STATE TRADING

Hokitika Guardian, 8 April 1929, Page 2

STATE TRADING

SUfJCJESTIONS FOR REFORM. The trading departments of the State should he converted in the law into what they are already in fact, namely, trading and industrial corporation*, said Hr R.. L. Zinian, <i Auckland, in a paper read j|t the conference of the New Zealand Law Society, Wellington.

“ Apart altogether from the hardships entailed to individuals hy privileges enjoyed by trading departments, the existence of such privileges is detrimental to the nation as a whole from two points of view,” said Hr Zinian. “ Firstly, hy reason of their obvious injustice and the rankling sense ol dissatisfaction which they cause, they tend to undermine the traditional respect for and obedience to the law which is one of the outstanding sources of strength of the British nation. Secondly, they tend to undermine the authority cif the Courts. In this Dominion the Supreme Court is an institution which enjoys universal respect, and is trusted by all the people, and it is obviously a serious matter if judges of that Court are forced by the law into the position of giving judgments which are obviously unjust, or if the judgments of that Court can be flouted by the Executive. 11 ENORMOUS PRIVILEGES.” “The trading .departments have by legislation acquired enormous privileges, but how ? Not by direct grant, so that Parliament realised what it was doing, but bv the simple and ingenious method of establishing trading activities in the name of the Crown. It is notable how the majority of the departments, realising undoubtedly the advantages of carrying on in the name of the Crown, have managed to entrench themselves in that position.

“ Coming now to the difficulties created hy the present system of State trading in New Zealand, it is fair to state that in isolated instances an anomaly has already been removed. For example, some departments now pay income tax. In other instances, a sort of compromise h ;l s been offered, the department paying some dues and refusing to pay others. Departments are naturally tenacious, and one may. without trenching at all on the political field, suggest that if the problem he attached piecemeal it will he impos sible during existing lives to achieve the application of adequate remedies: also that the piecemeal mode of attack may lead to serious difficulties in otlier directions.

THREE PRINCIPLES AS BASIS. “Jt is also clearly an undesirable manciple that justice and 'fair dealing should depend on political pressure, instead of on the strong arm of the law. On the other hand, it may he suggested that the prerogative rights should he taken away from all State departments. That, however, may be going too far. Does not the logical solution of the problem appear, therefore, to be to convert the trading departments in law into what they already are in fact, namely, trading and industrial corporations, and to endow them with exactly the same rights and liabilities as trading and industrial corporations owned hy private individuals, unless Parliament in its wisdom thinks fit expressly to grant any such State trading corporation special privileges? “ One may reasonably mention three principles, compliance with which appears necessary to put the matter on a proper footing. They are:—(l) Tli;\ 1 the State trading activity he carried on under conditions which give it no unfair advantage in law over private traders in the same line. (2) Tim the State trading activity he so car i-icd on that its results are capable o' accurate comparison with those of private enterprise in the same line. Thh clearly cannot he the case when the State department is endowed with so many privileges, prerogatives and exemptions. (3) That the State tradingactivity ho carried on in such form not to work any hardship on individ uals having no association with it.”