POWER BOARDS.

Auckland Star, Volume LX, Issue 36, 12 February 1929, Page 8

POWER BOARDS.

COMPETITION WITH PRIVATE

COMPANIES.

CHAIRMAN'S VIEWS OX TAXATION

Reeent criticism of the operations of power boards has been made by Mr. J. W. Hayden, chairman of the Waitemata Board.

"I have noticed that the Prime Minister, Sir Joseph Ward, is considering the question of the taxation of the profits of power boards," said Mr. Hayden. "There is, no doubt, very strong pressure by shareholders in competitive industries to have hydro-electric development checked to some extent, on the ground that its competition is unfair, inasmuch as power boards receive preferential treatment as against private enterprise. The real objection is that the rapid growth of electric power and the improvement in domestic appliances are combining to make serious inroads on the future revenues of private enterprise. "The business side of hydro-electricitv has been placed in the hands of power boards, elected by the people to run the business for which they have pledged their holdings, firstly* for Government loans, and secondly, for the power boards for the reticulation of their districts. The duty of a power board is. therefore, to adopt business principles in supplying its own shareholders with electric energy at cost price, after making due allowance for sinking funds and depreciation. It is compulsory for every board to pay certain amounts to sinking fund commissioners for depreciation, etc., so that the total fixed charges on its total loan indebtedness amount to nearly 9 per cent, which would be available as dividends if a power board were a private company.

"I do not know of any private concern that is compelled to repay the whole of its capital in a given time by a sinking fund, and has also to set aside each year another fund for depreciation, which is virtually another sinking fund, besides a large annual commitment for repairs and renewals to keep the whole system in first-class condition. Surely thepreeentday consumer has a hurdle "big enough to jump without any further taxation to help posterity. I do not object to income tax being levied, because there are no profits to tax. If a profit is made in one year it is given back to the consumer the following year by a reduction in charges. 1 fail to see what extra taxation can be levied on power boards, as they now pay the local rates and motor taxation.

"Regarding the allegation of unfair trading. I do not know of any board in the Auckland district that is competing unfairly agsiinst private enterprise. Mv board has a very restricted trading department, which exists solely to extend the cooking load, which is absolutely necessary in the ratepayers' interests, but we will finance any particular stove! provided it will give good service to the consumer. We could make serious inroads on the business of private traders, but, as that would be unfair, we have never contemplated it." •