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Keynote address at the Regional Capitals Australia Annual Networking Breakfast



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Keynote Address at the Regional Capitals Australia Annual

Networking Breakfast

Speech

JBS010/2015

17 June 2015

E&OE

Thank you Deirdre. Congratulations on your election as the chair of this body, and congratulations to all of you for

making it here this morning after the LGA dinner last night. So a late night, but that is our life in Canberra, isn't it

Julie? Late nights followed by early mornings. It's great to see Julie here as well and we'll acknowledge George

and Lisa even though they're slightly late arrivals. Can I also acknowledge Jo Gash, a former member of the

Coalition in the Federal Parliament for many years; it's great to see Jo here and a bit of parochialism for Mayor

Ann Ferguson, the great Mayor of Mount Barker. So it is great to be here. This is the second year in a row I've

had the opportunity to speak at this breakfast, and it is a great opportunity because regional capitals and regional

Australia is such a vital part of our economy, of our social fabric of what it is to be an Australian.

I'm a born and bred regional Australia boy, I grew up largely in Mildura in Victoria, and it is always really important

to remember the contribution that regional capitals in regional Australia make and the opportunities that regional

Australia has for us in 2015 and beyond. Often in the past, I think there's been a focus on the problems with living

in regional areas, the challenges with the remote lack of access to services, but those challenges in large part

now are less than what they used to be. We are much more connected with this society than what we used to be.

Not to say that it doesn't still bring difficulties, but I think it brings an equal share of opportunities, an equal share

of opportunities that can help us grow as a country, and that's very much the focus of our government and

certainly of the recent budget, growing Australia, growing us faster and ensuring that we are as prosperous

tomorrow as we have been in the past.

We have enjoyed an unparalleled generation of growth and anyone under 40 years of age has not seen a

recession in Australia since they left school. They haven't seen high unemployment, high interest rates. They have

seen difficult patches, the Asian financial crisis, the global financial crisis, but we haven't seen a recession, we've

seen growth. But to continue that growth, we need to continue to reform.

John Howard often used to say that economic reform is like an endless footrace; that the moment you slow down

your competitors catch up and get ahead, so we must continue to be as competitive as we have to be to ensure

that we continue to grow and be as prosperous as we ought to be. I think an increasing share of that growth will

be upon the shoulders of regional Australia and our regional capitals and we are trying to facilitate that growth in

the way that we've gone about our budget, and what we are trying to do with our increasing focus on how we get

our product to the world.

It is important to remember that 40 per cent of Australia's exports are produced in regional Australia. Most of those

obviously pass through regional capitals and obviously use the infrastructure, not just in regional Australia but in

metropolitan Australia. This reminds us that having cities which are not congested is nearly as important to people

who live in regional Australia as it is to those living in metropolitan Australia, whether that be through rail networks

or through the road network. That is why our focus on infrastructure is so important, and we have a major focus

on that, but equally small business which of course is a key component of regional Australia. Outside of capital

cities around 20 per cent of regional income earners are business owners which compares to 12 per cent in

capital cities.

There is much more risk taking innovation in regional Australia than what there is in metropolitan Australia. Many

more business owners, whether they be farmers or small businesspeople supporting regional growth than there is

in metropolitan Australia and that's why the Budget very much focuses on the opportunities for small business to

grow, with the accelerated depreciation focus with purchases up to $20,000 being included from the night of the

Budget for two years. It's a big focus of the Budget and the Government to help small business grow, to create

jobs and to drive opportunities in Australia. Particularly I think as I said at the beginning, the challenges growing

up in a regional capital, of the remoteness, of the lack of access to services, simple things that I remember. We

had access to two television stations for most of my youth, now when I go home and see Mum and Dad in Mildura

they've got access to exactly the same television services as what we have living in the Adelaide Hills.

Indeed with the successful rollout of the National Broadband Network, the work that Malcolm Turnbull has done to

turn that project around, the benefits largely, the uplift benefits come from outer metropolitan and regional

Australia. There haven't been the great challenges in metropolitan Australia with access to fast broadband. Sure

people who live in the inner-city would like access to faster broadband always, but there are challenges in

electorates like mine and in regional Australia in getting access to decent broadband. There has been for many

years and the work that Malcolm Turnbull's done to ensure that the NBN is rolled out appropriately and effectively

means that the people in regional Australia have the opportunity for a better uplift of that and the benefits of that

connection—not just across Australia but to the globe, which, at a time when we've never seen a market the size

that we have, is an absolutely vital element of being able to do business.

We talk about the Asian growth often, but we forget the pure, hard, statistics of just exactly what is in front of us.

When I was in India in January with Andrew Robb on a trade mission, Prime Minister Modi's target over the next

decade is to move 600 million people from abject poverty into the middle class. That's a staggering amount of

people.

To move those people from abject poverty into the middle class means that they need to be able to service that

growth with the commodities that we largely produce. Not just the agricultural commodities, the resource

commodities, but the service commodities as well. Those are the opportunities that we have before us, the

regional capitals and regional Australia very much have before us. One of the things that we are doing to try and

make the most of those opportunities, and I think one of our proudest achievements thus far, and one of the

longest reaching achievements for the Abbott Government will be the free trade agreements we've signed with

Korea, Japan and China. As many of you know, I've got by far the best wine districts in the world in my electorate

—within McLaren Vale particularly—and with the Japanese free trade agreement beginning in January, we've

already seen in the first few months of this year, Australian wine exports to Japan increasing in volume by 63 per

cent, and in value by 17 per cent in comparison to the 12 months before.

That's exceptional growth in a very short amount of time. It highlights the opportunities that free trade agreements

provide for our country, and for our regions, and for regional Australia. To get the most of that benefit though, we

have to have the infrastructure which allows us to service that growth. We have to be able to get our product to

market as efficiently and cost-effectively as possible, so we can take advantage of what are burgeoning markets

at our doorstep. And that's why we focus so heavily on infrastructure.

We asked Infrastructure Australia, when we came to government, to do the first ever audit of Australia's

infrastructure stock, and a month ago we released that audit. It shows what you all know, that Australia has what is

a good problem. We are growing really quickly, particularly our major cities, which has been the story of Australia.

Our major cities continue to grow very quickly, particularly Sydney, Melbourne, Perth and Brisbane. But what I

think it also shows is the need for regional capitals to pick up that growth as well, to be able to allow us to grow

faster, because the capacity restraints within the cities are always difficult to address. We will always be behind

infrastructure tasks in our capital cities. The opportunities of the regions to pick up some of that capacity constraint

are immense.

Recently, after we announced the first round of the Stronger Regions programme, I visited Angus Taylor in his

electorate of Goulburn, where one of the successful National Stronger Regions projects is located, relating to the

use of water through Goulburn, creating recycling water into agricultural enterprise. The Mayor of Goulburn was

telling me that the challenge or the opportunity for Goulburn was that, as Western Sydney grew, and the

agricultural enterprises in Western Sydney were reduced as land was being taken up by housing, or industrial use

or what have you, Goulburn was picking up some of that, or a lot of those agricultural opportunities. They were

taking advantage of the need for land, and the need for accessible water, and the need for the opportunities to

grow.

The same can be said in our own area, Mayor Ferguson, with the development opportunities in Monarto, the use

of recycled water from the Mount Barker Council for the Mount Barker growers, to increase agricultural activity in

that part of South Australia. So there is, I think, not just road and rail infrastructure needs to help us deliver upon

what but there are also opportunities for regional development, to pick up that capacity constraint which is going to

hold back our cities. Infrastructure Australia's audit says that congestion in our major cities will cost the Australian

economy $53 billion by 2031.

Now, clearly we need to address that with infrastructure investment, and we are very focused with our $50 billion

infrastructure programme, particularly on driving city growth and addressing that congestion. But there are also

opportunities for the regions to help allay that capacity constraint. In that respect, the debate we've been having in

the last few weeks in respect of housing affordability also provides opportunities for regions, because there is

more affordable and more accessible housing in our regions if we can connect our regions more effectively with

our cities, or allow for growth in the regions.

One of the complaints I know with my local councils' is the dormitory effect some times of growth in regional

capitals when people live in the regional capitals and travel to the cities to work. The challenge is to create the

opportunities in that region so they're capturing much more of that economic activity. And I think that is a

challenge that we all share and we need to work together upon.

The freight task in Australia is growing enormously as well. It will be 1.8 times by 2030 from what it is today on

road and 1.9 times on rail. So the investments in the Pacific Highway and the Bruce Highway, massive

investments in those two highways, duplicating the Pacific Highway, improving the Bruce Highway so it can

sustain the effects of major weather activities which are so common in North Queensland of course, it will be a big

productivity increase. And in rail, the focus on inland rail, John Anderson has been leading a group doing the

work, preparing the case for inland rail and its coming along. I think in the coming weeks and months there'll be a

lot more said about what we intend to do with developing inland rail because it will be something which will help

with that freight task which will help take the pressure off the road network and will allow for greater movement

particularly between the Port of Melbourne and the Port of Brisbane.

You all know we focused very heavily on regional roads for our doubling of the Roads to Recovery Programme

this year and next and also the Black Spot Programme this year and next and broadening the criteria with black

spots so it is easier particularly for regional councils to get access where there are intersections, sections of road

which haven't necessarily yet caused- or had fatalities or injuries, but you will know in your areas they will at some

point in time and we've seen through that programme already some massive improvements. And we are looking at

ways to work with local government out of the Productivity Commission Report, better funding in approaching the

first and last mile access that local government has in the way that we price some of those road networks and that

work is underway as we speak.

And something I should mention of course, which is close to the incoming chair's heart, is the work we're doing on

developing Northern Australia and I think later this week there'll be a lot more said about developing Northern

Australia. There were obviously announcements in the Budget in respect to giving access to concessional loan

arrangements and some more of those details would be coming shortly. But the purpose I guess with Northern

Australia is really trying to facilitate that private sector growth to capture what we'll see as big opportunities in an

area which is yet to be fully developed or developed in much of a way in our north. So it is a focus that the

Government has for some time.

And the last thing of course is the Stronger Regions programme for which we had the first round announcements

in May and it was an extremely competitive process. The ministerial panel, the Deputy Prime Minister, myself and

our Parliamentary Secretary, Christian Porter had tough tasks. Well, in the end we announced $212 million worth

of programme projects and we had $1.3 billion worth of applications. It is a tough competitive programme. Round

two is open. We encourage you and your councils and your local community groups to look positively at that

programme, but with the caution that you make sure your applications are really strong. That's the best way we

can be successful because it is a very competitive base programme.

This year, this second round, we are allocating some $25 million to projects under a million dollars because one of

the things we found, certainly in round one, is that applications that sought $5 million to $10 million put a lot of

effort in and put a lot of work into those applications and they were very good projects and they were funded. The

challenge for projects under a million dollars was that it was harder to compete against those projects, so we've

allocated an amount in this next programme to try and encourage smaller Councils in regional areas to have more

access to smaller grant programmes, smaller amounts for their area.

So I think there is a very positive feeling and opportunity for regional Australia, more so than we've had for a very

long time. We still have challenges in some parts of course, with droughts. We will have ongoing challenges with

access to water, but these are not beyond our wit and these are not beyond our country's capacity to adapt and to

deal with them. I think there are, with the right policy settings and the right attitude from state governments, local

governments and the people in regional Australia, some of the greatest growth opportunities we've ever seen

before us and if we can get our infrastructure spending focused and right, I think you can provide access to

communications and we can ensure that we've got policy settings and access to markets that we want in the

future.

Regional Australia stands at the dawn of enormous opportunities and people in this room will be at the forefront of

leading regional Australia to ensure we make the most of that. We need to make the most of that because, to do

what we want to do and grow Australia faster, you need to lead the way. So thanks for being here this morning,

thanks for taking the time for this breakfast, at the end of what has been, I'm sure, a very busy few days of local

government conference, a busy week for government in Canberra and I'm delighted to take a few questions if

you'd like to do that. Thanks so much.