Press conference at visit to Riverina Oils
Welcome today. Welcome, Michael McCormack. Welcome today, thanks very much for coming to announce another piece of very supportive infrastructure. We feel very privileged here at ROBE to be supported by all levels of government and the infrastructure that's coming in almost behind us to really take us to new levels is quite exciting. So really excited to hear a bit further about Ernst & Young's study today and thanks for revisiting the plant again, Michael?
Well thank you very much, Scott. Today is, as you say, quite a landmark day, quite a significant milestone in the Inland Rail history and of course, the Inland Rail continues at a pace. Narromine to Parkes already generating hundreds upon hundreds of jobs. This 1,700 kilometre corridor of commerce between Melbourne and Brisbane is going to transform regional areas but create so much national prosperity. It is going to be ground-breaking in what it does for regional areas, right up and down the line, from Brisbane to Melbourne. As I say, a 1,700 kilometre corridor of commerce.
The Government commissioned EY, Ernst & Young, to do a report into what the Inland Rail could bring, the benefits that could be passed on, be created by, be established within regional Australia and indeed, the nation through Inland Rail, and this report, quite a tome, has reported back that $13.3 billion will be generated by Inland Rail in its first 50 years. Perhaps just as importantly, 2,500 jobs in the tenth year and that will only go up to the 20th year, to the 30th year and beyond. So $13.3 billion, 2,500 jobs, already it's creating jobs in construction but when Inland Rail is up and running from 2025, from the mid-2020s, this is going to create so much economic opportunity for inland Australia.
But, of course, for the two capital cities as well, and beyond. Indeed, Sydney, no matter where you live in eastern Australia, indeed, right across the nation, Inland Rail is going to benefit. Parkes, well, it's the epicentere of Inland Rail because it is on the north-south, east-west intersector and so it brings benefits to Western Australia as well. The benefits don't just stop for eastern Australia. They are for all of Australia.
Ernst & Young, EY, I'm glad that Emma Buchanan is here today and she can talk further about the report. A lot of detail has gone into this report, stakeholders have been engaged, governments have been engaged. You can see the figures in this report, just how beneficial it is going to be. Of course, this goes on the back of the report independently done by the CSIRO in late 2018 which reported that the average saving per tonne going on Inland Rail, of goods going on Inland Rail, was going to be up to $94. $94 a tonne saving for those companies using Inland Rail and of course, an average of $76 per tonne. So that's significant savings for whether businesses are small, medium or large.
I'm glad to be here at Riverina Oils because Riverina Oils knows just how beneficial the Inland Rail, which won't be far from here, is going to be for their company. They are investing in the Inland Rail and the opportunities that will open up for them, both domestically and perhaps even more importantly for markets overseas is going to be significant. Scott Whiteman understands the benefits of Inland Rail. He and his company, they are getting on board. They are going to invest for their future, for Inland Rail’s future and certainly for the Riverina and this great region.
I'll hand over to Emma. She can make some comments about the EY report. Happy to then take any questions. Emma.
Thank you. EY's delight to do have had the opportunity to work with the Commonwealth Government and regional communities on this study. The aim of the study was to identify the enduring economic benefits from Inland Rail that will continue to flow to regions along the corridor long after the construction of the project is finished. To do this, we met with industry, we spoke with regional communities, including here in Wagga Wagga, undertook research and also completed economic modelling. This allowed us to identify a suite of potential investment opportunities and translate how those investment opportunities add value to regional economies.
The study found that Inland Rail will indeed be a catalyst for investment in regional Australia and support a range of investments such as food processing hubs, logistics hubs and investments in abattoirs. We estimated that in the tenth year after the commencement of Inland Rail, it will support up to 2,500 full-time jobs along the corridor and over the first 50 years of operation of Inland Rail, it has the potential to boost gross regional product along the corridor by up to $13.3 billion in today's dollars.
The report will be available on the Department's website from today. EY would like to thank the businesses in Wagga and the local governments in the Riverina for participating in this study. I can take your questions but I will now hand back to the Deputy Prime Minister.
I guess, Michael, we are in quite economic trying times at the moment, with coronavirus going around, bushfires, how necessary are these sort of, I guess, future prospects to bring us back?
This is absolutely critical and crucial and you're right. We do live in trying times, we live in troubling times. This is why the Federal and Liberal Nationals Government is investing in infrastructure and not only are we investing in $9.3 billion for the Inland Rail but indeed, $100 billion right across the nation. Regional areas are benefitting by a third of that. 8.8 million Australians live in regional areas. 8.8 million, that's about a third of the country so you'd expect a third of the infrastructure and we're investing in roads of strategic importance. The Newell Highway benefitting from that.
But when it comes to rail, when it comes to roads, when it comes to even regional aviation where we're putting down $100 million, we're making sure that we've got the right infrastructure in place so that regional communities cannot only survive but indeed thrive and I was very, very pleased that Rabobank has come out with a report, also released in the last couple of days, which shows that regional confidence is up.
Farmers, given a bit of rain, are now looking forward to buying seed and fertiliser and planting their first crops in some cases for some years and I know that for Scott and his team here at Riverina Oils, that's going to be beneficial for them too. So it all feeds into one another. It's all about confidence, it's all about the right infrastructure in the right places, getting the right result and Inland Rail is going to do just that.
Can I just add to that, just two examples where it's going to significantly benefit our business. So we export about $30 million of canola oil to the US, to California, the non-genetically modified part of the sector. That means we need to take the seed from the local farms here, process it here and get it all the way to the east coast of the US. So for us to be competitive we need super-efficient infrastructure. We're competing well there now but this will allow us to take that extra step to become dominant in that market. So that's one.
The other area is that this does drought proof the company because this year, the last two years we've crushed more seed here than has been produced in New South Wales. So it means that seed needs to come from long distances to get here. So the efficiency that rail will have, combined with the Inland Rail hub across the road, to this site is fantastic and the connection through to Western Australia to get seed.
Traditionally, whenever there's been a drought on the east coast, there's been plentiful supply on the west, so we're really excited, both opportunities and future proofing the company.
Do you have any figures with regard to sort of efficiency savings, cost savings for your business that this might bring?
We believe it will be a 30% saving on freight from here to the east coast of the US which just puts us in front of the competition rather than really having to work hard to differentiate. So on the freight savings but then in terms of drought proofing, there's not really a dollar we can put on that.
Michael, do we have a timeline for this project to get under way and are we on time?
Well, it's on time at the moment, and the Narromine to Parkes section has already got hundreds of people working on it and hundreds of people, but also procurement locally. I know for Parkes and Forbes that has been significant and when Inland Rail, when the development goes elsewhere, it takes those jobs, it creates those jobs, it makes those jobs also locally, but it also helps local procurement.
Wagga Wagga will also see the benefits of that. We're already seeing this wonderful hub here at the moment. We've done that through the help of the State Government. We've done that through the help of Wagga Wagga City Council but we've done it because we invested in Wagga Wagga. We've invested in the Riverina. It's all about jobs, it's all about local businesses being able to procure because what we want to see is those local small businesses, no matter what they're doing, being able to feed into this process and over the next five years or so of construction, they're going to benefit, jobs are going to be created and as you've just heard from Emma Buchanan, this is going to create jobs in the long run, not just for a few years, but for decades afterwards.
This is something that this Government, indeed other governments have talked about for a long time. We've actually delivered. Inland Rail has been discussed since the 1890s, would you believe? This Government is now getting on and we're building it.
So obviously we don't have any cases here but I know that people are panic buying in the shops, what would you say to your people in your electorate just about how we're going to handle this moving forward?
I would say and I would urge and I would encourage them to stay calm. I know that Woolworths has overnight decided that they're going to have a dedicated time for elderly people to shop. I think that's good. I know we're in discussions with the transport sector, I've been in daily discussions with truck drivers and transport companies to see what we can do to get more deliveries to more supermarkets sooner. But the panic buying is unnecessary. The stocking up of toilet paper is totally unnecessary. I mean if there's one product we're not going to lose, we're not going to run out of in Australia it is toilet paper. It's produced by product from here in Australia and it's produced locally. So we're not going to run out of toilet paper.
I would just urge and encourage people to not only think of themselves but also make sure they think of others, too. We will get through this. Yes, there are going to be troubling times for all sectors, for business. I know for aviation I've been talking to Alan Joyce from Qantas and Paul Scurrah from Virgin and John Sharp from REX just in the last couple of days and they're, of course, they're making sure that they can do whatever they can to keep as many planes as they can in the air. The fact is they are cutting back. They are scaling back as we've put in place measures to ensure that people who come back from wherever they are overseas, they have to self-isolate for 14 days.
And of course, with the cruise ship industry, we've made sure that we've put a suspension on those cruise ships and asked any cruise ships that are on those round trips to return to Australia and for those people, those Australians on those vessels to also self-isolate. These are difficult times. We will get through them but we need to get through them in a calm and rational manner. We need to, most of all, use common sense.
Obviously you had a colleague test positive. Have you had to do any tests or anything like that? How is your health going?
No, my health's okay. My health's just fine. So, yes, Peter Dutton has needed to go to hospital and of course, get tested. He's okay. I spoke to him yesterday and he's doing fine.
Michael, a lot of events here in the Riverina. Obviously we've been struggling with bushfires, now a lot of those big-ticket items have been cancelled. Is there any prospect for further stimulus for smaller regional communities like ours here to get through this next bit of virus?
I know that the $17.6 billion stimulus package has had great benefits and certainly for business to keep cash flow and to keep people in work. That's been so important. And I know how many small business people came up to me just when I was out and about on Saturday and telling me how much they've appreciated what we've done but, yes, it could well be that we do need to do more and we will address this as the coronavirus situation develops.
I spoke to, yesterday, Marc Geppert, the local regional manager of the Southern New South Wales Australian Football League about what they perhaps need to do and have communicated with Bob Hay from Group Nine Rugby League. I'll be talking to other sporting organisations about what they need to do. Of course, the Mardi Gras on the weekend was cancelled and that was greatly disappointing for all of those people who were looking forward to that. There's been a number of events which have needed to be cancelled or postponed. That's unfortunate and regional agricultural shows, too, are now assessing whether they'll go ahead.
So it's a situation that is developing. It's a situation that will, you know, unfold each and every day and people will need to be in close communication with one another to see what they can do about their particular event but rest assured, again I say calm and reason is necessary. Thank you very much.