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Investment of Commonwealth and state funds in public passenger transport

CHAIR —Welcome. I remind senators that the Senate has resolved that an officer of the department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. Officers of the department are also reminded that any claim that it would be contrary to the public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for the claim. Would you like to make an opening statement before we moved questions?

Ms Morrissey —Thanks very much for the opportunity to present today. It is a very important issue for the Northern Territory, and we have acknowledged the terms of reference and the parameters of the review. We just want to emphasise there is more in this tag team than the four people sitting at the front. We have various expertise sitting around us for when we get into more detailed questioning. We have noted your journey around Australia. We have noted the key issues outlined in other jurisdictions and the public transport issues. Many of those urban issues would be similar to the issues faced in the Northern Territory. I would like in particular today to outline some of our regional and remote issues because in the future planning of public transport services in the Northern Territory we feel that is where the emphasis will need to be both in terms of public policy and in terms of funding and infrastructure.

Within that context I would like to take a minute to talk about our geographical and population sitting. There is a population of around 221,000. Darwin has 117,000 or thereabouts. It is the only centre classified as a large urban centre. Our population density overall is extremely low, at approximately 0.16 persons per square kilometre. Darwin and Alice Springs hold approximately 66 per cent of our population and a further 7.88 per cent live in smaller urban centres of Katherine, Nhulunbuy and Tennant Creek. They are the main urban highlights.

Outside of these places the vast distances, isolated population centres and remote communities are a challenge for governments, bureaucrats and others working in this space. And we concur with our colleagues from the Local Government Association about the particular challenges in the bush and the need to address them. Those long distances create challenges for moving people for social, recreational, employment, health, educational, business, tourism and other purposes. There are big needs out there on a daily basis. To add to this we have the seasonal mix in our particular set of circumstances. For many months of the year many of our communities are isolated, and that creates great challenges for accessibility for health, education and normal commuting.

To meet these challenges over time the Northern Territory population and government have responded with a very creative mix of road, air and marine transport—and this needs constant refocusing as players come in and out of the market and other needs emerge. The regional circumstances and the regional solutions to those circumstances are very important and there is certainly no one-size-fits-all solution for public transport needs in the Northern Territory. We have an extensive network of roads and bridges. Maintaining this infrastructure to allow for the delivery of services is a great challenge in itself. I think you would have seen situations that make the national papers—such as the recent Barkly floods—and the enormous effort put in to remedy those situations. Statistically those things happen and they create more of that challenge.

To those geographical and social circumstances you can add the particular policy mix in the Northern Territory at the moment. We have significant responses such as the Commonwealth government’s Emergency Response, which has been mentioned again by our local government colleagues. This has created new constructs. We also have the Northern Territory government’s Working Future program, an important focus of which is the development of 20 growth sounds. This was mentioned by the Local Government Association as well. A key focus of both the Commonwealth and the Northern Territory government endeavours at the moment is to improve social and economic benefits. We would argue very loudly and forcefully that transport is such an important part of the future delivery of many of these services. The planning and provision of public transport services and infrastructure, including roads, aerodromes and barge landings to support new and current hubs is going to be critical in terms of health, education, housing and employment outcomes.

I would like to indulge in an example of a desktop exercise that was carried out in relation to Maningrida, which is one of our communities that was mentioned this morning by our local government colleagues. It is a remote community in north-east Arnhem Land. The exercise was based on a 50-kilometre radius zone. The operational cost, excluding roads, of providing public and school bus transport to and from Maningrida and the outstations varies from about $1 million to $2.3 million per annum, depending on the service delivery parameters. We can provide figures on the Darwin comparison to that.

CHAIR —Is that for school transport, or for all transport?

Ms Morrissey —It is for both public and school bus transport. The cost of upgrading the existing maintained network of Northern Territory government roads and shire roads within the 50-kilometre radius zone to targeted standards—that is, upgrading to sealed, gravelled or formed standard based on traffic demand and need—has been estimated at $30 million over the next 10 years and a further $32 million for the following years. Those figures are based on 2009 data. They do not include the escalation of costs that is a regular feature of road infrastructure building in Australia.

CHAIR —Sorry to interrupt. What population would that service?

Ms Morrissey —What is it in that area, Leon?

Mr Morris —We are talking about Maningrida, which is hinterland. I can only make an estimate.

CHAIR —Yes, that is fine.

Mr Morris —It would be in the region 3,000 to 5,000. I can get details, if you like.

CHAIR —Yes, if you could take that on notice and come back to us, that would be good. Thanks.

Ms Morrissey —Those costs would be typical. That is one of the 20 growth towns. With escalation in those costs we can begin to appreciate the amount of future spending that will be needed in this area to provide public transport services. In a recent submission to Infrastructure Australia, the Territory identified the cost for upgrading major regional roads from their current low-standard, unsealed condition, with minimum drainage structures, at approximately $1.6 billion for the regional development roads and over half a billion for Indigenous community major access roads. That is in addition to the figure that I cited above. They are big numbers, so we would see those future public policy developments as very important.

What are we doing in terms of our integrated transport planning? Currently we are working on a 10-year transport strategy. In our notes to you when we were invited to submit to the inquiry, our minister replied that we have a number of pieces of work underway at the moment, which was the reason for the lack of a formal submission. We are developing a 10-year transport strategy. That will be a high-level framework to coordinate our delivery of transport services and infrastructure across the Territory. It will encompass both urban and regional services. Importantly, as part of that, we have commenced work on a 10-year integrated regional transport strategy through a comprehensive study of regional transport issues and opportunities. The study will look at ways to improve and expand passenger and freight services to communities, and will make recommendations on possible service delivery models, which may encompass marine, aviation and bus services, which take into account those different needs that I mentioned before, given different community needs and different geographical circumstances. We will have something in draft by the end of this year on that. That is a major exercise. To my knowledge it is the first time it has been attempted in the Northern Territory. We will be using that to inform a lot of our future planning.

You may be aware that there are some very innovative solutions in the bush at the moment. There are a number of bush bus type operations serving the west and south-west of Alice Springs. The Commonwealth has recently funded a trial in the Katherine region that we are all watching closely in the hope that that is going to be a good, innovative and useful transport solution.

It should be noted that the commercial viability of any of these services without some form of government subsidy or support, whether it is land or aviation based, needs to be further considered. I think there was some discussion with the local government association about funding a government subsidy of our urban bus services—and we can talk a little more about that in the future—but, generally speaking, urban bus services take through the fare box no more than 20 per cent of revenues. So in terms of the public good most of these things are subsidised at least 80 per cent and sometimes higher through government subsidy. I think we have to be realistic about what expectations we have in the bush for these commercial operators to be able to make a viable business. It is quite an issue.

The Commonwealth government, as has been noted before, contributes substantially to the provision of road infrastructure in the Northern Territory. There were some figures quoted for the Tiger Brennan Drive exercise in the local government—I think a figure of about $100 million was mentioned. That is a substantial federal investment in joining two of our satellite cities together. I can add a green note there: cycle paths have been included in that planning. So that is the regional picture, to the extent that I can sketch one fairly quickly.

In terms of our urban delivery, the centres of Darwin and Alice Springs have existing, government contracted, regular bus services and school bus services, so the government provides those. We also provide school bus services in Katherine, Jabiru, Nhulunbuy, Batchelor, Alyangula and Ti Tree. Our spend each year is about $15 million or $16 million on public bus services in Darwin and Alice Springs, and about another $16 million on school and special needs services throughout the Northern Territory. Our service delivery model in Darwin is predicated on a government contract. There are two major providers: one is Darwin Bus Service, which is a government business division or GBD, and the other is a major private sector company, which is Buslink. We spend a lot of effort in improving, or trying to get improvements in, that urban delivery. I think it is fair to say that in the last couple of years there has been a revamped government investment in public bus services. In particular, there is an investment of $3.2 million or thereabouts in services that will commence in January or July next year to substantially improve the Darwin service. So there is a lot of activity in that spot, and others here can give more detail.

Early in 2009, the government introduced free travel on the public bus network for seniors, pensioners, carers, and school children on school bus services. So that was a substantial announcement in terms of getting the payments down for people and getting people onto the services. Recently, too, there have been a number of service announcements in relation to new suburbs and areas, and we will be introducing a new, much upgraded, schedule from the middle of next year.

In terms of those broader regional issues and the needs of Indigenous people, we are also looking at better aligning our services in Alice Springs with town camps and getting children to school, and we are in close conversation and planning with other agencies on that. I would mention that there are special services, like Centre Bush Bus that have been operating from Alice Springs, and we can provide more detail on those. Centre Bush Bus is a pretty good success story. It has been going for about 11 years. It travels in the Alice Springs region to Tennant Creek, Docker River, Yulara, Yuendumu, Kintore, Amata and into the Pitjantjatjara Lands in South Australia. The government has provided a subsidy of $700,000 or thereabouts recently to get a second weekly bus service happening there. So that operation is really about helping people on communities to get into town, to get to their hospital appointments and to undertake their community business in town. I mentioned the Katherine trial, and that, as you know, is being funded by the federal government.

I should mention aviation before closing. A number of private aviation companies provide regular commercial passenger transport and charter services between Northern Territory centres. These services are vital for transporting people and essential goods to communities.

The viability of these services is continually being challenged by a number of issues including economic sustainability, ageing existing light aircraft and, as I think was mentioned by our local government colleagues, some of the CASA regulations. We would acknowledge that it is important to have a regulated sky for safety reasons, but there is no doubt that that is an impost. The Northern Territory government does not currently subsidise regular air services, but we do encourage communities to access the Remote Air Services Subsidy Scheme which was mentioned earlier. We maintain 72 regional airports. That was part of the local government discussion too with major communities and there is a big program of progressively upgrading those airports. The Commonwealth government’s emergency response has provided additional funding in that area as well.

In summary, the Northern Territory faces some extreme and complex challenges in seeking to provide sustainable public transport services in an urban setting but also, we would like to emphasise, in its regional and remote areas. Again I would state that the importance of public transport to society, environment and disadvantaged groups cannot be underestimated. In terms of equity and social policy progress in the Northern Territory, the transport link is an extremely important one

CHAIR —The 10-year transport strategy, why now and not five years ago or 10 years ago or five years down the track?

Ms Morrissey —I would not wish to create the impression that there has been no transport planning in the Northern Territory to date. I think there are probably a range of circumstances to do with the fact that there has not been a recent strategy but I can assure people that there has been a massive amount of planning in that time. Why now? I think it is a particular set of circumstances with urban growth, with our needs in the bush being highlighted more and more and with the substantial population growth occurring in the Northern Territory. I think it is fair to say that, nationally, transport has been a bit of a poor relation in terms of public policy in recent years but we are seeing the focus that is happening in the Territory now mirrored elsewhere in Australia.

CHAIR —So it is those sets of circumstances coming together at a point in time?

Ms Morrissey —At a point in time, yes.

Mr Morris —If I might add, on 20 May this year the government announced the Working Future policy. This is the government’s vision for remote area servicing. It is a six-part strategy, one plank of which is remote transport. What has happened is that there has been considerable thinking about how our remote service delivery will operate. You have heard about territory growth towns and the importance of the hub and service model is an absolutely critical element of that. One of the planks of that strategy is the remote transport strategy. It links in with the fact that we have had a substantial announcement on our policy for remote service delivery within the last couple of months.

CHAIR —Thank you. I am very happy for you to take this on notice. The local government association mentioned earlier that they had put in a submission some years ago to one of the transport planning reviews. Would you mind coming back to the committee on what that actually was and what the outcomes of that review were?

Ms Morrissey —I think it was a plan to inform a plan, at the risk of sounding like the total bureaucrat. It was before my time. The work that has been carried on and that planning over time will obviously inform this one as well, but I can provide more information on that.

CHAIR —That would be fine. I did not expect you to have that with you.

Ms Morrissey —I suppose the other area that I would like to cover off on local government comments is that there was some suggestion our road corridors have not been protected or claimed for our future transport growth. I think we have some very farsighted public servants, some of whom are in the room now, who 20 years ago absolutely secured those corridors for future transport needs, certainly in the Darwin region.

Senator STERLE —One can only wish you the best in trying to solve the regional public transport situation. I am very well aware of the distances that we are talking about in your fine Territory. Here in the city you have told us there are two bus companies and one is government owned.

Ms Morrissey —For the urban contract. That is the principal model.

Senator STERLE —And they go as far as Palmerston and around the coast?

Ms Morrissey —And beyond.

Mr Shearer —The bus services will run out as far as Howard Springs, Coolalinga and Noonamah, although they are relatively infrequent. Part of our expansion is to upgrade rural transport and include it into a more integrated model with people commuting into Darwin on a daily basis or shopping in Palmerston.

Senator STERLE —So regularity of service is an issue?

Mr Shearer —Yes, it is.

Senator STERLE —That is not unique to Darwin, we can tell you that. In terms of getting best value for the ratepayers in Darwin, how are those contracts negotiated?

Ms Morrissey —That is a good question. We are to commence some new contracts from next year. In terms of normal contract negotiation, it is working out as a government and a government agency how to provide the best possible outcome for the end user.

Senator STERLE —The Territory government obviously puts out the routes for tender every so many years; is that how it is done?

Ms Morrissey —To date it has been fairly short-term contract renewal. The government has a government service provider, which is an important part of this delivery mechanism. Over time there have been a number of private sector providers, but currently there is one other major private sector provider, and that is very much about the market forces of bus companies.

Senator STERLE —Do they tender against each other’s routes or does company A have this area and company B have the other area?

Ms Morrissey —We operate a hybrid model of service delivery in the Northern Territory currently. That means that the government bus service and the private contractor work together to provide an integrated service for the whole region. Over time that has developed as the most efficient model. It is a shared service delivery model.

Mr Shearer —Perhaps it is easier to put it this way. A Darwin bus, which is the government business division, might be running a seven o’clock service to Casuarina and Buslink might be running the 7.15 service to Casuarina. They vary through the day in running shared services. They operate with the one livery. For all practical purposes, other than the driver’s shirt, you would not be able to tell the buses apart, so the public see it as a holistic service. There have been a number of reasons why that has come about. Only recently, as part of the contract preparation that you just asked Marj about, we looked at models for the best value for money. We are currently suggesting internally that what we have got has out of evolution worked out to be very good in relation to the actual cost we are paying, the profitability of the two companies and the services we are getting from them in the way they reduce what we call dead kilometres—that is, where a bus runs with no passengers. We think we have a pretty good service up here at the moment for the money that is being spent on it.

Senator STERLE —So the government owns all the government company buses. Does Buslink own their own buses?

Mr Shearer —Yes, they do. Their company policy is to purchase only new buses, and they have quite a young fleet. The fleet across Darwin by Australian standards is quite young and it is 100 per cent disability discrimination act compliant.

Senator STERLE —Good. It would not be easy for another bus company to come in and tender on these routes as well unless there was a very lengthy contract because you have to talk about depots, drivers, buses and all sorts of stuff. I am trying to work out how to make sure that the taxpayers are getting the best value for their buck, for want of a better phrase.

Ms Morrissey —I think it is fair to say that we are at a fairly delicate point in a tendering process at the moment. I do not wish to go into too much detail on that.

Senator STERLE —That is fair enough. If you had said that at the start, I would have left you alone.

CHAIR —Was the government bus service running and then the private service came in on top of that? If it eventuated like that, what was it that the private company offered that the government could not do simply by expanding their existing service?

Ms Morrissey —A decision was made at the time, I think in the 1990s, that that was the model that the government of the day, which was a different government than today’s government, made in terms of delivery of the services in the Darwin region. So those decisions were made at that time.

CHAIR —So nobody knows why it came about.

Ms Morrissey —I would think that in terms of the government of the day it was a question of policy and probably about allowing the private sector into the marketplace.

CHAIR —Okay. Having let it in and not knowing the actual reasons, you find, having inherited that system, that it works more efficiently than if you had just a single government structured entity?

Ms Morrissey —That is our current advice but, as I say, we are in a period when we are looking at all that at the moment. But certainly we consider that the hybrid model serves both the government well and the commuters of the Darwin region well.

Senator STERLE —How many buses are government owned?

Mr Shearer —We contract them to supply 26 on a daily basis. They actually have 31 in order to have spares and some spare capacity for us in the event we require them for special needs or other unscheduled services.

Senator STERLE —And the private owned company have how many?

Mr Shearer —The private owned company contractors on a daily basis to supply 21 buses for urban services. They operate 26 to allow for some spares and some fill-in if required. School buses are separate. In the Darwin region Buslink operate 67 buses for us on a daily basis but have a fleet of 80. They also have 11 special needs buses fitted out for wheelchairs and for children with disabilities but they operate nine on a daily basis so that there are two spares in the event of accident or breakdown.

Senator STERLE —What are the impediments—understand money is the main one, but what other impediments does the city of Darwin face in providing top-class public transport that is safe, sustainable, regular and having commuters wanting to start using public transport?

Ms Morrissey —I suppose we would argue for the size of the population it is many of those things that you describe. Certainly in terms of comparisons that we have made as part of our planning with similarly sized jurisdictions in Australia, the Darwin service is an extremely good one and we have had independent assessments made of that. It is hard to discuss your question without going to the money, because more investment in this area—

Senator STERLE —How would that money be better spent?

Ms Morrissey —One of your headings was around the regular services. We run models on our geography to provide what we consider to be the best possible services we can provide and what we would consider in terms of national and international comparisons to be very good services. So it is one of those ones where we would make those comparisons and as the government provider say that that is a pretty good service. I think if you are sitting out in some places on a Saturday or Sunday in Darwin and wanted to catch a bus then there would be some challenges in that. So we have got some challenges around planning for our vast geographical spread. If you were redesigning a city of Darwin, I do not think it would look the same shape.

Senator STERLE —There is an airport where buildings might be too close.

Ms Morrissey —There are some challenges right in the middle of it. We need an airport, so that is very important as well.

Senator STERLE —And Defence places.

Ms Morrissey —Yes. I think we face all the challenges that other jurisdictions do. You have made comments in terms of other jurisdictions getting people out of their cars is going to be an ongoing challenge as well.

Mr Shearer —To put some statistics out there, we are currently running about 578 services a day from point A to point B via various suburbs. With the government commitment for an additional $3.2 million next year, we will be increasing that to about 740 services a day. We are looking to increase frequency right across Darwin as part of our platform. The key transport corridors here are from Darwin to Casuarina and back. Casuarina is the main shopping centre. Palmerston is the new growth centre. Effectively, we have a triangle. We are trying to increase the frequency as part of the plan on those triangle routes. On route 10 we are currently running basically 15-minute services all day. It is very well patronised. Route 4, which a scenic routes to Casuarina along the coastline, is full nearly all day. We have had to run our articulated buses on there virtually every service to keep up with the growing number of people who are actually catching buses.

This is partly attributable to the change in policy in January this year where there was free travel for seniors, carers travelling with seniors, people with certain Centrelink privileges and all students. We found quite a dramatic move in non-commuter travel—that is, social travel—during the day. Many of our routes have increased by 10 and 15 per cent, which are big numbers in public transport. We are moving a lot of people, I am not necessarily sure at this stage if we are moving more people out of their cars or if we are just moving the same people more often, because with it being free when you are a pensioner you do not have this restriction of money limitations. There is a feeling that they are moving around more often.

We would like to increase our patronage on commuter services, but the reality is that we cannot really have enough buses operating all day to justify the commuter travel. We are running 46 buses on a daily basis. It would be nice if we could have, say, 50 or 60 for that hour-and-a-half in the morning and hour-and-a-half in the afternoon, but that would make them completely unviable for the rest of the day. So we are trying to cater for as many commuters as we can through express services and direct services and then we are using our other services during the day for the more social transport.

Senator STERLE —When you talk about those extra services—120-odd or whatever the sum is—it is simplistic to think you can just whack more buses in. There is the price of the bus, you have to put a driver on it, you have to house it somewhere eventually and all sorts of other staff. That really brings into context this planning, doesn’t it?

Mr Shearer —Yes.

Senator STERLE —Is the $3 million extra that the government has committed for next year for road upgrades as well as extra buses?

Mr Shearer —No. The $3.2 million committed for next year is simply to increase bus services. We currently have, and will have for the next four years, $750,000 a year to build or upgrade existing bus stops and bus shelters to make them Disability Discrimination Act compliant. As a matter of recent record, in June and July this year we installed 15 new bus shelters that are fully compliant and we have upgraded another 10 bus stops. The program will continue for the next four years. Given the size of Darwin, that is a reasonable commitment. We will be upgrading something like 70 bus stops that do not have shelters so that by the end of this program they will have shelters and we will upgrade either existing shelters or middle-of-the-road bus stops so that they are Disability Discrimination Act compliant. We think that is pretty good funding for the size of the area that we are operating in.

Senator STERLE —That is a good initiative and the government should be congratulated. But how are you getting the extra 120 services? Are you putting a bus lane in so that the buses turn around quicker, or is that money going to go to extra buses?

Mr Shearer —The money is simply going to extra buses.

Ms Morrissey —Extra services.

Mr Shearer —My apologies. I meant extra services, not necessarily extra buses. If you travel around Darwin even in peak hour traffic you can actually achieve quite high average speeds. If you are travelling from Casuarina to Darwin in the morning—and I have done it on a number of occasions, while I do not live there—you can be in town averaging the speed limit the entire way until right to the edge of town. So the buses actually flow very well. There are some restrictions around Palmerston where traffic congests in the morning, but the Tiger Brennan Drive extension should resolve that. For the most part, we do not actually have any issues with buses being blocked in traffic. The buses flow very well.

Senator STERLE —What I am missing is: how are you squeezing in those extra services?

Ms Morrissey —Rescheduling, basically on the same roads. Our future transport planning does allow, with the corridors that we have, for bus lanes when it is deemed we are at the point where that would be the right way to go, considering the cost benefit.

Senator STERLE —Because those bus lanes are not there now.

Ms Morrissey —No. Ken, do you want to make any comment on that? Ken is one of our major transport planners.

Mr Grattan —There has been a bit of talk about bus lanes and where they fit in the context. The use of buses in the peak in Darwin is about 3.5 per cent of commuter use of public transport. If you move through Hobart, Adelaide, Brisbane and upwards through the system, Sydney is about 25 per cent or 30 per cent. By comparison, we are very close to Hobart even though we have half the population. There is a fairly high public transport usage on buses here even for a small population. If you look at the numbers, we are directly comparable to Christchurch and all the other similar sized cities in New Zealand,.

In terms of the uses Stuart alluded to, in the system that stands at the moment we do not have any delays to drive that issue. There are three things that drive public transport usage. One is congestion, one is parking fees and one is service delivery. Congestion is not an issue in Darwin. There are isolated intersections but they are to be dealt with by Tiger Brennan Drive, so congestion is not a driver. The travel time from Casuarina into the city, for example, in the peak time is 20 minutes and off peak it is 17 minutes—hardly a congestion issue. So that is not a driver. It costs $3 a day to park in the city in Darwin, so parking fees are not a restriction on people using their cars. If you take those out of the equation you have service delivery. Marj has already talked about the options of improving service delivery to make people use buses. A series of things have been done over time—for example, putting bike cages at our interchanges and improving the interlinking of services. People do not like changing buses. Stuart has been looking at having through-run buses from areas. Rather than having to change buses you have a through-run service, so people get on a bus and stay on a bus. These are all issues of service delivery. That is going to attract people initially.

In terms of the road network, as it stands there is no immediate need for bus lanes or those sorts of things in the system. We foreshadow that in the next five to 10 years we may end up needing to deal with things like intersection jump lanes, where you give a bus a preference to bypass the intersection during delays. You may need to give some preferential entry to various elements, like buses coming out of their bus stops by signal control to give them a special exemption to the system. They are going to be the short-term issues.

Regarding the long-term issues, rapid transit is the future. We have the corridors protected; they have been protected for 30 years. The freeway runs along Tiger Brennan Drive. The rapid transit system busway or light rail—I believe in a busway; other people prefer light rail—uses the same corridor. It does not matter what it is, what form it takes; it is a rapid transit system. We have the corridors protected, but it is 15 to 20 years away. There is no justification in the short term for that. We have planning for the city around where we will develop that goes back to the seventies. We are lucky in Darwin. The land we are developing for the urban centres, Palmerston and the future Weddell, is Crown land. Therefore, the government has had the ability to manage the town centres and the road links upfront to protect the corridors for both road and public transport, and we have done that. The only issue is the timing—when to implement those various stages.

Senator STERLE —To come back to my original question, these extra 120 services are going to be delivered through better scheduling not through extra buses?

Ms Morrissey —Better scheduling may imply extra buses.

Mr Papandonakis —Up to five extra buses.

Senator STERLE —Okay.

Ms Morrissey —But those are conversations we need to have with others.

Senator STERLE —Yes. I will leave it at that. Thank you.

Senator O’BRIEN —I would like some further information on a couple of issues already mentioned. You mentioned the Centre Bush Bus system. I did not get a complete understanding of what you were talking about. You were talking about linking centres to the Alice on some semiregular basis. Can you give us more information, please.

Mr Shearer —The Centre Bush Bus is effectively a private operation run out of Alice Springs. They use a number of buses; a couple of them have been specially built: they have a four-wheel drive chassis and then a bus body is put on top of that, because of the types of roads they are operating over. The government, as Marj mentioned earlier, has provided them with a grant of about $700,000 in the past financial year and will probably do the same again, although I cannot guarantee that. We have got some timetables; they have just arrived.

Ms Morrissey —We can table these.

Mr Shearer —The service itself tends to focus on transporting Indigenous people to home country or bringing them into regional centres. Much of the transport is to bring them in for health reasons, to visit Centrelink or whatever else. The services are regular but would be described as infrequent, but if you look the passenger numbers they are carrying it probably cannot be any more. They might do a run 200 or 300 kilometres out to the west, stopping at Hermannsburg and a few other communities, but for the last 100 kilometres they might have two people on board.

The methodology for payment is that the Indigenous people have Centrelink accounts and they are billed through Centrelink so they do not necessarily have to pay on the day. So if they do not have money on the day that is not a problem to the bush bus people because as soon as the Centrelink payment comes then it will be drawn down. So not actually having cash available is not a restriction on the use of the bush bus, which is pretty good.

As Marj mentioned earlier, there is a lot of interest in how this operates in and around the Northern Territory, probably from Far North Queensland and also in northern Western Australia, because we all share the same issues. We have low populations and long distances, and saying to somebody, ‘Would you like to operate a bus service on a commercial basis?’ would be asking them to go broke. So a government subsidy, at whatever level of government we are talking about, is going to be an ongoing requirement if we are to provide those people with at least the bare minimum in transport for health and to deal with government agencies, not to mention shopping and the visiting of relatives. Within the Indigenous community, attending ceremonies is a very important thing and this is helping them to go to those formal functions.

Senator O’BRIEN —How are fares structured?

Mr Shearer —They are structured by the company. I am not sure what their methodology was, but it is effectively: the longer you go, the higher it is. But they are not unreasonable by any bus service standards.

Senator O’BRIEN —Can you give us examples?

Mr Shearer —Sorry, not off the top of my head. Marj?

Ms Morrissey —We can.

Senator O’BRIEN —You have got some documents and stuff—

Ms Morrissey —We can find that out and we can provide that.

Senator O’BRIEN —On notice?

Ms Morrissey —I should add that light freight services are also provided as part of the mix, and the operators have recently provided us with information that the amount of freight carried has risen with the introduction of that second service, with the main items carried being fresh fruit and vegetables for stores; medical supplies and pathology; vehicle parts; and art supplies. So, in the six months to 1 April 2009, 2,467 freight items were carried on the service.

Senator O’BRIEN —In the region covered by that service, there are other needs, and one that I am aware of is the sporting needs of those communities—the fact that Northern Territory AFL requires the teams from the communities to play in Alice Springs, and to get there they need transport. Do you have any information on how they provide that? Is it in any way subsidised by government or is it their responsibility?

Mr Shearer —You are right; AFL, and to some extent Rugby, is a passion amongst Indigenous communities. There is also a large amount of pride in the players that play both at a local level and at a national level, with the new team, the Territory Thunder. However, for people to come from the communities, it involves booking something like a minibus, as you heard before, or booking local charter services. We do not at this stage fund that in any way, shape or form. Having got them into town, though, both in Darwin and Alice Springs, for the AFL or Rugby games we put on special-event free buses to move people around, and they are widely used by all the communities. But we get a very high increase in the number of Indigenous people coming into town because they love the all-star games. Coincidentally, for the last three of four years, those games have been played at roughly the same time that the NTFL finals have been played, so we will get an increase in town of 3,000 to 5,000 just from Indigenous people coming in to watch their own players play a high-level sport.

Ms Morrissey —I would be happy to check out whether there are any other subsidies through other agencies in relation to those sporting trips, and we can take that on notice. As well, we can table those Centre Bush Bus fares. We can provide them to you.

Senator O’BRIEN —We would appreciate whatever you can supply to further elaborate on that particular service. Could you elaborate on the reference by Mr Morris to the remote transport strategy being part of another strategy. Is that documented?

Mr Morris —Yes. I can provide you with a Working Future package. I can table that. Would it help if I provided each member with a copy?

Senator O’BRIEN —It would, ultimately, but do not worry if you do not have it now.

Mr Morris —I have it here. As explained before, the Working Future package is the Territory’s vision for remote area service delivery. There are six planks to it, of which remote transport is an integral part.

Senator O’BRIEN —Does this document which we have just received detail the remote transport strategy aspect of the whole strategy?

Mr Morris —The details of the remote transport strategy have already been referred to by Marj in that we are developing a regional integrated transport strategy. This strategy document points to the requirement for that transport strategy and its need within the framework of the Working Future document.

Senator O’BRIEN —This is the beginning of that work?

Mr Morris —Correct.

Ms Morrissey —We have recently appointed that consultancy. It went to GHD. They are currently working with us and particularly over the next couple of months there will be substantial consultation with communities about that strategy.

Mr Morris —If I could summarise the vision very quickly. It is about growing 20 Territory growth towns to become major service centres for outlying communities, outstations and homelands. Integral to that is transport, both in and out of that service centre. The vision as it is expressed is that for very remote homelands most of the service delivery is likely to be some form of access to the local centre, although we do have service delivery moving out from service centres. The intention is that all existing services will be maintained and there will be improvements through improved service delivery in the hub centre and the ability for people to access that hub centre, and have transport facilities back to their homes. That is a summary vision of where it is going. We are in a very intensive process of putting the flesh on the bones of that vision and working very closely with the Commonwealth government in relation to the National Partnership Agreement on Remote Service Delivery, which targets 15 of the Territory growth towns.

Ms Morrissey —We can table the terms of reference for that integrated regional transport strategy as well.

CHAIR —That would be useful.

Ms Morrissey —It is a public document. It provides more detail of what we are hoping to achieve.

Senator O’BRIEN —The other question which hovers around these issues for aggregations of communities that rely heavily on traditional transport forms is the potential for a rise in the cost of fuels and the impact on costs of strategies. What consideration has been given to that issue within the government for 10, 15 and 30 years into the future?

Ms Morrissey —In terms of transport economics in recent years, we have seen very high fuel prices. It is a component of our transport planning and we measure it and weigh it along with other needs. Our bus network and fuel subsidies, can be outlined for you.

Mr Shearer —In relation to fuel subsidies, the federal government currently subsidises most businesses that run on diesel motors, in general terms. I think that is 16½c or 17c at the moment per litre. Having said that, we then subsidise all our contractors. Prices were put in place a number of years ago that it was agreed were reasonable prices on which to base their business model. So we have a fuel subsidy. It is a convoluted formula, but effectively we subsidise them back to the level agreed in around 2004-2005 so that their ongoing profitability is assured, no matter what the fluctuations of petrol are. In the world of public transport, you do not want one of your contractors to go broke, as happened in Victoria when national handed the keys back to the trains. You want to make sure that they are profitable and that they can buy new fleet and maintain their existing fleet. To be penny-pinching, for want of a better term, actually causes the service to be degraded, as you commented earlier, Senator. We have been looking after them on that to the tune of, in the last financial year, $1.1 million in fuel levy.

Senator O’BRIEN —Thanks for that. If there is any more that you want to add we would appreciate it.

Mr Shearer —No, I think that probably covers it.

Senator O’BRIEN —The only issue is that subsidy, if the price of fuel rises, either has to be borne by the contractor or by the government.

Mr Shearer —The government will have to continue that. We are hoping that, under the negotiations for the new contract, that may change, because it is one of the things that fluctuate for us. In government it is hard to argue for a budget that may go up or down depending on fuel prices; we are sensitive to that. But I think our contractors value the fact that we do this, because this does not happen in every jurisdiction.

Senator LUDLAM —I have one question which goes to the Northern Territory government submission to Infrastructure Australia. What you could tell us about the priorities there and what was funded in the end?

Ms Morrissey —Loosely speaking, the priorities were our bush roads, but I might ask Ken Grattan to provide a little bit more detail on that.

Mr Grattan —To get a feel of the Territory network, only 24 per cent of the Territory network, which is currently about 36,000 kilometres, is sealed. So the balance of the network, 76 per cent, is unsealed, of which 30-odd per cent are only unformed, flat bladed tracks, so it is a very low-standard network, basically unsealed, which means in the wet season in the Top End you do not travel on the roads—it is as simple as that. In terms of the Infrastructure Australia submission, what we focused on was regional roads in the system—in other words, arterial roads. We said we should be getting those up to sealed standard. Central Arnhem Road, which goes through Arnhem Land to Nhulunbuy is unsealed for two-thirds of its length, and that is one of the roads we targeted. That bill is $1.7 billion, just to get the arterial roads to a sealed standard. What we then looked at were the secondary roads to the major Indigenous communities out there. There is another $640 million to seal those roads. Even to seal just the high-level roads in the system was $2.3 billion. At this stage, that was not supported under the Infrastructure Australia first cut. I am not too sure where the second tranche will go in terms of that consideration, but there was no support in that.

In terms of Commonwealth funding outside Infrastructure Australia, there is a current program for which $52 million has been committed over four years. That is a shared-funded project with the NT of $83 million. It targets some of those roads for initial works. That was announced last budget. So there is money coming through but it is a very small bucket, as you can see, compared to the gap that has been identified—

Ms Morrissey —I should clarify, too, that we are just talking about the roads component of that Infrastructure Australia submission. There were broader submissions related to Northern Territory.

Senator LUDLAM —I was just wondering whether there was a public transport component to your submission.

Ms Morrissey —Not specifically. It was more, I suppose, infrastructure.

Senator LUDLAM —Other states and territories did have a public transport component. Was there a reason—if you could just step us through the thinking—why that was not included in the Territory’s submission?

Ms Morrissey —As with all jurisdictions, we had to prioritise what was considered the most important, from memory, in the guidelines for submission about the terms of reference. We decided to place our emphasis on the road network and other infrastructure, including the port of Darwin.

Senator LUDLAM —I will leave it, there, Chair.

CHAIR —Thanks, Senator Ludlam. I have one final question. How do you measure consumer dissatisfaction and satisfaction with the public transport services that you provide?

Ms Morrissey —We have an excellent public transport feedback system. We have cards in buses and on counters. People avail themselves of the system. We get back to people. We have tight turnaround times and we are able to be reasonably responsive where we are able to find a quick solution. As with all feedback processes, we are not able to fulfil some of the requests that we get, but many we are.

Mr Shearer —In the last 12 months we have received approximately 520 different items of feedback. At least one-third of those were positive. They were mainly from interstate tourists who wrote to us to tell us that they love our service. Then we have our locals, who probably think differently. But, on balance, for the number of passengers we carry, we think it is pretty good.

CHAIR —Thank you very much to the officers of the departments for being here with us today.

[11.11 am]