Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Joint Select Committee on Northern Australia
Development of northern Australia

BROWN, Mr Kevin, Chief Executive Officer, North Queensland Airports

de WAAL, Mr Alex, Chief Executive Officer, Tourism Tropical North Queensland

MANNING, Councillor Bob, Mayor, Cairns Regional Council

MATTHEWS, Mr Mark, Chief Executive, Advance Cairns

QUINN, Mr Neil, Executive Manager, Cairns Regional Council

TWOMEY, Mr Trent, Chair, Advance Cairns

Committee met at 08:35.

CHAIR ( Mr Entsch ): First of all, I would like to acknowledge the traditional owners of the land on which we meet and pay our respects to elders past and present. I declare open this public meeting of the Joint Select Committee on Northern Australia and would like to thank everybody for being here today. Before I call on representatives to give evidence, basically the purpose of the inquiry, which I am sure you are familiar with, is identifying opportunities and impediments in growing northern Australia. We have 40 per cent of the landmass and four per cent of the population—about a million people. When you look at that and at the fact that by 2050 over 50 per cent of the world's population will be living within a tropical zone of the world, it creates a tremendous opportunity for us in relation to tropical expertise not only in food production and supply but also in all things tropical, from medical to educational to environmental—a broad range of opportunities there. We have to identify what we need to do from a government perspective to encourage investment and growth in our region. We have to significantly increase our population to be able to capture a lot of these opportunities, so we are also looking at impediments to attracting people to come and live in our region—and not only in attracting them to come but in retention, to make sure that they stay here for the long term as well—and the challenges that are there and what government needs to do in relation to provision of services where there are gaps in those services. That is basically where we are heading.

We have already travelled from Mackay to Townsville and Mount Isa. We went through the Pilbara a couple of weeks ago. We were supposed to go into the central gulf and lower gulf area—Richmond, Georgetown and Normanton—in the week immediately after Cyclone Ita, but that has been postponed until 1 July. At the end of this week we will be travelling across to the Kimberley, and then we will be doing the Northern Territory. The thing that we are finding as we travel through is that there are a lot of common themes and issues, which is going to make it much easier for the report. So we are very interested to see how those common themes lock into us or how they impact on us in our region here. I would encourage you not only to think parochially but to think about the tropical zone as a whole and what you feel is the best way for us to maximise those opportunities.

We have three groups here who are very tight in together. So, rather than go through the formalities and, in doing so, take up time and constrain it to half an hour, if you are happy to do it I will go through the three groups as one, and that will provide us with an opportunity for us to go through till around 10 o'clock. We have quite a number of members here. We have Senator Ludwig and Senator McLucas, Queensland senators. We have Warren Snowdon from the Northern Territory, from Lingiari, which is pretty much all of the Northern Territory. Melissa Price is the member for Durack, which is of course a fair chunk of Western Australia. It is the largest electorate in the world. In the dark glasses is Alannah MacTiernan, the member for Perth in Western Australia, who is my deputy. You know Senator Macdonald, another Queensland senator. I am the local member for Leichhardt. Witnesses, are you agreeable to the arrangement?

Councillor Manning : We have four groups: airports, TTNQ, the council and Advance Cairns.

CHAIR: Are you happy to do it as a group?

Councillor Manning : Yes, if it saves time.

CHAIR: In that case, we will make a slight amendment. We will have a late morning tea and that will give us another 30 minutes. That will take us to around 10.30. We can have a break then, if that is okay. It does give us a good chance to be able to dig down into it. There is a lot of commonality.

With that, I declare the public hearing of the Joint Select Committee on Northern Australia open. Welcome. These hearings formal proceedings of the parliament. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of the parliament. The evidence given today will be recorded by Hansard and it attracts parliamentary privilege. I invite you to make a short opening statement, speaking to your submission, and after that we will have time for our committee to ask questions.

Councillor Manning : We will do the four opening statements and then we will be treated—

CHAIR: That is correct.

Councillor Manning : Firstly, as Mayor of Cairns I would like to extend a warm welcome to everybody. The locals, of course, are still warmly welcomed. It is a great pleasure to have you here and we appreciate the opportunity to appear before this committee. I go to the need for action. In the 1970s, Doug Anthony, when he was a minister, made the claim that if we do not develop the north of Australia we have no moral right to it and eventually somebody else will develop it for us. Those are some very timely words. I wonder, 40 years later, when we look at that statement by Doug Anthony, how far things have really changed for northern Australia. The statement remains valid today. We continue to be underdeveloped, we continue to be underpopulated and we continue to be undervalued. We continue to be dictated to by terms of populist politics. Quite often the views of electorates in southern capital cities, with little or no understanding or regard for our position up here, affect decisions which are made with regard to the northern part of Australia. In fact, the weighting is skewed.

The true value of northern Australia needs to be recognised. The communities that live in northern Australia are entitled to expect the same level of service, the same living conditions and opportunities, that are enjoyed by residents in the southern part of Australia. These are challenges which are faced by all levels of government, and in that I include local government. We are all in this together.

The establishment of your committee and the white paper process that has been set up will provide us all with an opportunity to address these issues. I trust, Mr Chairman, that your committee will share the same passion that we have for northern Australia and for delivering on what this has the potential to provide. The announcement of this committee was warmly welcomed in this city, as is any decision by government that they will view the situation in northern Australia on a more favourable basis. We believe that opportunities do abound here and, if governments can implement policy settings and government initiatives that are properly targeted, then we will realise upon those.

Regardless of whether or not there has been assistance or stimulus or the appropriate settings have been made, particular areas of northern Australia have continued to grow over the last decade or so. The population of Cairns has grown on a consistent basis of 2.66 per cent per annum in the last 20 years. If this population growth continues, then, by the year 2050, Cairns will have a population of 400,000 people, with another 150,000 people in the immediate area, so the Cairns region will have a population of 550,000 and will be, by far, the biggest city in northern Australia. That compounds even further when we look at the fact that, given our current tourism numbers, on any one day there are 50,000 people in this city who are not counted in any census. That is our visitors. When you look at our visitor numbers with our population, that is another 50,000-plus people every day. That does not get recognised.

If we look to the future for Cairns, it will be a city which is based upon a growing tourism industry; a growing seaport, not only in terms of coastal shipping but in terms of the marine industries that are carried on here; an expanded naval base and border protection presence, which is something that we have been pushing strongly with successive governments and which was recognised in the force posture review, where they foreshadowed a greater concentration of military bases in the north-east and the north-west of Australia, strategically well located and from a regional perspective ideal in terms of satisfying regional policies of the government; a specialised marine and aviation sector; a service hub and access link for agricultural precincts on the Atherton Tableland, Cape York and the near gulf area; and centres of research for education and tropical expertise.

I want to just touch briefly on two topics here. One of those is the AQIS project, which is a coordinated project presently under the control of the state government which involves an $8.15 billion investment in tourism infrastructure at Yorkeys Knob, about 15 kilometres north of the city. We can look at that in terms of other major projects that have been forecast for Australia, including the recent announcement on Badgerys Creek—a new airport, $2.5 billion—and the Roy Hill project in Western Australia, Gina Rinehart's. I think that is about $8 billion, but that includes the mine, the railway line and the port. If you look at that, you will probably see that it employs 3,000 or 4,000 people. The Aquis project, when it is in full swing, will employ 20,000 people. It will employ about 8,000 people during the construction phase, and the flow-on population impact for us over that decade of construction and implementation will be about 54,000 people. So we will have a 33 per cent growth in our population over a 10-year period. It is quite a phenomenal impact upon our economy and upon our region.

The other one I would like to quickly draw to your attention is the issue of water. The council have started a process whereby we are looking at the future potential sources for water to supply this city. We are at a point now where successive dry seasons—and we are at dangerous levels—mean we have 'by demand' management. We have almost halved the water consumption here, but we do have to look at future water supplies for both consumption and for agricultural use. The Mareeba-Dimbulah Irrigation Area has an untapped potential of about 40,000 hectares of farming land, and we will in our submissions point you to the Nullinga dam proposal, which was something that was looked at back in the 1950s when the decision was made on Tinaroo. It was Tinaroo or Nullinga, and as late as 2008 SunWater in Queensland presented a report to the state government about the viability of the Nullinga dam proposal. That is another one that we will be putting on the table with you. I think that certainly exceeds my five minutes, but after all it is our chamber. Thank you very much.

Mr Twomey : Senators, members, welcome to tropical North Queensland. Thank you for making the trip north to hear from us today. There are a few points that Advance Cairns would like to raise as we talk to our submission. We have taken the view that we would like to help the Australian government. Both sides of politics, for that mind, took various policies to last year's federal election that involved the growth of northern Australia. The path that we have taken is to help regionalise those ambitious growth targets to tropical North Queensland. I have a few notes here that I will use to speak to Advance Cairns's submission: (1) we would like to help realise the national goal of creating a food bowl specifically in the north, (2) we would like to help grow the tourist economy, and (3) we would like to help the energy export industry. All three of these particular industries require an increase in population. As the mayor just said, we are aiming to have about 550,000 people living in tropical North Queensland, centred mainly around our beautiful city of Cairns, by approximately 2050.

Now to service a population of this particular scale and to help realise those very ambitious goals across those three sectors, we are going to require certain pieces of enabling infrastructure, and this is what I will talk to now. As the mayor just said, the first goal is water, specifically the project of Nullinga dam. Nullinga dam creates and provides water not only for urban growth around the Cairns city but also for the expansion of the agricultural industry in the Mareeba-Dimbulah Irrigation Area and across the Atherton Tableland. It also provides for the second goal—that is, power generation—and the third goal, which is transport. I will not touch or speak to, unless asked, the sea or the airport. I will leave those to the experts who are on the panel, but I would like to raise specifically the Bruce Highway and the inland Hann Highway.

Nullinga dam: I have before me an executive summary, which I know has been submitted to the committee, from the final draft report The Nullinga concept investigation report, as done by SunWater for the previous state government in November 2008, and I would like to read a brief segment of that to you today.

The Nullinga Dam site was investigated as part of the original investigations for the development of the Mareeba-Dimbulah irrigation area in the early 1950s. It was in the planning stage of the irrigation area that a decision was taken to construct Tinaroo Falls Dam. The scheme was so arranged that both storages could be interconnected and operated conjunctively to maximise the amount of water available. Nullinga Dam is likely to be required before 2020, at which time it will provide for the urban supply of Cairns. The Nullinga Dam site on the Walsh River is within the Mareeba shire, and the proposed dam site is located approximately 55 kilometres south-west of Cairns and approximately 24 kilometres south-south-west of Mareeba.

The purpose of the proposed dam is to provide for the future urban demand of Cairns and also to help realise the future rural demand for the Mareeba-Dimbulah water supply scheme. Investigations into the proposed Nullinga dam include the three dam cases, each with different storage volumes and non-overflow crest elevations. Storage volumes of 168,000, 364,000 and 491,000 megalitres were investigated.

Indicative project time frames have been developed for the construction phase and the overall project delivery. The overall project delivery schedule, which includes preliminary design, detailed design and construction, is estimated to take approximately four years. As you can see, if we are actually to meet the urban supply of water that is required for the city of Cairns and to help realise the agricultural food bowl concept as outlined in both of your parties' policies, construction work on the Nullinga dam is required within the next 18 months.

The next thing I would like to touch on is transport—specifically, the Bruce and the Hann highways. Both sides of government have committed to both of these roads, but what we would like to see and what we are asking to see is a renewed commitment to the rollout and the upgrade of the Bruce Highway, specifically in the southern corridor. We have had a commitment from the current government. However, we have not had a commitment based on time for the continued rollout of the dual carriageway of the Bruce Highway from Edmonton through to Gordonvale.

In relation to the Hann Highway, my CEO was recently quoted in the Cairns Post and also other news after Cyclone Ita, when the Bruce Highway was closed and therefore the city of Cairns was cut off from all southern ports. This highlights the need for the sealing of the Hann Highway. We can speak specifically to that if you ask us to when we come to questions.

In relation to HMAS Cairns, I will not speak specifically, unless asked, about the upgrading or the dredging of the port of Cairns. Rather than asking for the committee in its report to commit to an increased defence presence in the city of Cairns, which is a great headline topic or strategic goal, specifically what we are seeking is for the basing of a new vessel at the port of Cairns with HMAS Cairns. I am led to believe by my CEO—and he can talk to this later if required—that once the LHDs come online towards the end of this year HMAS Choules, which is currently based in Fleet Base East in the port of Sydney, will have no specific home and has not yet been assigned to a home. So what we would like this committee to investigate specifically for the development of HMAS Cairns is the relocation of HMAS Choules north to HMAS Cairns once the LHDs come online.

I will move on from the Bruce-Hann to the Aquis development, the second last point I would like to highlight. In our report, we highlighted that the Aquis development was a $4.2 billion development. As most of you will know, this has been upgraded to an $8.15 billion development, as outlined by our mayor. The state government and the federal government, through environmental processes, have been extremely accommodating to the proponents of the Aquis development. However, the people of Cairns do require this and we ask for anything the federal government can do to assist the process for the approval of the Aquis development. We need an accommodating framework for that particular development.

The last point I would like to touch on, if I may, is the current government's commitment to deregulation, specifically under the Parliamentary Secretary to the Prime Minister, Mr Josh Frydenberg. The current government has two sitting days each year dedicated specifically to the rolling back of red and green tape. While that is a great headline topic, what Advance Cairns is asking for is for one of those sitting days in its first term to be dedicated specifically to the rolling back of red and green tape as it applies to Northern Australia.

I will just recap the five things that Advance Cairns is specifically asking for: (1) the timely approval of the Aquis project, (2) a commitment to the building of the Nullinga dam for power and water, (3) the relocation of HMAS Choules to the HMAS Cairns base at the port of Cairns, (4) the recommitment to the dual carriageway of the Bruce Highway from Edmonton to Gordonvale in a specific time frame and the sealing of the Hann Highway, and (5) a dedicated day in the federal parliament, through Josh Frydenberg, for the rolling back of red and green tape for development prospects in Northern Australia.

Mr de Waal : I was delighted to read the coalition's 2030 vision for developing Northern Australia and the three major priorities that are seen to potentially drive the growth of this region. One of them is tourism, of course, which is my area of expertise. The disadvantage I have is that you are all tourism experts and they are a dime a dozen. Everybody is an expert, every street corner is occupied by experts on tourism. That is part of our challenge. I guess the simplicity, if you like, of enabling visitors to experience the lifestyle, the natural and cultural environment that we take for granted every day masks the complexity of the highly competitive field of destination marketing.

I would like to present to the committee today a couple of points to highlight the opportunity that I think Australia is largely living in ignorance of at the moment. First of all, according to the World Tourism Organisation, one billion international travellers roamed the planet in 2012. Annual global travel is projected to grow by 3.3 per cent over the next 20 years to 1.8 billion visitors by 2030. Moreover, Northern Australia's next-door neighbour, the Asia-Pacific region, is projected to achieve about seven per cent growth in visitation during that period. In the year ending February 2014 Australia attracted 6.49 million international visitors. That represents about 6.8 per cent annualised growth on last year, which I guess we are all clapping ourselves on the back about. But given that the region's growth is seven per cent, we are barely keeping up. That is the reality.

There are a minimum of 4,000 destination marketing organisations around the world that are currently competing for these visitors. They aggressively market their destinations and Las Vegas is one of those destinations. It attracts 40 million visitors a year currently. Las Vegas destination alone invested $570 million in attracting those visitors. In other words, $14 per visitor was invested by that one city in the United States. Tropical North Queensland attracts 2.3 million visitors and invests approximately $2 per visitor. So how do we compete? Who is going to increase my budget, who is going to increase this destination's budget, by 700 per cent? Tropical North Queensland currently attracts nine visitors for every resident. The Darwin number is five to one, Brisbane is three visitors for every resident, and for Sydney and Melbourne it is two visitors for every resident. So you can see the proportion of visitation relevant to the population and the importance of tourism to this region.

A benefited rate levy is not tenable in Northern Australia or in destinations that are focused on tourism. The population base and ratepayer base will always be, comparatively speaking, too small to sustainably fund growth that we are targeting. This is why competitor destinations such as Hawaii, Guam, Phuket, Fiji, all ones that are top of mind when you compare them to this destination, have introduced visitor levies in those countries. And that is how Las Vegas funds $14 per visitor. So my organisation and a number of witnesses here today will eminently present the priority tourism foci. As I say, you go to any street corner to get some expert opinions. But without sustainable funding, without the industry at large in Australia having a sustainable funding model in place, we are not going to be able to compete globally. We will go along for the ride but we are not going to actually kick some goals.

Mr Brown : I am here representing North Queensland Airports, which runs and operates both Cairns and Mackay airports, so the points I am raising today equally apply to both of those regions. To put it into context, in aviation in our respective arenas collectively for North Queensland Airports we contribute over $4 billion a year to the annual economy directly and indirectly through aviation, and that supports directly and indirectly 40,000 jobs. So we are a significant enabler of the local economy. I think in Cairns alone the aviation contributes 22 per cent of the economic worth and Mackay it is 14 per cent, so significant players in the market.

I am pleased to be here today and I believe it is within your gift to address the north-south divide that exists in Australia. The mayor has already alluded to some of the key infrastructure that does not best enable us to deliver and realise our full economic worth. I am not here today seeking handouts; I am here wanting and willing to discuss further the facilitation of economic stimulus in the region. I believe we have a number of unique selling points. The chair has already mentioned the tropics, which we share with 40 per cent of the world population, and that is going to grow to 50 per cent by 2050. So we have a significant advantage as a developed nation: close adjacency to Asia, a similar time zone to Asia and a significant landmass—over a third of Australia—within your grasp to help influence opportunities going forward. If we do not grasp this opportunity, I am sure there are plenty of our neighbours who would be willing to do so.

I believe the core of our issue—and I have struggled hard to think about what is the real fundamental issue we have to address in everything that we will collectively have to do—comes down to diversifying our population. We need to increase the population in our region and we need to diversify our population. Cairns is very dependent on tourism and Mackay very much on mining. That make aeronautical development much more difficult, because when we are facing the economic cycles of those respective businesses the whole region catches a cold and it can be very severe, as we know. Mackay is facing some challenges at the moment with mining, and Cairns has done so with tourism for a number of years and still has some way to go to realise its full potential. In education, for example, one student is worth 4½ airline seats per annum, because they travel home or their friends and family visit them. We do not have the full potential of that diversified economy or the synergies that come with that.

It is a very complex jigsaw. There is not one easy fix to it all, but what we do have to do is make it easy for people to do business with us in northern Australia. That is not just about improving the visa situation to make it easier for people to get here on holiday or to work here, and it is more than just the local planning. I have to commend the mayor and the council in Cairns. I have experience with some of the other councils I have dealt with, and the council in Cairns is a lot more progressive and focused on generating and stimulating, through planning, some economic development. But it is more than just local planning; we are competing in a global marketplace. We are not competing with the south of Australia, although I do wonder at times about whether the amount of money that has probably been invested in addressing congestion is perhaps less efficient than investing in growth, grasping new opportunities and working with the unique selling points of our region.

So what am I advocating? I am advocating special economic zone status for parts of northern Australia, particularly in and around airports. This is not something that is particularly new. The panel may be aware of Shannon Airport, which was probably the first to develop this back in 1959, so it has certainly been well ahead of the curve. As a regional airport in a regional area, it has managed to develop a significant economic benefit and attracted over 100 new international businesses to the region. India is well ahead of us as well. It started its first economic zone in 1965; there are now 143 special economic zones in India alone, and there are another 634 in the cards. Russia has over 16 different economic zones and China over 100. In Guangdong province in southern China, Shenzhen is a prime example of a city that has gone from strength to strength by developing special economic zone status. So, going right back to 1959, there is some stuff that is laid out right in front of us that we should be looking to learn from and bring to our great part of the world so that we can continue to prosper and benefit. If we do not do that, our neighbours will certainly be happy to do so.

If we are going to be truly competitive and have a special economic zone, it requires us to truly trade, and on an open basis. That is about having open skies, relaxing the bilateral arrangements that are in place with airlines, reviewing the whole foreign investment criteria that we have for investors coming to our part of the world, and reviewing the tax structure to incentivise investors to come to our great part of the world. To put it into context, one international wide-body route coming into Cairns three times a week contributes $35 million to the local economy and supports over 1,000 jobs. If that wide-body aircraft moves to a daily service then it contributes over $85 million to the local economy. With the review of the open skies policy for northern Australia and the establishment of special economic zones we can truly put our great part of the world on the map and change the course of history.

As I said, I am not seeking handouts. I am just looking for you to help facilitate the economic stimulus to realise the unique assets that we have to offer in this great part of the world. We are the only airport in northern Australia that handles wide-body aircraft. Next week we will have an international trading forum bringing buyers from India and China to meet with local producers, airlines and cargo-handling agents to try and facilitate the export of goods—specifically agriculture and aquaculture goods—from this part of the world. It is going to take some time, but we have taken the lead in developing this. One wide-body aircraft can support 40 tonnes of cargo, whereas a narrow-body aircraft can only support one tonne of cargo. If we are fortunate and Aquis comes off—and it is the best project that will ever happen, probably, to Australia and certainly to this part of the world—we potentially have the skill to have the more significant cargo belly-hold capability in Australia, and we have to fully utilise that.

Water and electricity are key to enable us to cost-effectively grow this environment. The cost of water and electricity is excessive. It does not put us in a good competitive arena. I look on these as investments for the future. This is not about us competing with southern Australia. It is about wasting less energy in transporting long distances to resources that are available to serve areas closer to those power stations such that they can continue to grow as well. So we are not looking for any favours. We are just looking for a fair shot at the great opportunities that are out there. Thank you for your time this morning.

CHAIR: Thank you very much indeed for each of your overviews. I will now seek questions from members. Who would like to fire off the first question?

Senator IAN MACDONALD: Thanks very much, gentlemen. It was a very professional presentation. Thanks for your written submissions, too, which were also great. As you all know, some of the questions I ask I know the answers to, but I put them anyway. I particularly like—and I had not heard of these before—having the chills based here, which is a good idea. The one-day regulation approach to northern Australia also sounds like a good one. Can I go to Nullinga. That has been around for a long time. Two difficulties with Nullinga have always been raised. First is the cost-benefit—it costs more than it is worth. Secondly, and I am conscious of this, there are environmental oppositions to the damming of the Walsh River. How do you address those two?

Councillor Manning : I think it would be fair to say that there will be environmental issues with respect to the building of any dam. No dam would be built—

Senator IAN MACDONALD: Or building anything.

Councillor Manning : Or anything, for that matter. Even shifting flying foxes out of your ceiling. Nullinga dam has been in the frame since the 1950s. It and Tinaroo Falls were shortlisted, and it was Tinaroo Falls that got the nod based upon, I think, the fact that the catchment would fill the dam quicker—it was more reliable in that respect. From recollection, about 40,000 hectares of land in the Mareeba-Dembulah irrigation area is available for cropping but dependent upon additional water. There is also the issue that Cairns is moving to a point where the gap between capacity and consumption is starting to narrow, and we are moving into a red zone for that. The option for us is to look at other sources, which involves the Mulgrave River Aquifer and the Baron River. But if we take out of the Baron River then there is a need to top up the Tinaroo Falls area, for their agricultural area. There is the ability to trade the two off a bit. The fact of the matter is that there is pent-up demand and growing demand from the city.

Senator IAN MACDONALD: But, Mr Mayor, someone has to pay for it. Are the Cairns ratepayers prepared to pay for a fair share—perhaps not all—of any of the alternatives you have mentioned and does Nullinga come out from the Cairns ratepayers' point of view as the best option?

Councillor Manning : The Nullinga dam is far too big a project for any council. We have already built one dam—the Copperlode Falls Dam—and we would be one of the few local authorities in Australia that own a dam.

Senator IAN MACDONALD: I am not saying you would build it—somebody else might build it—but can you make it profitable for whoever else does build it, be it the council or anyone else?

Councillor Manning : The financial feasibility has to be looked at. There has been preliminary work done. As late as 2008 SunWater did a report for the state government. I think that did cover some aspects of financial feasibility.

Mr Quinn : Yes. Before you build a dam the first thing you do is wind back your demand. We have done that. We have reduced demand from about over 750 litres per head per year back to about 450. That has happened over the last 20 years. We are reviewing our water strategy. We are looking at all options, including things like desalination as well as further demand management. If Nullinga dam were seen to be the right way to go, it would provide an opportunity for water for agricultural use, it would provide water to boost the capacity of the Barron Falls hydroelectricity scheme and ultimately it would provide urban water for Cairns. I think for agricultural use the farmer pays $12 or $13 a megalitre. The equivalent rate in Cairns for water consumption is about $1,000 a megalitre. So if the dam were built it would have to be built with a substantial portion of its use being directed to Cairns where there is the capacity to pay.

CHAIR: Are any of you familiar with—and this can work in conjunction with this—the Johnstone River overflow? Does anybody have any information on that?

Councillor Manning : No.

CHAIR: This is diverting peak floods from the Johnstone to the Barron to supplement the Tinaroo Dam.

Councillor Manning : I have not heard that one before. It is a bit like when Mr de Waal was saying before, on any street corner there are a whole lot of experts on tourism. I think on every second street corner there are a whole lot of experts on water too. We are not pushing Nullinga dam; we are just saying this is one of the suite of options that need to be looked at. It is one that is well advanced; it is not something that has just been plucked out of the air.

CHAIR: I understand that this was to complement that as well.

Councillor Manning : It could be. They could be complementary.

CHAIR: I just wondered whether you had any information.

Senator IAN MACDONALD: Clearly, what you are saying is that Cairns will need an alternative water supply in the next 10 or 15 years.

Councillor Manning : It is either that or we start to cap growth in some way, and that will do it.

Senator IAN MACDONALD: Mr Brown talked about an open skies policy for the north. Don't we have an open skies policy in Australia?

Mr Brown : No. There are a lot of restrictions in terms of what airlines can fly into Australia and then fly onwards. One of the opportunities we have got here with a more open skies policy is we can have airlines flying here from Asia and then flying to other parts of northern Australia and triangulating their journeys. Respective populations in each part of northern Australia are not necessarily large enough of themselves to fill wide body aircraft, but if we have got the scope to allow triangulation of services—

Senator IAN MACDONALD: But is that not possible under current regulations? I thought it was.

Mr Brown : Not with all the airlines that potentially are out there to serve our region.

Senator IAN MACDONALD: Perhaps you could in writing explain that a bit.

Mr Brown : Sure.

Senator IAN MACDONALD: Are you sort of suggesting that they would not go—

Ms MacTIERNAN: It has got to do with reciprocity of landing rights.

Senator IAN MACDONALD: Reciprocity involves others besides the Australian government. Are you talking about coming into Australia and then going to Sydney or Melbourne?

Mr Brown : Potentially, yes, Senator.

Senator IAN MACDONALD: It is the bit that is the problem at the moment. It is the onward flight to Sydney and Melbourne which the airlines want but which are not available.

Mr Brown : Potentially, because there are certain elements where they are priced out. We had this example last year with China Eastern in bringing passengers in and then having to rely on domestic airlines to move the passengers. The cost of those facilities—

Senator IAN MACDONALD: Is it an Australian government regulation that stops China Eastern from going on?

Mr Brown : Yes, it is.

Senator IAN MACDONALD: On notice, would you tell the committee what needs to be done to address the specific issues you are raising. Chair, if there is time, I will come back later; but, if not, I will put my follow-up questions on notice.

Ms MacTIERNAN: There are quite a few issues that I thought were very interesting, and one that I would like some people to make some more commentary on is devolution. Certainly, from my experience in Western Australia, if we are going to make progress there has to be a substantial devolution of power. Is it in the access paper where you have talked about devolution of government structures? It is a really interesting area that we have got to do more exploration on. I would be interested in how you see that working, how you would see that tie in and what the financial implications of that might be. Obviously, the more autonomy you get in terms of decision making, if you were wanting to use more generally collected resources, is going to create a conflict. I would be interested in that.

When you were talking about water, you did seem to make reference to something that might indicate there has been not just the growing population but also a drying effect. I would be interested to know what analysis you have done on climate change, what particular vulnerabilities might be emerging in your region, what additional costs might be emerging from that and how you believe they should be dealt with.

A smaller one but one that I thought was very interesting is this proposal to be the customs hub for PNG. How much value would be in that? I would like to hear a little bit more about how that would work.

Councillor Manning : The issue of devolution, as you describe it, is not one necessarily where we are saying that there are greater powers that ought to be given to the region. The issue there is one of governments recognising that they need to look at, as I term it, the balance sheet of Northern Australia, which, at the moment, is a very lazy balance sheet. It desperately requires investment. It is easy for governments to say that investment needs to come from the private sector; but it also requires the appropriate policy settings and incentives offered by government to make that happen.

Ms MacTIERNAN: We are talking at cross-purposes then, because I am looking very much at the submission of Advance Cairns, which is talking about devolved decision making. So it is not about policy; it is about devolved decision making.

Mr Twomey : Specifically, they were referring to a paper that was written by Allan Dale, who is the chair of the RDA for Far North Queensland and the Torres. So I can refer you specifically to that paper for detail. I am not an expert specifically on that.

Ms MacTIERNAN: So it is not something that has got a lot of traction? Someone put it in a paper but it is not something that really—

Mr Twomey : No. George Street is a long way away and Canberra is on the other side of the planet as far as Far North Queensland is concerned, so any way that you can get both those levels of government out of the road for the people of Far North Queensland so that we can get on with our lives we are very much supportive of. If you want specific answers to that, I am just referring you to that paper; that is all.

Mr SNOWDON: Can I follow up on that. Your submission actually says:

At the heart of these issues—

which you refer to in terms of enablers for growth—

and crucial … we are seeking … governance reform …

What specific governance reform are you seeking?

Mr Twomey : On that, I was understanding that I would be able to have my CEO and my deputy chair here for those questions. If I am able to bring them forward as well, I can get my CEO to answer that question specifically for you. It was just that we rearranged the format of the day, so I did not get the opportunity to bring him up. That is all. Is that fine?

CHAIR: Absolutely.

Mr Matthews : I will outline some of the elements around that but perhaps defer to the subsequent submission later on as part of Regional Development Australia Far North Queensland and Torres Strait, particularly Allan Dale, the chair of RDA FNQ&TS, who will talk specifically about the governance arrangements and the proposal that sits around that. Our submission supported a new framework for a stronger level of governance in northern Australia. As mentioned, much of that decision making has been based either in Canberra or the south-east corner. In relation to the specific issues that we are seeking government reform upon, there has been some early work but much of this has not been well developed. A lot of it is centred around a place based approach to regional development, but much of it has been looking at a very broad canvas and at each of the specific regions you mentioned, Mr Chair. There are a lot of recurrent themes across northern Australia, but the specifics in each particular region require a specific approach to their own developmental needs. That was the fundamental of the basis itself. It was also about building regional capacity to be able to manage the challenges that sit within the individual regions.

Ms MacTIERNAN: What we are trying to get to, sir, is that you put this in the submission, and it is an interesting idea, but what this committee is about is: what are the practical things that you would do to implement this? We all understand the philosophy, but what are the specific changes that we would have to make?

Mr Matthews : Could I take that on notice?

Ms MacTIERNAN: That is okay. It just indicates that this is not an idea that has been really well developed in the region.

Senator McLUCAS: When RDA comes up, that might be the place where you can ask that question.

Ms MacTIERNAN: It is interesting that it was in the submission but it is obviously not something that has got a lot of traction locally.

Mr Twomey : The RDA chair is the expert in this specific field. In our submission we put one paragraph to refer to and support the RDA on this specific comment. We were not claiming that it was an Advance Cairns concept at all. We were supporting the RDA's submission.

Mr SNOWDON: But you do say that at the heart of the issues is governance reform, so you cannot walk away from your submission. We are interested in having a discussion about it. We are not being critical here, but we would expect that, if you have got it in your submission, you would have more detail.

Senator IAN MACDONALD: Perhaps we should leave it to Mr Dale when he arrives. He has written a paper and he is an expert on it. That would save a little bit of time.


Ms MacTIERNAN: Yes. On the broader issue of climate change, what analysis have you done about what risks that is posing, what additional costs that might impose on the region?

Mr Quinn : In terms of water supply, the city has got two primary water sources: Copperlode Falls dam, from which we take about 122 megalitres per day—that is our licensed maximum—and Behana Creek, to the south. Our licensed maximum there is about 44 megalitres per day. There is about a three to one relationship between the two primary sources.

In the dry part of the year, Behana Creek basically is not used as a supply source, so all the supply for the city reverts to Copperlode Falls Dam. So the reliable yields when we look at that really come back to about 72 megalitres per day as the reliable yield from Copperlode and zero from Behana Creek. In an average day across the year we use 63 megalitres, so it is a little bit under. On a maximum day, we use 77, so we are fairly finely balanced.

Over the last 30 years, there have been three occasions where Copperlode Falls Dam has dropped below 50 per cent capacity. The impact of dropping below 50 per cent is that obviously there is a reduction in the volume, but also the water quality deteriorates. Of those three occasions, on two occasions there has been a successive dry year. We have never had three successive dry years. In 1992 and then again in about 2003 were the periods where we had particularly dry years, but only one followed by another. If we had a third one, there would be a fairly critical situation arising from that. In normal times—and we can provide a graph to this effect which outlines it fine—in the dry season, Copperlode would drop back to about 80 per cent. In the wet season—

Ms MacTIERNAN: Have you noticed whether there has been a change in your climatic conditions over a period, or have you not perceived any changes here?

Mr Quinn : We have measured the capacity of the dam. We have not necessarily tried to relate that back to climate change or any climate factors. It is run-off, rainfall, that charges the dam.

CHAIR: Population growth?

Senator IAN MACDONALD: Did I hear you say you have not had two consecutive dry years for more than 20 years? Is that what you are saying?

Mr Quinn : We have had two occasions where we have had consecutive dry years. We have never had three in a row over the last 30 years.

CHAIR: But your challenge is more about the fact that your population continues to grow but you are not able to grow the capacity of your water supply. You mentioned the Mulgrave aquifer. My understanding is that the Mulgrave aquifer has been discounted because of other issues, so you need a new, reliable source if your city is to grow. Is that right?

Mr Quinn : Obviously the demand management side is the first thing you do. You try and reduce the waste, and I think really we have done that. We have gone from 740 back to 450 litres per head per year over the last 20 years. We have options. We have an unallocated reserve from either the Mulgrave River or the Mulgrave aquifer, and we have an unallocated reserve from the Barron River at the moment. We are not using either of those at this point in time.

Councillor Manning : We do not discount the Mulgrave aquifer, Mr Chairman, but it does have issues, particularly with farming people down there. We recognise that, but in the nine- or 10-month consultation we are going through at the moment—we have a water reference group, a broadly based one, looking at this; in fact, it meets tomorrow night again—that will be looked at. It is one where we already know there will be some fairly serious issues and concerns about development of the aquifer.

CHAIR: The water issue, though, is more about accommodating a growing population. You are seeing yourselves growing from 160,000 to 400,000.

Councillor Manning : That is at the other end of the spectrum.

CHAIR: The existing facilities just do not have the capacity to meet those demands.

Mr Quinn : Certainly, as part of the review of the water strategy, the projected population increase and the demand on the water are very much part of the process that will be professionally done.

CHAIR: Copperlode cannot be increased in size. You are not going to be able to grab any more capacity out of the Behana.

Ms MacTIERNAN: There is nothing more generally on cyclonic activity, risks, costs—any more general work that has been done by the group?

Mr Quinn : No.

Ms MacTIERNAN: I thought the proposal in relation to PNG was interesting. Does anyone know anything about that?

Mr Matthews : I can talk on this. Advance Cairns has been working with the Australia PNG Business Council and the Cairns Chamber of Commerce. This was an idea initiated some years ago in developing bilateral trade between our region and PNG. The current impediments, or the current requirements, are for all trade to go directly into Port Moresby, Jackson's airport, and that is a significant block in terms of air trade. But currently much of the sea trade comes out of southern ports, so we are looking at both, for sea and air, for passengers and also for hard trade, to be able to be pre-cleared within this region, which can then move directly into other ports within PNG.

Ms MacTIERNAN: What actually is the problem in PNG? I am just trying to get the problem that you are trying to solve.

Mr Matthews : The challenge is the infrastructure in Port Moresby for air traffic or air trade. There is not sufficient infrastructure to be able to support fresh or perishable produce. There is an enormous demand for that, and there is capacity out of our region to satisfy that, but there are not the handling and storage facilities in Port Moresby to be able to facilitate that, so much of it gets sea shipped, and the quality condition and the opportunity for the region are minimised. This would open up opportunities to have the goods pre-cleared here so that they are effectively then moved on to their destination either in Port Moresby or to open up other avenues throughout the country.

Ms MacTIERNAN: What do you need to have happen for that to go forward? What is the impediment to that?

CHAIR: Can I just answer that. There is a draft paper being worked on at the moment to have a look at a pilot project specifically to do this—this has been around for quite a long time—working on the work of Advance Cairns and others of the PNG business association. There is work being done now to put to the minister to have a look specifically at a pilot program, possibly based here and/or in Townsville to look at pre-clearance on goods going into PNG. That is being worked up at the moment. Actually, it should be finished in the next couple of weeks. Once that is done, we will certainly have an opportunity to look at that.

Mr Matthews : Currently there is bilateral agreement. There is a framework under PATCRA to allow that to occur, and that is—

Ms MacTIERNAN: And you are saying that PNG is keen?

Mr Matthews : Currently at the political level on both sides there has been support. The impediment at the moment is at the bureaucratic level.

CHAIR: At the business level and the political level there has been support.

Senator McLUCAS: Thank you, gentlemen, for presenting to us today. I would like to briefly talk about water and just get some clarity for the record. Mayor Manning, I think we are talking about two issues. We are talking about domestic consumption issues, which are real, and agricultural development issues, which are also real, but I would like to just talk from the point of view of Cairns city. What is the expected growth in consumption following the expected population rise that would need to be provided for in new capacity? Do we have that work done?

Councillor Manning : If we project our population trend line over the last 20 years, we are looking at 2.66 per cent. Let us just park that for a second. That has been consistent. If we then look at or consider the Aquis project, assuming that over the next few months the state government and the Aquis people come to agreement on some of their licensing provisions, we are looking at a 2015-18 construction period for stage 1 and a 2020-24 period for construction of stage 2.

Senator McLUCAS: Can I interrupt there. Can we park Aquis, because it has not been approved. Can we just put Aquis off to one side and go to the population growth as projected on the figures.

Councillor Manning : 2.66 per cent trend line?

Senator McLUCAS: Yes.

Councillor Manning : But I cannot ignore the Aquis one, in the sense that—

Senator McLUCAS: No, but it is not approved yet.

Councillor Manning : It is not approved yet, but it is rocketing ahead at a very fast rate, so it is no good turning our back on it. We look there, over that construction period, at a 33 per cent impact on our population as a result of that. So I think you cannot ignore it. Sure, it still has a couple of boxes to be ticked yet, but it is going to have an incredible impact upon our population, estimated at 33 per cent, or 54,000.

Senator McLUCAS: But Mr Quinn was talking about the two unallocated reserves, Barron and Mulgrave. I am trying to ascertain whether, if we started using the capacity in increasing the Barron and in Mulgrave, we would actually hit the projected population growth within the capacity that is available at the moment.

Mr Quinn : If I might answer that: we have established the water strategy group. They have met once. They meet again tomorrow night. Their report is due by the end of the year. This is exactly what they will be looking at, as well as identifying the various sources.

Senator McLUCAS: Thank you. Just on a different topic—

Councillor Manning : The third factor that needs to be taken into account there too is power generation, which should be looked at in the context of whatever is done. It is possible with damming to create a power generation source. That is another part of it.

CHAIR: That power generation would come through increased capacity for the Barron hydro?

Mr Quinn : The conceptual drawings from SunWater for the Nullinga dam have a hydro attached to it, but also, through feeding back through Tinaroo and then through the Barron, it also increases, as you say, hydro through the Barron.

CHAIR: Which increases your capacity for base power.

Senator McLUCAS: Can I now go to Mr Brown and Mr de Waal. Tourism will always be the basis of our economy in this part of Northern Australia, and I understand that you are not asking for handouts, but, in terms of the domestic marketing capacity that we have, are we different in Northern Australia, or particularly in this region, to the rest of Australia in what we need? We have all these experts, and we are all here. We have a national marketing campaign. We have local marketing campaigns. We have state based marketing campaigns. Does that structure work, or do we need a different structure to market the product that is Cairns, the Great Barrier Reef and this region?

Mr de Waal : It really comes down to the resourcing. The domestic market, fostering domestic tourism within Australia, should be an absolute priority. To this region and in fact to most of the regions within Northern Australia, as far as I understand it, the focus on domestic tourism is not as strong as it should be. That is driven primarily by the fact that the industry base and the number of residents we have make for insignificant resources. As such, they rely on travel distribution, so they pay commissions to wholesalers to market their products, and they do so on the international environment as well.

The primary focus in the Northern Australia, I think, is pretty much on driving international visitation, whereas I think there is great opportunity to place greater focus domestically. The constraint to that is the population base and the availability of resources, hence my proposition that the only way that Australia will have a sustainable investment in tourism will be if we are able to levy the visitor and therefore, if you like, have an appropriate level of resources to attract those visitors on a sustainable basis.

Senator McLUCAS: Are you saying that we need to do that nationally or by region?

Mr de Waal : Nationally. In my view, that needs to be a national focus. It is the only basis upon which you can fund tourism effectively.

Ms PRICE: Sorry, Alex, can you just explain to me: how would a levy work? The tourist comes to Cairns. How do you get the money from them?

Mr de Waal : They are referred to in different terms. In some parts of the world they are referred to as 'bed taxes', but basically it is levying the visitor. The collection point, worldwide, is always through accommodation houses, hence it is referred to as a bed tax. But a visitor levy tends to more focus on a set amount versus, if you like, a percentage share of the accommodation take.

Ms PRICE: When that is collected, where does it go to?

Mr de Waal : There are varying methodologies. That can go to a state, to a local body or environment et cetera, or to an association for distribution. That comes down to the concept of actually getting our tourism network right—I guess the methodology by which the tourism industry is managed. That needs structural review, and then the funding of that. For that methodology, there are various different options you can take. There is no one solution that fits all. That would still need to be determined.

Mr Brown : I could perhaps add to that. Effectively there is a charge at the moment. It is the passenger movement charge, which the government levies. I think it is in the order of $55 per passenger, so there is already a mechanism that captures that money from each departing passenger. My perspective is that we should be reinvesting that, because my understanding is that that is actually over-recovering for what it is intended to do, which is to pay for the Customs, the Immigration and the quarantine. There is actually scope to reinvest that money back not just into our tourism marketing up against the 4,000 other marketing bodies around the world that are competing for customers but equally for Advance Cairns to have that fighting fund to go out and promote the economic development of the Northern Australia region and this region in particular from the Advance Cairns perspective. So it is a reinvestment of money. It is there. It goes into the government coffers. It disappears into a big black hole. I believe it is over-recovering and it should be diverted to actually allow us to get up there and promote our region.

I think that, in terms of the finances that are currently available to both these organisations, they both punch above their weight, but there is a hell of a lot more work to do. I think that when we last discussed it, when the Japanese market was first being marketed, it took in the order of $4 million to actually get the momentum of that market. That is almost the whole budget of TTNQ on an annual basis, which is barely enough to target one market, so the team do a phenomenal job in spreading the word. But, if we are truly going to get some traction, we truly have to fund the marketing efforts for both tourism and economic development.

Mr de Waal : If I may just add one additional comment: the University of Queensland did some research for me on worldwide practices in this regard, and the average percentage of value that is levied on visitors in countries around the world currently is between three and 11 per cent of the visitor expenditure, if you like, in regions—to give you an idea of the expenditure.

Senator McLUCAS: I have one more question, Mr de Waal. Could you give us the split between domestic and international visitation into this region, just for the record?

Mr de Waal : It is 67 per cent domestic.

Senator McLUCAS: I think it is important. A lot of people think that Cairns is only international.

Mr de Waal : Absolutely. You are absolutely right. Again, increased investment in the domestic environment is critical for this region and for Northern Australia, full stop.

Senator McLUCAS: Thank you very much.

Mr Brown : I think it is worth not losing sight of the significant growth on our doorstep in Asia. It is a phenomenal opportunity, and we have to start investing now to lay the foundation to make sure that we get our fair share of that visitation.

Councillor Manning : Could I just respond for the sake of clarity on that. I do not think that Mr Brown was suggesting that the passenger movement charge should be increased either to fund tourism.

Mr Brown : Definitely not.

Councillor Manning : We have seen that grow from something that was very small to something that is now very large. I think what Mr de Waal was talking about in terms of the so-called bed tax or tourism levy is something which is more broadly based, where it does not go through another level of government. Effectively it is collected direct.

CHAIR: And invested straight back into the area.

Councillor Manning : And invested straight back.

CHAIR: I have a question just exploring something that has been raised, but I have a couple of others that are totally different. Just in relation to the water issue, in clarification: the Nullinga option is the only one that provides an opportunity for increasing power capacity along with water, so you have two benefits there. You have the water plus you also have a capacity to increase power generation in the area. I would be interested in your comment on how important it is for this region to be able to be more self-sufficient, if you like, in power, and what impacts relying on power from southern based generation plants has. How important is it to build capacity here?

Councillor Manning : I think the electricity equalisation contribution that is made by the state due to loss of power through transmission is something like $700 million or $800 million a year. It just seems crazy to be generating power down there and losing so much of it. It is about a 50 per cent loss through transmission. I do not know whether Nullinga is the only one that provides that three-way benefit of consumptive use, irrigational use and then the ability to generate power. That may be available through other systems too.

All we know is that Nullinga is not just something that has been plucked out of the air. It was a serious consideration in the 50s when the decision was made on Tinaroo Falls dam and it has been looked at by the state government and by SunWater as late as 2008. So it is a serious player and that is all we are saying at this stage. Given that this committee is now undertaking this task, we want make sure that the committee is aware of that.

CHAIR: There has been a lot of work put into Nullinga over an extended period of time. Has there been any consideration made or investigation done in relation to funding options for the construction of the dam? Or is it something for which you believe the government has to foot the bill?

Mr Twomey : Are you referring specifically to a public-private arrangement?

CHAIR: I am referring to a public-private arrangement or partnership.

Mr Twomey : The specific model of water infrastructure that Advance Cairns has been looking at is the Mundaring waste water treatment facility in Western Australia. A few of the private infrastructure banks that we have had preliminary conversations with have used that as an example. We are planning on investigating that further. We are led to believe that that is the only private-public partnership in water infrastructure in Australia. I cannot confirm that but it is what I have been led to believe. We are using that as a model that exists. It is in the grid in Western Australia and it is working quite well.

In terms of who is going to own the asset, obviously the more stable or the larger the proponent mitigates the risks and makes it more likely for a private investor to invest in something of this scale. So a specific level of government being the proponent would be our preferred option, whether it be the state government, the federal government or whether it be a local council or a conglomerate of local councils as for our current dam.

I know that our equivalents in Bowen have suggested a specific dam for you to consider as well. I know they are not mutually exclusive but I will just draw a few different comparisons to the Urana dam in Bowen. Although that dam is larger in scale to Nullinga, it is only for one purpose—that is, irrigation. As Mr Quinn highlighted, the capacity for irrigators to pay for water is a lot less per megalitre than for urban dwellers.

CHAIR: What impacts are insurance costs and availability having on this region? Is it an issue up here?

Councillor Manning : We have not done any direct work on that, maybe Advance Cairns has. What we are aware of by virtue of communication with people and with businesses is that the impacts have been huge. One of the great examples of that is Dunk Island. The redevelopment of Dunk Island has stalled. What was really one of the principle jewels in the crown of the Cassowary Coast is now no more. There is no way in the world they are able to even get insurance.

CHAIR: Is one of the main reasons they are stalled the fact that they cannot get insurance?

Councillor Manning : You will not be able to insure what you build there. You will not be able to get bank finance or any finance so this is becoming a big issue. If we go through the last cyclone, Ita, the impacts really were quite small yet it reached national prominence and the insurance companies retreated a little bit further back. The impact is a large one but we have not done any work on quantifying that.

CHAIR: What about Advance Cairns?

Mr Twomey : Unless we are going to nationalise the insurance companies, I do not really—

CHAIR: It does not matter what we have to do. I am just asking is insurance a major issue here, availability and affordability?

Mr Twomey : Yes it is an issue. One of the issues it came down to specifically was the mapping. If I use my personal home as an example, in the same risk area as somebody who lives waterfront in the CBD. For anybody who knows Cairns, I live in Bayview and I live behind a hill so the chance of my own the flooded or being exposed to a cyclone is completely different to a home built on the esplanade or on the waterfront. It comes down to the mapping which the insurers were using.

Senator IAN MACDONALD: I do not know if you watch any TV but there is one insurance company advertising that they take all that into account. Someone suggested to me that an insurance company does not insure at all in northern Australia. Do any of you know about that? Have you ever seen that?

Mr Twomey : I have a conflict on that because I am a director of a company that is shareholder of an insurance agency so I will not answer that question.

Senator IAN MACDONALD: Trent, does your insurance company do the north and do they do it reasonably?

Mr Twomey : Certainly there is an impediment to business growth within the region. When you talk about the aspects of insurance there is not the market competition within the region in terms of insurance companies. As senator McDonald pointed out quite correctly, many insurance companies do not operate within this region so it limits the opportunity for competition. Many businesses now are finding that they are not insuring at all. Those who are wanting to develop business opportunities are finding that the cost of insurance is a significantly greater proportion of their investment than it is in other parts of Australia, so it is a problem.

Ms MacTIERNAN: I noticed a number of papers talk about Defence. You raised it in your submission. I thought it was interesting one of the things you said regarding the fact that you are finding Defence personnel are determining that they would stay here after their time of duty. The reason I raise this is because we had a hearing with Defence personnel. We talked to them about the possibility of prising a bit more of the naval establishment out of Woolloomooloo and getting them based more regionally. They were highly resistant. A couple of their arguments were that this is where people want to live and that people now today have to think about their spouses and the jobs that their spouses are going to get. Another point was that there are dangers in putting them into cyclonic areas because if there is a cyclone it is good to have your vessels outside the area so you can come in and help. It is also important to have them outside the area of attack so if there is as attack the ships—a la Pearl Harbour—are not obliterated. I am just wondering to what extent the personnel up here have had discussions with senior military strategists on this?

Councillor Manning : I will make a couple of comments on this that maybe this is something too which ought to be raised with Ports North. I speak with a little bit of experience, having been the CEO of that organisation for many years.

Ms MacTIERNAN: Which organisation?

Councillor Manning : Ports North when it was the Cairns Port Authority. We also owned the airport. I also have a small history in the Defence Force and also I have period of directorship of an NQEA, which was a Defence shipbuilding company up here until recent years. I do not mean this in any disrespectful way but I imagine that those discussions would have been held with somebody with a lot of grey on their shoulders and they do not particularly want to move out of anywhere in Sydney—I mean, afternoon cigars and the glass of wine are traditional. If those were criteria then we would be closing down Darwin and we would be closing down Townsville. There is not one port that I can think of anywhere in the world where if the main channel is blocked or something goes wrong that the port has not got a problem, it happens.

The argument is often raised about cyclones here. If you go down to the wharf area and look at the tourism fleet that operates out of this area and out of Port Douglas, there are well practised procedures when a cyclone is in the area and we do not have the level of damage with cyclones or we have not had here in my lifetime. Boats move out of port. The safest place for a boat is simply to go to sea when there is a cyclone on. Occasionally in our case they move up behind Admiralty Island and hide in the mangroves until the thing passes over, but it is normal practice for the Navy to put to sea. The Navy has had 14 vessels in this city now for a number of years. None of those have been lost or damaged and nothing has gone wrong. The eight hydrographic survey ships just go to sea, the other ones poke up behind the island and they are safe there. This really is a bit of a furphy.

Councillor Manning : The Navy base here is a very high employment multiplier for this region. We have vessels here that are serviced or maintained by what used to be the DMS and is now Serco where we have got three slipways here that cater to naval vessels. We undertake the maintenance pretty much on all of the Armidale class vessels, all of the Customs fleet. The contract at the moment is held for the ongoing maintenance of the Pacific Island patrol boats, 22 of those. So there is a lot of work that goes on here. I am told by local economist Cummings that the employment multiplier effect for a naval base is 5.27. It sits absolutely on the top of the tree. So the benefits for this region in terms of both having the Navy here and attracting the defence maintenance people into here are quite large for this city.

Senator IAN MACDONALD: Just addressing your question, perhaps you could say how long the naval base has been here, how many sailors have been lost through cyclones, how many cyclones there have been since the naval base has been here and how many ships have been sunk or damaged as a result of cyclones.

Councillor Manning : The naval base first started up here in about 1984 with about five or six men. There are now about 1,000 people employed on HMAS Cairns. About 600 or 650 of those are sailors, the others are contractors and whatever. There has been no loss of ship, no loss of life.

Ms MacTIERNAN: Obviously they are not going to move the whole Woolloomooloo establishment up here, but what are you saying would be a realistic scale for you to grow from 1,000? How much more, and is there room?

Councillor Manning : We are not putting any number on that. The thing is that in terms of strategic thinking the force posture review report that was done I think by the previous government for the parliament indicated that there should be a greater concentration of assets within the north-west, the north-east and in Darwin. That seems to make common sense. We do not want all our Defence people sitting in the southern part of Australia ready to reinvent the Brisbane Line. We want them up in the north here where most of their work is, both in terms of strategic military importance and also aid to countries north of us when they have natural disasters. Our response to that is normally fairly quick from here. We have the Army and the Air Force in Townsville, we have the Navy in Cairns and the Navy in Darwin. Darwin and Cairns must rate as the two most common-sense places to be looked at in terms of the further growth of naval facilities.

Ms MacTIERNAN: But they have got this argument that if you get attacked up there if you have got the ships down in Sydney they can—

Senator IAN MACDONALD: You send drones in from wherever in the Northern Hemisphere straight into Sydney. So the idea of being attacked is—

CHAIR: As to your comment, there is a high level of satisfaction in relation to liveability for serving personnel in the area, and there is a high level of competition for people wanting to come here, and to Darwin—to be based here. That flies in the face of those that are Canberra based arguing that they want to stay in the Russell offices.

Councillor Manning : I have been involved in the maintenance of the Armidales, and that contract was held by DMS which is now Serco. They have moved more of that maintenance to Cairns because they are able to attract and hold skilled tradespeople here to do the work whereas they cannot do it in Darwin. It has been very hard in Darwin—

CHAIR: I think we are running out of time—

Councillor Manning : The wives go up there and they do not particularly like it. Mr Quinn just mentioned to me that we have had no Japanese mini-subs in Cairns but you have certainly had them in Sydney. I do not know what the message is there!

Ms PRICE: We have got some good statistics. I think Alex talked about there being some 2.3 million visitors to tropical Queensland—and I am from Western Australia, and the northern part of Western Australia can only dream of those sorts of numbers—so that is the highlight. We have also heard from the mayor that by 2050, judging from your current trajectory, there will be some 400,000 people. We have heard that you have got a water problem and also, potentially, energy problems here.

Your focus, Alex, is to increase tourism. We hear that across the whole of Northern Australia. Everywhere in Australia wants to increase tourism. I am interested in the mayor's view on this: if you increase tourism—and you have already noted that there is going to be a greater number of people living in Cairns—what would be the impact on you as a council? I guess that is good because you and your businesses make money. But what about you as a local council? What is the impact that it has on you? If we know what the impact is, what does the federal government need to do to support you with that particular growth in that industry?

Councillor Manning : The impacts, if you increase any industry, I think are going to be the same. Maybe there will be a different emphasis, but you have got problems. If you plot our population growth through the fifties and seventies to now, we have come from a fair way back to get to the position where we now project ourselves to be.

There will be problems for us. We have gone through problems in recent years of having to upgrade our sewage treatment under the Cleaner Seas program. We are a city, a destination, which is more environmentally conscious than people realise. I think tourism is, to quote Sir Frank Moore, one of the great employment generators. And it is one of the most sustainable of all industries. We do not use it up; the idea is to maintain it and manage it for the future. I think the challenges for us are to work with both state and federal governments to address some of the infrastructure needs that are there and which may in fact need to be pump-primed by government, or pump-primed by government to attract private investment in. It is just not a simple solution where someone says, 'Get private investors to do it,' or 'The government can't do this.'

It would seem to me nonsensical that any government at the moment would walk away from growth. I remember listening to a paper recently by Hugh McKay, the economist from the Westpac bank. McKay said: if we are going to make Northern Australia truly successful—and this is just stepping away from the tourism question—we need to look at farming on a corporatised basis. A farm here and a farm there is not going to solve the problem. If Australia is going to truly convert on this great opportunity we have, to grow high-protein food in Northern Australia, then farming on a massive scale has got to be looked at. This is the sort of challenge and the vision that we are all going to be confronted with, and we really need to start thinking about this now and start moving on it now.

Senator McLUCAS: I understand that Advance Cairns has done some work on the risk of having increased Navy activity up here. If you could provide that document to us on notice I think it would be very helpful.

Senator BOYCE: My question is around a comment made in the Cairns council's submission, Mr Manning. Talking about environmental values and conservation and the like, you say:

Where properly assessed reserves are given protected status, recognition must be given to the impacts which will be borne by the immediate (relatively small) community in providing a benefit in the national or international interest.

Could you expand a bit on how you would see that being done? It seems to me to be a very pertinent point that often the costs of not using land in a productive way is borne by the local community and not by the people who use the facility.

Councillor Manning : Land or the sea. We can take the recent Coral Sea declaration as an example of that. As a community we will accept the scientifically based conclusion. Whether we like it or not, we will accept that. We have to accept that, or we have to look at how that can be managed or what can be done to mitigate what the issues might be. Certainly with regard to the Coral Sea closure, the compensation package that was presented back was simplistically based upon, from memory, one year of impact—and that was it. It was like, 'That's it; that's the impact for next year and that's your payout.' That is not, by any stretch of the imagination, a fair prospect. All we are saying is that if there is going to be an impact on business, whatever the compensation is that needs to be looked at in a fairer way.

Senator BOYCE: So you are talking about compensation packages per se? You are not talking about a different mechanism for compensating local communities?

Councillor Manning : No, we are not. There are ways of calculating that impact over a projected life of the asset or the lost benefit which are, as I say, generally accepted. In terms of some sort of a net present value calculation, that is what should be done—not just the plucking of the smallest figure that you can.

Mr Quinn : In smaller regional communities one industry is largely dependent on services that are provided to many industries. If you lose an industry, you start to lose critical scale and it is not just an immediate effect of a particular area that may be taken as a conservation zone; there is a broader impact through the broader community. I think that needs to be recognised.

Ultimately, as a community we accept that the science must rule. But equally important is that the community are informed and the community are worked through it. If the community support it, there is a broader level of support for it and it will work. Without that, I think, we have the cases where the local communities feel that they are the environmental conscience of Australia, if you like, where we are picking up all the slack and the impacts are on our communities for the benefit of voters in Brisbane, Sydney and Melbourne.

Senator SIEWERT: We were just talking about tourism. Surely tourism in this region is largely centred on the environmental values of the region. Mr Quinn, you were saying that the local community bears the cost. You could also say that the other side of the argument is that the local community also gains by that environmental protection as well. Manning, you were saying, as I understood it, that tourism is one of the biggest sustainable industries here.

Councillor Manning : It is our biggest industry.

Senator SIEWERT: So I think we need to look at both sides of the coin. Would you not agree?

Councillor Manning : I do not think we are talking a difference here. Tourism is probably the most renewable of all industries. You would be absolutely crazy to destroy what it is that makes that industry. I sat with Minister Hunt and a group of scientists the other day talking about issues around the Great Barrier Reef and the state of the health of the reef. There was not one person in that room who was not agreeing what needed to be done. I was telling someone just the other day that there was a WWF fellow there, and he just spoke so much common sense. The difference between the people in that room was not great. We all had the same interests. The environmental values that we so desperately cling to here and love are what makes us so attractive. We do not want to lose that under any circumstances.

Senator SIEWERT: Thank you.

Ms MacTIERNAN: So that is not included in the green tape, red tape stuff that we heard today?

Councillor Manning : That is not green tape, red tape; that is just something of critical importance.

Senator SIEWERT: I just think there needs to be a bit more of a sophisticated discussion around green tape, red tape and comments about the community bearing the cost as opposed to the community also tremendously gaining.

Councillor Manning : It is like a lot of things these days, isn't it? We simplify them to an acronym or to a couple of words which I do not understand.

Senator SIEWERT: I have a question around some of the comments from Advance Cairns about some of the social capital and the need to make sure that we bear in mind the impacts on rural communities and the diminishing size of rural communities. Where do we need to be investing in some of our social services and making sure that we do keep that social capital, if I understand correctly where you are coming from in those comments?

Mr Twomey : Before I hand to my CEO, there is one that I would like to highlight, and that is the Cairns and Hinterland Hospital and Health Service. It is severely underfunded. Its clinical plan is nowhere near being met. It is not treated as a tertiary referral hospital even though it acts as one. We are very privileged in this region to have one of the highest number of Aboriginal and Torres Strait Islanders per capita. They may up a great percentage of our population, and we are very fortunate for that. However, as I am sure the committee is acutely aware, they have a unique set of health requirements and that places a further burden on our health system.

I know we could say that this is a state issue, but I will give you a specific example of how the federal government, through its actions of past, have placed more pressure on the Cairns hospital. When Papua New Guinea became independent, part of the treaty enables the flow of people between Papua New Guinea and the Torres Strait and we have a large amount of referrals from the Torres Strait back to the Cairns hospital for treatment. In fact, we actually had a death late last year from a multidrug resistant tuberculosis of a Papua New Guinea woman that made her way to Cairns. There is a moral imperative to treat that person but, from a public health point of view, you cannot just put somebody with that particular condition out on the street, for obvious reasons. So, in terms of how we build up social capital just from a health perspective, one thing that Advance Cairns is seeking is to fully fund the clinical pain of the Cairns and Hinterland Hospital and Health Service. We believe that is not just a state government responsibility; that is a federal government responsibility because of the referrals that hospital is getting due to that international treaty.

CHAIR: There was also an Australian woman from Saibai Island who died from multidrug resistant tuberculosis.

Mr Twomey : Yes.

Mr Matthews : In terms of the development of, particularly, rural areas, there needs to be capacity and access. Part of that access is the ability for connectedness. As there has been an increase in sophistication in a lot of these services, they have been brought back to major areas and many of the smaller communities do not have the fundamental services that had been available to them in the past and there has been the need to travel for the potential to access. The indicators right across Australia have shown that rural areas as a whole—not just in northern Australia—are very much below the rest of Australia. So, really, there is a fundamental access need, and that can be brought about by the development of communications.

Senator SIEWERT: Communications in terms of being able to access the services even though they are not in the community?

Mr Matthews : That is right. The services themselves may not necessarily be delivered face-to-face within communities, but you do need that capacity to be able to deliver within the communities themselves. Such things as strong communications and a strong broadband network that sits throughout the region are fundamental to that form of delivery, particularly in remote communities where there is not the capacity to have those levels of services, certainly from an economic cost, but you need the capacity to be able to connect back to the major hubs.

Senator SIEWERT: In the past there has been a call: 'We need this service and this service in town.' There is now a recognition that you can look at other mechanisms to achieve not quite the same level of support but a different type of support. It is a more sophisticated understanding of how services can be provided. Is that right?

Mr Matthews : Yes, it is. I think that sophistication is growing, not just with the capacity to be able to deliver those services. There is also the capacity of the community to be able to self-manage a lot of the services themselves. That work has gone back to individuals at a lesser extent within the community. That is certainly a growing capacity, particularly within the health and education sectors of delivery in the regions.

Senator SIEWERT: Thank you.

Mr SNOWDON: I would like to further pursue the question of social capital. In your planning for population growth into the future—and you were talking about economic growth and economic activity—has there been a similar exercise in planning social infrastructure requirements into the future: aged care, disability services, health services and education services?

Councillor Manning : We are talking about the spread of responsibilities between federal, state and local government. In the earlier presentation, I recognised that we understand that we are part of the solution too. All we are asking is that the state and federal governments also accept that they are part of that.

Mr SNOWDON: I appreciate that. I do not disagree at all. I am trying to get my head around this: if your population is growing, people are staying here, so they are dying here as opposed to what might have been the case 30 or 40 years ago, when people came and worked for three or four years and then nicked off. People now spend their lives here and that puts pressure at the hospital end, disability services and aged-care services. Clearly, if we want to have a comprehensive view about developing northern Australia, we have to have a view of the lot; not just one aspect of it. We can all talk about special economic zones, but, if we do not deal with the population's needs, there is not much point in having special economic—

Mr Twomey : Specifically on those two issues, you mentioned health and education. I referred to the clinical plan for the Cairns and Hinterland Hospital and Health Service.

Mr SNOWDON: Forgive me: that is a current plan, presumably. I understand there may be issues currently, but we are talking about 2050. We are talking about a long period ahead. Presumably, we will need more than one hospital. Are there plans for more than one hospital? Clearly there are a whole range of issues here which go—

Senator McLUCAS: I did not set him up!

Mr SNOWDON: I am a former health minister, so I have some understanding of it. I just want to know where your thinking is at. When we talk to government about what government needs to do, we can talk about all the good stuff, about dams and what we can do and how to fund them, but really, at the end of the day, we are here to service the community and, if we cannot service the community's needs into the future, we have a few problems. How do you marry the two? Where do you see the relative importance of the two? Clearly, if you cannot provide the population in the first place, you might as well forget the rest of it.

Councillor Manning : I appreciate your understanding and your explanation of the point back. From where this council sits, we are probably taking a longer term view than any preceding council. I am not going to damage my shoulder in doing that, but I think we are taking a longer term view. I think we are more aware of what the growth pattern is going to be. I know you must get sick of hearing the word 'Aquis', but that really did hit us about 15 months ago out of the blue.

Mr SNOWDON: Before I came here, I thought it was a quarantine service!

Senator LUDWIG: We changed that!

Councillor Manning : Yes. Some people, I think, pronounce it 'aqueous', maybe to get around that, but it is Aquis. So I think we are more aware of what is coming. When you are coming off a smaller base and you grow, it is not much, but when you are coming off a city base of 150,000 and a regional base of 250,000, and you are looking at 2.66 and a doubling of your population in 30 years, it starts to become frightening, but you cannot go and hide from it. So I think that for us there is the issue of getting this out into the open and also becoming more accepting ourselves of the fact that we have these issues to solve. The water reference group that we are working with at the moment is something that should have started maybe 10 years ago. So I do not give you an answer, except that we are mindful of where we are at.

Mr SNOWDON: I guess what I am trying to do is highlight—

Councillor Manning : There is an issue you mentioned about the hospital. We have just come off a bit of a thing with the state government about land that was acquired at Edmonton for a second hospital and the state government saying, 'Now we don't know whether we need it.' We are saying that land is staying zoned for that purpose; we are not budging off that, because we know that is what is going to happen.

Mr SNOWDON: You have answered my question, and I appreciate that. That leads me to my last question, which goes to the paragraph from Advance Cairns about Indigenous communities. You mentioned before the privilege of having a large Aboriginal and Torres Strait Islander population in the region. Their demands are going to be different in some respects. I go back to the governance issues and the place-based approaches. They are going to be very different here from what they are in central New South Wales, for example. So, when we are thinking about infrastructure development, clearly we have to be talking about, as you mentioned, population mobility, communications and all of those things. So, when we are drawing this picture of the North, we have to see a very dynamic and young population growing very rapidly and how that creates additional demands to what might be seen in a place a fair way to the south. Do you agree? How do we then marry the two components?

Mr Matthews : That is a fundamental question for the committee, I guess, in terms of what it is really looking at.

Mr SNOWDON: I am seeking guidance.

Mr Matthews : It gets back, I think, to the way that the leadership is shown from this region here and—as a central hub, for example, within the cape itself—the capacity that this region has to be able to support that. You talk about the development and the needs within their own individual communities, but the larger regional centres must be able to cope with and manage that and have sufficient resources to be able to deliver and also to lead.

Councillor Manning : This council accepts that it has a very important role to play in the development of, particularly, the Indigenous communities and councils north of here. We have a close association with those people, and in fact we are moving to establish this council as a service provider to those Indigenous communities and other small communities. We are surrounded by the Cassowary, Mareeba, Douglas and Tablelands councils, which are fine, but once you go out a little bit further it is pretty hard for them to provide those services themselves. We are now establishing ourselves as a hub and a service provider to those councils to be able to bring value to them. We can provide that from here at lower cost and probably better.

CHAIR: A lot of those remote community councils are now establishing offices here in Cairns to take advantage of those services through that hub.

Councillor Manning : We accept that responsibility.

Senator IAN MACDONALD: Many of you have mentioned diversification of the economy here. I am conscious of a very big marine aspect with the Pacific islands, PNG up in the north and HMAS Cairns here. I am conscious that one of the few manufacturing industries in northern Australia was a very successful shipbuilding industry in Cairns, which I understand has diminished if not disappeared. Is there any prospect, in your view or the view of anyone, of getting that shipbuilding re-established? If so, what is needed? As I understand, it started with the original patrol boat construction, which was a government decision. I understand NQEA also had a wink and a nod for part of the air warfare destroyer shipbuilding, which went astray at the last moment. But is there any way that that can be restored? Is there a prospect, or should we just forget about it and put that down to history?

Councillor Manning : The company continues to exist. It has gone back to its original core business in the sugar industry, in the milling, and working on that, plus some other work. If you ask me, and my experience is limited—it is about 10 years as a director and a couple of years as a GM on the company—I do not believe it is possible to start up a shipbuilding industry anywhere in regional Australia now. What we have got is what we have got. The NQEA's movement into Defence contract work was built off the Freemantles: they won that contract and did it very, very successfully, which then led them into other builds and particularly into the hydrographic survey ships. The AWD contract, together with Forgacs in Newcastle, would have been a re-entry into the market. But for a number of reasons, or for one particular reason, that did not succeed. But I do not think there is any chance of rebuilding that. That is my personal view.

Ms MacTIERNAN: And even within Perth we can't, unfortunately, with the high Australian dollar. We had a very strong shipbuilding company there, building ferries. That has closed down operations.

Councillor Manning : I do not think this is in the national interest. And in shipbuilding, unfortunately, you get big licks every 10 or 15 years with Defence contracts, and you get nothing from Defence in between.

Senator IAN MACDONALD: You get a lot of catamarans here as well.

Councillor Manning : And all of the Quicksilver fleet, bar one of its dive boats, is designed and built locally. But as I said, that went when the AWD contract went.

Senator LUDWIG: I want to go back to the issue of electricity, or power generation more broadly. In the Advance Cairns submission, you effectively spoke about a coordinated distribution or baseload system. But I want to come back to the main issue: where is your nearest baseload power supply? Is there any work being done on what your future baseload will be over the next 20 or 30 years as you develop? I am happy for anyone to comment on that. And if it is, as I suspect, an increasing necessity to have reasonably priced baseload power generation, where is that going to come from? The proposals around hydroelectricity, as I understand it, will not add base power to it. It will pick up power, but it will not be—even the proposal for Nullinga dam hydroelectricity scheme does not baseload, so where is that going to come from in the future? Or is it going to be transmission lines from the south?

Mr Twomey : We referred specifically in our paper to the Pentland study, and I assume that is what you are referring to. We are led to believe that in Queensland there is actually a surplus supply of electricity. The problem is, as you just quite rightly said, the length that it has to be transmitted up the coast. One thing that Advance Cairns is extremely nervous about is the state government's Strong Choices questionnaire that is live at the moment. One of the questions for potential savings is, 'Would you like to see a rollback of the power equalisation subsidy?' and I am sure it makes everybody at this table extremely nervous that that question is even asked.

We know that our equivalent, Townsville Enterprise, is also lobbying to have a baseload power station built somewhere around Townsville, so in northern Australia. Our view is if there was a baseload power station in Townsville, it is still a heck of a lot closer than Rockhampton. At this particular stage, we are not asking for our own coal baseload power station in tropical North Queensland; we are simply saying if Townsville is successful in its bid, we would support having it there because it is still a hell of a lot closer than Rockhampton.

Senator LUDWIG: I understand that, but if you do not need projections as to what your requirements will be now and into the future if you have a growth potential, currently your transmission lines—you have said that there is about 50 per cent loss of power and that in today's economy, unfortunately, equates to money. And you also highlight the issue of Strong Choices. If that is an issue put on the table, where is (a) the money going to come from, (b) the baseload power going to come from, and (c) the cost of power going to come from? What will happen to that?

Mr Twomey : Are we saying that it is no longer a state government responsibility?

Senator LUDWIG: The state government seems to be asking the general population as to whether or not it should sell the power assets and whether or not it should then continue to subsidise power into North Queensland. That is my take on it; is that yours?

Mr Twomey : I am not going to be one to try to say what I think the Premier is and is not thinking, but to my mind those two things—

Senator LUDWIG: Well that is what he has put out.

Mr Twomey : They can be separated. I am assuming they can privatise the assets while maintaining the subsidy. I do not automatically assume that privatisation—

Senator LUDWIG: But the question in the survey is asking both questions. It is asking (a) do we want to sell and, in a separate question, (b) do we want to save the money on the cost of the distribution to North Queensland. That is confronting you. Whether you like it or not, there is a document from a state government that is confronting you about the cost of power to regional Australia.

Mr Twomey : I did raise that, and I did say that I assumed it made everyone at this table extremely nervous, but I can assure you our position is to make sure that we maintain pressure on the state government. That subsidy has to be maintained for the people of Far North Queensland. Our industries and our households cannot afford to pay more for power than what we are already paying. Do you want to speak specifically to the study?

Ms MacTIERNAN: They may just want to make it more transparent.

CHAIR: We have to wind it up now. Thank you very much for coming today. Unfortunately, there were a couple of other—we talk about diversification; tropical sports industry was one that was raised as a prospect. We have not had a chance to investigate that too much, but I assume that is something that is very strongly supported. I know from TTNQ and from Advance Cairns that they are going into great detail; I am sure council would be supportive of that as well.

Thank you for your support and for your information. Some additional information has been requested. I would appreciate it if that could be forwarded in writing to the secretariat by 15 May. If the committee have any further questions, we will submit them in writing. Thank you very much indeed for your time.

Proceedings suspended from 10:37 to 10:47