THE GAS INDUSTRY

Ashburton Guardian, Volume 49, Issue 200, 10 June 1929, Page 7

THE GAS INDUSTRY

PUBLIC AND PRIVATE ENTERPRISE. (Nineteen Twenty-Eight Committee). It must have been either a very simple or a very subtle person who would write to the “New Zealand Worker” last week, claiming that municipal enterprise was supplying gas for lighting, heating and power at a much lower price than private enterprise , was charging. Either he did not know the facts of his case, or he attempted to disguise them. He stated that while the Auckland Gas Company charged 7s per 1000 feet for its gas, and the Christchurch Company 7s 6d per 1000 feet, the 'Dunedin municipal gas department charged only 6s 3d for light, 6s 3d for heat, and' 6s 3d for pow'er. 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 inquiry at the office of the Wellington company, however, elicited the information that the average net price charged for the company’s gas was 6s 10d per 1000 feet. It may he assumed that the net average price of the other two companies i 9 approximately the same, though the works of the Christchurch company are not, as the contributor to the “Worker” says, “at or near a port where transport charges on coal would be the same.”

If it effords the champion of municipal enterprise any satisfaction, it may he admitted at once, that the municipal gas department should be producing and selling gas at a much lower rate than a proprietary company can do. The municipal department is exempt from a number of charges which fall upon the proprietary company. Take, as an example, the case of the Wellington Gas Company. This company last year made following payments:—Annual license £200; receipts stamps £520; income tax £10,089; land tax £529; City Council’s royalty and miscellaneous charges £l3Ol. 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, a substantial difference between the rates of interest on capital and debentures charged to municipal undertakings and private undertakings. Using the instance just quoted, this would mean a further additional charge of £9920 upon the private undertaking. It is plain, then, that the municipal undertaking starts out with an annual concession of £22,559, which would amount, in this particular instance, to a handicap of 9-Jd per 1000 feet upon the annual output of gas from tho private undertaking. This being the case, it follows that the Dunedin municipal gas department, exempt from the burdens imposed upon private enterprise, should be selling its gas at 6s OJd per 1000 feet, instead of 6s 3d as at present.

This champion of municipal gas production implies that the smaller municipal undertakings, with few exceptions, are doing as ivell, proportionately, as is the Dunedin undertaking. “In considering this question,” he observes, “we must not lose sight of the fact that municipalities frequently provide a service in circumstances and under conditions which offer no inducement to a private concern to establish works, as there is no prospect of these works showing a profit.” Whether this is intended as a reflection upon “private concerns,” or as an admission that “municipal concerns” cannot cope with such problems, is not quite clear; but it is obvious enough that private enterprise, hampered as it is by taxation and conditions from which municipalities are exempt, cannot go to the assistance of such communities, however anxious they may be to extend their operations. The solution of the whole problem, of course, lies in the adoption of the recommendation made by the Taxation Commission ,a few years ago, to the effect that, all Government and municipal trading concerns should he placed upon the same footing in regard to income tax and other charges, as are private trading activities. Meanwhile, the exemption of these concerns from taxation is a scandalous imposition uoon both workers and employers.