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