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Freight Needs Equal Consideration

Much has been written and said since Malcolm Turnbull’s rise to power, about the Federal Government’s role in our cities. There is universal agreement that unless there is a renewed focus by all levels of government to improve our cities’ transport infrastructure, our economic prospects will inexorably suffer.

Chief amongst these is Infrastructure Australia, which warns in its National Infrastructure Audit that growing congestion threatens to cost Australians $53 billion by 2031 as the population increases to 30.5 million.  Infrastructure Australia also reminds us that the economic contribution of our major cities will increase by 90 percent to an input of $1.6 trillion in 2031.

From the perspective of the logistics industry, greater Federal Government focus on the workability of our cities is a positive step.  It has the financial muscle that many state and territory governments simply don’t have to invest in projects to improve the economic efficiency and liveability of our capitals.  Similarly, the development of policies that pave the way for greater private sector investment in infrastructure projects is strongly encouraged by industry.

But in the rush to extol the virtues of government investment in trams, buses and rail links in our cities, the need to invest wisely in key logistics projects to improve supply chain efficiency has been somewhat overlooked in the national debate. As attention turns to the crafting of the next budget, it is essential that the Government gives equal consideration to the movement of freight as it does to the movement of people.  In short, any new federal approach to moving people should not be at the expense of supporting supply chain projects to move freight.

Too often, freight is seen as an inhibitor, rather than a creator of wealth, prosperity and opportunity in Australia. But the fact is the health of our cities and our lifestyles are inextricably linked with national supply chain efficiency.

There needs to be greater integration between urban planning and freight planning to avoid repeating the mistakes of the past that restrict supply chain efficiency.  In practice,  urban encroachment, a lack of buffer zones, and a tangle of passenger and freight rail on the same lines are all symptoms of a lack of attention to the needs of freight.

Ensuring there is a strong approach by governments to freight is imperative for three key reasons.

The first, Australia’s rising freight task. The Bureau of Infrastructure, Transport and Regional Economics predicts Australia’s freight task will double between 2010 and 2030, and likely to triple by 2050.  Unless there is targeted investment focussed on connecting our sources of wealth with our domestic markets and international gateways, our cities will inevitably suffer.

The second is the economic windfall from improving the efficiency of our national supply chains.  A report by ACIL Allen and ALC found a one per cent improvement in efficiency of our national supply chains will yield a $2 billion-a-year benefit.  It provides the evidence, if it were ever needed, that inefficiencies in the industry will cost Australia dearly unless all governments continue to focus on improving the efficiency of our supply chains.

The third is to maximise the economic benefits that can be achieved through recent trade deals, such as the Trans Pacific Partnership.  Maintaining and enhancing efficient national and international supply chains is a fundamental component of any international trade deal, such as the TPP, and will help to ensure Australian businesses receive the full benefits of this and other important international agreements.

These economic realities underscores why ALC is encouraging Government to ensure there is clear responsibility for supply chain efficiency and freight in the new ministerial arrangements. It is critical there not be duplication or overlap between these ministerial responsibilities, particularly as they relate to major freight projects.   Freight cannot fall between the cracks, particularly when it comes to responsibility for major infrastructure projects.

The logistics industry looks forward to Infrastructure Australia’s 15-year Infrastructure Plan, due later this year, to provide this high level infrastructure blueprint, and to deliver the framework Australia needs to facilitate the more efficient movement of freight across our national supply chains. 

Michael Kigariff is the managing director of the Australian Logistics Council.

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