POWER SUPPLY

Evening Post, Volume CXXIII, Issue 142, 17 June 1937, Page 15

POWER SUPPLY

STATE'S ACTIVITY

NOTE OF WARNING

Quoting overseas experience as a warning the Associated Chambers of Commerce, in a statement issued yesterday, emphasises the desirability of the State leaving to private enterprise the retailing of electric appliances. "Reorganisation of the whole system of electrical supply, which the Minister of Public Works has stated is the next big job he will undertake, raises some points of considerable public interest," said the statement. "The desire of the Minister to put the system on a better footing is to ba applauded, and he should be supported in any reforms he may sponsor which are on sound jjnes, and •which'wiij have . the eilect of improving the service, reducing 'overhead""charges," Jsringpig /'down the cost to the consumer)' ahd increasing consumption. With 40 independent power authorities in existence, most of them highly efficient but others probably not quite so efficient, and carrying between them heavy overhead; costs, there is a prima facie case for cost reduction, but it would be a matter of public interest to hear the case for the power boards. "The Minister lias stated, among other things, that the system might be taken over by the State; that the sales department is one that will have to be investigated; and that he intends to visit Victoria to investigate the electricity commission system in that State.- ' INVESTIGATION OVERSEAS. "It is to be hoped that the Minister will make a thorough investigation of all departments, past and present, of the commission's activities, particularly if he possibly has in mind not only the nationalisation of the retailing of electricity, but also the nationalisation of the retailing of electrical appliances and apparatus. When the Minister goes to Victoria he will find that the State Electricity Commission does not trade in appliances, but confines itself to the generation, distribution, arid supply of electricity. However, it was not always so; in 1925 the commission decided on a policy of .trading in appliances, it purchased large stocks,; built new premises, and opened trading depots. By the end of, 1926 a great retail organisation had been built up, and, by means of its financial resources and legislative powers, it made very serious inroads into private trade. "The commission claimed that without leadership on the part of the commission the trade would not be brought to provide sales facilities of a quality and extent which the consumers of electricity were entitled to have at their command,' but the only effect which the trading activities of the commission had in this respect was to force private trades out of business, to prevent others from obtaining a footing, and to create a state of uncertainty in the industry which prevented natural development. "The first five years ot the merchandising operations of the commission were apparently so unsatisfactory that even questions in Parliament failed to secure figures indicating the results of its merchandising activities. The commission subsequently admitted that,, notwithstanding its exemption from rates, taxes, and other similar charges with which private enterprise was saddled, it had suffered trading losses. The fact began to emerge 'hat the commission had failed to prove in any way that private enterprise had shown itself incapable of successfully handling the distribution of electrical appliances and apparatus. Whereas during the year prior to' the. commencement of :.direct sales by the commission sales by private traders of, electrlcaj appliances had increased "considerably, the commission, despite the introduction by it of a tariff with exceedingly favourable energy rates, could, on its own statement, effect little Improvement. It was obvious that it was the success of private enterprise in marketing electric appliances that had Inspired the commission with the desire to enter that field of activity. TAXATION ADVANTAGE. "In 1933 an Act was passed forbidding the commission's carrying on or engaging in the business of trading hv any electric apparatus, or undertaking electrical wiring installations in any premises other than its own, and the extraneous activities of the commission were consequently ended. With this example before them, New Zealand people should be well content to see the retailing of electrical appliances and- apparatus .left in the hands of those most competent to handle it, namely, private traders. "A second point of public interest is the matter of the present exemption of electric power boards and municipal electric undertakings from the taxation which is today carried by their competitors, the gas companies. It is grossly unfair that such a position should exist, whereby consumers of gas supplied by private companies contribute taxation to the State through their, gas charges, whereas -consumers of electricity pay no such taxation. Since private concerns are taxed, then public trading undertakings should be; taxed similarly: Whether or not the Government intends to nationalise: power* boards, the Minister of Public Works by imposing taxation oil electricity enterprises, would only be doing what is just and equitable:"