CEDA State of the Nation 2017 – New Thinking for New Challenges

Speech

fns002/2017

31 May 2017

Parliament House

Thank you Megan (Motto, CEO, Consult Australia) for the kind introduction.

I would like to acknowledge:

  • Paul McClintock, CEDA National Chairman
  • Hamilton Calder, CEDA Acting Chief Executive

It's a privilege to be here.

The focus of this year's event is absolutely right for our times.

As a nation we are facing new challenges, so as a government we must demonstrate new thinking.

Developing regional Australia is critical to that new thinking.

To not just pay lip service to, but to actually acknowledge through policies and through Budget measures, that Australia's regions drive our national economy, and are fundamental to the functioning of our cities and the nation.

The statistics speak for themselves.

Nearly eight million people live outside our capital cities.

In 2016, our agriculture, forestry and fishing and mining industries, all predominantly located in regional Australia, made up 57 per cent of Australia's merchandise exports.

Around 45 cents of every tourism dollar is spent in regional areas.

Regional Australia supplies the water, gas and electricity that powers our households.

As a regional Australian, I see amazing things happening all the time in rural, regional and remote Australia.

But regional Australia isn't just important to people like me.

Every Australian owes his or her lifestyle to regional Australia. But I would be confident in saying that most people living in cities have no idea just how dependent they are on the regions …

… from the milk on their breakfast cereal, to the meat and vegies for dinner followed by the cream on dessert, as well as the gas that cooks that dinner, the water for showering and most of the materials that built their homes.

Given all this, it is impossible to discuss economic development in Australia without discussing our regions. It is even more impossible to drive national economic development without investing in our regions.

Regional Australia is critical to the Turnbull-Joyce Government's plan for economic growth to secure more and better paying jobs that will encourage investment, facilitate innovation and provide vital infrastructure.

I don't want to give the impression that things are all perfect in every region. The recent Productivity Commission report into regional economies found 80 per cent of our regions are doing very well while 20 per cent face challenges. If you only read the media you might think only bad things happen in regional Australia, but there are boundless opportunities.

This year's Federal Budget includes substantial investments aimed at harnessing those opportunities.

Federal Budget

Connectivity—to better connect our cities and regions and to grow the economy—is at the heart of the infrastructure investments.

We are investing $75 billion over the next decade to fund and finance critical airport, road, and rail infrastructure projects.

A centrepiece of the Budget is a once-in-a-generation, $20 billion commitment to upgrade Australia's passenger and freight rail, to better connect people to jobs and services, and get goods to market.

In one of the biggest investments ever seen in regional Australia, we are funding the Melbourne to Brisbane Inland Rail with an additional $8.4 billion. Many have talked about this for so long—this is the government that's actually building it.

By 2025, this nationally significant freight transport project will better connect our regions to domestic and global markets to take advantage of the tremendous opportunities offered in Asia and beyond.

As part of the $20 billion commitment we have put $10 billion on the table over the next decade for the National Rail Program. A third of this will go to regional Australia.

This investment will reduce the burden on our roads, provide more reliable transport networks, and support our efforts to decentralise our economy and grow regional Australia.

The Budget also contained an extra $200 million for the Building Better Regions Fund (BBRF), bringing the total amount in that fund to almost half a billion dollars so more regional communities can grow and drive their own futures.

The Building Better Regions Fund invests in infrastructure projects to which create jobs as well as economic benefits through its infrastructure stream. It also invests in people and communities by supporting things such as tourism initiatives, local leadership and regional planning through its community investment stream.

The Building Better Regions Fund has seen huge demand for local regional projects, evidenced by the record number of applications made under the first round of BBRF which closed earlier this year—more than 900 applications, with 545 for the infrastructure stream and 371 for the community investments stream.

BBRF invests amounts of up to $10 million in federal government funding per project, with a requirement for matching funding from elsewhere. These infrastructure projects are an important way for regional communities to upgrade and improve facilities.

However, in some regional areas larger infrastructure is needed to unlock significant potential.

The 2017–18 Budget provides $272 million to fund major projects that will help take advantage of new opportunities and potentially develop new industries.

Under this fund, the Australian Government's minimum contribution to a project will be $10 million, with the requirement for matched funding meaning the minimum total value of a project funded will be $20 million. Successful applications will require the support of all levels of government.

Guidelines are currently under development, and it is expected that the funding round will open towards the end of this year.

The Government's $220 million Regional Jobs and Investment Packages (RJIP) is another important aspect of regional development, aimed at helping regions stimulate long-term economic growth and deliver sustainable employment.

Ten diverse regions have been selected as pilot sites for the RJIP programme.

Funding packages will be made available through three streams—business innovation, local infrastructure and skills and training.

In each region, a Local Planning Committee which will bring together community leaders across a range of sectors to identify the region's strategic priorities.

Successful applications will align with the local priorities listed in a Local Investment Plan written by the Local Planning Committee. This will create a community-driven, government investment partnership between local communities, business and the Australian Government.

This is all capped off with tax cuts for small business, because small business is the backbone of regional economies.

Around a quarter of Australia's small businesses are outside the capital cities. In rural, regional and remote Australia, the butchers and bakers, the farmers and stock feed businesses, the corner store and newsagents are the lifeblood of our economy.

The Coalition Government believes in a better tax system. We want to reward people for the effort they put into their business.

Under the Coalition Government, tax rates for small business will continue to reduce.

The first instalment of the Government's Enterprise Tax Plan will reduce the business tax rate to 27.5 per cent for companies with a turnover of less than $10 million.

Most businesses in regional Australia will benefit from this.

There are so many more good things in the 2017–18 Budget for regional development. This is on top of what we were already doing such as improving mobile black spots and rolling out the NBN, that I don't have time to cover in any detail.

I'll mention just a few:

  • In response to the National Taskforce Report, we are providing $298 million toward education, prevention, treatment, support and community engagement around ice and other drugs;
  • Over the next decade, there will be an 84 per cent increase in Commonwealth funding for students in regional and remote Australia.

Regional Policy Statement

I have talked a lot about investing in the regions, and while these investments and initiatives are significant, they don't mean the job of regional development is done.

I mentioned earlier that there are huge opportunities in the regions, as well as significant challenges.

Our approach to regional development is that one size definitelydoesn't fit all, and regional development isn't just about grant programs.

Regional development is about lifting the profile of regional Australia, and looking at the issues affecting rural, regional and remote Australians across many policy areas.

Our Regional Policy Statement Regions 2030, is a comprehensive plan to unlock the opportunities and give regional cities and rural areas the investment which helps spur our national economy.

It recognises that local communities often have better solutions than government, and that when communities and government work in partnership, long lasting and great outcomes can be achieved.

Ultimately, it aims to build the kinds of sustainable regional communities our children and grandchildren either want to stay in or come back to.

We know regional Australians care about the health of their families, the education of their children and the ability to access technology, alongside traditional indicators such as employment and economic growth.

So our approach coordinates activities across five key areas:

  • Jobs and economic development
  • Infrastructure
  • Health
  • Education; and
  • Communications.

When the combination of actions across these five areas is right, those who live, work and raise families there, are positioned to make the most of their potential.

The recent Productivity Commission report clearly endorses my approach—and the Coalition's approach—to regional development.

The report emphasises that a one size fits all approach does not work; acknowledges the importance of local leadership and gives the nod to community-led projects being co-funded by different levels of government.

This brings me to the newly established Regional Australia Ministerial Taskforce, which is chaired by the Prime Minister. I'm the deputy chair.

The Taskforce illustrates the Government's significant commitment to regional Australia.

As the opportunities and challenges in regional Australia cross many portfolios, a cross-portfolio Ministerial Taskforce is the best way to address them.

The Taskforce spearheads our whole of government approach to developing Australia's regions by working to improve the lives of rural, regional and remote Australians across the five key areas I mentioned.

It makes sure we don't consider issues in silos and that our thinking goes well beyond the next electoral cycle.

Decentralisation

Then we've got our decentralisation policy.

As part of the Government's commitment to regional Australia, a structured approach to decentralisation is being developed, starting with a strategic assessment of which departments, agencies and their parts are suitable for decentralisation.

The policy is to look at all departments and agencies across Sydney, Melbourne and Canberra, although certain elements seem to have forgotten about Sydney and Melbourne and only report on potential moves from Canberra.

There are countless excellent examples of decentralisation—the NSW DPI in Orange and the Australian Tax Office in Albury to name just two.

Moving government entities to the regions puts more money in our towns, more customers in our shops, more students in our schools and more volunteers in our local fire brigade.

It also creates more career opportunities for our children to enable them to stay in the communities they grew up in and helps keep more bright young brains in the bush.

Cabinet has agreed on a structured approach, which will result in business cases for potential moves being presented to Cabinet in December.

I'm also a supporter of corporate decentralisation and the benefits for both the economic development of regions and the companies themselves, in terms of cheaper rent, rates and land, and I'm working with the business sector to progress this.

We've already seen some huge successes demonstrated by Mars in Albury-Wodonga, and Macquarie Bank setting up offices in Orange and Albury Wodonga.

Conclusion

Ladies and gentlemen, thank for again for the opportunity to speak at the 2017 CEDA State of the Nation Conference.

As I have said today, rural, regional and remote Australia is great already.

But it can be even greater.

To make this happen the Coalition Government is working through a vast range of new and ongoing initiatives, some of which I have outlined.

We are demonstrating new thinking for new challenges.

Thank you. I'll now take questions.