Press Conference Sunshine Coast Airport

Interview

DCI017/2016

17 November 2016

Subjects: Funding for Sunshine Coast Airport redevelopment

Ted O'Brien: So firstly thank you very much everybody for coming along today. It's a really exciting day for the Sunshine Coast. Let me say a particular welcome to the Minister, Minister Darren Chester who's here today, and let me pass immediately to him.

Darren Chester: Well, thank you Ted for those kind words of introduction. It's great to be here.

It is a terrific day and it's great to be here with Ted O'Brien and Andrew Wallace, CEO Peter who I saw before but has disappeared, and also the Mayor of Sunshine Coast City Council Mark Jamieson. And this is a great partnership, a great partnership between local, state and federal government, and I could simply say that a world class tourism destination and a highly desirable place to live like the Sunshine Coast does need a world class airport, does need an international airport, and this is the next step along that journey. I'm very pleased to announce and confirm today that the Coalition Government will meet its election commitment to provide a $181 million concessional loan for the Sunshine Coast City Council to assist in this major redevelopment of this important regional—in fact, important national facility.

Now I recognise that Councils right across Australia would prefer to receive grants than loans, but in the difficult budgetary circumstances the Federal Government's dealing with, the best we can do in this circumstance is support a council which is getting on with the job of delivering for its community and working in partnership with them as much as we possibly can.

The Turnbull Government has a $50 billion infrastructure investment program across Australia, and we're seeing the benefits of that on the Sunshine Coast with more than a billion dollars worth of work going ahead on the Bruce Highway in the next couple of years. It's part of an $11 billion commitment to Queensland which will actually change lives and will save lives.

It changes lives by reducing congestion and improving productivity in the community, and it saves lives by reducing the incidents of road trauma. Tragically on the Bruce Highway we've seen too many fatalities, too many serious injuries, and this investment in the future of the Bruce is significant as well.

So it's great to be here making another significant announcement in terms of the future of the Sunshine Coast. It is a great region, it is a growing region, it is one that the Commonwealth Government is very keen to support, and I'd like to congratulate the Mayor, Mark, for the work he's done along with his fellow councillors in having the vision to build the type of infrastructure that our kids and our grandkids will thank us for.

Ted O'Brien: Thank you very much Minister, and how exciting is this? We have the Turnbull Government delivering on a $181 million concessional loan which allows a fully fledged international airport to be built here on the Sunshine Coast. This investment really unlocks an enormous amount of potential for the Coast—over $4 billion of economic benefit of a 20-year period. Over 2000 full-time jobs—1500 jobs just in the construction phase itself. This is enormous news, not just to the tourism sector but particularly to ag and food, because we can tap into our free trade agreement with Japan, Korea and China to really ensure that our producers reach the Asian destinations, and so this commitment, which now turns into the delivery of $181 million in a concessional loan allows Council now to get on with the job and deliver a fully fledged international airport by their target date of Christmas 2020.

There are three things that the Council needed from the Federal Government after this last election, and that was an environmental tick of approval—done, that was international designation—done, and that was a concessional loan of $181 million and today—done. And so we're very excited about what this means. What we need to do now is just get on with the job and get it done. Of course, full credit to the Council for having the vision and the guts to take this forward, and this is why it's important that you see us working collectively as a team, and with that, let me introduce Mayor Mark Jamieson.

Mark Jamieson: Well thank you very much Ted and Andrew, and welcome to Minister Darren Chester, it's great to have you here to make this important announcement, and I start by saying I appreciate the Minister's qualification of the loan versus a grant; I think one will appreciate it's challenging funding infrastructure around Australia. Our Council I think courageously has been determined to press on with this project because we realised how important it is to our region. So we thank Ted and Andrew for the assistance they've provided, and definitely the Minister for his support.

I've been on this funding journey for two years, so today is a very satisfying day, to have that announcement made. But as I think ahead to the next couple of weeks here on the Sunshine Coast, certainly in the lead-up to Christmas, the announcement around the funding obviously is critical, and it removes any doubt about the construction for this airport. It reinforces very favourably with the bidders who are currently involved in our expression of interest process, which we hope to have finalised also in the next couple of weeks to add more impetus to this announcement, because this is a step in the journey; finalising that partner and then getting the construction underway and completed obviously is the next big challenge.

But also, importantly, for the fastest-growing airport in the country for the last 14 months bar none we will welcome our one millionth visitor through this terminal somewhere over the next couple of weeks. So there's three really great Christmas presents for our airport and for the community of the Sunshine Coast. But again, I go back and thank in particular the Councillors who've been on this journey with me. We've had to deal with some very challenging community issues to make this a reality. Also to the Council staff, particularly the executive staff and also the airport management for the wonderful job they've done in gathering around and putting together a really strong argument about why this airport is so important. As Ted has indicated, independently assessed and delivering a $4.1 billion economic benefit from 2020 to 2040.

It will also be the impetus for a range of investment on the Sunshine Coast, potentially unlike we've ever seen before in terms of international hotel opportunities and tourism attractions. We've got a very clear vision about what we want the Sunshine Coast to be. A very broad-based economic plan. Tourism's a key part of that and up until this stage, our ability to participate in international tourism has been severely limited by access. This new airport will solve that problem. So thank you.

Ted O'Brien: Thank you very much Mr Mayor and Mayor talked about Christmas—Christmas presents and so we should also start thinking about where we want to fly to Christmas 2020 as this airport then hits target to be a fully fledged international one. You know, the thing that gets me excited is the dream of seeing an Airbus A330 landing here with 300 cashed up tourists ready to spend their money locally and then that very plane taking up with over 70 tonne of local produce destined for the Asian market so it's very exciting, thanks very much Mr Mayor. And I'll call on my colleague and friend Andrew Wallace to also make some comments.

Andrew Wallace: Thanks very much, Ted. Well it's very exciting to be here and this is a great news story for the Sunshine Coast. This is about the Federal Government, the Turnbull Government working in step with local councils. The Turnbull Government acknowledges the importance of this project and really there can be no argument, there can be no reasonable argument that the Turnbull Government is not looking after the interests of the Sunshine Coast. The Turnbull Government is spending $1 billion on the Bruce Highway and also sees this as a great example of another project with $181 million concessional loan. This is a great example of tiers of government working together, Mr Mayor and we as the federal members on the coast are very keen to be part of this project.

Ted O'Brien: So thank you very much, we'll open to questions.

Question: It'd always be great to get a grant from the Government, but concessional loan, what's the benefit of that concessional loan, what's the benefit to the Sunshine Coast ratepayers as opposed to going to the commercial market?

Mark Jamieson: Look I've always said as Mayor from the day I was elected that this was one of our key priority projects, so five years ago and said we will seek the best and most inexpensive means of financing this airport development. That is why we have pursued the Federal Government so vigorously. It was made clear to us very early on that our prospects of getting a grant were very slim so we took the bit between our teeth, good to see Councillor O'Pray here as well and the Council took up that challenge and pursued a concessional loan. Now I'm not going to go into all the details but along the way there's been some twists and turns and that has taken a fairly long time. Look the net benefit in terms of having it funded by the Federal Government rather than through or totally through QTC, look it's somewhere in the—depending on the drawdown timetable, somewhere in the order of $1 million.

Question: You happy with that? Is that a fair deal?

Mark Jamieson: Look I just want to get the airport completed. This is a community asset, an important community asset. We've got some big decisions to make in terms of how we take that forward, in partnership with the major airport operator but this asset will always belong to the people of the Sunshine Coast, this is the most inexpensive way for us to fund the development.

Question: You talked about rents there, Minister, and yourself, Mr Mayor, I'm aware about Hobart Airport got a $38 million grant, why didn't Sunshine Coast get a grant?

Mark Jamieson: As I said, early on in the process it was made clear to us that a grant wouldn't be an option and you know, I think as the Minister said, there's a fair amount of work to be done on budget repair. We pride ourselves on being a region that's got a get up and go attitude and Councillors have been very determined as I have been to make sure this asset is developed. So in the end, we took what was the very best outcome we can get and as I say, in the next couple of weeks, we finalise our preferred partner and be able to make another great announcement there.

Question: What kind of destinations can we expect to see when you first—when it starts the operation?

Mark Jamieson: Sorry, what was that?

Question: What destinations can we expect to be flying into?

Mark Jamieson: Look it's difficult for me to be absolutely specific but certainly think Asia Pacific, there's enormous growth in international tourism coming out of China, that will only have grown by a significant number come 2020. But increasingly we're seeing people from Indonesia, Malaysia, obviously Japan, there's a tremendous opportunity for us and if we're talking Tourism Queensland about having 1 million Chinese customers by 2020, well we surpassed that this year so by 2020 it might be 5 million. A modest share of that coming into the Sunshine Coast Airport will make a huge difference and that's why the investment in high end and five star international hotels and resorts will be critically important, and we're fortunate that we've got a number of locations where they can be developed.

Question :Tell us a bit about the path forward too. Do you try and—I guess, does a private partner sort of fund the rest of the project to try to eliminate the risk on the ratepayer, or how do you move forward from here?

Mark Jamieson: Well there is—I don't believe there's a significant risk to ratepayers at all, but as we've said, we've gone through an expression of interest process. There's now a binding bid process in place. We will select, as recommended by the tender assessment panel, their recommendation as to who that successful partner should be and the terms of what that arrangement will be, and I'm anticipating that that will be finalised, as I said, before Christmas.

Question: When would you expect construction to start? Or will it be get your money sorted out first?

Mark Jamieson: Well, look, some things in terms of the planning and the project management, in anticipation we've already been underway. This is a bit like a relay race in the Olympics; you want to take the baton on the move, and we're on the move already. So obviously our conversations in negotiation with the Federal Government have been ongoing now for some time, but we want this open by Christmas 2020.

Question: Mark, can you talk us through what the terms of the deal are? Is there an extra cost to ratepayers in terms of paying back interest, and how long is it going to take for ratepayers to pay that off?

Mark Jamieson:There's no cost to our ratepayers at all. The loan has been set as concessional, which means we're paying an interest rate less than we would pay if we went into the market or borrowed from QTC, for instance. And the arrangement we will have with that partnering entity will ensure that we're in a position to pay back that loan to the Federal Government post the construction of the airport.

So really, ratepayers should only be thinking benefits, in terms of more people coming to this region, more tourism opportunities, more opportunities to depart from the Sunshine Coast to elsewhere in the world from right here. And there's a whole lot of spinoff industries that will come of that as well, and I'm heartened by the Federal Government's support. I see huge opportunities on the Sunshine Coast for the Federal Government and the State Government, local government and the private sector to work to make a model city, a model region for Australia.

We've halved our unemployment number from 10 to below five per cent. This is an area that's on the move, and I think other levels of government should be happy to work with us to achieve those sort of outcomes. I should make mention of the State Government. They've also obviously been supportive, and QTC ultimately will be the guarantor for this loan. And so it is a really good example of the three levels working together, but I've certainly got, as I've indicated to the Minister—and I haven't bugged his lapel badge—that there is a lot of opportunity here. And particularly around Prime Minister Turnbull's City Deals proposal. There's no better place than the Sunshine Coast.

Question: Great news today. What other jobs, what other things are on the wish list for the particularly two, but maybe the third Minister?

Mark Jamieson: I'm not telling them anything they don't already know. I want certainty around our hospital in terms of the medical school. That's incredibly important. It's what the people of this region expect, and I want to see that happen. I also want to see the take-up on our broadband submarine cable processed. I think there's a lot of frustration being felt about a really good idea that just isn't getting the level of push it needs from the regulator.

So there's a couple of priorities. Obviously Ted and Andrew are all over the Bruce Highway, and there's a lot of money being invested there. I think the Minister made the point earlier that it's not only about road, it's about rail as well. If we just add lanes to the Bruce Highway, we'll be doing that for the next 20 years. So there's got to be a bigger solution around rail and indeed around light rail, and again, council is well placed with plans for those, but we need the support and the funding and the direction from the other levels of Government.

Ted O'Brien: Can I just make a few comments, as some of you might recall, I think I shared a platform with the Mayor in 2012 at a UDIA event, albeit then as somebody with a big deals infrastructure background. Full credit to the Council on this sort of a deal. This is not an easy thing for a Council to pull off. But there's still a long way to go.

The big thing is—and we spoke about it four or five years ago—this airport, in order for it to be funded for the upgrade, was going to rely on some assistance from government. And ultimately the loan arrangement that's been struck is indeed the best deal in the marketplace. And indeed, as the Mayor indicated, it came down to what's the difference between a Queensland Government and a Federal Government loan, and of course, the Federal Government one was a better deal in that regard. But it's been the three tiers working together.

The big thing moving forward with any of these large infrastructure deals—and the airport's no different—is to make sure that as the Mayor said, the ratepayer is not burdened with any long term liability, that we do not overcapitalise the asset, and that our local workforce maximise the jobs through the construction phase. One thousand five hundred global jobs, and we need to ensure that the procurement packages for that maximise the opportunity for our locals.

There is a tie to this deal as well as other potential opportunities on the coast, including the optic cable and the CBD. There's no doubt that unleashing a fully fledged international airport will help both of those opportunities. Indeed, this might be the landing pad for an optic cable to come on the coast, and that's why the Turnbull Government has dedicated a quarter of a million dollars to help that process to ensure we're identifying the investments that can come in the coast.

The medical school indeed is a key priority, also for Andrew Wallace and I. The issue here with medical placements, as far as I'm concerned rural and regional Australia do not get sufficient GPs, and so we need to fight to ensure that we have sufficient places here on the Sunshine Coast. That's a matter of allocation, not funding, and we just have to keep up the fight. And today's a fantastic day, and it's wonderful to see a day of delivery.

Thanks very much everyone.