P. M. No. 4+ 3/ 1959
MT. ISA RA LWAY
Statement by the Prime Minister
In August I concluded a published statement concerning
the actions of teCommonwealth in relation to the Mt. Isa
railway project with these words:
" All that need be said at this stage is that the Queensland
Government and my owm are both active and co-operative, since
we are both enthusiastic about the project, and will do all
that we can to see it completed as a whole, in the interests
of both mineral and pastoral development in Northern Queensland."
Today, I am, able to publish a letter from myself to
Mr. Nicklin, Premier of Queensland, dated 26th October and a reply
from him which I have received today. Some details will
have to be worked out on the official level but they will not, I
imagine, create any difficulties.
In effect, therefore, the great problem of the financing
of the rehabilitation of the railway from Collinsville to
Mount Isa in North Queensland will be solved and a new era of
North Queensland development will be opened up. When it is realised
that in addition to the œ C30m. which will be spent by government,
the Mount Isa Company will spend substantially more
than that sum in developing its mining production, it will be
seen that the total project is of immense magnitude. When both
the mine development and the railway rehabilitation are complete,
there will be not only groat improvement in Queensland railway
finances and in employment in many ways, but there will also be
a very large addition to both Queensland industry and to national
export income. I do not need to recapitulate the actions of the Commonwealth
on this matter. Up to a very recent point, I explained
them fully in a statement which was widely published in
the Queensland press.
Mr. Holt, on his recent journey abroad, conducted,
with the Secrotary to the Commonwealth Treasury, Sir Roland Wilson,
a close examination into all possible sources of special
borrowing for the Mount Isa railway, including those which had
been suggested from the Queensland end. It turned out that
there was no imrnadiate prospect of such a loan-raising. This
was, from our point of view, unfortunate; since to obtain the
money overseas would have had the dual advantage of strengthening
our overseas funds while at the same time helping to finance
this great enterprise in Australia.
I want to make it quite clear that from first to last
we have been tremendously keen on seeing this job done. I myself,
as is well known, have devoted a very great deal of time
and effort to solving the problems involved.
Upon considering Mr. Holt's report, we were naturally
disappointed. Since the Commonwealth Budget is already in deficit,
it is no simple matter to accept added burdens. But we
felt that the time had comeo when a very special effort should be
made by us to assist Queensland in this matter. After close deliberation
with the Treasurer, we agreed that we should in effect
put the Cormmonwealth in the position which the World Bank
would have occupied had the recent lean negotiations succeeded;
except that we would not, as the lender, insist upon the conditions
which the World Bank found it necessary to put forward.
This is not a criticism of the World Bank, which has treated
Australia's requirements with marked consideration over a long
term of years. But we are not the Bank's only customers by a
long way; and it found it impracticable to give terms in respect
of the Mount Isa railway loan which it had denied to other customers.
In the result, the Commonwealth will find œ C20m, in the
earlier stages from its own resources but later on, if that
turns out to be possible, by some borrowing abroad at a future
date. As between the Queensland Government and ourselves we
guarantee to underwrite the œ C20m. on the basis set out in my
letter to Mr. Nicklin and which he has told me is satisfactory
to him. It will be widely realised that this has been a big decision
for us to take. W~ e have taken it because we have a great
faith in the future of North Queensland and have felt all along
that this railway undertaking is the key which can unlock the
door to major developm~ ent.
I would like to be allowed to add for myself that I
ara very happy to be able to announce these arrangements, and
that I am confident of the great State and national benefits
which will flow from them.
CANBERRA, 29th October, 1959.