RAILWAY FINANCES

Otago Daily Times, Issue 23707, 14 January 1939, Page 12

RAILWAY FINANCES

In a statement issued at Auckland on January 3 the Minister of Railways made the claim that there was much solid evidence that the year 1938 had been one of definite progress in the Railways Department. Among the achievements mentioned by the Minister were the introduction of increased wage scales for men in the second division and the reclassification of those in the clerical and higher grades; the improvement of staff accommodation and of rolling-stock and tracks; and the acquisition by the department of 33 goods and six road transport services formerly conducted by private enterprise. These are doubtless evidences of progress, according to the present Government’s conception of a progressive railways policy. But of the financial aspect the Minister on that occasion said not a word, yet the truth is that railway finances during the year maintained a steady drift toward a condition which the Government, by its recent decision to increase both passenger and freight rates, is now seeking desperately to remedy. The latest figures, which we printed yesterday, show that for the period from April 1, the beginning of the financial year, to December 10 last, revenue amounted to £5,968,199, and expenditure to £5,970,455, leaving a deficit of £2256. At the end of the corresponding period last year a net revenue of £231,525 was shown. A glance at the comparative figures for revenue and expenditure is sufficient to show how the change has been brought about. Between April 1 and December 10 last year operating costs totalled £5,440,377. This year’s total represents an increase of approximately £530,000, Revenue this year also advanced by nearly £300,000 as compared with the last year’s corresponding period, but even at that it still lagged badly behind the increase in expenditure. The trend, as can be seen, has been toward the complete cancelling out of railway profits. What the busy holiday period will show, in the direction of improvement before the end of the current financial year, remains to be seen. Peak traffic and higher tariffs may together enable a favourable balance to be struck, but it is apparent nevertheless that the capacity of the system to contribute anything at all toward a heavy burden of interest on capital cost has been gravely prejudiced by the Government’s cost-raising policies. It has, of course, been argued by the Minister that the railways system should be regarded as a public utility rather than as an undertaking expected to pay its way. But the taxpayers, confronted by the fact of increased transport charges as well as by the possibility of having to cover losses in addition to meeting an unrelieved interest bill, may be inclined to view the situation less, complacently. Whether the higher rates will tend, after the holiday rush is over, to restrict railway earnings by diverting traffic to other systems, is another question for later determination. Having drawn a majority of the important road services into the State monopoly the Minister perhaps does not regard such a prospect with any anxiety. But the fact remains that, in spite of belated efforts to stay the drift, the railways balance-sheet for the year is likely to prove a disturbing document for the taxpayers.