Report of the British Economic Mission to Australia

Bibliographic data

Monograph

Identifikator:: 179824683X

URN:: urn:nbn:de:zbw-retromon-182286

Document type:: Monograph

Title:: Report of the British Economic Mission to Australia

Place of publication:: London

Publisher:: His Majesty's Stationery Office

Year of publication:: 7th January 1929

Scope:: 63 S.

Digitisation:: 2022

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Supplementary memoranda

Collection:: Economics Books

ts 6. It is apparent from these statistics that the capital employed, judged by the earnings, which, during the past five years, have on the aver age only provided about 3% per cent. interest on it, cannot be considered ag worth its nominal amount as an in- come-earning asset. On the other hand, it is only fair to bear in mind hat more than two-thirds of the ‘cost of construction was incurred prior to the increase in the general level of prices consequent upon the war, and that, therefore, the capital value of the railways to-day is probably higher than the amount expended in their sonstruction, even after making due allowance for depreciation. It is well, also, to remember that at the time of the construction of the majority of the railways, neither the present coscs of labour nor the present rivalry of motor services could reasonably be anticipated. Further, it is necessary to remember that in the development of a new country with distances so vast as those in Australia, railway con- struction may have been in the past iustifiably undertaken as an alterna- tive to road construction, i.e., as a provision for transport essential to the development of the country, but which might ‘not become directly remunera- tive for long perieds, and, indeed, might ultimately only become in- lirectly remunerative, as is the case with roads. Finally, it must be remembered that the railways have sometimes been made to serve State, rather than business purposes, by :arrying goods at unremunerative rates, and thus subsidizing the indus- ‘ries affected. . 7. It must not be inferred from what we have just said that we entirely approve of the policy adopted, but we wish to avoid the reproach of criticizing after the event, and we recognize that it may have been reasonable for Governments in the then existing conditions, subject as they were to pressure from all sides to pro- vide railway facilities for the purpose of development, to undertake the con- struction of some lines which have been long in reaching a paying stage, and may indeed never arrive ihere. But whatever may have heen +he 14992 notives governing past railway con- truction, we recommend for the uture, especially having regard to the »ossibilities of motor transport, that 10 further construction of State rail- vays should be undertaken except Jfter a full investigation by some in- lependent authority, and unless it is hen considered that the proposed rail- vay is the most efficient method of roviding the requisite transport ‘acilities, and likely to give within a ‘easonable period, either directly or ndirectly, a commercial return upon he capital invested. 8. We are not unmindful that argu- nents can be advanced for the con- struction of railways for such purposes 1s saving stock hy their transport ‘rom pastoral areas during periods of irolonged drought. We would instance he proposals made in the Report of he Federal Pastoral Advisory Com- nittee, dated 18th May, 1928, for a “ailway to join Blackall in Queensland vith Charleville, and for a further ailway to join Cunnamulla with 3ourke in New South Wales. The rest estimate that we have received of the probable cost of a line from 3lackall to Charleville is abcut 22,000,000, and it is very hard to sup- rose, since it would have very little reight to carry except in times of irought, that what it would have to :arry in such times could come uny- vhere near to paying for the cost and naintenance of the line. A calculation f the freight charges which would 1ave to be made per head for the rarriage of sheep in such times, if the -ailway line was to be self-supporting, vould reveal the economic difficulty of -he project. 9. We therefore think that any such laim should be resisted unless the vasboralists who are thereby to be enefited are themselves prepared to ruarantee a fair return year by year m the capital employed in the con- struction of a railway for such a pur- sose. They are the persons who are rimarily benefited, and the com- nunity at large should not be ex- rected to pay for what in effect umounts to an insurance of their stock wgainst periods of drought. Here we R 2

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