STATE IN BUSINESS

Evening Post, Volume CVII, Issue 102, 4 May 1929, Page 8

STATE IN BUSINESS

JAN INDEPENDENT AUTHORITY (Nineteen Twenty-Eight Committee.) In the course of his recent address at the annual meeting of the Wellington branch of the Economic Society of Australia and Xcw Zealand, Professor B. E. Murphy, of Victoria College, prefacing his remarks with some general allusions to the economic position, defined as closely as might be the limitations and obligations that should be plated upcin State industries in competition with private enterprise. Competitive industry, he said incidentally, while wasteful in some respects, was "a great incentive to energy and progress, anil the loss by its withdrawal would probably be much greater than the waste by competition. Competition keyed men up to a high pitch of en-dea-vour and performance, and there seemed no alternative way of 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 were compelled to do. lheso costs, he said, wore: (a) Operating expenses; (b) interest on capital; (c) repairs and maintenance; (d) reserve to cover fluctuations; (o) reserve equivalent to its proportion of rates ami taxes; (f) provision for extension of service; (g) provision for value of 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, privileges in collecting accounts and privileged Position in litigation. The "costs" as they are laid down by Professor Murphy in detail probably are more formidable v.i some respects than even private enterprise itself would have imposed upon State trading, but examined closely, it will be seen there is not one of them that logically can be leit out of account.