Federal budget hits and misses

While the recent federal budget contained some welcome investments in transport infrastructure and funding for skills and apprenticeships, the allocation of funds throughout our national federation represented something of a missed opportunity to better support resiliency in our supply chains.

Questions being asked about whether some jurisdictions have missed out or haven’t received their fair share of investments on a per capita basis, miss the bigger point about how best transport infrastructure investments should be allocated.

From purely a freight and logistics perspective, what we need are investments that will propel us further towards the ultimate goal of better intermodal connectivity to be able to maximise productivity and efficiency on our road, rail, sea and air freight networks.

It’s not – or shouldn’t be – about one mode or jurisdiction getting more or less investment; it’s about allocating transport infrastructure funding towards new and existing projects, and repairs and maintenance, to enable seamless freight connections between planes and ships, and trucks and trains, and ultimately to the customer.

On this measure we welcome Victorian transport infrastructure investments that will get us closer to better intermodal connectivity, particularly funding for intermodal freight terminals in the north and west of Melbourne.

While there may be some conjecture between the Victorian and Commonwealth governments about how these projects should be prioritised, what’s important is that these terminals become operational as quickly as possible to create the better connections we need between the Port of Melbourne and interstate rail and road infrastructure servicing the rest of Australia.

These and other transport infrastructure investments in the budget are critical for attaining the intermodal connectivity our freight networks need, which will ultimately benefit operators of every mode of transport.

With positive steps being taken towards transport infrastructure, the next priority needs to be getting legislative and regulatory conditions right to support the free and seamless movement of freight, and in a way that creates productivity gains for operators and safer conditions for every transport worker.

This extends to improving local access rules and regulations and removing the red tape and bureaucracy that leads to confusion for drivers about where and when they can travel on certain roads.

Eased travel restrictions on heavy vehicles servicing supermarkets and other essential retailers during Covid proved the freight industry can safely undertake this work at night, and in the process ease congestion on the roads for other motorists during the day. 

These are the kind of common-sense learnings we should be taking from the pandemic and retaining going forward, rather than going back to the old status quo way of doing things. 

In fact, with public transport usage still well down on pre-pandemic levels, road congestion is worse than ever in most major cities – especially Melbourne where latest figures report only a 15 per cent occupancy of CBD offices, with most people still working from home.

Elsewhere in the budget, the VTA is deeply disappointed in the reduction of the fuel excise at the pump. The government’s response provided a disproportionate benefit to motorists compared to the freight industry. After factoring in the Road User Charge (RUC) and loss of the Fuel Tax Credit, operators only get 4.3 cents per litre of fuel excise relief, underscoring why the VTA had advocated for the RUC to be adjusted as a lever for reducing transport costs.

Our customers are expecting the full 22.1 cents reduction in cost calculations, however the road freight industry has not and will not get to this level of cost reduction.

Consumers well may have a lower fuel bill because of the temporary halving of the excise, but they shouldn’t expect a dramatic reduction in the costs of food, groceries and medicines because freight operators have little – if any – fuel savings to pass on.

As we have consistently said, operators need to continue passing on these higher business costs through the supply chain to avoid exposing themselves to undue risk of financial ruin.

Looking at budget investments in skills and apprenticeships, the VTA will be advocating very strongly for heavy vehicle drivers to be included in an eligibility priority list given the labour shortages that are rife across the industry. 

The pathway to professionalising the heavy vehicle driver is through apprenticeships and training, highlighting the importance of the government recognising freight drivers as a priority skill, and allocating funding to help with their training. 

Peter Anderson is the CEO of the Victorian Transport Association.

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