HARBOUR TARIFFS

Evening Post, Volume CXL, Issue 19, 23 July 1945, Page 6

HARBOUR TARIFFS

EVIDENCE FOR BOARD

"COULD FACE BANKRUPTCY"

"If the Harbour Board were put on true accounting principles,. the board would be bankrupt if we go on as we are doing. The earning capacity is the only test of the soundness of such a business," said Mr. W. Appleton, accountant, appearing this morn- | ing as a member of ■ the .If arbour Board before the resumed hearing by the Price Tribunal "of the, aplication of the Wellington Harbour Board for permission to increase dues and charges. Mr. Justice Huntes is presiding. / . Mr. Appleton subsequently denied, when cross-examined by Mr. B. :S. Coilnoi*, a member of the tribunal, that i this was a, "scare statement," and he land the board's solicitor, Mr. J. F. B. Stevenson pointed out that if the money was not' there to. allow the board to pay its way, debenturer holders had the right to have the receiver called in. In his evidence Mr. Appleton said that the loss on the current accounts by September 30(this year was estiI mated at £48,000, and a further £40,000 loss could be expected between then and the end of 1945. This could not be covered by overdraft, because the Local Bodies Finance Act prevented an overdraft being raised more than the amount of outstanding rates or revenue, and at September 30, the board's anticipated outstanding dues would be only £12,000. Mr. Appleton described the situation of the board's special funds and claimed that they were not in such a position as to be of any help in the present difficulty, when the board was facing a loss of £169.000 a year. As for any idea of raising, a loan,. the money was simply not there, or'in prospect, to pay interest and sinking fund. "It would be frank suicide to borrow now," added Mr. Appleton. Mr. A. P. O'Shea,, representing the New Zealand Farmers' Union, asked Mr. Appleton if it was any use allowing the board extra money if it was just going to be taken off it, for it seemed to Mr. O'Shea that the more money the board might get, the more 'demands would be made on it. Mr. L. Munro, a member of the Price Tribunal: Are you suggesting that we should not consider an increase to the board? Mr. O'Shea: I think it is the duty of the tribunal to safeguard the public. To Mr. H. L. Wise, secretary of the tribunal, Mr. Appleton said that, ignoring depreciation, there was now no margin at all between revenue and expenditure and the larger the volume of traffic handled, the greater the board's loss. HARD ON THIS GENERATION. "It seems to ,me that, while the policy of the board is very sound, that policy does press somewhat hardly on the present generation," said Mr. Wise, after pointing out that a loan of more than £800,000 is to be repaid in 1946, which would save the board £48,000 a year in charges. Mr. Wise also! questioned the need to set £77,000 aside in 1943 for depreciation, as compared with a normal £50,000. Mr. Appleton said 1943 had been a particularly heavy year for wea.r and tear, and maintenance costs were rising. ' . , ■Mr. Wise said that m a few years' time the board's assets would haye been completely paid for. Hence the present generation was really paying twice over: it was paying for depreciation and repair and maintenance, which was quite right and proper, and paying off the assets as well, plus re-j placement funds for when the assets wore out. If the board were run as an ordinary commercial undertaking, it would not have to pay off a loan in such a short time. Mr Appleton said he could not agree with that. However, supposing the results of a successful application to the tribunal were that the board made a profit above a reasonable margin, the board would be perfectly willing to have its charges reviewed again. EFFECT ON CONSUMER GOODS.

Asked by Mr. Munro what effect any increase in the board's tariff might have on consumer goods, Mr. Appleton said he had seen some figures the other day which showed that the effect would be "very, very slight." It might be 2s or 3s a ton on some goods and much, less on others; for instance, the extra cost-of handling flour would be only about 6d Further evidence for the board is being heard, along the lines indicated by Mr.. Stevenson when the hearing opened. .