Australia's Railways.

Press, Volume LXVIII, Issue 20493, 11 March 1932, Page 10

Australia's Railways.

The amalgamation of transport authorities in New South Wales, referred to in this mornings cable news, is one outcome of the. joint conference of Federal and State Railway Commissioners convened recently by the Federal Government. Australia, like New Zealand, has been forced by the depression and by increasing road competition, to look for a way of reducing the losses on a railway system which, partly through over-anxiety to develop the country and partly through political interference, has become heavily over-capitalised. The accumulated capital invested in the Australian railways is £341,366,000; the interest charge is £17,535,000; the losses for the year ended June 30th, 1931, were £11,741,000; and the accumulated deficits, since 1924, when the combined systems last showed a profit, are £66,407,000. Railway finance is therefore the dominating factor in the public finance of all the Australian States, and it is a sufficient proof of this that 70 per cent, of the deficit of &14,765,000 shown by the States for the year ended June 30th, 1931, is 1 accounted for by railway losses. The main cause of the railway deficit, however, is not road competition, but an excessive mileage of tracks laid down at an excessive capital cost. Australia, like New Zealand, has been " strewn "with railways in the sacred name of "progress and development," though the real purpose has often been to secure votes and even to boost private property values. The capital cost of the lineß averages £12,843 a mile, which means that every niile of line has to earn £634 a year for interest. This charge is higher than it should be for the reason that none of the States has kept its railway accounts separate. Much of the loan money out of which the railways were constructed was borrowed at 4 per cent., but it is charged at the average rate of interest on all Government borrowings for the year, which for many years past has been over 5 per cent. The position is further complicated by the practice of including railway earnings in the consolidated revenues instead of crediting them against the railway capital accounts. New Zealanders will take a melancholy interest in Australia's effort to straighten out this tangle—an effort which will necessarily be hindered b,v the unwillingness of the States to accept guidance from the centre. The depression would confer at least one benefit on Australia if it compelled her to set up a Federal authority, on the lines of the United States Inter-State Commerce Commission, to co-ordinate trapsport services.