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Wednesday, 27 October 1971
Page: 2613

Mr CHARLES JONES (Newcastle) - The Bill before the House at the moment is a Bill to ratify an agreement between the Commonwealth and the State of Tasmania to lend to that State a sum of $4,250,000 of which $2,500,000 will be by way of a repayable loan at the normal long term bond rate, which I believe at the moment is 7 per cent, and of which $ 1.75m will be by way of a nonrepayable grant. The object of this bill is to permit the State to build a new railway line from Launceston to Bell Bay. It is a railway which, in my opinion, is long overdue. It should have been built many years ago to assist the development of the northeastern section of Tasmania and the establishment and growth of industries in a State that has problems. Being an island it has transport problems that are not associated with the mainland. It is regrettable that this agreement has taken so long to negotiate.

While the Opposition supports the measure, it believes that the Government should have been prepared to make the money available at a much earlier date than is proposed. One of the sound features of this Bill is the provision that the Tasmanian railways will be required to repay the loan within a period of 30 years by way of 60 equal repayments. This is an arrangement which should be introduced in respect of all the railway systems throughout the Commonwealth because many of them still owe money on rolling stock or lines that are no longer in use or perhaps in existence. The systems still owe money on tracks that have become redundant because services are no longer required or are uneconomical to run. In many cases railway departments have removed the lines and dispensed with the systems altogether. Rolling-stock has become antiquated and has been disposed of. The result is that these items no longer produce revenue to be used to repay loans that were raised originally to build the tracks and purchase rolling-stock. Railway systems as a whole throughout Australia find themselves in the ludicrous position of not having a source of revenue in these antiquated assets or even non-existent items. The result is that today the systems are heavily burdened with debt.

I have said on a number of occasions in the House that it is time the Commonwealth did something to assist the States to liquidate their outstanding indebtedness. As I said a moment ago, the pleasing feature of this legislation is that the State of Tasmania will be required to repay the loan within a certain period. I hope that the proposed line will be sufficiently profitable to enable the loan to be repaid in the manner laid down in the agreement. This arrangement will put the Tasmanian railway system on a much better basis economically to operate efficiently in the interests of the State. If one examines the indebtedness of the Tasmanian railway system, one finds that the figure increased from $6,794,000 in 1950 to $20,848,000 at 30th June 1970, which is the latest date for which figures are available. The interest payments which this small railway system in a small State has had to make - and it is interest payments that are crippling the railway systems of Australia today - increased from $268,000 a year in 1950 to $1,185,000 in 1970.

I hope that the Commonwealth will be able to devise ways and means whereby it will be able to assist not only the Tasmanian system but also the railways systems as a whole. Let us take as an example New South Wales. In 1970 interest payments by that State in respect of the railways' indebtedness amounted to $35m and it is expected that they will be about $40m next year. No railway system, no matter how profitable or how efficient it is, can carry this sort of burden and continue to function. I am glad that the Commonwealth has imposed these conditions of repayment - harsh though they may appear to be - but in reality, I believe, this arrangement is in the interests of the Tasmanian railway system as a whole. The Opposition supports the measure and gives it a speedy passage.

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