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Joint Select Committee on Northern Australia - 20/06/2014 - Development of northern Australia

LETHLEAN, Mr Neil, Economic Development Manager, Capricorn Enterprise

[12:02]

CHAIR: Welcome. I see you have been sitting through this hearing. Do you need the preamble, or are you familiar with it?

Mr Lethlean : I am familiar with it, thanks.

CHAIR: Could you make a short opening statement, and then we can fire off some questions.

Mr Lethlean : Capricorn Enterprise is the peak tourism economic development group in central Queensland. It is a not-for-profit organisation with two primary operational streams, being tourism marketing and destination promotion for the broader Capricorn Coast-Rockhampton-central highlands region; and for economic development, investment attraction and industry development for the Capricorn Coast and Rockhampton areas. We are structured very much on the Townsville Enterprise model.

Following up on the Rockhampton Regional Council presentation today, I do not propose to duplicate or replicate what they have discussed with probably some added comment. Our first concern is about the composition of the Northern Australia Advisory Group associated with your inquiry. We note with interest the government's appointments to the advisory group and note that there is no strategic representation on the group south of Townsville. This clearly is an oversight, and we commend to government that this anomaly be addressed as a matter of priority to ensure that the southern sector be appropriately represented on the advisory group by a qualified nominee, hopefully put forward by our organisation. There is some cynicism existing in the south about the operations of this, not so much as to its direction but as to including those regions typically on the line—that is, the Tropic of Capricorn—and we note the primary focus seems to be to the far northern regions. We are just saying that as a comment. I know the matter is being taken up with the Deputy Prime Minister as we speak.

As far as our region is concerned, we are one of only five—and you would be aware of this—in northern Australia boasting a population in excess of 70,000 people. As a major population centre, we offer varied, diverse and affordable lifestyles; safe and inspirational communities; diversified economy; and extensive career opportunities and significant growth opportunities in the areas of education, health and medical services, aged care, tourism, agriculture and agrifoods, transport and logistics, resource services, construction and defence.

I noted the question by Mr Christensen earlier on the Gracemere industrial area. I do not think the question was appropriately answered by the council representatives. In fact, the GIA was a necessity due to the existing infrastructure for industrial development around Rockhampton being completely full. That was the old Parkhurst region. Gracemere was the logical extension. It was formerly part of the Fitzroy Shire. It was zoned in the late nineties as an industrial area, but, due to lack of funds and commitment, it did not proceed. It has only been in the last two years that the Gracemere industrial area, which comprises some 1,300 hectares—a greenfield site—has been zoned appropriately for industrial development.

I was a member of a group looking at an intermodal logistics study or opportunities for that precinct. If you look at the GIA and how it is proceeding at the moment, it is really about intermodal and transport logistics. In fact, Toll NQX are in the final stages of completion of a very major intermodal warehousing and transport depot in that precinct. Others are emerging. The add-on to it is infrastructure around rail. The existing rail infrastructure in Rockhampton is flood prone, very old and central city. With us being a gateway for both road and rail to north-eastern Australia and north-western Australia, it is logical for QR, Aurizon and even groups like the Pacific National Group to put in infrastructure within the GIA, which has suitable land for rail infrastructure.

Water security was raised this morning by the Rockhampton Regional Council. The logical extensions of Ban Ban and Rockwood have both been approved. It is just a matter of funding those. One that was not raised—and it is certainly not within our precinct—is Connors River. You would be very familiar with that. That is another huge opportunity for water infrastructure in that Central-Northern Queensland area.

I have had major discussions with CQUniversity. CQUniversity is one of only three universities within northern Australia. You have Charles Darwin, JCU and CQUniversity. As from 1 July, the CQUniversity and CQ TAFE will merge and be the first unified TAFE-university in Queensland. CQUniversity are also looking at working with the agricultural colleges, by consent of the minister for education in Queensland, at Longreach and Emerald to look at pathway creations and postgraduate courses for agricultural students. The opportunities for CQUniversity to expand into agriculture and expand on their existing strengths in medical and health, trade services, mining services and heavy rail are very opportunistic. The agricultural and food precinct of FIS was discussed. Naturally, it is a logical region for extension of agribusiness, agrifood and agriculture. It is just a matter of having water guarantee and the investment to take that forward.

Tourism is a key topic of yours. It should be noted that there are two major developments proposed within the Capricorn region particularly. There is the Great Keppel Island redevelopment—$600 million over 10 years. Land tenure was raised this morning as a major topic. Certainly, land tenure for the proponents, in discussions with the state government, has been a major stumbling block as to tenure and length of tenure, to gain international or investment confidence for people to invest in this resort. It would be major infrastructure for our region, for Queensland and for Australia.

The other one is the Iwasaki Sangyo proposal to develop a 300-room, five-star resort adjacent to their existing facilities at Yeppoon, which are now aged. They are proposing to declare 400 hectares as a nature conservation area and, as part of the overall concept, 1,400 hectares of land to be used as proposed integrated resort and other activities, residential community and village centre, caravan park and conservation precinct. The remaining area will be utilised for the cattle breeding which currently exists.

Defence was also raised. Shoalwater Bay is a no-brainer. It is just a matter of the ADF taking strategic decisions through a white paper et cetera to look at increased utilisation of that facility. I was instrumental in establishing what we call an AIDN, an Australian Industry Defence Network, in the Rockhampton region—the only one outside of South-East Queensland. That is about networking with regional industry to expand into opportunities in defence, and that is getting some positive response.

Mr CHRISTENSEN: The feedback that I have had from people who I think would be in the know is that it is incredibly difficult to break into that defence market because of the established players that are already in it, basically. I noted in the Rockhampton city council's submission, or presentation that they gave us and the associated paper work, that they were talking about having some defence facility there at Rockhampton—or that is what I gathered from it. Is that the end goal—that they are looking at attracting some defence base on the back of the activity at Shoalwater Bay, or is it simply that you are looking at leveraging off that activity with servicing defence somehow.

Mr Lethlean : The presentation by Rockhampton Regional Council predominantly was around the airport precinct, significant storage and probably some serviceability of aircraft. ADF do have a presence in Western Street and that of course ramps up during times of training—whether that be Talisman Saber, the biannual with the Americans, or annually with the Singaporeans. We are looking to link initially with the Singaporean opportunities. Their licence to continue to utilise Shoalwater Bay as a training facility is under review. They are, I think, looking for a 15- or 18-year continuation of that. That is an annual exercise of some 10 weeks. It is my understanding—and this is not confirmed—that they are looking to maintain a presence of equipment, machinery and armoury within Shoalwater Bay or in close proximity rather than import-export every time they do an exercise. It is a very costly exercise. You have to go through all of the regulations and the biosecurity issues surrounding that.

ADF have confirmed that they are not looking at expanding their permanent presence as part of a Shoalwater Bay activity. So we are not going to waste our time and effort in encouraging defence around that, because the concentration seems to be further north.

The AIDN project is about introducing opportunities from industry. It is a difficult industry to gain access to, but ADF are promoting it more and more in gaining accreditations by a lot of industry to work closer with ADF or given that opportunity.

Mr CHRISTENSEN: Thanks for that.

Mr Lethlean : In summary, that is probably all I have to present on, unless you have questions.

CHAIR: Thank you very, very much indeed. I certainly appreciate your contribution. It has always been very clear as to the focus that we have—and, of course, it is right across northern Australia.

Mr Lethlean : I am sure it is.

CHAIR: We have been covering as extensively as we can. We are very limited in the time frame that we have, unfortunately. That is primarily because we have to get this completed if we are going to be able to fulfil the commitments that we made. We need to have recommendations from this committee into the white paper in time for them to be able hand down the white paper by the end of this year.

There are quite a lot of areas where it was just impossible for us to get to in between parliamentary sitting periods, but we have basically been travelling since February; in every sittings gap we have travelled. If you feel that you have missed out or that you have not been focused on—the other thing too is that your local member, Michelle Landry, is a member of the committee. She has been working on the committee, although she has put in an apology for today. She is in Melbourne with another committee unfortunately; this has made it difficult for her to be in two places at once. But anyway, that being said, I can assure you that there is absolutely no intention to—we recognise the opportunities that are in Rockhampton and in that region, and that it plays a critical part. It is identified as one of the cities—Rockhampton, Mackay, Townsville, Cairns, Darwin and Port Headland were the six that have been identified for the hubs. Do you have any questions at all, Tash, that you want to fire off?

Mrs GRIGGS: No.

CHAIR: I have a couple of things. Again from your perspective, given you are in the lower area and we use the Rockhampton—generally it is just marginally north of yours with insurance, where there was a tendency to cut off. Do you have the same impacts in the Rockhampton area in relation to affordability and accessibility of insurance?

Mr Lethlean : There is minor impact. We are not subject to the climatic conditions of further north. The Fitzroy River of course does flood and there are areas of Rockhampton particularly that are impacted. I do not think it is a major issue, but it is certainly is an issue for those areas that are impacted by flooding, in that southern precinct of Rockhampton.

CHAIR: Most of the issues seem to be from about Sarina northwards. That is where the postcode concerns come in; just a little bit north of you.

Mr Lethlean : Exactly.

CHAIR: Again we have asked the council about this, but are there any priorities from your perspective in relation to achieving opportunities that we should be looking at or recommending in relation to infrastructure or the like?

Mr Lethlean : From the perspective of looking at northern Australia, it is predominately infrastructure and that is around road. We are well catered for with power supply energy. Stanwell is in operation. It is currently servicing about 23 per cent of its capacity, so it has huge surplus capacity to be utilised elsewhere. The Galilee Basin is of particular interest to us, the mining region. I am working with the centres of Townsville and Mackay, Rockhampton naturally, the Sunshine Coast, and the new Wellcamp airport at Toowoomba. I am looking at a FIFO operation, or a FIFO skilled worker transfer to satisfy skills demands within the Galilee mining precinct—now whether that is the north Galilee or the south Galilee, we will see—and that is getting some momentum. We anticipate we could supply up to 4,000 skilled workers from each of those regional centres, which would be a huge boost—understanding the Galilee will be 100 per cent FIFO or approximately that. But I think it is about road infrastructure predominately. Rail is very important, but nothing that is not—

CHAIR: I noticed there was a focus there from council, and a lot of forward thinking, in relation to acquiring properties around the airport for airport expansion: I assume that is something that Capricorn Enterprises would be very strongly supportive of, particularly in relation to a military presence et cetera.

Mr Lethlean : Yes, very much so. Again, Rockhampton Airport is influenced by flooding at times of peak water flow.

CHAIR: Have they got the bund wall around that yet?

Mr Lethlean : No, they have not.

CHAIR: There is a proposal for that, isn't there?

Mr Lethlean : There is a proposal before council and council are promoting a southern levee to protect Depot Hill, the infrastructure of Aurizon and some of the major developments around the rail head. But there is no proposal at this stage to flood-proof the airport.

CHAIR: I remember the last time there was a major flood it actually shut the airport down for an extended period of time.

Mr Lethlean : Yes, it did.

CHAIR: I was looking at some of the maps here. For some reason or other, I saw a levee marked on the map and I assumed that that work had actually be done.

Mr Lethlean : No, that is stage 2. The stage 1, the priority of council, is the southern levee, which, as I say, takes in the suburb of Depot Hill, the rail infrastructure of Aurizon and Queensland Rail, Hastings Deering and a number of other fairly major employers in that precinct.

CHAIR: Where is that funding coming from?

Mr Lethlean : It is a matter of conjecture. The final study has not been completed. It is being undertaken by AECOM. Preliminary estimates for the cost of the southern levee are $58 million. The council is seeking a third of the funding each from the federal and state governments and contributing a third themselves.

CHAIR: I see. There are three levee options there at the moment that they are considering. What did you say was the cost of the third option?

Mr Lethlean : It was $54 million, and that is not a final engineering assessment.

CHAIR: We were fortunate in that we had the council here earlier on. We should have set you in with them.

Mr Lethlean : Yes, we had some preliminary discussions.

Mr CHRISTENSEN: We have Regional Development Australia after lunch too.

Mr Lethlean : You have.

Mr CHRISTENSEN: We are getting hit by all CQ sides.

Mr Lethlean : It has a broader spectrum, of course.

Mr CHRISTENSEN: Absolutely.

Mrs GRIGGS: I want to comment that I think it is quite obvious that you guys are thinking strategically and you have really got a plan together. I commend you for what you are doing. It is always important to aim big and I am very proud of the work that you guys are doing. It really does stand out. We have travelled around and seen that the calibre of the region's proposals is really good.

Mr Lethlean : Thank you. I prepared a supplementary six pages today, which I will send through to the inquiry secretariat. There are no boundaries for northern Australia. I noted some of the comments this morning, particularly by Mr Gray, about doing away with the state borders and having government agencies particularly work closely together. I think that is imperative.

Mrs GRIGGS: That is something that we have been encouraging.

CHAIR: Standardisation across east-west.

Mr Lethlean : Absolutely. We become too bogged down in boundaries, whereas this has no boundary.

Mrs GRIGGS: There have been other examples where things have worked really well across jurisdictions and they have got some great outcomes, particularly in the education sector, and in the health sector too.

CHAIR: Turning to your comments in relation to the reference group, that it has a more northern focus, let me assure you I have also received similar complaints from the Torres Strait and from Christmas and Cocos islands, which are much further to the north. They said that they also wanted representation on the reference group. It is relatively small. There are two Indigenous people on it, I understand, but it would be expected that the rest of them would cover the whole spectrum of it. I cannot answer your question as to how the final ones were selected, but I think it was based on experience.

Mr Lethlean : I detect some cynicism and parochialism from our behalf.

CHAIR: Of course.

Mr Lethlean : It was an observation.

CHAIR: Fair enough. But, as I say, I copped it from the Torres Strait. We copped it from—

Mrs GRIGGS: Territorians are pretty happy Shane Stone is on it.

CHAIR: Nevertheless, unfortunately with these things you cannot satisfy everybody's interests or concerns. But I can assure you, as the chair, that I have constantly argued against any parochial attitude. This is about Northern Australia. It is 40 per cent of our land mass, it is north of the Tropic of Capricorn and we are intending to focus absolutely. There were places in Western Australia that it was suggested be incorporated, and we said no. The only reason Alice Springs was is that Alice Springs feeds everything to the north; there is a lot of space between Alice Springs and the next town—which of course is Adelaide. And there is a lot of stuff out there that is very relevant, particularly in relation to their desert research et cetera, which takes up a fair whack of Northern Australia. But I can assure you that regarding parochialism—well, some of them have been a bit more parochial than others; I am not going to point the finger at anybody in particular!—I always make sure there is a reality check there.

Mr Lethlean : Good on you; thank you very much.

CHAIR: Thank you very much indeed for your time.

Proceedings suspended from 12 : 26 to 13 : 18