UNDEVELOPED ASSETS

NZ Truth, Issue 1031, 29 August 1925, Page 17

UNDEVELOPED ASSETS

Tourist and Health Resorts Department Spineless ' Policy Proves Expensive SCENIC AND THERMAL WONDERS OF GLORIOUS NEW ZEALAND REMAIN UNMAR- -' ; KETED. WHY? In this article our contributor on financial subjects has given politicians and departmental heads something to cause them to sit up and think about. But will they act?

(By "FIAT LUX.")

The. Public Accounts of the Dominion of New Zealand are so vast and highly complicated that it is small wonder that the average interested , person, is unable to- devote that time to. Studying them which i is necessary to obtain even a casual acquaintance with them, let alone an intimate knowledge of their intricacies. Yet to the initiated there ■ are few publications issued by the Government which afford such &< wealth of real interest for the public as do the Public Accounts. Therein may be found all the financial details relating to the multitudinous Departments of State, whether purely administrative or purely trading or partly one and partly the other. As New Zealand is oiie of the youngest members of the British Empire family, being approximately 85 years old only, private enterprise has been quite unable or unwilling to keejp pace with the requirements of the rapidly expanding population, particularly m regard to rail transport, immigration, telegraphs', forestry, hydro-electricity, and similar public utilities. Hence the various Governments of the day- have been compelled m the interests of the Dominion as a whole to enter those fields of endeavor, which m older countries are the particular prerogative oC private enterprise, and it is therefore fitting arid proper that the Government should render to "the public an annual accounting, more particularly m regard to its trading ventures. The Tourist . and Health Resorts Department may be classed as a purely trading concern, but "Fiat Lux", has .. doubts whether the Minister-in-Charge or the Government of the day would agree with this classification, since the financial resuit of the Department's efforts for 1924 resulted, m the Consolidated Fund being mulcted m the sum of £35,625, representing losses for the year's trading. And trading concerns, even Government ones, are supposed popularly to be concerns carried on for profit making. Perhaps m the case of the Government. all Department* spheres of activity which do not ear a a modest not return *;f, sfiy, 7 por cent, on the capital used may be conveniently classed ns "essential public utilities," and- thereby earn or enjoy comparative immunity from the rules of the Science of Business. This is NOT AN IDLE OR CATCH-PENNY PHRASE. Business now is an exact applied science, divided into four cardinal points— (]) Buying; (2) Selling; (3) Financing; and (4) Accounting. Any Government or concern which violates the rules pertaining- thereto must pay, and pay dearly, for that violation. The Tourist Department's capital on March 31, 1024, amounted to £417,631, which was investor! m land, buildings, water and drainage systems, plant and machinery, furniture and fittings, wharves, beacons, steamers, launches, boats, bridges, motor vehicles, jjaixlen implements, linen, cutlery, crockery, live stock, telephone lines and sundry stores. Included m the inyentory may be mentioned the Rotorua baths, fvardens, electric, drainage and water systems, Waitomo hostel and caves. Lake House, Waikaremoana, Glade House and Milford Track ; huts, ' and Mount Cook Hermitage (which is most advantageously leased at present). Now let us see what financial result (he Department gets on this huge capital, invested as it is m assets nil properly equipped and efficiently run lo sell good service to the tourist traffic of this Dominion. An analysis of; the various working accounts reveals the deplorable fact that' the gross revenue for the year amounted to only £46,000, and out of this has to be taken the whole of the expenses connected with the Department's many establishments amounting to approximately £82,000. Hence the loss for the year, £35,625. In this connection it must be laid to the credit of the Controller and AuditorGeneral that the loss included interest on the Department's capital, £417,631, and depreciation on wasting assets, £230,482, respectively, fit the rate; of. approximately 3 per cent, per annum. Why should such a state of affairs be tolerated? WHAT CAN BE DONE TO IMPROVE MATTERS? . I Mr. Walter Boyle, the recentlyappointed American Consul m Auckland, wns .most refreshingly franjv on this subject when addressing the Auckland Chamber of Commerce,.recently. He said inter alia: | If' you will permit a suggestion. a suggestion which I presume .'yon have heard thousands of tiroes, I would like to point, out to.yqu that your country has an inexhaustible supply of a product that you could dispose of m immense blocks to eager Americans. It is your seen- ■ nry, your thermal wonderland, and your medical springs. Really, I can see only one reason why you do not have to employ hundreds of traffic policemen to keep the Aperican tourist traffic from blocking your highways, and that is because your country is not well enough known m the United States; because it is only the traveller looking for something outside of the beaten track of tourist travel who coiWs'- to your co'infry. It -would- appear that judicious advertising would remedy this doubtful advantage of lieing m the beaten track ,of the average tourist. , This, then, is how an American views the position. The Tourist Department undoubtedly has the "goodft," but what is it doing to sell them iiv-.'the world's best market — America? Practically nothing. For the year under review its total expenditure ' on/ general advertising was £1060, whiUst the cost of photos and pamphlets was sufficiently negligible to be buried m/ the accounts with "Travelling expenses, rent, postages, telephones, photos and pamphlet? £1941 12s 6c1." Assuming £900 of tiiis sum was. spent an advertising material for ' distribution, the total outlay, on .publicity equalled only £3.7 per cent, of the gross revenue for the same period. Yet successful commercial houses will spend/ up to 12% per cent, on maintaining their sales, and this after spending large sums to create the initial demand for their goods, • ' Cannot those who 'direct the policy of this Department wake up to the fact that 'the scenfcry and thermal Avonders of New Zealand have a very definite saleable value m the world, of. commerce? Cannot'; they appreciate the fact that these s^cenic wonders have to be marketed exactly as a. merchant sells his gbods? .The Tourist Department cannot live financially on the result of talcing Aucklanders to Dunedin .. or taking Dunedinites to

Rotorua, hence the vital necessity of selling the scenic attractions and wonders of this country m other lands. This being so, what better country can be chosen as a market for this purpose than America? The Union Steam Ship Co. of N.Z., Ltd., has four of the finest and most .palatial ocean liners m the world plying frequently between North America, Australia, and New Zealand, and travelling Americans like to travel luxuriously and are prepared to pay well for good service. This supplies the essential ocean 'transport, and the New Zealand railways and the various motor transport companies reach every corner of the country, providing a fair degree of comfort for even the inexperienced traveller, who is always the first to complain of lack of comfort and the first to rush into print to air his views of how travellers should be catered for. HAVING CHOSEN A MARKET, the question arises: How is it to be worked? The answer as Mr. Boyle puts it is: "Advertise judiciously." And this has to be done on such a huge scale that only the national banking' account could possibly stand the strain. A minimum of. at least £100,000 per annum for not less than five, years would-; be required to be spent m the United States alone to create an appreciable value, of tourist traffic from that country, and- this should be provided partly by the Railway Department and partly by the Tourist Department. It is hopeless expecting private enterprise to foot the bill or any part of it, since the difficulties of equitable contribution are insuperable; but if the Tourist Department opened booking bureaux m the principal cities, and issued complete "Home Back to Home" tickets on a definite itinerary covering steamer, rail and motor travel and all hotel and other accommodation charges, then all directly concerned would be, glad to pay the Department even up to ,15 per cent, commission for the traffic thus created. It would, of course) be inevitable, that many tourists would come without booking through the Department, but the people of; this country frenerally would benefit from the wealth spent by all these travellers during their sojourn i:i this fair land, and m particular the Rotorua Baths Account would not continue to strain a loss of about £9000 per annum. Hence both the Railways and the Tourist Departments would obtain some definite return for their outlay, the latter by its commissions on bookings and the increased revenue from its wonderful resorts — such as Rotorua, Waitomo and the 1 mcnnitfiffe — and the Railway Department from increased passenger traffic. It is a maxim of modern business that "THE SELLER MUST SEEK THE BUYER," and the sooner this maxim is brought to bear upon the policy of the Tourist Department the better for this Dominion's 'finances. Can anyone imagine anything quitq s6 absurd as a business concern having a capital of approximately half a million sterling- invested m good, sound, •saleable lines sitting down patiently awaiting the arrival of customers and spending the ridiculously small amount of £2000 per annum on publicity to, attract 1 the said shy customer? In 1(124 the number of tourists visiting these shores totalled 742.3. It is a fair assumption that each remained here for a month and spent at. least £15 per week on transport and accommodation. So from this negligible number about £445,000 of foreign capital was distributed here. It is authoritatively estimated that for the same period tourists distributed m Honolulu £27,000,000, Switzerland £66,000,000, and California £100,000,---000. The population of the United States is about 120.000,000. Suppose a modest 50,000 of these come to Ne\y Zealand each year, the Department's booking commission alone, at say £10 per head, would amount to £500,000, and the amount spent by these people whilst m the country would amount to at least £20,000,000. These returns are more than capable of attainment if ordinary business methods arc applied to their consummation, as is proved by Honolulu's figures. The highly organised wool business of New Zealand resulted for 3 024 m £15,000,000 worth of wool being exported overseas. The supine policy of the Tourist Department with superior but latent possibilities for profit resulted m a loss of £35,625. Verily have men much to weep over. Wake up, you politicians who control New Zealand's destiny. Wake up and put New Zealand on the map of the world, where she has every right to, be. The people of America will help you if you will only give them the opportunity. FIRE DEVOURS LIFE SAVINGS. Handsome residence gutted —the savings of a lifetime devoured ny. the fire fiend. Incredible that any man should take this risk when a "Phoenix" Fire Policy gives security. Prompt payment of claims, liberal terms. Inquire Phoenix Assurance' Co., Ltd., 215 Lambton Quay, Wellington.* i