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What is the transport industry’s reaction to the federal budget?

The latest federal government budget for 2024-25 has drawn strong reactions from many parts of the transport industry, from the VTA and NatRoad through to energy companies, the QTA and the bus sector

With the cost of living rising and inflation continuing to impact the way transport businesses operate on a daily basis, the federal government’s annual budget provides a telling snapshot into what relief is on the way.

This year’s budget, released earlier in the week, includes a wide range of transport measures, from key infrastructure and road safety projects to an increasing focus on renewable energy and battery production in Australia. With freight rail safety upgrades also joining funding announced for truckie tax relief and the impending New Vehicle Efficiency Standard, there’s a lot for transport and fleet owners to siphon through.

So is the federal budget a good announcement for the wider Australian transport industry? The Victorian Transport Association (VTA) is one associated that thinks so, with its state snaring 30 per cent of the federal infrastructure spending in the 2024-25 budget announced by treasurer Jim Chalmers.

“In the Victorian infrastructure spending allocations, significant investments have been earmarked for various key projects aimed at enhancing transportation, connectivity and public amenities across the state,” VTA CEO Peter Anderson says.

“Significant funding has been provided to the North East Link, with $3.3 billion allocated to this transformative project.

“We applaud federal commitment to enhancing connectivity and unlocking economic potential – by seamlessly linking the Eastern Freeway to the M80 Ring Road, this project will significantly reduce travel times, enhance freight efficiency and alleviate pressure on existing arterial routes.”

This major funding came as part of the budget’s $120 billion 10-year road, rail and transport infrastructure pipeline. Alongside the North East Link was $200 million for the Safer Local Roads and Infrastructure program, with Western Australia’s METRONET rail program receiving $1.7 billion in funding.

In Queensland, the Bruce Highway Corridor was allocated $467.2 million in funding, while the Direct Sunshine Coast Rail Line received $1.2 billion. In south eastern and northern Melbourne, $437.3 million will help upgrade roads.

“In alignment with broader national objectives, the Victorian infrastructure spending allocations also prioritise initiatives aimed at fostering economic growth, creating job opportunities and enhancing the overall quality of life for residents,” Anderson says.

“Overall, the federal budget underscores a commitment to investing in Victorian infrastructure to support the state’s long-term development, competitiveness and prosperity.”

Outside of the trucking landscape, the funding boosts unveiled in the budget for freight rail drew positive responses from many. The Australasian Railway Association (ARA) welcomed more than $1 billion in critical investment to improve the resilience and reliability of essential national rail infrastructure.

ARA CEO Caroline Wilkie says the $540 million federal investment will combine with the Australian Rail Track Corporation’s (ARTC) $500 million investment into the Network Investment Program.

“The ARA welcomes the decision to invest over $1 billion to upgrade critical sections of the 8,500-kilometre national rail network to help ensure the safe, reliable and efficient delivery of commercial goods to support businesses and families,” Wilkie says.

“This announcement recognises the critical role rail plays in supporting a strong national supply chain and the great economic and environmental benefits of having a more reliable and resilient network and getting more freight onto rail.

“Repeated severe weather events, particularly flooding, have had a major impact on rail freight and passenger services and resulted in significant disruptions to our national supply chain, with washouts on the east-west rail line alone costing the economy $320 million in 2022.”

The overall funding package in the freight rail space includes $100 million for the replacement of rail to support larger trains between Tarcoola and Kalgoorlie, as well as key track rehabilitation between Albury and Sydney and from Maroona to Portland in Victoria.

“It is very pleasing to see the federal government acknowledge the significant impact that increasingly frequent extreme weather events have had on our national rail network,” Wilkie says.

“This essential investment will help ensure our supply chains keep moving when our communities need it most.”

The National Road Transport Association (NatRoad) was also similarly positive about the budget, with CEO Warren Clark labelling it as “mostly good”. Now, the focus for NatRoad is seeing these funding announcements turn into tangible benefits for the industry.

“A 12-month extension to the $20,000 instant asset write-off will help small businesses claim an immediate tax benefit on new assets through to June 2025,” Clark says.

“This is something we’ve pushed hard for in a number of budgets. Eligible road transport businesses will also appreciate the modest $325 rebate on their power bills.”

Clark also welcomed increased funding for the Roads to Recovery and Black Spot Programs.

“NatRoad hopes that the $10.8 million in 2024-25 for a one-year National Road Safety Education campaign has a heavy emphasis on truck awareness,” he says.

“The $21.2 million over six years to improve the reporting of national road safety data via the National Road Safety Data Hub is important and long overdue.

“While we welcome additional road funding where the routes are relevant for freight, ultimately we still need to see all governments, including the states and territories, implement road service level standards so we know our tax dollars are going to the roads which need it, with an increased focus on road maintenance.”

Yet not everyone in the wider transport sector is satisfied with the budget announcements. The Queensland Trucking Association (QTA) says the funding boost, even when including projects for the Bruce Highway and the Inland Freight Route, remained insignificant when compared to spending in the household sector.

“These measures fall well short of the incentives we need for road freight productivity-enhancing investments and the review of the Heavy Vehicle National Law continues to lack any ambition as a reform program,” QTA CEO Gary Mahon says.

“Tax incentives were welcome for Queensland industry, with tax credits for hydrogen energy and critical minerals and, more broadly, an extension of the instant asset write-off for small businesses.

“However, there’s little to promote in regards to substantial ongoing reform to power up productivity, which has been flattening for road freight since 2007.

“Investment in workforce gaps were encouraging, including 20,000 additional fee-free TAFE and VET places to train construction workers, but yet again, there were no provisions for any priority for road transport.”

Outside of the trucking sector, a lack of funding in the bus industry has seen the Bus Industry Confederation (BIC) call the budget “disappointing”.

“We were hoping that the bus and coach industry would be captured in the government’s Future Made in Australia announcement to address ongoing bus manufacturing and supply issues, but it didn’t eventuate,” Chivers told ABC.

“The most significant and interesting announcements made were the $100 million for the Western Sydney Rapid Bus Infrastructure Upgrade and $115 million for zero-emissions buses tranche one infrastructure at NSW’s Macquarie Park depot.”

Looking beyond transport, the energy space served as a major winner, with roughly $8 billion committed over 10 years to support the production of renewable hydrogen, and a further $549 million over eight years will help with local battery manufacturing.

It all left CEO and co-founder of Hiringa Energy Andrew Clennett positive about the latest budget, much like the majority of the wider transport industry.

“The federal government has demonstrated its understanding of the scale of investment required, and Hiringa welcomes the budget’s $19.7 billion allocation to accelerate investment in priority industries, including $8 billion to support production of renewable hydrogen,” Clennett says.

“We should not lose sight of the fact that, while government support is essential, there are a range of decarbonisation pathways, and government intervention should facilitate the development of a broad toolkit of viable decarbonisation technologies allowing for the breadth of our industries and use-cases.

“We believe this budget has set the framework for achieving such a balance, including through the Hydrogen Production Tax Incentive and CfD mechanisms via additional Hydrogen Headstart funding.

“We encourage ongoing policy allow the market to indicate where green hydrogen makes the most sense rather than relying on ‘picking winners’, which will ensure a broad range of projects deliver low-emission products to end-users in the format they need, at the point they need it, and at a scale that is consistent with actual demand.”

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