Speech at the Ausrail 2022 Conference
I would like to begin by acknowledging the traditional custodians of the land on which this event is being held, the Turrbal and Jagera peoples.
I pay my respects to their elders, past and present, and to any First Nations people in the audience today.
I also acknowledge all those involved from the Australasian Railway Association who organised this event and representatives from governments, industry and our universities and researchers.
“In the cutting or the tunnel, out of sight of stock of shed”
“Have you seen the bush by moonlight, from the train, go running by?”
When Henry Lawson wrote On the Night Train in 1922, rail was central to the Australian imagination – we need to make sure it is central to modern 21st Century Australia.
Of course, Lawson worked for years at the Clyde workshops as a carriage painter.
I am not here today to lecture you about rail – nobody in Australia knows more about rolling stock, locomotives, signalling, rail infrastructure or logistics than you do.
Today my job is to set out what we can achieve if we work together in the national interest for better public transport and local manufacturing.
In late 1892 the editor of The Bulletin J.F. Archibald decided Henry Lawson needed to get away from Sydney to refresh his imagination.
Archibald gave Lawson five pounds for expenses and a rail ticket to Bourke in New South Wales, a town right on the fringes of the Outback.
It is one of the most famous gifts of a rail ticket in Australian history. Lawson made the most of it.
That trip to Bourke certainly refreshed his imagination and resulted in some classic short stories.
He mentions a pub and says it is safe to call it the Railway Hotel.
Just do a search for Railway Hotel and they will pop up everywhere. There are a number here in Queensland.
Being a country of vast distances, the railways were critical in opening up Australia. Hotels grew up along the lines to provide accommodation, rest and refreshment for travellers.
Bourke is no longer linked by rail, along with many other towns like my hometown of Glen Innes.
But when thinking of the future we must consider the past. And we have a rich history to draw upon with Australia’s railways.
We also have to prepare for the future, specifically for a net-zero future.
There are major environmental and efficiency dividends from moving people off congested roads and onto public transport.
A train line can move 50,000 people an hour. A freeway lane can only move 2,500 people per hour.
Rail passenger travel generates 30 per cent less carbon emissions than road travel.
Rail is also the best performing land transport mode for large volumes of freight.
It is three times more fuel efficient and produces three times less carbon than road transport.
We were reminded of just how critical freight trains are in supply chains, when a one-in-200-year weather event in South Australia earlier this year cut off freight transport between Western Australia and the eastern states.
Australia’s railways have a solid practical purpose and employs more than 50,000 people in the sector today.
Rail should be part of our vision to reduce emissions, generate jobs, secure supply chains and put Australian research and innovation to work.
I am very pleased today to outline our fresh vision for a renaissance of rail manufacturing in Australia.
As Assistant Minister for Manufacturing I will be overseeing the implementation of the National Rail Manufacturing Plan, working with the Rail Supplier Advocate and Office of Rail Industry Coordination.
At the 2022 Federal Election, we made a commitment to build a Future Made in Australia and it’s a privilege to now be in Government to deliver on this.
Ultimately, the plan is designed to support skilled manufacturing jobs and support more trains being built here in Australia.
In taking our rail vision forward we must lift our sights and expectations.
It’s more than just creating rolling stock here in Australia.
It’s about creating national pride and purpose, in the public interest.
For a lesson in what not to do, look no further than the NSW Government’s bungling of major transport projects over the last five to ten years.
It’s a dismal track record;
- trains didn’t fit through tunnels,
- ferries that couldn’t fit under bridges,
- light rail that won’t fit on tracks,
- Projects over budget and behind schedule.
The lack of confidence in Australians, in Australian workers and engineering capability has corroded our capacity to create the rolling stock of the future, to shape the future of rail in the public interest.
It’s destroyed NSW regional rail manufacturing and eroded public confidence.
It’s killed regional jobs in industrial communities.
When announcing the rolling stock for the New Intercity Fleet, then-NSW Transport Minister Andrew Constance said that the South Korean trains would be a 25 per cent cost saving compared to local production.
Four years later, he again cited cost savings, saying:
“As a rule of thumb, they say around 25 per cent [more], and that comes down to our energy cost, our labour cost, our raw material cost; we need to be honest about this.”
It’s worth interrogating this supposed ‘saving’; taking into account actual costs through the life of the project, including from delays and design flaws, the figure becomes bloated.
On the New Intercity Fleet project alone, the more than 18-month delay added to the cost blowout of $1.1 billion. That’s on top of the original $2.8 billion price tag.
A McKell Institute report that examined the average cost of six NSW transport projects contracted to international firms estimated an average increase of more than 40 per cent above the original quoted price.
The NSW Liberal Government was mugged by overseas manufacturers.
They put important projects at the mercy of global supply chains, time and time again.
The McKell report estimated four of these projects would have generated around 1,700 direct and 2,400 indirect jobs if they were built here.
That’s 4,000 jobs, 4,000 good jobs, engineering cadetships and trade apprenticeship opportunities lost.
These offshored rail projects have been utterly mismanaged.
They have been more expensive than a local build.
They have been hopelessly delayed.
They have cost thousands of good jobs and apprenticeships.
And the projects have been plagued with safety, quality and reliability problems.
On any measure, the Liberals New South Wales rail fail is an utter disaster for taxpayers, rail workers and Sydney commuters.
Just look at what other State and Territory Governments have achieved.
The Queensland Government's $7.1 billion Queensland Train Manufacturing Program will build 65 new six-car passenger trains at a $239 million purpose-built manufacturing facility at Torbanlea, in the Maryborough region.
They estimate this investment will create 800 direct jobs in the Maryborough region from construction through to manufacturing over the life of the program.
800 more local, secure jobs in Maryborough with local train manufacturing.
4,000 less jobs in Newcastle, Western Sydney and the Illawarra, because NSW didn’t believe Australian firms and workers could do it.
Western Australia’s $1.6 billion WA Railcar Program will deliver 246 new C-series railcars to service new METRONET projects, as well as six new diesel railcars to replace the existing Australind Service between Perth and Bunbury.
This marks the return of train manufacturing to Western Australia after 27 years.
A new manufacturing facility in Bellevue operated by Alstom will assemble and commission the new railcars over the next 10 years.
The Western Australian Government anticipates this program will support 200 direct jobs at the Bellevue facility. But in NSW, 4,000 jobs gone.
The Victorian Government is investing $1.85 billion in 100 Next Generation Trams and a new tram maintenance and stabling facility in Melbourne’s west.
The trams will be designed, built, and maintained by Alstom.
This is the largest investment in locally made trams in Australia.
The Victorian Government expects the project will support up to 1,900 jobs through direct manufacturing and across Victoria’s strong rolling stock supply chain.
1,900 more jobs in Victoria, 4,000 less in New South Wales.
We can’t afford to keep haemorrhaging jobs, industrial capability and investment offshore.
Imagine the industrial capability that we could build if billions weren’t wasted on offshore design flaws and delays…
If we put our money where our mouth is and back Australian ingenuity…
If industry, government, unions and researchers worked collaboratively towards a common purpose of getting rail manufacturing back on track.
The 2022-23 October Budget included $14.2 million to establish the National Rail Manufacturing Plan and create several bodies to support local jobs and rail manufacturing capability, helping to drive a national approach to facilitate local manufacturing and procurement – more jobs, high-quality trains, more scale and efficiency.
We need to drive Australia up the value chain and broaden our export complexity as well as our product diversity.
Reaching a higher level of export complexity is key to generating good jobs across communities in the suburbs and the regions.
At the same time, we know that Australians take pride in locally made products that are of high quality.
Manufacturing more of our own trains and rolling stock components builds national pride as well as Australian capability.
The Albanese Government wants Australia to be a smart nation that makes high-value products for Australia, our region and the world.
Although the focus will initially be on passenger train manufacturing, I want to identify flow-on benefits for freight rolling stock manufacturing.
Key elements of the plan include establishing an Office of National Rail Industry Coordination (ONRIC) within the Department of Industry, Science and Resources.
ONRIC will lead a coordinated national approach to support and grow the Australian rail manufacturing sector.
We are also establishing a Rail Industry Innovation Council to bring together industry leaders, researchers and experts to help transform the sector.
In collaboration with other stakeholders, it will support capability building by identifying opportunities for Australian innovation, research and technology.
Today I announce that the Government will appoint a Rail Supplier Advocate to develop high impact strategy to deliver on the Government’s objective to support local manufacturing of safe, fast and sustainable rail rolling stock.
The Advocate will work with me and the ONRIC, providing advice to the Government on the Australian rail industry and the most effective strategies to back Australian manufacturing.
They will also assess the rail procurement and local content targets for rolling stock and other drivers to support a competitive rail manufacturing industry in Australia.
They will advocate on behalf of the rail industry to State and Territory Governments, ensuring local suppliers are considered for critical transport projects.
I need the successful candidate to have deep sectoral knowledge of rail manufacturing and the desire to drive genuine change.
Applications will open in the coming days. I want the very best person for this role.
One of the challenges facing the rail industry is that currently we have no consistent national standards for passenger rolling stock.
This makes it harder to achieve consistency for products and components such as windows, axles, wheels, and emergency equipment which are different across the country.
It makes it harder to deliver scale, efficiencies and quality.
It makes it harder still to target global supply chains.
Standard harmonisation should be a key objective.
The National Transport Commission’s 2019 National Rail Action Plan report sets out the case in stark terms:
“Harmonisation may deliver benefits such as lower input costs, improvements in operational efficiency, higher inherent safety and lower training costs. It can also widen rail’s freight market.”
All of these dividends are worth fighting for. But they can’t be achieved by individual companies or by individual states. They need to be done together.
Standard harmonisation holds significant benefits.
The report goes on to say that the current approach:
“Results in there being less ability for there to be nationally consistent standards for rail infrastructure and for operations, including for interoperability of communications and control systems.”
Governments and industry continue to develop priority standards, under the National Rail Action Plan, through Rail Industry Safety and Standards Board.
What I want to clearly set out is that standards harmonisation is of significant economic benefit.
It has been the focus of determined work by many skilled and dedicated experts, but it needs extra impetus. I am keen to work with industry, but the Commonwealth has to show leadership here.
Public procurement is a major driver of economic activity and productivity, accounting for 15 per cent of GDP – that’s well above the OECD average of 11 per cent.
But too often rail procurement is reliant on the three- or four-year election cycle.
Firms have a 30-year investment horizon, State Governments a three-year political imperative.
The Albanese Government will help turn that around.
The Government is leaning in on the reindustrialisation of Australia, and so too is industry.
Just last week we saw Downer EDI’s COO Peter Tompkins say the company is taking advantage of the decarbonisation trend, with billions pouring into renewable energy and energy transmission networks.
Business and the investment community are already there. Imagine what we can achieve together with a Government who will meet them with this same clear-eyed commitment.
We will deliver a National Rail Procurement and Manufacturing Strategy to identify opportunities to make more rolling stock here and push firms up global supply chains.
The strategy will focus on:
- Delivering the local build of more top-quality trains;
- Building scale and industrial capability; and
- Driving innovation, efficiency and competitiveness of Australian rail manufacturing to supply components to global markets.
We will be working closely with State and Territory governments, unions, and industry to effectively deliver the National Rail Manufacturing Plan.
That will no doubt include many people here today.
The plan is part of Our Future Made in Australia commitment, which complements our Buy Australian Plan and the National Reconstruction Fund.
These are crucial elements of the Government’s strategy to boost the national economy.
Our flagship program, the National Reconstruction Fund (NRF), is a $15 billion investment fund to help revitalise Australian industry and create secure, well-paid jobs.
It’s the biggest industry policy offering in living memory, demonstrating the Albanese Government’s faith in Australian ideas and ingenuity.
It will provide loans, guarantees and equity to drive investments that add value and capability in priority areas.
Transport is one of the Fund’s seven priority areas, which also includes renewables and low emission technologies and critical technologies.
The fund includes $1 billion in dedicated support for advanced manufacturing.
Trains are not the only vehicles that the Government wants to see increasingly manufactured in Australia.
Last month I spoke to the Bus Industry Confederation National Conference here in Brisbane about our commitment to help build more buses here.
I’m reluctant to talk about buses at a train conference. (You are a very different crowd).
But I do want to make a few points that straddle all of public transport.
In 2020 nearly 90 per cent of public transport passenger route service buses and around 60 per cent of school buses were manufactured in Australia.
The majority of these were built by Australian body manufacturers on a European or Asian sourced chassis.
Bus and coach manufacturing is already moving towards low emissions and electric vehicles as technology continues to improve.
Before the conference I visited Volvo’s impressive truck assembly facility in Wacol.
The Wacol factory employs over 700 people and supports over 90 local manufacturing suppliers.
It’s Australia’s biggest auto manufacturer – after the last government forced the auto industry offshore.
We can build more buses and trucks in Australia. And we can build more trains.
But we have a current shortage of skilled labour in most industries.
Addressing this will involve a united effort.
The Government is supporting the training and skills development of Australians, and we’ve boosted permanent migration for this year to help complement the Australian workforce in the short term.
This includes delivering STEM education and careers to meet our current and future workforce needs and working on a Digital and Tech Skills compact between the government, unions and technology employers.
I know many of you are engaged in ensuring our workforce reflects the diversity of our nation. The social justice case for gender equality is unimpeachable.
But so too is the business case.
Despite best efforts, the gender segregation in the sector is stark; women represented less than a quarter of the workforce (23.3 per cent) last year.
The Government is committed to advancing local industry so we can create world-class products at scale here and build on our strengths.
We can only deliver together.
Together we can build on the foundations laid by our pioneers and help bring about a renaissance of rail in Australia.
I look forward to the challenge ahead and I will no doubt be working with many of you over coming weeks and months.
Working together with governments, industry, researchers and other stakeholders will help create the high-value, high-wage and high-tech rail manufacturing jobs of the future.
We will create long-term capability that will last beyond the election cycle and build national pride and purpose.
This is more than building rail in Australia. It’s building a future that should be a source of pride for all Australians.