STATE COAL MINES

Hawera Star, Volume LII, 27 January 1933, Page 7

STATE COAL MINES

ILLUSORY PROFIT UNFAIR TRADING ADVANTAGES hmSOS FROAI 'NEW SOUTH WALES. (By the Associated Chambers of Commerce.) ■ The reaction or the ordinary taxpayer to the* report on the woriving of che State coat mines, recently l presented to Parliament, is possibly one or satisfaction at the tact that a net profit of £3116 was made, despite bad trading conditions. What is not generally appreciated is that, when extraneous revenue is disregarded, there [was actually a substantial loss on the year’s working. | The Minister of Mines (Ho.il. C. E. Macmillan) has made a public denial of a statement that the State collieries are not returning a profit to the State. Nevertheless, on analysis, the profit on the State coal mines vanishes like a pricked bubble. Included in the latest accounts is the sum of £8403 for royalties received on account of coal taken from Crown lands. One private company alone paid £3633 of these royalties—more than the profit 'shown on the State mines. It is therefore .clear that this “profit” has not accrued from the State undertaking as a working proposition, but that there is actually a substantial loss on its working operations. The position can be shown as it its in the accounts only because heavy royalty payments made by competitive companies have been taken in as revenue to the department, instead of being credited to the Consolidated Fund.

EXAMPLE OF NEW SOUTH WALES

In reply to this, it may be said that the State department subsidises the cost of workmen’s railway and bus fares, supplies coal to employees at reduced rates and makes grants for street maintenance. This it does, but on the other hand the department pays no income tax, no rates, no royalties and no heavy traffic fees. Hie whole basis provides no comparison whatever with private companies, which have to meet these charges and try to.carry on business against a State competitor that is exempt from them. The National Expenditure Commission has pointed out 'that the State, is losing a considerable I sum by way of royalty in respect of the State collieries, and it suggests that this and all State enterprises should bear the charges applicable to similar undertakings conducted by private enterprise. A weigliing-up of State trading in c-oal production ill New Zealand is timely, in view of a recent decision of the New South Wales Government. The latter, declaring that the cost of 'producing coal from the State mine at Litligow was 6s a ton greater than at private collieries, resolved in July last to close down the mine altogether, and then decided that the mine be reopened. blit that in future it would be required to pay the same rates and taxes as all private mines, including immicipi. Federal and State taxation. This is a decision of the utmost importance. It recognises an inescapable principle of taxation, and it marks the turn of the tide of so-called progressive legislation that gave tax exemption, to ■State trading departments and still looked, for taxation revenue from private concerns that had been made profitless in consequence. For the sake of fair trade, the relief of the general tuxoav’ine community and the employment of the peon.le. the New Zealand Government would usher in a new era if it followed the example of the New South Wales Government in subjecting the State coal mines to. the same rates, taxes and charges, as are refutired of private traders, and if it also n lived every State and municipal trading department, as well 1 as power boards’; in tbe same position.