Last week I described how our colleague, Phil Potterton, has determined the economic impacts of introducing high speed rail services from a major city to a regional urban centre based on their Route Geography - the relative size of the urban centre and its current level of public transport services(which roughly equates to distance from the capital city).
This week looks at how regional economies in Australia will grow based on Phil's route geographies approach. The key to Phil's approach is that faster connectivity ‘shrinks the distance’ between locations. It increases job markets by expanding commutable areas and integrates regional economies by enabling convenient same-day return visits.
Sydney-Melbourne and Sydney-Brisbane fall into RG1 (less than 1,000km between each other). High speed rail will supplement air travel and induce travel for those that prefer comfort over speed, or are more cost-sensitive, if fares below low-cost airline levels are offered. It will increase visitation to each city and reduce pressure on the expansion of air services e.g. additional runways. However, these cities are too far apart to be considered as the first stage of a new high speed rail network.
Most of Australia’s largest regional cities fall into RG2 (100-200km from a capital city), notably Geelong, Ballarat, Bendigo, Shepparton, and the Latrobe Valley in Victoria, Newcastle, Southern Highlands and Wollongong in NSW, and Gold Coast, Sunshine Coast and Toowoomba in Queensland. Even with fast rail (ie 200 to 250 kilometres per hour, rather than higher operating speeds), these cities will attract residents from Melbourne, Sydney and Brisbane respectively for more affordable housing and a better lifestyle. Connecting these cities are ideal as the first stages of a high speed rail network in Australia.
Canberra is an exception in the Australian context. It is a large city with frequent air services from both Sydney and Melbourne as the national capital. It is too small to fit the profile for RG1 and, with frequent air services, is an exception in RG3 which is the distance band it sits in. It is therefore likely to see rail compete for most of the current air, coach and even private car traffic from Sydney, as well as induce new travel from both Sydney and Melbourne. In addition, being the national capital means Canberra could generate significant growth, particularly from Sydney, as well as attract major business investment in key strategic industries that have close interaction with government and the research sector.
Albury-Wodonga lies within the RG3 band (200-350km from Melbourne) and RG4 from Sydney. It could become a manufacturing and service hub being conveniently located between Sydney and Melbourne.
Wagga Wagga in southern NSW lies in the RG4 band (350-450km) from both Sydney and Melbourne. It should attract some manufacturing and service businesses given better connections with both capitals.
While most of the regional centres along the northern NSW coast north from Newcastle to the Queensland border fall into the RG3 band (some are RG4), they are more likely to benefit from growth associated with increased tourism rather than business relocation. However, the potential for increased residential and business growth should not be discounted.
Smaller centres along the entire corridor are likely to benefit from local regional rail services on the existing line connecting them to the nearest major regional city. They will be popular with people seeking a rural lifestyle with good connectivity to a capital city when needed.
Our expectation is that this will lead to the creation of a series of overlapping megaregions along the main trunk of the high speed rail corridor.
Clearly Sydney, Melbourne and Brisbane will draw their nearby regional cities into a common regional economy - a megaregion. We see this all over the world where groups of cities form a common economy based on fast and frequent rail connectivity between them. We also expect Albury and Canberra could become centres of similar megaregions given their growth and strategic location in the Sydney-Melbourne corridor. And in northern NSW, high speed rail will tie the loosely-connected economies together as a more cohesive region.