Just two months ago, Prime Minister Malcolm Turnbull threw a high speed rail (HSR) hail Mary, declaring that the Government would commit to building a very fast train network that would eventually run all the way from Melbourne to Brisbane.
It was subsequently revealed by the Liberal MP leading the examination of the policy, John Alexander, that the HSR project is all about boosting property values in regional towns rather than delivering efficient and cost-effective transport, along with improving the nation’s productivity:
“The real purpose of high speed rail is to be able to develop regional areas… It would appear there’s a perfect storm of opportunity to liberate those cities through high speed rail”…
Mr Alexander suggested property in Goulburn now worth $200,000 could be worth $600,000 if it were just a 30 minute train ride from the Sydney CBD. Meanwhile, the newly-connected regional growth centres would act as a “pressure release valve” on property prices in Sydney and Melbourne. Under conservative estimates, 50,000 people could move into towns along the rail line each year, Mr Alexander said.
“You will push up prices enormously around Goulburn, people will be delighted,” he said.
Thankfully, I can report that the Turnbull Government has now junked its HSR proposal, with Major Projects Minister, Paul Fletcher, admitting that the project’s cost is far too high and that it is not a sensible priority for Australia. From The AFR:
The $114 billion price for a high-speed railway by the previous, Labor government is considered by many to be “an optimistically low assessment,” Mr Fletcher told The Australian Financial Review’s National Infrastructure Summit.
“If you look at a country like Spain, it’s taken 30 years to get to point as having as many kilometres of track as will be proposed between Brisbane and Melbourne,” he said.
“So, newsflash: There is no commitment by the Turnbull government to that kind of funding. It’s just not a sensible priority”…
“It’s conceivable that in 30, 40, 50 years that the [rising] population may make the economics of it less challenging than it is now,” he said.
I have written many times why I believe that HSR linking the East Coast capitals is a bad idea (for example see here). These reasons can be summarised as follows:
- Exorbitant cost: the 2013 study estimated a HSR line linking the East Coast capitals would cost around $110 billion to build.
- Lack of population density to support the project.
- Lack of competitiveness against air travel unless there are massive ongoing operational subsidies from taxpayers.
- Equity issues: why should residents of WA, SA, NT, TAS or anywhere else not located along the route fork-out huge taxpayer subsidies for what will in all likelihood be an infrastructure white elephant?
HSR would also very likely be used as an excuse by government to ramp-up Australia’s population growth even further in a bid to make the project economically viable (tail wagging the dog).
Ultimately, HSR was always about juicing Australia’s “population ponzi” to fuel the rent-seeker CBD economies. In the meantime, the overall Australian economy – which let’s face it earns its keep in the world by selling its fixed endowment of resources – would become even more services-oriented, with the lion’s share of new arrivals working in non-productive “bullshit jobs” in the CBD.
If the Turnbull Government is looking to spend money to make the economy more productive, how about improving Australia’s freight links so that Australian businesses can more easily (and cheaply) deliver their goods to port, thus boosting exports?
Such an approach would be far cheaper and more beneficial than fueling ponzi growth.
