PUBLIC BODY TRADING

Evening Post, Volume CXI, Issue 106, 7 May 1931, Page 10

PUBLIC BODY TRADING

REFORM WANTED

(By the Associated Chambers of Com-

merce of N.Z.)

To those optimists who believe in the pussibilily of a political millennium, tho rapprochement last session between, tho major parties in the Legislative Assembly must have.: 'been .encouragingl. , Mr. Forbes showed great strength of character,v.courage,::and determination, and in this, no doubt, he had tho backing of Ms party. Mr. Coates and his followers displayed tolerance, and friendly co-operation with a disposition to help where they might easily have hindered. The result, has been, the passing of measures of retrenchment (as distasteful to politicians as they are to business men -in similar circumstances) which will do much to ease the economic situation.

Such zeal on the part of these parties in the House tempts tho Associated Chambers of Commerce to express a hope that the Prime Minister, supported liy the Leader of the Opposition, will tako steps to carry out a longstanding pledge to put.all Government and, public body trading concerns on the same footing as those 'conducted by private .. enterprise.■-;-. This- policy figured in the platform of both parties at last election and has, in fact, boon the subject of many expressed,, ; but unfulfilled promises. : Neglect in > thisj direction has seriously affected the Government's, revenues, and now that the Minister of Mnance is experiencing so much trouble with his Budget, it seems strange that he has not turned his attention to a hitherto untapped source of revenue. It has often been stated' that; the influence of public bodies', representatives (of whom-.'bo many are also members of the Legislative Assembly) has been too strong to permit any Government to attempt reform in this direction. Mr. Forbes, however, .has shown such rugged disregard for political consequences, when convinced of the righteousness of his cause, that that explanation can hold no longer. ;. TWO RESULTS. : Un taxed public body trading has'two results: Firstly, it narorws the'field of taxation in an ever-increasing degree, and secondly, it places a handicap on private concerns, which pay all classes of taxation, so that they have no chance whatever when, in competition. By way of illustration, : two instances will serve to show this disparity. In Wellington, Christchureh, and Auckland,..the City Councils and the gas companies are in active competition in the fields of light, heat, and power. The gas companies -in > ; 1930 paid £53,578 in land>- income, and debenture tax, whilst the electricity departments in these three cities with disclosed profits' of £278,072 (see P.W. Statement, 1930) paid ■ nothing. Further, the gas companies are compelled to place a two-penny stamp on every receipt —public bodies are exempt from this tax. "Why?

In Christehurch the Electricity Department goes even further. It carries out wiring, contracts,, soils electrical supplies of all kinds, and even holds sole agencies with the result that electrical trading concerns, many of whom were established long before municipal trading came into existence, are being driven out of business one by one. The income tax these ■ private concerns paid for many years is now lost to tho Government, andi lias to be collected in. increasing: degree;from the narrow circle of those who have so far escaped public1, competition. In reality, the latter are being almost equally handicapped for they are providing heavier taxation which was formerly more widely and fairly distributed.'The subject will bo dealt with in.greater detail in another article.. In the meantime, traders who aro fighting for a bare existence beg of the Government that relief shall be afforded. An untaxed profit of over £50,000 recently disclosed by the Wellington-Electricity Department in a year of stress,.provides a text upon which to base their plea.. .:'■>.;.