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Crunch time for land transport reform



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29 July 1991

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CRUNCH-TIME FOR LAND TRANSPORT REFORM

Tomorrow (Tuesday 30 July 1991) is crunch-time for land transport reform in Australia, according to Federal Land Transport Minister, Bob Brown.

"The outcome of the Special Premiers' Conference (SPC) will be crucial to Australia's future capacity to operate land transport efficiently. It will be a measure of the commitment of State Premiers and Territory Chief Ministers to the process of reform and to national objectives. It will reflect their capacity and willingness to adopt a national vision and to submerge narrow State parochial

interests, Mr Brown said.

"The SPC can put the final stamp of approval on a whole series of major land transport reforms which have been pursued over recent months by Australian Transport Ministers and Government officials.

"The SPC can make decisions which should have been made over 100 years ago. Australia has lived with and tolerated gross inefficiencies in its land transport industries because of an incapacity or unwillingness to recognise and ยท overcome the deficiencies of our Federal system.

"The achievement of world standard performance in the delivery of all transport services in Australia can add at least $12 billion in increased productivity to Australia's GDP every year. f ‘

"About $6 billion of that potential benefit is contained within the area of land transport - $4 billion in rail and $2 billion in road transport.

"National tax payers are becoming increasingly aware of and intolerant towards the knowledge that the poor performance of the national rail system is costing them $4 billion every year in increased taxation to cover operating deficits, Mr Brown said.

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"The proposed National Rail Corporation (NRC) is designed to address these deficits in the area of interstate freight. For the first time in over 100 years it will make possible the single control and management of all

interstate rail freight movement. It will eliminate an annual operating deficit estimated at $400 million and save State tax payers $1 billion over three years. It will allow the interstate rail freight system to become self supporting within five years. It will involve a $1.7 billion investment package over 15 years to bring

interstate rail freight services into the 21st century.

"It will bring national benefit of at least $1.3 billion in GDP each year.

"The NRC will help eliminate the last vestiges of our inheritance of inefficiencies associated with the different rail gauges which have made Australia a joke to the rest of the world.

"Overcoming these deficiencies will represent one of the greatest challenges to the statesmanship of State Premiers and Territory Chief Ministers.

"If they fail to measure up they will commit Australia to a continuation of these absurd rail operating arrangements for years into the future. The losers will be State tax payers, transport efficiency, the railway industry and the whole national economy.

"The second major area of reform involves road transport where efficiency gains can provide a benefit to the national economy of about $2 billion every year.

"Our whole approach to road transport reform has been based on the principle of "revenue neutrality" so that not one extra dollar will be raised in government revenue as a result of the reform process. However, there will be a redistribution of the financial responsibility for providing for the road network from lighter to heavier vehicles, because of the significant cross subsidisation which has been occurring. The undercharging of heavier vehicles has caused inefficiencies and distortions in the

pattern of investment and the distribution of resources in the road transport industry.

"The reform in road transport should be seen as a package. We have already started to introduce a national registration scheme for heavy vehicles. The SPC should also put its final stamp of approval on the creation of a

National Transport Commission to implement uniform operating and technical regulations across the whole of Australia. It should also agree on the principles which should govern the distribution of road responsibility

between the three levels of government.

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"At the October 1990 SPC Heads of Government agreed to introduce a uniform national system for heavy vehicle charging based on the principle of full cost recovery. It will be a measure of their genuine commitment to reform when they confirm this agreement.

"It is likely that the new charging regime for heavy vehicles will include a nominal registration charge, an access fee, continued fuel excise on diesel fuel and a mass distance charge. It is possible that zonal charging arrangments may be introduced and that any new charges will be phased in to ensure minimum disruption to the industry and those operators.

"It is not our intention to favour one mode of transport over another. It is not the purpose of Government to cause damage to any transport industry sector or to any transport operator. Our objectives are the pursuit of increased efficiency, greater cost effectiveness, improved national competitiveness and improved economic performance. The national community has a right to expect nothing less. All Australians will be the beneficiaries of these economic reforms, Mr Brown said.

Media inquiries: Brian Hill 06 - 2777440