RAILWAYS POLICY IS DEFENDED.

Star (Christchurch), Issue 18547, 22 August 1928, Page 5

RAILWAYS POLICY IS DEFENDED.

SA-”~ SOME OF WRECK, SAYS MR COATES.

(Special to the “Star.”) WELLINGTON, August 22. Possibly those who looked at the huge constructions of workshops at Christchurch, Dunedin, Hutt and Otahuhu might wonder what it was all about, remarked the Prime Minister in the House last night. He proceeded to explain what the workshops meant Mr Coates said he believed that the estimates were working out right and that they would save £250,000 a year after paying interest on the capital cost of these works. It would mean that they could run on fewer men, as machinery would take their place, but the Railway Department could arrange this without any great disability to the employees. To those who were complaining about money being borrowed and wasted he would say, “Come out-into the open and say where.” As a matter of fact, the expenditure on the railway shops was long overdue. He enumerated other large railway worlds, asking members which ones they would stop, and when the Auck-land-Penrose duplication came into the category, Mr Lee (Auckland East) remarked laughingly, “I’ll admit it’s pretty hard, when it comes into your own backyard.”

Increased Tonnage Wanted. Mr Coates said that it was impossible for anything but a railway service to give New Zealand an economic transport service. Last year the service cost 2.41 penny per ton mile. It would cost at least a shilling, and in some districts Is 6d, to provide a similar service What”expensive roads would be required and how could concessions be made to coal, timber, fertiliser, stock, farming and commercial interests? There could be no concessions without the railways. If the railways had earned 2.56 penny per ton mile last year the earning power would have been increased by £300,000, or if it had earned eight points under threepence per mile, the railways would have earned £1,000,000 more. Bigger earnings would be possible only with increased tonnage. It would be bad business to force up the rates and competition, even though they could operate only in selected areas. Buses. Mr Coates suggested that the only definite statement to which the Nation alist Leader had committed himself was that the Railway Department should not run motor buses. Should it sit down and allow deficits to pile up? Mr Forbes: That will not improve it. Mr Coates asked how else could the position be retrieved. He had nothing but the highest admiration for what the Railway Board had done, and he intended to put on record what it had been responsible for. Mr H. E. Holland: Why did you empty them out? Mr Coates: I made a statement why we changed. (Laughter.) There is no catch in it. The chairman’s time was up and the other members had only a very little time to go, so it would have meant carrying on twelve months and making another change. Mr Holland; Under the authority of what Act? Mr Coates: “We will bring an Act before Parliament and the hon gentleman will have an opportunity of saying whether he agrees with it.” Returning to the question of railway buses, Mr Coates said that the Government took the responsibility for that. There were sixty-four railways in America owning lorries and buses. Four of the Australian States and South Africa were doing the same. The Government had developed the Hutt Valley. When motor transport threatened its trade to such an extent that it was running empty trains with definite commitments to seasonal and workers’ ticket-holders they could not run competitive buses, but they took over the whole service on a business basis, and would now see whether it was possible that the Railway Department could successfully run a fleet of buses in conjunction with the railway service. “Here is a huge system with £50,000,000 capital which in a few years will be £70,000,000,” concluded Mr Coates. “Are we to sit down and allow this to go to pieces without an endeavour to demonstrate that it is possible to save some of the wreck at any rate.” Renewal Funds.

New facts on railway finance were given by Mr Coates. The Government, he suggested, was entitled to credit for making it possible for the Press and public to understand the Railway Accounts, which were kept on a commercial basis, enabling them to quickly detect anything included in the receipts which was not strictly railway revenue. lie explained how a contribution of approximately £750,000 was made from the Consolidated Revenue to the Railway Account to meet the cost of unprofitable branch and isolated lines. This part of the system comprised 124 miles in the North Island. 665 miles in the South Island, with 204 miles of isolated lines. The Government could have met the losses either by raising freights generally or by ripping up unprofitable sections. Its policy was to maintain development and the enterprise of the people served by those lines, some of which in the past, had there been a renewal account, might have paid over and over again, but there had been no correct system of accounts, all receipts going into the Consolidated Revenue. Had there been a renewal fund in past years it was possible that every bit of rolling stock and line would have been paid off. The position had to be met under a commercial system of bookkeeping, by payment from the general revenue, so that the Railway Department, as a commercial concern, could be paid to maintain a service necessary for the country’s development, bast year tms payment was £189,568 and the railway deficit over and above this was £291,4n2 Members should recollect that prior to 1924 no cognisance was taken .of renewals which this year exceeded the amount of the deficit, being £294,132. Mr H E. Holland: That is a proportion of the cost of running the system The Prime Minister: No, the renewals have to lie provided for in each year 7 and there is over £1,000,000 stand*o the credit of the Renewals Fund since °its establishment in .1924 Had this fund been provided m the early davs we could have renewed the whole of'the rolling stock and possibly written down the cost of the railways by £30.000.000 or £10.000.000-"