COAL SUBSIDY

Press, Volume LXXXII, Issue 24901, 14 June 1946, Page 8

COAL SUBSIDY

MINE OWNERS REPLY TO MR MCLAGAN COSTS IN STATE COLLIERIES DISCUSSED (P.A.) WELLINGTON, June 13. The New Zealand Coal Mine Owners’ Association has replied to the. Hon. A. McLagan’s statement at the annual conference of the Federation of Labour that State ownership of mines was the only means l by which the subsidising of mine owners could be discontinued, and that if the Government stopped paying subsidies at least one-third of the mines would cease production. One way of avoiding subsidies would be for the State to take over both the mines and subsidies, but it was not the only way, said the statement. Another would be to have allowed the increased cost of coal production to be recovered by higher prices. “Since the Government has chosen the method of subsidising production to prevent price increases, continuance of subsidies is at present essential to the life of the mines,” says the statement. “Nevertheless, it is necessary to call attention to the fact that of the toal subsidy during the year ended March 31, 1945, £717,916, State mines received more than half, although they produced less than a third of the coal output. Moreover, the increased costs of coal during the war are approximately 80 per cent, due to increased wages, and the subsidies are therefore much more to the benefit of mine workers than to owners. “Since State ownership is suggested as a means of avoiding the continuance of subsidies, it is pertinent to, ask how the increased costs of State mines are to be met without subsidies.” Contending that under State ownership costs would rise still further, the statement points out that for 1944-45 11 company-owned collieries produced 931,396 tons at a cost of £1,080,928, or an average of 23s 2d a ton, for which they received subsidies of £245,794, or 5s 3d a ton. Eight State-owned collieries produced 601,177 tons, at a cost of £859,524, an average of 28s 7d a ton, and subsidies totalled £302.528, or just over 10s a ton.