The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. FRIDAY, AUGUST 24, 1928. ROSY FINANCE.

Auckland Star, Volume LIX, Issue 200, 24 August 1928, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

FRIDAY, AUGUST 24, 1928. ROSY FINANCE.

For the «o%m that lack* autttWMl, For wrong thai needs retutonat, For the future in the dittanc*, . And the good that «m dm do-

It may occur to sqme on reading the statement of the Minister of Finance on State enterprise that a very successful company promoter was lost when Mr. Downie Stewart took up politics. A Conservative survivor from the old days when the fathers of the present Reform party thundered against the "Seven Devils of Socialism" may stand aghast at the positively loving way in which the Minister lingered over the possibilities of profitable State trading. We are left in some doubt as to when he was referring to electrical enterprises and when to State trading generally, but he was really lyrical over the blessings of State-owned water power. His speech was faintly reminiscent of a certain type of prospectus, in which the promoter gaily hurdles the essential uncertainty. "Assume that only five per cent of the population use our product, then the profit will be so-and-so," when the whole problem is to induce that percentage to be customers. Mr. Stewart foresees a profit of millions from water power, and he pictures a glittering future when, if the public in the meantime consents to forego reduction in charges, the non-productive debt will be paid off, taxation lowered, and social services increased. Here he seems to refer to State enterprises in general. Mr. Holland must have enjoyed the Minister's reference to the Socialist ideal of State ownership, in which profits previously reaped by private trading would be devoted to the general good. Of course, the still small voice comes in wi.'.li the awkward question, "Would there be the same profits?"

Immense profits would be made, says Mr. Stewart, "and there was no end to the financial possibilities, assuming the profits were up to predictions." Exactly; assuming that five per cent of the population use our goods. We shall be delighted if the Government's water power enterprises turn out as well as Mr. Stewart expects, but is it utterly unreasonable to point out that the Government to which he belongs has been sadly astray in estimates of the cost of these schemes, and to suggest that possibly calculations of profits may also be unreliable? Look at the history of our railways. Quite apart from the fact that they do not make a profit, how much has been written off for depreciation since Vogel brought in his Public Works policy? The branch lines that are unprofitable—what does their value stand at on the books of the Department? There is also the consideration, of which the Minister is well aware, that the public may not consent to be taxed to allow a succeeding generation to be happy in a debtless world. It may ask what posterity has done for it that it should be taxed for posterity. On every public ent- •-

prise there is the doable pressure of customers demanding lower rates and employees demanding higher wages. Private enterprise must make a profit or die. State enterprise ean yield to sach demands and send the bill to the general taxpayer. Of course, we are not arguing that State enterprise is never justified. We are merely looking a little deeper than the writing on the prospectus.