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Establish Joint State and Federal Government Governance

The final difference between our approach and the 2013 HSR Study is to establish a joint governance structure for both high speed and conventional rail lines across regional Australia.

Who is responsible for railways in Australia? 

Originally each state had its own independent rail network under the management of a fully-integrated government-owned agency that provided passenger and freight services on its own network.  Each state adopted different gauges, with some states ending up with more than one, leading to multiple locations with a “break of gauge” problem.  As a result, standard gauge was adopted as the national standard, which was used to build the trans-Australian railway.

In 1975, the Whitlam federal government invited the state governments to hand over their railway systems, which was taken up by South Australia and Tasmania.  This led to the creation of what has now become ARTC – the federal-government agency responsible for managing most of the interstate railway network. 

More recently, there have been different moves to privatise the railways.  Governments have retained ownership of corridors and track, but have relinquished freight to private train operators.  Also, some networks are managed under concession agreements, with regulatory authorities established to manage competition and safety.  Further, NSW split its rail network and operations into two, Sydney Trains and what is now the Country Regional Network, but recently transferred the operation of all trains to Sydney Trains.

As a result, Australia has rail networks managed by ARTC, Sydney Trains, Country Regional Network (NSW), VLine (Vic), QR (Qld), Arc (WA) and Aurizon (in SA and the NT).  These networks are governed by different regulatory authorities, including the federal agencies (ACCC, ONRSR and RISSB), the NSW Independent Pricing and Regulatory Tribunal (IPART), the Queensland Competition Authority (QCA), and the Essential Services Commission of SA (ESCOSA), while Victoria is currently reviewing its regulatory framework.

And now we now want Australia to introduce modern, convenient high speed rail travel into this dog’s breakfast of network managers and agencies. 

And this is where it gets tricky.  The 2013 HSR Study came in at well over $100Bn (probably over $200Bn today).  This raised the concern of cost-shifting from the states to the federal government, and a desire to see a competitive market rather than a state-owned monolith.  This led to the fully-private CLARA proposal that would create 8 new cities in regional Australia.  However this was not supported by state governments who saw themselves locked out of the decision-making process, particularly regarding the distribution of urban settlement within their state. 

Which means we have to tackle the problem of governance of railways in Australia.  And also find a way to develop consensus on what new rail lines are built and where they go, because they dictate where settlement and economic activity occurs.

Clearly this requires state and federal governments to work together.  Both levels of government have a role in the planning, funding, implementation and operation of rail lines.  It requires the federal government to take a national perspective, and a greater role in funding, and in developing the market for intercity passenger rail services.  State governments have to provide the land for the corridor, funding from value sharing, and the urban planning for stations and precincts associated with the network.  And let’s not forget local government and communities who have the greatest interest in achieving the best outcomes from the investment in new rail infrastructure.

This will be complex, but history shows that we are doomed to fail if we don’t get it right. Without the right governance structure, we will either end up not getting high speed rail at all, or missing out on the potential benefits it could deliver.  It is arguably the most important reform that state and federal governments can make.


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