Problems associated with subsidising Australian non-urban rail services are revisited by evaluating the macro-economic impacts of a policy that would eliminate railway deficits. The model used demonstrates how several policy scenarios for the abolition of railway subsidies can be explored by simulating shocks to the economy. The results illustrate the range of economic benefits that could accrue from the abolition of subsidies and identifies interests most likely to benefit or lose from such a policy.

Systematic risk in the deregulated airline industry is found to be significantly lower, at least for national carriers, than under regulation; but it was much higher during the period of transition. National carriers have a greater systematic risk than regional carriers, but the difference is less after deregulation.