HIGHER RAILWAY FARES TEN PER CENT. INCREASE

Southland Times, Issue 23681, 2 December 1938, Page 8

HIGHER RAILWAY FARES

TEN PER CENT. INCREASE

Rise In Freight Charges NEW SCALE BEGINS ON DECEMBER 11 RATES IN AUSTRALIA COMPARED An all-round increase of 10 per cent, in railway fares and freights, including the charges for conveyance of goods by road, was announced yesterday by the Minister of Railways (the Hon. D. G. Sullivan). The increase will operate from, and including, Sunday, December 11. “The Government,’ stated Mr Sullivan, “has deferred as long as possible adopting the course followed by Great Britain and other countries, which, because of increased operating costs, raised their railway fares and freights some time ago. The British railways, for instance, found their costs for stores and materials increasing to such an extent and their wages bill rising so rapidly that they were compelled to apply to the Railway Rates Tribunal for authority to increase their tariff charges. “A similar position existed in France, where a 24 per cent, increase has been instituted,” said the Minister. “Quite recently the Queensland Government decided to increase the railway tariff by 5| per cent., and this became operative from the first of the present month. All lailway administrations have been feeling the pmch ot rising costs, the working expenditure of the South African railways for the four months of the current year from April to July showing an increase -t £805,225, compared with the same period last year, notwithstanding a decrease of £380,177 in their gross earnings. A recent message from England indicated that the financial position of the British railways was causing concern, despite the tariff increases. ME ALTERNATIVES It was with a knowledge of those facts and full information about the financial position of the New Zealand railways that he spoke during last session of Parliament, stated Mr Sullivan, and indicated the possibility of an increase in railway charges at some future date. This possibility had never been lost sight of, and had been more or less constantly under review. As he had stated on several occasions, the Government had two major remedies for adjusting the railway finances, u irst, a reduction of wages and salaries, or, alternatively, an increase in fares and freights. . „ “I think everybody will appreciate, said the Minister, “that there are many good reasons which make it undesirable fiom the national viewpoint to follow the first course, leaving only the other alternative to be adopted, as was done in Great Britain and the other places I have mentioned. “The desirability of following the latter course will be clearer and better appreciated when a comparison is made between the railway charges in New Zealand and those in other countries, particularly Australia. This comparison, apart from any other aspect of the question, places the railways of New Zealand in a most favourable light, as the tabulation below sho\ys.” Made on the basis of fares and freights alone, the comparison proved beyond question the advantages still to be enjoyed by the users of railways in New Zealand. That, however, was by no means the whole of the story, important as .it was to every user of railway transport. The quality of and the recent improvements in the department’s services and facilities provided at such favourable rates were another aspect with which New Zealanders should well be pleased, and this comparison was frequently made by those from overseas who' understood the railway problem, and who testified enthusiastically about the benefits enjoyed by the users of the railways in this country. . > Commenting upon the effect the increase was likely to have on the business of the department in so far as freight generally and passenger traffic were concerned, Mr Sullivan stated that a careful survey of the increase as applied to typical cases showed that it was not expected that any material loss of business would ensue. Speaking this year after several months’ experience of the increases made by the British Railways, Sir William Wood, on behalf of the London and Midland Railway, stated that after a careful examination of the position the companies considered that there had been no important loss of traffic which could be ascribed to the increase in charges, and he was supported by Sir Walter Monckton, K.C., who spoke on behalf of all the railway companies. “As the tabulation below clearly shows,” continued the Minister, “the fares and freights in New Zealand, after adding the 10 per cent, increase, compare more than favourably with those in force on the Australian railways, and if the policy of the ‘user

paying’ is to be continued in a reasonable way no logical objection can be raised to the alterations that the Government has decided Upon in order to maintain a satisfactory financial balance between the departments income and expenditure accounts. “Taking a few typical illustrations, the 10 per cent, addition to. passenger fares will increase the ChristchurchLyttelton 12-trip worker’s weekly ticket by 4d, from 3/6 to 3/10, or one-third of a penny a trip; similarly the Lower Hutt-Wellington 12-trip ticket will increase by sd, from 3/9 to 4/2, or Aid a trip. The ordinary secohd single fare from Christchurch to Timaru will be increased by lid, from 8/10 to 9/9, and from Christchurch to Dunedin by 2/-, from 20/2 to 22/2.” . Referring to freight rates, the Minister said that based on the average haul of all consignments for last year the increased rate on sheep would amount to less than one penny a head, and on cattle approximately 7Jd. Brown coal, with an average haul of 126 miles, would be increased for that distance by less than 1/4 a ton. The Government had come to the conclusion that over the whole field of passenger and goods operations the alterations decided upon, spread, as they were, equally over all classes of traffic, while materially improving the net revenue position of the department, would not prejudicially affect the trend in trade and industry generally. SIMPLIFICATION OF TARIFF

Following upon the indication given in his first Railways Statement presented to Parliament in which he stated that the railway tariff was to be critically reviewed in terms of the Government’s general policy with a view to simplifying the classification and rates, in line with present-day requirements, and the representations that had been made to him from time to time on the subject, a flattening out of the higher rates for general merchandise had been decided upon by the Cabinet. That decision would bring about the elimination of the two highest classifications in the tariff (classes A and B) and their merging with the next lower classified rate (class C). That adjustment would not, however, be introduced until the beginning of the new financial year on April 1, 1939. In addition to the simplification of the tariff, which would be appreciated by the business community generally, the general effect of the adjustment would be to bring the method iof assessing railway freights more closely into line with the practice followed by road operators. “This decision,” concluded the Minister, “follows on the purchase of those long-distance competing road services which the Government has already decided upon. It also fulfils the promise made on behalf of the Government that a simplified method of railway rating would be introduced as soon as the purchasing tribunal has completed its work, which is now nearing an end, so far as those services already listed for purchase are concerned.”

Referring to the social services rendered by the railways of New Zealand, apart from those for which it was recouped through its revenue account, the Minister said it must be recognized that as far as practicable the expenditure that was economically made in the provision of railway transport facilities must be recovered in the charges made to the users.