P. & T. SERVANTS

Wanganui Chronicle, Volume 76, Issue 287, 5 December 1933, Page 10

P. & T. SERVANTS

CONDITIONS OF PAY “CHRONICLE” VIEW APPROVED. The contents of the annual report of the Post and Telegraph Department, as presented to Parliament by the Post-master-General last month, have received considerable attention and favourable comment by the Dominion’s Press, and it appears to be generally agreed that both the services provided and the financial results accruing io them are most creditable to the de partment —which, after all. is the personnel employed. This opinion is but further endorsement of that given by the Hon. the Postmaster-General himself, who, in his previous and first report, stated that he had assumed his office with a high opinion of the Pon Office and its staff, which high opinion had been enhanced by the opportunities sfforded him as Postmaster-General of gaining an insight into the department’s organisation and method. The Minister has since repeated his h’gh appreciation on numerous occasions, before and since the presentation of his second report now under notice, in which be again stressed his gratification with the efficiency of the department and the kenness of the staff in the service they render to the public, and it was pleasing to hear him say when addressing a conference of the employees recently that, with a full knowledge of all the facts, he was of the opinion that the value of officers’ services warranted payment of higher salaries.

In this respect, an editorial appearing in “The Wanganui Chronicle,” under date of November 2, 1933, contains a timely word in the interests of the employees, and the logic of the arguments about the making of profits and their equitable distribution is worthy of emphasis at this time when the claims of the employees to part of the profits are subjugated to the interests of the Consolidated Fund, that is, to the national financial commitments of the country. This is what “The Chronicle” has to say:—

“The Post and Telegraph Department. after paying £546,000 interest on capital, was able to pay to the Consolidated Fund £456,000, and to maintain a carry-forward of £34,528. The P. and T. is a public utility, and because of its character as such it should not be looked to to provide profits to the State. A healthy organisation should make profits, and the object of profit making keeps an organisation healthy. The absence of the profit-making element encourages extravagance and slackness. Nevertheless, the public utility which makes big profits is inclined to become but the instrument for the exploitation of a monopoly. When this takes place, the user of the monopoly becomes a super taxpayer. “Another phase of postal and telegraphic work which must not be lost sight of, is that the employees must remain permanently in the service if efficiency is ‘to be assured. The efficiency gained by long service unfits the employees for any other calling of appropriate remuneration, and they are consequently in an unsatisfactory position when it comes to group bargaining. The claims of the P. and T. employees to reasonable wages must not be overlooked in the interests of the Consolidated Fund, otherwise it is the employees of the department who become super taxpayers.”

The provision of profits to the State, criticised in this statement, is something that was legislated for in 1931, tnd a total amount of £1,397,616 was Po paid for the following two years up to March 31, 1933. Payment of interest for the same period totalled £1,096.000, while £352,847 went into the depreciation fund and over £34.000 was carried forward each year. Thus, if profit making keeps an organisation healthy, there can be little doubt about the robust condition of the P. and T. Department. A little further analysis of “The Chronicle’s” deductions will show that there has been no exploitation of the P. and T. monopoly to place the users of such monopoly in the position of being super taxpayers, for the rates and charges for various services provided have actually been reduced during the period 1931-33, while during the same period the National Expenditure Com-, mission reported to the Government that the Post and Telegraph Department wa.s providing certain unremunerative services at a loss of £64,660 an nually; that it was provided free services worth more than £6OOO, and was giving concessions Qn other services to special institutions of as much as 50 per centum off usual charges.

From this it is clear that there are general users and privileged users of the many services grouped under the control of our P. and T. Department and, to amplify the statement that the general users are not being exploited, it is only necessary to say that whereas previous charges compared very favourably with those for similar services under private enterprise of State control in any part of the world, the reductions referred to have placed our services in an almost incomparable position as regards cheapness, scope and efficiency. As for the position created by the privileged users, it is obvious that the legitimtae profits are not what they rtiight be if the department had

not to carry the losses involved. If this requires emphasis it can be found in the National Expenditure Commission’s Report, which recommended that non-paying services should be reviewed so that “those which arc considered a proper charge against taxation should be provided for each year on the vote of the appropriate department.” and that “at least a 50 per centum contribution towards free services and a 50 per centum increase in the charges at present levied for partly remunerative services” would not, bo unreasonable. The object of these recommendations was with a view to securing a corresponding gain to the Consolidated Fund, but as no legislative action has followed to give effect to them for that purpose, it is extremely unlikely that the initiative of the Commission in pointing the way to securing legitimate increases in revenue will bo followed by the Government to provide reasonable wages for the department’s staff. But the “Wanganui Chronicle” points out that, as an alternative to the users of the department’s services being super taxpayers to provide profits to the State, the employees of the department may be the super taxpayers because the wages they receive are not in proportion to the i alup of the services they render. That this actu-

ally is the case can be shown in several ways without departing from the official figures of the department’s disposition of profits and credit balances year by year, which later have been arrived at after meeting every financial obligation and the placing of large «ums to reserves. As all such profits have accrued to a public utility in which “efficient service, rigid economy and minimum charges” is the motto, it is obvious that efficiency and economy are the positive elements which, added to the simplified element of charges tatter subtracting minus quantities), produce a result that leaves a handsome margin after operating costs are provided for. As something like 71 per cent, of the department’s operating costs is paid in wages, it follows that the amount of this item is the deciding factor in the profits made, and there is no doubt whatever that the staff has suffered, and is still suffering, to provide profits. To instance this, the financial position of the department over the past three years, when two “cuts” have been imposed in salaries, will suffice. For the year ended March 31, 1931, there was an excess of receipts over working expenses of £1,065,020, to which was added balance forward from the previous year of £52,898. Out of the total £558,238 was placed in the Depreciation Fund, £504,000 was paid as interest op capital liability, and a balance of £55.670 was carried forward. Despite this result ,a general reduction in salaries was imposed to operate from April 1, 1931. the amount of which was for the specific purpose of assisting the

Consolidated Fund. In its next year’s operations, the department's revenue exceded the previous year’s by £7BlO, and the excess of receipts over working expenses was £1,550,692, to which was added the credit balance of £55,670, making a total of £1.606,362. By special legislation, the Consolidated Fund benefited by receiving £941.616 of this; £550,000 was paid as interest on capital liability: £80,029 went into the Depreciation Fund; and the balance of £34,717 was carried forward. Despite this result, too, a further general reduction in salaries was imposed to operate from April 1. 1932, and again in the interests of the Consolidated Fund. It will be noted that with the direct payment of nearly a million pounds to the Consolidated Fund there was £478,219 less in 1931-32 for the department’s depreciation reserves than in 1930-31; and again last year, when a second direct payment was made to the Consolidate Fund, the amount placed to reserves was less than half of the average amount so utilised each year prior to the Finance Enactments of 1931, which appropriated the greater part of the department’s profits for the general purposes of the State. It i.s an interesting point that when the department is called upon to provide profits to the State, the amount allocated in the Post Office Account for renewals and replacements of assets is comparatively small, yet for the three years immediately preceding the State's appropriation of profits an average amount of £560,000 per annum was placed in the Depreciation Fund. The rate at which reserves were being built up naturally made the balance carried forward each year comparatively small, and these were the items that were always brought under the notice of the staff when increases in salary were asked for; but when the State set out to appropriate the profits it was not with the credit-balance items in view, and inroads on reserves were made, while orders were given the department to revise its depreciation rates so that less would be reserved with corresponding gain to the Consolidated Fund. In fact, when the Finance Bills, 1931, were being debated in Parliament, it was freely stated 'that it was never intended that the department should build up such large reserves as had accumulated since 1928, and inroads into them were made without compunction—to provide profits to the State.

This year, again, the department is committed to pay a further amount to the Consolidated Fund, and for how long thereafter such payments will continue depends entirely upon the duration of the emergency finance legislation; but if and when the department reverts to complete control of its profits again, what prospects have the staff for a little consideration being given to their long-overdue salary claims? Probably it will be stated that the reserves have been depleted and require building up again, but will the staff accept .such statement with the same resignation and continued optimism that they adopted when the reserves were founded and added to on a large scale in the period 1928-31? The State has reviewed the depreciation rates of previous years and decreed that they were unnecessarily high, so when the department regains control of its profits once more, will the revised rates that were adopted to provide profits to the State continue in force with some hope of a share in future profits for employees? These are questions of paramount importance to the staff during this transition period from the depths of a depression to more prosperous times, and

only by the lessons learnt from the experiences of the past can our service make a stand for a fair and equitable share in future profits accruing to its efforts. Until the end of the financial year 1921-22, the balance of receipts over working expenses was simply paid into the Consolidated Fund, and the department was dependent on vote and

loan money for its maintenance of assets and development. Thon from April I. 1922, the “Commercial System’’ was introduced, under which Ihe department was expected to meets its own financial commitments for maintenance, etc., and the excess of revenue over working expenses, while still paid into the Consolidated Fund, was credited to nayment of interest on loan capital and in reduction of capital liability. At this time the staff was assured that as soon as the commercial system proved to he a success salary claims would receive favourable consideration, but as the years wont by it became apparent that, although the business of the department was increasingly profitable, the degree of success that would entitle ’he staff to salary increases would not be defined. Then from April 1. 1928. the Post Office Account was separated from the Consolidated Fund, and all profits over working expenses and payments nf interest on capital liability were retained by the department. Once again the staff was assured that, as reserves accumulated to correspondingly dispense with borrowed capital, salary claims would receive consideration—and how those reserves did grow! Put alas! after mounting steadily for three years, the. State found itself in need of these founds, and there briefly is the story of how the employees of the department have become super taxpayers as envisaged by “The Wanganui Chronicle.’’ The thanks of the P. and T. Ser- , vice are due to “The Wanganui Chronicle’’ for its fair and construe-