One apparent difference related to land values. The revenues of private rail
companies were boosted when the lines enhanced the value of land granted
them by government. In Australia, the government railways had no land
grants, except rights of way, and the government garnered some of this
‘developmental dividend’; and that very fact early became an argument for
subsidies to railways from general government revenues. For land-grant rail-
ways, the revenue gain was determined by the grants themselves; for state
railways, some official made a forecast or guess. This may have encouraged lax
capital and operating decisions.
Too much should not be made of this difference. Any land grants were, in
some fashion, the result of speculations about the size and nature of the‘devel-
opmental dividend’; and government assistance was not confined to land
grants—financial assistance to private lines was funded from general govern-
ment revenues, themselves dependent to some extent on the same‘dividend’.
Therefore, the chapter has to be content with suggesting plausible and long-
lasting consequences:
An innovative form of governance—Railway Commissions—which was
refined and adopted widely, and not only for rail- and tramways.
The commission system reinforced a tendency of Australian parliaments
to establish‘independent’or expert bodies, with considerable power to
make decisions.
The Australian public grew accustomed to government monopolies and
more dubiousabout the benefits of competition between privateenterprises.
The state railways provided a strong impetus towards unionization, and
the forging of solid links between unions and the ALP.
For many decades, Lang’s aphorism held true:‘As goes the rail revenues,
there goes the state budget.’
When motorized transport became more attractive, governments dis-
torted modal choice through regulations designed to protect their largest
asset, the railways.
Rail assets continue to be used to provide services that make losses that
cannot be easily justified on grounds of beneficial spillovers or their
distributional incidence.References
Abbott, G. J. 1974.‘Martindale, Ben Hay (1824–1904)’inAustralian Dictionary of
Biography, vol. 5. Melbourne: Melbourne University Press.
Abbott, M. 2014.‘The limits of socialism: the New South Wales Labor Party and the
proposal to nationalise the gas industry’,Labour History, no. 107, pp. 115–27.
Jonathan Pincus