RAILWAYS DO NOT PAY.

New Zealand Herald, Volume LXI, Issue 18692, 24 April 1924, Page 6

RAILWAYS DO NOT PAY.

INTEREST CHARGE TOO LOW. NEW COSTS MEAN MORE TAXES. FURTHER RELIEF UNCERTAIN. LOSS ON PREVIOUS REMISSIONS. [BY TELEGRAPH. — ASSOCIATION.] WELLINGTON. Wednesday. Some aspects of the national finances were discussed by the x rime Minister to-day. He mentioned that he had several enquiries as to the finances of tho Dominion, especially whether tho railways made a profit on the year's work. Mr. Massey said that, on account of the very large sums which have had to be converted during recent years, and the higher rate of interest paid during the war, the average rate of interest payable on the public debt has increased considerably. It is now iittle less than per cent. The railways are expected to earn 3J per cent., and he had no doubt did so for the last financial year, but for each of tho three previous years there was a deficit. For the year 192021, the deficit was £124,390; for 1921-22 it was £1,068,224 for 1922-23 it was £285.011 Interest on Unopened Lines. In normal years, freights and fares are not high enough to meet working expenses and the fixed interest rate of 3j| per cent, charged on the capital cost of open lines. Working expenses, moreover, do not cover all the charges as, for instance, interest charges on unopened lines which, in a railway company, would immediately become a capital charge. ' They are, in the Government railways at present, borne by the Consolidated Fund until such time as the Railway Department takes ohe lines over. The loss in interest under this heading at 3| per cent, for the last 10 years is estimated at £1,250,000, the amount ranging from approximately £90,000 in 1915 to £224,000 in 1922-23. If those charges were borne by jhe Government railways, as in commercial railways, together with the superannuation liability, estimated to be at least £170,000 per annum, the present railway revenue, without allowing for any increased expenditure in other directions, would not earn anything like tho interest margin required to meet public debt charges. " It will be seen from the foregoing.' said Mr. Massey, " that .Jiy additional charge on the railways cannot be earned in the ordinary way, but must coma from tho taxpayers through the Consoliated Fund. This means additional taxation. I know that most people are looking anxiously for a reduction of taxaI tion rather than for an increase."

P9miy Postage and Free Tea. Referring to a recent speech in Wei lington, Mr. Massey said it had been reported that, as Finance Minister, he said he would ask Parliament to reduce taction by a,n amount equivalent to that by which it was reduced last session. "What I did say," he stated, "was that I would like to reduce taxation by the same amount as last session, but I was very doubtful about being able to do it. I quoted figures to show some of the additional expenditure which would be expected from the Consolidated Fund during the present year. Penny postage was reinstated on October 1 last; that is, half the financial year had gone before the change, so that, even allowing for a reasonable increase of business, the loss for the present 12 months is almost certain to be more than for the last six months. So with the customs duty on tea. We collected duty on tea for about five months of last year before the duty was struck out. The surplus for last year was helped to that extent, but there is no such help available for this year. During the last few days, the cables have indicated a considerable drop in the prices of our principal products, with the exception of wool. This, of course, means less re venue. I do not want to cause any anxiety about financial matters. The financial position is good at present, but I desire to warn the public against extravagant expenditure, either publicly or privately. With economy, .. we shall come through all right and at the same time keep our 'policy of development going, bat without care and economy, there may be serious trouble." 1 r