The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. SATURDAY, MAY 2, 1925. TRADING AND RATES.

Southland Times, Issue 19540, 2 May 1925, Page 6

The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. SATURDAY, MAY 2, 1925. TRADING AND RATES.

One of the speakers at last night’s function in connection with the official opening of the Monowai Scheme and the Ohai Railway, touched on a subject in terms which elsewhere might have drawn a reply from Hon. J. G. Coates. Reference was made to the hydro-electric scheme serving Dunedin, and it was stated that before long Dunedin would be rate free as a result of the successful operation of this scheme. If these remarks were intended to convey the impression that the profits gained through the working of the hydro-electric scheme were being utilised for the reduction of general rates, the Minister of Public Works must have been interested, because on more than one occasion he has argued with great force that no public trading concern should be used for the purpose of reducing general rates, and in the wider field of the national administration the revenue accruing as a result of the operations of public services should not be used for relieving the Consolidated Fund. It is a sound principle that every publicly owned trading concern should be run as if it were a private concern, and that its profits should be distributed either to the State’s employees in the shape of higher pay or to the customers of the department in the form of reduced charges. In the same way the users of any service should be expected to pay charges which are high enough to meet all the charges which would be levied by private enterprise. Where -work is essentially developmental in character it is to the interest of the State, or in a more limited sense, to the interest of the district to meet a deficit by way of rate until the concern is on its feet, but- the Waipori scheme cannot be said to be developed at this stage, and the direction of its profits to the reduction of the general rates means that those who use electricity are paying rates which should be properly borne by the whole, and not by a section of the citizens. The Railways are in a similar position. While in the old days the Railways were being pushed on with the idea of assisting settlement, there may have been some claim on the Consoli dated Fund for something akin to a subsidj in order that the weak lines of those days could be maintained, but to-day, the Rail ways are established and the system, wher it is extending its lines for the purpose ol developing trade through increased settle ment, should be able to meet all fair business charges, including all interest, from the

revenue it earns. It may be argued that the Railways might be run *>t a loss in order to keep motor competition off the roads, but it is obvious that, such a remedy would ultimately intensify the evil effects of the disease. So far as the State is concerned, competition between the motors and the Railways, with the former paying a fair proportion of the cost entailed in the maintenance of the roads listed by the motors, is the only means by which the transportation systems can be run to full efficiency and economically. It is ridiculous to talk about running the motor off the roads by means of subsidies drawn from the Consolidated Fund to make up losses incurred by the Railway Department, because the motor companies will be paying part of the subsidies used against them. In the same way if motor traction does not pay its fair proportion of the cost of road maintenance the public must suffer through higher rates and through the unfair competition levelled against the Department. The only safe means by which tlie public services can be run is the application of business principles and this doctrine involves not merely the earning of enough to meet all interest charges, but the maintenance of.the doctrine that those who use the services must pay a fair charge for that service. The term fair charge, in its turn, obviously means that where profits are made, these profits shall be used for the cheapening or the improvement of the service, and not for the reduction of general taxation or of general rates.