In defence of competition: The successful application of competition policy in NSW rail

This paper argues that recent rail reform in NSW has been successful. NSW r ail is now not only more cast effective, but also offers improved service a nd safety levels to its customers. As such the NSW rail reforms hate been o f benefit to the community as a whole, and have laid the groundwork for a r esugence of the rail sector: Despite the criticism surrounding recent job l osses, it is argued that the reforms have reinvigorated an industry that ha d been caught up in an ever decreasing vicious circle. The success of the 1 996 reforms have been dependent upon a reform model that mixes factors such as vertical separation and independent regulation with government provisio n of targeted community service obligation payments. This paper argues that the most important ingredient for rail's future is the removal of the enor mous bias in government tar and user charging policy against rail and towar d; road transport. In addition to keeping faith with the traditional Nation al Competition Policy agenda, nothing is more important than that Australia n governments address this continuing and debilitating bias against rail tr ansport.