HARBOUR BOARD CHARGES

Greymouth Evening Star, 25 July 1945, Page 8

HARBOUR BOARD CHARGES

WELLINGTON ' APPLICATION ' ... WELLINGTON, July 23. The Price Tribunal resumed to-day the hearing of the Wellington Harbour Board’s application to increase its charges and dues. Mr W. Appleton, appearing as a member of the Harbour Board before the Tribunal, said: “If the Harbour Board were put on true accounting principles, the Board would be bankrupt if we go on as we are doing. The earning capacity is the only test of the soundenss of such a business. v Mr B. S. Connor, a member of the Tribunal, subsequently cross- examined Mr Appleton, and asked him was this not a “scare” statement. Witness denied that it was. He said that it was estimated there would be a loss on current accounts by September 30 of this year of £48,000, and that a further £40,000 loss could be expected between then and tne end of 1945. This could not be covered by overdraft, because the Local Bodies Finance Act prevented an overdraft being raised by more than the amount of outstanding rates or revenue, and at September o 0 trie Board’s anticipated outstanding dues would be only £12,000. Witness described the situation of the Board s special funds, saying they were not in such a position as to be able to help in the present difficulty, when the Board was facing a loss of £169,000 yearly. As for raising a loan, money was simply not there or in prospect to pay interest and sinking fund. “It would be frank suicide to borrow now,” said Mr Appleton. Replying to Mr H. L. Wise, Secretay of the Tribunal, Mr Appleton said that, ignoring depreciation, there was now no margin at all between revenue and expenditure. The larger the volume of traffic handled the greater was the Board’s loss. Mr Wise: “It seems to me that, while the policy of the Board is very sound, that policy does press somewhat hardly on the present generation.” Mr Wise also pointed out that a loan of more than £BOO,OOO is to be repaid in 1946. This would save the Board £48,000 a year in charges. Mr Wise added that, in a few years, tne Board’s assets would have been completely paid for. Hence, the present generation was really paying twice over. It was paying for the depreciation and repairs and maintenance, and was paying oft the assets as wen, plus the replacement funds for when the assets wore out. If this Board were to be run as an ordinary commercial undertaking, it would not have to pay off the loan in so short a time. . .. Mr Appleton expressed disagreement. ~ , . ~ Mr Appleton said that, supposing the results of a successful application to the Tribunal were that the Board should make a profit above a reasonable margin, the Board would be perfectly willing to have its charges reviewed again. Mr L. Munro, a member of the Tribunal, asked what effect any increase in the Board’s tariff might have on the consumer of goods. Mr Appleton: “The effect would be very very slight. It might be two shillings or three shillings per ton on some goods, and much less on others. Captain' M. P. Congdon, board traffic manager, said the board s tonnages were reduced in the first six months of this year, and were likely to be reduced in the second six months. His estimate was £169,000 ioss for the year ending September 30. It might well be exceeded. The increases in dues and charges asked for were about 50 per cent, on the labour costs, which was not a steep increase, considering that the boards wages bill had increased by £ 108,000 a year since 1937. ' j +-n The hearing was adjourned till tomorrow. FARMERS’ OPPOSITION WELLINGTON, July 24. Evidence brought by the Wellington Harbour Board in support of its application to the Price Tribunal tor permission to increase its dues and charges by 37 per cent, on the ruling 1937 levels was completed this morning after a sitting of two and ahalf days. Submissions wore made this afternoon by Mr. A. P. O’Shea, opnosing the application on behalf of the New Zealand Farmers’ Union, and Mr. J. F. B. Stevenson, the board’s solicitor. The Tribunal reserved its decision. Owing to the centralisation of shipping during the war, the Government had had to subsidise nine of the smaller ports, said Mr. T. Rait, representing the Treasury Department. Subsidies, however, were not granted so as to maintain the Harbour Boards concerned in the same financial position as they were before the wav, but were merely to make up losses directly due to the centralisation of overseas shipping. j To Mr. O’Shea Mr. Rait said that policy as he understood it was not to subsidise boards just because their revenue had dropped to a bad relative position. If boards were strong enough to-“take a knock” they were expected to take it.