Great challenges often bring great opportunities.
In the next few decades, Australia faces the difficult challenge of upgrading public transport services in our cities to tackle traffic congestion.
Bringing our nation’s passenger rail services into the 21st century is an essential investment in future economic growth, in addition to being vital for improving liveability in our cities.
We have no choice. According to the Bureau of Transport, Infrastructure and Regional Economics, traffic congestion is already costing the economy about $16 billion a year in lost productivity.
The good news is meeting our public transport needs comes with an opportunity to revitalise our manufacturing sector by building the necessary rolling stock – trains and trams – here in Australia, rather than sourcing them offshore.
In coming years, states will roll out projects including the Melbourne metro, Brisbane’s Cross River Rail, the Perth METRONET, the Western Sydney Rail and the Melbourne Airport Rail. Then there is the Inland Rail freight link from Brisbane to Melbourne, and, potentially, the High Speed Rail Link from Brisbane to Melbourne via Canberra and Sydney.
These services will require at least 1100 new trains and trams in the next three decades.
According to the most-recent census, between 2011 and 2016, the number of jobs in Australian manufacturing fell by 24 per cent to about 680,000.
The expansion of rail provides a chance to reverse this trend and create thousands of new, well-paid jobs, including apprenticeships for young people.
That’s why the next Labor Government will create a National Rail Industry Plan – a blueprint for co-operation between governments, businesses and unions in the national interest.
The Plan will support Australian manufacturers to access rail industry work while optimising training opportunities for young people and building up local industry’s capacity via research and development.
But the starting point should be an acceptance that when it comes to buying trains and trams, cheapest is not necessarily best.
While overseas manufacturers might offer lower prices, building rolling stock here has broader community benefits, like jobs, that must be built into any cost comparison.
Consider some recent examples.
In 2014 the Coalition Newman conservative State Government in Queensland arranged to pay a German company with manufacturing facilities in India $4.4 billion for new carriages associated with an expansion of suburban passenger services in Brisbane.
There were few local jobs beyond maintenance roles.
But the Victorian Labor State Government is investing $2.3 billion to build 65 seven-car trains in Victoria as part of its program to improve its passenger rail service.
It is being delivered by the Andrews Government in partnership with private consortium Evolution Rail, creating 1100 jobs in Victoria.
That includes 100 apprenticeships – 100 young people earning a wage while learning skills that will last them a lifetime.
This is the sort of investment Labor would aim to promote under a rail industry plan.
It will include investment in research and development, including universities and research agencies so that, as we build trains here, we are developing our capacity to reduce costs and improve quality.
It would set guidelines for collaboration between government, industry and the training providers to ensure apprentices are taught the skills needed for the industry to prosper.
Critically, it would promote co-operation between states.
Under current arrangements states are doing their own thing on procurement, with 36 different train models in our public transport fleet, many being purchased overseas.
We should standardise the rolling stock platform used in this country instead of designing a new model each time a government decides to acquire new trains or trams.
Key features of Labor’s plan include:
- Tying Federal investment in rail projects to objectives including work being undertaken in Australia.
- Establishing the Office of National Industry Co-ordination top undertake a national audit of the adequacy, capacity and condition of passenger trains nationally.
- Reinstating the Rail Supplier Advocate, abolished by the Coalition in 2013, to help small and medium-sized enterprises identify export opportunities and link with Government purchasing bodies.
- Establishing a Rail Industry Council to prevent loss of more jobs and address the need for more local research and development.
A key element of the plan is to seek to create certainty for manufacturers by ironing out the peaks and troughs in market demand through better co-ordination on procurement between state governments.
If every state government orders a new fleet of trains at the same time, local industry cannot deliver. Better coordination of tenders would allow for a steady stream of work that could sustain and indeed grow the local industry.
Our National Rail Industry Plan will also target job creation in regional Australia.
In the 21st century, there are two sure-fire ways to generate economic growth – investing in infrastructure to lift capacity and boost productivity, and investing in people through education and training.
A National Rail Industry Plan can address both.
This piece was first published in the Herald Sun on Monday, 7 May 2018