STATE HYDRO LOSES DUE TO TAXATION

Grey River Argus, 1 October 1948, Page 2

STATE HYDRO LOSES DUE TO TAXATION

P.A. DUNEDIN, September 30. The bulk supply committee of the Electric Power Boards and Supply Aui..u.iues’ Association of New Zealand,

■ in a report presented to the conrerence in Dunedin this morning, said ■ t.icu ior 1947 the department showed a let loss of £74,954. First made subject to taxation in 1941, the State Hydro-electric Department has shown a loss on its operations every year from 1943 to March 31, 1947. To that date the accumulated loss and arrears of loan redemption amounted to £1,088,291. From 1941 to the same date, the department paid in taxation £2,655,574. A study of the position showed conclusively that, if the department was to continue to be subject to taxation, then without some increase in revenue its position must continue to deteriorate, the report continued. The committee, which was set up last year to consider the practicability of altering the department’s method of charging the distribution . authorities for electricity, felt that the department should first be allowed to meet all it's statutory commit- ■ ments, including loan redemption, be- ' fore arriving at the taxable balance. The adoption of the report was op- . posed by Mr. A. Lovegrove (Auck- ' land) and his amendment that it be ■ received was eventually carried on a ; show of hands. - UNWISE SUGGESTION

It was unwise for the conference to suggest that the department be relieved of taxation, he suggested. If - the department did not pay taxation, the burden would fall on the distri- . buting authorities and they would pay an amount much in excess of that received from the department. Mr. Lovegrove was supported by ; Mr. L. M. Wright, chairman of the ' Electricity Committee of the Dunedin Committee of the Dunedin City Council, who said it was better that tax should be collected from the departs, icm. than from the distributing authorities. "SHEER NONSENSE”

Mr. M. E. Lyons (Christchurch), contended that the "bogey that the boards will be subject to taxation is sheer nonsense.”

"Why should you make profits at all ?” he asked. “Is not our job to render service at the lowest possible cost ? When you get to the point where you might pay taxation, you should lower your tariff.” Several other speakers opposed Mr. Lovegrove’s motion, but it was carried on the voices.