Pivoting back north: refreshing the northern Australia development agenda

Sustainable development of northern Australia has become a national priority over the past decade. The region’s geostrategic importance has grown, and recently there have been calls to strengthen Australia’s sovereign capability in the north. Importantly, northern Australia is increasingly referred to as the country’s gateway to the Indo-Pacific. It will also need to cope with increased climate-related risks like heat stress, more intense cyclones, and more extreme wet and dry climatic events.

In 2015, even before current geostrategic stresses kicked in, the white paper on developing northern Australia became the catalyst for Canberra’s bilateral and bipartisan northern development agenda. Billions in government and private-sector investment has been put into an extensive range of policies and programs. These have included the Northern Australia Infrastructure Facility or NAIF (a concessional loans facility), substantive infrastructure spending, labour market programs and productivity-focused research.

Policy complexity, however, emerges because in the face of the north’s economic opportunity lie internationally significant environmental and cultural values that are under threat. It’s feared that the cumulative impacts of development are driving biodiversity and other ecosystem losses. The region is also an Indigenous domain, with First Nation’s interests across the entire land- and seascape and specific First Nations’ rights extending over some 78% of the land. Australia needs to ensure that development proceeds with the free, prior and informed consent of traditional owners.

Despite the white paper’s intent and public investment, large-scale private-sector investment and on-the-ground economic and social benefits have been slow to materialise. This largely arises from the fact that both public- and private-sector investment across the north generally involves major land-use and tenure changes.

Without visionary, engaged and evidence-based regional and land-use planning, it’s no surprise that the agenda’s promise has tended to falter. This risks social and economic decline and continuing cultural and environmental loss. With the exception of economic envelopes around larger regional cities, much of the northern landscape could come to resemble a ‘failed state’.

Over the past year, the government’s renewed interest in the north has opened up opportunities for revitalising the northern Australia agenda. The announcement that the Northern Australia Ministerial Forum would be reconstituted and the Northern Australia Indigenous Reference Group revitalised were early signs of the new government’s desire to refocus priorities and strategy, shaking up bilateral relations and re-engaging the north’s Indigenous leaders. Last month, in the 2024–25 budget, the government affirmed its commitment to a refresh of the northern Australia white paper.

These are welcome developments. But some serious reforms need to be made to pave the way for positive progress.

Getting the planning right. Northern development is a contested agenda. Tensions between economic development, Indigenous aspirations and environmental and cultural protection yield multifaceted policy problems. New approaches to regional planning are increasingly called upon to resolve these tensions.

While the NAIF has historically been unfairly criticised for slow investment, little attention has been paid to the way development is prioritised, planned and assessed. Developers have communicated frustration with these processes, and a recent review of Commonwealth legislation suggests that regulations aren’t protecting the environment either. The north’s traditional owners have long been concerned that such processes don’t frame development in ways that protect cultural values and enable Indigenous-led development. The Commonwealth’s new Nature positive plan, if diligently applied, could break this deadlock.

Climate-resilient and enabling infrastructure. One area of the white paper in which positive progress has been made is major infrastructure-enabling packages, such as the Beef and Strategic Roads packages and funding for Roads of Strategic Importance. These investments have been well planned and genuinely bilateral and have focused on generating localised procurement and employment.

Such enabling infrastructure is required to overcome supply-chain fragilities and cope with the increased risks of extreme climatic events. It can also help decarbonise the economy while maintaining energy and water security, reorient our defence and trade relationships in the Indo-Pacific and address socioeconomic disadvantage in remote and Indigenous communities.

The development of a multi-year blueprint for northern Australian enabling infrastructure would help to address these issues. It would need, however, to be based on both existing and new funding systems.

Indigenous-led development. With most of the north infused with Indigenous interests and right, under the previous ministerial forum a strong Indigenous voice was established through the Indigenous Reference Group. This group of high-profile Indigenous leaders worked across governments to create the Northern Australia Indigenous Development Accord—a cohesive package of initiatives aimed at ensuring that northern Aboriginal and Torres Strait Islander communities lead their own development. The accord now needs to be effectively implemented.

Workforce development. There’s a need for cohesive development of human capacity in the north. The region’s school-based educational outcomes lag behind the rest of the nation. This, coupled with deep liveability and cost-of-living pressures, means that the north faces unique workforce development and retention challenges.

Statistics from annual Closing the Gap reports also show the continuing educational and economic divide between Indigenous people and the wider population. A pan-northern approach is required to lift school outcomes and pathways, with universities and vocational institutions playing a central role. Workforce development also requires long-term sectoral planning and place-based delivery of education and training.

Creating an investment pipeline. The NAIF was an important white paper initiative that suffered from a lack of a pipeline of investable development opportunities. It needed at least a 10-year program of effort focused on research and assessment to drive priority opportunities; bilaterally agreed regional and infrastructure planning; collaborative partnerships to develop targeted supply-chain interventions; durable feasibility assessment; and a stronger focus on small, medium and large investors supported by more brokerage to a range of concession and other finance options.

If the nation is to avoid economic stagnation in the north (with a fragile boom–bust economy, entrenched regional poverty and faltering investment), a cohesive, longstanding and well-implemented approach is needed. Much can be learned from approaches that have worked well under the existing arrangements.

The greatest success in development planning and major infrastructure delivery in the north has come through highly collaborative approaches between governments, communities, industries and traditional owners. Examples include the Cape York Infrastructure Package, which has delivered stable partnerships and major regional and local benefits.

Getting the financial and cost-sharing architecture right for shared investment in the north is a key to building long-term investment confidence. A strong and bilateral approach could be developed through either national or sectoral agreement mechanisms envisaged under emerging Federation Funding Agreement arrangements.

Once areas for priority development are identified, delivering regional and local benefits will rely on getting the governance arrangements for local delivery well established. Highly place-based approaches to development planning, assessment and delivery have the potential to deliver positive results.

Targeted packages for developing major enabling infrastructure have demonstrated benefits and have shown the value of governments leading the planning and delivery of such projects.

With geostrategic change, fragile supply chains and the real risk of continuing social decline and environmental loss, more visionary, scenario-based thinking needs to underpin long-term strategic policy and planning for the north. Such thinking, however, must be tested by appropriate economic modelling of the value achieved by shared investment.