Shadow Minister for Infrastructure, Transport & Regional Development Catherine King sets out how rail transport could lead Australia out of a COVID-19 recession.
In July 2019, prior to the arrival of COVID-19, governor of the Reserve Bank, Philip Lowe called on governments around the country to invest more in infrastructure. Cutting the official cash rate to a then-record 1 per cent, Lowe said that more spending on infrastructure was needed.
“This spending adds to demand in the economy and – provided the right projects are selected – it also adds to the country’s productive capacity. It is appropriate to be thinking about further investments in this area, especially with interest rates at a record low, the economy having spare capacity and some of our existing infrastructure struggling to cope with ongoing population growth,” he told the Darwin business community.
Much has changed since that speech, but in some ways, Lowe’s words could be read, word for word, again, with added emphasis, as the cash rate is now 0.25 per cent and spare capacity in the form of unemployment has only risen.
To hear how the federal government and opposition are responding to this call for an infrastructure-led recovery, earlier in 2020, Rail Express spoke to Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack and his shadow, Catherine King. The below interview with King has been condensed and edited for clarity and length. To read Rail Express‘s interview with Michael McCormack, follow this link.
THE ROUTE AHEAD FOR INLAND RAIL
It’s a project that all major parties support, however Inland Rail has been a headache for the government and the Australian Rail Track Corporation (ARTC) since objections have been raised to the route over floodplains in northern NSW and Queensland. With the rail industry looking for certainty over the project, governments are hoping to increase the project’s momentum.
Rail Express (REX): Labor has brought up some concerns with Inland Rail in the past, particularly around the section over the Condamine River floodplain in Queensland, how confident are you in the delivery of this project, particularly that section in Queensland?
Catherine King: Labor supports Inland Rail and in fact we put the first billion dollars into the project to actually get it started. I’m surprised the government has taken the notion of Inland Rail very literally with it not having any connection to the Port of Brisbane or the Port of Melbourne. They are important, difficult, and challenging issues to sort out but you can’t just build Inland Rail with no connectivity to either port. These projects are complex and we know that you’re never going to please everybody and there are issues around having to procure land, having to dissect across farmland, but one of the things that I’ve learnt as being a long time local MP and also having portfolios like this before is that you have to get the consultation right and when you’ve got such a big community expressing significant concern about the sort of hydrology work that has been done by the government and a lack of transparency about how the decision was made, you’ve got a problem.
REX: How would Labor look to extend Inland Rail or make those connections to other freight networks around Australia?
King: If we were fortunate enough to be in government in 2022, we don’t know what plans would be in place but what I would like to see is the start of a discussion about it. At the moment all we know about it is there’s going to be significantly increased trucks going through Acacia Ridge but no plan or discussion about what some of the alternatives are. The government needs to start that work now because without those connections Inland Rail doesn’t make as much sense as it should.
A LEVEL PLAYING FIELD FOR FREIGHT
Without freight rail continuing to operate throughout the COVID-19 pandemic, Australia’s supermarkets shelves would be empty and commodities would be sitting at farms and mines, never making it to market. To ensure that this critical link in the logistics chain continued to operate, governments stepped in, allowing freight to cross otherwise closed borders. In May, the ARTC provided some financial relief for rail freight operators by extending payment terms for current access charges and deferring a consumer price index increase that was scheduled for July. Rail freight operators are still concerned however, with more empty containers being transported by sea, and a lack of competitive neutrality with road freight.
REX: Would you want to go back and have a look at competitive pricing neutrality between rail and road, and access charges?
King: That wasn’t part of our policy at the last election but we’ve just seen an extraordinary effort in terms of all our freight and logistics companies, whether it has been rail through to what’s happened in the trucking industry.
I think there’s a much stronger appreciation about the role that our freight and logistics companies play and we support the government’s pausing of some of those fees and charges in order to make sure that we get through this crisis. As a nation, what’s the most efficient way of delivering our freight? It’s important to ensure that we don’t pick one over another that we make sure that there is a reasonably level playing field for both but what we want to focus on is ensuring that we have the most efficient system that we possibly can whether it is road, whether it is rail, or whether it’s via shipping and our ports.
THE FASTER OR HIGH-SPEED RAIL DILEMMA
In a speech delivered to shadow cabinet in May, Anthony Albanese reaffirmed Labor’s commitment to building a high-speed rail link between Melbourne and Brisbane, via Sydney and Canberra. As a nation-building project it would certainly be iconic, but could COVID-19 actually turn Australia’s long held dream of high-speed rail into reality?
REX: High-speed rail proposals obviously have a long history in Australia. Why did Labor feel like now is the right time to return to the project?
King: Well I think we’ve never left the project to some extent. We’ve been pushing high-speed rail as a visionary rail infrastructure project for the nation for a long period of time, and obviously when we had the opportunity to hold the government benches started to progress the business case for that.
REX: Labor took the policy of a billion dollars for land acquisitions along the corridor to the last election. Is that something the party is still committed to at a federal level?
King: Well obviously we’re reviewing all of our policies at the moment, we’re two years out from the next federal election and we’ll have a bit to say in the lead up to the next election in terms of our transport policies including rail. Obviously money is going to be pretty tight this time around for both sides of politics, given the COVID-19 crisis, but we’ve laid a marker down pretty clearly that we think high-speed rail is an important long-term economic opportunity for our nation and shouldn’t be one that’s lost.
REX: There’s also a number of proposals for faster rail. How would Labour see a program of high-speed rail interacting with the current businesses cases focused on faster rail on similar corridors to those the high-speed rail line would follow?
King: Faster rail can be anything from substantial corridor improvements, improvements in rail technology, through to more expensive projects of duplication and looking at improving some of the regional rail networks. It doesn’t have to be either or but what you have to do is be serious about it. There’s lots of potential for regional rail improvements and we should be looking at that all the time.
REX: One of the stumbling blocks for high- speed rail has been that price tag but there are alternative funding methods such as value capture that are used to get projects like these off the ground. Would you be looking at these as a way to fund a high-speed rail project?
King: One of the things that coronavirus crisis has shown us is that we’ve lacked any large scale, iconic infrastructure transport project and Anthony in his vision speech wanted to particularly go back and highlight high-speed rail because of a couple of things. One is the investment potential that it has, but also the nation building potential that it has, in terms of developing a much stronger sense of regional and decentralised towns from Melbourne from Sydney, all the way up to Brisbane.
REX: Another element of Anthony Albanese’s speech was calling for the local manufacturing of rollingstock. Albanese nominated successes in Queensland, WA, and Victoria. How would Labour seek to expand this to other states and for builds to continue happening in those states that already have a manufacturing capability?
King: My hometown of Ballarat is a railway town. We still have our railway workshops here, many of the X’Trapolis trains are built here as well, and they’re really important skilled manufacturing jobs for our region. Part of the problem for many of those manufacturers has been that the procurement is really patchy. Each state and territory government does that separately, they may procure three trains here, they may do 50, and the manufacturers in my own constituency tell me it’s that long term pipeline of projects that keeps those railway workshop doors open.
COVID-19 has taught us that our manufacturing does have enormous capability, but it does need support. One of the things we announced in the 2019 election campaign was that we felt there was a need to have a national rail procurement strategy to actually start to look at how you can smooth out some of those lags that occur in rollingstock procurement so that we can continue to still have those terrific railway workshops here. We’ve got a great history of it, and we don’t want to see railway manufacturing go the way of the car industry. You need a plan to support it, to keep it here and to keep local jobs here.
REX: Would you support or encourage quotes or targets for locally manufactured rollingstock like there are in Victoria?
King: As a Victorian I’m very attracted to the plan that the Victorian government has in relation to local procurement. Federally we are subject to trade law as well so we always have to be conscious about that but I am a big fan. Many people have decided that we should be manufacturing more things that we are capable of manufacturing in this country and I’m a big fan of local content and local procurement.