Dec 27, 2019




Big challenges often create even bigger opportunities. So it is in Australia’s rail industry, where the challenge of expanding our inadequate freight and passenger networks offers a huge opportunity to build our manufacturing capacity and create jobs, particularly in regional Australia.

In the next decade, Australian governments will invest at least $50bn in new railway projects.

State governments are working on projects such as the Melbourne Metro, Brisbane’s Cross River Rail and Perth’s Metronet.

Then there are projects under development, such as Western Sydney Rail, the next stage of the Gold Coast Light Rail and the inland rail link between Brisbane and Melbourne.

These new railways, and many others progressing along the construction pipeline, will require thousands of new trains and carriages. Our nation faces a choice: buy the trains overseas on the cheap or embrace the opportunity to build them here using Australian companies and creating Australian jobs.

For Labor, that choice is a no-brainer — we’ll back Australian jobs every time.

Earlier this month in the Queensland regional city of Maryborough I saw first-hand what can go wrong when governments take the wrong option on manufacturing.

For more than a century, the Maryborough railway workshop operated by the Downer Group has been building trains. It employs 400 staff including 30 apprentices who are being taught skills they can use for a lifetime of work. Right now, Downer is delivering an $85m contract from the Queensland government to repair trains built in India for the former Liberal National Party state government of Campbell Newman.

The trains were not fit for purpose. Their braking systems and disability access did not meet Australian specifications. So the proud Australian workers in Maryborough are cleaning up the mess.

It would have been wiser to have built the trains here in the first place.

Buying the trains overseas is shortsighted and ignores the broader national interest.

Our national interest is served by the existence of a heavy manufacturing sector. Australia needs to have a capacity to build things. Manufacturing provides jobs.

And large, long-term manufacturing contracts provide opportunities to expand our skills base by training our young people, such as the apprentices at Downer in Maryborough, to learn skills that will serve them for their entire working lives.

Indeed, if we get the policy settings right we can use the opportunities in rail manufacturing to develop our advanced manufacturing capacity so it can expand beyond the rail sector into the future. To deliver on this vision, Australia needs a national rail plan — a framework to ensure we extract maximum national dividends from growth in the rail sector.

It should be developed in consultation with businesses, state governments and the training sector to maximise Australian involvement in meeting our growing need for rolling stock.

The plan should ensure that states co-ordinate procurement strategies to make certain that Australian manufacturers such as Downer have a steady flow of work, smoothing out peaks and lows in demand.

The Morrison government has no such plan. It is doing nothing to exploit the opportunities that lie ahead.

State Labor governments are taking a different view. In Queensland, the Palaszczuk government is working with Downer to repair its new-generation rolling stock.

In Victoria, the Andrews Labor government is investing $2.4bn on rolling stock being built at Dandenong and Ballarat.

And in Western Australia, the McGowan Labor government has commissioned Alstom to build 246 rail cars, at least half of them at a plant at Bellevue, near the old Midland Railway Workshops. The work will create up to 200 jobs.

There is also capacity for the expansion of train manufacturing in the Hunter Valley, where Downer has a workshop.

It is encouraging that many of these workshops are located in regional Australia.

When regional economies are shrinking and jobs are scarce, governments must do everything we can to encourage jobs growth in the regions. Expansion of our manufacturing capacity offers real hope to those parts of 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.

Anthony Albanese is the federal Opposition Leader.
This piece was first published by The Australian on Friday, 27 December 2019.