It'll take a dose of political Viagra to put COAG on the right track

WOULD you like to earn a lazy $2.4 billion? That's a year. It's Kevin Rudd's latest get-rich-quick scheme. On second thoughts, hold the quick part. And, unfortunately, it would have to be shared with 22 million other Australians. Still, in these straitened times, why look a gift horse in the mouth?
After his latest meeting with premiers and chief ministers last week, the Prime Minister announced another breakthrough in his project to fix the federation. The breakthroughs at the Council of Australian Governments came so thick and fast that this one barely rated a mention in the media. Rudd and Transport Minister Anthony Albanese said the meeting had agreed to ``historic'' reforms to streamline transport regulations that ``have the potential to boost national income by as much as $2.4bn a year''. There would be a single national regulator for trucks, covering areas such as inspection standards, safe driving hours, weight limits and registration.
The Australian Maritime Safety Authority would become the national regulator of all commercial vessels operating in Australian waters, not just those that travel between states, as now. And there would be a national rail safety system.
What good ideas. Trucks have been travelling interstate for many years but still have to comply with all sorts of different rules when they cross borders. Trains don't stop at state borders either, at least not since the extension of the standard gauge, but nevertheless Australia has seven rail safety regulators and three rail safety investigators. Considering the US, with 50 states, has had one body responsible for rail safety since 1932 and there has been a European rail authority to harmonise the regulations of 23 countries since 2004, such a reform in Australia is, in the words of Rudd and Albanese, long overdue.
The cost of the tonnes of red tape, the duplication and the conflicting rules covering not only transport but scores of other areas add up to multiples of the $2.4bn on offer in transport. Clearing these thickets can provide a significant boost to productivity. According to Business Council of Australia president Greig Gailey, the progress COAG makes over the next 18 months in implementing such long-term reforms will determine Australia's prosperity for the next decade.
But before we get carried away with the euphoria, it pays to apply a reality check. Heads of government like to have so-called announceables following COAG meetings, but experience suggests these announcements should not always be taken at face value. The first niggling doubt emerges with a short sentence at the end of the Rudd-Albanese statement: ``It is proposed that all reforms will be fully implemented by 2013.'' That suggests there are just a few wrinkles to be ironed out. More than a few, as it turns out.
What the COAG meeting actually achieved on rail safety last week was to put the reforms into reverse, with the potential, believe it or not, for Australia to end up with more safety regulators than it has now.
A meeting of commonwealth and state transport ministers in May signed off on a single national rail safety regulator to ``provide a one-stop shop for all those operating in and on our rail networks'', as the statement issued at the time said. Victoria subsequently had second thoughts when the state's transport bureaucrats raised concerns. Did Victoria really want a national body determining safety issues on Melbourne's trams and trains? What if that resulted in a demand that Victoria spend billions of dollars on its rail systems to comply with national rules?
The advisers were persuasive enough for Premier John Brumby to take the objections first to a meeting with his state and territory counterparts, and then to COAG last week. Instead of telling Brumby where to get off, Rudd meekly went along. As a result -- and contrary to the misleading Rudd-Albanese announcement -- COAG failed to agree on a single national regulator. In the words of the detail buried deep in the COAG communique, there will be ``further consideration of the scope and form of the regulator following receipt of advice at the end of 2009 from the standing committee on transport on specific safety requirements within jurisdictions, especially in relation to urban systems and the interface with interstate and freight operations''. You can bet the Victorian bureaucrats had a celebratory cappuccino after that one.
In plain English, what the communique means is that the Victorians want their own regulator for metropolitan rail. The other states may start thinking what's good for Victoria will do them nicely, as well. As Bryan Nye, chief executive of the industry body the Australasian Rail Association, puts it, under the Victorian proposals ``we will end up with a bigger mess than we have now''. Take a freight train carrying grain from rural Victoria to Geelong. Part of its journey is on the Melbourne metropolitan network, where it could come under the jurisdiction of the metropolitan regulator as well as the national one. ``Sheer madness,'' Nye says.
Still, nothing much surprises Nye and others in the rail industry. Administration of the railways is a metaphor for everything that is wrong with the Australian federation. The reforms on rail safety are as blindingly obvious as a uniform rail gauge, but that doesn't stop them being next to impossible to achieve.
Federal and state governments reached agreement as long ago as 1996 on the need for ``a cost-effective, nationally consistent approach to railway safety''. In 1999, an independent review commissioned by governments recommended a single national rail safety regulator, a finding since echoed by the Productivity Commission and the National Transport Commission. In 2006, COAG identified as one of six hot spots warranting priority action the harmonisation of rail and road regulation, including safety. All governments are supposed to have passed national rail safety legislation two years ago but most missed the deadline and Tasmania and the Northern Territory have not yet gotten around to introducing their bills. The acts that have passed all include variations from the national model. For example, NSW decided it would require two drivers on interstate freight trains, meaning that an extra driver has to be sent to Victoria or South Australia to get on board before trains cross into NSW. It would be funny if it weren't so serious.
Fixing the federation is one of Rudd's professed priorities and he calls COAG ``the workhorse of the nation''. There has indeed been progress but it has been more in the process than in terms of achievements. As public servants present and former from Rudd down will tell you, the right structure has to be put in place and it is the result that matters.
But in some areas, such as managing the Murray-Darling Basin, time is running out and the delays are causing real harm. There has been no end to the benchmarks and goals and interim targets for tackling everything from indigenous disadvantage and homelessness to standardising business reporting, but precious little yet in real resources on the ground.
In transport, agreement on a single regulator for trucks is significant, as are new heavy vehicle user charges. But like many other issues, including uniform national occupational health and safety laws for businesses operating across state boundaries, the timetable has slipped. The operation of the new arrangements is often years away and compromises have cast doubt on the eventual result.
What COAG needs is a good dose of political Viagra. If that doesn't work, Rudd should drop the nice guy approach and flex some of the commonwealth's muscle. If Victoria is so keen on fencing off its metropolitan rail system from big bad government in Canberra, then Rudd may like to suggest that it do without the commonwealth funding as well, including the $3.2bn being kicked in for a new express line from Werribee to the city. Then we would quickly find out states' rights, too, have their limits.