FRUITS OF POLICY

Gisborne Herald, Volume LXVI, Issue 20017, 16 August 1939, Page 7

FRUITS OF POLICY

RAILWAYS PROGRESS

MINISTERIAL REVIEW SERVICES TO COMMUNITY “BEST AT LOWEST COST (Parliamentary Reporter.) WELLINGTON, this day.

“In the three full years of my associations with and responsibility for railway administration, I have been (fortunate enough to see come to fruition some portion of the longrange railways policy enunciated by the present Government upon coming into office,” stated the Minister of Railways, the Hon. D. G .Sullivan, in introducing the annual Railways Statement to the House of Representatives.

“The policy was one calling for foresight and courage in handling the whole transport service in the interests of public welfare, and 1 should like to express my. appreciation of the co-operation which has existed between my department and the Department of Transport, in advancing that policy—a course which is now seen to react beneficially on the Dominion's whole economic fabric.

Best Possible Service

“Not only was it necessary to put the railways in a position where they could supply "the best possible service at the lowest possible cost,” but this had to he done as speedily as possible in order to keen pace with the Government’s drive for national recovery —a movement which included, of course, the assurance of opportunity foi useful employment for all capable of work within the Dominion, and covering also the opening of new avenues for the coming generation.”

Reviewing the exploration of different means by which the railways could assist m implementing the Government policy, the Minister mentions that many projects which had been considered previously, and had either been deferred or dropped for one reason or another, had been resumed, and at the same time many new projects were planned and put under way. “Associated, with the Government’s railway plans was the decision to complete certain new lines which had previously been commenced and abandoned; and l already it has been my happy privilege to see one of those works completed. I refer to the Napier-Wairoa-Waikokopu section of the Napier-Gisborne railway, which n.y department took over on July 1, 1939.” continued Mr. Sullivan.

“An important aspect of this and other lines intended to further the major integration of the Dominion’s transport is the necessity for ensuring the utmost mobility as between one district and another for defence purposes. Not only are those new lines essential, towards the Dominion’s protection, but the railway workshops, the most modern and best-equipped engineering plants m the Dominion, are also playing an important part in the country's defence. .i. ’jg.f. - Record Year For Business

“The financial year ended March 31 1939, has been a record year for railway business, the gross revenue — for the first time in the Dominion’s history—exceeding £9,000,000, the actual amount being £9,345,387. This is all the more notable following a year which also established a record in gross operating earnings. “The railway barometer, in New Zealand as in other countries, is always regarded as a good indicator of the country’s prosperity, even though the fluctuations of railway business and general trade conditions may not always exactly coincide, and, viewed in this light, the increased business done by the railways, the State’s biggest and most important developmental and commercial enterprise, is an indication of the strength of the country’s economic position.

“The gross earnings for the year totalled £9,345,387 and the gross expenditure £8,644,324, leaving £701,063 of net earnings, an increase of £68,266 over the net earnings of the previous year, after placing £990,495 out of revenue to the credit of the various depreciation, reserves, and equalisation accounts. “The total expenditure (£8,644,324) was £642,935 more than in the previous year, due mainly to the payment of wages at higher rates, higher prices for coal and stores, and the cost of handling the increased business.

“The net revenue of £701,063 is equivalent to 1.23 per cent of the capital, and the amount set aside out of revenue for depreciation alone is £698,678, equivalent to 1.19 per cent of the capital. In addition, reserves set aside out of revenue for track-renewals, slips, floods, and accidents, betterments, insurances, and workers’ compensation amounted to £291,817.

“The improved net financial return was helped by an increase of 10 per cent in fares and freights in the latter months of the financial year. Further Improvement Expected “I anticipate a marked improvement in the net earnings of the department during the present financial year for the first sixteen weeks of which the net revenue earned will be approximately £200,000 greater than for the corresponding period of Last year, notwithstanding that there is a day less in this year's accounting period. “In the current financial year my preliminary estimate is for a total net revenue of £1,250,000, and the figures for the first 10 weeks exceed that, preliminary estimate, which, of course, takes into account the general activity in the 'building and manufacturing industries and the increased passenger traffic anticipated from the Dominion's Centennial Exhibition and celebrations. “Attempts are sometimes made by critics of railway-administration to discount the real improvement in the railway position by separating the ‘operating’ from the ‘total’ revenue. But in a business which obtains over £1,300,000, or nearly 15 per cent of its 1 total earnings, under the heading of ‘subsidiary services and miscellaneous,’ such separation of figures (some of which are kept purely for internal accounting purposes) is useless as a means of judging the real position of the department—particularly as the proportion of revenue earned by our subsidiary services is likely to grow larger with further development of national resources and the Government’s related trans■**t pol'cv. The amount mentioned is practically double that earned under this heading in 1933, and is £500,000 more than the 1930 figure.”