A comparative assessment of the productivity of Australia’s rail systems 1971/72 - 1990/91

Abstract

There is a recognition that Australia’s rail systems, as the major recipient of government subsidy, have to improve their performance and become more cost efficient. Any policy designed to reduce costs must consider the implications of resultant actions on the overall productivity of a business. In this paper we propose the use of the total factor productivity index as an appropriate reference benchmark, calculated annually for each rail system. As a reference benchmark, it enables each railway to evaluate the productivity implications of any change to the operating and managerial environment designed in part or in whole as a cost saving strategy. Total factor productivity indices are derived annually from 1971/72 to 1990/91 for the 5 major rail systems and sources of variation are identified.