In 2001, our book Back on Track – Rethinking Transport Policy Reform in Australia and New Zealand set out an agenda to prioritise rail in government funding. The book followed many government inquiries conducted in the 1990s, noting that in the 25 years to 1999 there had been an outlay of $43 billion dollars of federal funding to roads and only $1.2 billion to rail track.
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We estimated a “road deficit” of $8 billion a year if vehicle impacts were included. We set out a plan for rail, and much of that has now happened, which is very pleasing, but there are new issues that need an update of our book.
The context
The last 50 years of the 20th century were heavily influenced by narrow road-based interests. No fewer than 60 road lobby groups were identified in Australia, and very few public transport groups.
One such was the Friends of the Railway, formed after the Fremantle Railway was closed in 1979, which won the politics, so Perth began a rail-oriented era driven through a series of elections won by the Western Australia Labor Party. This new rail politics was followed by many other cities around the world recognising that rail was an important part of urban competitiveness and could be good politics.
The 21st century has been marked by what we call the second rail revolution, where rail continued to be linked to more and more economic benefit over freeway-congested cities. This has been demonstrated in Europe and all major Australian cities. For example, when Anthony Albanese was Transport Minister in 2007-13, he established Infrastructure Australia on the need to provide a more integrated transport system.
Out of the first 14 projects funded, there were 12 rail projects. This was later reversed when Tony Abbott was Prime Minister and personally designed three huge road systems, saying that urban rail was “not in his knitting”. Two of these freeways were stopped (in Melbourne and in Perth), but the Sydney tunnel expansions continued. The Perth Freight Link was so dramatically opposed by activist groups it became a major factor in the election of the McGowan Labor Government in 2017, with funds transferred to the Metronet rail system.
Thus, roads and rail priority became highly party political, but at least rail began winning its share through election promises. Our update sets out the continuing contested values and political interests.
Road funds
In June 2004, an Auslink white paper noted measures including the need for improved road pricing. This was forcefully addressed in the 2010 Henry review of taxation. Despite the new direction outlined by the white paper, roads continued to get generous funding, and road pricing reform was stalled under Coalition governments.
In 2018, the International Monetary Fund found that Australia was overspending on roads but should be spending more on both rail and ports. However, in the 2020s, Australia’s three levels of government have been spending over $40 billion a year on roads.
Rail funds
Federal transport funds were provided to assist major new passenger rail projects in Sydney, Melbourne, Perth and Brisbane, although each of these was mostly funded by state governments from the 2010s as they drove the new politics of rail.
The result has seen large patronage increases in the mainland state capital cities with significant popular support. In some cases, this was assisted by new lines such as the very successful 72 kilometre long Perth Mandurah line that opened in 2007 and now has over 20 million riders a year, significantly more than the 6 other new Metronet lines. Projects such as the Chatswood to Sydenham metro in Sydney and the Melbourne metro tunnel have also seen strong patronage growth, reassuring governments that the politics works.
The renaissance of light rail in Australia has also happened in this Second Rail Revolution. Melbourne has upgraded its globally significant system but still has not extended it into the road-oriented new areas of the rapidly growing western suburbs. Sydney has extended its light rail very successfully in the city, Parramatta and Newcastle. Brisbane has a new electric bus rapid transit, and the Gold Coast has successfully created a three stage light rail system. Canberra created light rail and has over 16m passengers a year, and Adelaide partly extended its small tram system, but Perth and Hobart have none. There is good scope for more light rail in Australia as it can assist well located affordable housing projects.
High speed rail (HSR) has recently been revived by the Albanese government as a predominantly federal project with $0.7 billion to start. It will take many years and priority funding before Australia joins a growing list of countries with HSR.
Freight funds
Problems in freight due to an over-reliance on roads, identified in the book and in a 2007 Parliamentary committee report, The great freight task: is Australia’s transport network up to the challenge?, are still to be addressed. When mining and grain are left to roads, then major issues emerge with local roads rapidly deteriorating. This is not yet embraced by the Labor or Coalition, and the rise of One Nation has not been associated with more rail in rural areas.
Road pricing reform for heavy trucks was set back in 2006 and again in 2016 by political considerations. In 2026, with shortages of diesel, despite the need to shift more freight onto the more energy efficient modes of rail or sea, road pricing reform still remains elusive.
Where to?
Much of the first quarter of the 21st Century in Australian land transport has been highly dominated by road lobby requests, now over $40 billion a year. The rail projects in this period have been very popular without coming close to such funding. The second quarter of this century will require some real changes in transport priorities and reform.
The next funding on passenger rail will need to focus on extension of heavy and light rail to car based suburban areas and to surrounding country towns as in Europe. In WA this has been called TramNet and CountryNet which would build on similar Melbourne and Sydney projects. Federal involvement will need to increase.
The shift to all electric freight is the next big thing for trucks and freight trains. China has created cheap EV trucks and freight trains and the early adopters are happening in mining and agriculture. The rapid shift to EV cars, especially cheaper Chinese vehicles, is now moving to freight vehicles and this will need federal and state focus to assist in the transition, beginning with a phase-out of the 44 year old diesel subsidy. A new focus is needed on recharging services, vehicle data, and creation of new employment in rural centres.
Road pricing measures are needed to complement the new technology and assist the multiple benefits of passenger and freight rail. New Zealand has distance-based road user charges for electric vehicles and diesel-powered vehicles (both light and heavy) as well as lower annual registration charges for light vehicles – a measure recommended over 20 years by Australia’s many ministers of transport.
Transport needs to be a major part of the net zero transition, and a new opportunity for getting back on track is emerging but needs more attention.
