WA PORTS & EXPORT INFRASTRUCTURE SUMMIT 2008

GS02/2008
08 April 2008

Opening Address
WA Ports & Export Infrastructure Summit 2008
8 April 2008
Duxton Hotel, Perth

Thank you for your warm welcome Greg, and good morning ladies and gentlemen.

After spending so much time travelling throughout Australia since the election, it is a privilege ... and a welcome relief ... to be talking to you this morning in my home town of Perth.

My first visit to this city, like so many migrants to this country, was by ship. In June 1966, I sailed on the Fairsea from Southampton to Adelaide via Fremantle Port with my family, as a 10 Pom. So it was in fact a Western Australian port that gave me my first taste of life in Australia.

I am here to talk to you today, to outline the Rudd Government's initiatives in the critical areas of Infrastructure and Transport - and the ways in which we see these initiatives supporting the Australian shipping industry and the broader Australian economy.

Australia's ports serve as vital gateways to global markets. For us to compete effectively overseas, it is crucial that we createand facilitatethe sort of port infrastructure that is sustainable, efficient and effective.

In August of 2007, the House of Representatives' Standing Committee on Transport and Regional Services handed down the Neville Report, officially titled 'The Great Freight Task: Is Australia's transport network up to the challenge?'

A great task was indeed identified. The report highlighted real concerns about Australia's national freight transport capabilities. It also found that a number of Australian ports suffered ... and unfortunately still suffer ... from infrastructure deficiencies.

The report referenced that there is broad agreement, that within twenty years, Australia's freight levels will be around twice the current levels. In WA the expectation is that the task will double in about fifteen years.

The overwhelming issue in the report was the need to adopt a national approach to infrastructure investment.

At the time of the report's release, the Australian Financial Review published an editorial on the 14th of August which stated and I quote:

"The startling thing about the House transport committee's Great Freight Task report is that so many of the measures that it recommends are not already being done as a matter of course. Most significant markets have gone emphatically national in the past quarter of a century. One would have thought it blindingly obvious that transport networks should be treated as a single Australia-wide system, that mainland transport regulations should be uniform across state and territory borders, and that transport infrastructure should be planned a uniform 30 years and land acquired in good time."

The editorial went on, "this represents another alarming failure of political will by federal and state governments, and in many cases the triumph of state parochialism over the national interest."

I want to make it clear today, that since that report was tabled the Australian political landscape has changed.

The Rudd Labor Government has a fresh approach and will provide the long-overdue leadership to work with the states and territories in addressing our nation's infrastructure needs.

It is impossible to ignore the fact that business is booming in Western Australia. Export and population growth is having a dramatic impact on our economic and social way of life. According to the Western Australian Chamber of Commerce and Industry, the WA domestic economy grew by a remarkable 12 per cent over the year to September 2007, making it easily the fastest growing state in Australia.

The Ports in Western Australia are an integral component in delivering this staggering economic growth. The eight major Ports stretching down our coastline from Broome through to Esperance, collectively handle almost half of Australia's commodity exports - and this percentage is climbing.

It is not only Western Australia however, that is experiencing unprecedented economic growth.

The Northern Territory recently saw an export increase of $210 million to record a trade surplus of $1.3 billion. The Darwin Port Corporation has projected further growth with a one million tonne increase in cargo trade this financial year.

Recent figures from Queensland show that the Ports Corporation of Queensland seaports, make a major contribution to that state's economy - responsible for 4,400 jobs and a $1.14 billion injection to regional economies. In fact I discussed these figures with John Mickel, the Queensland Minister for Transport, Trade, Employment and Industrial Relations on the weekend. He told me that in the past five years there has been a 58% increase in the ports' contribution to the Queensland economy and a 36% increase in jobs generated.

Through the creation of jobs and household income, Australian ports are often considered as the lifeblood for regional communities. As the Parliamentary Secretary for Regional Development and Northern Australia, I am well aware of the significance of ports, not only to the Australian economy as a whole but also to the communities in which the ports are located.

We all know as Western Australians, in line with the resources boom, there has been a massive increase in demand placed on Western Australia's infrastructure network.

But until recently, Australia has lacked a national and coordinated approach to the provision of major infrastructure. Because of a lack of national leadership, stakeholders have acted in isolation, without a coherent vision driving infrastructure investment.

According to a 2004 estimate by the Australian Council for Infrastructure Development, a lack of investment in public infrastructure over many years is now costing the Australian economy some $6.4 billion a year in lost production.

Unlike our predecessors, the Rudd Government is committed to a co-ordinated approach to infrastructure investment.

Failing to address our national infrastructure bottlenecks will stifle our economic growth and prosperity.

The Bureau of Infrastructure, Transport and Regional Economics estimates that by 2020, the cost of congestion will be around $20 billion. These costs are borne by businesses which cannot get their goods to market efficiently - that encompasses livestock, produce and commodities.

Inefficient and inadequate infrastructure puts the hand-brake on our economy and limits our true economic potential. The costs of congestion are high, and the effects are widespread.

The nation's Government must work with all stakeholders to ensure that our infrastructure networks are accessible, effective and complementary to our national economic and social agenda.

Access to our nation's ports must rely on the three levels of government, working for a mutual benefit with the rail and road transport industries, port owners and stevedores.

The Rudd Government explicitly understands this and that's why we are a government with a vision for nation building.

During the election Labor committed $1.76 billion of AusLink funding to new land transport projects in Western Australia. We will deliver on these commitments.

Western Australia will benefit from some $786 million for specifically targeted road and rail infrastructure projects.

The Rudd Government is also about to begin negotiations with the Carpenter Government to develop a jointly funded package of specific road and rail infrastructure projects for the five years from July 2009.

This package will see that Western Australia - as the nation's economic engine room - has the infrastructure capacity to underpin its performance.

The Rudd Government recognises that Fremantle Port handles 90 per cent of Western Australia's seaborne imports and 27 per cent of exports, by value. Nearly 500,000 containers and 19 million tonnes of bulk cargo travel through the Port each year and this will significantly increase over the next decade.

The vibrant, cosmopolitan port city of Fremantle has certainly changed in the forty-some years since I stood at the railing on the Fairsea. It even has its own recently successful AFL team - well at least last weekend it was successful.

We have committed $350 million to improve transport connections in Perth, including the creation of a state-of-the-art Kewdale industrial area and inter-modal network, as well as road improvements for the Leach, Tonkin and Roe Highways, and the Kwinana Freeway.

In addition to this, we are putting $436 million into improving access arrangements to a number of other key WA ports:

• $136 million for a new access road to Bunbury Port and an outer ring road around the city that will provide a more direct route to the Bunbury Inner Harbour and separate heavy vehicles from local traffic;
• $60 million for an access road to clear transport bottlenecks to Esperance Port, involving the realignment of rail track and roads and construction of new road bridges;
• $80 million for the Pilbara mining, oil and gas, and chemical export hub of Port Dampier and the Burrup Peninsula - which will see the completion of the Dampier Highway duplication; and
• $160 million towards upgrading of roads vital to the Pilbara mining and pastoral industries' export hub of Port Hedland - this will provide for future network demands generated by rapid growth in the local resources sector.

These projects indicate our commitment to supporting a world class, best practice supply chain for Western Australia's ports.

But the upgrading of WA ports infrastructure is just one part of a much larger and intricate infrastructure network that will deliver sustained economic growth.

The Rudd Government has established a federal department of infrastructure, and for the first time ever, we have a federal minister, Anthony Albanese - whom I represent here today - with responsibility for infrastructure.

Australia's size, our scattered population, and our heavy reliance on export industries mean we are particularly dependent on efficient, well planned and adequately financed infrastructure.

I am pleased to say we have already passed legislation to establish a strategic new body - Infrastructure Australia.

Infrastructure Australia will be headed by Sir Rod Eddington, a man who brings formidable experience to this role. His career began in transport and aviation. He spent five years service as CEO of British Airways, and was also part of a joint commission by the UK Government to examine the long-term links between transport and the UK's economic productivity, growth and stability.

Infrastructure Australia will consist of 12 members drawn from industry and all levels of government. It is significant that five of the twelve members, including the Chair, will be from the private sector.

Engaging the private sector is vital to the success of Infrastructure Australia.

Engaging the public is vital to the success of Infrastructure Australia.

We want to hear the voices of people whose lives and livelihoods depend on efficient and reliable infrastructure.

We want to hear from owners and operators of infrastructure, business and investment leaders, academics and community organisations - just like all of you in the room today.

Reporting regularly to the Council of Australian Governments, Infrastructure Australia will advise on the key issues of:

• national infrastructure priorities;
• the policy and regulatory reforms needed to improve the efficient utilisation of national infrastructure networks;
• options to address impediments to the development of efficient national infrastructure; and
• financing mechanisms.

Importantly, Infrastructure Australia will advise on ways in which barriers to investment in nationally significant infrastructure can be removed. This involves:

• improving the delivery of projects;
• aligning infrastructure plans across all levels of government;
• harmonising guidelines, legislation and regulations across jurisdictions; and
• standardising formats in tender documents and contracts to promote best practice procurement.

Infrastructure Australia's first priority will be to conduct a national audit of Australia's infrastructure within the first year of the new Parliament. After the audit is complete, a priority list will be drawn up to deliver to the Coalition of Australian Governments in March 2009.

This work will allow us to make evidence based decisions, enabling a better matching of investment dollars with the nation's infrastructure priorities.

In addition to establishing Infrastructure Australia, the Rudd Government has answered the call of the shipping industry, for an inquiry into coastal shipping. The findings are expected to be presented to the Parliament by October 2008.

Shipping is seen as an efficient mode of transport when it comes to moving large quantities of cargo from one part of the country to another. And yet, we have seen the number of Australian registered trading vessels fall from 75 in 1996 to just 46 in mid-2006.

The scale of shipping has expanded, the technology grows ever more sophisticated, and there is much greater appreciation of the significance of shipping in the context of overall logistics chains.

Shipping is now very much a 21st century industry, competing globally and employing people with 21st century skills and experience.

As with many other industries, the maritime industry is finding it difficult to attract and keep skilled and experienced staff. This will be a major challenge for industry.

Amongst other things, the review of coastal shipping will consider strategies for developing an adequately skilled maritime workforce.

The Government's aim is for a viable coastal shipping industry in a competitive domestic transport sector - an outcome critical to Australia's economic future and long term national prosperity.

Over the next two days, as you discuss the future for WA ports, you can be assured that the Western Australian port network and its vital role in Australia's economy is of upmost importance to the Rudd Government.

Thank you