Investing in Australia’s Freight Infrastructure

Australia is an expansive country and is subject to frequent extreme weather events including floods, cyclones and bushfires. These events cause significant disruption to supply chains and communities from country to coast. The criticality of maintaining supply chains to ensure essential goods and supplies can reach communities has been demonstrated time and time again in recent years.

Whether it be toilet paper, medical supplies or food and groceries, recent disruptions demonstrate Australia is one national economy and is reliant on freight to ensure stability and prosperity.

Our nation was reminded of the fragility of our supply chain infrastructure when in January 2022 the east-west rail link connecting Melbourne, Adelaide and Perth was severely impacted by an extreme flooding event. This rail line is over a century old.

Due to the severity of damage, supply lines to Western Australia were cut off with the state experiencing severe shortages of critical goods and supplies, such as food and fuel. Freight was pivoted to road and sea modes, to ensure essentials were provided to communities. The reality is the volume required, was not able to be replicated and other modes were unable to satisfy demand while the railway was out of service. It took four months for supplies and reserves to be restored with approximately 80 per cent of land freight transported via rail into Western Australia from the eastern states.

This is a prime example of the need to ensure key infrastructure is replaced and maintained to appropriate standards to withstand extreme weather events and minimise disruptions to Australian communities.

The Australian Infrastructure Audit conducted in 2019 reported, “Australia’s social and economic infrastructure sectors account for around 21% of national Gross Domestic Product (GDP) , and every dollar of value we create is reliant on infrastructure in some way.” Also, for every dollar of public infrastructure investment can generate GDP increases that can add up to $4 of value over the life of the asset.

With public and private investment into infrastructure projected to increase there is a strategic imperative to ensure:

• Infrastructure investment takes into consideration the needs of freight
• There is alignment with the National Freight and Supply Chain Strategy
• Sustainability and climate factors are considered
• Infrastructure meets the needs of future generations.

The Government’s proposed review of the role of Infrastructure Australia (IA) and ensuring the agency is more involved in infrastructure investment, is timely and provides an opportunity to ensure the right projects are funded to meet Australia’s current and future requirements.
 
Recommendations

1. Any review process of IA should recommend IA consider Australia’s future freight task, improving efficiency, productivity and sustainability in the supply chain, as identified in the NFSCS
2. Investments need to improve network resilience, safety, efficiency and sustainability - working toward modal shift, low and no emissions vehicles and future fuel technologies
3. Commonwealth funding should be allocated to support local and state governments in the form of a ‘betterment fund’, similar to the recently announced funding in NSW. With funding allocated in partnership with IA assessments, to identify critical infrastructure investments
4. The effects of extreme weather should be taken into consideration when assessing infrastructure investment, as one in 100 year events are occurring more frequently and requiring injections of public funds to rebuild and repair more frequently.