FACING HEAVY LOSS

Timaru Herald, Volume CLVIII, Issue 23262, 25 July 1945, Page 4

FACING HEAVY LOSS

Wellington Harbour Board Application To Raise Dues And Charges (N.Z.P.A,.1 WELLINGTON, July 24. “If the Wellington Harbour Board were put on true accounting principles the Board would be bankrupt if wc go on as we are doing. The earning capacity is the only test of the soundness of such a business,” said Mr W. Appleton, an accountant, appearing to-day as a member of the Harbour Board before the Price tribunal, which is hearing the application by the Harbour Board t..’ increase its dues and charges. Mr Appleton subsequently denied, when cross-examined by Mr B. S. Connor, a member of the Tribunal, that it was a “scare" statement. Mr Appleton. in evidence, said that the loss on current accounts by September 30 this year was estimated at £48.000 and a further loss of £4OOO could be expected between then and the end of 1945. This could not be covered by overdraft because the Local Bodies Finance Act prevented an overdraft being raised for more than the amount of the outstanding rates on revenue, and at September 30 the Board's anticipated outstanding dues would be only £12.000. Mr Appleton described the situation of the Board’s special funds and said they were not in a position to help in the present difficulty when the Board was facing a loss of £169,000 a year. As for raising loan i money it was simply not there or in ' prospect to pay interest and sinking fund. "It would be frank suicide to borrow now," said Mr Appleton. To Mr H. L. Wise, secretary of the Tribunal. Mr Appleton said that. | ignoring depreciation there was now : no margin at all between expenditure. [ and the larger the volume of traffic ! handled the greater the Board’s loss. I “It seems to me that while the pclicy of the Board is very sound, that ' policy does press somewhat hardly on the present generation." said Mr Wise, after pointing out that a loan of more than £BOO.OOO is to be repaid in 1946, which would save the Board £13.300 a year in charges. He added that in a few years the Boards assets would have been completely paid for. hence the present generation was really paying twice over. It was payinc for depreciation and repairs and maintenance, and paying off the assets as well, plus replacement funds for when the assets wore out. If the Board were run as an ordinary commercial undertaking it w-ould not have to pay off the loan in so short a time. Mr Appleton expressed his disagreement. Supposing the results of a successful application to the Tribunal were that the Board made profit above a reasonable margin, he said, the Board would be perfectly willing to have its charges reviewed again. Asked by Mr Munro, a member of the Tribunal, what effect the increase in the Board's tariff might have on consumer goods, Mr Appleton said the effect would be very slight. It might be 2/- or 3 - a ton on some goods and much le c s on others. Captain M. P. Congdon. Board traffic manager, sted the Board’s tonnages were reduced in the first six months of this year and were likely to be reduced in the second six months. His estimate of a £169.000 loss for the year ending September 30 might well be exceeded. The increases asked for were about 50 per cent on labour costs, which was not a steep increase considering that the Board’s wages bill bad increased bv £lOB.OOO a year since 1937.