The Lonie Report argued that, despite the immense change in demand for various modes of transportation since the beginning of the twentieth century, the transport system was still run by the same methods as prevailed in the nineteenth century. It argued for large-scale deregulation of transport markets, especially by the removal of the current restrictions on the carriage by road of such goods as cement, sawn timber, fertilisers and grain.

The report was particularly concerned about the operating losses made by VicRail due to significant declines in patronage and large increases in car ownership. The report fundamentally argued that it would be much too expensive to upgrade the rail system to be competitive with the car, or even with buses, and that therefore:

• all country passenger rail services, except from Melbourne to Geelong, should be replaced by buses
• trains on the suburban Port Melbourne, St. Kilda, Altona, Williamstown, Alamein and Sandringham lines should be replaced by buses, as should the Hurstbridge line beyond Eltham.
• trams on Routes 1 (to South Melbourne Beach only), 12, 57, 69, 72, 78/79, and 82 should be replaced by buses
• all night-time and weekend rail services be replaced by buses or multi-hire taxis
• fares should be increased more frequently to eliminate public subsidies as soon as possible
• already-closed rural freight lines should remain closed and be dismantled to recycle the sleepers and steel
• small-volume freight should be shifted from rail to road
• a multi-modal public transport fare system be developed
• a system of multi-hire taxis be instituted to provide public transport in new suburbs

The report stated that because of increasing demand, Victoria's major highways should be duplicated. It also argued for the reservation of land to allow the construction of road bypasses around major towns on these highways. Within Melbourne, it argued for extensions to the Eastern and South Eastern Freeways, for the linking of the West Gate Freeway to Port Melbourne, and for the building of a ring road around the city, claiming that these increases in road capacity were needed to meet predicted demand for road transport. It also advocated a road bypass of Lilydale on the Maroondah Highway, and argued for the introduction of clearways on main suburban streets to speed up road traffic.

Another recommendation of the report was the staggering of school and work hours in order to spread out the demand on public transport services, which it said would reduce the overcrowding on these services during peak periods, and the number of under-used services at other times. The report argued that this be done through employers being encouraged by government to develop more flexible hours.