Northern Development Summit

27 June 2014
Andrew Robb
Minister for Trade and Investment
It is a great pleasure to be back in Townsville to make a contribution to this most timely summit.
A little over a year ago I was here to release the paper Developing Northern Australia – A 2030 Vision, with then Opposition leader, Tony Abbott, Ewen Jones, the larger than life Federal Member for this great part of the country and Senator Ian MacDonald, the indefatigable promoter of the North.
We chose Townsville’s world-class James Cook University for the launch to recognise its role as a global leader in tropical medical research and marine biology, under the inspired leadership of Sandra Harding, and to highlight that the opportunities in the North go well beyond agriculture and resources and energy.
The document we released that day was the culmination of three years’ work from Opposition, which I had the privilege of leading.
The aim was to put in place a credible, strategic framework to help unlock the enormous, unfulfilled potential of the North, should we get the chance to govern.
It is pleasing to see that this body of work substantially guided the development of the Government’s Green Paper which Warren Truss released a fortnight ago, and which is available on the government’s web site.
I would also like to acknowledge the Federal Member for Leichardt, Warren Entsch, a proud Northern Australian – and Chair of the Joint Select Committee on Northern Australia – who has been instrumental in advancing this work.
Among other things, the final White Paper, due for release before the end of this year, will establish more robust collaborative networks across Australia, to drive bi-partisan political support and industry support.
In Opposition we took a very conscious decision to assume a national leadership role in regard to Northern development.
It was evident to us that without sufficient political will and coordinated federal, state and territory leadership, the renewed efforts of many to take the already impressive development of Northern Australia to a new level altogether, would amount to nothing of substance.
Our political opponents sought to ridicule our work, yet in the dying days of the 2013 election campaign, Kevin Rudd belatedly hitched his wagon to the cause.
To be clear, it is not the role of government to direct or be the principal financier of further major development of Northern Australia, or in any part of the country for that matter.
Government’s primary role is to put in place the most conducive policy settings possible to enable the private sector to lead and to prosper.
Policy settings that give confidence to investors and businesses that promote calculated risk-taking and the pursuit of innovation.
Make no mistake, substantial investment, including foreign investment, is absolutely fundamental if we are to see an admirable vision converted into real and tangible development outcomes.
As the first minister for both trade and investment that is a particular focus of mine and I will return to this a bit later.
But first, to capture the essence of why we are here, I’d like to briefly refer to two great Northern Australian trailblazers if not pioneers in John and Terry Underwood.
I got to know and respect the Underwoods in the early ’80s when I was the executive director of the Cattle Council of Australia, and John was president of the Northern Territory Cattlemen’s Association.
In 1968 the couple made their home in the Northern Territory on the banks of a creek bed, which was in fact part of the headwaters of the Victoria River.
From nothing they developed the renowned Riveren cattle station, 600 kilometres south-west of Katherine which has been described as ‘the size of Luxembourg’.
In later years they added the adjoining Inverway Station to the family pastoral holdings, with the two properties running around 40,000 head of Brahman cattle.
The family’s story is a quintessential one of triumph over adversity through hard work and perseverance.
And one of their biggest challenges was presented not by drought, flood, fire or disease but by the hand of government.
The Underwoods were one of the hundreds of Northern cattle families left reeling in 2011 by the inexcusable snap live cattle ban to Indonesia imposed by our predecessors in response to a single television program.
The ignorance, panic and disregard for the livelihoods of the people of Northern Australia was palpable, and the episode will long serve as a prime exhibit for governments of how not to act without thinking.
In 2012, following the ban, live cattle numbers collapsed to around 220,000 from a high of over 700,000.
For this reason, one of our first priorities on coming to government was to visit Indonesia and work on repairing the damage done to our relationship over the ban, and good progress was made.
This year there are expectations that cattle numbers will well exceed 600,000.
Late last year the Underwoods sold Riveren and Inverway to Indonesia’s biggest importer of live cattle Santori, reportedly for more than $30 million.
In an example of the collaborative model that can well suit foreign investment and the preservation and growth of Australia’s farm management expertise, the Underwood’s son Michael and his wife Georgia agreed to stay on and manage the properties.
Back in 2011, Terry Underwood made a submission to the Dams and Water Management Task Group that I also chaired.
In it she cited the late Western Australian writer Gerald ‘GM’ Glaskin.
And I quote:
“The North is a country in itself, a third of the size of the United States – three times the size as Texas. It is a land that has slept through the centuries, but can sleep no more … It is stirring now – stirring and waiting for man to be sufficiently civilized, sufficiently knowledgeable, to make it his own.”
These words were written back in 1960.
More than half a century later, the North has done some very notable stirring in the Pilbara and elsewhere, but there are signs of a further major awakening; a growing realisation of the emerging opportunities on offer.
On account of an exploding middle class across the Asia Pacific this will be the century of food, water and energy security.
The region’s middle class is set to grow from 600 million to more than 3 billion over the next 20 to 30 years. It’s almost inconceivable.
This will drive extraordinary demand for higher protein diets, and the first-world lifestyles and services many of us take for granted.
Two of the government’s key objectives are targeted squarely at helping to meet this increasing demand, they are:

  • To develop another Australian food bowl, focused on premium produce, which could help to double our country’s agricultural output.
  • To take our energy export industry to one worth $150billion annually to the economy, by 2030, with a major focus on clean and efficient energy, providing significant increases to resource exports.

We currently feed 60 million people directly and 400 million indirectly through our technology and innovation.
With the right support, investment and further innovation we can double those numbers, and the North can play a significant role.
Why? Because the simple mathematics say we can.
For example, the CSIRO has concluded that across the North there is up to 17 million hectares of arable soil, potentially suitable for a variety of agriculture and horticulture.
I am not suggesting we are likely to farm anywhere near that, but it demonstrates the sheer scale of opportunity.
And there is an abundance of reliable water that we have the know-how to manage efficiently, and in an environmentally effective manner.
There is an estimated 152,000 GL in total surface water run-off across the North, or around 60 per cent of the water that falls in Australia, and currently we capture just 2 per cent of it.
If we captured just six per cent of it and utilised it sensibly for agriculture we could feed millions more.
In promoting the North to both the rest of Australia and the world, these are the types of vital statistics we need to highlight.
In addition, the North is of course blessed with an abundant energy and mineral endowment.
The region is already home to 90 per cent of Australia’s gas reserves in the Browse, Bonaparte and Carnarvon basins.
Regions such as the Pilbara, Gladstone and Mackay have developed rapidly by leveraging their natural resources.
Projects like Gorgon and Inpex are set to deliver LNG to the world for decades to come, while Roy Hill and others will join the existing iron ore giants to deliver even more iron ore.
In agriculture, Stage 2 of the iconic Ord River project is now being developed.
Chinese company Shanghai Zhong Fu will invest up to $700 million after securing a 99-year lease to grow sugar on 13,400 hectares. They will build a sugar mill which is expected to mill four million tonnes of cane annually.
Early last year I met with the company which has also expressed an interest in developing Stage 3 into the Northern Territory, involving a further 14,000 hectares for tropical horticulture.
If they were successful they indicated the potential to develop port facilities near Kununurra to the north, new roads, a power plant, other value-added industries, using the by-products, and an open access rail link to join up with the Adelaide to Darwin line.
I asked if they would be seeking Australian government funding support, to which they said no, but assistance with approval processes and satisfactorily resolving indigenous issues would be welcomed.
This to me demonstrated the prospective flow-on benefits of such investment for infrastructure development, job creation and tourism.
Given the remoteness and high-cost of major developments in the North, the typical agricultural and horticultural developments will need to be of a size that will support much of the necessary infrastructure that will get product to market.
Individual enterprises involving 30,000 hectares of sugar, or 20,000 hectares of fruit and vegetable crops, or 75,000 to 100,000 hectares of specialist crops will resemble mines in their capacity to largely or fully fund water, power and transport infrastructure, except they will be exporting a renewable resource.
A visit to Go Go Station in the Kimberley, which is three times the size of the ACT, also highlighted to me the potential for diversification of land use.
There are tens-of-thousands of hectares of arable soil on this station alone and they have established wet and dry season cropping techniques on a trial basis to grow sorghum, but other crops are possible.
Diversification permits are being issued in the Kimberley to allow land owners to do more under their pastoral leases than just graze cattle. Historically, restrictive lease conditions across the North have stymied the productive potential of land.
Other stations in the Kimberley are also venturing into agriculture to grow crops like sweet corn, potatoes and melons.
Also in the Kimberley there are reports that 10 of Australia’s biggest indigenous operated cattle stations are preparing for a merger backed by China’s ASF Group. This would include major investment in breeding, management and feed crop technology.
In Queensland’s Gulf Country I am also aware of multiple proposals that would see crops such as cotton and sugar grown on individual projects involving up to tens of thousands of hectares.
The Etheridge Integrated Agriculture Project west of Georgetown for example would involve 50,000 hectares of irrigated cropping, including sugar and sorghum. There would be significant infrastructure investment, including dams, a sugar mill, ethanol production and power generation facilities.
The new Free Trade Agreements recently concluded with Japan and Korea, and other bi-lateral (China) and regional trade and investment agreements in advanced stages of negotiations, provide a much stronger network of country-to- country partnerships to support these opportunities.
As well, the infrastructure, and related economic activity, will greatly foster the growth of other sectors such as tourism, where we are looking to grow the Northern international tourism market to two million visitors a year by 2030.
In this tourism space there is an $8.2 billion proposal by Tony Fung from Aquis for an integrated resort development at Yorkey’s Knob north of Cairns.
It would include eight high-end hotels with 7,500 rooms.
Backing our strengths
As a government, one of our key guiding principles is to back our strengths, the things we do as well as any and better than most.
This means leveraging our areas of comparative advantage, and that strongly applies to Northern Australia.
The North possesses many comparative advantages with world-class and growing strengths in agriculture, aquaculture, energy and resources, tourism and hospitality, tropical health and medical research and education.
And, all the services, high-end manufacturing, infrastructure, logistics, training, innovation and research and development that cluster around these strengths.
There are the geographic advantages in our proximity to the booming economies of South East Asia and Southern China.
There are also the time zone advantages relative to Europe or North America.
There is the use of English, the world’s business language.
And also the brand advantages with our growing reputation as a knowledge-based economy and a ‘clean, green and safe’ producer and country to visit.
Australia is a high-cost country, and while it is critical that we restore some of our lost competitive position, we have this reputation for quality, and the emerging middle classes are prepared to pay a premium for that quality.
As such, we must aim for the premium end of the emerging markets for all of these things we do well if the business cases are to hold up.
Rare place in the Tropics
The other defining advantage of Northern Australia is that it makes Australia one of the very few developed countries in the world that sits at the intersection of the two great regions of global economic and population growth – the Asian region and the Tropical region.
So on account of our geography, prosperity and innovation across an array of areas, we are in a rare position to provide products, services and IP relevant to the Tropics where, if you go around the globe, 40 per cent of the world’s population resides.
And this figure is expected to grow to 55 per cent by 2050.
Our relevant strengths, as mentioned earlier, go well beyond agriculture, resources and tourism.
For example, investment and expanded collaboration, in such fields as tropical bio-security, bio-medical research, agricultural and veterinary science and animal husbandry, along with investment and increased partnerships to develop our research and service delivery capability in tropical health and diseases, all have enormous potential.
Advancing our Northern Centres of Excellence in these fields, and developing international tropical health services, will provide ongoing economic benefit, not only for Northern Australia, but as well for the 40 per cent of the world’s population that lives in the Tropics.
To immediately assist that goal, we have committed $42 million in the budget to expand the Australian Institute of Tropical Health and Medicine at James Cook University for research into tropical diseases such as dengue fever.
Such significant growth opportunities, combined with the huge range of industry services needed to support the great development of rural and remote Northern Australian communities, clearly recognises the key role of building substantially on the cities of the North.
In turn, this opens up the need to plan for rapid and sustainable long-term population growth.
Investment is the key
Ever since the First Fleet we have relied on foreign investment to drive major advances in our economy.
Foreign investment not only provides essential capital, but it invariably brings with it new perspectives, other ways of doing things, new intellectual property and innovation which can greatly enhance productivity and return on investment.
And so, ‘buy-in’ by global investors is essential.
In Australia we’ve got lots of what fast growing Asia wants but very little of these opportunities will be fully and quickly realised without huge injections of capital.
The world happens to be awash with capital looking for stable long-term investments. But we won’t draw this capital if we don’t identify and present viable projects with which this capital can partner.
This means that local knowledge and expertise is critical in developing such projects.
In my role as Trade and Investment Minister, the Prime Minister told me that I’m to be Australia’s number one salesman.
I’m in no position to argue.
During my visits abroad I take any opportunity to promote our country to investors.
In fact, since September I have now conducted 35 significant investment round tables in 12 countries.
To give you an example, during my recent visit to North America, I participated in a roundtable with the seven biggest investment funds in New York, representing well over $1 trillion under management.
In Toronto I had a roundtable with the major pension funds representing nearly $500 billion, in Singapore I met with six potential investors managing $1.2 trillion in sovereign wealth funds.
It has been a similar story in China, Japan, Hong Kong, Korea, Germany, the United Arab Emirates and France among others.
In virtually all such round-table meetings I have flagged our intentions with regard to Northern Australia.
Every-time, I have had their attention.
As some of you may be aware I returned late Wednesday from a series of meetings with very senior members of the Chinese government.
Over and above discussions about the Free Trade Agreement with China, the Chinese leadership proposed the development of an Investment Co-operation Framework, which would involve identifying particular projects of mutual investment interest, both in Australia and China.
I took this opportunity to inform them, among other things, of the types of projects in Northern Australia that we are discussing today.
And I had a very receptive audience.
So, at the risk of repeating myself, I am very sincere in my need to carry with me viable projects.
Against this background, today I can confirm that I plan to host a major investment forum here in Northern Australia in the second half of next year.
The primary purpose is to attract to the North some of the biggest investors of Asia and elsewhere to expose them to the opportunities both on offer and in prospect.
We will draw on our own contacts, and the extensive global network of Austrade, to identify high-calibre investors with a prospective interest in the North.
I am also in the process of appointing a team of five senior investment specialists, recruited from the commercial world.
They will work with Austrade and the states and territories to identify significant investment opportunities and to help see them realised.
They will focus on the areas we have identified as national investment priorities which are compatible with the strengths of Northern Australia and include:

  • Food and agribusiness.
  • Resources and energy.
  • Tourism and hospitality.
  • Tropical health and medical research.
  • International education.
  • and all the essential enablers such as infrastructure, logistics, professional services, advanced manufacturing and technologies that cluster around these strengths.

Between now and the forum our investment specialists will be tasked with paying particular attention to tangible opportunities in the North which are seeking investment.
Identifying and promoting those projects which are well advanced and are at the ‘investor-ready’ stage, and marrying these up with compatible investors and potential partners, is paramount.
In this regard we must recognise the importance of having local expertise willing and able to engage with would-be investors both foreign and domestic.
Earlier I also mentioned the importance of highlighting vital information to help generate interest in the North.
As an extension to this there must be a renewed effort to producing and making available the highest quality data and research possible, to answer the myriad questions that such ambitious projects will pose.
This will allow prospective investors to make informed decisions and help ‘de-risk’ investment.
Our proposal to establish a Cooperative Research Centre (CRC) specialising in Northern development would greatly support this objective.
This model promotes research driven by end-users through partnerships between researchers, industry and business, and even prospective investors.
The development of Australia’s North also presents an opportunity for Australia’s Indigenous people.
We are blessed to have a country of incredible natural landscape which carries the history and connection to the oldest living culture on earth – our Indigenous people.
As well as being the Minister for Trade and Investment I am also the Minister for Tourism and I know that the world’s attraction to our Northern Australian landscape, and interest in indigenous culture, has already resulted in a number of successful indigenous tourism ventures.
As we create a policy environment that welcomes foreign investment to drive development in the North, more opportunity for indigenous Australia will result, and not just in tourism and resources and energy.
It will occur across all of the investment sectors such as agriculture, agribusiness, aquaculture, water infrastructure, and all of the infrastructure and services that will support these developments.
In closing, I would like to return to some words from Terry Underwood herself, and I quote:
“We who live and love and work this land, young and old, black and white, understand that there is an urgent responsibility to develop Northern Australia … Now is the time to convert this perceived Last Frontier to the New North – Providential Gateway to Asia – the Applaudable and Affordable Land of Opportunity.”
Thank you for this opportunity today.
The Hon Andrew Robb AO MP
Courtesy of the Hon Andrew Robb AO MP