FEDERAL BUDGET: Amid a slew of infrastructure spending announced in the federal budget this week was one rail project on the Sunshine Coast with all the hallmarks of a mistake, according to a leading transport expert.
Among the spending spree was a string of “roads through the middle of nowhere, epic new dams and NBN services to the nation’s remotest places” as The AFR dubbed it. All considered to be the cost of wining over Barnaby Joyce’s Nationals, to support a decent net zero target at somewhere between $17 billion and $34 billion.
With an urgent need to shift from petrol-based cars to sustainable transport in order to meet net zero emissions by 2050, investments in railways are vital.
And the announcement this week was for funding to grow from $2.8 billion to $4.2 billion in 2023-24, before declining to just under $3 billion in 2025-26.
This included a new commuter line from Brisbane to the Sunshine Coast (from Beerwah to Maroochydore), upgrades to the Gold Coast and Newcastle lines, and METRONET projects in Perth.
“The thing that has paid for federal transport projects for a very long time, fuel excise, is a dying instrument. We’ve cut it in half now and will be dead within 10 years anyway.Cities Research Institute deputy director Mathew Burke
But the devil is always in the details.
Griffith University’s Cities Research Institute deputy director Mathew Burke, said the latest announcements will potentially create long-term problems for transport funding, and risk prioritising the wrong rail projects, especially on the Sunshine Coast.
Professor Burke told The Fifth Estate there is some speculation within transport planning circles about the federal government’s true motivations on both the fuel excise cuts and the Sunshine Coast railway.
“The political reading of this might be that the government thinks it’s in real trouble. They’re sandbagging seats that aren’t in the marginal list—they’re the next rung down—including on the Sunshine Coast.
“And they’re creating really problematic time bombs six months from now for the next government to deal with, regarding fuel excise.”
The wrong track for the Sunshine Coast?
According to Professor Burke, there are two major rail projects competing for priority on the Sunshine Coast.
The first, chosen by the federal government in the budget, is a commuter rail line that links the Sunshine Coast to the Brisbane CBD. The second is a light rail system, similar to the one recently built in Canberra and the Gold Coast, that serves trips within the city.
“Now, without a business case, without it going before Infrastructure Australia, they have just said ‘no, we’re going to build commuter rail’”
“The light rail proposal serves the tourist market, commuters, shoppers – everybody within the city. Based on what we saw on the Gold Coast, that would have significant economic development potential for the Sunshine Coast,” professor Burke said.
“This is a Commonwealth government that has chided the states for not putting all their proposals past Infrastructure Australia. Now, without a business case, without it going before Infrastructure Australia, they have just said ‘no, we’re going to build commuter rail’.”
“Now, without a business case, without it going before Infrastructure Australia, they have just said ‘no, we’re going to build commuter rail’”Cities Research Institute deputy director Mathew Burke
The commuter rail is likely to be beneficial for the Brisbane 2032 Olympics, given that many of the events will be held on Sunshine Coast. But as Professor Burke points out: “The question is, is it the best bang for buck right now?”
“Without its own strict economic processes being followed, the Commonwealth has just decided to move forward. That’s why there’s disquiet from the Sunshine Coast City Council, who are not a ‘lefto greeny’ kind of council in any shape or form. There’s also been disquiet from the Queensland government.
“At least in terms of federal funding, that’s going to be it for a while for the Sunshine Coast for transportation. Particularly as we’re going to have less money to go around for infrastructure, as we get rid of fuel excise, and we finally see EVs starting to be sold in Australia.”
The good news is that the major rail projects in the budget are “long planned and prepared projects” that are being built on reserved corridors, and are likely to go ahead.
“These are not car parks in Kooyong that literally can’t be placed where they were proposed, as happened before the last election. It’s not the kind of stupidity we saw last time around.”
A ticking policy timebomb for transport funding
However, professor Burke says the temporary 22 cent per litre cut in fuel excise is “a time bomb for the next parliament” and “a much more generous cut in excise that most of us in the transport planning community were expecting”.
“The thing that has paid for federal transport projects for a very long time, fuel excise, is a dying instrument. We’ve cut it in half now and will be dead within 10 years anyway. We have to start moving towards something different, and that is a distance-based pay-as-you-go road pricing system.
“I’m disheartened that most countries around the world are setting up road pricing authorities in their budgets, they are setting up inquiries on how to set it up and how to do it. We’re starting to fall right behind on that agenda as well.”
“Rather than cut fuel excise, a better option would have been to roll back the $7.5 billion in petrol subsidies given to mining companies each year.”Cities Research Institute deputy director Mathew Burke
Rather than cut fuel excise, a better option would have been to roll back the $7.5 billion in petrol subsidies given to mining companies each year.
“That’s about the same we spend on our army, as a proportion of the budget. We could have easily simply removed those fossil fuel subsidies from those guys, giving everyone a very small, modest cut to fuel excise permanently,” professor Burke says.
“We could have used the rest of the money to promote electric vehicles, which really gets us out of the mess, and to set up a road pricing authority to work out what to do when fuel excise is dead within 10 years’ time, as EVs wipe out petrol. That would have been a far more sensible solution to this mess.”
Caught in a trap
The decision to cut the fuel excise—instead of encouraging more sustainable modes of transport—compounds “15 years of pretty bad policy” around fuel and emissions standards.
That includes a lack of policies or quotas to promote electric vehicles. “We’ve had policy settings for a long time that have done the wrong things, encouraging people to buy bigger, thirstier, dirtier, less fuel efficient cars.”
Fleet sizes are bigger and there’s ever bigger utes and SUVs, which makes us more vulnerable to higher petrol prices than we probably were 15 years ago.
“Now we end up with a stopgap measure…It’s just a mess.”
Australia has also traded off the higher costs of inner-city housing for low-cost housing in the outer suburbs. But this has only made people car dependent.
“If you look at the number of cars in many of the outer suburbs, there is basically one car for every human between the ages of 18 and 75. We’ve just continued to build on that model,” he says.
“That was fine for the past few years while interest rates and petrol prices were low. But we’ve built a gigantic vulnerability into the system. We’ve just led another huge generation of people to now be stuck in that trap. They’re starting to discover it’s unaffordable when interest rates and petrol prices go up.”