RAILWAY FINANCE

Dominion, Volume 37, Issue 204, 26 May 1944, Page 6

RAILWAY FINANCE

Revenue And Expenses For Past Year

RECORD BUSY PERIOD

Financial results of railway operations in New Zealand during the year ended March 31, 194-1, were announced last evening by the Minister of Railways, Mr. Semple. He said it was the busiest year in the railway history of the Dominion. The net revenue was £2,567,970. The Minister said that the gross revenue reached the record figure of £15,325,3(16 and exceeded that of the previous year by £l4-96,3113, or 8.47 per cent. Had it not been necessary to impose restrictions over the last three months as a result of the shortage of coal, it was anticipated that the gross revenue would have reached £16,000,000. The marked rise in gross earnings was brought out by a comparison with the last pre-war year ended March 31, 1939. when the gross revenue was £9,345,387. The figure for the year just ended represented an increase of nearly 64 per cent, over that amount. , , , All sources of revenue had shown an increase. Both passenger and goods traffic had been heavy throughout tbe year, the revenue derived from these sources showing increases of ±004,.HA anil £434.524 respectively. Miscellaneous and subsidiary services revenue showed an iucrease of £146,414. • Increase in Expenditure.

The expenditure for the y?, a !v» £12,757,336, an increase or £l.4o4,J_*J oi 12.87 per cent. This increase was largelj due to the additional cost resulting iroin the handling of the increased volume ot traffic, rises in material costs and higher wages costs due to improved staff conditions. It should also be noted that the traffic lost through the imposition of the restrictions could have been carried witir comparatively little addition to the expenditure figures as a considerable proportion of railway costs was constant and the whole expenditure did not react to reduction in services as quickly, or m the same ratio as the receipts. . A factor in the expenditure which warranted special mention was the provision of £410.500 for deferred maintenance, said Mr. Semple. It was felt that the best policy to adopt was to absorb out of war-time revenue an amount estimated to meet maintenance expenditure which would have been incurred but for war-time conditions rather than to make a very favourable showing for the present and load such costs .on to the post-war period. As a result of this policy. the net revenue for the'year was £2,567,970. a decrease of £2a5,610 compared with the year ended March 31, 1913, and, allowing for an increase in the average capital invested in open lines, the return on such capital was approximately 3.71 per cent, as compared with 4.31 per cent, last year.