D.—2

1927. NEW ZEALAND.

RAILWAYS STATEMENT BY THE MINISTER OF RAILWAYS, THE RIGHT HON. J. G. COATES.

Mr. Speaker,— In the following annual Railways Statement, the fifth that it has fallen to my lot to present, I have the honour to report substantial progress in most phases of railway activity, even though the financial results of the year's work are not so gratifying as were those recorded in the special circumstances obtaining last year. The net revenue amounted to £1,943,774, which is equivalent to a return of 3-99 per cent, on all the capital invested in lines open for traffic. This represents a decrease of £48,560 compared with last year, but is higher by £169,540 than the forecast contained in my Statement for 1926, upon which the Railway estimates for this year's Budget were based. The revenue includes £445,221 received from the Consolidated Fund (in terms of the Government Railways Amendment Act, 1925) for services performed in working such branch lines as, although beneficial for the development of the country, are not in themselves reasonably remunerative railway assets. Out of the year's revenue has been set aside the sum of £310,544 to strengthen the reserves available for renewals, depreciation, insurance, and betterments, whilst a subsidy of £175,000 has been paid to the Government Railways Superannuation Fund. £17,574 was also provided out of railway revenue on account of (a) increased superannuation allowances granted to widows and children, and (b) the cost-of-living bonus paid to superannuated members in receipt cf allowances amounting to less than £100 per annum. This charge has hitherto been borne by the Consolidated Fund. In the pre-reorganization period each of these three items would have (either immediately or ultimately) constituted a charge against the Consolidated Fund. They require, therefore, to be taken into account in any comparison between one year and another, and their total (£503,118) may reasonably be regarded as an offset against the branch-lines payment referred to above. In comparison with last year, the increase of £85,681 required as payment on account of branch lines and the decrease of £48,560 in net revenue are.together less than the amount of shrinkage in passenger receipts following the inflation caused by the Dunedin and South Seas Exhibition of the previous year, and the combined effect of an increased number of private motor-cars added to augmented motor-bus competition. Apart from passenger traffic, there has been an increase of £98,627 in the net revenue derived from goods traffic and other subsidiary services. Interest charges increased by £130,122, this sum including £55,600 paid out of revenue on account of railway-improvement works under construction.

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