Keynote Address: National Farmers' Federation Agricultural Infrastructure and Logistics Forum

Speech

WTS019/2014

18 August 2014

Realm Hotel, Canberra

Thank you for the invitation to speak at the first National Farmers' Federation Agricultural Logistics and Infrastructure Forum.

The link between effective and efficient transport networks and global competitiveness in extracting every competitive advantage for our farm exports or minimising our geographic disadvantage is something the NFF has long recognised.

So I commend the NFF for this initiative and for always being prepared to take on the big issues in the national interest.

Building better infrastructure is central to this Government's agenda and central to the competitiveness of the agricultural sector.

It is, therefore, a pleasure to have the opportunity to join experts in a range of fields for what is surely a discussion of critical importance.

Meeting opportunities for growth

Australian agriculture is among the most innovative, efficient and least protected in the world, and under the Coalition Government has a prime place in our nation's future.

In 2013, farm produce contributed $48 billion to the economy—a 3 per cent increase on the previous year, and the total value of agricultural exports was $38 billion.

And despite droughts and natural disasters, the value of farm produce has increased almost 900 per cent over the past 40 years. 

At face value, growing populations and rising affluence across the Asian Pacific region means there are enormous opportunities for our food and fibre producers, which should assure the sector a continued productive future.

But surely the opportunities ahead are more than just keeping pace.

The UN tells us that the world needs to produce around 75 per cent more food over the next 40 years just to keep in step with global population growth, which is expected to top 9 billion by 2050.

In fact, our own Asian Pacific region will be home to more than half of the world's population come the middle of the century.

So we should no longer have a freight disadvantage to the best markets in the world. We are right at the heart of the real action.

As an agricultural nation of excellence, a supplier of choice and a leading innovator in agricultural sciences Australia is uniquely positioned—both geographically and in terms of ability—to fill much of the void.

The question is…are we geared for that growth in demand and to deliver it in the most efficient way possible?

This government is taking the decisions to let farmers take control of their businesses and get with doing what they do best.

Our agenda includes slashing red tape, axing taxes and putting more money into rural research and development.

Yet, much of the infrastructure to support agricultural supply chains is under pressure and has been for some time. That pressure will only increase as we strive to meet the anticipated 75 per cent increase in global food demand.

This requires governments, the farm sector and communities to work together to develop innovative and practical solutions to ensure all our transport modes are working well.

That is why, even in the context of an economy in the midst of major transformation, this Government has put such an emphasis on infrastructure in the Federal Budget.

We have made the biggest commitment in our nation's history—totalling more than $50 billion—to develop vital road and rail projects around Australia.

This investment will help to create a competitive, innovative and growing economy, stabilise public finances and encourage broader investment in infrastructure and, in doing so, lift Australia's productivity growth.

But I want to emphasise that our $50 billion investment is not just funding more infrastructure. It is about funding the right infrastructure, capable of the greatest productivity impact.

The right infrastructure is made up of projects that will increase productivity, ease congestion and deliver freight and logistics networks in our capital cities, our regional centres and the outback.

The right infrastructure includes:

  • WestConnex, NorthConnex, the Western Sydney Plan, the second Sydney airport and Moorebank Intermodal Terminal in Sydney;
  • both stages of the East West Link in Melbourne;
  • the Gateway Motorway widening, Legacy Way and Ipswich upgrading in Brisbane;
  • the Perth Freight Link, linking the Roe Highway with the Fremantle Port, and the Swan Valley bypass;
  • the Midland Highway in Tasmania;
  • two sections of the South Road in Adelaide; and
  • Tiger Brennan Drive in Darwin.

In addition to these commitments we are upgrading major regional highways including:

  • fixing the Bruce Highway in Queensland;
  • finally finishing the duplication of Pacific Highway in New South Wales and doing so by the end of this decade;
  • the Toowoomba Second Range Crossing and upgrading the Warrego Highway west of Toowoomba;
  • the Western Highway and Princes Highway in Victoria;
  • the Great Northern Highway and North West Highway in Western Australia; and
  • the Outback Way, traversing WA, the Northern Territory and Queensland.

We are also investing heavily on local roads and bridges, including last mile projects which are regularly damaged by heavy commercial freight vehicles and which local councils struggle to address.

Our plan includes $2.5 billion for local roads under the Roads to Recovery Programme—including an extra $350 million more to provide double funding in 2015–16—so long as we can get the legislation through the Senate.

  • $565 million for Black Spots—crucial to fixing dangerous and accident-prone sections of local roads and streets.
  • $248 million for Heavy Vehicle Safety projects.
  • $229 million for a new national highway upgrade program.
  • Round One of the $300 million Bridges Renewal Programme is currently seeking applications for projects that are sufficiently advanced to begin in this financial year.

Farmers should consider the priorities in their regions in association with their local council over coming months.

Infrastructure, productivity and reform

Funding infrastructure is an important part of the opportunities we need to seize, but governments cannot afford to do it all—weighed down by billions of dollars of inherited debt. We must deliver more for agriculture to reach its full potential.

We have put in place a policy agenda to target investment in productive infrastructure, complete projects faster, partner with state governments and leverage more private sector investment.

We are developing innovative financing models, which we believe will help to build $125 billion of much needed infrastructure over the next decade.

Reforming Infrastructure Australia is a key plank in our productivity agenda.

The Infrastructure Australia Amendment Bill 2013, passed by both houses of Parliament in June, delivers on part of our election commitment to achieve greater independence and improve transparency for the expert advisory body.

We will be bringing further legislation into the Parliament later this year to, hopefully, deliver the remainder of our IA reforms—including pieces we could not get through at the first attempt.

Effectively prioritising investment is critical to maximising productivity improvements.

Work on our promised national audit has commenced in consultation with state and territory governments and will feed into the 15-year infrastructure plan, both of which will be updated every five years.

This plan will enable IA, for the first time, to get ahead of the electoral cycle and actually prioritise projects before they are announced and all the available money is spent.

The infrastructure plan will include clearly defined service standards for project delivery, outline short and long term productivity gains, identify complementary projects and articulate a timeframe for projects to be brought to market.

This is part of our commitment to ensuring that every project with capital expenditure valued at more than $100 million (with the exception of Defence projects), is subject to IA scrutiny to ensure robust analysis.

To drive longer term infrastructure financing reforms in the future, the Government will consider the findings from the Productivity Commission Review into public infrastructure, the Taxation Review and the Federation Whitepaper—all of which are currently underway or soon to start.

These reforms will help the Australian Government to remain focused on delivering critical infrastructure, ensuring taxpayers are getting value-for-money, productivity is maximised and the infrastructure of the 21st century is being built.

Inland Rail—in the nation's best interest

And we are working to get the $300 million iconic inland rail project back on track. This was largely shelved by Labor for six crucial years.

The inland rail will connect Brisbane to Melbourne through regional NSW. We are finalising plans, engineering design and environmental assessments now.

Because of these six lost years, I have fast-tracked the project and formed an Inland Rail Implementation Group headed by former Deputy Prime Minister and Transport Minister John Anderson to get construction underway in our first term.

I said at the ABARES conference earlier this year that Melbourne to Brisbane Inland Rail has the potential to be nothing short of transformational.

It is economic reform that is important for the agricultural sector's, and the nation's, best interest.

The potential benefits are well known to this sector.

Inland Rail will enhance the national freight network and reduce freight costs.

It will provide alternative and far more efficient links to ports in Brisbane, Newcastle, Sydney, Wollongong and Melbourne, to get exports into key Asian markets especially China, and will help to strengthen trade relations.

It will offer inland Australia, especially New South Wales, greater choice in ports and heighten competition.

And it will allow for longer, heavier, more productive trains to bring grain and other goods to market.

Inland Rail will reduce the truck task for agriculture alone by 100,000 semi-trailers by 2050, creating safer roads, easing congestion and reducing the requirements.

I am expecting a report by the end of the year on how the project can be progressed, including staging options, funding and financing and a rail link to the Port of Brisbane.

I can report that to date, significant progress has been made by the Australian Rail Track Corporation in establishing a delivery team, working to settle the alignment and starting to update the business case.

My Department has undertaken a public submissions process, reviewed the relevance of North American infrastructure standards for the route and is examining finance options.    

A key part of the Implementation Group's work has been meeting council leaders, stakeholders and industry representatives to capture local ideas and look for ways to deliver the project as innovatively as possible.

While face to face consultations have focused on south east Queensland and northern NSW to date, more consultation with other regions will take place later this year.

I also encourage regional communities to commence their discussions with the private sector and local governments regarding optimal locations for intermodal terminals that meet regional needs and retain the efficiency gains of a direct route. 

Addressing port and freight challenges

As an island nation it stands to reason that shipping is inextricably linked with our national land freight system.

By 2030, Australian ports will need to process, at a minimum, more than double the amount of container freight—both international and coastal.

Ports are key economic drivers and it is critical they have productive and efficient road and rail links.

In Sydney we are upgrading the Port Botany rail line.

In Melbourne we are committing $38 million to the Melbourne Metropolitan Intermodal Terminal system.

In Brisbane we are investigating a new 24/7 rail freight link to the Port of Brisbane.

And in Perth, we will shortly complete the North Quay rail terminal at Freemantle. This will significantly improve the rail connections between the port and key freight hub of Kewdale. And we have committed to the massive new port road access project.

The Government also supports the work of the ports industry to develop integrated long-term master plans.

Earlier this year I announced the release of an options paper on approaches to regulating coastal shipping in Australia.

Submissions by the NFF and the Tasmanian Farmers and Graziers association have helped to shape our views on how coastal shipping could work better to support the businesses it serves.

We are currently considering the way forward and it will not be easy with the current Senate mix. May I encourage primary producers to argue the case strongly and publicly for coastal shipping reform and explain to everyone why shipping reform is so essential for Australian industry.

Coalition delivering on election commitments

I said at the outset of my speech that the Coalition believes the agriculture sector has a prime place in our nation's future.

As an election promise a year ago, we delivered a policy for an innovative and competitive agriculture sector to create more investment and more jobs in our regional communities.

The Agricultural Competitiveness White Paper is well underway and will be the Government's plan to grow agriculture's competitiveness, profitability and its contribution to Australia's prosperity.

The consultation process finished in April. We are now considering the issues raised in the submissions and will release the Green Paper in coming weeks.

These submissions will play a critical role in informing not only the White Paper, but also infrastructure reform and funding decisions. I am sure the grain supply chain will be a significant focus for comment.

Next, the Government is honouring its commitment to provide $100 million in new funding for rural research and development, specifically to support continued innovation in our agriculture, fisheries and forestry sectors.

We are also easing the burden of red and green tape costs by repealing onerous, unnecessary and redundant legislation. 

In March we repealed more than 10,000 pieces—some 50,000 pages—of legislation and regulations, saving over $700 million in compliance costs. The next repeal day will be held on 29 October.

Our commitment to high-quality free trade agreements has seen agreements concluded with Korea and Japan, and we are aiming to finalise negotiations with China by the end of the year, looking closely at agriculture.

Northern development

Developing northern Australia is a major focus for the Government.

Northern Australia is already a big contributor to the national economy, with 55 per cent of our exports shipped through our northern ports and an agricultural sector worth over $5 billion.

Further growth and investment will have direct benefits across the north, with the potential for farmers and business developers also in the south to expand and diversify their interests.

We have made great headway in our commitment to build on our 2030 Vision for Developing Northern Australia, which includes producing a Northern Australia White Paper that sets out a clear, well-defined and timely policy platform.

Formal submissions to the Green Paper closed earlier this month to which the NFF was a contributor, and the White Paper is expected to be released later this year.

Last but not least, we repealed the carbon tax. The NFF is on the record as breathing a sigh of relief that the unnecessary cost impost on Australian farm businesses, agricultural input suppliers and food processors has been abolished.

Conclusion

Thank you again for the opportunity to provide an overview of the Government's plans to drive competitiveness for the farm sector.

I also thank the NFF for your submissions and contributions to the many policy and reform processes underway.

Australia's agriculture sector has so much to offer the region, and indeed the world. It is one thing to have a lot to offer, it is quite another to succeed in meeting vastly increased demand.

Success requires us all—farm businesses, communities and governments—to be partners in a profound transformation of how we think and how we operate.

At the heart of this transformation is the Government's commitment to delivering infrastructure that is integrated, that drives productivity and that is built for the long haul.

We are pleased to partner the National Farmers' Federation in this commitment.

Thank you.