THE OTAGO DAILY TIMES TUESDAY, MAY 9, 1950. USERS MUST PAY

Otago Daily Times, Issue 27384, 9 May 1950, Page 6

THE OTAGO DAILY TIMES TUESDAY, MAY 9, 1950. USERS MUST PAY

The increases in railways passenger and freight charges announced by Mr Goosman represent an honest and realistic approach to the problem of restoring one of the State’s principal trading organisations to financial and businesslike stability. These measures were long overdue. As the Minister disclosed in his review of the departmental accounts last February, departmental officers, with a full consciousness of the effect of rising costs, had repeatedly represented to the late Government the imperative need to provide compensation by increased charges, but only once had any relief been given, and the burden of maintaining the railways in apparent solvency had been placed on the general taxpayer. Since 1947 the Railways Department has been dosing money at a rapidly mounting and alarming rate. In 1947 the losses, inclusive of interest, were £3,257,113; in 1948, £3,670,058; in 1949, £3,813,184; and in the year ended March, 1950, approximately £4,000,000. In view of the importance of the railways as a national institution some case might be made for debiting part, at least, of the interest charges to the Consolidated Fund, but the practice, indulged in by the Labour Government, of subsidising the enforced inefficiency of the railways from the public purse was wholly inexcusable. Railways operation, like every other type of business, has been affected by soaring costs, but the greatest factor in the recent tally of losses has undoubtedly been the wage bill. Since 1939 this item alone has risen by more than £5,000,000, and the crippling effect of the 40hour week in an industry which can acknowledge no cessation in its service to the public is reflected in the figures which show that in 1949 penal rates of pay in the operating branches amounted to 22 per cent, of the wages paid. The total wages bill for all branches in that year was £11,500,000, and of this sum £2,500,000 represented penal rates of pay. There would appear to be little possibility of bringing about any material economy in the present wages bill. Penal pay-outs could be reduced only by recruiting extra staff to do the work for which overtime must be paid, and the department is experiencing the utmost difficulty in obtaining a labour force sufficient for even its minimum requirements. The cost of operating such a huge organisation as the New Zealand Railways is tremendous, and it will be met only by applying businesslike methods to what is, in fact, the biggest transportation, business in the country. By declaring the policy that thosewho use the railways must pay for the service given, the Minister has made a promising approach to the task of restoring the department’s finances to a stable level.