STATE TRADING.

Auckland Star, Volume LX, Issue 244, 15 October 1929, Page 8

STATE TRADING.

I a | OPPOSITION TO PRINCIPLE.

UNDESIRABLE INFRINGEMENTS

LESS POLITICAL CONTROL URGED.

'■ Several remits calling on the Government to restrict competition wi£h private enterprise were discussed at this morning's session of - the Associated "Chambers of Commerce. Suggestions were made that Stale enterprises should be organised and conducted as trade corporations, such as was adopted in 4 the .case of the Comor.wealth Bank of Australia and the Canadian Government Merchant Marine, Ltd. The Stratford branch urged the appointment of a commission to report to Parliament on the "existing undesirable infringements of private rights," while an Auckland remit advocated "that in order to place the railway and other State trading Departments on a true commercial basis it is desirable that they be freed from political control." All the remits dealing with the subject were accorded support after a lengthy discussion, and after the hearing of an address by Mr. R. L. Ziman on "The Crown in Business." Mr. Ziman's remarks were identical to those delivered on previous occasions, and pointed out that with the law as it stands at present the Crown was in a privileged position, and had certain prerogatives which ordinary business concerns and private traders did not possess. He exemplified numerous instances where the State was exempt from liabilities which devolved on private enterprise, such as freedom from taxing statutes, and almost the whole of legislation relating to local government. In moving a vote of thanks to Mr. Ziman for his address, Mr. A. F. Wright said that an abuse of the previleges of# government was created when the Royal prerogative was invoked to make a profit for a State trading department, and a loss for a private venture.

, Fear Of Abuse. Fear (that trading by the Crown would be abused was expressed by Mr. H. T. Merritt, in, presenting the two Auckland remits. There were interferences by the Government which were legitimate, but there was danger of its being used for unscrupulous purposes. There was some State trading to which no objection could be raised, but it should all be subject to laws and taxation that governed other institutions. If the conference adopted a definite stand in the matter, there was a probability of some action being taken by the Government next session in the direction of restricting its trading operations. \ Control of the Railways. Referring to the railways and the announcement by the general manager (Mr. H. H. Sterling) relative to the commercialisation of them, Mr. Merritt said that if they were to regard the railways as a 'commercial proposition there were three commercial principles to be applied to them. They concerned the control of expenditure, the control of prices, and the control of the staff. Yet when these principles were applied it was found that expenditure was entirely determined by the Minister and the Government, the management was not allowed to fix the rates, and the control of the staff was also outside of its control. In his Budget statement the Minister had written off £8,000.000 from the capital account, and in the same breath said he was going to spend a further £10,000,000 on/capital expenditure.

Control by Politicians. How much of that £10,000,000 had been approved by the management of the railways? If the test were applied' and, the necessary, information were available it might be discovered that much of the proposed capital expenditure was unremunerative and uneconomical. If the railways were to pay, then the present system of control must be abolished.- If they were content to lose £1,000,000 on the service annually, then let the present policy" continue to remain in the hands of the politicians. Otherwise they had to face the position and bring pressure to bear to have remedies effected. • ■.• Mr. D. Seymour, of Hamilton, said it seemed impossible to place private enterprise on an equal footing with business by the Crown so long as the State was behind it with the State guarantee. It followed that the members of the community were the guarantors of the State, and automatically guaranteed the very institutions that were "cutting their throats." The value of the State guarantee could be gauged by an examination of the Public Trust accounts, which invested in estates it held at the market rate and paid out on the common fund rate. The difference between the two amounts was £1,000,000 in 1922, since when the figures had not been available. Mr. J. B. Richards said it was little 'use tackling the question in a sectional manner. He favoured a commission to report to the Government on the' infringements of private rights by the State. Mr. A. G. Lunn said it was not realised that incursions into private enterprise had the tendency to narrow the compass of taxation. He felt that the railways were being used too much as a "pawn in the political game." Fair Play Asked. Mr. W. Machin, of Canterbury, said that the very people who were against the socialisation of the means of distribution and exchange, by interference with private enterprise were bringing about a socialistic state of affairs. Things had come to the pass when a serious principle was invojved, and steps would have to be taken to prevent private, enterprise being rendered impotent by Government Departments and local bodies. As traders, they should ally themselves together and see that the Government gave fair play and justice so far as trading was concerned.