LICENSING REFORM

Poverty Bay Herald, Volume LIII, Issue 16389, 11 July 1927, Page 10

LICENSING REFORM

CORPORATE CONTROL PROPOSAL

The Vcn. Archdeacon 11. W. Williams presided over a- meeting of the Dominion executive of the X.Z. Licensing Reform Association, held in Wellington, when it was decided to hold the Dominion Conference on July 27, and to request, the l'rinie Minister to receive a deputation on the subject of the practical reforms of the licensing laws advocated by the association. One of the most important of these is.the proposal that an issue, to be known as corporate control, be substituted for the existing middleissue of 'State purchase and control, and the association has drawn, up in proper form an amendment to the Act providing for this substitution witli the object of asking the Government to incorporate, it in any Licensing Bill brought down.

The amendment, as drafted by the association would constitute a new part of the Licensing Act to lie entitled "Corporate Control."' Clause 1 provides for the. substitution of the issue, and follows closely the method adopted under the 1918 Amending Act, when the submission of State purchase and control was first provided for. Hub-clauses set out the Hire questions lo be submitted to the electors. The issues of nalional continuance and national prohibition with out compensation are as described in the existing law. Sub-clause (c) describes corporate.control as "the question whether,the ownership of licensed premises and the manufacture, importation, and wholesale distribution of alcoholic liquors in the Dominion bo exclusively vested in a corporation as hereinafter defined, such corporation thereinafter being alone entitled to manufacture, import and sell wholesale alcoholic liquor and derive profit from such trade."

Clauses 5 'to !) cover the "effect of corporate- control" in the event of more than 50 per cent, of the valid votes being in favor of that issue' at any licensing poll. It is set out that "immediately upon the coining into force determination a corporation shall be constituted as hereinafter provided in which there shall be exclusively vested by force of thisAct": All brewery plant, machinery, etc.. and all land adacent tu and used for brew-cry purposes, all freehold land and promises in respect of -which a publican's license was in force immediately before the coming into force of the determination and all plant, furniture, liftings, etc.. and all stocks of liquor owned or held by brewers and by -the holders of licenses of any description.

The various items as shortly summarised in the foregoing paragraph afe described as "the assets," and clause 7 provides that the value thereof shall be in every case ascertained by valuations to be made in such manner and by such persons as •the Governor-in-C'ouncil by regulation prescribes. Clause S provides that the capital of the corporation shall be an amount equivalent, to the aggregate of the valuations, plus, in consideration of the transfer of the businesses as going concerns, a sum equal to three years' net profits actually earned by such businesses during the three years immediately preceding. STATE. PARTICIPATION Clause- 9 provides for the division of the capital into 20 per cent. A shares and 80 per cent. B shares.. The A shares to be allotted to the Government of New Zealand without any payment in cash. These A shares shall have an earning power equal to Ihe B shares; but it is provided that the dividends accruing shall be applied to repayment of the nominal value of such shares, and that upon completion of such payment the shares and all dividends thereon shall be the property of the Government of New Zealand. The practical effect of this would be that at the end of, say, 10 years the State becomes the owner o.f one-fifth of the whole business and will not have paid one penny in cash for such interest. The remaining SO per cent. B shares are to be allotted to the owners of the assets in proportion to the ascertained value thereof. The distribution of the profits of the business are to be limited to 10 per cent, per annum, ami all profits over ami above thai figure will lie applied to such national purposes as the Government shall from time to time determine. STATE ADMINISTRATION

It is provided that on the board of management there shall always be a maority.' of State appointees, including the chairman. Tho other shareholders shall bo represented by four 'members elected by them. The corporation shall have- no po,wcr to alter by increase or reduction the total number of licenses, nor tho hours of sale provided by statute, for the time being in force in the Dominion; but on the termination of any lease, they may, if deemed to bo in the public .interest, limit any license to the sale of light wines and btecr only. In order to give the new system a fair trial (he amendment provides that if the electors adopt the proposal no further poll shall be taken for nine tears.

II is claimed by the promoters that the proposal of corporate control embodies all the potentialities for social benefit accruing to the proposal of complete State purchase without involving the state in any •financial liabilities or obligations whatever.. It is also claimed that the constitution of the corporation and the method of setting up flic board of management will place it beyond political 'influence of any kind.