RATING ON UNIMPROVED VALUES.

Taranaki Daily News, 25 April 1919, Page 6

RATING ON UNIMPROVED VALUES.

ADDRESS BY MR. P. O'REGAN A meeting of ratepayers was held at the Empire Theatre last evening, when an address was given by Mr. P. O'Regan, of Wellington, on the unimproved system of rating. Mr. S. G. Smith, M.P., presided, and in expressing his pleasure at Mr. O'Regan, said he was glad • > f :••!? opportunity of publicly tlet<larit>£ >y.-w--' right out in favor of the- v■asm of ..,ij- : on the unimproved value of the land. (Applause.) Mr O'Regan said that the {a.xp.ikr.i r-i the unimproved value was; n<. km,;.:"y ' mere theory. It had been tested in pr*:-. tice, a,nd had not been found wantinj';. The Rating on Unimproved Value* A<re h-xi bew pasesd in 1890, eince wbicitime polls had been taken in 147 di---triots and had been successful in 127. There had been 12 polls to revert to the pld eyutein of ruling improvements, but in only four instances had the attempt been successful. Thus it was evident tb.st rating or. unimproved values was popular, and the most cursory examination would show that its popularity wa< just.mod. .At first sight it might appear that inasmuch as a certain / amount of revenue had to be .raised, the method was unimportant—that taxation at best was a "necessary evil." He joined issue at once, and would maintain, first, that taxation was as necessary to civilised men as food or clothing; and, secondly, that just taxation was a powerful means to social and political improvement. The present system of local taxation was unjust in that it fell, on property without regard to the essential difference between the two factors of which its value composed. For example, the capital value of the rateable property of the borough of New Plymouth was £2,039,960; of this the unimproved value was £.1.193,W>, r>.nd the value of improvements ££3r,,oi?4 Now there was a radical distinction between the latpsr and the un- '.■-'•■-:•.••'! -?!'!•?. Improvements were the product of labor, and the constant appli.Vvion o» iebar was required to maintain ;!ifi.-. '■■.■■ <■.■• :■?:«•*»«, while the unimproved ' value was a community-created fund. K" •:■,%,.: h>A made it. but it came into existence as the natural result of the jrrowth of the community. Statistics threw a lurid light on the relation be- : tween population and this community-

."•»sf<>'! u»OTiVyalue of land., For example, the unimproved value of all the

lv-.r r ,:-, r .-V..; ;;: i^. v v Zealand WSU> £71,509,319, of which half was accounted for by the foy chief oentres. and yet the total area of At!" the horoughs was only 234.652 acres. His submission was that that value was the natural and equitable source of public revenue. The total revenue of nlj the local bodies in New Z»!»l»nd -Wived from rates was £2,G71,948, and he would not rest' until the whole uf it were levied upon the unim-i proved value of land. In New Plymouth, continued the speaker, therp were 1700 dwelling-houses. Bating on unimproved values would meati that these dwellings would tie completely exempted from taxation, while the sites on which they stood would be taxed exactly as if they were vacant. Obviously, if £836,984 were exempted from taxation, since the same annual amount of borough revenue had to be raised, the rates would have to be increased on vacant land, but the increase would depend entirely upon the unimproved value thereof. In the result it would hi found that the vast majority of the ratepayers would pay less, tfmt the few whose rates would be increased were the wealthiest and best able to pay, and that a permanent impetus would be given to the progress of the town. It was no mere figure of speech to say that rating on unimproved values was the best .fertiliser known, inasmuch as it made farms blossom in the country, while in the towns it made piles of bricks and mortar spring from the earth. (Laughter.) "I ask you," continued Mr. CRegau. "to consider seriously the rationale of taxing unimprovements." Did we want to discourage the improvement of property as a thing undesirable and opposed to public policy He could understand the policy of a dog-tax. Its object was to prevent doga/firom 1/ecoming a nuisance. Were improvements a nuisance? Jn the early days of New Zealand —in 1842 to be accurate—the Legislature had imposed a special tax on houses having thatched roofs, the object being to discourage the use of thatch on account nf the increased risk of loss by fire. Where was the wisdom or expediency of fining the man who put his land to good use—of making that fine heavier on the man who did the moat? If it were right to, tax houses it must be equally right to tax the furniture and valuables inside them. The erection of dwellings meant employment for carpenters, bricklayers, carters, sawmillers, cabinet-makpra; in fact, it was impossible to state the multifarious and beneficent activities that were set in motion by the improvement of land, and all these activities would be wroused by the simple device of exempting from taxation everything done by industry to utilise land. Granted that the man who made improevments was prompted primarily by self-interest, on that he would make two observations —first, that there was nothing necessarily wrong in obeying the promptings of self-interest, and, secondly, that it was impossible for a man who put his land to its best use to limit the benefits thereof to himself. The utilisation of land meant employment for all, and the levying of taxation on the unimproved value thereof would have a tendency to bring land and homes within reach of all who wanted them. He trusted, therefore, that their historic and picturesque town of New Plymouth would fall into line with the rest of the country and adopt the only rational, just, and beneficent system of rating. Once adopted, its benefits would be so appreciable that a reversion to the old system would be unthinkable. (Applause.) QUESTION®. Mr. F. J. Lyons asked if it was not a fact that there was overcrowding in Wellington before the unimproved system of rating was adopted, and Mr. O'fiegan replied that it was so, and that the opposition to the system came chiefly from the owners of property in the overcrowded areas. Another question: was asked as to the success or failure of the system as operating in Petone, Mr- iCTßegan replied that it had been adopted in 1905, after several previous attempts to bring it in, and the ratepayers were so well satisfied that no one dared go round with a petition asking for it to be rescinded. It was noteworthy also that the two districts immediately contiguous to Petone had since adopted the system. Mr. Nas,h asked what the effect had been of adopting the system in Gisborne. Mr. O'Regam said the area of Gisborne was 2304 acres, compared with 4088 in New Plymouth. The population was 9000 compared with 8700, and the numW of.dWilUsai 2804 cwapwd with 1700

in New Plymouth. He did not claim that the better position at Gisborne was due to rating on unimproved values; he thought he might say it was in spite of it.

Mr. Richards asked what would be. the effect of the change in the rating system on a property on which there was at present a mortgage on the improvements of; say, £4040, and Mr. O'Regan replied 'that while under the present system in New Plymouth io some extent the rates were collected on the mortgage, such v,t--.:U' Tio-. •*- i.!n< case under the other •ty»i°m. as all the improvements would !i-.- exemns.

A7>iith«- ouestion was as to the quali- .-. i •::.•!■•■ / ■•- voli.'i.' ■•" the issue, which ■a« t'splained by stating that only thosu ■ •,-. I.'.- <-.--:< v; ■'.';<' ratepayer qualiflca-

(ion '■ould T-'ot.e. 7vtr. Nasb stated that the local newsn;)::.!!r? :i.»>! fi'Tf-irSA that the proposed system of rating would increase the rates ;•■. ':? paid ?.n i.'.nd in, the suburbs,, and that men would not be able to take up small holding'- i.f an acre or two. Much was said regarding ! Mr. Frethey's Frankleigh Park property, but on going into !ii? ;»sition it "•a.-" that his rates

would be less under the unimproved, system than they were at present. Other instances of men in the suburbs had also been investigated. ?.nd in every case it had been found that the rates would he reduced oy the adoption of the proposed system. One notable case of~a man who owned half an acre on Devon Street, Fitzroy, had been quoted, and it was found, that lie also would '«avc to pay lew under the new system. In seeking' for a reason for the opposition of certain men to the proposal it had been found that these were the men whose rates would be more under the new system than they paid at present. He stated that nine people owned or controlled oneeighth of the property value in New Plymouth, and it had been found that if the new system was adopted -they would have to pay £fi2o more per annum in rates —hence the opposition. Mr- Nash then moved a hearty vote of thanks to Mr O'Regan for his address, which was carried with acclamation. A vote of thanks to the chairman concluded the meeting.