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Thursday, 30 September 1971
Page: 1783

Mr CHARLES JONES (Newcastle) - Mr Deputy Speaker, the Bill before the House provides for a small amendment to the Railway Agreement (Western Australia) Act. The Railway Agreement (Western Australia) Bill was introduced into this House in October 1961 by the Right Honourable Robert Gordon Menzies. It was designed to ratify an agreement between the Commonwealth and Western Australia for the completion of what now can truthfully be described as the Transcontinental Railway, connecting Sydney on the east coast with Perth on the west coast and continuing down to Kwinana. At that time the then Prime Minister outlined to the House the terms and conditions of the agreement. The Bill set a time limit and, by rights, the agreement should have been terminated by 30th June this year. However, because of complications in Western Australia the work was not completed by that date. As a result the Government, I think sensibly, has extended the time for completion of the work and has placed a limit on the amount of money which can be spent on the work. I hope that at some stage - probably when he replies - the Minister for Snipping and Transport (Mr Nixon) can indicate what will happen if for some unforeseen reason the amount of $125m, which he has stated has been set aside for the work, is exceeded. I have been assured that the amount will not be exceeded, but if it should be I hope that the Government will be sympathetic and show a reasonable degree of understanding to ensure that sufficient money is made available to complete the work.

There are several other matters concerning this agreement to which I will refer. This railway is another milestone in the development of rail standardisation which has been talked about in Australia for more years than most of us have been on this planet. I believe that in .the original agreement the then Prime Minister adopted a very niggardly attitude towards the Western Australian Government in regard to the terms of the agreement, and unfortunately this Government has not seen fit to give any relief to the Western Australian Government or to the Western Australian railways. The figures which were tabled in 1961 by the then Prime Minister indicated that the estimated cost of the railway was $82,400,000. I will use that figure rather than the figure of £41,200,000, which was used at that time. The Western Australian Government had to provide $12,400,000 out of its own Consolidated Revenue. This meant that the Commonwealth had to provide funds to the extent of only $70m.

The unfortunate thing about this matter is the formula which the then Prime Minister adopted. Basically this is a rail standardisation project. It provides for the conversion of the railway from a 3 feet 6 inches gauge to the standard gauge of 4 feet 8i inches. Yet the Government at that time - and this Government is continuing the anomaly - decided that one-half of the cost of this railway should be credited to a development project. This meant that the Western Australian Government had to pay the whole of the cost of that development, and that the standardisation formula would be applied to the remainder of the project. The Western Australian Government has to meet 100 per cent of one-half of the cost and the Commonwealth had to meet 70 per cent of one-half of the cost. In plain terms it meant that the Western Australian Government had to provide $12.4m out of its own Consolidated Revenue, and that under the formula which was adopted, out of Commonwealth funds the Western Australian railways had to provide ten-seventeenths of $70m, or $4 1.2m, making a total of $53. 6m, and the Commonwealth had to provide only $28.8m.

We must bear in mind the fact that the original agreement between the Commonwealth and' Western Australia was entered into in 1961. Only 3 years earlier - almost to the day, but at least to the month because it happened in October 1958 - a similar rail standardisation agreement was entered into between the Commonwealth and the States of New South Wales and Victoria. That agreement provided that the Commonwealth would make available 100 per cent of the funds for the conversion of the Victorian railway to the standard gauge of 4 feet 8i inches. The Commonwealth made available the whole of the funds and New South Wales and Victoria had to provide only 15 per cent each of the total funds, by way of repayments to the Commonwealth, making a total of 30 per cent of the total funds. The standardisation formula which was applied in that instance provided that the Commonwealth would contribute 70 per cent of the funds and that the 2 States would each contribute 15 per cent of the funds, making a total of 30 per cent. The richest States in the Commonwealth received treatment which was most favourable compared with the treatment meted out to Western Australia, although Western Australia has the largest area of all the States. It is one of the smaller States in terms of population and it has considerable problems associated with distance.

One of the first major developmental projects in Western Australia was the decision of Broken Hill Pty Co. Ltd to build at Kwinana an integrated steelworks - provided rail standardisation was provided - which would process some 2 million tons of ore mined at Koolyanobbing. That works was expected to produce from 2 million tons of ore some 450,000 tons of pig iron or 330,000 tons of finished steel products. However, immediately this project was announced the Menzies Government was not prepared to deal sympathetically with it and provide all the funds required. That Government would not apply the same formula to Western Australia as was applied to New South Wales and Victoria. I think this is a serious anomaly and I hope that this Government or some other government in the years to come will give sympathetic consideration towards assisting the Western Australian Government with its railways system.

There is a serious anomaly when one considers the treatment that was meted out to the Western Australian Government and particularly when one updates the figures.

The Minister for Shipping and Transport in his second reading speech said that the current estimate of the cost to complete the project is $125m and of that amount the States will have to provide from general revenue funds $18,750,000 and the remaining $106,250,000 is to be provided by the Commonwealth. The catch is still there. The Western Australian Government will still have to repay $62.5m of that amount of $106,250,000. This is based on the Menzies formula of ten-seventeenths of the funds provided by the Commonwealth. The State will also have to meet the interest payments on that $62.5m.

The failure of the Government in not applying to Western Australia the formula which was applied to New South Wales and Victoria is not the only anomaly. When money was provided in 1961 most of the Commonwealth funds made available to the States was money which the Commonwealth raised by means of income tax, company tax, sales tax and other forms of taxation available to it. In effect the Government became the money lender. The Government provided the money for rail projects and the States have had to pay from 6 per cent to 7 per cent interest on the money loaned to them. The amount of interest varies because the money made available is by way of annual grants and in recent years we have seen the long term bond rate climb from 6 per cent to the present rale of about 7 per cent. As far as the Commonwealth is concerned it may well be that by the time one portion of the loan, which is over a period of 20 years with the remainder over a period of 50 years, is paid and the interest is also paid the Commonwealth will have made a profit on the rail standardisation project from Kalgoorlie to Kwinana. Even though this line goes to Koolyanobbing it will in reality be between Kalgoorlie and Kwinana.

It is important to bear in mind the repayment figure of $62. 5m plus the interest rate of 6 per cent to 7 per cent on the money made available to the Western Australian Government. That Government will be committed to a total cost of $81,250,000. Once again we should compare this amount with what would have been the case under the rail standardisation agreement between the Commonwealth and the State governments of New South Wales and Victoria. If the formula had been applied to the Western Australian Government that State would have had to pay only $37.5m, a saving of about $43 .75m. The Western Australian Government has received no favourable treatment whatsoever from this Government whereas the 2 wealthiest States of the Commonwealth - New South Wales and Victoria - have received quite substantial and favourable treatment. The formula applied to New South Wales and Victoria should likewise be applied to this project. No-one can deny that this project is part of rail standardisation connecting the capita! cities of this country. In the last 20 years the outstanding debt of the Western Australian State Railways has increased from S59m in 1950 to $161.7 in 1970. In that same period the amount of interest has increased from §2. 186m in 1950 to $6.574m in 1970.

It is because of the substantial increase in interest rates that the State railway systems are today moving for substantial increases in freight rates and in passenger fares. New South Wales and Victoria have both substantially increased these rates at about an average of 50 per cent and some went as high as 70 per cent and 80 per cent. I believe there has been a similar increase in Western Australia. The Minister for Shipping and Transport also recently announced increased passenger fares of about 20 per cent on the Commonwealth Railways, which uses the Australian railways system. There have been substantial increases in freight charges. All these increases have an important bearing on the cost structure of this country. I would hope to see this Government or a future Commonwealth government make a serious review of the whole question of rail freights, rail passenger fares and the capital debt of our State railway systems with a view to giving financial assistance to them. The Commonwealth provides subsidies for civil airlines. Last year airlines in Australia were subsidised by the Commonwealth to the tune of $50m or $60m. This figure is difficult to work out exactly. The Commonwealth provided the money for the construction of airports and associated charges in the airline industry. We have had subsidies paid in respect of various developmental air routes. I believe that the amount paid last year was $2m. But this amount of money is not made available to State governments for their railway systems. In the Estimates for this year an amount of Si 8m has been made available for the shipbuilding industry. I do not disagree that these subsidies should be paid - and this particularly applies to the shipbuilding industry - but I am just drawing attention to the favourable treatment this Government gives to one industry and not to another. The Minister can smile. I have in my electorate a shipyard and I agree that a subsidy should be available for this industry. I think the Government should be looking at ways and means of assisting the Australian railways industry by subsidising the construction of rolling stock the price of which in many cases does not compare with the price for which it can be purchased overseas.

I want to refer to the finance made available by the Commonwealth by way of a subsidy for the construction of roads. The Government will make a considerable profit this year from the additional duty imposed on fuel. I believe that during the term of the present Commonwealth Aid Roads Agreement the Commonwealth will pay to the States $ 1,252m. I estimate that the Commonwealth Treasury will finish up with a surplus of $750m from the additional revenue received from the fuel tax. Some of this money should be used to assist the States to make their railway systems more attractive, particularly the suburban transport systems so that people will prefer to use this form of transport instead of driving their cars into the city. The suburban rail transport systems in Sydney and Melbourne in particular can carry about 30,000 to 40,000 people per hour, compared with the highways, expressways and freeways which are being built into the capital cities which carry about 2,500 people per lane. A 6-lane highway, with 3 lanes each way, will carry about 7,500 people compared with the figure of between 30,000 and 40,000 people that can be carried by rail, depending on the type of train being used.

This is where money should be expended. When I make a plea on behalf of rail transport I can quote any number of cases. I have quoted the figures for other types of competitive transport such as road, air and sea transport. I believe that about $28 lm is paid as a subsidy to primary industry and secondary industry to which I have made reference already. There are any number of grounds why the Government should have looked more favourably on the Western Australian Government and given it a better arrangement in relation to the repayment of the money lent to standardise the railway from Koolyanobbing down to Kwinana.

I was a little disappointed with the Indian-Pacific Express. One would have to go a long way to better the comfort on that train, and I have no unfavourable comments to make about that. We have a new train, a new line and Commonwealth money was provided to upgrade various sections of the New South Wales line between Parkes and Broken Hill. I think that about $10m was made available. Money has been provided to complete the Broken Hill to Port Pirie section. I think that everyone expected a train which would be comparable, in relation to time - it is comparable in relation to comfort - with other trains throughout the world. Having in mind the long stretches between stopping points, I had hoped that the journey from Sydney to Perth would have been much faster. The train leaves Sydney at 3.15 p.m. on a Monday and a Thursday, and does not arrive in Perth until 7 a.m. on the Thursday and the Sunday. That is a total actual travelling time of 65 hours 45 minutes. This represents an average speed of a little over 38 miles per hour and an actual travelling speed of 45 miles per hour..

I will not for one second try to compare it with the new Tokkaido Express between Tokyo and Osaka, but there are many trains throughout the world with which the Indian-Pacific Express could be compared. I would like some indication from the Minister as to what the position is. Have the Commonwealth, New South Wales, South Australian and Western Australian railways any plans for speeding up the journey so as to reduce as far as possible the travelling time between our east and west coasts? I think that there is a need for it. I would like some information from the Minister as to why the average speed is only a little over 38 miles per hour. I believe that it is about 38.5 miles per hour and the actual travelling speed is about 45 miles per hour. Having in mind the long distances between stopping places, it would be quite easy to> obtain; a decent speed for the whole of the journey. The Opposition supports the proposal because it is a reasonable approach to a situation which has developed and for which no-one is to blame. Unfortunately, as I have said many times in my speech this afternoon, it perpetuates an unfair and unreasonable financial arrangement between the Commonwealth and the State.

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