THE OTAGO DAILY TIMES THURSDAY, September 1, 1938. MAKING THE BEST OF IT

Otago Daily Times, Issue 23593, 1 September 1938, Page 10

THE OTAGO DAILY TIMES THURSDAY, September 1, 1938. MAKING THE BEST OF IT

Replying to criticism in Parliament of the financial results of the operations of his department during the past year, the Minister of Railways

endeavoured to cloud hard facts in a mist of cheery optimism. Never before had the railways given the public such a service as they were giving it at the present time, declared Mr Sullivan, and the aim was to make the service the best in the world. He twitted Mr Hargest with being greatly concerned over a " slight decrease " in the net revenue since the present Government came into office —as though net revenue were an airy trifle, and a factor of little importance in the assessment of the success of the year's operations. As a matter of fact the " slight decrease " has been a heavy decrease, representing a falling off of over £400,000 in the past two years. And rather foolish was the comparison suggested by the Minister between the financial results of the railway operations during the two and a-half years of the present Government's regime and those of the six years prior to that. Those six years included four years of the depression, and there can be no fair comparison of the results of those years with results of years of a prosperity for which, without justification, the Government claims credit. The Government's policy, said the Minister in his annual report, had been the power which had brought the railways out of the doldrums into the fair trade-wind of presentday conditions. It is the more unfortunate in that case that, with this fair wind to help them, the railways should have made so much

financial leeway. The percentage of net railway revenue to capital costs was actually lower in the past financial year than that recorded in any depression year. This is seen in the following figures for the past ten years setting out respectively gross revenue, expenditure, net revenue, and percentage of net revenue to capital cost: Revenue Percentage Net to Capital

It is to be borne in mind, moreover, that in 1931-32 the capital was written down by over ten millions—an operation which has advantageously affected the percentage returns. The Minister's reference to the expenditure on the maintenance of rolling stock is irrelevant to the issue of the financial results of the year's operations. It would convey to the public the inference that this expenditure of £BOO.OOO was a charge against the revenue. In reality it is provided for out of the Public Works Fund—that is to say out of loan money—and consequently does not affect the revenue and expenditure figures in the railway account. The increase in the expenditure through restoration of wages to their pre-depression level, which would have been brought about with the recovery of economic conditions whatever Government had been in office, and the introduction of the forty-hour week have, it is to be admitted, necessarily had their effect on the earnings of the railways. But upon the question whether there is an economic justification for reduced working hours in operating a railway system upon which the loss for the past year was £l,7o3,oll—the difference between the net revenue and the liability represented in interest charges on capital—the taxpayers who have to meet this loss, since it falls upon the Consolidated Fund, are likely to reflect with mixed feelings. Nor can they be expected to rejoice in the thought that the railways expenditure for the current year is expected to increase by another £700,000.

Kcvenue Kxpehditurc Revenue Cost *> £ £ £ s. <i. 102? 8.434,054 0,490,880 1,043,774 3 19 10 1028 8.524,338 0,685,123 1,839.415 3 12 19 192!) 8,747,975 6,840.383 1,898,592 3 9 0 1930 S,288,116 7.358.850 929,257 1 12 4 103! 7,571,537 6,882,810 088,727 1 3 :i 1032 B ,,108,948 5,670,955 837,993 1 12 8 1933 6.034.403 5,183.859 850,541 1 13 0 193! 0,332,711 5,247.153 1,085,558 2 1 0 11)35 (i.f>27,928 5.540.437 1.087.491 2 0 3 1936 7.004,316 5,952,839 1,051,477 1 IS HI 1937 7,790,651 0.880.703 903,858 I 13 0 193S 8,034.18(1 8.001.389 G32.797 1 3 0