$60M deficit makes big increases likely in railway charges

Press, 19 April 1979, Page 3

$60M deficit makes big increases likely in railway charges

PA Wellington A hefty increase in all New Zealand Railways’ charges seems inevitable next week in the light of the department’s rising deficit. While the size of the increase is still a matter for speculation, the Minister of Railways (Mr McLachlan) has indicated that he will make an announcement on Monday. Now that the department knows that its projected deficit for the 1978-79 year has risen by 30 per cent to S6OM from the original budgeted deficit of S46M, big increases in freight and fare charges seem inevitable. Rail charges last rose last July, when they shot up by 12.5 per cent. Indications are that next Monday’s announcement might presage increases of at least that amount again to bring the department’s losses down to more manageable proportions.

In the department’s booklet released this year, called “Time for change,” the General Manager of Railways (Mr T. M. Hayward) noted that while rail and road passenger transport comprised

about 11 per cent of the total business, it ran at a projected SI9M operating deficit for the year. It seems likely that these sectors of the department’s services will be among those to incur the heavier increases next week. i

Rail freight operations had a projected loss of S2OM, Mr Hayward said when the booklet came out in February. Freight forwarders and manufacturers can therefore also be expected to be hit hard when the new rates are announced. Rail users have been subjected to at least seven increases in charges since February, 1971, At that time, suburban rail trips went up by about 10 per cent. In November that year rates were increased for the third time since 1971, and the rail ferry one-way fare went up from $2.40 to $3. Charges for private cars also went up by 5 per cent.

The rail ferry adult fare from Wellington to Picton is now $7.60. Charges for cars vary from $23.90 to $37.75. Labour’s transport spokesman, Mr R. 1.. Bailey, yesterday criticised the Government’s decision to in-

crease railway charges again.

Mr Bailey, a former Minister of Railways, said the continual increase in charges would simply slash rail use still further and

“drive the system into the 'ground.”

He accused the Government of trying to skim a little extra money off the railway system before killing it completely. The railways had been forced into a totally uncompetitive position in relation to the road-haulage industry. Road transport had been given a competitive edge through the extension of road-haulage limits, while the Railways were denied the right to compete in equal terms in lucrative areas such as freight haulage.

Mr Bailey said that, until the system was “revamped” and allowed to work as a competitive and innovative unit, it would never become a viable part of the transport sector. A Labour government was committed to restructuring the railways, as the backbone of an integrated transiport sector.