TWO PUBLIC ASSETS

Otago Daily Times, Issue 22258, 10 May 1934, Page 15

TWO PUBLIC ASSETS

TO THE EDITOR. Sir, —We hear so much of the wonders of electricity, all over the world, of what it can do in cooking, in lighting, wireless, television, etc., and we have heard just lately of the wonderful progress of the Waitaki Electric Power Board during the past financial year, and of the lovely profit of £1719 it has made for the year just ended. We would naturally conclude that this profit has been made because of the united wisdom of the Power Board under the present chairman. But let us examine a few facts. Let us examine the profit of £1719. In thinking of this amount, let us first of all remember that the reduced interest on loans amounted to £1750 for the year. Curious, is it not?

Again, the public will remember that shortly after last election and operating for most of the financial year large'economies were effected in staff reductions, telephone charges, transport, etc. Possibly. these savings amounted to £IOOO approximately. Yet at the last meeting of the board great acclaim was made about the handsome profit from the board’s business this year. But will the electors just think? Everyone is capable of adding together reduction of interest £1750 and economies £IOOO. giving a total saving of £2750, and yet only £1719 profit. Something to think about here. But, suppose we forget these figures and think of the profit of £1719 as a genuine trading profit without any outside aids. Then what interest on the capital invested does this amount represent? The capital is £IBO,OOO (approximately). To make 1 per cent, on this sum £IBOO would be required. Yet the profit is only £1719 —and after savings of £2750. Wonderful! No wonder a capable member of the Power Board said at the last meeting that “affairs were chaotic.” Just think—not 1 per cent. Fancy a turnover of £BO,OOO (approximately), and if the Government had nof stepped in with a reduction of interest this wonderfully-managed concern would again have shown a loss on the year’s trading. It may interest ratepayers to know that the purchase of current from the Government sunply costs only 30 per cent, of the board’s sales of current. This leaves 70 per cent; of the selling price to go to payment of interest, sinking fund, charges, salaries, and waste'. A grocer works on 12 per cent, and 15 per cent, (some on less) of profit, and very few- go bankrupt, yet with 70 per cent, of gross profit the Power Board is running at a trading loss. Yet the Power Board buys daily and has 365 turnovers yearly. The figures given in this letter are obtained from published reports, and any ratepayer can verify them by a study of the balance sheets. In comparison with the capital of

£IBO,OOO, the capital of the Borough Gas Department is £30,000 approximately, *of which 10 per cent, is £3OO. _ Yet in a recent published statement of the year’sbusiness in the Gas Department a profit of £1157 is shown after full payments, are made for interest, sinking fund, deprecia-; tion, and repairs. For the sake of. comparison with the Waitaki Electric Power Board, disallowthe sum of £3OO (approximately), wliicli] is the saving for the year for interest reduction -jou capital, thus leaving a trading profit of, £BS0 —a very creditable performance in the face of competition from a business with a capital six times as large. But, a..further comparison is interesting. A profit of £1719 on £IBO,OOO capital of the Power Board is less than 1 per cent. A profit of £1157 on £30,000 for the Gas Department, is nearly 4 .per' cent. A profit of £1719 is made on sales of £30,000, and a profit of £1157 on sales of £13,000, Surely the figures given are interesting and place two public assets in fair comparison.—I ain. etc;, y; Oamaru, Slay 8. Ex-Employee.