In order to secure the nation’s productivity into the future, Australia needs to adopt a clearly defined goal of having a national and integrated approach to freight. Failure to have a national approach means higher cost of living for Australians and reduced competitiveness of Australian exports in the global marketplace.
Australia’s freight system is one of the foundations of the nation’s economic success. It connects Australia to the world and facilitates the movement of goods domestically between regions and within cities. The freight and logistics sector accounts for up to 10 per cent of Australia’s gross domestic product.
Historically Australia’s transport sector has continued to grow in accordance with market demands. Reforms in the 1980s and 1990s led to a quarter of a century of productivity growth, based on open markets, enhanced vehicle capacity and access, capital investment and privatisation of state and territory government run infrastructure.
Trade agreements help by facilitating the flow of goods across national borders that once protected their industries from outside competition with tariffs, duties and penalties.
However, more recently, high domestic population growth rates, new technologies, global sourcing and increasing import substitution, and changing consumer habits and expectations are driving massive changes in demand for freight in Australia and across the world.
Policy leaders are now calling for a renewed focus on productivity growth to ensure Australia remains internationally competitive in the future. The Productivity Commission warns that simply adding more transport infrastructure, like rail lines and roads, may not be enough to sustain the current freight system.
Over the past five years, a number of important national reviews, which impact on freight, have been undertaken by government. We have also seen reforms and strategies with freight as the main focus including the 2012 National Ports Strategy, 2013 National Land Freight Strategy and Infrastructure Australia’s 2015 Australian Infrastructure Audit, which highlighted potential future national freight constraints.
These previous reforms and strategies do not deal with the supply chain in its totality. A number of priorities/reforms identified in those documents are still to be implemented, and a number of the identified issues remain. Urgent action is now needed to facilitate the physical growth in the freight task, and to maintain and boost Australian competitiveness through productivity and efficiency enhancements which have been stalled in recent decades.
This inquiry was tasked with identifying priorities for Australia for the next 20 years, to improve freight and supply chain efficiency and capacity, and manage the costs of transporting goods through our major national container ports, airports, intermodal terminals and pipelines.