“HIDDEN AIR SUBSIDIES”

Press, Volume XCI, Issue 27636, 18 April 1955, Page 3

“HIDDEN AIR SUBSIDIES”

COST ESTIMATED AT £1,000,000 A YEAR STATEMENT BY SHIPPING COMPANIES “The Press” Special Service WELLINGTON, April 17. The New Zealand Shipowners’ Federation believes that the “hidden subsidies” to internal air services in New Zealand amount to about £1,000,000 a year and says the Civil Aviation Administration should make public the cost to the country of all the services civil aviation enjoys. The secretary of the federation (Mr G. W. Mitchell) says in a statement that the federation is disturbed by a report about a proposed air link with the Chatham Islands.

The report said it was felt that too many of the costs of civil aviation administration in New Zealand were charged to airline operators when much of the annual vote for civil aviation was for capital costs and for services not purely for aviation, an example being the meteorological services which were also used by shipping which competed with the aviation industry. Mr Mitchell’s statement says: “Steamers sail irrespective of a weather forecast and consequently the shipping services are not dependent upon the meteorological service. In fact shipping supplies the Meteorological Office daily with a great deal of weather information. “It is well known that the growth of the Meteorological Office is largely due to the exacting demands of aviation which requires up-to-the-minute route reports over an extended day. In 1938, when commercial air services were in their infancy the Meteorological Vote was £16,601 and there was no Civil Aviation Administration. The 1954-55 Vote for Civil Aviation was £2,957,000 as a consequence largely of the development of commercial air services and included in the Vote was £331,200 for Meteorological Services. "User Pays” Principle

“The New Zealand Shipowners’ Federation considers that the principle of the user should pay’ should apply to all the public facilities enjoyed by the air services and that the fares and freights should be adjusted accordingly. Many millions have been spent on aerodromes and their maintenance throughout the country for the use of the civil air services apart from the defence aspect and the charges levied on the airlines last year for the first time are only ‘a drop in the ocean’ of the cost which should properly lie at the door of the air services. “It is felt that the time has arrived when the Civil Aviation Administration should make public the cost to the country of all the services which civil aviation enjoys, including the cpst of administration by Government Departments and amortisation of the capital expenditure. Without full information before it from the Government accounts the New Zealand Shipowners* Federation estimates that the hidden subsidies to the internal air services alone amount to approximately £1,000,000 per annum and it is ironical that the shipowners have to help pay by taxation for these subsidies in addition to meeting themselves full comparable charges for harbour dues, light dues, etc. "The New Zealand Shipowners’ Federation wishes to place on record its view that all forms of transport have vital parts to play in both war and peace and that the sound policy for obtaining proper balance is to give each form of transport an equal chance of providing without subsidies the job it is best suited economically to perform.” _