20 June 2017
Speech delivered by Hancock and Kidman Executive Chairman Gina Rinehart to the Developing Northern Australia Conference in Cairns, Australia on 20 June 2017.
Good afternoon distinguished guests, ANDEV members, and fellow North Australians.
May I firstly thank the Association for Sustainability in Business, the Conference Advisory Committee and the sponsors for organising today’s important event.
I am happy to be speaking with you about the potential for progress, investment and growth in what is one of my favourite parts of our country, the North.
This afternoon I would like to talk about agriculture and its ability to contribute towards developing our north, along with the changes needed by our governments to reduce red tape, decrease government costs and support the development of this region by not acting as an impediment to development and growth in the north.
Secondly, I will talk about some private sector investments in our North, investment being essential to maintain and improve living standards for northern Australians. Investment needs to be encouraged, as I’ve often said when advocating ANDEV’s policies, in particular that of a huge special economic zone across our north.
Agriculture’s ability to develop northern Australia
We are on the verge of an exciting time in agriculture with indicators spelling a bright future for the industry, providing Australia remembers it must be cost competitive. Cattle prices are strong, the value of agricultural land is increasing, and innovative agritech is becoming more useful.
On top of this, overseas demand for our cleaner agricultural produce is growing strongly and this growth is certain to continue as the globe’s population and Asia’s middle class continues to expand, the latter expected to grow to over three billion people by 2030.
On my many trips to Asia, it has become very obvious that we, Australia, are an integral part of the Asian region and therefore need free trade agreements in the region, and not be left out. We need to progress both Australasian and Austral-Pacific free trade agreements, in addition to bilateral agreements. More trade with Asia will not only help us to prosper as a nation but will provide an important way to develop out northern region.
We are blessed to be a country with a large land mass, but unfortunately vast areas lay idle and underutilised, particularly in our north.
Australia lagging well behind in cattle numbers
To illustrate just how much room our agricultural industry and our north has to grow compare Australia and Brazil.
Both are the largest two countries in the Southern Hemisphere with similar land masses – Australia at 7.69 million square kilometres, and Brazil just a little larger.
Both are leading economies in their regions and both experience similar climatic conditions in many parts of their countries.
Please ask yourself, how many head of beef cattle does Brazil have?
And, how many head of cattle do you think Australia has? The answer is astonishing.
Approximately, Brazil currently has more than 225 million head of beef cattle, compared to Australia’s mere less than 27 million, declining in recent years.
That’s right – Brazil, a country with a similar land mass has a cattle industry approx. 10 times bigger than Australia’s and we are supposed to be world leaders in agriculture!
This comparison illustrates that Australia has a huge capacity to grow our agriculture industries.
We have the room, we have the skills, we have the knowhow, we have the history, and the Asian market right on our doorstep. We can achieve a cattle industry that is in the order of Brazil’s, only if our governments cut red tape, and does not jeopardise our northern region.
Government impediments to developing our northern agricultural industry
Too often those in government and the bureaucracy implement growth and investment deterring regulations from capital cities without realising the adverse impact that they will have.
And, it’s not just me saying this – The Institute of Public Affairs’ researchers determined last year that the cost of red tape to the economy annually is a staggering $176 billion, equating to 11 per cent of GDP.
In short, the economic costs of red tape are larger than the size of the agriculture and mining sectors combined.
Concerningly, a Productivity Commission report last year also concluded that farm businesses are “subject to a vast and complex array of regulations.”
Their report also went on to say that “regulations are in place at every stage of the supply chain – from land acquisition to marketing – and are applied by all levels of government.”
The report stated that because of their sheer number and vast complexity “the cumulative burden of regulation on farmers is substantial.”
Excessive regulation, red tape and other government costs are, as respected business commentator Terry McCrann says, nothing more than taxes in disguise.
Making it easier for famers to do business is key to ensuring that Australia doesn’t miss this massive opportunity to develop and grow the north.
Take just one example of government regulation that acts to prevent our industry from developing.
Many of you would know of the Fitzroy River in the Kimberley’s in West Australia.
Across the average wet season, approximately 7,000 gigalitres of water is wasted as it uselessly overflows into the ocean.
Now, 7,000 gigalitres of water can be hard to put into perspective but think of it this way, The Fitzroy could fill, 14 times, the huge Sydney Harbour. In other words the Fitzroy waters flow past may stations unused into the sea.
As it stands in 2017 the government only allows one water licence to access water from the Fitzroy River for Liveringa, in the Kimberley’s.
And guess how much water the government permits to be taken? Six gigalitres.
This leaves 99.9991% of the water to run out uselessly into the Indian Ocean.
We all know that water is absolutely essential for cattle and to grow cattle numbers and that for many months water can be very difficult to obtain, unless already stored, or from bores.
How can we advance the North if one of its biggest industries is prevented from accessing a vital asset for growth, water?
We can’t raise cattle without adequate water supplies, and we sure can’t match Brazil without adequate water supplies!
In short, if the government allowed us to tap into this huge wasted water source we would be able to increase our cattle numbers and just imagine the benefit to all the related industries which depend upon agriculture. It’s too often forgotten that it’s not just stations that would benefit from water and less red tape to let them grow, but the myriad of other industries, trough suppliers, tank suppliers, truckers, hydraulic crusher suppliers, and many more who would grow along with an increasing agricultural industry.
Innovative agritech investments essential to growth and development
Another factor important to northern development and to advancing our agricultural sector is investment in state-of-the-art, practical technology.
At Hancock, we are undertaking large-scale investment in agritech across both our Hancock and Kidman stations, the majority of which are located in northern Australia.
We are rolling out the digitalised UHF system and walk-over weighing systems, which I will mention shortly, as well as solar pumps, hydraulic lifts, hydraulic weaner cradles and soon, drones.
The digitalised UHF system enables clear and quick and widespread communication from anywhere on the property to anywhere in Australia or overseas, through the use of a handheld device.
The digitalised UHF devices enable private and group phone calls, text messages, brief emails and can transmit emergency notices so emergencies can be responded to quickly throughout the station, improving staff safety, and enabling greater knowledge and efficiency for managers.
The digitalised devices mean that a station manager inspecting cattle at the far-most point of say Ruby Plains station in northern Australia for example, can in a few seconds, speak directly with his station staff, Kidman’s head office over 2,500 kilometres away in Adelaide or a customer in Tokyo over 6,000 kilometres away.
Another major technology we are rolling out is walk-over weighing, an innovative self-mustering technology which improves station efficiency and animal welfare through reducing the need for mustering or re-mustering cattle, leaving the cattle more relaxed and able to eat and drink when they need.
Walk-over scales are fitted near a water point and record the weight of the cattle that walk over it.
The weight of each animal will indicate the most appropriate destination for it, and a corresponding gate will open leading it into a paddock if underweight or leave the cow in the yards if ready for market.
A technology we plan to adapt from our usage in the mining sector is the use of drones.
Drones are able to observe, photograph and film in real-time things such as dam levels, fences, fires, floods, licks, cattle movements and other operations.
Our drones will be able to carry and transport by air items weighing more than four kilograms, allowing for items such as tools, emergency supplies and medical needs such as epi-pens to be quickly and easily transported around the station.
At the inaugural Kidman board meeting with new owners in February and recent board meeting in May in Shanghai, the first ever Kidman board meeting in China, we agreed that we would reinvest this year’s profits so that we invest in these important technologies to grow and develop our stations.
Ultimately, if we are to get serious about developing the large untapped area in the north of our country we need to make sure that governments cut red tape, decrease government costs they impose and reduce impediments to development. Australia must always strive to be cost competitive.
The example of the Fitzroy River is a telling one but unfortunately there are many more examples of unfortunate government impediments right across the north.
The second crucial part to northern development is technology investment. As technology becomes more advanced we must harness its benefits.
I hope that you will join me later this year in Canberra as we launch Australia’s inaugural National Agriculture and Related Industries Day on 21 November.
This will be a day where we recognise the efforts of those who work in our agriculture industry and speak up for our industry and its importance to the Australian economy.
And of course, for those interested in the mining industry, please join us each year for the mining and related industries day, held annually on November 22.
I wish all attending an interesting and enjoyable conference, and let’s encourage the development of regional free trade agreements.