After dumping Inland Rail, Australia has no plan to stop relying on diesel trucks for freight
- Written by: Philip Laird, Honorary Principal Fellow, University of Wollongong
Every day, hundreds of trucks barrel along highways from Melbourne to Brisbane. Some B-triple trucks stretch to 36 metres or more, more than seven times the length of an average car.
Australia relies on those largely diesel-fuelled trucks for the vast majority of our intercity freight.
More trucks are on the way. Infrastructure Australia predicts “large increases in road freight are expected for Melbourne, Brisbane, Sydney and Perth” – especially in Melbourne, home to Australia’s busiest cargo port.
As the recent global oil shock has shown, Australia’s reliance on road freight leaves the nation vulnerable to global oil supply problems.
Yet the federal government has just dumped the northern half of the Inland Rail project, connecting Parkes in central New South Wales to near Brisbane.
The axing came after the cost of the whole 1,600 kilometre project was forecast to exceed A$45 billion – more than four times the original budget.
But with Inland Rail not proceeding to Queensland, what does the future of rail freight on Australia’s east coast look like? And does this risk leaving the nation dependent on road freight for decades more?
Inland Rail’s problems and potential
Just three years ago, the Albanese government re-committed to building Inland Rail. Construction had already started in 2018 under then prime minister Scott Morrison, with the project overseen by the government’s Australian Rail Track Corporation.
Labor’s commitment followed an independent review in 2023 by Dr Kerry Schott, who found Inland Rail was “late and over budget”.
Yet the independent review still concluded Inland Rail was “an important project”, which was “needed to meet the increasing national freight task”.
The review said Inland Rail was expected to take around 200,000 trucks off the road each year, cutting greenhouse gas emissions by an estimated 750,000 tonnes a year by 2050. It was also expected to boost regional communities in NSW and Queensland.
Last week, one regional Queensland business said scrapping the northern leg of Inland Rail was “a disaster”.
Why rail freight has declined for decades
Since the 1990s, all Australian highways have been upgraded to handle larger, heavier trucks.
Over the same period, there have been only limited improvements to rail freight. Not surprisingly, much freight that used to go by rail now goes by road.
As an example, back in 1994-95, rail carried about 28% of freight on Australia’s busiest freight corridor between Melbourne and Sydney.
By 2024, rail carried just 2% of freight between the two cities.
Inland Rail was meant to take pressure off highways
The Newell Highway is NSW’s longest highway, reaching from the Victorian border at Tocumwal to Queensland’s border at Goondiwindi. It’s currently the main means of moving freight between Melbourne and Brisbane.
Truck movements on the Newell Highway come with many costs. As well as road maintenance costs and the significant costs of ongoing highway upgrades, there are the very real human costs of road crashes.
In the past two years alone, there have been three fatal crashes involving trucks and semi-trailers: in July 2024, September 2025 and January this year. Five people died in those crashes.
Roads and city rail get a better deal
Only days after scrapping the northern half of Inland Rail, the federal government announced it would spend another $3.8 billion on Melbourne’s controversial Suburban Rail Loop. That new funding – ahead of November’s state election – takes the federal contribution to $6 billion over four years.
Other suburban train projects have also won federal funding, such as $5.2 billion towards a Western Sydney Airport Metro and $4.87 billion for Perth’s Metronet urban rail.
Road projects consistently do even better, such as more than $10 billion in federal funds to upgrade Queensland’s Bruce Highway or $15 billion in federal and state funding for a past upgrade of the Pacific Highway.
$2.8 billion for rail freight doesn’t cut it
In place of completing the Inland Rail project, the federal government promised reallocate $1.75 billion towards other interstate rail track, on top of another $1 billion previously announced. That’s less than $2.8 billion for upgrades on a 9,600km national rail network.
That funding will include track renewal, passing loop extensions and improved signalling to remove speed restrictions on the rail network between Melbourne, Sydney and Brisbane. There will also be some upgrades in flood-prone parts of the east-west rail corridor to Perth.
It’s far from what’s actually needed, especially for interstate rail lines waiting on much-needed track upgrades. Priority areas I’ve long argued need funding include:
Along with upgrades like those, if Australia wants to be able to reduce its reliance on road freight, a future government will have to revisit completing the northern half of Inland Rail.
Without Inland Rail reaching Queensland, we won’t get as much benefit back from upgrading inland freight tracks from Melbourne to central NSW, underway now.
Our current approach to transport funding favours roads and urban rail projects. Rail freight – which gets trucks off the road and better connects our regional communities with our cities – keeps being shortchanged.
Until we strike a better balance, we will continue to be as vulnerable to future oil shocks as we are today.
Read more: More than ever, it’s time to upgrade the Sydney–Melbourne railway
Authors: Philip Laird, Honorary Principal Fellow, University of Wollongong
