The Committee for Gippsland is pleased to provide you with a submission of funding priorities and projects for the Gippsland region ahead of the 2017-2018 Commonwealth Budget.

Established in 2011, the Committee for Gippsland is a not-for-profit, incorporated organisation that provides a positive and influential voice for Gippsland. It takes a whole of region approach to advocacy, on projects and priorities informed by around 90 business and community organisations, collectively employing nearly 10,000 people across the Gippsland region.

Sector neutral, the Committee for Gippsland represents higher education providers, transport operators, manufacturing businesses, agribusiness and food processors, professional services, tourism operators, energy and resources sectors, healthcare providers, timber mills, small businesses and community groups. Our members share in a common goal for Gippsland to develop as a prosperous, sustainable and connected region. Within the region, the Committee for Gippsland works collaboratively with other organisations, including the Gippsland Local Government Network, individual councils, the RDA Gippsland Committee, Regional Partnerships, and One Gippsland.

The Committee for Gippsland has appreciated the opportunity to discuss our Budget submissions with the Commonwealth Government on previous occasions and would be grateful for a similar opportunity prior to this year’s Commonwealth Budget. Previous Committee for Gippsland budget submissions have focussed on a new hospital for West Gippsland, funding towards the Macalister Irrigation District 2030 modernisation project, Phillip Island Nature Park’s Summerland Peninsula Infrastructure Master Plan and transport infrastructure.

We are grateful for the funding support of a number of these projects. We are a still highly supportive of a new hospital for West Gippsland and upgrading rail infrastructure in the region.

Since 2011, the Committee for Gippsland has auspiced the Gippsland Community Leadership Program, which has made a tremendous contribution to identifying and developing Gippsland’s leaders through a transformational 12 month program. GCLP has empowered Gippslanders to make a positive contribution not only to their local communities but also the wider Gippsland region.

The Gippsland Region

Gippsland is a diverse and resource driven region. It is 4.2 million hectares in size, with a population of nearly 260,000 people. By 2026, this is forecast to grow to over 300,000 people. With an average travel time of around 90 minutes from Melbourne, Gippsland is serviced by the Princes Freeway and V/Line rail in the north and the South Gippsland Highway and V/Line coach services in the south. Gippsland is one of Victoria’s eight key regional growth areas, producing 85 per cent of Victoria’s electricity, 97 per cent of Victoria’s gas, around 23 per cent of Australia’s milk output, and 26 per cent of Victoria’s beef production.[1]

The Gippsland region aspires to develop beyond a national food bowl, and is exporting high value and quality food to international markets. This is aided by the region’s natural advantages of access to water and high yield agricultural land, utilized across a range of sectors, from beef to dairying, and horticulture.

The region’s top five industry sectors include manufacturing, construction, mining, agriculture, forestry and fishing, and electricity, gas and water supply. Combined, these sectors represent approximately $16.67 billion, or 58.8 per cent of total regional output. They also generate approximately $9.46 billion, or 88.3 per cent of total regional exports, which is estimated at $10.71 billion.[2] Milk production alone comprises about half the total value of Gippsland’s agricultural commodities and earns an estimated farm gate value of $624 million. The gross value of forestry and timber products in Gippsland is $1.2 billion.

The region also possesses a vibrant tourism industry, from small bed and breakfasts and wineries, to the largest inland lakes system in the southern hemisphere. It also includes Phillip Island Nature Park, which is not only a national icon, but an international draw card attracting millions of international ticketed visitors to Victoria each year.

While there have been several changes to the direction of government policies that seek to transition Australia to a low carbon future, the Latrobe Valley energy sector continues to make a major contribution to not only Victoria but Australia’s ability to access relatively cheap and reliable energy. There are also a range of innovative coal products being commercially developed in the region that have strong export potential. This development presents a significant economic opportunity for the region.

These include projects seeking to utilize Latrobe Valley coal for fertilizer, hydrogen and other opportunities that will present significant economic, employment and industry diversification dividends for both Victoria and Australia more broadly.

Our Region Our Future: Securing an Economic Future for Gippsland and Latrobe Valley

In 2016 the Committee for Gippsland initiated and launched the Our Region Our Future: Securing an Economic Future for Gippsland and Latrobe Valley (Our Region Our Future) report, which provided a blueprint strategy for transitioning within the Latrobe Valley stationary energy sector. There was a particular focus on jobs and training, and the economic link between small to medium businesses and community sectors in the region.

To date it is the only comprehensive, locally driven set of analysis and recommendations on the impact of the closure of Hazelwood power station.

With 2,000 direct jobs linked to the Latrobe Valley stationary energy sector, and innovation opportunities linked to the resource, Our Region Our Future has provided a fact-based body of evidence about the relationship between the stationary energy sector and small to medium businesses in the Latrobe Valley. Closure of the Hazelwood Power Station not only presents major challenges for the Latrobe Valley and broader Gippsland region, but also strengthens the case for the Commonwealth Government to invest in infrastructure and projects that will generate jobs and fast-track growth in industry diversification.

The Our Region Our Future report helped identify innovative, low emission uses for coal that are commercially available now, as well as a recommended suite of key infrastructure projects that are shovel ready and able to generate jobs, and encourage further investment into the region. These recommendations are included within this submission.

Among a number of recommendations, support for small businesses and contractors in the region who are impacted by the closure of Hazelwood power station is a major priority. Investing in new infrastructure through the transition period will assist in serving two purposes.

One, in the construction phase providing new jobs, and two, to help fast track investment attraction activities by ensuring Gippsland has a capable and efficient infrastructure base.

The Latrobe Valley has 500 years of brown coal resource. For the coming decades that resource will provide affordable and reliable baseload energy supply for both Victorian and Australian households and businesses. Beyond that period, its continuation will be dependent on technology like carbon capture and storage to remain cost and emissions effective.

Away from electricity generation, there are hundreds of jobs, and millions of dollars’ worth of export potential in coal projects including fertilizer, magnesium and hydrogen. The Committee for Gippsland is strongly supportive of a coal derivatives future for the region, and strongly advocates that these ambitions be reflected in the government policy.

Continued investment in research and development of technology that secures a low emissions energy future is critical. Carbon capture and storage has the capacity to help achieve the deep emissions cuts necessary in coal and gas fired power generation, and its development and deployment through improved technology should be a significant point of focus for the Commonwealth Government.

Priority Projects for Gippsland

  1. A new hospital for West Gippsland

Since 2011, a number one strategic priority for the Committee for Gippsland has remained a new hospital for West Gippsland. With Baw Baw Shire among the fastest growing regional municipalities in Victoria, the existing infrastructure of the West Gippsland Hospital is struggling to keep pace with this demand and growth. A new greenfield site has been acquired by the West Gippsland Healthcare Group, which has also been earmarked in Baw Baw Shire Council’s precinct structure plans. Since 2011, the Committee for Gippsland’s Strategic Plan has included as a key priority the proposal for a new hospital for West Gippsland, to be developed on the already acquired greenfield site.

The current site is small and cannot keep pace with increasing demand with West Gippsland forecast to reach 100,000 people by 2030 and there is no way the current hospital will be able to service this number of people. A new hospital will include:

  • direct access to ambulance bays and the emergency department;
  • a multi-level designed facility that will be energy and material efficient;
  • improved clinical facilities and patient amenities;
  • easy pedestrian access, plus multi-level car park facilities;
  • a new 60 bed high care residential aged care facility;
  • provision of a dedicated EMS helipad, with direct access to the emergency department; and
  • greater employment opportunities – a bigger hospital with more beds will need additional staff.

A new project can be delivered under one phase of work in under half the time that a rebuild on the current site would allow, presuming the current site would even cope with the size of the facility required to meet the population forecast. This is of particular significance given the growth predictions presented by Plan Melbourne for the Warragul and Drouin areas. Gippsland not only needs a new hospital in West Gippsland in terms of health outcomes but also for the construction and engineering jobs that will be generated by a project on this scale.

The Committee for Gippsland strongly welcomes the Victorian Opposition’s recent announcement that if elected it will fund the construction of a new West Gippsland Hospital. A commitment from the Commonwealth Government to provide a funding contribution in partnership with the Victorian Government would expedite the construction of an urgently needed new West Gippsland Hospital.

Recommendation 1

That the Commonwealth Government commits funding towards the construction of a new West Gippsland Hospital.

  1. Roads and Infrastructure for Gippsland

With a resource intensive local economy, naturally mountainous terrain and a large geographic area, the Gippsland region relies heavily on a well-connected and regularly maintained network of local roads and highways. This includes tourists visiting Gippsland, and local commuters, particularly in a region where intra-region travel for offices based throughout Gippsland is common.

Safe and efficient roads also carry high importance for heavy vehicles transporting goods within and out of the region, from milk tankers on local roads to heavy haulage on the region’s highways.

The Committee for Gippsland released the Gippsland Freight Infrastructure Master Plan in 2013, and included an intensive survey of local transport and transport related businesses in the region to assess their infrastructure priorities. The Committee for Gippsland appreciates your ongoing interest and support for a number of these priorities, which have been successfully funded. The seven overarching trends that emerged from the 12 month project were:

  • Resilience for growth: Increasing demand on the limited main routes is exacerbating existing issues. Incidents on these main routes have increasingly wider impacts for industry because of the region’s dependence on them.
  • Vehicle productivity: Industry seeks more widespread access for larger vehicles, particularly on the secondary road network but also on the rail system where train lengths are limited.
  • The role of rail: Industry sees the potential benefit in using rail, provided it is at the right price and has the right capability.
  • Townships: Freight issues are concentrated at townships, which are experiencing increasing amenity and congestion issues.
  • Maintaining the asset: The existing assets are declining in performance because of maintenance gaps. The quality and extent of road maintenance is not meeting industry’s needs and imposes higher costs on business.
  • Exports: Emerging higher value export opportunities may need new freight infrastructure such as connections to the Port of Hastings.
  • Information: Increasing use of information technology could enable new strategies to optimise vehicles and demonstrate compliance with freight regulation.

Building on these identified priority areas, the Committee for Gippsland urges funding consideration for the following eight projects in the immediate term:

  • Increased funding support for local road investment: This would include a more consistent and performance-based standard of maintenance to reliably improve access. There would be preventative and rapid response maintenance of roadside vegetation to avoid road closures and damage to vehicles and loads from overhanging branches. Increased funding across this area would also improve minor access blackspots and intersections. Key priority areas on local roads include Boolarra-Mirboo North Road, Budgeree Road, Bullumwaal Road, Ferguson Road/Willow Grove Road intersection, Grand Ridge Road, Grantville-Glen Alvie Road; Jeeralang West Road, Kongwak Road, Loch-Wonthaggi Road, and Morwell River Road. Warragul-Korumburra Road should also be considered in this context.
  • South Gippsland Highway Upgrade: Freight and commuters along the South Gippsland Highway would benefit from additional overtaking lanes and the realignment of the heavily curved section at Coal Creek, Korumburra. Ultimately a dual carriageway could be developed between Lang Lang and Leongatha to provide better access to the Ports of Melbourne and Hastings for food processing manufacturers in South Gippsland.
  • Traralgon Bypass: Traralgon is the largest city in Gippsland without a highway bypass. As freight volumes grow, it is becoming an increasing point of delay and the amenity impacts on the township are worsening. A bypass route has been set aside but development of the full bypass is a long-term initiative. In the short term, small improvements to truck movements through Traralgon, such as altering to highway roundabouts and priorities of high-value freight movements, could be examined. There are an estimated 10,200 vehicles per day likely to use a Traralgon bypass, including dairy, logging, general freight, commuters, all of whom would benefit from cost savings.

The Traralgon Bypass will be critical to Gippsland freight companies and those businesses that rely on trucks to transport products and materials throughout Gippsland. For exporters based east of Traralgon, the current road through Traralgon is identified as the remaining Gippsland sticking point in getting trucks to the Port of Melbourne.

One Gippsland based timber company has confirmed that 4200 logs come in bound while 3800 logs are carried outbound. Up to 60 per cent of inbound logs travel through Traralgon while nearly all outbound logs travel through Traralgon on B-doubles. Another transport company travels through Traralgon over 50 times each day. There are around 8 – 10 traffic lights that would be avoided for these heavy trucks if a bypass was constructed.

Business operators and Gippsland residents are concerned that the current route through Traralgon is too narrow for trucks. Roadside parking, pedestrian crossings and traffic lights throughout the CBD section of the Princes Freeway make this stretch of road unsafe for large trucks. The Traralgon Bypass is critical both for road safety and economic progress of the Gippsland region. The Committee for Gippsland understands that public acquisition overlay is already in place, along with preliminary concept design and initial scoping that have been completed. A business case would be the next logical step, followed by construction.

  • Princes Highway Duplication: The Committee for Gippsland also supports the full duplication of the Princes Highway from Traralgon to Sale, with the remaining distance of around 10 kilometres still requiring duplication work.

Broadly, businesses in Gippsland are experiencing a widening gap in pricing of deliveries to the eastern suburbs compared to the western suburbs and Geelong. The time taken to travel across Melbourne has increased dramatically, and transport companies need to be compensated for the additional time, which is often passed on through the supply chain or absorbed by the transport company.

Similarly, there are charges for freight that is cross docked through the depot at the Port of Melbourne and delivered on a tray truck. Congestion issues across Melbourne are significantly adding to cost pressures throughout the supply chain.

The Port of Hastings is considered a major export opportunity for Gippsland. While the Committee for Gippsland aspires for the Hastings port to be developed as a bulk and container port, the current bulk opportunities that it presents are significant. Larger volumes of livestock can be imported to be processed at local meat processing businesses, and there are opportunities for concrete to be imported, and resource products and wood chips to be exported.

In a 2016 Committee for Gippsland submission to Infrastructure Victoria regarding Victoria’s Future Port Capacity there was overwhelming support for the view that a second container port for Victoria should be located at Port of Hastings. The rationale for that support included all of the efficiency, shorter time to port, cost effectiveness, liveability benefits for Melbourne, environmentally responsible shortening of freight miles and congestion miles, social licence for continued expansion of Port of Melbourne, and population and employment growth scenarios for enhanced planning of Melbourne.

East West Link is a project that the Committee for Gippsland has supported since 2011, and was reaffirmed in the Gippsland Freight Infrastructure Master Plan as a priority for industry. The Committee for Gippsland would welcome any opportunity for East West Link to be constructed. While not in the Gippsland region, the East West Link would provide more efficient and competitive access to market for our region, which is heavily reliant on freight and transport.

Gippsland rail upgrades

While significant funding in other Victorian regions including Ballarat, Bendigo and Geelong has been invested in upgrading passenger rail, Gippsland continues to lag further behind. The region’s infrastructure base urgently needs upgrading, with a focus on track duplication, service frequency and reliability.

With Hazelwood power station closing, more Gippsland residents will need to look for employment opportunities beyond where they may live, particularly in the Latrobe Valley. Ensuring there are adequate public transport services will enable these residents to access employment opportunities beyond the Gippsland region, without forcing them to leave the region because of public transport inadequacies.

The Committee for Gippsland welcomed Infrastructure Victoria’s acknowledgement in its recent 30 year vision that V/Line service frequency needed to be increased to Bairnsdale. While this is welcome and urgently required, it must be increased with train services, not additional coach/ bus services.

Inadequate train services are a major impediment to productivity and employment growth in Gippsland, as well as a deterrent to enticing more tourists and visitors to the region. The Committee for Gippsland is also supportive of other work undertaken on upgrading rail services, and endorses the recent advocacy by the Gippsland Local Government Network.

Recommendation 2

That the Commonwealth Government commit to working with the Victorian Government on funding priorities that upgrade and improve the Gippsland rail corridor’s infrastructure, reliability and frequency from Melbourne through to Bairnsdale.

  1. Digital Connectivity Infrastructure

Continuing with the implementation and advocacy of the Gippsland Freight Infrastructure Master Plan and Our Region Our Future, an opportunity exists to develop, prepare and implement a project focusing on digital connectivity in the region. In January 2017 the Committee for Gippsland prepared an initial scoping paper for a Gippsland Connectivity Infrastructure Master Plan.

The Connectivity Master Plan would be used as a representative and fact-based body of work to inform government priorities and encourage commercial investment in Gippsland. It could also be used as a pilot project for other regions to adopt in time.

For example, the project would be used to prioritise the fast tracking of mobile phone tower rollout in Gippsland, based on community input. As well as assisting government to identify emerging issues and trends in prioritising projects, the project will also provide the private sector with an up-to-date snapshot of the region’s connectivity infrastructure base, and give investors certainty that connectivity innovation is a major priority for the Gippsland region.

The project will deliver to government and industry a clear set of challenges and opportunities. With identified problems, the project will provide a menu of options to help resolve the issues.  The project will be able to be used as an investment attraction tool for the region by providing businesses and potential investors with a contemporary analysis of existing connectivity infrastructure and opportunities for job creation.

Recommendation 3

That the Commonwealth Government supports the initiative of a digital Gippsland Connectivity Infrastructure Master Plan.

  1. Increasing Gippsland’s Education Opportunities

International education is Victoria’s largest export sector, and regional Victoria is particularly well placed to play a leading role in recruiting more international students. The Committee for Gippsland commends the work of Federation University in capitalising on sister city relationships in China, to bring students to Gippsland. Regional universities like Federation University not only offer international students a first-class education, but a welcoming and uniquely Australian lifestyle experience.

Federation University Australia Gippsland has been a positive and transformational influence on Gippsland. The 2011 Gippsland Tertiary Education Review reported on the established gap in higher education attainment levels between students in Melbourne, and students in regional Victoria. In addition, the student university deferral rate in Gippsland is recorded at 17.1 per cent, which is the second highest deferral rate of any region in Victoria, while the state average is recorded at 9.8 per cent.

The level of higher education participation in Gippsland is of significant concern, which is recorded at nearly double below the state average. There is a high deferral rate, and the number of young people enrolled in both university and TAFE in Gippsland is substantially lower than in metropolitan areas. The establishment of Federation University has presented a new opportunity for the Gippsland region to engage with Australia’s only regionally based, multi-discipline university that is focussed on building enrolments and working closely with industry. Federation Training is also establishing itself in the region, and it is important that government policies are closely aligned with the regional and strategic objectives of both Federation University and Federation Training.

Private Registered Training Organisations (RTO) in the Gippsland region also play an important role in ensuring young people have access to skills and training that will help secure a job, and that employers have access to those skills. These RTO’s need continued sufficient support funding to provide support to agriculture, aged care, child care, horticulture, food processing, meat processing and export industries. This includes allowing individual companies the right to select their preferred workplace training provider.

The Committee for Gippsland remains concerned by data in 2011 that revealed only 26.4 per cent of Gippsland students were opting for higher education, compared with a Victorian average of 41.3 per cent. The region also has high rates of early school leavers (people who did not complete year 12 or equivalent) of 61.4 per cent compared to a national average of 46.1 per cent. Since the establishment of Federation University in Churchill, the University has been able to nearly double its direct enrolment of local students from the Gippsland region, at the same time as engaging with international students through sister city arrangements in China and Japan.

The Committee for Gippsland would welcome the opportunity for the Commonwealth Government to initiate a body of work that updates the data, findings and recommendations of the 2011 Gippsland Tertiary Education Review, with a particular focus on Latrobe Valley industry transitioning, as well as the needs of students from remote areas of South Gippsland and East Gippsland.

A fact-based body of work that updates the data collected through the Gippsland Tertiary Education Review would be of immense value to the region at this point in time, ensuring that government, industry and community are able to make informed decisions on higher education priorities that respond to the challenges presented by the closure of Hazelwood power station.

Recommendation 5

That the Commonwealth Government continues to invest in outcomes that will substantially lift higher education participation and attainment rates in Gippsland.

Carbon Capture and Storage

The Committee for Gippsland has been pleased to note the increasing support for the development and deployment of Carbon Capture and Storage Technology. The Committee for Gippsland supports the work of CarbonNet and the C02CRC. It was pleasing to see the opening of a CCS test lab at Gippsland’s Federation University last year. The Latrobe Valley has 500 years of brown coal, and even with the closure of Hazelwood power station, the National Electricity Market will continue to rely heavily on the remaining three power stations. The Committee for Gippsland notes the view of the Intergovernmental Panel on Climate Change that it will be 138% more expensive to meet the Paris climate change targets without CCS deployment. The Committee for Gippsland is supportive of the Commonwealth Education Investment Fund support made available to the C02CRC and further efforts to support research and commercialisation of CCS technology.

HOPE project

The Committee for Gippsland has been approached by community proponents of the HOPE project. The Committee for Gippsland understands that a local board of management is establishing a 112 bed residential substance abuse treatment facility in Bairnsdale, East Gippsland, and that the proposal has broad community support. Residents would be offered therapy, with Odyssey House Victoria to operate the facility. The program would cover four levels of treatment for residents. Last year, statistics in Gippsland showed that, of the over 4,000 addicts seeking treatment in Gippsland, only a handful could access a residential facility. Should the HOPE project make a formal application for Commonwealth funding, the Committee for Gippsland would offer in principle support for their application.

The Committee for Gippsland appreciates your long-term interest and engagement in our region. We would greatly value the opportunity to meet with you to further discuss our budget submission with you when we visit Canberra on 22 and 23 March 2017.

Yours sincerely

Mary Aldred

Chief Executive Officer