GAS COSTS

Gisborne Times, Volume LXIX, Issue 10920, 11 June 1929, Page 2

GAS COSTS

PUBLIC AND PRIVATE ENTER-

PRISE.

BOTE SHOULD BE PLACED ON LIKE FOOTING.

(By the Nineteen Twenty-Eight

Committee)

It must have been either a very pimple or a very subtle person who wrote to the ‘ ‘New : Zaland Worker” last week claiming that municipal enterprise was supplying gas for lighting, heating and power at a much lower price than -private enterprise was charging. Either lie did not know the facts of his ease or he attempted to disguise them. He stated that while the Auckland Gas Company charged Ts per 1000 feet for its gas and the Christchurch Company 7s 6d per 1000 feet, the Dunedin Municipal Gas Department charged only 6s 3d for.light, 6s 3d for heat and 6s 3d for power. He did not quote the prices charged by the Wellington Company for light and power, hut he gave 7s as its price for lieat. A direct enquiry at the office of the Wellington Company, however, elicited the information that the average net price charged for the Company’s gas was 6s lOd per 1000 feet. It may he assumed that the net averge price of the other two Companies is approximately the same though the works of the Christchurch Company are not, a,s tlie contributor to ,thp. “Worker” says, “at or near a port wher e transport charges on coal would be the same.” If it affords the champion of municipal enterprise any satisfaction it may be admitted at once that the municipal gas department should be producing and selling gas at a much lower rate than a proprietary company can do. The municipal department is exempt from a number oi charges which fall upon the proprietary company, 'fake, as an example, the case of the Wellington Gas Company. This company last year made the following payments: Annua]_license. £200; receipts stamps, £520; income tax, £10,080; land tax, £o29>; City Council’s royalty and miscellaneous charges, £1,301. Here is a total of £12.639. not a penny of which would fall upon :i municipal, concern of the same character. I hen there is. naturally, a. (substantial difference between the rates of interest on capital and debentures charged to municipal undertakings and private ''Undertakings. Using the instance just quoted, this would mean a. further additional charge of £9,920 upon the private, undertaking. It is plain, then, that the municipal undertaking starts out with' an annual concession of £22,559. which would amount, in this particular instance, to a handicap of 9Jd. per 1,000 feet upon the annual output, of gas from the private undertaking. Tlibs being the ease, it follows that the Dunedin Municipal Gas Department, exempt from the burdens imposed upon private enterprise, should he selling its gas at 6/0-id per 1,000 feet, instead of at 6/3. as at present. This champion; of municipal gas production, implies that the smaller undertakings, with few exceptions, are doing as well, proportionately, as is tlif- Dunedin undertaking. “In eonsedering this question,” lie observes, “we must not lose sight of the fact that municipalities frequently provide a service in circumstances and under conditions which offer no inducement to a private- concern to establish works, as there is no prospect _ of these works showing a profit.” Whether this is intended as a reflection upon .“private concerns” or as an admission that “municipal 'concerns” cannot cope with such problems, is not quite clear; hut it is obvious enough that private enterprise, hampered as it is by taxation and conditions from which .municipalities are exempt, cannot go to the assistance of such e mom unities. however anxious they may he to extend their operations.

Tile solution of the whole problem, of course, lies in the adoption of the recommendation made by tile Taxation Commission a few years ago to the effect that all Government and municipal trading concerns should lie placed upon the same footing in regard to income, tax and other charges as are private trading activities. Meanwhile, tho exemption of these concerns from taxation is a scandalous imposition upon both workers and employers.