The Territory Economic Reconstruction Commission's Final Report illustrates that the Northern Territory is uniquely positioned to take advantage of post-COVID global market trends to accelerate the growth of its economy and lead the national economic recovery. Doing so will require the co-operation of the broad Northern Territory community and the government, whose role must change from approving and underwriting projects, to actively co-ordinating stakeholders, creating sustainable development opportunities, and winning investment for the Northern Territory.
The Commission is co-chaired by heavy hitters the Hon Paul Henderson AO (Northern Territory Chief Minister between 2007 -2012) and Andrew Liveris AO (the Darwin-born former Chairman and CEO of The Dow Chemical Company). Other Commission members include Gail Kelly, Dr Martin Parkinson AC PSM, Prof Mick Dodson AM, Gary Higgins, Romilly Madew AO and Eytan Lenko.
Why the Northern Territory?
In the view of many of the people who live and work there, the Northern Territory is Australia's best kept secret. It has all of the necessary elements required to create an internationally competitive investment environment:
- highly prospective offshore and onshore gas resources;
- abundant mineral deposits, including https://www.ga.gov.au/about/projects/resources/critical-mineralscritical minerals which are vital for modern economies;
- strong agricultural sector with opportunities for growth;
- water resources;
- deep water harbour and intermodal logistics;
- large-scale solar potential;
- a strategic location for Australia's defence forces; and
- proximity to Southeast Asian markets.
The challenges for the Northern Territory
The Northern Territory has experienced a number of years of falling private investment following the downturn of the construction boom fuelled by the INPEX gas development. The Territory has stepped in with necessary stimulus spending at levels which are not sustainable.
Additional barriers to grow the Northern Territory economy include:
- a small permanent base population with migration further impacted by COVID-19 to feed into a skilled and unskilled workforce;
- a perceived lack of strategic direction and co-operation both within the Territory government and between the Territory and the Commonwealth governments to reduce the regulatory complexity and streamline approval processes; and
- perceived complexity of land access and administration, which is often poorly understood by the rest of Australia and international investors. Particularly in the Northern Territory, as the majority of the land (over 48% of land and 80% of the coastline) is Aboriginal land governed by the Aboriginal Land Rights Act 1976 (Cth) or is subject to the Native Title Act 1993 (Cth).
Blueprint to Grow the Northern Territory's Economy
The Gunner Government has adopted an ambitious goal of a $40B economy by 2030. The Report states that achieving this goal will require an average $1.4B per annum of additional economic output, involving a sustained average annual Gross State Product growth rate of 3.9%. To this end, the Commission states that the Territory and industry must shift focus to investors and create a 'bankable investment environment' in the Northern Territory.
The Report sets out a blueprint to diversify the Northern Territory's narrow industry base and recommends that the Territory take immediate action to:
- appoint a new Investment and Major Projects Commissioner reporting directly to the Chief Minister who is vested with the power to coordinate and accelerate major private investment by case managing the government's assessment of projects and directing prioritisation of resources. Decision-making power will remain with individual agencies;
- adopt a master-planning approach to development, involving proactively working with traditional owners to develop sustainable development precincts and mutually-beneficial land uses, identifying investment opportunities with secure tenure, taking those opportunities to the market, and fostering capacity and strong governance in indigenous land organisations;
- grow the energy and resources sector (including by establishing a Territory Minerals Development taskforce to target new mines and prioritise critical minerals, accelerating approvals, harnessing gas to lead the transition to renewables, advance the continued development of large-scale solar and hydrogen projects and promote value-adding through local petrochemical manufacturing and minerals processing);
- promote low-emissions manufacturing (including by progressing the electrification of manufacturing to free up gas as a feedstock for low-emissions petrochemical manufacturing, minerals processing and food-related processing using a master plan approach, delivering carbon-neutral products and supply chains);
- create opportunities for agribusiness projects (including de-risking the landscape by creating Sustainable Development Precincts in partnership with Aboriginal land owners, supporting the development of Aboriginal-led Agribusiness enterprises, and promoting value-adds such as manufacturing); and
- maintain and expand existing operations and critical infrastructure (including expanding marine infrastructure and the Darwin Liquefied Natural Gas export hub at Middle Point, securing future water supply, incentivize low emissions technology R&D, and facilitate carbon offset industry growth).
In addition, the Commission recommends facilitating the further development of authentic cultural tourism experiences with traditional owners, and expansion of the digital, maritime, defence, and space industries in the Northern Territory.
Ultimately, the Report concedes that the current modelling for the Commission's recommendations do not predict that the Gunner Government's targets will be met, forecasting that the Northern Territory's economy will grow to $35.2B by 2030.
Where to from here?
It is clear that there needs to be a focus on strategic land use planning and for the Territory to take investment opportunities to market, to foster strong relationships of trust and respect with traditional owners, and to assume a role in brokering the approvals and consents required to facilitate development.
The Report drew broad stakeholder engagement, with the Commission receiving 179 submissions with 956 recommendations, identifying over 300 projects.
Of these, the Report states that there are currently 17 projects in the Northern Territory development pipeline worth about $5.7B in proposed capital expenditure, and expected to generate up to 5700 construction jobs, and 3400 operation jobs.
Specifically, the Report refers to:
- the $20B Australian-ASEAN Power Link Project proposed by Sun Cable involving the export of electricity generated by solar farms in the Northern Territory to Singapore through a land and subsea HVDC transmission system; and
- existing projects in the Beetaloo Basin, including wells drilled by Origin, Santos and Pangaea in Velkerri B shale and current and future projects targeting other prospective layers in the Beetaloo Sub-basin (including the Kyalla shale).
Other current and future projects in the Northern Territory include:
- the Darwin Ship Lift and Marine Industry Project enabling the maintenance and servicing of commercial and private vessels, and the Defence and Australian Border Force fleets;
- the Terabit Territory Project which involves the development of a highly secure, high speed terabit network linking Darwin with South East Asia;
- on-going water investigations to secure the Northern Territory water supply, including investigations into the Adelaide River Off-Stream Water Storage project involving surface water capture and storage; and
- six trial agricultural projects with secure tenure and 1,650ML water licences announced by the Aboriginal Land Economic Development Agency (a joint initiative of the Northern and Central Land Councils) which will form the basis of a Land and Opportunities Prospectus for release in 2023-2024.