PLAN FOR COMPETITION

Evening Post, Volume CXL, Issue 21, 25 July 1945, Page 6

PLAN FOR COMPETITION

Transport has been, and probably always will be, a .heavy charge oh New Zealand production, so heavy in fact that it may affect our standard of living. Indeed it does so now. For example, sub-tropical fruits from North Auckland, cheap where they

are grown, become dear by the time they are loaded with all carrying and handling costs involved in marketing them in Southland. The geographical and topographical obstacles to cheap transport are the beginning of this trouble; and unfortunately we have made the position worse by our rather muddled and extravagant attempts to make it better. Costly harbourmaking, political railway-building, ambitious roading, and so on have carried competition to excess, and then we have attempted to correct this by "co-ordination" that has swung too far in the other direction and developed into quasi-monopoly. Twenty years ago the transport cost on production and industry was examined and found to be an excessive burden. Improvement has been made, but not enough. But we are at least, beginning to see some of the pitfalls. This is shown in the report of the Rail and Coastal Shipping Committee published last week. The committee emphasises strongly that the public interest must be paramount in regulation. It recommends regulation with caution. We can see that a case for this exists. The public interest is safeguarded by competition, but competition which is excessive, to the extent of eliminating one competitor, may kill itself. The aim should be to plan for continuing competition—the one kind of planning to which Hayek gives full approval. How is this to be done? The committee recommends a tribunal: a judicial chairman and representatives of shipping and railway interests, to pronounce on the fairness of special, as distinct from standard, freight rates. This is designed to cut out the cut-throat competition but to leave other competitive spurs to efficiency. It is careful regulation, but we think a stronger check is needed. The judicial chairman would have the main responsibility of guarding the interests of transport users as against two tribunal members interested in transport operation. User interests should be directly represented by one or two persons who would be concerned to assure that rates were fair, not only as between two forms of. transport, but as between all forms of transport and the public who use them.