Railway Deficit

Hawke's Bay Tribune, Volume XII, Issue 239, 22 September 1922, Page 4

Railway Deficit

BIC WACE INCREASES. TRAFFIC DECREASE IN ALL DEPARTMENTS. COST OF PUBLIC (Special to “Tribune.”) Wellington, Sept. 21. The railway figures in the department’s annual report are less recent than those given to the House by the Minister, but the causes of the deficit are fully explained, and a guarded estimate is made of the current year’s finance, revenue being estimated at £6,700,000 and expenditure not less than £6,164,000. Passenger traffic showed a decrease last year of over one million. Cattle, timber, minerals and general goods also declined. The general manager states that in eight years railwaymen’s wages increased by 94.5 per cent., or, in actual money. £1,859,501. The last two years’ wage increases would have paid 2.74 per cent, on the £39,000,000 invested in open lines. The manager points out that in 1896 the department was direcfpd, as a matter of policy, to earn 3 per cent., any surplus earnings to be returned to the railway users in reduced fares and freights. The policy has been to regard the railways as adjuncts to settlement oi the country, and to consider the earnings of a large profit of secondary importance when compared with the benefits that would accrue to the State from using the railways in the development of the country. The material reductions in rates and charges which followed the inauguration of the Government’s policy continued until the war conditions compelled a halt to be called. The reductions, which ranged from 10 to 40 per cent, .included all the staple products of the Dominion and other articles in everyday use, and affected the major portion of rail-borne tonnage. In the aggregate these reductions in rates, granted as a matter of policy, represented revenue of over £2,000,000, of which £1,400,000 went to the farmers and pastoralists. From 1896 until 1909 the railways earned £1,667,968 in excess of policy requirements, while during the eight years since the outbreak of war they returned £579,610 in excess of working expenses, or 3 3-4 per cent, interest. Despite the present financial position the general manager declares that considerable difficulty is experienced in handling traffic, and it would be disastrous to postpone the policy of railway improvement in preparation for increased business which the railways will be inevitably called upon to handle.