Transportation by land, sea, and air is vital to Australia’s modern economy. The physical movement of goods, passengers, and raw materials accounts for 4.5 per cent of Australia’s annual GDP. The freight supply chain connects virtually all sectors of the economy, facilitating domestic and international trade and production. The efficiency of freight in Australia affects the costs of domestic production, competition and productivity in various industries, and the prices of consumer goods.
Safety is the focus of much of the regulation in the transport sector and is the principal focus of this inquiry. Transport is inherently risky, and governments have a legitimate role in ensuring that safety standards are not compromised by commercial pressures. At the same time, governments and regulators must consider how best to achieve safety objectives while minimising costs to businesses and taxpayers. Properly designed regulation can lead to both improved safety and increased productivity — there is no intrinsic need to trade off safety for productivity.
- COAG’s reforms established national laws and regulators for heavy vehicles, rail, and domestic commercial vessels. After eight years, the transition is nearly complete.
- Reform has delivered more consistent regulation across most jurisdictions and is likely to have reduced compliance costs for some operators. Reform has lifted productivity by improving road access for larger, more efficient trucks.
- Reform was expected to unlock large efficiency gains for heavy vehicle operators. While gains have been made, these forecasts were optimistic and have not been achieved.
- By most measures, safety has continued to improve since 2011. At present, it is unlikely that the recent reforms have contributed to additional improvement to safety outcomes.
- There are significant opportunities for COAG, regulators and industry to further improve productivity and safety.