The Hon. MICHAEL GALLACHER (Leader of the Opposition) [5.00 p.m.]: I lead on behalf of the Opposition in debate on the Transport Administration Amendment (New south Wales and Commonwealth Rail Agreement) Bill. Other Opposition members will contribute to this debate to put a personal perspective from the areas of the State they represent. Members should be encouraged to participate in this debate because, as the Minister for Transport Services has said, this is a significant piece of legislation for New South Wales and the entire nation. As to the long-term national interest, this legislation is as significant for the transport sector as was the standardisation of rail gauges during the twentieth century. The Minister made reference to the legislation being long overdue. Without politicising this issue, I must state on the record that such an approach was made to the Government in 2002, possibly earlier, but it fell on deaf ears. I am sure that the Minister will not interject whilst I have the opportunity to make this observation.

It must be put on the record that this significant and long overdue legislation, which operates in the national interest, came up against a brick wall in the form of Carl Scully, the former Minister for Transport. He was inflexible and not prepared to move on this issue. If we took a vote, I am sure that some of the Government members would agree that this long overdue legislation should have been acted on earlier. We have never been told why the former Minister for Transport, now the Minister for Roads, vehemently opposed this legislation, or whether his opposition continues today. I would be interested to know whether he has changed his mind or whether he still holds the same view. Be that as it may, this proposed legislation is significant and I look forward to its passage through Parliament.

At the time of Federation, all those years ago, the need for standardisation was spelt out. Today we are considering a logical outcome for the rail sector in this State and Australia as a whole. The agreement will end more than 150 years of division and shortsightedness in the management of Australian railways. Additionally, this legislation is timely, given the particular circumstances that exist in rural and regional rail infrastructure in New South Wales. This legislation is all about growth in the transport market. I was fortunate recently to receive briefings on this proposed legislation, which brought home to me the significance of this bill. I was told of the difference between rail usage on the east coast and elsewhere in Australia. For example, in the Nullarbor rail constitutes about 80 per cent of total freight coming across from Western Australia. When compared to the north and south market on the east coast, which is less than 20 per cent, it gives a stark picture of the need for improvement and the inclusion of both road and rail in the process, as this legislation will provide for years to come.

I am a very strong supporter of road transport. This legislation enhances both road and rail modes of transport because they work closely together. I am aware that some members are concerned that the Government is pushing a great deal more transport onto our roads, such as the transport of commuters in New South Wales, particularly on the North Coast. As to road freight, this legislation encourages the growth of the transport market along the north-south corridor, provides opportunities and enhances competition.

The intention of the legislation is to provide for the wholly Australian Government-owned Australian Rail Track Corporation [ARTC] to lease for 60 years the New South Wales interstate rail track and Hunter Valley rail freight corridors. The ARTC will also manage on behalf of New South Wales the remaining country network, which includes branch lines and non-interstate main lines. I note that the Commonwealth and New South Wales governments reached an agreement on implementing this process last December. It is anticipated that the handover will occur on 1 July. This legislation will bring the last major element of Australia's interstate rail system under the management of a single agency. The ARTC process will create a national standard gauge rail network, linking Australia's capital cities and major ports. It will create a one-stop shop for rail access from Perth right around to the Queensland border and will assist in building a competitive rail industry on a commercially viable basis, adding value to the national logistics system.

In general, the legislation will allow for New South Wales rail agencies to lease for 60 years rail lines predominately used for freight or country passenger lines used to transport freight and other non-electrified passenger services; enable agreements to be entered into to allow for the ARTC to construct additional freight lines and facilities and also for the secondment of staff to the ARTC; enable the lease, licence and sale of the ARTC of associated rail infrastructure facilities; confer on the ARTC the rights and responsibilities of a rail infrastructure owner in respect of lease or licensed rail lines; enable the New South Wales rail agencies to enter an agreement for ARTC to manage other lines used to predominately transport freight or country rail lines used for freight and other non-electric passenger services; and make other consequential amendments and provisions of a savings and transitional nature.

There are significant benefits for our rail infrastructure as a result of the ARTC process, particularly for rural and regional New South Wales. This is important when we consider the current appalling state of rail infrastructure, particularly outside the greater Sydney area. Honourable members would be aware that the Government's failure to make appropriate investment in the rolling stock and infrastructure since 1995, particularly in regard to the ongoing improvement and modernisation of the network, has led to the crisis situation we face today. Since the March 2003 State election numerous rail safety issues have been exposed. Initially it was the controversial decision not to close the Menangle Bridge prior to the State election. Circumstances of this decision ultimately became the subject of an Independent Commission Against Corruption investigation. The revelations relating to these decisions were followed closely by the release of a series of reports on rail safety and maintenance issues, which exposed a raft of serious problems within the rail system that must now be addressed.

Last year's Auditor-General's financial report on the Rail Infrastructure Corporation revealed a maintenance backlog as at 30 June 2003 of at least $479 million. While the ARTC process is predominately concerned with improving the freight capacity of the rail network, passenger rail services in New South Wales will also greatly benefit, which is something this Government should pay particular attention to. After all, we have already seen the Minister's first attempt at wiping out country rail services: the XPT running between Casino and Murwillumbah, which will cease operation from 16 May. Thanks to the Premier and the Minister it will go. The Opposition has proposed an inquiry to be conducted by General Purpose Standing Committee No. 4 to examine in detail this outrageous decision, which breaches the Minister's own 12-month moratorium on cutting CountryLink rail services. I fully acknowledge the support for this inquiry of a number of crossbench members in this House.

I reiterate the Coalition's commitment to restore this rail link when it attains office in 2007. Last week a matter that was made clear to usand it was evident as a result of the overwhelming North Coast support for the Murwillumbah protest trainwas that local communities in rural and regional New South Wales support their CountryLink rail services. I established that fact after having visited many regional communities that had a CountryLink rail serviceeither an XPT or Xplorer train servicefrom October to December last year. I pay tribute to my Coalition colleagues for their efforts in this regardthe Hon. Patricia Forsythe, the Hon. Robyn Parker, the Hon. Catherine Cusack and the Hon. Melinda Pavey, who have the support of their constituents on the North Coast and in the Hunter region.

I acknowledge that members on the crossbenches took the time to travel on the protest train to support their constituents, in particular, those on the North Coast. For once the Minister should pay attention to the wishes of the community by ensuring the retention and improvement of CountryLink passenger train services. Bearing in mind the significant investment in rail infrastructure in rural and regional New South Wales that the ARTC arrangements will bring about, we will be faced with a far more viable arrangement for CountryLink rail services, in particular as New South Wales passenger priority principles will continue to apply across the New South Wales network, including lines leased to or managed by the ARTC.

Aside from obvious flow-on benefits for passenger rail services in New South Wales, the key area that will benefit is obviously the transportation of freight. For the first time rail's natural competitive advantage over long-haul distances will be able to be properly utilised, in particular, on the north-south rail corridor running along Australia's east coast, with New South Wales obviously benefiting directly. The ARTC's management of the east-west rail corridor to Perth has already increased rail's market share of land-based freight to 80 per centa factor to which I have already alluded. Unfortunately, the current situation on the north-south transport corridor is nowhere near as impressive.

Anyone travelling on the Hume Highway, the Pacific Highway, or the New England Highway would be well aware of the difficulties being experienced by motorists in this State. They are confronted not by trains or by rail freight but by heavy vehicles and B-doubles. The concerns that have been expressed by the farming community will result in the closure of branch lines in the future. Under this Government, heavy vehicle freight moving along the north-south corridor will increase exponentially over the next few years. As at March this year, rail held only a 19 per cent share of the Sydney to Brisbane freight market and only an 11 per cent share of the Sydney to Melbourne freight market. The rail link between Melbourne and Brisbane, which covers much of New South Wales, has only a 21 per cent share of the freight market. That means that more pressure is placed on the New South Wales road network.

The Minister continues to focus on the economic bottom line, but he should start looking at the social and environmental impacts of what he is trying to achieve in New South Wales. Improving the quality of rail transport for freight has the benefit of mitigating the otherwise unsustainable long-term pressure that will be placed on the capacity of the State's road network. Our cities and natural environment will benefit from a greater proportion of freight utilising the rail network. Given that the volume of freight being transported is expected to double over the next 20 years or so, that is an important issue. With that in mind, I turn to the funding package for New South Wales.

Over the next five years of ARTC management more than $870 million will be injected into the rail system, predominantly in regional areas, to bring it into line with what New South Wales and Australia need for the twenty-first century. Significantly, there will be funding injections of $180 million for a new southern access route for freight trains through south-western Sydney. That will entail building a non-electrified rail route from Macarthur through to Chullora, separating freight and main line passenger traffic from the urban CityRail electrified system and giving CityRail enhanced capacity and reliability. I am reliably informed that, with the passage of this legislation and with money starting to flow into the Government's coffers, we can expect to see some positive outcomes in about 2 years time.

There will also be a funding injection of $145 million to upgrade the Hunter Valley network consisting of the track at Port Waratah, Newcastle, to Werris Creek and Ulan via Muswellbrookan issue to which I will refer in a few moments. The Hon. Robyn Parker, as a member who hails from the Hunter Valley, will also refer to that aspect. New South Wales coal exporters in particular will gain real access charges of around 20 per cent and increased capacity from that measure. I am talking about improvements in services and reliability but we are starting to see access savings for the coal industry in the Hunter Valleyyet another win for the Hunter Valley.

There will be a funding injection of $170 million for the main south line from Macarthur to Albury, and the Murrumbidgee Bridge at Wagga Wagga will be replaced. There will be a funding injection of $123 million for the North Coast line from Maitland to the Queensland border, including the long overdue replacement of the 1920s era signalling systems. There will also be a funding injection of $54.1 million to upgrade the line between Cootamundra and Werris Creek. All the timber bridges on that line will be replaced. That is particularly welcome news in light of the Carr Government's appalling failure to invest in rail infrastructure. All those members who use the country rail network would welcome that announcement.

All rail operators in New South Wales, whether passenger or freight, will benefit from the better track, bridges and signalling systems that will be provided via the ARTC lease. The New South Wales Labor Government has failed to fund rail infrastructure in this State. This package will go some way towards addressing those problems. However, some considerable distance is yet to be coveredan issue to which I will allude later in my presentation. Access to the full length of the interstate main line from Perth to the Queensland border will be negotiable through the one organisationthe ARTC. Importantly, the proportion of freight being carried by rail will be set to increase. Exporters in regional New South Wales will in due course find rail transport a much more attractive option and they will benefit from greater choice, competition and reduced transport costs.

I have spoken to many people who rely on our existing rail network who are calling out for competition. They are certainly calling out for choice. I have been assured by those in the ARTC that this proposal will be a massive leap forward in that direction. Over time we will see more choice and greater opportunities for competitiveness in the system. At the end of the day, that will benefit our primary producers. We must expedite the passage of this legislation. These infrastructure improvements will see rail transit times from Melbourne to Brisbane via New South Wales slashed by 6 hours. Rail transit times between Sydney and Melbourne will be cut by three hours and between Sydney and Brisbane by 3 hoursan outstanding improvement.

I reiterate that the ARTC is prohibited from operating passenger or freight train services. It leases and manages the tracks and it is not competing against existing train operators. This is all about enhancing what we currently have and improving freight movements throughout the country. The ARTC process, which is fully supported by the Federal Government, will go a long way towards redressing the disgraceful neglect of rail infrastructure in New South Wales by the current State Government. If action had not been taken via this ARTC lease, rewards from the efficiencies being achieved in other sectors of the economy would have dissipated as a result of the inadequacies in our transport infrastructurea major Achilles heel for the Carr Government, as it knows only too well.

One of the reasons the New South Wales Government is fully supportive of the ARTC process is that, by coincidence, it will resolve many of the rail infrastructure problems that it has not addressed in the past. Is it simply a case of the Government knowing that eventually it would move toward the ARTC? That is why there has been such a concerted effort over the past few years not to put any money into infrastructure.

It is a little like selling a second-hand car. You do not have rust cut out, modify the engine, or improve the car before you sell it. You wait until it is on its last legs, save your money and prepare to spend it elsewhere. I believe that is exactly what has happened in this case. The Government has allowed rail infrastructure to slide. Thank goodness the ARTC has come to the party and we will finally see some improvements in our rail infrastructure. I commend the Federal Coalition Government for its role in this process. It has again shown leadership. The Minister for Transport Services would do well to take stock of the Federal Government's achievements not only in this sector but in many portfolio areas throughout the nation.

Affected country employees of the Rail Infrastructure Corporation or State Rail Authority are to remain New South Wales Government employees unless they wish to apply for a position with the ARTC. Most will be seconded to positions with the ARTC rather than be transferred to it. I understand that the Minister intends to resolve the outstanding issues he has with the Rail, Tram and Bus Union. In light of the Minister's background in the rail industry, there is delicious irony in his driving these reforms when his counterparts walked away from them completely. It is quite interesting. But we cannot forget that when Ministers and senior bureaucrats were questioned in Parliamentary committee hearings about potential job losses as a result of these reforms

The Hon. Christine Robertson: Nothing positive ever comes out of those committees.

The Hon. MICHAEL GALLACHER: I thank Labor members for their encouragement. It was not Government members but Opposition members who put questions about job lossesreasonable questions that had been raised by the union movementto the bureaucrats and to the Government. It fell to us to do it yet again. The voice of the worker in this debate was once again also that of the New South Wales Opposition. Harpo Marx and his friends up the back of the Chamber sat like silent hand puppets when we asked those questions. Honourable members may remember Vince Graham telling the committeeI will paraphrase himthat he would be dragged kicking and screaming from the committee before he would answer questions about job losses.

The Hon. Christine Robertson: The cross-examination.

The Hon. MICHAEL GALLACHER: We asked reasonable questions.

The Hon. Michael Costa: He called you McCarthy, if I remember rightly.

The Hon. MICHAEL GALLACHER: We hear again from one of the Hollywood Ten. Be that as it may, Opposition members put on the record reasonable questions about job security but the Minister for Transport Services pulled the doona down over the answers to ensure that there was not one leak from the Government.

The Hon. Michael Costa: What is a doona?

The Hon. MICHAEL GALLACHER: It is the big quilt that the Minister uses to smother the voice of everyone who works with him. Opposition members asked the difficult questions and it is great to say that we played a part in helping the work force and providing some job security and certainty. Until that time the Government had refused to answer any questions whatsoever.

Additionally, I note that the Independent Transport Safety and Reliability Regulator remains responsible for the approval of engineering and maintenance standards on the rail network in New South Wales. The State Government must certainly answer several more questions about this process. I am sure that, true to form, it will ignore them because they are reasonable questions, such as what structures are in place to protect workers. Other questions are at the forefront of our minds as we consider the legislation this evening.

It is estimated that removing funding responsibility for the main rail lines in New South Wales will save the State Government approximately $200 million per year in investment. Where will that money go? The material that was distributed details clearly where money will be spent under the ARTC proposal. As I said, $175 million will be spent on the main south line and $54 million will go to the Cootamundra to Werris Creek line, and all timber bridges on that section of track will be replaced. The ARTC has indicated where it wants to spend money; it has been quite up-front about it. It is now up to the Government to tell the people of New South Wales where it will spend the $200 million it is saving as a result of this partnership and these reforms. We want an ironclad guarantee that the money will not be spirited away and swallowed by the other black holes in the State Government budget. According to the Auditor-General, there is a $470 million maintenance backlog. Obviously a certain amount of that work will soon be assumed by the ARTC. But what about the $200 million that this mob opposite will save as a result of these reforms? We need to know where that money will go. That is only fair.

I have looked at the rail maps and identified a big void between Sydney and the Hunter, which is of particular concern to the Hon. Robyn Parker and me. Exploration is under way by BHP Billiton, which is heading towards securing a 20-year or 30-year lease for the rights to export-quality underground coal worth more than $20 billion. Why has the Government decided to exclude the ARTC from upgrading rail infrastructure in that area? Will we have the opportunity to revisit this issue and ensure that $20 billion worth of coal does not leave Wyong and the Central Coast on heavy vehicles? The roads on the Central Coast are saturated with traffic now. We want some certainty from the Government about this issue.

We want to know that when the lease is granted the rail line will be extended to Wyong. We want the savings that we have been promised in this legislation to be hypothecated to the new BHP Billiton lease in Wyong shire. We want more jobs and benefits in Wyong. There is no doubt about that. However, we do not want our local roads to be destroyed by coal-laden B-doubles, which impact adversely on the environment. We certainly do not want to see serious or fatal motor vehicle accidents caused by an increase in heavy vehicle movements. One can only begin to imagine the thousands upon thousands of truck movements required if we are talking about extracting $20 billion worth of coal from the valleys of Wyong shire. The Government must certainly answer some big questions in that regard.

The ARTC is injecting $872 million under this agreement to upgrade State infrastructure. The Minister is more than happy to put his hand out and say, "Yes, we'll take that $872 million." But look at the list. That money is going to much-needed maintenance upgradeswhether they are improvements to bridges, signals or safety. We need that money to make our system better. But if $872 million worth of work will result from this deal, what work remains to be done to make the entire system equally safe and reliable? The Minister is more than happy to take the money but I guarantee that he will not stand up in this Chamber and spell out exactly the millions of dollarsperhaps billions of dollarsof work that is required throughout the entire system. Standards must be consistent across the ARTC, commuter, and branch lines. We must know exactly how much work remains to be done.

The other bone of contention is the Casino to Murwillumbah line, and we cannot move forward in this debate unless I touch on that matter. The Minister needs to explain why that line is included in the alliance agreement to be managed by the ARTC when the Government has earmarked it to be non-operational. Why would the Government allow the ARTC to manage something that will be non-operational? If the Government is going to allow the system to be run down and will not maintain it, why is the ARTC being asked to manage it? I am sure the Minister has a reasonable answer. He is once again rolling his eyes. The public needs to know the answers to those questions because there has been a lack of information provided by the Government in the lead-up to this process. Like the rail network, it is all interlinked. Representing the people of Casino to Murwillumbah and The Tweed, we want to know why this line has been included in the alliance agreement when RailCorp has earmarked it to cease operating and will not put any more money into it.

The $145 million upgrade of the Hunter Valley network will be well received. The business community there is screaming for help. I point out that the overall success of the Hunter Valley relies on small businesses in the main street of Newcastle or Charlestown. The $145 million from the ARTC will go a long way to assist a beleaguered Hunter Valley that for so long has been treated as second-class. The Government has treated the people in that area worse than it has treated the people in the Southern Highlands. There is no doubt that the rail network will be improved, and we will then have to look at the ability to move bulk haulage off the port and onto the sea.

On last count there were approximately 50 ships sitting off the Port of Newcastle waiting to dock. We should not for one moment think that this proposal will see the end to the Christmas tree lights off the Port of Newcastle every night. It will rectify the transportation delays in rail and will move the bottleneck up to the coal loader. That will need some leadership and commitment from both private enterprise and the Government.

In the past the Government has been asked questions about the preparedness of the private sector to go through the problems with the Government. The private sector has been prepared to put money into the process. Up until now when we have asked questions, rather than get the certainty that the Hunter Valley business community wants, we get a vitriolic attack from the Minister for Transport Services. It is a shame that the Minister has not gone beyond his old bovver-boy days at the Labor Council. Be that as it may, the Opposition will continue to put these matters on the record and hopefully they will be rectified at some stage.

The $145 million for the Hunter Valley includes more than $14 million for track strengthening and remediation work, $4 million for bridge strengthening work, and more than $66 million, which is crucial, for capacity enhancement through the elimination of identified congested locations which I referred to earlier. The congestion issues will be rectified but until there is some leadership from this Government to rectify the problems on the coal loader, the Government is only going part of the way.

The Hon. Michael Costa: We don't own the coal loader. Hasn't anybody told you that?

The Hon. MICHAEL GALLACHER: The Minister said, "We don't own the coal loader." He is the Minister for the Hunter, and the Hunter wants an advocate, not an apologist. The Hunter does not want somebody who says there is nothing he can do; it wants somebody in the Hunter Valley who will knock heads together and start getting things happening.

The Hon. Dr Arthur Chesterfield-Evans: He is a lower House wannabe!

The Hon. MICHAEL GALLACHER: Once he knifes John Price and moves into Maitland, or gets rid of Kerry Hickey, he will fulfil his dream. But right now the Minister is crushing the dreams of the Hunter. The people of the Hunter want a fighter, not a wimp. They have a Minister who is the best dressed. When was someone from the Hunter in the top 10 best-dressed people in Sydney? The Minister is from Sydney. He is not the best-dressed person in the Hunter, but in Sydney. One can see the Minister sipping cappuccino in Glebe, but the people of the Hunter want a fighter. All they have is this follicly challenged fashion statement who is not prepared to knock heads together and make this coal loader proposal work. For goodness sake, surely someone on the Government side has a bit of passion about the Hunter Valley. We will support anyone for Minister who makes the coal loader work.

Right now we have this burden opposite, this albatross around our neck in the Hunter, and we are stuck with him until such time as we get someone else. But we are only three years away from rectification of that problem as well. That is another bottleneck that we will get rid of but at a different stage. We will not need the support of the ARTC. The Minister is destroying the Hunter Valley by himself. I am pleased to have participated in this debate. The Opposition does not oppose the legislation that will bring major benefits to the rail sector in New South Wales. I conclude by saying: please give us somebody decent for the Hunter Valley.

The Hon. ROBYN PARKER [5.36 p.m.]: I support the Transport Administration Amendment (New South Wales and Commonwealth Rail Agreement) Bill on behalf of the people in the Hunter and as a resident of the Hunter. At the outset I congratulate the Federal Coalition Government and Minister Anderson on their leadership, because this legislation is long overdue. I know without that determined effort this would not have happened. People in the Hunter and the coal industrythe Hunter relies on the coal industryhave been calling for some assistance for a long time. In 1999 Port Waratah Coal Services shareholders invested $330 million for a third coal loader to take Newcastle's port capacity to 89 million tonnes per annum. I know that that is a private organisation but it needs leadership from government.

The Hon. Michael Costa: They want to nationalise it!

The Hon. ROBYN PARKER: No, they need leadership from government to assist them. In 1999 representatives of the coal industry wrote to Carl Scully, in his capacity as Minister for Transport Services, asking for support for upgrading rail infrastructurea request that was totally ignored. As a result, the coal industry in the Hunter, and in fact in New South Wales, has suffered. In 1999 the industry advised the Government that the current rail network was approaching full capacity, and that it was seeking initiatives that would address the capacity shortfalls. It asked for help and called for some assistance. While the Government ostensibly supported the request, it did little, and the Rail Infrastructure Corporation did not spend the capital required to upgrade the infrastructure despite industry's request.

The coal industry even indicated to the Government that it was prepared to underwrite the capital expenditure to the tune of millions of dollars. As well as a capital works program to reduce the bottlenecks, the initiatives included reducing the average train cycle times, as well as an improved communications system between Port Waratah Coal Services, the Rail Infrastructure Corporation, and the rail freight carrier Pacific National. Those initiatives, aimed at extracting maximum network efficiencies from the rail system, were ignored by the Government, rail maintenance was neglected, and the constraints on capacity continue. I have spoken previously about the queue of ships something in excess of 50 ships at a timethat one can count off the coast at Newcastle. They call it Carr's navy.

We have even heard in this House about the consequences, not only for the coal industry but also recently for the fishing industry, of those ships sitting offshore. During the budget estimates proceedings last year I asked the Minister for Mineral Resources, the Hon. Kerry Hickey, about coal loading and shipping in Newcastle and the demurrage costs that many companies are facing as they wait on the horizon off Newcastle. He denied responsibility for the issue, and told me it was the responsibility of the Minister for Transport Services, and Minister for the Hunter, the Hon. Michael Costa. On 18 September I asked Minister Costa whether he had taken any action to address those reports.

The Hon. Michael Costa: No. We do not have any shares in the coal loader.

The Hon. ROBYN PARKER: Of course, the coal loader is a private enterprise, but if the coal cannot be transported on the rail network and onto ships, it cannot be shipped or exported. That was just the usual arrogant response from the Minister. Despite the Minister's insistence that the problem does not lie solely with the coal loader, lower coal prices and a high Australian dollar are factors in plunging profits for our coal industry. The Managing Director of Rio Tinto and Coal & Allied was quoted in the Newcastle Herald of 21 February this year as saying:

The bottom line is the problem rests with rail infrastructure. We are reaping the whirlwind for a lack of money spent on rail infrastructure over the past decade.

Thank goodness the Federal Government is doing something about this matter and we are dealing with this legislation today. The ships are costing the coal industry and New South Wales valuable export revenue. The current queue of ships off the port of Newcastle is costing the coal industry something like $100 million per annum in demurrage costs. It is suppressing its growth and job opportunities in the Hunter. The Leader of the Opposition spoke about the ability of the industry to increase its capacity if we could only get the coal down the rail line and load it.

ARTC's leasing of the interstate and Hunter Valley networks will seek to put an end to years of mismanagement and inadequacies in the Hunter rail corridor by the New South Wales State Government. ARTC will be investing more than $870 million in the rail system in regional areas, which includes specified funding of $145 million to upgrade the Hunter Valley network, which includes $67 million to eliminate bottlenecks. Although ownership of the Hunter Valley rail corridors will remain with New South Wales, the ARTC will have full responsibility for these lines, including investment decisions and train control. The coal industry and other users of the Hunter Valley rail network will benefit from this lease arrangement as infrastructure investment programs include the removal of conflict between coal movements and interstate and regional commuter traffic on the main line.

It is no secret that improvements in the performance of the Hunter coal chain is vital to allow the region's coal suppliers to compete against growing coal exporters in China and Indonesia. Coal exports through Newcastle have increased from around 50 million tonnes per annum in 1996 to more than 70 million tonnes at present. Our mining operations in and around the Hunter Valley are leaders in efficiency and best practice when it comes to the extraction of coal. This makes the New South Wales coal industry one of the most efficient in the world, but in the Hunter it is being let down time and again by the New South Wales Government and its failure to address rail infrastructure problems. The mining sector contributes not only to the Hunter economy but also to the New South Wales economy. It generates 15,000 jobs and contributes approximately $220 million per year in the form of mining revenue. The upper Hunter in particular has seen a huge growth in the industry over the past 20 years. Coal has a total production value of more than $5 billion per year, and it is the State's major export earner by volume and by value.

Production cuts of up to 6 per cent for coal companies were forecast early this year as companies looked at implementing quota systems in order to cut the shipping queuebecause they could not get the coal transported by rail as they were unable to have it loaded. Fortunately, in the end, this was not necessary, due to a sudden increase in export coal prices. This would have been a restraint on free trade and a loss of profit for the coal suppliers. Couple this with the Government's plans to change the way it taxes the coal industry by replacing the flat-rate royalties with a system based on coal prices. We welcome ARTC's leasing of the rail corridor. Finally there are solutions to an ongoing and worsening problem.

I encourage honourable members to support this legislation, not only for the people of the Hunter but for everyone in New South Wales. Again I commend the Federal Government for its initiative. I am really pleased that the New South Wales Government and Minister Costa have been dragged, kicking and screaming, to this agreement, which finally will address the rail infrastructure needs of the Hunter. I support the bill.

The Hon. Dr ARTHUR CHESTERFIELD-EVANS [5.56 p.m.]: The Democrats support this bill and we are very pleased that finally this is to happen. Of course, different railways and different rail gauges have bedevilled Australia since Federation, which was about the time when governments should have started to solve these problems. But more than a century later we are still putting the pieces together. That goes to show how slowly things happen. The historic agreement of September 2003 was entered into to set up a framework for the integration of the management of the New South Wales rail network with the rest of the national rail network. I understand, but am not certain, that this was at the suggestion in 1974 of Gough Whitlam, who was very farsighted in wanting to abolish the States and regionalise government, which is Australian Democrat policy.

Under the agreement contained in the bill, the Australian Rail Track Corporation [ARTC] will lease the New South Wales interstate and Hunter Valley freight corridors and assume the management of New South Wales country branch lines. I believe that the ARTC has done quite a good job of handling things. It has recognised the need for a national network, and it has certainly modernised the rail network across the Indian Pacific route. It might be noted that the Glenbrook train disaster was a result of poor integration of the State Rail network and the Indian Pacific, a matter that obviously had to be addressed.

I must confess that I cannot recall the chronology of this Government's series of rail disasters, and I have told this story a number of times, so I apologise to non-Government members who have heard it before. Minister Carl Scully was trying to persuade the crossbenchers not to have an inquiry into rail safety because, he said, it was not necessary. He then said that he would get all the rail people together. Of course, at the time rail was split into four different authorities, including the Rail Infrastructure Corporation. The representatives of all those authorities gathered in room 1136 and the question was: Should the rail authority heads sit at the table? Should their minders sit at the table with them? Or should the politicians sit at the table?

There was a great deal of juggling, politeness and so on, and finally the Minister said, "Here they all are, crossbenchers. Ask anything you like. We do not need an inquiry; we are open about all this." I asked, "Who is responsible for rail safety in New South Wales?" There was a lot of clearing of throats and discussion to the effect, "I think you should take the question," to which the response was, "No, perhaps you should take that question," and, further, "No, I think that might be your question." But, no, it was not. That was the sort of discussion round the table. It demonstrated pretty clearly why rail accidents were happening: the economic theorists had said that people should be made to compete for the use of the track, that a few telephone calls could be made and the trains would not crash, and so on.

It was pretty clear that rail maintenance was being done by a different group to the group that owned the track, a different group was running the rolling stock and so on. Although there were problems co-ordinating a fairly antiquated network that had been neglected for such a long time, it was very clear that the rather daring market mechanisms used by the economists were not going to succeed. It has now been put back together, which is what Christie recommended. We need a single operator to run the show and a huge injection of funds to try to make up for the many decades of neglect. No-one has had a visionary look at New South Wales rail since Bradford's time.

The Hon. Michael Costa: There is now.

The Hon. Dr ARTHUR CHESTERFIELD-EVANS: We hope that the situation will improve with the ARTC taking it on. About 18 months ago when I spoke to David Marchant by chance he pointed out that various segments of the line needed to be upgraded. The ARTC web site listed the likely benefits and cost of upgrades for anyone who was interested in reading them. It was a step in the right direction. It is one thing to build a highly symbolic line from Alice Springs to Darwin where it is postulated less than 1 per cent of Australia's freight will end up when nothing is being done to upgrade the line from Sydney to Melbourne. If it is true that it is cost effective to use rail only when containers can be stacked two high, but overhead power lines and tunnels cannot accommodate trains at that height, there is a problem. I understand that because western New South Wales has very few tunnels and no overhead electric lines for the trains, it can take trains stacked two containers high. The problem has to be addressed.

In the 1920s the line around Mittagong was slowed down to improve gradients for the less powerful trains, but that needs to be re-addressed. The Sydney to Melbourne line, which is where the bulk of freight by weight is moved in Australia, must be improved from a rail perspective. It should be roll on and roll off. The convenience of road transport is that once a truck is loaded at the source it can go straight to its destination without double handling. Some weight must be taken off the roads. Prime movers should roll onto the train and go up the highway far more cheaply, then roll off or have their loads taken off in smaller units through an effective loading and unloading mechanism. I understand that is world's best practice, and that is what we need in Australia if rail transport is to compete with road transport. But it will be achieved only with a considerable injection of capital, and intelligent and savvy management in the market. The inland route from Melbourne to Brisbane, which requires a new line from North Star to Goondiwindi, or thereabouts, would be a great boost for western New South Wales and could lead to a decentralisation policy that would help western New South Wales.

The Hon. Rick Colless: Have you been to North Star, Ace? Do you know where North Star is?

The Hon. Christine Robertson: I think we need a 10-carriage train at North Star.