TRADING BY THE STATE.

New Zealand Herald, Volume LXVI, Issue 20221, 4 April 1929, Page 10

TRADING BY THE STATE.

DETRIMENTAL PRIVILEGES.

REMOVING UNFAIR ADVANTAGES

PROPOSED SOLUTION OF PROBLEM

[r,Y TEI.EGHAFH.—OWN CORRESPONDENT. ]

WELLINGTON, Wednesday.

Suggestions for placing State trading activities on an equal footing with those of private traders were advanced by Mr. It. L. Ziman, of Auckland, at the legal conference in Wellington to-day. " Apart altogether from the hardships entailed to individuals by privileges enjoyed by trading departments, the existence of such privileges is detrimental to the nation as a whole from two points of view," said tho speaker. " Firstly, by reason of their obvious injustice and the rankling sense of dissatisfaction which they cause, they tend to undermine that traditional respect for and obedience to the law, which is one of the outstanding sources of strength of the British nation. Secondly, they tend •to undermine the authority of tho Courts.

" Enormous Privileges Acquired."

"In this Dominion the Supreme Court is an institution which enjoys universal respect, and is trusted by all the people, and it is obviously a serious mattor if the Judges of that Court are forced by the law into the position of giving judgments which are obviously unjust, or if tho judgments of that Court can be flouted by tho executive. The trading departments have by legislation acquired enormous privileges, but how ? Not by direct grant, so that Parliament realised what it was doing, but by the simple and ingenious method of establishing trading activities in the name of the Crown. It is notable how the majority of the departments, realising undoubtedly the advantages of carrying on in the name of tho Crown, have managed to entrench themselves in that position.

" Coming now to the difficulties created by tho present system of State trading in New Zealand it is fair to state that in isolated instances an anomaly has already been removed. For example, some departments now pay income tax. In other instances a sort of compromise has been offered, the department paying some dues and refusing to pay others. Departments are naturally tenacious and one may, without trenching at all on tho political field, suggest that if the problem be attacked piecemeal it will bo impossible during existing lives to achieve tho application of adequate remedies; also that the piecemeal mode of attack may lead to serious difficulties in other directions.

The Logical Solution

" It is also clearly an undesirable principle that justice and fair dealing should depend on political pressure, instead of on the strong arm of the law. On the other hand, it may be suggested that the prerogative rights should be taken away from all State departments. That, however, may bo going too far. Does not the logical solution of tlie problem appear, therefore, to be to convert the trading departments in ■ Jaw into what they already are in fact, namely, trading and industrial corporations, and to endow them with exactly the same rights and liabilities as trading and industrial corporations owned by private individuals, unless Parliament in its wisdom thinks fit expressly to grant any such State trading corporation special privileges ? " Ono may reasonably mention three principles, compliance with which appears necessary to put the matter on a proper footing. They are:—(l) That the State trading activity be carried ori under conditions which give it no unfair advantage in law over private traders in the same line. (2) That the State trading activity be so carried on that its results are capable of accurate comparison with those of private enterprise in the same line. Ihis clearly cannot be tho case when the State department is endowed with so many privileges, prerogatives and exemptions. (3) That the State trading activity be carried on in such form as not to work any hardship on individuals having no association with it."