13 July 2013
The Australian Financial Review
The Coalition’s Andrew Robb has a plan for Australia’s under-developed north. If Rudd wants to push his own message of making Australia more competitive, maybe he should take a look. Prime Minister Kevin Rudd went to the National Press Club this week for a soft launch of Labor’s rebranded (by Rudd) re-election campaign, whenever that poll might be held between now and November 30.
In that speech he called for a genuine policy debate, decrying Tony Abbott for a lack of policy focus. Let’s take Rudd at his word, and join a clamour for discussion about a range of policy issues, including a vastly underdeveloped northern tier beyond the Tropic of Capricorn. For most of us the Tropic of Capricorn is a vague concept. It exists as a piece of ephemera in our imagination somewhere to our north.
Perhaps we should define what is actually meant by this parallel. It refers to the southernmost latitude over which the sun can be directly overhead. It is also part of what is known as the Tropics, the area between the tropics of Capricorn and Cancer.
We are talking, in an Australian context, about a region of 3 million square kilometres, 9 million hectares of agricultural land and a population of about 1 million people, or about 4 to 5 per cent of the total Australian population.
On top of that, 60 per cent of the nation’s water resources are above the Tropic of Capricorn, only 2 per cent of which is captured for agricultural and other uses. The CSIRO, in a 2009 study, concluded that 5 million to 17 million additional hectares across northern Australian was potentially suitable for agriculture. Australia’s irrigated agricultural land is put at 2 million hectares. In other words, this is a hugely underexploited part of the country.
Vision for the north
Opposition finance spokesman Andrew Robb has developed a 2030 Vision for Developing Northern Australia. He notes that if water capture could be doubled in the northern tier, it would “turbo-charge” development, including the exploitation of a “food bowl” in areas adjacent to the Asia-Pacific region. He has a point, including an observation that a vast expansion of an Asian middle class will accompany a continuing surge in prosperity. Asia’s real gross domestic product is expected to increase from $US27 trillion ($29.3 trillion) to $US67 trillion by 2030.
Robb should be given credit for developing a northern exposure policy in the face of the naysayers who argue that resources devoted to the development of remote regions do not yield economic benefits that would justify the investment.
Apart from anything else, this ignores the national security implications of the need to develop the northern tier. This involves the absolute requirement to shift military assets to the vulnerable north-west, despite the defence establishment’s reluctance. Boston Consulting Group, in an analysis, concluded that by maintaining Australia’s current share of nonresources trade, or recovering our 2001 share, we could add from $60 billion to $125 billion of economic value over the next decade in business driven by proximity to Asia.
The Coalition has pledged a white paper on the development of northern Australia. Opposition Leader Tony Abbott might also consider adding northern development to Robb’s finance portfolio. Alternatively, Robb might be entrusted with a super ministry for development that would include infrastructure. A co-ordinator for national development might be considered as part of such a ministry.
Successive Australian governments have regarded the country’s northern tier as something akin to outer space. This has represented a failure of imagination, apart from anything else.
Competitiveness a watchword
At the National Press Club this week, Kevin Rudd talked about the need to find ways to accommodate a tapering off of the China commodities boom, and to make better use of resources competitively.
Competitiveness will become a watchword of the next period, whatever the outcome of the forthcoming election. In this regard, the recent release of a regional competitiveness index by the Regional Australia Institute is a useful development. Less useful is that the RAI is refusing to yield data that would rank regional centres from most competitive to least, or from best to worst. This is on the grounds it does not want to be seen to be branding some areas as “losers”.
That aside, the RAI and its spokespeople, including Sandra Harding, vice-chancellor of James Cook University in Townsville, are joining a more insistent discussion about the need to pay attention to what is happening in the remote north.
Harding is not talking about handouts, but a significantly more focused government approach to investing in infrastructure, ensuring that local industry secures sufficient base-load power, and consideration be given to incentives to live and work in remote areas. “It’s very important we have a grounded understanding of life in the north and its proximity to Asia,” Harding tells me.
That appears to be what the Robb approach is offering. Rudd himself might pay attention.