PARLIAMENT Attempt To Merge Gas And Power “A Failure”

Press, Volume XCVII, Issue 28699, 24 September 1958, Page 14

PARLIAMENT Attempt To Merge Gas And Power “A Failure”

(New Zealand Press Association) WELLINGTON, September 23. The attempts to co-ordinate the electricity and gas industries had failed, said the Minister of State Electricity (Mr Watt) in the House of Representatives this evening during the second reading debate on the Gas Industry Bill. It was read a second time. The bill establishes the Gas Council which will administer the distribution of money paid to the industry in the form of a subsidy. Mr R. A. Keeling (Government, Gisborne) said that as from April 1 next, one-third of the present subsidy would be used by the council, at its discretion, for the betterment of the industry. Mr Watt said the industry was essential and the aim was to improve the industry’s efficiency. The subsidy was not to be used for the immediate benefit of the consumer, as such; but rather to improve efficiency and reduce costs.

Mr Watt said an honest attempt was being made by the Government to retain, maintain and expand the gas industry. He was not critical of previous attempts to co-ordinate gas and electricity interests; but when be assumed office, a report had ’been made to him which indicated that the proposals could not became effective unless they were enforced. In view of that, the Government had decided, as a first step, to declare the gas industry essential to the economy of the country.

If gSs was not available to consumers, there would have to be a one-tenth increase in power to meet an increased demand for electricity by about 178,000 consumers. Having established the necessity of the gas industry, the Government had to ensure that every encouragement was given it to get it on to a sound footing. The bill provided for a gas council which could appoint technical and advisory councils. The functions of the council emphasised the need to develop- effi - ciency in the industry and it would administer an account drawn from the Consolidated Fund.

Plana for Subsidy The Government had agreed to extend the present gas subsidy to the end of March, 1959; but from that date the subsidy would be reduced gradually until its disappearance by the end of March, 1960. The Gas Council would determine where the subsidy was to be paid and emphasis would not be on the amount of gas sold, but increased efficiency in the undertakings concerned. Mr Watt said the very fact of declaring the industry essential had attracted some capital and the assurance of the Government’s continued support for the industry would, he hoped, attract more. It was in the best interests of New Zealand that the industry, which used New Zealand oal and manpower, should be rejuvenated. “There is no doubt gas and electricity have been fighting,” said Mr W. S. Goosman (Opposition, Piako). “They will continue to do so. It is very hard to mix them. They are like oil and water. Perhaps I should say that it is personal. They have been contesting—almost abusing each other—for years and they do not come together very well.” Coal Prices “If the Government in the next two or three years spends £500,000 it will still be worthwhile if the industry is placed on its feet,” said Mr Keeling. it would be helpful if a five-year contract for coal could be negotiated and also if the price could be levelled out. The price at Greymouth was £3 17s a ton. while at Dannevirke it was £8 14s There was also provision in the bill for a power supply authority to take over a gas company if it could be arranged. Mr W. A. Sheat (Opposition, Egmont) said quite inadequate

time was being given for all the people and organisations affected by the bill to study the provisions properly. Departmental representation was too heavy—the departments could give their views to tjje council without being members. He also criticised the appointment of a representative of the Federation of Labour to the council. This was carrying worker participation a bit too far. The council was not going to deal with workers’ conditions, but with the financing of the industry. It was the policy of the federation “to get a finger in every pie.” Workers’ Representation

Mr W. A. Hudson (Government, Mornington) said the Government believed in worker participation and the Federation of Labour, with its 250,000 members, was a representative of consumers.

Mr A. E. Allen (Opposition, Franklin) said it was probably a wise provision not to make a flat rate subsidy to every gas undertaking. It would be better to apply the subsidy in such a way as to increase the undertaking’s efficiency.

Mr Watt, said co-ordination had been tried and it had failed. So far as composition of the council was concerned, all the departments represented had a vital interest in its work. The Federation of Labour would represent the workers in the industry who knew as much about the industry as anybody else.