The Australian reports that the main harbour at Cairns in Australia will be dredged to make way for larger cruise ships, under a A$40 million tourism commitment proposed by Queensland Liberal National leader Campbell Newman.

The dredging of Trinity inlet is also expected to boost Cairns' capacity to accommodate a greater naval presence, diversifying the economy of far north Queensland, which has seen unemployment reach over 10 per cent in recent years.

Making the announcement from the deck of local charter boat Crocodile Explorer, Mr Newman said the project would be subject to environmental approval but "where there's a will, there's a way".

The Australian said vessels up to about 280m in length are capable of docking at Cairns, but larger boats are often dissuaded from stopping in the region because the nearest safe berth is at Yorkey's Knob, 18km north of the city.

"That ship behind us has about 2400 or so passengers, so if they come ashore and each spend $100 or $200, you do the math. It's a huge economic benefit for Cairns," he said.