoined is the letter despatched by Mr Maoarthur (County Chairman) to the Colonial Treasurer, protesting against the withdrawal of the subsidies, in which it will be seen he makes out a very strong case in favour of 'continuing them for at least another year. We also publish a memorandum whioh Mr Maoarthur has kindly furnished to us, in which he deals with the effect the proposals of the Treasurer re rating Crown and Native Lands would have on the finances of this County. The letter and memorandum are exceedingly instructive, aa ehowiner tbe manner in which the North Island Counties will be affected by the Government proposals : — Letter to the Colonial Tbeasubeb. The Hon. the Colonial Treasurer, Wellington. Sir, — I am instructed by the Manawatu County Council to represent you the difficulties under which they will be placed if effect ia given to the proposals affecting the local bodies contained in your Financial Statement. The power to rate to 2s in the £ cannot possibly be exercised in this County. At present a Highways rate of Is is imposed throughout the greater part of the County, and aleo a County rate of Is over the whole Connty. These oharges, together with the property tax, are already felt oppressive, and no assistance to our revenue oan be looked

for from additional rating. The proposal to assist local bodies by grants in aid of 75 per cent, of tho amount required on main roads,provided the local body baying oharge of suoh road provides the other 25 per cent., would seem to perpetuate the worst feature ef the subsidy system, that of " To him that hath it shall be given," and would result in the wealthy local bodies in the South Island, who alrealy hold large sums of publio money uslessly locked up, obtain ing a still further errant from the Public Treasury, while the needy Councils and Highways Boards, — needy because their necessities are great through the amount of new country they have to open up,— would be left in such a condition that men will be reluotant to retain or accept the thankless position of a member of one of those bodies. In this County, our revenue will be reduced by considerably more than one half, and the remainder will not suffice for the mere maintenance of roads, ferries, _0. 1 he withdrawal of the 20 per cent of land fund will prevent us opening up the districts whence such land fund, ia derived, and the settlers in districts where the roads are not constructed will have just reason to complain that, though rated, no portion of the rates is likely to revert to them, aB the whole revenue will be swallowed up in maintaining the roads already constructed in the older, settled portion of the County. The borrowing part of the scheme now before Parliament will, I believe, become inoperative bo a great extent. The funds proposed to be put at the disposal of the Board of Local Public Works for the purpose of lending to Local Bodies for the con. rttruction of district roads would be utterly inadequate to the demands that would at once be made upon it from all parts of the Colony, and the power of borrowing at a higher rate than that formerly allowed would result either in Local Bodies borrow ing at an exorbitant rate of interest, or in not being able to borrow at all. In thi? I specially refer to the smaller or thinly populated or newly settled Counties whose needs are greatest, but whose credit and reputation not being so well established as the richer and more influential Counties, would necessitate the paying of a much I higher rate on any loans they might I negotiate. j In conclusion, I would respectI fully submit that the engagements entered into by " The Financial Arrangements Aot, 1876," should be adhered to,* as the notico given last year to local bodies that subsidies would be with- ! drawn at least led them to expect a substitute, which the present scheme in no respect is. Further, no notioe was given that the 20 per cent, of land fund would be also withdrawn, and also, as I gather.the 33 per cent, derived from instalments paid on deferred payment land until one-third of the purchase money has been paid over to the local body. These last sources of revenue have been calculated on and to some extent anticipated by us, and so far as I am aware no intimation has ever been given that they would be withdrawn as well as the subsidies. The Counoil of this County has given its best attention under many difficulties to make the Counties Act work smoothly, but if the local finance proposals become law the position of a County Councillor will be snch that men who have accepted the position for the purpose of furthering the settlement of the country will feel themselves to be useless, aud will probably resign in a body .leaving the care of the roade and County masters generally to the Government. I have the honor to be, Sir, Your Obedient Servant, D. H. Macabthur, Chairman, M. C. C. Feilding, August 2nd, 1880. Memo, foii Editor op the Manawatu Herald. The above letter was written somewhat hurriedly, and does not deal with the subject in so exhaustive a manner as I could have wished. It will be noticed, for inj stance, that no allusion is made to the reve • nue proposed to be derived from Crown and Naiive Lands in the shape of rates. As the minimum rental value allowed by the Rating Act is 5 per cent on onetwentieth of the selling value, and a rate of Is in the £ is again one twentieth of that rental value, the rate derivable from Crown lauds under the Local Finance proposals may be approximately estimated at one four-hundredth part of the value to sell, and of native lands at one eight-hundredth, assuming, of course, that a shilling rate is struck over the whole County. I will now estimate the revenue arising from these lands within this County, which certainly contains more than the average share, as follows : — Selling value. 140,000 acres Crown land, first quality, at £1 £140,000 60,000 acres Crown land, second quality, at 6s 8d 20,000 Total .. .. £160,000 Giving, at one four-hundredth, £400 of rates. 320,000 acres native land, first quality .. ... .. 320,000 480,000 acres native land, second quality 160,000 Total .. .. 480,000 Giving at one eight-hundredth, £600 of rates, or £1000 in all. This — which is decidedly an excessive estimate, both as to quantity and quality — would give altogether, counting County and Highways Board rates, £2000 payable by the Government, were all these bodies to strike a shilling rate. This contingency is, however, not probable, aud especially so in the case of the Otaki Highways Distriot, which contains the greater bulk of the native lands estimated above. It will be fairer, then, to estimate these rates at £1200, which sum can soarcely be considered an adequate substitute for the A' 7,000 or £8,000 of subsidy which would be receivable under the Financial Arrangements Act of J 876 by the local bodies of Manawatu. I am informed that it is not contemplated to withdraw the one-third of purchase money of deferred payment land whioh waa allooated to tbe Local Bodies under the Land Act of 1877, but as this revenue must be spent within the blocks from which it is raised, no consolstian can be derived from this source by the ridings of the County having no such lands within their boundaries. D. H. Macaiithur. Feilding, August 18, 1880.