STATE AND MUNICIPAL TRADING.

Press, Volume LVIII, Issue 17393, 2 March 1922, Page 7

STATE AND MUNICIPAL TRADING.

WHAT IT MEANS. INEFFIENCY AND WASTE. (Contributed.) No. 1. "Certain. State services hive hitherto Qjeea conducted at an. or.tiua.l losa which has to bo met by the general tuxpurors instead of by tho uaors. Those wrvic+n should be self-supporting and should be oonduoted upon a proper business basis." The above statement was made by the Prime Minister in tho Budget submitted to' the House of Representatives in November last. Of its accuracy there can bo no doubt and of its significance little question. Mr Massey was speaking with a full knowledge of the facts, and. with an earnest desire, wo may bo sure, to remedy a state of affairs which conduces neither towards national efficiency nor towards national economy. Faced by tho necosßity of maintaining the financial stability of tho country under conditions ol unparalleled difficulty ho was driven to admit that iStato and municipal trading undertakings were not only competing unfairly against privato undertakings of a similar nature, but were also failing to realise tho beneficent objects for tho attainment of which they were promoted. With so muoh it may be reasonably resumed that m tho near future tho Prime Minister will apply himself to the restoration of tho sound conditions of trading which provide for equality of opportunity and stimulate enterprise and efficient service l - Meanwhile, however, it will not be amiss to mention somo aspects of the question witih which tho pubjic may not be familiar. In tho remark with which Mr Masse,y emphasised the need for placing the various State enterprises upon a propet business basis and malting them solfsupporting he merely' indicated what be attempted to improve tile existing position without entering upon any radical reform. His suggestion, in short, was rather ft palliative than a cure. "With thia object," he said, "expenditure has been reduced in several cases, whilst in others a rearrangement of certain fees and charges is being made which will largely reduce the charges at present borno by the Consolidated Fund." This implies that the activities of certain continuing State trading departments have been restricted, and that the fees and charges of others have been increased. If these steps are effective from the financial point of view, tho result will ba contrary to the expectation and experience of most business men. Lessened services and higher charges are not calculated to attract additional patronage, and in a fcJtuto trading ■ concern the greatest good to the greatest number surely is a factor to bo taken into | account. It is quite true that State trading, in the imagination of sanguine and not very obset'vint people, may develop a glamour which makes it a very attractive proposition. Not i«oed it be denied that tihere are great national undertakings, such as railways, post and telegraph offices, and so forth, which properly remain in the hands of the State. Those are so vital to the development of the country and to the wel.l-boing of its people that it would be impolitic to commit them to the custody of private enterprise maintained for the sake of profits. But Stat© coal mines. State tourist resorts, State house-building, State sawmills, State fisheries, and Stat® steamer services, • like municipal milk, supplies, fish distribution, tram services, electric lighting and gas works, stand in quite a different category. State railways and State post and telegraph services, though notoriously lacking in the "proner business basis" which the Prime 'Minister declares to be necessary to ensure tho best result* from such undertakings, are essentially monopolies that coulcT not be removed from Government control in existing circumstances. But, speaking goner- , ally, the other undertakings mentioned, ooth Stat® and municipal, serve merely sections of the community and are neither so economical nor so efficient as are the privato "undertakings against which they compete. Though provided with ample funds at a low rate of interest and relieved of income tax, land tax, and, in tho case of State undertakings, of Customs duties, harbour dues, and municipal rates, in no comparison that has been made has a State undertaking been shown to bo as economically and a« efficiently conducted a 9 are private undertakings of the same nature.!