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STANDING COMMITTEE ON INFRASTRUCTURE, TRANSPORT, REGIONAL DEVELOPMENT AND LOCAL GOVERNMENT
30/04/2009
Impact of the global financial crisis on regional Australia

CHAIR (Ms King) —I declare open this public hearing of the House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government for its inquiry into the impact of the global financial crisis on regional Australia. This is the second of the committee’s hearings in Western Australia and this morning we look forward to the evidence from witnesses from local council, economic and regional development organisations and business representatives. Before I commence, we received a submission late last night by Mr Smith and I would like a member to move acceptance of that.

Mr RANDALL —Moved.

CHAIR —Thank you. I welcome everybody here today. I know that we have a rotating panel this morning of each of the difference councils. The committee does not require you to give evidence under oath, but these are formal proceedings of the parliament and as such should be treated with the same respect as proceedings of the House of Representatives. It is customary for me to remind witnesses that giving false or misleading evidence is a serious matter and can be considered a contempt of parliament. That being said, you are most welcome. We would like to thank you for hosting us in your fine city and we are very keen to hear about the impact of the economic crisis in your area and some of the pressures that you are facing as a local government area. If you have an introductory statement to make that would be most welcome.

Mr Macnish —My response to that would be that our evidence is purely observation. We have an economic development area within our organisation, but most of the data comes through are lag indicators. The financial crisis has occurred since October/November and is just starting to filter into our community, so it is just our observations at this point in time.

CHAIR —That is fine. They are perfectly valid. I would be interested in knowing about the diversity of the economy in your area and what sorts of things are happening with each of those sectors. Do you have any evidence or have you noticed anything regarding retail, manufacturing, tourism and so on?

Mr Macnish —We do have some retail. It is predominantly in our major town of Busselton, which is discount retail. We have two distinct parts of our shire, the Busselton area where the main population base is a relatively disadvantaged community, which some find hard to understand. On the ABS benchmark 1000-point indicator it is sitting at about 970, whereas Dunsborough in the western part of the shire, with a lot of absentee landowners and high property values, sits at about 1050 or thereabouts. There is almost like a demarcation and the two communities are quite separate in their cultures. It is very difficult to tell the immediate impacts of the crisis in the west of the shire because the economy out there is basically run on development, which is unsustainable. The development industry employs tradesmen and, if they have sufficient work, they will take up root and their kids go to school there, so there are teachers, medical people and so on.

A lot of the builders at the top end with the high property values had jobs booked up for two and three years in advance and are still working on those. It is only now that we are starting to see the lead trades, being the earthwork guys, having to reduce their rates but still have work. No doubt once the pent up demand for building houses out there is expunged there will be a very significant or classic boom-bust situation that we have seen in WA, which is almost amplified in the west of the shire.

CHAIR —What is happening with your building approvals at council?

Mr Macnish —They have started to taper off in the last three months. We expect a further small reduction and then a tapering off. We are a community of 19,500 ratepayers, or nearly 30,000 people, so there will be a baseline level of activity. Now that land has become more affordable down here and it is a beautiful place to live, people are starting to come in to the bottom end. A project home on a $150,000 block—that is cheap land down here—has not really been affected. We do not know how that will be affected by the extinguishment of the first home owners scheme. I guess the rest of Australia is looking at it.

That is retail and building. We have some agricultural and wineries. We are part of the famous Margaret River wine region. They are reporting a possible glut, which is not good. We have had decreased rainfall, so that will be affecting things again in the future.

Tourism is a fledgling industry down here in that it is not robust. It is very seasonal. We have a massive influx of people on the summer period and Easter periods. I was in Dunsborough this morning, a beautiful morning, but you could have fired a cannon and not hit anyone. It is very up and down.

I expect that tourism business in winter will still be poor, as it always has been, but we had a very good summer and if global tourism, swine flu and so on mean that people are not travelling abroad, then it is highly likely they might spend their holiday dollar coming down here three hours south of Perth, and also people from the eastern states.

CHAIR —Thank you.

Councillor Hartley —From the perspective of an elected member, we are also looking at the issue that if we are to maintain the level of services into the future for the reasons the CEO has outlined, if there is a decline in building approvals there is also a decline in general revenue earning for the local government authority. We are either faced with the situation of having to decrease services, which we are not prepared to do, or to significantly increase our rate structure. In an economic downturn situation, when you are having to head towards a potential double digit rate increase that can be negatively interpreted in the electorate, particularly in an election year for local government, because in Western Australia, similar to the Senate, they have a half-retirement rate in the middle of October.

They will be some of the issues in terms of how. If we cut back on our infrastructure spending that starts to affect right across the community. For example, simple things like vehicle purchases being put on hold affect the local dealers because of our local preference policy and that flows on. We are the largest employer in the southwest region and certainly the largest employer in the shire of Busselton, so anything that we do, in a sense, has an almost flu-like symptom; if we start to catch cold or get cold feet, then it will flow on to the community and will affect community confidence.

Part of the balance is that, similar to the state and federal governments, we are trying to promote a range of infrastructure developments when borrowings are going to be probably the cheapest they are ever going to be. There is the competitive aspect for tendering, as we have experienced just in the recent jetty tender, which came in marginally under what was budgeted for. Six months ago we would probably not even have been able to find a tenderer. We are hoping, for example, that the civic hub project goes ahead, which would be a new civic chambers and a whole range of facilities. That would be an economic driver. But, of course, you then live with the negative potential aspects of the community perception of that as to whether it is wastefulness in the midst of economic tightness, but if we are not the provider of jobs for artisans, labourers, fabricators and so on, then we just compound the problem by agreeing with everyone else that we are potentially heading into a crisis.

Our CEO has also alluded to what we share with our neighbouring shire of Augusta-Margaret River; the tourism and wine industry are the two key drivers. If there is a downturn either nationally or internationally, particularly with the quality wine trade, that has a dramatic effect on not only those who bottle the wine and sell it, but of course the new agriculture down here is increasingly through vines and the support industries reflected there. If there is a downturn in that or the dumping of crop then that creates its own momentum, which suddenly cannot just be replaced over night. It is a long-term issue of building up a quality vintage.

The other area, of course, is tourism. We are quietly hopeful of inbound tourism from interstate and intrastate, but of course with the low-budget carriers now cutting back, particularly from Asia, the inbound tourism from places like Singapore, Malaysia and so on is potentially under threat and that is going to have an effect on those who might be looking at long-term plans for the development of quality infrastructure.

CHAIR —Thank you. I would like our next witnesses to make an introductory statement as well.

Mr Smith —I am the Mayor of the City of Bunbury, but I also hold a couple of other positions on the Bunbury Port Authority, the Bunbury Wellington Economic Alliance, the Bunbury Water Board and I am the National Executive of the Sea Change Taskforce. My submission today is a personal one, which I provided in writing to the committee. I would like to speak to it briefly later on.

CHAIR —Would you like to make an introductory statement now?

Mr Smith —As is obvious from my submission, we are one of the rapid growth areas of Australia. Part of the problem, of course, when there is an economic downturn is that the rapid growth areas are more likely to feel the impact of it, because people are wanting to come and wanting to be employed when they come, but once the economy starts to turn down that opportunity disappears. I would expect that in the current decline not only are we unlikely to maintain our growth figures, but there is a chance that there will be a decline in that growth.

The impact on the residential construction industry is immediate. I think people forget how important that is as an industry in rapid growth areas. For instance, I would estimate that in the greater Bunbury area residential construction has gone down by about 70 per cent, which has probably caused the loss of about 1,500 jobs from bricklayers, plasterers, tilers and so on.

On top of that, of course, the major industry in the region is mining. We have something like 25 per cent of the free world’s alumina reserves and four alumina refineries in the region. In addition, we have mineral sands mining, tin and spodumene from Greenbushes, coal at Collie, which brings the power generation industry of WA into the region, and a variety of other mining, such as silica sand and others.

The other impact that is occurring at the same time is the problems confronted by some particular industries, which are not directly related to the downturn but are occurring at the same time. EG Green and Sons was the major export abattoir based at Harvey. They got into financial trouble themselves, but were taken over by a South Australian finance group, which obviously borrowed more than they needed to to make that acquisition and have been in financial trouble ever since. They have laid off the equivalent of about 300 workers. That not only affects the direct workers but the local community, whether it is in transport or servicing that industry.

There is a pine timber mill at Collie, which had a similar problem. It has gone into administration, employing 70 people. Again, I think the reason they went into administration was not related to the current downturn. It was simply not enough finance was put in to carry the operational costs, and, of course, they had problems flowing from the Varanus gas explosion and the loss of their gas supply. The receivers have announced, only in the last few days, that they have not been able to find a buyer and therefore the 70 workers employed there will be put off. That is in Collie.

At a more regional level, the deregulation of the dairy industry has created its own problems. A number of the producers went out of the market and there has been a reformulation of the industry in terms of who owns what. Most of it is now owned from the east, New Zealand or from other overseas places. Because of the drop in production caused by producers leaving they have had trouble supplying both their fresh milk market and their processed milk market so they have announced in the last few days that in the case of Fonterra, which owns Peters Ice Cream—the ice cream that I enjoyed as a child—they are closing their production operation in Perth. Things like that have an immediate flow on to the southwest.

Clearly, there are problems with the mining industry. Alcoa and BHP Billiton own Worsley alumina. They get through initially on long-term contracts that have been written some time before. I suspect that a number of those are getting to a stage where they are coming to an end. If there was any downturn at all in the alumina industry, in particular, then that would have a major impact.

We have gone dramatically from a situation where we were crying out for skilled labour. The hospitality industry, in particular, was losing people to the mining industry across the state. We are now in a situation where there is really a large pool of people who appear to unemployed or underemployed, and I think that is creating a situation where employers and companies can use the current circumstances to change some of the ways in which they operate.

Iluka is the major mineral sands miner and it has changed the shift arrangements and has dropped production of some of its mines. Again, it is 170 or 180 jobs. While numbers like that may not sound that horrific to people who are based in the city, when you are in a situation where you have a large number of people coming to the south west, wanting to live here, wanting to recreate here, and suddenly the employment situation changes in the dramatic way that it has—and I think will continue—it just creates an additional pool of unemployment and underemployment. Once people cannot get a job in a regional sense they will go to where they are more likely to get a job, and that is a return to Perth.

As I have said in my submission, we are fortunate enough to be getting more federal government money in the southwest than we ever have, but more is not necessarily enough. I think this is the time when we ought to be really fast tracking a lot of economic infrastructure to make up for the shortfall.

Bunbury has always relied on its port. That is the very reason it is there. It is the thirteenth largest port in Australia. The Bunbury urban area is the twenty-seventh largest in Australia, including the capital cities. We believe that in terms of port development we are being left well and truly behind. I know capital funds are short, but the position of the state government is that it has got Oakajee, Port Hedland, Port Jones with the private port, and the possibility of another port to supplement Fremantle. We simply take the view that the sort of money that they are spending there, if they only deferred some of that expenditure for a few years, the interest on the money saved would more than complete the expenditure that is required on our port.

Mr RANDALL —Can you expand on how you are saying you are being left behind in Bunbury in terms of the port?

Mr Smith —For instance, coal exports have been on the cards for some time. Trial shipments of half a million tonnes a year have been going out in the last 18 months. They have had to go through Kwinana, because we cannot handle it at Bunbury with our current berth numbers and the actual infrastructure required. Griffin, in particular, are about to go to 2.5 million tonnes and probably 4 million tonnes. We have known about this developing industry for the best part of five years. We have known and planned for berth 14, which would be the coal handling berth, but there has been absolutely no progress in terms of getting any commitment from the state government to it.

The second industry that is about to start, if all the announcements are right, is a urea production plant at Collie, which will use coal converted to gas as the feed product. That involves 2.5 million tonnes of exports through the Bunbury Port, through what is known as berth 5. Berth 5 is already at about 30 per cent capacity. That 2 million tonnes would exhaust the spare capacity and we would have to give priority to that in preference to other shippers.

The Bunbury waterfront redevelopment is a redevelopment of the old areas of the port which have now been closed. It involves a commitment by the state government of $200 million to the infrastructure required for the redevelopment and would lead to $2 billion of private investment. The condition of the government contribution has been one of cost neutrality and there has been some opposition to the first area chosen for redevelopment. In my view, the area that would be the easiest to redevelop is what is known as the outer harbour, or breakwater. The leases out there still run to 2018. The exporters who use that outer harbour facility would welcome the opportunity to come to the inner harbour, both for efficiency and because they would have a much faster loading rate and hence turnaround rate. In order to do that the port needs $45 million to provide a new conveyor and ship loader, and probably $20 million in sheds. That item has been in our capital requirements request for the last three years. Again, this year it has been knocked back, and the only money that the Bunbury port is getting this year is about $3 million for maintenance and carryon. This is a regional port that is the thirteenth largest port in Australia. Regretfully, even Infrastructure Australia takes the attitude that it does not want to get into port development because of the cost involved and they see it as largely being privately financed.

In the new ports such as Oakajee and the additional facilities at Port Hedland, Dampier and elsewhere the companies were quite happy to provide the infrastructure because they have guaranteed contracts and growth. When you are in the insipient stage in the industry you really need a bit more financial support than is the case with those privately funded developments.

Our coalminers, because of the volume and the uncertainty of forward contracts, cannot afford to put a heap of money into infrastructure. That is just an example. These are developments that state governments, past and present, have known about for a considerable time, but actually getting them to commit to any sort of funding for it is difficult.

CHAIR —I might just interrupt. Given that we have two other councils here and there will be a number of questions around that particular issue from members, I might ask Councillor Dilley to give an introductory statement just to set the scene for what is happening in your area and then we will go into more detail.

Councillor Dilley —The shire of Donnybrook-Balingup is just under 1,600 square kilometres with a population of about 5,000 people. It is still a very strong agricultural base. As you may be aware, committee member Ms Parke is actually a Donnybrook girl from our shire. Her great-grandfather was one of the first to export apples out of our area to the UK way back in 1927.

Ms PARKE —He was the first.

Councillor Dilley —The first, I stand corrected. It has still got a very strong agricultural base, which has not had much of an impact from the global economic crisis but certainly has been under enormous cost price squeeze like most of the farming right across Australia. This area is no different. That relates to beef farming, horticulture in general, and certainly dairy. A large part of the apple industry now is domestically focused and at the moment it is going reasonably well. Typically when there is an economic downturn the food industry and agriculture tends to weather it fairly well, with a rider perhaps that as long as it is not too export focused; that is a double edged sword. Certainly for anything export focused at the moment, like the wine industry and to a large extent some of the dairy as well, once that export demand heads south it certainly has a big impact on them.

Some of those agricultural industries, which are more domestic market focussed, are going reasonably well at the moment. Having said that, the apple industry has had quite reasonable exports of pink lady apples to the UK over the last 10 or 15 years and it looks like this will be the first year that there will not be any that will go out, due to the UK economy being in fairly dire straits at the moment.

As I said, the industry has a fairly strong agricultural base. It also has quite a lot of plantations and plantation woodchip in the area as well, particularly further east of us towards Boyup Brook and further south down towards the Manjimup and Pemberton area, which creates a real issue that I can bring up later on regarding the state of the South Western Highway and a railway line between Greenbushes and Picton, which is very serious.

CHAIR —In terms of the woodchip, we have had some evidence in Victoria and in Tasmania that because the demand for the market has collapsed in Japan that has caused enormous pressure. Obviously, there have been two large companies go into receivership just recently. What is happening with your sector in relation to that?

Councillor Dilley —It is just starting to have an impact. The shock came last week when Timbercorp went down. That is the big one. There are still quite a few other companies; Great Southern Limited plantations, which is a larger resource manager, and ITC Limited to a lesser extent as well—I think they are hanging on at the moment. Mayor Smith might be able to back me up. There is certainly a fairly large excess of woodchips stockpiled at Bunbury port at the moment and it is having an impact that is going right back. Obviously, the demand for high-quality paper from the Japanese paper pulp mills is less at the moment because of the global economic downturn. It is having an impact that is flowing all the way back through. At the end of the day that is probably what has tipped Timbercorp over as well.

The other part of the Donnybrook-Balingup Shire, like many of the shires around the Bunbury port in the southwest area, has a strong lifestyle base, with many residents certainly in my shire that are working in the Collie area, perhaps in Worsley alumina and in the coalfields—and obviously in Bunbury as well. Anything that affects them and stifles their development has an impact on my shire and the surrounding shires as well.

I see one of the really big issue being a huge bottleneck at the Bunbury port. You will see that picked up the Bunbury Wellington Economic Alliance, of which our shire is a member. As I said, the impacts are just starting to show now from the global economic crisis, and I hope that we are all here today to find some solutions. Certainly one of the solutions for economic growth and development in the southwest will be Bunbury port and basically all the roads and rail that lead there as well. If we can fix that problem during the next 12 months to two years, then hopefully when the demand starts to increase again we will be well placed to generate employment and supply the demand for our raw materials.

CHAIR —I am conscious we also have Augusta-Margaret River representatives at the back. I might ask you to come forward. We would like to have some introductory information at this point to set the scene. I will need to juggle people around as we start to ask questions, but I would like to provide the opportunity for that shire to give us some information.

Councillor Hartley —I would like to seek a point of clarification. We are individually preparing, but we also have collective frameworks of perspectives. Are we going to have the opportunity to respond as a group or just individually?

CHAIR —Hopefully as a group.

Councillor Hartley —We can juggle.

CHAIR —You are a region as well so that is why you are all here together. I must apologise that I did not introduce the members of the committee. I welcome representatives from Augusta and Margaret River.

Councillor Harrison —Thank you for inviting us along today.

Mr Evershed —I am a relative newcomer. I have only been in the position for six months so Councillor Harrison will talk about the big picture and I can talk more about the shire’s operations and our response to the crisis that we are experiencing.

CHAIR —Thank you.

Councillor Harrison —Given your comments just a moment ago I will try to keep to headline things and then if you want more detail I am happy to do so.

CHAIR —I am sure we all have lots of questions.

Councillor Harrison —The Augusta-Margaret River shire sits to the south of Busselton shire. It has approximately 12,000 residents. It is a fairly well known area in relation to its name, which is actually one of our issues from an economic point of view. The shire has one of the lowest socioeconomic ratings in the southwest and that is quite a shock. It is the same thing as Mr Macnish was saying about the Busselton shire. People have an expectation when they come down to Busselton, and particularly when they come to Margaret River, that Margaret River is a very high end, rich and affluent place. The vast majority of our workers, our resident population, work in either agriculture, viticulture, leisure and tourism or construction. We have a marked divided population between people who have moved to the area with quite a bit of wealth behind them and semiretired or working from a distance, and the vast majority of people who live there who are working on fairly low incomes. That combination itself creates fairly massive affordable housing issues, which we were struggling with anyway. Certainly the first home buyers support has been extremely helpful, if not vital, both to the people trying to get in to the housing market and get accommodation, but also for the construction industry, which is really beginning to feel the sharp end of the recession now.

We have a lot of people being laid off in the construction industry. Because there has been a vast amount of growth we are now beginning to suffer. I think that decline will continue over the next year or so. Local builders are beginning to lay off their staff, so we have quite a lot of people looking for work now who were not a while ago. Reflecting on what has been said already, we have gone quite quickly from a situation where industries in our shire, whether they be tourism or wine, who were struggling to find staff but now have no vacancies and a lot of people are looking for work. That has turned around frighteningly quickly.

The tourism industry is important, although it comes behind agriculture and viticulture with respect to the economic inputs in our shire. Tourism is still very important in terms of the number of people it employs. Interestingly, over the last few years we have approved some fairly major tourism developments that have not appeared on the ground—quite big resorts near Cowaramup, down near Augusta, and two others in the shire just on the edge of Margaret River. Also, fairly major tourism companies have pulled back from actually investing on the ground. There is a lot there waiting to happen. It is not an approvals block; it is an economic block in relation to whether or not they can make it work.

The wine industry has been growing rapidly across the Capes area and the two shires that cover the Margaret River wine region. There is further potential as climate change impacts on more marginal areas. The Capes area in the Margaret River region is probably one of the most secure wine growing regions into the future in relation to the climate, despite our reducing rainfall, but certainly that growth has dropped off now as well. That is partly because of the investment schemes and the changes there, but also because people are very anxious about the situation and are beginning to struggle. Of course, in the southwest of WA the isolation of the market creates particular challenges for the industry.

During this last year the retail industry has begun to suffer. You cannot put it all into one basket with one summary. Not surprisingly it depends almost entirely on how discretionary the spending is. Food and beverage sales are having their best year yet. Some of our hotels, pubs and supermarkets are doing well, but our discretionary spending shops are really struggling now and beginning to lay off staff. It is quite a mixed picture.

There is one thing about the infrastructure. There is a huge argument that goes on in our shire, and I guess it is in the Busselton shire as well, regarding the difference between resident population and service population. The Census is not particularly helpful to us in getting a good indication about where people state their primary residence. At Census time a lot of people who own properties in our shire will put down their primary residence as Cottesloe or wherever. Our absentee ownership averages about 30 per cent in this shire. It goes up to 80 per cent in places such as Gracetown and over 50 per cent in Augusta. That has a big impact upon the economy of a town. Augusta is a classic example. There is not a critical mass of people living there supporting the local businesses in order for the local businesses to survive and then, of course, it does not attract many visitors in because the facilities are not there to support them. You can add to that the fact that we are having to both plan for the accommodation of people who are only living part time in the shire and also trying to provide services for a very large number of people who have very high expectations. I guess the more iconic you are as a tourism destination the higher the expectations, the higher the demand upon the resident population to provide infrastructure and the harder it is to support that infrastructure. For a shire of our size to try to provide something that matches people’s expectations and keep that tourism economy rolling is a very major strain.

CHAIR —Thank you for providing a comprehensive picture of what is happening across the district. We have covered lots of issues. I have a question from Councillor Hartley’s evidence and about which I would like you all to comment. Councillor Hartley talked about the procurement policy. I do not know if you have changed it or you have always had a procurement policy that has an emphasis on local. Some of the evidence we have heard from other areas has been concerned with some of the big players on some of the large infrastructure spends coming through as part of the economic stimulus package; that a lot of the bigger companies are basically underquoting in order to buy work at the moment and that is shutting out a lot of smaller local construction companies. I do not know whether you have had any experience of that or whether your local procurement policies are, in fact, actually buffering some of the construction companies at the moment.

Councillor Hartley —I think your observation to date is probably correct. If you are buying, for example, a motor car you can say you will favour a local dealer to eight per cent to 10 per cent or whatever it might be. When you are setting up a major construction project—in our case the jetty tenders have been agreed to, and in fact we are signing the contracts next week—when you are looking at something as massive as, say, a civic hub that could have a dollar value of the $40 million to $50 million mark, the difficulty is that you could almost be accused of restrictive trade if you are insisting that you have to have certain contractors that will only do certain work because they happen to be local. All we can do, as we have just experienced with the jetty contract, is to appeal as much as possible to the successful tenderer that they might consider, for example, somebody that has come from a mining site who was a professional welder and is now sitting here serving coffee. When we are welding and doing all the skills that are necessary for that construction project, we believe there would be economic advantages in not having to relocate staff from Perth and all the rest of it and to try to use locals. We can only appeal to people’s sense of fairness in that. That is part of the difficulty that we are going to experience with any regional infrastructure projects. The evidence that has been given elsewhere is essentially correct. The CEO might have an additional perspective on that, but that is part of our dilemma.

The Augusta-Margaret River alluded to the Census period. It is often taken in the midst of winter. We are practically ghost towns in the midst of winter, and yet as the president of the shire of Augusta-Margaret River alluded to, our population can suddenly treble with people who have come from affluent suburban environments who have high expectations that are undeliverable as far as infrastructure is concerned.

Part of the issue is that we know what our projection growths are, but often they are not reflected accurately in projection figures because they are taken off Census data which is, in a sense, skewed unfairly literally because of the time it was taken. If it was taken in January, for example, we would be getting grants all over the place because of our growth potential.

As to the contract issue, in terms of mainly local employment, Mayor Smith alluded to the fact as well that when Iluka cut back just three weeks ago that affects people who come in from Nannup, Dardanup and Busselton. The road traffic between Busselton and Bunbury alone is 20,000 car movements a day, but the highway itself is rural in character. They are some of the major issues that we need to look at, which are going to provide local employment.

Mr Smith —I have to say that we have not experienced that. Part of the reason is because Bunbury has always been involved with coalmining and mineral sands mining and over the years we have developed a major fabrication and spare part replacement type of industry. The real issue is not necessarily one of price. The real issue is where the major companies want to have alliance relationships where companies will provide a broad range of services. Not all of our companies are able to provide that broad range of services. What they effectively have to do is subcontract to the alliance partner. I need to emphasise that our miners are very corporate citizens. They recognise the need to buy and employ locally wherever possible. We would be a much poorer community if it were not for them.

CHAIR —I will let my Western Australian colleagues ask some questions first, especially in terms of some of the infrastructure issues.

Ms PARKE —It is a great pleasure to be back home in southwest Western Australia. I am very new on the infrastructure committee and I think it is a great opportunity to learn about the things that are needed on the ground around this country. I would like to hear from each of the council representatives about the specific recommendations that you would like this committee to make to the federal government.

Mr Smith —Minister Albanese is doing a great job. Having Gary Gray only an hour or so away is a great advantage. They have actually done the region well by not only continuing with the first stage of the port access road but also fast tracking the second stage and the first stage of the Bunbury bypass, but we have been at the federal government for some years to try to get them to put the southwest highways north and south on the AusLink program—the Bunbury bypass itself, the Bussel Highway, and the coalfields highway between Collie and Bunbury put on the AusLink program.

In addition, urea and coal exports cannot possibly come by road, so the Collie to Brunswick line, in particular, needs to be upgraded, but that railway line is not on the AusLink program, either. The Brunswick to Bunbury section of that line is already at capacity. It carries both cargo and a passenger train called the Australind, and with the growth that is going to happen, in any event, it is not going to be able to cope with that. The declaration of those as AusLink roads would at least put us in a position where we could bid for money out of the AusLink program. We have effectively bid and been successful, and those works that have been approved have been added to the AusLink program, but the remainder of the road has not. You could take the example of the Bunbury bypass road. We have 2 million visitors to the southwest every year. In addition, there are about 30,000 visitor landowners who come down on weekends and reside. How many there are none of us knows, because it is impossible to get that sort of stat.

The problem in Bunbury is really the mix of port traffic and the fact that the only roads from the major part of our resident population—and Australind and Eaton and those areas—the only two roads they can use to get into Bunbury are Estuary Drive and the Perth-Bunbury Highway. Estuary Drive, because of the volume of rail traffic, is going to have to be closed. It will also have to be closed because the port needs to extend out into where it is currently. That means the whole of that population, plus the increasing numbers going south, and the port transport are interacting at what is called Eelup roundabout. It is critically important that within five years we are able to build the Bunbury bypass so the traffic can turn off about five kilometres out of Bunbury and bypass Bunbury altogether and go on to Busselton, Dunsborough, Margaret River or wherever they want to get to.

The one that is most critically needed to be on the AusLink program in its entirety is that bypass. As part of the port access road that will take some of the traffic off the interaction with domestic traffic, but the sections of Bunbury bypass from the Perth-Bunbury Highway to what is called the Picton-Dardanup Road is not on the AusLink Program and there is no commitment to build that leg. Similarly, the stretch from South Western Highway south to the Bussel Highway is not on the AusLink program and there is no commitment. It really does not make any sense to build the middle section of the bypass and the port access road if you cannot get on to it from the Bussel Highway and you cannot perform that bypass function.

We all know that it is probably another couple of hundred million dollars to complete that work, but we are currently at the first stage of the port access road. The federal government has promised to fast track the middle stage of the bypass and the second stage of the port access road, which will actually complete the port access road, but there are the bits at either end. They are very important, not so much to Bunbury for safety and traffic management reasons, but in terms of getting people down south as quickly as they can.

The Mandurah bypass and the extension of the Granada Freeway, which is underway now—hopefully open in July—would actually make coming south safer and a 25-minute quicker drive than it currently is, with none of the frustration of all of the lights at Mandurah. In my view, that is going to increase the number of people who feel safe about getting down to Dunsborough and so on quickly. All we are doing at the moment is transferring the bottleneck from Mandurah to Bunbury. If they would only say, ‘Look, as soon as we complete the middle section of the bypass we’ll do the two ends of the bypass’, we would be more than happy. That is probably seven or eight years away. Otherwise, there will be frustration because we know the metropolitan area has 78 per cent of the population and therefore consumes 85 per cent of the state government’s resources, but we are the most centralised population in Australia.

Sydney comprises only 62.5 per cent of the New South Wales population. Perth is 78 per cent of our state population. Seventy-five per cent of the growth of the population in WA, despite the mining industry, is occurring in metropolitan Perth. We have to develop our regional cities. The southwest is the place where people want to live and recreate. We are the obvious centre that should be doing it. Queensland has seven regional cities with a population of over 100,000. Mandurah is the largest regional city, but it is really a metropolitan outpost. We are the second largest.

Mr RANDALL —We will see if they say that tomorrow.

CHAIR —I am sure they will not. Do any other councils wish to address that last question?

Councillor Dilley —I concur with Mayor Smith’s comments. For your information, I printed out a map this morning of the current AusLink roads. I will pass that over. As Mayor Smith said, one of the big issues that we have is that, from my understanding, there have not been any new AusLink roads designated in WA for perhaps about a decade.

One of the roads that concerns greatly me runs through the shire of Donnybrook-Balingup. It is the South Western Highway between Bunbury and Manjimup, and obviously right down to Manjimup as well. In the last 12 to 18 months the RAC—a very reputable organisation—rated that as probably the most dangerous highway in Western Australia.

Mr NEVILLE —Which one was that?

Councillor Dilley —The South Western Highway between Bunbury and Manjimup. There is a particularly bad section going from Manjimup down towards Walpole and Albany as well. There is an enormous amount of traffic on it, particularly from woodchip trucks. That is not going to lessen. There might be a temporary hiccup at the moment with the demand for woodchips, but there is certainly an enormous amount of resource out there that has to find its way to the Bunbury port. That brings us back again to how critical the need is for the increased ship berths at the port and also the road and rail links into there. That is absolutely critical. In particular, if the South Western Highway between Bunbury and Manjimup were made an AusLink designated road it would open up an opportunity to get that upgraded and make that a much safer one.

Likewise, I suspect that probably Councillor Hartley and Councillor Harrison, from their two shires, would have a very good argument that AusLink should be extended from Bunbury right through Bussel Highway down to Margaret River as well, which is a very busy route, more so from tourism than perhaps from the business and commerce on the South Western Highway. AusLink is a very important funding opportunity that is currently not there at the moment.

Councillor Hartley —As the shire president of Donnybrook-Balingup has alluded to—and I am sure the member for Forde will understand this—we are really where southwest Queensland was 20 years ago. People were in denial for about a 20-year period as to the extent of growth. The difficulty we have is that the neighbouring local government authorities, particularly in the southwest and to a lesser extent Capel, but certainly Busselton, Augusta and the Margaret River, do not have a port and we do not have any secondary industry to speak of, so therefore if we are looking at infrastructure into the future and how the economic downturn might affect that, I know the member for Forrest has taken quite a deal of initiative because the shire of Busselton, as well as the Augusta-Margaret River to a certain extent, is developing a centre for excellence in education, with growth particularly in the private school sector and our sector, in addition to the need to expand tertiary education across-the-board not dissimilar to some of the regional universities like New England, which we used as an example, based in Armidale. This is essential if we are going to create that quality and depth of employment opportunities into the future. It is not a matter of just manual or primary industrial sector jobs. We also have to create a framework of tertiary industry and our expertise will possibly be in the tertiary area—not that we are going to be a Silicon Valley into the future. But certainly the growth of that style of expertise and people choosing a lifestyle place where geography is not important to where they conduct their business from, are going to be some of the critical issues that we are going to face if we are going to create an employment base and not just a massive unemployment base in a time of economic downturn.

CHAIR —Every council area, my own included, is desperate to get their road infrastructure on to AusLink. The Commonwealth is seen as having the largest source of money. Why should the Commonwealth fund this road? Why is it a Commonwealth responsibility and not a state responsibility?

Mr RANDALL —Before you answer, the real term on this is ‘cost shifting’—shifting from the state government to the Commonwealth.

Mr Smith —The real reason is because the AusLink program was meant to be the transport to the export ports, and Bunbury is one of those.

Mr NEVILLE —There are two qualifications for roads. The first one is that it has to be a major arterial road in the national network. Just looking at this map, I would think that you would have a case of some extension to Albany, on the basis that it would take you from the top of the state to the bottom of the state. The second qualification, as you have just said, is access to the major export ports. But like the chairman said, I have a half a dozen roads in my electorate I would love to have designated as AusLink, but the reality is that the government is not going to do that. They will do the Bruce Highway up through my area and when I had Gladstone in my electorate they would do all the port connector roads to Gladstone, but you cannot just say, ‘This road’s difficult. We want it nominated as AusLink’, you have to craft a case. I think as to one of roads you mentioned earlier that feeds into it, you have this $80 million coming up, have you not? It is the one that we found in our last inquiry down here. Do you remember that?

Mr Smith —Yes.

Mr NEVILLE —That is being dealt with now. Now you are saying that for that to work efficiently you have to get a northern and southern connector around it. Is that the idea?

Mr Smith —I should point out that the $80 million is the port access road and the bridge across the Collie River. The federal government has recently fast tracked the second stage of the port access and the first stage of the Bunbury bypass. We are not only getting that $80 million, we are getting an extra $160 million on those secondary works.

Mr NEVILLE —My argument would be with those northern-southern accesses that you say are going to just shift down from Mandurah into Bunbury as bottlenecks that you argue them as part of the efficient use of the port. Then I think you would have a case. But just to say, ‘We want this road as an AusLink and that one as an AusLink’, it is not going to happen like that. You can certainly move the chess pieces on the table quite a bit and argue your case for the extension of that $80 million north and south, but I do not think it would cover whole new sections of road on other highways. You can probably argue the Collie set-up—the road and the rail—on the basis that that is access of a major commodity to a port, but I do not think that some of the ones that you have put up to us today, with my limited knowledge of the geography, would be a goer. I am not saying that to be a wet blanket or to be negative, but as Mr Randall says, it would be perceived in Canberra as a cost shift unless you can argue a case for each of those.

Councillor Hartley —The analogy that I would use is that if it was Queensland it would be from Brisbane up to the new Sunshine Coast in terms of the degree of development and scale, and also the road would not be dissimilar from the Oatlands Highway between Launceston and Hobart, where they are essential commuter roads. Economically, do they do anything because there are ports at either end? No, but it is the road that everybody has to use because that is how you get from A to B? That is a different question and that is part of the difficulty.

You would have travelled all of those roads to get down here. As soon as you pass Capel you are on a single lane road with some passing lanes, and as you move from Busselton to Augusta-Margaret River it is an even narrower road. On the state government’s projections with Main Roads, they believe the population does not warrant an upgrade to a dual highway until 2025. This is the sort of mentality thinking that we are working on, which is not only creating a restriction to infrastructure growth but also an ongoing risk to life and limb.

CHAIR —What is the volume of freight that is using that road?

Councillor Hartley —It is huge because of all the mines.

CHAIR —What is the volume?

Councillor Hartley —The current vehicle movements are estimated at 20,000 a day between Bunbury and Busselton. I am not quite sure; I do not have the figures from Busselton.

CHAIR —What about in terms of trucks?

Councillor Hartley —Of those, trucks would probably constitute at least 15 per cent of that traffic. That is huge, particularly when they are slow moving 30 tonne trucks pulling out on to the major highway in the middle of passing lanes and so on. That is part of the dilemma we have. If that style of development is going to increase and we are going to have a meaningful transport infrastructure, with the absence of rail or anything else, then we have to look seriously at it. Our CEO also wants to make some comments.

CHAIR —Of course.

Mr Macnish —I have just a couple of points to add to what people are saying. Divided we fall and united we stand. Roads are connecting our communities, but so does the port. It is a very important piece of infrastructure here. And also our airport and, I might add, the world famous Margaret River brand. There are some very strong, if you want to call them, infrastructure assets that couple together to create a very strong South East Queensland in 20 years time kind of argument. We are looking as a region for this to be taken seriously now so that we can learn from that experience of the past. There is also the social infrastructure involved down here—with a lack of a tertiary institution there is a massive investment of our community into our children. My eldest two are now in uni and I am missing them terribly. My youngest two are just about to go to uni, and then I am off.

Mr NEVILLE —Do you not have any regional campuses at all?

Mr Macnish —We have very limited stuff in Bunbury. Mr Punch is at the back, who can add to that.

Mr Smith —There is a regional campus in Bunbury.

Mr Macnish —How do the kids get there? There is no public transport.

CHAIR —We might go to some of that university stuff.

Ms PARKE —Councillor Harrison has something he wanted to add.

Councillor Harrison —I will steer clear of the roads, excuse the pun. I would like to pick up on the broad point of your question about what we can do now to invest so that there is sustainability in terms of employment and economic moves for the future. This may be particular to areas where the affordable housing issues are more important, but that investment in construction is absolutely vital. We have a situation now where there is very little being built. There is a huge demand. There is a big increase in immigration into the state. There is quite a major issue arising, if it has not already arisen, and a perfect storm about to appear as to what is not being built and what the demand is, and people not being able to get into the housing market in the first place. Whether that is state and/or federal, that investment in keeping the construction industry moving along in terms of housing and other forms of construction and accommodation is absolutely vital to get us through this period so that we are not left with a major problem when the economy picks up again.

Just to pick up on what has been said about tertiary education, yes, there is a campus. I must state an interest here, that I am a research student at the Margaret River campus. There is a wine excellence centre there. It is not just Curtin University’s Wine Excellence Centre, but there is an excellent tertiary campus, which is a combination of TAFE, Curtin and Edith Cowan, but that kind of investment in the future is obviously vital. If we can invest in things specific to the area, and not trying to repeat through regional campuses what the main campuses do, we have a real chance of success. That is why the Margaret River campus has been particularly successful with its wine and viticulture research and teaching, which is now being branched out into value adding in food. We need to focus on those things that are very specific to the southwest in terms of the agricultural, viticultural, tourism and leisure aspects of our area. If you do that you can make a regional campus work really well. If you just try to repeat what is happening in the major metropolitan centres we will always struggle with the regional campuses. That investment in tertiary education in Busselton, Margaret River, Bunbury and elsewhere is critical for the future.

CHAIR —Mr Smith has a final point on this overall issue.

Mr Smith —The question that has always puzzled me is why South East Queensland does so well in terms of federal funding. I have finally woken up to what it is. It is the southeast regional cooperation between the federal, state and local governments. The second area where encouragement is required is to press the states about the need, in all the regions, to be working cooperatively between local government, federal government and state government in the way that South East Queensland does. I used to think it was because it had National Party members and it is just the luck of the game.

Mr NEVILLE —There is a bit of that.

Mr Smith —There is $107 billion of capital investment going into South East Queensland on an agreed program and funding arrangement between the state, federal and local governments.

CHAIR —That is obviously interesting in terms of Queensland. What is the cooperative arrangement between each of these councils? Do you have a united view about what the most important infrastructure projects are, whether they be social or economic, for the south-west region, that you can put to us as a group of councils that represent the southwest?

Councillor Dilley —There is the southwest local government association, which encompasses the 12. Certainly from an economic point of view it is quite unique. There is the Bunbury Wellington Economic Alliance, which does not include the shires of Augusta-Margaret River and Busselton, but it does include Collie, Bunbury and the shires that are in the hinterland where a lot of the issues with the port are. Our two or three top priorities are obviously getting some more berths built at the port and the access roads and rail into that. That is the critical driver of economic employment and development in the southwest.

CHAIR —Should we go away saying the most important economic development for the southwest is the development of the port of Bunbury and its access roads?

Ms PARKE —And rail.

Mr Smith —I want to emphasise that South East Queensland cooperation model. It is interesting that South Australia has just appointed a formal Liberal Premier to do that precise thing in South Australia, to get the regional partnership groups and the development boards they have in South Australia to work cooperatively together. If I can convey any message at all, I think the South East Queensland model stops the cost shifting. It gets everyone at the table so no-one can avoid stating what their priorities are and where the money might come from. It is a model that ought to apply right across Australia, but especially in the rapid growth areas like the southwest.

Mr NEVILLE —I think you do the three levels of government a greater compliment than they deserve. One of the reasons there is a great deal of activity around that south-eastern corner is that you have the convergence of three national highways there. You have Highway 1, the Pacific Highway, coming in to Brisbane. You have the Bruce Highway, Highway 1, going out of Brisbane and through the Sunshine Coast. You then have the New England Highway coming up into the Cunningham Highway and coming down through Warwick. That then comes through Ipswich where all of that activity is.

I am not trying to pat ourselves on the back, but I think the federal members in South East Queensland, in particular, are very assiduous in their duties on roads. That is on both sides of politics. In the last parliament Bernie Ripoll, the member for Oxley, and Cameron Thompson, the member for Blair, both had a vision of what the road should be into Brisbane. Both were very good projects and the government has since decided to go with Mr Ripoll’s project. The point was that those two guys had a vision and were driving it. That is very much a part of doing that.

When I had Gladstone I used to fight continually with both the federal and the state bureaucrats. I think what you have to do, as the chair inferred, is get your councils together. Do you have the ROCs over here that they have on the eastern seaboard? Do you have the regional organisations of councils here?

Mr Smith —Yes.

Mr NEVILLE —You need to get the ROC for this area and craft a case for what are genuinely and arguably AusLink links and go after that. You will find that you may not pull off every one that you have discussed with us this morning, but you will pull off quite a few of them.

Mr Smith —As Councillor Dilley indicated, we have zone of the 12 shires, we have the Bunbury Wellington Economic Alliance of the six local authorities around Bunbury and we also have the South West Development Commission.

CHAIR —We are hearing from them next, so that will be helpful. Councillor Hartley, just briefly on this point and then we will move on.

Councillor Hartley —I am conscious that time is eluding us. I think the key area, certainly from our local government authority, is the regional approach, because that is where funding is going to come from in the future from state and federal levels. How that is achieved is an issue that we will visit on another day. I will try to deal in analogies. I believe we are at where Tasmania once was. If you fly to Tasmania you are only going to Tasmania; otherwise you are going to the South Pole. In the southwest of WA it is a similar end of the world-type scenario, but in the next 25 years we are going to have a population in the southwest the equivalent of the entire state of Tasmania. What we cannot work out is, for example, if I fly into Tasmania I have the choice of an international airport at Launceston. There is the secondary airport at Wynyard. There is another one at Devonport. There is also an international airport at Hobart. They were industrial based. They switched that over to tourism, which is effectively where we are heading in terms of how it supports its tourism structure. We do not have anything like that. South African Airlines, for example, has to carry enough fuel to fly to Adelaide because if you cannot land at Perth that is where you have to head.

We are serious about trying to promote the second airport for Western Australia here not only from a tourism point of view but also from developing our regional tourism aspect. Again, in Queensland, the Gold Coast and other regions have airports, and this has been done effectively. In addition, there is a security point of view. Perth Airport is so landlocked that, if we were ever under a crisis for whatever reason we have no significant secondary airport in an emergency situation. We have the runway here that can land jets already. It is just that we do not have the infrastructure to develop it. We could develop the way Coolangatta and other regional airports have developed. We also have the environmental issue that not everything should be on roads. We have to look at why Queensland has developed its road structure. It is because people want to live there. We need to be able to access that. At the moment we are effectively being denied the style of resources that South East Queensland, and certainly Tasmania in more recent years, has been able to experience, and that is going to be critical to infrastructure and developing employment.

Mr RANDALL —Building on the airport, which was one of the points I wanted to ask about, we have heard what you have said, but what do you need to make it a secondary airport? What infrastructure investment do you need?

Mr Macnish —It needs a bit of resurfacing. We can handle that. It needs extension. It needs land acquisition to take out only four or five farms around it where we are having significant noise regulation issues. Ideally it needs land acquisition to create an east-west runway so that when the full-on westerly wind blows off the ocean here we do not have the cross-wind like on the existing runway. You do not want planes coming down and having a problem.

Mr RANDALL —Who are you looking to for that sort of investment? Would it be state or federal funds?

Mr Macnish —We think it is a federal issue.

Councillor Hartley —It is a state issue, but in the national scheme of things from a provision of infrastructure issue we believe it is a national issue.

Mr RANDALL —Just to get it on the record, in terms of this committee’s terms of reference, you would like to see federal investment in a secondary airport?

Mr Macnish —It also creates industry, jobs and freight.

Mr RANDALL —Is it true that it is being looked at as a hub for fly-in fly-out workers?

Mr Macnish —Absolutely.

Councillor Hartley —It is already used for that. It has taken off and would expand dramatically. It also takes pressure off Perth Airport. Its infrastructure is hopeless, as we all know, particularly for those who fly into Perth Airport. I do not mean that in a negative sense. It is just the sheer volumes of increase and the location of the airport. It can only expand in a frame of reference. If we do not develop something in terms of infrastructure that has a less Perth centric character about it, we are going to be detrimentally affecting our future development. That is partly the issue.

Mr NEVILLE —What is the asking figure on this airport?

Mr Macnish —Which aspect? In what sense?

Mr RANDALL —What would it take to bring it up to that level? Do you have a ballpark figure?

Councillor Hartley —We have the material downstairs. We can get that person up here very quickly.

Mr RANDALL —We can put that on notice.

Mr Macnish —If we are looking at the global effect of China and India churning out millionaires by the week, they are going to want to spend their wealth. They are going to want a holiday. They are going to want to drink Margaret River wine and come down to God’s own place down here. In flying time you cannot get people from Europe; it is too far to travel on a plane. So, they will come from China and India. If we can land them in Broome where there are some Customs facilities. Most of them or a lot of them will want to get off in Broome, or certainly for six months of the year they want to get off in Broome. Once they are in the country we do not have to invest in Customs facilities down here; they would just fly down here, land at our airport and for the rest of the six months they enjoy what we can provide.

Mr NEVILLE —How far is the airport from Perth?

Councillor Hartley —It is 220 kilometres. With the economies of scale and a new South West Highway, currently where the airport is located is the geographic centre of the shire of Busselton, but within a 40 to 45 minute driving zone you can encompass all of Harvey, Bunbury and the southwest, including Augusta-Margaret River. The difficulty we have is that if it is delayed for too long, and with the increase of the superhighway that is going to go between Bunbury and Perth, people will toss a coin and work out that for an extra hour they can go to Perth. We are trying to stop the lugging up of the roads, because as more and more people live down here, if we have do not have that framework to operate directly, we are really going to create an infrastructure problem into the future that we cannot handle.

Mr RANDALL —Mayor Smith was gracious enough to refer to the Perth to Bunbury Highway, which as you know some of us fought very hard for that funding. I will make the point, which I am sure has not been missed, that because it is not an AusLink road, as many of the members sitting here will tell you, we have to fight very hard on behalf of infrastructure in our electorates or in our areas. For example, if you go through the seat of Hinkler you will find the roads very good there. They used to call them the roads of National Party importance. The fact is that road should be open by the end of June rather than July, and at the end of the day, as much as it is going to cause a bottleneck down further, at least it is getting the economic pull into this region. Mayor Smith, I have had representations in Canberra from Perdaman Industries, who you have mentioned, Griffin Coal, and one of their economic impediments to further investment is the emissions trading scheme. Do you have any views on that?

Mr Smith —It depends upon your view about global warming. I am not a sceptic. I believe it is happening. It is a major issue in WA because all of us live on the coast, and especially for Bunbury. We honestly believe that we have to do something about our part in fixing the problem.

The message I am getting from major industries in my region who are affected by it is that they would prefer certainty rather than uncertainty. The one thing that the current scheme is doing is giving them certainly so they can ascertain what their position is and the actual impact upon them. I am quite close to one of the majors and their advice to me is that they can live with the ETS. I understand that Woodside is really in the same position. I think that is what companies really need. In terms of forward planning for their own capital fundraisings and expenditure they need certainty. While it continues where effectively there is no scheme and no-one has certainty it is very hard to make those forward commitments. The advice I am getting from industry in my region is, ‘Just give us certainty and then we can decide whether we can live with it or not and we can plan to cope with it if we’ve got the resources to do it.’

Councillor Harrison —This a side part to your question. One of the things that we should look at very closely and is being looked at now is the fact that the southern part of the southwest area is probably a premier point for wind and wave energy sources, and investment is required to get that over the threshold and going. Verve Energy is putting in an Albany-sized wind farm on the south coast where Nannup meets the Augusta-Margaret River Shire. You can look at the energy maps of potential wave power. There is an infrastructure requirement, though, in relation to transmission so as to get the power from there, but there is an amount of potential power there in relation to wind and wave power, and the technology now exists through the company which is trialling off Fremantle. Those things coming together now are of major significance. I do not know enough about the state-federal relationship as to whether or not that is a state and/or federal issue, but it seems to me a major issue of importance for the economy of the region.

The one that is being put in on the Nannup south coast will create enough energy to service almost the whole of the south west’s residential power. The source of power there is amazing, and we are not making enough of that natural power. I am not saying that this is instead of our traditional power. It is a combination, or it is complementary.

CHAIR —Thank you. I know we have covered a wide range of issues. I would like the councils and shires to make a brief concluding comment. I am conscious that Mr Neville has a brief comment on the AusLink issues.

Mr NEVILLE —I think you would have a very good case. You made a very good point. The end of the road thing in Tasmania gets the treatment from Launceston to Hobart, in fact, from Burnie through to Hobart as the equivalent of Highway 1. They do get that treatment. I do not know which route the councils would prefer to extend from Bunbury down to Albany, but I think you would have a very good case for that on that same basis.

The second thing is that on the Sunshine Coast the federal government did not build the second artery. The second artery, the one through the middle of the Sunshine Coast, was built by the state government. They tried to impose a toll on it and there was a jack-up on the Sunshine Coast. They said, ‘This is basic infrastructure. We should not be paying toll money for basic infrastructure’ and people actually boycotted the road for about six months until the government lifted it. That was built by the state government. The Bruce Highway is certainly federal government.

CHAIR —Thank you.

Mr NEVILLE —Can I move that this be taken on the record as an exhibit?

CHAIR —Yes, you can move that it be taken as an exhibit. I would like each of the councils to make some concluding comments, in terms of the sorts of recommendations or the sorts of messages you want this committee to go away with. Have I covered all of the issues, Ms Parke? You look as though you have a burning question.

Ms PARKE —I was just wondering about the lack of love from the state government for the southwest region, as I am hearing from the evidence here, particularly given the fact that there are some senior ministers within the Barnett government from the southwest region. Are there movements within the state government that you know of to attend to some of these issues?

Mr Macnish —I heard one of the bureaucrats on this table say—I will probably get shot for this—that it is hard to love someone who does not love themselves. As I see the southwest region, with the 12 shires or local governments that comprise it, they just do not get on as well as they should. There is a lot of individual stuff and it takes a realisation at gatherings like this where the serious money is to reinforce the point that our shires should be arguing strongly for the Bunbury port and strongly for the Margaret River branding—this sort of thing.

CHAIR —Thank you. That was helpful, because we were getting a sense of that. That is why I asked the question.

Mr Smith —I want to refute that point of view.

CHAIR —We are not really here to have a dispute between the councils.

Mr Smith —We have the Bunbury Wellington Economic Alliance and close liaison between the local authorities. The only reason there is any occasional sort of ill feeling is the amalgamation work. We make no secret of it. We think Bunbury should be one single local authority and not four, so that creates tension. Otherwise we are unanimous in Bunbury amongst the local authorities.

CHAIR —You have just made Mr Macnish’s point. Thank you.

Mr Smith —The No. 1 priority from all the local authorities in our region is the completion of the Bunbury bypass. No. 2 is the port. No. 3 is the rail. No. 4 is the servicing of our major proclaimed industrial parks in Kemerton, Coolangatta and Shotts.

CHAIR —Is the airport not on your agenda?

Mr Smith —We absolutely agree the airport should be either in Busselton or in Margaret River and we will leave it to those two to sort out. We have a local airport in Bunbury that is very busy, but it will never be a regional airport.

CHAIR —Thank you. Did anyone want to answer Ms Parke’s question around state government or will we let that go through to the keeper?

Mr Smith —Locally we have the state treasurer as the member for Vasse. In this community where you are today we have the Minister for Agriculture and Forestry, Mr Redman, and we only have one state Labor lower house seat in the whole region. We do not have any federal seats other than Liberal federal seats. I have to be honest, it may be because I have a Labor background, but I have difficulty getting on the same wavelength as the state government or attracting their attention. They just seem absolutely focused on the Mid West, North West and Kimberley. I think they should be, but they should also have some focus on the southwest region. Given the number of ministers and political representation that we have from the state government side, I just find it amazing that we are getting as little attention as we are.

CHAIR —Thank you.

Councillor Harrison —I would like to go on record about an announcement only yesterday of $500,000 being spent on engineering and planning work for our Margaret River bypass. Certainly from our perspective in Margaret River, we are getting excellent support from our local member, Mr Buswell, and also from our other local member further south in Augusta, Mr Redman. Mr Redman and Mr Buswell are certainly providing excellent support and understanding of our issues. There just seemed to be a wave of comment going in one direction and I just wanted to balance that out.

CHAIR —Thank you. That is helpful. We might leave it at that point. I think that is possibly an unhelpful area for us to get into. Are there any final comments? I would ask you to be brief given the time, as our next witness is here and waiting.

Councillor Hartley —The Deputy Chair picked up on the essential nature of the analogy model of Tasmania. I believe that if we were receiving the degree of attention that Tasmania has experienced in the last 20 years in reinventing itself a lot of the difficulties that we are discussing would be over. The key areas are in education and transport, particularly an airport. If those analogous comments could be made in terms of comparison and population, I think we would have a more finely understood model for people to work on the other side of the continent. Thank you.

CHAIR —Thank you. Councillor Harrison.

Councillor Harrison —I think the area works very well together. Mayor Smith summed that up very well. Also, as a board member of the South West Development Commission, I am glad that we are going to hear from Don Punch, the CEO. In relation to the priorities of the area, if you take the bigger picture, there is no doubt that the investment in the port and the road infrastructure which goes with that in Bunbury is the most vital thing for the southwest. Bunbury is our capital in the southwest. It is the vital main centre. Even though it is very tempting to look at your own patch and say, ‘This road here or this project is important to us’, clearly I do not think there is much doubt about the fact that the investment in Bunbury and bringing Bunbury up to that standard in relation to the whole infrastructure is vital, as is a regional airport. I think the Margaret River Airport at Busselton will be excellent when it gets up and running.

Those are major priorities. But in relation to looking at that, in terms of our focus on Bunbury and that priority, we need to be aware how that shifts the road issues down south. What you have done as a group in relation to the Manjimup bypass and the Bunbury road from Perth is excellent. The next stage, in terms of the Bunbury investment and the bypass around Bunbury is vital, but there needs to be an understanding that that actually moves the impetus, the congestion, the danger and all of the traffic down into an area that is almost entirely unprepared for that volume of traffic. Thanks to your fantastic work in getting that Busselton bypass in place, there will now be a number of people who will come for a weekend rather than a long weekend, so that is going to immense. The deaths on the Bussel Highway will increase even further. Between us, the South West Highway and the Bussel Highway, we have two of the most dangerous roads in WA and the fatalities there are really unacceptable.

Councillor Hartley —The black spot capital of Australia.

CHAIR —Thank you. Mayor Smith, would you like to make a concluding comment?

Mr Smith —No. I thank you for coming and I am sorry if I have seemed preoccupied.

CHAIR —Not at all. It is hard to get through so many people. It is wonderful to hear so much passion about a region. It has just been terrific. Councillor Dilley.

Councillor Dilley —I would like to pick up on a question that Mr Randall asked about regarding the emissions trading scheme. My take on it is that I am probably still a little bit of sceptic, unlike Mayor Smith, but my word of warning there would be to be very careful. I have been involved in agriculture all my life and travelled the world fairly extensively as well. I have seen a free trade agenda, if you like, where we have basically reduced tariffs and got free trade agreements everywhere. A lot of our industries—agriculture being one of those—are fairly high cost producers. I would be very worried about any kind of emissions trading scheme that made our big miners and our big export companies uncompetitive.

Also, I have seen with agriculture that same free trade agenda. We are out in front leading the rest of the world and we look around and they are not following us. That is a real worry for me with the emissions trading scheme. That is the danger, if we go charging off ahead leading the rest of the world and they are all sitting back there looking after themselves. That is my word of warning.

I have made this point fairly strongly, and I know the CEO of the Bunbury Wellington Economic Alliance will be making a presentation shortly. He will emphasise the importance of the Bunbury port and the rail and road links. That is absolutely critical for the southwest.

Just as an aside, prior to the state election, the Bunbury Wellington Economic Alliance developed a list among all of the six shires and the big businesses involved in that. We said, ‘What are the things we want?’ We had a list with about 50 or 60 things on it, but when you look at it now it is probably a bit of a joke. Just after the state government got into power we went through and said, ‘Let’s get serious about this. What are the four or five most important things on there?’ All of us, the shire presidents and mayors, sat back and dropped off a lot of our own individual cute shire projects and came down to the important ones. No. 1 was the port. No. 2 was the port access road. I think that is a good process to go through.

CHAIR —Thank you. It is certainly helpful to hear that. I would like to thank you all for giving evidence here today. You will receive a proof transcript of the Hansard to which you can make editorial changes only, if we have spelt your name incorrectly or things like that. If, after this, you do wish to make further submissions you would be most welcome and can write to the secretariat to do so. We may have some further questions as well that we may put to you.

Councillor Hartley —We would like to have our airport submission tabled as evidence.

CHAIR —I do not think that we have received that yet.

Councillor Hartley —We will bring it up before you finish today.

CHAIR —I would also like to thank the shire for hosting us here today. Please thank your staff for the excellence facilities and looking after us as well. Thank you.

[10.35 am]