RAILWAY LOSSES

Dominion, Volume 23, Issue 256, 25 July 1930, Page 12

RAILWAY LOSSES

Curtailing Estimates

NEED FOR ECONOMY

Mounting Deficit

Referring to the railway losses, Mr. Forbes said the department had been required to overhaul drastically its estimates of expenditure for the coming year, and compared with last year’s expenditure they had been cut down by £360,000. The net revenue for the year was £929,257, as against £1,399,655 for the previous year. Interest charges amounted to £2,132,324, leaving a deficiency on the year’s operations of £1,203,067, to which had to be added an adjustment of £8202 on account of the previous year, making the total deficiency £1,211,269. “The net accumulated loss in the railway accounts for the five years amounted to approximately £1,956,000, but up to the end of last year the losses have been met out of the working capital and reserves created,” the Minister said. “Apart from a cash advance of £150,000 from the Consolidated Fund to enable the railways to complete the payment for last financial year, the interest due to the Consolidated Fund has been paid each year out of the cash resources of the railways, and the losses incurred, apart from those on branch lines and isolated sections, did not fall upon the taxpayers. “As the liquid portion of the reserves is now exhausted, the railways, from sheer lack of cash resources, must fall short in their interest payments by the amount of net loss for the ensuing year, estimated on the basis of last year’s operations at about £1,300,000. The interest on the relative portion of the public debt will, of course, be paid in the usual way, so that the extent of the railway shortage will this year mean just so much more to be found out of taxation.

“The Government has already adopted strong measures to minimise this additional burden on the taxpayers, which could hardly have fallen upon them at a more awkward time, coinciding as it has with a heavy fall in Customs and other revenue. The department has been required drastically to overhaul its estimates of expenditure, which, compared with last year’s expenditure, have been reduced by £360,000. This means the curtailment or elimination of unremunerative services, and, while the cutting-down of train services is regretted, it must be recognised that such action is essential if savings are to be made.

“The possibilities of increasing the revenue have also received attention, and the steps being taken will, it is estimated, lead to an increase of hbout £90,000, making a total immediate improvement of position calculated to reduce the estimated shortage for the year of £450,000.”