I suspect you are not with me at all.
My view is that before you start worrying about making significant improvements to transit times and the like, you need to have a very solid plan for how you are going to improve cost recovery. Otherwise, spending a dollar on improvements today is just going to lock you in to many years of further spending to cover induced demand, and the level of subsidy for inter-urban rail has already gone well beyond what could be justified from the point of view of general public benefit.
People can have their fast interurbans if they want, but they need to be prepared to pay for them.
I believe Victoria has more recently made the same mistake that NSW made about 30 years ago when it extended the coverage of heavily subsidised interurban travel.
Totally agree on the cost recovery issue and this applies Australia wide.
However with NSW, Sydney outgrew the basin and Central Coast, Blue Mountains and Wollongong are now effectively part of the sprawl. The only difference with Sydney is that its surrounded by a very large defining series of National Parks and Water catchment reserves (the later of which is a Sydney'ism as few other places in Australia or world preserve the entire catchment).
Comment on Cowan Bank needing a 3rd line, yes I agree, but I just focused on Mullet Creek. If you are going to rebuild such long section like Mullet Creek you add a 3rd line to improve freight train access to Sydney. I'd also make the lines full bi-di.
On Cowan Bank, I would build an entire new bank from close to Hawksberry direct to Berowa (never crossing the M1 west to Cowan), most of which would be in a tunnel and all of which is 3 tracks. Likewise continue the 3 tracks and realignment all the way to Asquith.
The current Woy Woy to Hornsby time for an express is 37min to cover the 40km or 64km/hr.
I'm guessing the realignment and by-passing Cowan would save about 2-3km between the above stations and lifting the average speed to even 100km/hr would save 15min and overall Gosford to Central down from 80 to 65min.
Other options, Gosford to Woy Woy is 8km in 8min, so 60km/hr for an express! (11min for an all stopper 3 extra stops) yet if you drove along the route you'd be asking why with so many straight or near straight sections and only a few bends of reasonable curvature including the reverse curve nth of Koolewong. Surely 2min is ripe for the picking here.
Where is the pay back?
If you apply this realignment all the way to Broadmeadow, maybe 40min can be pulled back and this is just to get the current 130km/hr rated stock to 130km/hr as much as possible or certainly out of the sub 80km/hr as much as possible. Current Newcastle 2.5hr express is reduced to 1.75hr. Sorry don't believe the HSR hype of 60min Sydney to Newcastle, or if so at what horrific cost and leaving the bulk of users stuck in the 1880's goat track along with the main freight route to Brisbane.
Faster trains = less trains, less braking/wear and tear, less curvature, more track capacity, more freight train access. The current timetable must be close to line saturation, more so on the Sydney end.
20 years ago the DD sets were 10 x V set cars long on certain trains. Thats 240m of train, Now its 8 car standard car length only 160m long (although higher density). A return to 240m trains means less trains during peak and/or more capacity (extra 50% per movement) = increased productivity for the railway (= lower costs). Longer haul interurbans with limited stops in the suburban area should be the goal ie many people as possible per movement as possible as stations are cheap to extend or as common on the Central Coast, short platforms are easily managed as the people are trained.
Pull 20min out the Gosford to Central rail commute and open the window for an additional 30-50% peak capacity and you will fill the trains. Current 7 x 8 car DD, why not 6 x 12 car DD (~30% more seats).