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Prime Mover Magazine

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Peter Anderson

Productivity gains at heart of Victorian and federal budgets

June 2017

Budget seasons in Australia are replete with rhetoric and platitudes from politicians about big-picture themes that resonate with voters and electorates.

Whilst at their core they are economic statements about where and how tax revenue derived from businesses and individuals will be spent, their real intent is to tell a story about where they want the country to go, and how they intend to take it there.

Transport operators and lobby groups that represent them, like the Victorian Transport Association (VTA), were looking for major infrastructure commitments from various state governments and the Commonwealth during this budget season.

I am pleased that for the most part, the Victorian and Federal Governments have heeded the advice of the VTA and others like us, with big-ticket infrastructure investments on our road and rail networks that will help operators improve their productivity.

In Victoria, the VTA’s lobbying efforts over the North East Link were rewarded in spades, with a $100 million State Government commitment for a feasibility study into the connection we have long argued needed to be built. The study will look at potential routing options, with the Government committed to preparing the business case and selecting a preferred route before the next election in November 2018. 

The VTA has met with the North East Link Authority, who will coordinate construction, to discuss our preferred routing, and the need to consider options that do not include tunnels, which are expensive to build and cannot accommodate dangerous goods vehicles.

With or without tunnels, the freight industry desperately needs the North East Link. With general bi-partisan support, the only remaining question surrounds where it will go, and we will advocate for routing options that have the broadest possible appeal to all vehicle types and configurations.

The other important story from the Victorian Budget for freight operators was the commitment to rural towns and communities that for too long have put up with average infrastructure.

The more than $500 million earmarked for regional road networks will benefit regional operators tremendously, with improvements to bridges on key freight routes vital for enabling more high-productivity freight vehicles (HPFVs) to be deployed throughout the road network, saving operators considerable time and money, and making the freight task more efficient.

The Commonwealth Budget similarly contained encouraging news for regional operators, with almost $9 billion of funds allocated for the port-to-port Inland Rail project between Melbourne and Brisbane. This massive investment – contained as part of close to $80 billion of new and improved infrastructure over 10 years – is validation of industry calls for significant investments in inland rail in order to create greater diversity in our national freight task by putting more freight onto rail.

We were also encouraged that the Federal Budget considers a variety of perspectives that are integral to the freight task, other than just infrastructure. Investments earmarked to continue Black Spot, Roads to Recovery and other vital programs are critical for encouraging better driver safety, which is welcome news for operator and road safety in general.

The inevitable congestion improvements on regional and metropolitan roads thanks to infrastructure funded by the budget will create productivity improvements and ultimately benefit state and national economies with supply chain improvements.

Budgets are of course political documents as well, intended to resonate with voters in marginal seats and segments of the electorate that have expressed grievances about spending priorities across emotive areas like health and education.

These politics can be amplified when there are different ideologies in play, such as exists with Labor in Victoria and the Coalition in Canberra.

Indeed, some infrastructure spending earmarked in the Victorian Budget is contingent on the Commonwealth releasing funds Spring Street says Victoria is owed as part of the Asset Recycling Program and the sale of the Port of Melbourne.

This spending takes the form of the $1.45 billion Regional Rail Revival package outlined in the Victorian Budget, which would offer alternatives to passenger vehicle use and free up the road network for freight movements, and inevitably complement Commonwealth inland rail investments.

With this Victorian project contingent on federal funding, the VTA encourages the Commonwealth and Victorian Governments to set aside political differences and reach agreement on Victorian funding which, notwithstanding Commonwealth allocation in the budget, continues to lag behind other states.

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