Issues for Australia Addressed

Australia and other countries are experiencing voluntary, self-imposed austerity by consumers and companies. They are restraining consumption and investment. As a result, incomes and growth are below the long term average increase. People are unwilling to accept government austerity as well. It could take 10-20 years for austerity to unwind. It might get worse. It would be exacerbated by the next recession.

Fiscal and monetary policy at historic extremes are unable to correct austerity.  There are no reserves to moderate recession. “Helicopter money” will not work. The Australian Labor Government experimented with it to little effect. Governments must lead by spending more on large scale infrastructure to offset austerity, stimulate general spending and raise GDP to full productive capacity. They are prevented by existing large government debts and, in other countries, by few available large scale, economic projects.

Australia is blessed. It has the large scale, economic, $200b HSR project available that would replace the $200b decline in mining investment. It would be bipartisan. It would be a private project entirely self-funded through the railway creating value and capturing value on sales of property and housing it built. The population is growing rapidly, doubling in the next 40-50 years. Other advanced countries’ populations are shrinking. Their HSR railways are almost always government initiated, funded and owned. The Australian HSR and housing would be privately financed, built and owned. Little or no direct government funds or additional debt would be needed. This would be facilitated by government private finance guarantee which would be a contingent liability, not an increase in government debt. The AAA rating would be safe with such a reliably high profit, high ROI, self-financed project. Much finance would be foreign investment. Japan is building HSR in India and lending long term at 0.1% (yes,0.1%) interest.

The private HSR investment would kick-start spending to reverse the ingrained general austerity and to stimulate economic growth. Higher growth and prosperity would increase tax income, create budget surpluses and reduce the pain of cutting government spending to restore structural budget balance.

HSR is a highly profitable, readily built, everyday job creating project in Australia. It would take 10 years to build between Melbourne, Sydney and Brisbane with the main spending starting in two years, after first completing the private feasibility study and planning. It would be built before population grew too much. Three private consortia are interested in building the railway. The one selected would capture virtually all the value it created to cover the total capital cost. It would privatise from the start, not later.

These are the short term imperatives for HSR now. The first strategic long term reason is to decentralise the rapid population growth from the major cities to the regions. Some 10 million of the 24 million increase in population over the next 40-50 years would be housed above or around HSR. There would be new cities of 1 million or more on either side of Melbourne, Sydney and Brisbane located on the HSR line within 2-300km and 60 minutes HSR commuting time of CBDs. Many outer suburbs are only 20km, but an hour by car from CBDs. Neither road or air could adequately serve commuters from the new cities.

Melbourne, for example, may rise to a population of only 5m instead of the 8m projected, with 1.5m people living in regions to the east in Gippsland near the sea and 1.5m to the west near the Surf Coast. The route would be from Canberra via Gippsland and later to Adelaide, which may double in size to 2m.

In Melbourne, and this also applies to Sydney and Brisbane, around 250,000 or more people would be housed in the inner suburbs rather than the outer fringes. This would be achieved by cutting a trench next to the suburban railway into the CBD, building higher capacity tracks in the trench, switching the suburban trains to the new tracks, cutting a new trench under the old tracks for HSR and building 4 stories of low rise apartments above the 30km of trenches from Dandenong to Melbourne, and 30km onwards. It would provide well located densification in inner-city suburbs from the east to the west.

People would be attracted to the convenience of living over the tracks. They would have ’30 minute’ access to suburban stations, public facilities, and also continuous walking and bicycle tracks and gardens above the low rise buildings, like the ‘HighLine’ in New York. They would have quick entry to the CBD and via nearby local stations for jobs. There would be medium rise buildings over stations and high rise over the Dandenong outer hub HSR station. The buildings would be smart and environmentally sustainable.

HSR would connect Melbourne CBD and new cities with Avalon, Tullamarine and Sale airports.


The CBDs would grow to envelop HSR terminals more closely with HSR high rise offices and more value capture. Interstate HSR would be attractive to business. Delivery right into the CBD in 3 hours becomes even more convenient as airport road congestion grows. HSR would be increasingly competitive with air.

People would be attracted to live in the many new, 30 minute/smart, regional cities on HSR by the well-designed built environment, vital new communities and desirable liveability, knowing they will grow to 1m in their lifetime; by the lower priced regional city houses in contrast to the high priced capital city houses (The Australian sparsely populated, low cost regional areas compare with high density and high cost regional areas with prices near those of the major cities in other advanced countries.); by the easy access to HSR stations; by the short commute to the CBD; by the rapid communications via NBN; by the compact 30 minute ready access to shops, new public facilities, good schools, good hospitals, good universities and, as they grow, to local jobs. Businesses would be attracted by favourable conditions, labour supply and innovation. In summary, people would be attracted to new cities by the rapidly growing, modern, well planned, amenable, liveable, sustainable, more affordable built environments.

The large increase in housing supply would make housing generally in Australia more affordable for the young and less well-off, while catering for population increase away from the major cities which would protect their liveability. Melbourne and Sydney would experience less congestion and greater liveability with populations of 5m rather than 8m, and likewise Brisbane with 3 instead of +4m.

All this greater liveability is possible by HSR, but not by road or air.

The second strategic reason is Fast Freight Rail (FFR). HSR would combine with the FFR to both serve each new city along the east coast. Separate FFR tracks would be built side-by-side to HSR at the same time at less cost. FFR would create a remarkably large on-going productivity increase. Interstate general freight costs and delivery times would be halved. The Australian cost of living would be reduced. Competition would be increased. Competitive isolation of major cities caused by very high interstate road freight costs would end. (Australian transport percentage of GDP is high cost: two or three times higher than the most efficient American transport percentage. Transport is Australia’s biggest industry.) Increased competition would stimulate innovation and increase international competitiveness. FFR would be very profitable.

HSR would distribute population and FFR would increase productivity. Primarily, HSR would add value/create capital value that would be captured by property sales to pay for the capital cost of both HSR and FFR. Beneficiaries would pay. In addition, FFR would add value/create operating value, capture value through its low freight rates and contribute its large operating profit to the private HSR/FFR project. Users would pay. HSR and FFR would both be profitable. Jointly they would be very profitable and completely self-financing. They would call on little or no government funds or debt.

HSR/FFR would reduce road and air co₂ emissions and assist in meeting reduction targets. It would be low emission itself and would contribute substantially overall to Australia’s combat of global warming.

HSR/FFR would save thousands of lives and injuries from interstate truck accidents, and $bs over 40-50 years. Drivers would switch to safer, more amenable local deliveries around intermodal freight terminals.

HSR would be a secure alternative interstate connection service to air should airport control towers be hacked or disrupted or damaged. HSR/FFR would have a defence role to deliver soldiers and defence materiel quickly along the east coast. The electric HSR/FFR would reduce the reliance on petroleum fuels and extend the security of Australia’s short 21 days of national fuel reserves.

HSR/FFR would be a profitable private enterprise project with enormous social, economic and strategic benefits beyond costs for Nation and States, tested for viability by the private feasibility study.

The Federal Government should initiate, promote and spur the innovative HSR/FFR project. It should coordinate State Governments to cooperate and facilitate its successful private implementation now.

PJK ©11.7.16

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