Transcript: ABC Radio interview, Mount Isa
08 July 2015
Topics: Northern Australia White Paper, road funding, attracting investment, rail feasibility study funding
Question: So, Deputy Prime Minister, we've got this big white paper release that happened not long ago that a lot of people were waiting for the results of that. You're head of the National Party, which really is the voice for rural Australia, or wants to be the voice for rural Australia. What's your big vision for Northern Australia, given that we've had this paper come out, what can you see developing in the next 20–30 years?
Warren Truss: Well we're very excited about the white paper. We think it does lay down a blueprint for the future. Everyone has been talking about the potential of the North for generations, and a lot of important and really good things have happened. But what we do need now is a new impetus to provide the infrastructure and the support for the local community, for the many dreams and ambitions to come to fulfilment. So this package puts forward not only a framework to achieve those kinds of objectives, but real money on the table to support important infrastructure projects and developing the social and economic infrastructure for the region.
Question: Now I'm glad you said real money on the table, because that leads into my next question. The Hann Highway, the inland highway linking Cairns and Melbourne, is in desperate need of finishing. A lot of people that we've spoken to across the Northwest in that region want to see that project funded. Now it's had principle support from the Government, it's been mentioned in the documents—when is the Government going to commit to putting the money on the ground for that roadway?
Warren Truss: Well we have $700 million in the package for roads, that includes $100 million that had been especially set aside for new beef roads. So obviously the Hann Highway is one that really I guess qualifies under both elements of the package. The Queensland Government has indicated an interest in supporting that road, so I'll be looking for their budget to see what their contribution will be. But clearly that is one of the roads that's been identified in the white paper as one that we're interested in funding, and we'll be talking with the State Government about how quickly that can be done. There obviously has to be design work and the like to be undertaken, but essentially our money is available now and we're ready to proceed with significant road projects.
Question: So can you say with any certainty that this will be getting funding?
Warren Truss: Well there are other roads that are being talked about as well. What I can say with absolute certainty is that on top of the $50 billion road package, road and rail package we have for our nation, there is now another $700 million that will be spent on roads in Northern Australia, and the Hann Highway is one that interests us greatly.
Question: And how much of a contribution would you be looking for from the State Government?
Warren Truss: Well clearly we want to be in partnership with the states wherever we can on these projects. The new Labor Government in Queensland had made a promise to spend money on the Hann Highway; presumably it would have been their intention to fund all of it before the Commonwealth said well we're prepared to be involved as well. So we'll be looking for a partnership with the State Government, but we don't have any particular predetermined amount in mind. We want to build the best roads and deliver the best outcomes for projects in this region. We already have a very substantial commitment to the national highway, and there'll be about $3 billion spent on the Bruce Highway in Northern Australia, we've committed money to the Barkly and across through to Western Australia to the Darwin to Perth Highway. So there'll be a lot of money spent on roads that's already on the program; now there's an extra $700 million available.
Question: Now we've got another one of the big drivers for the North right now is the availability of water, and not just for security but also for projects like irrigation. We've got that $500 million water infrastructure fund, but looking at some of the proposals on the table where people want to build those up, for example the Nathan Dam, could cost up to, you know, in the billions. So, looking at that money that is available now, how is that going to be spread across Australia, and what can you say to people that are looking to shore up their water futures given that that amount is what's been offered?
Warren Truss: Well certainly of the $500 million, we've committed $200 million to Northern Australia, and $30 million of a $50 million commitment to doing feasibility studies to get projects to the shovel-ready stage. You're right that the Nathan Dam is a significant project, although it's actually our Northern Australia zone. But nonetheless, it is a project that's virtually ready to go. However the major customer for that dam is the Wandoan coal mine, and currently that project hasn't been given the go ahead.
But many of the proposed sites for dams across Northern Australia have never really been thoroughly investigated. So feasibility work needs to be done, and that's why the 30 million's on the table. In my discussions here today in Mount Isa a number of projects have already been identified, and they would be the sorts of projects that we'd want to spend this early money, to make sure that there is a bankable proposition that can then access potentially a contribution from the Commonwealth towards the capital cost. There are literally hundreds and hundreds of sites across the North. The Dams Paper has identified some of the best prospects, and we'll be following those through. But we're keen to talk to local communities about their dreams and aspirations and how some of those projects can be brought to fruition.
Question: Well no doubt some of the groups you've spoken to today would have talked about some of the opportunities available on the Cloncurry River with the two towns of- well the City of Mount Isa and the town of Cloncurry looking for better water security. Can you say whether that's a priority given that on some of the lists for dams that the Federal Government is interested in that's quite low on the list.
Warren Truss: Well, the interesting thing though about that project is that it's not dependent upon just agriculture or just urban water supplies, it is also supplying water for a rich minerals province and so that improves its economics, and therefore its chances of being funded. The key thing is to have projects that economically viable. As you pointed out earlier, it is very expensive to build dams, and as a result they have to have a revenue stream into the longer term. People have got to be able to afford to pay for the water once the project is built, even if there is substantial state or Commonwealth subsidies. So we're looking at projects that would be not white elephants, but actually contributing to the growth and prosperity of the region, and I am confident that there's quite a number of those in the North.
Question: And when will that money in the Water Fund be made available across Northern Australia?
Warren Truss: Well the money is available now for all of these projects. In some cases we may have to go through some kind of an application process. But we also have this $5 billion infrastructure financing package as part of this program. Now that's available for infrastructure, but it might also be a part of new mining developments and the like to provide the financial support that's necessary, again, for these projects to come to fruition. So that package may also be a part of funding dams, or roads, or other pieces of vital infrastructure—gas pipelines, power stations. Whatever we need to have a stronger northern economy. And so if there are people who've got projects ready to go, well, talk to us now. If they believe that this financial package has- will make their proposal viable where previously it wasn't, well we want to hear from them right away. They don't have to wait for any kind of application process. The money is available and we're ready to roll.
Question: Traveling along the Flinders Highway, about every town you reach—maybe excluding Mount Isa—were here today. But every other town almost has a proposal in for a meatworks, for somewhere that will create jobs and stimulate the economies in these small towns. Now, it didn't rate much of a mention in either of the White Papers that have been recently released. They're all there looking for investment. Can the government make any sort of commitment to that sort of project for this area to bring people back into Northern Australia?
Warren Truss: Well, it's unlikely that the government would fund a meatworks. That would be something for the private sector. Clearly a meatworks might benefit if there's new water infrastructure or new roads. One of the things that I'm announcing in Mount Isa today is our commitment for the feasibility study to upgrade the Townsville to Mount Isa railway line, and the prospect of building a new line from Mount Isa to Tennant Creek. We're providing up to $5 million for that study, and the Northern Territory have indicated that they'll put $1 million on the table for the Mount Isa to Tennant Creek railway line.
So major new rail infrastructure would obviously be a boost for the beef industry, and also the potential for abattoirs in this region. But an abattoir will need to stand on its own feet economically. We have probably 100 closed abattoirs in Australia. Now, I know that the industry has changed since that time, but those proposing an abattoir would need to do a very close economic study about whether it can be viable in the longer term. But I know that there are, as you say, a number of proposals around the country at the present time for new abattoirs. They're all private sector investments, and we'd encourage the private sector to do what they think can be done profitably. It certainly value adds to the beef industry in regions like this one, and would be good for the local economy.
Question: From talking to the people that have the proposals up at the moment, they feel as if at least a show of support from the government for a plan like that, not one specific one, but one along the way could help get those investors over the line—so in terms of just generally attracting investment—what can the government offer in that respect, to these developments that are hopefully budding up across the Northwest?
Warren Truss: Well, the former Queensland Government assisted by doing feasibility studies for abattoirs in Queensland. The West Australian Government has done feasibility studies for an abattoir in the north west of Western Australia. An abattoir has now been built in Darwin, so one has already happened, and that of course may also affect the viability of potential competitors in Western Australia and Queensland. So I think the facts are on the table and it's a matter for those who now are interested in constructing an abattoir to do the economics for their proposal and how they would like to proceed.
Question: The White Paper looks at a number of things, including in their portion to discuss liveability which is a big issue for Mount Isa, you wanting to attract people out here to the industries, get people involved and one of the things suggested to do that was setting up a special tax zone or giving tax allowances for people who come out here and live the rural lifestyle in a place like Mount Isa, which is quite remote. That didn't feature as highly in the Northern Australia White Paper, why not?
Warren Truss: Well the tax incentives and the tax zones haven't provided an enormous amount of assistance, the amounts haven't been adjusted for such a long time that they're not as meaningful any more as they once were. We took the view that it was actually better to provide the cash cost of some kind of new tax concessions into building infrastructure now. We think the bigger attraction to have people coming to live in regional communities are good roads and railway lines, better economic prospects. Once they start making a profit, once they start making money, well then it's probably reasonable that they pay their share of income tax but what we want to do to encourage them is to make sure that firstly we have nice towns to live in, but particularly that they've got the infrastructure that they need and that's where the Government has a particular role in funding that sort of vital support for the local community.
Question: So speaking of infrastructure there, you've mentioned that looking into the feasibility of some different rail lines across the northwest and into the neighbouring states is on the agenda. Can you make any announcements now?
Warren Truss: Well certainly we're committing the $5 million towards that feasibility study. The Northern Territory Government has indicated that they will provide another $1 million especially for the missing link between Mount Isa and Tennant Creek so we'll be looking now to engage consultants to undertake that feasibility study. The key thing will be to be able to identify who will use a potential Mount Isa to Tennant Creek railway line so that there is some assessment about its economic viability and then what would be the value in upgrading the Mount Isa to Townsville line. It's owned by the Queensland Government and so the key thing there will also be to have cooperation from the Queensland Government about how it would be managed into the future and how it might be able to attract new users to the system. Clearly the line now can only manage trains at very slow speeds and that's not attractive to other users. So this is a feasibility study into what we might be able to do in the longer term about building a rail link potentially between Darwin and Townsville but clearly Mount Isa and the towns along that route would benefit from having that dual access option.
Question: So the money's been put up, who's going to be responsible for undertaking that study?
Warren Truss: Well we'll have to engage consultants to undertake a project of that nature and then we would want them to be engaging with local councils and local businesses to sort of test the viability of a proposal of this nature, so then we can take the next step of looking at who would build it, whether the Queensland Government wants to continue to look after a project of this nature, whether the ARTC Australian Rail Track Corporation might be involved, or whether it's something the private sector might be interested in doing. So that's—those sort of things will clearly be the outcomes of the feasibility study.
Question: And Minister Truss is there a timeline on how long you would expect a study like that to take to then move to the next stage?
Warren Truss: Well they usually take quite a number of months but we want to see action on what's happening in this northern paper so we're not anxious for things to drift on and on. Let's deal with some of these issues, if the studies show that it's not an option, well then we've got to look at what else we might be wanting to spend the money that's available in the package on, but what can best serve the local community. We can test these things because many of these great ideas that there's been around for Northern Australia have never really been subject to any kind of detailed economic assessment. There's been quite a bit of work done by the CSIRO and others on dams and agricultural land that might be available for full production so that's a great start in that field, so we've got some advantages there that we don't have in some of the other infrastructure ideas that are around. We've got also a substantial increase in funding to local government for their roads, through the Roads to Recovery program, new bridges programs, heavy vehicle programs, they're all on top of what's on top of the Northern Australia package so by accessing this funding, I think there's enormous opportunity for the north to see substantial upgrades in the local infrastructure over the years ahead.
Question: Thanks for spending some time with me Deputy Prime Minister Warren Truss.
Warren Truss: Very pleased to be here and look forward to seeing a revitalised northern Australia over the years ahead.