TRAMWAY FINANCE

New Zealand Herald, Volume LXXII, Issue 22004, 10 January 1935, Page 10

TRAMWAY FINANCE

AUCKLAND BOARD'S COSTS i >4 HIGH FIGURE EXPLAINED INCLUSION OF EXCHANGE An inference to be drawn from official statistics, that the management and office expenses of the Auckland Transport Board in 1933-34 were unduly high, was refuted by the chairman of the board, Mr. J. A. C. Allum, in reply to an inquiry yesterday. The newly-issued New Zealand Official Year-book for 1935, in its chapter on the Dominion's tramway systems, gives the following figures, among others, of tramway operating expenses in the four centres Management and office Total Auckland . . £41.393 £380.373 Wellington .. 10,248 227.427 .Christchurch 6,743 111,501 Dnnedin . . 6.502 78,803 "I am almost certain that the large figure for Auckland is due to the heavy exchange charge on the board's London payments and the cost of goods bought abroad," said Mr. Allum. "In filling in the forms sent us by the Government Statistician the £20,599 which we had to pay in exchange last year was included in 'management and office expenses' because that appeared to be the only appropriate heading under which the payment could be brought. Whether the other tramway authorities did likewise I do not know. Overseas Debt "The forms were sent to us without any clear directions as to how they should be filled in, and I should be very surprised if all the authorities classified their expenditure in exactly the same wav."

The Auckland Transport Board, Mr. Allum said, had £1,600,000 of overseas debt, a very much larger total than any other transport authority. The annual interest bill was £84,000 and the exchange cost just over £20,000 a year. The Wellington City Council, he believed, had practically no overseas debt upon its tramways. The Christchurch Tramways Board had about £BO,OOO of such debt due last year. If that was the total, the exchange cost would be only about £BSO yearly. The Dunedin City Council's tramway undertaking was jn much the same fortunate position as the other two. Different Finance Methods

As a matter of fact, the larger Auckland authorities were responsible for about half the overseas local government debt of the Dominion. One reason for this was that the Auckland tramway undertaking had been financed mainly from Britain in the first instance, and there had been large capital expenditure upon it since the Great War for extensions of track and plant to overtake work which had been blocked by war conditions. The complete reticulation of Auckland for electric power had been carried out in the same period. The southern local authorities had carried out similar works much earlier, and to a large extent by means of internal loans.

As regards actual office and management expenses, said Mr. Allum, there was no extravagance on the part of his board. Many economies had been effected and he knew the costs were low. It should be enough to mention that, although the board's revenue had fallen 25 per cent sinco the predepression period, its rate of loss at present was relatively small.