RAILWAY FINANCE

Sun (Auckland), Volume III, Issue 732, 3 August 1929, Page 11

RAILWAY FINANCE

RAISING OF INTEREST TO AVERAGE LEVEL NEED FOR ADJUSTMENT A financial feature o£ the Prime Minister’s Budget proposal in respect of the New Zealand Railways’ liabilities to the Consolidated Fund was commented upon by Dr. E. P. Neale yesterday. “The proposal is to write off the £8,000,000, representing the capital cost of the railways met, not by loan, but by transfer of surpluses from the Consolidated Fund,” he said. “At the same time Sir Joseph Ward proposes to abolish the subsidies from the Consolidated Fund to the railways. As I understand it, the rate of interest the Consolidated Fund has charged the railways in the past is rather less than the average payable on New Zealand Government loans, presumably on account of the fact that not all the capital for construction by the railways was raised by loan. “If, however, the Government writes off the capital not represented by loan from the railway capital account, it seems logical that the railways should be asked to find, hereafter, the actual average rate being paid by the Government in respect of its loans. “It would be logical for an Order-in-Council to be Issued for the raising of the rate of interest payable by the railways to the Consolidated Fund to a level commensurate with what the Government is actually paying on loan liabilities. “I imagine that this would increase by about £200,000 annually, the amount paid to the Consolidated Fund.”