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Building a stronger regional Australia, Outlook Conference, 5 March 2003.

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Speeches AS01/2003 05 March 2003



I take the opportunity to speak at Outlook very seriously. It's a chance to discuss the Government's policies in detail with Australia's top rural decision makers.

Four years ago, I warned that Australia was in danger of fragmenting into two nations: prosperous cities and slowly declining rural communities.

The Government is not allowing it to continue. Regional Australia is just as important to our country's future as Sydney or Melbourne. It pays our way in the world and is the foundation of our national identity. After all, there are no famous ballads about The Man From Parramatta River.

The Government is building a stronger regional Australia through the policies that have made this country one of the best performing advanced economies in the world. We are working in partnership with regional communities through the Stronger Regions framework and increasing investment security through the development of stronger land and water property rights.


However, our long-term economic future will also be powerfully affected by international terrorism and the threat of Iraq's weapons of mass destruction.

There has been extensive discussion about the economic and trade consequences of a possible war in Iraq, if Saddam Hussein does not disarm peacefully.

There has been much less discussion about what would happen in the long-term if the international community fails in its resolve.

It would send a message that rogue states could develop weapons of mass destruction with impunity.

In addition, there would clearly be the potential for Iraq to provide chemical and biological weapons to terrorists in the future, given its history of support for terrorism.

I ask you to consider the long-term consequences of the spread of these terrible weapons to other states and possibly to terrorist groups.

It would lead to increased arms spending, uncertainty and fear throughout the world. There would be an enormous impact on trade and travel.

Most importantly, it would lead to human suffering on a scale that we all hoped we had left behind in the 20th century.

The Government is determined to avoid this grim possibility. We have used every gram of influence we have to encourage the United Nations to take a resolute position against Iraq and to persuade Iraq to disarm peacefully.

The world cannot allow this issue to go unresolved. History has shown that if we do not take resolute action against dictators we will just face a bleak future and harsh decisions tomorrow.

Despite the international situation, we are maintaining our focus on our domestic priorities.

Economic policy

The OECD has confirmed that our policies have made Australia one of the best performing advanced economies in the world.

- The OECD forecasts that the economy will grow robustly next year, at 3 ¾ percent.

- We have created more than a million new jobs since March 1996.

- We have paid back $61 billion of Labor's $96 billion Commonwealth debt. As a result, Standard and Poor's have upgraded Australia's credit rating to AAA again.

The Government will press on with our reform programme to maintain Australia's sound economic position.

I want to make it very clear that our reform programme does not include abolishing the single desk for wheat exports. It will continue as long as it benefits Australian wheat growers and our export performance.

Regional policy

Our reforms and good management have boosted Australia's economic performance, but we recognise that some communities are struggling with the effects of social and economic change. Our Stronger Regions framework aims to support these regional communities and enable them to build a stronger future for themselves. It's a partnership.

The centrepiece of Stronger Regions is the $100 million Sustainable Regions Programme. The programme is currently enabling eight prototype regions to develop their own regional priorities and then fund local solutions to address them.

For example, the Gippsland Sustainable Regions Advisory Committee developed a list of priorities that included upgrading the local port infrastructure. As a result, it has allocated 10 percent of its budget to redeveloping the port at Lakes Entrance to make it more useable and to make the town more attractive.

The Government runs a series of other regional programmes, such as the Regional Assistance Programme and Regional Solutions.

They are highly effective but they predate the partnership approach that we adopted in the Stronger Regions package.

We have decided to integrate these programmes, except Sustainable Regions, into a single package that will start in July this year. No existing grants or applications will be affected.

The new package will strengthen the role of the Government's network of Area Consultative Committees. It will ensure that all of the projects funded under the package are well-developed and consistent with the local priorities set by each region.

Natural resource management

Warren Truss has already provided you with an extensive briefing on our response to the drought.

The Government is continuing to monitor the drought and is planning ahead for the possibility that it could continue.

We are working to reform natural resource management, which is absolutely critical for the future of regional Australia.

Last year, I outlined our reform principles to you: information, partnership, incentives and property rights. Of these, property rights is the most important.

We know that a secure system of rights will encourage investment and innovation.

We also know it would lead to good environmental outcomes because it would enable landowners to plan sensibly for the long term.

It is also an essential prerequisite to carrying out increased environmental flows in the Murray under the Living Murray initiative.

I am very pleased with the growing level of support for stronger environmental property rights, including from the Wentworth Group of Australia's leading environmental scientists.

The Government is pushing ahead with the first step in our new approach, which is to work with the states to reform their water


The existing regimes are unfair and impose the full cost of meeting the community's environmental requirements on the farm sector. They do not provide farmers with compensation for the reduction in water allocations that is occurring as the regimes are implemented; nor do they provide investment security for the future.

In a recent issue of the Law Society Journal, Katherine Gardner pointed out that the NSW Water Management Act does not provide investment security:

- The NSW water minister can vary the bulk access regime in a water-sharing plan at any time, which significantly undermines the security and value of access licences.

- The Act does not provide an automatic right to compensation for a reduction in water allocations. The NSW water minister has the power to decide whether or not to pay compensation and what the amount should be.[1]

Last year, COAG released a consultation paper on reforming water property rights, which was prepared by the Water CEOs' Group.

I want to emphasise that the CEOs' Group paper is a contribution to the water reform debate, not the outcome of it.

The Federal Government has released our own set of principles on water property rights. They are much more definite than the CEOs' paper and I regard them as the minimum acceptable blueprint.

Our principles include:

- Defined and guaranteed access rights, with any decision to reduce the consumptive pool during the term of a plan being compensable by the states.

- Measures to encourage water trading, which is critical to ensure that water is used as efficiently as possible.

- Adjustment assistance for individuals and communities facing reduced water access due to the transition to sustainable water regimes.

We will pay the states $2.5 billion over the next three years in National Competition Policy payments.

I reiterate that we will, if necessary, revise the competition policy system to require the states to recognise the legitimate water property rights of farmers and their communities.

The Government is also looking closely at the way the states manage native vegetation.

Land clearing in Queensland is one of Australia's major natural resource management problems.

The Queensland and Federal Governments are currently discussing how land clearing could be better managed. We have an interest in Queensland land clearing because it raises greenhouses, biodiversity and potential salinity issues.

The Government is prepared to make a substantial contribution to the cost of meeting the first two objectives and has already made a substantial commitment to the cost of addressing salinity under the National Action Plan.

We have not reached any agreement with Queensland. We will not enter into an agreement without first holding discussions with Queensland farmers and their organisations. We will not enter into an agreement unless it is fair to farmers and their communities, including the provision of adequate compensation and adjustment assistance.

In New South Wales, the Native Vegetation Conservation Act has had a disastrous effect on the farm sector. It has reduced property values by 20 percent without any measurable gain for the environment.

Last August, the NSW Auditor-General released a devastating performance audit on the Department of Land and Water Conservation. It concluded that:

- DLWC did not have an adequate information system and operational capacity to regulate native vegetation efficiently and effectively.

- Its staff used different versions of its land clearing guidelines across the state, which would have resulted in inconsistent and unfair decisions.

- The department comprehensively failed to meet its Customer Service Guarantee, which required it to assess applications within 40 days. The average time to assess a land clearing application

was 160 days.[2]

I believe the NSW government must adopt clear rules for protecting native vegetation that recognise landholders' property rights and provide them with proper incentives to protect the vegetation on their land.

The NSW Coalition has released its policy on native vegetation, which meets these requirements. All we have heard from the Sydney Labor Government is a promise to release a plan by the end of April - five weeks after the election.

They are simply not interested in this most important issue at a time when there is growing agreement that secure property rights are the indispensable first step towards improving Australia's natural resource management.


Our campaign to establish secure land and water property rights is gaining momentum and will create enormous benefits for Australian farm businesses.

For example, it has been estimated that the combined effects of secure rights and water trading in the southern Murray-Darling basin could improve the value of production by a third. Just imagine the difference it would make to its communities and export potential.

It will also result in better environmental outcomes, and for a very simple reason: people look after their own property, because it is in their own self-interest.

I believe our work on natural resource management and investment security will prove to be one of our most important regional development initiatives, along with Stronger Regions and the regional effects of our broad economic reforms.

These policies are working and they will, under this Government, build a stronger regional Australia.

[1]Gardner, K. 'Worried About Water?' in NSW Law Society Journal. December 2002. Pages 60-63.

[2]NSW Audit Office. Department of Land and Water Conservation: regulating the clearing of native vegetation. Sydney, 2002.

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