APPROPRIATION BILL (NO. 1) 2012-2013 – CONSIDERATION IN DETAIL (REGIONAL AUSTRALIA, REGIONAL DEVELOPMENT AND LOCAL GOVERNMENT PORTFOLIO)
May 30, 2012
Mr CHESTER (Gippsland) (11:42): I would like to thank you, Minister for Regional Australia, Regional Development and Local Government, for being here today. I appreciate your interest, but also to thank you for your attendance in the Latrobe Valley as we deal with some of these issues relating to your carbon tax policy. I want to refer specifically to the Regional Structural Adjustment Assistance Program, which, as you would be aware, is a $200 million fund to provide assistance to those regions strongly affected by carbon pricing. I note from one of your statements on your website:
The Department of Regional Australia, Local Government, Arts and Sport will monitor the impacts of carbon pricing on regions to identify regions that may require structural adjustment assistance
And further:
Where structural adjustment assistance may be required, the Government will work in close consultation with communities through a coordinated, whole of Government approach …
It is against that background, Minister, that I ask my questions. How are you actually going to monitor those regions and what procedures are actually in place to evaluate which regions are most adversely affected. Changes are occurring right now in Latrobe Valley as a result of carbon pricing, which I think you would understand is some cause for concern in my community. In particular, we need to address the issue of confidence in the community at local, state and federal government levels. I would be interested to know whether the bulk of that $200 million will be allocated to the regions that are most adversely affected and how you will make that evaluation.
The other questions relate to contract foreclosure, which I am sure you understand is very close to and relates to this whole issue. I wonder whether you could provide me with an update on the progress of negotiations in relation to contract foreclosure? I understand there has been very little discussion, if at all. We are only weeks away from supposedly making an announcement as to which stations will be closed. My understanding is that a power station such as Hazelwood generates $130 million annually in terms of wages to the Latrobe Valley community, but we are talking about a $200 million structural adjustment package. If the Hazelwood power station were to close, it would dwarf the whole $200 million package. I do not think there is any suggestion from government that the Latrobe Valley will get the whole $200 million. My concern is that the impacts will be very severe and that the allocation in terms of structural adjustment will be nowhere near enough.
The only other question I would like to ask the minister relates to this whole-of-government approach. You may recall that there is an active application from the Latrobe Regional Hospital for $65 million. I put it to you that, in terms of a whole-of-government approach, that would be the type of project that would benefit the Latrobe Valley and the Gippsland community more broadly. Given that that actual program has now been exhausted, are there any other avenues that you can see where the Latrobe Regional Hospital should apply to try to secure $65 million in the future, keeping in mind that I do acknowledge the state government will need to come to the party at some stage in that process?
Mr CREAN (Hotham—Minister for Regional Australia, Regional Development and Local Government and Minister for the Arts) (11:44): I thank the member for Gippsland for his question. He has attended a number of the forums that we have held in the Latrobe Valley to look at the challenges that are presented down there but most of all to identify future opportunities. I just make this point about what we have done in the Latrobe Valley. It is very interesting that we have been able to secure an agreement with the Victorian government, who opposes what we are doing with carbon pricing, to work in partnership for the economic development and diversification not just of the valley but of the whole Gippsland region. Partnership agreements with the states are absolutely fundamental, in my view, if we are to get this model of regional development right. We can put up the funds that I talked about before, but on their own they are not going to be enough. We have got to leverage the other funding and we have got to encourage regions to join the dots, so that they do not just look through the silo of a regional development fund, or for that matter the $200 million Structural Adjustment Fund, but look to the opportunities, for example, in the Education Infrastructure Fund and in the Health and Hospitals Infrastructure Fund—which I think the member just made reference to in relation to the Latrobe Regional Hospital.
I am terribly proud of having been able to negotiate that agreement and that framework and also establish the committee that is working to identify opportunities. The guidelines for the Structural Adjustment Fund for the regions most affected by the carbon pricing initiative are still being considered and, in any event, they were always going to be contingent upon impact once we knew where the contracts for closure were going to occur. On that question, the member for Gippsland has asked me about progress. This is really an issue that should be addressed to the Minister for Resources and Energy, because he has responsibility for it. We have called for the expressions of interest for contracts of closure. They are going through their process at the moment. He has made the point that the effects of the closure of Hazelwood would dwarf the $200 million assistance, and even if a fair slab were allocated to the Latrobe Valley it may not be enough. I do not agree with that. I have just recently been involved in negotiating, in partnership with the Tasmanian government, structural adjustment initiatives for job creation activity in Tasmania. As you know, with the forest issue down there, there is a potential $120 million available to Tasmania, but it is conditional on getting an agreement. To show good faith, we made the first $20 million not conditional.
We have allocated all of that money. Quite frankly, the $20 million that we have allocated has the potential over coming years to create 4,000 jobs. This is the opportunity. You do not need, in my view, a lot of money to make these things happen. What you need is a lot of good ideas. You need businesses prepared to make the investment, with governments coming in to fill the gap. Whether it is a gap in terms of infrastructure, whether it is a gap in terms of training, that is the sort of thing we have got to be doing. That is what I want to develop in the Latrobe Valley. That is why we have got not just the state government framework but we have got all the local councils involved. We have got regional input. We have been using the university to help identify opportunities. In the Latrobe Valley, forget about the carbon price that is going to be put on; what about the opportunities in the electorate of Gippsland for carbon farming? They have some of the richest farmland in the country, and the opportunity to enrich and improve soil productivity, capture the carbon and trade the credits creates the opportunity for another income stream. They have also got the big potential for growth in the dairy industry and the food processing industry. There are funds that enable that to happen. I think we have got to look beyond the silos in terms of considering the opportunities down there, because they are enormous.