ABARES Outlook 2015—‘Infrastructure and Profitable Agriculture’



04 March 2015

Royal Theatre, National Convention Centre, Canberra

Thank you very much, Leigh [Radford, National Editor, ABC Rural].

Good morning everyone, it is a pleasure to be with you—and my particular thanks to our international guests for their contributions.

I want to extend my congratulations to ABARES. In July this year the Bureau will mark 70 years of service to the nation.

Outlook itself has been going a long time. I attended my first Outlook back in 1974 as a young farmer and I have been back many times since.

Much has changed in Australia over seven decades—but thriving and profitable agricultural and natural resource industries remain fundamental to our national prosperity…and always will.

The mining and resources sector have been a major driver of the economy over the last couple of decades, but with the decline in mineral prices we come to appreciate again just how important agriculture is to our nation.

So often the contribution of the farm sector to the economy is overlooked in what is a heavily urbanised nation.

Abolition of mining and carbon taxes

Coalition governments recognise the fundamental value of these essential industries—resources and agriculture.

In spite of commodity price falls the value of export earnings from Australia's mining and energy sector is projected to rise by seven per cent annually to $274 billion in 2018-19.

We, therefore, understand the need to remove unnecessary brakes on the sector's growth—including wrong-headed taxes.

The Mining Tax was described by the Sydney Morning Herald as ‘one of history's most idiotic pieces of legislation’—which I suppose is an achievement of a kind. Well, it's gone!

The removal of the carbon tax saves industry compliance costs estimated at $85 million per annum—and yields average annual savings of $550 each year for households.

We came into office determined to create a better platform for Australian businesses to operate and grow the Nation's wealth. The removal of these two confused and counter-productive taxes are major planks in this platform.

This achievement is often overlooked by the mainstream media. There was an expectation that they would be abolished… simply and very quickly. We had to fight to get rid of them and I know industries appreciate the fact they are gone.

We promised to reduce red tape and green tape for business by $1 billion a year. Well, that target was exceeded last year and we will do even better this year.

We've unlocked the log-jam of Commonwealth Government environmental laws, releasing over $800 billion worth of projects now coming to fruition.

We've got the NBN back on track, which is starting to connect Australian households—particularly in regional areas where there are about 1,000 broadband wireless towers under construction or planned.

And our $100 million mobile phone black spots programme will shortly be announcing successful projects.

We have taken a balanced approach to the nation's fisheries and forestry resources, which balances the need to preserve these assets into the future with the immediate livelihoods of the people and businesses operating in them.

Infrastructure and profitable agriculture

Outlook 2015 focuses on the profitability of agriculture. It is valuable and timely to do so.

It reflects the Australian Government's priorities too… freeing up farmers to focus on running their farms, rather than being bogged down in red tape and unnecessary compliance that costs them time and money.

For most farmers, their work is about much more than earning a living. It's also about responsible stewardship of the land and natural resources…preserving them for the next generation of farmers.

Ninety Four per cent of Australian farmers actively undertake natural resource management. It makes economic sense to ensure the sustainability of your land.

Anyone who operates a farm can attest that achieving a profit on the land can be more than difficult. It's hard work.

If Australian agriculture is not profitable then the whole nation has a serious problem.

As you would have heard from Minister Joyce yesterday, the Australian Government has prioritised agriculture as one of the five pillars of the economy—along with Manufacturing Innovation, Advanced Services, Education and Research, and of course, Mining Exports.

We have initiated the Agricultural Competitiveness White Paper process to identify ways to strengthen the agricultural sector for the challenges it faces into the future.

There will always be diverse opinions about the future directions the agriculture industry should take—I think that is a positive thing.

But there is little disagreement about the need for agriculture to be profitable.

A few years ago (2012), the ecologist and farmer Allan Savory observed that ‘without agriculture, it is not possible to have a city, stock market, banks, university, church or army’.

Everyone has a stake in profitable agriculture. Achieving it requires efforts from many quarters—including from within my own responsibilities for transport infrastructure and regional development.

Infrastructure plays an integral role in contributing to Australia's economic growth and productivity.

Nowhere is this more obvious than in the case of agriculture, where transport costs comprise a sizeable portion of farm-gate value.

Profitable agriculture depends on strengthening the social and economic fabric of our regions—the places where the business end of Australia's $40 billion a year farm exports starts.

It's also where 12 per cent of Australia's GDP originates. That's about $155 billion a year in economic activity derived from our farms.

Efficient and competitive transport infrastructure that connects regional Australia's farmers with their national and international markets, is vital.

The benefits of the Asian Century are already real.

But meeting burgeoning demand for our high quality produce across our global region will only come to fruition if our road, rail and port networks can cope with massively increasing volumes.

The Government's infrastructure investments mesh with our other efforts to make the most of these opportunities—including the Free Trade Agreements we have formed with Japan, Korea and China, and are progressing with India and the Gulf Cooperation Council.

Our food exports accounted for a substantial 15 per cent share of Australia's total merchandise exports, up from 12 per cent in 2011-12.

We have taken the live export trade from its lowest ebb. We have reopened trade with Indonesia, revived markets in Egypt and Bahrain, while creating new markets in Cambodia, Thailand, Lebanon and Iran. And we are still working to crack the Chinese market.

Since coming into Government, the Coalition has worked to strengthen the connections between farmers and their markets with real and strategic commitments.

Our record $50 billion investment in critical transport infrastructure needed to secure Australia's future prosperity is pivotal. This includes our $5 billion Asset Recycling Initiative, which is designed to stimulate the development of new infrastructure.

We are projected to leverage additional investment of $125 billion off the back of our $50 billion outlay.

We are investing in transformational infrastructure projects which sensibly and necessarily mesh metropolitan and regional needs.

You hear of large scale investments in all our major cities—but I am also proud of our regional investments.

$6.7 billion to fix the Bruce Highway to make it safer and more reliable.

$5.6 billion to finally complete the duplication of the Pacific Highway from Hexam to the Queensland border within this decade.

We have allocated $400 million to upgrade Tasmania's Midland Highway as a key step to growing that State's economy.

$263 million for Victoria's Western Highway and $185 million for the State's Princes Highway.

We are investing $755 million in the Northlink WA project. This involves new highway and interchange construction, and upgrades to existing roads. This work will invigorate the key freight route connecting Perth to the north of Western Australia, including the vital transport of equipment and supplies to mining operations in the Pilbara.

There's $335 million for the Great Northern Highway and $174 million for the North West Coastal Highway in WA.

We are committed to investing up to $1.3 billion for the Toowoomba Second Range Crossing and $508 million to upgrade the Warrego Highway.

$290 million is being announced this we on upgrades to the other sections of national highway network which isn't always in the news.

We are investing $2.1 billion to extend Roads to Recovery—the popular local roads and streets programme. We are paying the latest installment of $117 million to 297 local governments today.

And these are just some of the highlights of an infrastructure investment portfolio firmly focused on the needs of Australia's agricultural and resource industry engine rooms.

There is another $210 million upgrade for infrastructure on the Cape York Peninsula.

Across the country we are allocating $500 million for Black Spots on roads and $100 million for mobile phone Black Spots.

In the last week, I have announced 86 projects under Round 1 of our new $300 million Bridges Renewal Programme—mostly in rural communities. We are repairing and replacing dilapidated old bridges—including many that now cannot carry heavy vehicles—to reconnect the heavy transport network.

Yesterday, I announced the rollout of the Australian Government's Heavy Vehicle Safety and Productivity program—totaling $195 million for 53 projects to improve road safety and economic productivity across the country.

These two initiatives dovetail and will help improve bridges serving local communities and facilitate access for larger, high-productivity vehicles like B-Doubles and B-Triples.

Like never before, our infrastructure arteries will better integrate Australia's regions into the economic pulse of the nation.

The need to boost our international competitiveness in agriculture and resource industries is among the most urgent of Australia's needs for modern, 21st Century infrastructure.

Northern Australia

Looking north, the development of northern Australia is a priority for our Government. A growing northern economy benefits all of us through investment, infrastructure, jobs, services and emerging industries and export potential.

The Government's White Paper on Developing Northern Australia is being informed and guided by public submissions and hearings through the Joint Select Committee, Chaired by Warren Entsch.

That's real people with a real stake in the future of the north.

I have long believed that Australia has a unique opportunity to make the most of the vast, productive expanse that is the north of our nation. It is virtually untapped and on Asia's doorstep.

The agricultural, energy, tourism and recreational prospects of the north are almost limitless—and our Government is committed to ensuring we allow these prospects to take root and grow for generations to come.

And we are prepared to back our confidence in the north with investment.

The White Paper is being finalised as I speak and the Government looks forward to working with the residents of the north to invest with them in their futures.

Inland rail

At the 2014 Outlook, I spoke of the Government's commitment to the Inland Rail project—a major project which will significantly increase national productivity.

This will advantage consumers with lower transport costs reflected at the check-out, while also supporting economic development along the rail line corridor. It will be transformational for agriculture, resources and other regional industries.

This is a complex project that will take a decade to deliver across three States and requires careful planning.

To assist in managing these complexities I formed an Inland Rail Implementation Group, led by John Anderson, Australia's longest serving transport Minister and a true champion of rail reform.

The Group has conducted an extensive public consultation process, including stakeholder forums, numerous regional community leadership meetings and industry briefings.

These consultations have enabled the Implementation Group to advance the project's design specifications.

This includes future proofing the alignment to cater for trains of up to 3,600 metres in the longer term, meeting the needs of industry for services that are competitive with road.

The Implementation Group is also considering how the initial $300 million budgeted by our Government for the Inland Rail project can be used most effectively.

I expect to receive the Implementation Group's advice and the detailed business case for Inland Rail in the middle of this year. This will allow the Government to make informed and strategic decisions about the project.

Stronger regions

The Coalition Government is committed to accelerating the development of strong and healthy regions.

We launched the dedicated $1 billion National Stronger Regions Fund to help deliver the priority projects which create jobs and support regional Australia's economic growth.

The Fund will help provide the infrastructure that regional communities need… but too often lack.

The Fund has an annual allocation of $200 million over the five years from July 2015, and applications for Round One opened last October.

Some 400 applications were received in Round One. Eleven projects were agriculture-related. I would be keen to see even more applications with agriculture objectives in Round Two, which opens on the 1st of May.


To sum up, it is crystal clear that the profitability of our agricultural and resource industries is far from just an industry-specific issue.

It has flow on effects for us all.

So much of economic activity is driven from the regions and felt across the nation…in every city and in every home.

A strong, profitable future for agriculture, resources and regional communities is inextricable linked to the prosperity of the Australia and Australians. Our international trading balance sheet depends on it.

This places a great responsibility on everyone involved in farming and mining today to ensure that we have industries that will continue to flourish for generation to come… and in doing so feed and sustain those generations.

Today I hope I have given you a sense of our Government's commitment to your industries and your livelihoods.

Thank you