Speech to AusRail 2018 Conference – Investing To Get Rail back On Track – National Convention Centre, Canberra – Wednesday, 28 November 2018
Thanks for the opportunity to address AusRail 2018.
It is now nearly 11 years since I was appointed Labor’s spokesman on transport and infrastructure.
Eleven years as either the Shadow Minister or Minister.
And on each and every day, I have learned something new.
Either I am very committed to the portfolio, or I am a glutton for punishment.
Let me start today by acknowledging that during those 11 years, the ARA has been a constant voice for serious debate on infrastructure and transport policy and the ways in which rail can best serve the national interest.
You’ve always been constructive.
We have usually, but not always, agreed.
But your advocacy has been of real assistance to me, as have events like AusRail, which have allowed me to develop a serious dialogue with your industry and an understanding of its issues from your perspective.
So thank you.
The value of your advocacy has been highlighted again today by yesterday’s release of your research by BIS Oxford Economics.
It provides a compelling case for greater collaboration between government and industry to address the looming skills shortage in the rail sector.
This is an important contribution to public discourse.
I would like to offer strong in-principle support for this report and its recommendations, particularly the establishment of a Rail Industry Skills Development Strategy.
You are certainly on the right track, so to speak.
This year’s AusRail takes place at a time of significant political activity in this country.
We’ve just had the re-election of the Andrews Labor Government in Victoria with an ambitious infrastructure program and now the campaign for the NSW state election will begin to gear up.
And then the big dance – the Federal election, probably on the 18th of May.
Today I want to focus on the obvious – what you might expect from a Federal Labor Government.
Simply put, we would build more rail – a lot more rail.
Over the past five years the Coalition Government has cut infrastructure investment overall, but particularly in rail.
The process began as soon as it took office in 2013, when Prime Minister Tony Abbott cancelled the billions of dollars put into the Budget by the former Labor Government for projects like the Melbourne Metro, Brisbane’s Cross River Rail and the Parramatta to Epping line.
Mr Abbott did this for purely ideological reasons.
As he outlined in his 2009 book Battlelines, Mr Abbott believes Australians don’t want to use public transport because: “Mostly there just aren’t enough people wanting to go from a particular place to a particular destination at a particular time to justify any vehicle larger than a car and cars need roads.”
Instead of investing in rail, Mr Abbott diverted the money to toll roads, two of which he was unable to get off the ground.
That was five years, or two prime ministers, ago.
Mr Abbott’s successors Mr Turnbull and Mr Morrison seem to have less antagonism toward rail, but have nonetheless failed to reinstate the bulk of his cuts.
There was some new investment in the 2018 Budget. But 85 per cent of that funding will not appear until beyond the Forward Estimates period.
Indeed, the independent Parliamentary Budget Office says Commonwealth infrastructure grants to the states expressed as a proportion of GDP will halve over the next four years to 0.2 per cent.
So we not only have a reduction in total infrastructure investment, but it has been skewed toward toll roads and programmed off into the Never Never.
Recently, the Coalition appears to have shifted its rhetoric in response to growing public concern about the erosion of quality of life caused by traffic congestion in our big cities, particularly in Sydney, Melbourne and South East Queensland.
But its response has largely focused on the hot button political issue of immigration levels.
Immigration levels are relevant to urban growth.
But whatever factor drives population growth, governments must respond to it with commensurate infrastructure investment, or else cities become more congested.
This isn’t rocket science.
Yet the Coalition has failed to invest at a rate appropriate to the growth of our cities.
I go back to that short-sighted decision by Mr Abbott in 2013 to cancel all Federal investment in public transport.
At a time of strong population growth and worsening congestion, this was just madness.
If that had not happened, important projects like the Melbourne Metro and Cross River Rail would today be nearing completion.
DISTORTION OF THE INFRASTRUCTURE MARKET
Worse still, conservative governments have in recent years become so obsessed with “off-budget” and “innovative” financing of projects that they have chosen to overlook the benefits offered by rail in favour of toll roads.
For example, last year it was revealed that the NSW Coalition Government ordered its bureaucrats to ignore rail as an option when considering ways to tackle traffic congestion and improve commuting times between Sydney and Wollongong.
The bureaucrats were told to design the F6 Motorway as a toll road, even though a Transport Department paper advised that a rail option would be cheaper.
Departmental documents said completing the Maldon to Dombarton freight line would remove coal trains from the existing Illawarra line, freeing up space for passenger trains.
This, combined with construction of the Thirroul Rail tunnel between Waterfall and Wollongong, would reduce travelling time from Wollongong to Central Station by a third to 60 minutes.
Yet the NSW Government wanted a toll road.
A Federal Labor Government would end these distortions.
We would invest in the projects that best serve the public interest.
Now, I can’t change the past.
But I can offer a better future.
Our starting point would be the restoration of proper process when it comes to assessing infrastructure proposals.
When we were last in government we created Infrastructure Australia to independently assess infrastructure proposals on the basis of value for money and whether they would fit within the existing infrastructure landscape.
The aim was to create a pipeline of worthy projects that could attract bi-partisan support across parliaments.
We wanted to break the nexus between the political cycle and the project development cycle.
Regrettably, the Coalition has spent five years undermining Infrastructure Australia.
First, Mr Abbott ignored its recommendations to invest in urban rail.
In 2012 Cross River Rail topped Infrastructure Australia’s priority list, which it declared viable and ready to go.
Because this project does not fit in with the Government’s political agenda, the figures were reworked and it slid down the list.
At the same time, projects not even assessed by Infrastructure Australia, like the ill-fated Perth Freight Link, received funding.
Then came Mr Turnbull.
He tried to sideline Infrastructure Australia by creating his own Infrastructure Financing Unit, which he said would work with government and industry to utilise innovative funding mechanisms to increase private investment in public infrastructure.
The problem was that Infrastructure Australia already had the expertise and the legislated role to provide such advice and had done so in the past.
The IFU has failed to deliver a single new project.
A Labor Government would abolish this waste of resources.
We’d restore the independence of Infrastructure Australia and re-establish within it the scrapped Major Cities Unit to focus on the productivity, sustainability and liveability of Australian cities.
Elected representatives must always be responsible for making funding decisions because it is they who are accountable at the ballot box.
But when it comes to major infrastructure projects, taxpayers rightly expect decisions to be based on evidence, not political whims or rigid ideology.
Of course, while proper assessment processes and an effective, respected and independent Infrastructure Australia are vital, they must be backed with real dollars from government.
And the good news here is that despite the decision of the current Federal Government to largely vacate the field, state governments of all persuasions, together with the private sector, have been stepping up.
Over the course of the past decade we have gone from a situation where there were few projects on the drawing board to a pipeline of heavy and light rail projects worth some $46 billion.
In the area of urban rail, there are major network upgrades and expansions planned, or in some cases already underway, in every mainland capital city.
In Brisbane, major works will soon commence on Cross River Rail.
In Sydney there’s the Metro, CBD and South East Light Rail and Parramatta Light Rail.
In Australia’s fastest growing city, Melbourne, work is ramping up on the Metro Tunnel and the removal of level crossings.
Meanwhile here in the nation’s capital, Canberra, the first stage of its new light rail network connecting the fast growing area of Gungahlin to the City is progressing apace, with planning on the next stage well advanced.
In Adelaide, the completion of the long-delayed electrification of the Gawler Rail Line will soon be underway, while in the West, the McGowan Labor Government is steaming ahead with METRONET.
This is Perth’s most ambitious public transport program, the first stage of which – the Forrestfield-Airport Link – is on track to be completed in 2020.
On top of all these public sector projects, the resources sector is also expected to invest heavily in coming years, building new and extending existing rail lines to transport their valuable commodities to port for exporting.
To round out the picture, a change of government at the next Federal election will result in a further injection of real investment in the nation’s rail infrastructure – and the money will begin to flow in our very first budget.
Federal Labor’s position is clear: for sound economic, social and environmental reasons, rail must play a central role in not only moving freight around our country but also people around our cities.
Rail will be at the heart of a Shorten Labor Government’s infrastructure agenda.
When it comes to moving people, rail offers greater value than roads.
Cars are among the most inefficient modes of transport.
According to the United Nations Economic and Social Commission for Asia and the Pacific, for each lane 3.5 metres wide, cars can transport 2,000 people per hour.
Trams can move 22,000 people per hour in the same amount of space and trains a massive 88,000 people per hour.
In the case of freight, rail also offers advantages over road, not the least of which is safer roads and fewer carbon emissions.
Indeed, just one 1,800 metre freight train is equivalent to removing 70 B-Doubles off our roads.
I don’t argue that we should never build a new road.
But if we are to keep our nation moving we need to invest in both roads and rail.
That’s why, as well as proceeding with all the projects currently in the Federal Budget, we will add to them to create an even more ambitious capital works program, particularly in the area of urban public transport.
For one, we will invest in Brisbane’s Cross River Rail project.
In Sydney we will partner with the State to build the Western Metro as well as ensure the new Western Sydney Airport is connected to the City’s passenger rail network from the day it opens, as a part of a north-south line through Western Sydney.
The latter project, in particular, would help unlock the full potential of Western Sydney, a region that is already home to two million people – nine per cent of the Australian population – and the country’s third largest regional economy.
According to an analysis conducted by Deloitte and Arup:
“The economic benefits of the corridor are clear. From 2024 to 2040, north-south rail will add $44.7 billion in benefits to the economy, reaching $3.6 billion per year in 2040.
“There can be no doubt that a north-south rail solution is crucial to the sustainable development of the Western Sydney Growth Corridor and its future as a smart city.”
This statement could not be clearer about rail’s potential to transform cities.
Lastly, we will partner with the recently re-elected Andrews Labor Government to build what will be Victoria’s biggest and most transformative public transport project, the Suburban Rail Loop.
This new 90 kilometre underground rail line will run through Melbourne’s western and eastern suburbs via the airport, linking all of the city’s major train lines.
The $50 billion project will allow commuters to travel between suburbs without having to come into the city, thereby reducing travel times and making it much easier to get around for work or leisure.
Expected to be used by 400,000 passengers a day, the new line will also take pressure off existing lines and 200,000 cars off the city’s road network.
As well as investing in the infrastructure itself, Federal Labor is also determined to ensure that the rolling stock required for these new projects is built in Australia, rather than sourcing it from offshore.
This is an issue the ARA highlighted at AusRail a year ago.
And in response, Federal Labor announced earlier this year that if elected we will work with the states and territories through the Council of Australian Government to develop a National Rail Procurement and Manufacturing Strategy.
As part of this strategy, future Commonwealth grant funding for rail infrastructure projects will be linked to objectives such as work being undertaken in Australia, rather than commissioning overseas companies, and cooperation between jurisdictions on procurement.
Simply put, a Shorten Labor Government will ensure that more trains are built locally by Australian manufacturing workers.
Add to this the long-term projects like a High Speed Rail Link between Brisbane and Melbourne via Sydney and Canberra.
You have heard me say for years that High Speed Rail would revolutionise interstate travel.
But its other big benefit would be to promote decentralisation, which this nation desperately needs as our capital cities struggle to cope with growth.
Today we meet in Canberra.
Imagine the potential for economic development in this city if people could travel from Canberra to the Sydney CBD in less than an hour.
Suddenly, establishing businesses here or moving here to work would be far more attractive.
High Speed Rail would turbo-charge development opportunities for the other regional communities along its path – cities like the Gold Coast, Casino, Grafton, Coffs Harbour, Port Macquarie, Taree, Newcastle, the Central Coast, the Southern Highlands, Wagga Wagga, Albury-Wodonga and Shepparton.
Successful decentralisation requires fast connections between regional centres and capital cities.
That’s why High Speed Rail is so important.
In Government, Labor would move quickly to create a High Speed Rail Authority to work with the Queensland, NSW, ACT and Victorian governments to commence detailed planning and corridor acquisition.
It would also put in place an expressions-of-interest process to seek feedback from international rail companies with expertise when it comes to building High Speed Rail projects.
A Labor Government would also support the further development of the proposed Inland Rail Link between Brisbane and Melbourne.
We see great potential in this project.
That’s why we supported it with investment when we were last in Government.
However, over the past five years the Coalition has failed to confront key impediments to Inland Rail, including the fact that on current plans, it does not connect to the ports of either Brisbane or Melbourne.
I know it’s called Inland Rail.
But this shouldn’t be taken literally.
It shouldn’t mean it doesn’t go to our ports.
The Government has put massive effort into promoting its commitment to Inland Rail as part of its political strategy in regional areas.
But it has failed to use its five years in office to put in the hard work necessary to give all Australians a clear picture of the actual cost and viability of the project.
The Government has also failed to address widespread concerns about the credibility of its Inland Rail funding model, which assumes the project can be funded via an equity injection without government grant funding.
For such arrangements to stack up, projects need to be able to make returns to the Budget.
And even the Government’s own implementation report concluded that won’t happen for at least 50 years.
From the roll call of rail projects currently on the drawing board, it is clear this nation is headed towards a golden era for rail.
But that brings me back to the BIS Oxford Economics research released by Danny Broad yesterday.
As your research indicates, this industry faces a serious skills shortage.
Training of train drivers, controllers, track workers, signalling engineers and technicians, maintenance workers, electrical technicians and tunnellers is not keeping up with growing demand.
The challenge is further complicated by the ageing of the existing workforce and the emergence of new technologies in your sector that require new skills not previously required in rail.
The research warns that by as early as 2023, the peak of the construction phase, we may have a workforce gap of up to 70,000 workers.
This will not only slow down progress, but also drive up prices as projects fight against each other for scarce labour.
It’s already the case that states within the commonwealth are aggressively attempting to poach each other’s workforces.
The current situation is the end result of poor long term planning by governments and a reduction in investment in training and skills development by both government and industry.
The conservatives have trashed the TAFE system. What now remains in states like NSW is little more than a shell of a once great institution.
Today in this country there are 130,000 fewer apprentices than there were under the previous Labor Government.
All up, Federal funding for TAFE and skills training has been cut by $2.8 billion.
It has cut nearly $4 billion from our universities.
Most worryingly, and this is the point of your research, there seems to have been little serious effort to plan for future workforce needs despite the obvious signs that rail was entering a renaissance period in this country.
We cannot ignore the skills challenge before us. Addressing it must be a priority.
But in doing so, we need to accept that we cannot import our way out of this skills challenge.
Instead, Labor will never waiver from the principled position that the national government’s first priority must be to train and skill up Australians to fill Australian jobs.
Accordingly, a Shorten Labor Government will adopt the central recommendation arising out of the report released by the ARA and establish a Strategic Rail Workforce Development Forum.
It will be tasked with developing strategic responses to the skills issues facing the industry, and building productive working relationships across the industry and with TAFE and other training providers.
The resulting skills development strategy will not only aim to boost the national training effort, but also to ensure that the training is fit for purpose.
That simply makes common sense.
Before leaving the issue of skills, I will say this: the challenge facing your industry is far from unique.
Indeed, your concerns about a lack of proper long term planning and investment in skills are reflected in other strategically important sectors of the transport industry.
The same issue has been raised with me by aviation maintenance engineers, who warn that the increased offshoring of aircraft maintenance is leading to a reduction in critical skills development in this country.
The same concern is also reflected in maritime, where the conservatives want to legislate the local industry out of existence, leaving only foreign-flagged vessels with seafarers earning third world wages to move goods around our coasts.
This is no way to run a modern economy.
The lack of proper investment in our people is undermining Australia’s economic sovereignty and security.
Recently I was honoured to deliver this year’s John Button Lecture, which honours the memory of the man whom I believe was the nation’s greatest industry minister.
During the Hawke era John Button used the power of government to create industry plans in areas like steel and automobiles that were central to the opening up of the Australian economy and dragging it into the 21st century.
Button’s work helped establish the conditions for 27 years of continuous economic growth in this country.
John Button understood there was a role for government to work with industry, unions and other interested groups on long-term policy settings.
While much of his work is related to tariffs and exports, the same spirit is required when it comes to skills training.
It is hard to believe we have a situation where we know our future training requirements, but have failed to act to meet those requirements.
Labor accepts absolutely that markets can drive the creation of prosperity which leads to higher living standards and the expansion of opportunity.
However, we also understand that there are times when it is appropriate for governments to intervene to secure national interest outcomes.
I often say that one of the weaknesses of the market is that it has no conscience.
Your report also shows us that markets, left to themselves, have no vision.
They don’t consider future needs.
That’s the job of governments working with industry.
The current Government’s hand-off approach, combined with its cuts to skills training, has failed to meet the future needs of your industry.
A Labor Government will intervene.
We’ll work with you to look to the long-term and put in place the policies needed to produce the skilled workforce your sector requires.
There has always been a role for government in industry policy.
But in the 21st century – a time of accelerating technological change – forward-looking industry policy is needed more than ever.
As Stephen Hawking said:
“We are not going to stop making progress or reverse it, so we must recognise the dangers and control them.”
Hawking was right.
There’s no need to panic about the inevitability of change.
The point is that you need to plan to cope with its effects.
I said when I started my contribution today that the obvious question for your industry is what would change under a Federal Labor Government.
I’ve outlined some of our approaches today. And we will have more to say in the lead-up to the election.
But sometimes the past can illuminate the future.
To get a real idea of where a Labor Government might take transport policy, particularly when it comes to rail, let me conclude by pointing to our record last time we were in Government.
We lifted federal infrastructure investment, expressed on a per-capita basis from $132 per Australian to $265.
We rebuilt a third of the interstate rail network, or 4,000 kilometres of track.
We committed more federal investment for urban rail than all previous federal governments combined since Federation.
Once again, thank you for years of serious and productive engagement.
I very much hope that I will be able to join your for AusRail 2019 – hopefully without that pesky word “shadow’’ in front of my ministerial designation.