SUBSIDY CONTROL

Gisborne Herald, Volume LXXIII, Issue 21980, 26 March 1946, Page 3

SUBSIDY CONTROL

PRINCIPLE OPPOSED CAP IN HAND TO STATE LIVING ON CAPITAL (P.A.) AUCKLAND, March 26. "It seems entirely wrong that we should be obliged each year to go cap in hand to the Government for a. subsidy, but the present controls, so long as they continue, will render such a course inevitable,” said Mr. V. J. Larner, chairman of the Auckland Gas Company, at the annual meeting yesterday. "So long as the principle of stabilisation is followed by the Government, so long will subsidies be required to rectify what would otherwise be an injustice. I have noticed recently the outspoken statements of. Mr. Walsh, a member of the Stabilisation Committee, with which we have to deal, and I think all will agree with his sentiment that harder work and more production is necessary for the future. “His reference to the evil of subsidies, however, cannot be taken as being of universal application. Where the costs of manufacture are not controlled, but selling prices are ‘stabilised,’ the outcome will be bankruptcy and winding up if relief is not afforded, by the State in respect of its self-imposed control of prices.” The Gas Company had . suffered grievously as a result of this, policy and, without a subsidy, the company would be using over £1,000,000 in capital to supply a "necessity” to Auckland without any chance of receiving a return as good as National Savings bonds would produce. If Mr. Walsh’s remark could be taken as an unofficial indication that the subsidy principle was to be abandoned without at the same time removing controls and unprecedented taxation, then the sooner traders were officially informed of the position the better, said Mr. Larner. "If that situation does arise, I and my colleagues on the board would consider it our imperative duty to summon a special meeting of shareholders to consider the future operation of the company. It would not be fair to carry on using shareholders’ funds with little or no chance of making the year's accounts balance,” Mr. Larner concluded.