RAIL CAPITAL CUT

Evening Post, Volume CXV, Issue 67, 21 March 1933, Page 7

RAIL CAPITAL CUT

N.S.W. POLICY,

(From "The Post's" Representative.) SYDNEY, March 9.

Within the next few weeks the Government of New South . Wales will write down the railway 1 capital debt from £140,000,000 to £100,000;000, with the object of fixing the capital charges of the system at a figure that will .enable it to provide efficient service at a reasonable rate. The formula to be adopted in determining the exact amount by which the capital shall be written down has not yqt been decided upon, but the major factor will be the developmental value of tho system. Non-paying branch lines are generally regarded as being the cause of tho constantly recurring railway deficits, but without the traffic from those lines the mair. lines generally would have difficulty in paying their way. Most of the agricultural -development of the State during the past thirty years has been made possible by the construction of the branch lines.

_ The enormous value of the branch lines to the State may safely be assessed at millions, but it is difficult to make the public realise this. All the public knows is that there are many lines that are not showing a profit, and there is always a ready response when someone suggests that they should be closed down. Figures show that this would be a shortsighted policy. One of the most prolific wheatgrowing districts in the State is served by a nonpaying line. If the line were closed wheatgrowing would cease, for the production of wheat is unprofitable if it has to be hauled more than twenty miles to the railway siding. The railway does not pay because of the measure of assistance given to the growers by the Government. If the growers ceased to operate the loss to the State would be considerably greater than the loss on this particular railway line.

In the circumstances it is argued that the loss on these lines should be a general charge on the poor taxpayer. If the railway debt is written down it will not disappear. The interest burden will still fall on the State, or, in ether words, on the ever-patient tax payer. Still, if the railways have to find less interest the deficit will be less, and in that way things will be evened up. It is very much like robbing Peter to pay Paul. There is a chance that the public will be given relief in the direction of lower railway charges. The sting of railway taxation might not then bo so irritating. That at least is what the politicians are hoping.