Nov 28, 2013

Speech – Passenger Rail as a Driver of Productivity

AUSRAIL CONFERENCE, SYDNEY

INTRODUCTION

Thank you for that generous welcome and thanks for the opportunity to address your conference.

I have always appreciated the Australasian Railway Association’s critical role in promoting policy debate about the rail sector and its importance to the nation’s infrastructure mix.

The Australian Labor Party will always engage with your organisation.

Like you, I understand the importance of rail transport – for freight and people – to national productivity.

Productivity is what I want to talk about today.

You can’t have a thriving economy without a thriving rail sector that can quickly move goods and passengers, allowing businesses to operate at peak efficiency and fostering the greater urban densities that will have a multiplier effect on productivity growth.

Governments that tolerate inefficiency in their transport systems cripple their own potential economic activity and growth.

They also limit their potential to create jobs.

FIXING THE HOWARD LEGACY

During my six years as Minister for Infrastructure and Transport, I worked hard to correct the previous Howard Government’s under-funding of the rail sector as part of Labor’s drive to boost productivity.

We replaced a government that talked a good game on freight rail but failed to back its words with significant funding.

Worst still in terms of productivity, former Prime Minister John Howard had an ideological aversion to investing federal money on urban public transport.

The responsibility for improving urban passenger rail, Mr Howard said, lay with state governments, while the commonwealth should focus on highways.

It was as though Mr Howard was wearing blinkers. He just didn’t get the relationship between public transport and productivity or, if he did, he chose not to make it his business.

Sadly for our nation, Tony Abbott has inherited Mr Howard’s ideological blinkers on public transport.

I am here today to tell you that Labor’s strong support for Commonwealth investment in passenger rail infrastructure in particular has not changed one iota.

And it won’t change. We are the party of nation-building. Always have been. Always will be. Nation-building is what we do.

We see enhancement and promotion of urban passenger rail as central to driving national productivity and creating jobs.

In government we committed $13.6 billion to urban passenger rail projects – more than the total of all previous commonwealth governments combined.

On freight, we delivered twice as much funding in half as much time as the previous Howard Government – that’s $3.4 billion in investment over six years, allowing the rebuilding of more than a third of the national network – about 4000km of track.

The result is that by 2016, the average rail transit time between Brisbane and Melbourne will be seven hours shorter than in was in 2005.

The journey from our east to west coasts will be nine hours shorter.

On inland rail, I note that it was the former Labor government which committed $300 million in new money to the project.

The incoming government has not committed one additional dollar to the project.

On top of this, Labor planned for the possible construction of a high-speed rail link between Brisbane and Melbourne, proposing that, if we were re-elected, we would appoint a high-speed rail authority and legislate to preserve the rail corridor for this exciting proposal.

THE NEW INFRASTRUCTURE AGENDA

That’s a truncated version of a very proud record.

But my real concern today is about where your sector is headed under Mr Abbott.

I know that Minister Truss addressed this conference earlier.

I welcome the minister‘s indications that he will not compromise the funding for freight rail that the Labor Government included in the budget.

However, no Australian Government interested in job creation and economic growth can be taken seriously if it wipes its hands of urban public transport.

Like Mr Howard before him, Mr Abbott says he wants to spend on roads and that the Commonwealth should “stick to its knitting’’ and leave the cash-strapped states worry about public transport.

In a modern and growing nation like Australia, under-funding public transport is sheer economic folly.

Mr Abbott’s doctrinaire, anti-public-transport approach will damage the economy by stalling productivity growth.

It will retard job creation and it will destroy existing jobs.

It will also damage our quality of life. We will all lose – commuters, businesses, job seekers, pensioners – all of us.

Urban congestion is a brake on productivity growth.

It slows the movement of goods and services and also affects our quality of life.

Mr Abbott’s position is serious because the current demographic trend in this country is heading toward greater density in cities.

The 2013 edition of the state of Australian Cities, which I had the pleasure of releasing earlier this year, noted that:

  • There is significant jobs growth in the centre of cities, particularly in high-paying jobs.
  • But, in line with global trends, our population growth is happening on the edges of cities.

Economists tell us there are two possible policy responses to these trends.

Firstly, we must endeavour to create jobs closer to where people live in outer urban communities.

Secondly we need to increase density in inner-city areas, particularly around transport corridors.

The policy experts also tell us greater urban density is a virtue because it places workers closer to their workplaces and promotes the generation of hubs that drive increased economic activity.

But we can’t just wish traffic congestion away.

One policy instrument governments need to use to meet these trends is to encourage greater housing density closer to city centres – something Labor in office did under its urban policies.

Another, which complements the first, is to construct modern, world-class public transport.

It’s a simple equation: if we want the economic benefits that can undoubtedly come with greater urban density, then we have to meet the resulting need for better public transport or else the increasing density will become a burden, not a productivity driver.

If we act appropriately, our efforts will have a multiplier effect on productivity an outcome that delivers greater prosperity for all.

The argument I am putting is widely held by people who understand urban policy and transport. It’s not radical.

For example, the 2013 State of Australian Cities report says, and I quote:

This new infrastructure agenda in our cities cannot afford to lose steam. It will need a continued focus over the long term.

Public investment in urban transport should focus on public transport, with expansions to the urban and road network funded by users, not all taxpayers.

The Australasian Railway Association also understands the productivity equation.

The first of five key priorities the ARA named ahead of the recent federal election was public transport.

I quote from the ARA website:

Traffic congestion is costing Australians $15  billion per year and rising.

Instead of simply building more roads, which encourage more cars, more trucks and make our cities more congested, our focus should be on building and expanding mass-transit solutions – of which rail is most suited to the task.

I couldn’t agree more.

However, Mr Abbott’s plan is to build more roads.

The modern infrastructure agenda is already losing steam under the new government.

When Labor was in office we committed to a series of important infrastructure proposals that were aimed at addressing urban congestion.

Projects included:

  • Brisbane’s Cross River Rail project, a tunnel under the Brisbane River to respond to the fact that the existing rail bridge over the Brisbane River is about to run out of capacity.
  • The Melbourne Metro: which Infrastructure Australia has reported could increase passenger capacity on Melbourne’s urban rail network by 30 per cent
  • The Perth Airport link, designed to ease congestion around the busy Perth Airport.
  • An upgrade of Adelaide’s Tonsley Park rail line.

These commitments in the Budget followed our investment in the Noarlunga line in South Australia, the Moreton Bay Rail Link, Gold Coast Rapid Transit and the Commonwealth’s single largest ever investment in urban rail – the Regional Rail Link.

Where Labor had proposed to partner with state governments to deliver these nation-building projects, Mr Abbott has vacated the field.

He won’t offer a penny in funding for public transport.

I have nothing against Mr Abbott’s plans to spend on roads.

In government, Labor doubled the roads budget we inherited from Mr Howard, built or upgraded 7,500km of roads and lifted grants to councils for local roads by 20 per cent.

But we saw it as our responsibility to funds roads AND passenger rail.

The infrastructure challenges I have been talking about are so profound that they demand federal leadership.

Incidentally, when Labor opted to fund the projects I just mentioned, we didn’t just pick them out of the air or pick projects that would benefit Labor electorates.

They were independently assessed by Infrastructure Australia, which assessed the nation’s infrastructure needs and prioritised them on the basis of the greatest potential productivity benefit.

There is nothing revolutionary in the policy approach I am advocating.

In a speech to this very organisation exactly a year ago today, Mr Truss said the importance of urban rail would increase in coming years.

I quote Mr Truss:

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.

So Mr Truss and Mr Abbott agree that our nation needs to tackle urban congestion. They just don’t want to pay for it or provide policy leadership to the states.

That’s an abdication of responsibility.

HIGH-SPEED RAIL

Leadership requires forward-thinking.

Labor in office was prepared to think decades ahead and to embrace one of the most-visionary projects on the national agenda – a high-speed rail link between Brisbane and Melbourne via Sydney and Canberra.

As you know, people have talked about this project for years.

Labor took this project seriously.

We commissioned a high-speed rail study which found a link between Brisbane and Melbourne would cost $114 billion and, if operational by 2065, would carry 84 million passengers a year.

Before the September election, we promised that, if re-elected, we would spend $52 million over four years to begin securing the corridor and establish a High-Speed Rail Authority to oversee the planning.

If you judge people on their actions rather than their words, the signs are not good.

Earlier this month Mr Truss sacked the High-Speed Rail Advisory group, which advised the commonwealth on the project.

Its members included former deputy prime minister and railway expert Tim Fischer, Business Council of Australia chief Jennifer Westacott and your own ARA chief executive Bryan Nye.

High-speed rail is a visionary project that could change the face of transport in this nation and reduce our carbon emissions.

If we don’t start planning now for the possibility of high-speed rail, it will never happen.

That’s why I confirm today that when Parliament resumes over the next fortnight I will be introducing a Private Member’s Bill that would require the Commonwealth to begin work immediately on securing a corridor for a future high-speed rail line.

It would also create a High-Speed Rail authority, which would be made up of representatives of the commonwealth and affected state governments as well as a nominee from the Australasian Railway Association.

I am certain that by the time this project materialises, I won’t be a Member of Parliament.

But, as I said earlier, I’m into Nation Building. Nation builders have to think beyond the political cycle.

They need to imagine the future and start planning for it.

BAD SIGNS

After only a few months of Coalition Government, we are learning more about the conservative agenda on infrastructure.

And the news is not good.

Mr Truss is proposing legislative changes that will allow him to directly interfere into Infrastructure Australia over what projects it assesses.

What that will mean is that if the government policy is that the federal government wants to “stick to its knitting’’ and just do roads and not rail, as Mr Abbott argues, then Infrastructure Australia will not be able to do the comparative analysis of where investment should go to.

And investment money should follow productivity. It should follow jobs. It should follow a proper objective analysis.
But the Infrastructure Australia legislation that has been introduced into the Parliament does the opposite.

It allows for the minister to designate what they will look at as opposed to the existing system of having a council whereby the council, chaired by Sir Rod Eddington, with representatives of state government, with representatives of federal government, have a look at the circumstances and do a proper analysis.

It is modal-blind, if you like, about what should be supported.

CONCLUSION

We meet at a critical point in the development of our nation’s infrastructure as our cities are transformed by technological and economic changes that will increase their already huge contribution to national growth.

If we make the right decisions, we can harness change and use it to drive productivity gains that will take us into a new golden age of productivity growth.

If we don’t we will consign ourselves to a future of urban gridlock, lower living standards and less growth.

Thanks again for inviting me here and I wish you well with the remainder of your deliberations.