STATE IN BUSINESS

Hokitika Guardian, 7 May 1929, Page 2

STATE IN BUSINESS

AN INDEPENDENT AUTHORITY. (Nineteen Twnoty-Eight Committee.) In flic course of liis recent address it the minimi meeting of the Wellington Brunch of the Economic Society ol Austrialia and Now Zealand. Professor R. E. Murphy, of Victoria College, prelacing liis remarks with some general •illusions to the economic position, defined as closely as might he the lunitatipns and obligations that should be •flared upon State industries in competition with private enterprise. ( ompetitive industry, lie said, incidentally, while wasteful in some respects, was a great incentive to energy and progress, and the loss hy its withdrawal would probably he much greater than the waste hy competition. Competition keyed men up.:, to a high pit h oi endeavour and performance, and -there seemed no alternative way cl evoking ■the highest business qualities or weeding out inefficients. Parliament, politicians. and officials were selected for political qualifications, and were amenable to political considerations. Political bodies were not constructed for business functions and were not trained for them. Turning more definitely to the actual presence of the State in business, Professor Murphy insisted that it should make provision for its “ costs in the full sense,” as the promoters of private enterprises in similar circumstances were compelled to do. These costs, lie said, were (a) operating expenses, (b) interest on - capital, (c) repairs and maintenance, (d) ieserve to cover fluctuations, (e) reserve equivalent to its proportion of rates ,111(1 taxes, (f) provision for extension of service, (g) provision for value ol services furnished free or under cost by other Departments of State, (h) an allowance for the damage they inflict upon private enterprise, (i) provision for the privileged position in competition of a State undertaking, such as exemption from Labour laws, piivileges in collecting accounts, and privileged position in litigation. The “ costs ” as they are laid down hy Professor Murphy in detail probably are more formidable in some respects than even private enterprise itself would have imposed upon State trading, but examined closely it will lie seen there is not one of them that logically can he left out of account.