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Thursday, 17 November 1938

Mr McEWEN - It had to pay a great deal more than its own share, as I shall show presently.

Sir Frederick Stewart - The State governments have certainly not honoured their promises in this regard.

Mr McEWEN - The royal commission reported against the provision of standard gauge main trunk lines in Victoria and South Australia without, at the same time, converting all the broad gauge lines of those States to the standard gauge. The commission's report was considered at a Conference of Premiers with the Prime Minister in Melbourne in November, 1921, when it was resolved -

That the adoption of a uniform gauge is. in the opinion of this conference, essential to the development and safety of the Commonwealth.

That the commission's recommendationof a 4-ft. 81/2-in. gauge is accepted.

It was further resolved that the Commonwealth should circulate to the States a draft agreement to give effect to the recommendation of the commission. In due course, this draft was circulated.

Further conferences with the Premiers were held in Melbourne in 1922, and in 1923, but agreement could not be arrived at between the whole of the parties. Victoria and South Australia were unfavorable to the work being put in hand at the time; it being contended that the time was not opportune, taking into consideration the high cost of money, and of wages and materials.

However, by an agreement between the Commonwealth and the States of New South Wales and Queensland, dated the 16th September, 1924, one section of the work recommended by the royal commission, namely, the 4-ft. 81/2-in. gauge railway linking Sydney and South Brisbane via Macksville, Kyogle and Richmond Gap, was undertaken. This work was completed and the railway was opened for public traffic on the 27th

September, 1930. Pending complete agreement among all the parties, the Commonwealth Government is bearing the amounts which would be debitable against Victoria, South Australia, . and Western Australia in connexion with the expenditure on the Sydney to South Brisbane section. I make that remark in reply to the interjection made a few moments ago by the honorable member for Herbert.

Mr Drakeford - The other States were not prepared to accept responsibility, because they could obtain no guarantee that the remainder of the whole plan would be carried out.

Mr McEWEN - There is absolutely no foundation for that interjection. Anyhow, within the next few months, those State governments will be given an opportunity to indicate their attitude. Personally. I hope that an agreement will be reached to proceed with other sections of this important work.

Although the provision of a 4-ft. 81/2-in. gauge railway from Port Augusta to Adelaide, forms part of the uniform railway gauge scheme recommended by, and included in the estimate of the royal commission, the portion between Port Augusta and Red Hill has been the subject of special legislation by both the Commonwealth Parliament and the State Parliament of South Australia. The 4-ft. 81/2-in. gauge railway has now been extended by the Commonwealth from Port Augusta to Port Pirie, and a 5-ft. 3-in. gauge railway has been built by South Australia from Red Hill to Port Pirie, thus linking Port Pirie and Adelaide by a 5-ft. 3-in. gauge railway.

The estimate submitted by the royal commission on the 22nd September, 1921, will no doubt be of interest to honorable members. It was as follows : -


This estimate was reviewed at a Conference of Premiers with the Prime Minister in Canberra in January, 1929, when it was decided that " Railway Commissioners of Commonwealth and States should confer and bring up to date the estimate of the cost of carrying out the proposals for unifying railway gauges made by the royal commission on the uniform railway gauge, 22nd September, 1921 ".

The revised estimate was submitted by the Railway Commissioners on the 21st October, 1929. It excluded the Grafton to South Brisbane section, since completed. The details are as follows: -


This estimate includes provision for increased operating costs and the cost of transfer of passengers, livestock, goods, and other commodities during the conversion period, but does not include interest on moneys required for the work. The 1929 estimate was based on the then current rates of wages and prices of materials, and assumed that the work would be commenced not later than the 1st March, 1931.

The Railways Commissioners estimated that the preparatory work in Victoria would occupy approximately four years, and the actual conversion three years, making a total of seven years. The preparatory and actual work in South Australia was not expected to' occupy anything like this period, but would be co-ordinated so as to ensure the conversion on the most advantageous basis for both South Australia and Victoria. The work in Western Australia was planned to occupy approximately five years. The Commissioners stated : -

Once the work is started, it must be completed within the specified period of seven years, otherwise the railway transport services in two of the States (Victoria and South Australia) will be seriously disorganized, and the cost of the work materially increased.

Although it was estimated that the work would be completed in seven years, financial provision was proposed to be made during each of eight financial years. The Commissioners estimated that the moneys required for each year would be as follows: -


This expenditure, whilst heavy, is not nearly the equal of the annual capital expenditure in connexion with the railway systems of Australia For the eight years ended the 30th June, 1937, the capital expenditure, quite apart from ex penditure on the maintenance and operation of the railways, was as follows : -


It will be seen that, despite curtailment in depression years, the capital expenditure was approximately 66 per cent, above the estimated cost of the uniform gauge work.

The following table shows what the annual expenditure would be by the Commonwealth and by the States, assuming the Commonwealth made a contribution of 20 per cent., and the balance was borne by the States on a per capita basis, on a round figure of £21,000,000 : -


Mr Martens - Does the statement show to what extent the State Governments of New South Wales and Queensland have met their obligations with regard to particular lines?

Mr McEWEN - No ; but I shall be glad to secure the information for the honorable member. The statement provides an almost complete historical record of what has been done in connexion with this important matter.

Mr Hutchinson - Has the Minister any figures showing the contemplated saving each year if the standardization of gauges is proceeded with?

Mr McEWEN - No; but I shall make some references to savings presently.

Mr Drakeford - Has the Minister any estimate of what the Commonwealth would pay on a 331/3 per cent, and 50 per cent, basis, instead of a 20 per cent, basis as originally agreed upon?

Mr McEWEN - No. The apportionment of the cost, on the basis on Commonwealth paying 20 per cent., is given in the following table: -


This estimate was reviewed by the Federal Government and the State governments were advised that the Commonwealth re-affirmed the 1921 proposals and was still willing to pay one-fifth of the cost. The matter was listed for discussion at a conference of Commonwealth and State Ministers in February, 1930; but the item was adjourned for consideration by a subsequent conference. During the remainder of the life of the Commonwealth Government of the day no subsequent conference was held.

Since the estimate was revised by the Railways Commissioners in 1929, there has been a reduction of the basic wage under industrial awards, &c. The works would be carried out in the States of Western Australia, South Australia, and Victoria, and in those States the basic wage now shows reductions on those applying when the revised estimate was prepared in 1929, as follows: -


The reductions would not apply in the same degree to the skilled workers receiving wages above the base rate, but in any case they would be substantial. In addition to the reduction of wages referred to, there has been a reduction of the prices of materials since the 1929 estimate was prepared. It is estimated that labour charges on the actual work can be taken as representing approximately 50 per cent, of the total expenditure, although actually there would be a much greater percentage of expenditure on labour, because nearly all expenditure on sleeper supplies is labour, as also is the greater portion of the expenditure on rails and fastenings. As practically the whole of the materials to be used would be of Australian manufacture, wages would form a very large proportion of all expenditure. From these facts it will be seen that in the past the Commonwealth has not only accepted responsibility for a substantial share of the cost of the standardization of gauges, but also has done everything possible to advance the matter to a practical conclusion, in agreement with the States. Unanimity among the States however, was not achieved, and the responsibility for the non-completion of the standardization of gauges,as recommended by the royalcommission in 1921, does not therefore rest with the Commonwealth.

Another matter which should be referred to while this issue is under consideration is that of through railway freights. At present it is often cheaper to rail goods from districts adjacent to State boundaries for a longer distance to the capital of the producing State than to rail them the shorter distance to the capital of the neighbouring State. [Leave to continue given.] This is due to each State charging' its local rate as for a separate journey to and from the border for interstate traffic, instead of one continuous mileage rate on the tapering principle for the total distance being charged, as would be done for a journey of a similar total mileage within the State. This position must affect the flow of certain goods traffic such as grain, wool and livestock, to the nearest port, as well as increase costs to primary producers and entail the haulage of traffic over longer distances than that to the nearest port. Passenger fares and parcels rates are similarly charged. The areas principally affected by this unfortunate discrimination in respect of border rates are -

District - States affected.

(a)   Riverina (N.S.W.) - New South Wales and Victoria.

(b)   Northern (N.S>W)-New South Wales and Queensland.

(c)   West Darling (N.S,W.)-- New South Wales, Victoria, and South Australia.

(d)   South-eastern (S.A.). - Victoria and South Australia,

(e)   Mildura and Mallee (Vic.) - Victoria and South Australia.

There are certain exceptions where special competitive through goods and parcels rates, local special goods rates, and special throughintercapital fares are provided to meet competition by sea and road ; but generally speaking, this unfortunate discrimination in respect of border rates exists, and is a very serious factor.

An exhaustive analysis of the whole of the intersystem goods and livestock traffic in Australia for the year ended the 31st December, 1922, which occupied twelve months and cost £10,000, was made by the Australian railways commissioners. This analysis was made in order to ascertain the effect on railway revenue and freight charges to the public by the introduction of through-rating for goods and livestock traffic. The Australian railways commissioners refused, on account of the adverse effect on railway finances, to introduce the system of through rating. It was contended that a uniform system of rating, without regard to State boundaries, would tend to the gravitation of traffic to the market or port geographically entitled to it. Apart from the restraint on trade, commodities are hauled unnecessary distances, entailing very serious economic waste. Owing to the present rating system, in many cases railway hauls are much longer than would be the case if the traffic crossed the border en route to the market or port of the adjoining State. There is no uniformity in the classification of goods in the different Australian railway systems; neither is there uniformity in the scales of the tapering rates. Both the classification and the scale of tapering rates have been framed on a State, rather than an Australia-wide basis. Some year3 ago, the Australian railways commissioners made an exhaustive investigation as to the financial effect of through-rating interstate traffic as against charging the sum of the local rates as at present. The investigation was made in respect of traffic for the year ended the 31st December, 1922, and showed that there would be a total saving to railway patrons, in reduced charges on goods and livestock traffic, of approximately £272,000 per annum. This, of course, would mean a corresponding loss of income to the various railway systems. The analysis showed that the loss to New South Wales on account of the Riverina traffic going to Melbourne and the Northern Rivers traffic going to Queensland would amount to over £380,000 per annum, whilst, by conversion to this through-rating system, Victoria would gain about £96,000 and South Australia £38,000 per annum. Other systems would have minor losses. These figures do not include the parcels or passenger traffic. Since this investigation was made sixteen years ago, newfactors have developed. The expenditure of twelve months' labour by selected staffs in each capital city at a cost of not less than £10,000 is obviously notwarranted to bring the 1922 figures uptodate, as they broadly reflect- the present position with, of course, fluctuations of the actual financial result which is, in detail, unknown. Broadly, after taking all these new and changed factors into full consideration, it may be concluded that the introduction of interstate through-rating would result in great savings in freight charges and would encourage traffic to flow to its nearest port.. No doubt, it would involve serious losses of railway revenue in certain States and cause embarrassment to their railway finances, but that would have to be considered against the greater national aspects which are involved.

In 1936, the Commonwealth again listed the matter of standardization of gauges and through-rating for discussion at the Premiers conference held in Adelaide. The honorable member for Maribyrnong has drawn attention to the report on the subject contained in the proceedings of that conference. The matters were considered by a transport committee of the conference, consisting of Commonwealth and State Ministers for Transport. The committee, which displayed no enthusiasm for the further standardization of gauges, made the following recommendation, which was approved by the conference to which the honorable member for Maribyrnong has referred : -

In view of the progress which has been made in road and air transport, this committee considers that, before any decision is arrived at with respect of standardization of railway gauges, a further inquiry by a competent body should bc made, having special reference to the economic and defence aspects.

Mr Drakeford - Does the Minister consider the Transport Committee to be a competent authority?

Mr McEWEN - No ; but the whole matter has been under consideration hy representatives of all the railways commissioners in Australia since that time, who, in my opinion, are competent authorities.

Mr Drakeford - There has been no advertisement of that fact.

Mr McEWEN - The Transport Committee also recommended, and the conference approved -

That a conference of Ministers of Transport should be held at a date to be agreed upon for the purpose of considering railway and transport matters generally.

That decision, I have no doubt, was made because of the very genuine desire of my predecessor to achieve something definite in this direction, notwithstanding the entire lack of enthusiasm displayed by the representatives of the State governments at that particular time. The Commonwealth Government considered it desirable that the States be consulted regarding the preparation of an agenda for this conference of Ministers for Transport, and, early in 1937, it invited the States to nominate representatives as members of an agenda committee to confer with representatives of the Commonwealth in the preparation of a draft agenda. Meetings of the agenda committee have been held from time to time, and the Commonwealth proposes to invite the State Ministers for Transport to confer with Commonwealth representatives at a conference to be held early next year.

One subject, if not the most important amongst those to be considered by the conference, will be the standardization of railway gauges in Australia. This was placed on the agenda at the initiative of the Commonwealth and Victoria. That fact, I think, provides a complete answer to the charge levelled by the honorable member for Maribyrnong that this Government and its predecessors have been recreant to their trust in connexion with this issue. It is a live issue at the moment. I hope to be presiding within the next few months at a conference of Ministers of Transport, and I assure the House that if this matter is viewed with the same seriousness by the State Ministers for Transport as it will he regarded by me, we may look forward with confidence to some action being taken in connexion with this vitally important undertaking.

Mr Drakeford - Has the Government considered increasing its quota above the 20 per cent, originally offered ?

Mr McEWEN - That is a matter for discussion by the Minister for Transport. I shall raise no obstacle in that regard.

Mr Drakeford - The matter is one of importance from a defence point of view.

Mr McEWEN - The Minister for Defence will presently have something to say on that aspect. The break of railway gauges is the one thing which, perhaps more than anything else, emphasizes and tends to perpetuate State consciousness, thereby preventing the full realization of Australian nationhood, something we possess in name, but not in fact. I suggest that if we can eliminate this break of gauge we shall take a big step forward towards breaking down State consciousness, and towards removing the evils associated with it. It is not, however, sufficient to eliminate the physical break of gauge if we permit the continuation of the break of gauge on the rate books of the various railway systems. I know that to bring about a complete system of through rating would cause serious loss to at least one State, but I a.m not prepared to accept that as an insuperable barrier to the achievement of the ideal of one gauge and one system of through rating. All Commonwealth governments, irrespective of- party, that have been in power since the royal commission sat on this question in 1921, have been earnest in their desire to achieve a standard railway gauge for Australia. I hope that while I am in office I may be able to contribute something further towards the achievement of this objective, even if I am not able to bring the scheme actually to fulfilment.

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