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Opening address to Australian Logistics Council Forum 2012, Sydney



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MINISTER FOR INFRASTRUCTURE AND TRANSPORT

OPENING ADDRESS TO AUSTRALIAN LOGISTICS COUNCIL FORUM 2012

SOFITEL WENTWORTH SYDNEY

29 MARCH 2012

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  INTRODUCTION

As the late, much-decorated American General Robert H Barrow once said: “Amateurs talk about tactics, but professionals study logistics”[1].

Wise words which not only apply to military campaigns but also modern economic operations.

We are witnessing structural shifts in our economy that will see us increasingly reliant on our ports, our freight industry and our connecting infrastructure.

That’s why we greatly value the work of the ALC.

You bring together a huge variety of participants - the program for the next two days is a testament to your logistical prowess.

The Federal Government recognises this and urges you to keep engaging with us.

This engagement is particularly important when you consider how your industry is evolving, in part due to the changing nature of the global economy.

Australia Post demonstrates this - from bearers of increasingly rare ‘snail mail’, they are now integral to the growth of e-commerce.

[1] General Robert H. Barrow, USMC (Commandant of the Marine Corps), noted in 1980.

Last financial year Australia Post enjoyed an 11 per cent increase in parcels, directly linked to the enormous growth of on-line shopping.

This evolving logistics environment requires an evolving policy response.

THE RIGHT INDUSTRY FOR THE GLOBAL ECONOMY

Since 2007 we have been implementing a substantial reform agenda to transform our transport infrastructure.

Key to this has been logistics.

You link our farms and our factories, our mines and ports and our cities.

You connect our businesses to markets around the nation and the world, including the booming Asian region.

We must be as connected as possible to emerging markets.

Your success allows us to take advantage of these economic and trade opportunities.

Your own research highlights the great diversity of operators in your sector - 165,000 companies, employing more than 1 million people.

Yours is an industry that is growing.

Growth in freight will climb from 500 billion tonne kilometres in 2010 to an expected 1,000 billion tonne kilometres in 2030.

Moving even further into the future - 2050 - it is estimated to reach 1400 billion tonne kilometres.

That’s why the theme of this conference is so important - ‘Positioning Australia in the Global Supply Chain’.

If we want to be competitive abroad we need to be efficient at home.

We need to get it right.

For us to succeed in the global supply chain, our domestic supply chain must be integrated, productive and efficient.

NATIONAL REGULATORS

One way the Government can help your industry is to remove unnecessary restrictions and encourage innovation.

That is why we have created single national regulators for the road, rail and maritime sectors.

It will cut the numbers of transport regulators across Australia from 23 to three.

It is hard to overstate the importance of this reform.

It is indeed the most important microeconomic reform to the transport sector since Federation, one that has been considered but never secured by generations of transport ministers.

It will mean an end to the various and inconsistent state by state regulatory arrangements which have frustrated operators, stifled efficiency and acted as a handbrake on productivity.

This change alone will boost national income by $30 billion over the next 20 years.

The three national regulators will come into effect from 1 January next year.

SAFE RATES

Last week the Road Safety Remuneration laws passed the Parliament.

I recognise your views on the tribunal, but as you know, this law is part of a comprehensive approach to road safety.

It must include Chain of Responsibility and cut the incentive for some drivers to operate unsafely in order to make a living.

The number of deaths involving trucks is simply too high - ten times the average of other industries.

For too long people talked about reducing this terrible toll.

Last week the Government did something about it.

LAND FREIGHT AND PORTS STRATEGIES

Reforming regulation is part of the answer, but it needs to be backed by smart planning.

This is where the National Ports Strategy and the National Land Freight Strategy come into play.

Both strategies are important steps towards a seamless national land freight system.

The ultimate goal is one national integrated system that identifies existing and future roads, rail lines, intermodal terminals, ports and airports, all linking together, seamlessly.

As a government and an industry, we’ve got to get this right.

Since the launch of the draft National Freight Strategy last year, we have received 75 submissions which we are now working through.

My thanks to those of you here today who have helped craft this strategy.

A successful land strategy is, of course, nothing without seamless integration at our ports.

Ports connect us to the world.

Almost all our exports and imports flow through our sea ports.

Our National Ports Strategy addresses the need for much better long term planning while acknowledging the ‘strategic connections’ between ports, transport corridors and shipping channels.

The strategy will be considered by COAG shortly.

The next step for any strategy is planning.

A good example of this is the PortLink Inland Freight Corridor Plan.

A couple of weeks ago I was in Esperance where I announced the Commonwealth’s $2 million dollar contribution towards scoping studies for PortLink.

PortLink is an inland freight initiative that will link Western Australia’s regional ports and the proposed one at Oakajee, through a new intermodal freight logistics hub in Kalgoorlie.

The scoping work will look at:

• road and rail alignments

• financial models, and

• the necessary engineering and design work.

This preliminary work is important.

PortLink is a complex project and we need to get it right.

SHIPPING REFORMS

We can’t talk ports without mentioning shipping.

Australia’s rapidly expanding commodity trade is driving a sharp rise in the shipping task.

Australia’s sea transport task is now the fourth largest in the world.

In the past decade, Australia’s own fleet has gone from 55 ships to 21 with only four operating exclusively on international routes.

In a country where 99.9 per cent of our trade is moved by ships, without action there will soon be none whatsoever flying the Australian flag.

Unless we took action, there would be no fleet left to revitalise.

That is why we introduced an important new package into the Parliament last week, called the Stronger Shipping for a Stronger Economy.

It has four key elements:

• Taxation reform;

• Creation of an Australian international shipping register;

• A new licensing regime; and

• Establishment of a Maritime Workforce Development Forum.

These will level the playing field and provide Australian shipping with a stable fiscal and regulatory regime supporting investment and promoting international competitiveness, whilst ensuring that foreign ships can continue to play a legitimate role.

INFRASTRUCTURE INVESTMENTS

I note that today you are releasing your follow up report on tackling freight blockages called Towards an Efficient Freight Future.

I welcome it and have to say that we agree on the key issues -

• the important role of Infrastructure Australia;

• the need for all Government’s and industry to work together to fix the neglect;

• the need to cut red tape and eliminate the poor planning that has plagued Australia’s freight transport network. The urgent need for a truly long term infrastructure vision is why the Government created Infrastructure Australia.

Already IA has undertaken a national audit, looking comprehensively at our infrastructure needs - from Kiama to Karratha and Burnie to Bundaberg.

IA has created a priority pipeline of projects to guide future funding decisions.

We need to invest in the right projects at the right time.

That’s why the Government is committed to revitalising and expanding our nation’s road, rail and public transport through our unprecedented $37 billion dollar Nation Building Program.

This program is helping to reverse our infrastructure deficit.

I’m proud to say we’re rebuilding one third of the entire interstate rail freight network[2].

The Australian Rail Track Corporation is extensively upgrading the interstate freight and Hunter Valley networks to build the capacity to meet future demand.

Work has begun on the $1.1 billion modernisation of the Northern Sydney Freight corridor[3].

This will mean faster movement of trains through Sydney.

This improved line will have the capacity to carry the equivalent of 200,000 truckloads of cargo within the next 15 years[4].

So, fewer trucks on the roads leaving them safer and less congested for motorists.

…And a cut to greenhouse emissions of 100,000 tonnes over that 15 year period.

We are funding improved rail access into and within Port Botany.

Our investments also mean that in the coming year, the Hume Highway will be fully duplicated.

We’re also working towards the complete duplication of the Pacific Highway by 2016, which will need the cooperation of the NSW Government to achieve this joint objective.

Right now, there are 1600 construction workers on the job at six major sites along the highway.

[2] http://www.minister.infrastructure.gov.au/aa/speeches/2012/AS02_2012.aspx [3] http://www.minister.infrastructure.gov.au/aa/releases/2011/December/AA231_2011.aspx [4]

http://www.minister.infrastructure.gov.au/aa/releases/2011/December/AA231_2011.aspx

Work is about to begin on the stretch involving Clybucca, the site of Australia’s worst road accident almost 23 years ago, when two passenger coaches collided head-on killing 35 people.

The duplication of these two busiest highways will be of enormous benefit to the truck industry.

You would also be aware that we are investigating the potential of an Intermodal Terminal at Moorebank.

It would be able to handle long interstate trains and connect Port Botany with the M5, M7 and the South Sydney Freight Line, making an enormous improvement to the speed and connectivity of our transport networks.

Looking at both public and private major infrastructure - the level of construction activity in the transport, communications, water and energy sectors - it is a pretty impressive story.

The figures back this up.

Average infrastructure construction between 2007/08 and 2009/10 was almost double the average over the previous 11 years in real terms, from $28 billion per year to $54 billion per year[5].

The Government’s major infrastructure investments will make the costly ‘last mile’ faster and cheaper for the transport industry, improving productivity in the process.

NATIONAL URBAN POLICY

Finally, while on the topic of the ‘last mile’, let me talk about congestion in our cities.

Congestion costs all of us time, money and patience.

Left alone, the cost of urban congestion to our economy by 2020 is estimated to be up to $20 billion[6].

[5] Bureau of Infrastructure, Transport and Regional Economics, Department of Infrastructure and Transport, Australian Infrastructure Statistics Yearbook 2011, p.30. [6]

State of Australian Cities report, p.65.

We need to make our cities more productive, sustainable and liveable.

That’s why we released last May Australia’s first National Urban Policy, ‘Our Cities, Our Future’.

In addition we’ve secured agreement through COAG that all States and Territories will improve the standard of their planning systems.

They must show how they are addressing complex challenges such as transport corridor protection, population growth, land release versus infill and climate change.

Cities are the international gateways to our supply chain and carry 90 per cent of our imports by value[7].

We need to make sure they have the capacity to manage the growth in business, tourism and investment opportunities in the new century.

CONCLUSION

Logistic solutions are like a Swiss clock, all parts must work perfectly and in unison.

It’s a great metaphor for the work of the Australia Logistics Council - a national, cross-modal body, bringing together different parties to focus on improving the entire system.

Government policy is the same - each of our reforms must link in with our investments to produce better outcomes.

All of this requires a willingness for governments and industry to work together.

You have a strong voice in the Australian Logistics Council.

It’s a voice I look forward to hearing more from as we work together to place Australia in a position of envy in the global market place.

ENDS

[7] http://www.infrastructure.gov.au/infrastructure/mcu/urbanpolicy/ourcities.aspx p.70