The Sun THURSDAY, AUGUST 9, 1928 A RECORD STATE SALARY

Sun (Auckland), Volume II, Issue 428, 9 August 1928, Page 8

The Sun THURSDAY, AUGUST 9, 1928 A RECORD STATE SALARY

IT must be pleasant for the new general manager of State “ railways to watch a train climb Parnell Rise and realise that its puffing labour helps to earn him a salary of over £9 a day all the year round. To the observant taxpayer the smoke of the engine is a black reminder that the railways are now losingmore than three-quarters of a million sterling a year. The two different points of view really explain the reason for the Government engaging Mr. H. 11. Sterling at the record State salary of £3,500 per annum. It is hoped that he will earn his fine remuneration by substantially reducing the grievous and growing deficit on railway business. The position bad become so serious that the desperate Administration had to do something out of the ordinary to avert financial ruin. It was essential to seek and secure a more efficient control.

A board of management, after doing a great deal of very good work (it at least discovered that the railway service ought to be run as a business concern and that it might be worth while to encourage popular use of its comparatively slow form of transport) failed to stop the heavy strain of monetary losses. The salaries of the three managers combined totalled £3,750 a year. On the principle that the best man for the job is probably better than three able men, Mr. Sterling was appointed on terms that represent a yearly saving of £250. This is the practice of real political economy, and if the public servant with the highest salary ever paid in the New Zealand Government’s service can arrest the runaway deficit his appointment and pay will represent the political practice of first-class business administration. The Minister of Finance has found it necessary to include in his Budget a warning about railways finance. Actual conditions reveal a sorry record. Net earnings decreased last year, while interest charges increased. This has become a chronic defect, so much so, indeed, that the annual gift to the railways from the Consolidated Fund liad to be increased last year from £359,540 to £489,568. And even then the total revenue of £1,839,415 was still far short of the bill for interest charges—£2,l3o,B67. In sorrow rather than in anger, the Hon. W. Downie Stewart had to tell the overburdened taxpayers, who again have been denied a pennyworth of relief, that unless railway business mends, they will have to provide more gift-money for an unprofitable concern.

There has been and will continue to be much talk about the fat salary given to the new controller of railways who, at £3,500 a year, will naturally have a greater say in the administration than the Prime Minister and Minister of Railways, whose supreme position is assessed as being worth only £2,000 a year. In view of the huge capital invested in the national railways, the sole manager’s remuneration is anything but excessive. Many private business administrators of relatively small concerns receive high salaries (on New Zealand’s miserable scale) and salaries proportionately higher than Mr. Sterling’s. But it is an axiom in private business enterprise that the payment of a big salary is expected to yield a reasonable profit for those who pay it. There is a tendency in public affairs to give substantial remuneration to men whose greatest financial success lies in their ability to prove that without their efficient control the loss they report would have been much heavier. That sort of argument may serve for a time, but, if it become chronic, the day of reckoning comes like a thunderclap. Meanwhile, the railway engines shriek for better times and less deplorable returns. It is for the new manager to prove that excellent management is worth a record salary.