COULD BE MADE BETTER

Ashburton Guardian, Volume 70, Issue 103, 14 February 1950, Page 4

COULD BE MADE BETTER

RAILWAY FINANCES STATEMENT BY MINISTER (P.A.) WELLINGTON, This Day. The Minister of Railways, Mr W. S. Goosman, announced to-day that as a result of his inquiries into 'railway finances, he was satisfied they could be put into a much better state within a year, “and the Government is considering certain remedial measures to that end.” Outlining the Government’s policy in relation to railways finances, the Minister said the railways should pay working expenses and return a reasonable amount of interest on capital. “As to the rate of interest return, the Government cannot expect a repetition of the same favourable conditions or the results so cheaply secured in 1943,” he said. “In that year the railways had the advantage of an increase of 10 per cent, in tariff rates made in 1938, and thus, although in the five years from 1938 to 1943 there had been wage increases amounting to close on £1,000,000, the swollen war-induced tariff easily swallowed up the increase in working costs. In the advantageous circumstances then applicable all operating costs plus full interest charges were paid in 1943, and would have been paid, in full in 1944, but for the addition of £250,000 to operating expenses brought about by increased employee costs.”

The Minister said that at the beginning of the present financial year, a working deficit of £2,000,000 had been estimated, but added that he was pleased to note that increases in goods traffic were such that on present indications, the loss would approximate only £1,500,000. “I am amply satisfied,” continued the Minister. “It would be incorrect and unfair to attribute the railway losses of the years 1947 and 1950 to nefficiency either in operation or management of the railways. The losses are clearly due to the policy of the late Government, which obviously was to- apply the principle of subsidising the Railways Department out of general taxation. By this means the crippling effect on tire railways finances of the 44-hour five-day week, in association with mounting employment. costs in the department, was not brought prominently before the public. The annual accounts of the department merely showed the total amount of wages paid.

Government Kept Posted “I requested the department,” said Mr Goosman, “to inform me whether any action had been taken to inform tne Government of the position in which it was being piaceci by rising costs, and official files produced showed that the Government had been kept fully posted. Also, that between 1945 and 1949, definite recommendations had been made in writing on six occasions and verbally once. Only on one occasion, however, did /the Government, afford any relief, and that was in September, 1947, when a 15 per cent, increase in fares and a 20 *per cent, increase in parcels and goods tariff was authorised. For some undisclosed reason, cheaper suburban fares were exempted by the Government from the passenger fare increase. 1 note, however, that 1947 increases which were not authorised until after four previous recommendations hqd been made did not come'until wage costs alone had risen by, £3,400,000 over 1939. It seems that within two morfths another £950,000 was added to the wages bill which, with added costs overseas, fuel stores and higher depreciation, absorbed a large proportion of revenue anticipated as a result of authorised tariffs increases. It was at this stage that verbal representations were made by the then general-manager to the Government. Approval of further increase was not given. Subsequently further wage increases advanced the wages bill to £5,050,000 above 1939, and the present general-manager, faced with circumstances that long-dis-tance travellers had already had a 15 per cent, increase 18 months before, and that there had been a flat rate increase of 20 per cent, on goods traffic, then recommended differing rates of increase involving some modernisation of the tariff structure. No increases at all were approved on that occasion, and these same recommendations are now being made to me, and are under consideration by the Government.” i

The Minister said an investigation of output and costs of workshops had not yet been made in detail, the present survey having been made for the purpose of arriving at the main reasons. for the large deficit in the railway accounts. ,