$800m military stimulus for central Qld

The defence industry has helped keep the economy in central Queensland afloat during the local challenges of the past few years and now more jobs are expected.

A Singapore Armed Forces soldier during an exercise at the Defence Department’s Shoalwater Bay Training Area. Picture: News Corp

The defence industry has helped keep the economy in central Queensland afloat during the local challenges of the past few years and now more jobs are expected.

This is because of a new $800 million investment by the Australian and Singaporean governments in defence upgrades in the region in the next few years.

While central Queensland does not have a large permanent military presence in the way that Townsville does, the Shoalwater Bay area about 100 kilometres northeast of Rockhampton is a military base owned by the Department of Defence where the Singapore Army is the main user, with the US and other forces also using the facilities.

There are two big projects planned for the base in the next few years — a $130m upgrade by the federal government, and a $660m investment from the Singapore Government.

A fact sheet prepared by accountancy group KPMG claims that this new investment in the next five years in central Queensland will lead to a net increase of $16m in annual income and 219 new jobs created directly during the development phase, with 68 permanent jobs after the upgrade is completed in 2022.

But more important, both projects are aiming to have 80 per cent of the work done on the projects to be performed by companies based in central Queensland, and aside from the direct jobs quoted above, there is expected to be a multiplier effect as the money is spent in the central Queensland community.

The government investment is expected to be of potential political benefit in the marginal seat of Capricornia to the incumbent, the Liberal National Party’s Michelle Landry, who holds the seat with a margin of just 0.6 per cent.

The injection of work from the defence sector has come at a crucial time for the central Queensland economy, which has been struggling for the past few years in the face of a downturn in the mining industry, the region’s biggest industry.

The unemployment rate for central Queensland over the past year has been about 8 per cent, some two percentage points above the rest of Queensland at about 6 per cent, and considerably higher than the national average of around 5.5 per cent.

But Central Queensland University professor of regional economic development John Rolfe said that the central Queensland economy had stabilised in the past 12 months as more certainty returned to the mining sector.

“But in the past few years when times have been tough, the defence industry has helped a lot, especially those smaller companies in engineering and construction, and that’s brought some money into the town,” he said.

Shoalwater Bay is used as a base for a joint military exercise with the United States and other allies every two years under the code name Talisman Sabre.

The Singapore Army, which has been using the base for over 20 years as a training venue, has increased its commitment and now has about three groups a year — or about 6000 people — coming into the central Queensland area.

“Apparently the Singaporeans are good spenders, and that’s good for the motel proprietors and the restaurant owners,” Professor Rolfe said.

The Defence Department has a presence in Rockhampton to help source local business.

But a lot of the effort in making industry aware of the opportunities associated with the project and preparing them with the skills to take advantage of those opportunities is being done by industry group Capricorn Enterprise.

Its economic development manager, Neil Lethlean, said that the main work being done on Shoalwater Bay included an upgrade of roads on the base to take heavy machinery such as tanks, an upgraded air strip, and a new village to be built for military exercises.

“That means we will have local work available in areas such as engineering and manufacturing, even smaller areas such as fencing,” he said.

“There’s also work associated with keeping the environment in a good state. One of the exercises the Singapore Army does involves a beach landing in amphibious vehicles, and after that sort of activity there needs to be some dune restoration and things like that.”

Rockhampton Mayor Margaret Strelow said that while the investment on defence facilities was good for the community, it would be a logical move for the Australian Army to have a larger presence in Rockhampton, given that so many military personnel visited the Shoalwater Bay base regularly.

“We know it would be difficult, but it would be just make good sense to use Rockhampton more as a base rather than having equipment and people coming up the highway all the time,” Ms Strelow said.

Laing O’Rourke was appointed last month as managing contractor for the work at Shoalwater Bay.

The company has developed a local industry capability plan to allow central Queensland companies to take advantage of opportunities arising from the project.

“But they’ve already taken up offices in town. That’s the sort of opportunities that this investment can bring,” Ms Strelow said.