Government launches AUD $52 million rail freight scheme

The Australasian Railway Association has welcomed the Federal Government's launch of the Transport Resilience and Capacity Kickstart Program, which makes AUD $52 million available for rail freight incentives.

The program creates a mechanism to support more freight moving by rail across Australia's transport network. Under the final guidelines, applications are now open, with the first round providing up to AUD $26 million for additional containerised and contestable bulk freight carried on rail.

The initiative is intended to improve the productivity, resilience and reliability of the national freight network. Assessment criteria for the opening round include diesel savings, productivity gains, mode shift and rail resilience.

Caroline Wilkie, Chief Executive Officer of the Australasian Railway Association, said the initiative reflected the need to make greater use of rail within the freight system.

"The recent fuel crisis confirmed that we must move more freight on rail to increase the fuel efficiency and environmental performance of the national network," said Caroline Wilkie, Chief Executive Officer of the Australasian Railway Association.

Her comments come amid supply chain disruption and fuel security concerns that have sharpened debate over how freight moves across Australia. Rail operators and industry groups have long argued that shifting a larger share of freight from road to rail can cut fuel use and reduce pressure on parts of the road network.

Wilkie said the case for rail also extends to emissions and supply chain efficiency.

"Moving more freight by rail is one of the practical measures Australia can take now to reduce transport emissions while improving the efficiency and resilience of our national supply chains.

"The TRACK Program provides a welcome mechanism to recognise those wider benefits and help address some of the commercial barriers that can prevent freight customers from making the shift to rail," said Wilkie.

Commercial barriers

The association's support for the program comes with a broader call for policy measures beyond direct incentives. While the funding is designed to encourage more freight onto rail, customers assess the full supply chain when deciding how to move goods, including cost, service levels, reliability and transit time.

Any lasting shift will depend not only on short-term payments but also on rail's competitiveness against other freight options. Network performance and capacity remain central issues for operators seeking to win more contestable freight.

"Freight customers make decisions based on the full supply chain, including cost, reliability, service and transit time," said Wilkie.

"Incentives need to be supported by measures that keep rail competitive and improve the productivity and reliability of the network.

"Australia needs an ongoing, coordinated approach that supports mode shift, addresses barriers to rail competitiveness and invests in the network capacity and technology needed to carry more freight efficiently.

"With Australia's freight task continuing to grow, getting the policy settings right now will deliver lasting benefits for productivity, emissions reduction and the resilience of our national supply chains," said Wilkie.

Policy focus

The structure of the TRACK Program suggests the government is targeting parts of the freight market where mode shift is considered most achievable in the near term. By focusing first on additional containerised and contestable bulk freight, the scheme targets traffic that can move between transport modes depending on economics and network conditions.

For the rail sector, that focus matters because these freight segments are often where operators compete most directly with road transport. Incentive payments may help close the gap for customers considering a switch, particularly where broader public benefits such as lower diesel consumption and emissions are not fully reflected in commercial decisions.

The association has presented the program as an opening step rather than a complete answer. Its position points to a wider policy debate over whether temporary funding support can deliver a permanent modal shift without parallel investment in network quality, corridor performance and operating conditions that make rail a dependable option for freight customers.

The first round of the program will allocate up to AUD $26 million to support additional freight moved on rail, with diesel savings, productivity improvements, mode shift and rail resilience central to the assessment process.