ANZ North West Gulf Grazier’s Forum
Saturday October 10th, 2015
Good Morning Ladies and Gentlemen
And what a pleasure it is to be here today at the ANZ North West Gulf Grazier’s Forum.
The Australian beef cattle industry is known around the world for its high standards, and for its quality and expertise, and for its substantial contribution to our national and regional economies.
Australia is the world’s seventh largest beef producer and third largest beef exporter. Our national cattle herd stands at over 29 million head and the annual value of Australian cattle and calf production (including live export) tips the scales at the $8 billion mark.
We have 76,807 cattle properties nationally and the red meat industry employs approximately 200,000 workers across farm, processing and retail operations.
The cattle industry in Northern Australia is a major part of the industry with the Northern Australian beef herd comprising over 12 million cattle and, according to 2014 figures from CSIRO, contributing approximately 90 per cent of Australia’s live cattle exports.
ABARES reported in 2013 that the 2010-11 gross value of agricultural production in the north had reached $5.2 billion, of which $3 billion was from cattle alone.
These are truly fascinating figures that show the strength of the great industry that has been built by people like those in this room.
And the Coalition government is committed to doing everything it can to help this industry keep growing.
We understand your frustration in the face of what has been seen to be convoluted processes and seemingly endless trade negotiations.
But with the announcement of the TPP outcome in recent days building upon the ChAFTA, the first step, the commencement, has been resolved.
There is still a long way to go as we in the Parliament battle to get these Treaties approved.
And while I earlier acknowledged your frustration, spare a thought for us as we battle with the ALP on China and with, sadly, a current member of Parliament who represents one of the biggest – if not the biggest – beef electorates in the land, who has vowed to sink the TPP according to the Herbert River Express.
Reaping the benefits of these improved terms of trade of course is a long-term proposition, but that is exactly what the Government is attempting to achieve: the right policy settings to create, if not benefit tomorrow, then generational benefit.
We have also heard your concerns about Freight Transport – concerns that include the condition of the Croydon-Richmond Beef Corridor and the Hann Highway – and about water management strategies. And as I say, the Government is absolutely committed to creating a regulatory and governance environment where these concerns can be constructively addressed.
And a significant step towards delivering on this commitment was made on June 18th 2015 when the Coalition government fulfilled its election promise to produce a White Paper on the development of Northern Australia.
The ‘Our North, Our Future: White Paper On Developing Northern Australia’ is a wide-ranging document that has renewed the focus on Northern Australian development by detailing the Government’s commitments to fostering economic and social growth across the north.
It is a document that I have been working towards for my entire parliamentary career.
As one of the key national industries, and certainly one of the key economic pillars of the Northern Australian economy, beef cattle features significantly in the Northern White Paper.
But there is a lot of good news in the White Paper not just for the Beef Industry but for the whole of Northern Australia.
Now I know that in the north we can be a bit cynical about Politicians’ promises but this time the promises are already turning into action with much of the funding already budgeted.
What matters the most are the things that we can actually achieve – the real results that we can put on the ground rather than dreams and hypotheticals that are just all talk and un-researched thought bubbles.
Some of you may be aware that on the day the White Paper was released, I was appointed to Chair a new Government Committee to oversee the implementation of the commitments in the Northern White Paper.
And it will be our role to monitor delivery of the commitments in the White Paper, ensure initiatives are being rolled out in a timely fashion, to seek the feedback of our constituents – people like yourselves here in this room –and to work proactively with Ministers and their Departments to ensure the best outcomes for the people of Northern Australia.
Since the creation of the Oversight Committee, my office has been in daily contact with relevant Ministers and their staff seeking updates and progress reports. And over this time I have written literally dozens of letters to my parliamentary colleagues asking about the status of the Northern development projects within their portfolios, and where necessary making an arse of myself when I think bureaucrats are not giving their Northern commitments the urgency we think they should.
Both the Northern Australia White Paper, and the subsequently released Agricultural Competitiveness White Paper, were written with essential Australian primary producers like yourselves in mind.
These two pivotal policy documents show that the things that matter to you– good terms of trade, access to premium markets, biosecurity, water security, transport and communications – are the same things that matter to the Government.
The northern cattle industry is a stand out success story.
However the industry is particularly exposed to the costs of moving cattle — the longest land transport distances of any Australian commodity. For example, cattle in the Northern Territory travel, on average, just under 1,000 km between farm and market, and sometimes as much as 2,500 km to abattoirs on the east coast.
Such long distances raise costs — land transport costs that according to CSIRO comprise up to 35 per cent of the market price of livestock — and increase risks to production, with floods and seasonal road closures isolating producers from markets for extended periods of time.
Key arterial roads are often subject to use restrictions and closures due to weather events which affect the movement of freight and people. Outmoded logistics, poorly designed or out dated regulations, or regulatory inconsistencies between jurisdictions, also add to costs.
To start addressing these issues, the Commonwealth Government has announced a new $100 million Beef Roads fund for Northern Australia. As part of this fund the Government, in close consultation with northern jurisdictions, local governments and transport and beef industry experts, will identify investment and reform priorities for the northern beef industry.
I am sure that most of you would be aware – and some of you may have attended – the first in a series of Beef Roads Round Tables that was held in Rockhampton just over a week ago. Follow up forums will be held in Darwin and Kununurra over the coming months.
Now, I know what you’re thinking because I thought the same thing too: $100 million isn’t going to go very far. The distances involved are vast and the high cost of laying blacktop could mean that only a very few sections of road will actually receive any upgrading.
In fact, just last fortnight Noeline Ikin and I have driven some of the more critical Beef Roads – and lived to tell the tale! - and I think I could have easily spent $5 billion and only addressed half of what needs to be done.
But, the Government has introduced a mosaic of roads programs that interlink each other and confer value across the whole transport network in the north.
So, as well as the specific $100 million Beef Roads initiative, the beef cattle supply chain will also be benefitting from:
- $600 million priority roads programme
- $8.5 billion on the Bruce Highway under the National Highway Program
- $500 million Black Spot Program over 5 years from 2014-15
- $200 million new Heavy Vehicle Program over 5 years from 2014-15; and
- $300 million Bridges Renewal Program
All of these programmes and projects will contribute to enhancing the total transport network that is available to beef suppliers. All of these improvements will help to get produce to market quicker and cheaper
And the Government will also be seeking co-investment on priority road projects from local and state governments and from the private sector.
We will be using CSIRO’s TRAnsport Network Strategic Investment Tool (TRANSIT) infrastructure modelling system to help us with the best options for upgrading beef supply chains.
I should mention at this point that the Government is also very aware of the need to promote and encourage private sector investment in meat processing across the north. Easier access to the abattoir will alleviate some of the challenges associated with long-haul transport. And of course greater competition in the processing sector can mean better returns for producers.
But the Beef Roads Programme is just one of the initiatives in the ‘Our North, Our Future: White Paper On Developing Northern Australia’ – one that is perhaps closer to the hearts and hip pockets of the people in this room. But there are many other development initiatives in the White Paper.
I know that over the years we have all heard the same words and promises about Northern development and still nothing has happened.
So what is different this time?
Firstly, a Prime Minister who steadfastly believes in the potential of the north.
Secondly, a Cabinet which is likewise convinced of the importance of the north for Australia’s economic future. And this is a Cabinet that now includes a specific Minister for Resources, Energy and Northern Australia, Josh Frydenberg MP.
And I am pleased to say that Minister Frydenberg has already visited northern Australia and will be in the north again later this month. He may be from inner city Melbourne but he is intelligent, able, enthusiastic, a good communicator and understands the importance of the north – and the need to bring the population of Melbourne and Sydney with us in our development dreams.
And thirdly the Northern Development White Paper itself is a serious and in-depth document that doesn’t just make promises, it actually commits funding to a range of specific projects.
There is $5 billion in concessional infrastructure loans available under the Northern Australia Infrastructure Fund. Under this fund Government will partner with northern jurisdictions, northern states and territories, and private sector partners.
It is a positive sign that the Department of Treasury has already received many expressions of interest for funding under the Northern Australia Infrastructure Fund.
Water projects in the North will receive $200 million in seed funding, the first $50 million of which has been earmarked for feasibility studies. This tranche of funding acknowledges that Northern Australia receives more rainfall, and has more runoff, than the rest of the country. It also acknowledges that capturing and managing these water resources is crucial to the development of Northern Australian agriculture and communities.
Kick-starting industry, agriculture, science and innovation in the north is also a priority and to help facilitate this $75 million has been committed to a Co-operative Research Centre or CRC. This CRC is currently in the planning stages and I expect that an Interim Chair will be appointed very soon to oversee the creation of this pivotal Northern Australian institution.
And $40 million has been committed to upgrading Regional Aviation Access and to facilitate further Remote Airstrip Upgrades.
And these are just a few of the many programmes in the ‘Our North, Our Future: White Paper On Developing Northern Australia’.
The blueprint presented in the White paper is effectively a roadmap for achieving positive growth and change across a 20-year timeline.
To ensure the correct policy settings are in place to facilitate this kind of growth, the White Paper is divided into six key areas.
Land, Water, Trade, Infrastructure, Workforce and Governance.
It is the interaction of effective policy shifts across these six distinct areas that will facilitate investment and growth in the north.
For example, the commitment to resolve all outstanding Native Title claims within ten years will give pastoralists across the north far greater certainty of land tenue. Already we are seeing some innovative producers in the north negotiating directly with native title holders to find solutions that provide for growth and employment opportunities while at the same time conferring benefit on the holders of native title.
Land Titles desperately need coordination across the north. And while land title regulation is principally a mater for State and Territory Governments, the Commonwealth is determined to encourage, by every means available, some rationalisation and reform. And the White Paper discusses this at length.
We have an opportunity, right now, to position Australia as the high-quality, high-end producer of the world.
Our proximity to Asia and the Tropical Zone – both of which are experiencing unprecedented growth – means that our future depends on our ability to carve out niche markets for ourselves as the size of the global middle class explodes in our neighbourhood.
And the Federal Government is absolutely committed to making sure that producers like you have every opportunity to make the most of these existing and emergent markets.
I mentioned before the Trans Pacific Partnership (TPP) agreements.
Over 55 per cent of Australia’s beef exports go to TPP markets. TPP market access outcomes for Australian beef producers and exporters include:
- Japan’s beef tariffs will be reduced to 9 per cent within 15 years of entry into force of the TPP. Australian beef exports to Japan were valued at $1.6 billion in 2014;
- The majority of Japan’s tariffs on offal will be eliminated over 10 to 15 years of entry into force of the TPP, and tariffs on cheek and head meat significantly reduced to 9 per cent within 15 years of entry into force of the TPP. Australian offal exports to Japan were valued at $161 million in 2014;
- Elimination of Japanese tariffs on processed meat products within 15 years of entry into force of the TPP. Australian exports of these products to Japan were valued at $20 million in 2014;
- Elimination of the United States price-based safeguard under the Australia-United States Free Trade Agreement (AUSFTA) on entry into force of the TPP. Australia beef exports to the US were valued at $2.5 billion in 2014;
- Elimination of Canadian beef tariffs (currently 26.5 per cent) within 10 years of entry into force of the TPP. Australian beef exports to Canada were valued at $163 million in 2014;
- Elimination of all Peruvian beef tariffs (currently 17 per cent) within 10 years of entry into force of the TPP;
- Elimination of all Mexican tariffs on beef carcasses and cuts (currently up to 25 per cent) within 10 years of entry into force of the TPP; and
- Elimination of Mexico’s tariff (currently 20 per cent) on “other offal” (used for taco meat) from entry into force of the TPP. Australian exports of this product were valued at $6 million in 2014.
Sustaining our access to these markets in the long term will require us to build substantial goodwill with our regional neighbours - and the more we co-operate with each other, the more goodwill we build.
The Colombo Plan and Reverse Colombo Plan shared/export education programmes – where youth from Australia have the opportunity to study in overseas countries and vice versa – in one such program that fosters understanding and goodwill between nations.
Sharing out technology and expertise across developing nations in the region is another way that Australia can continue to develop productive relationships with regional partners. The work being done by the Australian Institute of Tropical Health and Medicine – based at James Cook University in Townsville and Cairns – will benefit the entire Tropic Zone by improving the prevention and treatment of tropical diseases.
Animal health and the management of biosecurity risks are also top-of-mind for the Government when considering priorities in Northern Australia. Effective quarantine and border management is critical to the prosperity of northern agricultural industries. Addressing these risk factors will be a key element of the workload of the Northern Australia CRC.
But the Government is also committed to the development of Northern communities and will work with industry to promote trade and tourism across the north. The more people we have populating and moving through the north, the more infrastructure we will be able to build. The Outback Way is one such example of tourism driving infrastructure upgrades which will then benefit local industries as well.
Identifying and taking the greatest advantage of synergies such as this will remain key to our success in developing the north.
Before closing I would just like to say a few words about the Agricultural Competitiveness White Paper published on July 4th2015, which sets out a program for investment in the competitive strengths of Australian agriculture.
The Agricultural Competitiveness White Paper presents a $4 billion package designed to create better returns at the farm gate.
The initiatives in the Agricultural Competitiveness White Paper include
Up to $250 million per year in drought concessional loans – and while I accept we haven’t quite got this right, the intention and commitment is there. We just have to get the rules right.
- $200 million to improve biosecurity surveillance.
- $50 million to boost pest and disease eradication.
- $100 million to extend the Rural R & D program to ensure farmers keep getting the benefit of innovation straight form the laboratory to the farm
- $35 million for local products and production infrastructure to create jobs in communities impacted by drought
- $29.9 million for farm insurance and risk management advice
- $22.8 million for case management for farmers in their third year of the Farm Household Allowance
- $20.4 million to streamline access to farm chemicals; and,
- $13.8 million to provide farmers with access to information that will help them establish new business models
And that is to name just a few.
The commitments made recently by the Government to regional and rural communities and producers are valued in the billions of dollars.
There is no mistaking that the Coalition does not hesitate in acknowledging the agricultural sector as a key pillar of the Australian economy.
And nowhere is that more obvious nor more important that in north Queensland.
You are the backbone of the future economy here in the north as we transition from a Mining Boom to a Dining Boom - where we will be feeding tens of millions around the world.
And this is why your Government is committed to your success.
This is why wherever possible your Government seeks to facilitate technical market improvements and policy developments that will increase your competitiveness.
You are the future of the national economy and I look forward to seeing you all prosper.
Thank you and good morning.