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Joint Standing Committee on Northern Australia
16/02/2017

BRITTON, Mr Eric Charles (Rick), Mayor, Boulia Shire Council

GILMORE, Mr Thomas (Tom), Joint Deputy-Chair, Inland Queensland Roads Action Plan

McNAMARA, Mrs Jane Beatrice, Mayor, Flinders Shire Council

ROTH, Mr Michael, Head of Public Policy, RACQ

SCHUNTNER, Ms Glenys, Secretariat, Inland Queensland Roads Action Plan Working Group

Committee met at 09:18

CHAIR ( Mr Entsch ): Welcome to this private briefing. Our committee is particularly interested to hear from you. Thanks for taking the time to be here today. If there are no objections, the briefing will be recorded for those members who are unable to be at the meeting. There being no objections, it is agreed. To enable the recording, I will go through a formal process with you, but before I do that we will introduce ourselves.

Senator DODSON: I am a senator for the Labor Party in Western Australia. I live in Broome, so I know what remote parts of Australia are like, like the other members here, but also the potential and the aspirations that many people have in these places across the whole of Northern Australia. I am very pleased to be on this committee under the chairmanship of the two Warrens. I am glad to see you here. I apologise: I will have to go to the Senate to do duty, otherwise I will be in trouble with the whip.

CHAIR: But that is why I say we come and go.

Ms PRICE: I am the federal member for Durack, which is a big part of Western Australia.

Mr SNOWDON: I am the member for Lingiari, which is all of the Northern Territory except Darwin and Palmerston. I live at Alice Springs, so I know a bit about remote places.

CHAIR: I am the member for Leichhardt—from Cairns right up to the mainland of Papua New Guinea. It is interesting that, with our focus on northern Australia, with who we have here now we have a representative from each of the states and territories in northern Australia, which makes it quite useful. But there will be others coming.

Just briefly, this briefing is a formal proceeding 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 does attract parliamentary privilege. I am now going to invite one of you to make a brief opening statement, after which the members here will start firing off a few questions.

Mr Britton : I first got involved with this, and then I stepped back due to the drought that we have had in western Queensland. Now we have had a bit of a turn of season, so I have taken it back up. In my first term of local government we worked with the outback regional road group which is in central Queensland. Each of those regional road groups in Queensland has priority roads, within our seven shires. I was thinking through it: when we are providing our road network, do we connect with our northern neighbours or our southern neighbours? Has anyone actually ever looked at that?

In that role I was also on the RDA Townsville and North West Queensland with Glenys and, at the time, with Ron McCollugh. RDA is all about how we run a regional Australia. What does it cross with? How we can have something that we have a uniformity with? I raised the question, 'Has anyone actually looked at connecting the priority roads,' because, when each regional road group is asking for priorities in our section for state and federal funding, it would be a more powerful message if we could connect those significant roads in each of our road groups. That is where that comes from, and that is where the RDA got involved with that.

As an update, briefly, out of that there have been a hundred federal and state members, senators, MPs and senior government staff behind all this since it was launched in February 2016. There are 500-plus industrial representatives who have been briefed across this, and we have had letters of support from peak bodies—Queensland Farmers' Federation, the Resources Council, and tourism, transport and logistics councils. There has also been funding from the Northern Australia Roads Program, through the beef roads program. So it has hit some of the targets that are actually in this plan, which is showing that it is in the right spot. The funding paid brings it up to $400,000 from 2014 to date, to see us through to July this year, which is able to put the IQ-RAP to the funding committee during the last year.

The group has probably been asked by government about economic and social benefits to analyse to meet these requests. The group has made a prebudget submission seeking $2 million to carry out a more in-depth analysis over the next 12 months. I suppose, to implement the whole program, it is going to cost $277 million—

Ms Schuntner : Per annum.

Mr Britton : per annum, and equivalent to that is 0.2 per cent of economic contribution of the region of Queensland to gross date—

CHAIR: This $277 million implemented per year is for the road program?

Mr Britton : The road program.

CHAIR: I am sorry to cut in on this, but you mentioned the beef white paper and beef roads initiative. That is $100 million. But you have not mentioned the other one, which is—

Mrs McNamara : Strategic roads funding.

CHAIR: a $600 million investment. You are including that as well, I assume.

Ms PRICE: Did you get any of that money?

Ms Schuntner : Yes.

Ms PRICE: You did well out of that.

Ms Schuntner : Queensland did well, in fact. Every road on the Northern Australia Roads Program and beef roads program was also factored in the IQ-RAP.

CHAIR: Have you finished making your opening statement?

Mr Britton : Yes.

CHAIR: I did not mean to cut in on you.

Mr Britton : Taking the whole perspective of it, it is $390 per person in the area, and if you look at gross product that comes out of that area it is a pretty good investment per person.

CHAIR: What I am going to ask you now, while I have it in my mind, is: all the money that has been promised has been committed, right? The $600 million has been spent and the $100 million has been spent.

Mrs McNamara : It has not been spent.

CHAIR: Well, it has been totally committed, right?

Mrs McNamara : Yes, that is correct.

CHAIR: Over the end of the forwards. Are you happy with the process? Are you happy with the projects that have been committed to in the expenditure to date?

Mrs McNamara : Definitely. I have an issue, and I think we need to raise it here: you know how long and hard we have all lobbied for some of the roads in the area, and now the Department of Transport and Main Roads think that it is their money and they will spend it as they wish. So we need to do something about that, because it is a little bit irksome when you are told, 'Well, we'll be handling it from here,' and you question how it is going to be spent.

CHAIR: How do you mean, 'We'll take it from here'? Are they excluding opportunities for councils to tender? Are they excluding opportunities for local small businesses to tender? I am interested, because we are trying to deal with this, and we have started a process through the PDR where we are trying to engage with locals—

Mrs McNamara : That is right.

CHAIR: and make sure that they get a fair whack of it. That was basically a trial, if you like, and we have been working very closely through the RDA for this.

Mrs McNamara : We just had a meeting on Tuesday with regard to the Hann Highway funding at the Lynd, and they are pushing it back to you fellows and saying that the No. 1 for the northern roads funding is that it must go out to open tender. So they are hiding behind that. So it will be very difficult, if it goes out to open tender, for the local councils to be able to tender and secure the funding. They have been very good in trying to factor in the local governments, but I am just alerting you to the fact that we need to keep an eye on that process.

CHAIR: There are tier 1, tier 2 and tier 3 contractors. I know we have broken that up in the cape and said, 'Rightio, these are for the lower level of contractors; they don't have to go through the same workplace health and safety requirements as the bigger ones.' I would be very interested, particularly in the Hann. I suppose that could be a test case.

Mrs McNamara : It will be a test case, and Flinders shire has secured the federal safety accreditation, so we can actually tender for the open market. Etheridge shire is still working on that.

CHAIR: I think that would be a good one for us to keep a close eye on.

Mrs McNamara : I would keep a very close eye on it.

CHAIR: Part of this whole process is to make sure that the money is spent locally, and I remember when—

Mrs McNamara : And you are in the media saying that, and we raised that issue on Tuesday.

Mr SNOWDON: Hold him to account!

CHAIR: Mr Snowdon has to go for a short time; he will be back.

Mr SNOWDON: But I just want to say that one of the issues we need to have a discussion about is the procurement guidelines, because it is clear that if we use the ACCC stuff, the competition model, we are going to exclude people from being able to do the work, because they do not have the size to be able to put in a price which is going to be—

Mrs McNamara : One thing that has happened already is that the gravel for 99A and 99B on the Kennedy Development Road has already gone out to open tender, and we were just told that that has already been organised. That has already been awarded.

CHAIR: Who told you that?

Mrs McNamara : It was from the project engineer.

CHAIR: Who is from main roads?

Mrs McNamara : Yes.

CHAIR: Did they find out who got the tender?

Mrs McNamara : I do not know exactly, but there are two: there is one in Charters Towers and there is one of ours. That is fine for us, except we have got two quarries so now there is going to be angst in the community because only one of the people is going to get a very significant tender out of it. Whereas if it had gone through ask, we may have been able to spread the load a little bit so that everybody gets a little bit of it.

CHAIR: I am not sure how we can micromanage—

Mrs McNamara : I do not need that. I am just alerting you to the fact that that has already happened.

CHAIR: But it will be one of the locals who will get it. One will get it and one will miss out.

Mrs McNamara : Yes, for 99B but for 99A, the gravel has been awarded to someone from Charters Towers. That is all we were told.

Ms Schuntner : If I may just make a comment to add to this, this is a really interesting test case because the whole premise of the IQ-RAP is for it to be used as a planning tool to help inform future programming or decision-making on road funding, on the basis that the packages of work are spread across regional Queensland, across many years, to get the long-term benefit of ongoing jobs on the ground for small business contractors and councils. That is the whole premise, so this is a really good test case to say, 'How do we make sure, like with the KDR, that we ensure that the packages of work do create the best job outcomes on the ground?' That is because that is what this whole project is all about.

Mr Roth : RACQ is very supportive of the IQ-RAP process, because the Australian government is supporting the Bruce Highway already and that is going well. There are some initiatives in South East Queensland as well. Obviously, we would like more. But the rest of Queensland—the IQ-RAP represents 82 per cent of the landmass of Queensland—does not have a good road network and is not getting sufficient Australian government funding. IQ-RAP is about not just getting the funding but also—as Glenys and Eric were getting into earlier—setting up the program so the funding can be better managed, it can stretch further and it can be used to support local councils through those areas.

At the moment, with the one-off initiatives and with the way TMR—the Department of Transport and Main Roads—manages them, the productivity of the actual road construction is not as high as it could be. It varies throughout the area. By focusing on a program, a 15-year kind of time frame, it lets those more remote areas have the right labour, the right quarrying and the right equipment to deliver much more for the same amount of money. It will take some of the political problems away from it. I think the fundamental thing about IQ-RAP is that it is a long-term program that gives much more certainty to whole remote areas so that the other businesses know which corridors will be upgraded and how long it will take. They can make their business decisions based on this, so it will help the freight industry, it will help the agricultural industry and it will help the local councils a lot. That is why RACQ is very supportive of IQ-RAP.

CHAIR: We agree. Everywhere we went in the Pivot north report, it was evident that if we wanted to get more bang for our buck, we had to make sure that the local councils were dealt in. We looked at costs on the Hann with the Flinders Council and we looked others ones on the Outback Way and the Tanami. It was interesting that the council costs for construction, compared to the state or territory government costs, were about 50 per cent cheaper. It was consistent right across the network. In our report and in the white paper, it said there—as you rightfully say—that it has to capture opportunities for the local communities where the roads are going through.

What I would ask you to do is to keep a very close eye on the process—we will see where we go with it—and alert us before it moves too far ahead so that we can then ask questions at our level, because 80 per cent of the funding that is going up is federal funding. Unfortunately, we do not have a lot of say. We gave directions in relation to the Gregory, the Hann and a couple of others; but the state governments are the ones that are going to make the decisions on this, not us. We need some help in the early stages to make sure that we can direct our way through this. Unfortunately, there is a division: we will be back.

Proceedings suspended from 09 : 35 to 10 : 00

CHAIR: I think it is important that you guys keep us informed. If something happens, there is no point in us reading it in the paper after the fact. We are absolutely and totally committed to the model which you are expecting. As soon as you get wind of it, it gives us an opportunity to go back to the minister, particularly if we can pull back on the dollars until such time as they bring it into line. The RDA has proved to be very useful as the canary in the coalmine in working through the PDR. It has been able to negotiate across the line. People like Allan Dale have done a great job there. I would encourage you to keep in touch with them.

I said this to some of you the other day: when you talk about this not being enough, of course, it is not enough. This is the start of the process. I would encourage you to continue to put forward the notion that this recognises goes from the start of the committee to its completion. There is no start and stop; there has to be continuity. There is no point in putting more money in there at the moment until the money that is there is running out.

Mrs McNamara : You have a four-year program.

CHAIR: We should be making sure that it is funded. In three years' time there should be money so there is no stop and start. That is what we are trying to do in the PDR—it finishes at the end of 2018. At that point in time it is anticipated there will be 130 kilometres of unsealed road to the Weipa turnoff. The 40 kilometres from the Weipa turnoff through to Weipa cannot be done because it is under the Comalco lease and a lot of that area is yet to be mined. Up to the Weipa turnoff there would be 130 kilometres and we have to make sure that the money continues, including the lifting of the Archer River causeway, so that there is continuity because there are Indigenous businesses that are now getting contracts and they cannot afford to stop and wait for six or 12 months for the funding to continue.

Mr Gilmore : May I make a couple of comments?

CHAIR: Yes.

Mr Gilmore : I suppose it seems a bit trite at the moment because this thing is operating but I would like to congratulate you on getting this done—this northern Australia thing. I put it in the box of nation-building, and it is time we had some vision. It is good that the vision is happening. There is one little contradiction that I would like to address, though I am not sure how it resides with this road-building. You would recall that we got a grant for the Mareeba aerodrome redevelopment—$13 million from the state and $5 million from the Commonwealth. The Commonwealth insisted that all of the work go to open tender, even the state money, because of the Commonwealth contribution. That eliminated the council from doing a hell of a lot of the earthworks and that sort of stuff. That is a bit of a contradiction to what you are saying now, when you say, 'We want to get the councils and others to get a lot of this work.' I do not know how you can have a policy on one side with the aerodrome and then a different policy for this Northern Australia road-building exercise.

CHAIR: It is quite specific. Part of the Northern Australia white paper was that the money had to go that way. Yours was done as a program outside of that, if I remember.

Mr Gilmore : Yes, it was but—

CHAIR: There is no reason we cannot look at making changes. You can make a good case for that. How long ago did that money come through?

Mr Gilmore : It is well into the planning process now; it is still happening. It is not a matter that I want to change now but it is a matter that I wanted to raise with you—

CHAIR: You can look at making a submission saying, 'This is not the right way.' I would encourage you to raise the point that what we are doing with northern Australia infrastructure development, and roads in particular, is local engagement. A project like that is worth $20 million and is a significant public investment in your shire, but the way the contract has been written excludes you from providing us. I would be putting that letter in now and asking if there can be a variation or if there can be changes to ensure that this does not happen again, because it does not reflect policies relating to the white paper.

Mr Gilmore : It will have to be in terms of the future, because yesterday we went to open tender.

CHAIR: Okay, but do it, and I will support you on it 1,000 per cent. It has to happen in this way, because at the end of the day if you go through that white paper, all the way through, if we do not get the engagement, if the money is not spent in the area, then we are failing to achieve the outcomes that we want. It is the same in relation to Indigenous engagement. As we move further out into these communities, there has to be Indigenous engagement. If there are not jobs and opportunities created and they are not part of the building process then we have actually failed. Given what we are doing in relation to roads and what we will be doing in other areas of expenditure in the white paper, I would be saying, 'Look at this. This is a contradiction and it has been a major problem for us and we would ask that future contracts be brought into line.'

Mr Gilmore : I will take that on board.

Mrs McNamara : I think that is the exact thing that TMR is hiding behind, because that is what they kept saying to us: 'Well, if you can get a change to the rules—' they are saying that the first rule from the feds is that it has to go out to open tender. That is where you people need to step in, so that we do have consideration, within the recommendations from you, that these things go to local—

CHAIR: Did I catch a possible additional submission from you guys suggesting that there should be a change to the rules?

Mrs McNamara : Well, we do not know what the rules are—that is the problem. TMR is telling us—

CHAIR: TMR has told us that they cannot include you guys because of the current process.

Mrs McNamara : They are trying to and they are saying, 'We are bending the rules so that we can—'

CHAIR: No, no. There is a difference between trying to. We have to deal with reality. Are they bending the rules or are they rigidly enforcing the rules that force them to exclude local government?

Mrs McNamara : The PPR is here now for approval to be ticked off by the federal government, and they are saying to us, 'What is holding up the project at the moment is that the PPR has not been ticked off by the federal government.' So that would be the way that you could find out exactly—

CHAIR: But have you been excluded from tendering?

Mrs McNamara : No, as I said, they have given the tenders out for the gravel, and there are two sections that they would like to go out to open tender on, and 99B is Flinders and 99A is Etheridge at the moment.

CHAIR: So they have given you both work?

Mrs McNamara : Both work at the moment, yes, but not to the extent that we thought it was going to be. They are looking at probably 40 per cent of it going straight out to open tender and possibly thirty-thirty—that is roughly—

CHAIR: So what is the 40 per cent?

Mrs McNamara : That will be the gravel, the sealings, the project design and management, the sealing of the road and the line markings. That will all be going out to open tender, we believe. But we have not been given enough detail to know how they are working it, so really we need to find out what the PPR is that is down here for the tick-off from the feds.

CHAIR: This inquiry is going to take some time to go through. We will be doing it for the next six months, I suspect. If you want specific inquiries on projects that are happening today, you need to put in a note to us and ask us what is happening on that, outside this.

Mr Gilmore : It might just require clarification from your side and say: 'These are the rules. Tell the main roads department this is how it works.'

CHAIR: Then, help draft the letter—chair and deputy—and get it to us in the next week. You can send it to me as the chair. But, you see, this is not something we will be able to deal through here.

Mrs McNamara : No, but it is a test case for you.

CHAIR: But it is something we can raise with the ministers and say, 'There is an issue here,' and get something written. You give it to me in writing and we can get a written response. Then we know what is happening.

Mr Gilmore : Part of the money that went from Beef Roads went to the Burke Development Road east of Chillagoe, $6.1 million, and I do not know how that is going to turn out. We are negotiating with main roads about council actually getting that work and I hope we will be successful. At the moment, it is not clear, but we are actively engaged in that. We will see how that goes, Jane, because it appears that it there is a bit of difference from office to office et cetera.

CHAIR: If you have stuff that is ready to be sent, give us the letter and we can start doing it. It is too late—well, it is not too late; we had a contract ripped up recently. It is not too late but let's do that.

Mrs McNamara : They are happy to run by whatever you people—not 'whatever' but to be guided by what you want.

CHAIR: You tell us that. From our perspective, I am interested in what you guys think about the funding and to make sure that it flows for you. I am glad to see that RACQ is here—and I am sure they will back you on that—to make sure that there is a continual funding stream and that the bulk of the work is done within the communities that the road is going to benefit. The other one I was particularly keen on is to make sure that the decisions, in relation to prioritisation of roads, are in line with what your communities see, that you are happy with what is happening. It appears they are reasonably happy.

Mr Britton : I suppose what I would like to add is, when you look at the IQ-RAP partners, out of this document, there are 33 local councils, eight regional road transport groups and five RDA committees. That is a pretty vast area of Queensland that comes up sitting, on the one page, working on the one document, for the benefit of that wide community and wanting that opportunity to take the vast majority of that work. The training programs, you said, with Indigenous people, training them up, your contractors, the people living and employed by shires, in that area that we are talking about the shire would be one of the biggest employers of those people. And it is that roading.

With ourselves, Boulia Shire, 80 per cent of our funding is that road and grant funding. To me, Boulia Shire Council should be fully Boulia Shire road contractors. That is our bread and butter. You have a look at the area we are working here. That is where Jane said—

CHAIR: We are going to have to wind this up now but, before we do, make sure you mention the RDAs when you are writing to us. Work with them on this too, because they are really good at driving this as well.

Ms PRICE: I have an observation on dealing with Western Australia, because that is what I am familiar with. When I first came to this place I was having a bit of a whinge to Warren Truss about, 'How come this road is not getting funded?' and 'That road is very important.' These are roads that are not Highway number 1. They are roads between Tom Price and Karratha, for example. He said, 'What does your state think about that particular road? The federal government, unless it is told by the state government that a road is a priority, is not going to fund it. So my question to you is: what does your Queensland government think of your proposal? Why would the federal government write out a cheque for 277—because we do not build roads. We give money to the state, and the state gives the money to, hopefully, some of your councils.

Ms Schuntner : I will take that question, if I may, and then I might throw—

CHAIR: Yes.

Ms Schuntner : We have had excellent engagement right across the federal government and parts of the Queensland government. I guess RDAs were set up to work with communities, councils, to provide advice from the ground to the federal government on what regional economic development challenges we have and what the opportunities are, and how we see the solution. That is how IQ-RAP came around. It is to say: these are the identified priorities, using a multi-criteria assessment that is totally transparent to come up with the priorities. But the reason everyone came together was that we consulted with TMR and they said they did not have a long-term plan for the western road network. They had the Bruce Highway action plan, which was great. It was 10 years plus and they had great funding for that. There was no heavy vehicle action plan that has been released and there was no existing document. So the council said, 'This is too important for us not to have investment in our freight and tourism routes,' and that is how IQRAP came about. To this point in time we have regularly engaged with Transport and Main Roads, but they have not endorsed it because they say they have their priorities and that we are taking some initiative in their space and in that planning. But 33 local governments have fully endorsed this.

As we sit at the moment, we are about to update the IQRAP with the support of all these partners again for stage 2. We are having ongoing engagement. I guess our challenge in Queensland and in budgetary constraints is that we always get beaten by the argument about numbers. Productivity means saving 10 minutes commute time in Brisbane versus productivity for industry—that is a bit of our challenge. We are up against it. I will give one example. One large project in Brisbane would fund all of that for 18 years to deliver those outcomes across all of regional Queensland and 15,000 jobs. We are seeking that ongoing engagement with Transport and Main Roads to say we are helping with the planning process. We think this will be a good planning tool to inform the current development of new plans, but it has not been endorsed by them at this stage.

Ms PRICE: That is the challenge for the federal government, though. I think it is a great plan, by the way. I am all for further development of regional Australia. That is the challenge we face here today.

CHAIR: That is the reason I asked whether you were happy with the priorities. We are going to have to close it there, I am sorry. The division killed us on this one. Thanks very much for today. If you have been asked for additional information please provide it. This is a letter that is not necessarily going to the committee but to me, and needs immediate action and I will be looking forward to seeing that.

Mrs McNamara : We just need clarification.

CHAIR: You write the letter and ask us what you want questioned.

Ms Schuntner : Chair, on page 18 of the handout we actually have some questions on whether your committee would be able to provide any support for the IQRAP. Part of that is about whether you are able to endorse it or recommend it through a formal letter of support, through the Hansard or through any other process. Also, we have that budget submission with the government to ask if there is any opportunity for the committee to endorse it. We will only be tabling that here and now, so we do not expect it yet.

CHAIR: I cannot make that decision now.

Ms Schuntner : But could we leave it with you?

CHAIR: I am more than happy to put it to the committee to see whether they would be happy to put in a letter of support. That letter of support can then be used in other areas. As a committee, though, we cannot go knocking on, otherwise we would be doing it for everything. But I do not see it as unreasonable. Given the role it may well be that we can do a letter of support, but I would need to get the committee across it. I do not anticipate there will be an issue, but we have not got any of our colleagues from the other side here.

Ms Schuntner : We have a copy of the prebudget submission to give to you.

Mr Britton : The issues that you have, as you said, in northern WA—is this something that we could get you to have a look at and take to your groups up there with that as a template?

Ms PRICE: That would be useful. The reality is that the roads in Western Australia are pretty good.

Mr Britton : Yes.

Ms PRICE: We have some roads which are currently gravel. It is almost like they are part B of the road improvements. We did very well in terms of the northern Australia roads funding up there.

CHAIR: We just have to keep it going.

Ms PRICE: We just have to keep it going. There are no complaints from there. But I constantly have these challenges, when the money that we have funded are all for highway No. 1. That is the federal government's responsibility and that is what we should be doing. But a lot of the road networks that you are talking about are ordinarily funded by the state government or the local council. I did make the point last night that between all of those shires there will be a big bucket of money in Roads to Recovery. Are you looking at that money, perhaps, as a way to start this? This is a really great initiative, and I really applaud you guys for getting together. We all want shires to have a bigger piece of the pie because we know they have the ability to do it. But the federal government is not going to sign on. You need to get the state government. Even if they say they have not got the money, they have to prioritise these things.

Mr Britton : Yes, exactly.

Ms PRICE: And then say, 'We'll go to the federal government.'

Mrs McNamara : This is to be used as a tool to help you so that you do not—

Mr Britton : It will help everyone. It will help states. The actual initiative was to help the states and federal to prioritise the priority roads that each regional road group had. Why ask them to build a multibillion-dollar road in this section but it is not connected to the next one?

CHAIR: Keep us informed on it. In the meantime, thanks for coming. A proof copy of the transcript will be sent to you to give you an opportunity to make minor corrections to grammar and spelling et cetera, and the secretariat will be in touch. I am sorry I have to wind up, but I am conscious of time and we are running very late—and that is nobody's fault except ours. It is the way the system works, unfortunately.