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The Australian Government’s independent review into the potential for enhanced cruise ship access to Garden Island in Sydney has concluded the proposal is “essentially incompatible” with the future needs of the Navy.

Defence Minister Stephen Smith, who commissioned the report, said, “In the short term there appears to be limited opportunity to increase cruise ship access… Our priority, of course, has to be Naval security and defence.” But greater access to Garden Island is an option, he said, if another naval base is established elsewhere on the eastern seaboard.

The infrastructure of Sydney Harbour has long been recognised as insufficient for the growing needs of the rapidly expanding cruise industry. An increase in the number of cruise ships visiting Australian waters and parallel increase in ship size calls for a second terminal east of the Harbour Bridge and the sharing of Garden Island was seen by many as the best solution.

The conclusions of the review have been met with a slew of criticism.

“This is a disappointing outcome that could see big cruise ships turned away at Sydney Heads”, said Patricia Forsythe, Executive Director of the Sydney Business Chamber. “Both the defence and cruise industries are important economic generators for Sydney. I accept the importance of national security but it is disappointing that a way forward to support both the Navy and cruise industry has not been found.”

Ann Sherry, CEO of Carnival Australia, which represents 80 per cent of the local cruise industry, believes the issue could have consequences for more than just Sydney.

“If port facilities in Sydney aren’t right the whole of Australia suffers because Sydney is … the cruising hub for the entire country and for our region,” she said.

“Leadership at the highest levels of government is essential or Australia risks putting a brake on the standout success of the tourism sector in a difficult economic environment,” Ms Sherry said.

Ms Sherry drew attention to the risks in terms of the economic contribution of the industry. Referring to a Deloitte Access Economic study, she quoted $830 million in added value to the economy from the cruise industry in 2010-2011. And NSW, she said, experienced the added economic value of $370 million in 2010-2011. An amount the study forecasts would increase to 1.1 billion in 2019-2020, should infrastructure issues not hinder its growth.

The federal government will not make its final decision on the issue until it has received a NSW government transport and infrastructure paper and the Defence Department’s Force Posture Review later this year.