State Government Budget Submission 2020 TOWNSVILLE CHARTERS TOWERS HINCHINBROOK PALM ISLAND BURDEKIN 1 Foreword As the largest city and region in Northern Australia, Projects like the $293M North Queensland Stadium Townsville North Queensland encompasses five the Port and Channel pipeline are now becoming major regional centres: Townsville, Charters Towers, reality, the Port of Townsville’s $1.6B expansion project Burdekin, Palm Island and Hinchinbrook. The region has been approved, the resources sector is ramping contributes over $16.6B annually to the Queensland up, the private sector is investing again and we have economy and is home to nearly 240,000 people. Government policy agreements like the landmark Townsville City Deal and the Australia and Singapore Over the past eight years, the people of the Townsville Comprehensive Strategic Partnership providing North Queensland region have experienced some momentum and funding for future developments. of the toughest economic conditions in its 153-year Whilst the region has been on the move again, history. The downturn in commodities, the drought unemployment is still sitting uncomfortably at 7.9% and dramatic changes in the makeup of the economy and approximately 11,000 people still out of work. We saw unemployment in 2012 at an unprecedented need to work harder to ensure long term job creation 14%, with youth unemployment over 20%. A looming now and into the future. water security issue and skyrocketing energy prices threatened the closure of our remaining Projects earmarked for North Queensland and manufacturing and production industries and business declared as ‘Coordinated Projects’ by Queensland’s confidence hit historic lows. Coordinator-General, the CopperString 2.0 Project and the North Queensland Country Club and Equestrian Adding to this, in February 2019 the region Centre (Toolakea) are a part of a pipeline of future experienced one of the worst natural disasters investment the region will look to pursue over the in North Queensland’s recent memory. This coming years. unprecedented flooding event across the North resulted in significant property damage displacing The targeted priorities included in Townsville thousands of residents and severely impacting the Enterprise’s 2020 State Government Budget capacity of businesses to trade in the Townsville North Submission have been defined based on their Queensland region. capacity to stimulate economic growth, encourage industry and private sector investment, influence Townsville Enterprise seeks to not solely focus on business confidence and create jobs. This is now more the recovery and the drag caused by the disaster, important than ever with the additional economic but to deal with the pre-existing structural issues challenges our region is facing after such a devastating that undermine future resilience and the investment weather event. necessary to resolve these issues. This includes further investment into the key infrastructure and industries The State Government plays a key role in the economic that are the lifeblood of regional Queensland, such recovery of North Queensland following the floods, and as flood proofing and upgrading the Mount Isa to the outlined economy building package is about giving Townsville Rail Line and securing the necessary communities and people hope for a better future. support and policy settings for the mining and resources industry to continue to grow in regional We encourage the State Government to work in Queensland. partnership with the North Queensland community to fast-track investment and implement policies that will Prior to this event, the landscape was looking more not only get the region back on its feet but secure its optimistic, and all levels of Government and the private long-term future and economic resilience. sector have played a part in the region’s economic recovery. 2 Summary of Recommendations To continue enabling the growth of Townsville North Queensland, Townsville Enterprise is calling on the State Government to support the following priorities: Enabling Infrastructure Capital of Northern Australia Hells Gates Dam Business Case and Big Rocks Weir Townsville North Queensland Population Target Lower Energy Prices and Access and Defined Regional Development Agenda Regional and Remote Area Tax Concessions and Payments Port City Cowboys Community, Training and High- Townsville Eastern Access Rail Corridor (TEARC) Performance Centre and the Mount Isa to Townsville Rail Line Royal Flying Doctor Service Townsville Support Hub Industry Development Innovation and Connected City Resources and Mining Re-regulate the Mount Isa to Townsville Air Route Tropical Aquaculture Accelerator Supporting the Regions Destination Development Townsville City Council Magnetic Island 2030 Tourism Vision Burdekin Shire Council Museum of Underwater Art Palm Island Aboriginal Shire Council DriveIt NQ Hinchinbrook Shire Council Wongaloo Conservation Park Charters Towers Regional Council 2032 Olympic Games Bid Event Attraction – North Queensland Stadium 3 ENABLING INFRASTRUCTURE Hells Gates Dam Business Case and Big Rocks Weir Recommendation Continued support from the Queensland Government for the Hells Gates Dam Business Case and construction of Big Rocks Weir. represented a Benefit-Cost Ratio (BCR) of between 1.4 THE ISSUE and 0.68 and the potential to generate up to 4,000 FTE jobs post construction (12,000 during construction) The Hells Gates Dam Business Case and the Big and $1.3B annually to North Queensland’s GRP. Rocks Weir construction have the potential to provide significant employment opportunities and new The Federal Government announced on 10 April 2019 agricultural investment to the region. The North that Townsville Enterprise would be engaged to carry Queensland community calls on State Government the Feasibility Study forward and deliver the Hells to continue their support for these transformational, Gates Dam Business Case. long-term projects. The $24M of Federal Government grant funding BACKGROUND associated with the delivery of the Hells Gates Dam Business Case will be a direct allocation from the National Water Infrastructure Fund (NWIDF) and The agricultural sector is critical to the Townsville will be overseen and administered by the newly North Queensland economy, contributing 3,642 jobs established North Queensland Water Infrastructure (3.5%) and approximately $565M (3.8%) to Gross Authority (NQWIA). Regional Product. In line with Australian Constitutional water The Federally funded $2.2M Hells Gates Dam management arrangements, Townsville Enterprise has Feasibility Study, led by Townsville Enterprise and been directly engaged by the Queensland Government conducted by SMEC Holdings Ltd, was completed through the Department of Natural Resources Mines in July 2018. This Feasibility Study was primarily and Energy (DNRME) to undertake the Business Case tasked with assessing the agricultural potential of the process. northern reaches of the Burdekin River catchment and surrounding land approximately 150km northwest of Townsville. THE SOLUTION The study identified the Hells Gates development’s The State Government’s continued support for the potential to support large scale/ broad acre Hells Gates Dam Business Case and the construction agricultural development, irrigation network including of Big Rocks Weir. the proposed Hells Gates Dam, water distribution, power generation and supply (pumped hydro). While the feasibility study primarily addressed the agricultural development potential of the northern reaches of the Burdekin, it also undertook a preliminary investigation assessing environmental and cultural heritage concerns unique to the area. The study found that the $5.35B greenfield agriculture development is economically viable with the potential to open up 50,000+ha of highly productive arable land in close proximity the Upper Burdekin river system. The Feasibility Study defined that the project 4 ENABLING INFRASTRUCTURE Lower Energy Prices and Access Recommendation Fast-track the establishment of cost effective ‘clean technology’ base load generation in North Queensland (seek diversification of ownership); The next 2,000MW of electricity generation to be licensed in Queensland must be based in North Queensland and connected to the grid north of Collinsville; The State Government must use its influence to police the behaviour of the generators so that wholesale prices match the costs of production – not prices driven by market distortion; A review of the existing regulatory framework must be expedited in order to address North Queensland’s particular issues (this may require the establishment of a different regulatory framework to that of South East Queensland); Ensure North Queensland has future access to competitively priced natural gas; Support industry diversification in the north by assisting the NQ Bio Energy Project in Hinchinbrook; and Modify how the Queensland Government distributes its CSO through a GOC is essential to enable retail competition that occurs already in SEQ and the southern states. Victorian and NSW CSO’s are distributed through commercial entities already. most expensive. This has occurred in an environment THE ISSUES of the Queensland market being oversupplied with generation capacity by around 30% (Queensland Unsustainable and escalating power prices in North Productivity Commission, 2016). Wholesale electricity Queensland. prices have increased significantly across the National Townsville North Queensland is not connected to Electricity