TRUE NORTH 2008 CONFERENCE

GS04/2008
21 April 2008

Keynote Address
True North 2008 Conference
Monday 21 April 2008

A FRAMEWORK FOR SUSTAINABLE DEVELOPMENT IN NORTHERN AUSTRALIA

Introduction

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

I would like to acknowledge the Larrakia people who are the traditional owners of the land on which we stand.

I would also like to acknowledge the Northern Territory Chief Minister Paul Henderson and my colleague Damian Hale, the Federal Member for Solomon.

And, finally the conference organisers for bringing such a diverse and experienced range of people together.

I see from the program that this session is entitled "Grasping the Future". I would like to thank YOU for grasping the opportunity to take part in this forum.

Over the next two days, you will hear from a range of speakers from governments, private enterprise, international manufacturers and Indigenous bodies.

Most importantly, you will be able to share your ideas.

And, as the Parliamentary Secretary for Regional Development and Northern Australia, ideas are important.

• Sensible, smart and sustainable ideas;
• Ideas which will help us meet the challenges ahead;
• Ideas which help us build on our economic prosperity;
• Ideas which will protect our unique environment; and
• Ideas which will help us establish efficient and appropriate human, physical and financial infrastructure.

As many of you know, I am no stranger to Darwin.

I arrived here in 1982. I had taken a bus from home in Whyalla as it was the cheapest option... from memory it was $17. That sticks in mind because I remember later in the year not having $17 in my back pocket or in the bank and realising that this is the point in my life that I really had left home.

Although I had left my family home at the age of 19, I was always able to go back to get my washing done, to get a meal or just take anything of value such as the TV from the spare room which was put to much better use in my flat.

I realised in late '82 that I had no financial capacity to get back home and at the same time, I realised home was here in Darwin.

I lived in many places, sometimes looked after other people's homes and at one point I was living south of Darwin in what they imaginatively called 17 mile.

I worked at many different things, eventually picking up a job with Bob Collins, and out of that I was fortunate to meet many good people, develop relationships that would last a life time and grow to have a great affection for the Northern Territory.

I always enjoy coming back to Darwin, jumping in a hire car and making my way around the city that holds so many memories for me.

I was very fortunate in the amount of time I spent outside of Darwin, visiting communities and forming friendships with a whole bunch of people including Wesley Lahupuy and Jack Ah Kit.

I can remember meeting a fellow out at what some still call Hooker Creek ... but what is called Lajamanu ... sleeping under the stars, eating home made sausages. Lord knows what they were made of but washed down with enough beer they were definitely good enough to eat. That is where I meet Brian Ede.

Brian led the Labor Party in the Territory for many years. Brian is my brother-in-law and although he is growing grapes and making wine in the South West of Western Australia, we both still like to keep a real connection to the Territory.

Since leaving Darwin, I have always stayed in touch. When I was with Woodside Energy I frequently called in to Darwin on my way to East Timor and now as the Parliamentary Secretary for Northern Australia, I intend to get here as often as possible.

I have attended a number of functions in this iconic venue. In fact, I find it curiously appropriate that we are meeting here on the very day that Skycity celebrates its 25th anniversary.

Why do I find this appropriate?

Because Skycity is a good example of a sustainable development. It was conceptualised not long after Cyclone Tracy flattened Darwin, and the building's unique shape and design are in direct response to the challenges faced in a tropical climate.

The last 15 or so years has seen the blossoming of a new Darwin, a modern city with great tropical architecture and city design. A city where building crafts and trades reflect design excellence.

Over the years, this venue has continued to expand and to diversify its facilities.

Skycity has positioned itself as a major tourist drawcard. It provides employment and training opportunities, and is a strong contributor to Darwin's economy.

Obviously, Skycity have "played their cards right".

And that is what we have to do in Northern Australia.

We have to plan ahead, we have to adapt, and we have to get things right. We need to develop the right projects and make sure they are supported by the right infrastructure.

Northern Australia: a snapshot

The Rudd Government recognises the importance of this region to Australia's economic prosperity, and to assist in "getting it right", the Government has established the Office of Northern Australia.

This is an important move and I will speak more about the Office a little later -- but just to set the scene -- Northern Australia is defined as the area of Australia above the Tropic of Capricorn.

We are talking about 3 million square kilometres, with diverse economic centres located off-shore and in the Pilbara, in the Kimberley, in the Barkly Tablelands, in Mount Isa, in the ports of Broome, Cairns, Townsville and Darwin, and in regional centres such as Katherine.

Around 959,000 people live in Northern Australia - just over 4.6 per cent of Australia's population.

An estimated 9 million hectares of land in Northern Australia is used for agriculture.

A large proportion of Northern Australia's land area is owned by Aboriginal and Torres Strait Islander people and much of it remains national park.

In Cape York and the Northern Territory, over half the land is Indigenous owned and communities play a vital role in managing land and sea areas.

Forests occupy a further 800,000 hectares and mineral and energy resources, fisheries and water resources are spread across the region.

And the North is blessed with a unique environment.

• Cape York Peninsula is outstanding on a global scale for its biodiversity and the integrity of the natural environment;
• Kakadu National Park is one of only 20 World Heritage sites recognised for both its natural and cultural heritage values; and
• In the Kimberley, less than one per cent of total land area has been cleared, making it one of the few places in Australia, that hasn't lost a species of endemic fauna since European settlement.

Not only are these areas important in themselves, but they bring in substantial tourism dollars to the Northern Australian economy.

Northern Australia is also the gateway to the markets of Asia. The tyranny of distance is something Australians understand, however, Northern Australia has a strategic advantage in terms of trade and tourism given its closeness to Asia and the associated links to the global community.

The obvious advantages relate to freight costs, freight lead-times and minimum stockpile requirements. There are also proximity benefits for promotional marketing.

And the gate opens both ways. Northern Australia has a wealth of natural features which are attracting an ever increasing number of tourists - particularly from Asia.

Tourism is a major contributor to local economies. 13 per cent of Australian tourism visitor nights are spent in Northern Australia, with about two thirds of these in Northern Queensland.

I see from the program that you will be discussing the potential for growth in the tourism sector tomorrow afternoon.

Northern Australia is attractive to investors because it offers a stable economic environment, a great climate and a wonderful landscape.

My Department's Major Project Facilitation Unit advises me that projects in this region account for 83 per cent of new investment in Australia.

And there are a number of very promising projects on the horizon. For instance:

• The Ichthys project being undertaken by Inpex, 200 kilometres off the north-west coast of WA, represents a potential new investment in the order of $20 billion. Inpex is proposing to develop this world-class reserve to produce LNG, LPG and condensate for export out of Darwin.

• In Northern Queensland, Chalco -- the only producer of alumina, and the largest producer of primary aluminium in China - is proposing a new $3 billion investment in the Aurukun Bauxite/Alumina project.

• The Ord River Scheme, represents a significant opportunity for regional development, particularly in the East Kimberley. The Kimberley Development Commission estimates the value of production from the land irrigated could amount to $500 million annually.

These projects will not only contribute to the north's economic growth but will provide employment and training opportunities -- including for Aboriginal and Torres Strait Islander communities.

I know this conference is about forward thinking, but I'd just like to take a quick look at the status quo. To date, the economy of Northern Australia has been dependent on the production and export of raw or part-processed materials.

Three industries support most of Northern Australia: these are pastoral, agricultural, and the mining -- or mineral and energy resource -- sectors.

• Pastoral activity stretches over a large area of semi-arid to arid land, and involves, from an infrastructure perspective, the relatively simple export of live cattle and carcasses.

The Australian Bureau of Agricultural and Resource Economics (known as ABARE) has indicated that around 80 per cent of Australia's live cattle exports over the past five years were sourced from Northern Australia. In 2006-07, Northern Australia exported 618,000 live cattle, valued at $416 million.

• Northern Australia has abundant natural resources and the mineral and energy resource sector, is, as we say -- booming -- particularly in WA where this week Andrew Forrest's FMG began exports from Australia's newest billion dollar Iron Ore project.

Ports in Northern Australia (including Gladstone and Carnarvon) shipped over 3.3 billion tonnes of cargo in 2006-07 including:

• $14.7 billion of iron ore from WA;
• $12.7 billion of coal and coke from Queensland
• $5.8 billion of LNG from Darwin and WA
• $7.6 billion of crude oil and condensate from WA; and
• bauxite from Queensland and the NT.

This is an incredible total of $40.8 billion.

Growth is not only evidenced in export values, in the five years to 2006 the population of the North Queensland mining town of Weipa increased by 39 per cent. During the same period, the East Pilbara in Northern WA grew by 27 per cent.

• Agriculture in Northern Australia includes crops such as sugar cane, tobacco, peanuts and tropical fruits. Most are transported out of the region for processing elsewhere.

In 2004-05, sugar cane was the big ticket item accounting for $836 million - or a quarter of the total agricultural production in Northern Australia.

Infrastructure as the key to economic development of Northern Australia

Industries such as mining, agriculture and tourism have an associated dependency on intensive infrastructure, in particular transport infrastructure.

It is simply common sense to acknowledge that the development of appropriate and effective infrastructure in Northern Australia is essential for our future prosperity.

Investment in more efficient modes of transport and communication and environmental management will increase the efficiency of existing industry, and provide the incentive for new and emerging enterprises.

INFRASTRUCTURE AUSTRALIA

Northern Australia has consistently identified infrastructure bottlenecks as an impact on development. Problems with road, rail, aviation, communication and port access have limited the capacity of industry to grow.

Some of these limitations are related to duplication of private infrastructure in the mining industry and some due to demographics and the distances involved.

It has also been argued that infrastructure problems have been the consequence of planning processes that respond to single development projects rather than a regional assessment of need.

So what is the Government doing to address these issues?

As part of our plan to strengthen the economy, the Government is offering a truly national, long-term approach to the provision of infrastructure.

Australia's size, our dispersed population, and our reliance on export industries mean we are particularly dependent on efficient infrastructure that needs to be well planned and adequately financed.

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

Infrastructure Australia will be lead by Sir Rod Eddington, who grew up and attended university in WA.

Sir Rod brings significant experience to the position. His career began in transport and aviation. He spent five years 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 have 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, signifying the importance this Government places on private sector partnerships.

The composition of Infrastructure Australia will provide the grunt needed to deliver on Australia's infrastructure needs - including those of Northern Australia.

Infrastructure Australia will advise governments, investors, as well as the owners and users of infrastructure, on matters including:

• 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 will include:

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

Infrastructure Australia's first priority will be to conduct a national infrastructure audit within our first year in Government.

This work will allow us to make evidence-based decisions, and allow a better matching of investment dollars with national infrastructure priorities.

In an intelligent economy, infrastructure systems interact organically, building interdependencies. Too often in Australia, system constraints heighten the risk of a virus like flow-on of problems from one network to another.

For example, capacity constraints on our railways and on our roads affect the functioning of our ports. Water shortages impede industrial and mineral production and, often, improvements to our arterial roads simply push traffic snarls and congestion downstream.

This has a cost for the Australian economy.

To give a Northern Australian example, the Goonyella Coal Chain Capacity Review, commissioned by the Queensland Government and Queensland Resources Council in June 2007, indicated that capacity constraints in the coal chain resulted in a loss of more than $1 billion over the year.

This is an alarming statistic and the solution requires cooperation at all levels of government - Federal, state and local - as well as the involvement of all sectors of the economy.

Unfortunately, until now, the provision of important infrastructure has been considered in silos.

A lack of co-ordination between governments and the private sector has inevitably resulted in a loss of national income and reduced opportunities for our export industries.

This is where Infrastructure Australia comes in.

It will provide advice about infrastructure gaps and bottlenecks that hinder economic growth and prosperity. It will also identify investment priorities, policy and regulatory reforms that will be necessary to enable timely and coordinated delivery of national infrastructure investment.

Infrastructure Australia will also provide advice on nationally significant infrastructure, including transport, energy, communications and water infrastructure where further investment will improve national productivity.

But, Infrastructure Australia is ONLY PART of our commitment to communities across the length and breadth of our country.

The Rudd Government brings a new way of thinking about Northern Australia and creates an opportunity to establish collaborative relationships that cut across government and industry.

The Government is implementing a number of initiatives that recognise the importance of the Northern Australian region that will:

• identify key infrastructure projects;
• encourage and sustain economic growth in Northern Australia; and
• nurture and facilitate economic development.

TRANSPORT

Distance between population centres and a high number of remote and rural communities create a distinctive set of costs and issues in delivering reliable infrastructure and ensuring people can access services.

People who live in Northern Australia have unique constraints in terms of infrastructure and this affects the way in which they live. Better infrastructure means better communities.

In terms of improved transport infrastructure the Government has committed:

• $74 million for the full upgrade of Tiger Brennan Drive which will enhance transport links between major business areas including the Darwin CBD, Palmerston, Darwin East Arm Port and Rail Terminal, Darwin Business Park and the proposed Defence Hub adjacent to Robertson Barracks;

• $50 million over the next four years in community, pastoral and mining roads in the Northern Territory;

• In partnership with the Western Australian Government, $160 million for the upgrade of roads vital to the Pilbara mining and pastoral export hub of Port Hedland; and

• In Queensland, $2.2 billion to upgrade the Bruce Highway.

A Sustainable Future

With all this work it is essential that sustained economic development goes hand-in-hand with the protection of our unique environment and consistent with efforts to tackle climate change.

There is no doubt that there are concerns about environmental and social issues associated with development in Northern Australia.

We have a responsibility to protect our natural heritage for its intrinsic value. But it is also economically important.

For instance, a report done by Access Economics for the Great Barrier Reef Marine Park Authority states that along with other attractions in the region, the Great Barrier Reef contributes $6.9 billion annually to the economy.

This comprises $6 billion from the tourism industry, $544 million from recreational activity and $251 million from commercial fishing. This economic activity generates around 66,000 jobs.

Commercial and recreational fishing constitute a major use of fishery resources of the Great Barrier Reef. Each year about 24,000 tonnes of seafood -- valued at around $120 million -- is harvested by the commercial sector alone.

Some 120 fishing charter vessels operate in the Great Barrier Reef Marine Park, ranging from large reef-going charter vessels to smaller inshore operators. Recreational and charter fishing is an integral part of Great Barrier Reef tourism, valued at $4.2 billion a year.

Infrastructure and industry developments must aspire to constant improvement and to increasingly higher environmental standards.

At the same time, Governments should be signalling their expectations early in the development process.

Through the Kimberley Strategic Assessment, the Federal and Western Australian Governments are examining the entire region's economic potential as well as its environmental needs. This should provide a forward-looking framework for decision-making, rather than the reactive and piecemeal approach of the past.

If you look at the importance of the pastoral industry and the nature-based tourism industry to the economy of the North, the good condition of the land and our ecosystems are critical for future sustainability.

The Government's new Caring for our Country program identifies the environment of Northern Australia as one of six national priorities. The program takes a pragmatic approach to investing in the environment, with less red tape and more opportunities for indigenous communities and the pastoral, tourism and other industries to be supported for conservation efforts.

The program also supports emerging economic opportunities in providing environmental services.

Indigenous rangers throughout the North are providing important environmental services, drawing on traditional knowledge and offering career opportunities for remote communities.

Our Government is also establishing a number of structures that will promote sustainable economic development in Northern Australia.

Office of Northern Australia

As I mentioned earlier, these initiatives, include the Office of Northern Australia - or ONA .

The Prime Minister has given me responsibility for the establishment and success of the ONA, which exemplifies the Rudd Government's commitment toand focus onsustainable, long term economic development in Northern Australia.

The Office will:

• enable better communications and coordination across governments;
• create an avenue for industry to access the federal Government overcoming bureaucratic red tape;
• provide advice on the sustainability of economic development activities; and
• provide advice to the Government about priorities, strategies for development, and barriers impeding the development of significant initiatives in Northern Australia.

The establishment of ONA provides a significant opportunity to establish and bolster key collaborations with State, Territory and Local governments, industry stakeholders and communities to ensure a consistent approach to issues affecting development in Northern Australia.

The ONA will be able to co-ordinate policy across government and provide focussed, high-level advice to the Rudd Government on major projects.

The ONA will build on the considerable consultation, planning and research activities of other Northern Australia forums in recent years. And it will work with the many agencies at Federal, state and territory level with interests in the region.

Previous initiatives and forums on Northern Australia have tended to be ad hoc and lacked funding for strategic ongoing collaboration and work programs.

But the Rudd Government has committed funding for 4 years to the ONA, so it has the opportunity to put the mechanisms in place to provide support and follow-up for strategic projects and processes.

As a first step, I am arranging a number of stakeholder meetings across Northern Australia to take place in the coming months.

I want to have frank discussions with key stakeholders that will help to drive the work of ONA.

The Rudd Government is determined to underwrite the sustainable long term economic development of Northern Australia. I am pleased to announce today, the Prime Minister has asked me to take responsibility for the Northern Australia Land and Water Taskforce.

This will fit perfectly with the work of the Office of Northern Australia and is a clear demonstration of the importance of Northern Australia to the Rudd Government.

During the election, we committed to expanding the Taskforce Terms of Reference beyond the agricultural focus to allow for a more strategic review of all economic opportunities, to ensure that economic, environmental and social benefits are achieved for Northern Australia.

Some people may be concerned at the thought of this task force being transferred from the water portfolio into the "Department of Hard Hats and Bulldozers", as I have heard our department referred to...

No such concerns are necessary. There will be a seamless transition and I will continue to work closely with Ministers Wong and Garrett as well as Ministers Burke and Ferguson.

As a Government we will be working together to ensure that the development of the North is sustainable and that we don't repeat the mistakes of southern Australia, where we are grappling with the environmental consequences of more than a century of unsustainable development.

I would also like to pay tribute the previous taskforce members, including Senator Bill Heffernan, for their initial work on the Taskforce. I know that they spoke to many people across Northern Australia and their invaluable contribution will be pivotal for the success of the Taskforce.

The Taskforce will now examine the potential for the development of economic opportunities that include but go beyond the land and water resources in Northern Australia in an environmentally, socially and economically sustainable manner.

To this end, Penny and I will soon be presenting the Prime Minister with a recommended membership list for the taskforce. This list will include the non-political members of the former Taskforce and a range of new nominees.

Shortly after finalising the members, I will instruct the taskforce to deliver their first report by September this year.

CONCLUSION

In closing, let me say that when I lived in DarwinI experienced first hand the deep commitment of locals to building Northern Australia.

There is also a strong affinity with the natural environment and a commitment to protect it.

Now, as the Parliamentary Secretary for Regional Development and Northern Australia I have the opportunity to represent and promote Northern Australia.

I will be a strong advocate for Northern Australia within the Federal Government and beyond.

This conference is about harnessing the region's abundant natural resources for sustainable economic growth supported by appropriate economic, industrial and social infrastructure.

I urge you to make the most of the opportunities provided over these 2 days and I look forward to working together into the future.

Thank you.