December 2014 – January 2015


Roads to nowhere

By Paul Cleary
Roads to nowhere
Tony Abbott’s office. © Andrew Meares / Fairfax Syndication
Road freight is expensive, dirty and dangerous. Why are our governments addicted to it?

The reach of the billionaire trucking magnate Lindsay Fox extends far beyond the distinctive red and gold Linfox trucks that operate on the nation’s highways in ever increasing numbers. His influence can be seen in the office of Prime Minister Tony Abbott, where a model Linfox semitrailer holds a prominent place on the bookshelf. When Abbott did live interviews from his desk in late 2014, the model truck sat above his right shoulder, while a portrait of Sir Robert Menzies and a Steeden football appeared to his left.

At 77, the bald, barrel-chested Fox, who presides over a transportation empire that runs more than 5000 trucks in ten countries, has a lot in common with Australia’s pedalling prime minister: they both love all things automotive. As Abbott said in his 2009 book Battlelines, the “humblest person is king in his own car”. He went on to dismiss outright the practicality of public transport in Australia’s sprawling cities: “Mostly, there just aren’t enough people wanting to go from a particular place to a particular destination at a particular time to justify any vehicle larger than a car, and cars need roads.”

Despite this assertion, the new freeways partly funded by the Abbott government are being built in the most densely settled parts of Australia, notably Sydney and Melbourne. One of them is the proposed $6.8 billion East West Link project, which the Napthine government said was crucial for reducing Melbourne’s growing congestion. Labor vowed to dump the project, even though contracts for the first stage have been inked.

This project and Sydney’s NorthConnex and WestConnex motorways involve building very long tunnels. All are likely to ignore the safety recommendations from the coronial inquest by Judge Jennifer Coate into the three-truck pile-up inside Melbourne’s Burnley tunnel in 2007. Between them, the three projects involve more than 30 kilometres of new tunnels. Coate urged governments to build tunnels with dedicated emergency lanes and to eliminate the need for lane-changing, but the Victorian and NSW governments have indicated that such features won’t be included.

Earlier this year, the economic dries inside the Productivity Commission urged the federal government to back user-pays charges to fund Abbott’s infrastructure utopia. In the case of roads, this would mean charging vehicles for the distance they travel, and possibly for the congestion they cause. Abbott categorically dismissed the idea, saying he doubted whether any government in Australia would be brave enough to introduce such a system. The potential for massive blockades by truckies and their powerful semis seemed to be at the fore of Abbott’s thinking.

He said in a radio interview, “I think it’s not one that’s ever likely to be accepted by any government. Tolls are a fact of life. We pay for road tolls, we pay for roads through our taxes, we pay for roads through our registration, and we pay for our vehicles, so there’s already a significant form of user-charging.”

The relentless rise of heavy vehicles in Australia’s transport system over the past four decades has occurred in part because Australia has no such charging system, and because governments have starved the publicly owned rail-freight system of investment. As a result, rail’s share in moving the goods that Australians buy every day has steadily declined, while the volume of road freight has increased almost tenfold over the past 40 years, to 203 billion tonne kilometres (though rail still dominates shipments of bulk commodities like coal, iron ore and grain).

In 1971, when big prime movers were starting to appear on our highways, just over half of Australia’s non-bulk freight – which is mainly consumer goods and business inputs – was moved via road. Today, road’s national share of non-bulk freight has risen to 83%, but on the eastern seaboard it’s around 95%, and as high as 97% on some routes. Rail’s share of eastern-seaboard freight was around the 30–40% mark in the early ’70s. The domination of road freight has in turn underpinned the multi-billion-dollar empires built by Linfox and other conglomerates.

This development is in marked contrast with the situation in the United States. Even though many of the semis on our roads are made by the American companies Kenworth and Mack, the US still moves about 40% of its intercity freight via rail. The US rail system is one of the most efficient in the world, and it is also profitable. It’s such a good business that the shrewd investor Warren Buffett recently sank $US26.5 billion into buying a rail company.

Australia’s shift to the roads has locked us into a freight system that is inherently more costly, more carbon intensive and more dangerous. Figures published by the federal government’s Bureau of Infrastructure, Transport and Regional Economics (BITRE) show that the cost of moving 1 tonne of freight by road over a distance of 1 kilometre (known as cost per tonne kilometre) is 7.5 cents for road, more than double the 3.5 cents for rail. The greenhouse-gas emissions for road are more than triple those for rail: 52 grams per tonne kilometre versus 15.

This road-dependent freight system also means that Australia’s cost of living is much more exposed to oil price rises. The carbon-intensive nature of the system makes it vulnerable to any future moves to introduce international trading systems or other regulations for greenhouse emissions.

There’s also road dependency’s cost to human life. In the five years to 2011, the average number of fatalities from Australian road accidents that involved a truck of more than 4.5 tonnes was 239 a year. The comparable number for rail, including passenger trains, was 34 deaths a year, which is remarkably low given that rail moves greater tonnage than road when bulk commodities such as minerals and grain are included. This means that trucks cause around 20% of all road fatalities in Australia even though they make up only 2.5% of the vehicles on the road. The number of people injured in such accidents continues to rise. In 2008–09, the latest year for which injury data is available, 1536 people were hospitalised after accidents with trucks. Accident victims classified as suffering a “high threat to life” totalled 551 in 2008–09, an increase of 18% in eight years, according to a 2014 BITRE report.

BITRE predicts a further 50% rise in the number of trucks on our roads over the next 15 years. Despite the urgent need for policy action, the wheels of government are moving slowly.

Two key reforms would give Australia a less costly, less dangerous and more climate-friendly freight system, and they are related. The first is distance-based charging for heavy vehicles, and the second is the construction of an inland rail line between Melbourne and Brisbane, which would avoid Sydney’s notorious congestion and the 19th-century coastal rail line.

Angus Taylor, a federal Liberal MP, farmer and former McKinsey management consultant whose electorate of Hume straddles the Hume Highway south of Sydney, argues that any large-scale investment in inland rail could end up being a waste of money unless it is coupled with distance-based charging for heavy vehicles. He told federal parliament in June that increased fuel efficiency had undermined the existing fuel-excise system and that governments should consider “progressively shifting the basis for charging away from use of fuel, to distance and vehicle type, particularly for heavy vehicles”. While the trucking industry claims that the move would increase costs for regional areas, Taylor says that this would not be the case if vehicles were also charged for congestion.

He added: “This will be good for regional areas, we will see more investment in road and rail infrastructure, and we will see an appropriate level of charging for roads in urban areas.”

Despite the prime minister’s emphatic dismissal of distance-based charges, some members of Abbott’s government are also starting to talk about the need for reforms, albeit in limited terms; and both the NSW and Victorian governments have been looking closely at introducing them.

The federal assistant infrastructure minister, Jamie Briggs, reveals that NSW and Victoria are planning “small trials of road-user charges”. In order to head off a backlash from industry, longer and heavier semis would be allowed on our roads for the first time as part of the trial.

The NSW roads minister, Duncan Gay, confirmed that the state was looking at “a direct-charging model of heavy vehicles”. He said the state needed to look at these charges because as much as 75% of the heavy-vehicle traffic on NSW’s roads is registered in other states.

“A direct model will improve the way heavy vehicle registration is collected, as it will be based on the kilometres travelled and will allow money to be better invested back into the roads that heavy vehicles actually use,” Gay noted in a written response to questions. This reform, however, requires co-operation from Victoria, and Gay confirmed that the state was working with Victoria “towards a future trial of better heavy-vehicle access on the Hume Highway”.

The words “better heavy-vehicle access” refer to the plan to allow so-called A-double trucks onto the Hume. These trucks are 4 metres longer than the existing B-doubles and they are designed to allow an additional pallet of goods to be loaded.

Also known as “high-productivity vehicles”, these trucks, which include semis with two or even three full-length trailers, may be approved along with distance-based charges. Briggs said that GPS-based technology was already available to allow the system to operate, but he admitted that the heavy-vehicle safety regulator and the National Transport Commission needed to do further work to bolster the safety regime governing these trucks.

“The technology exists right now – it’s not that big a jump to get there, and the freight industry likes it,” Briggs said.

(Some federal Coalition sources say that trucks with three trailers could be allowed to operate as part of the plan, but a spokesperson for Gay said this was not under consideration.)

The Victorian government is less forthcoming about its plans. A spokeswoman for the Coalition’s roads minister, Terry Mulder, confirmed before the state election that he had sought advice from VicRoads on ways to permit “safe and productive freight vehicles to operate with heavier payloads on defined routes”. This sounds like code for allowing A-doubles at the very least onto Victoria’s roads. But there was “no immediate plan” to introduce distance-based charges, she added.

Victorian Labor’s Natalie Hutchins, who was shadow minister for port, freight and logistics before the election, has only said that the “routes and roads” used by heavy vehicles and cranes would be assessed, and that Labor would invest in intermodal terminals to improve access to the rail network.

Federal Labor’s transport spokesman, Anthony Albanese, who in government presided over substantial investment in upgrading 4000 kilometres of track and the eastern seaboard rail system especially, says “there is a place for user-charging for trucks”, but he argues that investment in rail is what’s needed to make it competitive. “People who need to move freight will shift to rail when rail is competitive with road haulage.” Some of this investment has cut the transit time from Melbourne to Brisbane by seven hours (when there are no delays), he says, and led large businesses like Woolworths and Australia Post to move more of their freight by rail.

The road-focused Abbott government seems half-hearted about inland rail. Its 2013 policy mentions “a staged, 10-year approach to the construction of the Inland Rail, with construction to start within three years”, which suggests it would be finished by 2026, but no deadline has been set and the Coalition is yet to commit to a completion date.

Much of the so-called “new” inland route, which was developed under Labor, uses existing track, and it will be slow and windy in parts. The project involves building only 600 kilometres of new track along the 1731-kilometre route. The new line will be only 176 kilometres shorter than the existing coastal route. This explains why it is budgeted at a modest $5 billion, a small fraction of the $20 billion in new freeway projects planned for Sydney and Melbourne. A research note by Rob Dossor of the federal parliamentary library shows that the federal government’s infrastructure funding to the states is increasingly dedicated to roads. Road’s share will rise from 78% in 2014–15 to 83% in 2017–18, while rail will decline from 13% to 6% and then just 0.5% over the same three years.

Nevertheless, the proposed inland rail line would create Australia’s first fully-fledged freight hub in the NSW city of Parkes, which is where the new line would intersect with the Sydney–Perth line. Other hubs could emerge along the route, possibly in Shepparton and Toowoomba. The project would be a major driver of growth for regional Australia, and conceivably businesses that operate nationally and need large warehouses would see the benefit of relocating from the city to a regional centre along this new line.

National Trunk Rail, a private-sector group backed by some of the big engineering firms, has proposed an alternative route for the inland rail that would be much straighter, flatter and shorter, and would involve more new track and tunnelling through Brisbane. NTR says its line would be about 30% more efficient than the government’s proposal, though it would cost twice as much. So far, the implementation group, headed by the former National Party leader John Anderson, has shown little interest in this plan.

While $300 million is shown in the budget’s four-year forward estimates for pre-construction work, the budget papers show no funding for construction from 2016 onwards. As Albanese points out, Labor had allocated $30 million for spending on preparatory works this financial year, but the Coalition will spend only one-third of that amount, “thereby slowing down the project compared with our plans”. Albanese argues that a “roads-only” approach won’t address urban congestion, nor will it deliver benefits in economic productivity.

Trucking has become so dominant that even the trucking companies are saying that it’s in their interest to shift more freight onto rail. Fox and his company executives declined to answer a series of questions put to them, and Abbott would not comment on his relationship with Fox. But back in 2009, Fox broke ranks with the industry, and the Abbott view, and said Australia had to shift back to rail if it were to have a viable freight system.

“I’m talking against myself when I’m talking about putting things on rail,” Fox told a forum at the National Press Club. Fox backed the inland rail line, but he also advocated making greater use of coastal shipping, transferring more of Sydney’s trade activity to Newcastle or Wollongong, and shifting Melbourne’s major port to Hastings on the Mornington Peninsula. In the early ’70s, about one-third of the freight moved between Victoria and Queensland went by sea, but that has now fallen to nil. He said Australia could learn a great deal from China, which has built deep-water ports away from major cities. “We do need to move away from running transport operations in the centre of the city, particularly on the east coast of Australia.”

Fox expressed what might be the vain hope that he would see sensible reform happen in his lifetime: “We’re only here for a short time. I’ve got probably less than ten years to go. I’d certainly like to see some of these things that are in the interests of the nation.”

Paul Cleary

Paul Cleary is a policy analyst and author of five nonfiction books. He has a doctorate from the ANU for a thesis on Australia’s policy framework for managing its resources wealth and outcomes for Indigenous communities in the Pilbara.

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