far north queensland · mareeba airport expansion ... ergon energy has no competition in far north...
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FAR NORTH QUEENSLAND
REGIONAL ORGANISATION
OF COUNCILS
Regional Priorities (updated 09/02/2016)
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Far North Queensland Regional
Organisation of Councils Regional Priorities (updated 09/02/2016)
CONTENTS FNQROC Chair Summary Presentation to Townsville Summit 9 October 2015 ........ 3
Regional Infrastructure Priorities ......................................................................................... 6
Aquis Great Barrier Reef Resort Development ............................................................... 6
Water Security ......................................................................................................................... 6
Cairns ..................................................................................................................................... 6
Lakeland Irrigation Area .................................................................................................. 7
Port Douglas Reservoir...................................................................................................... 7
Southern Atherton Tablelands Development Scheme ............................................... 8
Transport Infrastructure .................................................................................................... 11
Roads – General ................................................................................................................. 11
National Highway ............................................................................................................. 11
Regional Integrated Road Transport Strategy .......................................................... 13
Bruce Highway .................................................................................................................. 13
Hann Highway ................................................................................................................... 13
Ootann Road ....................................................................................................................... 14
Mareeba Airport expansion ............................................................................................ 15
Cairns Shipping ................................................................................................................. 16
Mourilyan ............................................................................................................................ 17
Wungu Beach ...................................................................................................................... 17
Policy Priorities ........................................................................................................................ 18
Health Services ...................................................................................................................... 18
Natural Disaster Relief and Recovery Arrangements ................................................. 18
Cost of Electricity ................................................................................................................. 20
Land Tenure and Lease Issues .......................................................................................... 22
Appendix A – Aquis Great Barrier Reef Resort benefit summary ........................ 25
Appendix B – Wungu Beach Economic Development Summary ........................... 26
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FNQROC CHAIR SUMMARY PRESENTATION TO
TOWNSVILLE SUMMIT 9 OCTOBER 2015
The Far North Queensland Regional Organisation of Councils’ membership includes 10
local governments from Hinchinbrook in the south, north to Cook and west to Croydon.
The FNQROC region covers more than 250,000 square kilometers and represents more
than 260,000 people. As a region we work collaboratively but also respect the rights of
individual member Councils to advocate for their local priorities which will make an
economic and social difference for their communities. Some individual Council’s are
making their own submission as invited.
Regionally we have common priorities across Councils, Advance Cairns and Far North
Queensland and Torres Strait Regional Development Australia which will have a positive
economic effect in our region. These common priorities are identified in the ‘8+8’; that
is 8 infrastructure priorities and 8 policy priorities.
The 8+8 is currently being updated in preparation for the November summit in Cairns
and it is envisaged the priorities identified in the report presented today will remain or
be included.
Our regional infrastructure priorities include:
Aquis Great Barrier Reef Resort; which:
Has widespread community and civic support and will contribute $8.15 billion in
capital investment into the Queensland economy ($4.89 billion will be realised
before 2017).
Is expected to attract 500,000 visitors as a result of Stage 1.
Is expected to need a direct workforce of 3,750 construction workers and 20,000
full-time equivalent staff when the resort is operational; the regional flow on
effects will result in 50,000 full-time jobs throughout Far North Queensland.
From the Queensland Plan it will support achieving target 8 to double the
regional population outside of South East Queensland, target 9 to have the
highest income, trade and employment growth in Australia and Goal 8 to have
strong and prosperous regions.
We encourage the State and Commonwealth Governments to continue to work
proactively with the proponent to make this private investment a reality.
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Water Security
Water security is essential for any economic growth in the region. Whilst our region has
significant rainfall our ability to store or access water is reaching current capacity which
will inhibit growth. Identified as a priority are Cairns, Port Douglas reservoir, Croydon,
Lakeland, Georgetown and Southern Atherton Tablelands Development Scheme.
Transport infrastructure and in particular:
Continued inclusion of Bruce Highway upgrades within forward budgets.
Budget allocation for the committed Hann Highway with the funds allocated to
Councils to undertake the works.
Widening and sealing of Ootann Road (91.4Km) – remaining link between Burke
Development Road at Almaden and Kennedy Highway west of Mt Garnet.
Aviation development; we support Cairns International Airport’s masterplan to
manage future growth with significant opportunities for increased capacity and
further investment; and Mareeba Airport’s plan for expansion to support
general aviation and training, and
Shipping from Cairns and Mourilyan which could be supported by
Yarrabahs development of Wungu Beach.
At this point FNQROC would like to thank the State Government for the additional $60
million over two years into the Transport Infrastructure Development Scheme. In our
region this will support regional infrastructure improvements to support economic
growth; particularly for agriculture, grazing and tourism.
Finally, we have health services. It is estimated we are short $80 million per year for
health services in region. The Cairns Hospital not only services the FNQROC region but
also the Cape, Torres and Papua New Guinea communities coming across to the islands.
In terms of policy priorities, we have three: Natural Disaster Relief and Recovery
Arrangements and having clarity in the support offered by the State and
Commonwealth Governments, which is imperative not only for local governments but
for investors to have confidence that infrastructure supporting their investment will be
restored after an event. Cost of electricity in the region - not only are we not
competitive within the state but we are not competitive nationally or internationally.
There are some policy decisions which could help the situation in Far North Queensland
such as removing the 5% head room charge in our tariff which is designed for
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competitive markets; Ergon Energy has no competition in Far North Queensland.
Finally, and by no means least, is resolving Land Tenure and lease issues. This is
particularly important in the Cape and Indigenous Council areas. We need to see active
processes to resolve these issues which will allow investment into these areas. Until
this is resolved economic development will continue to be stifled.
The opportunities for the FNQROC region and our surrounds are endless however we
need:
The State to make the most of the Commonwealth Governments focus on
Northern Australia. Infrastructure Australia has undertaken an infrastructure
audit as part of this process; the State should actively seek to leverage
Commonwealth funds to capitalise on this audit. Regional State departments
should also be encouraged through KPI’s to review the priorities of the Northern
Australia White paper to incorporate them in their planning.
Alignment of the timing of Commonwealth and State Government grants;
financially we need the support of Commonwealth and State Government grants
to get major infrastructure projects off the ground, this is made difficult when
there are 3 or more months between notifications of funding. It is also difficult
when funding is announced in the second or third quarter of a year it is to be
delivered in.
The State as the only shareholder of Ergon to make electricity affordable. We’re
aware it is revenue for the State but this is at a cost to economic development;
with nationally and internationally competitive pricing there is the potential to
grow industry in the north which in turn will make returns for the State.
Consistent State policies; we have seen inconsistent policies between the
different governments examples of this include environmental legislation,
planning legislation and disaster management funding. This makes it very
difficult to gain investor confidence for large projects.
In preparation for this summit, the State requested two top priorities, if we had to
choose, it would be Water Security and Transport (Road, Rail, Air and Sea) infrastructure
as the policy issues surround Aquis approval, NDRRA, Electricity and land tenure could
and should be fixed with minimal budget allocations.
Cr Bill Shannon FNQROC Chair
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REGIONAL INFRASTRUCTURE PRIORITIES
AQUIS GREAT BARRIER REEF RESORT DEVELOPMENT Aquis needs no introduction as a nationally significant development proposal for Far North
Queensland. The region seeks to ensure the State and Commonwealth Governments
continue to work proactively with the proponent to make this private investment a reality.
Appendix A contains a detailed briefing on Aquis and the benefits to the region.
WATER SECURITY
CAIRNS
Water security for Cairns and the region is critical for economic development. Cairns
Regional Council has projected a population increase from 160,000 to 272,000 by 2044
and with Aquis Great Barrier Reef Resort an additional 68,000 on top of the 272,000.
Regionally there is a need to manage competing conflicts between urban and
agricultural uses of our water; to manage this, long term planning is needed.
In late 2013, Cairns Regional Council started a resource planning project called “Our
Water Security’. Between April 2014 and March 2015, a community-based Water
Security Advisory Group (WSAG) met on a regular basis to consider the water supply
needs of the Cairns regional and, ultimately, to formulate a preferred water supply
strategy for consideration by the Council. The strategy plans to meet the needs of the
Cairns region for the next 30 years.1
The Strategy elements are categorized into near term (5yr) initiatives based on
certainty to cairns; mid-term (10yrs) initiatives which merits further investigation and
mid to longer term initiatives.
FNQROC supports the long term planning by Cairns Regional Council as the major
regional center for Far North Queensland.
1 Our Water Security: Cairns Regional Council Water Security Strategy Final Report March
2015
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LAKELAND IRRIGATION AREA
Lakeland in Cape York has rich soils, reliable rainfall, all weather access to market and a
strong grower presence has evolved to become one of the premier agricultural areas in
the region.
In 2013/14 banana productions was 372,000 tonnes, 90% of which are grown in Far
North Queensland with a value of $540m.
The only constraint Lakeland faces is an affordable and secure water supply. Current
demand far outweighs supply which has meant a slowing in expansion for the
agricultural and horticulture industry.
Improved water security is essential to grow the future of the region eg. A 300,000ML
dam with utilization rate of 70% could potentially irrigate a further 15,000 to 20,000
hectares with the potential gross earnings at the farm gate exceeding $250m.
Cape York Sustainable Futures is seeking $825,000 to do a feasibility study.
The feasibility study will look at:
1. Major Dam and irrigation reticulation/hydro power/tourism
2. Previously unused/unidentified underground water, and
3. On farm dam efficiency and affordability
PORT DOUGLAS RESERVOIR
There exists a demonstrated critical water storage shortfall for Port Douglas and Craiglie
current and future development areas; a new, larger, and higher reservoir is required to
meet existing and future water needs.
The additional water storage is critical to investor confidence. As an example, the
Sheraton Mirage has recently completed a $4 million upgrade to improve infrastructure
in preparation for a larger redevelopment. It has plans for a $40 million dollar
renovation and refurbishment to be completed by 2016. After this, over five to six years
Fullshare Group will carry out a $200 million facelift to existing Mirage facilities to
propel the resort to a new level of luxury. Fullshare Group has confirmed that the ability
for the Douglas Shire Council to provide sufficient infrastructure services to support the
increasing needs of its residents, businesses and visitors is a critical factor influencing
the planned renovation and refurbishment.
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Based on tourism industry growth forecasts it is estimated that the investment required
in new development required to accommodate the projected increase in visitor
numbers would be $150 million or $7.5 million per year over the next two decades. This
would generate 30 local jobs per year for the next two decades.
The current scheme relies on the drawing of raw water, for treatment, from a creek
system that is subject to seasonal variations. There are no dams for providing storage.
Within Port Douglas the visitor load is exceptionally large and highly variable and in
equivalent resident terms adds an additional 50-60% to the resident population of the
Shire (The 2011 census recorded three time the number visitors to residents). Seasonal
visitor peaks occur during the dry season when the flow of water from the water source
(Rex Creek) is least reliable. Water storage is critical as it acts as a buffering device for
managing short-term mismatches between water production and consumption.
A site for the new reservoir has been identified and purchased with all approvals
required under Commonwealth, State and Local legislation being met.
National engineering design and construction company BMD, in conjunction with post tensioned structure specialist Glynn Tucker, have completed the detailed design and documentation. Douglas Shire Council has determined it will need to invest an estimated $14.4 million to deliver the following infrastructure:
A 20 ML reservoir above the 53m elevation contour
Dedicated inlet & outlet mains each approx. 2.5km
Access road of approximately 0.6 km.
The reservoir is Council's highest priority. It will unlock the Shire’s development
potential but without financial help, it will not proceed. Council has lodged an
application for matching funds under the Commonwealth’s National Stronger Regions
Fund, and has also submitted an application for $5 million under the State
Government’s Building Our Region program. The outcome of both applications is due to
be announced in December 2015.
SOUTHERN ATHERTON TABLELANDS DEVELOPMENT SCHEME
The Southern Atherton Tablelands Development Scheme is a proposal to develop
100,000ha of irrigated agriculture in the catchment of the Upper Herbert River, with
integrated flood mitigation and power generation could provide significant benefits for
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the Tablelands Region. It is believed it will establish up to 100,000 ha of irrigated
agriculture in the catchment of the Upper Herbert River, combined with integrated
flood mitigation and hydro-electric power generation.
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Project costs
This will depend very much of a cost/benefit analysis of the distribution of suitable
agricultural land in relation to the costs of water storage and water distribution
infrastructure. At this stage and with very limited information available, I would suggest
the first stage (a single dam, agricultural development and some flood mitigation) at
about $200m.
Economic value of project.
a. Agriculture - The scheme is similar in size to the Burdekin. This has a Gross
Regional Product of about $1 billion and supports 18,000 people. My guess is
that returns from SADITS will be greater because of higher potential crop
diversity and average crop value (more at p10 of submission).
b. Flood mitigation – About $10m for every day the Bruce Highway remains open
when it would have otherwise been cut. No data for rail but something similar
might be expected. NDRRA funding for Hinchinbrook Shire has averaged about
$22m/ annum. Crop and other losses are at least $7m/annum (see p5 of
submission).
c. Hydro-electricity – Some savings in minimising transmission losses especially at
peak loads are indicated. Significant reductions in CO2 emissions will help the
Reef (climate change is seen as the #1 threat) and the status of Cairns as a clean
green destination.
Current project status
a. A request to State and Commonwealth Governments was recently submitted for
feasibility funding under the National Water Infrastructure Development Fund
(copy to be sent). A decision is expected in June.
b. A draft MOU has been prepared for a Steering Committee to advance the
objective of SADITS. The envisaged initial membership is TRC, HSC, Herbert River
Improvement Trust, Advance Cairns and Townsville Enterprise (copy to be sent).
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TRANSPORT INFRASTRUCTURE
ROADS – GENERAL
It is noted in the Infrastructure Australia audit that over 55% of the Queensland
Northern Australia network exceeds the theoretical design life and a third of network
seals today are older than the target optimum, compared with only 10% in 2003. Based
on Department of Transport and Main Roads input to the audit, Queensland notes
pavement rehabilitation and programmed maintenance requirement in Northern
Queensland of $700m over the next five years, $318m of which represents backlog2.
FNQROC welcomes the doubling of Roads to Recovery and the State Governments
increase to the Transport Infrastructure Development Scheme for 2015/16 and 2016/17
and call on a commitment to continue this investment past 2016/17. This scheme
supports transportation to State and Commonwealth Networks and continued and
increased investment into our road networks is a priority with an estimated 90%
increase in freight movement between 2011 and 2026.
NATIONAL HIGHWAY
ACCELERATION OF EDMONTON TO GORDONVALE DUPLICATION
Infrastructure Australia identifies the Bruce Highway as Queensland’s major north-south
corridor connecting coastal population centers from Brisbane to Cairns and supporting
58 percent of the State population. A general lack of capital investment over the years
means the road now faces significant safety, flooding and capacity challenges.
We are seeking:
continued commitment and investment into the Bruce Highway Action Plan
focusing on safety, flooding and capacity and
acceleration of Edmonton to Gordonvale duplication using savings obtained from
completed Bruce Highway projects.
2 Infrastructure Australia Northern Australia Audit Pg 113
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EXTENSION OF NATIONAL HIGHWAY FROM RAY JONES DRIVE TO
SMITHFIELD ROUNDABOUT
The designation of the National Highway should be extended from the
current terminus in the Cairns CBD to the intersection of the Captain Cook
and Kennedy Highways at Smithfield.
The Bruce Highway is part of the National Highway and provides the vital linkage
between Cairns, other Queensland coastal cities and Brisbane.
Currently the Bruce Highway terminates in the Cairns CBD, almost adjacent to the
Port of Cairns, but some distance from Cairns Airport.
Access to Cairns City from the north is via the Captain Cook Highway, which links
Cairns and Port Douglas / Mossman and via the Kennedy Highway which intersects
with the Captain Cook Highway at Smithfield. The Kennedy Highway (via the
Kuranda Range) provides the principal link to the Atherton Tablelands and Cape
York Peninsula and eventually links to the Kennedy Development Road to provide
access from Far North Queensland to Gulf of Carpentaria communities and to the
Northern Territory. The Captain Cook Highway terminates at Cairns Airport, on the
northern fringe of the Cairns CBD.
The Kennedy Highway is currently a critical freight route for the efficient
distribution of fuel, fertiliser and other products from Cairns to Tablelands,
Peninsula and Gulf industries and communities and for transport of product from
these areas to Cairns. The road is also a growing commuter route for residents of
Kuranda and the Northern Tablelands who work in Cairns.
The Cairns Airport is the single most critical piece of infrastructure in North
Eastern Australia. Whilst providing the point of entry or exit for tourists visiting the
region, it is a critical freight hub enabling the export of a variety of products
including seafood, fresh flowers and fruit and vegetables and it provides expertise
and service capability in aviation services. It is considered that there is significant
potential to expand export activities, particularly to Asian markets. Some airlines
operating services to / from Cairns have an ever increasing reliance on the freight
component of the flight which serves to sustain seasonal variation in passengers.
Connectivity to the Airport from the north and south is a critical enabling factor in
the future development of the airport as an export and service hub.
There is an obvious “missing link” in the current road configuration:
1. the National Highway does not connect with the principal regional export
hub i.e. the Cairns Airport;
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2. the National Highway does not connect with the principal freight route into
Cairns from the region’s productive agricultural regions i.e. Atherton
Tablelands, Cape York Peninsula and Mossman.
REGIONAL INTEGRATED ROAD TRANSPORT STRATEGY
It is noted that the Far North does not have any nominated State Strategic Roads in the
region. Nor do we have a regional integrated road transport strategy. Investigations
cannot find when or if one has ever been in place. Surprisingly, the FNQ2031 was not
informed by an integrated road transport strategy.
Development of a Far North Regional Integrated Road Transport Strategy in consultation
with Local Governments is a priority to inform decisions and support economic
development.
BRUCE HIGHWAY
Infrastructure Australia identifies the Bruce Highway as Queensland’s major north-south
corridor connecting coastal population centers from Brisbane to Cairns and supporting
58 percent of the State population. A general lack of capital investment over the years
means the road now faces significant safety, flooding and capacity challenges3
We are seeking continued commitment and investment into the Bruce Highway Action
Plan focusing on safety, flooding and capacity.
HANN HIGHWAY
CSIRO’s Transport Network Strategic Investment Tool (TRANSIT) is being utilized by the
Commonwealth Government to priorities’ $100million funding on the Beef Roads. This
same tool has identified that sealing the remaining 105km of the Hann Highway would
reduce travel time on the highway from five to three and half hours. TRANSIT also
identified that the number of road trains using the fully sealed Hann Highway would
increase by 25 per cent.
When the then Prime Minister (Tony Abbott) was in Cairns to launch the Northern
Australia Alliance he announced funding to seal the Hann Highway.
Currently we are seeing a difference in opinion between Councils and the Department
of Main roads on the cost to seal the remaining unsealed sections of the Hann Highway.
3 Infrastructure Australia Northern Australia Audit Pg 60
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This difference in the main is due to the differing standards applied to the costing. The
sealing should be fit for purpose rather than to the ‘gold plated standard’ meeting Q50
(or 2% Annual Exceedance Probability) standards. To ensure value for money and
continue employment of the local workforce we are seeking the support of the State
Government to have this funding delivered directly to Etheridge and Flinders Councils to
undertake fit for purpose works.
We are also seeking to see this funding identified within the Commonwealth and State
budgets.
OOTANN ROAD
Ootann Road is a critical north-south link road in the central western area of Mareeba
Shire Council and Tablelands Regional Council. It is identified as a Local Road of Regional
Significance (LRRS) by the FNQ RRTG and is the last missing transport link between the
Cape and Burke Development Road at Almaden with the Kennedy Highway 22km west
of Mt Garnet. The road is 91.4km in length (86.59km within the Mareeba Shire Council,
and 4.81km within the Tablelands Regional Council), most of which is unsealed. Ootann
Road is a Type 2 road train route, used predominantly for cattle and mineral ore
transport. Ootann Road is a road of vital importance to the cattle industry. Many large
cattle properties to the west of Chillagoe (Nychum, Bolwarra, Wrotham Park, Mt
Mulgrave, Gamboola, Highbury, Dunbar etc.) and further to the north in the southern
reaches of Cook Shire transport cattle to southern and eastern markets.
The road had an AADT of 40 – 50 vehicles per day in 2008. Heavy vehicles comprise
approximately 60 - 70% of the traffic. Between 2004 and 2008, traffic volumes grew by
30-50%. With the highly likely increase of mining operations in the area and the
increased marketing and promotion of the area as tourism “must see”, traffic volumes
are continuing to increase significantly.
With definitive wet and dry seasons and the high heavy vehicle component of traffic
volumes, the unsealed pavements are susceptible to rapid deterioration and
damage. The road is now in very poor condition and has long sections which require
gravel re-sheeting. Anecdotally, heavy transport vehicles are starting to avoid using
this road due to its poor condition awhich is damaging their vehicles and stock, and they
are choosing to instead take a lengthy detour through the Atherton Tablelands at
considerable additional cost and unnecessarily accelerating the deterioration of both
State and Council roads. For B-doubles, there is a detour of approximately 261km from
Almaden to Ravenshoe via Mareeba dn Atherton. On the same route, a detour for Type
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1 road trains is 540km as Road Trains are not permitted between Mareeba and
Ravenshoe, so they decouple at Mareeba and double back from Ravenshoe. For Type 2
Road Trains the detours would be 680 km as they need to travel 3 times between
Mareeba and Ravenshoe to carry the three trailers.
Tablelands and Mareeba Shire Councils have limited funds and is currently struggling to
maintain the 91.4km section of predominately gravel road and is unlikely to be able to
fund upgrades.
An estimate of $54mil is required over the 91.4km to widen and seal the link.
MAREEBA AIRPORT EXPANSION4
The Mareeba Airport was constructed quickly during the World War II period, 1941 -
1945 as an important military base and is now over 70 years old. The airport is
strategically positioned well above sea level, close to the town of Mareeba and within
easy driving distance of the coastal regional city of Cairns, in Far North Queensland.
The Mareeba Shire is home to a population of 21,382 persons, of which 13.4% of the
population are from Aboriginal and Torres Strait Islander backgrounds, compared to the
Queensland average of 3.6% (Source: OESR, June 2013 & ABS, 2011). The township of
Mareeba is rated as a very low socioeconomic area (Source: ABS SEIFA Index of Relative
Socio-economic Disadvantage, 2011). Critical to the Mareeba region and growth of the
Far North Queensland’s economy is an alternative location to Cairns Airport for light
aircraft.
The inadequate and aged infrastructure at Mareeba Airport is preventing regional
economic growth and efficiencies. The runway is at the end of its useful life and its
strength is inadequate for all but very light aircraft, there is a lack of taxiways resulting
in take-off delays and there are no more aviation business lease spaces available for key
anchor tenants. A short distance away, the Cairns Airport is growing strongly and is
considered the leading airport in Northern Australia. Congestion of the Cairns Airport
runway is increasing and economic modelling by Cummings Economics has shown that it
is evident that over a 30 year period, very substantial single runway congestion
constraints are likely to emerge. Further, in an emergency situation, there is no close
alternative airport for smaller passenger aircraft or large freight to land. These
constraints and the significant projected growth in the region due to planned
investment projects highlighted in the Northern Australia White Paper mean that a
4 Mareeba Airport Upgrade Business Case, Mareeba Shire Council
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regionally beneficial solution is required to enable the economic growth potential of Far
North Queensland to be realised.
An upgraded Mareeba Airport will provide an alternative to Cairns Airport for activities
like pilot training, maintenance and some general aviation, almost certainly delaying the
need for a costly new runway in Cairns resulting in catalytic economic efficiencies. The
upgrade will build export income by providing access to growing international demand
in flight training from Asia. Regionally, the upgraded airport will be an effective facility
for use in the case of disaster management. The new facility will increase employment
as it becomes a base for development of regional capabilities in avionics and aircraft
maintenance. Economic modelling has shown that the upgraded airport will satisfy the
needs of growing regional aviation demand flowing from major projects and
developments identified in the Australian Government Northern Australia White Paper,
particularly in the Fly In Fly Out (FIFO) market and maintenance of larger aircraft.
The Mareeba Airport Upgrade proposal provides a regional solution for growing aviation
demand. The proposal has a Benefit Cost Ratio of 1.66, a projected Gross Regional
Product of $430 million, is strongly supported by all levels of government and a key
stakeholder – the Cairns Airport. Economic modelling demonstrates that the project
will create an additional 447 FTE in direct and flow on positions over a 30 year period.
238 FTE will be generated in ten years which is comparable to the 25% of
estimated unemployment in the Mareeba district as at December 2014.
Qualified engineers have estimated the cost of upgrading the Mareeba Airport at $18
million, of which $13 million has been committed by the Queensland State Government.
A further $5 million (28%) is required to fully fund the project.
The Mareeba Airport upgrade is investment ready, supported by the QLD Airport
Consultants (QAC) 2010 Mareeba Airport Development Plan and the 2012 Lambert and
Rehbein tender ready designs. Construction will commence in April 2016.
CAIRNS SHIPPING
It is envisaged a more detailed briefing will come from Cairns Regional Council, Ports
North and Advance Cairns. The Port of Cairns is a strategic port with a diverse range of
operations and is critical to the economic sustainability of our region. Closing the port
for future expansion will have a major impact on our economy. We continue to
advocate for the Port of Cairns and the ability for the port to develop as the city grows.
There is a clear message of broad support to ensure that our infrastructure keeps pace
with our population growth.
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MOURILYAN
Mourilyan is an ideally placed port with access to air, rail and road. It has easy access to
the Tablelands and no dreading is needed.
FNQ 2013 recognises that rural residential development between Mourilyan township
and Mourilyan Harbour should be limited to protect the port’s freight route. The
regional plan recognizes the potential of the Innisfail-Mourilyan area as a transport hub
for the region and advocates further investigation of land for industrial purposes.
We seek to maintain Mourilyan as an option for further development in the future.
WUNGU BEACH
Wungu Beach is located on Yarrabah Aboriginal Community land just 20 kilometers as
the crow flies to the east of Cairns.
Passenger numbers at the Cairns Airport are forecasted to double of the next 20 years
and the Yarrabah Aboriginal Shire Council has a strategy to facilitate the development of
a resort and cruise ship precinct on its lands at Wungu Beach to contribute capacity to
meet the future demand for resort and tourism products in North Queensland.
Yarrabah Aboriginal Shire Council has been allocated $7 million for a jetty in Yarrabah by
the Department of Transport and Main Roads. It is believed that the project would
complement other ports in the areas and bring economic development.
Appendix B contains further briefing notes on this proposal.
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POLICY PRIORITIES
HEALTH SERVICES FNQROC understands there is a Health Strategic Plan for the Cairns and
Hinterland Hospital and Healthcare Service. The Plan has been written to meet the
clinical demands of the Tropical North Queensland region (including those referrals
from the Cape & Torres Hospital and Healthcare Service). To fully fund this plan a
further $80mil is required annually to fund additional bed capacity following the
hospital redevelopment and the recruitment of approximately 100 additional
frontline and tertiary personnel.
FNQROC is seeking a staged plan to fund the requirements of this Strategic plan.
NATURAL DISASTER RELIEF AND RECOVERY ARRANGEMENTS There is a need for the State and Commonwealth governments to show commitment
to restoring the region after a natural disaster. Private investment in the region is
likely to be difficult if essential and social infrastructure within the region
deteriorates as a result of reduced Commonwealth and State support to restore
infrastructure within the region.
Councils contribute significantly to preparing and restoring their communities after
an event. A significant amount of resources are put to those assets not deemed
essential under the Natural Disaster Relief and Recovery Arrangements (NDRRA);
generally this is for all restoration works outside of a road network. In addition to
this they contribution funds up to a ‘trigger’ point before they can receive any
support. We are still waiting on confirmation that the annual trigger point
requirements are an acceptable demonstration of the exhaustion of Councils’
resources from Emergency Management Australia.
The Productivity Commission recommendations for Disaster Funding displayed a
clear direction to retract financial support for those areas affected by a disaster
which has caused considerable concern for both State and Local Governments.
Whilst the Commonwealth Government has assured us that there is reluctance to
lessening their support, there is no clear direction forward to allow us to plan a
response with confidence. This lack of direction could cause significant financial
hardship on a local government area resulting in a further backlog of asset
maintenance and renewal thus making the region less appealing for an investor.
We are aware of a number of ‘audits’ undertaken on the benefits and savings as a
result of the Federal Inspectorate and Queensland Reconstruction Authority (QRA)
however, it is argued that these ‘savings on ineligible claims’ are a result of unclear
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Commonwealth policy with the interpretation consistently changing at both the
Commonwealth and State level.
We understand there is a new approach to NDRRA by the Commonwealth and the
possibility of an upfront agreed restoration of essential public asset (REPA) cost.
The QRA were at one stage looking to agree project costs up front with each Council
and sought tender rates for the 2013 and 2014 contracts and Councils own rates to
build a data base of these unit rates. It appears that rates will be ‘locked’ for
Councils. This concerns us as:
1. Each Council area and in fact each area within a Council will have differing
rates depending on the damage and the distance from a service center.
2. Cairns Regional Council has completed a rate comparison between Cairns
‘greenfield’, Cairns ‘brownfield’, Townsville, Mackay and the Road Alliance
Road Asset Valuation Toolbox. This comparison showed significant variances
and this doesn’t even take into consideration a disaster damaged road which
can vary significantly.
3. QRA representatives have advised that there may be a contingency and
possibility to be able to go back to the QRA to request additional funds if the
agreed amount is exceeded. Our confidence in this occurring is very low with
a high expectation that the requirements needed to justify additional funds
could never be met by Councils; especially if we can’t put in place processes to
prepare substantiating evidence for all projects to show a ‘profit’ from one
could not be put on an underestimation of another. This exposes Councils to
a high risk of funding the difference as you cannot stop construction once it
has started. As we approach the next season it is concerning that discussions
between the Commonwealth and State have become quite complex on this
issue and there is no resolution in sight.
4. Also concerning are the discussions around betterment; it is understood that
the current deal is the Commonwealth will fund 70% if 5% of the costs are
going to betterment (essentially, that 5% will come from Councils). How is
this determined?
With this proposed new approach, will it resolve the ineligibility of day labour and
internal plant hire for counter disaster operations, emergent and restoration works?
It just does not make sense that a contractor can cover day labour and plant hire
costs but a Council cannot. It does not make sense to a community that the
Commonwealth and Commonwealth Governments will pay significantly more for a
contractor than use local Councils and their workforce; the economy of a town.
FNQROC acknowledges the efforts of the State Government and Queensland
Reconstruction Authority to resolve these issues with the Commonwealth
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government however we cannot stress enough the financial impact of any ambiguity
on Councils. The majority of Councils are not out to defraud the Commonwealth and
State Governments of funding to restore essential assets they are simply unclear of
eligibility as what is eligible and how it is substantiated changes from one year to
the next and from one person to the next assessing the claim.
COST OF ELECTRICITY It is recognized that the provision of electricity to the region and the policies and
legislation around it are very complex. However Infrastructure Australia identified
that Northern Queensland power prices for industrial use are comparatively high,
relative to other northern locations and despite connection to the National
Electricity Market. This limits resources, agricultural and other economic
opportunities. Long transmission lines from southern-located generators and
marginal losses result in higher prices. The extent to which prices are also a
function of market cost allocation rules and whether there could be an economic
efficiency case for altering these rules, including the concept of splitting Queensland
into two or more market regions, are matters for review5.
A typical electricity bill within the region is broken up as follows:
21% Wholesale
3% Green schemes
49% Network distribution
5% Solar Rebate and
22% retail
Large processing businesses are the mainstay of many regional economies and the
ripple effect of their closure would be economically and emotionally devastating to
whole towns and communities. One long established regional manufacturing
business employing up to 100 people has managed to negotiate on average a 2
percent rise on all input costs except for electricity. Their electricity bill increased
52% in 5 years. Electricity is necessary for the business to continue operating. 6
The frustration and impact of high electricity costs are evidenced by the broad
involvement in the recent Australian Energy Regulator 2015-2020 distribution reset
process. This caused the creation of the Far North Queensland Energy Users Group
and the Alliance of Electricity consumers; both of which provided in depth responses
to both the AER and Ergon Energy’s proposal.
5 Infrastructure Australia – Northern Australia Audit Pg 8 6 Far North Queensland Electricity Users Network (lead by Cummings Economics)
submission to Australian Energy Regulator 24 July 2015
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It is recognised that Electricity is a significant revenue source for the State
government with sole shareholder status in generation, transmission (Powerlink),
distribution (Ergon) and retail (Ergon) earning the State dividends; for the 2014-
2015 financial year it appears the dividend paid by Ergon to the Queensland
Government is $1.9billion.
There are a number of State Government policy decisions which are a hindrance to
electricity affordability and economic investment in the region. We would like to
see:
Removal of the 5% headroom charge
Removal of the Solar Feed in Tariff (FiT) in network charges, and
Reflection of actual not market borrowing costs from the Queensland
Treasury Corporation within the Weighted Average Cost of Capital.
5% headroom Charge
The 5% headroom charge is recommended by the Queensland Competition Authority
to promote retail competition for Energex and Ergon. This charge maybe
appropriate for Energex where there is a competitive market however for the Ergon
region there is no competition and is perceived as an additional hidden tax by the
State on communities within the Ergon area.
This 5% is reflected in the fixed service fee and variable consumption charge.
Solar Feed in Tariff
The cost of electricity in this region has caused those who can afford it to move to
solar which has in turn had a major impact on the Feed in Tariff (FiT) also added to
our electricity bills.
The Solar Feed in Tariff (FiT) (a State policy) is funded by consumers rather than
from general State Revenue. The FiT is included in the network charges – this in
effect means that those that can least afford it are substituting the cost for those
that could afford this infrastructure; this is a state policy which should be funded by
State Government revenue
We now find that those with and without solar are facing high network (service)
charges; with the introduction of affordable battery storage, those that can afford it
will look to moving ‘off the grid’ to avoid the service charge; again leaving many
businesses and those that can least afford it to fund the network and state policy
decision.
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Reflection of actual borrowing costs.
Under current arrangements, it is recognised that Ergon (and Energex) can only
borrow from the Queensland Treasure Corporation (QTC). QTC charges market not
actual rates. Reflection of actual not market borrowing costs from the Queensland
Treasury Corporation within the Weighted Average Cost of Capital would assist in
reducing electricity prices. With the State policy to increase debt within Ergon, it is
recognized that this also increases revenue for the State through borrowing costs
being at market rather than actual rates. Again, it is recognized that this is for
competition purposes however Ergon has no competition and thus the impetus for
efficiencies and reduced operational and capital expenditure is lessened.
LAND TENURE AND LEASE ISSUES At the request of the Northern Australian Ministerial Forum (NAMF) and under the
direction of its Expert Advisory Panel (EAP) CSIRO (supported by James Cook
University and The Cairns Institute) prepared a report on Land Tenure in Northern
Australia: Opportunities and challenges for investment7.
The report identifies the case for improving tenure arrangements are compelling but
the challenges in doing so are significant, requiring cross-jurisdictional cooperation,
research, data management and policy development.
Common barriers to investment include:
deficiencies in specific aspects of tenure information and registration of
interests and accessibility of this information to investors;
diversity of tenures and land and water entitlements including the different
conditions of use on similar tenures across jurisdictions;
under resourced negotiation and tenure resolution mechanisms; and
legal and other conditions that limit Indigenous and other land owners
ability to leverage their land assets for capital and development purposes
without affecting existing rights.
It identifies three avenues by which impediments to investment might be reduced
and development in the north encouraged:
1. Increase consistency and reduce complexity through improved tenure
arrangements. This was also identified in the Queensland Parliamentary
7 CSIRO Land Tenure in northern Australia: Opportunities and challenges for investment
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Committee report Inquiry into the future and continued relevance of
government land tenure across Queensland8
2. Improve development assessment, and
3. Improve landscape-scale planning
In March 2014 the State Government announced the first phase of restructure to
Queensland’s land tenure system and the Land Act. These reforms were to made in
two phases and deliver on the 2013 Parliamentary Inquiry into the future and
continued relevance of government land tenure in Queensland9
This inquiry10 identified 44 recommendations; as subset of this is below:
one of the important issues which became apparent during the Inquiry was
the currently fragmented division of responsibility between departments
administering the tenure of various forms of state land and that a more
coordinated approach was needed.
It was apparent that addressing the needs and aspirations of Indigenous
Queenslanders and complying with the future act regime under native title
law lay at the heart of ensuring a sustainable and viable future for all
Queenslanders. The development of Indigenous Land Use Agreements
(ILUAs) in Future Development Areas;
One of the most important issues affecting the viability of the pastoral
industry in Queensland is certainty. There is a need to support pastoralists
seeking to enter into, extend or roll over lease agreements by establishing
services to facilitate the streamlined development of Future Development
Area ILUAs. Recommendations also included reforms to include a program
of incentives to support lessees wishing to convert from term leases to more
secure forms of tenure or fee simple.
The need for business certainty was critical to the tourism sector. It was
recommended that the Government review the trigger point for the renewal
of leases, particularly in circumstances where a proponent is contemplating
capital investment for a future development.
“Our North, Our Future: White Paper on Developing Northern Australia” was
released in June 2015 and identified the need for secure, tradeable titles to land
(and water) to improve economic growth opportunities. Principles for pastoral lease
reform in the North are proposed with specific actions to address tenure issues
include:
8 Parliamentary Committee Final report: Inquiry into the future and continued relevance of
government land tenure across Queensland 9 Media Statement made by Minister for Natural Resources and Mines – March 19, 2014 10 Parliamentary Committee Final report: Inquiry into the future and continued relevance of
government land tenure across Queensland
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1) improving certainty for investment – bringing forward opportunities for
lease renewals and introduction of rolling pastoral lease renewal;
2) diversifying economic activity on leasehold land - business friendly
information; legislating for transferable permits for non-pastoral use on
pastoral leases; template leases for large capital investment and for
greater range of economic activities;
3) providing pathways to freehold – template ILUAs to assist conversion of
pastoral leases to freehold; and,
4) easier administration – compensation costs to be borne by prospective
lessee/grantee; detailed data/maps to be made available; land condition
linkages to lease renewal process.11
The region is eager to see active continued reform of the land tenure system and the
Land Act.
11 Our North, Our Future: White Paper on Developing Northern Australia, 2015,
Commonwealth of Australia
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APPENDIX A – AQUIS GREAT BARRIER REEF RESORT BENEFIT SUMMARY
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APPENDIX B – WUNGU BEACH ECONOMIC DEVELOPMENT SUMMARY