BIG RAILWAY LOSSES.

New Zealand Herald, Volume LXIX, Issue 21136, 19 March 1932, Page 14

BIG RAILWAY LOSSES.

AUSTRALIA'S MILLIONS. WHERE MONEY HAS GONE. POLITICAL CONTROL BLAMED. ["FROM OUR OWN CORRESPONDENT."I SYDNEY, March 10. Remarkable revelations are contained in the interim report of the Australian Transport Conference, which has just been presented to the Federal Government. In every State, it is said, railways have been constructed that were not economically justified, and probably never would be, so it is not surprising that the total loss on the operation of the Australian railway system since 1915 should be £81,890,000,' including the estimated deficit to June 30 next. It is recommended that several branch lines should be closed immediately. Here are tho particulars of two of those lines in New South Wales: Glenreagh-Dor-ridge, 43 miles; capital cost, £1,378,000; average annual loss for tho past live years, £82,891. Richmond-Kurrajong, six miles'; capital cost, £153,709; average annual loss, £14,609. There are numerous other lines, not all of them in New South Wales, that arc incurring a heavy loss, but it is not suggested that all these should bo closed, because "tho damage is now beyond repair, owing to the fact that interest is the predominating factor in the burden of loss." Higher Rate of Interest, It was shown to the conference that tho rate of interest paid on tho money that had been sunk in the New South Wales railways was higher than that paid by any other Stale, tho figure being 5.14 per cent. The New South Wales accounts, thanks to Mr. Lang's rule, also showed a number of charges that were unique. Those included family endowment payments, £172,000; payment in excess of tho Federal basic wage, £1.030,030; and the cost of tho 44-hour week, £4CO,COO. The chairman of the conference, Mr. A. E. Heath, a prominent Sydney accountant, roundly condemns political control. lie said: '"lt is utterly impossible to conduct successfully a great business such as the railways, unless the management is released from the never-ending political interference that exists at present. Tho management must be in a posilion to exercise initiative, energy anc enterprise so that it may demand and expect judgment of its efforts by results only. It is futile to expect that railway revenue, fluctuating from day to day, can be leiied upon to sustain conditions that aro rigid, and over which the management lias little or no contiol. Causes oi the Deficit. '•lnterested claimants, knowing that the last word rests with the Minister, will rarely, if ever, accept the decis.on of the commissioners as final. The Minister, being unable to load responsibility for refusal on to the commissioners, as he was previously, is exposed to great temptation to appeaso influential claimants in cases where an impartial body of experienced administrators would reject the claims." Tile report discloses that tho New South Wales railways lost £12,695,000 between 1915 and 1931, and will lose anva aid nof) hv .Tune 30 next. The

'•lnterested claimants, knowing that the last word rests with the Minister, will rarely, if ever, accept the decis.on of the commissioners as final. The Minister, being unable to load responsibility for refusal on to the commissioners, as he was previously, is exposed to great temptation to appeaso influential claimants in cases where an impartial body of experienced administrators would reject the claims." Tile report discloses that tho New South Wales railways lost £12,695,000 between 1915 and 1931, and will lose another £4,410,000 by June 30 next. The principal causes of tho deficits aro stated to be: —(1) The depression; (2) motor transport; (3) over-capitalisation; (4) competition bv shipping companies and Harbour Boards; (5) multiplicity of authorities controlling wages and working conditions. According to the report no State has ever made adequate provision for depreciation, and, in some States, including New South Wales, no provision whatever has been made on that score. There are three lines in New South Wales where tho annual loss during the past five years has averaged more than £IOO.OOO, but owing to tho heavy interest charges, as already mentioned, it is not suggested that they should be closed. Presumably the taxpayer will go on paying for tho political blunders of the past.