POWER BOARD RATES

Evening Star, Issue 21751, 20 June 1934, Page 3

POWER BOARD RATES

A SUBSTANTIAL REDUCTION A discussion took place at tbe monthly meeting of the Otago Electric Power Board at Milton yesterday on the proposal to reduce the rating by 50 per cent. At the May meeting of the board an amendment to reduce the rating to this extent was carried after a motion that there should be a reduction of 25 per cent, and an amendment that there should be a reduction of 33 1-3 per cent, had been defeated. At the close of the discussion yesterday the board confirmed the original proposal authorising a reduction of 50 per cent. The confirmation of the motion was moved by Mr C. R. Smith, who quoted estimated returns in justification of the reduction. If the board balanced its budget this year, he said, the deficit would be worked off in three years at the half-rate, and even if a small Joss wore the result of each year’s working, it would mean an extension of only one extra half-year to wipe off the deficit. He wont on to speak of tho financial difficulties of' the ratepayers, all of whom appeared to be delighted with the reduction proposal. The motion was seconded by Mr W. Lee. Mr D. Boyd said that he could not agree with the proposal. He spoke on the subject of the board's financial position, and moved as an amendment that the reduction should be 33 1-3 per cent. There were many things which might happen to affect the board’s finances, he contended, and they could not at this stage afford to take risks.

Mr A. E. Russell said that as one who paid over £IOO -a year in rates he would welcome a 50 per cent, reduction, but as a responsible member of the board he had no hesitation in characterising the proposal as misleading to the ratepayers and entirely lacking in sound business, considerations and discretion. He went on to discuss the question of revenue which he considered could be expected to decrease this year. The condition of the main line to Milton was a matter of great anxiety to the engineer, and expenditure might be required in this direction ‘at any time. The Lawrence lino might also require the expenditure of a large sum. Capital was running low and another loan would be generally distasteful. The improvement which had taken place recently in the hoard’s affairs had been due to drastic economies, and interest reductions and no further benefits could be expected from those sources. The future was full of difficulties which would demand sound business treatment. Last. Juno Mr Smith had reviewed the board’s position, and had expressed the opinion that rating would have to he continued for many more years. With a gradual scale of rate reduction the speaker believed that rating would be entirely wiped out, in a few years. A 50 per cent, reduction now, however, would result in extending the rating and would possibly necessitate an increase. He had the greatest sympathy with the dairy farmers, but he believed that their circumstances would be greatly improved by the time the next rate had to be paid. Mr R. H. Michelle said he had received many messages congratulating the board on its decision to reduce the rates by 50 per ceut. He wished to support the proposal. Mr J. K. Simpson said that this matter had given him great. concern. He felt confident that until the rate was removed the board would have a great hurdle. He did not like the idea of reducing the rate by 50 per cent., but many of the ratepayers were members of poor farming communities, and they were in need of relief. He felt it his duty to support the proposal. Mr Lee, in supporting the motion, said that the biggest factor in the board’s improved financial condition was the reduction of-interest, for which the Government was responsible. Even if the board was taking, a risk, he thought that it was justified in doing so to help the ratepayers. Replying to the discussion, Mr Smith said that certain remarks had been made about his speech at the board table .in June of last year. That speech had been made prior to the issue of the balance-sheet, which was not available till several months later, and it was then discovered that the board’s position was much better than they had thought at the time his remarks were made. Mention- had also been made in the discussion of the state of the power Hues. They had been told at the annual meeting a month previously that the lines were all in the best of condition, and now they were told that much money might have to be spent on them in the near future. In any event, such expenditure would have to come from the depreciation fund, which was in a healthy condition. There was only a matter of £1,500 difference in rates represented by the motion and the amendment, and hie had already shown them how a loss of £1,500 a year would mean only an extra half-year’s rating to bring the board into the same position as would be tlie case if the amendment were carried.

The amendment was then put to the meeting and lost, and the motion was carried.