The proposal by Transport Minister John Anderson to take a longer term view of the transport needs of the nation is a welcome one. Often political figures are damned if they do and damned if they don’t. Too frequently, Ministers are criticised for not taking the long view. But as soon as they do they are accused of mean motives. In the case of the transport proposal and the intergeneration report produced by Treasurer Peter Costello at Budget time, the cry went up that it was just an excuse to cut federal funding. It is important for governments to look beyond the next couple of elections. Australia is facing a doubling of freight in the next 15 to 20 years. Labor has already proposed greater integration of road and rail. Mr Anderson wants that, too. But he also wants to get more private investment into road and rail transport and for the states to contribute more, using their increased GST revenues.
The call for the states to put in more GST revenue while the Federal Government marks time on funding is an early indication of the long-term difficulties with the GST model. At present GST revenue goes unconditionally to the states and it is rising. It means less federal control of total government spending other means are found to force the states to do the Federal Government’s bidding.
Transport is a critical area in interstate relations. Left to their own devices, state and territory Government’s would be more likely to fund roads and rail according to the marginality of electorates than efficiency and transport needs. The Federal Government is also guilty of this sort of thinking, but to a lesser degree because it deals with national roads and rail links. Successful lobbying by industry groups has also led to inefficient funding allocation – particularly to roads over rail.
In this environment the need for a long-term, integrated, national approach on a solid funding model is imperative. Mr Anderson’s desire to get more private funding into transport might well help this process. Private funding is less susceptible to political influence – the money goes where the economic (not political) return lies. Further, more private money is likely to see a shift away from inefficient road freight into more efficient rail freight. At present, nearly all trucks are privately owned and nearly all roads are taxpayer funded. With rail – until recently – it was nearly all publicly owned. The pressure by the private trucking industry for ever greater public subsidies in the form of expensive roads has been immense. Owners of private roads will not put up with it and will demand an economic return for the costs of roads damaged by trucks. Meanwhile, private rail will start getting competitive and take advantage of rail’s greater efficiency and lower infrastructure cost.
Hitherto, transport decisions have not been integrated. Indeed, the jealousy between private trucking and public rail has often meant a lack of co-operation.
If Mr Anderson’s long-term proposal reduces the number of trucks on the road, it will reduce the repair and upgrade costs of roads.
In the cities, the challenge will be more difficult for the Federal Government. It will require greater co-operation from the states to improve transport. Most state governments have engaged in decades of short-sighted building of ever more freeways and parking places only to find them consumed almost immediately by the insatiable car. Politically, it is difficult for states to move from that approach because the greener, cleaner more pleasant cities that come from greater use of public transport and drastic reduction in car use come very slowly – well beyond the time of the electoral cycle. Once again the need for long-term thinking and funding is evident.