Key findings related to freight and supply chains Key recommendations Australian Government response Project Selection An urgent need existed to examine the decision making processes for assessing and developing public infrastructure to avoid poor investment choices and inefficient provision of infrastructure; Private sector involvement in infrastructure funding and provision should be well designed and implemented in order to deliver efficiency gains. Jurisdictions should have best practice institutional and governance arrangements for infrastructure provision, including processes, procedures and policies for planning and selection projects; Transparent, innovative and competitive processes should be used in the selection of private sector partners; Regular monitoring of project performance and review of funding policies including user charges; Rigorous cost-benefit analysis for all public infrastructure projects over $50 million. These should be released publicly and made available to bidders in competitive tenders; Australian Government funds should only be forthcoming where the jurisdictions have adopted these processes and governance arrangements. These recommendations were largely supported by the Australian Government. The threshold for cost-benefit analysis was retained at the existing $100 million level. Privatisation of infrastructure Governments in Australia have successfully privatised ports, airports and utilities and should consider privatising any remaining assets of this type. The Commission recommended the privatisation of major ports, and investigation into the potential for privatising the Australian Rail Track Corporation (ARTC) and Air Services Australia. The Australian Government supported in principle the privatisation of mature infrastructure assets, and undertook to make detailed consideration for the sale of Commonwealth owned assets. User Charging User charges should be used to the fullest extent that can be economically justified, recognising that governments will still need to full or partly fund some infrastructure. The formation of Road Funds by state and territory governments; and Investigation into the use of vehicle telematics for distance and location charges for light vehicles as well as heavy vehicles, with a view to inform future consideration of direct user charging and hypothecation to roads for funds arising from the measure. These recommendations were supported in principle by the Australian Government as longer term reform options. Information collection and dissemination Data limitations restrict comparisons of project costs and other benchmarking parameters. Fund the development of a detailed benchmarking framework for major infrastructure projects, including transport projects, supported by collection of data from funded projects; The Australian Government supported the recommendations regarding
Provision of data should be a requirement for all major infrastructure projects funded by the Australian Government and other governments; Infrastructure Australia (IA) should not be restricted from publishing information on evaluated projects unless commercial harm could result. benchmarking data and data acquisition. It was noted that legislative amendments to reform Infrastructure Australia had overtaken that recommendation and IA is expected to publish its reviews of infrastructure projects. Productivity Commission Inquiry: Regulation of Australian Agriculture 2016 The Inquiry examined ways to encourage private financing and funding for major infrastructure projects and investigated costs, competitiveness and productivity in the public infrastructure sector. Key findings related to freight and supply chains Key recommendations Australian Government response Competitiveness in the agricultural sector is critically dependent on efficient and transport systems, particularly the road transport system; Efficient heavy vehicle selection and use is hindered by complex regulation relating to dimensions and weight restrictions on local roads. While there have been improvements in this area, inefficiencies remain; Direct road user charging for selected roads would encourage investment in roads with the greatest net community benefit; The poor state of some rail infrastructure imposes costs on producers, and results in pressure on alternative road networks. Road pricing reform will help address pricing distortions between road and rail networks; Efficient ports are crucial for primary producers – privatisation of major ports can give efficiency gains; Current barriers to entry to Australian ports for foreign vessels should be removed to increase competition and reduce prices. Increasing the number of routes gazetted for heavy vehicle access, with provision for road users to propose and assess routes for gazettal as heavy vehicle routes; Requiring access permits only in certain cases where there are risks to safety or infrastructure management; Improving the efficiency of road infrastructure investment and use through direct road user charging on selected roads, the creation of road funds and the hypothecation of revenues to incentivise the efficient supply of roads; Requirements for moving oversize agricultural machinery should be proportionate to the risks involved, with greater use of exemptions and extended validity for permits; As a matter of priority, the Australian Government should amend coastal shipping laws to substantially reduce barriers to entry for foreign vessels, to improve competition in coastal shipping services. The Australian Government has not yet responded to the Inquiry.
Harper Competition Review 2015 The Harper Competition Review undertook a stocktake of competition policy with the aim of improving the Australian economy through recommending reforms to competition policies, laws and institutions. Key findings related to freight and supply chains Key recommendations Australian Government response Roads are the least reformed of infrastructure sectors, with little change to institutional arrangements around provision and funding over the past 20 years; Lack of suitable road pricing models leads to inefficient investment decisions and creates distortion on the choices users make between different modes, particularly between rail and road freight; Pricing should be overseen by an independent regulator and should not be an additional impost on road users; Reform of coastal shipping and aviation cabotage regulation should be a priority; Part X of the Competition and Consumer Act 2010 (CCA), which regulates international liner shipping and provides for exemption from Australia’s competition laws, should be repealed. Introduce cost-reflective road pricing using new technologies, subject to independent oversight, with revenues used for road construction, maintenance and safety; Use a cross-jurisdictional approach to road pricing so that overall road user charges do not rise, with adjustments to state and territory grants to account for changes in revenue; Remove cabotage restrictions on coastal shipping. Also remove cabotage restrictions on aviation services for specific geographic areas such as island territories and poorly served routes, unless it can be demonstrated that the benefits to the community outweigh the costs and policy objectives cannot be achieved in any other way; Block exemptions for minimum standard liner shipping agreements should be granted by the Australian Competition and Consumer Commission (ACCC). The Australian Government supported the road pricing recommendations as a long term reform option and will continue working through COAG to investigate such options. In relation to the recommendation on coastal trading and aviation cabotage, it was noted that the Government had developed plans for coastal shipping reform but did not intend to change aviation cabotage arrangements. In relation to liner shipping agreements, the Australian Government remained open to the recommendation and agreed to work with the ACCC and stakeholders on the issue. Infrastructure Australia: Infrastructure Australia Plan 2016 The Infrastructure Australia Plan 2016 (the Plan) is a reform document that develops a vision and roadmap to address current infrastructure gaps and position the nation for future infrastructure development.
Key findings related to freight and supply chains Key recommendations Australian Government response Productivity More efficient infrastructure will support a more productive economy and help create a more prosperous and equitable country; Greater value from infrastructure can be achieved through reform and investment; Technological advances will allow better use of our infrastructure; The Australian Government should play a stronger role in driving reform. Establish an infrastructure reform incentive scheme to link funds to delivery of reform outcomes; Governments should use greater private sector involvement in infrastructure services, use good regulatory oversight to improve outcomes for consumers, and make transitional arrangements where necessary; Caps, curfews and other restrictions on operation should be avoided; A material increase in private and public funding is required to meet requirements and boost productivity; Funding pools for transport should be consolidated into a transparent Infrastructure Fund; Increase funding in projects and technologies that make better use of existing infrastructure; Operators should generate, collect and use data to drive productivity. The Australian Government supported the recommendations concerning productivity improvements. It noted several initiatives that meet the Plan’s recommendations, including the Asset Recycling Initiative, the heavy vehicle reform program and the Smart Cities Plan. The Australian Government committed to work with the states and territories to deliver key recommendations of the Plan including: the National Freight and Supply Chain Strategy, urban rail plans, a data collection and dissemination plan and a road user charging study. Connectivity Australian has generally high quality infrastructure and services, but there is scope to do better; First and last mile issues, bottlenecks and pinchpoints in Australia’s key freight routes need to be addressed. Data on real-time operation, use and performance of transport networks should be made available to the private sector; Deliver a National Freight and Supply Chain Strategy; Establish targeted investment focused on removing first and last mile constraints across the freight network. The Australian Government supported these recommendations, noting that it will collaborate with state and territory governments, as network operators, on data availability Funding Road network funding has weak links between usage and charging; Require consideration of costs for projects seeking government funds; The Australian Government generally supported these recommendations, noting that it will collaborate with state and territory governments on charging regimes.
Not enough is invested in maintaining and renewing our current transport infrastructure; Funding of land transport is the most significant opportunity for policy reform in the infrastructure sector. Government to commit to full implementation of a heavy vehicle road charging structure in the next 5 years and a light vehicle charging structure in 10 years; Continue incentives for asset recycling; Review capacity to increase public borrowings for an infrastructure investment program. Better Decisions and Delivery Failure to protect corridors increases costs; Long term planning needs to be improved; Integrated planning across all levels of government is needed. State and territories to produce long-term infrastructure plans; Establish effective corridor protection mechanisms for future infrastructure priorities; Increase funding for development of projects identified in the Infrastructure Priority list. The Australian Government generally supported these recommendations, noting that they are matters for state and territory governments. White Paper on Developing Northern Australia, 2015 The White Paper on Developing Northern Australia, 2015,lays out the policy framework to create successful business and investment environments, invest in infrastructure, access natural assets, reduce employment barriers and improve governance in northern Australia. Key findings related to freight and supply chains Australian Government response Most northern Australia infrastructure has been provided by the private sector under a user pays principle; In areas where it is difficult to charge users or where there are broader social benefits, there is a role for governments to support development; Individual jurisdictions face reduced incentives to prioritise projects where benefits cross borders. The White Paper included the following commitments: $5 billion in concessional loans for projects through the Northern Australia Infrastructure Facility; $600 million for priority road projects in northern Australia including consideration of the Great Northern Highway, Arnhem Highway, Flinders Highway, Barkly Highway, Hann Highway, the Outback Way and the Tanami Road; $100 million to improve cattle supply chains through a northern Australia beef roads fund; using CSIRO modelling and livestock transport and beef industry experts to identify investment and deregulation priorities; $5 million for analyses of freight rail projects in northern Australia, with an initial focus on a pre-feasibility study, including a high level cost benefit analysis, of the proposed Mount Isa to Tennant Creek railway;
Review regulations and legislation for government owned organisations that control ports; Improve productivity through pricing access reform; Explore opportunities for real time information. Port performance data reporting improvements made by BITRE. National Land Freight Strategy 2013 The National Land and Freight Strategy 2013 developed under COAG, sought to improve the efficiency of freight movements, minimise externalities associated with such movements, and to influence policy making relevant to freight. It represents a partnership between all levels of government and industry to drive efficient and sustainable freight logistics. The Strategy outlines issues for action, and points to possible long term solutions and desired outcomes. Key Findings related to freight and supply chains Key actions Status Fast growing Asian economies will increase demand for our commodities; The land transport sector is highly dependent on crude oil based energy with limited alternative energy sources for the immediate term; New infrastructure corridors are needed that balance efficiency with urban amenity; Government fiscal constraints will put pressure on budgets and infrastructure spending; Opportunities will be created through technological developments and innovation and regulation and policies need to encourage these. Map key freight routes; States and territories to develop long term freight plans, with government investments reflecting the priorities in these plans; Progress demonstration projects to address specific impediments; Commonwealth co-funding for first and last mile projects; Trial the Performance Based Standards (PBS) route assessment tool to assist local government decisions on heavy vehicle access; Review the economic impact of the national transport regulation reforms; Produce freight data through BITRE; Enhance community engagement on the value and importance of freight. The Strategy was endorsed and released by COAG’s Standing Council on Transport and Infrastructure in September 2013. Key freight routes map released (see Ports Strategy). State and territory freight strategies released by most jurisdictions. First/last mile assessment tool released to local government. Productivity Commission review of national regulation to occur in 2019. Commodity freight data collection and reporting improvements. Compendium released of existing research on community attitudes to freight. Smart Cities Plan 2016 The Smart Cities Plan 2016sets out the Australian Government vision for our metro and regional cities to support productive, accessible, liveable cities that attract talent, encourage innovation and create jobs and wealth. It has three pillars: smart investment, smart policy and smart technology.