RAILWAY CHARGES TO BE HIGHER

Press, Volume LXXXIX, Issue 27051, 28 May 1953, Page 8

RAILWAY CHARGES TO BE HIGHER

Increased Freight Rates And Suburban Fares AUTHORITY FOR RISE IN BUS FARES BEING SOUGHT (New Zealand Press Association) WELLINGTON, May 27. Suburban railway fares are to be increased by 10 per cent, from June 21, and increases in freight charges ranging from 5 per cent to more than 20 per cent will also operate from the same date for various classes of commodities. The increases, which have been approved by the Government, were announced tonight by the New Zealand Railways Commission in its first public statement since it took office at the beginning of the year. The increases now announced are expected 1 to return 4 £1,000,000 for a full year’s operations. An early application to increase railway bus fares is also to be made. Railway revenue for the 1952-53 financial year totalled

£26,007,937, and expenditure, including interest, amounted to £29,648,101 making an over-all loss of £3,040,164. The commission said that even if interest was disregarded the net revenue was only £83,272, an amount which represented a very small contribution towards interest on the capital invested. There will be no increase in ordinary passenger fares.

The items affected by the new scale of railway freights and fares are as follows:

Suburban fares: 10 per cent, in-

crease. X Mails, newspapers, etc.: 10 per cent, increase. Livestock, wool, and timber: 5 per cent, to 15 per cent, increase, according to mileage. Goods in small lots: not exceeding 20 per cent, increase in most cases. Low rated goods, such as bricks, lime and manures, coal, sand, etc., and local-rated goods: 15 per cent, increase. Goods such as produce, grain, flour, and cement: 5 per cent increase.

The commission said that an increase in fares on road services operated by the Railways Department would also be sought, and an early application would be made to the Commissioner of Transport. The proposed increases would affect most road services, but, in the main, suburban bus services (including Hutt Valley), on which losses were the greatest, would provide about half of the additional road revenue sought. On some of these services there had been only one fare increase in the last 26 years. The commission’s announcement said that the decision to increase the charges for certain items was a sequel to the examination of railway finances which it carried out immediately it took office in January. The decision was delayed, however, till the commission was satisfied that increases could not be avoided, and in making its recommendation to the Government the commission put forward no more than the minimum increases necessary.

It was clear that there was no quick, •spectacular way to cut costs or increase revenue. It was equally clear that deficits were inevitable unless increasing costs were absorbed into railway charges in sufficient time to offset additional expenditure. Movements Since 1938

Since the 1938-39 financial year, expenditure had increased by 197 per cent., while passenger rates had increased only 45 per cent, parcel and luggage rates 78 per cent., and goods rates from 63 per cent, to 111 per cent. Fares and freights, the commission felt, must be brought into closer alignment with present-day costs of operating the railways, which were essential to New Zealand’s economy. Discussing the railway finances for the last financial year, the commission said that operating losses of £133,000 on the North and South Island main lines and branches and £34.000 on the Nelson section were offset by a profit

of £250,000 derived from subsidiary services and miscellaneous revenue.

A sharp drop in oil fuel prices reduced expenditure, but the net revenue for the year would have been about £505,000 had it not been for the 1952 wage increase. This increase represented about £422,000 over the Sep-tember-March portion of the year’s operations, but for the 1953-54 financial year it would amount to about £722,000, which could be met only by tariff increases.

Money available from the department's depreciation reserve would be inadequate to meet expenditure on essential renewals and replacements during the current financial year. The department was faced with a very heavy outlay on track renewal, and this year it would require to spend £1,500,000 on this essential work, as compared with slightly more than £1.000,000 last year. The increases in freights and fares now announced should return £1,000.000 for a full year’s operations, but for the remaining nine months of the current financial year there would be an estimated net revenue gain of only about £BOO,OOO. Surveys by Commission The commission said it had been in office for a little more than four months, and during this time had done everything practicable to reduce expenditure. It had given consideration to immediate problems associated with giving improved service to the public and in making the service more attractive to the staff; locomotive power to meet increasing demands had been examined; plans had been pushed ahead for the increased use of rail-cars; and the waggon and tarpaulin supply position had been reviewed and appropriate action taken. Considerable time also had been devoted to staff recruitment “Possible economies associated with the proper spheres of road and rail operation, branch line operation, and the working of railway ports are not matters which can be dealt with in a few months,” says the commission. "The commission has already made progress with its investigations into these and other matters, but worthwhile economies can be only effected over a long term. “It is not generally appreciated how much the country owes to loyal railwaymen who, in spite of staff shortages, are handling increased tonnages every year. The commission has had opportunity to confer with the service organisations, and in visiting centres has conferred with railwaymen individually and in groups concerning suggested improvements in the operation of the railways. Immediate steps will be taken to inform the public and the staff fully on decisions concerning the future development of the railways and other important matters affecting the welfare of the service.”