THE RAILWAYS.

Taranaki Daily News, 26 September 1924, Page 5

THE RAILWAYS.

“CAN BE MADE TO PAY.’’ CONFIDENCE OF MINISTER. NEW FINANCE SYSTEM. COMMERCIAL PRACTICE (By Wire—Parliamentary Reporter.) Wellington, Last Night. The Minister for Railways (Hon. J. G. Coates) proposes a new system of finance for the railways, and this he outlines in the railways statement, which was presented to the House this evening. He says:—

*T am definitely of opinion that the railway finance and accounts should be on an entirely different footing and brought into line with commercial practice as far as may be possible. The first and most important step in this direction is the establishment of a separate railway account, into which all the earnings will be paid, and out of which all the working expenses will be met, as well as superannuation subsidies, actual interest on fixed and floating capital, and renewals and replacements. On the other hand, the railway account will be credited with all services rendered by it, including the’loss on the operation of unpayable lines. *'Tt is now generally recognised that the compiling and publishing of facts and figures relating to the financial results in a proper form will dispel ignorance. and inspire confidence in the administration* In the past the New Zealand Railway Department’s accounts have been prepared essentially on a cash basis. All the revenue earned is paid into the Consolidated Fund, and all the expenditure is provided annually by Parliament. It might be contended that the proposals outlined will weaken Parliamentary control, but that is not so. In South Africa, for instance, the State railways are run as a separate account. Interest on loan moneys provided by the Treasury is invested in the undertaking, and is a charge against the earnings of the undertaking. Parliamentary control is not diminished, as (a) all accounts are subject to Parliamentary appropriation each year, and (b) all investments of reserves, etc., are under the control of public debt commissioners.

“Another important departure proposed is the making of adequate provision for depreciation as a charge against earnings and the creation of a reserve fund. In addition to this a betterments fund will be provided out of the profits to meet expenditure for improvements of a non-capital nature. In South Africa all charges to the betterments fund are subject to Parliamentary appropriation, and the same course would be followed here. With reference to accounts, these would be kept on double entry principles and in a commercial form.

“I have already expressed the opinion that, given reasonable facilities, and with the finances placed on a more satisfactory footing, our railways can be made to pay their way. In the event of the system being worked at a loss, however, the adoption of the foregoing proposals would enable the accounts to show the true extent to which the railway service was a burden on the taxpayer. “Provision will also be made for deferred expenditure to be debited in the working account for the year in which it takes place and it will be transferred to the renewals fund, so that when works are undertaken funds will be available to meet the expenditure, and thus the accounts for the particular year in which it is actually affected will not bear more than their normal quota. REPORT ON RAILWAYS.

WORK FOR THE COMMISSION. OPINION ON NEW WORKS* REDUCTION IN FREIGHTS. By T.legraph—Preus Association. Wellington, Last Night. In the House to-day the Minister for Railways (Hon. J. G. Coates) moved for leave to lay the railway statement on the table. Mr. T. K. Sidey (Dunedin South) desired to know whether the Minister proposed this session to bring down a Railways Authorisation Bill. He contended that there were general railways which should now -be undertaken. He especially mentioned an extension from Miller’s Flat to Roxburgh. Mr. T. W. Rhodes (Thames) advocated the duplication of express trains between Auckland and Wellington, and Mr. J* McCombs (Lyttelton) urged the speedy duplication of the Lyttelton tunnel. The Hon. J. A. Hanan (Invercargill) desired particulars of the taking over by the Railway Department of the Midland Railway, including the total cost of the purchase to date and the amount yet to be paid. He declared the whole system of railway administration required overhauling. He desired the Minister to state what was the order of reference to the railway commission. The Hon. J. G. Coates, in reply said the order of reference to the railway commission covered every phase of railway work. They had a free hand and could make any inquiry they pleased. In addition he had placed his own ideas on paper as to what railway Improvements were necessary. These would be submitted to the commission, and they would be asked to express their opinions on them. Th© commission would be open to the press. The Railway Authorisation Bill would. be brought dowr this session, but he was not at liberty to disclose its contents* He expected the report on the e’ectrification of certain railways would be ready by May next. He regretted the delay, but the information could not be supplied earlier. Freight reductions this year would amount to £2OO 000. The paper was laid on the table.