NEW ZEALAND RAILWAYS

Wairarapa Times-Age, 3 May 1938, Page 9

NEW ZEALAND RAILWAYS

FINANCIAL RESULTS. By Telegraph.—Press Association, WELLINGTON, May 2. Financial results of railway operations during the year ended March 31 last were announced this evening by the Minister of Railways, the Hon D. G. Sullivan. Gross revenue amounted to £8,634,186, and expenditure to £8,001,389, leaving a net revenue of £632,797. The Minister said that from the national aspect the results were very satisfactory indeed. The Government’s policy was that the railways should be administered as a State department, rendering a direct value to the community in social service and betterment. “The gross revenue of the railways for the financial year ended March 31, 1938,” said Mr Sullivan, “amounted to £8,634,186, the greatest amount earned by the railways in any year. As, contrary to the position obtaining in Regard to other services and commodities, the rate of fares and freights have not been increased, the revenue earned clearly points to a record traffic handled by the Railway Department during the past 12 months. “The gross revenue is £843,535 more than the amount earned in the year ended March 31, 1937, and is £346,070 higher than that earned in the financial year 1929-30, which was the previous record year of railway earnings. “The expenditure totalled £8,001,389, leaving a net revenue of £632,797, or £271,061 less than for the year ended March 31, 1937. The increase in expenditure, amounting to £1,114,596, was principally due to wages increases totalling £739,000, of which £442,250 was for providing improved wages and conditions for the staff, and £296,750 for the cost of handling the increased traffic. The remainder of the increased cost was on account of the higher price of coal (£100,000), greater consumption of coal in hauling the increased traffic (£41,000), increased material used in repair of rolling-stock (£44,000), increased cost of expanding subsidiary services, e.g., road services, refreshment service and bookstalls (£88,000), and other expenditure due to increased traffic and increased prices of commodities (£102.596).

“The 40-hour week, adopted as one of the Government’s policy measures for creating more employment, gave work to an additional 1668 men in the Railways Department during the past year. The cost of the 40-hour week and other improvements in staff conditions, such as the restoration of wages to the 1931 level, had the effect of reducing the profit on operations by £442,250 for the year. The net revenue would have been higher by this amount, or £1,075,047 instead of £632,797, had these improvements in wages and conditions not been made, or if the cost had been passed on to the users of the railways. I would like this position to be understood, as it affects all comparisons that can be made between one year and another from the purely administrative aspect. “In this respect a comparison with the financial year 1929-30, the previous record year of gross revenue, is particularly interesting. In that year the net revenue was £929,257. If in 192930 the Railways Account had been called upon to meet the charges due to additional wages and exchange that the 1937-38 Railways Account has to bear, the net revenue of the 1929-30 year would have been only £223,007, or £409,790 less than the net revenue of 1937-38. “Passenger traffic for the year showed a revenue increase of 5 per cent over 1937 and a substantial increase in the total of ordinary passengers and season tickets. The goods tonnage reached the remarkably high figure of approximately 7,517,000 tons, an increase of 1,305,000 over that of the previous year and 2.500,000 tons more than the total carried in 1933.”