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Hawke government resolved to push road and rail reform



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COMMONWEALTH

PARLIAMENTARY LIBRARY MICAH

158/91

15 April 1991

HAWKE GOVERNMENT RESOLVED TO PUSH ROAD AND RAIL REFORM

The Federal Government is prepared to move quickly and decisively in cooperation with the states and territories to implement micro-economic reforms in Australia's road and rail sectors, the Federal Land Transport Minister, Bob Brown, said today.

'Public support for road and rail reform has been matched by government agreement to the coordinated development of these important sectors', Mr Brown said.

'The Industry Commission estimates that formation of a National Rail Freight Corporation will generate national savings of $1.7 billion, while road transport reform has the potential to deliver a further $1.4 billion. Overall,

land transport reform is estimated to add more than $6 billion annually to Australia's gross domestic product.

'Such substantial gains cannot and will not be ignored by this government. It makes absolutely no sense to continue to forego these benefits'.

Speaking in Canberra at the annual conference of the Australian Bus and Coach Association, Mr Brown said the Federal Government was confident that the overall cost of transport to the national economy could be lowered.

'Long-distance bus travel is an example of an industry disadvantaged by the fragmented way road transport is regulated in this country', he said.

Transport reforms would be introduced in a manner that did not advantage road or rail, but allowed each mode to compete fairly for a share of the expanding national transport task, Mr Brown said.

The aim of the reforms in road transport is to:

. establish a more durable decision-making process with greater independence from governments;

. introduce simplified, nationally-consistent regulations and a national heavy vehicle registration scheme; and

. introduce fair and equitable national road user charges based on road costs that reasonably can be attributed to vehicle categories.

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Mr Brown said that while the road transport industry was highly competitive, the rail sector was not.

'The combined operating losses of the various State- operated railway networks is approaching $3 billion annually.

'The Federal Government believes that Australia cannot continue to tolerate a rail system that does not meet the needs of users and incurs massive, increasing deficits.

'If we do not act as a nation to arrest this decline now, in a few short years we will have effectively lost our rail systems altogether'.

Mr Brown said it was wrong to suggest that governments were seeking to favour rail over road in the establishment of a National Rail Freight Corporation.

'What matters ultimately is the efficient, cost-effective movements of goods between destinations by whatever means is appropriate.

'Accordingly, the Government's aim is for a revitalised land transport sector where road and rail compete fairly for tasks best suited to each mode without the distortions of hidden subsidies.

'This requires a more efficient, competitive, commercially- orientated rail system better able to meet the needs of users.

'It also requires reform of road charges and heavy vehicle regulations to remove distortions in state revenues and road costs and to improve the productivity of the road system and transport operators'.

Mr Brown said that based on current expenditure projections, the Federal Government would provide an unprecedented $5 billion on road and rail infrastructure during the next three years.

'Spending by states in these areas will be in addition to this sum. The overall revenue contribution is large in comparision to Australia's tax base.

'This massive investment will be delivered to the Australian people in a manner that will generate optimum transport efficiency and stimulate industries relying on getting goods and produce from manufacturing and primary production areas to processing plants and ports'. Decisions

on these matters will be taken at the Special Premiers' Conference next month.

Media contact: Brian Hill (06) 277 7440 (w)