MR ALLEN AT LAWRENCE

Otago Witness, 1 June 1910, Page 34

MR ALLEN AT LAWRENCE

RAILWAYS AND PUBLIC ACCOUNTS

Speaking at Lawrence on May 30 to a meeting- of his constituents, Mr James Allen, M.P., dealt specially with the questions of railways and the public accounts.

He thought ifc right, ha said, that people should know how the cost of construction of our railways had increased. He had taken five-yearly periods, beginning- with 1891-2, and he found that for the first five years the average cost per year wae £197,253; for the second year, beginning in 1896-7, it was £413,736; for the third period, commencing- in 1901-2, it was £974,710; and for the four years up •to Marsh 31 last the average cost per year was £1,131,904. In order to make the comparison even more than fair he had excluded from the last four years a total of £1,336,216. made up bv '£125,689 for the Hutt railway. £222,772 for railway improvements, £l3 391 for the Waikaka railway, and £974,364 for the WellingtonManawatu line. Even with these excluded it would be seen that the average amount spent per year was close on six times as much in the last period as it was in the first period. This was a very heavy amount to be spending on railway construc- . tion. Some of it no doubt was owing to perfectly legitimate works like the North Island Main Trunk, but some of it the Dominion had,» he thought, been committed to without Parliament fully knowing what was being done. ' He referred particularly to the railway from the east to the west coast of this island. What was perhaps of still more importance was the cost per mile of the railways. Since 1898-9 this had increased by £2012 per mile right through the Dominion, and last year railways had cost £10,351 per mile. They would naturally ask what was this increase due to? In the first place, it must be admitted there was more expensive construction—better work and heavier rails; in the second place, he believed it to be due to the system of co-operative works; and, thirdly, to incompetent control in management and unsatisfactory engineering. He had not time to deal specifically with co-operative works, but the people of Lawrence had been eye-witnesses of what was s;omg on. So, too, they had been witnesses of the incompetence referred to. Pipes had been put in as culverts and covered up. only to be uncovered to have concrete culvert® built in round the pipes. They also knew of the filling-in, of the levels being altered, and of the soil being taken away again. Further, the line for about a mile and a half or two miles had been laid on the wrong gauge, and had to be altered, and the cost of the alteration had not been recovered from the workmen. They must also realise how wasteful had been the stoppage of the work where it had been stopped. When Sir Joseph Ward informed him that the line was to be stopped at Big Hill he had said: " Then you had better stop it now, and not waste more money on it, because it will be waste to take it only to the Big Hill '' The Prime Minister had insisted however, on finishing it to the Big Hill, and he, the speaker, ventured to say that the traffic returns from this section—which jiobody expected to yield reasonable returns—would be used as an _ argument against the continuance of the line. Another point which rendered it very difficult for the railways to earn reasonable interest was the unworkmanlike manner in which.the unopened lines were dealt with It was absurd that a country like this should have £1,289.000 lying idle in unopened lines. Yet that was so, with the result that the- interest, which m the previous year to this one was £3 ■lss per cent, on opened lines, was only M OS per cent, on the money invested in opened and unopened lines. So, as a matter of fact, there, has been, a loss of approximately 1 per cent., or nearly £300,000. The object of our railways, continued tne speaker, was first of all, he supposed, to pay interest—not that each small unit should pay interest, but that the system as a whole should. For this reason concessions should only be very carefully given as those without railways had been paying bv taxation their share of the lines made. Luxuries should, therefore, be avoided till outsiders had had something done for them. Secondly, railways were intended to open up fresh country and feed the main lines. He looked upon this as a most important object, and quoted the evidence of Sir Anthony Macdonnell on Indian railways, given before the viceregal commission on Irish railways in 1907, as follows:—"It was just the peculiar value and force and virtue of the Government system that it was able to use the profits of the profitable lines to build smaller lines in the backward districts and thus feed the main trunk lines." That was,, he felt" sure, said the speaker, the proper way to deal with backward districts. The best plan was to construct lines of the same gauge as the ordinary, but at very much less cost than £IO,OOO per mile. He did not see why lines to open up back country should not be constructed at, approximately, the cost of the lines in the early days. Some had suggested lines of a lesser gauge, but he had no faith in this proposal, arid could not recommJ3nd ifc. There was a further system which he had brought under the notice of the Minister of Railways, and that was the Brennan mono-rail, which he believed was successful and adaptable for the purpose. On the question of the guarantee asked for by the Government for the local railway, the speaker said that though this was much talked about they had never been able to get a satisfactory definition of what was meant by the guarantee system, and he had no doubt it was the intention to allow the idea to die still-born. It did seem very hand that by restrictive legislation the power of building railways should be held by the Government, and nobody allowed to build a lin* even ; i; they were prepared to find the meney for it. That seemed to him to be a dog-in-the-manger policy. The principle of betterment had also been spoken about. In theory, no doubt, this had much to commend it. Some parts of New Zealand had, however, had their lines built at ihe cost of the nation, and probably these lines lost money at the start. At anyrate the whole of the railways had lost money, and those people who were now asking for lines had been paying their share of that loss, and in view of that it seemed rather hard to impose upon them severe betterment conditions.

. Mr Allen t.hen pointed out that the extra cost per mile made it extremely difficult for the railways to pay interest. In addition to this, he was afraid that in many places there had been overstating. The cost of maintenance i»r mile 'had increased

T in nine years from £173 to £258, and the ] cost of locomotive power per train mile from 14d to 22d. Nor did he think that i the price, at which the State coal was puri chased by the railway was fair as compared ! with the price at which it was received j by the coal depots. The railways paid £1 ■ per ton and the depots 17s 6d for Port Elizabeth, and 16s 6d for Seddonville.. It was said that the railways paid at the calorific value of the coal. But why should not the depot* also buy at the calorific value? There was one point in connection with the railways which he could not ex-" plain., and that" was why with all the in- . creased expenditure upon railways and upon unopened lines —for instance, nearly a quarter of a million for the year endingMarch, 1909—there was still a shortage of trucks. With regard to the railway in that district he was sorry that the Prime Minister was, owing to the death of the King, unable to pay his promised visit. Had he done so he thought they would have been able to convince 'him that the line should be carried to its authorised point—namely, the Beaumont —where it would tap the fruit traffic and the trade of the district. Coming to the question of the public accounts. Mr Allen said in regard to the Public "Works Fund that it had been said that he had been'asking for railway expenditure, and that he complained of borrowing. That was not. so. He did not complain of reasonable borrowing for productive purposes, but his complaint was against waste and extravagance. He thought it undoubted that waste and extravagance did take place. It was alarming- to note the enormous increase in the public works expenditure. When he first went into the House l in 1887-8, it amounted to £966,160 Owine- to retrenchment it fell in 1890-1 to £3OB-633. This last year it was close on £2,000,000, and he felt it his duty to call attention to the very great increase that was taking place' in the expenditure upon public buildings. In the similar five-yearly periods used in connection with the railways, the average spent on public buildings was £48,128, £97,644. £168,377, and £253,848. Coming to specific instances, he did not think that the country was justified in spending £IOO,OOO for a post office in Auckland, and the same sum for another in Wellington. The speaker then quoted an extract from a speech made at Kaitangata in 1892 during the Bruce by-election by the late Mr Secklbn. Referring to the continuous Ministry which had gone out of office in 1884 he had said that it had kept itself in power by a lavish expenditure on public works, and that one million and a-half a year was a, large sum to pay to keep it in power. If these words were true of the continuous Ministry of that time, asked Mr Allen, was it not fair to assume that they were true of the continuous Ministry of to-day which had not only snent £1,500,000, but nearly £2,000,000 on public works? At the same time Mr Seddon also remarked that he attributed the exodus that was proceeding to the borrowing policy of the previous Government and its lavish expenditure which' had enriched l the few and impoverished the many. They would notice at the present time that the Prime Minister was a little anxious about criticisms referring to the' present exodus. Could it be true that this remark of Mr Seddon's was true to-day? A detailed financial criticism was next entered upon by the speaker. Sir Jcseph Ward had said at Winton that for public works expenditure, he had available at the end of this last year £654,741, and that this would carry him on till the end of September next —a period of six months. If he desired to do that, said Mr Allen, he would have to make an enormous reduction in his public works' "expenditure, for the expenditure during the year just closed had been close on £2,000,000, which meunt £1,000,000 for a six months' period. They should, however, be told that in the £654,741 he had included £200,000 of post telegraph money which had been allotted for the building of the two- new post offices at Auckland and Wellington'. "The Prime Minister had therefore really available only £454,741. People, generally, said Mr Allen, hod no idea of the enormous borrowing powers that were now available to those in power. Last year there was a possibility of borrowing nearly £8,000,000 of money. Another-point he wished to refer to was the question of liabilities at the end of the year. On March 31, 1909, we had liabilities of £803,760 according to table 3 of the Public Works Statement, and we only had £433,709 available at that time to meet it. What the liability at March 31 last was, he could not say, as the figures had not been made available. It was true that in the liability mentioned the're was included that of the Midland Railway tunnel. But there was no other provision for it at that date except the sum mentioned. Coming to the Consolidated Fund, the ■ I speaker said that some few nights ago' he I had referred to the fact that the expenditure had increased at a greater ratio than the revenue, and he had said that during Sir Joseph Ward's time this increase amounted to £215,000. The Otago Daily Times made that amount a great deal mere. He, however, in making his comparison, took the year 1905-6 and compared it with last year, giving thereby every advantage—and more advantage perhaps than he ought to have done—to the Ward Administration. The Daily Times, taking a subsequent year, made the increase in expenditure' somewhere near £400,000, and that perhaps was the more true comparison. In his Winton speech the Prime Minister said that the financial results showed a magnificent recovery, and then, by way of proving this, he compared the revenue derived from last year not with the revenue of the previous year, but with what he estimated the revenue to be this year—an obviously illusory comparison, and only used with the purpose of deluding the people. As a matter of fact, the only increase in revenue over the previous year's revenue was derived from three departments—namely, Railways, £339,756; Land Tax, £37,369; and Endowmnts, £67,142. Every other department showed a decrease. For instance, the Customs to the extent of £130.127, and Stamps, Post, and' Telegraph £53,976. The increase in revenue amounted to £237,076, and the increase in expenditure, including annual and permanent, to £205,405; so that the magnificent recovery was represented by £31,671! The revenue from the Post and Telegraph Department, which was estimated to be £10,672 more than the previous year, was actually £57,976 less than in 1908-9, so that its total deficiency was £68,648. The old-age pensions showed an increase of £5521, but to- that he believed there would have to be added £20.000 from endowment moneys, and, similarly, the land tax increase wns shewn at £14.712, but he fancied that: to thi-.i vausl bo add 2d

T £47,000 from endowments, _ was then called to the great increase .in permanent appropriations, especially to- the increase in the interests on the sinking fund of £139,096. There had been some correspondence between Mr Massey and Sir i Joseph Ward with regard to the surplus, I which the Prime Minister 6aid was | £432,316. If any of them believed that figure was the result of one year's operations they were entirely mistaken. It included a balance of £184,321 from the previous year, and, as nothing whatever had been transferred to the Public Works Fund from the Consolidated Fund, Sir Joseph. i Ward's surplus was, as Mr Massey pointed! | out, practically the surplus of two years. Great ere"' too, had been taken by the Prime Minister, because on March 31 last he had reduced outstanding Treasury bills to £IOO,OOO. At March 31, 1909, ho '-»d made the same remark because he h duoed them to £250,000. But, ouri enough, in June, 1909. they found that the Treasury bills had amounted to £550.000, or £150,000 more than they were at the same period in 1908. The claim, therefore, that he had reduced the Treasury bill in amount would only be valid if during the coming quarter they did not jump up again just as they had in the previous year It was no use using a portion of the cash at the end of the financial year to redeem Treasury bills if the transaction was not to be' permanent and last only for a few days. The Prime Minister had" also claimed at Winton that economies had: been carried out in various department. He (the speaker) had dealt with this question at Waitahuna, but he would just remind his hearer* that, v ith regard to the saving of £88.098 in the of Internal Affairs, the whole of it could be accounted for by nonrecurring items such as £60,000 for the general election. £14,000 for stationery, paper, etc., £3500 for printing the Con- , solidated Statutes, £9260 for entertaining ■ the American fleet, and '£l2Bo for medaJs to school children. Similarly, in the Lands and Survey Department, the saving of £27 629 was more than accounted for by one' item—namely. £29.702 for grass, seed for Crown land «<*-W