THE RAILWAYS TAX.

New Zealand Herald, Volume LXVIII, Issue 20959, 24 August 1931, Page 8

THE RAILWAYS TAX.

One of the major proposals of the United Party three years ago was the expenditure of £10,000,000 in three or four years on railway construction, and one of the principal arguments in support of this proposal was that it would bring into remunerative employment the millions of loan money represented by idle construction works. In spite of curtailment of the original programme, the capital expenditure on the railways in the last two years has been £0,402,811, a sum that surpasses any previous performance. Moreover, in each of the last two .years, during which loan money was being poured into the system at a record rate, the operation of the railways resulted in unprecedented deficits, and the Government was constrained to write off £8,100,000 of capital last year and £2,300,000 of capital this year as hopelessly lost. The former amount is supposed to represent the investment of public money; the latter is undoubtedly loan money, which is transferred from the railway account to become a perpetual burden upon the shoulders of the taxpayers. Far from reducing the amount lying idle on incomplete construction, the Government has increased it in two years from £5,708,000 to £8,13-1,000. Upon the whole of the debt represented by railway expenditure, about £60,579,000, the interest charge alone, at the average rate over the whole public debt, now amounts to £2,726,000. Toward this huge sum, the railways earned £688,000 last year; according to the Budget, they will contribute £930,000 this year. ' If that estimate is realised, the taxpayers will have to provide £1,796,000 and also the interest on any fresh expenditure during the year to cover the deficit on railway operation. For many years, the railways have been a heavy tax upon tho country; the weight of the burden has been vastly increased during the last two years by the profligate expenditure on extensions that are even more hopelessly unprofitable. That is one direction in 5 which the Government's recklessness has aggravated the country's difficulties.