Keynote Address: Securing Victoria’s future prosperity


Published on

Deborah Cope, Commissioner, from Victoria Competition & Efficiency Commission has presented at the Victorian Transport Summit. If you would like more information about the conference, please visit the website:

Published in: Technology, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Keynote Address: Securing Victoria’s future prosperity

  1. 1. Victorian Transport –Today and TomorrowSecuring Victoria’sFuture ProsperityDeborah CopeCommissioner3 October 2012
  2. 2. 2Transport, postal and warehousing industryshare of the Victorian economy (per cent)Source: ABSTransport has a large impact on the economy• Transport is a keyinput to otheractivities. An efficienttransport sector isessential to highproductivity• Department ofTransport analysissuggests transportmay be as much as15 per cent of theeconomy
  3. 3. Melbourne is a key infrastructure assetfor Victoria• Melbourne >75 per cent of Victoria’s GSP• Structural shift to knowledge-based and service-based industries driving employment growth– financial and insurance services– information, media and telecommunications– professional, scientific and technical services– wholesale trade• Transport and land use planning are keyenablers of productivity and liveability3
  4. 4. Productivity growth in transport andrelated sectors has fallenSource: Cunningham and Harb, VCEC, forthcomingVictoriaAustraliaProductivity growth: transport, postal and warehousingTransport productivity hard tomeasureSteady decline in productivitygrowth in transport, postal andwarehousing sectors in Australiasince mid-1990sVictorian productivity growthsharp decline from early 2000s,following earlier gains fromCityLink4
  5. 5. Victoria’s productivity growth problemProductivity growth has fallensharply from the peaks of thelate 1990sSharper in Victoria’s economythan comparable StateeconomiesThe consequences are serious:• puts current living standardsat risk• makes structural adjustmentharder, especially for Victoria• potential to miss theopportunities from the middleclass in AsiaSource: VCECMultifactor productivity growth rates (five-yearmoving average, per cent per annum-1.5-1.0- NSW SASAVictoriaNSW5
  6. 6. A (draft) State-based reform agendaDraft inquiry report focusedon five areas:• State taxes• skills and education• infrastructure and cities• regulation• innovationReform priorities for VictoriaUnderstandingof pathwaysDirect relevance ofState’s policy toolsLowLowHighHighState taxesStateregulationCities andinfrastructurePublicsectorinnovationEducation &skillsPrivateinnovation6
  7. 7. Productivity and spatial decisions are linked• Growth has put pressure on Melbourne’s infrastructure:– road congestion costs Victoria around $3 billion annually– rapid patronage growth on trains with overcrowding– fiscal constraints• Spatial decisions are distorted by:– presumption that planning will trump market forces– regulatory burdens for medium density housing developments– planning controls and restrictions on intensive forms of land use– higher construction costs associated with medium and high-density dwellings– subsidies for new dwellings on the fringe– high stamp duties on property transactions7
  8. 8. Productivity-centric reforms:draft findings and recommendations• Planning and integration Melbourne:– ensure development and implementation of Metropolitan PlanningStrategy so growth responds to market and builds productivity andliveability– identify and remove policies that distort choices and promote urban sprawl– remove planning risks and disincentives for higher density developments• Regions:– giving priority to infrastructure spending that improves road and railconnections with the largest impact on productivity8
  9. 9. A larger role for demand management?• Benefits of demand management:– quicker and lower cost than infrastructure– revenue stream to pay for infrastructure– focus on high productivity trips• Demand management:– improved information– use of technology– increased contestability– changing ground on use of price-based mechanisms:• while there is still public resistance, the use of road charging isincreasing• its impact and use needs to be investigated9
  10. 10. 10Any questions?