The Coalition’s Draft Discussion paper on Northern Development generated much debate in the media this week. The plan has been backed by residents in the North, with Mt Isa mayor and former Labor minister Tony McGrady also supportive of the initiative. Land-use restrictions could be eased if aspects of the draft are picked up, permitting agricultural development and the expansion of water storage across the North.
A KPMG study commissioned by the peak resources groups has shown that Australia’s mining regions have faster growing permanent populations than other regional areas, unemployment levels are lower and they are home to more high-income earners. “Mining is not hollowing out the regions in which it operates – it is boosting incomes, attracting families and reducing unemployment,” said Minerals Council chief executive Mitch Hooke.
Marc Faber has warned that China’s demand for import commodities is set to level out over the coming years, potentially leading to geopolitical tensions throughout Asia, the Middle East and Africa. “I would assume that the Chinese economy will grow at a much, much slower pace in the next 10 years… and this will have an impact on the demand for raw materials,” Dr Faber said.
The Minerals Council of Australia has warned that Labor’s proposed changes to native title laws will create a system with “increased contestabilitiy”, higher costs, longer timeframes for decisions and “uncertainty for stakeholders”. The Western Australian government’s assessment agreed that “the majority of proposed changes are unnecessary and will increase uncertainty and inefficiency in the management of native title”.
Kevin Gallagher, the head of engineering firm Clough and former senior executive at Woodside Petroleum, has called on the federal government to provide tax breaks to resource companies that invest in high-end local skills. Mr Gallagher said that Australia’s high cost, low-productivity business environment means that local contractors are being left to do the lower-skilled work on projects while high-value engineering and design work are being outsourced and performed overseas.
The Australian Financial Review
The Australian Financial Review also reports on this week’s release of the Coalition’s draft discussion paper, which includes strategies to increase population, develop a food bowl and enhance infrastructure to maximise opportunities from Asia, as well as improve education access for Australians living in remote regions. Opposition leader Tony Abbott said the plan focuses on “sensible, responsible policies that will make it easier to develop our country”.
Two leading US coal companies – Alpha Natural Resources and Arch Coal – are preparing to challenge Australia’s hold on the Asian market, saying they could be more competitive than Australian producers because of the local industry’s high cost base and regulatory constraints. Alpha Resources chief executive Kevin Crutchfield said Australia’s “surging labour, project and regulatory costs, limited port capacity, long distances from population centres for new projects and intensifying environmental pressures” is stymying its competitiveness.
Legal experts and industry leaders have warned that conflicting and incomplete regulations across different states may slow the development of Australia’s emerging shale gas sector. Lakes Oil executive chairman Rob Annells criticised Australia’s attitude to the industry in the face of domestic gas shortages: “shale gas is going to lead the US out of recession, they believe – and while that’s going on they have slammed the doors here,” he said.
BG group chief executive Chris Finlayson has told investors that the ‘bad news’ on Australia was over and the UK gas company’s $US20.4 billion LNG project in Queensland was on track to turning from a “major capital absorber” into a profitable project. “What we’re actually seeing is quite a significant reduction in cost pressure as we – as local contractors, civil contractors and the like have much less work to look at,” Mr Finlayson said.
The West Australian
Town of Port Hedland chief executive Mal Osborne said that many council operational staff who provide essential services are leaving the Pilbara as they are unable to afford the high rent prices. “We’re at breaking point in terms of not being able to potentially provide the services that the community sees as essential, and that could be as basic as collecting garbage or reticulation,” Mr Osborne said.
The Pastoralists and Graziers Association has supported a ban on live exports to Indonesia and other key markets from certain Kimberley properties that may be holding cattle at risk of carrying bovine Johne’s disease. PGA president Rob Gillam said that while the ban was a “blow for the industry” in the short-term, it was vital to protect the industry’s reputation in Australia.
The Daily Telegraph
An editorial in The Daily Telegraph praises The Coalition’s draft discussion paper’s vision in unlocking “a big Australia” through the powerhouse of the North, likening the expansion of Australia into the North to America’s expansion into the west; it could potentially be be a cornerstone to our economic growth for the whole of Australia.
Northern Territory Chief Minister Terry Mills believes joining Australia’s gas pipelines through the NT could bring energy security to the nation. The move would open up onshore gas supplies for cheaper, easier development, hopefully solving the Territory’s domestic gas supply, particularly as many producers are unwilling to sacrifice higher prices in the LNG export market to satisfy local demand. Mr Mills is currently preparing to speak with Rio Tinto managing director Sam Walsh in London to ensure the Gove development can continue.
North Australia Weekly Digest – 08/02/2013