AusRAIL 2008 CONFERENCE AND EXHIBITION

GS019/2008
02 December 2008

Capacity, Climate & Culture

MELBOURNE CONVENTION AND EXHIBITION CENTRE

Thank you for the warm welcome Bryan.

ACKNOWLEDGEMENTS

• Fred Green, President & CEO, Canadian Pacific Railway
• Len Porter, Chief Executive, Rail Safety & Standards Board, UK
• The Hon John Forrest MP.

Good morning everyone.

I am pleased to be able to join you here today in Melbourne for what is the Australian rail fraternity's major annual event.

I'm here today in two capacities.

First, to represent my friend and colleague, Australia's first federal Minister for Infrastructure, Anthony Albanese.

Anthony is sorry that he can't be here today. This is Parliament's last sitting week for 2008 and as Leader of the House he has a very busy few days ahead.

Anthony wishes you well with this conference and exhibition.

I am also here in my role as the Parliamentary Secretary for Regional Development and Northern Australia.

Both these areas of responsibility-regional Australia and the Office of Northern Australia-come with a fundamental and obvious interest in the health, productivity and efficiency of Australia's rail network.

Queensland Rail accident

Our deepest sympathies go to the families of the two train drivers Richard Wetherell and Michael Smithers who were killed.

Our thoughts are also with the 81 passengers, a number of whom were injured, and their families.

The Government has a $90 million commitment to upgrade the Bruce Highway where the incidence occurred, including building a rail overpass. Work on this project will begin in 2009.

But this terrible tragedy is a reminder to us all government, industry and individuals of how important safety is, and that it must always be our number one priority. 

Everyone here today is a vital part of the supply chain that takes our goods to export hubs and domestic markets.

This is a massive contribution to keeping Australia on time, on track and connected.

It is a contribution that the Rudd Government welcomes and recognises as critical to our ongoing prosperity and our sense of what it means to be Australian.

I spoke at the Australian Rail Summit in Sydney in July, and looking back at my speech notes I am encouraged by the progress that has been made on the rail front in the past five months.

We have made significant progress on a National Transport Strategy, and are working towards a nationally consistent rail safety regulatory and investigation framework.

In particular, the National Transport Commission has released its draft Regulatory Impact Statement for comment and is holding a forum tomorrow in Sydney to discuss it with industry and interested parties.

However, progress not withstanding, the Australian Government acknowledges that we face a huge transport challenge in Australia a challenge which rail, if we make the right decisions, can go a long way to helping us meet and beat.

But a rail revival alone is not a silver bullet.

While it seems self evident, and I know that you as the thought leaders in the rail industry understand, it is worth stressing and repeating that the solution is not about road OR rail, it's not about freight OR passenger transport.

It's about multimodalism, it's about road AND rail, it's about moving freight AND moving people in the most efficient ways possible. It's about all our transport modes rail, road, air and sea working together in an efficient, seamless system.

It's about putting in place a comprehensive, national strategy backed by strong leadership and underpinned by strategic long-term planning.

The Rudd Government is providing the leadership. The days of the "she'll be right", piecemeal, blame game attitude which has seen our vital transport infrastructure matrix eroded, are over.

The cities are linked by commuter rail and the region is served by bulk freight rail grain, bauxite, coal. It's a busy patch especially as the grain harvest begins.

There is a lot going on in Perth to upgrade the public transport system to meet rising demand.

For example, the Perth to Mandurah rail line opened less than a year ago and is a terrific addition to our public transport infrastructure.

It is the biggest public infrastructure project ever undertaken in the Perth metropolitan area.

Kwinana is a commuter suburb about 20 minutes from the Perth CBD serviced by two train stations; Kwinana and Wellard.

The new line, with trains running every 10 minutes, puts Kwinana station at a little over 20 minutes from the Perth CBD, while the Wellard stop is just under 30 minutes.

Wellard is an award-winning, purpose-built, transit-oriented development or TOD, as the urban planners call it.

The concept involves concentrating a mix of uses houses, shops, offices and other facilities around transport hubs in this case, the Mandurah line and its feeder bus routes.

It also means creating walkable, cycle friendly precincts to reduce car dependency and provide more liveable and sustainable communities.

I am proud to be able to point to my own electorate as a success story and I would like to see the concept gather momentum across Australia.

Urban congestion is a complex issue as you know, some of the obvious challenges revolve around housing, security, waste disposal, pollution, noise levels and adequate transport infrastructure.

These are generic problems, that to a greater or lesser degree, affect all cities around the world.

Effective, efficient and well planned public transport systems and the infrastructure to support both public and private transport, is a critical component in the sustainability of a city.

In our cities, this revolves around the fundamental need to get people to and from their places of employment or training, to access essential services and retail centres, and to move freight in and out of our domestic and international export hubs.

On top of its social bedrock role, public transport also performs a vital mass transit role in our major cities.

Twelve months on

And it has been a busy and productive 12 months.

The Government has rolled out an ambitious nation building program which we believe will be the cornerstone of our economic prosperity in the years ahead.

We have engaged with all levels of government, industry and the community to forge partnerships and ensure an agreed and cooperative approach.

To bring our vision to reality the Australian Government has committed significant funds to infrastructure investment across road, rail, ports, high speed broadband, health and education. 

• Nearly $26 billion in roads and rail infrastructure through 2008-09 to 2013-2014;
• $8.7 billion in education infrastructure, through the Education Investment Fund;
• $11 billion in health and hospitals infrastructure, through the Health and Hospitals Fund and other programs.
• The Building Australia Fund has been established to fund identified nationally significant transport and communication priorities.

To help guide this investment, we established Infrastructure Australia; tasked with conducting a national audit to take stock of our existing infrastructure, identify shortfalls and bottlenecks and provide us with a priority list, or pipeline, of projects.

Infrastructure Australia is also looking at ways industry and governments can be smarter in using existing infrastructure, and how best we can implement long overdue changes to regulations to remove barriers and encourage investment.

Those tasks are coming to fruition.

Following submissions from stakeholders governments, industry and the community IA has looked closely at the projects submitted and has coordinated a list for consideration by the Government.

Effects of the global financial crisis

The past 12 months have also been a turbulent time for the global community.

The past 90 days have been a watershed.

It is hard to escape the daily headlines of the current global and domestic credit crunch.

I would like to say a few words about this issue.

While many of these global causes are outside Australia's control, what we can do as a Government and what we are doing is to invest in those things that are going to help keep us strong and prepare us for tough times ahead.

We have strong prudential regulation and financial management systems, and a determined Government.

The Prime Minister and Minister Albanese have made building productivity a key priority of this Government.

If the nation is to have an agenda for prosperity both economic and social we must search for sustainable long term solutions.

This means putting in place strategies to build sectors of the economy which are crucial to ongoing economic growth.

There are compelling reasons for tackling transport infrastructure investment as a matter of urgency and investment in rail is obviously crucial.

We know that the freight task will double by 2020.

We know that congestion is set to cost $20 billion by 2020 if no action is taken.¹

And we know about the unacceptable carbon pollution cost of inaction.

Conference themes

First up, let's consider the issue of CAPACITY.

There is no escaping the need to increase capacity on freight and passenger networks.

As I have said, we expect to see a doubling of Australia's freight task by 2020.²

As the populations of our major cities and regional centres continue to grow, we are also faced with a need to move ever increasing numbers of passengers.

For instance, in May this year, the New South Wales RailCorp estimated that Sydney's rail patronage had increased 4.4 per cent over the past year and shows no sign of declining.³

In July this year, during the Pope's visit for World Youth Day, Sydney's rail network performed something of a miracle. Following the papal motorcade, CityRail shifted 100,000 people an hour out of the city for five consecutive hours.

That is 500,000 people moved out of the city centre and into the suburbs without serious incident. Quite an achievement and indicative of the positive role rail can play in our major cities.

Connex estimate that rail patronage in 2007-08 reached 201.2 million passenger trips the highest ever recorded.

I said earlier that there is a lot going on in Perth to upgrade the public transport system to meet rising demand. This is not surprising given that rail patronage is growing faster than bus patronage patronage of rail services recorded an increase of 4.8 percent in 2006-07 while bus patronage increased by 1.1 per cent.

Perth was 35 million boardings by 07-08 this had increased to 44.9 million, a whopping 28 percent growth. WA anticipates this will increase to 54.5 million boardings by 2008-09, capping two years of 20 percent plus compounding growth.

And it is a similar story in Brisbane, where the number of people using public transport grew at an average rate of 4.3 per cent annually between 1999 and 2007 and shows no sign of declining.⁴

I am sorry that I was not able to be here yesterday to hear Fred Green outline the ways in which Canadian Pacific Railway is successfully meeting the need for ever increasing freight and passenger capacity.

Canada and Australia have a lot in common.

We have much to learn from the Canadian experience.

The main focus of the Government's AusLink 2 rail funding program is to improve the efficiency and competitiveness of freight rail, including the vital rail linkages to our major ports.

Directly, and indirectly, through the Australian rail track Corporation (ARTC), we are planning to invest more than $2.6 billion in rail infrastructure improvements on the National Land Transport Network and the interstate rail network over the period 2009/10 to 2013/14.

Two months ago (October 14), in the New South Wales country town of Gunning, I took part in laying the one millionth concrete rail sleeper between Sydney and Melbourne as part of the ARTC's major works on the North-South rail corridor.

On the face of it, and to the travelling public, laying a rail sleeper may not seem significant. But you know that in reality, consistency in sleepers means a more reliable track and reduced transit times.

It also means a stronger railway line allowing heavier loads to be carried at faster speeds.

The east coast North-South rail corridor is one of the most trafficked rail routes in Australia, however rail's share of the freight market has been in decline for the past 10 years.

Today it carries less than 10 per cent of freight between Sydney and Melbourne.

When the sleeper project, together with new passing loops and upgrades to signalling and bridges is completed early next year, travel time between Brisbane and Melbourne will be just 27 hours.

This makes rail quicker than the road trip and a very real and competitive freight option putting pressure on us to fix our intermodal connectivity. I will say more about this in a minute.

New South Wales

This is extremely important to our nation's productivity and the Government will be having more to say on this issue in the near future.

The Government is also providing $820 million towards the provision of a dedicated freight line north of Sydney between North Strathfield and Gosford and a further $150 million for road and rail access and handling improvements for Port Botany.

And $300,000 has been committed for a pre-feasibility study of the Maldon to Dombarton line in southern New South Wales which will soon get underway.

Victoria

Tasmania

Western Australia

South Australia

This is an important study. On a typical day, around 13 interstate freight and passenger trains use this line with resultant noise, safety and congestion issues being raised by the local community.

Intermodal terminals

We have committed $300 million to redevelop the current Moorebank Defence site on the outskirts of Sydney as a multi-user intermodal terminal.

And over $60 million towards the development of a Brighton transport hub and upgrade of the current terminal at Bell Bay in Tasmania.

Movement of Grain

Both these states have differing grain markets - the grain market in WA is primarily export driven, whereas in NSW it is primarily a domestic market.

I am taking a lead role in the review of the situation in WA and I have had discussions with the WA Minister for Transport, Mr Simon O'Brien, about the way we take forward this review in the new year.

In relation to the situation in NSW, the Government has appointed Mr Des Powell a former deputy of the National Transport Commission to head up the Review of the NSW Grain Freight.

Mr Powell is being supported by a high level taskforce made up of representatives including farmers, growers, grain users, grain handlers and marketers, road and rail industry and local, state and federal governments.

Mr Powell is due to report to both the Commonwealth and NSW Governments by the end of May 2009.

Tackling carbon pollution

Once again, I have to say that I regret not being here yesterday morning to hear your international speakers.

However, I understand that Len Porter, Chief Executive of the UK's Rail Safety and Standards Board, posed some compelling arguments and practical examples of the positive role rail transport can play in tackling carbon pollution.

I can assure you that the carbon pollution imperative is a major part of the motivation behind the Government's rail agenda.

There has been plenty of discussion about the development of an Australian emissions trading scheme. The Government has recently consulted on the Carbon Pollution Reduction Scheme (CPRS) Green Paper.

In August Minister Albanese convened a CPRS transport industry roundtable at which a number of key representatives from the rail industry expressed their views on the Green Paper.

We have continually said that the transport sector needs to play a key role in reducing our greenhouse gas emissions because it accounts for some 14 per cent of the total.

Obviously, rail can play a starring role in reducing emissions as each tonne of rail freight uses only one third of the fuel of that which goes by road.

Which brings me to my next point. The challenges raised by carbon pollution go hand in hand with that other dilemma of the 21st century -- urban congestion.

I spoke earlier about improved efficiency and capacity on the north-south corridor and the competitive edge those improvements mean for rail freight.

David Marchant from ARTC has said a number of times that each 1500 metre train replaces about 100 semi-trailers.

While our major highways may well be able to cope with the convoys of long distance trucks, once they reach urban areas chaos can result.

One only has to think of a major urban artery such as Sydney's Parramatta Road where semis, trucks and B-doubles vie with buses, local and commuter traffic to realise that as the freight task grows, rail simply has to play a more prominent role.

Some states have set targets for the amount of freight that they aim to move by rail in their metropolitan areas.

There needs to be concerted action by all levels of government and industry to make this happen.

The Victorian Government is also committed to increasing rail's market share into Port Melbourne.

We are also contributing $10 million towards a project that will address that 'missing link' between the Port Dynon and Tottenham rail lines to maximise its operational efficiency. The Victorian Government and the ARTC will fund the remaining $30 million.

Major Cities unit

Culture

However, while many of our major industries are dealing with issues surrounding Australia's ageing workforce, and the need for skilled and flexible workers, rail is particularly vulnerable.

More than 42,000 people are employed in diverse occupations in rail throughout urban and regional Australia. More than 70,000 work in supporting industries.

The problem is that in an era of unprecedented growth in the freight and passenger task, the average age of rail workers is 44.⁶

Compounding this, there is an Australia-wide scarcity of qualified labour, a shortage of rail-experienced staff and a lack of interest in rail as a career particularly for women.

In the Australasian Rail Association's (ARA) recent report, 'A Rail revolution' prepared in conjunction with the Department of Education, Employment and Workplace Relations, it was noted that to meet demand and cover age retirement companies involved in rail will need to access:

• 250-340 engineers every year for the next five years - this equates to almost 100 per cent turnover;
• 500-700 trades people every year for the next five years; and
• 420-700 operations staff every year for the next five years.

These are all issues which you as an industry have recognised and I congratulate you on your initiatives and strategies to address the challenges.

Indeed, earlier this year, ARA, in partnership with the Australian Government, developed an Indigenous Employment Strategy for the Australian rail industry.

The purpose of the project was to allow the Association to develop strategies, in consultation with members, which will lead to alternative forms of labour supply for the Australian rail industry.⁷

I've also noted that more than 30 per cent of Queensland Rail's recent intake of trainee coal train drivers are women.⁸ This is a significant breakthrough and bodes well for the future of women in Queensland Rail.

The issue of attracting women into rail was the subject of a panel session yesterday and I note that this afternoon Rob Mason from RailCorp will be exploring the options around skills shortages and productivity .

The Government recognises that the issue of "skilling up" Australia is fundamental to ensuring our future prosperity.

As part of the Skilling Australia for the Future initiative, this year's Budget outlined the Government's commitment to invest $1.9 billion over five years to fund up to 630,000 new training places.

The training is being undertaken in an industry driven system, ensuring that we develop the skills that industry needs and that training is more responsive to the needs of enterprises and individuals. 

To ensure that the education and training funds are well directed, we have allocated greater funding for Industry Skills Councils. We have also established Skills Australia, a new, statutory, vocational educational and training leadership body.

Skills Australia will provide the Government with independent, high quality advice to assist us in targeting government investment in training to meet acute skills shortages.

We have also created an Education Investment Fund to transform higher education and vocational education training.

Money from future budget surpluses will be channelled into the fund subject to macroeconomic conditions and final budget outcomes.⁹

However, while investing in the education and training of Australians is crucial, it will only go part of the way to meeting Australia's immediate skilled labour shortages.

That is why we are making additional places available for skilled migrants.

In this year's Budget we announced that an additional 31,000 places would be added to the 2008-09 Migration Program.¹⁰

We have also allocated nearly $20 million to improve processing and compliance of the temporary skilled migration program.

This will restore integrity and public confidence in the 457 visa scheme while assisting Australian industry including rail to engage skilled workers to meet immediate and short-term labour shortages.

This is an important issue and one I'm sure will be discussed in Rob Mason's session this afternoon.

Closing

In closing I would like to thank you once again for the opportunity to speak to you this morning.

I wish you well with the remainder of the program.

Thank you.

1. BITRE Working Paper 071 Estimating Urban Traffic & Congestion Cost Trends for Australian Cities

2. National Transport Commision 2006, Twice the task a review of Australia's Freight Transport task. BITRE 2003 Information Sheet 2 Freight Between Australian Cities 1972 to 2001

3. http://www.railcorp.info/media_centre/on_the_record Petrol prices and rail patronage

4. Brisbane City Council, Lord Mayors Taskforce, Mass Transit Investigation, September 2007

5. Minister Albanese Media Release, 26 September 2008, AA141/2008

6. A Rail Revolution: future capability identification and skills development for the Australasian rail industry, The Department of Education, Employment and Workplace Relations, 2008

7. http://www.ara.net.au/dbdoc/08-11-14%20Fortnightly.pdf

8. Catherine Kelly, media liaison Queensland Rail. Catherine.Kelly@qr.com.au

9. Louise Batchler Department of Education, Employment and Workplace Relations (Louise Batchler) 19/11/08

10. Media release: Senator Chris Evans: Budget 2008-09 Record skilled migration program to boost economy www.minister.immi.gov.au/media/media-releases/2008/ce01-buget-08.htm