Alliance Condemns Govt. Offer Of Loan For Hotel

Press, Volume CI, Issue 29928, 15 September 1962, Page 12

Alliance Condemns Govt. Offer Of Loan For Hotel

(N.Z. Press Association) WELLINGTON, September 14. The New Zealand Alliance today condemned the promise of the Government aid to private enterprise in the hotel industry. The Government, the Alliance said, had offered New Zealand Breweries, Ltd., a loan of £500,000 to help build the Southern Cross Hotel at Auckland and was also offering £4 million—half by loan and half by guarantee—“in sponsoring Jiquor interests* endeavours to retain the tourist business.

After commending the decision of the Tourist Hotel Corporation to build hotels at Wanaka and Waitangi the general superintendent of the Alliance (Mr T. J. Young) said the taxpayers bore the cost of isolated tourist resort hotels, while the Tourist Hotel Corporation had no hotels at the profitable and compensating tourist gateways to New Zealand, such as Auckland, Rotorua, Wellington and Christchurch. The corporation's last report showed that £263.509 of the corporation's debt to the taxpayer was written off. '"Only a few weeks ago the in charge of Tourist and Health Resorts (Mr Eyre) bluntly stated that the trade had failed to meet the demands for tourist accommodation in the main centres, and that the Tourist Hotel Corporation therefore intended to build hotels there,” said Mr Young. “The citizens commended the Minister for his forthright statement and his determination to cater through the corporation for the demands of tourists. “Only the trade and its mouthpiece, the Travel and Holidays Association, condemned the Minister for his hold announcement. Offer to Trade ■ “What has happened in the Weeks between? We now have the Government offering £500,000 to New Zealand Breweries as a loan on the Southern Cross Hotel at Auckland and offering £4.000,000 —half by loan and half by guarantee—in sponsbring the liquor interests’ endeavour to retain the tourist business at these strategic gateways. •“During the last few years the liquor trade, with sufficient bar outlets to sell their beer, have been systematically converting city accommodation into office space. “Under buoyant trading conditions New Zealand Breweries paid-up capital advanced from £3,486,023 in 1959 to £7,046,424 in 1962. and during that time it has reaped, by way of net profit, from the community £2,441,633 and has lifted its shareholders’ funds from £6,191,272 to £11,044,706. “It? bank overdraft last vear was raised from £700.255 to £1,117,956 at a

time when ordinary businessmen were being forced to liquidate or reduce their bank accommodation. Trusts "Handicapped"

"In contrast with this accommodation and the offer of £4 noillion to private enterprise, trust control has been heavily handicapped for want of guarantees and financial accommodation. Also local trusts are asked to pay upset prices for several thousands of pounds whereas the trade, for a century and up to 1948, received all its licences for nothing.

"Only two of some 23 trusts 'voted for have been able to start. The percentage of trust voting in Matamata was 69 per cent.. Mount Maunganui 72 per cent., Te Puke 78 per cent., Upper Hutt 82 per cent.. Lower Hutt 80 per cent., and Stewart Island 74 per cent., but means of finance thwarted their commencement.

"In 1949, the King Country voted in favour of trust control with 74 per cent., but. in 1954, that vote was reduced to 35 per cent, after the Government announced to the people in that area that it would not assist with advances or overdraft guarantees. “We know another instance where a trust had completed arrangements for a bank overdraft, but the Government stepped in and stopped it. “Attractive Investment” “Price control and capital issues control have been removed. Considerable progress has already been made in easing restrictive licensing laws, and proposals for fur-

ther modifications are ait present before Parliament. These factors, in themselves, have made investment in hotels more attractive. "In face of this admission we consider the people ought to have an opportunity to say, by vote, whether they want extended trust control to benefit from the widely increased facilities and from this financial support, or whether the liquor monopoly should be so vigorously assisted. “In any case we urge that the Tourist Hotel Corporation be considerably strengthened and widened by the building of tourist hotels in strategic tourist centres. Unless this is done and trust control is more adequately helped, it would appear we are drifting rapidly into government of the people for the trade.”

Hotel Investment Body Named

(N.Z. Press Association) INVERCARGILL, Sept. 14. Appointments to the Hotel Investment Account Advisory Committee were announced today by the Minister of Justice (Mr Hanan). Those appointed, are Messrs M. J. Mason, public accountant. C. H. Suisted, retired public accountant, and J. R Tipping, public accountant, all of Wellington. The committee was established to advise the State Advances Corporation on applications for loans from the Hotel Investment Account.