Northern Australia Alliance - 2019 NAA Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

PO Box 3065, Cairns QLD 4870 Ph: 07 4080 2900

PO Box 3508 Broome WA 6725 Ph: 0455 774 438

PO Box 1313 Rockhampton QLD 4700 Ph: 07 4927 2055

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PO Box 1076 Mackay Qld 4740 Ph: 07 4845 8222

Shop 13, 5-15 Sharpe Ave Karratha WA 6714 Ph: 08 9144 1999

GPO Box 1825 Darwin NT 0801 Ph: 08 8982 8100

PO Box 1043 Townsville QLD 4810 Ph: 07 4726 2728

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FAST

NORTHERN AUSTRALIA

FACTS

53%

OF AUSTRALIA’S LAND MASS

10.7%

OF AUS TRALIA’S GDP

$187B GDP IN 2016/17

AVERAGE HOUSEHOLD INCOME

$63,585 $1322 ABOVE AVERAGE

5.2% OF AUSTRALIA’S POPULATION

1.3 MILLION LIVE IN THE NORTH

169,400

INDIGENOUS

PERSONS

19.5%

25.4% OF TOTAL NORTHERN TERRITORY POPULATION

INNER REGIONAL AREAS

56.7% OUTER REGIONAL AREAS

12.1% REMOTE AREAS

11.8%

23.2% OF TOTAL WESTERN AUSTRALIA POPULATION

9.6%

OF TOTAL QUEENSLAND POPULATION

TRENT TWOMEY Chairman, Northern Australian Alliance

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aunched by former Prime Minister Tony Abbott in June 2015, the Northern Australia Alliance (NAA) is an agreement between Advance Cairns, Broome Future Alliance, Capricorn Enterprise, Greater Whitsunday Alliance (GW3), Karratha & Districts Chamber of Commerce & Industry, Northern Territory Chamber of Commerce and Townsville Enterprise.

The NAA allows the key advocacy bodies from northern Queensland, Northern Territory and northern Western Australia to unite and work collaboratively, acting as a catalyst to shape and change communities across Northern Australia in a strategic, consultative way.

Northern Australia is broadly defined as the parts of Australia north of the Tropic of Capricorn.

The area covers approximately three million square kilometres with a growing population of around one million people.

WHY THE NAA IS NEEDED The principal purpose of the NAA is to provide northern Australia with a clear regional development framework that is consistent with the unique identity of the region, ensuring that development is driven by an apolitical agenda and can be implemented over successive governments..

Members of the NAA share a common platform on issues that are universal and unique to the northern Australian region, namely:

Northern Australia is characterised by a geographically dispersed population

A significant proportion of the population are indigenous and continue to practice traditional law and culture while engaging in the mainstream economy

The breadth and depth of existing industry is limited, particularly outside of the major urban centres

There is a growing skill shortage, particularly in areas such as healthcare, agriculture and engineering

Much of northern Australia is closer in proximity to Asia-Pacific export markets than to the major Australian domestic markets

In many cases, investment and economic development activities in northern Australia require consideration of native title

Northern Australia has extraordinary land and marine environmental values which underpin indigenous culture, are highly valued by the local, national and international community, and are the basis for important economic activity

Much of northern Australia can be characterised as a development frontier, however opportunity is challenged by the tyranny of distance

The dispersed population, limited existing infrastructure and limited breadth in the local skills base leads to high development costs, which elevates the importance of coordinated government investment to underpin catalytic private ventures.

VERY REMOTE AREAS

Through working with the NAA, Governments can take a socially-driven approach to economic analysis and project feasibility, rather than rely on traditional cost benefit models that preference large urban populations.

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FEDERAL ELECTORATES: LEICHHARDT, KENNEDY, HERBERT, DAWSON, CAPRICORNIA, FLYNN

DAMS & WATER SECURITY THE ISSUE BRIEFING NOTE SUMMARY • To cater for growing demand for water access across northern Australia, four significant water supply and infrastructure projects are considered essential enablers: Nullinga Dam (Far North Queensland), Urannah Water Scheme (Mackay, Isaac and Whitsunday Region), Rookwood Weir (Central Queenland) and Hells Gate Dam (North Queensland).

• All four projects require bilateral commitment and shared investment (split 50:50) to facilitate environmental approvals and progress to construction stage.

• The Rookwood Weir is the most advanced project and while Federal and State funding commitments are in place, construction has been delayed and there is a need to fast-track the Weir’s development.

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As a region, northern Australia has experienced uneven population growth in recent years with areas such as Tropical North Queensland, Broome and the Pilbara experiencing growth of more than 0.5% while other areas such as Darwin have experienced decline. In areas where population has increased, the trend has been largely underpinned by economic activity related to agriculture, aquaculture and access to natural resources such as coal.

However, additional growth and investment in northern Australia is now constrained by reliable access to water.

The agricultural sector, which is vital to northern Australia and has an industry sector output valued at $8 billion (13.6% of Australia’s total annual production), currently has 8023 agricultural businesses operating in northern Australia (9.4% of all agricultural businesses operating in Australia). Of these businesses, 91.2% are located in Queensland, 4.6% are located in the Northern Territory and 4.1% are located in Western Australia which indicates that Queensland relies on higher intensity farming than the other two states.

Recent trade deals secured with China, Japan, Korea and Indonesia present new market access opportunities with the Cairns, Broome and Darwin International Airports providing direct air access to these markets, where agricultural exports underpin sustainable tourism flights.

However, while there are 16 million hectares of soil suitable for intensive agriculture, at a time when demand for fresh Australian produce is increasing, further growth is constrained by factors such as irrigation and access to supply chain infrastructure. In addition, urban demand for water continues to grow and infrastructure designed to cater for local populations is currently also catering for an estimated three million tourists visiting northern Australia annually.

To ensure the growing needs of northern Australia can be met, an effective and multifaceted water supply strategy is required.

At the present time, four significant water supply and infrastructure projects are considered essential enablers: • Nullinga Dam (Far North Queensland) • Hells Gate Dam (North Queensland) • Urannah Water Scheme (Mackay, Isaac and Whitsunday Region) • Rookwood Weir (Central Queensland)

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BACKGROUND

On the back of record drought periods in Australia, water security and food security have become priority national policy issues, leading to controversial decisions around water allocations and infrastructure. In recognition of this, in 2019 the Federal Government expanded the National Water Infrastructure Development Fund by $500 million to more than $1 billion, adding to the existing $2 billion for the National Water Infrastructure Loan Facility program.

The combined investment opportunity of more than $3 billion is designed to support State and Territory Governments and private project partners to build new water infrastructure, boosting water security and growing social and economic opportunities, especially in regional areas.

In strengthening the role of northern Australia as a food bowl, substantial feasibility work has progressed in the past three years to explore new agricultural development opportunities. However, while more than $680 million has been committed in northern Australia to identify and build water infrastructure, no projects have been delivered on the ground with funds largely tied to feasibility and business case work. With many of these studies now coming to a close, there are clear priorities for progressing environmental impact and construction activities and a coordinated approach to development is required.

NULLINGA DAM: The Queensland Government, through Building Queensland, has released a detailed business case showing costs for a 74,000ML standalone dam at $1.068 billion. The project will require shared State and Federal investment of $854 million on top of industry contributions of $213 million (based on $2900ML price). A Queensland Department of Agriculture and Fisheries study showed agricultural output on the Tablelands grew 30% in four years to $552 million. Nullinga Dam would unlock additional agricultural production worth around $200 million per annum. The Queensland ALP Government has announced it would ‘protect’ the proposed dam site but would investigate alternative water supply solutions such as the North Johnstone River diversion scheme in preference to Nullinga Dam. The diversion scheme is considered a viable short-term option to stimulate the economy, delivering up to 50,000 ML with a low capital cost.

NAA RECOMENDATION

However, longer-term Nullinga Dam will be required to service the growing urban water supply needs of the region.

HELLS GATE DAM: The Hells Gates Dam Feasibility Study confirmed the viability of the $5.35 billion irrigated agricultural and power project on the upper Burdekin River.

The Federal Government has committed $54 million towards Phase 1 of the Project which includes $30 million for the first stage of Big Rocks Weir at Charters Towers.

The remaining $24 million is for detailed engineering, construction, enhanced economic modelling works, environmental surveys and satisfaction of cultural heritage interests.

The project comprises a 2110 GL dam, a pumped hydroelectric scheme of up to 1200 MW, a 20 MW solar farm, a 15 MW run-ofriver hydro facility and a pipeline from Hells Gate Dam to Ross River Dam. On completion, the dam has the potential to redefine northern Queensland’s agriculture sector, underpinning long term export market growth and investment. A detailed Business Case, inclusive of a comprehensive Environmental Impact Statement (EIS) is currently being led

by Townsville Enterprise.

URANNAH WATER SCHEME: The Urannah Water Scheme is a large-scale dam, irrigation and renewable energy generation scheme (hydro power) located approximately 90km west of Mackay in north Queensland. Over 40,000 hectares of irrigation land would be supported by the scheme together with more than 1000 MW of renewable energy production and 150,000 ML storage capacity.

On completion, the scheme will deliver water security for farming, agricultural and industrial land across the Mackay and Whitsunday regions with the ability to gravity feed water to the Bowen and Galilee Basins. Under the feasibility component of the National Water Infrastructure Development Fund, the Australian Government has committed $10 million in funding to the Urannah Dam Business Case and Approvals Feasibility

Study. The dam would sit within an expanded regional water grid that links three of the region’s four main water schemes (Bowen Broken WSS, Proserpine WSS and Emerald WSS). The project has an anticipated capital cost of $1,465 million and in addition to supporting agriculture, would support development of the resources and coal-mining sectors in the Bowen Basin.

ROOKWOOD WEIR: The Lower Fitzroy River Infrastructure Project (LFRIP), also known as Rookwood Weir, will improve water security for residential, industrial and agricultural users in Rockhampton, Gladstone and the Capricorn Coast. The Rookwood Weir will be located on the Fitzroy River, 66 kilometres south-west of Rockhampton and following construction, will be capable of supplying 76,000ML of water per annum. The project’s capital cost of $352 million and the ongoing operational costs of $55 million per annum have received Federal and State funding commitments (split 50:50), however construction has been delayed by the Queensland government. Expressions of Interest for project construction closed in October 2019 and will be followed by a tender process in early 2020. The project is expected to take four years to complete.

NEXT STEPS

Development of the four proposed water infrastructure projects would meet a range of State and National Policy objectives: • Expand northern Australia’s agricultural productive capacity – this is nationally significant given the impact of drought on food and water security in southern Australia; • Increase northern Australia’s contribution to GDP through an increase in agricultural production; • Diversify northern Australia’s economic capabilities to facilitate investment and reduce reliance on tourism; and • Strengthen Australia’s international competitiveness through proximity to Asia.

• That the Federal and State Governments commit to invest $854 million as a 50:50 contribution to the construction of Nullinga Dam with $10 million of Federal funds going towards an environmental impact statement.

• That, subject to completion of the business cases, the Federal Government works with the Queensland Government to facilitate and coordinate the development approval processes for Hells Gate Dam and the Urannah Water Scheme and commit to funding the capital costs (split 50:50) as determined through the business cases.

• That the Federal and State Governments deliver on the commitment to invest $352 million in capital costs and $55 million per annum in ongoing operational costs for Rookwood Weir (split 50:50) by fast-tracking project construction.

Sources: ABS 3218.0 - Regional Population Growth, Australia, 2017-18 ABS 2015-16 Agricultural Census and ABARES Agriculture in northern Australia Tourism Research Australia: International Visitors and Spend by State 2018

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FEDERAL ELECTORATES: LEICHHARDT, KENNEDY, HERBERT, DAWSON, CAPRICORNIA, FLYNN, MARANOA, LINGIARI, SOLOMON, DURACK

ROADS OF STRATEGIC IMPORTANCE BRIEFING NOTE SUMMARY • The Bruce Highway has seen unprecedented Federal and State investment since 2013, however many future projects are scheduled to start after 2023. It is essential these be brought forward to 2019-2023 to address critical congestion and safety issues across central and northern Queensland and to stimulate badly needed jobs.

• To maximise the benefits provided by Bruce Highway upgrades, a number of corresponding catalytic projects are needed: a strategic transport plan to deliver vastly improved Bruce Hwy between Cairns and Townsville; $144 million for Stage 5 upgrades to the Townsville Ring Road; upgrades to inland connections such as the Peak Downs Highway ($50 million); and a Business Case for Kuranda Range Road ($21 million).

• Under the Roads of Strategic Importance program, the Federal Government has committed $235 million toward Tanami Road upgrades.

However, an additional $330 million is required to bring the entire corridor upgrade to completion.

• To complete the sealing of the North West Queensland section of the Gulf Savannah Way, an additional $186 million Federal Government commitment is required.

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THE ISSUE

BACKGROUND

An integrated and efficient road transport network is critical for economic stability and growth across northern Australia. With a geographically dispersed population of 1.3 million people, the road network underpins the economy and is vital to ensuring accessibility to markets (export and domestic) and to essential services such as health, education, retail and community facilities.

Due to population growth in urban regional centres, the road transport network faces increasing pressure, particularly on road networks in and out of cities such as Townsville, Mackay and Cairns which act as main distribution hubs for their respective regions. In addition, meeting the growing demand for freight has strained existing infrastructure, impacting transport costs and service levels across the northern Australian supply chain where major highway networks often remain unsealed. The strain has been exacerbated by the need for the transport network to concurrently cater for industry, commuters and tourists, and by resilience gaps whereby roads are frequently impacted by weather events.

BRUCE HIGHWAY: The Bruce Highway is part of the National Highway A1, providing Queensland’s vital link between 11 coastal ports from Brisbane to Cairns and supporting around 58% of the state’s population.

The 1700 kilometre highway supports the transport of freight into and out of inland production areas and provides access to many coastal tourism attractions, making it a vital road for the self-drive tourism market.

It also serves as a local commuter road for many regional communities.

While the Federal Government has committed $10 billion through the Bruce Highway Upgrade Program to deliver priority upgrades along the route, to maintain and grow regional competitiveness through improved productivity, a number of corresponding catalytic projects are still needed. These include a strategic transport plan to deliver vastly improved access between Cairns and Townsville, $144 million for Stage 5 upgrades to the Townsville Ring Road (North Queensland), and investment in vital inland connection roads such as $50 million to upgrade pavement and bridges on the Peak Downs Highway (Central

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Queensland) and $21 million to prepare a Business Case for Kuranda Range Road (Far North Queensland).

TANAMI ROAD: The Tanami Road links Halls Creek in Western Australia to Alice Springs in the Northern Territory and is the most direct route from the Kimberley region to Alice Springs. The 1053 kilometre road crosses the expanse of the Tanami Desert and being an unsealed and isolated route, is closed for much of the wet season with sections often cut-off at short notice due to rain damage and/or flooding. Through Halls Creek, the road connects Alice Springs to Broome via the Great Northern Highway and therefore underpins the economic potential of future investments in the minerals, resources and agribusiness sectors for northern Australia.

Under the Roads of Strategic Importance program, the Federal Government has committed $235 million toward Tanami Road upgrades which has since been matched by the States ($42.7 million Western Australia and $40m Northern Territory), bringing the total current commitment to $317.7 million.

However, it is estimated an additional $330 million is required to bring the entire corridor upgrade to completion. Based on current forward estimates, the majority of funds will not be released until 2023-2024, meaning the project will not be delivered until 2027 or beyond.

GULF SAVANNAH WAY: The Gulf Savannah Way crosses northern Australia, linking Cairns in Far North Queensland to Broome in Western Australia’s Kimberley. The 3700 km route provides access to 15 National Parks, five World Heritage areas and a host of natural attractions across the Top End. Considered to be in the top 10 greatest road trips of Australia, the self-drive tourism market delivers $69.8 million annually into the Gulf region, with 38% of visitors starting the journey in Cairns.

The North West Queensland section of the Gulf Savannah Way takes in 313 kilometres with almost 60% of the road already sealed.

However, a number of critical links are missing with additional upgrades needed and four major river crossings still required.

The Federal Government has promised $50m towards sealing the remaining Queensland sections of the Gulf Savannah Way but a further $136 million is needed to complete the works. The project will extend across North West Queensland, travelling along the Gulf of Carpentaria from Normanton to the Northern Territory border, passing through Burketown, Doomadgee and Hell’s Gate in Queensland and connecting to Wollogorang

in the Northern Territory.

NAA RECOMENDATION

NEXT STEPS While a number of significant investments have been announced that will continue to address safety and efficiency challenges on the road network in northern Australia, many of these projects are scheduled for commencement after 2023. To address the critical congestion and safety issues in the north it is essential that Bruce Highway Upgrade projects be fast tracked and that the following key projects be concurrently delivered through the Roads of Strategic Importance program: 1. Bruce Highway, Cairns to Townsville: Prepare a strategic transport plan that delivers a vastly improved highway between Cairns and Townsville by 2024.

2. Townsville Ring Road: Reallocate $144 million of projected Bruce Highway development savings toward fast tracking the completion of Stage 5 of the Townsville Ring Road project.

3. Peak Downs Highway: Invest $50 million to upgrade pavement and bridges via three main projects: (1) widening sections between Mackay and Nebo; (2) widening sections between Nebo and Clermont; and (3) replacement of eight narrow bridges between Nebo and Clermont.

4. Kuranda Range Road: Undertake Strategic Assessment of Service Requirements ($1 million) and Preliminary Evaluation and Business Case ($20 million) with a view to research completion by 2021.

5. Tanami Road: Commit an additional $330 million to deliver full project funding, facilitating efficient project planning, preparation and commencement of the corridor upgrade.

6. Gulf Savannah Way: Commit $186 million to be delivered through local councils over 10 years to complete the sealing of the Queensland section of the road.

• That through the Bruce Highway Upgrade Program, the Federal and Queensland Governments bring forward to 20192023 their commitments to upgrade the central and north Queensland sections of National Highway A1, and commit to developing a strategic transport plan that links Cairns and Townsville via a vastly improved highway.

• That through the Roads of Strategic Importance Fund, in 2020-2022 the Federal, Queensland, Northern Territory and Western Australian Governments commit to progressing economic development in northern Australia by investing in stronger supply chains through six catalytic road networks: Bruce Highway, Townsville Ring Road, Peak Downs Highway, Kuranda Range Road, Tanami Road and the Gulf Savannah Way. Sources: ABS, 3218.0 - Regional Population Growth, Australia, 2017-18 Department of Infrastructure, Transport, Cities and Regional Development, Bruce Highway Upgrade Program

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REGIONAL

MIGRATION

FEDERAL ELECTORATES: LEICHHARDT, KENNEDY, HERBERT, DAWSON, CAPRICORNIA, FLYNN, MARANOA, LINGIARI, SOLOMON, DURACK

ADDRESSING SKILLS SHORTAGES

NAA RECOMENDATION

THE ISSUE

BRIEFING NOTE SUMMARY • Evidence from regional Australia shows it can be hard to fill available jobs due to perceptions of poor infrastructure, services and amenity.

• A widespread skilled labour shortage is the most pressing issue impacting regional growth.

• Australian residents are showing they want to live in regional areas.

However, to encourage this trend to accelerate there is a need to rebalance infrastructure spending away from urban locations to improve the liveability of regional cities and towns.

• While the Productivity Commission’s review of remote area tax concessions is welcomed, removing these tax benefits in their entirety would have a negative impact.

Over the past five years there have been growing signs of worker shortages in many parts of northern Australia and while there are some variations in the types of skills needed, competition between regions for workers is increasing.

As at September 2019, there were 9785 advertised job vacancies in northern Australia: 521 in the Northern Territory; 1635 in Western Australia; and 7629 in Queensland. The majority of vacancies were for skilled workers such as medical practitioners, nurses, engineers and automotive technicians but a large number of low skilled labouring jobs were also on offer.

Evidence from the regions shows it can be hard to fill available jobs due to perceptions of poor infrastructure, services and amenity.

This is particularly evident in small rural towns and labour shortage is the most pressing issue impacting regional growth. It is also one of the most compelling reasons for regional and rural communities to welcome new migrants, and migrants can often find meaningful work not accessible to them in large cities where job competition is tighter.

While population growth has been centred on capital cities, many Australians are showing they want to live in regional areas with more than 400,000 choosing to relocate from the city to the regions in the five years to 2016. To accelerate this interest and ensure that relocation is a real and viable alternative to capital cities, there is a need to rebalance infrastructure spending away from urban fringe locations while continuing to develop strong policies that support regional migration. When combined, these initiatives improve the liveability of regional cities and deliver on the Federal Government’s northern Australia agenda for economic growth.

Sources:

Office of Northern Australia, Economic Data Indicators, Released August 2019 Regional Australia Institute, The Future of Regional Jobs, April 2019 Jobs Queensland, Anticipating Future Skills: Jobs growth and alternative futures for Queensland to 2022, October 2018 http://www.regionalaustralia.org.au/home/2019-future-regional-jobs/ http://www.regionalaustralia.org.au/home/regional-jobs-vacancy-map/

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• That the Federal Government allocate an additional $40 million ($100 million in total over four years) to the Regional Connectivity Program to deliver reliable connectivity across regional and remote Australia.

BACKGROUND

Northern Australia has an estimated resident population of 1.3 million people, making up 5.2% of the total Australian population.

The population is widely dispersed with the majority living in larger regional centres (56.7%) while 23.9% are in remote or very remote areas. This dispersion creates unique challenges for developing and maintaining a skilled workforce and for providing appropriate options for education and training.

Within this context, the importance of regional universities cannot be overstated as its been demonstrated that on completion of their studies, more than 55% of employed regional graduates remain in regional areas. Support for regional universities has therefore become a priority national policy issue, leading to controversial discussions around micro-degrees and the introduction of work-integrated courses that would enable students to enter the workforce sooner.

In recognition of these challenges, to aid in attracting more skills into the regions and to encourage more students to attend regional universities, in 2019 the Federal Government announced significant changes to the immigration program with the aim of strengthening regional economies. In addition, in July 2019 the Senate established a Select Committee into the Jobs for the Future in Regional Areas. The committee has been tasked with reviewing and reporting

on matters such as: new industries and employment opportunities that can be created in the regions; the use of renewable resources in northern Australia to build a clean energy export industry; and lessons learned from structural adjustments in the automotive, manufacturing and forestry industries and their impact on labour markets and local economies. The findings will be presented in December 2019.

NEXT STEPS

Policy that supports migration to the regions can be part of the solution to balancing population growth away from capital cities while supporting regional workforce planning and development. Successful examples include the Designated Area Migration Agreement’s (DAMA) secured by Darwin and Far North Queensland.

However, while the Productivity Commission’s 2019 review of remote area tax concessions and payments is welcomed (i.e. the zone tax offset (ZTO), the remote area allowance (RAA) and the fringe benefits tax (FBT)), it is wrong to assume that all the difficulties associated with remote living have now been overcome.

Removing these tax benefits in their entirety would have a negative impact on small business and on the cost of living for regional residents more broadly. Instead, replacing existing Zone A and B remote area

boundaries with boundaries linked to the ABS zones would be a more positive outcome.

Any savings made from a taxation policy restructure could then be redeployed into targeted programs that encourage investment in rural hubs centred on health care.

Additional policy options to consider to include: • to allow the attraction of skills in the areas needed most by the regions (such as medical practitioners and engineers), lift the occupation restrictions attached to existing Designated Area Migration Agreements • to encourage people to enter the workforce sooner, continue to expand and initiate work-integrated courses, advanced apprenticeships and university based micro-degrees • to assist local economies to transition from dependence on declining sectors, commit to initiating the programs identified through the Jobs for the Future in Regional Areas Senate review • to deliver improved digital connectivity for the agribusiness sector and for remote communities more broadly, increase funding for the Regional Connectivity Program • to encourage greater visitation and spending in the regions, continue to expand and support the Working Holiday Maker program to allow for longer periods.

• That to accelerate economic growth and improve workforce retention in northern Australia, the Federal Government provide more flexibility with annual caps and with concessions for occupations eligible for sponsorship under the Darwin and Far North Queensland Designated Area Migration Agreements.

• That following completion of the Productivity Commission remote area tax concessions review, the Federal Government commit to redeploying saved funds into targeted policy programs that deliver investment in rural hubs anchored by health care services.

• That to drive tourist visitation to the regions to stimulate spending and attract new potential residents, the Federal Government expand the Working Holiday Maker program to allow for longer periods of continuous work in regional areas for tourism.

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INDUSTRY

DEVELOPMENT

FEDERAL ELECTORATES: LEICHHARDT, KENNEDY, HERBERT, DAWSON, CAPRICORNIA, FLYNN, MARANOA, LINGIARI, SOLOMON, DURACK

RESOURCES & MINING BRIEFING NOTE SUMMARY • Australia holds world-class deposits of iron ore, oil and gas, lithium, uranium, bauxite and diamonds, and mineral exploration and expansion activities are fundamental to the future success of the Australian mining industry and in particular, northern Australia.

• The resources sector is a strong and steady employer, however growth has been constrained by inconsistent policy decisions across Federal and State Governments.

• It is vital that the Federal, Queensland, Northern Territory and Western Australian Governments define their position regarding the development of the mining industry in Australia and remain consistent in their messaging.

• The Federal and Queensland Governments, having provided the major approvals needed for Carmichael Mine need to work together to progress the project and unlock an estimated $40 billion in additional investment in the Galilee Basin more broadly.

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NAA RECOMENDATION

THE ISSUE

With concerns raised by international investors around Australia’s sovereign risk in the development of resource projects, and in particular at present the Galilee Basin, it is vital to gain clarity around Federal and State Government positions in relation to support for the mining and resource sector.

Australia holds world-class deposits of iron ore, oil and gas, lithium, uranium, bauxite and diamonds, and mineral exploration and expansion activities are fundamental to the future success of the Australian mining industry and northern Australia in particular.

For the 2016-2017 financial year, total mineral exploration expenditure was valued at $1.6 billion. In northern Australia, expenditure by state consisted of $1028.3 million in Western Australia (66% of total expenditure), $207.1 million in Queensland (13%) and $78.4 million in the Northern Territory (5%). In 2017-2018, exploration expenditure in Australia rose by 20% to $2 billion but remained well below the peak of $4 billion recorded in 2011-2012.

While current exploration expenditure is consistent with long-term historical averages, activity is largely related to exploration at existing mines (brownfields) rather than the identification of resources at new sites (greenfields), which demonstrates that future opportunities are being constrained by the lack of consistency in Australian mining industry policies.

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BACKGROUND

The importance of the mining and resource sector to the northern Australian economy cannot be overstated. In Queensland alone, one in eight jobs and 14,200 businesses are linked with the industry. The resource sector is also responsible for contributing one in every five dollars generated by the Queensland economy.

The resources sector is a strong and steady employer of Queenslanders, despite the fact that Queensland’s unemployment rate is among the highest in Australia. In 2017-2018, the sector delivered $5.2 billion in wages and salaries to approximately 35,649 direct fulltime resident employees, representing an average salary level across the industry of approximately $147,039 per annum.

In addition, there were 18,367 fulltime equivalent contract workers employed in the resource sector in Queensland. Over 8,000 of these jobs were based in the State’s capital of Brisbane.

The Galilee Basin is a 247,000 square kilometre thermal coal basin in the central region of Queensland. It is one of the largest untapped coal reserves on the planet and existing proposed coal mining leases have a combined footprint of approximately 1.38% of the entire basin. Coal mining leases within the Galilee Basin have near term open-cut and long-term underground resources. The opening of the Galilee Basin will generate billions of dollars in taxes and royalties for

the national and Queensland economies and create thousands of jobs; importantly many of these employment opportunities will be delivered to struggling regional communities.

The most advanced proposal associated with the development of the Galilee is Adani Mining’s Carmichael Mine. According to the Office of the Chief Economist’s December 2018 update, if the six major projects in the Galilee were to proceed as currently configured, the projects would have a combined cost estimate of nearly $40 billion. This would help to fund more schools, hospitals and public services in our communities, plus support 13,900 jobs during construction and 12,803 jobs during operation. The Adani project will be the catalyst to the realisation of all six mines.

NEXT STEPS

After eight years of approvals and courts upholding judgements to support the opening of the Galilee Basin, of which the Carmichael Mine is critical, it is noted that Governments of both persuasions have allowed tenements and approvals to progress for up to six additional Galilee projects.

A sustainable future in mining is critical to the future of northern Australia and in particular the Galilee Basin. In the past, well paid mining jobs and investment have experienced bipartisan support and have underpinned regional development, with the

Bowen Basin, Pilbara Region and North West Minerals Province significantly contributing to the wealth of the nation.

To capture these opportunities for the future, both the Federal and State Governments must provide investment security and consistency in decision making to the Australian mining sector, offering a clear and consistent pathway to approvals to minimise policy ambiguity and sovereign risk.

In addition, to encourage continued resource exploration investment the following key initiatives are proposed: • Extend Geoscience Australia’s $100.5 million Exploring for the Future program beyond its initial four years (2016-2020).

• Initiate industry partnership programs to foster the development of new exploration technologies and data analysis tools.

• Retain and expand the CSIRO Mining and Manufacturing program to drive efficiency and productivity gains across the minerals sector value chain.

• Extend the Australian Tax Office Junior Minerals Exploration Incentive (JMEI) program beyond its initial four years (20172021), encouraging ongoing investment in small minerals greenfields exploration. The JMEI has consistently been oversubscribed which demonstrates the importance of this initiative to the sector.

• That the Federal, Queensland, Northern Territory and Western Australian Governments define their position regarding the development of the mining industry in Australia and remain consistent in their messaging.

• Having granted key approvals, the Federal and Queensland Governments provide ongoing support to facilitate the Carmichael Mine project as the principal catalyst in kickstarting development across the Galilee Basin.

• That the Federal Government re-invest in and extend the Geoscience Australia Exploring the Future and the Australian Taxation Office Junior Minerals Exploration Incentive programs beyond their initial four years Sources: Geoscience Australia: Australian Mineral Exploration Expenditure for 2016–17 Townsville Enterprise State Government Budget Submission, 2019

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