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Thursday, 26 February 1987
Page: 760

Mr LLOYD(10.11) —The Australian National Railways Commission Amendment Bill 1987 amends two parts of the original 1983 Act. The first amendment changes section 13, which deals with the sales and supply of travellers' requisites, to enable AN to provide entertainment, including gambling facilities or other services for travellers, and allow travellers to use those facilities. The second amendment broadens section 70 relating to the powers of boards of inquiry to examine the causes of accidents and make the appropriate recommendations. The Opposition parties support the amendments.

The reason for the major-or most interesting-amendment is to allow the attachment of an entertainment car to the Ghan, the passenger service to Alice Springs. That entertainment car will include a souvenir shop, video booths, eight poker machines, a hairdressing salon and some card tables. My understanding is that it is only intended to have that one car on that one service at this stage. One of the reasons for that is that it is the only interstate passenger service completely controlled by Australian National and obviously it is an innovation and an experiment which needs to be taken stage by stage to see whether it can increase patronage. At a time of generally declining long distance rail passenger services, AN management is to be commended for trying to do something innovative in order to encourage more passengers. I understand that the South Australian and Northern Territory Governments have given their approval, although that is not strictly legally required. That passenger service already has a conference car and the entertainment car will be managed by private contractors. I believe that is sensible because it will allow complete management of it and thus tighter cost control.

There is a problem of declining patronage on passenger services everywhere, not just with AN and not just on long distance services. It happens on metropolitan services as well. There is the problem of determining the sort of passenger who can be encouraged to go by train. Obviously a time sensitive person cannot be encouraged. That person will fly. At the present cost levels one cannot beat the overnight interstate bus services for those who are budget travellers. I presume that here AN is looking at those who have a little more time-perhaps pensioners, retired people, families and so on.

It is important for Australian National Railways, the Government and the taxpayers of Australia that the $70m deficit incurred by AN is continually reduced. I must make the point that there has been a continuing reduction in the deficit. Of that $70m, about $30m is for its passenger services, both intrastate in South Australia and interstate, east and west and north and south. AN has an additional problem with some of its passenger services where it does not control all aspects of those services. For its east-west services it has Western Australia on one end and New South Wales on the other, and the Indian Pacific in particular has been subject to declining patronage. I make the point again that it is not unique to AN.

A seminar was held in 1985, and I think others here will also refer to it. It endeavoured to look at ways of improving the passenger services, particularly east-west and west-east. Two areas of action were taken following that seminar-management consultants were appointed and a market survey was carried out. A recommendation was made that there be a single organisation to control that passenger service, something akin to Amtrak in the United States of America or Via in Canada. The result so far, to my knowledge, has been restricted to the Railways of Australia establishing a national passenger group. If the present pace of improvements in intrastate and interstate rail services generally in this country is to be continued it will be a snail's pace, and it will be several years before we see any results whatsoever.

The Federal Minister for Transport (Mr Peter Morris) has established targets for Australian National railways, and I commend him for that. He wants to lift cost recovery on AN's passenger services from 45 to 60 per cent by 1988-89. If that is achieved-I believe it must be-that will also make AN's passenger cost recovery better than that of the State railway systems, which at the moment would have to be under 40 per cent. For example, my understanding is that in Victoria V/Line has a cost recovery at present of 25 per cent on its passenger services; Metrail hopes to have 50 per cent in five years; and the Inter-State Commission in its landmark report of April last year comparing cost recovery for interstate land surface transport said that for interstate passenger services, the cost recovery was about 37 per cent.

On return to government the coalition will review the progress of cost recovery for AN's passenger services, look particularly at the degree of State co-operation and co-ordination that is essential to lift patronage, efficiency and cost recovery, and determine what future there is for long distance passenger services controlled by Australian National Railways. As I said earlier, the total deficit for Australian National in the last year was $70m. For the freight service Tasrail it was $20m, and for mainland freight-that means basically the South Australian and interstate services of AN-it was another $20m. I commend again the progress that AN is making in being more commercial and reducing in both dollar terms and real terms the level of that deficit.

This is particularly so because in AN's main area of activity-that is, South Australia outside the metropolitan area-all forms of transport are completely deregulated. That is, there is competition with buses and planes for passengers and with road freight, particularly in those profitable sectors of wool, grain and superphosphate. There is no restriction whatsoever. That is not the case with most of the State systems. With timber in Tasmania and South Australia, road transport obviously does not provide the same level of competition.

The second point that I want to make in AN's favour is that I believe its accounts are more honest and complete than those of the States. In some of the States superannuation payments, leasing payment and interest payments are not included in the annual railways accounts. By not only my calculations but also the calculations of State railway people talking about the other State railway people-therefore giving, I think, a slightly more honest total picture-the total railways deficit of the State systems is about $2 1/2 billion. Victoria, New South Wales and the metropolitan passenger services are the most significant part of that staggering loss. I believe that figure is a national disgrace.

The State railway systems, together with the waterfront area-I just do not mean right at the waterfront itself but the whole stevedoring system-are the worst areas in the total transport chain in this country. They add tremendously to the cost of all of our exports and, for that matter, our imports. It is a dramatic cost to our consumers. The taxpayers of this country have to find an additional $2 1/2 billion every year to pay for this cost. If we want to reduce taxes-I believe that members on both sides of the House want to do this-we should look at the State railway deficits. This, to me, is the most significant area in the total tax load-not separating out the Federal, State, local and other taxes-on all Australians.

Industrial problems are partly responsible for this national disgrace. Last year 44,836 working days were lost in Victoria. Productivity and restrictive work practices are also part of this problem. I make special reference to the Sydney-Melbourne corridor which should be a perfect route for the carriage of interstate freight by rail. I believe that progress has been made with the introduction of super-freighters along this corridor. However, 75 per cent of freight goes by road. One should look in a little detail at some of the work practices which are still in place on the railways in spite of the fact that we are told that there is now a super-freighter service. Four separate railway crews are used between Sydney and Melbourne. The old coaling and water changes still occur at Goulburn, Junee and Albury-Wodonga. I am told that on the New South Wales side a call boy-please do not misinterpret that; it is an official title-is still used to wake up crews. Of course, we all know that many railway crews, on completion of their shifts, are put in a taxi to be taken back home or to where they begin their next job.

Mr Hollis —But that is a State railway; this is the national railway.

Mr LLOYD —I agree. If the honourable member listens to me he will note that I am criticising the State railways.

Mr Hollis —But we are not debating the State railways.

Madam SPEAKER —Order! If the honourable member reads the second reading speech he will see that the honourable member for Murray was quite within his rights. The second reading speech widens the debate quite considerably.

Mr LLOYD —The honourable member should not knock somebody who is actually supporting the Government on this legislation. We cannot blame the road transport operators for the fact that they carry 75 per cent of the total freight along the Sydney-Melbourne corridor. The April 1986 Inter-State Commission report on interstate land transport-and as I said earlier, I believe that is a landmark report and I commend the Government and the Minister for instituting that investigation-stated that the cost recovery in respect of interstate rail freight is 66 per cent. The cost recovery in respect of interstate road freight transport is between 72 and 93 per cent. The Minister moved to reduce the Federal licence fees for interstate road transport because interstate road freight demonstrably has a higher cost recovery percentage than interstate rail freight.

I want to emphasise the distance that freight has to be carried before rail becomes efficient and economic. This creates problems for Australian National because basically it has to link in with the State rail systems. This creates problems which are beyond its control. I also want to make the point that at present the Australian National north-south or south-north rail link ends at Alice Springs. I believe that it would be to the advantage of Australian National and to the overall advantage of Australia if the railway line between Darwin and Alice Springs were constructed. The coalition fully supports the progress that is being made by the Country-Liberal Party Government in the Northern Territory to obtain private finance for the construction of that railway. It seeks to have in place a railway that will be efficient and economic. That construction will allow a more complete use of the rebuilt railway which AN uses and which, at present, ends at Alice Springs.

The frustration which I believe all parties in the Federal Parliament share is that they have no power, in a direct way, to intervene to improve the problems that we have with the State railway systems. One of the things that we must do is deregulate surface transport to allow competition with the railways at a State level; that is, allow competition which presently exists in some States, and which AN has to meet in South Australia with passengers, grain, wool and superphosphate, and at the same time, reduce the burden on the taxpayers and the exporters of this country.

The point I want to make is that cost recovery, by itself, is not enough. If the railways have a monopoly, cost recovery is then just a matter of gaining a monopoly rent, which can be just as bad and just as inefficient as some other so-called system of efficiency when there is no ability for competition to test how efficient that system is.

Federally, we are restricted to the power to expose. The Inter-State Commission, commissions of inquiry, royal commissions and the Industries Assistance Commission are the avenues by which we can expose. It is very important from a national point of view, for improving our exports and for keeping costs down for the consumers, that the railways, operations of the waterfront and the whole transport chain are exposed. I believe that what the present Government is doing is correct. The Inter-State Commission has carried out a land transport inquiry. The Minister for Transport, who is at the table, presently has a waterfront package, with the Inter-State Commission hovering over the top as a threat. I believe that the Government has to move with the Inter-State Commission. By exposure and by embarrassment all parties-I am not just thinking of the unions; I am thinking of all parties in that waterfront area-will be forced to be accountable to the people of this nation.

This Government has also established a royal commission into grain handling, storage and transport. Commissioner McColl has released a paper ahead of the public hearings in which he has indicated that 47.3 per cent of a grain grower's gross return is taken from him beyond the farm gate. Sea freight costs represent 16 per cent, the Wheat Board 11 per cent, rail freight 10.4 per cent, and storage and handling approximately 10 per cent

The tonnage of grain handled or moved per year is 24,000 tonnes per employee at the bulk grain terminals in New South Wales. In Canada, the lowest figure is 33,000 and the highest figure is 75,000. In the United States of America, it varies from 53,000 to 96,000 tonnes per employee. So we can see that Australia has a long way to go to provide a competitive transport system which will allow the primary producers and exporters of this country to continue to survive and to do something about reducing our international debt burden. Dennis Hussey, formerly the Deputy Director of the Bureau of Agricultural Economics has stated that, on a cents per kilometre basis, it costs two to three times more to transport grain in Australia by rail than it does in Canada or the United States. The costs are two to three times higher to move the grain from a silo in a country town to the waterfront.

In Government the coalition parties will intensify the exposure process which this Government, to its credit, has begun. We have to expose, we have to make accountable, we have to embarrass all of those people who are involved in the total transport chain-I mean the railways and the waterfront. I believe that interstate road transport and overseas shipping are efficient-through the IAC, royal commissions, the Inter-State Commission and commissions of inquiry. At all times we will endeavour to encourage competition and to open up the monopolies that the railway systems have. We will push for increased productivity and end restrictive work practices.

The coalition supports the legislation and commends Australian National on its progress. It has reduced its work force by 32 per cent and increased its productivity by 115 per cent since 1978 but more has to be done; AN has to become completely commercial.