Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

I have been an advocate for the interests of Northern Australia for my entire parliamentary career. For 23 years I have been drawing the attention of this chamber, the media and the people of Australia to the diversity and abundance offered by the north. My colleagues and I have been labelled alarmist when we have suggested that if Australia does not develop the natural abundances in the north then somebody else will. Recent talk has suggested that these concerns may not be entirely fanciful.

It may come as no surprise that I am encouraged to hear about the government's reported engagement with Chinese interests in investigating infrastructure and agricultural developments in the Ord River in Western Australia, through various regions of the Northern Territory and also on the Atherton Tablelands in Queensland. I will always welcome any action that encourages development in the north; however, I would inject a note of caution. The current joint Australian-Chinese study of the north is expected to report over the next few months but the government is yet to indicate the exact terms of reference for the review. The expected controversy over foreign ownership is perhaps also a distraction from the more critical logistic challenges that are faced by any development program for Australia's north.

The attractiveness of the idea of opening up Northern Australia to development is self-evident, but any actual action that is taken must be managed with great care to ensure that the results we seek are achieved and that the results are sustainable. The Farm Institute of Australia's executive director, Mick Keogh, recently drew attention to the developing view that Australia is being reckless with its agricultural assets and that future generations may not be appreciative of this cavalier approach.

Australia's agricultural abundance allows farmers currently to export approximately 60 per cent of their production. This does not automatically mean that Australia is geared to become the food bowl of Asia. Only a thoroughly planned and meticulously executed strategy will yield the best case results that all parties seek. The challenges that have economically marginalised production in Northern Australia must be acknowledged and addressed.

The trade minister, Mr Emerson, may see Chinese hunger for Australian agricultural assets as an opportunity. However, it remains to be clarified whether it is the Chinese seeking to invest for their own food security reasons or if it is the Australian government seeking to secure billions of dollars of Chinese investment in order to deliver on infrastructure promises that it cannot possibly honour and to simply balance their current account.

The population of China was estimated at over 1.343 billion people in July 2011. To put this in perspective, Australia's population is just 1.6 per cent of this vast figure. Hunger remains a widespread problem in China. As recently as 2007, 130 million Chinese people, or 10 per cent of the population, were judged to be suffering from the effects of malnutrition. These startling statistics are perhaps simply an indication of the challenges that are faced when attempting to administer and feed such a large population. Economic development, however, has led to an increasingly affluent Chinese society with expanding dietary aspirations. These aspirations and the need to overcome hunger are placing increasing pressure on Chinese officials to deliver food safety and food security to the population. They are issues along with the elimination of hunger that are key imperatives for Beijing at the moment.

Not surprisingly, the same economic development that is currently increasing pressure for food security is also creating conditions that are making food security more difficult to deliver. Rapid urbanisation is consuming vast tracts of accessible arable land in China, and since 1990 China has lost around 8.3 million hectares of food-producing land to the needs of urban growth. Inevitably, Chinese officials are seeking alternatives to producing foods of sufficient quality and quantity within its own borders. At this stage the exact nature of how the Australian government seeks to engage with Chinese state owned industries in the north of Australia remains to be clarified. In 2010-11 the Foreign Investment Review Board approved more than 5,000 Chinese investment applications, with a total value of $15 billion.

Chinese investment in Australia is of course nothing new. I mention as an aside to the Senate that the early gold rush populations of Northern Australia in the mid-19th century were fed often by Chinese market gardeners. It is common knowledge that the imperatives of providing safe and secure food to the populace of China in the long term far outweigh any financial or environmental considerations for Beijing. The priority for Beijing is to maintain social stability by providing safe and sufficiently abundant food sources for its population. The intent of the current study has been expressed by Dr Emerson as augmenting Australia's food production delivery to world markets. This intent remains to be tested. Indeed, the information provided thus far suggests that Beijing would provide substantial investment to allow the development of agricultural infrastructure and then allow the food that is produced to be raised for sale on the world market. Once on the open market, the Chinese, along with other customers, would compete for the purchase of these food stuffs. This sounds ideal for Australia; however, it does raise questions.

Principal amongst those questions raised by this insufficiently defined investment model are: who will own and operate the farms; will operational ownership be freehold or leasehold; who will own the produce; who will own the infrastructure; and how will Australia, through the Australian Taxation Office and the collection of tax, benefit from this activity?

If the means of production and the food that is produced are both owned by foreign government entities, how does the Australian government propose to enforce an agreement that such activity should provide benefits for Australia as well as for China? Any clear advantage to Australian interests in this scenario remain to be clarified. The trade minister is reported as advocating increased productivity to take advantage of the burgeoning demand in the developing world. This may make good economic sense but it is little more than empty rhetoric when there are no concrete plans to be presented on how this can be achieved.

Carefully managed investment can produce benefits like decently privately funded or encouraged public infrastructure. Clearly, suggestions of thousands of lowly paid Chinese workers crossing the borders and putting Australians out of work is scaremongering nonsense. All people working in Australia, even those foreign workers being encouraged by the Gillard government for the Roy Hill Iron Ore project in Western Australia, must be subject to Australian wages and Australian working conditions.

Whether or not a parcel of agricultural land is able to sustain production will largely be determined by effective water management. A substantial interest has already been shown by Chinese investors in acquiring land for agricultural development in the north of Australia. It has been widely reported that the Shanghai Zhongfu group, a company with a close association to former Prime Minister Bob Hawke, has shown an interest in 30,000 hectares of land by the Ord River in Western Australia. The Ord River scheme is a useful example for us today of the challenges that exist in water management and agricultural development in northern and remote regions of the Australian continent.

My support for the Ord scheme is well known but political will alone is sometimes not enough to overcome the challenges presented to us by Mother Nature. But these are challenges that science, good will and political leadership can overcome. Water catchments in the north are currently inadequate for the kinds of agricultural production that is being discussed. Most of the rain that falls simply drains off to the sea rather than being harnessed in any functional way. Any catchments that are developed must, by necessity, consider local ecosystems, coastal biodiversity and downstream consequences. The prevailing weather conditions in the north also pose evaporation issues.

The major capital projects required to make northern development proposals a reality extend far beyond the construction of transport corridors and the installation of utilities. Before we can turn a sod we must first turn our minds to the construction of dams and water management systems. The work that has been done by my colleagues and I on the federal Coalition's Dams and Water Management Task Group has engaged with these very issues. Some important work has also been done by a company called MWH in the area of recharged aquifers. Their work in the Pilbara and in the Sierra Nevada in California show promising results. If these results prove to be open to duplication in the challenging northern environments then they may be able to be utilised to address water management challenges in the north.

Storage of water underground may prove an advantageous approach to water management in the climate of Northern Australia The use of recharged aquifers for crop irrigation has been the norm for some time in my home town of Ayr in the Burdekin delta of North Queensland. Cane farmers in Ayr have used this system to great effect for more than half a century now. Good water management is supporting the expansion of the cane industry in the Burdekin and also enabling new interest in rice and cassava crops in the Burdekin delta.

Any proposals to develop Northern Australia will naturally be heavily reliant on overcoming the challenges of water management, and it is clear that the water management models that are employed to meet these challenges must be sympathetic to the environment, to the needs of industry and to the needs of a growing population. The coalition has been providing leadership and serious debate on developing Northern Australia for some time. Currently, I and my colleague Andrew Robb have a policy in development for the expansion of Northern Australia which builds upon the coalition's Northern Australia policy taken to the last election. Developing the north of Australia will take far more than foreign investment in agriculture. The potential of Northern Australia is vast. As well as agricultural opportunities, there are vast opportunities in mining and resources and in value adding to manufacturing and processing. There are opportunities in tourism, health and education services. With the development of infrastructure and industry will come increasing population and the cycle of redevelopment will commence.

Population growth in the north will be critical to the success of any developmental proposals for remote and northern regions. A recent Newspoll survey indicated that 63 per cent of Australians believe that increasing the population in the north is a good thing. I have never hesitated in reminding this chamber that despite creating more than 40 per cent of Australia's export earnings the north of Australia is home to a mere five per cent of Australia's population. A substantial increase in this population coupled with improved infrastructure, improved transport and more efficient water management may also mean that Northern Australia will become not only the food bowl of the world but also an increasing element in Australia's overall growth. Achieving these goals and becoming the significant global citizen that Australia is well placed to become will, however, take more than a single agricultural study and a single engagement with foreign investment.

The north of Australia has been my home for more than half a century. I am proud to be part of a team that seeks to address the challenges of utilising the resources of the north. Development of Northern Australia is inevitable. The abundance of natural resources, the availability of land and the proximity of our trading partners make it a matter of common sense and urgency to apply ourselves to northern expansion. The development of Northern Australia is a goal that the coalition supports. To achieve a best-case outcome for all Australians, however, the development of the north must occur as part of a wide-ranging, inclusive and comprehensive plan. The coalition does have such a plan. Regrettably, the Gillard government does not.