STATE AS RETAILER

Lake Wakatip Mail, Issue 4328, 24 August 1937, Page 6

STATE AS RETAILER

POWER SUPPLY INQUIRY AN OVERSEAS LESSON Reorganisation of the whole system of electrical supply, which the Minister for Public Works has stated is the next big job he will undertake, raises some points of considerable public interest (says a statement by the Associated Chambers of Commerce of New Zealand). The desire of the Minister to put the system on a better footing is to be applauded, and he should be supported in any reforms he may sponsor which are on sound lines and which will have the effect of improving the sei’vice, reducing overhead charges, bringing down the cost to the consumer and increasing consumption. With 40 independent power authorities in existence, most of them highly efficient but others probably not quite so efficient, and carrying between them heavy overhead costs, there is a prima facie case for cost reduction; but it would be a matter of public interest to hear the case for the power boards. The Minister has stated, among other things, that the system might be taken over by the State; that the sales department is one that will have to be investigated; and that he intends to visit Victoria to investigate the electricity commission system in that State. s DEVELOPMENT RETARDED It is to be hoped that the Minister will make a thorough investigation of all departments, past and present, of the commission’s activities, particularly if he possibly has in mind not only the nationalisation of the retailing of electricity, but also the nationalisation of the retailing of electrical appliances and apparatus. When the Minister goes to Victoria he will find that the State Electricity Commission does not trade in appliances but confines itself to the generation, distribution and supply of electricity. However, it was not always so; in 1925 the commission decided on a policy of trading in appliances, it purchased large stocks, built new premises and opened trading depots. By the end of 1926 a great retail organisation had been built up. and by means of its financial resources and legislative powers it made very serious inroads into private trade. The commission claimed that “without leadership on the part of the commission the trade would not be brought to provide sales facilities of a quality and extent which the consumers of electricity were entitled to have at their command”; but the only effect which the trading activities of the commission had in this respect was to force private traders out of business, to prevent others from obtaining a footing, and to create a state of uncertainty in the industry which prevented natural development. The first five years of the merchandising operations of the commission were apparently so unsatisfactory that even questions in Parliament failed to secure figures indicating the results of its merchandising activities. The commission subsequently admitted that, notwithstanding its exemption from rates, taxes and other similar charges with which private enterprise was saddled, it had suffered trading losses. The fact began to emerge that the commission had failed to prove in any way that private enterprise had shown itself incapable of successfully handling the distribution of electrical appliances and apparatus. Whereas during the year prior to the commencement of direct sales by the commission sales by private traders of electrical appliances had increased considerably, the commission, despite the introduction by it of a tariff with exceedingly favorable energy rates, could, on its own statement, effect

little improvement. It was obvious that it was the success of private enterprise in marketing electric appliances that had inspired the commission with the desire to enter that field of activity. EXEMPTION FROM TAXATION In 1933 an Act was passed forbidding the commission carrying on or engaging in the business of trading in electrical apparatus, or undertaking electrical wiring in any premises other than its own, and the extraneous activities of the commission were consequently ended. With this example before them, New Zealand people should be well content to see the retailing of electrical appliances and apparatus left in the hands of those most competent to handle it —namely, private traders. A second point of public interest Is the matter of the present exemption of electric power boards and municipal electric undertakings from the taxation which to-day is carried by their competitors, the gas companies. It is grossly unfair that such a position should exist, whereby consumers of gas supplied by private companies contribute taxation to the State through their gas charges, whereas consumers of electricity pay no such taxation. Since private concerns are taxed, then public trading undertakings should be taxed similarly. Whether or not the Government intends to nationalise power boards, the Minister for Public Works, by imposing taxation on electricity enterprises, would be doing only what is just and equitable.