Following the federal election in October 1998, two new Ministers were appointed to the portfolio: the Hon John Anderson MP, as Minister for Transport and Regional Services, and Senator the Hon Ian Macdonald, as Minister for Regional Services, Territories and Local Government. Senator the Hon Ron Boswell was appointed Parliamentary Secretary to the Minister for Transport and Regional Services on 20 July 1999.
The Department's name changed from the Department of Transport and Regional Development to the Department of Transport and Regional Services. Several regional and rural services programs were transferred from the former Department of Primary Industries and Energy, and the Maritime function returned from the former Department of Workplace Relations and Small Business.
INVESTOR IN PEOPLE
A major milestone was passed in March 1999, when the Department became the first Australian Public Service agency to be accredited as an 'Investor in People' (IiP). IiP is a quality standard which sets a level of good practice for improving an organisation's performance through its people.
The Department was acknowledged by Senator the Hon Christopher Ellison, Special Minister of State, as being the largest and most complex organisation outside the United Kingdom to achieve the prestigious international IiP standard.
The IiP standard provided a framework for the development of numerous initiatives aimed at bringing together the 'results' and 'people' elements of the Department's activities.
The Commonwealth Government has had considerable success in positioning Australia's economy in the global community. Australia now has a strong growth rate of approximately five per cent and the lowest net government debt to gross domestic product ratio of any Organisation for Economic Cooperation and Development country. Interest rates remain low, as does inflation. These economic indicators do not mitigate the need for further crucial reforms, both in transport and in regional communities. The rapidity of Australia's integration into world markets will continue to drive the need for a more efficient, integrated transport system and a greater capacity of regional communities to take opportunities in new or growing industries.
In particular, the Department has accepted its Ministers' challenge to develop effective processes by which the public and private sectors can work in partnership to achieve better results for themselves and for Australia.
Over the last 15 years, the Transport portfolio has been at the forefront of microeconomic reform: developing policy to assist the shift of transport operations and, more recently, infrastructure, into the private sector; leading cross-jurisdictional reform to enhance the efficiency of regulatory regimes; and achieving greater transparency, accountability and industry consultation from the portfolio's regulatory and safety agencies. Establishing effective public-private partnerships represents the next stage of an ongoing reform process to build the competitiveness of Australia's exporters and assist its regional communities to seize opportunities in new and growing industries.
The biggest challenges faced by the Department during 1998-99 were to:
- encourage the use of existing transport infrastructure to be as efficient as possible;
- identify alternative sources of funding for infrastructure;
- ensure transport networks integrate effectively;
- ensure that Government interactions with the private sector are as efficient and effective as possible;
- address the needs faced by regional communities, to provide the tools needed to help them find their own best way forward; and
- assist regional, rural and remote Australia gain improved access to economic and social opportunities comparable with those available in metropolitan areas.
During the year, $868 million was spent improving the National Highway System and Roads of National Importance, including upgrading the Pacific Highway in New South Wales and Queensland.
More of Australia's new infrastructure is, however, being provided in partnership with the private sector. Projects worth $70 million were approved during the year, as part of the Commonwealth's $250 million Interstate Rail Investment Fund to upgrade the interstate rail network over four years by leveraging private sector and State investment.
A scoping study is underway to establish the commercial viability of the proposed $3.5 billion Very High Speed Train service between Canberra and Sydney. Five projects worth almost $1 billion qualified for assistance under the Infrastructure Borrowings Tax Offset Scheme, including the Adelaide airport terminal, the Melbourne Citylink freeway extension, and the Brisbane cruise port.
The Commonwealth Government has also sought to expand the liberalised approach to international air services it has taken since 1996. Under the revised policy arrangements announced in June 1999, Australia will, where the national interest is enhanced, negotiate 'open skies' agreements with like-minded countries which will remove restrictions on a reciprocal basis on capacity, frequency, routes, code share, multiple designation and tariffs for passenger and freight services to and from Australia.
Where 'open skies' is not possible, the Government will negotiate the most liberal arrangements possible, including open access to airports in regional Australia.
Work on intelligent transport systems and electronic commerce is also helping maximise the return on the current stock of transport infrastructure, as is the introduction of higher mass limits on vital freight routes for heavy vehicles with road-friendly suspension.
The Department has been exploring options for private sector infrastructure charging. While the private sector will play a vital role in meeting Australia's infrastructure needs in the future, the need for a return on investment on a single asset must be managed within the broader framework of providing a transport network with a significant social, as well as economic, role, particularly in regional Australia.
The Department has been active in ensuring that transport networks are integrated effectively through the formation of sea and air freight export councils, which will improve communication between players in the vital transport and logistics chain from producers to shippers and airlines.
In creating the Department of Transport and Regional Services, the Government re-emphasised its belief in the importance of a 'whole of government' approach to the provision of services to regional communities, and in addressing the serious problems that many bush communities face.
Ministers of key portfolios have signed four Memoranda of Understanding to formalise the 'whole of government' approach to deliver services seamlessly across regional Australia.
The Government believes that regional development cannot be externally imposed, but must be generated from within regional communities and businesses, taking advantage of those communities' two greatest assets, their people and their environments. The Department's crucial task is, therefore, to facilitate basic levels of services and infrastructure that, while being taken for granted in urban areas, will enable regional communities to seize opportunities in industries such as tourism, agri-business, and information and communication technologies. The launch in March 1999 of the Government's election commitment to the Rural Transaction Centres Program was a major step in that process.
Following Parliamentary Committee reports on rail and road funding, and calls from several quarters for a national transport strategy, the Department established in July 1998 a small Transport Review Group to consider the issues and to help develop a Commonwealth response.
The Minister for Transport and Regional Services announced on 9 February 1999 terms of reference for an independent review of the Australian Transport Safety Bureau (formely Bureau of Air Safety Investigation). The review team completed its report and made recommendations on BASI's efficiency and role in late July 1999. The report was publicly released on 6 August 1999.
The Rail Projects Taskforce reported in April 1999 to the Prime Minister (Smorgon Report) on impediments to private sector investment in the rail industry, including the continued retention of rail operations in public hands and inefficient Government regulation.
The Department has undertaken initiatives and achieved some important results during 1998-99. It has:
- analysed Sydney's future airport needs, including completing an Environmental Impact Statement for a proposed airport at Badgerys Creek;
- assessed the initial draft master plans and airport environment strategies submitted by the new operators of leased federal airports;
- introduced major changes to Australia's international aviation policies to liberalise further tourism, travel and trade to and from Australia;
- encouraged private transport infrastructure investment to achieve efficient, innovative and responsive private transport operators;
- continued to play a leading role in ensuring a national approach to the implementation of higher mass limits for heavy vehicles in order to improve the efficiency of Australia's road network;
- administered 324 federally funded road safety Black Spot projects at an estimated cost of $36 million;
- conducted public education road safety programs including print, television and radio advertising;
- administered the Regional Flood Mitigation Program to assist regional centres and rural towns;
- administered a Local Government Incentive Program;
- organised a Regional and Rural Women's Roundtable that identified priority issues in regional Australia;
- established a Regional and Rural Women's Unit;
- established a pilot Remote Communities Liaison Service to develop links between communities and the Commonwealth Government;
- conducted a joint review with the Department of Finance and Administration to assess the long-term economic sustainability of the Indian Ocean Territories;
- implemented service delivery arrangements with several Western Australian State Government agencies for the provision of services to the Indian Ocean Territories;
- implemented client service charters in Cocos (Keeling) Islands, Christmas Island and Jervis Bay Territory;
- assisted the Office of Asset Sales and Information Technology Outsourcing to achieve a successful sale of ANL Limited; and
- initiated and led projects in the APEC Transportation Working Group to promote an efficient, safe and competitive environment for transport in the APEC region.
A feature of the Department's 1998-99 financial statements is the distinction between operations controlled by the Department and those items simply administered by the Department on behalf of its Ministers.
The Department's operating deficit for 1998-99 was $25.5 million after extraordinary items. The deficit arose largely as a result of the Government's appropriations framework in 1998-99 being based on the cash requirements of the Department. As a result, the Department received insufficient revenue for its services to offset such costs as depreciation and accruing employee entitlements. The reporting year 1998-99 was the final year before a new budgeting framework was introduced to appropriate prices for outputs expected from Departments.
The Department's revenues during the year consisted of $136.9 million from the Commonwealth Government for the Department's outputs, $7.5 million in fees for services and goods sold to other recipients, and $0.6 million in services provided to the Department free of charge by other Commonwealth agencies. Each of these revenue items increased over the previous financial year largely as a result of an increase in services relating to regional, rural and remote communities, Australia's non-self-governing Territories, and maritime transport.
Total expenses for the Department for 1998-99 also increased from the previous year as a result of an increase in services to Government. Total expenses of $169.3 million for the year included employee expenses ($53.8 million), payments to suppliers ($87.7 million), depreciation and amortisation of assets ($25.7 million) and losses of $0.5 million on assets.
Administrative Arrangements Orders also had a negative impact of $1.2 million in 1998-99 due to the transfer to the Department of more liabilities than assets.
The Department also administered on behalf of its Ministers programs amounting to $2 513.4 million in 1998-99. These items include grants and subsidies and payments to the Portfolio's statutory authorities. The Department also collected $228.1 million on behalf of Ministers from taxes and levies, dividends, interest earnings, and other sources.
The Department's net equity position reduced by $12.2 million over 1998-99 as a result of its operating deficit during the year. This was largely reflected in a reduction of $12.4 million in the value of the Department's fixed assets and an increase of $2.8 million in accrued employee entitlements.
Capital works of $10.6 million were carried out for a range of projects on Cocos (Keeling) Islands and Christmas Island in line with the Government's objective of bringing public infrastructure in the Indian Ocean Territories to comparable mainland standards.
The Department's net cash inflows from operating activities during the year were $17.0 million. This was almost all used to acquire fixed assets to maintain the Department's delivery of outputs to the Government.
THE WAY AHEAD
The initiatives and achievements described above clear the way to enable the Department to address more fundamental long-term issues, in particular, how to facilitate and enhance the role of the private sector in transport, and encourage a greater community role in the development and delivery of regional services.
International air services will continue to be liberalised where 'open skies' arrangements cannot be achieved. A major focus of any liberalisation will be to open up regional and rural Australia to international air services.
Fifteen major airports are now leased to private sector companies, allowing the new operators to provide services on a commercial basis and invest in infrastructure, subject to regulatory controls that ensure the public interest is protected.
As part of the 'whole of government' approach to improving services to regional and rural Australia, initiatives being implemented to produce significant benefits in coming years include the Rural Transactions Centres Program, Local Government Incentive Program, Rural Communities Program, and the Rural Plan.
The Department is committed to several key strategies to ensure it continues to provide services to its Ministers and Parliamentary Secretary to broaden and strengthen Australia's transport and regional links and services through:
Efficient and effective transport policy, governance and services to communities;
X (cross)-modal transport focus;
Competitive transport modes and regions;
Environmentally sustainable policies and services;
Linkages that strengthen Australia and our relations with other nations; and
Safe transport and communities.