RAILWAY FINANCES FOR 1937,38

Press, Volume LXXIV, Issue 22491, 27 August 1938, Page 13

RAILWAY FINANCES FOR 1937,38

Record Year; Lower Net Revenue

EXPENDITURE HEAVIER BY MORE THAN £1,000,000

High Percentage Increase in Operating

Charges

[From Our Parliamentary Reporter.]

WELLINGTON, August 26,

Revenue earned by the Government Railways Department for the financial year ended March 31, 1938, was the highest on record, but expenditure rose to such a high level that net revenue decreased by a sum in excess of a quarter of a million pounds. These figures are revealed in the annual Railways Statement, which was tabled in the House of Representatives to-day by the Minister for Railways, the Hon. D. G. Sullivan. Gross earnings amounted to £8,634,186, an increase of £843,535 on the previous year. Working expenses totalled £8,001,389, an increase of £1,114,596. Net revenue, at £632,797, was higher than the estimate, but represented a decrease on the previous year of £271,061.

The Minister, in his statement, attributes this decrease to improved wages for the staff and claims that in the latst two years the railways have "come well out of the doldrums into the fair-trade wind of present-day He points out that for the year under review the total increases in wages was £734,185.

The percentage of net earnings to capital invested showed a further drop during the year.to 1.15 per ceni. (1.65 last year); the percentage of railway operating expenses to earnings increased to 96.05 (91.81 last year), and net operating earnings an average open mile decreased to £9O (£l7O in 1937).

"The financial, year, the second since I assumed the portfolio of Railways, has been one of marked progress in every feature of railway activity," states the Minister's own section of the report, "with, notable buoyancy in many of the classes of traffic carried by the department and with some important developments that have been particularly helpful to the people of the, Dominion from Tabth the business and the recreational aspects. "More business has been done by the tailways during the last 12 months than in any previous year in the history of the Dominion. This fact is attested not only by the record gross . revenue earned, but also by the record total of 561,000,000 goods net ton-miles. There was an increase over the previous year of 1,205,784 passenger journeys by train, and 890,023 additional passengers were conveyed by. railway road services, as compared with the • year ended March 31,1937. The internal activities of the department have been equally impressive. Never previously have the railway workshops - been so fully engaged, their total staff - now ' standing at: approximately iBOOO. have so rriany • major improvements:;been introduced into: .the. w orkiijgJ rail ways." 4 , „ ,„.„^.. ~ ' ■ ..'■■/■-' ''■ i ■''<■'.- : *<"';Jtecofftf learnings " < : v Dealing'specifically with the financial position,' the Minister states:— , "The revenue for the year ended " March 31, 1938," was £ 8,634,186, the highest amount '.yet-earned by the'flepartrdent in any financial year, representing ' an increase of £843,535, or 10.83 per cent.,-over the gross earnings of the previous year, and £1,629,870, or 23.26 per cent., more than the earnings for the year ended March 31, 1936. This increase of 23.26 per cent, in the gross revenue of the railways during the two years of the present Administration is a remarkable proof of the earning capacity of the railways when trading, and the conditions of the country generally are favourable for their ; operation, particularly as there have j Taeen no increases in the rates for pas- ? sengers or goods during this two-year t period. Bearing this in mind, it may reasonably be claimed that in the last ■ two years the New Zealand railways have come well out of the doldrums ?■ intov-the fair trade wind of. presentday conditions, and that the Govern- * ment's policy has ■ been the power . which has helped them to achieve these results. "The gross earnings for the year—namely £8,634,186—are the true earnings of the department, no device having been adopted to swell the gross revenue.. This should _ be remembered when comparison is made with, say, the financial years ended March 31, 1926, 1927, 1928, and 1929, when therailways were provided with subsidies from the Consolidated Fund amounting to £359,540 in 1926, £445,221 •in 1927, £489,568 in 1928, and £490,735 in 1929, which amounts were included in the gross revenue of the respective

years, and the,net revenue return increased correspondingly. The expenditure for the year totalled £8,001,389, an increase of £1,114,596 upon the previous year's figures. The main items of this increase are additional expenditure upon maintenance, rolling-stock, and locomotive and traffic transportation, which together accounted for £905,163 of this amount. "I think the public is already well aware of the need, in the interest of safety and progress, for necessary and desirable expenditure upon the efficient maintenance of the railways so far as track, structures, and rolling-stock are con csrnGdL' 1 The summary shows that for the current year it is anticipated that the revenue will reach £9,211,605, and the expenditure £8,706,207.