RAILWAY LOSSES

Evening Post, Volume CXXVI, Issue 56, 3 September 1938, Page 10

RAILWAY LOSSES

"A SHOCKING POSITION"

MR. COATES'S ATTACK

ENORMOUS BURDEN

"It is time someone entered an emphatic protest against the trend of administration costs on the railways," declared the Rt. Hon. J. G. Coates (National, Kaipara) in the House of Representatives yesterday afternoon when the vote for this Department was under discussion. He added that expenses were outrunning revenue and it was questionable as to where the present policy would end. It seemed: difficult to place a finger on the cause, but the people were being asked to carry an enormous burden. Mr. J. A. Lee > (Government, Grey Lynn): Interest on the balloon loop is one of the causes. Mr. Coates: If you can show that the balloon loop is the cause of rising costs well and good, but you must prove it. Government voices: You prove that it is not. Mr. Coates said the Government had voted £7,779,665 for the railways last year and for this year it was proposing to spend the colossal sum of £9,051,869. ...... PAYING MERELY RUNNING EXPENSES. "The railways are merely paying running expenses," he continued. "That is a shocking position for a responsible Government to get into. This will all come back on the country. The people will find that if the present trend is not checked they will be paying interest on capital charges, maintenance, and a deficit on running Costs as well." i Mr. W. A. Bodkin (National, Central Otago): The motor services are paying. Mr. Coates: Yes, they are paying, but { here- we are driving ahead building more railways that will only add to costs that are too high already. The way to settle this business is to move an amendment and clean matters up that way. Government members: Well, you move it. N y Mr. Coates's time expired before he was able to reply. '. MINISTER IN REPLY. The Minister of Railways (the Hon. D. G. Sullivan), in reply to Mr. Coates, said the complaint against losses came poorly from" him. Holding up a file, the Minister said this contained a record of the losses made on the railways under the administration of Mr. Coates and his colleagues. The losses were well over £ 1,000,000 a year for several years. "These lysses were, made after the past Government had reduced wages and brought down the expenditure for the maintenance of rolling-stock by £400,000 a year," continued Mr. Sullivan. "The past Government made numerous changes in the method of control from commissions to boards and back to Government control but still the losses continued." " , The present, Government had spent j a couple of million pounds in two] years,,in improving conditions on the railway services generally. Most of this money was spent out of revenue, and the expenditure had been necessary as a result of the policy of the past Government. The present Government had made losses on the railways, but at least it had something to show for these losses. Its predecessors had nothing but losses to show for its administration. If Mr. Coates and his colleagues wanted to show a bigger net profit on the railways they would have to say how they would accomplish that desirable end. They would either have to reduce wages and lower the conditions of the wprkers, or increase the freights and fares. They could not have it both ways. LOSSES INCREASE. j In moving^ an amendment to express disapproval of the vote for the Working Railways Account the Leader of the Opposition (the Hon. Adam Hamilton) said the business of the railways had increased and revenue had gone up by nearly £2,000,000 since 1934, but as the business had increased the losses had increased. It was true that more rolling-stock was required to meet the increased business, but the rolling-stock had not been increased to the same extent as the business coming to the railways and the deficit should have been reduced. Four years ago every £100 earned had cost £86 in expensed but now expenses were £96. He moved: "That the Working Railways Account of £9,051,869 be reduced by £5 as an indication that the financial management of the railways has got out of hand."

The Committee divided on the amendment a few minutes later and it was defeated by 35 votes to 13.

The vote was approv.ed without further discussion.