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Promoting Regional Growth

Promoting Regional Growth

A range of measures aimed at accelerating jobs available in North Queensland.

Content accurate as of July 2020.

Townsville, North Queensland has suffered a series of economic shocks including:

  • The end of the mining investment boom (2013 – 2015)
  • The closure of Queensland Nickel (2016)
  • The closure of international recycling markets (2018)
  • The unprecedented Townsville North Queensland floods (2019).

Consequently, the region has suffered a prolonged period of poor economic conditions with high unemployment peaking at more than 11 per cent in the December quarter of 2016.

The COVID-19 pandemic and its associated restrictions have dealt a major blow to the economy of a region already under strain.

Employment – as one major indicator of economic activity, in the region has dropped significantly since COVID-19 restrictions started to be put in place.

Indigenous unemployment in the last census was 17.2%. Youth unemployment in May 2020 was 16.8%. It is anticipated with the end of the JobKeeper program in September 2020 that both youth and Indigenous unemployment are likely to at least double to more than 30%.

Since 31 March 2020 to the end of May 2020, the number of people on JobSeeker in the 5 North Queensland Local Government Area’s has increased by 159% (Figure 1). In addition, the number who are on youth allowance has increased by 168% (Figure 2).

Figure 1: JobSeeker payments

Graph of JobSeekers payments in April and May 2020

Figure 2: Youth Allowance (other)

Graph of Youth Allowance payments in April and May 2020

The labour force and participation for Townsville has rapidly decreased (Figure 3). And there has been an ongoing reduction in job ads for Townsville with May 2020 being the lowest (Figure 4).

Figure 3: Townsville Labour Force and Participation

Graph of Townsville labour force and participation from January 2018 to April 2020

Figure 4: Townsville Seek Job Ads

Graph of Townsville Seek job ads from November 2019 to May 2020

Fringe Benefit Tax
Current Policy

Transport provided by employers to employees who work in remote areas in Australia is exempt where the following apply:

  • an employee's usual place of employment is at a remote location in Australia or overseas, or on oil rigs or other installations at sea
  • employees are provided with accommodation at or near the worksite on working days
  • on a regular basis the employee works for a number of days followed by a number of days off, returning to their usual place of residence on their days off
  • you provide the employee with FIFO transport between their usual place of residence and their place of employment
  • the FIFO transport provided is a residual benefit having regard to the location of the two places, it would be unreasonable to expect the employee to travel to and from work on a daily basis.
Proposed Policy

In 2011, the Australian Government commenced an inquiry into the use of fly in fly out and associated work practices such as drive in drive out in regional Australia. As part of that review, the Australian Government reviewed aspects of the Fringe Benefit Tax Assessment Act 1986. Their response in 2015 outlines that any such recommendations would be reviewed as part of the White Paper on the Reform of Australia’s Tax System. It is unclear if the recommendations were implemented. No specific recommendation was made in relation to flights out of capital cities.

This FBT exemption for companies using FIFO workers should be amended to only apply to flights from regional cities to encourage regional employment only.

It would not apply to flights out of major capital cities such as Brisbane.

Responsibility
  • Australian Government
Decentralisation
Current Policy

The vast majority of Australian Government and Queensland Government offices are based in Canberra and Brisbane respectively. Both have some regional presence in North Queensland, but it is minor in comparison and all decision making is made in Canberra and Brisbane.

Proposed Policy

A commitment that any reviews of current government service delivery models and proposed future growth of public service agencies and their service providers and supply chains at a State and Australian Government consider North Queensland as a location. This would need to include delegation of authority to the regional offices to be able to make decisions.

Decentralisation has many benefits and the COVID-19 pandemic has shown that colocation is not necessary, and workers can be just as productive wherever they work. Moving any future growth to North Queensland reduces the impact on services in major capital cities, provides valuable economic growth for regional areas and allows for public service agencies to expand their understanding of unique issues facing regions.

Responsibility
  • Queensland Government
  • Australian Government
Fast Tracked Approvals
Current Policy

Approval times under the Environment Protection and Biodiversity Conservation Act for major projects can be assessed by the Queensland and Australian Government at the same time under bilateral arrangements. However, these approvals can still take years to get.

On 15 June 2020, the Prime Minister announced that the approval times under the EPBC Act had reduced from 90 days last year, to 40 days this year and would fall to 30 days for 15 major projects under his plan.

Proposed Policy

Extend the fast tracking of approvals under EPBC Act to all projects that can provide an economic boost to regional areas with high unemployment in a COVID-19 recovery context.

Responsibility
  • Queensland Government
  • Australian Government
Local Procurement
Current Policy

Under the Queensland Government Procurement Policy 2019, there is a focus on economic benefit to Queensland and to support regional and remote economies, including through the use of including an up to 30% weighting to local benefit.

Local councils also have ‘buy local policies’ in place to procure from local businesses. Local Buy was established by the Local Government Association of Queensland to meet the needs of government with the procurement process.

Australian Government procurement is guided by the Commonwealth Procurement Rules which were last updated in April 2019. The last update
included an additional target for procuring from small and medium enterprises (SME’s). This target outlines the Australian Government committed to non-corporate Commonwealth entities sourcing at least 10 per cent of procurement by value from SME’s. In addition, the Government has a target of non-corporate Commonwealth entities procuring 35 per cent of contract by volume, with a value of up to $20 million, from SME’s.

Proposed Policy

Reform government procurement for:

  • Greater specificity around the definition of local within any procurement process delivering region based projects (e.g. SA4 as local).
  • Mandate that service providers on awarded major contracts (greater than $10 million) provide guaranteed jobs in regional areas with high unemployment north of Gladstone.
  • Reduce the quantum of insurance requirements for small business (e.g. professional indemnity and public liability).
  • Reform government contract procurement to provide greater small business opportunities.
  • Reducing the time that it takes for government to make decisions, with more contemporary procurement processes.
Responsibility
  • Local Government
  • Queensland Government
  • Australian Government
Northern Australia Infrastructure Facility
Current Policy

The Northern Australia Infrastructure Facility is a $5 billion lending facility to provide loans for infrastructure project in northern Australia. Only $2 billion of their $5 billion has been allocated.

Their investment mandate sets out five mandatory eligibility criteria. The explanatory statement outlines the type of projects that may be eligible as ports, airports, rail, roads, water, energy and communications networks, social infrastructure (including health facilities, education facilities, research facilities, training and related accommodation facilities), processing facilities (including abattoirs and agricultural processing plants) and transhipment vessels.

NAIF has developed a Risk Appetite Statement to guide its investment decisions.

Proposed Policy

In the next annual review of the NAIF Risk Appetite Statement amend it to respond to the emerging risk that COVID-19 has presented and allow the
following:

  • provide loans to industry and business projects
  • allow longer repayment periods to enable business to lower operating costs to be more competitive
  • employment creating projects and business adaptation in a similar loan function to QRIDA
  • social impact through jobs as a major criteria for investment for the 2020/21 financial year
  • allow small business to access the loans with a changed risk appetite and financial viability and terms, rather than a one-size-fits-all model as per review processes within the organisations charter.
Responsibility
  • Australian Government
Regional Investment Incentive Scheme
Current Policy

The Queensland Government has the $150 million Advance Queensland Industry Attraction Fund. The Fund seeks to bring contestable projects to QLD in order to drive job creation, regional growth, increased innovation and technology and supply chain development.

A contestable project is where there is at least one other viable, alternative international or Australian project site to the QLD location under active
consideration.

QLD Government also has the $175 million Jobs and Regional Growth Fund to facilitate projects which support regional investment and improve ongoing employment outcomes in regions facing economic and employment challenges.

NSW Government has a Regional Investment Attraction Package to attract new and growing businesses to NSW. It includes:

  • grants and interest free loans to help new businesses to establish themselves
  • an ‘investment concierge’ for expert and tailored support
  • relocation assistance of up to $10,000 per worker to help attract skilled employees to regional businesses operating in eligible industries
  • special activation precincts to offer a coordinated approach to land-use and infrastructure planning with the aim of creating attractive centres for businesses to establish and grow.
Proposed Policy

Safeguarding existing jobs through the creation of a Regional Investment Incentive Scheme in North Queensland. It could be modelled on the NSW
Scheme, including a comprehensive review of existing relocation scheme to ensure it acts as an attractor.

The Regional Investment Incentive Scheme would be in addition to the existing Advance Queensland Industry Attraction Fund and Regional Growth Fund.

Responsibility
  • Queensland Government
Mining Royalties
Current Policy

In Queensland, mineral royalty rates payable under the Mineral Resources Regulation 2013 are either a percentage of the value of the mineral or a flat rate per tonne.

Proposed Policy

Provide reduced mining royalties for companies that choose to:

  • FIFO hub out of Townsville instead of capital cities like Brisbane
  • Move or establish headquarters in regional areas.
Responsibility
  • Queensland Government
Royalties for Regions Program
Current Policy

The Royalties for Regions Program ran from 2012-13 to 2015-16. The program has now closed.

Proposed Policy

Re-establish the Royalties for Regions Program to support infrastructure projects in regional areas with high unemployment (separate proposal available).

Responsibility
  • Queensland Government
Collaboration with NQ Councils
Current Policy

There is collaboration already through:

  • the North Queensland Regional Organisation of Councils
  • the Cairns to Mackay Alliance (water utilities)
  • The Local Authority Waste Management Advisory Committee which reports to the to the northern alliance of Councils
  • LGAQ COVID-19 waste recovery group.
Proposed Policy

NQ infrastructure and utility services collaboration.

Establishment of a collaboration with NQ Councils and State to support critical infrastructure.

Responsibility
  • North Queensland Councils

Positive migrations to the regions, sustainable long-term jobs, and economic diversification and growth.

Projects
  • NQT-1019 – Defence NQ Maritime Replenishment and Logistics Hub
  • NQT-1020 – Defence unmanned aerial vehicles opportunity
  • NQT-1021 – Joint amphibious force capability
  • NQT-1095 – Australian CoE simulation training precinct
  • NQT-1064 – CopperString 2.0 Power Transmission Line
  • NQT-1067 – Energy from waste
  • NQT-1070 – Hells Gate Dam (including Big Rocks Weir)
  • NQT-1099 – Townsville Eastern Access Rail Corridor
  • NQT-1104 – Bioenergy/biofuel production
  • NQT-1105 – Fuel Storage and Distribution Centre for Northern Australia
  • NQT-1106 – District grain storage
  • NQT-1079 – Port expansion perimeter rock wall
  • NQT-1083/NQT-1097 – Smartlink Transport connection and Tropic IQ
  • NQT-1084 – Southern industrial development corridor
  • NQT-1089 – Tropical aquaculture accelerator
  • NQT-1202 – NQ ICT Centre of Excellence
Initiatives
  • NQT-1022 – Boost Indigenous employment and training
  • NQT-1023 – International student pathway into Northern Queensland
  • NQT-1024 – Re-visit STEM booster
  • NQT-1029 – Place-based solutions for regional Queensland