Our Ref: DGBN161401

2 4 MAR 2016

Mr Peter Russo MP Chair Finance and Administration Committee Parliament House Corner of George and Alice Streets BRISBANE OLD 4000

Email: fac@parliament.qld.gov.au

Dear Mr Russo

Queensland Government

Department of

State Development

I write in relation to the Inquiry into the North Stradbroke Island Protection and Sustainability (Renewal of Mining Leases) Amendment Bill 2015 and North Stradbroke Island Protection and Sustainability and Other Acts Amendment Bill 2015.

On 14 March 2016, you wrote to Mr Jim Reeves, Director-General , Department of Environment and Heritage Protection requesting a response to submissions received in relation to the Inquiry. As a number of submissions relate to the draft North Stradbroke Island Economic Transition Strategy, the Department of Environment and Heritage Protection forwarded your request to the Department of State Development for input Please find our response to submissions enclosed.

If you require any further information, please contact Ms Danielle Ellem, Office of the Chief Economist, Economic and Industry Development, Department of State Development, on 3452 7275 or danielle.ellem@dsd.qld.gov.au, who will be pleased to assist.

Yours sincerely

Michael Schaumburg Director-General

Enc

61 Mary Street Brisbane PO Boit 15009 City East Queensland 4002 Australia Telephone +617 3452 7100 Website www.statedevelopm ent .qld .gov .au ABN 29 230 178 530

Queensland Government

Background

Department of State Development

Request for information - March 2016

Parliamentary Finance and Administration Committee

North Stradbroke Island Economic Transition Strategy

Response to public submissions

Source: 0 16/48404

On 14 March 2016, the Chair of the Finance and Administration Committee, Mr Peter Russo MP, wrote to Mr Jim Reeves, Director-General of the Department of Environment and Heritage Protection. The Committee has requested a departmental response to public submissions received regarding the inquiry into legislation governing sand mining on North Stradbroke Island. The Department of Environment and Heritage Protection has forwarded the summary to the Department of State Development to respond to submissions relevant to the economic transition. The submissions have been responded to based on their key theme.

It must be noted that the responses below do not provide a complete response to each submission that is listed under each theme. Rather, the responses are only relevant to that particular theme in the submission. The following responses complement information provided to the Committee by the Department of Environment and Heritage Protection.

1.0 Transition timeframes and adequacy of transition package

1.1 Issue

Submitters are concerned that the transition timeframes are too short, and that the $20 million transition package is not enough to be able to effectively transition the economy to become sustainable following the closure of sand mining.

This response refers to the following submissions: 1, 3, 5, 6, 7, 18, 31, 32, 35, 41, 44, 50, 52, 56, 63, 64, 74, 82, 98, 117, 120, 121, 125, 128, 139, 141, 150, 163, 173, 197, 202, 203, 207, 208, 216, 232, 230, 231, 232, 233,238.

1.2 DSD's response

The decision to end sand m1nrng on North Stradbroke Island was an election commitment of the government. This decision was supported by the government's further commitment of $20 million to fund a North Stradbroke Island Economic Transition Strategy. As this is a matter of government policy, the Department of State Development is unable to comment further on the transition timeframe.

In the draft strategy, the government has identified additional funding that will be available to the island over the next few years:

• $3.87 million in government agency in-kind contributions, to assist with implementing various initiatives under the strategy. This includes $1 .19 million for the appointment of a senior officer to oversee implementation of the strategy with offices on the island and at Cleveland.

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• $5 million North Stradbroke Island Sand Mining Workers Assistance Scheme, to help sand mining workers transition to other employment.

• $1 .68 million over two years to implement the Indigenous Land Use Agreement.

• $12.1 million over four years to jointly manage the island's protected areas.

• $275,000 in 2015-16 to develop infrastructure with the Traditional Owners.

• $450,000 for structure planning for the One Mile settlement.

• $18.1 million for regular services, including education and training programs, social and community infrastructure, fire safety and primary healthcare.

2.0 Funding allocation and implementation of the Economic Transition Strategy

2.1 Issue

Submitters raised concerns about how the $20 million transition package would be spent and questioned how and when projects in the strategy would be implemented.

This response refers to the following submissions: 6, 16, 116, 121, 145, 173, 216.

2.2 DSD's response

The draft Economic Transition Strategy has nominally allocated funding (from the $20 million) to each of the three industry sectors identified for growth. This broad allocation is as follows:

• $13.48 million to grow sustainable tourism.

• $5.2 million to develop the education and training sector.

• $4 million to encourage the growth of local businesses.

As the Economic Transition Strategy is a draft, final decisions have not been made about the allocation of funding to specific initiatives or who will be responsible for implementing them. These decisions will be addressed in the final strategy approved by government.

Once the final Economic Transition Strategy has been approved, implementation will commence. The Department of State Development will appoint a senior officer to coordinate the implementation of strategy initiatives under the guidance of a Governance Committee.

Membership of the Governance Committee will include relevant state agencies and key stakeholders.

It is proposed that implementation activities will also be overseen by the North Stradbroke Island Ministerial Forum. Members of the North Stradbroke Island Ministerial Forum are:

• The Honourable Jackie Trad MP, Deputy Premier, Minister for Infrastructure, Local Government and Planning and Minister for Trade and Investment.

• The Honourable Kate Jones MP, Minister for Education and Minister for Tourism and Major Events.

• The Honourable Dr Anthony Lynham MP, Minister for State Development and Minister for Natural Resources and Mines.

• The Honourable Dr Steven Miles MP, Minister for Environment and Heritage Protec!ion and Minister for National Parks and the Great Barrier Reef.

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Initiatives have been prioritised across short, medium and long term implementation timeframes. This prioritisation will ensure that the time to transition the North Stradbroke Island economy is maximised and that economic benefits are generated as early as possible.

3.0 Results of public consultation on the draft North Stradbroke Island Economic Transition Strategy

3.1 Issue

Submitter 203 believes that results from the public consultation process on the Economic Transition Strategy should not be withheld from the public.

This response refers to the following submission: 203.

3.2 DSD's response

Public consultation on the draft strategy was conducted between 3 December 2015 and 5 February 2016. During this time, members of the community were able to comment on the draft strategy through the completion of an online survey form, via email/ phone or in person.

The Department of State Development received 191 completed online surveys, 110 stakeholder comments (through listening posts on the island, and one on one stakeholder meetings) and 30 written submissions.

The results of the consultation are being considered in the development of the final Economic Transition Strategy.

The Economic Transition Strategy is currently the subject of Cabinet deliberations. Consequently, the draft consultation report is considered Cabinet-in-Confidence and is therefore unable to be released.

4.0 Initiatives in the draft North Stradbroke Island Economic Transition Strategy

4.1 Issue

Submitters questioned what benefits the strategy would bring to the island including opportunities for residents, and how initiatives were assessed and prioritised.

This response refers to the following submissions: 1, 3, 6, 7, 11, 16, 24, 35, 41, 43, 44, 48, 50, 52, 54, 56, 64, 74, 82, 87, 97, 98, 115, 116, 120, 121, 130, 134, 135, 139, 141, 145, 148, 150, 163, 201 , 203, 216, 221, 238.

4.2 DSD's response

The draft Economic Transition Strategy identifies 26 potential initiatives across three key themes:

• Diversify and expand the current tourism industry.

• Expand the education and training sector.

• Inspire business development and growth.

These themes were identified as they capitalise on the competitive advantages of North Stradbroke Island, were already established and had the capacity to develop sustainably without the need for on­going Government support.

To identify initiatives for inclusion in the draft strategy, the Department of State Development undertook a multi criteria assessment of approximately 180 potential projects. This process enabled the department

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to rank initiatives according to their benefit to industry and the community, economic development,

employment creation and community support.

Many of the proposed initiatives do not necessarily generate a direct monetary return but rather act as catalytic investments to stimulate economic growth through:

• Diversifying the island's tourist offering, which in turn will attract more visitors to the island especially

during the tourism low season

• Attracting private sector investment to the island

• Supporting the preservation of the island's unique cultural and environmental values

• Increasing economic activity on the island and therefore provide opportunities for existing business to expand, new business to establish and employment opportunities to be generated.

Other initiatives in the draft strategy will provide opportunities for residents to access education and

training services and for small business operators to increase their capacity.

The draft strategy outlines the proposed timeframes for implementing initiatives in the short, medium and long term.

The results from the public consultation process are being used to further develop the scope, implementation timeframe and budget for each initiative that will be included in the final Economic Transition Strategy.

5.0 The economic impact of ceasing sand mining on North Stradbroke Island

5.1 Issue

Submitters are concerned about the economic impact that the closure of sand mining could potentially have on North Stradbroke Island's economy.

This response refers to the following submissions: 3, 5, 6, 7, 9, 10, 12, 13, 14, 16, 17, 18, 20, 24, 31, 32, 40, 44, 52, 61, 63, 64, 72, 74, 86, 87, 89, 91, 97, 98, 109, 112, 113, 115, 117, 119, 121, 124, 126, 128, 129, 131 , 138, 139, 142, 145, 150, 151, 154, 163, 173, 196, 201 , 203, 204, 216, 221, 232, 233, 236,

239.

5.2 DSD's response

The Department of State Development commissioned an independent analysis of the direct economic

impacts of ending sand mining on North Stradbroke Island. As North Stradbroke Island is a relatively small geographic area, data sets are too small to enable the modelling of indirect or flow on impacts (for example impacts on local business). Also. the techniques used to model indirect impacts tend to

overstate the impacts.

The economic impact analysis was prepared to inform the development of the draft Economic Transition

Strategy and to assist Cabinet in its deliberations. As this report is considered Cabinet-in-Confidence, the department is seeking advice on whether it can be released to the Committee.

6.0 Assistance to community organisations that currently rely on financial support from

Sibelco

6.1 Issue

A number of submitters questioned what support would be available to community organisations that currently rely on the mining company Sibelco for financial contributions.

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This response refers to the following submissions: 7, 13, 43, 50, 87, 89, 121, 125, 127, 131, 139.

6.2 DSD's response

The Department of State Development is aware that Sibelco provides some financial support to community organisations on North Stradbroke Island. As part of the Economic Transition Strategy, a senior departmental officer will be appointed to coordinate the implementation of the strategy for five years.

This senior officer will work from offices both at Cleveland and on the island to ensure close working relationships with stakeholders and the broad community. The officer can provide advice and assistance to community organisations to assist them to identify alternate funding sources.

7.0 Impact on ferry, fuel and electricity prices as a result of sand mining ending

7.1 Issue

Submitters are concerned about the impact on ferry, fuel and electricity prices once mining on North Stradbroke Island ceases.

This response refers to the following submissions: 9, 11, 12, 13, 16, 17, 24, 41, 43, 48, 54, 74, 82. 87, 89, 109, 121, 128, 145, 163,209,236, 239.

7.2 DSD's response

It is difficult to predict what impact the end of sand mining operations will have on ferry and fuel prices.

This is because the pricing is influenced by a number of external factors:

• For the ferry service, it includes the potential decrease in mining-related traffic, as well as the potential increase in tourism traffic.

• For fuel prices, it includes the rise or fall of international oil prices.

For electricity prices, Energex has advised the Department of State Development:

• that residential and small business customers will not be directly impacted by the closure of sand mining, as they are in a different tariff class to Sibelco, the sand mine operator.

• that there are also no planned reductions to the distribution network and supply of energy to North Stradbroke Island.

Throughout the transition time, the Department of State Development will continue to monitor impacts on business and the community, including business input costs, as a result of sand mining closures.

8.0 North Stradbroke Island Sand Mining Workers Assistance Scheme

8.1 Issue

A number of submitters questioned what support would be available to displaced workers once sand mining ceases.

This response refers to the following submissions: 10, 20, 24, 43, 53, 58, 61 , 63, 74, 82, 89, 91, 112, 113, 114, 119. 121, 126, 138, 154, 163, 179, 203,204,207, 225, 232, 233,244.

8. 2 DSD 's response

The North Stradbroke Island Sand Mining Workers Assistance Scheme will provide affected workers with access to training and employment support services to assist the transition to alternative employment.

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There are two categories of eligible workers:

• all permanent workers can apply for every component of the Scheme

• casual workers may be eligible on a case-by-case basis, assessed on their employment record in sand mining.

The package comprises the following elements:

• job search support

• training, employment and relocation assistance

• housing assistance

• commuting subsidy

• income supplementation

• dislocation assistance.

It is anticipated that assistance under the Scheme will be available for a five-year period once the program commences. This is anticipated to be the passage of the North Stradbroke Island Protection and Sustainability and Other Acts Amendments Bill 2015.

Queensland Treasury will administer the Scheme. The $5 million package includes funding to appoint an Employment Services Manager (ESM) to project manage implementation and delivery of services under the Scheme. The Scheme also includes funding to employ case workers to work on a one-on-one basis with affected workers assessing individual skills and needs, including recognising prior learning.

9.0 Work undertaken to determine the impacts on North Stradbroke Island property values as a result of sand mining ending

9.1 Issue

Submitters were concerned about the effect that the closure of sand mining could potentially have on North Stradbroke Island property values.

This response refers to the following submissions: 2, 7, 11, 14, 16, 17, 89, 116, 129, 131, 145, 196, 236, 239.

9.2 DSD's response

The Department of State Development undertook initial investigations to determine whether it is possible to attribute any changes to property values on North Stradbroke Island to government policy on sand mining. These investigations were undertaken with advice from the Valuer-General's office.

The lack of available data, the small geographic size of North Stradbroke Island and the presence of external factors mean that it is not possible to draw a link between the decision to end sand mining and property values on the island.

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10.0 Scope of the Finance and Administration Committee's review and timing of consultation on the draft Economic Transition Strategy

10.1 Issue

Submitters questioned why the Economic Transition Strategy was not included in the Finance and Administration Committee's inquiry into legislation governing sand mining; and why the consultation process for the strategy was not run concurrently with Committee proceedings on the island.

This response refers to the following submissions: 63, 173, 203, 209.

10.2 DSD's response

The draft North Stradbroke Island Economic Transition Strategy was announced in Parliament on 3 December 2015. On the same day Parliament referred the North Stradbroke Island Protection and Sustainability and Other Acts Amendment Bill 2015 to the Finance and Administration Committee.

The media release issued by the Office of the Deputy Premier on 3 December 2015 announcing the strategy specified that the closing date for public submissions on the strategy was 5 February 2016.

The Department of State Development became aware of the dates of the Committee's public forums in late December, after they were added to the Committee's page on the Parliament website. By this time, the closing date for consultation on the draft North Stradbroke Island Economic Transition Strategy had already been announced.

Prior to the strategy's referral to the Committee on 17 March 2016, the Department of State Development had participated in public forums and departmental hearings at the Committee's request.

11.0 Federal Government role in implementation of the Economic Transition Strategy and the North Stradbroke Island Sand Mining Workers Assistance Scheme

11.1 Issue

Submitter 98 questioned what role the Federal Government would have in the implementation of the Economic Transition Strategy and the Workers Assistance Scheme. This response is provided to a direct question from the Committee on p62 of the summary document.

11.2 DSD's response

With respect to the economic transition:

Research has been undertaken to identify potential business assistance funding sources, however engagement with these federal authorities has not yet taken place.

At the time this research was undertaken, it would have been and still is, too early to determine the exact needs of businesses.

DSD will work with the Department of Tourism, Major Events, Small Business and the Commonwealth Games, as well as federal authorities, to provide information on small business assistance during the transition process.

With respect to the Workers Assistance Scheme:

The North Stradbroke Island Sand Mining Workers Assistance Scheme will provide affected workers with access to training and employment support services to assist the transition to alternative employment. The Scheme consists of a number of elements including training, employment and relocation assistance, transport subsidies, income supplementation and dislocation assistance.

No direct consultation has been undertaken with the Commonwealth Government at this stage. 7

However, services offered by the Commonwealth Government to support displaced workers, particularly under the jobactive network, were considered in the development and design of the scheme. Jobactive is the Commonwealth Government's employment services network. Jobactive providers can assist jobseekers with resumes and job applications, job search advice, links to job vacancies and information about local employment opportunities and financial assistance. Additionally, other social services and financial support for displaced workers is also available through Centrelink.

Support under the Scheme will be provided until affected workers become eligible for assistance under the Commonwealth jobactive network. The Employment Services Manager (ESM) and case managers

would continue providing assistance to affected workers as they transition to jobactive services.

12.0 Jobs figures featured in the draft North Stradbroke Island Economic Transition Strategy

12.1 Issue

Several submitters questioned how job figures which featured in the Economic Transition Strategy were calculated and the validity of the figures.

This response refers to the following submissions: 117, 121, 131, 203.

12.2 DSD's response

Based on predicted construction and mine rehabilitation jobs and growth in the tourism industry, it is estimated that 151 positions may be driven through the initiatives in the draft Economic Transition

Strategy plus predicted growth.

These jobs will be generated across a range of sectors providing North Stradbroke Island residents with opportunities for employment in skilled positions (e.g. training and education roles) trades and service roles (e.g. construction and hospitality).

The North Stradbroke Island Sand Mining Workers Assistance Scheme will support sand mining

employees to access training programs in order to obtain alternative employment.

Other initiatives in the draft strategy will provide opportunities for residents to access education and training services and for small business operators to increase their capacity. Many initiatives are aimed

at improving the island's tourism offering and attracting more visitors during the off-peak season. This will help to address issues of security and seasonality of employment.

Overall, the initiatives in the draft strategy will assist in supporting NSI residents throughout the transition ensuring that they can capitalise on employment opportunities as they arise.

13.0 2011 Draft Situational Analysis

13.1 Issue

Submitter 1 drew the Committee's attention to a report produced by the government in 2011 - the Draft Situational Analysis for North Stradbroke Island. The Committee requested a copy of this report on p32

of the summary document.

This response refers to the following submission: 1

13.2 DSD's response

The draft Situational Analysis produced in 2011 is attached to this response.

B