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Speech at the Australian Logistics Council Annual Forum, Gold Coast.



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The Hon. Mark Vaile, MP Minister for Transport and Regional Services

VS02/2007 16 February 2007

Australian Logistics Council Annual Forum Gold Coast, 16 February 2007

I'm very pleased to be here today to address your fourth annual forum. The logistics sector has a key role in the Australian economy. We're here today because we know that a ripple of efficiency gains through the logistics sector generates a wave of benefits for Australia as a whole.

Review of the Australian Logistics Industry Strategy

The Government included freight logistics in our programme of Industry Action Agendas because of its importance to the economy. The Australian Logistics Council and the Australian Logistics Industry Strategy were the result.

The ALC has achieved some important results since it was established, including the Retail Logistics Supply Chain Code of Conduct. It is a simple and consistent code of practice that meets the requirements of the states' chain of responsibility legislation.

The first companies to sign the code were Woolworths, Coles Myer, Metcash, Toll Holdings and Linfox. They are fierce competitors, but their endorsement of the code makes it clear that safety is their highest priority.

One of the Government's policies is that we commission an independent review of our industry strategies every four years. As a result, the logistics industry strategy came up for review in 2006. The review was completed last week.

The review concluded that there was strong support for the Logistics Strategy in terms of its key focus areas and the initiatives introduced to date.

In particular, the work of the Australian Logistics Council and the Freight Councils in implementing the strategy was very favourably noted.

The review concluded that the Logistics Strategy had gone as far as it could in its current form and that a new strategy - independent of the Government's Action Agenda programme - should be developed.

It recommended that the new strategy should focus more sharply on key areas and build on your achievements since the original strategy was introduced.

The report called for the industry to own and develop the new strategy under the leadership of the Australian Logistics Council, with the Government moving to a secondary role. The new strategy would be developed by the industry throughout 2007 and delivered through the period to 2010.

Finally, the report recommended that the Government should continue to provide the ALC with funding support during the transition process.

The Australian Government's response

I am announcing today that the Government has accepted these recommendations, because the Logistics Council has done a great job over the last four years.

You are the right people to lead the next stage of the development of the logistics industry.

I am also announcing that the Government will provide the ALC with $1.6 million over the next four years - $400,000 a year.

This funding will provide you with valuable support as you develop and lead the new logistics strategy. However, our funding cannot replace the support that you receive from the industry, and I am particularly pleased to see that it has grown solidly over the last year.

It's an important development and needs to continue to ensure that the transition from a government established body to an industry led forum is completed by 2010.

The challenge of world's best practice

So I now invite Australia's transport and logistics industry to get firmly behind the ALC in developing and implementing the new logistics strategy.

I would encourage the industry to pursue world's best practice aggressively to create a wave, not a ripple, of industry development and improvement.

The transport and logistics industry needs to be an early adopter of new technology and modern work practices. It needs to seek out opportunities to innovate, pay close attention to attracting, training and retaining quality staff, and draw on developments in the sector from around the world.

The Australian Government's role

For our part, the Australian Government is working to eliminate the regulatory impediments to the industry's efficiency. We are also building better transport infrastructure to support your operations.

We are working through the Australian Transport Council and the Council of Australian Governments to deliver a substantial new national reform agenda with important implications for future transport policy.

Of particular importance is the agreement by ATC ministers on the direction for finalising the Heavy Vehicle Performance Based Standards (PBS) initiative.

When it is fully implemented, this initiative will encourage the use of innovative vehicle configurations and designs to adapt to different circumstances and road conditions. It will result in significant efficiency gains for the industry.

In one of the first key proposals under the PBS initiative, ministers have endorsed an initial Australian B-triple network, which consists of the current roads that are potentially capable of accepting B-triples, including sections of the AusLink intercapital network.

Although the B-triple network is limited at the moment, ministers have agreed on procedures for expanding it, involving an assessment of the capacity of the infrastructure and the benefits and costs.

Work is also continuing on a plan to improve the efficiencies that are available for the heavy vehicle industry by using quad axle semi trailers. Depending on the approach taken by the states and territories, it should enable the industry to access up to an extra 7 tonnes on approved routes around Australia.

I would encourage your members to reiterate to my counterparts in the states and territories how important these developments are.

A number of milestones on the COAG National Transport Reform Agenda have already been achieved, including the implementation of Concessional Mass Limits, progress on the Higher Mass Limits initiative and the endorsement of a national Model Rail Safety Bill.

The Productivity Commission has now provided its final report on transport pricing to CoAG, after receiving more than 120 submissions, including contributions from the ALC and many of its members. The Australian Government welcomes the report and will work with its COAG partners in considering its findings and recommendations.

We will continue to work with the state and territory governments and our industry partners to ensure that CoAG's vision is delivered in a timely and effective manner.

But you have a vital role - we are depending on you to join us in urging the states and territories not to settle for easy solutions and the lowest common denominator. We have to maintain the focus on reform.

Building better roads and railways

The Government is building better roads and railways across Australia through AusLink, which is the biggest investment programme of its kind in Australia's history. We are spending $15 billion on AusLink over the five years to 2009.

For the first time, transport infrastructure funding is being guided and underpinned by a five-year national plan with a 20-year horizon.

AusLink's approach to future infrastructure planning is based on the development of long-term corridor strategies across the AusLink National Network. Our aim is to use the strategies to make funding decisions on the basis of the best solution, whether it is a road construction project, a better rail link, or new technology.

Our approach to investment planning for corridors:

• focuses on the whole corridor; • is multi-modal;

• identifies major bottlenecks and deficiencies; • determines the strategic priorities for the corridor's long-term development; and • considers the land transport corridor within the broader transport system.

The corridor strategies will all be completed by June 2007. An agreed approach to corridor analysis and determining strategic priorities has been developed, drawing on the National Guidelines for Transport System Management endorsed by the Australian Transport Council.

The analysis is also underpinned by traffic projections prepared by the Bureau of Transport and Regional Economics (BTRE) and new work undertaken by DoTARS and state and territory agencies.

In conjunction with the Australian Rail Track Corporation, we are investing $2.4 billion over the five years to 2009 to upgrade Australia's national rail infrastructure.

The primary focus of our investment is to upgrade the north-south rail corridor between Melbourne, Sydney and Brisbane. Our spending is already starting to get results:

• Last month, I opened the new Wagga Wagga rail bridge, which spans the Murrumbidgee River. The speed limit on the old bridge was 20 kilometres per hour, and we were always worried that we would have to close it for safety reasons. Trains can cross the new bridge at 80 kilometres per hour.

• ARTC has started building 17 new passing loops between Junee and Melbourne. The extra loops will allow trains to pass each other at speed.

ARTC's work will reduce the Melbourne- Brisbane cycle time from 96 hours to 72 hours - a 25 per cent improvement. The Sydney to Brisbane return cycle time should fall from 72 hours to 48 hours.

Towards AusLink 2

I am now turning my attention to the projects that will need to be funded in the second five years of the AusLink programme, from 2009 to 2014.

I believe that the Government will need to spend at least another $15 billion during those years, on top of the $15 billion we are already spending.

The second stage of AusLink will need to include planning for the proposed inland railway from Melbourne to Brisbane.

We will also need to provide additional road funding for south east Queensland. The population of south east Queensland has grown from 1.7 million people in 1986 to almost 2.7 million people today. It is expected to gain another million people by 2025.

Queensland is receiving more than $3 billion in land transport funding under the current AusLink programme. We are spending about $1 billion on AusLink projects in south east Queensland, including:

• more than $600 million for the Ipswich Motorway, where work has now started on the $255 million interchange that will connect it to the Logan Motorway. • $192 million to complete the widening of the Caboolture Motorway to six lanes from the Gateway Arterial Road to Caboolture. • $120 million to help build the Tugun bypass, which will reduce traffic congestion on

the Gold Coast and Pacific highways.

We recognise, however, that we need to do more. I am currently working on a major road funding package for south east Queensland and will be announcing more details in the near future.

Conclusion

So in conclusion, the Government is pressing ahead with our $15 billion investment in Australia's roads and railways under AusLink. We are starting to plan ahead for the next five years of the programme.

We are working to clear away the regulatory impediments that are stopping the logistics industry from reaching its full potential. We now look to you, as the leaders of the industry, to guide the next stage of its strategic development. Thank you.