Firstly, we wish to very sincerely thank the many witnesses who provided evidence to the inquiry in good faith. We appreciate the time and effort taken to contribute to the inquiry and value the participation of each witness. The impact of COVID-19 on the inquiry's hearing process has been substantial. While the committee endeavoured to hold hearings across Northern Australia as much as possible, the complications of border closures meant that this was not always possible. We acknowledge the work of the Secretariat in navigating these complications to ensure that the work of the committee could continue and that, most importantly, witnesses were able to provide their valuable insights via phone/video-conferencing when in-person participation was not possible.
The Coalition Senators, comprising Senator Susan McDonald and Senator Dean Smith, have prepared these additional comments for the purpose of best serving the terms of reference of the inquiry. The recommendations in this report are incomplete and not properly reflective of the work tasked to the Committee by the Senate. The scope of this committee was very broad, as is required when considering the complex task of developing a region like Northern Australia, yet the final report is quite narrow in scope. Time constraints at the end of the committee process have also made it difficult for us to provide full and exhaustive recommendations within these additional comments. The Chair provided less than one business day for the report to be reviewed and for additional comments or amendments to be submitted. This has been detrimental to the quality of the recommendations.
This Select Committee provided an opportunity to very genuinely investigate the effectiveness of the Government's Northern Australia agenda and to propose ways in which the development of this area could be expedited or improved. The Coalition Senators hoped to have more recommendations regarding the reduction of existing barriers to investment and ways to better attract private investment. Unfortunately, many of the recommendations focus on issues that are not within the jurisdiction of the Federal Government, that would be best considered in other more targeted forums (which already exist) or that cannot be supported for another reason. However, in an effort to be constructive the Coalition Senators have decided to note the recommendations they can support as detailed below:
Recommendation 3
11.14The committee recommends that the Australian Government facilitate strategic planning between all levels of government and other stakeholders, with a view to derisking the investment environment in Northern Australia.
Recommendation 4
11.15The committee recommends that the Australian Government empower the Northern Australia Infrastructure Facility to open information sharing dialogues with commercial financiers, to improve investor confidence by allowing for region specific knowledge, experiences and learnings to be used to improve their understanding of investment risk and potential mitigants in Northern Australia.
Recommendation 5
11.19The committee recommends that the Australian Government, in consultation with the state and territory governments, develop and publish a timetable for the construction and maintenance of identified key freight routes.
Recommendation 6
11.21The committee recommends that the Australian Government, in partnership with the state and territory governments, outline a long-term strategy of road and rail funding for Northern Australia, with a view to creating a comprehensive and fit-for-purpose road and rail network.
Recommendation 7
11.24The committee recommends that the Australian Government work cooperatively with the states to expedite the completion of all announced road projects, including those in the 2019-20 and 2020-21 Federal Budgets.
Recommendation 8
11.26The committee recommends that a portion of the funding from the next round of the Road Safety Program be committed to supporting projects that improve road safety in Northern Australia.
Recommendation 18
11.51The committee recommends that the Australian Government implement the recommendations of the Cooperative Research Centre for Developing Northern Australia, which include:
rural recruitment of rurally-based health professionals to assist with the retention of the local health workforce, particularly in medical "generalist" (and other health professional) roles.
investment in an Aboriginal and Torres Strait Islander health workforce to continue development strategies, including in innovative community roles and in leadership positions.
eHealth and telehealth training to ensure that health professionals in rural and remote areas can work to their full scope of practice in team-based models using tele-health.
strengthening of comprehensive primary health care to improve health outcomes and contain health care costs.
cross jurisdictional planning to establish a permanent cross-jurisdictional health service delivery and workforce network will enable shared strategic planning and implementation of new initiatives across the northern region and appropriately fund cross-jurisdictional systems.
continuing to expand Aboriginal Community Controlled Health Service models of community governance.
determining need and mechanisms to finance appropriate health service delivery models for rural and remote health service delivery.
Recommendation 19
11.53The committee recommends that the Australian Government consider, with a view to implementing, the recommendations of the National Rural Health Commissioner's 2020 Final Report and recommendations from the Medicare Benefits Schedule Review Taskforce's 2020 Final Report as soon as practicable, with particular focus on recommendations relating to telehealth, preventative health care, and healthcare workforce development.
Recommendation 20
11.56The committee recommends that the Australian Government develop a dedicated plan for improving digital connectivity and mobile 'black spots' in Northern Australia.
Recommendation 25
11.78The committee recommends that the Australian Government take urgent steps to meet the education and skills needs of Northern Australia, including by:
addressing the severe shortage of early childhood, primary and secondary education and care places in Northern Australia;
addressing the severe shortage of teachers and other educators in Northern Australia by working with state and territory governments to recruit locals and better encourage these workers to move to the region; and
providing additional support for apprenticeships, traineeships, VET and tertiary institutions operating in Northern Australia to help them recover from the impact of COVID-19 and provide greater opportunities to study and train in regional communities.
Recommendation 26
11.79The committee recommends that the Australian Government urgently prepare a post-COVID workforce strategy for Northern Australia that identifies mechanisms to access essential overseas labour, including from Pacific nations, on a sustainable basis, with proper protection from exploitation and wage theft, that preserves the integrity of Australia's migration system.
Recommendation 27
11.93The committee recommends that the Australian Government prioritise its response and consideration of the recommendations contained in the Australian Competition and Consumer Commission's December 2020 inquiry into insurance in Northern Australia.
Recommendation 29
11.95The committee recommends that the Australian Government increase investment in disaster mitigation in Northern Australia, and research to improve mitigation options. This may include delivering funding committed through the Emergency Response Fund, and greater investment in household resilience programs.
Other recommendations that are not abovementioned cannot be supported by the Coalition Senators in full in their current form. We have decided to "partly disagree" with these recommendations. We believe it is unhelpful to provide commentary on each recommendation as they can largely be grouped into broader themes. Commentary is provided below in reference to each of these.
Broad themes within recommendations that cannot be supported
Refresh of agenda
We are broadly supportive of the idea of refreshing the Northern Australia agenda. It is possible that a combination of COVID-19 impacts, the time since its original design and the progress that has been made since, means that there is value in reviewing and updating the agenda. However, we believe that a potential refresh must primarily focus on economic development. The creation of jobs and economic opportunity is what will drive growth and development in Northern Australia. Having a strong and sustainable economy is the only way that the lives and disadvantage of Northern Australian citizens can be permanently improved.
Social impact
Many of the recommendations focussed on social impacts disregard the all-inclusive intent of Northern development. The development of Northern Australia is about addressing the geographic and economic disadvantage which is felt to some degree by all who live and work there. There are already existing programs and organisation that are able to support Indigenous Australians in a much more direct and helpful way.
Within the terms of reference, social benefit is mentioned as "arising" from investment in infrastructure and economic development. While housing affordability and availability is an important issue, we should not be confusing the symptom and the cause. Investing in economy-stimulating infrastructure and development will lead to an environment in which Northern Australia has an efficient construction industry and supply chain that will ensure housing availability and affordability. This will enable residents to build the houses they want and provide them with the same economic freedom that other Australians enjoy. Merely building houses or subsidising the construction industry is a short-term solution that will not create permanent, sustainable housing in Northern Australia.
Water
A number of recommendations focussed on water yet failed to acknowledge areas where the Federal Government has little authority, such as urban water. Another key omission is that water infrastructure is of no value in terms of economic development unless water allocations are made available. This is also a state government responsibility and buy-in from relevant governments is a critical part of ensuring project success.
In the 2020-21 Budget, the Australian Government announced an additional $2 billion in funding under the National Water Infrastructure Development Fund, bringing the total commitment through the Fund to $3.5 billion. This additional investment supports the Government's commitment to a rolling ten-year water infrastructure investment program.
The Government has already committed more than $1.5 billion to co fund the construction of more than 20 water infrastructure projects with a total construction value of more than $2.7 billion. The Government is also working with States and Territories to develop a forward pipeline of projects for investment through the remaining $1.8 billion in the Fund. Our investments in these projects will provide water into the future and unlock the economic potential for new and expanded industries in Northern Australia.
NAIF
To date the NAIF has committed $2.8 billion in loans, well over half of its funds, which will support close to 8,000 jobs. Despite this success the Federal Government acknowledged that the NAIF could still be more agile and flexible. To address this and expedite new job and economic opportunities throughout the North the below reforms have been announced:
Streamlining the approval process for the NAIF.
Increasing the NAIF's risk appetite to back more job creating projects.
Collaborating with lending institutions to support smaller projects ($1m-$10m).
Permitting NAIF to take non-controlling investment equity positions in projects, with an overall investment cap on equity of $500 million (10 per cent of NAIF's total $5 billion investment fund).
Broaden even further the instruments available to NAIF to include new debt tools like bank guarantees.
The definition of public benefit to be simplified and expanded to include factors such as jobs, regional income, and opportunities for local suppliers (including Indigenous).
Adjusting the NAIF board to ensure it has the right mix of skills and capabilities; including Indigenous development; and
Appointing a Commonwealth representative to the NAIF Board to strengthen the NAIF's strategic direction.
We acknowledge that some of these reforms come after an extensive period of consultation related to Australian Government's Statutory Review which contained 28 recommendations. NAIF's mandate was recently extended to 30 June 2026 by Minister Keith Pitt.
Many of the recommendations related to NAIF have been superseded by the announced reforms. We also note that the purpose of the NAIF is to fill a market gap in terms of access to capital in Northern Australia and that other important objectives, such as mitigation are better funded through different initiatives.
Additional comments on other issues
While travelling extensively throughout Northern Australia we speak with many current and prospective businesspeople. The below issues have been included to highlight their importance as some of the most significant issues which are raised consistently by industry. Evidence regarding these issues was also raised throughout the inquiry.
Insurance
Insurance has become the single largest barrier to investment for many businesses in Northern Australia. Average residential insurance premiums within the region are nearly double the rest of country and are also continuing to increase at a faster rate than the rest of the country. Commercial insurance premiums are also increasing rapidly with some customers being quoted double-digit increases year-on-year.
The cost of insurance has become so great that many business, individuals and councils are now uninsured or underinsured. Not only is this creating economic and social consequences for local residents, but it is also acting a disincentive for skilled works to move to the region.
The Australian Government is reviewing the ACCC's Northern Australian Insurance Inquiry report. Recommendations from the report are currently being considered. The Coalition Senators are also highly supportive of other additional measures that the Australian Government believes could help to solve the insurance crisis in Northern Australia.
Access to capital
An apparent reluctance by commercial financiers to fund projects and businesses in Northern Australia is deeply concerning. It is believed that commercially-viable proposals are being dismissed or quickly rejected due to a lack of understanding within the investment community in regards to the actual risks present within Northern Australia. Proposed NAIF reforms that will allow for closer partnerships with lenders (and the recommendation to open information-sharing dialogues with them) should help to reset the overly cautious bias against Northern Australia that currently exist.
Tenure and land usage
Raised consistently, land tenure and usage of land are issues seriously impacting investor confidence in the region. The complications of having a number of different approval processes at different levels of government for the development and use of land is something that needs to be addressed.
In closing, we would like to highlight the substantial opportunity that is present within Northern Australia. The vast economic benefit that will be realised across the country by developing the North is something that all Australians should be excited about. While we are extremely optimistic about the future of Northern Australia, the development of this region is going to require large investments of capital, labour and other resources by all levels of government and industry. The development of a thriving Northern Australian economy will be one of the greatest economic feats in Australian history and the size of this task should not be underestimated. Success in this endeavour will further strengthen the nation's economy and help to provide prosperity for all Australians.