LABORS COMMITMENT TO FREIGHT RAIL: ADDRESS TO RAIL FUTURES CONFERENCE

hank you for the kind invitation to address you today, it is always risky to follow Albo.

 

The story of Australia’s economic development is also the story of rail development. In 32 days’ time we will celebrate the centenary of the opening of the trans-continental railway. I'm proud that one of the greatest Labor Prime Ministers, Andrew Fisher, was responsible for the transcontinental railway.

 

It’s a cause that has come a long way from 1917 when if you wanted to travel from Perth to Brisbane you had to change trains six times.

 

It’s a cause that has also made strange bedfellows. One of my great heroes is Bob Menzies’s nemesis, the firebrand from East Sydney Eddie Ward. When he wasn't baiting Menzies, Ward as Transport Minister was passionately pushing for rail gauge standardisation. In fact, the Prime Minister Gorton paid tribute to Eddie when he opened the East West standard gauge railway in 1969.

 

Labor’s strong commitment was continued under the last Labor Government which made a record investment in the nation’s existing rail infrastructure. We committed more funding to urban passenger rail than all our predecessors since Federation combined and rebuilt a third of the Interstate Freight Rail Network, including sections that run through Victoria.

 

Indeed, in Victoria we:

 

[if !supportLists]•      [endif]Built the Wodonga Bypass Duplication – $50 million;

[if !supportLists]•      [endif]Upgraded the track between Seymour and Wodonga – $45 million;

[if !supportLists]•      [endif]Re-railed the line between Albury and Melbourne and Geelong – $109.6 million;

[if !supportLists]•      [endif]Upgrade the line into and out of Geelong Port – $50 million;

[if !supportLists]•      [endif]Installed passing loops between Gheringhap and Maroona – $32 million;

[if !supportLists]•      [endif]Upgraded Western Victoria Track – $105.7 million;

[if !supportLists]•      [endif]Extended passing loops between Melbourne and Adelaide – $74 million.

 

We were also the first ever national government to commit to building the 1,700 km Inland Rail between Melbourne and Brisbane via regional Victoria and the NSW central west.  In particular, we invested $600 million upgrading existing parts of the rail network that will form part of the line. And in the 2013 Budget, we allocated $300 million to complete the detailed planning and get the project under way.

 

As Anthony Albanese frequently remarks, the best way of predicting what a political party will do in the future is to look at their past. And based on our record in government it’s clear that Federal Labor is a great supporter of rail.

Globally, rail influence is growing, not declining. It is essential to industrial growth especially in Asia and Africa. There is no greater example than China’s Belt and Road initiative, which is intended to link Asia, Europe and Africa.

 

In Australia freight rail carries half of our domestic freight, up from 36 per cent in 2000. In 2013/14 freight rail carried 1.3 billion tonnes of freight and contributed $5.1 billion to the Australian economy. 98 per cent was bulk freight with the remaining 2 per cent intermodal or containerised freight.

 

By 2040, rail freight is expected to increase above its 2010 level by 130 per cent mainly driven by mineral exports.

More generally, the domestic freight task has grown by 50 per cent in the decade to 2016 and is forecast to grow by another 26 per cent by 2026. By 2050 almost 12 million tonnes of freight is expected to move between Melbourne and Brisbane each year – more than twice the current levels.

 

This massive growth requires a Federal Government committed to supporting infrastructure investment.

 

Unfortunately, this Government is all spin on this.

 

ABS data released this year reveal that the value of public sector investment has been lower in each of the first 12 quarters presided over by the Coalition Government than in any of the 21 quarters under the Labor Government after our first Budget in 2008.

 

Overall infrastructure investment was cut by $1.6 billion in the last financial year. The budget papers forecast Commonwealth investment will fall dramatically each year from $7.6 billion in this financial year to $4.2 billion by 2020-21.

 

In fact, independent analysis by the PBO demonstrates that over the next decade Commonwealth investment in transport infrastructure will halve from 0.4 per cent to 0.2 per cent. This halving of investment is at a time when we have a significant infrastructure deficit.

 

Infrastructure Partnerships Australia pointed out that the Budget would result in budgeted capital funding on infrastructure being at the lowest level in more than a decade. The IPA also accused the Government of hiding the cuts through a mixture of “underspending, re-profiling and narrative.”

We need to get on with Inland Rail Project between Brisbane and Melbourne. This project will lift the export capacity of thousands of businesses. That is why in Government we strongly supported it.

 

However, we are concerned about the structure of the Inland Rail funding and fear it could jeopardise the project. Revenues from over 50 years of Inland Rail operation will not be sufficient to cover its construction costs.

 

Past practice by Governments of both persuasions would be to provide grant funding to make the project work. Instead the Government is funding the project through an equity injection into the ARTC. This is a desperate attempt to avoid the funding increasing the deficit further. Because the project won’t cover the construction cost, the ARTC will be forced to pay for the project out of its general revenue. So in reality, the Government is asking all users of the ARTC’s freight rail system to subsidise the project!

 

This is clearly a rort.

 

In addition, the current planning for the project has the Inland Rail stopping 38km from the Port of Brisbane, at Acacia Ridge. This makes no sense.

 

Another trend that means we must focus on rail freight is the need to decarbonise our economy.

 

Australia is the 13th highest emitter of greenhouse gasses. In 2013/14 domestic transport accounted for 17 per cent of Australia’s emissions with 60 per cent of this attributed to light vehicles.

 

From 2013/14 to 2029/30, transport emissions are projected to increase by 25 per cent. Emissions from light and heavy commercial vehicles and rail are expected to growth faster than passenger vehicles.

Australia currently has the eight highest national transport emissions in the OECD and this trend is likely to continue. This is measured through average emissions intensity so it takes into account the longer distances we travel.

 

We must reduce the emissions intensity and absolute emissions of the transport sector.

 

Rail freight has to play a strong role in that effort.

 

Rail freight is 10 times more fuel efficient and causes up to 10 times less emissions than road freight.

 

This is recognised internationally, and the world railway sector has set ambitious 2030 and 2050 targets including a 50 per cent reduction in carbon emissions from train operations by 2030 and 75 per cent by 2050.

 

These targets will be achieved by railway companies across the world through:electrification of existing lines,

decarbonisation of  electricity supply,

improving load factors,

procurement of more efficient and lighter rolling stock,

energy management and

efficient driving.

 

These goals are achievable, for example the European rail industry has developed more energy efficient rolling stock that is up to 50 per cent more energy efficient than 1990 vehicles. Regenerative breaking will also play a role.

 

Integrated management systems have led to 10 per cent reduction in energy consumption.

As important as getting existing rail operations to emit less greenhouse gases, is the need to shift transport activity towards low carbon rail transport otherwise known as modal shift. In fact, the Intergovernmental Panel on Climate Change (IPCC) is depending upon the modal shift to help global warming below 2 degrees. The IPCC wants the railway share of freight land transport to equal road freight share by 2030 and to be 50 per cent greater than road by 2050.

 In Australia rail freight has essentially achieved the IPCC 2030 goal, but we need to make sure we have strong policies in place to reduce transport emissions.

This brings me to briefly outline what Labor’s approach to rail freight will be. We are going through the process of developing the principles that will be fundamental to determine our policy. These principals could include:

A commitment to a competitively neutral policy approach;

An examination of a national framework for corridor protection;

Ensuring equitable access pricing for road and rail;
Maximising the efficiency of infrastructure investment;

Increasing utilisation of  the existing network; and

Addressing externalities such as greenhouse gas emissions

 

In all our infrastructure decisions, we will make sure that Infrastructure Australia will be at heart of decision making. We’re proud we established it and we will make sure it is returned to its central place in policy advice.

Regarding specific projects, Federal Labor supports the current $440 million Murray Basin Rail Project which is being jointly funded by the Federal and Victorian governments. It will provide Victoria’s north-west with better rail freight services and more choices at lower cost.

 

The project involves standardising and upgrading 1,055 kilometres of track. This investment will drive economic growth, create jobs and provide a major boost to the local agricultural sector and regional communities. It will also support a mode shift from road to rail, removing over 20,000 trucks off the road and delivering the region’s exports to the State’s ports more efficiently.

 

Federal Labor also supports the $58 million being invested by the Federal and Victorian governments to move shipping containers between the Port of Melbourne and intermodal terminals located around the city. The Port Rail Shuttle Project will see 3,500 trucks replaced by freight trains carrying 1.4 million containers a year.

 

Thank you for the opportunity to address your conference.

 

If I can leave you with two key messages they are rail freight has a bright future in this country.

 

And that you can rely on a future Labor Government to back it in and help it realise its potential.

 

Good luck for the rest of the conference.