UNITED CONTROL

Otago Daily Times, Issue 21982, 17 June 1933, Page 2

UNITED CONTROL

AUSTRALIAN RAILWAYS GIGANTIC SCHEME (From Oub Own Correspondent.) SYDNEY, June 8. One of the most important conferences of its kind yet held in Australia opened in Melbourne this week. It was convened by the Federal Government for the purpose of considering the transport services of the Commonwealth, with particular application to the railways, which continue to lose money at an alarming rate. As a matter of fact if ways can be devised for wiping out railway deficits most of Australia’s financial troubles will vanish as though by magic. It is worthy of note that in the year 1931-32 the aggregate losses on Government railways in Australia were £343,883 more than the income tax collected by all the States. Each State now has its own system, and the Commonwealth has a railway department as well. Thera is a complete lack of unity in the management of the various systems. If the Commonwealth secures the adoption of its policy all the railways will be brought under a single controlnational railways corporation, which would be established by special charter, and be responsible only to the Federal Transport Council. That council would comprise representatives of the Federal Government and the State Governments. The basis on which the suggested national railways corporation would take over the amalgamated railways, in the opinion of the Commonwealth,' should bo their exploitation value which, it is estimated, is about £240,000,000. This would necessitate the writing off of some £112,000,000 of over-capitalisation. The Commonwealth suggests that the process of amalgamation should be undertaken under the direction of the Federal Transport Council.

The capital of the suggested corporation might consist of 51 per cent, of ordinary stocks and 49 per cent, of (say) 4 per cent, cumulative preference stocks, guaranteed by the Commonwealth. The cumulative preference stock, which would be recognised as a first class trust security, would be available for public issue and could be utilised in reducing the public debt. It is claimed that a first class public security of more than £100,000,000 would be available. The cumulative preference stock might, it is suggested, be preferred as to capital as well as dividend. On this basis the security would bo represented by more than twice its value in assets. The whole scheme is put forward by the Commonwealth for examination by a committee of experts which, it is proposed, should go into the whole matter of the rehabilitation of the railways of the Commonwealth, It is maintained by the Commonwealth that tho rehabilitation of railway finance can only be possible by a reconstruction of the whole scheme of railway administration and co-operation, including a complete scheme of coordination of all forms of transport. Efforts to check the drift in railway finance by indiscriminate elimination of competitive means of transport, it is held, can never be truly effective, because Australia is well into the “ period of transition in methods of transport." It is maintained that if the reorganisation of the Australian railway systems is to be seriously undertaken, there should be no half measures or palliatives.

The “ railway dead assets fund ” will call for attention if any scheme resembling that put forward by the Commonwealth is adopted. To this end it is suggested that there should be a 5 per cent, tax on the gross revenue earned by all forms of passenger transport — motor bus and coach, taxi cab, hire cab, air, rail, and tram services, and coastal and inland water steamship lines. On the basis of an aggregate revenue of £31,000,000 for 1029-30 this tax would yield £1,550,000 a year. Other suggested contributions to tbe fund are: 25 per cent, of motor registration and license fees, 25 per cent, of the Customs duty on petrol, 25 per cent, of the Customs duty on motor vehicles and parts. The possible total revenue to the fund, it is estimated, would be £3,950,000 a year. It is certain that the States and the people will want to be assured on many points before tbe scheme receives general approval.