Distinguished guests, parliamentary colleagues, ladies and gentlemen.
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1 Developing the Territory Keynote 16/06/14 Developing the Top End from the last frontier to the next frontier. Chief Minister Distinguished guests, parliamentary colleagues, ladies and gentlemen. The frontier days are over. Settling the Territory claimed many lives and created many legends in its early years and it is a proud history that the rest of Australia claims as its own. But the days of the last frontier are over and a new and much larger opportunity has opened before us. Just to our north are many of the world s key economies including China and India. All are going through an unprecedented period of growth. Page 1 of 18
2 China will have over 90 million households with middle class incomes within the decade. By 2022, Asia is forecast to have 21 of the world s megacities, metropolitan areas with more than 10 million inhabitants. It s estimated that two thirds of the world s middle class will live in the Asia Pacific Region by Indonesia s population alone is estimated to reach 253 million this year. The demand for energy, food, raw materials and consumer goods will be unprecedented in human history. It is an emerging market that the whole of Australia wants to invest in and the Northern Territory sits right in the middle of the country perfectly positioned to become a trading hub into and out of the region. Page 2 of 18
3 Darwin is Australia s northern most capital city which puts Darwin within four hours of 8 capital cities, 36 trading ports, 69 international airports and nearly half a billion people. On the wall in my office I have a map showing the Territory s proximity to all those ports. Every day I look at that map and ask myself how can this benefit everyone in the Territory. How do we create jobs, business opportunities and prosperity for the whole of the Territory. The answer is we use our geographical advantage to become Australia s gateway to the north and we build on our excellent relationships with Asia to open new markets and create new business opportunities. At the same time we build. Page 3 of 18
4 We build new infrastructure such as ports, roads and gas pipelines to open up the Territory and unlock its economic potential. I ve established the Northern Australian Development Office to promote the Territory to the rest of the world as a premier investment destination and to work with Canberra, Western Australia and Queensland to spearhead the Territory s agenda as the north of Australia opens up to new business. We have established a dedicated red tape abolition squad to work with industry and remove unnecessary administrative burdens sector by sector. I have set up an Office for Asian Engagement, Trade and Investment, to work with our Asian neighbours on building new business relationships and opportunities. Page 4 of 18
5 I have travelled to Timor, Indonesia, Singapore Japan, China and Vietnam to build on our strong links in the region. Those talks have already opened up the live buffalo trade to Vietnam with the potential to sell up to 60,000 head a year. They have led to the signing of a number of trade agreements including a deal between Mitsui and the Tiwi Plantations Corporation to export wood chips through Port Melville. We have a Memorandum of Understanding in place with the China Development Bank and we are encouraging foreign business leaders to invest in the Territory s vast opportunities. The Australia-Japan joint business conference will be held in Darwin in October and the Northern Territory Page 5 of 18
6 investment guide is being circulated around the world. The Federal Government can see the opportunities too and is developing a white paper to Develop Northern Australia to meet the so called Asian Century head on. But we re not just going to sit around and wait. This government has adopted a strategic, planned and structured approach to investment that will allow us to build a prosperous economy, a stronger society for all Territorians, a confident culture that is proud of the Territory and its values and do it in an environmentally sensitive way. We have embarked on an extensive consultation campaign to ask Territorians how they want to develop the Territory so that we can focus our Page 6 of 18
7 efforts in the right places and maintain our unique lifestyle. Agriculture The demand for nutritious food will rise dramatically over the next five years as Asian purchasing power increases. More than 70% of fresh produce sold in Indonesia s major supermarkets is imported and demand for quality imports is growing. The consumption of quality vegetables and fruit from reliable sources is forecast to more than double by The potential for new agribusiness in the Territory is enormous. CSIRO and the Australian Bureau of Agricultural and Resource Economics and Sciences are working Page 7 of 18
8 together on a Northern Australia Food and Fibre Supply Chains Study due to be completed later this year. The project will identify irrigated crops best suited to six different regions across Northern Australia, analyse the crops market and economic potential and identify supply chain infrastructure needed to support future development. We look forward to seeing the results of that study. We already export nearly 350,000 head of live cattle a year and as I ve already mentioned we ve started exporting live buffalo to Vietnam. The Territory will diversify into packaged beef later this year when AACo s $91 million abattoir comes on line south of Darwin. Page 8 of 18
9 It is expected to process 225 thousand cattle annually once it reaches full production. GAS It s estimated the Northern Territory has reserves of around 240 trillion cubic feet of unconventional gas in six basins. The industry rule of thumb is that one trillion cubic feet is enough gas to power a city of a million people for 20 years. We are already exporting billions of dollars of LNG to the world and when the Inpex project comes online in 2016 it will produce more than 8.4 million tonnes of Liquid Natural Gas every year, supplying around 7% of Japan s needs. We also have a gas pipeline running the length of the Territory to Alice Springs and by extending that Page 9 of 18
10 pipeline to the gas grid coming out of Moomba we could sell gas to the south east corner of Australia and help fix the New South Wales and Victoria gas crisis. APA Group is investing $2 million in a feasibility study into a pipeline linking the group s Territory assets to its east coast grid and we are asking the Federal Government for additional support for the project. Mining Mining is another huge industry for the Territory. There are a dozen operational mines with expansion plans in each of them. There are over 40 known but as yet undeveloped deposits and there are over 200 exploration companies operational in the Territory right now. Page 10 of 18
11 The Territory Government has begun a Territory wide planning study to prioritise vital infrastructure development to support mining and other industries in regional areas and any flow on business from development. The study will be completed by the last quarter of 2014 and lead to a 30 year Territory Government Regional Infrastructure Plan. We can then use that to attract public and private investment. Tourism Tourism is another important economic sector worth $1.5 billion dollars and one of the biggest employers in the Northern Territory supporting 16 thousand jobs. Page 11 of 18
12 We have committed an additional $8 million to the Tourism NT budget and an extra $7.5 million to the international marketing budget to increase the Territory s share of high growth markets such as China. More than 97 million Chinese travelled abroad in 2013, up from 83 million in 2012, and predictions are for growth of between 6.4% and 9% per year. China is Australia s second-biggest source of tourists after New Zealand and has the largest spend per visitor. But we still need more hotels and more infrastructure to support the growing tourism market across the Territory. So I was very pleased to see that Darwin s newest hotel, the $150 million élan Soho Suites, is near Page 12 of 18
13 completion and will officially open its doors to the public next month. It s yet another sign that our plan is working. Defence Our strategic location has also attracted enormous investment in Defence. The Australian Defence Force spends almost 1 point 6 billion dollars in the Territory every year, and that has been growing by around 11% a year over the past decade. There are currently 1,150 Marines and four heavy lift helicopters on rotation through Darwin, And you will have read that the Prime Minister and President Obama held discussions last week about Page 13 of 18
14 expanding the numbers to a full Marine Air Ground Task Force of 2,500 personnel by There are 5 key private companies currently providing direct support to the Territory s Defence capabilities and many more involved in its day to day operations employing around 1000 people. That is certain to grow. Infrastructure The key to unlocking the Territory s full potential is infrastructure. It was roads, rail and ports that opened up the east coast of Australia more than a century ago and now we need to do the same. Agribusiness, Mining, Gas and Tourism support regional economies and that is why developing the North of Australia is about opening up the whole of the Territory. Page 14 of 18
15 We currently have bids for almost $2 billion worth of roads with the Federal Government and a long wish list of other projects. The Federal Government released its green paper into the development of Northern Australia last week and I m very encouraged that it has taken on board many of our recommendations including the need for more roads and bridges to open up the north. We are intimately involved in the Federal Government s Northern Australia Infrastructure Audit to ensure that Territory projects are included in the critical infrastructure requirements list. And as I mentioned earlier we are developing a 30 year Northern Territory wide infrastructure plan so we can take our case to the public or private investment markets. Page 15 of 18
16 We are already encouraging private investment in East Arm Wharf and there is scope for a second port at Glyde Point. I don t expect that all of this is going to happen quickly but there is a recognition at all levels of government that new infrastructure is the key to our future. Conclusion The Northern Territory has natural resources in abundance. There is room and capacity to grow. We have the closest deep water port to Asia and we have recently completed a dredging program to make access to it even better. We are a growing, confident, can-do place of business and we re already seeing the benefits. Page 16 of 18
17 The most recent Commsec State of the State s report shows the Territory s economic growth is up by 51.8% on a ten year average, construction is up by 112.7% for the same period and retail spending is 17.8% higher than the decade average. Gross state product grew by 5.6% last financial year to almost $20 billion well ahead of national growth of 2.6%. We enjoy one of the highest rates of employment and workforce participation in the country and business continues to rate the Territory Government as one of the most supportive. The Territory has come of age. The frontier days are over. Page 17 of 18
18 We now have modern communications, air transport, modern shipping, major highways and a rail link to Adelaide. It is no longer a question of whether we should develop the north, we have run out of excuses not to do it. Everyone has a role to play. Government, business, industry and the community. If we all work together we will make this the century of the Northern Territory. Page 18 of 18
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