The Southland Times PUBLISHED EVERY MORNING. “Luceo Non Uro." WEDNESDAY, JULY 22, 1936. A Sop For The Ratepayers

Southland Times, Issue 22948, 22 July 1936, Page 4

The Southland Times PUBLISHED EVERY MORNING. “Luceo Non Uro." WEDNESDAY, JULY 22, 1936. A Sop For The Ratepayers

The Southland Electric Power Board goes on demonstrating its unfitness to control any power scheme, let alone a scheme that is in such difficulties as the Southland scheme. On July 1 the Board gave notice of its intention to strike a rate to yield £23,000 which was the amount by which receipts for the year were expected to fall short of expenditure and capital charges. On July 21 the Board decides that there is, after all, no necessity to strike this rate; it is suddenly very deeply impressed with the need for relieving the ratepayers. Accordingly it now proposes to draw £lO,OOO from one of its reserve accounts (the account which it intended to use for the further development of Monowai) and to obtain the balance of the £23,000 partly on overdraft and partly, as far as can be judged from Mr McChesney s statement, from expected increases in revenue. Up to three weeks ago a rate was considered necessary; now, suddenly, it is found unnecessary. Why? What does the Board know now that it did not know three weeks ago? The only public developments in the situation during that period have been first, the Board’s unsuccessful deputation to Mr Nash, which certainly has not improved its position; secondly, the ratepayers’ meeting of protest. The thing that the Board knows now but did not know three weeks ago is that the ratepayers are at last thoroughly aroused and determined on action; and so it has thrown them a sop in the shape of a year’s freedom from rates with hints of permanent freedom. Its object, apparently, is to disarm ’ their criticism until the immed-1 iate crisis is past and its loans are converted. The Board is extremely foolish if it has so underestimated public intelligence as to think that these tactics will be successful. The ratepayers will want to know:

(1) If there was no financial justification for eliminating the year’s rate three weeks ago how is there justification for this step now?

(2) Is it not true that the Board is abandoning the rate when it does not even know the terms on which its London loan will be converted in September, and must be aware that interest rates in London are showing a distinct tendency to harden? (3) Is it not true that when the year’s deficit of £23,000 was originally estimated full allowance was made for increases in revenue as well as for a favourable conversion? If that is true, what is the new factor which leads Mr McChesney to estimate that the total deficit will now be only £18,000? (“The carrying of the motion would mean that £lO,OOO would be transferred from the separate account to the sinking fund and an overdraft of about £BOOO against outstanding accounts at the end of the year.”) (4) What will be the position after the ratepayers have had relief from rates for one year? What additional rate may the Board have to levy the next year? The Board’s chairman said a few weeks ago that it would be necessary to levy a rate for four or five years, the first year’s rate was to be £23,000 and thereafter the levy would be reduced as revenue increased and the exchange rate fell. Assuming that the total amount to be found in these four or five years is only £60,000 or £70,000 —if it is not raised by rates, how will it be raised? From the “separate account”? But the Board has been depending on this account for the extension of Monowai. One of the resolutions carried yesterday suggests that it has suddenly found new sources of supply in addition to the Invercargill steam plant and apart from Waitaki; but it does not indicate what these sources are or how long they may be expected to last, though it is now evidently prepared to postpone the full extension of Monowai for an indefinite period. It seems obvious, however, that at the best the use of the city steam plant and other minor sources will tide the Board over for only a few years, and that if the Board’s present relations with the Government are maintained it will ultimately have to extend Monowai to its full capacity. Where will the money come from then, if the “separate account” is raided this year and perhaps in succeeding years? Presumably out of revenue. How will the Board’s contemplated overdraft of £BOOO and any subsequent overdrafts be settled? ' Presumably out of revenue. How long will it be, then, before the Board is able to use its increases in revenue to reduce power charges, as it has promised? ' If the ratepayers do not meet the Board’s deficits in this and succeeding years, it is quite certain that either the ratepayers or the electricity consumers will pay for them some

time in the future. Even the Southland Power Board cannot produce money out of the air. It is true, as Mr McChesney said, that the ratepayers of Southland are “discontented” about the rate. They have, he will admit, fair reason to be discontented when they have had to pay £527,000 in rates after having been told when the scheme was launched that there was a “remote possibility” that they might have to pay a total of £14,000. But if they have to make up a deficit of £23,000 this year we think they would rather make it up in rates than watch the Board embark upon this sort of financial legerdemain —“gambling in futures,” it might be called. What are the ratepayers to believe? On June 20, in The Southland Times, they were told by Mr Carswell that “the Board was led to believe” that in four or five years at the most there would be no rate at all. On July 1 according to a statement by the Board the rate was expected to “disappear entirely” within four years. On July 21 Mr Carswell hopes that “there will never be the need for a rate again.” (By August 1, no doubt, the Board will be offering its ratepayers a bonus out of profits). How on earth does the Board expect to retain the people’s confidence when it doesn’t know its own mind from one day to the next—when it decides to take a referendum and then decides not to take a referendum; when it gives formal notice that a rate must be struck and then discovers —three weeks later —that a rate needn’t be struck; when it talks of extending Monowai in the immediate future and then of extending Monowai in the indefinite future; when it tells the province first that the rate will be levied up to five years, then that the rate will be eliminated within four years, then that there may be no i need for a rate at all! Does the Board not know its own mind, does it not know its own financial position, or what doesn’t it know? The ratepayers’ representatives, dissatisfied with the Board’s reception of their resolution, have taken the only course that remained to them and decided to circulate a petition calling upon the Government to take over the scheme without regard to the Board’s wishes. If the petition is I properly drawn up and its circulation is properly organized there i seems no doubt that an overwhelming majority of ratepayers will sign it. In the meantime the Board’s Finance Committee is considering the ratepayers’ request for a referendum. At yesterday’s meeting of the Board Mr McChesney repeated and increased his charges against The Southland Times. He has accused us not only of breaking a | promise to publish in full a cerI tain document issued by the ' Board but also of omitting from I our reports of the Board’s meet- ■ ings statements which did not suit our own case. A letter which we print to-day from Mi’ Carswell, chairman of the Board, is a sufficient answer to both charges. The promise of full publication referred specifically and only to the history of the Board’s negotiations | with the Government between i March and June of this year over the proposed referendum, and to the Board’s statement of reasons for the retention of the scheme; and this promise was fulfilled to the letter. As for our reports of the Board’s meetings, Mr Carswell is satisfied that they have been “full and fair,” if Mr McChesney is not. In our editorial columns we have severely criticized the Board more than once, as we do to-day; but we have done everything in our power to make our news reports scrupulously impartial, and it is a fact that we have given the Board fuller reports and fuller opportunities to state its case than any other paper in the province.