THE RAILWAY SERVICE

Otago Witness, Issue 3993, 23 September 1930, Page 23

THE RAILWAY SERVICE

MINISTER’S REVIEW.

PROBLEM NOT HOPELESS.

OVERLAPPING OF ROAD TRANSPORT.

WELLINGTON, September 18. The opinion that the outlook for the Railways Department was not so bad as the figures made it appear was expressed by the Minister of Railways (Mr W. A. Veitch) in the House of Representatives to-day, in moving that the Railways Statement should be referred to the Government for consideration. He justified the increased expenditure on the ground that the department had been forced to trj r to increase business in the face of trying circumstances, and he said the time would soon come when the most serious consideration would have to be given to the waste brought about by unnecessary competition from road transport. PROBLEMS OF FINANCE. “ I feel sure members will realise that the duty devolving upon the railway administration at the present time presents many difficulties, although the problem is by no means hopeless,” the Minister said. “ The financial records of the department up to the end of last financial year are such as to cause responsible men to view the situation carefully and seriously in order to bring about more satisfactory results. No doubt it will be recognised that the Railways Department, apart from its own finances and the effect of them, is a great national service of value to the people of New Zealand, and reaching far beyond the mere figures relating to its finance. It will be acknowledged that if it should prove that the railway figures cannot be balanced, and that a part of the cost of maintaining the Railways Department must be placed on the shoulders of the taxpayers it will still be desirable to give the best service to the people.” The gross earnings of the department last year, proceeded Mr Veitch, were approximately £8,250,000. That represented a decrease over a five-year period of £90,000, which was, after all, not a very large fall for a big concern like the Railways Department. Against that, there was an increase in working expenses of nearly £900,000, and the result was that the net profit available for interest had fallen from 4.35 per cent, to 1.61 per cent, pf. the total capital invested in open lines. These figures were serious and important. At first sight they gave the impression that there had been carelessness in the expenditure of the department, and the Minister confessed that this was the impression he gained when -he first analysed the figures. However, the more he looked into the problem, the more he realised that there was a great deal of justification for the increased expenditure. The department had been faced with increasing difficulties, and repeated losses, and it had endeavoured to retrieve the position by giving a better service to the country. On the whole, there was no reason to condemn the railway administration up to the present, and it was only fair that he should express that view from his place in the House.

“ The methods of accounting in the department require some changes and improvements,” the Minister added. “ I am convinced that it is impossible for the Railways Department to continue to meet the requirements of the present law as to the amount of money it is expected to provide for depreciation, interest on capital, and other relative accounts.” A new. set of accounts had been adopted in 1925 and the major one of these, the general revenue and depreciation reserve account, showed a credit of £1,687,561. It would appear that this amount stood to the credit of the railways; but -such had been the demands of the Treasury upon the funds of the Railways Department that it had not been possible for it to pay the money over to this particular account. The result was that although the new system of accounting had made it necessary for this account to be compiled, it was only a paper calculation and a record of what would have been done had the funds been available. RECENT ALTERATIONS.

Referring to the recent changes in the service, the Minister said that the alterations made since he had assumed the portfolio had been carried out for the purpose of effecting immediate economies and with .the knowledge that the Royal Commission had yet to report. Nothing drastic or comprehensive had been done and nothing would be done until the report of the Royal Commission had been made. : ..One of the most important economies made was the elimination of 870,000 train iniles .a year. That would bring about substantial reductions in the running costs of trains and incidentally reduce the department’s expenditure. This reduction of train mileage was fully justified when it was realised that during the previous five or six years the train mileage had increased by 2,900,000. It was possible that. the department might be criticised for increasing the mileage to such an extent in the face of reduced business', and particularly of reduced passenger revenue However, the department would havg been blamed seriously by the public if it had not done everything^in its power to retain passenger traffic. On the other hand, experience had proved beyond doubt that it ■was futile to spend large sums every year in chasing passenger business, which it was now realised could not be caught.” Another large saving had been brought about aS a result of the closing of various unprofitable branch lines, and it Was gratifying that vigilance committees set up by settlers had done everything they could to help the department As a result, it was hoped that satisfactory arrangements would be made in most districts in the near future in view of the fact that the settlers were for the most part bringing business back to the department. - ' MOTOR COMPETITION. The Government had not been able to adopt legislation to enable the Railways Department to co-ordinate motor transport with its other activities. In other parts of the world the railways had been closing down unpayable branch lines and

transferring the whole business along these routes to road transport. If legislation could be* passed giving power to co-ordinate the motor transport owned by private enterprise and the railways owned by the State it would be possible to cut out a great deal of the heavy loss incidental to the present lack of organisation. Mr Veitch said he hoped that Parliament would in the near future extend the powers invested in the Government concerning this problem. He said he was positive that such co-ordination could be carried out without detriment to private enterprise. There was no suggestion that the power of the Crown should be used to suppress private enterprise; but it was a matter of urgent necessity that the huge waste of unnecessary competition should be done away with. ■ “ Unless we can strengthen the finances of the department,” he said, “ unless we can get such transport legislation as will enable us to eliminate wasteful and unnecessary competition, and unless we are permitted to adopt the measures of economy and improvement under contemplation in the department the time will come when we will fail to compete with road transport, and when that day comes it, will not be a question of dispensing with the services of a few hundred men, but one of an annual decrease in the number of permanent men employed in the department.” STAFF REDUCTIONS.

Referring to the question of employment in the department, the Minister said he had no hesitation in saying that although he was faced with the most unpleasant duty of dismissing a large number of men, he had to contend with a much more serious and comprehensive question. He was sure -that the present position was fully appreciated by the railwaymen, and he thought they realised that it was wise to attack the problem at once so that the finances of the department could be strengthened. This could not.be done without the co-operation of the staff, and he believed they would give the assistance asked. THE FUTURE. Touching upon the future of the department, the Minister said he viewed it with hope. One of the causes of the nnancial troubles of the department was the general economic depression, and an improvement in conditions generally would react favourably upon the department’s operations. Although drastic changes and economies, had been made, more would be required in the future. However, he was quite sanguine about the possibilities of developing the system.