N. Australia sells itself as new frontier to investors

The plot of land in Darwin in the Northern Territory where the Australian government hopes to develop a luxury hotel.
The plot of land in Darwin in the Northern Territory where the Australian government hopes to develop a luxury hotel.ST PHOTO: MARISSA LEE

The mining boom may be over, but Australia's sparsely developed north is determined to stay in the sights of rich investors by marketing itself as the "next frontier" in the Asian century.

The government is on a charm offensive to pull cash into Northern Australia - an underused land mass where 5 per cent of the population sits on 40 per cent of the continent - and some Singapore investors are warming to the opportunity.

Palm oil giant Wilmar International runs sugar mills in Queensland, and chairman and chief executive Kuok Khoon Hong said he is exploring the possibility of more agriculture investments in the north.

"I became interested after the Australian High Commissioner to Singapore, Mr Philip Green, spoke to me about the potential of Northern Australia for agri-development," said Mr Kuok, who was in Darwin earlier this month for the Northern Australia Investment Forum.

The forum, which was invitation-only, showcased dozens of ready-to-go projects to some 250 blue chip investors from 20 countries, including delegates from Singapore Power and Far East Organization. The projects cut across a range of industries, from mining to prawn farming, tropical medicine research and even a five-star hotel development on the Darwin beachfront.

It was no gathering of "Mickey Mouse" investors, said Minister for Trade and Investment Andrew Robb, who hosted the forum and repeated his call for foreign investors to keep coming in a big way.

Currently, private sector investment accounts for 96 per cent of all investment in Northern Australia.

"The government may help put some money in, but we're not looking to have this publicly funded," Mr Robb told reporters on the sidelines of the event. "Like the huge iron ore mines, we expect these properties, these farms, to be big enough that they support the development of their own infrastructure. It's got to be big to be economic, do it on a big scale."

Projections suggest that by 2040, northern jurisdictions will account for nearly 42 per cent of the Australian economy, from 35 per cent in 2011.

In January, a Major Project Approval Agency will be opened in Darwin to help firms investing more than A$50 million (S$51 million) in Northern Australia sort out their regulatory approval obligations.

But the high cost of doing business in Australia, especially labour costs, may be checking a stronger Singapore presence in the north, despite its proximity. Mr Kuok said: "Unless it is a very big-scale project, the return on investment will not be very attractive."

Still, Northern Territory Chief Minister Adam Giles believes the Australian dollar's close parity with the Singdollar is another recent sweetener for Singapore firms.

Much effort has also been spent to cut red tape for investors. Mr Giles said: "This is like real estate - we're saying this (project) is for sale, who wants to do it?"

A version of this article appeared in the print edition of The Straits Times on November 30, 2015, with the headline 'N. Australia sells itself as new frontier to investors'. Print Edition | Subscribe