Rail services

Press, 24 September 1983, Page 16

Rail services

Sir,—l read Roy Sinclair’s article on rail subsidies (“The Press,” July 15) and I think the passenger trains are a much needed and well used service and should be retained. Therefore, I would also like to challenge the Minister of Transport to make public his calculations and method of showing such a loss by passenger trains. Will he please show the cost of train subsidies paid by the Government compared with the amount paid for road upkeep by private citizens in our taxes. As Roy Sinclair also states, people do have an option of riding buses but many drive cars instead. It is only too clear who benefits financially from this situation. It is a great loss to our community to have a public service which is serving us so well abandoned just because our Government representatives give in to oil company pressure so easily.—Yours, etc., C. GORDON. July 20, 1983. [The Minister of Transport, Mr Gair, replies: “The long-distance rail passenger losses that are met by the taxpayer are the difference between the forecast revenue and the fully-allocated costs of the services. This represents the level of funding required by the Railways Corporation if the services are to make a fair contribution to overheads. For 1982-83 the subsidy requirement for these long-distance rail passenger services was S33M which meant an average subsidy of more than $5O a passenger journey or more than twice the - average fare paid. In the shorter term it is appropriate to consider the revenue against the avoidable costs of the services. When this is done, the deficit against revenue is reduced. The Government is considering the alternatives to the longdistance rail services in terms of these financial considerations as well as the “social” costs of withdrawing any services. When comparing the subsidy/taxation position of the two modes, regard must be had to the total situation. Taxes collected from motorists for the year ended March 31, 1983, for revenue or roading purposes, total well over SBOOM. This comprises road user charges, petrol taxes and sales and customs duty on road vehicles. Taxes for specific nonroad purposes, such as the accident compensation levy, are not included in this amount. The total expenditure on roading for the same year, both by the National Roads Board and local authorities, was about S42OM. Whereas rail passenger services require a taxpayer contribution, those using road transport are actually making a net contribution to the taxation pool.”]

[The Minister’s office says this reply was sent on August 12, but it was not received by us.—Editor]