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Future Freight Networks : Yearbook 2018
74 ALC FORUM 2018 The development of a National Freight and Supply Chain Strategy is not merely important for the nation’s freight logistics industry – it also has the potential to deliver economy-wide benefits. During this session, senior leaders from two of Australia’s most important economic regulators shared their perspective on how those benefits can be maximised, and what needs to be done to prepare our regulatory frameworks to meet the needs of a changing world. Peter Harris AO, Chairman of the Productivity Commission, began with an overview of Australia’s productivity performance, which he noted has been down since about 2004, coinciding with the rise of the digital economy. New products, such as Uber and Uber Eats, are massively influencing social trends, such as under 35s buying more meals than they prepare themselves. The expectation of rapid home delivery and a general move towards online shopping will add to urban congestion, which will fuel public demand that governments ‘do something’ about the problem. This may well lead to a shift in perceptions about demand management tools (such as congestion charges), and will also reshape our approach to charging for road use. Autonomous vehicles are undoubtedly coming to Australian roads, and will not only change road transport, but also port and rail interfaces. The increasing fuel efficiency of modern vehicles is already placing pressure on current road-funding models, and the large-scale introduction of autonomous electric vehicles would render it wholly impractical. Harris noted that roads are becoming more expensive to build, yet revenue from fuel taxes is declining. We will have to find smarter ways of raising the revenue needed to sustain the network. We can’t afford to think that it will be ‘alright on the night’ – we have to start work now to change people’s attitudes towards road pricing. Every other form of transport has users paying the costs – road transport will also have to move towards that model. Cristina Cifuentes, Commissioner at the Australian Competition and Consumer Commission (ACCC), outlined the role the ACCC plays in ensuring pro-competition policy settings. There is widespread consensus among economic experts as to the manifold economic benefits of competition – the ACCC’s task is to see those benefits flourish by preventing restrictive practices and anti-competitive behaviour. This is achieved by looking at natural monopolies across the economy, with an objective of creating market-like outcomes but with an appropriate return on investment. Regulation can vary from full economic regulation (such as in the electricity market), or light-handed intervention (such as industry-negotiated arrangements). Cifuentes highlighted road transport as an area of the economy that has not been significantly reformed in recent decades, in contrast to many other sectors that have been subject to (and are now benefiting from) significant micro- economic reforms. Echoing Peter Harris’s comments, she suggested that there are economic efficiencies to be realised by establishing a closer link between what people pay and the costs they incur through road use. How greater freight efficiency can drive national productivity and enhance competition Cristina Cifuentes Peter Harris AO