SURVEY OF RAILWAYS' YEAR

Press, Volume LXXIII, Issue 22240, 3 November 1937, Page 16

SURVEY OF RAILWAYS' YEAR

INCREASE SHOWN IN GROSS EARNINGS

Big Falling-off in Net Revenue

[From Our Parliamentary Reporter.J

WELLINGTON, November 2,

The largest earnings for any year since 1929-30, when a record revenue was received, were reported by the Minister for Railways, the Hon. D. G. Sullivan, in his annual Railways Statement presented to the House of Representatives to-day. The total earnings for the year ending March 31 this year had been £ 7,790,651, which was nearly £BOO,OOO more than in the preceeding year. Net earnings, however, had shown a decrease over the two preceding years, the figures being:— 1937 1936 1935 £903,858 £1,051,477 £1,087,491 The Minister made special reference to the influence of the restoration of wages cuts on the net revenue, setting out a special comparison of the latest figures with what net earnings would have been in previous years if the wages cuts had not been imposed. An increase in both the number of passengers carried and quantity of goods handled is shown in the statement, which also sets out a comprehensive scheme of development for the coming year and gives the Minister's attitude towards competition from road services.

The marked improvement in the trading and industrial outlook of the Dominion which had manifested itself in the last year, and the greatly improved economic conditions now prevailing generally were reflected in the financial returns of the department, the Minister said. The revenue reached the high total of £7,790,651, which was £786,335 more than in 1f3536, and actually the largest earnings in any 12 months since the record year, 1929-30.

The surplus of revenue over expenditure, which was £903,858, had been secured notwithstanding the concessions granted to the staff in wage and salary restorations and the general application throughout the service of the shorter working week of 40 hours, Additional expenditure incurred in train mileage, stores, and "man-hours" had also been necessary to meet an increased turnover of business, while in addition the financial commitments in the programme of improvements in the standard of services and facilities on which the Government had embarked as part of its general railway policy had also been met from revenue.

Decrease in Net Revenue

The net revenue, although approximately £170,000 less than the average net earnings in the preceding three years, when wages cuts and other measures characteristic of the depression years were in force, continued the Minister, was approximately the same as that earned in the 1929-30 year, before the depression had "settled down," and was approximately £IOO,OOO greater than the average earned in the three years from 1931 to 1933.

"It should not be overlooked," the Minister went on, "that up to March 31, 1936, the expenditure on wages and salaries was, in the aggregate, considerably reduced as a result of the cuts authorised by the legislation- of 1931 and 1932. The full effect of these cuts and the policy of compulsory early retirements as applied to members with not less than 30 years' experience, on the working expenses of the department is not, I am sure, fully appreciated, and in order to facilitate a true comparison of the position during the years the cuts were in operation—l 932, 1933, 1934, 1935, and 1936—with the year under review I submit the following table setting out what the net earnings would have been had not wages and salary cuts to the extent of £2,512,000 been made.

"The table also sets out (1) the percentage of working expenses to gross earnings, (2) the operating earnings a train mile, (3) the operating expenses a train mile, and (4) the net operating earnings a train mile. These figures show the results for 1937 in a most favourable light, and when the further fact of compulsory early retirement, affecting as it did 138 employees, with a further saving of £37,700 per annum, is taken into consideration, the position is still more satisfactory:— BO BJ jj UOC C bo ra J) 60 ™<u a a i> w «w Kb Cwr? ' C Jfl —2 t- 'H ■— .S So e" «.S5 gfi s g\E E £ $« s«* *? rt«2 5-x2 £»2 £ d. d. d. 1932 .. *452,993 93.04 136.63 133.97 2.66 1933 .. *203,544 96.63 130.37 133.41 —3.04 (loss) 1934 ~ *438,558 93.07 132.92 130.05 2.87 1935 .. *590,492 91.09 133.44 127.00 6.44 1936 .. *715,477 89.79 135.60 127.09 8.51 1937 .. *826,858 89.39 139.61 129.70 9.91 ♦These figures are not the official net earnings, but what the earnings would have been if wages cuts had not been made.

Future. of Policy—"The Government's policy of railway development," said the Minister, "is grounded upon the belief that there is no adjunct of material progress that is so generally important and exercises so vital an influence as the railway system. Probably no country owes more to its railway system than does New Zealand, and certainly no country has made greater use of railways in the furtherance of general.development. From the year 1863, when the first lines were opened for traffic, until the present day our railways have been and still are our first line of communication. They constitute, in fact, the economic foundations of our national life.

"The benefits to the people of this or any other country through the operations of a great publicly owned and operated utility service such as the railways cannot be fairly measured in the summary of its annual balancesheets. It will. I feel sure, be freely conceded that the railway system of this Dominion in the first place was constructed as a developmental agency rather than as a profit-making institution. It is beyond question that down through the years the country has reaped very material indirect returns from the existence of the railways by way of what may be termed 'social service and betterment.' The advance of settlement, the opening-up of new country, and the increase in its productiveness, the provision of employment for large numbers, the cheapening of the means of transport tot both goods and passengers, and many other items, must all be reckoned as value obtained for the expenditure in addition to the mere monetary returns earned by the system.

"These facts should be clearly understood and appreciated if a true and proper interpretation of railway accounts is to be arrived at. In keeping with the opinions, as expressed

Statement Submitted by Minister

above, and which coincide with those i of the best-informed minds abroad, the i Government has reflected its faith in the future of the railways of the Do- 1 minion as a means at hand for the further development of the country, j arid as providing, a 1 method of transDort j which for general purposes, particularly in a country so dependent upon the marketing and transport of its: primary produce, has an inherent and , very definite economic advantage over j other forms of transport. • I Increased Number of Passengers "The effect of the general policy of the Government is reflected in the increased number of passenger journeys made by rail during the year: this increase of 877.000 passengers brings the total ud to 21,235.000. As an additional 4.556,000 passengers were also carried . by the department's road services dur- j ing the year, it will be seen that the department's total of more than 25,500,000 passenger journeys is equal ; to 17 journeys with the railways for , every inhabitant of the Dominion.

"The policy of extensions and improvements in goods rolling-stock, facilities, and services has proved equally effective in giving increased, satisfaction to the department's customers and increasing the quantity of business handled. The increase of the J goods tonnaee bv 625.000 to an aggregate of 6,814.000. represents an actual increase of 10 per cent, over the tonnage carried in the previous 1 year." " J