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Hokitika Guardian, 30 April 1924, Page 2

Tiif, New South Wales Treasurer lias announced that Australia, has lost seven millions in various State enterprises during recent years and that this loss is one of the causes ol the present high rates of taxation in the Commonwealth. New Zealand has been awakened in timo to the perils of State trading of the kind that lias been attempted in Australia, and the Commissioner of Taxes lias declared that the State coal, railway, and post and telegraph services are the only departments now exempt from income tax. To the exemption of the railway, and post and telegraph services there can bo no reasonable objection. These are monopolies, properly held by the State, and they are not in the ordinary sense in competition with any ] rivate enterprise, though it would appear tint the motor ear is some way on the road towards capturing part of the rail\rei\ revenue. The Stato Coal enterprises

—milling, distributing and retailing,— however, are on a different footing and these plainly should lie hearing their fair share of taxation. These arc among the enterprises -which the Prime Minister stated in Parliament two yeais ago “should lie self-supporting and conducted upon a- proper business basis.” Doubtless Mr Massey will take tho opoprtunity afforded by the impending revision of the taxation system to place these services oil a proper business basis. But the more important question of placing municipal trading enterprises on the footing the Minister urged, for State trading enterprises still lias to lie determined. Tho Commissioner of Taxes lias stated definitely that “municipal trading undertakings pay no income tax whatever.” This means that municipal tramways, gas and electric light anil power undertakings, coal depots, fish and fruit markets and any one of the other score of trading activities in which local bodies may engage escape all taxation, while their private competitors in business are subject to every form of taxation the ingenuity of the Minister of Fin- • nco and the controlling municipal bodies can devise. The injustice of this is so obvious, and its ultimate injury to the community so great, that there should he no further delay in removing this glaring blot from the taxation system of the conntrv.

The following is the paragraph appearing in the report of the Taxation Committee of 1922 referring to the quo tion of taxing State and local body trading concerns:—The Committee lias carefully considered the question of charging income-tax to public bodies and Government trading concerns. Such concerns in general have either replaced or come into competition with Privately owned undertakings which have to pay income-tax at the usual rates. Certain public utilities are provided in one town by companies which Pay income-tax, and in another town by municipal enterprise which escapes tax, with the result that the town served by a company has to pay incroa* ed charges for the services rendered in order to cover the tax. and indirectly, therefore, hears part of the taxation which the other town escapes. It is the opinion of the committee that, if Government or local body trading is to operate, it should do so on even terms with private enterprise, and should accordingly hear the charges and taxes to which private undertakings are subject. Under no other conditions is such competition fair, or in the interests of the community. Publicly owned undertakings are carried on with borrowed money, secured on the credit of the ratepayers, and therefore cannot lie taxed on the same basis as companies. It would therefore he necessary, for taxation purposes, to assume an income based upon a fix* ’ percentage of the total amount of capital employed, and this might be fixe ’ at a lower rate when capital is borrowed within the Dominion, than when borrowed from foreign lenders. The

lowing resolution was unanimously carried : That income-tax. equivalent approximately to the average rate paid by companies bo paid by all public bodies and Government trading and publicly owned utility undertakings, and the tax arrived at by assuming income based on » fixed percentage of the total amount of capital employed. Evidence was given to the effect that the State Fire Insurance Department was placed on a better footing as far as income-tax on overseas treaty reinsurances is concerned than is the ease with private fire-insurance companies operating in the Dominion. The Committee considered that all should lie on the same footing and unanimously resolved that in the matter cf treaty reinsurances the State Fire Department should be placed on the same basis as regards taxation, ps private insurance pompanies.

Tiif. local Borough Council last evening voiced very general opinion in the motion carried condemning the strike. It was equally in keeping with public opinion in the mass in supporting Government action. A strike is a cruel method of enforcing demands. It is a resort to force, a breach of the law, and a step in which the innocent are made to suffer, 'j .io railwaymen had no occasion to take the extreme step they did within a couple of months of the sitting of Parliament. Assuming the Government were over long in dealing with the matter, the state at which the negotiations stood was not any excuse to suddenly drop proposals for investigations, and demand extra pay with the alternative of a strike, if not conceded at once. By their act the railway men not only put themselves out of the court of good sense and reasonable judgment, but they forfeited claims to public sympathy, because it was the public who were attacked by the method adopted. A good deal has been heard from allied unions of sympathy with the strikers. It was quite time the larger voice of the public was heard, and the Borough Council has done a Dominion service in giving a lead to public opinion. The moral effect in supporting the Government openly will ensure adequate encouragement to the administration which will bo of value. We are sure Mr Coates is not looking for a personal triumph in this matter. The light lias been forced upon him—it was not his seeking. But. as the responsible Minister of the Department he has shown back-hone, and that of course, is necessary where public interests are involved. Mr Coates has not been curt nor inconsiderate. He lias dealt fairly with the parties involved, and lias won much kudos because of bis bearing. The same remark applies to bis attitude in regard to the other Department bo directs, the Executive of which is showing some unrest. Any overt act by the members of that organisation at this juncture would still further inflame public opinion, and bring about the reform of the public service in a way which would surprise even the vast army of public servants who would lie the masters, rather than the men in this country.

DuniNCs the forenoon a whisper went round that the strike was off. Later came official news that trains would run this afternoon. It is all very good news for there is nothing so stupid i a. strike it is a weapon which is rather more than a double edged sword—it cuts always. At the time of wiiting there is nothing known of the terms or conditions of the settlement. Ui't however is but a detail. f ! lie main fact is that the recalcitrants have come to their senses, and realised where duty pointed. A cruel wrong lias been done the country meantime. The liest thing the railwaymen can do to make amends is to resume their work with a keen desire to do full service to their country and never again take so foolish a step. Public servants bo!ore all others "ill fmd that loyal service pays, and that after all the public service is not without many advantages of comfort, and very few discomforts. If the public service as a whole has learned its lesson from the railway strike there will he some compensating advantages for which at least there will he something to he thankful for.