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Standing Committee on Infrastructure, Transport and Cities
Australian government's role in the development of cities

ALLAN, Dr Geoff, Chief Operating Officer, National Transport Commission

POTTER, Dr Jeff, Director, Productivity and Safety, National Transport Commission


CHAIR: I now welcome representatives of the National Transport Commission to give evidence today. Although the committee does not require you to give evidence under oath, I should advise you that this hearing is a legal proceeding of the parliament and, therefore, has the same standing as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. I now invite you to make an opening statement before we proceed to discussion.

Dr Allan : Thank you for the invitation to appear. We would like to focus our evidence today on one term of reference, which is sustainability transitions in existing cities, primarily the term of reference that talks about regulations and barriers, where the Commonwealth could influence opportunities to cut red tape. Noting that the introduction to the terms of reference also spoke about a national approach to collaborative planning, we will focus a lot on the collaborative nature of planning.

To that end, we would like to talk about two related matters that we canvassed in our written submission. Firstly, we would like to talk about the role of the National Transport Commission and its work with governments and the Ministerial Council for Transport and Infrastructure to gain nationally consistent transport regulations. This may provide a model—and I am conscious you spoke earlier about organisational structures and capability—that could be adapted for further work in cities for the Commonwealth to extend its influence.

Secondly, we would also like to talk about issues surrounding development around ports and the need to protect essential transport corridors from urban encroachment or other changes in land use. This has an opportunity to actually hinder development of cities and economic development in Australia and it is something that we have an interest in. I will talk to the first point about the organisational operations of the National Transport Commission, which could be a model.

Firstly, the National Road Transport Commission, which was our predecessor, commenced operations in the early 1990s. It was originally conceived at two special premiers conferences in 1990 and 1991, when the heads of Australian governments met to resolve a number of economic issues that the nation was facing at the time. First ministers realised that Australia's regulatory system was not working in certain regards and certainly they wanted Australia to be regarded as one economic market. To that end, premiers and the Commonwealth agreed to establish a range of new processes through the Council of Australian Governments. One of those new agencies was the National Road Transport Commission, which became the National Transport Commission in 2004.

The NRTC and the NTC was established via that agreement through legislation in the federal parliament and underpinned by an intergovernmental agreement between the Commonwealth and the state, but certainly acknowledging the role of local governments. Within the legislation that created the NRTC and then the NTC, the same law agreed a power for the ministerial council to approve model laws that related to vehicles and road rules. Again, the desire was to have a nationally consistent approach to laws in certain regards. So, it was those two things. That was the agency to drive the reforms, being the NTC, and the powers to approve nationally consistent reforms that have combined to allow Australia to have relatively consistent traffic laws and consistent laws relating to vehicle safety, heavy vehicles and rail safety.

For example, the NTC has worked with state and territory governments to have relatively consistent traffic codes which are recognised through the model laws on the Australian Road Rules and that are updated every two years to take account of changing circumstances, and nationally consistent laws in relation to rail safety, which I now understand have been adopted in all six states and two territories, and national heavy vehicle regulation, which applies in most Australian states and territories with the exception of WA and the Northern Territory. We also manage nationally consistent laws for a range of other transport issues, such as the transport of dangerous goods. I am conscious we spoke about cross-portfolio matters there. In that role, we do not just deal with transport agencies; we deal with safe work agencies and also environmental agencies. We work across portfolios. We work on things like vehicle standards and a range of other transport laws.

We are not just dealing with existing matters, we are also looking to the future. One of the things that the ministerial council has asked us to work on is the regulation relating to automated vehicles, which is an emerging technology. We gave evidence to a parliamentary committee in this very room only about six months ago on that issue. Again, that is a cross-portfolio issue. We are not just working with transport agencies but with third-party insurers, for example, and also with agencies that manage digital spectrum, given that is critical to operation. As I said, it could be a model that could be adapted for the committee.

In order to develop and propose reforms, we have a range of structured processes that we employ. We use an evidence base to identify issues and proposed policy reforms and then we consult on those reform options through discussion papers and various meetings, something similar to these. We are then required to bring states and territories, those who have to implement the reforms, along with us, in developing those and seeking their consent before they go to the ministerial council for approval and then adoption. Once adopted, we also have a role in maintaining those laws, keeping them contemporary, but also in monitoring the agreed implementation to make sure that they are delivered in the way that they were intended to by the ministerial council. The intergovernmental agreement gives us the mandate to recommend to the council where reforms have not been adopted as expected. Our aim is not just to have reports but to have implemented changes to law so they actually have an effect. I think that is important. That is enough about the structures of the National Transport Commission and how we operate. I will now hand over to Dr Potter to talk about urban encroachment surrounding ports.

Dr Potter : The growth in our cities, and particularly the growth in the population more generally that is contributing to growth in the cities, has also led to a growth in the amount of imports that are coming in through our ports, which fortunately is being matched with a large volume of exports to go off and sell what we need to to pay for those imports. That has also been exacerbated by the change in the balance between locally manufactured and imported goods over the last few decades.

As the cities are growing and that volume of freight is coming in, particularly in containerised form through the ports, to fuel that growth the operation of the ports at the larger volumes is being constrained by the very growth that is driving it. As the urban encroachment towards the very attractive residential areas, such as Fishermans Bend, and with views of the water and proximity to the CBD lead firstly to constraints on the ability of ports to expand, to meet the growth in volume that they are anticipating and also putting pressures on the operation times and volumes of the major roads and rail links leading from the ports out through distribution to the city and, indeed, for connections to regional growth areas as well, that equally rely on import through our capital cities of most of their consumer goods.

A number of things have been brought to our attention in work we have been doing over the last 18 months around, firstly, identifying what the current situation is with the movement of people and freight around Australia's road and rail networks, but also on identifying a framework to measure changes in productivity and the effectiveness of interventions to improve productivity of freight movements. The first of these is, as I say, the need to ensure that the transport links that currently exist or are forecast to be required to move the growing volume of freight from our capital city ports, in particular, are able to be preserved and not be constrained by the quite reasonable demands of residents who find themselves buying into new developments close to 24-hour operating freight routes, and decide, 'It would be a good idea if they stopped working at midnight so we can go to sleep.' It is reasonable for them to want to do so, but very difficult for the port to continue efficient operation and meet the needs of the city. Likewise, as you are bringing housing development to the very fringe of the existing industrial areas that are in operation for the ports and the port hinterland, where necessary storage/staging areas for freight operates, it is very hard then to expand into what are now residential areas rather than industrial areas for the forecast future growth needs.

Certainly from the current volumes of freight that are going through Port Botany, with 2.3 million 20-foot equivalent container units per year and their forecast growth to double that over the next 10 to 15 years, and the recently announced recommendation with Infrastructure Victoria to continue the operation of the Port of Melbourne until it reached 8 million TEU per year before needing to build additional port capacity, this needs to include planning for how that volume is going to move. So, not things which need to be built immediately but which need to have the reserve for the land to accommodate them put aside, because we know that will be a need in 20 years' time as the growth continues along that trajectory.

So, in that regard, and as we have suggested in our submission to the Inquiry into National Freight and Supply Chains, there is potential there for Commonwealth involvement through putting in some consistent guidelines around the preservation of amenity and the planning for how to accommodate the need to keep the city alive by the flow of freight with the liveability of the surrounding areas.

CHAIR: Thank you. Our previous recommendations that all infrastructure should be master planned and the land use around it master planned would encapsulate your concerns regarding the land use around ports that is being eroded by urban development. It is a bit like housing releases around the Canberra Airport. The airport was there. It was meant to be operating 24 hours a day. As sure as hens lay eggs—not my hens—those who have taken those houses knowing this will then rise up and demand that there is a curfew, and that is what is happening. We need to employ this land use concept attached to the existing infrastructure as much as future infrastructure.

Dr Potter : Yes, that is right. A lot of the decisions are made at a local government level. Being able to connect their decisions through to the requirements of servicing the national economy and the broader issues of maintaining the city or the state as a whole is really quite critical in terms of linked up decision making.

CHAIR: They play State of Origin, which Mr Wallace is familiar with.

Mr WALLACE: Not only am I familiar with; we consistently trounce New South Wales year after year after year.

CHAIR: I should not have opened that up. What so often seems to have happened in our ad hoc or lack of planning and then coming up with solutions to problems that evolve—and we call that planning—in this area, for instance, with the inland freight rail line is that there has not been any consideration regarding the possibility of a freight airport along that line to take full advantage or to facilitate the important export and transport of those imports and exports to fully realise the potential of the high-speed rail. Is there any consideration of that, to integrate the inland rail with a freight airport?

Dr Allan : This is not something we have been involved with, but I understand with the inland rail, which is not necessarily the high-speed rail, there was—

CHAIR: No, inland rail.

Dr Allan : Sorry, inland rail. There was a proposal to expand an existing airport somewhere near Parkes or Dubbo—I cannot recall—to be a major air freight hub. So, it depends on obviously the development.

Mr WALLACE: Are you talking about the airport at Toowoomba, the new Wellcamp airport?

Dr Allan : No. This was talk early prior to the announcement of the funding of the line. I am not sure what the final route is. Again, given your warnings at the beginning, this is not our area of expertise and we do not want to mislead the committee.

CHAIR: Conceptually, to break down these silos and have one level of freight meshing in with another is a sensible idea, is it not?

Dr Allan : It certainly is. Mr Potter can talk about this in more detail. You are seeing a change in freight supply chain cycles and changes in terms of where effectively freight hubs are from the transfer to bigger line haul, whether they be trains or whether they be the larger trucks, the B-doubles and so on, into effectively smaller deliver areas.

Dr Potter : In recent months we have been talking to some of the larger transport operators, who are saying that with the growth in the cities that is currently the case they are finding that relying on large distribution centres on the fringe of cities is not as efficient as it used to be, because of the slow average travel speed getting from, say, the outskirts of Melbourne towards inner suburb deliveries. They are increasingly looking for smaller staging points closer to their customers.

Ms BIRD: In Sydney with the massive increase in people there has been a fragmentation rather than an agglomeration of activity, because people are going online ordering stuff expecting it to be delivered to their household. It used to be quite an uncommon thing that you would have a delivery to your household, but it is now becoming perhaps a weekly thing. We heard the same thing. They were saying there is no parking anywhere in the city when you are doing these deliveries, even if you are in fairly small vehicles. Is that the trend that you are picking up on?

Dr Potter : That is it. Increasingly, for some of the larger stores we have been told that they are holding stock in stores in suburban shopping centres rather than in large distribution centres. All of your flat screen TVs might be in Chadstone and all of your audio equipment might be held out at Keysborough. The freight delivery route is from these middle suburbs to a destination rather than from the fringe into the destination. Of course, for online purchasing you do not really know where it is coming from. My daughter ordered a new pair of netball shoes a month ago because the local shopping centre did not have the colour she wanted. They came from the storeroom of a store outside of Perth, but all she was concerned about was that the freight was cheap enough and that it arrived before the next game.

Ms BIRD: The significant and rapidly changing nature of the economy of a city is one of the things I am quite interested in. To some extent, how we live our lives is changing quite rapidly, and yet our planning and structures seem to be around presumptions of how it has been done to date-type basis. That was just a glaring example that was given to us, that is, a person might have a home delivery once a year, if ever, and now we expect it to be there all the time.

Dr Potter : We have seen that in newly registered commercial vehicles, freight vehicles, it is the small light commercial ones that are growing most rapidly, whereas the demand for the very large long-distance prime mover has been falling. Certainly, New South Wales pointed out to us last year that their biggest growth in road crashes was light commercial vehicles within the Sydney metropolitan area, which ties in with that growth in their use.

Ms BIRD: I wanted to go to the other issue you raised around road funding and charges. There is an astonishing figure there. Fuel excise revenue is projected to drop from $8.5 billion per year in 2012 to just $3 billion in 2050, and the implications that has for funding of roads and so on. Can you just touch on the work that you are doing there for the Commonwealth?

Dr Potter : Yes.

Ms BIRD: Also, being in an area where my state government is proposing a $10 each-way toll for an upgrade at the road between Wollongong and Sydney, there is huge resistance to that in the community. It strikes me that part of the reason that happens is actually because we do not have well developed public transport, and so people see governments are locking them into an expensive option as opposed to saying, 'You've got the public transport, which is good and efficient, and if you need to use the road you pay a premium to do that.'

Dr Allan : I will also talk a bit now about our role in current price settings. We have a role under the Fuel Tax Act but also through the agreement where we recommend to ministers charges that apply to heavy vehicles. That is the road user charge, which is the rebate on diesel excise, and then the registration charge. The goal was to have nationally consistent prices applied to heavy vehicles. The Commonwealth, though, is looking at changing that. The federal minister, Minister Fletcher, made some announcements last year about the government's response to the Infrastructure Australia report. He flagged that they would look at changing that, but he also flagged that the Commonwealth will look at, over the next 10 years—so certainly not in the short term—ways to improve what they call a total market reform in terms of charging for road use and road consumption. Our evidence has shown declining revenue from fuel excise over the coming years. We are assisting the Commonwealth in that, but certainly it is the Commonwealth Department of Infrastructure and Regional Development that is leading that. I notice Philippa Power put in a submission to the inquiry. She is the FAS who is responsible for that area.

Ms BIRD: The other issue is about public transport development alongside road transport development. It is not just in terms of moving people. I am very conscious that movement of freight can become a significant issue, and particularly when you are talking shorter runs, actually putting onto trains, decanting off trains into trucks and things, and the natural market pressure is to go, 'Let's just put it on trucks at the beginning and move it around.' What sorts of trends have you seen in that space that we might need to look at?

Dr Potter : There is some restriction, particularly with the intermingling of networks between the urban passenger network and the freight network. You will certainly see that in some areas. I understand in the Sydney Basin that freight movements are prohibited at certain times of the day to allow for passenger movement. In terms of getting greater freight capacity, there is probably a need to disentangle the urban commuter networks as much as possible from the freight networks. I think the inland rail route is a proposal to do that, to disentangle some of the freight that currently goes through from Melbourne to Brisbane through the Sydney Basin.

Ms BIRD: Just finally on that, coming in the other direction, given that our economy is also fragmenting in terms of many more smaller businesses, home based businesses and people doing all sorts of activities in smaller and smaller units, one of the things they are doing is also the export side of it. A wonderful business that is now a medium-sized one started quite small in a fellow's backyard/garage and producing very specialised electronics.

Mr WALLACE: Was that Microsoft?

Ms BIRD: Yes, that is them—a Wollongong based company. The challenge then is getting stuff out and about and distributing from a very diverse base as well. I am just wondering if you have seen evidence of that and the challenges.

Dr Potter : Yes. Certainly, in terms of logistics forwarding, part of the growth around the port hinterland is for the staging of exports. It is relatively straightforward if they are arriving in full container loads from their origin, but for the smaller markets that may not be producing a full container load of exports themselves, having somewhere the container can be assembled, loaded and then put efficiently on ships is one of the drivers of port precinct growth.

Ms BIRD: So, that is pushing the demand for additional land within port precinct areas, which is fairly new?

Dr Potter : Or within convenience and with a direct connection from it. That has been one of the changes in the dynamics of traffic around the cities. Areas that used to be receiving imports to manufacture things that went back out again are becoming areas where—

Ms BIRD: We aggregate exports. Thank you.

Mr WALLACE: Are you familiar—and I am just speaking a bit more parochially—with the rail corridor between Brisbane and the Sunshine Coast?

Dr Allan : I am certainly aware of some of the planning from my earlier days. I am conscious you had two speakers who spoke about the better cities program. I was actually the Commonwealth program manager in the Department of Housing and Regional Development that looked at the southern rail corridor from Beenleigh extending to the Gold Coast. Chair, you spoke earlier about master planning. That was an area where the Commonwealth did use some money. I think it was $125 million total Commonwealth expenditure, and they pulled in money from the Department of Transport, about $90 million, to build that rail line and then have some master planning of that corridor for the urban settlements around Coomera, Ormeau and Robina stations. That seemed to pick up some of your sentiments. At the time, we were looking at what was then called the CAMCOS corridor, which was going into Maroochy.

Mr WALLACE: CAMCOS corridor.

Dr Allan : Yes. I have some understanding, but it may be a little dated.

Mr WALLACE: I think it is probably fair to say that it is dated. The CAMCOS corridor is still a corridor with no rail on it. The rail line in parts between Brisbane and the Sunshine Coast, where my electorate is, particularly north of Beerburrum, is a single track—the same track that was laid in the 1890s and the same track that supplies all passenger and all freight movements to Cairns. What is your view of the productivity of having that single-rail track and what would be achieved by duplicating the rail line at least in part?

Dr Potter : I would need to know a lot more than I do about the demand for commodities to move along it. We have had some advice from Far North Queensland fruit growers, for example, who have talked to us about the inefficiency of trucking their produce down to Brisbane to go out through the port there and then continue back north past them again in export markets. But, again, we have not looked in any sort of detail about the sorts of volumes that are involved in that and whether they would be sufficient to justify any new infrastructure to support them.

Mr WALLACE: That is not something you have even looked at?

Dr Potter : We have not, no.

Mr WALLACE: Would you expect to be asked to look at that issue?

Dr Allan : It is not within our mandate. As I say, our mandate is primarily around nationally consistent legislation. In terms of freight planning, for example, that would probably be better looked at by Infrastructure Australia. But our goal is to have nationally consistent, as I say, legislation. If we are talking about planning legislation—and I am conscious you are dealing with six states, two territories and 500 councils—there may be a role for the Commonwealth to play in improving the planning legislation. Going back to my role in the former Department of Housing and Regional Development, the Commonwealth used to fund programs such as the Local Approvals Review Program, which provided grants to improve processing times and other things in a collaborative manner to allow developments to proceed in a relatively quick time.

Mr WALLACE: Thank you.

CHAIR: With automation and robotisation of storage and autonomous vehicles has much thought been given to whether our ports and immediate storage areas can be concentrated, and is there the capacity through this advancement to differentiate transport so that whatever could be transported and delivered at night or away from peak periods as a more active strategy could be pursued?

Dr Potter : In terms of the off-peak period and off-peak delivery, that is something where there is a fair bit of research going on at the moment, certainly through Austroads, which is looking at some pilot programs, particularly up around the Gold Coast, in anticipation with the Commonwealth Games and the demands that it's going to put on the road network and freight delivery. One of the pressures for off-peak and late-night delivery is that the destinations are often in urban areas and the residents do not like the idea of the freight arriving in the early hours of the morning, for noise reasons rather than congestion reasons.

CHAIR: Yes. Electric vehicles can be close to silent. Would that facilitate that type of delivery?

Dr Potter : There is certainly potential there for that as we move into electric, and even the modern generation of diesel vehicles are a lot quieter than their predecessors, but with achievable noise limits. Some of this was put in place in London during the Olympic Games of 2012, around off-peak deliveries with some noise restrictions and use of particularly quiet vehicles. There is still the potential noise of getting the container on and off the truck and onto the loading dock, which is not necessarily a silent operation. But there is certainly a prospect there. I think the freight forwarding companies are interested in the potential for electric vehicles for autonomous or automated vehicles.

CHAIR: Going back to Port Botany, for instance, we had a presentation some time ago about the prospect of decentralising, to some extent, and having Newcastle and I think Nowra as major ports linked to Western Sydney, with infrastructure to dramatically increase our capacity.

Ms BIRD: Port Kembla.

CHAIR: Was it Port Kembla?

Ms BIRD: Port Kembla-Newcastle. That is the triangle.

CHAIR: That would be sort of long-term planning for that whole regional growth. Is there any active work being done there?

Dr Potter : I am certainly aware that the Port of Newcastle is quite interested in the prospect of increasing their general freight and the potential of the inland rail connection for making that a viable operation, increasing the potential catchment coming in. Sydney, of course, with the intermodal hubs that are either existing or being developed at Chullora and Moorebank, the very substantial ones, are intended to be open access so they can be provided for by any operators, road or rail, on the way in. Certainly, an appreciable amount of work is being done by Data61 on a model to calculate the relative efficiency and productivity associated with using other road or rail to get from a port to one or other distribution centre, and what is the most efficient way of moving the freight within the current constraints.

CHAIR: Thank you very much for your attendance here today. If you have been asked to provide any additional information, would you please forward it to the secretary by Tuesday, 12 September 2017. You will be sent a copy of the transcript of your evidence and you will have the opportunity to request corrections to transcription errors. Thank you both, again, for attending.