WHY RAILWAYS LOST MONEY

Chronicle (Levin), 7 September 1949, Page 6

WHY RAILWAYS LOST MONEY

Press AssociationJ

More Expensive Coal And Higher Wages

(Per

WELLINGTON, Sept. (5. The Railways statemeiit for the year cnded March 31, was presented to the House of Representatives today by the Minister, Mr Sernple. A new liigh. level in gross revenue was establi§hed this .year, the total reeeipts being £18,597,728. This amouiit exceeded last year's reeord by £1,528,850, or S.94 per eent. The greater por tion of this additional revenue came trom tlie increase iii. fares '-and freights whieh operated tliroughout the whole y'ear, as against oiiiy seven nionths of the previous year. Passenger reveiiue sliowed an mcrease over the previous year. Although armed service travel eontinued to deeliue, ordinary passenger traflic revenue sliowed a slight increase, brought aboui maixily by the increased fares. Beasouticket journeys and revenue sliowed marked increases. The actual increase in passenger revenue over the previous year ainounted to £71,711. Goods Traflic Expands The steady upward trend in goods trallie tliat has taken place over the last few years eontinued during the present financial year. This is indicat ed in the increased revenue and in the increased tonnago liauled. The goods revenue has shown an increase of £1,. 200,385, or 12.02 per cent., reacliing a new record of £11,747,129. The tariii increase brought an additional revenue ' of £891,050, while it is estiniated tlnit additional traflic increased the revenue by £309,335. The goods tonnage uioved during the year uniounted to 9,000,13 » tons, being 142,087 tons in excess of the previous year, whieh was a recoru achieveinent at tliat date. The suusuliary serviees account sliowed an excosr, of revenue over expenditure of £349,508. The niain iteui in this section ia the road niotor serviees, whieh sliowed a proiit ot £2i,330, froin a record re.venue of £1,910,251. This was an increase over the previous year of 9.07 per cent. The expenditure in this brancn £1,882,915, also sliowed an increase wluch ainounted to 12.99 per cent. Tiu.« increase was due chiefly to the lugher wage-rates now in iorce and the liigher depreciation cluirges, iixed charges, aiui licence fees resulting from tlie purchasc of additional veliicles. The gross expenditure for tlie year totalled £19,700,594, an increase of £1,989,l397j or 11.23 per cent. The increase in wage costs ainounted to £1,121,833. increased nian-liours incurred in haiulling the increased traiiic caused a rist in expenditure of £220,198, while tlie increased wages and concessions granted bv tlie Kaiiwavs .Industrial Triuuir.il

uiu'ing tne year liad a subsiantial elfeci upon all avenues of expenditure. The remainder of the increase in expenditure is spread over a number of miseei luneous lleins, paiticiuany fuel, stores and materia.l, depreciation, and dererred inaintenance. Tlie net luss on woi king was £1,102, 800, whieh was recovered from the vote • " Economic fcitabilisation. ' ' The extra cost of imported fuel oii and imported coal, compared witli the cost of New Zealand coal ul equivalent fuel vaiue, was £793,054. it is necessary to make it clear that the Eailways Account has carried an increased cost, and tne use by tlie Departnient ot this lugu-er-priced imported oil and coul has released tlie luvver-priced New Zealand coal for industry and domestic purposes. Lt is not unreasonable to claiin, tlierefore, that the Eailways Account, in eltect, has carried an extra burden whieh. couid have been sliared by tlie rest of tlie eoimuunity. Pubiic Utility "I would like to point out liere. " said JMr Seniple, "tliat, in assessing the elfectiveness of the admiuistration of the railways and their use-value, it La necessary to remeniber that it is a great pubiic utility, and tlie usual tests of commerciai efhciency therefore do not whoily apply. In otlier words, it is necessary to ascertain. the (juantum of ser vice in reiatiou to real expenditure, and to measure wlietlier tliere has been a prudent use of tlie man-power, rollingstock, and raw inaterials tliat are in- ' volved in producing the service. "In presentiug this statenient regarding Ihe reveiiue-expenditure position of' the railways, 1 am not unniindful oi! the vexed question ot "making the railways pay. Transport costs emer largely i into the. cost strueture of the whole of j tlie .Donunion. Taking into consideration the liigli vohune of traflic carried ' by tlie railways, anv allerations iii i'are.s ' and freights would liave far-reaching elfects. it would take a very exliauslive econoniie survey to reacli linal couclu- 1 sions on this point, but 1 am satisfied tliat any disturbance of this stabilisiug factor in general costs would not be m tlie pubiic inlerest and it would tendi to nuliify tlie apparent good eil'ect of | the excliange-rate adjustment. On ac- , count of tlie social nature of the rail- 1 ways, and the niajor part thev play in providing transport serviees, they niust be the basis oi' transport co-ordinatiou througliout the country, and steps are j being taken to bring about a rationalisation of Ihe rail and road serviees tliat belong to tlie Departnient, while, in associaiiou 114111 my colleague tlie hlinister of Transport, oil'orts are being made to properly co-ordinate all transport serviees, wlietlier tliey be JState owned privately owned. Tliere are many difliculties in tlie wav, but 1 am sure tliat alJ tlie transport agencies ihvolved will co-operate in the pubiic interest in nunimising the over-all transport costs of tlie country, whieh aie ' generally estiniated from £75,01)0,000 to £80,000,000 per amium."