When I moved the adjournment of the debate on Friday last on this motion I was making the point that having regard to the benefits which have been added by the community to ground values that the proprietors of land, particularly of land used for building purposes, were enabled by the addition of that value —a value to which they made no contribution—to secure for their land a very enhanced value. I said that that enhanced value was a factor which entered into the cost of house building and that the provision of houses for our people, being such an urgent problem and it being desirable to keep the cost of providing housing accommodation to as reasonable a figure as possible, it was necessary that steps should be taken by the Legislature through this motion, but preferably through a more comprehensive motion, to ensure that the community was enabled to recover from those who had lands to sell for house building purposes some of the community created assets which at present helped to swell the value of lands for building purposes.
As I pointed out then, the only charge which ground rents at present bear is a charge in respect of income tax. It cannot, I think, be said that the imposition of an income charge on ground rents results in the raking off, from the standpoint of the community, all the additional value which the community's efforts have given to the land which is used for house building purposes. It is well known that the movement of population alone produces an enhanced value in respect to land. If a local authority decides to open up new arterial roads or to extend its sanitation scheme, if a State electrical undertaking decides to extend its lighting scheme, or if it is desired to extend a water supply scheme, every person who has land for sale in that previously undeveloped area is enabled by this muncipal development or by that kind of community progress to secure for his land a price which shows a considerable increase as compared with the former value of the land. The increase in value which has been made possible by community efforts is one which, I think, should revert, as far as the Legislature can ensure its reversion, to the benefit of the community which helped to create that enhanced value in respect of the land. To the extent therefore that it is possible, through the medium of this motion or any action taken upon it, to ensure that the community-created value of lands may be recovered for the benefit of the community generally, I support the motion.
I realise, at the same time, that there are defects in the motion and that at all events it is only dealing with portion of a problem the end of which we cannot at present see. Deputy Anthony's motion suggests that a rate should be levied on money received by ground landlords in respect of ground rents. It may be possible, I think it is possible, to enable the community to levy a tribute on ground rents received by private landlords. To that extent you may recover, in respect to existing ground landlords, a certain portion of the enhanced value which has been given to the ground rents by community efforts. But we are not dealing merely with the problem of ground rents as it exists at present. There is another portion of the problem to be considered, the problem of future ground rents. Any scheme which enables a local authority to exact a levy on ground rents might be easily overcome in respect to any land utilised for building purposes in future, because any landlord who is likely to sell his land to potential house builders would be able, in fixing the rate at which they would let or sell the land, to take cognisance of the charges which would have to be met out of the income which he would receive. If he has to meet 4/6 in the £ in respect of income tax and the local authority is permitted to increase that charge by the levy of an additional 2/6 in the £, we get the position where the ground landlord will be compelled to pay in the form of income tax and municipal tax a sum of 7/- in the £ on land which he lets for building purposes.
With the knowledge that moneys received in the form of ground rents are subject to a charge of that kind, the ground landlord of the future can overcome the difficulty by charging a rent which will enable him to meet without difficulty the charges imposed by the Legislature and by the municipality. In that way the position which Deputy Anthony now seeks to remedy would not be remedied and, in fact, the position might well be aggravated, because the ground landlord would thus be able to overcome any imposition which might be put upon him unless, as I said earlier, it were possible to fix by legislation or otherwise a certain definite price which would determine the value of land, particularly for house building purposes, and more especially for the erection of houses which are in urgent demand by the working-class section of the community. I do not, therefore, think that Deputy Anthony's motion is sufficiently comprehensive. It only deals with the problem as it exists to-day. It does not deal with the future problem in respect of the new ground landlords who may be able, notwithstanding a municipal levy, to escape the penal consequences of that levy in respect of themselves. But I agree that the motion nevertheless has the merit of enabling a local authority to exact from a ground landlord just retribution in respect of the additional value which the efforts of that local authority and of the local community have added to the land. That portion of the motion is one with which I am in complete sympathy.
I think, however, that there is a wider problem and it is the problem of the future ground landlord. In that respect, I do not think the motion is sufficiently comprehensive. If that aspect of the matter is to be dealt with, we must take care, particularly in respect of land which is required for the erection of working class houses, to insure that the ground landlord is not enabled to exact from potential house builders or the local authority an enhanced value for his land—an enhanced value which bears no relation to his own individual efforts, but which is made possible by the efforts of the local authority acting on behalf of the local community. I think that not only would it be necessary, in order to deal comprehensively with this problem, to fix definite standards which would come into play in determining the value of land for house building purposes, but it would also be necessary to endeavour to provide that the sale of land for housebuilding purposes should be effected through the local authority so as to enable the local authority to become the ground landlord. In that way the abuses which are inseparable from the present system of selling land at high prices, when there is a keen demand for land to satisfy the needs of the people in respect of housing, might be overcome and the worst evils of the present system obviated.
I think it ought not to be impossible to devise a scheme by which any potential house builder having decided upon a site which he desires for house building purposes would be enabled to approach the owner, and to have the value of the land determined in some reasonable way, but bearing in mind the necessity for taking cognisance of the community— added value in respect of that value and that the local authority should then be enabled to effect the sale of the land between the builder and the ground landlord through the local authority in such a way as to ensure that the local authority would become the ultimate ground landlord. Any rate which it might fix in respect of ground rent ought to be a reasonable rate, and even if there were a surplus realised by the local authority from the sale of land to a potential house builder, that surplus should at least be used for the benefit of the whole community. Instead, at the present time, any enhanced prices which are paid for land for house building purposes do not benefit the community in the slightest. They are pocketed by the individual ground landlord, and, not merely does he put into his pocket the value of the land, but he puts in a substantial addition to the normal value of the land.