Address to the Australasian Railway Association AusRAIL 2012
28th November, 2012
Bryan Nye, CEO of the Australasian Railway Association, John Fullerton Chairman of the ARA, distinguished guests, ladies and gentleman.Thank you for the opportunity to address your conference today.
The 33,000 kilometres that make up our railway network is a vital part of our integrated transport network: moving passengers and freight around our vast country.
As we all know, rail in Australia has developed in a piecemeal way, a product of the history of our Federation.
Today we have moved beyond local economies based in our neighbourhoods, cities and towns. With improvements in technology, instantaneous communication and advances in e-commerce our national economy is now firmly a part of the world market.
With a few clicks of the mouse you can source and buy goods from the other side of the world, let alone the other side of the country.
There are fewer shopfronts but more local deliveries. Post Office counters are smaller but have huge warehouses.
As our economy has transformed, so has our freight transport task. Our rail network is vital to e-commerce.
In 1917 anyone wanting to travel from Perth to Brisbane had to change trains six times as the track gauge chopped and changed.
Australians recognise the vital role of rail in our nation but have never quite developed the train culture of Europe and Asia.
While we are still plagued by multiple track gauges in differing parts of Australia, significant investment has been made over the past few decades to adopt standard gauge track on key routes.
And there is still more work to do.
Freight rail
Rail's potential benefit to our freight network is unquestionable. It has the ability to move large quantities of goods vast distances efficiently and effectively.
However, according to the ARA's own research released last year, the share of interstate non-bulk freight met by road transport has risen from around 22% in 1970 to 70% in 2011. At the same time rail's share has fallen from around 45% to under 30%.
Our freight task is growing. Recent figures suggest that it is expected to double between now and 2030. At the same time, congestion in our cities is on the rise with the Bureau of Infrastructure, Transport and Regional Economics estimating that it will cost us $20 billion by 2020.
This rise in freight has the potential to grind our economy to a halt unless we improve rail's share of the freight task.
The ARA often notes that one freight train can remove up to 110 trucks off the road. Realistically given the anticipated rapid growth in our freight task, better utilisation of rail won't take trucks off the road but it will mean that there will be less growth than otherwise would be the case. That will ease the exponential increase in congestion on our highways.
For freight movements over 500 kilometres, rail is a clear winner as the most efficient mode of transport.
Unsurprisingly rail is very successful on the east-west corridor, capturing 82% of the land transport market.
However, reliability on the eastern seaboard has been an issue, particularly in and out of Sydney where freight and passengers share the same track.
In 2006 a Coalition Government study found that on-time reliability of rail on the north-south corridor was 40-45%, compared to 95-98% for road transport.
However, the completion of the Southern Sydney Freight line in the first quarter of 2013 and the eventual completion of the Northern Sydney Freight Corridor in the future, should assist in making the current coastal freight route more reliable and increase its capacity.
Inland rail
It is clear that even with improvements to the coastal route, the inland rail or 'steel Mississippi' as it has been called, remains a national priority and a priority for the Coalition.
In 2006 the former Coalition Government commissioned the North-South Rail Corridor Study to examine the freight flow along the route, current pinch points and the benefits, both economic and social, of investing in an alternative to the coastal route.
The report found that freight flows in most markets within the corridor were expected to double over the next 25 years. Updated forecasts indicate that his will be surpassed.
In 2007 we commissioned a scoping study. Labor did not release it until 2010. Since then, the Rudd-Gillard governments have done nothing to progress the Inland Rail project.
Further, the $300 million they committed several years ago sits perilously in the Contingency Reserve Fund for allocation under the next Nation Building programme.
But there's more. Even that $300 million is woefully inadequate, with the total Inland Rail project estimated in 2010 to cost $4.7 billion.
And there is more. Since 2010, following the imposition of the carbon tax, the full cost of construction will be even more than the $4.7 billion forecast a few years ago. It will more next year and more again the year after.
Labor is so short of what is necessary to get the Inland Rail built that it's fair to say under this current regime it will not get done.
The Government's Rail Alignment Study concludes that: "... it would be appropriate to re-examine the [Inland Rail] project between 2015 and 2020."
It says that it would be prudent to take action now to preserve and protect the route corridor.
On this point, the Department has confirmed that "a decision on the final alignment will not be made until after 2014-15."
So at this point we have an unconfirmed and unreserved corridor which won't be determined for at least another two years and insufficient funding well in the future.
That's the track Labor is on... and it is mirrored across so many policy areas.
The Coalition believes this is a truly nation building project. An incoming Coalition government will pick up the pieces and make the necessary decisions to get the project back on the right track.
As a nation, we need to be ahead of the game not playing catch up.
Global demand for the things Australia produces - our mineral resources and agricultural produce - are highly sought after and will continue to drive our economy. With new coal and resource projects under development in New South Wales, there are real opportunities to secure the necessary private sector interest to make this project happen.
We need to make sure our infrastructure is geared to meet that demand in the most efficient way possible - that means we need the route locked away, fully funded and built as soon as possible.
Passenger rail
I mentioned congestion in our cities. Passenger rail already plays an important role now and will accelerate into the future, providing an efficient means of mass transport in our cities and providing a true alternative to the car.
The ARA's True Value of Rail Report found that every trip made on rail, rather than road, can reduce costs to society by between $3 and $8.50 based on an assessment of the safety, environmental, congestion and social benefits that rail provides.
Urban public transport is an essential part of our capital cities and larger regional centres. Mass transit through rail and public buses has the potential to provide a link between our homes and workplaces, hospitals, schools, universities, sporting facilities and child care.
Of our capital cities, Perth and Melbourne, in particular, have seen significant growth in passenger numbers over the last decade.
Urban congestion is on the rise and passenger rail presents as an effective means of reducing reliance on the car as the primary means of travel to work.
Today, eight-out-of-ten commuting trips in Australia are undertaken by car. However, rail traditionally does better in the CBD. For instance, rail accounts for 46% of journeys to work in Sydney's CBD. Of course, these journeys form a very small part of the overall number.
Patronage in urban passenger rail has been linked to a number of factors like fuel prices, disposable income, population density, service quality, fare levels and road and rail network improvements.
The Federal Government doesn't control our urban passenger networks, nor should it.
But policy decisions made in Canberra can clearly provide an incentive, or conversely a disincentive, to the use of passenger rail and public transport more generally.
Carbon tax
One obvious example is the carbon tax.
Today I have spoken about the fundamental need for rail to play a greater role in our transport network. I think everyone here would agree that we need to do better.
Yet, what does this Federal Government do? It imposes a carbon tax on the rail industry, which does not affect the family car and will not impact on the trucking industry until 2014.
From 1 July 2012 the rail industry became subject to the world's biggest carbon tax through reduced fuel tax credits and increased electricity costs.
This has been estimated to cost the rail industry more than $100 million in 2012-13 alone - again that goes up next year and the year after and provides a direct competitive disadvantage on passenger rail.
Federal Government and rail
There is more the Federal Government can and should do to assist, namely encouraging the harmonisation of conflicting and contradictory regulations.
To this end, the Coalition supports the introduction of the National Rail Safety Regulator and legislative changes which saw the Australian Transport Safety Bureau become the national rail safety investigator.
We have an ageing rail fleet across the country and there are great environmental and efficiency gains to be achieved by upgrading older model locomotives.
As a Member for a train manufacturing electorate, I am disappointed in the major down-sizing of locomotive and rolling stuck manufacturing in this country. So often local manufacturers are not given a chance to tender as companies once at the heart of manufacturing in Australia look to source from overseas. As a nation new have put so much into keeping a car industry, but we have failed to offer similar support to train, aircraft or other manufacturers.
As a nation we must get back to playing to our strengths rather than pound with taxes those sectors that drive our economy. That means backing our miners, farmers and manufacturers. That means supporting them with a modern, viable and efficient rail network as part of a national transport system.
The Coalition is also awaiting Phase Two of the High Speed Rail Feasibility Study due out shortly. In principle, the Coalition supports the concept of a high speed rail linking our major eastern state cities as a means to address congestion, take pressure off airports and provide opportunities for regional communities along the rail corridor.
However, it is vital that we make sure the project is viable. And we are not in the business of making grand announcements that cannot be delivered.
Conclusion
Thank you again for the opportunity to address your conference today.
Rail has had a key role in building this nation and that job isn't finished yet.
Your industry has an exciting future in Australia, both as part of our freight network and as a means of public transport.
The Coalition is committed to supporting your industry in its growth to meet the challenges that lie down the track.
Thank you.
