Northern Australia Investment Forum
It is my pleasure to be back in Cairns to co-host the second Northern Australian Investment Forum.
I'd like to give a warm welcome to our overseas visitors to Cairns, the tourism capital of North Queensland. Famous for its proximity to the Great Barrier Reef and the Daintree Forest, Cairns is a jumping off point for some of the most sensational wildlife and nature experiences Australia has to offer.
And I speak from firsthand experience – though I now live and represent the Gold Coast in Southern Queensland, I grew up in this region. Comparing regions is as fraught as comparing my children, let's just say they are both beautiful and I love them equally!
Less well known than its tourist delights are the 4,000 students studying at James Cook University's Cairns campus, with its internationally recognised research in marine sciences, tropical ecology, tourism, and tropical medicine and public health.
It's a great example of the strong institutions and skilled workforce Australia has to offer investors.
And it underscores what all of us here today have already realised – opportunities in Australia's North go well beyond the obvious sectors of agriculture, resources and energy.
Foreign investment is an essential part of Australia's economy – this is something the people of Northern Australia understand well, as they have long seen the tangible benefits it brings.
This Government is strongly committed to unlocking the enormous, unfulfilled potential of the North.
The region covers 40 per cent of Australia's land mass, and is inhabited by just 1.3 million people.
This Forum is about showcasing, for the second time, investment opportunities and projects across agriculture, resources and energy, tropical health and medical research, tourism and infrastructure.
There are real opportunities seeking the right capital partner, so I'm delighted to see participants here today looking seriously at what we have to offer.
Substantial investment, including foreign investment, is fundamental if we are to turn the vision of the White Paper on developing the North two years ago into tangible outcomes. As the White Paper stated, developing the North is a long term endeavour of many decades.
So I'm genuinely delighted to see my Parliamentary colleagues from the opposition Labor Party here. That's an important signal to investors that their investment will see stable policies welcoming the development of the North over the long term as bipartisan endeavour.
And things are already moving since the first Forum, held in Darwin in 2015. We have seen significant developments in the Port of Darwin as a direct result of foreign investment.
Refrigerated container capacity at the Port has increased by four times in the two years since Landbridge purchased the lease; the company is now looking at expanding the port's cruise ship facility and building a $250 million luxury hotel development in Darwin.
Shanghai Zhongfu's subsidiary, Kimberley Agricultural Investment (KAI), announced in August 2016 the $100 million purchase of the Carlton Hill Station in the Ord River District of Western Australia, close to the Northern Territory border. KAI's purchase and leaseback deal with Consolidated Pastoral Company (CPC) gives KAI access to additional fertile land for irrigated cropping in the Ord region.
Many other international investors have made return visits to northern Australia to follow up on discussions held at the first Forum.
Among them are Nanjing Fullshare Industrial Holding Group, which now owns four key tourism properties in Australia and is undertaking a $2 billion master planned re-development of the Laguna Quays Resort near Mackay; and Thailand's Minor International Public Company Ltd, and with its Elan Soho Suites hotel in Darwin.
Last year, through Australia's trade and investment promotion agency Austrade – who has led the organisation of this Forum - we also hosted a group of the world's foremost authorities in tropical agriculture – Brazilian farmers.
Many of Austrade's experts in investment promotion are here at the Forum, and I particularly encourage you to meet their Senior Investment Specialists in key sectors – and I may ask them to each stand as I introduce them so the investors can note who to find:
Resources and Energy – David GrabauFood and Agribusiness – Tony Eyres Tourism and Infrastructure – Emma McDonald
Northern Australia has much to offer global investors.The time zone is advantageous for Asia, relative to Europe or North America.There is the use of English, the world's business language.
And there are brand advantages from our growing reputation as a knowledge-based economy and a 'clean, green and safe' producer and country to visit.
Australia's 26 years of uninterrupted annual economic growth, strong institutions and highly skilled workforce also ensure we remain highly attractive.
Then there are the geographic advantages of our proximity to the booming economies of South East Asia and Southern China. The region's middle class is set to grow from 600 million to more than 3 billion over the next 20 to 30 years. Opportunities will be increasingly driven by this surge in middle class consumers, from India through to China and all the countries in between.
Australia, and particularly the North, are well placed to be the reliable supplier of the resources, food, services and experiences those consumers want.
As you are no doubt aware, the North is blessed with an abundant energy and mineral endowment, including 90 per cent of Australia's gas reserves.
Projects such as Gorgon and Icthys are set to deliver LNG to the world for decades to come, while Roy Hill and others are joining the existing giants of the Pilbara to deliver even more iron ore. Australia is also well positioned to be at the forefront of the coming green energy battery boom, with substantial lithium deposits in the North.
When it comes to food production, across the North, there is 17 million hectares of arable soil, potentially suitable for a variety of agriculture and horticulture.
About 60% of the water that falls in Australia – falls in the north. Currently we capture just 2 per cent of that. Raising it to 6% and using it sensibly would enable us to open lands for horticulture and cropping, that presently only see the odd cattle hoof.
You may be asking "Why now? Why hasn't the North developed earlier?" And there are two reasons I'd give:
Firstly, as silly as it sounds, for many years Government policy actively discouraged horticulture and cropping in the North, by only permitting the running of cattle;
Secondly, the size and remoteness of Australia's North has always made it a location needing large-scale developments to justify the investments in infrastructure needed. It's only now, with Asia's burgeoning middle classes, that we now have the scale of markets and opportunities on our doorstep to drive such investments
Both things have now changed, in a positive direction.
Diversification permits are being issued in the Kimberley region to allow land owners to do more under their pastoral leases than simply graze cattle. Some are beginning to grow crops like sweet corn, potatoes and melons.
In Queensland's Gulf Country we have multiple proposals that would see crops such as cotton and sugar grown on projects of up to tens of thousands of hectares.
In Hughenden, Queensland, Chinese-backed CNVM Investment Pty Ltd will invest over $100 million to develop an integrated processing plant with capacity to handle around 180,000 head of cattle per year and provide frozen meat to the Asia-Pacific region.
In the Northern Territory, trials of soybean cropping have been undertaken.
And as a Government, we're responding to changes in key Asian markets through Free Trade Agreements to provide greater market access.
New ventures in our North will benefit from Australia's Free Trade Agreements, especially those with the giant markets of North Asia, China, Japan and Korea, which together represent more than a third (37% in 2016, source ABS) of Australia's total trade.
These agreements naturally give Australian exporters a competitive edge abroad and lower prices for Australian consumers at home. They also promote two-way flows of investment by providing certainty about foreign investment policy settings, and they lock in Australia's access to service sectors, such as education and telecommunications services.
Significantly, these FTAs make Australia a more attractive destination for foreign capital as each agreements increased the growth potential of each exporting business. The additional market of consumers each FTA opens up, is accompanied by preferential access, giving the Australian export a competitive advantage.
The margins on the return are also therefore more attractive to investors and shareholders alike. The ambitious trade agenda we are pursuing also means that the many markets into which we have or are negotiating preregistration access means a diversified export market that can weather shocks and disruptions.
For example, our agriculture sector has benefited significantly from our three North Asian FTAs.
These FTAs have seen tariff cuts in markets like beef exports to Japan and Korea where our exports are up around 23 and 57 per cent respectively compared with before the FTAs, or exports of fresh Australian table grapes were more than six-fold higher than they were prior to the FTA with China after the 13 per cent tariff was cut (due to be eliminated 1Jan 2019).
These tariff cuts abroad flow into higher prices at the farm gate here at home, a positive price signal to investors that's now stimulating a supply-side response
But this Government knows that diversification of markets is critical to the continuation of our growth trajectory and to the stability of our industries, exporting or otherwise.
Most people here will know we have just concluded negotiations for an FTA with Peru, one of the world's fastest-growing economies, which our sugar, beef, lamb, dairy, rice and almond producers (and our winemakers), have welcomed enthusiastically.
We will soon start trade negotiations with the Pacific Alliance, which groups the four Latin America economies of Chile, Colombia, Peru and Mexico.
This Latin American markets build on our continued push for greater liberation closer to home -from Hong Kong, to Indonesia, to the members of the Regional Comprehensive Economic Partnership, which include China, Japan and India).
This work will support growth across our economy -from goods to our increasingly competitive services industries. In services sectors such as tourism, we are looking to grow the Northern international tourism market to two million visitors a year by 2030.
Here in Cairns, Crystalbrook Collection is investing $370 million to add 3 new 5-star hotels to the city, as well as investing $100 million to redevelop the Port Douglas marina to our north. These projects will provide quality accommodation for domestic and international visitors, as well as employment opportunities for the entire Cairns region.
I was also very pleased to open Daniel Leipnik's new $53 million Cairns Aquarium in September, which in its first six weeks welcomed almost 60,000 visitors. Investment in attractions is vital to providing a range of different experiences for visitors, which encourage repeat visits and longer stays.
Accordingly today I am pleased to launch the Government's Tourism Investment in Regional Australia pitch document, developed by Tourism Australia and Austrade. The brochure outlines the great variety of regional tourism investment opportunities alongside Australia's strengths in food and wine; aquatic and coastal; nature and wildlife; culture and heritage; and wellness.
As well as being the Minister for Trade and Investment I am also the Minister for Tourism and I know that the glorious Northern Australian landscape, and global interest in the culture of our indigenous people, has already resulted in a number of successful indigenous tourism ventures.
A policy environment that welcomes foreign investment to develop the North will create more opportunities for indigenous Australians.
I am pleased Mr Peter Yu, a widely respected and senior Indigenous leader from northern Western Australia, will be speaking later today.
To our overseas guests, I urge you to look seriously at the significant opportunities to form business partnerships with Indigenous people and organisations in the north.
Some of these will be further explored in the panel session tomorrow on Indigenous Partnerships, led by Helen Brown, Managing Director and Founder, Bisnis Australia.
In Australia, we understand the critical link between investment and the health of our national economy.
Investment means innovation, it means skills development and it means entrepreneurship – all important drivers of job creation.
Foreign investment not only provides essential capital, but it invariably brings with it new perspectives, other ways of doing things, new intellectual property and innovation which can greatly enhance productivity and return on investment.
'Buy-in' by global investors is essential to realise our vision for the North.
Australia has a lot of what fast-growing Asia wants - but few of these opportunities will be fully and quickly realised without sizeable injections of capital. So I welcome you all to this Forum and I look forward to meeting as many of you as I can. To those of you who are already investors in the North, I encourage you to look at some of the new horizons presented here at the Forum.
And for those new to the region, I hope you find here at the Forum the right opportunity to take the first steps in what will be a long term, profitable partnership.