Keynote Address at the Regional Capitals Australia Annual Networking Breakfast
17 June 2015
Thank you Deirdre. Congratulations on your election as the chair of this body, and congratulations to all of you for making it here this morning after the LGA dinner last night. So a late night, but that is our life in Canberra, isn't it Julie? Late nights followed by early mornings. It's great to see Julie here as well and we'll acknowledge George and Lisa even though they're slightly late arrivals. Can I also acknowledge Jo Gash, a former member of the Coalition in the Federal Parliament for many years; it's great to see Jo here and a bit of parochialism for Mayor Ann Ferguson, the great Mayor of Mount Barker. So it is great to be here. This is the second year in a row I've had the opportunity to speak at this breakfast, and it is a great opportunity because regional capitals and regional Australia is such a vital part of our economy, of our social fabric of what it is to be an Australian.
I'm a born and bred regional Australia boy, I grew up largely in Mildura in Victoria, and it is always really important to remember the contribution that regional capitals in regional Australia make and the opportunities that regional Australia has for us in 2015 and beyond. Often in the past, I think there's been a focus on the problems with living in regional areas, the challenges with the remote lack of access to services, but those challenges in large part now are less than what they used to be. We are much more connected with this society than what we used to be. Not to say that it doesn't still bring difficulties, but I think it brings an equal share of opportunities, an equal share of opportunities that can help us grow as a country, and that's very much the focus of our government and certainly of the recent budget, growing Australia, growing us faster and ensuring that we are as prosperous tomorrow as we have been in the past.
We have enjoyed an unparalleled generation of growth and anyone under 40 years of age has not seen a recession in Australia since they left school. They haven't seen high unemployment, high interest rates. They have seen difficult patches, the Asian financial crisis, the global financial crisis, but we haven't seen a recession, we've seen growth. But to continue that growth, we need to continue to reform.
John Howard often used to say that economic reform is like an endless footrace; that the moment you slow down your competitors catch up and get ahead, so we must continue to be as competitive as we have to be to ensure that we continue to grow and be as prosperous as we ought to be. I think an increasing share of that growth will be upon the shoulders of regional Australia and our regional capitals and we are trying to facilitate that growth in the way that we've gone about our budget, and what we are trying to do with our increasing focus on how we get our product to the world.
It is important to remember that 40 per cent of Australia's exports are produced in regional Australia. Most of those obviously pass through regional capitals and obviously use the infrastructure, not just in regional Australia but in metropolitan Australia. This reminds us that having cities which are not congested is nearly as important to people who live in regional Australia as it is to those living in metropolitan Australia, whether that be through rail networks or through the road network. That is why our focus on infrastructure is so important, and we have a major focus on that, but equally small business which of course is a key component of regional Australia. Outside of capital cities around 20 per cent of regional income earners are business owners which compares to 12 per cent in capital cities.
There is much more risk taking innovation in regional Australia than what there is in metropolitan Australia. Many more business owners, whether they be farmers or small businesspeople supporting regional growth than there is in metropolitan Australia and that's why the Budget very much focuses on the opportunities for small business to grow, with the accelerated depreciation focus with purchases up to $20,000 being included from the night of the Budget for two years. It's a big focus of the Budget and the Government to help small business grow, to create jobs and to drive opportunities in Australia. Particularly I think as I said at the beginning, the challenges growing up in a regional capital, of the remoteness, of the lack of access to services, simple things that I remember. We had access to two television stations for most of my youth, now when I go home and see Mum and Dad in Mildura they've got access to exactly the same television services as what we have living in the Adelaide Hills.
Indeed with the successful rollout of the National Broadband Network, the work that Malcolm Turnbull has done to turn that project around, the benefits largely, the uplift benefits come from outer metropolitan and regional Australia. There haven't been the great challenges in metropolitan Australia with access to fast broadband. Sure people who live in the inner-city would like access to faster broadband always, but there are challenges in electorates like mine and in regional Australia in getting access to decent broadband. There has been for many years and the work that Malcolm Turnbull's done to ensure that the NBN is rolled out appropriately and effectively means that the people in regional Australia have the opportunity for a better uplift of that and the benefits of that connection—not just across Australia but to the globe, which, at a time when we've never seen a market the size that we have, is an absolutely vital element of being able to do business.
We talk about the Asian growth often, but we forget the pure, hard, statistics of just exactly what is in front of us. When I was in India in January with Andrew Robb on a trade mission, Prime Minister Modi's target over the next decade is to move 600 million people from abject poverty into the middle class. That's a staggering amount of people.
To move those people from abject poverty into the middle class means that they need to be able to service that growth with the commodities that we largely produce. Not just the agricultural commodities, the resource commodities, but the service commodities as well. Those are the opportunities that we have before us, the regional capitals and regional Australia very much have before us. One of the things that we are doing to try and make the most of those opportunities, and I think one of our proudest achievements thus far, and one of the longest reaching achievements for the Abbott Government will be the free trade agreements we've signed with Korea, Japan and China. As many of you know, I've got by far the best wine districts in the world in my electorate—within McLaren Vale particularly—and with the Japanese free trade agreement beginning in January, we've already seen in the first few months of this year, Australian wine exports to Japan increasing in volume by 63 per cent, and in value by 17 per cent in comparison to the 12 months before.
That's exceptional growth in a very short amount of time. It highlights the opportunities that free trade agreements provide for our country, and for our regions, and for regional Australia. To get the most of that benefit though, we have to have the infrastructure which allows us to service that growth. We have to be able to get our product to market as efficiently and cost-effectively as possible, so we can take advantage of what are burgeoning markets at our doorstep. And that's why we focus so heavily on infrastructure.
We asked Infrastructure Australia, when we came to government, to do the first ever audit of Australia's infrastructure stock, and a month ago we released that audit. It shows what you all know, that Australia has what is a good problem. We are growing really quickly, particularly our major cities, which has been the story of Australia. Our major cities continue to grow very quickly, particularly Sydney, Melbourne, Perth and Brisbane. But what I think it also shows is the need for regional capitals to pick up that growth as well, to be able to allow us to grow faster, because the capacity restraints within the cities are always difficult to address. We will always be behind infrastructure tasks in our capital cities. The opportunities of the regions to pick up some of that capacity constraint are immense.
Recently, after we announced the first round of the Stronger Regions programme, I visited Angus Taylor in his electorate of Goulburn, where one of the successful National Stronger Regions projects is located, relating to the use of water through Goulburn, creating recycling water into agricultural enterprise. The Mayor of Goulburn was telling me that the challenge or the opportunity for Goulburn was that, as Western Sydney grew, and the agricultural enterprises in Western Sydney were reduced as land was being taken up by housing, or industrial use or what have you, Goulburn was picking up some of that, or a lot of those agricultural opportunities. They were taking advantage of the need for land, and the need for accessible water, and the need for the opportunities to grow.
The same can be said in our own area, Mayor Ferguson, with the development opportunities in Monarto, the use of recycled water from the Mount Barker Council for the Mount Barker growers, to increase agricultural activity in that part of South Australia. So there is, I think, not just road and rail infrastructure needs to help us deliver upon what but there are also opportunities for regional development, to pick up that capacity constraint which is going to hold back our cities. Infrastructure Australia's audit says that congestion in our major cities will cost the Australian economy $53 billion by 2031.
Now, clearly we need to address that with infrastructure investment, and we are very focused with our $50 billion infrastructure programme, particularly on driving city growth and addressing that congestion. But there are also opportunities for the regions to help allay that capacity constraint. In that respect, the debate we've been having in the last few weeks in respect of housing affordability also provides opportunities for regions, because there is more affordable and more accessible housing in our regions if we can connect our regions more effectively with our cities, or allow for growth in the regions.
One of the complaints I know with my local councils' is the dormitory effect some times of growth in regional capitals when people live in the regional capitals and travel to the cities to work. The challenge is to create the opportunities in that region so they're capturing much more of that economic activity. And I think that is a challenge that we all share and we need to work together upon.
The freight task in Australia is growing enormously as well. It will be 1.8 times by 2030 from what it is today on road and 1.9 times on rail. So the investments in the Pacific Highway and the Bruce Highway, massive investments in those two highways, duplicating the Pacific Highway, improving the Bruce Highway so it can sustain the effects of major weather activities which are so common in North Queensland of course, it will be a big productivity increase. And in rail, the focus on inland rail, John Anderson has been leading a group doing the work, preparing the case for inland rail and its coming along. I think in the coming weeks and months there'll be a lot more said about what we intend to do with developing inland rail because it will be something which will help with that freight task which will help take the pressure off the road network and will allow for greater movement particularly between the Port of Melbourne and the Port of Brisbane.
You all know we focused very heavily on regional roads for our doubling of the Roads to Recovery Programme this year and next and also the Black Spot Programme this year and next and broadening the criteria with black spots so it is easier particularly for regional councils to get access where there are intersections, sections of road which haven't necessarily yet caused- or had fatalities or injuries, but you will know in your areas they will at some point in time and we've seen through that programme already some massive improvements. And we are looking at ways to work with local government out of the Productivity Commission Report, better funding in approaching the first and last mile access that local government has in the way that we price some of those road networks and that work is underway as we speak.
And something I should mention of course, which is close to the incoming chair's heart, is the work we're doing on developing Northern Australia and I think later this week there'll be a lot more said about developing Northern Australia. There were obviously announcements in the Budget in respect to giving access to concessional loan arrangements and some more of those details would be coming shortly. But the purpose I guess with Northern Australia is really trying to facilitate that private sector growth to capture what we'll see as big opportunities in an area which is yet to be fully developed or developed in much of a way in our north. So it is a focus that the Government has for some time.
And the last thing of course is the Stronger Regions programme for which we had the first round announcements in May and it was an extremely competitive process. The ministerial panel, the Deputy Prime Minister, myself and our Parliamentary Secretary, Christian Porter had tough tasks. Well, in the end we announced $212 million worth of programme projects and we had $1.3 billion worth of applications. It is a tough competitive programme. Round two is open. We encourage you and your councils and your local community groups to look positively at that programme, but with the caution that you make sure your applications are really strong. That's the best way we can be successful because it is a very competitive base programme.
This year, this second round, we are allocating some $25 million to projects under a million dollars because one of the things we found, certainly in round one, is that applications that sought $5 million to $10 million put a lot of effort in and put a lot of work into those applications and they were very good projects and they were funded. The challenge for projects under a million dollars was that it was harder to compete against those projects, so we've allocated an amount in this next programme to try and encourage smaller Councils in regional areas to have more access to smaller grant programmes, smaller amounts for their area.
So I think there is a very positive feeling and opportunity for regional Australia, more so than we've had for a very long time. We still have challenges in some parts of course, with droughts. We will have ongoing challenges with access to water, but these are not beyond our wit and these are not beyond our country's capacity to adapt and to deal with them. I think there are, with the right policy settings and the right attitude from state governments, local governments and the people in regional Australia, some of the greatest growth opportunities we've ever seen before us and if we can get our infrastructure spending focused and right, I think you can provide access to communications and we can ensure that we've got policy settings and access to markets that we want in the future.
Regional Australia stands at the dawn of enormous opportunities and people in this room will be at the forefront of leading regional Australia to ensure we make the most of that. We need to make the most of that because, to do what we want to do and grow Australia faster, you need to lead the way. So thanks for being here this morning, thanks for taking the time for this breakfast, at the end of what has been, I'm sure, a very busy few days of local government conference, a busy week for government in Canberra and I'm delighted to take a few questions if you'd like to do that. Thanks so much.