The Commonwealth Government has released the Our North, Our Future: White Paper on Developing Northern Australia, building on the Green Paper released twelve months ago.  The White Paper outlines an action plan for the development of northern Australia – defined as all of the Northern Territory and areas of Western Australia and Queensland above the Tropic of Capricorn. 

Partner, Ren Niemann, and Special Counsel, Tony Roccisano bring their expertise in projects and infrastructure to consider the implications of the White Paper.

It is first worth noting that the White Paper is targeted more broadly than just infrastructure.  It sets out the government’s policy framework for addressing the following objectives:

  • making it easier to use natural assets, in close consultation with, and the support of, Indigenous communities
  • providing a more welcoming investment environment
  • investing in infrastructure to lower business and household costs
  • reducing barriers to employing people, and
  • improving governance.

These are important policy objectives, even if they have been previously articulated, as infrastructure alone is not enough to make a lasting and real difference to the economies and communities of the region. 

The difficulty will be the development of long-term objectives with short-term funding, within short electoral cycles.  This problem has and will always plague Australian governments, yet has an even more pronounced impact on regions where sheer distance, isolation, topography and a lack of skilled labour can blow out the cost of construction sufficiently to test any governments’ will and commitment.

What does the White Paper mean for farmers?

Stimulating economic activity on pastoral land is one of the stated objectives of the White Paper.  More than half the region is held under pastoral lease and these leases co-exist with native title rights.  The Government intends to broaden and secure these leases, open more land to agriculture projects and remove unnecessary restrictions on pastoral leaseholders to “unlock the potential of the land” and benefit pastoral leaseholders as well as Indigenous leaseholders.

In addition to pastoral lease reform, the Government wants to improve Indigenous economic activity and investment across the north and has promised funds to support and secure more effective native title negotiation.  The White Paper proposes to deliver simpler and more secure land arrangements in the north, by investing:

  • $20.4 million to support native title bodies to realise their potential and negotiate more efficiently with business
  • $17 million to support secure property rights through more cadastral surveys, area mapping and township leases, and
  • $10.6 million for pilot land tenure reforms to fund ‘next steps’ for projects that demonstrate the benefits of tenure reform. They will cover native title, Indigenous land and pastoral leasehold.

The White Paper includes $200 million to build water infrastructure that is tied to the development of secure, tradeable water rights, as part of a new National Water Infrastructure Development Fund.  This fund is to be established within two years.  The initial objectives for this fund, also to be actioned within two years, are:

  • $15 million to determine the best locations for water infrastructure across Northern Australia, including in the Mitchell River Catchment in Queensland, and
  • up to $5 million for detailed feasibility studies of the Nullinga Dam in Queensland and the Ord Stage 3 development in WA and NT.  The Nullinga Dam initiative has been welcomed by Queensland’s Treasurer, Curtis Pitt, who has said that he would like to see Building Queensland involved, and is eager to see earthworks commence.2

The White Paper reinforces heavy vehicle road reform and is looking to explore options where industry pays for upgrades to, or alternative service outcomes from, roads, as well as developer contributions and specific charges for new roads.  Road infrastructure projects that will benefit northern graziers and agribusiness include:

  • $600 million for priority road projects in northern Australia, including consideration of the Flinders Highway, which connects Townsville to Cloncurry, Barkly Highway, Hann Highway and the Outback Way.  The projects to be funded are to be announced in early 2016, and
  • $100 million to improve cattle supply chains through a northern Australia beef roads fund.  The projects are to be announced within two years.

The White Paper states that investments from the beef roads fund will be partly informed by CSIRO’s logistics modelling tool, the Transport Network Strategic Investment Tool (TRANSIT), to maximise the benefits from that fund.  TRANSIT analyses all possible combinations of transport routes and methods (both road and rail) to determine those that will optimise vehicle movements between enterprises in the agricultural supply chain.

What does it mean for industry and development?

The White Paper is clearly aimed at providing a more encouraging investment environment; it identifies the need to cut ‘needless’ red tape and applies a risk neutral, rather than risk averse, framework for assessing the impact of development in the north.  The White Paper also recognises the need to support investment by encouraging a more flexible labour market system in the north (by asking the Productivity Commission to examine the workplace relations framework) and boosting the opportunities for Indigenous workers and businesses through the use of Indigenous procurement targets in all road projects funded through the White Paper.  

Some other highlights for industry and development are:

  • $3.7 million to develop an infrastructure pipeline to give investors information on potential infrastructure needs, to be published within two years
  • $39.6 million to upgrade airstrips and subsidise air services in remote Australia
  • $75 million to establish a Cooperative Research Centre for developing North Australia, initially focussing on agriculture, food and tropical medicine
  • $5 billion in concessional loans for projects through the Northern Australia Infrastructure Facility (discussed further below)
  • Infrastructure Australia’s northern Australia infrastructure audit.  This has been published.  The White Paper references its recommendations for:
    • resilient export related infrastructure, with sufficient capacity
    • improved connections with southern Australia, and
    • connections between Darwin, Cairns, Townsville and Mackay, and their hinterlands.

What does it mean for local and state government?

The government announced its intention to establish a $5 billion Northern Australia Infrastructure Facility in this year’s budget.  The White Paper states that this Facility will offer concessional loans for projects such as airports, ports, rail, roads, energy, and water and communications infrastructure.  The Facility will be administered by Treasury, but projects will be assessed by the relevant Commonwealth department (e.g. the Department of Infrastructure and Regional Development for a transport project), and if appropriate, by Infrastructure Australia.  How this will operate with the State’s own infrastructure investment bodies, such as Building Queensland, remains unclear at this stage.

The eligibility criteria are still under development, but draft criteria will apparently be released soon for consultation with relevant interested parties.  The White Paper and the Facility’s website  state that the criteria will include requirements that a nominated project:

  • would not otherwise have been constructed, i.e. the Commonwealth will not lend to projects that are commercially viable without government assistance
  • will increase the productive capacity of northern Australia
  • will produce benefits that extend beyond the project proponents
  • must be capable of repaying the Commonwealth’s loan
  • is located in geographic areas that were identified in the Northern Australia Infrastructure Audit.  In Queensland, this includes local government areas intersecting the Tropic of Capricorn
  • must have other funding sources in addition to its concessional loan, i.e. the Facility would only be co-funding projects and will not be the sole funder. 

What happens now?

At a macro level, the Office of Northern Australia will be shifted from Canberra to the north to oversee implementation of the White Paper.  High-level leadership will be provided by the Northern Australia Strategic Partnership, a regular meeting chaired by the Prime Minister with Ministers of northern jurisdictions and the Deputy Prime Minister. 

The support and collaboration of the Queensland, Western Australian and the Northern Territory governments will be crucial in achieving any of the inter-jurisdictional elements such as land and water reforms, priority infrastructure projects and ongoing deregulation.  We expect these issues will be ventilated at the proposed major northern investment forum flagged for Darwin in late 2015.

Some actions are expected to start immediately while others will take years.  The White Paper includes a two, five, 10 and 20 year implementation plan for each policy direction.  These longer term time horizons provide snapshots of the likely pathways of development under the White Paper’s six key policy areas of land; water; business, trade and investment; infrastructure; workforce capability; and governance.

The key to the successful implementation of the White Paper will be the ability of participating governments, from the Commonwealth to States, Territories and local governments – and industry, community and Indigenous leaders – to work together to overcome partisan agendas and objectives.  If successful, the strategy could enhance the northern economies’ commodity markets but also complement primary industries and the resources sector with high value exports of knowledge services and tourism.