RAILWAY FINANCE.

Auckland Star, Volume LIX, Issue 198, 22 August 1928, Page 19

RAILWAY FINANCE.

RENEWAL FUNDS A MILLION OFFSET TO THE DEFICITS. (By Telegraph —Parliamentary Reporter.) WELLINGTON, Tuesday. New facts on railway finance were given to the House by the Prime Minister when he interposed in the financial debate to-night. The Government, he suggested, was entitled to credit for makinp it possible for the Press and the public to understand the railway accounts, which were kept on a commercial basis, enabling them to quickly detect anything included in the receipts which was not strictly railway revenue. He explained how a contribution of approximately three-quarters of a million was made from consolidated revenue to the railway account to meet the cost of unprofitable branch and isolated lines. This part of the system comprised 124 miles in the North Island and 665 miles in the South Island, with 204 miles of isolated lines. The Government could* have met losses by either raising freights generally or ripped up unprofitable sections. Its policy was to maintain development and the enterprise of peoples served by those lines, some of which in the past, had there been a renewal account, might have paid over and over again. But there had been no corrcct system of accounts, all receipts going into consolidated revenue. Had there been a renewal fund in past years it was possible that every bit of rolling stock and line would have befti paid off. Tlie position had to be met, under a commercial system of book-keeping, by payment from general revenue so that the Railway Department, as a commercial concern, could be paid to maintain a service necessary for the country's development. Last year this payment was f489,568, and the railway deficit over and above this was £291,452. Members should recollect that prior to W24 no cognisance was taken of renewals. which this year exceeded the amount of the deficit, being £294,132. Mr. Holland (Leader of the Opposition): That is a proportion of the cost of running the system. The Prime Minister: No. the renewals have to be provided for in each year, and there is over one million standing to credit of the renewals fund since its establishment in 1924. Had this fund been provided in early days we could have renewed the whole of the rolling stock and possibly written down the cost of the railways by thirty or forty millions.