POWER BOARDS

Ashburton Guardian, Volume 49, Issue 199, 8 June 1929, Page 7

POWER BOARDS

LIMIT TO TRADING ADVOCATED.

UNFAIR COMPETITION ALLEGED.

(Per Press Asst*ciatio'n.) . WELLINGTON, June 7. The competition of power supply authorities with private enterprise in Ihe sale of electrical appliances was the subject of a deputation to the Minister for Public Works (Hon. A. Ransom) to-day representing the Electrical Federation, comprising those engaged in the trade. The chairman of the Federation (Mr J. M. Fleming) said the late Minister (Mr Coates) had interpreted the authority given to Power Boards as meaning that they should be permitted to enter into trading only in the event of a combination of private enterprises operating against them to their detriment. In many cases, however, it was found that Power Boards had been trading since their inception. He pointed out that the Boards were exempted from various charges which those engaged in private enterprise had to bear, and this was another respect in which the Boards had an advantage over the private traders with whom they were competing. Then there was the question of public money being used to give terms to purchasers, the Boards being thus enabled to offer more attractive terms than private enterprise could afford it. A point which the Federation felt particularly sore about was that certain local bodies arid Power Boards acted', as agents for manufacturers of electrical goods, placing the private trader in the position that it was impossible for him to compete. It was found in some instances that supply authorities were withholding deferred terms from customers unless they purchased the particular article for which the authority was agent.! That meant that _no trader had a chance to sell his article.

Profit and Loss. The Federation further maintained that there was no necessity for Boards to sell electrical apparatus at cost in order to build up their load. How was it possible for any trader to compete with a power authority which offered an article at cost price because cf the profit made out of the current which the article consumed? Surely It was never intended that the Boards should become active competitors against the electrical trade in that way. Mr Fleming submitted that every trader should be entitled to go into every Power Board district and obtain the same terms as the Board enjoyed in selling its supplies. A lot had been heard abeut the profits made by the Power Boards. He ventured to say that if an Investigation was made into the actual finances of the Boards since their inception it would be found in many cases that no profits had been made, but actually losses. That was a serious thing from the national point of view, for the taxpayers had to stand losses and pay accordingly. Mr Fleming said it seemed to him that too much power had been given to the, Power Boards. Under the legislation passed in 1918 too much latitude was given to the Boards in the matter of trading, and he felt that the time had arrived when in. the interests of the country as a whole, and particularly in the interests of electrical traders, some definition should he made by the Government on the question. It should not be left at the discretion of individual Boards as to whether they should embark on trading operations. Apparently the Act was not clear enough in its intention. He suggested that the Government should define its policy in the matter.

Equal Basis Desired. "If you think trading by Power Boards is not desirable," said Mr Fleming, "then we ask you to put trading on a fair competitive basis. As traders'we have no objection to any competition we have to meet, and if yon put it on a fair competitive basis •we can no longer have our present objection. If you are not prepared to do that, we say you should relieve us of' the responsibility of meeting various forms of taxation from which the Boards are exempt." Mr E. W. Ackland said it would not be so bad if there were some kind of uniformity throughout the Dominion in the matter of trading, but at present the Power Boards had the advantage over the traders. Ihey did not see the necessity for the Power Boards to enter into competition with the private traders, particularly in the larger centres. A Bill had coen drafte-J last year to give relief, but it had not come forward. In repaid to sales at cost by the Boards, Le said they were able to do so by se-bng cm rent at a high figure. • Mr S. Paterson also stressed the inequality of trading, and said that they were willing to compete on level terms fcrith the Power Boards. If the supply. Authorities were compelled to run their trading business on commercial lines, provide their constituents with proper balance-sheets of their operations, disclose whether they were actually making profits or losses, and adjust their losses by varying the charges to their 'Sconsumers, the trouble would cure iteelf in a very short time.

The Minister's Reply. Replying to the deputation, the Minister said that as a matter of policy the Government was setting its face against interfering as far as it was able with private enterprise. It also ■wished to give every encouragement to those engaged in the business of distributing electricity. Mr Ransom said lie knew the viewpoint of the Power Boards in respect to trading, and he suggested that the deputation had probably chosen exaggerated cases to illustrate its points. He thought the difficulties could be overcome without the drastic remedies suggested. He did not think the conception of the Department when it recommended the lines of legislation was that Boards should be permitted to trade in order to overcome the prevalence to charge consumers excessive prices. It was rather that facilities might be given to the Board to supply all the electrical requirements of their districts, particularly if those districts were- being served with electricity for the first time and trades had not come into business there. "It was almost essential," said the Minister, "that the Boards should be in the position of supplying their consumers with equipment to enable them to take power." The Minister said he was not in. sympathy with Boards which endeavoured to sell articles to consumers at prices that were not competitive. He knew that goods had been sold at practically mast price to encourage the consumpfta of a certain load, but Power

Boards had to run their concerns on business lines, and advantage had to be taken of every opportunity of advancing the business. It was, therefore, necessary to encourage the sale of equipment which would give a return to the Board other than on the peak demand, and it was sometimes necessary to offer apparatus for sale at prices which would not appear to the traders to be a profitable proposition, Mr Ransom said he was in sympathy with the deputation when it asked that the Boards be placed on a reasonable competitive basis in the sale of electrical appliances. It was recognised that most of the Boards which entered into trading in the early stages did so to encourage the sale of electricity. In most of the municipalities where power was introduced for the first time the Boards immediately found themselves in competition with gas companies. The gas companies wisely set out to compete against the sale of power, and offered attractive facilities for the sale of their goods. The Boards were' then obliged to offer similar facilities in respect to the sale of their apparatus. As to the point of fair competition', he would go into that and see- what could be done. The question of depriving Boards of the right to trade, was a policy matter, and the deputation's request would be noted should a Bill be brought down later. As to the Boards' colouring their losses he could not understand that suggestion. It was not the practice of the Board of which he was chairman. Its accounts were always audited and it endeavoured to run its trading on fair lines. Voices: That is not the case at all. Mr Ransom said he agreed that all Power Boards should be required to keep books showing clearly their financial position and that they should be audited and open to public inspection. He was not in favour of anything that lent itself to unfair competition, or which did not disclose quite clearly to the public what was being done. Mr Fleming submitted to the Minister • that no power authority should have the right to dictate to the consumers what particular range should be supplied to them. That was actually being done, and it was quite unfair. Every trader should have the opportunity to get his article on the market.

Mr Ransom: It would be all right provided the business could be done through the Boards. Mr Fleming said they did not object to that.

The Minister said he could not commit himself on the point: In regard to the taxation question, he said ho did not know'what the Minister for Finance proposed in his taxation 'nroposals.'