Will Bullet train emerge as an economic antidote to COVID-19?

  • May 29, 2020 AEST
  • Team Kalkine
Will Bullet train emerge as an economic antidote to COVID-19?


  • Anthony Albanese, the Opposition Leader is in the favour to call for a bullet train connecting Melbourne, Sydney and Brisbane
  • But a report from the Grattan Institute highlights that the costs associated with it are way too significant than the benefits from building it
  • Benefits, if any, would likely to be concentrated in capital cities, with fewer passing on to regional areas
  • Coronavirus crisis taught the importance of prioritising. This may be a good reason to investigate funding the worthy projects such as fast-track infrastructure which helps in job creation and stimulation of the economy wherein bullet train does not fit.

The virus storm of COVID-19 bought unemployment, contraction in GDP, suspension of tourism, trimmed trade deals, encouraged remote working, and decreased consumption of services in the country. The country is looking for rescue packages to help revive the economy which has been knocked out by the coronavirus. It now needs attention to bounce back with the GDP stabilisation, new employment opportunities, etc.

In the wave to fight against this biggest enemy, discussions have now altered to a pending project of High-Speed train as they has emerged into the big picture with mix reviews such as will involve new jobs creation while building the rail infrastructure or being a less crucial thing at present.

But the question arises that is it feasible for the government to spend over and above the amount, they have already spent since the crisis began?

There is uncertainty regarding the growth of population, future of travel and tourism, work patterns. Hence, the government needs to make a smart move and keep its doors wide open in case of spending, which the future will demand rather than on what was visualised pre-COVID-19.

Will Fast train prove as a safe bet for the rescue of the economy? In this article, we will look at whether it is realistic to have bullet train and if it is not, will renovated regional rail might work but bullet trains won’t, as highlighted by a Grattan Institute study recently.

Anthony Albanese, Federal opposition leader and infrastructure spokesman, believes that the country must invest in iconic projects like High-Speed Rail connectivity and should start building trains.

Whereas the Grattan Institute says and believes in uplifting the regional sector and considering the population of Australia is small and is spread over wide distances, so the cost that will be incurred to build the bullet trains will not justify the time and expense.

Don’s miss; Gush for Gold; How You Should Plan to Play The Consolidation?

Read on!

A strategic study was conducted in August 2010, on the High-Speed Rail (HSR) network on the east coast of Australia between Brisbane, Sydney and Melbourne. The study was to be conducted in various phases wherein Phase 1, highlighted the short-list of corridors and station options, what can be the possible preliminary costs and demand for HSR on the east coast of Australia, published in August 2011. Phase 2 was a building block of phase 1, contained broad and deep objectives and scope along with the refinement of estimates such as demand and cost. The phase 2 estimated cost of constructing to be about $114 billion (in 2012 terms) and the economic benefit-cost ratio (EBCR) using a discount rate of four per cent to be 2.5 for Sydney-Melbourne and 2.3 for the whole network.

Faster rail service would reduce travel times from over half an hour to ~ 1hour.

The Federal government had initiated a faster rail prospectus in 2017 which was won by the Consolidated Land and Rail Australia (CLARA) consortium led by businessman Nick Cleary. They were expected to establish a business case for a propped HSR from Melbourne to Shepparton, extend it to Sydney.

Did you read; Afterpay Dips from Record High After Fivefold Surge as MUFG Liquidates Position

Nick Cleary, in his media release, stated that CLARA looks forward to a role in the solution, considering substantial rise in the population, which in turn drives pressure on the existing cities.

Last year in May 2020, the Labor Government promised an investment of $1 billion to initiate securing a land corridor for a future HSR which links Melbourne and Brisbane via Sydney and Canberra.

The government announced its budget for 2019-20 wherein it suggested the population package of the future along with investment in the infrastructure for transport will support the regional growth. It will aid in knocking off the pressure across big cities. A 20-year fast rail plan was also introduced to connect major local centres with capital cities. This strategic plan was inclusive of $40 million for detailed assessments in the area of the five fast rail corridors.

But the question is, can the pressure be taken off? The people who will be travelling via train or they tend to drive? A study conducted by Grattan Institute suggested that fast rail service isn’t likely to have much impact on this front.

Did you read; Airline Industry Stemming for Revival after COVID-19 Disruptions

When everything was too rosy and working smoothly, a storm named Coronavirus hit the country which arose questions whether this process should move further or not?

Benefits can be derived from few updates done to the regional rail, still, the label of fiscal stimulus is not a licence to abandon cost-benefit discipline, the Grattan Institute says.

Did you read; Australian Dollar Soaring Amidst the Green shoots of Recovery

As per the study conducted by the Grattan Institute, they are firmly against this idea of HSA or bullet trains.

The regional areas of the country are in more need of the infrastructure such as better mobile networks, freight links, and internet connectivity other than the faster rail.

Several questions arose due to bans imposed in travelling amid COVID-19 and revolve around the Australian Bureau of Statistics (ABS) projected population of ~ 50 million by 2066. It cannot be predicted as of now what may be the population and immigration look like in the future.  

For any proposal to succeed during this time, the most important thing is the benefit that is associated with the cost while considering other factors into the picture as well. This has become a need of the hour, especially when the government has already spent too much on safeguarding the country against the turmoil. The government should make sensible decisions in terms of saving the economy during the present times rather than thinking of what future unfolds on things which can be postponed.

People might think it is going to be a climate saver in terms of knock out of carbon pollution of the sky, but what about the emissions during construction. The emission will be huge chunk due to the massive amount of concrete and steel usage.

As per the report, the proposed rail renovation project should actually to be reviewed considering COVID-19 crisis and alternates such as the regional rail upgrades sounds more sensible, but they are unlikely to take the pressure off capital cities.



Every economy that has been stammered by the hammer called COVID-19 is looking for several measures to revive its economy. It will be interesting to witness what the future may bring forth in consideration with the High-speed train in the country.


The website https://kalkinemedia.com/au is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) or engage in any investment activity under discussion. We are neither licensed nor qualified to provide investment advice through this platform. All pictures are copyright to their respective owner(s). Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.


There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK