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Finance and Administration Committee FINANCE AND ADMINISTRATION COMMITTEE Members present: Mr PS Russo MP (Chair) Mr MJ Crandon MP Mr DJ Brown MP Mr DA Pegg MP Mr TA Perrett MP Mr PT Weir MP Staff present: Ms A Honeyman (Research Director) Mrs M Johns (Principal Research Officer) Ms K Shalders (Executive Assistant) PUBLIC HEARING—INQUIRY INTO THE NORTH STRADBROKE ISLAND PROTECTION AND SUSTAINABILITY AND OTHER ACTS AMENDMENT BILL 2015 AND THE NORTH STRADBROKE ISLAND PROTECTION AND SUSTAINABILITY (RENEWAL OF MINING LEASES) AMENDMENT BILL 2015 TRANSCRIPT OF PROCEEDINGS FRIDAY, 8 APRIL 2016 Brisbane Public Hearing—Inquiry into the North Stradbroke Island Protection and Sustainability and Other Acts Amendment Bill 2015 and the North Stradbroke Island Protection and Sustainability (Renewal of Mining Leases) Amendment Bill 2015 FRIDAY, 8 APRIL 2016 ____________ Committee met at 10.28 am CHAIR: Good morning. I declare this public briefing and hearing of the Finance and Administration Committee’s inquiries into the North Stradbroke Island Protection and Sustainability and Other Acts Amendment Bill 2015 and the North Stradbroke Island Protection and Sustainability (Renewal of Mining Leases) Amendment Bill 2015 open. I am Peter Russo MP, chair of the committee and member for Sunnybank. The other members of the committee are: Mr Michael Crandon MP, member for Coomera and deputy chair; Mr Duncan Pegg MP, member for Stretton; Mr Tony Perrett MP, member for Gympie; and Mr Pat Weir MP, member for Condamine. Mr Craig Crawford MP, member for Barron River, is unavailable to attend and is replaced by Mr Don Brown MP, member for Capalaba. Dr Mark Robinson MP, member for Cleveland, is also present as he is participating in this inquiry. The purpose of this briefing is to receive evidence on the Draft North Stradbroke Island Economic Transition Strategy and the North Stradbroke Island Sand Mining Workers Assistance Scheme. The briefings and the hearing are formal proceedings of the parliament and subject to the Legislative Assembly’s standing rules and orders. The committee will not require evidence to be given under oath, but I remind you that intentionally misleading the committee is a serious offence. I remind all those in attendance at the hearing today that these proceedings are similar to parliament to the extent that the public cannot participate in the proceedings. In this regard, I remind members of the public that under the standing orders the public may be admitted to or excluded from the hearing at the discretion of the committee. Please turn mobile phones off or switch them to silent. Please note that no calls are to be taken inside the room while the proceedings are taking place. I remind committee members that departmental officers are here to provide factual or technical information. They are not here to give opinions on the merits or otherwise of government policy or alternative approaches. Any questions about government or party policy that the documents seek to implement should be directed to the responsible minister or left to debate on the floor of the House. Thank you for your attendance here today. The committee appreciates your assistance. You have previously received a copy of the instructions for witnesses, so we will take those as read. Hansard will record the proceedings and you will be provided with the transcript. The proof transcript will be placed on the committee’s website once it is available. Today’s briefings are also being broadcast live and an archived broadcast will be available soon. I remind witnesses to please speak clearly into the microphones and to state their name and position when they first address the committee. ANDREW, Mr Matthew, Executive Director, Industry Development, Office of the Chief Economist, Department of State Development DANN, Mr Trevor, Director, Economic Policy (Infrastructure), Economics Division, Queensland Treasury ELLEM, Ms Danielle, Director, Industry Strategy and Policy, Office of the Chief Economist, Department of State Development McFADYEN, Ms Catherine, Director, Economic Policy (Infrastructure), Economics Division, Queensland Treasury CHAIR: I welcome you all here again. I do not know how you want to run it, Matthew. Mr Andrew: As always, it is at the discretion of the committee. We were asked to prepare an opening statement. The directions we were given were that there were going to be fewer questions in this morning’s session than in the afternoon session. I have prepared a slightly longer than usual opening statement to read, if that is okay. CHAIR: It is advisable to start that way. Brisbane - 1 - 08 Apr 2016 Public Hearing—Inquiry into the North Stradbroke Island Protection and Sustainability and Other Acts Amendment Bill 2015 and the North Stradbroke Island Protection and Sustainability (Renewal of Mining Leases) Amendment Bill 2015 Mr Andrew: Treasury have an opening statement as well. Thank you to the committee for the opportunity to attend this briefing. My name is Matthew Andrew. I am the Executive Director of Industry Development with the Department of State Development. I would like to acknowledge my colleague Danielle Ellem, who is a director in the same department. Firstly, I would like to present the background to the Draft North Stradbroke Island Economic Transition Strategy. In 2015, the Palaszczuk government announced two significant election commitments relating to North Stradbroke Island: to return to the 2019 phase-out of sandmining on the island and a funding commitment of up to $20 million over five years to transition North Stradbroke Island’s economy away from sandmining. The intent of the economic transition strategy is to support the expansion of the island’s existing industries including tourism and education to ensure a strong sustainable economy. As you all would be aware, government policy on sandmining on North Stradbroke Island has a history. In 2010, the Bligh government released plans to phase out sandmining on the island and focus on building a sustainable economy. In 2011, the Queensland government consulted with the island stakeholders to develop a three-part strategy comprising a situational analysis, an economic transition strategy and an action plan. However, due to the change in government in 2012 these documents were never finalised. The current draft strategy acknowledges the extensive consultation that was conducted in 2011 and builds on these documents. I turn now to the economic impact analysis. In 2015, the Department of State Development engaged an independent contractor to undertake an analysis of the employment and economic impacts of ending sandmining on North Stradbroke Island. The analysis sought to quantify the direct economic and employment benefits only. The indirect impact of sandmining closure on North Stradbroke Island and the broader Redland City region was explored but only qualitatively discussed in the analysis. The mining company’s employment and financial records were not analysed as part of this process as they are private documents. The analysis was conducted using public information from the Australian Bureau of Statistics 2011 Census of Population and Housing data on employment and income. It should be noted by the committee that there are a number of limitations to using this data set, such as the age of the data, changes to the sandmining industry on the island since 2011 and any impacts of the mining company’s business decisions such as production rates, productivity changes and government policy. Therefore, it is very difficult to predict the impact the end of sandmining will have on the North Stradbroke Island economy due to the small size of the economy and the lack of reliable data sets. That said, the analysis found approximately 141 people are employed in sandmining operations on North Stradbroke Island and of these approximately 95 reside on the island. These direct employment estimates assume that the current rate of production will remain constant throughout the mine’s life until its operations cease. The analysis also found that sandmining operations on North Stradbroke Island generate between $62.8 million and $86 million in gross value added terms each year. It should be noted that this estimate captures the economic activity produced in the region rather than the proportion of economic activity retained in the region. With this in mind, this estimate is also likely to reflect the upper limit. Finally, the analysis also found that the tourism, construction and transportation industries are the most likely industries to absorb labour capacity in the future. I turn now to industries for growth. The draft strategy seeks to increase economic activity and employment in three sectors: sustainable tourism, education and training, and the local business sector. North Stradbroke Island already has a competitive advantage in these sectors. They were chosen as they currently exist on the island and have potential for growth, would continue to evolve without government intervention and capitalise on the iconic characteristics of North Stradbroke Island. Tourism, for example, is a major employer on the island, with 20 per cent of the workforce employed in accommodation and food services. Approximately 800,000 people visit the Cleveland-Stradbroke region each year, with a 5.5 per cent increase in day visitors recorded in 2014. There are many opportunities to expand and diversify current tourism offerings, particularly in nature, adventure and cultural tourism where the island can provide a unique experience close to a capital city. Tourism jobs on the island are seasonal. The draft strategy proposes a number of actions which are designed to increase visitors during the off-season to generate year-round economic benefits. The education and training sector is a relatively small sector on the island currently employing around six per cent of the residents. Education and training, particularly in relation to educational tourism, is growing overall in the region, and around 5.7 per cent of international visitors engage in educational experiences.
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