Article – Northern Australia plan: China backs 'economic powerhouse'

18 June 2015
Mark Ludlow
Australian Financial Review

Prime Minister Tony Abbott has pledged $1.2 billion in new money for roads and dams and relaxed visa requirements for backpackers and tourists as part of a package announced Thursday  in a bid to unlock the “economic powerhouse” in the north.
China has backed the deal saying its trade deal with Australia will facilitate Chinese investment in farms and infrastructure in the region which is attempting to become part of Asia’s food bowl.
Despite fears the new money along with the $5 billion Northern Australia Infrastructure Fund will result in taxpayer money being used to build “white elephant” projects, Mr Abbott said greater economic activity in the top half of Australia would help drive national growth.
“If the north does well, our country does well,” Mr Abbott said in Canberra on Thursday. “Northern Australia can grasp its full potential and become an economic powerhouse within our great country. We will drive down the costs of operating in the north for business, making it a more attractive place to invest and work.”
Although there was a push by some regional MPs to establish a regional tax zone – and a few kooky ideas such as a taxpayer-funded abattoir and re-opening a casino on Christmas Island to attract investment to the region – the federal government has played it safe with the latest plan.
At its heart is a bold ambition to increase the population of the northern parts of Queensland, Western Australia and the Northern Territory from 1 million people now to up to 5 million people by 2060.
“It is not the Commonwealth government’s role to direct, or be the principal financier of, development,” the White Paper said. “Business is far better placed to understand the risks and rewards from northern economic development.”
Under the 20-year-plan, the federal government will allocate $200 million for water storage, including $5 million for a feasibility study into the Nullinga Dam near Cairns and another $5 million for a detailed examination of land-use sustainability for the third stage of the Ord project.
There will be a further $15 million for water resource assessments of the Mitchell River (Queensland), West Kimberley (Western Australia) and the Darwin region.
There was also a $600 million roads package to improve key transport hubs in the far north, $100 million to improve cattle supply chains and almost $40 million to upgrade air-strips and subsidise air services.
Other aspects of the plan include a major northern investment forum in Darwin targeted at international investors, $75 million for a cooperative research centre on developing northern Australia, $15.3 million for tropical health projects and $12.4 million for indigenous rangers.
Deputy Prime Minister and Infrastructure Minister Warren Truss said the Coalition would also attempt to cut red tape to encourage businesses to invest in the north.
It also wants to accelerate pastoral lease reform to allow farmers to undertake more activities on their properties as well as overhaul native title leases so indigenous people can undertake more business activities.
There will also be schemes to help attract workers to the regions. Overseas working holiday makers will have their visas extended for one year if they are employed in northern Australia. The three-year multiple entry visa will also be extended to 10 years in a bid to promote tourists, especially from China.
Qantas chief executive Alan Joyce said he looked forward to working with the federal government to develop an aviation strategy to open up northern Australia to fast-growing Asian markets. This follows the Coalition abandoning plans to open up domestic routes in northern Australia to international airlines.
“We are committed to working with our tourism industry partners to lift demand for air travel across Northern Australia and realise the region’s economic potential,” Mr Joyce said.
Queensland Deputy Premier Jackie Trad welcomed the White Paper but said more federal funding needed to be allocated to key infrastructure projects.
Chinese Vice Minister of Commerce Wang Shouwen said Bejing saw opportunities in Australia’s north primarily in agriculture, food processing and infrastructure.

“Indeed our view is your strategy of developing the Northern Territory needs investment,” Mr Wang said in a briefing on the new free trade deal with Australia.

“China is the third largest investor globally and there is strong interest in investing in Australia … in the agricultural sector, food processing sector. China is very strong on infrastructure … and this [sector] could also benefit from more open investment,” he said.

PHOTO: The federal government is attempting to open up Northern Australia as the "food bowl" of Asia.Courtesy of the Australian Financial Review
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