UNFAIR COMPETITION

Evening Post, Volume CVI, Issue 5, 6 July 1928, Page 8

UNFAIR COMPETITION

STATE IN BUSINESS LOCAL BODIES' SHARE (Nineteen Twenty-Eight Committee.) The passage of the Board of Trade Amendment Bill through . Parliament provides a striking example of the rapidity with which important and farreaching legislation may be placed upon the Statute Book. This Bill was introduced in the Legislative' Council six days before the conclusion of the short and crowded sessionof 1923, read a first timo, a, second time, committed, read a, third time, passed, and sent on to the House of Representatives all within an hour. It was given its first reading in tho House the same evening. Four days later it was read a second time, committed, read a third time, and passed only thirty-six hours before the close of the session. In moving the second reading of the Bill in the Council, the Leader of that branch of the Legislature explained that tho passage of tho measure was urgen-; because business firms declined to produce their books, or to allow anybody to look into their private affairs, or to answer any question to which the Board of Trade alone had the authority to require an answer. The then Minister of Industries and Commerce stated that' from his point of viow the main purpose of the Bill was to substitute an inexpensive Minister for an expensive board. Should : that arrangement prove unsatisfactory it could bo reviewed at the end of the year. If there was any serious opposition to the measure it would be dropped. That the Government, for the most part, has administered tho Act with propriety and discretion there is no question, but the presence of Buch an enactment upon the Statute Book is a menace to the whole community and might be turned at any time to most undesirable purposes. Hence tho crying need for its repeal' or its drastic revision. LOADED ENTERPRISE. Grave as is the retention of such a measure as the Board of Trade Act onthe Statute Book in its present form, still graver is the entrance of the State into the spheres of trade and commerce in competition with private enterprise. The Board of Trade Act, at least, may be reviewed at any time while Parliament is in session, but once State trading in any direction is established it seems able to bid defiance to all the constituted authorities, "including the • Government its.elf, .for an indefinite time. _ There are, of course, great undertakings, such as railways and post and telegraph services, which by common consent have been accepted as national responsibilities on account of their universal use and the part they play in tho development of the country. It is not contended that the railways are as efficiently or as profitably operated by the State as they would be by private enterprise, but State control has been established and is likely to remain. Then "there is a large class of undertakings, such as life insurance, fire insurance, accident insurance, State Trust office} money-lending, sawmilling, house-building, and so forth, all of which are in competition, and often in unfair competition, with private enterprise, without conferring any tangible benefit upon tho general public and in many cases involving the State in heavy losses which the taxpayers in duo course must cover. Again, there are State activities of a similar kind, too numerous to be set out just now, which are frankly bolstered up from the Consolidated Fund. SQUEEZING TRADERS OUT. Though necessarily on a much smaller scale, and in a more confined area, tho interference of local bodies with private enterprise is even more pernicious than is State interference. At the moment it will bo sufficient to indicate one or two cases of gross injustice in this respect. When tho Electric Power Boards Act was placed on the Statute Book in 1918, giving the boards authority in certain circumstances to assist in the distribution and uso of electric current, it was never contemplated by Parliament or the public that this authority would be employed in driving the established traders out Of business. But that is actually what has happened in a number of .cases, many of the boards employing public capital in cutting prices and financing purchasers. Of the thirty-five power boards in operation at the present time, fifteen carry on full trading operations, supplying machinery, appliances, apparatus and material, as well as undertaking the general work of house-wiring. In addition to these fifteen boards, there are eleven others, selling ranges,! motors, water-heaters, and similar, articles. Practically the whole of these sales mean the diversion of business from tho private traders, who, having; to pay. rates and taxes and interest on the capital they employ, cannot afford to sell their goods and appliances on generous terms and at cost price. Then there is the case of the privately-owned gas companies-in competition with the muni-cipally-owned electric systems. During the last six years the Wellington Gas Company has paid £101,997 in State taxes, municipal rates, royalties, and so forth, and the Auckland Gas Company no less than £202,158, while the municipal concerns and power boards escaped these charges altogether. Surely there is a gross injustice here obvious to. everyone.