Perhaps you have been fooled by the old belief that what is written in the
newspapers is the truth. What happened was that Australian National
Railways, or it may have even been called Commonwealth Railways at the time
took over the non-metropolitan services of the state railways in SA and Tas.
All the states were offered the opportunity by the Whitlam govt but only the
two labour state govts took it up. Note the usual rational assessment of
policy here. In Tas there were no metro services and only 2 passenger trains
which were dumped as being grossly uneconomical in about 1978. When
passenger services cease, the media usually report that a railway has closed
and I suspect that is what you have heard.
Barry Campbell