Removing the roadblocks to development in northern Australia

Northern Australia has always been a big place, with much of its diverse social and economic activity unseen from the outside. Even before the ink was dry on Australia’s constitution, translating policy developed in the south into action in this broad and isolated region was challenging. That’s as true today as it was back then.

Now, as Australia continues to adapt to its changed geopolitical, environmental and economic strategic circumstances, there’s yet another wave of policy discussions about the north. In this uncertain strategic context, Australia can ill afford not to get policy and practice right in northern Australia.

The good news is that this isn’t a matter of selling the importance of northern Australia. There are plenty of great private-sector entrepreneurs and big-thinking northern Australians who see the region’s potential. Many Australian and foreign investors already see the commercial opportunities in northern Australia for large-scale agriculture, mining (for example, gas and rare-earth minerals), hydrogen manufacturing and energy, to name but a few.

More than enough federal politicians in Australia’s north and south know that the area is strategically important. Sometimes, though, their motivation for acting is dampened by the limited number of votes available there.

The federal bureaucracy is also well aware of the north’s importance. Policy measures such as establishing the Office of Northern Australia and its master plan for the region’s economic growth, Our north, our future 2021–2026, illustrate the commitment.

What’s the issue, then?

Operating in northern Australia—whether building infrastructure, running a mine, producing agricultural products or deploying the Australian Defence Force—involves dealing with unique factors. These factors often unnecessarily come to be seen as impassable challenges. This ‘it’s all too hard’ thinking requires a mindset change, including new approaches to drive greater value for money, such as making longer-term infrastructure development commitments.

The latest swell of interest in northern Australia stretches across Australia’s private and public sectors and beyond. From Japan seeking energy security to the US Department of Defense looking for regional fuel security to various countries making direct investments (including China through Landbridge’s lease of Darwin Port), many parties have equities and interests in the north’s development.

It seems everyone has a plan for what they want to do in northern Australia—and many are acting on them. Unfortunately, these plans tend to be developed and implemented in silos. This is not to suggest that deep thought hasn’t been invested; rather, their siloed nature means that this thought is often based on assumptions that infrequently consider the cumulative changes that other siloed plans bring.

The economy in Australia’s north is very different to that which operates in the south. There’s little surplus capacity, especially in critical areas for infrastructure development like the construction sector—though it can scale up to meet most demands if given enough notice.

Activating the industrial base in northern Australia requires those involved in developments to signal their requirements to the market well in advance. They must also consider working across the private and public sectors to synchronise projects to ensure workforce availability. If this isn’t done right, the economy in northern Australia experiences socially and economically devastating boom and bust cycles. For project owners, boom cycles contribute to higher costs. Bust cycles aren’t beneficial either, because scaling the industry back up requires much longer lead times.

Substantial national infrastructure projects in southern Australia are often supported by long-term strategic policy and planning to ensure that new developments have access to affordable power, water, transportation and workforces. In contrast, new developments in northern Australia often require those involved to create and fund supporting infrastructure at a higher cost. The siloed approach to northern Australian projects usually means that these costs can’t be shared or reduced through interproject synchronisation.

The Office of Northern Australia and the Northern Australian Investment Fund have worked collaboratively to coordinate resilient and sustainable economic growth. These policy measures have already brought about significant changes. However, they haven’t been able to improve communication and coordination across the various government departments and private sector investors with plans for northern Australia.

For example, the monolithic defence organisation struggles to integrate its own diverse, disparate infrastructure and enabling projects. At the state, territory and local government levels, public servants in Western Australia, the Northern Territory and Queensland consistently report the increasing number of visits by officials from across the defence organisation—and the often conflicting information they provide.

Given the increasing strategic uncertainty in our region and the work currently being undertaken by the defence organisation and Australia’s allies in northern Australia, it’s time for the federal government to address these project siloes and communication issues.

As a start, the government should expand the role and remit of the Office of Northern Australia, rebadging it as the Office for Northern Australia Policy Coordination. This office should be responsible for improving communication and consultation across the private and public sectors with and about northern Australia. It should also have the remit to work across the private and public sectors to improve project coordination and promote synchronisation and collaboration. It should focus on identifying channels for signalling markets and creating pathways for sustainable scaling of northern Australia’s industry base.

Through these efforts, the office could contribute to the kind of improved synchronisation of projects and collaboration that could reduce the severity of future boom–bust economic cycles in northern Australia. Just as importantly, it could be critical to national security in assisting the development of sustainable, on-time and fit-for-purpose defence and multi-user infrastructure in northern Australia.