PUBLIC AND PRIVATE ENTERPRISE

Hokitika Guardian, 8 June 1929, Page 7

PUBLIC AND PRIVATE ENTERPRISE

IN GAS PRODUCTION. (Nineteen Twenty-Eiglit Committee.) It must have been either a very simple or a very subtle person who wrote to the “New Zealand Worker’ last week claiming that municipal enterprise was supplying gas for lighting, heating and power at a iniuh lower price than private enterprise was charging. Either he did no., know the facts of his case or he attempted to disguise them. He states that while the Auckland Gas Company charged 7s per l(XX) feet for it.gas and the (Christchurch Company 7s 6d per ;I(KK) foot, the Dunedin Municipal Gas Company charged on y 6s 3d for light, 6s 3d for heat and (> 3d for power. He did not quote the prices charged by the Wellington Company for light and power, but he gave 7s as its price for heat. A direct enquiry at the office of the Wellington Company, however, elicited the information that the average nei price charged for the Company’s gas was Gs IOcI per I(XX) feet. It may lr assumed that the net average price of the other two Companies is approximately the same, though th< works of the Christchurch Company are not, as the contributor to th< “Worker” says, “at or near a port where transport charges on coal would be the same.”

If it affords the champion of municipal enterprise any satisfaction it may bo admitted at once that the Municipal Gas Department should hr producing and selling gas at a much lower rate than a proprietary company can do. The Municipal Department is exempt from a number of charge which fall upon the proprietary company. Take, as example, the case of the- Wellington Gas Company. This Company last year made the following payments;—Annual license,£2oo; receipts stamps, £520; income tax, £lO 089; land tax, £529; City Councils' royalty and miscellaneous charges. £1,301. Here is a total of £12,639 not a penny.of which would fall upon a municipal concern of the same character. Then there is, naturally, n substantial difference between the rates of interest on capital and debentures charged to municipal undertakings and private undertakings. Using the instance just quoted- the would mean a further additional charge of £9,920 upon the private undertaking. It is plain, then, tlisr the municipal undertaking starts on with an annual concession of £22,55!" which would amount, in this particular instance, to a handicap of PL per 1,000 feet upon the annual output of gas from the private under-

taking. This being the case it follows that the Dunedin Municipal Gas Department, exempt from the burdens imposed upon private enterprise, should he selling its gas at 6s o}-d per 1 .COOfcot, instead of at 6s 3d as at present.

This champion of municipal gas production implies that the smaller lmjni" cipal undertakings, wih few exceptions, are doing as well, proportionately, as is the Dunedin undertaking. “In considering this question,” lie observes, “w r e must not lose sight of the fact that municipalities frequently provide a set-ice in circuiustriiicos and under conditions which offer no induceinen to a private concern to establish works as there is no prospect of these work showing a profit.” Whether this is intended as a reflection upon“private concerns” or as an admission tha 1 “municipal concerns” cannot cop with such problems, is not quite clear hut it is obvious enough that privat'•nternrise. hampered i!S 't is h.v taxa ' tion and conditions from which muni cipalities are exempt, cannot go t the . assistance of such communitie however anxious they may he to e* tend their operations. The solutinof the whole problem, of course, lie in the adoption of" the recommends’ tion made by the Taxation Commission a. few years ago to the etfeo: that all Government and municipa trading concerns should be placed Tlpoil the same footing in regard t< income tax and other charges as arr private trading activities. Meanwhir the exemption of these concerns frnn taxation is a scandalous impositior upon both workers and employers.