Tourism and Transport Forum Leadership Summit 2011
20th September, 2011
Chairman and former parliamentary colleague the Hon. Bruce Baird, Chief Executive, John Lee, colleagues, ladies and gentlemen.Thank you for the opportunity to address the TTF's Leadership 2011 Summit on the Coalition's vision for the transport sector.
Today Australia has an incredibly large infrastructure deficit estimated to be around $700 billion. This 'gap' presents a key challenge for governments at all levels.
A failure to drive infrastructure and development and get regulatory settings right will constrain growth across many sectors of the economy and see national productivity stagnate.
Increased spending on infrastructure has a higher return on investment than achieved from spending in most other sectors.
While greater investment will help grow our economy, boost tourism and build communities, failing to invest will cost us dearly. Urban congestion alone is projected to cost our economy over $20 billion by 2020.
Leaving the statistics aside for a moment, most Australians experience the impact of our infrastructure deficit every day.
Commuters stuck in the daily traffic jam or waiting in a taxi, waiting for a bus, or at the station for a train, which is late or overcrowded, or seeing the backlog of ships at our ports on TV.
We all feel the result of those backlogs. It's comes at an economic cost, but it also takes a social toll adding to stress, anxiety and making daily life generally more difficult.
When Labor spent not one, but two, stimulus packages in the face of the global financial crisis, the rhetoric espoused a nation-building agenda.
However, despite this, Labor spent $2.5 billion installing and then removing combustible roof batts and $16 billion on over-priced school halls.
It is now spending $50 billion on the NBN without any cost-benefit analysis.
But the new road and rail networks that link to our ports and will drive efficiency and competitiveness for years to come are very slow in coming.
Where are the new ports that will take our products from the emerging resources and commodity boom to the world?
Where's the long-term gain for the tens of billions of dollars that were spent in the name of stimulus?
The Business Council of Australia estimates that only 14% of the Government's stimulus spending went to productivity enhancing infrastructure.
As a nation, we're seeing the money pour out but that doesn't mean it's being invested. Big ticket funding announcements make Ministers feel good today, but what do they return to taxpayers?
Coalition's infrastructure plan
Earlier this year the Coalition outlined our plan for enhancing Infrastructure Australia to better target spending and to make sure inter-modal strategies align.
We'll keep it, we'll fund it and we'll listen to it.
The Coalition will require that all major Commonwealth-funded infrastructure projects to undergo a full cost-benefit analysis by Infrastructure Australia.
This is something that Labor has repeatedly promised but, unsurprisingly, failed to deliver.
But we will also task Infrastructure Australia with developing a 15-year rolling infrastructure plan, to be revised every five years, to give certainty to the private sector and broader community about what infrastructure projects will be pursued by government and in what priority.
The Coalition is keen to partner with the private sector to ensure that vital infrastructure can be delivered on time and on budget.
To encourage private investment, the Coalition will task the Office of Financial Management with developing an Infrastructure Partnership Bonds Scheme, in consultation with advice from the market.
The goal of the Scheme would be to attract household savings and superannuation funds through tax arrangements to lever more investment in infrastructure.
Projects of national significance would be eligible under the Scheme. Subject to a public cost-benefit analysis, these could generate sufficient returns to the extent that some or all of the debt can be serviced by revenues generated through levies or charges that relate directly to the project.
This will give private sector investors the confidence they need to take these projects seriously and see the government as a worthwhile partner once more.
The doubling of our national freight task by 2030 - trebling along the eastern seaboard over the same period, and projections of a population of at least 36 million Australians by 2050 mean we cannot afford under-investment and short-sighted indulgence.
We can't put off rising to these challenges any longer.
Carbon tax
Then there is the carbon tax. It would be remiss not to mention its impact on transport and tourism industries, especially with three-quarters of tourism businesses expecting it to have a medium-to-high impact on them and two-thirds expecting a medium-to-high hit to their competitiveness.
As you will be aware, rail, shipping and aviation will be under the pump from the carbon tax from day one, via increased aviation excise, reduced fuel tax credits and increases in the cost of electricity.
Higher construction costs for buildings, roads, airports, more expensive food and other inputs will all have a significant impact on industry costs.
It's a vicious inflationary cycle.
It is the Labor Government's intention to include the fuel used by buses and the trucking industry in the carbon tax regime from 1 July 2014.
We oppose the carbon tax package and, if it is implemented, a future Coalition government will repeal it.
Both Qantas and, particularly, Virgin Australia have been identified among the Australian companies most affected by the carbon tax and, naturally, they will need to pass on the cost of the carbon tax to domestic passengers by increasing airfares. That's to be expected.
But smaller regional airlines that face the same cost inputs have less leeway to pass on higher cost. Inevitably they must re-evaluate many services.
Regional Express has already flagged that it may have to axe seven routes in regional Victoria and New South Wales. Some communities will lose air services altogether.
The irony of the carbon tax is that it will only apply to fuel used for domestic aviation - not international services. So flights that have a higher carbon footprint, like from Sydney to Bangkok or Los Angeles, will be carbon tax-free but a flight from Sydney to Cairns will cost more.
When Australians holiday in Cairns, the Gold Coast or Broome they will pay carbon tax, but if they fly to Fiji, Phuket or Honolulu they will not.
It's that same story for train and bus operators. They will feel the effects with diesel and electricity prices set to rise.
What message does this measure send to our struggling tourism industry?
Tourism operators, along with all Australians, want to protect our environment. It is a key driver of tourism in this country and is a natural asset that should rightly be preserved for future generations to enjoy.
From Kakadu to our beautiful coastline, coral reefs and rainforests, our diverse natural environment is iconic and important to protect.
But the inescapable truth is that Australia's carbon tax will do nothing to save our environment - global emissions will actually be higher. What it will do is make sections of the transport industry less competitive, make domestic tourism more expensive and push up the cost of living for everyone.
Tourism Research Australia has found that there is already an increasing tendency for Australians to take holidays overseas, rather than in Australia.
The rise of low cost international carriers, coupled with the high Australian dollar and the natural disasters experienced last summer, have combined to create a fragile climate for our domestic tourism industry.
Now is certainly not the time to be increasing costs and discouraging domestic travel in Australia or international travel to Australia through a great big new tax on everything.
It is often overlooked that the Coalition is committed to the same 5% target, reducing emissions by 2020.
The difference is in our approach. We will achieve this goal through a Direct Action Plan, which is incentive driven, not punitive.
Every dollar will go to actually reducing emissions and protecting our environment here in Australia.
Regional tourism and aviation
Over the past few years I've travelled extensively throughout Australia, especially regional Australia. I consistently hear concerns about jobs, cost of living pressures and access to essential services.
Often, it is regional communities and industries like tourism and aviation that feel the pinch first.
As I mentioned earlier, the carbon tax and other policy measures like the axing of the en route navigation charges subsidy scheme, will have a serious impact on the ability of regional airlines to compete.
But the obvious flow-on from that is the hit to local shops, restaurants and cafes, bars and hotel/motels.
It is frustrating to hear ignorant and out-of-touch Ministers talk about 'only a few dollars more' to the cost of an airline ticket from one place to another.
As you and I know, the route viability calculations are more complicated than that. If it was as simple as adding a few dollars to a ticket, then companies would have already done it to increase profits for their shareholders and expand their business.
Access to transport services in regional areas is a vital part of building and sustaining communities. Australia's population is the most densely packed in the OECD. In fact, it's almost double the OECD average, with 88% of or people crammed into around 3% of the landmass.
It is perhaps for this reason that it can be easy to forget the important part our regions perform in driving our economy.
Not only the mining and resources sector, which has changed the dynamic of many regional areas, but the agricultural and horticultural industries, forestry, fisheries and tourism, just to mention a few, contribute a large amount to our nation's economy.
Fly in/Fly out
There is no denying the mining sector, through the advent of fly-in, fly-out labour, has been a major boost to general aviation and regional air services, with many people living in cities and coastal areas flying to work.
This workforce has provided a boost to regular services for communities that have mines or gas. Indeed, Australia's FIFO regime has attracted worldwide attention as somewhat of a model.
The aviation sector has responded well to the challenges and opportunities of this lifestyle change but FIFO is not without its critics.
The Queensland government approval of an 100% FIFO new mine near Moranbah, is an ominous sign for those who had hoped the mining boom would leave behind a legacy of stronger country communities with permanently improved services and enduring populations.
For a long time these issues of fly-in, fly-out labour and balanced regional development have been seen as mutually exclusive.
I share the disappointment about how few mining companies contribute to the areas they invade and how little state governments return of the massive royalty incomes they receive to the communities.
There are things that can be done to share the mining boom and where aviation will play a role.
I foresee new FIFO services, not just from capital cities, but also from popular and growing residential regions like the Gold Coast, Sunshine Coast and Fraser Coast, northern NSW and Bunbury.
In fact, some of these communities are already interested in developing such services. Regional centres offer a pleasant, community conscious lifestyle and are more likely to offer support and assistance for families left behind.
There is a real potential for an 'Adopt a Mine' approach where regional cities can become the residential base for a particular mine, with fly-in, fly-out services from the base community direct to the mine.
Nationals' vision
Putting on my hat as Leader of The Nationals, we are keenly aware of the broader role regional Australia plays.
We argue that it is only fitting that a fair share of the revenue created in the regions should be returned to the regions.
A 2009 study by the National Institute of Industry and Economic Research revealed that, on average, it costs rural residents five-times more to access essential services as it does metropolitan residents.
At our Nationals' Federal Council last month, I launched our 'Regional Investment Strategy'. A central pillar of the strategy is to begin to fill the critical workforce skills shortage in our regional areas.
I note that the regional skills shortage is also a top-of-mind concern for the tourism sector in terms of business impediments.
We can't make people move to regional areas, but we can create the business case for start-up or relocating operations. People will follow worthwhile employment opportunities for themselves and their families.
Overwhelmingly, the majority of unemployed Australians are in our capital cities. Government policies should enable them to move to jobs in regional areas for mines, agriculture and tourism.
It is clear that access to good infrastructure - be it roads, rail, telecommunications, bridges, dams or airports - is a vital key to truly unlock regional Australia's potential.
But we know that a lack of soft infrastructure - such as health, including allied health services, education, childcare and other social institutions - are barriers to regional development.
We must set about the task to overcome these obstacles and capitalise on our national potential.
Conclusion
Today I want to assure you see that the Coalition is on your side.
We know that better national infrastructure is vital to create a vibrant transport and tourism sector and contribute greatly to rebuilding and growth.
I am unashamedly positive about regional Australia and its capacity to contribute to rebooting our nation's future.
I say to you that future must be bolder and wiser.
As a nation, we are overdue in recognising the role regional areas can, and must, play in overcoming Australia's national challenges.
While our major cities struggle under growing population pressures, our regions cry out for more people, services, infrastructure, businesses and employees.
It's time to correct that imbalance.
Thank you.
[ENDS]
