OPPOSITION CASE

Evening Post, Volume CXL, Issue 130, 29 November 1945, Page 9

OPPOSITION CASE

CO-OPERATIVE PLAN

APPEAL TO'GOVERNMENT

The first shot in the Opposition criticism of the Bill was fired by Mr. M. H. Oram (National, Manawatu). The Minister, he said, in making his second reading speech had failed to present a convincing case to show that the airways should be taken over by the Government. He proposed to place the control in the hands of the Government just in the same way as the Government controlled the railways. The only reason for the step appeared to be the successful operation of the Pacific ferry service, the Government being of opinion that it would also be able to make a success of commercial services. He suggested that the requirements for a commercial seryice were entirely different and distinct from services run by a def ettce organisation. In the past the State had not been prepared to take the risk of establishing commercial services, leaving that field to private enterprise. A Government member: Which Government? SUCCESSFUL SERVICES. Mr. Oram said the services had been left to private enterprise because only private enterprise could have carried them on. He referred to the Main Trunk service developed by Union Airways between Auckland and Dunedin. Considerable capital had been risked, and the company had felt it was its duty to educate the public and demonstrate the safety and advantage of commercial flying. The company commenced to operate in 1936, and the passenger miles flown in that year were 1.500.000. It increased to 8,600,000 in 1942, despite the war. The mails carried in 1936 weighed 32.0001b, and in 1944 the weight had increased to 254.0001b, the percentage oi' trips commenced between 1936 and 1944 averaged 99.56 and the percentage completed in the same period was 99.19. That was a record any company could be proud of. Cook Strait Airways commenced operations to develop the needs of a locality—the northern portion of the South Island. It became an essential feeder service and met all connections in Wellington, so that people in Nelson and the surrounding districts could be served. When the war came the company's machines were taken, and that service ceased, but a service was carried on by Union Airways.

The reason private companies had been successful was that they had the advantage of expert knowledge. They were careful in respect to detail and developed their undertakings on sound business lines. They had earned the confidence and good will of the public. The Minister had admitted that Union Airways had only received a subsidy amounting to £46.000 over a period of three years, the last subsidy being paid in 1940. Mr. Oram suggested that the sum mentioned was only a percentage of the loss suffered by the Company over that period. The amount of taxation paid by the company would greatly exceed the amount of the subsidy.

Mr. Oram said the Minister had stated that the companies had also received subsidies in the way of mail contracts. Such a statement was a distortion of the facts. The Government had received value for every penny it had spent in mail contracts. The Government had been making a clear profit of Is 6d a pound on account of the Id a letter surcharge. When the war commenced, companies had plans for the future development of their services, but they wore unable to carry out the proposals. The Minister knew that Union Airways had plans for

serving practically every part of the | Dominion. THE PRESENT POSITION. Mr. Oram said the companies had paid for air facilities. What the Government had spent on aerodromes was not solely for civil aviation. The cost was incurred largely for defence purposes. Surely it was the duty of the State to provide facilities for private enterprise to develop such undertakings. The Government had a large measure of control at present. It determined the routes, approved the timetables and their frequency, determined the rates to be charged for fares and freight, and also determined the type of machine to be used. The Government also had a right to say what equipment should be used and what training and qualifications pilots must possess. The Government also determined what subsidies should be paid and. the terms of mail contracts. Everything that concerned the safety, comfort, and convenience of the travellers by air was determined by the Government. What was left for private enterprise? he asked. "To take the risk and make the service work," he added. Mr. Oram appealed to the Government to exercise true co-operation between State enterprise and private enterprise. Had the Bill been brought down because the Government believed that under Government control there would be greater efficiency, or because it was driving blindly towards the ideal of nationalising everything? He believed it was an endeavour to grab a concern once it had become established and once private enterprise had taken all the risks. If it could have been shown that the existing service was not efficient, that heavy subsidies were needed, that the company was not prepared to develop new and initially unpayable routes, and was not prepared to meet in a co-operative spirit the requirements of the Government, there might have been some justification for the Bill, but the negative had been established. AFRICAN STATE SERVICES. Mr. H. T. Morton (National, Waitemata) quoted heavy "losses made by the State-owned air services of South Africa, adding that the Minister of Defence had not told the House what losses he anticipated through State ownership in New Zealand. The private companies, operating less than eight aircraft, had carried in New Zealand 52,424 passengers in one year, with a safety record which was remarkable. Air transport in New Zealand cost 3.75 d per mile, and although the United States rate of 3£d was slightly better it must be remembered that petrol in New Zealand was three times the price. As for regularity of service, Mr. Morton said the New Zealand record for the air was 99 per cent., and he compared this with the railways. "We never know when they are going to start," he declared, "and we certainly never know when they will finish." There had never been a strike on the New Zealand airways. They carried mail at 2s a lb, but in Australia the rate was 4s 3d. The Minister had mentioned as one reason for taking over the New Zealand airways the large amount of subsidy they had received, but he would like to remind him of the egg producers getting £162.000. bacon and ham producers £170,000, and the £800,000 paid in subsidy for sugar, £167,000 to clothing manufacturers, and £100,000 to coastal shipping. Mr. F. W. Doidge (National, Tauranga) said that no real justification had been given for the taking over of the companies. As the session neared its end they had had a spate of major legislation designed apparently to complete the process of socialism in New Zealand. A plan by which private enterprise would work hand in hand with the State would have met with the approval of the people of the country. New Zealand's air services under the measure were going to be clamped down into a sort of straightjacket of political administration. Would they get, asked Mr. Doidge, that efficiency, that energy, that enterprise they had a right to expect when they looked into the post-war years and the part that civil aviation was to play in the new air age? Mr. E. P. Aderman (National, New Plymouth) said the Opposition was not opposing a measure of Government control for the national air lines, but ownership of the lines by the State. It had been stated by one Government speaker that the Government would show more efficiency in the running of services than private enterprise The Government should be reminded that the Pacific ferry service was not Government-controlled. It was controlled by the military authorities and the efficiency spoken of was due to military direction. (Government laughter.) Political interference did not come into play in military matters, as it would .if the air lines were owned by the Government. He contended that more would be saved in subsidies than by subsidising by taxation the losses that would be incurred by Government direction and ownership. j REPLY BY MINISTER. The Minister, in reply, suggested that Opposition speakers, in contrasting military control favourably with Government control, omitted to state that the Armed Services carried out the instructions of the Government, Government control of airways in South Africa had been criticised, but the critics did not mention that the air services were conducted by the railway administration, and one of the reasons for their financial failure was that they were used only for travel where there were no railways. The losses of Union Airways in four years till 1940 totalled £69,486, and the Government, by direct subsidy, paid £46,000. Very substantial financial assistance was' given to the private airways system by the financial success of 'Cook Strait Airways during the war years. Not only did the private companies get the direct subsidies, but they were paid a fairly high rate for mails. .