Implications of the "One Nation" economic statement for land transport infrastructure

The 'One Nation' economic statement announced in late February by the Federal Government includes an allocation of funding for road and rail infrastructure projects over the next two financial years of around $1.1 billion. This represents around 0.12 percent of Australia's GDP. The national rail network received a boost of $454 million with road projects comprising $602 million. The proposed expenditures are placed in the context of the funds needed to keep the road system operating at an acceptable level of service. These requirements range from routine road maintenance to rehabilitation works and upgrading to keep pace with travel demand. Some of the $600 million allocated to roads is directed towards interstate links and urban freight movement. These projects can be expected to result in reductions in the cost of moving raw materials and processed goods between suppliers and their markets. To the extent that these cost savings affect prices, Australian goods will become more competitive on domestic and international markets. This paper argues that a package of improvements that placed a greater emphasis on road maintenance projects and projects that relieve urban congestion may have provided a higher economic yield than the 'One Nation' proposals which devotes considerable funds to relatively lowly trafficked interstate routes. The 'One Nation' rail projects by themselves are unlikely to result in significant freight modal shifts. At best, there will be slight increases in rail's market share on some corridors. However, the set of conditions attached to the release of funds by the Federal Government have the potential to help change management and work related practices which could lead to significant cost reductions and customer service improvements.