Advance Cairns State Budget Submission 2019-2020

Tropical North Queensland

State Budget Submission 2019 – 2020

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Michael Healy MP and Minister for State Development, Manufacturing,Infrastructure and Planning Cameron Dick MP meet with Advance Cairns CEO Nick Trompf at Parliament House.

Queensland Parliament, 13 November 2018

Advance Cairns is the peak independent non-government advocacy and economic development organisation for Tropical North Queensland.

We work with a long-term vision to create a resilient and prosperous TNQ, provide apolitical leadership and create a unified voice for the region.

FROM THE CHAIRMAN AND THE CEO Trent Twomey CHAIRMAN

Tropical North Queensland (TNQ) is a vibrant, multidimensional region with a growing economy and a motivated and skilled workforce. We have a world class tourism industry, diverse agricultural sector, emergent manufacturing and construction sectors and a rapidly growing research and education portfolio.

Our experience and expertise in sustainable design and construction, bio-security, and tropical health and medicine, combined with being home to two universities at the cutting edge of research and innovation, an international airport, shipping port and close proximity to our Asian neighbours, sees us perfectly positioned to attract new industry and investment.

Tourism growth over the past four years, as well as recent associated infrastructure spending, has created much-needed jobs – however this has not yet led to a broader based economic rebound, particularly in the rural and remote regions surrounding Cairns.

Through strategic State Government investment, diversification of the TNQ economy can be accelerated and looking ahead, the decisions made in 2019-2020 will shape the agenda for the 2020 Queensland State election.

Working with other key regional agencies including the Cairns Chamber of Commerce, Regional Development Australia and Tourism Tropical North Queensland, we have therefore identified a list of infrastructure and policy projects critical to the continued economic development of the Tropical North.

Nick Trompf CEO

In selecting priority projects for the region, Advance Cairns recommends the following priority projects: • $90 million to progress to Stage 2 of the Cairns University Hospital; • Delivery on the $176 million 2017-2018 budget commitment to expand Cairns Convention Centre; • $365.5 million to upgrade the Western Arterial section of the Cairns Ring Road; • $100 million split 50:50 with the Federal Government to secure four airline attraction support packages; • $100 million split 50:50 with the Federal Government to ensure the Cairns Marine Precinct has capacity to service future Naval and industry needs; • $37.2 million split 80:20 with the Federal Government to seal remaining sections of Gulf Savannah Way in Queensland; • $425 million split 50:50 with the Federal Government to progress Nullinga Dam to construction phase; • $13.3 million towards the Cairns Gallery Precinct; • $1.5 million to support development of a TNQ Strategic Energy Sector Investment Framework.

We look forward to discussing these projects in detail.

• admin@advancecairns.com • PO Box 3065, Cairns QLD 4870 • Ph: (07) 4080 2900

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ABOUT THE REGION Tropical North Queensland Tropical North Queensland (TNQ) covers a vast and economically diverse area. The region stretches from Cardwell in the south to the Torres Strait in the north, and west to the Northern Territory Border. It is Queensland’s largest region, covering over 20% of the state and 26 local government areas. The estimated resident population as at June 2017 was 275,673. Key industries include health, tourism, agriculture, mining and construction. In 2018 the TNQ GRP was $15.5 billion, up 2.7% on 2017 figures.

Cairns, the administrative and health services centre for TNQ, is ideally positioned at the gateway to the Asia Pacific and the Great Barrier Reef.

Cairns Airport, the busiest of Australia’s regional airports, handles in excess of five million passengers a year. It has connectivity to 11 international destinations and an extensive domestic network serviced by an array of carriers. Regional tourism has seen a return to strong growth numbers over the last three years with an estimated contribution of $3.1 billion to the regional economy.

The Cairns Marine Precinct is home to a large marine services sector that includes a variety of leisure, fishing, tourism and cargo vessels, local and international cruise ships and luxury yachts. It is also home to HMAS Cairns, one of only five operational naval bases in Australia.

The region’s growing agricultural sector contributes over $2.7 billion a year to the TNQ economy with livestock, horticulture and cropping, fishing and forestry being its main industries, while the mining sector continues to make a major economic contribution ($1.05 billion in 2017-2018) as does construction, education and health care.

RECOMMENDED INVESTMENT SUMMARY Unlock the potential Tropical North Queensland has significant opportunities for growth and diversification with the key to success being location and connectivity. To achieve our vision of a prosperous, productive and sustainable city and region, Advance Cairns is seeking Palaszczuk State Government commitment to the following priorities.

Cairns University Hospital

Cairns Convention Centre

Cairns Ring Road

$90 million

$176 million

$365.5 million

Cairns Aviation Route Expansion

Cairns Marine Maintenance Precinct

Gulf Savannah Way

$50 million

$50 million

$37.2 million

Nullinga Dam

Cairns Gallery Precinct

Energy Sector Framework and UTP

$425 million

$13.3 million

$1.5 million

Infrastructure Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

ENABLING INFRASTRUCTURE

Cairns University Hospital - Research, Education and Innovation Centre THE ISSUE Clinical research and education services are critical to servicing the future health needs of the growing population in Tropical North Queensland (TNQ). Establishing a Research, Education and Innovation (REI) Centre in Cairns is essential to ensuring skilled health workers are attracted to, and remain in the region.

To deliver the strategic objective of a Cairns University Hospital, increased capability and capacity in translational and clinical trial research is required. The Cairns and Hinterland Hospital and Health Service (CHHHS) Research Excellence Plan 2018-2022 identifies the following areas for greater focus and expertise in research: • Aboriginal and Torres Strait Islander (ATSI) health; • Tropical health and medicine; • Healthcare data linkages and health service models of care; and • Equity of access to healthcare for patients with rheumatic heart disease, sexually transmitted infections, renal disease, diabetes and blood borne viruses.

Briefing Note Summary A Research, Education and Innovation (REI) Centre in Cairns is essential to ensuring skilled health workers are attracted to, and remain in the region.

To deliver on the vision for Cairns University Hospital, a new five-storey REI facility is proposed on land adjacent to the Cairns Hospital.

A Stage 1 investment of $60 million has Federal bi-partisan support.

A Stage 2 State investment of $90 million is sought to progress the REI Centre to design and construction phase.

The need for more bed space is urgent with the Emergency Department facing unprecedented pressure - a record 254 patients were examined in one day during a month of Code Yellow situations (February 2019).

To progress the strategic vision, the proposed REI Centre will assist the CHHHS to address these research shortfalls, and provide opportunities for ongoing clinical advancement for its patients and its workforce. The centre will also allow for research and education staff to be relocated from the Hospital’s A Block, freeing up that space for clinical use.

In addition to clinical research, the REI Centre will house a clinical education facility and a virtual care facility to support the delivery of telehealth patient services. This aligns with James Cook University’s (JCU) vision of creating a Cairns Tropical Enterprise Centre (CTEC), which received a $60 million bi-partisan commitment from the Prime Minister and Opposition Leader on 21 January 2019. The Stage 1 funding will progress the acquisition of land for the REI and enable JCU to establish the CTEC facility in the Cairns University Hospital precinct.

BACKGROUND In 2017-2018, the Cairns Hospital had 130,174 presentations to its emergency department and 103,731 hospital admissions. In February 2019, the emergency department faced unprecedented pressure with more than 200

• admin@advancecairns.com • PO Box 3065, Cairns QLD 4870 • Ph: (07) 4080 2900

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Infrastructure Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

patients presenting every day except one, leading to a record 254 patients in one day. Due to estimated population growth of around 1.4 per cent per annum, and the large cohort of TNQ residents aged 40-55 years, it is expected that demand for CHHHS services will continue to increase. This will require continued investment in specialised training for the local health workforce and current planning predicts an extra 152 inpatient beds will be needed by 2028.

The proposal for a five-storey REI facility has broad partner support and seeks to build on successive government investments. CHHHS, supported by the Northern Queensland PHN, JCU and Advance Cairns, is collectively seeking to improve the ability of Cairns to build its own health workforce and support continuous quality improvement in health care. The proposed CHHHS facility will be complementary to, and supportive of, broader research developments in Townsville, and will complement the Tropical Australian Academic Health Centre, for which CHHHS is a major partner.

NEXT STEPS CHHHS master planning has identified the need for a new clinical research facility adjacent to the existing Cairns Hospital. The new facility will allow for the relocation of research and education staff (currently housed within Cairns Hospital) to free up space to be re-purposed for clinical use.

The new building will include research laboratories, education and teaching spaces, an auditorium and office spaces for research, education and executive staff.

To deliver on the vision for the REI Centre, a strategic land investment adjacent to the Cairns Hospital is required. A suitable site has been identified with approximately 18,627m2 of commercially zoned land. Of this, 16,347m2 is currently owned by one entity and consists of 4,823m2 developed for commercial use and 11,524m2 of vacant land. The remaining 2,280m2 is a land reserve owned by Cairns Regional Council.

The Stage 1 investment of $60 million will progress the acquisition of this land. A Stage 2 investment of $90 million is sought to progress the REI Centre to design and construction phase.

OUR RECOMMENDATION That in 2019-2020 the Queensland Government commit $90 million in funds to Queensland health to progress to Stage 2 of the Cairns University Hospital, enabling establishment of a Research, Education and Innovation Centre in Cairns.

Estimated project cost $150 million

2019-2020

2020-2021

Recommended State Investment

$45m

$45m

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Infrastructure Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

ENABLING INFRASTRUCTURE Cairns Convention Centre THE ISSUE Expanding and refurbishing the Cairns Convention Centre will ensure that Tropical North Queensland continues to secure national and international convention opportunities. Convention and events tourism is an important economic driver for TNQ and in addition to enabling conference and event attraction, revitalising the centre will activate private investment in supporting infrastructure in the region.

As part of the 2017-2018 Budget, the Queensland Government’s Regional Action Plan for Far North Queensland announced that: “The Cairns Convention Centre is a significant venue for the Cairns area and plays an integral role in the Cairns regional economy, attracting national and international conferences, conventions, concerts and sporting events... The Government is building on its commitment to the Centre in the 2017-18 Budget, providing $176 million over two years from 2018-19 to refurbish and expand the Centre, following consideration of a business case.”

Briefing Note Summary Expanding and refurbishing the Cairns Convention Centre will bring 25 additional large events to Cairns annually.

The project will deliver $30 million in additional economic benefit annually, creating 11 direct and 350 indirect jobs from year three. 300 workers will be employed during construction.

To retain business confidence, the Palaszczuk Government must deliver the $176 million commitment by commencing construction in May 2020 as planned.

When construction commences, the investment will activate private investment in support infrastructure in the region.

Through this announcement, the Palaszczuk Government recognised that refurbishing the Cairns Convention Centre will allow it to remain contemporary and competitive, retaining its market share in the national and international convention and events market into the future. This was reinforced in 2018 by Deputy Premier and Treasurer Jackie Trad, who described the centre upgrade as an “incredibly important project for the future of tourism in the region.”

The $176 million committed by the Palaszczuk Government for the expansion and refurbishment is subject to a detailed business case, now nearing completion. Construction is due to commence in May 2020, three years after the project was initially announced.

BACKGROUND The extension of exhibition halls and associated meeting space at the Cairns Convention Centre will allow centre operator AEG Ogden to grow the business and increase the economic impact of the conference and events sector in the region. Events at the centre currently contribute around $80 million annually to the Cairns economy through direct spending by delegates. On completion of the expansion, the centre is expected to accommodate an extra 20,000 visitors per year, which will deliver around $30 million in additional economic impact annually.

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Having been awarded the AIPC APEX Award for World’s Best Congress Centre in 2014 and 2004, the centre brings worldwide recognition to Cairns and to Queensland and helps to drive the growth of supporting tourism services.

The expansion is expected to bring 25 additional large events to Cairns annually, attracting world leaders in their field to TNQ. It will also provide James Cook University and CQUniversity new opportunities to bid for, facilitate and host academic events that improve the reputation, profile and funding opportunities for north Queensland’s universities.

Through the attraction of new events, the refurbishment will drive employment as the planned new exhibition space and meeting rooms have potential to add 11 direct and around 350 indirect jobs from year three. In addition, more than 300 workers are expected to be employed during construction phase.

The attraction of more visitors to the region will be a catalyst for private investment, with continued hotel refurbishments and new hotel infrastructure a likely outcome.

NEXT STEPS The detailed business case is due for completion in June 2019 and has taken into account essential works, such as roof replacement and equitable access upgrades, and refurbishment works, such as upgrades to the decor and audiovisual (AV) capabilities.

Preliminary work is now underway and full scale construction is scheduled to commence in May 2020, with an estimated completion date of December 20211.

1

Source: Queensland Department of Housing and Public Works (2018)

OUR RECOMMENDATION That in 2019-2020 and 2020-2021 the Queensland Government delivers on the 2017-2018 Budget commitment of $176 million to expand and refurbish the Cairns Convention Centre with construction to commence in May 2020.

Estimated project cost $176 million

2019-2020

2020-2021

Recommended State Investment

$88m

$88m

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Infrastructure Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

ENABLING INFRASTRUCTURE Cairns Ring Road THE ISSUE Access to the Cairns Port from the north and west of Cairns, and access between the seaport and Cairns Airport, is constrained by the need to travel directly through the Cairns CBD. There is significant traffic congestion on the Captain Cook Highway and along the Western Arterial Road, both of which lead from the northern beaches into the city, and this makes the transport of freight items to, from and between the key port locations difficult, as well as causing substantial commuter delays.

While there is significant potential to expand export activities for the Tropical North Queensland region, particularly to Asian markets, connectivity between ports is a critical enabling factor in the future development of Cairns as an export and service hub.

The need to improve connectivity between ports was acknowledged by the Queensland Minister for Transport and Main Roads, Mark Bailey, who wrote to the Deputy Prime Minister, Michael McCormack on 19 September 2018 to request an extension of the national highway in Cairns as part of the 20182019 NLTN Determination Review.

It is expected that this extension will be granted, releasing the State Government obligation for $287 million in funding for the required Captain Cook Highway upgrades.

Briefing Note Summary The National Highway A1 is expected to be extended from the Cairns CBD to the Smithfield roundabout, connecting the CBD with the airport and the Kennedy Highway, actioning Stage 1 of the Cairns Ring Road project.

Federal investment of $287 million is anticipated for phase one of the Cairns Ring Road project, releasing the expenditure from the State budget.

The Western Arterial section of Cairns Ring Road adjoins the northern end of the expected extension of National Highway A1. The road is a vital link between the north and south of Cairns and carries 36,550 vehicles per day.

The Western Arterial section of Cairns Ring Road is the only flood-proof highway access to the northern suburbs.

A Palaszczuk Government investment of $365.5 million is required to upgrade the Western Arterial section of the Cairns Ring Road.

However, the Western Arterial section of the Cairns Ring Road carries 36,550 vehicles per day and will not be included in the National Land Transport Network extension. Upgrading this section is essential to connecting Cairns’ freight routes with the region’s premier agriculture producing areas (Atherton Tablelands, Cape York Peninsula and Mossman), while also meeting demand for daily commuter traffic.

BACKGROUND The Bruce Highway is part of the National Highway A1, providing the vital link between Cairns, other Queensland coastal cities and Brisbane. The National Highway A1 currently terminates in the Cairns CBD at the corners of Comport and Draper Streets, and is expected to be extended to the intersection of Captain Cook and Kennedy Highways and Mount Milman Drive, Smithfield, north of Cairns, leading to a major upgrade of the Captain Cook

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THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

Highway. However, the effectiveness and safety of the road transport network in and around Cairns will remain inefficient until the State-owned Cairns Western Arterial Road is also upgraded.

The Cairns Arterial road network has been underfunded for many years in terms of capacity upgrades, with residential and industrial land development outpacing road project investments made by the Department of Transport and Main Roads. In January 2019, Cairns Regional Council identified a number of underfunded State owned roads and listed them as priority infrastructure projects for the region. The Cairns Western Arterial Road is a significant component of this list as the road is congested on a daily basis and when the Captain Cook Highway is flooded during wet season or natural disaster, is the only flood free access route between Cairns, the northern beaches and Kennedy Highway.

NEXT STEPS Investment in key roads infrastructure is critical to ensuring sustained economic growth for the region, which will lead to greater diversity in incomes and job security. The required infrastructure upgrades can be achieved through: 1. Creating a ring road that traverses the Western Arterial Road to the west of the city, connecting back with the northern end of the Bruce Highway and linking the northern-most part of the National Highway to the Cairns Port and Airport; 2. Upgrading three major intersections along the Western Arterial Road through a combination of overpass, traffic signal and slip lane projects; 3. Duplicating the full length of the road to increase traffic lanes from 1 to 2 in each direction; 4. Duplicating the Barron River Bridge and the Kamerunga Road overpass; and 5. Constructing the McCoombe Street connection road between Ray Jones Drive and Mulgrave Road.

An investment of $365.5 million is estimated to be required to cover the cost of the project.

OUR RECOMMENDATION That the Queensland Government commits to funding $365.5 million for the Western Arterial Section of the Cairns Ring Road, to be invested over three years to 2021-2022.

Estimated project cost $365.5m Recommended State Investment

2019-2020

2020-2021

2021-2022

$122m

$122m

$121.5m

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Policy Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

DESTINATION DEVELOPMENT Cairns Aviation Route Expansion THE ISSUE Cairns is the equal fourth largest international visitor market in Australia, but lacks sufficient international airline capacity. Of the 900,000 international visitors to Cairns each year, approximately three-quarters arrive and/or depart on domestic flights, typically having to ‘back track’ via a southern capital.

The lack of direct international flights results in there being a large under-served demand of international travellers who have a desire to visit Cairns but choose not to due to inconvenient travel itineraries and the resulting cost of flying via intermediate ports.

Briefing Note Summary An international flight to Cairns is potentially a $200 million per annum export business.

There is unmet demand for at least four new daily flights to Cairns, worth $800 million per annum in economic benefit.

A new route has significant start-up costs during its first few years.

Other Australian airports, notably Melbourne, have successfully Cairns Airport is seeking to assemble four moved to a new growth trajectory by actively securing new direct airline support packages. international services. Stimulating international services to the extent that under-served demand was met would see Cairns’ market share of international passengers increase from its current low of 1.7% to 5%, in line with the market share it held for 15 years from 1990-1991 to 2005-2006, and provide $800 million per year additional economic benefit to the Tropical North Queensland economy.

Cairns Airport aims to address the current market distortion of international visitors accessing Cairns via domestic flights and to secure international services in line with demand. New aviation routes directly benefit tourism along with opportunities such as international education, growth in regional agricultural and aquacultural exports and the region’s aviation industry infrastructure and services.

BACKGROUND Cairns Airport is the nation’s seventh busiest in terms of combined international and domestic passenger movements. It handles around 130,000 aircraft movements and over 5.2 million passenger movements per year1. The airport is widely recognised as one of the most significant economic drivers in the TNQ region and its facilities are critical pieces of infrastructure.

Tourism is a major contributor to the TNQ regional economy, providing $3.2 billion annually of the regional GRP of $15.2 billion2. A large portion of visitors to TNQ arrive by air, making air travel vital to the region with air connectivity directly supporting the agriculture, education and resources sectors. Cairns is also a hub to provide services to remote communities.

1

Cairns Airport passenger statistics

2

https://economy.id.com.au/fnqroc/gross-regional-product

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Air connectivity to Cairns is key to the economic development of the region. A daily international wide-body flight to Cairns is a $200 million a year export business comprising $100 million of international visitor spend in TNQ, $50-150 million of agricultural produce sales, and more than 650 new jobs for the region.

In addition, there are significant flow-on benefits as other trade is enabled by new air routes. These benefits are widely dispersed across businesses in the region.

There is significant international visitor growth to Cairns that would be unlocked by additional capacity, without reducing passengers on existing domestic and international flights.

To unlock this growth, Cairns Airport is targeting four priority new routes: one each from the Middle East and Southeast Asia to serve Europe, one from Shanghai and one from North America. Together these would provide $800 million per year additional economic benefit to the TNQ economy. These benefits are widely dispersed across tourism, agriculture, education and other businesses in the region.

NEXT STEPS Southern Australian international gateways have grown rapidly from an increase in trade and travel over the past 10 years, driven primarily by the rise of the middle class in Asia. There is an opportunity for Cairns to capture its fair share of this growth, but conversely a risk that the potential economic benefits across many sectors will not be realised if new air connectivity is not forthcoming.

Establishing a new long-haul route is a significant investment for an airline, as the route reaches maturity over its first few years of operation. Airlines increasingly look to communities, private enterprise and governments to offset the risk and share the economic benefit by contributing to the start-up costs.

Cairns Airport is seeking Queensland Government support to be combined with industry, local and Federal Government support for the start-up of these four key routes.

OUR RECOMMENDATION Government funds are required to support the launch of new aviation routes and create brand awareness for long-term route sustainability.

Cairns Airport and Tourism Tropical North Queensland recommend that the Queensland Government contribute materially to the four $25 million airline support packages to drive $800m in economic growth for Tropical North Queensland. Cairns Airport and the Federal Government are the most significant other potential contributors.

This request is in addition to ongoing destination marketing support in source markets via Tourism Australia, Tourism and Events Queensland, and Tourism Tropical North Queensland.

• admin@advancecairns.com • PO Box 3065, Cairns QLD 4870 • Ph: (07) 4080 2900

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Steaming Times to Cairns Seaport @ 12 knots

Osaka

Tokyo

Shanghai Shenzchen

Gaungzhou

Taiwan

Hong Kong

Phillipines

Singapore

Guam

Manus Island

Port More Bali

Darwin

Weipa Kurumba

CAIRNS

Alice Springs

Perth

Townsville Mack Bris

Adelaide

Newc

Melbourne • admin@advancecairns.com • PO Box 3065, Cairns QLD 4870 • Ph: (07) 4080 2900

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S

AIR LINK & SHIPPING ROUTES DIRECT AIR SERVICE

SHIPPING LANES

STEAMING TIMES TO CAIRNS SEAPORT TRAVELLING AT 12 KNOTS NAUTICAL MILES

Auckland Brisbane Darwin Fiji (Suva) Guam New Caledonia (Noumea) Papua New Guinea (Port Moresby) (Manus Island) Solomon Islands Weipa

d

esby

TIME Days Hours

2120 846 1351 1890 2038

7 2 4 6 7

9 23 17 14 6

1304

4

13

474 1147 1024 673

1 4 3 2

16 13 8

Soloman Islands Port Vila

e kay sbane

Suva

Noumea

castle

Sydney

Auckland

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INDUSTRY DEVELOPMENT

Cairns Marine Maintenance Precinct THE ISSUE The Cairns Port is a critical enabler of the Tropical North Queensland economy. In addition to industry, it supports national strategic Defence and foreign policy initiatives in the South West Pacific and northern Papua New Guinea. The changing nature of and competition for international influence in the Indo-Pacific, particularly by China, emphasises the importance of Cairns’ strategic location for Australia.

The Cairns Marine Precinct currently services vessels from HMAS Cairns, Darwin, the United States and the Pacific Islands. The significant Defence and border force contracts managed out of the precinct ensure a skilled, permanent marine and engineering workforce of 4600 people all year round. The economic significance of the precinct is reflected in the shipbuilding and repairs sector specialisation ratio of 24.251 (Cairns LGA).

In addition to servicing Australia’s Defence fleet, Cairns is home to a large and diverse marine sector with 1603 commercial vessels registered across tourism, fishing and shipping, and an active cruising yacht squadron. The precinct also plays host to superyachts and cruise liners visiting the region.

To retain its vital workforce and meet the needs of this growing sector, Cairns requires additional marine maintenance and sustainment capability. This will enable the precinct to service both Defence and industry needs while providing growth, jobs and a secure future for TNQ families.

Briefing Note Summary The Cairns Marine Precinct is a national defence asset that employs 4600 people.

The Cairns LGA regional economy has a shipbuilding and repairs sector specialisation ratio of 24.25, highlighting the precinct’s importance to the economy.

In 2017-2018, the Federal Government invested $24 million to upgrade the capabilities of the Cairns Marine Precinct, leading to additional private investment of $30 million. Additional upgrades are required to ensure Cairns has capacity to service Naval and industry needs in the Pacific, including the sustainment and maintenance of OPVs. A Stage 2 commitment of $100 million is sought, split 50:50 between the State and Federal Governments - $1 million will be allocated to a precinct-wide business case.

Investment in the precinct complements the Queensland Superyacht Strategy 2018-2023.

Under an existing $24 million Federal Government commitment, Stage 1 of a Cairns Marine Maintenance Precinct upgrade is delivering wharves, hardstands, slipway extension and service upgrades. A commitment of $100 million is now sought for Stage 2, which will lead to significant increases in precinct capacity.

BACKGROUND The Cairns Marine Precinct has serviced the Defence, Border Force and marine industries for many years. Due to the strategic location of the port and the role it plays within national Defence, in 2017-2018 the Federal Government 1

Department of State Development, Manufacturing, Infrastructure and Planning. Manufacturing Hub Delivery Model: Cairns, Townsville, Rockhampton. November 2018.

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invested in upgrading the precinct through staged investment. The Stage 1 investment of $24 million acted as a catalyst for renewed business confidence, leading to an additional $30 million in private infrastructure investment, the creation of apprentice positions and an increase in permanent employment opportunities within the marine sector. The investment also acted as a catalyst for ‘skills cluster’ benefits in Cairns, with marine industry suppliers actively investing in advanced manufacturing and engineering to support the precinct upgrades.

While Stage 1 focused on enhancing and modernising shipyard services and essential port services, Stage 2 will focus on building capacity, enabling the attraction of new customers while servicing the needs of HMAS Cairns as Defence and border force maintenance requirements grow. Stage 2 will also complement and support the Queensland Superyacht Strategy 2018-2023 and the Ports North master planning process.

NEXT STEPS To ensure infrastructure meets the future needs of Defence and industry in the Pacific, Stage 2 investment of $100 million is required, with $1 million to be allocated towards the development of a whole-of-precinct business case.

The business case will complement and inform the master planning process Ports North is undertaking to ensure the precinct is firmly established as a sustainment and maintenance hub that services the needs for Australian Defence forces in the Indo-Pacific.

In addition, Government commitment is sought to secure the long term, continuous maintenance and sustainment programs in Cairns for Offshore Patrol Vessels (OPVs), Pacific Patrol Boats, Armidale Class Patrol Boats and Custom Cape Class Patrol Boats to complement existing contracts for Hydrographic Survey Vessels and Survey Motor Launches. This commitment will: • • • • •

Leverage the precinct’s current capability, ensuring value for money for the State and Federal Governments Support job creation and economic growth for Tropical North Queensland Offer a continuous Naval patrol boat sustainment solution Provide industry continuity and sustain marine capability in Cairns to service Defence needs in the Indo-Pacific Support ongoing innovation and development of marine industry expertise in northern Australia

OUR RECOMMENDATION That in 2019-2020, the State and Federal Governments commit $100 million in funds (split 50:50) for planning and infrastructure purposes to ensure the Cairns Marine Precinct develops with future capacity to service Defence, Border Force and industry needs across the Indo-Pacific.

Estimated project cost $100m Recommended Federal Investment Recommended State Investment

2019-2020 $50m $50m

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ENABLING INFRASTRUCTURE Gulf Savannah Way THE ISSUE The Gulf Savannah Way traverses Northern Australia, linking Cairns in Tropical North Queensland to Broome in Western Australia’s Kimberley. The route is approximately 3,700 km long, crossing 15 National Parks, five World Heritage areas and a variety of natural routes across the Top End. The North West Queensland section of the Gulf Savannah Way takes in 313km with almost 60% of the road already sealed, however there are critical missing links that require pavement upgrades, bitumen seal, minor realignment of substandard curves, concrete causeways and four major river crossings.

As large sections of the Savannah Way remain unsealed and flood prone, communities become isolated during the annual wet season which limits the economic value of this northern road link.

Upgrading the Queensland segment of the Gulf Savannah Way will require replacing existing substandard infrastructure with a 7.5m wide bitumen sealed pavement, with concrete causeways through creek crossings and raised floodways (using 1.2m high culverts) through major river crossings.

BACKGROUND

Briefing Note Summary The Gulf Savannah Way stretches for 3,700 km and links Cairns in Tropical North Queensland to Broome in Western Australia’s Kimberley.

Large segments of the Queensland section of the Savannah Way are unsealed and flood prone, isolating communities during the wet season and limiting the economic value of this northern road link.

Sealing the Queensland section of the Gulf Savannah Way is estimated to require an investment of $186 million, split 80:20 between the State and Federal Governments.

On completion, the entire length of the Savannah Way will be sealed in Queensland with improved flood resilience that supports local communities, improves tourism opportunities and increases commerce and agricultural prosperity.

Normanton to Burketown is approximately 221km with about 50% unsealed. This section requires pavement augmentation and bitumen sealing to 7.5m wide, some minor realignment, concrete causeways and a major culvert crossing at the Leichhardt River.

Burketown to Doomadgee is approximately 88km long and fully sealed but has two major river crossings at the Gregory River and Nicholson River which require some minor pavement, alignment and causeway improvements.

Doomadgee to NT Border is approximately 104km long with only 30% sealed. This section requires pavement augmentation and bitumen sealing to 7.5m wide, minor realignment and concrete causeways plus a major river crossing at Branch Creek.

NEXT STEPS Sealing the Gulf Savannah Way is estimated to require an investment of $186 million. Completing the project over a 10-year period with funds made available to local councils each year will allow the retention of a local workforce. The

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Infrastructure Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

estimated investment breakdown is as follows: • Normanton to Burketown - $100 million to be constructed progressively over 10 consecutive years.

• Burketown to Doomadgee - $30 million funded over 4 consecutive financial years (equally in years 1-4).

• Doomadgee to NT Border - $56 million to be provided in equal installments over the 10 year project period.

The project will extend across North West Queensland, travelling along the Gulf of Carpentaria from Normanton to the Northern Territory boarder, passing through Burketown, Doomadgee and Hell’s Gate in Queensland and connecting to Wollogorang in the Northern Territory.

OUR RECOMMENDATION That the Queensland and Federal Governments support the sealing and improved flood resilience of the western Queensland section of the National Highway by providing project funding at 80% Commonwealth and 20% State Government in accordance with the Commonwealth State Roads funding model.

That allocation of funds in the 2019-2020 Queensland Budget be distributed to the controlling Local Government Authorities in equal portions over a 10 year period from 2019-2020.

Estimated project cost $186m Federal Investment State Investment

Budget

Forwards

2019-2020

2020-2021

2021-2022

2022-2023

$14.88m $3.7m

$14.88m $3.7m

$14.88m $3.7m

$14.88m $3.7m

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Infrastructure Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

ENABLING INFRASTRUCTURE Nullinga Dam THE ISSUE North Queensland has enjoyed consistent population growth over the past 25 years1. This growth has been underpinned by the expansion of several industries including agriculture, fisheries, education, health and tourism. Consequently, investment in key water infrastructure is critical to service our sustained economic growth. Consistent with the Cairns Water Security Strategy (CWSS)2, the opportunity to assess and construct Nullinga Dam and associated infrastructure would provide long term water security for the wider region and enable growth in northern Australia.

The Queensland Government, through Building Queensland, is working with the Commonwealth Government to ensure the detailed business case is completed and released by the end of the 2018-2019 financial year, ensuring a clear link between the proposal and the future urban water and agricultural needs in the region.

The Nullinga Dam project will require shared State and Federal investment of approximately $850 million to facilitate construction. The project will also require bilateral Government support to facilitate and coordinate the development approval processes for the dam, with the Environmental Impact Study estimated to require a $10 million allocation of Federal funds.

Briefing Note Summary Nullinga Dam would unlock additional agricultural production worth more that $200 million per annum.

10,000 hectares of currently unirrigated cropping land suitable for irrigated agriculture has been identified adjacent to the Walsh River.

The CSIRO Northern Australia Water Resource Assessment (August 2018) identified that Nullinga Dam has the potential to ensure long-term security of the water supply for Cairns.

The project requires bilateral commitment and shared investment of approximately $850 million (split 50:50) to progress to construction stage.

BACKGROUND On the back of record drought periods in Australia, water security and food security are national policy issues. In strengthening the role of northern Australia as a significant food exporter, the purpose of Nullinga Dam is to facilitate future agricultural demand in the Mareeba-Dimbulah Water Supply Scheme (MDWSS)3 while also catering for future urban demand in Cairns and Mareeba. The current indicated storage capacity of the proposed dam is 365,000 megalitres, however Nullinga Dam could provide an additional 126,000 megalitres with enhanced design options.

While the Nullinga Dam project would provide both agricultural and urban water supply options, it has the potential to stimulate a number of other catalytic projects around its construction, including hydro, lake-surface solar and water treatment plants. The dam would unlock additional agricultural production worth around $200 million per annum.

1

https://economy.id.com.au/cairns/population

2

https://www.cairns.qld.gov.au/water-waste-roads/water/security

3

http://www.sunwater.com.au/schemes/mareeba-dimbulah

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Infrastructure Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

NEXT STEPS Under the Northern Australian White Paper the Federal Government committed $5 million toward assessing the viability of the Nullinga Dam proposal, but further resources are required to secure approvals and investment.

While funded by the Commonwealth, the detailed business case is being overseen by Building Queensland, with the report due to be released mid-2019. The proposed location is on the Walsh River, approximately 55 kilometres south-west of Cairns and 24 kilometres southsouth west of Mareeba. The dam site is nearby the existing Mareeba-Dimbulah Water Supply Scheme, which is currently supplied by Tinaroo Falls Dam. 10,000 hectares of currently unirrigated cropping land suitable for irrigated agriculture has been identified adjacent to the Walsh River4.

The Queensland Government is yet to acquire the land required for the dam.

4

Nullinga Dam and Other Options Preliminary Business Case (2017)

OUR RECOMMENDATION That through Building Queensland, the Queensland Government works with the Federal Government to ensure the detailed business case is completed and released by the end of the 2018-2019 financial year, ensuring a clear link to future urban water and agricultural needs in the region.

That in 2019-2020, the Queensland Government works with the Federal Government to acquire the land required for Nullinga Dam, and commits $425 million as a 50:50 contribution with the Federal Government for dam construction.

Estimated project cost $850m (Stage 1) Indicative Timeline* Recommended Federal Investment Recommended State Investment

2019-2020

2020-2021

2021-2022

2022-2023

Environmental approvals (EIS) $10m -

Environmental approvals (EIS) -

Environmental approvals (EIS) -

Detailed design and procurement $25m $25m

NB: Construction funds to flow from 2023-2024 *Source: Building Queensland Fact Sheet - Nullinga Dam and Mareeba Dimbulah Water Supply Scheme Improvements Project (2018)

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Infrastructure Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

DESTINATION DEVELOPMENT Cairns Gallery Precinct THE ISSUE Building on natural assets and a strong cultural heritage, Cairns aims to be recognised as the Arts and Cultural Capital of Northern Australia. This objective is embedded within the Cairns Regional Council’s Corporate Plan 2017-2022 and forms an integral part of the Council’s Strategy for Culture and the Arts 2022.

The Cairns Gallery Precinct project is an initiative of Cairns Regional Council and is strongly aligned with the Cairns 2050 Shared Vision, which was launched in partnership with industry stakeholders in 2018.

The project aims to connect three regionally significant heritage listed buildings in the Cairns City Centre (the existing Cairns Art Gallery, the Old Cairns Courthouse and the former Mulgrave Shire Council offices) and add a new exhibition gallery to create a dynamic, transformative and world class gallery precinct.

The Cairns Gallery Precinct project will have strong connections with other key arts and cultural infrastructure in the region including the Munro Martin Parklands, Cairns Performing Arts Centre, Centre of Contemporary Arts Cairns and the Cairns School of Arts Building (incorporating the Cairns Museum).

Briefing Note Summary The Cairns Gallery Precinct is an initiative that will ensure Cairns is recognised as the Arts and Cultural Capital of Northern Australia.

The project will connect three existing heritage listed buildings in the Cairns City Centre and add a new exhibition gallery to create a world class gallery precinct.

The project will generate $25.1 million in GRP and 167 jobs during the construction phase, and contribute $19.4 million per annum in GRP and support 179 full time jobs once operational.

Cairns Regional Council is seeking a tripartite funding arrangement for the project’s estimated $39.8 million capital cost with Federal, State and Local (Council) Governments to each contribute $13.3 million to the project.

BACKGROUND The Cairns Gallery Precinct will provide a vibrant and expansive arts precinct showcasing domestic and international touring exhibitions as well as contemporary local and indigenous art. The precinct will also provide community arts and cultural facilities including collaborative working and learning spaces, production spaces, civic function and events spaces and food, beverage and retail facilities.

The Cairns Gallery Precinct will provide a significant positive economic impact to the region during construction, adding $25.1 million in gross regional product and supporting 167 full-time jobs. Once operational, the precinct will add a further $19.4 million annually to gross regional product and support 179 ongoing full-time jobs.

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Infrastructure Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

These ongoing economic impacts reflect the fact that the Cairns Gallery Precinct will become a major attraction within the Cairns City Centre, supporting increased domestic and international tourism visitation, contributing positively to visitor length of stay and activating business and economic activity in the surrounding area. The project will also contribute a wide range of social and qualitative benefits to the communities of Cairns and Tropical North Queensland NEXT STEPS The estimated capital cost of the Cairns Gallery Precinct is $39.8 million and Council is seeking a tri-partite funding model for this capital cost with the Federal, State and Local (Council) Governments each contributing $13.3 million.

Council has lodged a Stage 1 Initial Application under the Federal Government’s Regional Growth Fund (‘RGF’) Program as an avenue to secure Federal Government funding. A direct request for $13.3 million in funding has also been made to the Hon Leeanne Enoch, Queensland Minister for the Arts and Council officers are working directly with representatives of the Minister’s Department to progress this funding request.

OUR RECOMMENDATION That under a tri-partite funding arrangement, the Queensland Government commit $13.3 million in the 2019-2020 budget in funding towards the Cairns Gallery Precinct’s estimated capital cost of $39.8 million.

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Policy Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

INDUSTRY DEVELOPMENT

Strategic Energy Framework and Uniform Electricity Tariff THE ISSUE Tropical North Queensland faces unsustainably high electricity costs to the detriment of regional industries, small to medium enterprises, and domestic consumers.

Given our proximity to two world heritage listed assets, the Great Barrier Reef and the Wet Tropics Rainforest, the vision for the region is energy sector security, affordability and a seamless transition to reduced carbon emissions. At present, the region suffers significant energy security, affordability and transition challenges, while also providing opportunities such as energy export.

Despite policy instability over the last decade, there have been major new investments in the region in wind, solar, biomass and hydro-power electricity generation. As more stable State and National energy policy frameworks emerge, to achieve energy security and affordability while also transitioning to reduced carbon emissions, TNQ will require a region-wide framework and bilateral Government support.

BACKGROUND

Briefing Note Summary Electricity prices are unsustainably high in TNQ and restrict economic growth opportunities.

The TNQ energy sector is defined by three distinct energy markets: (1) High Demand Fringe of Grid (Cairns); (2) Fringe of Fringe of Grid (Rural Towns/Properties across TNQ); and (3) Off-Grid (Remote Towns/ Properties).

In 2018-2019, the Palaszczuk Government’s CSO to support regional Queenslanders was $465 million. However, a 5% headroom charge is still applied state-wide which removes the benefit of the CSO in TNQ. A TNQ Energy Sector Framework is proposed which requires shared investment of approximately $1.5 million.

Current energy prices seriously impact domestic consumers, adding to cost-of-living pressures and resulting in business and industry restricting their regional economic growth opportunities. While large subsidies exist for domestic consumers, industry operates in a largely unsubsidised environment, making energy a critical influence in decisions to live and invest in TNQ. Across northern Queensland, inefficiencies in the electricity network drive the case for increased power generation.

High transmission losses and fuel transport needs highlight the overwhelming costs of supplying power across the region and universally, the efficiency, reliability and security of TNQ’s energy supply needs to be assessed and improved.

As a predominantly tourism, services, resources and agricultural economy, TNQ stands firmly behind the need to: (i) ensure a strong reliable power strategy that delivers substantive energy security; (ii) identify new generation options that deliver improved energy affordability; and (iii) without compromising security and affordability, deliver significantly on reducing carbon intensity in energy production.

However, preliminary work by the CSIRO Energy Flagship suggests that the TNQ energy sector is defined by three

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Policy Priorities

THE COMMITTEE FOR TROPICAL NORTH QUEENSLAND

distinct energy markets: (1) High Demand Fringe of Grid (Cairns); (2) Fringe of Fringe of Grid (Rural Towns/Properties across TNQ); and (3) Off-Grid (Remote Towns/Properties). The security, affordability and transition challenges and opportunities facing these three markets is diverse, requiring significantly different policy, budgetary and industry investment solutions. In addition, the impacts of disruptive technology, including the uptake of domestic new renewable sources, progress in battery storage technology, and advancements with electric car technology are certain to impact the way that energy is generated, stored, transmitted and consumed in the future.

In response to escalating energy costs the Queensland Government provides a Community Service Obligation (CSO) payment to Ergon Energy (Energy Queensland) to subsidise the cost of electricity for domestic and business users in regional Queensland. The purpose of the CSO is to ensure the Uniform Tariff Policy (UTP) is implemented evenly across the State and in 2018-2019, the total CSO to support regional Queenslanders was $465 million. However, the 5% headroom charge introduced in 2013 to allow competition in south-east Queensland is applied state wide regardless of the fact that there is only one provider in regional Queensland. This diminishes the benefit of the CSO in the Tropical North.

NEXT STEPS A decade of policy uncertainty has led to limited activity around the resolution of energy security issues. In addition, the complexity of electricity regulation is a barrier for community and industry engagement in energy reform discussion and delivery. Significant and targeted effort is needed to frame the investment opportunities that deliver security, affordability and carbon emission transition outcomes for regional Queensland. As a region, we therefore propose to develop an Energy Sector Investment Framework. This would include efforts to: 1.

2.

3.

4.

5.

Better understand key security and affordability drivers in our region’s energy markets; Explore and define the most viable new generation opportunities: Determine the most critical policy refinement and public-sector investment pathways; Explore the potential for new energy and energy services export opportunities in the region; Engage with industry, community, Local Government, and other key regional stakeholders to scope and identify current and future energy options and aspirations; and 6. Develop a cohesive, bilaterally supported strategic pathway for regional investment.

OUR RECOMMENDATION That to maintain the Uniform Tariff Policy and annual payment of the Community Service Obligation, the Queensland Government remove the 5% headroom requirement and develop an energy strategy that provides opportunity, affordability security and transition.

That the Queensland Government support development of the TNQ Energy Sector Investment Framework through shared Federal investment of approximately $1.5 million (based on 50:50 contributions).

Estimated project cost $1.5 million

2019-2020

Recommended Federal Investment Recommended State Investment

$750,000 $750,000

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25

THANK YOU TO OUR MEMBERS Our Platinum, Executive and General members make a significant contribution to our work and we are sincerely grateful for their continued support in 2019.

Platinum Members

Executive Members Value guaranteed since 1923

INDUSTRIES

General Members AAB Equipment

Dodge Auto Repairs

Peters Bosel Lawyers

AFL Cairns Limited

EMBECA

Piccone’s Family of Companies

Air Freight Handling Services

Elite Real Estate

Planz Town Planning

Alive Pharmacy Warehouse

Energy Queensland

PMC (Plaster Metal Cladding)

Aurecon Australasia

FGF Developments

Quicksilver Group

Australia and New Zealand Banking Group

Flanagan Consulting Group

Ramsay Health

Babinda Electrics

Flinders Shire Council

Raymond Plumbing

Big Cat Green Island Reef Cruises

Fowler’s Group

RDA FNQ&TS

Brazier Motti

Grant Thornton

Reef Magic Cruises

Brilliant Technologies

Halpin Partners Accountants

Reef and Rainforest Research Centre (RRRC)

BSE Cairns Slipways

Haz-Elec Industries Pty Ltd

SBJ Joint Ventures

Cairns and Hinterland Hospital & Health Service

Herron Todd White (Cairns)

Shangri-La Hotel

Cairns Chamber of Commerce

Hilton Hotel

Star 102.7 and 4CA

Cairns Penny Savings & Loans

Holding Redlich

Study Cairns

Cairns Show Association

Jacobs Group (Australia) Pty Ltd

Super Yacht Group Great Barrier Reef

Cairns State High School

Joe Vella Insurance Brokers

TAFE North Queensland

Cairns Wholesale Paint

Kleinhardt Business Consultants

Taylor Byrne Valuers

Calanna Pharmacy

KUR-World

Telstra Business Centre

Catholic Education Cairns Diocese

LDI Constructions Civil Pty Ltd

The CaPTA Group

CBRE Cairns

LJ Hooker Cairns Edge Hill

The Morris Family

CCIQ

Mac Farms

The Wallace Family

Chapman Group

MacDonnells Law

The Reef Hotel Casino

Cock and Bull Hotel

McDonalds Restaurant

Ten Years Younger

Colliers International (Cairns)

Miller Harris Lawyers

TNQ Hydraulics

CPB Contractors

My Pathway

Trinity Anglican School

CQUniversity

National Australia Bank

Tropical Reef Shipyard

Crowe Horwath (Aust.)

Nightowl Convenience

Tropical Tourism North Queensland

Crystalbrook Collection

Norship

Westpac

Dawsons Engineering

Pacific Hotel Cairns

WGC Lawyers Pty Ltd

Destination Cairns Marketing

Pasma Electrical Member list current as at February 2019.

“

”

As a member from regional Queensland, I particularly want to see as many Queenslanders as possible interact with our Parliament – no matter where they live.

Hon. Curtis Pitt MP, Speaker of the Legislative Assembly Pictured at the Advance Cairns State Budget Luncheon, 19 June 2018

L-R: Michael Healy MP, Deputy Premier, Treasurer and Minister for Aboriginal and Torres Strait Islander Hon Jackie Trad, Cairns Chamber of Commerce CEO Debbie-Anne Bender, and Cairns Chamber of Commerce President Nick Loukas Advance Cairns State Budget Luncheon, 19 June 2018

CONTACT: NICK TROMPF E: CEO@ADVANCECAIRNS.COM PH: 07 4080 2900