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Thursday, 11 October 1956

Mr CLEAVER (Swan) .- I direct the committee's attention to Division 280 of the Estimates, item 23, being an amount of £60,000 as a subsidy for the city omnibus service in Canberra. That figure represents the anticipated loss on the operation of buses in the federal capital city. I find, further, that by reference to the annual report of the Auditor-General upon the Treasurer's statement of receipts and expenditure and other accounts for the year ended 30th June, 1956, on page 30, item 48, there are details relative to the transport section, Canberra. 1 quote from portion of the Auditor-General's report -

Receipts of the Trust Account include appropriations of £70,000, which was last year's subsidy, to cover the estimated loss on operation of buses.

It is that point I use to justify the emphasis- I make that this subsidy of £60,000 is tocover the anticipated loss on the operation, of buses in the capital city of Canberra for this year. This transport service in Canberra is, of course, a government service and I wish to emphasize the point that the estimated loss of £60,000 must be added to the ever-growing list of deficits of transport systems administered by governments across this country. I also desire to impress upon the committee, as indelibly as I can, that deficits of this nature are incurred by governments notwithstanding exemption from sales tax and petrol tax, so far as Commonwealth government departments are concerned, and also registrationfees. Then, in many cases preferential treatment in respect of revenue tax imposed by State transport boards is also enjoyed. Government-operated transport in Australia has a sorry record which spreads back over many years. Deficits of many millions of pounds are accumulating year by year on government transport systems, such as the government transport buses here in the City of Canberra.

The Commonwealth and State governments are only too well aware of this fact. The problem, is, of course, increasing; the deficits each year become more alarming to us all. Some governments, such as the socialist government of Western Australia, my own State, are spreading out eager hands, as it were, to take over private transport companies. To me, this is purely an extension of political power. 1 am convinced that unprofitable transport operations will soon replace the good services and successful operations of private enterprise.

To-night, I affirm the soundness of the Liberal principle of private enterprise. I am sure that in this enlightened age the people of this country will readily accept the view that if companies or individuals have determination, will to win and preparedness to work, their operations invariably are successful. The Canberra bus service admittedly presents an unusual and complicated problem. Those of us who know the difficulty of moving round Canberra will agree that the geographical dispersal of the suburbs of the city is responsible for the buses running over many miles of roads on which they pick up no- passengers. I admit that the passenger bus industry, as a whole, is a sick industry. An extract from an article published in the " District News " - an American newspaper - on Sunday, 10th June, is interesting in that connexion, lt is as follows: -

It was the biggest cities that first felt the impact of the problem. In one city after another, transit service has become unprofitable unless subsidized. . . Since World War II., when millions had no choice but (o ride the buses and street cars, the patronage of transit lines nationally has shrunk by half. On the average the rale of fare has been doubled. But this desperate effort to keep pace with rising operating costs has served only to hasten the loss of riders. It is a sickness that in all logic should prove fatal, though it won't, lt won't because few cities, large or small, can afford to do without transit service. Even if everybody should acquire his own automobile, the need for public transportation would still persist. For one thing, there would be no room for all the cars.

Mr. F.J. Spellacy, the chairman of the Passenger Section of the Australian Road Transport Federation, stated -

During the past few years the heavy increase in numbers of private cars in use has affected the passenger traffic on buses and trams to an alarming extent, until this traffic has been reduced principally to workers travelling to and from places of employment, whose carriage necessitates the provision of rolling stock for morning and afternoon peak-hour traffic, leaving the bulk of rolling stock idle for the rest of the day, andschool children travelling on concession fares, again only during morning and afternoon peak hours. These conditions, coupled with generally increased operating costs, have seriously affected the financial stability of the road passenger transport industry, and this condition is evident in the heavy deficits which have been disclosed during the last few years by government bus services. The same circumstances which have brought financial difficulties to government services have also affected private companies, until the ability of the latter to absorb increased costs and maintain their services is exhausted. 1 speak of the problem as it relates to Canberra, but I want to support my argument with examples taken from other parts of Australia. Like the secondary cities of the United States of America, our cities are facing the possibility that private operators will be forced out of the passenger bus industry under a nationalization plan. The Western Australian Government recently indicated a proposal to nationalize passenger bus transport in Perth by the formation of a transport trust. One private company which would be affected is the Metro Bus Company, which has served the people of the city and suburbs so effectively for the last 30 years. With the vision and drive of private enterprise, the company expanded greatly, lt began its operations with only 31 passenger units, but to-day it has 126 units, lt is operating on a profitable basis, but only just, because it has to pay various fees and taxes. Its competitors, the government services, are virtually exempt from those charges, but, nonetheless, they accumulate terrifying deficits year by year. That discrimination is a grave injustice, for it threatens the very existence of privately operated omnibus services throughout the Commonwealth.

A significant point to note is that in the whole of the national transport system only privately operated omnibus services and several railway companies, including the Midland Railway Company of Western Australia, pay sales tax on equipment and maintenance supplies. In Western Australia, although private services and government services operate on a common-fare schedule, there is a great disparity in their overhead expenses. Government undertakings pay no road licence-fees, but private companies are required to do so. Government undertakings pay only 1 per cent, of their gross revenue to the Transport Board, but the private companies are called on to pay 6 per cent, of their gross revenue. Government undertakings are exempted entirely from the sales tax. but private companies pay at the rate of 16J per cent, on their equipment and supplies.

It is apparent to me and I am sure, to all thinking persons, that the treatment of this section of the transport industry represents an anomaly. If we want to avoid paying a subsidy of £60,000 to the Canberra bus service, and if we want private enterprise to operate transport services in Canberra and elsewhere in Australia, that anomaly must be corrected. The Passenger Section of the Australian Road Transport Federation and the highest transport administrative authorities in New South Wales and Victoria have expressed their concern about this matter. No request is being made for subsidies or for special concessions. The request that has been made by private company after private company, and by those who would protect private enterprise in this field, is that the private passenger transport section of the transport industry shall be placed on an equal footing with all other sections of the industry. Why should there be the disparity that I have referred to? Why should there be unequal treatment of government undertakings and private companies?

To-night I ask the Minister for the Interior (Mr. Fairhall), who is responsible for the operation of bus services in the federal capital, to explore the possibility of private company administration of the Canberra bus services, provided tax concessions are available. I do not claim that that is possible of achievement overnight, but I believe that it would not take very long to consider and implement the proposal. I urge the Treasurer (Sir Arthur Fadden) and the Government to approve the requests in respect of sales tax exemptions which I know have been submitted by the private omnibus companies. The continued existence of essential services depends upon a measure of co-operation by both the State governments and the Commonwealth. The present inequitable and anomalous situation could be adjusted by granting sales tax exemptions. If that were done, private companies would continue to serve the people of our cities and towns as well as they have served them in the past. Instead of nationalized services, adding to the already out-of-hand government transport deficits, we should see private enterprise providing satisfactory services on a profitable basis.

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