Victorian Transport Association (VTA) state conference

Speech

DCS007/2017

05 June 2017

Mantra, Lorne, Victoria

Thank you for the warm welcome.

VTA has been servicing the freight industry for over 100 years. Congratulations—that is indeed a long haul, if you will excuse the pun.

The freight industry is an essential component of the national economy with your sector accounting for approximately five per cent of GDP.

It is estimated for every one per cent increase in efficiency in the transport and logistics sector, Gross Domestic Product is boosted nationally by $1 billion.

Your association represents over 800 employers and businesses supplying transport, logistics and freight related services across road, rail and sea.

According to figures from the Australian Bureau of Statistics, in 2015-16 the Transport, Postal and Warehousing industry in Victoria contributed $17.2 billion GVA (Gross Value Added) to the Victorian economy.

Australia has close to the fastest population growth in the OECD and this means that the world of freight is rapidly changing as demand continues to rise in line with that population growth.

There is also the changing nature of the freight task with new trade agreements in place with our major trading partners, new technologies and the rise of online shopping.

At the same time the industry must continue to meet the challenges of congestion, rising costs, productivity and efficiency—to name a few.

You play a major leadership role in adapting to change and I am particularly impressed by your innovative approach to industry training through the Academy Cadetship Program in partnership with Victoria University.

The Turnbull-Joyce Government knows how critical the freight and logistics industry is to Australia’s prosperity and productivity and we are developing a National Freight and Supply Chain Strategy in response to Infrastructure Australia’s Australian Infrastructure Plan.

You are the people who keep Australia moving and I encourage you to provide your feedback and views to the independent inquiry whose final report I expect to receive by March next year.

Australia’s vast distances and widely dispersed centres make it peculiarly reliant on road freight… Around 26,000 tonne kilometres of freight is moved annually for every person in Australia.

So it almost goes without saying that one of the fundamental reasons that the Government’s has committed to a once-in-a-generation $75 billion infrastructure budget for critical airport, road and rail projects is to ensure that our all-important supply chain moving people and freight around the country keeps flowing more quickly, more safely and more efficiently.

Our record investment supports a long-term vision designed to unlock the potential of our cities and regions.

We will increase the efficiency and safety of our land transport infrastructure while strengthening the Australian economy through better connections for Australian businesses and industries transporting products to domestic and international markets.

Our investments, including $10 billion over the next decade for the National Rail Program, will deliver an economic boost creating tens of thousands of new jobs during construction in cities and regional centres.

On completion, these projects will lift national productivity and drive economic growth.

I also want to emphasise that careful management of costs will be a priority for Government and strong oversight and assurance processes will insure the Government's project objectives are met.

Major Projects

Aside from the ongoing upgrades to our major highways and regional roads and rail networks three initiatives in particular will have significant impact on the transport and logistics sector.

One is the Melbourne to Brisbane Inland Rail.

The Inland Rail will transform Australia’s freight network and boost regional growth.

  • When completed, the Inland Rail will provide a high performance, 1700 kilometre freight rail corridor between Melbourne and Brisbane.
  • A typical train travelling on the Inland Rail will have the capacity of 108 B-Doubles and will be capable of moving double-stacked containers along the corridor in under twenty-four hours.
  • It is sometimes hard to grasp the sheer scale of this project.
  • It is too easy to just describe it as an express freight railway between two cities—it is so much more than that.
  • Many goods may not begin their journey at either end of the Inland Rail at all, but in the middle-in regional Australia.
  • And higher capacity trains, supported by higher axle loads, have the potential to unlock new export markets for Australia’s strategic coal reserves.
  • The new rail will enable faster, more efficient market access for primary producers, especially for large-volume grain and cotton harvests.
  • It is estimated that this project will attract two million tonnes of agricultural freight from road to rail significantly reducing congestion on major regional supply routes —a major plus for those of you in the trucking side of the game.

The decision to fund the construction of the Inland Rail will give regional businesses the certainty needed to invest in export growth, by tackling freight delivery costs head on.

  • The prospect of significantly lowering the cost of transporting regionally produced goods to global markets is, in my view, one of the most exciting benefits of the Inland Rail.
  • The second major project is of course the Western Sydney Airport.

The Turnbull-Joyce Government has committed up to $5.3 billion over 10 years in the 2017–18 Budget to build Western Sydney Airport through a new Government-owned company, WSA Co.

This major funding announcement is integral to the Government’s commitment to ensure the new airport is operational by 2026.

The airport is expected to generate around 20,000 direct and indirect jobs by the early 2030s. As the airport grows, so will the job opportunities.

WSA Co will be established early in the 2017–18 financial year with a high quality board and management team, including extensive private sector experience.

With construction set to commence by the end of 2018, a tender for enabling works is expected to be issued before the end of 2017.

Earthworks will move 22 million cubic metres of soil to level the site for construction.

WSA Co will build an airport with a 3.7 kilometre runway that can handle all types of passenger and freight aircraft, including the A380, and a terminal with capacity for 10 million passengers a year.

The development will include a full airspace design process and ensure that the airport meets all environmental conditions, among many other elements.

Western Sydney Airport will have a direct and positive impact on the national economy.

Sydney (Kingsford Smith) Airport is Australia’s busiest airport, and is approaching full capacity—without Western Sydney Airport to help meet demand, there would be nation-wide economic impacts.

Western Sydney Airport will connect with the national freight network, and VTA member companies operating outside Victoria may well find themselves ferrying freight to and from the new airport or connecting with interstate companies servicing the airport in the next decade.

As you will understand, good transport links and access routes will be needed for the airport to meet its full potential.

To this end, the Australian and the NSW governments have started construction of new and upgraded roads for the airport and the residents of Western Sydney, under the $3.6 billion Western Sydney Infrastructure Plan.

Our third big initiative focusses on rail with an investment of $10 billion in a new National Rail Program to improve the efficiency of services in cities and surrounding regional centres.

This program has been designed so that the Government can make major funding commitments to several transformational urban rail projects over the next decade.

The Government’s funding contributions to these projects will be provided as part of an overall package of support, alongside funding provided by the relevant state government and the direct beneficiaries of the project.

This investment will reduce the burden on Australian roads, provide more reliable transport networks and will support our efforts to decentralise our economy and grow regional Australia.

Nationally, the urban congestion debt that is currently robbing the economy of more than $16.5 billion a year is set to soar to around $30 billion by 2030.

For Melbourne alone, the costs of congestion are estimated to rise from $4.6 billion to $10.2 billion in 2030.

It is evident that investing in passenger and freight rail becomes essential to safeguarding our prosperity.

Melbourne is the fastest growing capital city in Australia and Victoria is the second largest economy, responsible for 22 per cent of all GDP, second to NSW but with a faster growth rate.

As I know at first hand, there is a pressing demand for improving public transport in Victoria, particularly on key regional rail lines.

The Bureau of Infrastructure, Transport and Regional Economics has estimated that the patronage on rail services to areas such as Geelong and Ballarat has more than doubled over the ten year period to 2015-16.

To help meet the challenge, the Budget includes over $1 billion to fund priority regional and urban infrastructure.

The measure aims to reduce travel times and improve transport connections between regional centres and metropolitan Melbourne.

The first $500 million investment includes:

  • $100 million for upgrades to the Geelong Rail Line;
  • $100 million for the North-East Rail upgrade;
  •  $290 million for upgrades to the Gippsland Line; and
  • $10 million for a Shepparton Line Passenger and Freight Upgrade Planning Study.

We are also providing $30 million towards the development of a business case for the Tullamarine rail link.

As I said earlier, Melbourne is the fastest growing city in Australia and the Melbourne-Sydney air route is the fourth most travelled passenger air route in the world.[1]

Tullamarine is a major international gateway and the second busiest airport in Australia with 34 million passengers recorded in 2016; this number is expected to rise to 60 million by 2030.

Work continues on upgrading the Tullamarine Freeway, which already carries 210,000 vehicles each day in its busiest sections.

However, airport management warns that the existing congested road network covering some 23 km into the Melbourne CBD will exceed its capacity and will be gridlocked within a decade not only hindering traffic to-and-fro the airport but further reducing the amenity, liveability and commuter experience of the surrounding suburbs.

Infrastructure Australia has identified the need to upgrade this corridor as a high priority initiative.

Working closely with the Victorian Government we can envisage progressing this city-shaping project through the business case development phase and investigation of wider land-use planning outcomes.

The remaining $461.2 million is available for Victorian infrastructure projects, which will be negotiated between the Australian and Victorian governments.

This was the subject of a very constructive discussion with Jacinta Allan prior to a recent meeting of the Transport and Infrastructure Council in Brisbane.

We both agreed that investing in regional rail is a high priority for the state and federal governments. But I made it clear I needed to see more detailed planning from the state in order to secure ongoing funding.

I look forward to receiving that information in the weeks ahead; we intend to have further discussions as we work towards reaching an agreement that will see significant investment across Victoria.

Now, I have given you the broad brush, big picture overview and I am sure that you will have questions, as I said earlier, I am more than happy to oblige.

However, before we turn to questions, I would like to thank VTA for your submission in June 2015 to the Senate Standing Committee [2] looking into Aspects of Road Safety in Australia—and in particular my thanks to Peter for his presentation to the Committee.

It is no secret that I am passionate about improving road safety. I see it as a key responsibility not only of governments but for all road users.

The need to make our roads safer is a complex and evolving problem at the national and international level.

As a developed nation, Australia has a well-earned international reputation as a leader in road safety.

Here in Australia, our three levels of government cooperatively pursue our various road safety responsibilities under the National Road Safety Strategy.

The Safe System approach, advocated by the World Health Organization, is absolutely embedded in this work.

It encompasses complementary interventions that work together to create safer roads, safer vehicles, safer speeds, and safer behaviour by all road users.

Our immediate goal under the National Road Safety Strategy is to reduce the annual numbers of deaths and serious injuries by at least 30 per cent by 2020.

This means that all Australian governments must work more closely together, and continue to implement measures and take actions that will secure improvements to address the recent increases we have seen in road crash deaths and in serious injuries.

In  a concerted effort to improve safety for the trucking industry—and the motorists, cyclists, bike riders and pedestrians who share the roads—we are providing $3.8 million a year to support the Heavy Vehicle Safety Initiative (HVSI) program administered by the National Heavy Vehicle Regulator.

This investment will benefit both freight operators and the community.

At our May meeting, my fellow transport Ministers and I agreed the National Heavy Vehicle Regulator’s 2017–18 HVSI work programme.

This programme, will see 12 heavy vehicle safety initiatives rolled out.

These include support to educate light vehicle drivers how to better understand how to share the road with heavy vehicles.

There is also more support for heavy vehicle monitoring, to better enable compliance and enforcement authorities to target those that do the wrong thing.

And there will be support to educate recreational vehicle and caravan owners on the critical need to keep rest stops open to heavy vehicles to ensure you and your operators can take required rest breaks.

I can say that a considerable portion of the 2017–18 Heavy Vehicle Safety Initiatives funding will be going to Victoria, and I look forward to hearing more about these initiatives.

Australia’s truck drivers help get our exports to the world, help get food from farmers to families and freight from Point A to Point B and we are serious about making our roads safer for all road users, including heavy vehicle drivers who play such a valuable role in our national economy.

I know your membership are looking to the future and are eager to take up the opportunities that are opening up through improved safety and regulatory frameworks and enhanced intermodal transport networks.

  • [1] 60th Edition of IATA World Air Transport Statistics
  • [2] Victorian Transport Association - Submission Senate Standing Committee on Rural and Regional Affairs and Transport References Committee Inquiry. Inquiry into Aspects of Road Safety in Australia.