Infrastructure Australia believes that the rail sector plays a vitally important part in the Australian economy—both in the moving of people and the moving of freight around the country.
The rail industry's network of infrastructure and services connects people and communities, supports freight transport across the country, delivers our resources to overseas markets and generates substantial economic growth and employment.
However, the sector is facing increasing uncertainty in terms of its future. The lack of a coherent pipeline of projects has left industry unable to plan effectively for the delivery of complex, but vitally important rail infrastructure.
This all comes at a time when Australia is at a cross roads both in terms of its infrastructure. If we are to deal with the challenges we face:
- we must get back to long term planning;,
- we must have high quality decision making; and
- we must ensure there is a long term infrastructure pipeline for the future growth of the country.
This morning I would like to outline for you the scale of the challenge we face, drawing on the findings of Infrastructure Australia's Australian Infrastructure Audit.
The Audit provided a top down national review of the key drivers of our infrastructure demand out to 2031, and our future needs across transport, water, energy and telecommunications.
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One of the key findings from the Audit was that Australia's population was projected to grow to 30.5m by 2031, and that this growth will occur mostly in our 4 largest capital cities.
By 2031—these four cities are expected to grow by 46 per cent.
By 2061—Brisbane and Perth will increase to approximately 5 million people. Melbourne and Sydney will have up to 9 million people.
They will be as big as major global cities like London, New York and Hong Kong are today.
Unsurprisingly, with population growth like this we will need to deal with issues of congestion—it will be the dominant challenge in our cities and infrastructure networks.
We found that the cost of congestion to the economy was already $13bn per year. Without action, this will grow to $53bn per year in 2031.
The passenger transport task across our six largest capital cities is projected to increase by 58 per cent, significantly exceeding current capacity by 2031.
And the demand for public transport is projected to almost double by 2031.
The forces driving the projected increase in demand for passenger transport will also drive increased demand for freight transport with the road and rail freight task projected to increase by 86 per cent.
In terms of rail, the Audit found that demand for freight rail infrastructure is projected to grow, in particular to service the mining sector in WA, Queensland and NSW.
We found that the direct economic contribution of rail infrastructure services in these states dwarfed that of other states owing largely to the growth of the freight task associated with mining and manufacturing operations in those states.
IA's role going forward
All of these statistics outline one key finding—that the demands of growth will have a profound effect on Australia's productivity and liveability.
If we get our infrastructure right the growth in demand will turbo charge our economy and capture the many benefits of modernisation.
But, if we fail, it will cause increasing congestion that harms both our competitiveness and living standards.
That's why our forthcoming 15 year Australian Infrastructure Plan is so important.
The 15 year Plan is a strategic approach for long term infrastructure decision making for our country and will outline our proposed policy and governance solutions to the challenges that we raised in the Audit.
The policy reforms are grouped into a list of 10 summarised in the slide behind me covering issues as diverse as productivity, population, funding and governance.
It's a long list, but at a high level it's really outlining our goals for the Plan, to ensure that we have:
- productive cities and regions;
- efficient infrastructure markets;
- sustainable and equitable infrastructure; and
- better decision making and delivery
The Priority List
In terms of the long term pipeline, we are also refreshing the way we assess problems, solutions and projects. Our updated Assessment Framework will look at strategic context in addition to the usual ‘Cost Benefit Analysis.’ This will include considering how initiatives fit into a wider network, system, or corridor solution.
We have been working with the various jurisdictions to put together a quality list of initiatives and project proposals that draws on the data from the Audit and other sources to clearly identify the problem they are trying to solve. We are also encouraging a stronger consideration of the strategic fit of the solution into the relevant systems and network.
This infrastructure priority list will allow governments across Australia to prioritise initiatives and projects that have been:
- carefully considered;
- address nationally significant problems;
- have strategic merit; and
- provide productivity enhancing benefits.
In conclusion, the stakes are high for us as a country—we will need to make hard, complex decisions about our future.
The reforms of the Plan and the investments recommended in the Infrastructure Priority List will help create a high quality infrastructure pipeline.
Working together we can help Australia reap the many social and economic benefits of our population growth, and protect and enhance our quality of life.
But, a reform plan is only as good as the practical action that comes from it…
And the responsibility for leading that reform falls to us all… to governments, business, peak bodies and the wider community.
I know that AusRail will be playing their part.