Fortnightly ALC Government Relations Update No.8 2 May to 15 May 2026 

The Victorian Government’s 2026–27 State Budget reflects a broader shift occurring across transport and infrastructure policy nationally. Governments are increasingly moving away from large headline freight projects and toward maintaining existing networks, improving resilience and managing fiscal pressure in a constrained economic environment. 

For the freight transport and logistics sector, the Budget contains several measures directly relevant to supply chain performance, particularly around freight rail, regional road networks, and infrastructure reliability. Just as importantly, it reinforces several of the issues the Australian Logistics Council (ALC) has consistently raised with governments across the country – namely that freight transport and freight logistics must be treated as essential economic infrastructure, not simply as a transport sub-sector. 

One of the more important announcements is the allocation of $127 million toward regional freight rail infrastructure upgrades. While modest against the scale of Victoria’s freight task, the funding is still significant because it reflects growing recognition that freight rail has a larger role to play in national productivity, fuel efficiency and supply chain resilience. 

The ALC has consistently argued that the challenge for freight rail is not solely about building new lines. The constraint often lies in terminal access, train pathing, siding lengths, first- and last-mile interfaces, maintenance windows, and network reliability. These are operational issues that directly affect whether freight can move efficiently between ports, intermodal hubs, distribution centres and regional production areas. 

Victoria remains one of the country’s most important freight gateways. The Port of Melbourne alone handles around one-third of Australia’s container trade, while regional Victorian corridors support major agricultural exports, fuel distribution, manufacturing supply chains and interstate freight movements. Small disruptions in those networks quickly flow through national supply chains. 

The Budget’s focus on regional freight rail, therefore, aligns closely with the work currently underway through the ALC Freight Rail Taskforce, which has been examining practical opportunities to improve rail utilisation, strengthen corridor resilience and reduce pressure on road freight networks during periods of fuel market instability and supply chain disruption. 

Importantly, governments are increasingly viewing freight rail through a resilience lens rather than simply an emissions or transport lens. That shift has accelerated following recent fuel market pressure, global shipping disruption and growing concern around national supply chain vulnerability. 

The Budget also commits substantial funding toward road maintenance and regional road upgrades, including: 

• $560 million in additional road maintenance funding 

• $73 million for regional road upgrades 

• $103 million for metropolitan and regional road and intersection upgrades 

The ALC recently reinforced through the House of Representatives Inquiry into Local Government Funding and Fiscal Sustainability that local and regional roads are not simply council assets – they are nationally significant freight transport infrastructure. 

The first and last mile remains one of the weakest points in Australia’s freight system. Freight productivity is often constrained not on major highways, but on deteriorating connector roads, urban freight interfaces, local bridge limitations and inconsistent heavy vehicle access arrangements. 

Australia’s freight task is expected to continue growing strongly over the coming decades, while the heavy vehicle sector is already dealing with approximately 28,000 driver vacancies nationally and an ageing workforce profile. At the same time, many regional councils are struggling to maintain infrastructure under increasing freight volumes, higher axle loads and repeated extreme weather events. 

Governments are increasingly recognising that resilience is not only about building new infrastructure. It is also about preserving the operational reliability of the networks already carrying the freight task every day. 

Several of the corridor upgrades and planning measures announced in the Budget are particularly relevant to freight efficiency, including works associated with the Calder Highway, Western Highway, Strzelecki Highway and regional truck route planning. 

Individually, these projects are relatively targeted. Collectively, however, they support freight reliability, reduce network friction and improve regional access. 

The Budget also reflects another issue the ALC has consistently raised – the growing pressure on infrastructure funding models nationally. 

Victoria’s debt position continues to tighten the infrastructure environment, with net debt forecast to approach $200 billion within the forward estimates and interest repayments rising sharply. That matters because it affects future infrastructure sequencing, maintenance sustainability and the ability of governments to co-fund major projects. 

The Victorian Budget ultimately reinforces the view that freight transport and logistics are moving further into mainstream economic policy discussions. 

The ALC will be looking closely at how these investments are implemented, whether they improve actual network performance and whether governments are prepared to address the harder operational and regulatory barriers that continue to limit freight efficiency across the system. 

From an ALC perspective, the Budget reinforces the importance of continuing to position freight transport and freight logistics as national economic infrastructure – essential not only to productivity and cost of living outcomes, but to the resilience of the Australian economy itself. 

AI, Cyber Security and the Growing Exposure Across Supply Chains 

Recent discussions involving the Australian Signals Directorate (ASD) highlighted how rapidly artificial intelligence is changing the cybersecurity landscape for critical infrastructure operators, including those in freight transport and logistics. 

The key message was straightforward. AI is making it easier, faster and cheaper for malicious actors to identify vulnerabilities, understand systems and develop more sophisticated attacks. 

For the supply chain sector, this matters because modern freight networks are heavily digitised. Fleet systems, warehouse platforms, terminal operating systems, fuel distribution networks, building management systems and industrial control systems are now deeply interconnected. Operational resilience increasingly depends on the resilience of those digital environments. 

One issue repeatedly raised was visibility across systems and software. 

Organisations using custom applications or open-source software packages were encouraged to maintain clear registers of what is operating within their environments, where vulnerabilities may emerge and how quickly systems can be patched or updated. The concern is not theoretical. Open-source software can often be examined in detail by anyone, including malicious actors looking for weaknesses. 

There was also a strong warning around the use of public AI platforms for sensitive operational or commercial information. 

ASD’s position was clear. If information would not normally be handed to a competitor, it should not be entered into a public AI model. Operational configurations, infrastructure layouts, asset registers, OT environments, fuel network information, access arrangements and system architecture all become more valuable when combined inside AI-enabled threat environments. 

The more detailed the information available to an attacker, the easier it becomes to identify and chain together vulnerabilities specific to a network or operating environment. 

Importantly, the discussion was not framed around a single technology solution. 

ASD reinforced that the fundamentals still matter most: 
• layered security controls 
• defence-in-depth network architecture 
• strong patching disciplines 
• segregation of critical systems 
• protection of operational data 
• continuity planning for essential functions 

The view from government is that the same controls that slow or prevent traditional cyber-attacks will remain critical in an AI-enabled threat environment. 

There was also an acknowledgement that AI is likely to increase the volume of cyber activity over time by lowering the technical barrier for attackers. Tools that once required specialist expertise are becoming more accessible, allowing actors to move faster and operate with deeper technical insight into systems and software. 

For freight transport and logistics operators, the issue extends well beyond IT. 

Disruption to freight management systems, fuel distribution platforms, ports, terminals, warehousing, or operational technology environments has direct consequences for the movement of food, fuel, medical supplies, and other essential freight. 

The discussion reinforced a broader reality already visible across resilience and critical infrastructure policy. 

Supply chains are now as dependent on digital resilience as they are on physical infrastructure.

The Australian Logistics Council joined an initial industry discussion led by Cam Dumesny on how Western Australia can build a clearer, more practical training pathway for freight transport and logistics. The discussion brought together industry, workforce and education representatives, including CTI, Westport, Curtin University, CCI and safety stakeholders. A clear issue was identified: the industry has strong workforce demand and genuine career opportunities, but the pathway into the sector remains too fragmented and too poorly understood. Too often, freight transport and freight logistics are still viewed only through the lens of truck driving, when the sector also includes warehousing, scheduling, operations, container logistics, oversized movements, rail interfaces, safety, compliance, technology, data and senior supply chain leadership.

The next step is to develop a practical WA careers and training model that can show students, parents, career advisers, workers and government what the industry offers. One option discussed was using the new North Metropolitan TAFE facility at Hazelmere as a visible industry showcase, supported by real employers, site visits, career stories and clearer links to licences, microcredentials and formal qualifications. From ALC’s perspective, this work matters because workforce capability is now central to the national productivity and resilience agenda. Freight transport and freight logistics underpin fuel security, food supply, regional connectivity, defence logistics, infrastructure delivery and Australia’s broader sovereign capability. ALC will continue to support the work nationally and help position the sector as an essential economic capability, not simply an operational transport function.

The Australian Logistics Council recently met with Transport for NSW to discuss freight network pressures, diesel policy settings, rail competitiveness, heavy vehicle productivity and the next phase of electric freight vehicle reform. 

A major focus of the discussion was the impact recent diesel relief measures may have on freight mode share across the supply chain. 

While the changes have provided welcome cost relief for many road freight operators during a period of sustained fuel pressure, there was acknowledgement that the settings could unintentionally strengthen the commercial position of road freight without a corresponding uplift for rail. 

Transport for NSW advised that work is continuing with rail operators, infrastructure managers and industry to identify practical reforms that improve rail productivity, utilisation and operational performance.

Discussion included: 

1. Opportunities for longer and heavier trains on parts of the New South Wales network 
2. reducing the need for additional locomotives through sections of the Sydney network 
3. Improving harmonisation between operators and infrastructure managers 
4. lifting rolling stock and network utilisation 
5. Improving first and last mile access to intermodal terminals 
6. Identifying practical measures that make rail a more attractive commercial option for freight customers 

Transport for NSW also outlined ongoing work on heavy vehicle productivity and electric vehicle access reform, including curfew settings, local government access issues, and high-productivity vehicle access to intermodal facilities. 

Particular attention was given to barriers affecting electric heavy vehicles, as current access frameworks can create operating conditions different from those of equivalent diesel vehicles. 

The ALC reinforced that freight policy settings must support an integrated freight system and avoid unintended market distortions between modes. Freight rail remains one of the clearest opportunities to improve freight resilience, fuel efficiency and long-term network capacity, particularly as freight demand continues to grow. 

The ALC will continue engaging closely with Transport for NSW and industry as this work progresses.