Debt has reduced slightly to $916m.
http://www.artc.com.au/library/annual_report_2014.pdf
Paying off the $916 million debt would be a better use for the dividend.
... Given that taxpayers' money has been poured into ARTC (and I am not criticising that situation) it may be a good thing that a small dividend has been paid? Value for money, and all that?
That money goes into specific rail infrastructure projects. Meanwhile the federal guvmnt funds road infrastructure and doesn’t receive any dividend payments from the relevant state road authority.
Called fuel taxAnd income tax, and GST, and corporate tax when not dodged, and every other source of money which ends up in the general revenue pot.
It's all relative really. 36 mill is a drop in the bucket for the Government coffers but given the scarcity of funding is money ARTC could spend quite effectively with demonstrated benefits on a network that has suffered chronic under investment for years. But we are told we must get the federal budget in surplus!!!!!
And income tax, and GST, and corporate tax when not dodged, and every other source of money which ends up in the general revenue pot.
Road usage costs take all of the directly road-related income and then require huge amounts of subsidy from general revenue over and above that. I'm not just talking about the cost of building and maintaining roads, but the full cost of road usage - which includes things like the massive health expenditure incurred by Australia being one of the world's fattest nations and on course to become number one in the next few years.
If more people rode bikes for private transport (benefitting the economy by $1.05 per kilometre, and the user by in excess of 80¢ per kilometre) and more freight transport was diverted to rail, the cost of subsidising motor vehicle usage could gradually be brought down to the point where it became close to sustainable.
The fuel excise is $18B, I highly doubt its less than the total cost of operating the road system. I couldn't find the actual amount spent in the short time I looked and then it gets messy as states also spend as well.
EDIT: I found a number of $14B for roads in 2013-14 budget and $4.5B for rail.
So we can pay of 7 years of increasing debt. So yes it is important.
...Given there's a clear need for additional capital expenditure on the network, pulling a dividend out of ARTC seems a bit silly. Beyond political driven "pay us a dividend so the budget looks better" type nonsense ...
That doesn't make sense. As MD says, you either pay a dollar towards a dividend, or you pay a dollar off your debts.
All petroleum fuel consumers initially pay excise, but then the non-public-road users mostly get that excise back as a rebate. Your $18 billion doesn't take that into account (or you are talking about net excise plus other stuff). After taking that rebate into account the net excise is expected to be about $9 billion in the budget for the financial year that is currently under way.
This mob have a nice summary of road charges and costs: http://www.bitre.gov.au/publications/2013/yearbook_2013.aspx - see tables T1.2d and T1.3 I would expect there to be a 2014 update soon, but historically it appears they like to be a little creative as to how often a yearbook should be published.
Given there's a clear need for additional capital expenditure on the network, pulling a dividend out of ARTC seems a bit silly. Beyond political driven "pay us a dividend so the budget looks better" type nonsense (which I'm sure goes on), I suspect this indicates that "ongoing" operations had spare cash (so here owners - you can have some of that back - plus we'll pay off $160 million or so of our debt), but separate to that there are quite a few "special" projects that are being funded by grants and equity injections.
(Having a quick look through the annual report there was no equity injection but there was $50 million against grants.)
That doesn't make sense. As MD says, you either pay a dollar towards a dividend, or you pay a dollar off your debts.
I've pointed out previously the absurdity of ARTC having to take on debt to build national transport infrastructure.
Last year borrowings cost it $57.1m, up from $46.8m the previous year. Throw in the $36m dividend and that's $93+m that could have gone back into... buying more ballastExtrapolated over the next 10 years it could be a billion lost to rail and further proof that road vs rail funding isn't a level playing field.
I've pointed out previously the absurdity of ARTC having to take on debt to build national transport infrastructure.
Last year borrowings cost it $57.1m, up from $46.8m the previous year. Throw in the $36m dividend and that's $93+m that could have gone back into... buying more ballastExtrapolated over the next 10 years it could be a billion lost to rail and further proof that road vs rail funding isn't a level playing field.
Not all of ARTC's infrastructure has a primary role of being "national transport infrastructure". ...
I noble effort I suspect. In the grand scheme of things it is chump change.
Why would the government demand a dividend?
I think there is a very strong case for separating out the Hunter coal network from ARTC (in terms of financial reporting/administration). ATM there is tremendous scope for ARTC to be a front for back-door unrecognised subsidies to the coal industry. There is similar scope for it to collect an unwritten coal tax (like Queensland used to?). If the Hunter network is sold, I think careful thought as to the possible ownership structures needs to be made. It would be far better if it were run by some sort of co-operative controlled by the miners but with a constitution preventing individual players taking complete control. Such restrictions would lower the sale price of course, but the alternative increases the sale price because the government essentially sells it's right to levy transport taxes on the mining industry.
If ARTCs losses are $500 million a year, that means that its track access charges are waaay too low.
So why not raise the charges to at least break even.
(djf01's figure is a gross exaggeration, perhaps by a factor of five.)
Because customers will just give rail operators/ARTC the finger and put their containers on a truck.
What the Balance Sheet numbers say is $5bil more has gone into ARTC than has come out. (It showed roughly the the same over a 10 year period from 2002 to 2012, which is how I came to the "loses $500mil a year"). Is it *really* worth $5bil more than it was in 1999?
BTW, consider myself knocked out! 200 pages of ACCC ecconobabale (so far) without a single digit of real data, much less a graph. Only 10000 pages to go.
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