D.—2.

I think the public are already well aware of the need, in the interest of safety and progress, for necessary and desirable expenditure upon the efficient maintenance of the railways so far as the track, structures, and rolling-stock are concerned. WAGES AND CONDITIONS. Wages for the year amounted to £4,902,226, or 61-27 per cent, of the total expenditure. Wages paid the previous year amounted to £4,168,041, so that the increase for the year under review amounted to £734,185, made up as shown hereunder : —• £ Restoration to 1931 level . . . . . . . . 74,516 Forty-hour week (in operation for only a portion of previous year) . . . . .. . . 223,697 Cost of removing anomalies as from Ist September, 1937, created by the introduction of the forty-hour week one year earlier .. .. .. .. 44,582 New wages schedules and regrading . . . . . . 99,401 Total increase in wages (Working Expense Accounts) due to concessions to staff . . .. .. 442,196 Increased wages cost of handling additional traffic . . 291,989 Total increase in wages .. .. .. .. £734,185 As the net revenue was £271,061 less than in the previous year, it will be seen that the" improved wage conditions provided for the staff during the year under review, costing £442,196, more than accounted for the decrease in net revenue. It cannot be stated too clearly that the Government's policy, based on the primary consideration that the general standard of living in New Zealand should be such as the country's great productive capacity justifies, is applied to the railways as it is to other industries and to other Government Departments, irrespective of whether they are revenue producing or otherwise. The policy called for action to improve the purchasing-power of the people, including the forty-hour week to assist in eliminating the national scourge of unemployment. In the railways it required also —(1) a complete restoration of wages following the " cuts " authorized by the legislation of 1931 and 1932 ; (2) the removal of certain anomalies in the wages scale ; (3) the regrading of positions, a right to which the staff were entitled, but the operation of which had been postponed by the previous Administration; and (4) a revision of the standard wages paid to the lower-paid men in the Service, with the object of ensuring that they received reasonable remuneration as compared with employees in other Government Departments and those working under awards of the Arbitration Court. As I pointed out in my last year's Statement, railway wages and salary " cuts," amounting to £2,512,000, were made from 1932 to 1936 inclusive, and I included a table setting out what the uet earnings would have been had not wages and salary " cuts " been made, and giving figures for operations per train-mile. That table is reprinted here, with the addition, for comparative purposes, of the figures for 1938.

III

Percentage „ .. Net 1 Net of Working- °P eratul g- Operating- OperatingYear. ™ • , earnings per expenses per r . ° | learnings. An Mife. £ d. d. d. 1932 .. .. .. 452,993 93-04 136-63 133-97 2-66 1933 .. .. .. 203,544 96-63 130-37 133-41 -3-041oss 1934 .. .. .. 438,558 93-07 132-92 130-05 2-87 1935 .. .. .. 590,491 91-09 133-44 127-00 6-44 1936 .. .. .. 715,477 89-79 135-60 127-09 8-51 1937 .. 826,858 89-39 139-61 129-70 9-91 1938 .. .. •• 632,797 92-67 142-59 136-95 5-64