ROAD SERVICES

Evening Post, Volume CXXIV, Issue 13, 15 July 1937, Page 7

ROAD SERVICES

SINGLE OWNERSHIP

REPLY TO MINISTER

THE REAL OBJECTIVE

The statement by the Hon. Minister of Transport in defence of the Government's so-called "single ownership" plan for the expropriation of goods motor services, released a few days ago, is not calculated to allay the growing public uneasiness in regard to the contemplated monopolisation by the State of the business of internal transport, says a statement issued by the New Zealand Road Transport Alliance. The" statement indeed is unconvincing, illogical, and inconsistent with itself; and is evasive as to the main issues, both as to the real extent to which the Government, committed in general terms to the socialisation of the means of production, distribution, and exchange, proposes to go in its effort to extinguish alternative forms of transport to the railways, and as to any clear and definite policy to be pursued. The expression "single ownership" simply means socialisation, and is employed to camouflage the real objective in view; which might, if openly expressed, prove unpalatable to many important sections of electors.

The Minister, while referring to the need for transport co-ordination, pays it lip service only. His proposals make no real provision for co-ordination, but on the contrary, if carried out, would destroy such measure of co-ordination as exists at the present time. Expropriation of road motor services which have grown up to meet a real and growing public demand, for the purpose of bolstering up the railway accounts (a futile effort at best), is destruction and not co-ordination. Coordination implies the binding into one unified whole of various types of transport in the public interest, and not the elimination of certain types for the protection of others less adapted to meet public requirements.

At all critical points of his statement the Minister relies on mere assertion without a scrap of evidence in support, or any serious effort to establish his case. In view of the great and growing importance of road motor transport to the country today, and the serious nature of this contemplated inroad into the rights of established private enterprise, especially as a precedent for further socialistic inroads in the future in other avenues of our economic life, the public is entitled to something more cogent than vague talk about "bogys" and "phantoms." The bogys to which Mr. Semple refers are of his own creation. To dismiss the serious and cogent case against expropriation which the road transport interests have built up, by the use of such epithets, is to substitute irrelevant declamation for reasoned argument. The living and employment of a considerable number of people should not be discussed or decided with such levity. Where, however, the Minister docs ■ attempt argument his contentions are easy to refute. A TURE ILLUSION. That co-ordination of transport services is required is, of course, generally admitted. The statement, however, says that the Government is convinced that co-ordination cannot be effected as Jong as the road freight services are run as small units wholly independent of the railways. This is a pure illusion. The possibilities of co-ordination have little or nothing to do with the private organisation of the road motor services. It is quite feasible to secure an effective measure of co-ordination of road and railway transport without interfering with the organisation of Ihe road transport industry as it is today. It is quite obvious from the statement itself that co-ordination is not the aim of the Government's policy at all. The real object is elimination of competition with the railways. Engaged as it is in a policy of active construction of further non-payable lines of railway, the Government is obviously attempting, by the use of the bureaucratic bludgeon of expropriation, to obtain for the railways business that they are unable to secure in fair and free competition on their own merits, because of the superior convenience of the road transport services. In one place the Minister says the railway service can deal efficiently with 90 per cent, of the business of the road transport services. If this is so, why have the railways not secured a proportion of this business already? The statement is unsupported by _ a shadow of evidence, and is proved incorrect by the admitted facts of the transport situation itself. If, howp.ver, it were correct, the obvious inference is that 90 per cent, of present I road transport would be eliminated ■ consequent upon expropriation of existing services. Yet, in another passage of his statement, the Minister says that the Government has no intention of depriving the public of "this vital service" of road transport. On this point, indeed, he is most emphatic. He says: "I want to remove any idea that the Government intends to take over the road services under discussion and suddenly cease operating them. There is no such intention. It is recognised that these services have become engrafted into the national transport system and that alterations to them will have repercussions in industry and trade." . In this passage the Minister supplies the best possible answer to his own policy. These services are admitted by the Minister himself to be necessary; why interfere, with them at all. They are running with smoothness^ and satisfaction to customers today; it is not at all clear that they would do so if made subsidiary to railway policy. The very object of the railways in seeking to control the road services i? to eliminate competition. Anyhow, in one place the Minister implies that 90 per cent, of the road services are superfluous; in another he affirms his intention to keep them in operation. Whicn is the Government's real policy? Is it heads or tails? 'It cannot be both. The Government policy is obviously intended to prevent anybody requiring goods transport to use it if it competes with the railways. Increasing motor registrations, however, prove the growing popularity of goods motor transport and its convenience to the public. It is preferred because it is the mosj, economic form available. Why should the public be deprived of the form of transport that it finds _ most useful, convenient, and economical? The Minister refers to the fact that, for the moment, it is proposed to take over only about 200 vehicles out of the very much larger total. These, however, tnough numerically few, are the i key services, and nobody can doubt that the rest will sooner or later share the same fate. If the Government is sincere in its professed intention to nationalise transport on a basis of] "single ownership." it cannot and will not stop here. When the key services have been swallowed up, the rest will follow if the present policy is to be carried out. EXEMPTION FROM TAXATION, Regarding the railways road services the Minister quotes the Wellington-1 Wanganui service. The facts sre that the net profit of all North .Island pas-.

senger services operated by private enterprise averages 10 per cent, whereas this railway-controlled service can only earn half as much. Further, the standard of service is no better than it should be, and in any case is set by private enterprise. The question may be asked here, too, do such Government services enjoy any total or partial exemption from the taxation imposed on private services.

The expropriation oi existing key services will tend greatly to develop the system of the ancillary user, to which business people will turn as a substitute for the present facilities once they are abolished. What does the Government intend to do to the users of private vehicles? Is it proposed to cope with this "menace" to the railway monopoly by forbidding carriage of goods in the goods-owners' own vehicles? There is already legislative authority to do this. If the Government is not willing to concede freight to the present road motor services, what will it do to the ancillary user?

This is perhapa the most serious inroad on private rights that can arise under the contemplated transport policy, and yet it is a matter on which the Minister has maintained an absolute silence. If it were not the intention of the Government to interfere with ancillary users, surely the Minister wotild have said su in clear terms, to allay anxiety among goods transporters employing, or contemplating employing, their own vehicles if present facilities are abolished to protect the railways. There is little doubt that the Government, having once succeeded in eliminating the road services, will similarly bludgeon out of existence the ancillary user in favour of railway transport. The silence of the Minister on this important point is very ominous.

In about ten years the railways have lost a million pounds worth of passenger traffic to the private car. Will the Government under its new railway bolstering policy allow the ancillary user to repeat this in the more important goods transport field?* An explicit statement of policy on this point is urgently needed. Meanwhile it can be assumed from the silence observed that the ancillary user will be wiped out in his turn. This is a point in which business men would be advised to interest themselves deeply, and at once.

Except to those who are determined to bring about the socialisation of the means of production, distribution and exchange at whatever cost to the community, there is no advantage in socialisation, i.e., "single ownership." for its own sake. On the contrary, there is considerable loss1, both immediate and prospective, in eliminating healthy competition. On grounds of efficiency, convenience, and cost, the consumers of road transport in New Zealand have shown decisively that they prefer the present road services. These services employ many men, use much capital, and show a satisfactory profit. What is the sense i.i destroying a prosperous industry in pursuit of an academic predeliction for socialism? If private individuals and firms can do a job to the satisfaction of all concerned, there is no case for intervention by the public authorities. FREEDOM OF CHOICE. Here and elsewhere there is a certain amount of duplication. This, however, is unavoidable if the benefits of competition in improving service and reducing costs are to be enjoyed. The so-called wastes of competition are exaggerated, but the wastes of Government monopoly in the shape of poorer services, higher costs, and dictatorial methods have been experienced in most instances where such monopolies have been established. Under the camouflage of an ostensible desire to eliminate imaginary waste, the Government proposes to introduce the much greater if more intangible wastes that would inevitably accompany a policy of socialisation. As far as the consumer is concerned, freedom of choice is surely something worth fighting for by a people who do not desire to become a race of socialised 'serfs.

The hollowness of the Ministerial statement is nowhere more fully exhibited than in the final summary of the alleged advantages of the socalled single ownership policy. In the first place, it is claimed that there would be a substantial increase in

railways revenue with only a small increase in expenses. This, however, is not borne out by experience of railway operation. Railway costs tend to vary in almost exact proportion with tonnage handled, and there is every probability that the additional load thrown on the railways, particularly if 90 per cent, of the existing services are to be abolished, will raise .railway overhead, and perhaps force a rise in railway freights. Figures show that in 1934, on a tonnage of 5,642,000 the ratio of expenses to revenue was 86.65 per cent; in.1935 it rose to 86.98 per cent, on an increased tonnage of 6,024,000, while in 1936, though, tonnage rose to 6,189,000 the ratio also again rose to 88.46 per cent. In.his second point the Minister refers to the saving of wear and tear on the roads. This wear and tear, however, is paid for by the industry in the from of heavy traffic fees, tyre and petrol taxes. If the wear and tear is eliminated, then the ■ revenue from i these is also eliminated, so that the I situation is unaffected. The third point, that of diminishing danger on the highways by eliminating goods traffic, is almost too futile to be worth refutation. The implication that goods vehicles are especially dangerous is incorrect, experience shows the contrary to be the case. All traffic involves some danger, but to offer this as a reason for closing the roads to some part of it is absurd. The Government's real intention is to close them as far as any competition with the railways for goods freight is concerned with the resultant public loss of 'facilities and service. There is neither precedent nor justification for this "single ownership" policy and the expropriation of the existing road transport concerns.