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Northern Australia White Paper a great start – follow-through needed

Mick Keogh, Australian Farm Institute, 30/06/2015

With the release of the Abbott Government’s Agricultural Competitiveness White Paper only a few days away, the Government has received some positive feedback from the Australian Farm Institute on the Northern Australia White Paper it released two weeks ago. Here Australian Farm Institute executive director Mick Keogh outlines why he believes the Northern Australia paper makes a great deal of sense.

 

Now that the dust has settled on the initial media announcements, its a good time to take a careful and sober look at the proposals contained in the Northern Australia White Paper, and to try and determine whether the proposals make sense – or whether they are just another grand government plan designed for publicity and promising little else.

The verdict, somewhat surprisingly for those familiar with grand government ‘plans’, is that the White Paper actually makes a great deal of sense, and definitely appears to set the right direction in relation to the task of accelerating development in northern Australia.

The White Paper makes a clear statement upfront about the appropriate role for governments, and the appropriate role for the private sector. It states;

If the history of northern development teaches us one thing, it is that business and governments should stick to what they do best. Governments’ role is to create successful business environments, not successful businesses. This is best achieved through prudent economic policies, the right infrastructure to get things moving, regulation that minimises costs on business, a workforce with the right skills, and basic research necessary for business to identify opportunities in the north.

It is not the Commonwealth Government’s role to direct, or be the principal financier of, development. Developing the north is a partnership between investors (local and international investors who provide capital and know-how) and governments (that create the right investment conditions).

Encapsulated in these few sentences is a very strong statement of principles, that should be welcomed by all those with an interest in the development of northern Australia, and just as importantly by all those who pay taxes in Australia. The statement identifies that the current Australian Government has learnt the lessons available from the many failed attempts to develop northern Australia in the past. It identifies a role for governments in enabling the environment for businesses, but not in deciding which industries or projects should proceed.Interestingly, it also identifies that overseas investment will be necessary in order to provide the volume of capital (as well as the investor patience) that will be required. This sends a somewhat different message to overseas investors with an interest in Australian agriculture to the messages that have been circulating over recent weeks.

Among the specific initiatives proposed in the White Paper, perhaps the most important but also the most challenging is the proposal to attempt to bring about some much-needed change to land tenure systems in northern Australia. The White Paper notes that the predominant land tenure is pastoral leasehold land, and most of those leaseholds have quite restrictive and anachronistic provisions in them that date from a time when governments felt they knew best how land should be managed. This type of land tenure is now well past its use-by date, but the reality is that it is state and territory governments that administer these arrangements, and they have shown a remarkable reluctance to convert these to freehold land titles in the past. There is no doubt the issue of native title is one which complicates and conversion of some leasehold titles, but the process of resolving this has been underway since Australian Government legislation was enacted in 1993 (twenty two years ago), and it seems that the only real beneficiaries thus far are the lawyers. Recognising this, the White Paper includes a commitment to support the native title system with expenditure of around $110 million a year over the next four years, with aspirations of finalising all outstanding native title claims within a decade. Achieving this would be of enormous benefit to all involved, but unfortunately much of the responsibility rests with the state and territory governments.

The commitment to provide $600 million to upgrade the road network in Northern Australia, on top of the $100 million beef roads commitment made in the Budget is sound policy – in so far as it goes. The reality is that the cost of upgrading gravel roads to all weather quality is estimated to be around $330,000 per kilometre, so this amount of expenditure will conceivably enable around 2,000 kilometres of roads that are currently unsealed to be upgraded. While this sounds like a lot in southern Australian terms, the road distance from Cairns to Broome is over 3,600 kilometres, highlighting that in reality the $700 million figure is just a start, and would need to be repeated many times in order to develop a comprehensive network of all-weather roads throughout northern Australia.

Other commitments in the White Paper, including the implementation of a Cooperative Research Centre, the promise to upgrade land and water information in specific catchments, and the funds made available to develop specific water infrastructure projects all appear to make a great deal of sense, as do the workforce initiatives proposed.

If there is one quibble with the White Paper, it is the fact that it does not include a strong progress measurement and reporting framework, to ensure that the focus is kept on the proposals over the longer term. The paper does commit to having the Deputy Prime Minister report annually to Parliament, and to a standing joint select parliamentary committee for Norther Australia, but there are no firm timelines associated with the initiatives proposed. Inevitably, political interest in these issues will wane over time, but real progress for northern Australia will take much longer to achieve, and it will be difficult to retain political focus over successive terms of government.

That aside, the White Paper actually makes a great deal of sense, and all those involved deserve praise for developing a sensible and realistic set of initiatives.

 

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