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Victorian Railways 1956 57 VICTORIA VICTORIAN RAILWAYS REPORT VICTORIAN RAILWAYS COMMISSIONERS FOR THI•i YEAR ENDED 30TH JUNE, 1956 PHEI'Ei'\'IEil TO BOTH HOI'fH:R OF L'ARLL-\'.\IF.:\T PUIUWA:\'1' TO ACT HI OJW. V. ?\o. :n.;!l /f uthority . \V. \;L HOt SI UN. (;OVFRNi\1EN"I PRINTER. lvlELBOl;RNE. No. 2.-[3~. fkl.]-11400/56. CONTENTS. J' A(H,, Corr~Mrssw!'ir·:Rs' R~WORT fl HEAD!'\ OF BHA~f'HES .. 30 APPENDIX Balanr.e-shePt 32 Financial Results (Totals), 1-lummary of 2 :J4 Financial Re,;ults (Detai!fl), Sumnmry of 2A 35 ., Reconciliation of Railway and 'l'rt;asury Figures (Re\·emw nnd \\forking ~~XfHmses), &e. ,) :36 Working Expenses, Abstract of 4 :H Working Expenses and Earnings, Comparative Analysis of :) 38 Total Cost of Each Line and of Rolling Stock, &e. 6 40 General ComparatiYe Rtatt'ment. for Last Fifteen Y f'ars 7 46 Htatistie;;; : Passenp:en<, Goods Traffic, &e. 8 4~ Mileage: Train, Loeomotin~, and Vehiele H 50 Halaries arHl \Vage,;, 'l'otal Amount Paid lO ;-)] Staff Employ;•cl in yPars rndecl ;)()t.h .Tmte, 1\);)6 and 195!) 11 :):3 .Loeomoti ves, Coaching Stoek, G·oods and HPr\·iee Stock on Hooks 12 ;);) Railway Accident and Fire lusumnce Fund ]3 !):) Ht. Kilda-Brighton and Sandringham-Rlack Rock J;~lectric Tramways, Results of Working 14 56 The Chalet, ::\Ionnt Buffalo Xational Park, Result~ of Working, &c. 15 ':)7 New Lines Opt'ned for Traffie or under ConRt.ruet.ion, &c. 16 5K Mileage of Railways and Tracks 17 fiH Railways HtorPR Suspense Account. .. 18 60 Hailway RPnew<~ls and Rrplaeenwnts Fund Hl 60 Depreciation-Provision and Aeenml 20 HO Capital Expenditure in year,; endt>d 30th June, 1!fin and Hl:):-) 21 61 Passenger Traffic and Re\·enue, Analysis ol' 22 62 Goods and Live Stock Traffic and Rt>n:nue, AnalysiN of 2:J 6:3 Traffic at ('aeh Rtation 24 ()4 REPORT OF THE VICTORIAN RAILWAYS COMMISSIONERS FOR THE YEAR ENDED 30TH JUNE, 1956. VICTORIAN RAILWAYS, Commissioners' Office, Spencer-street, }1elbourne, C. 1. iJOth October. 1956. To the Honorable the Jifinistm· of Transport. Sm, In conformity with the provisions of Section 99 of the RailU'ays Act 1928 (No. 3759) we have the honour to submit our Heport for the year ended 30th June, 1956. The results of working the railway;.;, electric tramways and road motor services under our control were as follows :- · £ s. d. REVENUE 37,182,292 10 1 WORKING EXPENSES 38,268,206 7 5 DEFICIT ON CURRENT OPERATIONS 1,085,913 17 4 £ s. d. Interest Charges and Expenses (including Loan Conversion Expenses) 2,878,425 11 2 Exchange on Interest Payments and Redemption 128,189 1 5 Contribution to National Debt Sinking Fund 178,151 1 0 TOTAL INTEREST, EXCHANGE, ETC. 3,184,765 13 7 DEFICIT 4,270,679 10 11 The total revenue was £2,795,027 less than in the record year of 1954-55. The discontinuance from 30th June, 1955, of the recoup by the Treasury to limit the cost of interest and other debt charges to 1 per cent. of the railway loan liability accounted for £2,148,060 of the decrease. The balance of £646,967 was due to a decline of £1,853,201 in revenue from goods, particularly wheat, live stock and other items, which was largely offset by increased revenue from suburban passengers, mails and other sources. Had the interest recoup been continued for the year under review, the revenue would have been credited with an additional amount of £2,518,000, which would have reduced the deficit accordingly. The gross increase in working expenses of £2,237,000 compared with the previous year, comprised £1,488,000 representing higher costs beyond our control, such as increased wages under awards, cost of living adjustments and payroll tax ; £413,000 for long service leave and superannuation payments, and £336,000 for sundry other items. This increase. however, was considerably offset by operating savings made possible by the use of modern rolling stock and equipment (£773,000) and other savings (£462,000), leaving a net increase of £1,002,000. With a staff of nearly 30,000, wageti costs account for approximately 67 per cent. of the total ·working expenses. and obviously any increase in wage rates involves a substantial rise in expenditure. For instance, cost of living adjustments, paid by direction of the Government. represent additional costs of about £83,000 per annum for each Is. per 'Week increase. The cumulative effect of these increases which were made during the year under revie\Y involved extra expenditure totalling £810,000. More detailed information on finanee is given in t,he section heaf1ed " Financial Review". To the extent of the deficit, rail users obtained transport at less than cost. The incurring of deficits engendered by factors beyond managerial control, however, cannot be attributed to inefficiency of operation or maladrninistration. as is so often asserted by uninformed critics. 6 The raihvays were constructed to develop the State in the interests of the community as a whole, and many lines were built although there was no likelihood of their paying, or the prospect of their doing so was remote. Traffic conveyed on these lines is insufficient to make them a payable proposition and the inevitable losses involved cannot always be offset by the better results obtained on other lines of adequate traffic density. The indirect benefits obtained by the community from railway operation, particular!~· in the sphere of primary production, where the railways are the only feasible means of handling the bulk traffic involved, cannot be measured in direct financial terms and are all too frequently overlooked when the value of the railways and their financial results arc being assessed. Another feature of railway operations in this State not generally known is the extent of the freight concessions granted to country industries for raw materials on the " down" journey and on manufactured products on the " up" journey. These concessions range from reductions of 26 per cent. to 66 per cent. on tariff rates for raw materials despatched to the country, and from 15 per cent. to 68 per cent. for products, including canned and driedfruits, forwarded to Melbourne for local use or for export, and it is estimated that they involve a direct subsidy to the industries concerned of upwards of £1.000,000 per annum. The object of these concessions ha;:; been to foster decentralization of industry throughout the State, which has been Government policy for many years, but the Commissioners are strongly of opinion that this method of subsidization is wrong in principle. They feel that any country industry requiring lower freights to enable it to compete with industries located in the metropolitan area or in overseas markets should be assisted out of the Decentralization Fund after inquiry by the Joint Committee on l<"'reight Subsidies for Decentralized Industries which has been specially set up for the purpose. This is already being done in respect of a number of country industries and, if applied to all the industries concerned,· would result in (i) the railways receiving full tariff rates for all traffic carried ; (ii) no subsidies being paid unless found to be justified after full inquiry, and (iii) the payment of subsidies being subject to periodical review. The Commissioners fully appreciate and favour the policy of establishing industries in the country, but consider that a subsidy scheme should be adopted that will put an end to the present serious distortion of railway accounts. Goods traffic (excluding live stock) in 1955·-f)6 deelined by 380,482 tons (4 per cent.), compared with the previous year, while goods ton mileage-the measure of work performed-decreased by 6·7 per cenL due mainly to the shorter average distance wheat was hauled. A decrease of 375,489 tons in the volume of wheat hauled accounted for the decline in the total tonnage of goods carried. This was due to the {act that, in 1954-55, the quantity of wheat handled was abnormal owing to the decline in export traffic in the previous year. As a result, a large tonnage of wheat remaining in the country storages had to be cleared to make way for the new season's harvest. Considerable interstate traffic was lost to road hauliers who continued to operate without restriction~particularly between capital cities-following upon the Privy Council decision in the Hughes and Vale case referred to last year. Intrastate traffic is also being carried by road in large volume to and from Victorian border towns under the guise of interstate traffic. Substantial reductions in rates and intensive canvassing for interstate traffic resulted in the retention to rail of much existing business and in many cases attracted new business. There is no question. however, that a large tonnage of goods is regularly moving interstate by hauliers who do not pay licence or permit fees : who do not operate to fixed schedules : whose disregard of working conditions and other regulations is well known, and who have none of the obligations of common carriers, thus enabling them to select the most suitable a,nd remunerative traffic. Moreover, the cost of maintaining the highways used by these hauliers is borne largely by other road users. In this connexion, suggestions have been made, and no doubt will continue to be made, by vested road interests, that a " superhighway" capable of withstanding use b;r heavy road vehicles should be constrneted between the capita] cities. 7 The fact should not be overlooked, however, that special highways-the railways-already exist which are capable of carrying speedily and efficiently, all the traffic offering.
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