THE PRESS MONDAY, NOVEMBER 28, 1977. Road and rail

Press, 28 November 1977, Page 16

THE PRESS MONDAY, NOVEMBER 28, 1977. Road and rail

The Railways have apparently carried less freight in the last few months than they were expected to do. Declining business as well as rising costs have contributed to a higher deficit than expected at this time of the year. The Opposition spokesman on transport (Sir Basil Arthur) has charged that the decline in the business of the Railways can be blamed largely on the easing, two months ago, of the road haulage restrictions which has allowed road carriers to capture Railways’ business. The Minister of Railways (Mr McLachlan) has retorted that the Railways have lost freight business because of the generally low level of business activity throughout the country and that the Government has been obliged, by the decline of the amount of freight offering for this reason and by rising costs, to raise railway freights again early next month.

If Sir Basil is right and competition from road carriers, intensified by the easing of the road haulage restrictions and the increased Railways’ freight charges, pushes the Railways further into decline, the Government may have to reconsider its policies. Such a reconsideration could be justified on the grounds that road carriers enjoy at present hidden and unfair advantages over the Railways. In this year’s Budget, Mr Muldoon claimed boldly that the road transport industry as a whole pays all the reading and community costs that can be attributed to it through taxes on the purchase, ownership, and running of commercial vehicles. But evidence to the contrary suggests that the community meets many of the uncounted costs of road transportinefficient use of energy in certain circumstances, damage to roads, and the building of new roads to higher standards than passenger cars require, excessive noise and air pollution and road deaths and injuries. Unless all these costs are calculated as accurately as possible and imposed on road trans-

port operators in some way, by adhering rigidly to a policy of making the Railways pay their commercial way, the Government may be unfairly penalising the Railways.

From April 1 next year lugher taxes and other charges will be imposed on those forms of road haulage in which the Railways should be able to establish a “natural” competitive edge. These tax increases may give back to the Railways what they appear to have lost or to be about to lose as a result of the extension of the road haulage limit and the rise in Railways’ freight charges. It is too early to predict exactly what rises in road cartage charges will result from the imposition of the new distance tax which will be imposed under the Road Charges Bill which has just come before Parliament The Road Transport Association estimates that while some rates may have to rise by nearly 20 per cent, most will rise far less. Furthermore, the increases will be offset to some extent by a gradual reduction in the sales tax on heavy vehicles. The Railways should probably not count on deriving much relief from the Road Charges Bill when it comes into effect

The Government’s policy appears to be simultaneously to shock the Railways into realising that they cannot expect to enjoy privileges when these are used merely to protect wasteful and inefficient practices by allowing the road carriers to breathe down their necks, and to encourage the Railways to improve their efficiency by providing funds for investment in new equipment. This may be a sound policy, but Sir Basil Arthur’s criticisms are a timely warning that the Government should beware of applying the stick of competition, especially when it may be unfair competition, too harshly without the carrot of investment being large enough to assure the Railways that they will not be starved of a means to achieve greater efficiency.