Etheridge Economic Development Forum (Georgetown)

I want to thank you for inviting me to speak here today and I am very chuffed that I am able to give my first speech as Minister for Northern Australia, in Northern Australia, in Georgetown. 

I accepted the invitation to speak here before I had any inkling that I would have the honour of serving as a Minister, and certainly before I knew that I would be minted as the Minister for Northern Australia. But it has turned out to be a fortuitous speaking appointment indeed. I was fully intending to spend a few more days in your region including a trip down to Hughendon. I apologise that I won’t be able to do that now as I need to travel to Canberra to be sworn in tomorrow but I am glad that I have still been able to keep this commitment.

And I am very excited about the potential and opportunities that I have in this new role. I am very lucky to have a portfolio where the government already has detailed plans in place through the Northern Australia white paper, and I want to thank Senator Ian Macdonald and Warren Entsch who have done so much to develop the plans that I now have the honour to implement. I also want to pay credit to Shane Stone and his Northern Australia Advisory Group.

Given our current budget constraints, I am even luckier to have a portfolio that has substantial resources devoted to it, including almost $1 billion in policies to support the construction of new roads and water infrastructure, and the establishment of a new $5 billion Northern Australian Infrastructure Facility. I will talk more about these today.

But first I want to reflect on why it is so important that the government is focused on the north today.

Our Northern Australia white paper is not a new form of social welfare policy. It is about economic prosperity and the creation of wealth not just for Northern Australia but for the whole nation. As you would be aware Northern Australia accounts for 40 per cent of Australia’s landmass but is home to just 6 per cent of our population. Yet that 6 per cent produce 11 per cent of Australia’s GDP. We as Northern Australians punch above our weight in terms of our contribution to our nation’s economic growth.

Good businesses seek to reinvest in those parts of the business that are making money, and Northern Australia makes money for Australia. It is right that we should choose to reinvest in our north at this time.

My passion for developing Northern Australia was kindled while I spent 3 weeks working in a stockcamp at a cattle station near Normanton just about 2 years ago now. I loved the landscape which to me at least just screamed opportunity.
I was also struck by how many towns and rivers and other landmarks took their names from the times of the Burke and Wills expedition. All around the Gulf there are the legacies of Burke and Wills’ intrepid mission. There is Burketown, the Wills Development Road, the Burke Development Road and the Burke and Wills roadhouse. Even the town of Cloncurry is named after Robert O’Hara Burke’s cousin, Lady Cloncurry.

There were other explorers too, such as Augustus Gregory who explored this district. Reading the history of this era it was no coincidence that this bout of exploration followed the last great mining boom in this country, the 1850s gold rush. Indeed, the Victorian Exploration Committee that funded the Burke and Wills trip was funded by the proceeds of that gold rush.

(As an aside there is some evidence that the real aim of the Burke and Wills mission was not scientific research but a plan for Victoria to annexe large swathes of North Queensland so they could match New South Wales in terms of territorial heft. I am glad that objective was not met because we would then of course be playing AFL today not rugby league!)

We have just come through the biggest mining boom since the gold rush. In my view, we should be using this wealth and opportunity like our forefathers did. Opening up new areas of our nation, creating new industries and leaving a legacy for our children is what we should be doing with the wealth we have been lucky enough to have inherited.

The Northern Australian agenda that this government has kicked off should not be owned by one side of politics. I hope that like the Burke and Wills expedition, the development of our north will not in the future be associated with just the Liberal party, the Nationals party or the Labor party, but be a period of shared vision and achievement that all Australians can be proud of. I hope for a bipartisan Northern Australian policy and I am happy to work with all sides of politics to bring that about.

Now in this role I am joined by the leader of our expedition, Josh Frydenberg, the Robert O’Hara Burke of our Northern Australian agenda, if you like. Now I don’t think that the Australian people will look back at the Frydenberg-Canavan team with the same sentimentality as they do Burke and Wills in the years to come, and I sure hope we don’t end up dead in the wilds of the Western Queensland desert, but I do hope that this plan spurs decades of economic advancement that can be looked back proudly by all Australians as a time of achievement and progress for Northern Australia and for our entire nation.

That is my message of hope and opportunity but I also want to add a dose of realism to it too. Because our Northern Australia policy is strictly business we must be hard-headed about. We do not have the money in Canberra to squander on projects that don’t stack up, that don’t make a buck or don’t return a dividend to the nation.

Indeed, even if we did have the money, a failure to spend this money well would be massively counterproductive to the long-term goal of northern development. I want our Northern Australia white paper to be a document that kicks off decades of commitment by all governments to develop the north. I hope I can make a contribution in my time as the Minister, but even more so, I hope that I am just one of many Northern Australia ministers in the decades to come that make a difference to the north.

The worst thing I could do to jeopardise that outcome would be to waste or squander the plenty I have been given. There is no shortage of bean counters in Canberra that covet the resources the Northern Australian portfolio has been given. The best way I could make their job easier would be to fund projects that fail. They could then readily point to such examples as just another failed regional development policy and argue that the money should be redirected to the budget or pet projects in our major cities.
That’s why our policies like the Northern Australian Infrastructure Facility will be run in a disciplined, business-like fashion and I will make no apologies for that. The draft legislation for the NAIF has been out for public consultation, and I just want to remark on a few elements about it and the associated investment mandate that will be given to the NAIF board.

First, the facility is focused on lending to economic infrastructure that is transformative and will accelerate economic and population growth. This is the appropriate focus of the public sector, to help provide the capital to build economic infrastructure that many industries and users can use to spur development across many businesses.

Second, as a loan facility we will be looking for projects that can generate returns and maximise the likelihood of the lent money being paid back. That is why we are looking at supplementing the capital available to economic projects such as ports, airports, rail lines, communications and water infrastructure.

Third, to maximise the potential for our lending to be successful we will require project proponents to have “skin in the game”. The facility will be available to lend up to 50 per cent of the total debt for an individual project. As projects will encourage private investment, this will give the Commonwealth Government greater security that the project will indeed be successful. Fourth, while the NAIF has been primarily established as a lending facility we are investigating whether its investment mandate should permit it to make other financial investments such as guarantees. The Clean Energy Finance Corporation, along with international infrastructure facilities such as the Transport Infrastructure Finance and Innovation Act Program (TIFIA) scheme in the United States, can use such arrangements.

The facility’s design has been drawn from the experiences of other government lending facilities such as the Export Finance and Insurance Corporation in Australia and the TIFIA program. These have been successful programs that have run for decades. The NAIF legislation has a 5 year investment decision making timeframe with a review after three years. It is my hope though that the NAIF proves as successful as these other programs and that the facility can last for many years into the future.

The draft legislation for the NAIF has been put out for public consultation. It is our hope that the legislation will be finalised and introduced into Parliament shortly. We are hopeful that it will receive bipartisan support. Pending its support by the Parliament the Government’s intention is that the facility will be ready to make loans after 1 July this year. We are already doing some initial investigation of potential projects so that the facility can “hit the ground running” come that date.

To get the most out of the NAIF, it will complement and partner with private and public sector investment in infrastructure. In particular, we also need to make sure we leverage off other investments by the Commonwealth Government. This includes the Government’s investment of $600 million in the Northern Australia roads programme and the $100 million northern Australia Beef Roads Programme announced by Deputy Prime Minister Warren Truss late last year.

Water infrastructure is crucial for development in Northern Australia. On 5 July 2015, the Australian Government launched the $500 million National Water Infrastructure Development Fund. Of this, $200 million was set aside for northern Australia. The fund provides support for detailed planning necessary to inform water infrastructure investment decisions as well as part funding for the capital component of a few priority projects.

We are very please at the interest shown in the water fund, with over 54 applications, representing more than $87 million of investment, received under round one for the feasibility funding component.

The $450 million capital works fund will be available from 2017-18 and we will assess projects for this fund on a case-by-case basis in consultation with State and Territory Governments.

There may be other investments that can partner with private sector projects. For example, here at Georgetown if the iFED proposal proceeds the Northern Australia Infrastructure Facility could provide a funding stream to supplement the public infrastructure you will need to manage such growth, such as the proposed Charlestown Dam. In other parts of Queensland further economic development may be spurred by investments in the Hann Highway, the Cairns airport, the Townsville Port and water infrastructure in the Fitzroy Basin.

However, I am also mindful that to spur that private investment we need more than just public funds for the north. Too often the regulatory landscape is just a huge handbrake on northern development without properly achieving regulatory aims such as environmental protection or indigenous advancement.

That is why the government has provided $40 million to help reform the native title system so as to facilitate the resolution of native title claims. This funding will be available to help native title landowners engage with potential investors and explore options to better commercialise native title rights.

Our aspiration is to finalise existing native title claims in a decade. This is an ambitious timeline but it will be of huge benefit to the north if we can achieve it.

I also want to make clear that in my view it is not indigenous groups that are holding things up. Almost all indigenous groups want investment and economic opportunity. But the current legal environment of native title makes it hard for them to unlock the opportunity that would otherwise normally come from property rights.

Further, the government has committed to reducing environmental red tape and I support further efforts to reform this area. We can not repeat the situation that has bedeviled the Adani Carmichael Coal project. It is a regulatory absurdity that it has taken us more than 1900 days to provide the environmental approvals for a $16 billion project. What country would take nearly 2000 days to say yes or no to a $16 billion project that can create 10,000 jobs, and the project is still held up in the courts.

We need to do better than that. If we are going to make this Northern Australian plan work we need to be more business like and a lot sharper.

I mentioned the Burke and Wills expedition earlier. While we admire their courage and initiative, that isn’t enough. We have to make sure our efforts are in the north this time are more organised and we focus on what is important. If we don’t we will get bogged down and ultimately fail.

Robert O’Hara Burke and William John Wills were chosen more for political reasons than their exploring credentials, and the 20 tonnes of equipment that they left Melbourne with played a big role in their ultimate slow progress and demise. The author Sarah Murgatroyd outlined what they carried:

“Luxuries were well catered for: a large bathtub, an oak and cedar table with two oak stools and forty-five yards of gossamer for fly veils. Yet the party took just two sets of field glasses, two watches and only twelve water bottles …

“Were twelve sets of dandruff brushes and four enema kits really necessary? There were six tonnes of firewood, 200 kilograms of medications for the camels and horses and enough ammunition to win a small war.”

In addition, they carried 270 litres of rum ostensibly for the camels for “medicinal” purposes, and given how much rum they were carrying perhaps these Victorians would have made very good Queenslanders after all!

The Commonwealth Government is much more prepared than this in my view, but we all must be clear minded about what we can and can’t achieve, and what baggage we can and can’t take to make this plan succeed.

While I want the Frydenberg and Canavan team to have the vision and initiative of Burke and Wills, I don’t — and I am sure Josh doesn’t too — want to end up the way they did!

Check against delivery.

Speech delivered to the Etheridge Economic Development Forum on February 17 2016.

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