Press Conference - Government Review of the Woomera Prohibited Area, Interim Report 

FERGUSON:

It's my responsibility today to release the joint report on behalf of the Minister for Defence and myself going to the government review of the Woomera Prohibited Area which is an interim report.

In doing so, can I say that we believe this is a fairly timely report. It is a report, I think, which will be welcomed by all parties in terms of a major step forward in terms of opening up further exploration into potential new mining activities in South Australia.

It's also a report in terms of how we come to terms with the national interest both from a defence and national security point of view and, I might say, from an economic point of view.

This report was commissioned in May by the then Prime Minister Kevin Rudd and was led by the then Minister for Defence John Faulkner.

Dr Alan Hawke was given the responsibility of preparing the report and, in doing so, going out of his way to actually consult with all the community potentially affected by potential changes to the Woomera Prohibited Area.

I think the process of consultation has proved to be a highly productive process and I think we're bringing forward a report today, which can potentially represent the foundation for a major change in terms of how we open up the Woomera Prohibited Area for exploration and production in the future.

As you can appreciate from a South Australian mining point of view, access to this area has been long sought after by the industry. The report makes a further step forward, to say milestone, in terms of a potential decision which enables us to fully explore an area of South Australia that has been locked up in many ways for far too long.

It represents a good understanding, I think, of both the needs of the Department of Defence and the South Australian mining industry and the comments contained in it are very practical in terms of how we might be able to co-exist in a balanced way in the future.

It is about how we achieve a multiple use of what is highly prospective land from the resources point of view, but also very important from our national security and defence point of view.

As you can appreciate, there are unique characteristics of the Woomera Prohibited Area which are very important to Australia and, I might say, our allies from a defence point of view going to testing and evaluation of our defence capabilities. But there's also potential major opportunities from a South Australian point of view going to exploration, production and exports in terms of the South Australian resources sector.

The area itself is a huge area. It represents one-seventh of the land size of South Australia, an area of 127,000 square kilometres. The prohibited area includes over 140 mineral and energy exploration and development tenements, which are sited across a range of potential opportunities.

For example, Geoscience Australia, an agency that I have responsibility for at a Commonwealth level, estimates that 62 per cent of Australia's known copper resources are located in the Woomera Prohibited Area, as well as 78 per cent of our known uranium resources; proportions that they believe will enlarge, as a result of further exploration opportunities.

By way of example, the South Australian Government estimates that some $35 billion worth of resource developments are likely to take place in the Woomera Prohibited Area if we're able to actually progress the recommendations of today's report.

At the same time obviously, we have to work out a co-existence model based on the balancing of, I suppose, aspirations of Defence and the resources sector, so as to ensure that the long range weapons testing facility, which is unique internationally, remains in full operation. It's very important, I might say, to our national defence and security point of view.

So what we're proposing is a co-existence model. Obviously there is an area, the red area, which is prohibited from the point of view of exploration and production. We're seeking to open up what is, I suppose, potential opportunities for full presumption of access within a shared area between defence and the resources sector from an exploration and mining point of view.

The report includes detailed recommendations as to how that co-existence might exist, which I think potentially brings security for the purposes of investment in the resources sector in Australia, which is what is being sought after by the South Australian mining industry over a long period.

The report is being released today. It will be open for further feedback until the end of November. Dr Hawke will then present to Government, for our consideration prior to the end of this calendar year, his final recommendations on the basis of this report.

I simply say in conclusion, that having been involved with the resources sector in trying to achieve this outcome since I became the Minister in December 2007, what we sought to bring forward in this report is a balanced outcome which meets both the needs of our nation from a defence and national security point of view, whilst also opening up a wealth of economic opportunities which will lead to investment, job creation and training opportunities in Australia.

It potentially brings certainty to industry for the purposes of investment in Australia, and I must say we have got a huge pipeline of investment in the resources and energy sector in Australia at the moment.

It also effectively means that we can have a co-existence between defence and national security opportunities, and resources and exploration opportunities to the benefit of Australia from, I suppose, the joint aspirations of all of us, obviously Australia remains a safe place to live in, a safe haven for investment, but also a nation wealthy in investment opportunities from a resource and exploration point of view.

QUESTION:

What will it allow mining companies to do that they can't do now?

FERGUSON:

It effectively means that we are opening up a huge area of South Australia that has been historically regarded as off limits. I think the mining sector's always had difficulties in terms of its ability to, firstly, gain access to this region.

But, I suppose more importantly, having potentially gained access, from an exploration point of view, to then be able to think about investment in production, it will bring, in my opinion, certainty and security of investment opportunities, which is the key to our attraction as a nation.

QUESTION:

If you have enough – if you open it up to more foreign investment, what kind of security risk would that pose for Australia's national security?

FERGUSON:

Look, in terms of foreign investments, firstly, we are a welcoming nation from a foreign investment point of view. Each foreign investment - each potential foreign investment - will continue to be considered on the basis of long-established and known FIRB principles, which include a national interest consideration.

There's no suggestion out of here as to any potential change in the method of operation of the Foreign Investment Review Board. This is, I suppose, more focused on opening up areas that were previously off limit for exploration and potential production.

QUESTION:

So are you trying to relax foreign investment more?

FERGUSON:

There is no proposal, as a result of this report, to put in place any change in the method of operation of the Foreign Investment Review Board, and the well-established and known principles…

QUESTION:

[Interrupts] This does look like more than previ...

FERGUSON:

This is about basically giving certainty to potential investors in this region, for the purpose of being able to put money on the table, do the necessary exploration, and then to seek to go to production.

It is in some areas potentially the green light to actually go ahead now, when these recommendations are finally determined. In others it's about negotiating a co-existence model, which enables Defence to do its work whilst also encouraging investment in South Australia.

QUESTION:

So, given that the report is favourably accepted, are you saying some work could start almost immediately? Is that how the time-frame [indistinct]...

FERGUSON:

The timelines are very short. It is released today. We're asking for any feedback by the end of November. Dr Hawke, who has done a good job in terms of consultations with the South Australian Government, and, I might say, the Indigenous community, representatives of the environmental NGOs, and the resources sector, will be presenting his final report to Government by Christmas.

QUESTION:

So, how much of this 127,000 square kilometres will now be opened up for exploration and development?

FERGUSON:

Well, obviously, there's a red area, which has always been accepted by industry as being a no-go area. But in terms of the rest of it, there is a huge area that is, I think, in the minds of the resources sector, not accessed, certainly, for the purposes of investment, in the past, and that will now be able to be resolved once the process of further public consultation and determination by government is finalised.

QUESTION:

What sort of sharing arrangements could we see? What time limit would the companies be expecting?

FERGUSON:

Well, that will be a matter of discussion and consideration by Government, but I might remind you that the sharing concept is not new to industry. In some ways, in northern Australia, the nature of our climate effectively means that for a certain part of the year mining is off limits because of the nature of the monsoonal season.

So the concept of being able to mine and process for a given part of the year, not a full calendar year, is not new to the resources sector in Australia. It will now be a question of working out what are the absolute needs of Defence, and then, I suppose, working out appropriate permit arrangements that can facilitate exploration, and development and production, at the same time enabling Defence to do its necessary testing, as required, from time to time.

QUESTION:

It sounds very much like a done deal, Minister, almost, isn't it?

FERGUSON:

I think a lot of effort has actually gone into getting us to where we are today, in terms of this interim report. And I must say I've been involved in discussions with SACOME, and I might say, the South Australian Premier, Treasurer, and Minister for Resources, over a long period, to achieve a set of recommendations akin to what is on the table this afternoon.

There's now an opportunity there for us, I think, to actually take it forward in a practical way. It's always been about how we achieve economic development, whilst also having proper regard for our national defence and security needs as a nation. The opportunity for that balance, that co-existence, is on the table for us as a community to embrace and nail down in the foreseeable future.

QUESTION:

Do you expect any opposition?

FERGUSON:

Look, only time will tell, but Dr Hawke, to his credit, and the secretariat associated with the report, has gone out of its way to actually consult, and to bring forward a practical set of recommendations which meets the needs of all in the community.

QUESTION:

Just to be clear on the foreign investment question, is government proposing - does the report propose to open up, to free up more land for foreign investment? I mean we can't see the report, because you didn't release it, but...

FERGUSON:

Well, it is released, as of now - it is online.

The report does not go to any proposed change of our Foreign Investment Review Board principles and how they are applied. It was never part of our consideration in terms of opening up this area to further exploration and development.

The issue of foreign investment in Australia is a separate issue. There is an established process that will continue to apply. There has always been, and always will be, a national interest test that is part and parcel of those considerations.

QUESTION:

Will it reduce any of the Defence Force operations?

FERGUSON:

It's not about reducing Defence Force testing, and overall operations. It's about securing their future, in an area that is very important to us, as a nation. But also creating a model based on co-existence which meets the needs of us, as a nation, from a defence and national security point of view, whilst also facilitating, potentially, further investment and job opportunities, and export opportunities for Australia.

QUESTION:

Just got a couple of questions in Canberra on other matters. Just talking about the Australian dollar, do you expect that parity will lower your expectations for mining-tax profits?

FERGUSON:

Well, I knew that the mining tax is a profits-based tax. Therefore the potential take for Government changes over time, because it's a profits-based tax.

It'll be a question of time, as we go forward, from year to year, what's actually collected by Government, from a revenue point of view, with a profits-based tax. That's why industry wanted this tax; it effectively means that in a down time, when the profits are low, they're not up for the huge royalties that sometimes exist at a state level.

QUESTION:

Will there be an impact on the resources sector in general, or what sort of impact are you expecting?

FERGUSON:

Look, I think our challenge at the moment in the resources sector is actually managing the pipeline of investments, and the potential impact that is having on the supply of labour in Australia, and, I might say, the impact it's going to potentially have on the wages system in Australia. That's the issue that raises its ugly head in my mind at the moment; basically, how we manage the huge pipeline of investments that is occurring in Australia in the resources and energy sector.

QUESTION:

Just finally, the Government's been quite excited about Oprah coming. Harpo's questioning whether they want to fly Qantas now, are you concerned about that?

FERGUSON:

I've got contrary feedback. Oprah will be coming to Australia. Qantas is the preferred carrier. Historically it has got a very, very safe record.

I am pleased that no-one was injured as a result of the accident of yesterday. It's now the responsibility of Qantas, and associated with the Australian Transport Safety Bureau, to assess the cause of the accident to make sure that all the other A380s are safe for travel.

Let's get on with maintaining what is, historically, a terrific safety record, from the point of view of the aviation industry in Australia, whilst also making sure we welcome Oprah.

Thank you.