BIG RAILWAY LOSSES

Taranaki Daily News, 26 March 1932, Page 10

BIG RAILWAY LOSSES

AUSTRALIA’S MILLIONS. POLITICAL CONTROL BLAMED. (New Zealand Herald Correspondent). Sydney, March 10. Remarkable revelations are contained in the interim report of the Australian Transport Conference, which lias 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 timmediately. Here are the particulars of two of those lines in New South Wales: Glenreagh-Dor-ridge. 43 miles; capital cost, £1,378,000; average annual loss for the past five 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 are incurring a heavy loss, but it is not suggested that all these should be closed, because “.the damage is now beyond repair, owing to the fact that interest is the predominating factor in the burden of loss.” It was shown to the conference that the rate of interest paid on the money that had been sunk in the New South Wales railways was higher- than that paid -by any other State, the 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 the Federal basic wage, £1,080,000; and the cost of the 44-hour week, £400,000. The chairman of the conference, Mr. A. E. Heath, a prominent Sydney accountant, roundly condemns political control. He said: “It 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. The management must be in a position to exercise initiative, energy aiid 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 relied upon to sustain conditions that are rigid, and over which tlie management has little or no control.

“Interested claimants, knowing that the last word rests with the Minister, will rarely, if ever, accept the decision 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 appease influential claimants in cases where an impartial body of experienced administrators would reject the claims.” The report discloses that the 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 the deficits are stated to be: (1) The depression; (2) motor transport; (3) over-capitalisation; (4) competition by 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 Soiith Wales where the annual loss during the past five years has averaged more than £lOO,OOO, but owing to the heavy interest charges, as’gilready mentioned, it is 'not suggested that they should be closed. Presumably the taxpayer will go on paying for the political blunders of the past.