Thursday 20th Sep, 2018

WORD FROM THE MINISTER: Freight… driving productivity in Australia

Photo: Office of Mr McCormack
Photo: Office of Mr McCormack

ONE of the greatest productivity problems facing the nation is creating an efficient, safe, secure and sustainable freight transport system which isn’t impeded by movement across borders and through regions and cities by different transport modes.

Having lived my whole life in regional Australia, the link between good infrastructure and economic growth is ingrained in my thinking.

The freight and supply chain logistics industry is an essential component of the Australian economy, accounting for up to 10% of our gross domestic product. Whether you live in a city or in the regions, all Australians rely on efficient and reliable freight movement.

The Liberal and Nationals’ 2018-19 Budget included major steps to improve freight productivity. This included our new $3.5bn Roads of Strategic Importance initiative to fund upgrades to key freight routes and a targeted new $1bn Urban Congestion Fund, addressing pinch points and last-mile access to ports, airports and freight hubs.

There were also commitments of $400m for the Port Botany Rail Line duplication and $971m for the Coffs Harbour Bypass, both of which are strategic investments in the productivity, efficiency and safety of the freight industry.

Inland Rail, a 1700km “corridor of commerce”, is an important part of the national supply chain, and the government has put some serious momentum into making it happen. When complete, it will reduce freight transport costs between Melbourne and Brisbane, improve service standards and move some freight transport off the congested road network.

We know there is scope for more domestic freight to be moved by ship. Between 2010 and 2030, Australia’s overall freight task is expected to grow by about 80%. Coastal shipping, by contrast, is only forecast to grow by around 15% in the period to 2030.

The current regulation of coastal shipping creates a range of administrative issues for shipping companies and Australian businesses that use coastal shipping, resulting in a substantial regulatory burden.

Our Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 aims to give industry more choice and flexibility in how it moves freight around the country, while at the same time reducing red tape.

As with all other industries, the freight industry is feeling the heat of international competition and fast-paced technological change. Australia cannot afford to be complacent in relation to freight and the physical and social infrastructure which delivers it. Failure to act will lead to loss of market share and an increase to the cost of goods.

Governments play a central role in the long-term planning, provision and management of the transport networks, but I freely admit government doesn’t have all the ideas, funding, or know-how – no government does. We are acutely aware though the pace of change is now so rapid it requires increasingly dynamic and responsive government.

Businesses and governments will need to embrace new thinking and adopt new technologies to make what is already in place work better, and capture new opportunities to meet the challenges of the growing freight task.

The government has heard the strong message of support for an overarching national strategy that will address the needs of all sectors of the freight and logistics industry and the users of freight services. To ensure we cater to these ongoing challenges, we are committed to developing a National Freight and Supply Chain Strategy.

In May, I released the final report of the industry-led Inquiry into National Freight and Supply Chain containing priority actions, which will be vital input into the development of a National Freight and Supply Chain Strategy.

I look forward to ongoing industry engagement as we work with the states and territories to develop a strategy which ensures an efficient, safe, secure and sustainable freight transport system to meet the needs of a growing Australia. 

This article appeared in the July edition of DCN Magazine

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