We have seen several clear signals in 2026 that rail must remain central to Australia’s long-term infrastructure pipeline.
The release of Infrastructure Australia’s 2026 Infrastructure Priority List in March confirmed that there is a need for continued rail investment, signalling growing recognition of the wider benefits rail infrastructure delivers to the economy and community.
Meanwhile, fuel access issues arising from the conflict in Iran have reinforced the importance of prioritising fuel-efficient, sustainable transport modes to keep supply chains open and support national productivity. At a time when Australia is managing population growth, increasing freight demand, housing pressures, rising fuel costs and the transition to net zero greenhouse gas emissions, rail is one of the few investments that can help address all these challenges.
The 2026 Infrastructure Priority List recognised that reality through a strong focus on high-productivity freight networks, high-capacity public transport, intercity rail connectivity and the preservation of rail corridors needed for future growth.
This is a welcome signal from the nation’s independent infrastructure adviser, but the task now is to turn that recognition into sustained investment over the next decade and beyond.
The ARA’s 2025-2030 strategic plan identified the need for ongoing rail investment to ensure the rail industry can continue to meet economic and community needs over time.
The rail construction boom of recent years has been welcomed but should be seen as just the beginning.
Recent investments in rail infrastructure have helped to rebalance the transport mix following years of underinvestment in rail compared to road, but this is not a ‘set and forget’ approach.
Rail investment must be ongoing and must target opportunities to promote greater use of rail to achieve a more productive transport network that makes the best use of all modes.
Benefits beyond direct contribution
The ARA’s recently released Value of rail 2025 report shows just how significant a role the industry already plays in the national economy.
Rail now contributes almost $40 billion to Australia’s economy each year and supports about 200,000 jobs, both directly and indirectly. That is a 30 per cent increase in industry value added and a 14 per cent rise in employment since 2019.
But the case for investment goes well beyond the industry’s direct contribution.
Rail helps cities function better. It improves access to jobs and services. It supports new housing by connecting communities to employment centres and social infrastructure. It reduces congestion and makes better use of scarce urban space.
The heart of modern communities
As the 2026 Infrastructure Priority List confirmed, many jurisdictions around the world have set ambitious targets to increase public transport use to make the most of these wider benefits. These targets are as high as 80 per cent, as jurisdictions look to rail to drive solutions.
While Australia does not have an established public transport target, recent fuel price rises demonstrate the dual benefits rail can offer in reducing consumption and easing cost-of-living pressures, in addition to the wider sustainability, safety and liveability improvements it offers.
Public transport is therefore an essential part of modern, well-functioning cities and towns.
It is essential that ongoing investment is maintained to support continued growth in public transport use and ensure the industry has capacity to meet rising demand over time.
A more productive freight network
Australia’s freight task is growing, and supply chains are under increasing pressure from higher volumes, changing trade patterns and more frequent disruption.
Infrastructure Australia identified high-productivity freight networks as a national priority and called for targeted investment to improve capacity, resilience, connectivity and interoperability across freight corridors and intermodal terminals.
That conclusion aligns closely with the ARA’s Future of Freight findings.
Our research found rail moves almost three quarters of Australia’s bulk commodities, but just 17 per cent of non-bulk freight. This is the result of historic policy and investment settings that have reduced the competitiveness of rail freight compared to other modes on key routes.
This is a trend we must reverse to ensure we can make the most of all freight modes to support a productive freight network, particularly on key interstate corridors.
The benefits of addressing these challenges would be substantial. The Future of Freight report found that a 10 per cent mode shift from road to rail between major Australian cities could save more than $700 million a year in social costs. Those are not marginal gains.
This is especially important as Australia works to address fuel instability and moves towards a net zero future.
Building Australia’s sovereign capability
There is also a strong case for sustained investment from an industry capability perspective.
Long-term rail programs give the supply chain the certainty it needs to invest in skills, technology and local manufacturing. They help retain specialist capability between major projects, they support a more productive and innovative delivery environment and they allow governments to move away from stop-start investment patterns that add cost and risk.
High-speed rail is a good example of a long-term project that could embed new skills and manufacturing capability in Australia for generations to come.
The lessons of recent months have shown that Australia’s transport networks must be efficient, productive, sustainable and able to withstand economic and environmental shocks over time.
Continued investment in rail ensures transport networks are better able to meet these needs, while creating the infrastructure required for Australia’s long-term future.
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