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Keating, grasping at straws



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D A V ID H a w k e r : Federal Member for Wannon A USTRA LIA yi> Shadow Minister for Land Transport

M e d i a R e l e a s e

KEATING. GRASPING AT STRAWS

The Prime Minister is showing his lack of economic credentials by sinking $1 billion into a rail system that loses over $5 billion each year without addressing the underlying problems that cause such massive losses.

Rail is the biggest loss-making enterprise in Australia and Mr Keating is willing to throw $1 billion of taxpayers' money at it for short-term political gain.

This is the first time in years that this Government, and Mr Keating as Treasurer for 8 years, has shown any financial interest in rail (see attached chart), and it is going about it in the wrong way.

Rail reform is a key priority in Australia's microeconomic rehabilitation. Not only is there substantial safety and environmental benefits involved in sharing the freight load between road and rail and reducing the growth in the amount of traffic on our major corridors, but there is tremendous scope for increasing efficiency. With cheaper

transport costs, a significant boost will be given to our mining, agriculture and manufacturing export industries.

The Industry Commission estimates that improving efficiency in government railways, by moving to international best practice, could increase Australia's gross domestic product by over $5,000,000,000 each year. This translates into an extra $300 income for every Australian each year, whether or not they use the railways.

The Coalition recognises that rail needs a boost. Under Fightback! rail will save nearly $260 million by abolishing fuel excise and payroll tax alone, let alone the other benefits. Rail reform does not, however, simply mean pouring more money into the rail network. The huge inefficiencies in our rail system need to be addressed if we ever hope rail to be a credible, competitive, alternative to road transport. There is also a need for the

people that benefit from rail to share more of the cost of providing the service.

Examples of the inefficiencies in our rail systems are far too numerous - railway stations employing 29 people and no trains; freight trains that carry nothing but sleepers to replace the sleepers on the track it is travelling on; paying 400 people to work out routes when it is done by two people and a computer overseas; and using 20 people to maintain

a train set when 4 multiskilled people can do the job. Some governments are attempting to address these problems - other States could and should do much more.

COMMONWEALTH parliamentary LIBRARY m icah

The proposed National Rail Corporation (NRC), if it achieves what it is supposed to achieve (fully commercial interstate rail), is a small step in the right direction. The NRC will only account for 12 per cent of total rail freight. Even this small step is proving too hard for the Government. No Government funding is supposed to go to the NRC unless

enterprise agreements are in place between employers and employees. At least the Government had recognised this need, yet Mr Keating is going to throw $1 billion away without addressing this area.

The most unfortunate aspect about pouring $1 billion into our rail systems as they stand now is that the jobs that will be "created" will only be for the short-term (the very cynical would say for about 14 months - or until the next election!).

If sustainable employment is to be found for the 1 million people Mr Keating has forced into dole queues, it cannot come from short term political "fix its". Confidence is needed. And confidence can only come from investment in sound, competitive enterprises. Rail can become one of these if it puts its mind to it - all the money in the world will not help

it if it does not want to be helped.

ends 13 February 1992

Contact: David Hawker (055) 72 1100

Janice Wykes (06) 277 4231 or (06) 288 3946

FEDERAL ALLOCATIONS TO THE STATES FOR RAIL INVESTMENT (excludes Australian National Railways)

YEAR $million

1969-70 20

1970-71 8

1971-72 6

1972-73 3

1973-74 33

1974-75 62

1975-76 34

1976-77 58

1977-78 51

1978-79 42

1979-80 47

1980-81 60

1981-82 61

1982-83 65

1983-84 11

1984-85 7

1985-86 7

1986-87 5

1987-88 3

1988-89 0

1989-90 0

TOTAL 583

Source: "Mobility in a Clean Environment": Australian Railways Union/Australian Conservation Foundation