STATE AND MUNICIPAL TRADING.

Otago Witness, Issue 3885, 28 August 1928, Page 32

STATE AND MUNICIPAL TRADING.

WHO IS ENTITLED TO PROFIT? . WELLINGTON, August 22. Mho is entitled to the profits of snc= cessjul State and municipal tradin'/ on gamsations, the consumers or the public generally? This question was put by the Minister of Finance (Mr W. Downie c-tewart) in the House of Representatives to-day, . apropos of the prophecy of the Prime Minister that in 15 to 20 years’ time the hydro-electric undertakings will an annual profit of about £8,000,000 or £9,000,000 over interest and repayment charges. Mr Stewart said Im had been interested in the interjection made by Mr E. A. Ransom (Pahiatua) as to whether the charges for electrig power to the consumer would be reduced, and in the Prime Minister’s reply that that would be a matter for consideration by the Government of the day. The interjection and the reply opened up the question as to what should be done with the profits of nationalised and municipalised industries. When the Socialists originally advocated the entry of the State into trading they claimed that the handsomg profits being made by private individual? would accrue to the State if the under, takings concerned were taken over. These profits would be used for the gradual reduction of taxation and finally its elimi, nation altogether, and also for the provision increased social services far beyond the dreams of the Labour Partv. The Minister pointed out that the claims of the taxpayers, . who had provided thg money for the inauguration of the State trading schemes, had to be considered. In Dunedin, for instance, the charges for power from the Waipori hydro-electriq scheme were the lowest in New Zealand, but yet the profits were sufficiently great as to allow for a reduction in rates. !(, had been said that New Zealand's charge? for the telephone service were high, out the fact was that the rate was the second lowest in the world. He had been informed by the secretary of the department that if the charges were fixed at the same rate as those charged by the private companies in America, it would be possible to pay for extensions out of revenue, and soon wipe out the capital costs of the department. Mr Stewart suggested that if the country would rigorously, without placing any undue restriction on its national life, discipline itself and not insist on a reduction of chai ges, it should be possible within a generation to pay off the whole of the external debt and the capital liability involved in its unprofitable enterprises, and thereby place New Zealand in a better position than any other country in the world. The Minister expressed the belief that there was room for a policy intermediate between the two he had discussed. The results from such an intermediate policy would be very gratifying to the people of New Zealand. If the great undertakings proved as profitable as it was said they would, it was matter for consideration whether some such scheme should be kept in view. It was not within the range of practical politics at present, but if it were adopted and adhered to we could put New Zealand in a position that no country could rival.