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Re-defining successful investment in northern Australia

Posted By on February 1, 2024 @ 06:00

According to Defence, investment in northern Australia is needed to help it achieve a robust national posture against threat from Australia’s northern reaches.

And for northern Australian communities, especially in the Northern Territory, this is an opportunity to develop a sustainable society underpinned by a prosperous economy.

Given the NT’s current development, the cost of progressing these goals is significant, and unexpected problems are sure to arise. But there’s a big difference between identifying, analysing and polishing plans around these problems, and actually solving them.

With election cycles and short-term thinking affecting policy settings, funding and resourcing for Defence, northern Australia has become the victim of a recurring cycle of band-aid solutions. This could endanger Defence’s oft cited ambition of improving outcomes for communities while still achieving its strategic goals.

Sure, there are many well-intended, but often siloed, programs Defence can point at as successes, but its plan for northern Australia lacks core principles to sustain it. Defence must be willing to lead a long-term, coordinated effort to achieve its lofty promises to the region.

For a start, Defence (and therefore Australia) has a substantial bill to pay if it wants to revitalise its northern bases and enhance their preparedness. Securing sufficient personnel is also a major hurdle. There is a pervasive dislike among personnel for being stationed in the north beyond one or two rotations. For most, the region can’t offer the same comforts, family networks and social norms they’re accustomed to in the southern states.

This is partly a sad reflection on the ruthlessness of modern Australia. Australia’s economic engine room is still overwhelmingly crewed by fly-in-fly-out workers, and compulsively negative reporting priorities on regional Australia, fueled by the need to attract clicks on social media, hardly help battle the stigma of moving. But it doesn’t have to be this way.

Defence is right to focus on its northern assets and repatriating sunk resources from past projects is an important part of this. But some of this cost would and should have been avoided by keener interest in building local business support and community capacity over the long term. This all goes to show that to go beyond being a short-term economic sugar hit to communities, Defence projects must take up a longer-term definition of ‘value’.

The fact is a billion dollars spent in a southern capital city is much more rapidly absorbed into existing markets and supply chains. It’s a very different case in the north, where that much money can fundamentally change market behaviour, radically distort costs and affect local living standards. Defence must recognise this and maximise its return on investment to the local and national community.

Large investments aren’t just ripples in regional Australia’s social fabric. They can cause a tsunami. If billions are dropped in a pond without forethought, the community and investors will struggle to adapt and maximise outcomes. Thankfully, the corporate sector is becoming ever more agile (in some cases by learning some very hard lessons), and better understands that ongoing success and shareholder value depends heavily on support from the community in which a project operates.

And fair enough too. Governments and communities don’t want to be responsible for mopping up corporate missteps. Unfortunately, some governments take this too far, concentrating more on ‘de-risking’ their policy than community preparation. Bureaucrats should accept that the world is changing rapidly and instead accelerate engagement with industry and communities during program development. Northern Australia wants progress, but not at any cost, and especially not when all the downsides of a project will be borne locally.

It's simple really. Competent engagement is needed to plan for a better future—not just accepting whatever first draft is dished up. There are many examples of what happens when this is done right. In Darwin, Inpex has done a better job than most in understanding the fundamental importance of the local community, not just to its operations there, but to its global business settings. Australia’s Covid-19 response may have been much more difficult without the assets Inpex gifted to the NT government, which transformed them into a Centre for National Resilience that set the gold standard for frontline pandemic management. Others need to reflect on this approach to partnership.

Recently, Infrastructure Australia noted that Defence’s civil programs need to be “better strategically planned and coordinated with government’s broader infrastructure investment programs, to ensure effective delivery and alignment in market capacity and value for money investment.”

Specifically, its review called for the effective alignment of investment in housing, social and energy infrastructure. If not carefully designed, money spent in these areas can overwhelm and distort local markets and exacerbate cost-of-living issues (also impacting defence systems and personnel) at the frontline of Defence’s positioning.

So, what can be done? As always, it’s good people that make the most difference. There are plenty of intelligent people in the executive ranks of politics, government and large businesses. They actually know what the problems are should be empowered to work on better ways of solving them, rather than delivering tactics for de-risking the inevitable political fallout from having to reverse unfortunate decisions made with short electoral cycles in mind.

How decision-makers, including senior Defence executives, interact with these investments needs to be reviewed and systematised so that a cleverer process can be developed. These leaders need to be included in wider policy conversations and empowered to explore this in greater detail.

Interoperability is not just a strategic necessity for working with allies in times of conflict—it’s a critical strategic threshold for a nation’s military development. To achieve it, Australia must take a new approach, where Defence better collaborates with local communities in the (hopefully long) time between conflicts. Who knows, it might just work and save us all some money.

Or Australia could just bumble along and accept wherever these things end up—probably as clear reflections of the country’s simmering problems.

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