“Took Long Shot to Hold Custom”

Sun (Auckland), Volume II, Issue 356, 17 May 1928, Page 11

“Took Long Shot to Hold Custom”

RAILWAY’S BIG LOSS YEAR’S DEFICIT OF £BOO,OOO EXPLAINED (Special to TB.E SUXJ PAJPAROA, Wednesday. By looking five years ahead, the administrators of the New Zealand Railways system have shown a loss of £783,047 for the 1927-28 financial year. The Prime Minister, the Et. Hon. J *G. Coates, explains this huge deficit by expounding- the recently-adopted departmental policy of giving service or. the railways, with a view to ultimate financial success. “We thought the best course was to take a long shot and to hold our customers by giving them service,” Mr. Coates said here this evening. In a review of the Railways Department’s year, the Prime Minister explained that the subsidy from the Consolidated Fund for branch lines and isolated sections was £489,568, which reduced the deficit on the railways books to £293,479. Passengers had decreased by 623,000, and the passenloss were increases of 650,000 passenger revenue by £150,000, but against ti ls S‘ ers . nnd £ 24,000 revenue from bus services. He considered this satisfactory in view of all difficulties. The year’s results were shown to be:

MORE GOODS CARRIED Goods traffic increased, by 114,000 tons, and the revenue from tills source by £84,000. A decrease of 13,000 tons in timber traffic was partly attributable to the falling-off in the demand for house construction, the abnormal shortage of houses that existed after the war having been overtaken. One of the most striking features in the goods traffic was the very large increase in the quantity of fertilisers carried during the past two years. In 1925-26 the total quantity carried was 312,000 tons, while in 1927-28 it had increased to 586,000 tons, an increase of 88 per cent. The reductions in railage made as a matter of Government policy amounted to £107,000. The working expenses of the railways and subsidiary services increased by £194,000, the chief contributing factors being railways, £144,000, the increased number of dwellings provided for employees, £25,000, and bus services £24,000. Interest charges increased by £87,000. The interest burden on works under construction which had not yet become reproductive amounted to £75,000. The increase in railway expenses, Mr. Coates explained, was due very largely to tlie greater mileage of line worked, the provision of better services, a- 1 the handicaps imposed by the construction of new works, which had not yet been brought into full use. After explaining the figures of working, Mr. Coates paid a tribute to the loyalty and co-operation of the staff—a feature of the departmental service of which he felt proud.

Receipts .. Expenses .. 1927-28. £ S,032,943 6,685,123 1926-27. Increases. £ £ 7,989,433 43,510 6,490,880 194,243 Net revenue Interest 1,347,820 2,130,867 1,498,553 2,043,433 *150,733 S7.434 Loss .. .. Subsidy 783,047 489,568 544,880 445,221 238,167 44,347 Leficit . . 293,479 99,659 in net revenue 193,820