Cairns Marine Precinct

Briefing Note Summary

• The Cairns Marine Precinct (CMP) is vital to the economic diversification of TNQ as the region continues to recover from devastating impacts of COVID-19 on its tourism and hospitality sectors.

• Cairns is a strategic port for Defence. The RAN’s Regional Maintenance Centre (RMC) North-East is now operational in Cairns following its launch in January when it became the first of four new RMCs in Australia.

• It is crucial that the Federal and State Governments work together to deliver on the initial $300m shared funding and further sufficient funds for the CMP’s Common User Facility, with the State Government delivering its share of $150m+ over a three-year period, as a centrepiece of fully developing the precinct’s infrastructure and tomorrow’s workforce.

• A commitment is needed to provide long-term continuous sustainment programs and to support the redevelopment of ship and boat building in the precinct.

• The Federal Government’s Defence Strategic Review, which is due for completion in March 2023, will play a significant role in shaping ongoing investment in and support for Queensland’s only naval base and indeed for broader strategic defence positions elsewhere in TNQ.

The Issue

The Cairns Marine Precinct (CMP) is a critical enabler of the Tropical North Queensland (TNQ) economy, supporting Australia’s strategic Defence and foreign policy initiatives, as well as border and fisheries, tourism, and maritime trade operations. The precinct is home to a large and diverse marine sector with 1603 commercial vessels across tourism, fishing and shipping, and cruising yacht sectors, in addition to several Royal Australian Navy (RAN) and Australian Border Force (ABF) vessels. The precinct also hosts superyachts and cruise liners visiting the Pacific. COVID-19 exposed the fragility of Cairns’ tourism-based economy, and the continued growth of the CMP is critical for economic diversification in the region. A sustainable marine capacity to ensure that both strategic Defence priorities and industry needs are met is vital to provide growth and jobs for TNQ.

Recently, growing tensions between the United States and China have elevated the strategic importance of the Pacific, and Australia is now more than ever a frontline player in terms of engagement and development of the region. Australia’s StepUp to the Pacific program, launched by the previous Federal Government, signalled a key change in Australia’s Defence posture as it prioritised the Indo-Pacific region.

The Albanese Government has further elevated the importance of Pacific engagement with Foreign Affairs Minister Penny Wong making several trips to the region throughout 2022. As well, in August 2022, the government committed to delivering the most comprehensive Defence Strategic Review the country has seen in 35 years with its findings due by March 2023. Under the Security of Critical Infrastructure Act (2018), the Port of Cairns is a critical national infrastructure asset. The port includes HMAS Cairns, Australia’s most northern naval base on the eastern seaboard, and the CMP, and it plays a key strategic role in Australia’s northern naval capability.

There is unmet and growing demand in naval, commercial and superyacht maintenance opportunities that supports a step change in ship sustainment capacity in the CMP. Certainty in the future pipeline of maintenance and sustainment work is critical in the workforce and resource commitments required by industry. Defence can play a key role in underpinning this.

The State Government’s CMP Expansion Detailed Business Case, released in January 2022, identified necessary infrastructure and skills requirements to ensure future growth and development in the precinct. The business case identified the potential to develop a maritime Common User Facility (CUF), accessible by all shipyards, to enhance the infrastructure capacity and capabilities at the CMP, optimise the use of the waterfront land, and maximise the emergent defence and marine industry opportunities. The CUF includes a 5000-tonne ship lift, two blast and paint facilities, additional wet berth capacity and three hardstand areas for vessels up to 120m in length.

It is essential that the State and Federal Governments deliver on their commitment to fund and develop the required infrastructure as outlined in the business case.

A commitment to long-term continuous maintenance programmes by the RAN will assist the individual shipyards to forward plan in their own businesses and give them the ability to make investments in their own infrastructure. Understanding the opportunities in specialist boat and shipbuilding will also allow further private investment and give security to individual businesses of a pipeline of continuous work in the marine precinct.

The CMP expansion needs to be complemented by a significant step up in industry workforce skills and training, both within the shipyards and also within the sector’s support industries. To support the CMP, there is a major role for training to upskill existing workers and contextualise training for the marine sector, and to recruit and grow the workforce through stronger training pathways. A further investment of $15m to expand and upgrade training facilities at the Great Barrier Reef International Marine College would play a vital role in meeting these needs.

Background

The Cairns region has the largest marine services sector in northern Australia, and has a skilled, year-round permanent marine and engineering workforce of 4600 across 270 organisations.

In 2017 the Federal Government committed to a Phase 1 $24m investment into Ports North Leaseholds to enhance and modernise the three shipyards within the CMP. In 2020, the State Government committed $28m for increased wharf capacity as well as $2m for the CMP Expansion Detailed Business Case to inform a step-change within the precinct. Significantly, the Federal Government committed $150m to the CMP in its October 2022 Federal Budget, which is also to be matched by the State Government.

In August 2022, the government announced details of the first Defence Strategic Review the country has seen since 2012. Defence Minister Richard Marles said the review, which is being led by former Minister for Defence Stephen Smith and former Chief of the Australian Defence Force Sir Angus Houston, will ensure the ADF is well positioned to meet security challenges amid “more aggressive posture” from China. With these current geopolitical tensions, particularly in the Indo-Pacific region, and with internationally significant events such as China’s security deal with the Solomon Islands, it is essential that this review sees a strengthening of Defence Force operations in far northern Australia.

The RAN is currently undertaking longterm planning for HMAS Cairns, and, in conjunction with Ports North Master Planning and the CMP Business Case, is looking at expansion of the current site as well as future purpose and requirements for the base. This expansion would align well with strengthening posture in northern Australia following results of the Defence Strategic Review.

The CMP is Australia’s maintenance centre for the RAN’s hydrographic vessels as well as ABF Cape Class vessels. It has serviced the Defence, ABF, and marine industries for many years and, as home to Fleet Base Pacific (HMAS Cairns), is one of the few ports in Australia that can offer the Department of Defence significant expansion opportunities in berth and land facilities.

The new Regional Maintenance Centre (RMC) North-East for the RAN under Plan Galileo is part of the CMP. RMC North-East provides a national naval sustainment and maintenance hub, enabling the CMP to build on its present capacity and commitments of servicing vessels from HMAS Cairns, Darwin, the United States, and the Pacific Islands.

The State Government’s CMP Expansion Detailed Business Case (released January 2022) highlights that one in six vessels in Australia over 15m – and four in five NQ registered vessels – are serviced in Cairns. The business case also highlights the existing shipyards are at or near capacity and that future demand will not be met with current capabilities.

Without a significant step-up in infrastructure and capability at the CMP, existing operators may not be able to compete for future sustainment contracts, and/or maintain or grow their business. Upskilling and training to meet critically under-resourced maritime workforce needs form a key part of this sector with planned expansion by the TAFE-operated Great Barrier Reef International Marine College essential. A combination of these factors will result in a potential decline in market share and loss of economic opportunity, while overall regional activity levels in allied industries will also sharply decline.

The objectives of the Defence Industrial Capability Plan are to broaden, deepen, and grow the industrial base of Defence to enhance Australia’s national security.

Next Steps

To ensure further growth and job creation in the region, to attract greater private investment, and to enable Defence to achieve its strategic goals, the following commitments for the CMP are needed to facilitate a transformation in the overall capacity and capability of the precinct:

• Delivery of the CMP’s Common User Facility as committed by the State and Federal Governments in accordance with the Cairns Marine Precinct Expansion Detailed Business Case released in January 2022.

• $15m investment in establishing a virtual sustainment college through the Great Barrier Reef International Marine College (GBRIMC). The college will develop and deliver agile micro credentials that meet future Defence sustainment demands (see Education & Research priority).

• A commitment of $24m for stage two capacity increases within the three existing shipyards.

• A commitment from Defence to provide additional vessels in Cairns and longterm continuous maintenance and sustainment programmes.

Our Recommendation

• That the Federal and State Governments work together to deliver the Common User Facility as outlined in the Cairns Marine Precinct Expansion Detailed Business Case.

• That Defence commits to basing and sustaining additional vessels in Cairns.

• That the State Government provides $15 million to expand the GBRIMC in order to further enhance this existing pipeline which is vital to deliver an increasingly skilled maritime workforce.

• That the Federal Government commits $24m over two years for stage 2 capacity increases within the three existing shipyards.

• That the Department of Defence delivers on its expansion of HMAS Cairns with the initial $155m upgrade of the Navy base by 2025, and further potential investment following the release of the Defence Strategic Review.