Opening Address: Second Beef Roads Roundtable, Kununurra

Speech

WTS032/2015

16 November 2015

The Kimberley Grande, Kununurra

Thank you David (Crombie) for the introduction.

As many of you know, David is Director of the Australian Agricultural Company, a world-leading provider of beef and agricultural products. David also operates family properties in southern Queensland, breeding cattle and farming, and has a great passion for Australian agriculture, and I am pleased to have him here today to Chair the proceedings.

Thank you all for coming to the second of our three Beef Roads Roundtables and welcome to Kununurra.

These meetings with key stakeholders such as yourselves are critical to the Coalition Government's agenda on developing northern Australia.

You know only too well the tyranny of distance—the significant costs involved in transporting cattle long distances and the risks and safety issues associated with supply chain inefficiencies due to weather events.

It is through you, the people in local communities living and working across the north of Australia, that we will get the real picture on the ground, as well as the best ideas and the best approach to developing the north.

Developing Northern Australia

Unlocking the potential of Northern Australia is an essential part of the Government's plan for a strong, prosperous economy and a safe, secure Australia—a strong north means a strong nation.

With its almost limitless agricultural, energy, tourism and recreational prospects, Australians have been talking about developing the north for many years.

Yet, northern Australia remains under-utilised, relative to the rest of the country and relative to its potential.

Northern Australia is already a major contributor to the national economy with 55 per cent of Australian exports shipped from northern ports in 2012–13.

The north, is home to some of the nation's largest private infrastructure projects in Australia including the Gorgon LNG project (US$54 billion), the Ichthys projects (US$33 billion) and the Wheatstone project (US$29 billion) in Western Australia.

These investments have been driven by the longest and largest mining boom in Australian history, which has transformed the northern economy and propelled the growth of jobs and income, and which we know is now tapering off.

This makes it all the more important to capitalise on the north's other strategic assets including agriculture and the cattle industry.

The release of the first ever White Paper on Developing Northern Australia: Our North, Our Future, confirms that the Australian Government is in northern Australia for the long haul.

The Northern Australia White Paper is an ambitious long-term reform agenda and we are starting work right away, alongside the people who live and do business in the north—that's people like yourselves with a real stake in the future of the north.

I want to stress that the White Paper is far more than a vision, it is a 20 year roadmap for achieving that vision by 2035.

It is a strategic action plan, backed by the necessary money to build real outcomes, and now with its own coordinating minister, Josh Frydenberg.

Over 50 measures and initiatives will be delivered across 15 government agencies in what truly is a broad comprehensive approach covering water, infrastructure, employment, governance, business, and trade and investment.

Implementation of the White Paper will continue to be supported by my Department and I will continue to work closely with the Minister for Resources, Energy and Northern Australia.

Hand in hand with the Northern Australia White Paper the Government has released the Agricultural Competiveness White Paper to which I know many of you, including David, made valuable contributions.

Australia can pride itself on a well-respected and developed agriculture sector, with world-class food safety and environmental credentials, modern farming technology and techniques, and a workforce of highly skilled farmers.

And given the right support, our agriculture sector is well placed to prosper.

That is precisely why the Australian Government spent 18 months listening to the challenges that farmers are facing and where improvements could be made to deliver success.

The Agricultural Competitiveness White Paper outlines what the Australian Government will do to address these concerns.

First up we are committing $4 billion towards necessary projects—this is essentially a $4 billion investment in our farmers.

Our actions will be targeted in five key areas, which include ensuring a fairer go for farm businesses, building the infrastructure of the 21st century, strengthening our approach to drought and risk management, farming smarter and accessing premium markets.

Government's role in Northern Australia

If history teaches us one thing, it is that business and governments should stick to what they do best.

The Australian Government's role in implementing the White Papers is to create successful business environments, not successful businesses.

Our role is to put in place well-thought out economic policies, the right infrastructure to get things moving, regulation that minimises costs to business, and access to the necessary research to help business identify the opportunities.

With the right policies, success will mean that within a few generations the north will be a world-recognised example of sustainable development.

Northern Australia's beef cattle industry is already a stand out success story.

Australia is the world's leading supplier of high quality live cattle to countries around the world.

Northern Australia's beef herd comprises 12.5 million cattle and contributes approximately 90 per cent of Australia's live cattle export.

In 2010–11 the gross value of agricultural production in the north reached $5.2 billion around $3 billion of which was from cattle.

The livestock export industry supports the livelihoods of thousands of farming families and is the dominant rural industry in the north.

Northern Australia is the logical gateway to the rapidly growing Asia Pacific trade zone including China and Indonesia.

The most significant recent development in Australia's beef export market has been the increase in beef and veal exports to China, from less than eight thousand (8,000) tonnes in 2009–10, to more than ninety thousand (90,000) tonnes in 2012–13 and one hundred and sixty-one (161,000) tonnes in 2013–14.

Our recent success in securing four significant trade agreements has immensely positive implications for our beef industry.

The agreement with the Republic of Korea will see tariffs on beef imports being reduced from 40 per cent to zero over the next 15 years.

Tariffs on beef imports to Japan will also fall under the Japan–Australia Economic Partnership Agreement, and the free trade agreement with China will help support the competitiveness of Australian beef in the Chinese market.

Moreover, the Trans-Pacific Partnership agreement could provide significant benefits to Australian beef producers when it is ratified by member countries. In particular, this agreement reduces tariffs on beef imports to Japan below those contained in our agreement with Japan.

Investing in Infrastructure

If Australia is to take advantage of such expansion in demand for our beef in Asia we must improve our competitiveness.

We must put our dollars into infrastructure projects that reduce operating costs and improve reliability for freight operators.

The beef industry, particularly in the north, is characterised by long supply chains that link properties, feedlots, abattoirs, live export ports and markets.

Distance between production, processing and markets often exceeds 1,000 km, with costs of transport exceeding $150/head.

Recognising that Australia's beef industry injects billions of dollars into the national economy and has such a bright future, the Government is investing in key transport infrastructure across northern Queensland, Western Australia, and the Northern Territory.

Our plan includes $100 million for the Northern Australia Beef Roads programme to identify investment and reform priorities that will benefit the beef supply chains, which we are here to talk about today.

It also includes the $600 million Northern Australia Roads Package in partnership with the NT, WA and Queensland governments to improve network connectivity, particularly those parts of the network that connect ports and regional communities to key agricultural and resource areas.

This is in addition to local programmes like Black Spot, our Heavy Vehicle Safety programme, the tripling of funding to local government under Roads to Recovery, which will all help to deal with some of the last mile issues that are so critical to being able to get produce to market.

There is also the $5 billion concessional loan facility that will look to partner with the private sector and northern jurisdictions to finance infrastructure projects such as airports, ports, rail, roads, energy, water and communication infrastructure.

I'm pleased to report that we have already had a number of proposals and expressions of interest for this part of our northern Australia initiative.

Beef Roads Programme

A fundamental tenet of the White Paper is ensuring that any policies, infrastructure, regulations and research that are developed are done in cooperation and in support of your aspirations so that together we can unleash the economic opportunities for our North.

That's why these roundtables are so important. Feedback and involvement from industry players is essential to the project selection process for the Beef Roads programme.

Industry and all levels of government are seeking to reduce cattle transport costs per head.

Today's discussion provides an opportunity for you as the industry's key stakeholders to help shape investment priorities for roads to reduce costs and risks and improve efficiency.

Last month's meeting in Rockhampton was really productive, which some of you here today can attest to.

As we did then, we have representatives here today from the transport and cattle industries, peak bodies, and all levels of government.

I won't go into detail about those discussions, because we want fresh views from this group, but broadly speaking the discussions touched on:

  • achieving long term fixes as opposed to quick fixes
  • identifying decisions that are right for the industry and not about individual state needs, and
  • taking a holistic integrated approach to upgrades—thinking through how transport upgrades benefit the cattle supply chain.

We are grateful to again have representatives from CSIRO here to talk about their computer-based logistics modelling tool TRANSIT (TRAnsport Network Strategic Investment Tool).

The Beef Roads Fund will use this logistics modelling to evaluate prospective investment in the northern cattle supply chain in order to identify opportunities to improve productivity.

Today's roundtable discussions will determine what priorities are tested by TRANSIT.

Conclusion

In wrapping up, today's discussion is your opportunity to help shape the future of the north.

Targeted upgrades that improve just one road link can strengthen the entire supply chain, allowing for more efficient use of existing infrastructure.

These improvements will benefit other road users, boost regions and communities and improve the profitability of a range of businesses—including pastoralists, livestock transporters, processors and live exporters.

Thank you for your time today.

I look forward to hearing the outcomes of today's discussions.