Manawatu Evening Standard. MONDAY, OCTOBER 21, 1929. SUBSIDISING DEVELOPMENT LINES.

Manawatu Standard, Volume XLIX, Issue 276, 21 October 1929, Page 6

Manawatu Evening Standard. MONDAY, OCTOBER 21, 1929. SUBSIDISING DEVELOPMENT LINES.

The example set by New Zealand in subsidising branch railway lines built for development purposes has been followed by New South Wales, where the State Government contributed some £BOO,OOO last year to the Railway Department, : to make good tne losses incurred by operating these unremunerative lines. That £BOO,OOO, however, only met part of the losses on the nonpaying lines, most of which were constructed of recent years under the Labour regime, and when the basic "wage was increased in 1927 it sent up the wages bill of the Railway Department to such an extent that action became necessary to relieve the commissioners of some at least of the added financial burden thrown upon them. And, as is the case in this Dominion, with the agreed upon subsidies on non-paying lines, the department had to take over charges previously borne by the State, of which the State accounts were consequently relieved. As these amounted to £715,475 last year, the Railway Commissioners only received £84,525 to recoup their losses on the branch lines. The capital invested in the New South Wales railways is more than double that of the New Zealand railways, the actual sum charged to capital account in the Mother State of the Commonwealth being £124,329,422. Primary products are carried over the New South Wales lines at less than cost, and here again the policy adopted is on all fours with that in operation in New Zealand. But the Mother State, according to I the Sydney Mail, has “many, many miles of railway in the country along which there has been practically no development.” That is scarcely the case in New Zealand, but here the trouble seems to be that motor competition, along the route served by many of our branch railways, has so cut into the traffic which might be legitimately claimed for the railways, that any prospect they might have had of paying their way seems to have vanished. Against the subsidy of £496,578, received from the Consolidated Fund last year, the department here paid into its superannuation fund during the same period £186,817, added £655,986 to its general renewals and depreciation fund, £58,570 to its reserve fund, £21,504 to its renewals, depreciation and equalisation funds, paid premiums amounting to £44,581 to its workers’ compensation fund and £15,642 to its insurance fund, besides placing another £2OOO to its betterments fund. Prior to the department taking charge of its own finances all such charges had to be met either

out of the consolidated or public works funds, as no provision was made for them otherwise, and these charges, all met last year out of working expenses, amounted to £985,J21. But, after having charged against it interest on capital liability amounting to £2,331,334, the actual deficit for the year only amounted to £432,742; or, if the subsidy of £498,936 is included as loss (which it should not be) to £929,320 —£53,801 less than the amounts it had appropriated or expended upon charges that would otherwise have had to be met by the State. And, in addition, the department actually held in its general renewals and depreciation account a credit balance of no less than £1,328,019 at the close of the financial year. The claim therefore can not unreasonably be advanced on behalf of the New Zealand railways that they are not only perfectly solvent but run on sound business lines.