Proposed east-coast HSR alignment

Late last month the Federal Minister for Transport, Anthony Albanese, told Parliament that HSR would be costly, but had to be considered in the context of the regional development opportunities it would provide.

The recent discussion paper on Melbourne’s metropolitan strategy emphasises the potential of developing regional centres. It says land should be reserved for a very fast train service between Melbourne and regional centres.

In its new report on the economic benefits of HSR, the Greens emphasise the potential of fast trains to relieve growth pressure on the fringe of our big cities by promoting regional centres as alternative locations for commuters.

HSR users will be able to live in Albury or Shepparton and commute on a daily basis to the Melbourne CBD. This will take pressure off Melbourne’s straining outer suburbs while also boosting regional economies. Perhaps more importantly, it will help get people into the property market by enabling them to buy property in regional Australia while commuting to where the jobs are.

According to the Federal Government’s Phase One HSR Report, the estimated travel time by HSR from the centre of Shepparton to Southern Cross station in Melbourne would be 55 minutes and from Albury/Wodonga it would be one hour and five minutes.

Whether or not HSR-led regional development is as sensible and attractive as it sounds is an important public policy question. The benefits and achievability of regional development – including avoiding fringe growth in major cities – are often asserted but seldom explained.

It’s a pertinent question because past efforts at regional development in Australia were underwhelming. This time regional development is being cited to justify an investment of around $125 billion – that’s enough to pay for 25 years of Gonski’s proposed reforms in education.

In earlier eras like the decentralisation push of the Whitlam Government, it was hoped new regional jobs would be created by inducing major manufacturers to locate in growth centres. This was plausible at the time because the low cost of transporting goods (as distinct from transporting people) meant that many manufacturers were relatively location-independent.

Thus the centrepiece of the Whitlam initiative, Albury-Wodonga, was able to induce (with large subsidies) some significant firms like Borg Warner and Uncle Bens to settle on the Murray.

But employment in manufacturing has declined precipitously in Australia since the 1970s. It was expected Albury-Wodonga would grow to 300,000, but today its population is only around 105,000.

Canberra wasn’t the subject of an endorsed decentralisation program, but it also provides a salutary lesson. It’s the national capital, but has a population of just 350,000.

That’s despite good air services, a freeway connection to Sydney and a very high standard of living. It’s also despite specialising in knowledge-intensive industries and having one of the best-educated workforces in the country.

However what the Greens advocate isn’t even regional development in the sense it was conceived in the Whitlam era i.e. self-containment of jobs and residents.

Rather, the Greens envisage regional centres would simply be dormitory suburbs connected by HSR to the jobs and economic activity in the capital cities.

New residents have to eat, so dormitory suburbs in the regions would certainly generate a lot of jobs in sectors like retail and personal services. Indeed, that’s what happens now when suburbs on the outskirts of capital cities are settled.

But it wouldn’t create self-sustaining growth in regional centres in the way it was hoped manufacturing might in the 1970s. Nor would it drive growth in the same way that a few regional centres have benefitted from expansion of the mining and tourism industries.

It’s also highly unlikely a centre like Albury-Wodonga would attract CBD-type businesses from capital cities in the event air services were replaced by HSR. Knowledge economy firms already have the choice of moving to the outer suburbs but they usually don’t because they prefer the benefits of agglomeration.

But if they wanted to move, the outer suburbs of capital cities would give them access to a far larger workforce and greater proximity to other firms than any regional centre could provide. And from a worker’s point of view, the median journey to work time is relatively short e.g. in Melbourne’s outer suburbs it’s 30-35 minutes door-to-door.

The cost of commuting from regional centres to capital cities by HSR would also be a major impediment to the Green’s plan.

There’s no estimate for Albury-Wodonga or Shepparton in the Phase One HSR report, but as a guide, note that it assumed the one-way fare from Gosford to Sydney would be $26 (51 km by air; 75 km by road). That assumes no capital cost is recovered in fares.

It proposed an additional subsidy for Gosford commuters to reduce that fare to $14.25 one-way. Albury-Wodonga is 280 km from Melbourne, so they’d pay somewhat more.

There’s an equity issue here – only those on decent incomes could afford to pay upwards of $30 a day in fares. Only those working in CBD jobs could make the station-to-station trip from Albury-Wodonga to Southern Cross Station in Melbourne’s CBD in the assumed one hour and five minutes journey time.

A further key issue is there’s no great advantage in building new suburbs on the edge of Melbourne versus building them on the edge of a regional centre. The required levels of infrastructure and community facilities are the same.

Like capital cities, regional cities also have problems with water supply, especially inland cities. Nor is there any reason why broadacre land should be significantly cheaper in a major regional centre than in the immediate hinterland of a city like Melbourne.

Moreover, the impact on the environment and on agricultural land would be little different on average between the two locations. In fact the pressure to provide smaller lots might be lower in a regional centre.

One potentially important difference, though, is transport infrastructure has to be upgraded to accommodate growth in capital city fringe suburbs. That expense has to be compared against the cost of HSR.

But the calculation also needs to account for the cost of consequential upgrades to transport systems within regional centres as population grows. That needs to be studied but my guess is the HSR option would be much more expensive.

Of course it doesn’t necessarily follow that all regional HSR commuters would be diverted from the urban fringe. Around half of all new dwellings in Melbourne are constructed within established suburbs. The proportion is considerably higher in Sydney but lower in other capitals.

Given the likely level of fares, a significant proportion of HSR commuters might be comparatively well-heeled residents of middle and even inner ring suburbs. They might be tempted to offset their long and expensive commute by living in much larger properties than they could afford if they stayed put.

So I don’t think there’s a compelling argument that HSR would promote regional development. Nor do I think it would be a cost-effective way of responding to growth pressures in capital cities.

The case has not been made that Melbourne and Sydney are anywhere near being “too big”. Their problems are a failure of politics and planning, not scale or urban form.

And I think the idea of subsidising extra-long commutes at a time when many observers think long commutes are bad for health and community cohesion deserves further consideration. Indeed, I’m surprised the Greens, of all parties, ignore this issue.

As a related aside, Anthony Albanese quietly let it be known last month (in answering a question in Parliament from Craig Thomson) that the Phase 2 HSR report which was due this month now won’t be “handed down until early next year”. I haven’t seen this reported anywhere.

HSR boosters won’t take much comfort from his final sentence:

We know that in Europe and Asia High Speed Rail is a growing part of the transport solution. Of course, they have much denser populations than Australia does across the vast expanse of this continent. So the challenge here is much greater.