RAILWAY HOUSING.

New Zealand Herald, Volume LXIV, Issue 19783, 2 November 1927, Page 10

RAILWAY HOUSING.

Among the unprofitable enterprises which remain a charge upon the earnings of the railways is the housing scheme, comprising the factory at Frankton and building operations in various centres, with some association with the railway timber supply. A year ago, the board of management gave a fairly elaborate account of house-building operations ; the last report dismisses the subject with a few brief paragraphs. Nor do the accounts of the branch present adequate information regarding an enterprise of such magnitude. They profess to present only "income and expenditure in respect of departmental dwellings," and apparently represent only the results of the department's house-letting business, without reference to the factory, in respect of which there is no information regarding either capital cost or financial results. More than a thousand houses have been built by the department, involving 'a capital outlay of about £1,400,000, since the branch is debited with '£63,000 for interest. In 1924-25, a net profit of £18,369 was claimed, but as no provision was made for interest, depreciation or insurance, the profit was fictitious. In the last two years, those items have amounted to £76,960 and £93,892 respectively, so that the account has revealed losses of £61,246 and £54,172. These figures may be regarded as the result of the departmental policy. ol charging a day's pay for a week's rent to employees occupying the houses. If so, they prove the policy to be unsound. Circumstances may compel the department to provide housing for certain of its servants, but a policy which gives housing to a relatively small number of men at from one-half to twothirds of the actual cost is manifestly unfair to the rest of the service, which has to meet the full cost of housing out of the same rates of pay, and to the taxpayers, who have to find the money to cover the loss. From that point of view there* is need for inquiry into the affairs of the housing branch. Recently there has been a suggestion that the management contemplates venturing into fresh fields ; already it has sold 122 dwellings to "non-departmental" customers. Before this competition with private enterprise develops, the department should disclose the exact position of the housing-factory finances. If it is being operated on the same principle as the dwellings account, without regard to losses, it would be manifestly unfair to allow it to compete with private builders, for whom such methods would mean an early introduction to the Bankruptcy Court and possibly to a higher tribunal.