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Impact of the global financial crisis on regional Australia

CHAIR —I welcome our first representatives, from the Launceston and Dorset councils and Northern Tasmania Development. Thank you very much for appearing before us today. Whilst we are not requiring you to give evidence under oath I do need to remind you that these are formal proceedings of the parliament and should be accorded the same respect as proceedings of the House of Representatives. It is also customary for me to remind witnesses that giving false or misleading evidence is considered a serious matter and may be considered a contempt of the parliament. Do you have a brief introductory statement to put before the committee?

Mr Wallace —Yes, a verbal one. Thank you for the opportunity to come and make a presentation and representations to you. We do not have a formal presentation as a written document. However, we would like to raise certain issues which we believe affect certainly this region and could equally apply in other regional areas across Australia.

I will give you a very brief description about the north of Tasmania, as I am aware you are travelling around the state. The northern region is basically a third of the north-east of Tasmania, from about the central area, almost to Devonport, and including Flinders Island, and it has eight councils. The main business, once retail has been removed, is agribusiness, which includes forestry, fishing, agriculture and horticulture. The second business is tourism and the third is education—there is a lot of education through the university, the Maritime College, colleges and senior secondary colleges. The majority of employees are involved in business as opposed to government bodies or NGOs, so we have very much a business focus, as I am sure you will hear later from our colleagues from the Launceston chamber and other business sectors.

From our perspective, Northern Tasmania Development operates right across the region as opposed to just with individual councils. Certainly in the last 18 months we have seen that there has been a slowing up of funding for certain projects and, as projects have been winding down, there has been a lack of ongoing projects that we could move straight into. I will give a quick snapshot of Northern Tasmania Development’s role, which is economic and social development. We basically are a lobbying, facilitating and broking organisation in the areas of ‘live, visit and invest’ and delivering on social issues. We run projects for both state and federal governments. Where there is no capacity for those projects to be run, we actually run them ourselves until we build that capacity. I will give examples of two or three we are running at the moment. One is in the area of youth justice and with young people. Another one is in the area of retention of students from grade 10 through to grades 11 and 12—Tasmania has one of the lowest retention rates in that area—and then also on engaging young people from the ages of 16 to 24 in ongoing training or re-engaging them in training.

One of the geographic difficulties, if I could call it that, across this region is the dispersion of the population. Approximately 60,000 to 70,000 people are in Launceston city itself, there are around 90,000 in the greater Launceston area, and there are 130,000 across the region. So we have a population dispersed right across the region, as opposed to a small, tight area—and we will make some comments shortly about the infrastructure.

That is just a very quick snapshot of what the region looks like and what our businesses are. One thing I would like to make a public comment on is that in the last two or three years there has been a lot of unity between the local government authority and the eight councils, where they are focusing more on the region and realising that each of their individual areas impacts significantly across the region. So at this forum here today the individual council representatives will speak for their own councils but the focus is definitely on developing the strength, liveability and sustainability of this region. Thank you.

CHAIR —Thank you very much for that. We will have some questions specifically about what is happening in the region, but as a Victorian MP I am quite interested in the regional development board concept, how that came about and what you are doing. But first I will introduce the committee. I am obviously the chair, Catherine King; I am the federal member for Ballarat, a regional city in the centre of Victoria.

Mr RAGUSE —Brett Raguse, federal member for Forde, which is in South-East Queensland, also known as the Gold Coast hinterland.

Mr CHEESEMAN —Darren Cheeseman, federal member for Corangamite in Victoria—the Great Ocean Road, surf coast kind of region of Victoria.

Mr NEVILLE —Paul Neville, member for Hinkler, which is Bundaberg and Hervey Bay.

Mr SULLIVAN —I am John Sullivan, the member for Longman. Longman is the area between Brisbane and the Sunshine Coast but it is being gradually swallowed up as Brisbane grows north.

Ms CAMPBELL —And, for those of you who do not know me, I am Jodie Campbell, federal member for Bass.

CHAIR —Thanks very much for that. Victoria does not have a long history of regional development councils—we have had some other models—so I am interested in how your regional development council was established, why councils made the decision to purchase the development board, how you are funded and what sorts of activities you undertake, just to give us a general idea of the role of regional development boards. In particular, I am interested in the relationships between local council and the state government and how you work together—or don’t, in some instances. Sorry; that was a big question!

Mr Wallace —That is fine. I can see why it was deferred. Just to give you a little bit of background, the company was set up about 17 years ago by private individuals, businesspeople in the city and across the region, and it was primarily to identify gaps where projects were needed in the region and to fund those through federal and state funding. So an organisation was set up and it worked quite successfully for about 10 years. It changed its name a couple of times and then it moved into a stage of building its membership. Mike Steele here, who is a current board member, was one of the very early members of this organisation. At that stage it started to drop off a little in its performance and its activities, and consideration was given to winding it up. The eight councils who were members believed that there was a need for this type of organisation, so they took over the shareholding. It had a representative board of 12, who were mainly council representatives and some business representatives as well—and at that stage Mike was still on the board.

About three years ago, it was realised that a different governance model was needed. The situation was that there was difficulty in making decisions on the split-up, I guess, of funds and activities, and where they might be applied. So new articles of association were developed and a new company was formed. It is a not-for-profit organisation. The eight shareholders are the eight councils. An independent chair was appointed, Des King, and he is still the chair, and a board of four independent, skill based people was appointed. At that stage, Mike was reappointed, and I was appointed along with Professor David Adams, who specialises in community development and innovation, and also Kym Goodes, who specialises in youth and youth justice issues.

So the five of us formed the board, and we had a CEO who had driven the change. After a year he actually left and moved elsewhere, and at that stage we were having some difficulties with our shareholders, so I was asked to come in as the interim CEO, which I did, and the task was to realign the business back to its fundamentals and to rebuild the relationship with the shareholders—which we did. We had an independent review performed by KPMG and there were 22 issues raised, and we have addressed virtually all of those issues. So it is a body and an organisation that has transgressed but is now in a position, as it has been for about two years, where it is being actively sought by federal and state governments to be the voice for the region and across the region. Perhaps some of the shareholders would like to make a comment.

Mr Dixon —Firstly, do you want to talk about services provided through NTD? I think that was part of the question.

CHAIR —Yes. I am interested in what it does and its relationships with other tiers of government and how that works or does not.

Mr Wallace —The three areas that we focus on, and I flagged one before, are live, visit and invest. ‘Live’ covers the social issues. It is across the region. We get involved with the state health services here, for example. We meet regularly with the director of the local hospital and the secretary of the state department of health and we give them input and they tell us what is happening and we tell them where there could be areas of change. Under liveability, and as I mentioned, there are some of the youth programs that we have been involved in. We are involved in other areas such as environmental issues. We work closely with NRM North in those areas.

The second area is tourism, which is in ‘visit’. Our organisation is the regional tourist authority in the north and that is funded by the Tasmanian state tourism department. Because it is our second largest industry sector in the north, we put a fair bit of focus on that area. The third area is ‘invest’, about economic business attraction and networking. Up until about 10 months ago we had a three-year project that we operated with DOTARS under federal funding, which was a very successful project in building networks within and across the region and also in investment attraction. Those are the three key areas we work in.

CHAIR —How do you work with local councils, state departments and with federal departments? I am thinking in particular of AusIndustry and agencies like that. How do you work in terms of the responsibilities that they have?

Mr Wallace —With regard to working with federal bodies, apart from when we are actually delivering projects and programs that have been funded, we operate on some of their committees—their local and regional bodies—where we give advice and we offer our network. We have a database of approximately 3,000 individuals. We work closely with AusIndustry, with ACCT or RDA, as it now, being Regional Development Australia, contributing and giving that regional perspective. With regard to the individual councils, part of our arrangement is that we do not get involved in actual local council issues. We are not fixing drains or potholes or those sorts of things—which my colleagues do extremely well. So it is very much at that higher level, if you like. The major area that we are working on right now is regional planning reform across the region. This is for regional planning schemes. We are in a state funded project for two years and are in the process of coordinating the eight councils to develop a common regional planning scheme. One of the difficulties with a region like this is if a developer comes to build a new set of warehouses or whatever. Within a few kilometres of our post office they can be in three municipalities so there can tend to be confused messages about buildings, building regulations and those types of things. So we are acting as the facilitator. That is one of the key roles that we have, facilitating this process and acting as an independent.

I think it would be fair to also comment that if we look at the structure of the eight municipalities, Launceston has approximately 50 per cent of the population, which is around 70,000 people, and it goes down to 800 on Flinders Island. As an organisation, we are trying to act as the big brother looking after everyone, as opposed to some of the smaller councils feeling as though Launceston is always driving them, pushing them and those sorts of things. I think that is what has certainly helped with unity in the last two years among some of the medium and smaller councils.

CHAIR —Thank you, as that has really helped to set the scene.

Mr NEVILLE —I would like to keep exploring some of these areas. What is your budget and what proportion of that comes from state, federal and local governments? What is your permanent staff level? So it is about budgets, sources of government funding and staff levels. By the way, if you have got sources of private funding, what are they? Just give us round figures.

Mr Wallace —Thank you as those are excellent questions. We have a core budget of approximately half a million dollars. That is 100 per cent from the eight shareholders. It is a split on a per head population basis. The funding was set by the shareholders under the old governance system and it was not developed or implemented by the existing board. We have approximately $500,000, which is our core funding. That runs our admin and some of the other areas. We also have a three-year shareholder agreement which is a rolling agreement so annually they renew for another 12 months. The source of funding is about 95 per cent from that source and we then have a small membership base from which we receive approximately $30,000 a year, from business or corporate members. They range in paying from $8,000 to $10,000 a year as large corporate bodies. This organisation we are in here, for example, pays a membership—and all these are public figures—of $4,000 a year as a gold member, as a country club. EskWater is one of our major members. It goes down to $250 for a small business membership.

We receive no state funding for our core funding. We then have our projects. Last year we had projects of $1.2 million, from federal and state bodies. Some of them are short-term projects and some of them are for up to three years. For example, in June 2008 we had the DOTARS project that we ran for economic development. That was $600,000 over a three-year period. That finished in June last year. That was actually an $800,000 project over three years as we brought in other shareholder money and other moneys to top that up.

Staff is an interesting one. When I took over as interim CEO 18 months ago, we had 18 full-time equivalent people. Within six months we had 10. We now have seven. We were into the areas of service delivery, which the board believed was not its core business, so as projects were finalised or people left we did not replace them. We are now back into servicing our core business, which is servicing our shareholders, which are the eight councils in areas across the region.

Mr NEVILLE —If you get government grants—say there are a number of federal grants—and a number of departments require facilitation components of them, do you just engage the staff for the length of the particular program?

Mr Wallace —Yes. If I could give an example—it is not public knowledge yet—last week we were awarded a very small project for the Dorset region through Enterprise Connect, the federal body, and we will engage staff. That is a project of around $120,000, with $75,000 from the federal government, from memory. The Australian Innovation Research Centre is also involved as a partner and it is contributing around $18,000, with Dorset council around $18,000 and Northern Tasmania Development, $23,000. We will employ period just for the period of that contract. It is a 12-month contract.

Mr NEVILLE —I will finish on this note for the time being. You mentioned that you have pursued, at least in recently past times if not currently, social infrastructure. The arguments that a lot of development boards get is that they lose their focus when they venture into the area of social infrastructure, rather than keep their eye on business, hard infrastructure and tourism. What is your comment on that?

Mr Wallace —If I could give an example—

Mr NEVILLE —Also, do you have an ROC here, a regional organisation of councils?

Mr Wallace —No.

Mr NEVILLE —The other states have them. You do not have those. So you, in a way, are the unofficial ROC for this area.

Mr Wallace —In the region, yes. NTD has a local government committee. However, the councils also have general managers committees, both for the region and for the state.

Mr NEVILLE —I suppose the purpose of the question is: even though you are derived from local government, you are not there second-guessing them, are you?

Mr Wallace —No, not at all. If I could return to your question about the social issues, if I can give a practical example, there is a project that we run, federally funded by the justice department. It is basically trying to keep young people out of the justice system. It is called Youth on Paterson. It operates in the city here, although it is regionally focused. It is a three-year project. It has an operational committee of 12 people. One of the briefs in that funding application was to not duplicate services already existing for young people who may be disadvantaged or at risk but actually assist and coordinate many of the projects that operate within the city. For example, of the 10 or 12 that sit around that committee table, most operate programs and projects in their own right, but there is very little synergy across them. So our role in this particular project was to develop that synergy. I think that is where the role of an organisation like ours can certainly operate.

Another one is in the Rural Co-pilots Mentoring Program, looking at disadvantaged young people, particularly in country areas. They are basically young kids who have been told: ‘Please don’t come to school. You’re too disruptive.’ This is a mentoring program. Again, organisations like ours can cross municipal boundaries by operating these projects and programs and being able to bring other resources. But I certainly would agree with you. From the perspective of having sat on the board of NTD and becoming the permanent CEO, I think we need to be careful as a regional body to not get into the delivery of services that others can provide. We are definitely there for those four key points: advocacy, brokering, lobbying and facilitating.

CHAIR —I have a supplementary question. What is your relationship with the new Regional Development Australia and the previous Area Consultative Committee Tasmania?

Mr Wallace —It is excellent, as it is with AusIndustry. We have worked very closely with them and continue to do so. We have contributed to the presentation they will be making to you later this morning. We work very closely with them.

CHAIR —This is in relation to some of the change that is happening at the moment. Obviously when area consultative committees were first established they had not so much an economic development focus but certainly an involvement in the field of training and employment. That is where they were set up, and they moved over time. I do not know enough about the one here, but certainly the one in my own district moved predominantly to become a pathway to the regional partnerships fund—I think that would be fair to say. With that fund ceasing and, obviously, some of Regional Development Australia’s focus on some of the economic arm of what they used to do, how do you see yourself fitting with that new, re-formed RDA, if they are in some of the same space as where you may be?

Mr Wallace —If I could be candid, it seems from our perspective that the area consultative committee, when it was first set up, was a consultative committee. Yet its role was more in the application and the disbursement of funds for projects, as you have just described. Now it has changed its name to Regional Development Australia, but my belief—from some of the workshops that we have had and the round tables we have had in this building—is that it is looking more at communication and getting information to and from government. So although its name says ‘Regional Development Australia’, it may not be in the space you have just alluded to. Northern Tasmania Development very much see our role as being with business and community in economic and social development.

Mr Dixon —I might comment a little bit further on behalf of the councils. On the day we had the community cabinet here in Launceston we had an opportunity to meet with Minister Albanese prior to that, on the topic of RDAs and their future. We really talked about being in the same space as an effective regional organisation such as NTD, and we raised the question of why there should be duplication when you have actually got something that has been built from the ground up and supported with the councils as shareholders.

CHAIR —That is part of what I was alluding to there. Thank you.

Mr SULLIVAN —Sorry to keep picking on you, Mr Wallace, but you have been the principal contributor so far. I want to know when you started reducing staff by moving out of the service delivery area. Have those service deliveries been picked up elsewhere? Are there BCs or the like that do that work around here?

Mr Wallace —No, there has not, and that has been one of the disappointments. For example, we had a very good team in economic development, which was funded under the DOTARS project, and when that ceased in June 2008 our organisation carried those people through to the end of October out of shareholders’ funds. They were a very good team. They had built good respect, contacts and networks, and we were hoping that there would be some program that would come out that would be able to continue that work, not just rolling the existing project. We had identified new areas where we wanted to put that economic development team to work for the benefit of the region. So that was certainly one disappointment.

Mr SULLIVAN —Right at the beginning you spoke about changes to federal government funding and ‘projects’ drying up. I wonder whether you mean those short-to-mid-term projects such as the three-year project that you just concluded or whether you meant funding for business projects.

Mr Wallace —Certainly the short-to-medium-term, three-year projects. Again, it is because of the skills we had and also the need we saw for the region that it was disappointing that we could not keep this type of work going. It was not specifically for funding for business grants, individual companies or firms, although I am sure that will be raised later in the morning. That was a concern.

Mr SULLIVAN —We have seen the same sort of thing at various times—it has a cyclical nature—in the area where I am from. I now move to what you are seeing in an area that you work in, that of tourism, in trying to attract additional business to this region. What are you seeing as the consequences of the current international situation?

Mr Wallace —I am not quite sure where to start, but I guess I could almost get straight to the bottom line. Tourism in Tasmania and in this region in particular is going extremely well at the moment. A very small proportion of our ongoing tourism business is internationally based or comes from international visitation. Figures released in the last two weeks show an increase of 12 per cent in visitation but, more importantly, an increase of 19 per cent in per visitor spend. To put that into practical language, instead of people from Sydney and Melbourne, which are our main drawing areas, going overseas, they are taking a holiday to an island. The biggest growth areas are now short visitations of three to five days. They are coming down perhaps once or twice in a year and they are staying at nice places like this, visiting wineries—they are actually spending money. They are not—if I can put it like this—the mums and dads with two kids and a camper van, which is an important market to us. That is a different market, which is well catered for here but is very seasonal, whereas what we are seeing is growth in short visitation through the winter. Tasmania’s tourism industry is basically from November to Easter and then absolutely nothing for the rest of the year. What we are seeing is the shoulder edges growing.

The other thing that has really assisted us is the discount airlines. Tasmania, the north in particular, has a very high uptake of seats on planes. There are very few empty seats. Many of those are discount seats—$49 one way to Melbourne or $79 to Sydney—and, again, we have good access, with direct flights to Brisbane, Sydney and Melbourne. We are very fortunate that way. The other area in Tasmania is intrastate travelling. We have seen significant growth in that in the last two or three years, and that has been promoted mainly through organisations like ours, for example. Up until June of this year, we have funds from the sale of the two Spirits—Tasmania to Sydney—and those moneys have been spread over three years for promotional advertising, some of which was intrastate advertising. Over the last three years the three regional tourist authorities, of which we are one, have really been promoting our regions within the state.

CHAIR —Are you aware of the government’s recent announcement about the tourism grants?

Mr Wallace —Yes. There are categories 1, 2 and 3, and we will be hopefully applying for 2 and 3.

CHAIR —I assumed so, but I just wanted to make sure you were aware of those.

Mr Wallace —Thank you for raising that.

Mr SULLIVAN —To follow on from what you were saying about the short-term and interstate visitation, how much role has the Hawthorn involvement with the Tasmanian government played in bringing people onto the island and from throughout the island to watch games? It is a silly question, but I come from a rugby league state.

Mr Wallace —Perhaps I will answer part of that and then refer to my colleagues from Launceston, who are invested heavily in dollars in that area. It is significant for this region. There is approximately $15 million that comes from four Hawthorn matches alone. In addition to that, of course, we have excellent stadium facilities, which my colleagues will comment on. It is a very important part of our tourism operation, but we have only four games. Some people think it is Hawthorn’s home away from home and that they must be there regularly. It is quite significant. From a council’s point of view, they have invested very heavily.

Mr Dixon —I think the most important thing is that it is part of that off-season that Robert had mentioned, so it is a great injection of additional people at times when it would ordinarily be quiet. We can provide some detailed information on its economic benefits to the committee. The council and the state have certainly been committed to Launceston as being the home of AFL in Tasmania, and that has been made very clear. There is ongoing commitment. Right at the moment there is an application from the council for replacement of the northern stand to give more than 2,000 additional seats as part of the strategic funding program. We see that as the sort of project that ought to get the funding because of the huge impact it has on the regional and state economy.

CHAIR —That is the bid you have put in under strategic projects for the Community Infrastructure Program?

Mr Dixon —Yes.

Ms CAMPBELL —Robert, I would not mind giving you a little rest for a while. I will focus my comments on John, Mayor Partridge, Frank or Mayor van Zetten and their particular areas. I say this because, though I clearly have knowledge of your areas, I think it would be extremely beneficial for other members of the committee to hear from you. We know that there have been some struggles with the north-east in relation to the GFC, and I think it would be beneficial to hear what has been happening in the north-east with the closure of the mills. We might be able to explore what you have been able to achieve. I think it might then be beneficial for Frank and Mayor van Zetten to talk about Launceston as well.

Councillor Partridge —Thank you, Jodie. I will paint a little picture of the Dorset municipality to the committee. We cover 3,400 square kilometres of the north-east of Tasmania. We have 750 kilometres of local roads and we have 109 bridges—one got washed away just recently. Robert summed us up pretty well. We are agribusiness. We are into tourism. There is some mining. Of course, forestry is a big part of the municipality. I guess the biggest restriction or impediment from the point of view of development—and I think there is a huge potential for future development, particularly in agribusiness and forestry, in the Dorset municipality—is the lack of a suitable access road from the point of view of freight. Currently, Scottsdale is the main centre of the Dorset municipality, and if you have to use a B-double to get our freight out of the area you have to go via Bridport, George Town and back up to Launceston, which adds some 30 per cent to your journey.

We have been working on that for a long time. It is a priority, as far as we are concerned. We have had some assistance and some small sections have been done. Currently, there is another small section of that road being upgraded. It is important to continue with that upgrade. The next major stage has been costed out at around $15 million, and it will make a huge difference if we can get that piece of road done. That is a brief picture. Yes, we have had setbacks. We have had mill closures. A few years prior to those we lost the vegetable-processing factory in the area. So there has been a downturn in employment, but I must add we are a pretty resilient group and we will survive. There is no doubt about that. Tourism is expanding in the area. With assistance from the federal and state governments, as well as the Dorset Council itself and the other councils of the region, we are developing the Trail of the Tin Dragon. It is a tourism route from St Helens on the east coast right back through to Launceston. We feel that those types of projects will be beneficial. But, as I say, the highest priority as far as we are concerned is to get that freight route. John, you might like to add something.

Mr Martin —Thanks, Mayor. I will add to those comments. Dorset Council is a small, rural-regional council but it covers the major part of north-eastern Tasmania. We have a budget of about $12 million. We have about $3½ million worth of Roads to Recovery financial assistance grants coming from the Commonwealth. That will give you an idea of the percentage of grants in our budget. Most of that has been granted because we have large roads, big bridges and all of that sort of stuff. We have major agricultural and forestry industries in our area and a significant, growing tourism industry. As the mayor mentioned, we have been affected by the closures of a milk-processing factory, a vegetable-processing factory, a timber mill and all of those types of things. That has affected probably in excess of 300 or 400 jobs, and in a population of 7,000 people that is a pretty significant downturn. There are associated flow-on effects to other smaller businesses, like smaller engineering firms and other commercial businesses.

We have been an active supporter of Northern Tasmania Development for a long time. As one of the smaller partners in the region, we believe there is real strength in working together as a region. Obviously, the Launceston council is the biggest council. We have a good working relationship with Launceston City Council. We are trying to re-engage with DIER in the areas of regional planning you have just heard about but also in relation to regional transport infrastructure planning. We think we will be successful in getting together some regional planning outcomes so that when there are opportunities in the future for funding from Infrastructure Australia—or wherever—we will be well placed to put forward justifiable submissions. The mayor mentioned one area which is very near and dear to our heart. We continue to talk about our access up into the north-east because of the significant industries up there. One impediment is the transport economics of freight.

A couple of issues have come up already in discussions about the effects of the global downturn. There were a couple of significant projects in ecotourism development up in the north-east: the $130 million Musselroe Bay ecotourism development and a $90 million one at Tomahawk. We are happy to provide details about those. Due to the economic downturn—and other factors, I would imagine—those projects have been put on hold. There is a significant wind farm worth up to $400 million. A couple of tick-offs on finances with the Commonwealth are needed before that can go ahead, but we feel very confident about it. There is also up to $80 million worth of water development in north-eastern Tasmania through the drought-proofing program being undertaken by the state government with the Commonwealth. We think that will assist and add value to our agricultural industry. Those are just a few other comments on some of the issues.

CHAIR —I am very pleased to hear about the wind farm and the drought-proofing project. That is a significant investment in your area. On the ecotourism developments that are not going ahead, is it difficulties with capital raising that is the problem? Do you know why they are stalled?

Mr Martin —I think that for potential investors, for instance, a lot of the money was going to come from overseas, from China and the US. That probably will be a little bit more difficult now than what it might have been 18 months ago. The Musselroe project has actually been approved, planning wise and all those types of things. We are hopeful that when things turn around those projects will come back either in a similar shape or in a different form because of the natural assets that we have up in the north-east in terms of ecotourism, beaches, the environment and those types of things.

Councillor van Zetten —I would like to support a lot of the comments Robert has made, especially about tourism for our region. It has been critical, not just in recent months but in the last six months and last year, that tourism has continued to increase. That is fantastic and great for our region. The economic climate at the moment is a bit patchy and there are some areas where there are concerns, like ACL Bearing, a local car component manufacturer in the Launceston area which employs 270-odd people. What is happening in the motor vehicle industry is critical there, so we would obviously encourage the government to continue to support that as best as possible to ensure it continues. Another area relates to Rio Tinto. It is in Georgetown but a lot of employees work in Launceston, and it is very important for our area. We see those industries starting to struggle, or they have been struggling for some time now, with a 70 per cent decrease in their income; that has a very great impact. Those are some of the stories of industries that are struggling.

Generally, Launceston is built on a lot of smaller industries—retail, farming—and generally there is still a fair bit of confidence. But we are also fortunate to have a local newspaper which is very strongly focused on the north and is now encouraging people to buy locally, bringing people’s attention to the need to spend here. People do go from here to Hobart or to Melbourne to do their shopping, or to the Gold Coast or wherever it might be. That is good for those regions but it is not good for us. It is good that the paper is making people aware of that, and if people are starting to buy locally and support locals that is great for employment. The general manager can probably talk about some of the other issues to do with council.

Mr Dixon —There have been a number of proposed developments around the CBD area of Launceston that have either been cancelled or put on hold. They are mixed business types of developments, from urban residential through to retail and so on. I guess those are indications of some uncertainty at the moment. Regional cities need to have diversity of employment. Whilst there are companies like ACL Bearing that provide an important manufacturing base, there are a number of others, like Waverley Woollen Mills and so on, where you know that pressures are going to be brought to bear.

What we will continue to do is advertise the competitive advantages of Launceston. One thing that happened a number of years ago was that Telstra made the decision to relocate call centre business out of Launceston. We had all the information then to talk about the competitive advantages of Launceston, and we will continue to do that. Certainly as a council working with NTD we do everything we can to broadcast the benefits of establishing businesses in Launceston. We certainly see that our job is to be positive.

There are lots of projects that the council is involved with, not just projects that we have received federal funding for, but we are about to open a $26.3 million aquatic centre with state and federal assistance. Certainly a really important role for local government to play, particularly in difficult times, is to provide recreational outlets and stimulus to the economy, which we are certainly able to do with levy rebuilding programs and so on.

CHAIR —I want to ask you two questions regarding the stimulus package. The first is: what is happening with your building approvals? What have you noticed there? The second is: have any of you used the community infrastructure fund? Are any of the projects that you have funded out of that going to community or not-for-profit organisations, or are they all council projects?

Mr Dixon —In relation to the first question, for Launceston the number of building approvals has remained constant; the value of them has decreased.

CHAIR —What is the mix of resident and commercial?

Mr Dixon —Residential has remained relatively constant; there just has not been the demand for some of the inner urban take-up. Recently we had an approval for some 400 new lot subdivisions, so there are certainly indications. I think that is very much to do with the fact that Tasmania in a comparative sense does have better housing affordability, so we know that we need to continue to cater for that. Does anyone else want to comment on building approvals?

Mr Martin —In Dorset it has probably flatlined a bit, but we had a council meeting last night and there were two or three houses that were going forward for approval for building, which is pretty good for one council meeting. The other thing that is probably worth mentioning, because it received some attention before, is in relation to Barnbougle. I do not know whether you have heard of Barnbougle Dunes; it is a golf course at Bridport. Some years ago it was dreamt up as a good idea and all those types of things. There was some ACCT funding—$300,000 or $400,000. It is probably the best part of an $8 million to $10 million development and employs 50 to 60 people, so with some of the incentives that were provided through that type of funding, which was only a minor part of the overall capital works, that project has become a very successful business nowadays. They get over 100 golfers a day and sometimes 200 on the weekends, and the owner of the property is now building a second 18-hole course out of his own funding right next door. That is another fairly important project that received some assistance in its infancy both from council and from ACCT.

Mr van Zetten —The golf course supports the Hawthorn Football Club. A lot of people who come to watch the football will go up there and play golf, so the region works well together, I think.

Mr Partridge —The new ratings have just come out. It is still the No. 1 public course in Australia and No. 35 in the world.

Ms CAMPBELL —The north-west mayors were talking about Barnbougle yesterday as well, and wrapping it up, for your information!

CHAIR —The second question was about the community infrastructure fund. Are any of the projects that you have funded out of that going to community or not-for-profit organisations, or are they all council projects?

Councillor van Zetten —They are all community focused.

CHAIR —But they are all council facilities?

Councillor van Zetten —They are council owned and related to the region. There are a lot of regional facilities—for example, our gorge, our city park, Albert Hall, and Lilydale, which is an area a little out of Launceston. That is to upgrade a hall that has being neglected for many years.

Mr Martin —In relation to Dorset, there was the best part of $300,000, so we split that across the municipality into 13 projects. Nearly all of them are involved with a local community group in the various small towns and areas like that. They will be undertaken by a mix of contractors, which provides employment, and some of the council workforce.

Mr CHEESEMAN —I have a number of questions. I might go firstly to the recession in the early nineties. What lessons did the region learn from that recession that now enable you to respond to the current global financial crisis?

Ms CAMPBELL —I might add to that, because I can see the looks on everyone’s faces. When we were in the north-west yesterday that was certainly something that Paul Arnold, the general manager at Burnie, brought up. We were talking about the recession in the 1990s and what they have learnt and what they have not learnt—that kind of thing.

Councillor van Zetten —I am a chartered accountant by background and that is what I was doing back then. I was involved with City Mission, a local charity. I only have three years in council, so I am not able to speak for council. Frank is fairly new to Launceston as well, but Peter has been around for a while.

Councillor Partridge —Probably too long—my memory might have faded a bit over those years! I do not recall a lot about the recession of the 1990s. We obviously lived through it and it is now history. We have to move on. I do not know that we have learnt a lot from it.

Ms CAMPBELL —It is different for different regions as well. Burnie and the north-west, with their manufacturing, are a completely different region to here in the north.

Mr Martin —From Dorset’s perspective, back in the early 1990s we had a vegetable processing factory, two major softwood sawmills, a clay mine, a milk processing factory at Legerwood and all those types of things. We were also going through amalgamations in Tasmania—1993 was when 49 to 50 came down to 29, so that was taking up a fair bit of council’s time and resources then, and I was around then. That was about the time when some of those sorts of things started to decline and our council started the efforts in terms of trying to improve our transport economics into the north-east. Since that time those things have continued to decline in those types of areas. Okay, there have been some good things that have been happening, but we were a great believer that the better, stronger and more diversified we could make our regions in terms of agriculture, forestry and those types of industries, the better the whole region is going to go—the better Launceston is going to go as an urban centre and as a region, and the better our industries in the hinterland are going to go as well.

Councillor Partridge —Now you mention it, John, the loss of those industries was probably the main reason why we also lost our rail into the north-east. We still have the railway line but we do not see any trains anymore. The clay mine and other industries closed down, so there was a lack of freight. That was another big loss and has probably contributed a lot to our road situation as well, because all freight now travels by road.

Mr Dixon —I was not in the state at the time but am certainly aware of what has happened between then and now, with a lot of investment in major tourism related infrastructure. You only have to look at things like the museum at Inveresk, the Aurora Stadium and the development of the seaport here in Launceston. There have been quite a number of things that have enhanced amenity. If we have learnt anything from the exercise, it is that we are still getting good figures in terms of bed nights, and that is because the mix was improved between then and now.

Mr Wallace —What occurred at that time was federal government intervention. Policies were put in place to support capacity building, and there are a few comments that I would like to make at the end if we have some open time. In a period of three or four years the federal government developed policies and put funds behind them through the Better Cities Program, which we now, nearly 20 years later, are still benefiting from. Things such as the Inveresk site, which was an old disused rail yard and is now a museum, are just phenomenal. Federal policies make a big long-term impact if they are the right ones. The policies which came out of that period—and I cannot remember which party was in government at the time—are still benefiting us.

Mr CHEESEMAN —My next question relates to private business. I am curious to know of the difficulties that businesses within your shires or within the region are telling you about accessing capital via banks or other institutions and whether particular industries are suffering more than others.

Councillor van Zetten —ACL Bearing is a major one for us. It has not been able to resecure. I have just heard from another business that had 60 per cent of the sum needed to purchase a business in town that it has been knocked back by a bank. It is happening, although I am not sure to what extent. The banks are more cautious now about lending.

CHAIR —Michael, do you have a comment to make?

Mr Steele —I can make a very personal observation. I think it has tightened but it is also certainly built on past relationships. Those businesses that have strong current relationships are not changing significantly. That is not an issue for them. I could make another comment about the government response, which I have been eager to make, but I do not know whether that is appropriate or not at this time. It is about the pace of action rather than the action itself. For instance, the 30 per cent additional depreciation is on the books at the moment. We are not far away from 30 June, but I am not sure where that legislation is. I think it is currently before the Senate. Is it?

CHAIR —I will have to double-check, myself. I am assuming so. We are House of Representatives members and so, for us, legislation tends to go into the ether a bit when it is in the Senate, and then we are in contact with it at the end.

Mr SULLIVAN —We are hopeful that it will be passed in the budget week, but we are in the hands of the Senate. I have actually asked the same question on behalf of constituents.

Mr Steele —There will be a tremendous response when it gets through. Our little business is waiting for a couple of hundred thousand dollars worth of investment in the new lift. I reckon there are a lot more people like us around the town who will be doing things like that.

In terms of confidence now as compared to 1991, I think the concern is the pace at which information is travelling around the world. Everyone knows there is a recession. In 1991, I think some of us did not even know that there was one. But we certainly all know about the recession now. I personally made a pledge about that to my staff. I have been on the other side of the world for a couple of months and I have seen firsthand that the recession in the northern hemisphere is significantly more severe than it is here. I said to my staff, ‘Step No. 1, before we do anything else, I will make a pledge to you that your five jobs are here and I am with you, and we are all in together.’ I had to keep their confidence levels high, because that seems to be the main issue for small business.

CHAIR —What sector are you in, Michael?

Mr Steele —In business services. We provide serviced offices and infrastructure support for a range of businesses.

Mr CHEESEMAN —Are there any particular industries within this region that are currently shedding workers? When big manufacturing places close down, we often see them dominating the media pages. But the unemployment rate really does jump when a lot of smaller businesses shed jobs, and those numbers never make the media. I am wondering what industries they might be.

Councillor van Zetten —I know, for example, that one employer in the car yard industry has put off 16 people throughout the north-north west. Some businesses here operate throughout Tasmania as well. We know that Rio Tinto has started reducing staff, which has an impact here. ACL Bearing has not reduced staff yet, but it has cut their hours and, therefore, the pay of people. That has an impact. There are also other smaller businesses. I know of chemists around here who are not employing some of their casuals for as many hours, and so that has had an impact on people’s level of income. I work with the Launceston City Mission, and we are noticing that the sorts of people who are starting to come to us for help are those who used to be on a part-time wage to supplement their family income. They are no longer getting that income to help with the additional costs, and that is where they are getting into financial difficulties.

CHAIR —Can I just note that we have been trialling having someone from Centrelink—he is up at the back of the room—attend each of the hearings so far. I was concerned that, if people came with individual stories to our public session, they should have some avenue to find out what assistance is available to them. Certainly a lot of the experience in my own electorate at the moment is that there is a bit of a mismatch with the programs and assistance that are available to people who are undergoing retrenchment or a downturn in their hours. If you have not already done so, I encourage local council representatives to get in contact with their local Centrelink office so that they have some avenue through which retrenched workers can access services.

The other experience, and one that I have certainly had in my own electorate, is the difficulty of getting Centrelink on site when there have been mass redundancies. It is really important that Centrelink get access to workers very quickly and certainly before workers make decisions about what they are going to do with sometimes quite large lump sum payments that can disadvantage them when they are seeking Newstart allowances. I just want to note Centrelink’s presence here.

Mr CHEESEMAN —What strategies are your organisations undertaking to try to assist the business sector in responding to the financial crisis? Are you holding forums and information evenings for your members or doing mail-outs to inform them about some of the opportunities that might be in the Commonwealth stimulus package and whatever assistance the state government might be providing and the like?

Mr NEVILLE —Good question. I was going to ask that too.

—If I could just hold off from answering your question for a moment, although this is related to it: you asked a question previously about industry sectors and their difficulty in attracting funding. Certainly the forestry industry is currently in that situation, particularly the large operators of logging contractors when they look at refinancing for new machinery, for example. The reason for that is a fall in the price for their product. Most of the forestry sector in this state is involved with woodchips, and there has been a significant price drop in that commodity. Also, many of the contractors have had their quotas, which is the amount of logs that they have to deliver, reduced significantly—some of them up to 30 per cent. So they are looking at either laying off people or working four days per week. That is one sector. However, the reverse situation occurs if you are a farmer who is about to put in a new centre pivot irrigation system, for example. The banks will be fighting to give you money because this state government and the federal government are investing $200 million over the next three years in new irrigation infrastructure. So there are different sectors.

With regard to your question, our organisation is not in the space at the moment to run forums. What we do, though, is disperse information that comes forward about seminars or workshops—be they from state or federal governments—through our database network. As we said at the beginning, we have not quite felt the recession. It is the bigger businesses like Rio Tinto who might say that they are going to reduce 8,500 thousand workers internationally. Fifty jobs went here. It could have been that way because there had to be a proportion or a percentage cut at each location. I do not know. If you talk to the retailers in this town, they will tell you that they are having very good times. The only retail sector, as Albert indicated, that is really struggling is new car sales. Of course, we know that is a litmus test for what is going to happen a little bit later on.

One thing about Tasmania is that we do not have the high peaks or the lows of Sydney or Melbourne when there are recessions on and/or good times. It tends to be flatter here. Having said that, I must point out that the state is divided into three regions. In the south there are government services. The government is the biggest employer down there, so the south tends to feel it a little bit more than the north, which is mainly business. In the north-west it is mainly manufacturing.

CHAIR —Thank you.

Mr NEVILLE —I should declare an interest here. My background is in regional development. Seeing there are some councils here I will ask one of my pet questions. I have often wondered about the efficacy of councils having so-called—and I use that term advisedly—development officers. My experience is that those people generally do things like meet and greet on behalf of the council, prepare the council and mayoral brochures, and put statements together for the mayor or the council but generally do not have the proactive ‘go out and get industry’ role. That is where organisations like yours can provide councils with another arm to do that. What is your view on where the industry development officers should be? Should they be with councils or should they be at arm’s length from councils and organisations like yours?

Mr Martin —The Dorset Council believes there is a significant role for Northern Tasmania Development to undertake. Our role, as a small rural and regional council, is to have someone on the ground who works closely with those people. I will give you an example—

Mr NEVILLE —But employed by whom?

Mr Martin —By us.

Mr NEVILLE —Your organisation or the individual council?

Mr Martin —By the individual council. In our particular instance, over the last two or three decades the economic and social development, major projects and those types of things have been jobs for the general manager. In the end the general manager started to wear out from working 80 to 100 hours a week or whatever, so our council employed a sustainable development manager. That is a part-time role. We have picked up someone who is extremely capable. That person’s role is to work on the major projects and social and economic development in our own municipality and to work with NTD on regional directions and those types of things. The general manager also continues to work with the other general managers in the region in the NTD role and, from a local council perspective, on the matters you are alluding to. That is where we see it.

In relation to the questions that were just asked about forums being held with industries or businesses that might be affected, we work with our local chamber of commerce and our local tourism association. We also have a local economic development group. That person’s role is to work with those types of people as well. Also, because of the nature of some of the projects that are occurring in the north-east, like the irrigation development work, they work with the Tasmanian Irrigation Development Board.

I will give you some examples of recent achievements in that area by this person. In the next couple of years we will have a state government links centre worth $2 or $3 million in Scottsdale. There is also a trade training centre. We have worked with the local schools and gained some federal support for that initiative. It is a $2 million development. We see that person’s role being in those areas I have already mentioned.

I want to make a couple of other comments in relation to the potential downturns that we have not seen yet. We have a lot of forest contractors up in the north-east. A lot of them are very close to going to the wall because of their investment in heavy equipment. They employ a lot of people. They have had their contracts cut back with Gunns and other people around the state. We are talking about the potential loss of 100-plus jobs in the north-east alone, but I think this will be right across Tasmania with more jobs.

I will finish on one other point. With the loss of the industries we have experienced in the last decade the north-east assistance packages that have been made available from the federal government and the state government are extremely important for maintaining other industries and businesses but, more importantly, for growing potential businesses and providing more jobs and economic growth in the north-east.

Mr Dixon —I will provide a very short response to your question. Provided you work together, there is room for both. There are things that councils can focus their attention on that are more than just being a friend to industry. Launceston is half of the population of the north. There are some things that we see some value in focusing our attention on and there are things that we rely on NTD for. Provided we are working together, it should not be a question of one or the other.

Mr King —I would like to reinforce that. I will take off my NTD hat at the moment. I am a resident of one of the smaller municipalities that is part of Northern Tasmania Development. They do not have a representative here today. They are working on economic development strategies within their municipality, which I think are quite justified. The people who are involved in that ought to be involved and paid by the council. I agree with what Frank said: the role of NTD is to work between those groups that we know have a facility available to offer to potential businesses that come to our region. We can then facilitate, coordinate and advise. Likewise, it is important for us to have this link with the state and Commonwealth government entities that support regional development.

I will put my chairman’s hat back on now. One of the disappointments I have had in my time in this role is this. When I first came into the role the organisation was very strong in tourism and the ‘Live’ type matters—rural co-pilots et cetera. There was not a lot of focus on economic development. I have industry background, so I found that a bit surprising. We then got the DOTARS grant for three years funding and that was excellent. We put on two highly qualified people who did a lot of work in the region to start and create that link between what the state was doing, because we have a state economic development focus and we have Commonwealth support over the top. You had DOTARS involved and you had local government. It was disappointing that that was just one block of funding for three years and then it was gone. We are not in that role now. It would be very, very good to be able to step back into that role of ensuring that people who come to our region can be made aware of where the opportunities exist within the region. It is not our role to draw comparisons between what Dorset and Meander Valley do, but it is our role I think to make sure that people who have an interest in developing in the region can be made aware that those facilities exist—that that support is out there and those opportunities are there.

Mr NEVILLE —Is there an industry development officer in the corporate group?

Mr Wallace —Currently, no. They finished up in October last year.

Mr NEVILLE —Forgive me, but I find that quite extraordinary.

Mr Wallace —It is a bit like the general manager on the end in Dorset—that workload is currently being maintained by the CEO, which is myself. That is basically 80 per cent of my time at the moment.

Mr NEVILLE —Sure, the CEO plays an important role in that. I understand that.

Mr Wallace —We do not have a dedicated officer, no. It is very disappointing.

Mr CHEESEMAN —I have a quick follow-up question. King Island is within your bailiwick, isn’t it?

CHAIR —No, it is Flinders Island.

Mr CHEESEMAN —Between the bearing manufacturer and the forest industry it sounds like there are question marks over—what?—300 or 400 jobs potentially within the region at the moment?

Mr Wallace —It would be much more than that.

Mr CHEESEMAN —Much more? How many more?

Mr Wallace —ACL Bearing would be 280, and they could go like that. That is just one business.

Mr CHEESEMAN —And in the forestry industry?

Mr Wallace —It would employ around about 4,000 to 5,000 people in the north—that is in its current state.

Councillor van Zetten —Rio Tinto would have 500 employees.

CHAIR —It is very heartening for us to hear that a lot of your sectors are doing quite well and that you have not seen the peaks and troughs that you have in the capital cities, but you are obviously alluding to concern about what is going to happen in the next six months. What are you doing to buffer yourself from what potentially may be the loss of a number jobs in this district?

Mr Wallace —If I can use again of the practical for example in Dorset with the Enterprise Connect funding. That is a research project looking at innovation that can be applied to SMEs across the region, across all industry sectors. It is a 12-month project. It is looking at what are their needs, what innovation can be applied to their businesses that actually take away from being commodity based takers of commodity prices to where they may be able to add value. It may not even be a manufacturing; it may be in intellectual property, it may be in other areas where they can add value. That is one project we are very keen to do quickly so that we can roll it out across the region.

A second practical example is with Skills Tasmania. We have already as a body had one project with them. We are about to launch another major project which with them, which hopefully will be announced in a couple of weeks. It is building on the work that has been done by both the Australian Innovation Research Centre in its audits of business and the census that was done two years ago of all businesses across the state that employed more than five people. Last year and audit was done as to what innovation was applied, and significant amounts of innovation have been applied. One of the issues that we have with Skills Tasmania is not just the skills of people for training but having actual bodies or people to train. Currently there are approximately only 2,000 permanently unemployed people in the state, which is quite significantly low. So, for example, if we looked at the north-east project of ecotourism development—the mussel row—that would have needed approximately 500 to 600 people employed and 150 people on the ground at any one time. It is in a semi-isolated area. Where were those skills going to come from for cooks, chefs, gardeners, housekeepers and what have you?

So we are working closely with Skills Tasmania. They have about $100 million a year to buy training. In the past it has basically gone to TAFE Tasmania. They are looking at new ways of applying training and learning to people in different ways. It could be, for example, a young chef at St Helens, an isolated area, doing online training so that they do not actually have to move away from the area to do their training. It is that sort of area that we are looking at.

CHAIR —One of the things in my own electorate—and we certainly heard it yesterday—is that there seems to be a fairly low level of awareness around the government’s Productivity Places Program. Certainly if you do not know already know about it I would encourage you to look into that—particularly the 10,000 that are available across the country for workers who have been made redundant fairly recently. Obviously Jodie can provide details of that. The other is the Jobs Fund guidelines that were announced yesterday. I want to alert you to those as well. Sorry to sound like an ad for government programs, but I am certainly conscious in my own electorate that people may not necessarily be aware of what is available. Darren, you had another question.

Mr CHEESEMAN —I did. It is a little bit along the lines of government advertising, I must say. It was announced a week or two ago that Tasmania would be the first state that would benefit from the government’s broadband agenda. I am just wondering what opportunities might exist in that for this region. The second question is with regard to the government’s second economic stimulus package—particularly the investment into schools. I am wondering how the region is placed to take advantage of that in terms of stimulating your building and construction sector?

Mr Wallace —They are two excellent questions. Broadband is absolutely critical for us. Our organisation, with the two economic development officers that we used to have, was working in the last 12 to 18 months closely with local councils. As new infrastructure or pipes were being laid for water or gas or whatever, then cables were being put in them even though there was no connection. So we have been working on that. The eight councils have accepted that quite readily. Given the dispersion of population across our region, broadband access is absolutely critical. It is connection from the node. Physically it is literally between here and Hobart. We need arteries going out and then the connection. There are a lot of small businesses that operate away from the city centre. I think the figure was something like towns of greater than 600 people would be connected. Unfortunately, a lot of our towns will be just under that. That is something that we will be looking at fairly closely, to see if there is some way, particularly if there are significant businesses that might be in those towns.

We see it as absolutely critical. As an island, we have always been very strong on being able to connect fast and quickly with our consumers and customers. Our main industries are mining and agribusiness, so virtually everything we produce gets exported because of our small population. We just cannot consume it. Connectivity is critical.

The second area is schools. It has been fantastic. There are two or three schools I am involved with. Some have received the $200,000 in the program—and I forget the name of the program—for primary schools to make them more attractive to work in. Equally, there is the $2 million for libraries and library facilities. I was speaking last week to one of our major building construction companies. They are being pursued quite actively and they are really worried now that they are not going to have the resources to fill the contracts. It has been an absolutely fabulous stimulation for our building industry and has come at a critical time.

Mr CHEESEMAN —Terrific. Thank you.

Mr SULLIVAN —Mr Wallace, you mentioned quite a while ago the level of resilience that has been built into the local economy for programs that were put in place 20 years ago. This committee is going to produce a report that will make recommendations to government. Here is an opportunity for you to actually make some suggestions as to what some of those recommendations might be.

Mr Wallace —Thanks, Mr Sullivan. There are a couple of points I would like to make, and I will not go into any detail on them. One thing that I think is critical is that the federal government creates policy platforms similar to those in the nineties, as were referred to earlier. We were able to use those platforms. We knew that they were not there for just one, two or three years but that they could be built on and worked on. Those platforms I believe need to be built. I will use the example of Tasmania, but it could apply regionally anywhere. We need to build on the physical capacities and the human capabilities of our region. In other words, we need to build on our strengths. We do not have time to create absolutely brand new industry sectors and to bring in new people and all of those sorts of things. Government policies should be flexible enough to allow the regions or the states to build on their distinctive advantages—that is, in both physical and human capacity. The whole focus should be on combining economic prosperity with community development and environmental responsibility. Communities in this day and age very much want to have that triple-bottom-line delivery too.

Mr NEVILLE —Give me an example of one of those platforms.

Mr Wallace —Let us say, for example, promotion of economic growth. That is very broad, I know. It could include things like investment attraction and incentives and encouragement of savings. That is one thing we have seen Australians respond to very quickly. Australians were spend-all a year ago; now people are saving. We have seen that in the figures that have been released over the last few months. It is for promotion of economic growth, investment attraction and incentives in that area, encouragement of savings, facilitation of—

Mr NEVILLE —Do you mean you would accelerate it right off some things like that?

Mr Wallace —Possibly, yes. Also, there could be facilitation of regulations and markets. I do not mean controlled markets. I mean things like, for example, the free trade agreements that have been developed. For example, in China it has been going on for so long. They are stalling. We need to bring that to a head fairly quickly, particularly in agriculture. We saw how the Americans stalled for a long time in agriculture in the free trade agreement. They are the sorts of high-level areas I am talking about. The final one, under promotion of economic growth, is in the provision of education and training. That is absolutely critical and we need to do it from a federal level. It could be done in the areas of incentives. It could be, for example, in tax. I do not mean R&D grants. I am thinking that perhaps there could be tax relief or what have you for small businesses who are training their staff. One area where we could be creative is in a two- or three-person business. For a person to go off and get training in a new or particular area, they have to step away from their business. Perhaps somebody could come in and there could be some sort of tax relief or incentive. So promotion of economic growth is one.

The second one is productivity enhancement. Any society which does not increase its productivity will eventually erode itself. The only way you can gain productivity is to get greater returns per hour worked. That does not mean to say we have to work harder, but we have to work smarter. So we need a greater return for each hour that is employed. This will increase sustainable prosperity. In other words, it will be shared by the whole workforce. It will also raise the economic output and the values of the combined economic inputs. I am talking about this from an innovation perspective, as working smarter rather than harder.

The other platform that I believe could come from federal assistance is to enhance the capabilities of companies in economies of highest potential sectors—in other words, working with industries, as I flagged earlier, that we already have a distinctive advantage in. In this state we know it is in agribusiness, but equally there are a lot of associated services built around that. We have an excellent university here. We have very good academic people. It could be like Finland or Denmark’s timber industries. We have good timber supplies here. We have good academic and training facilities, so we could almost develop a centre of excellence in timber. More importantly, then, would be to support commercial businesses that actually will develop out of that. So it would not just develop a hotpot of knowledge but actually articulate that into small business.

Finally, a strength for small business to go on is the activities of private companies. I flagged earlier that in the north we are a business centre. The majority of people are employed in business, be it in manufacturing, be it in tourism, be it in service provision. What we need to do is strengthen the market position and the capacity of private firms. They are big, high-level statements, and there is a lot of detail underneath. But they are the areas in which I firmly believe. Using the example that Mr Cheeseman asked about earlier with regard to the nineties, it was actually government policies that helped us then build for the next 10 to 15 years.

Mr SULLIVAN —You indicated—and I agree with you—that they are fairly broad statements you have made. How about considering, in the broad context, government taking an action to assist an area that was not Launceston to develop a seriously good tourism industry that competed with Launceston? How does a government make sure that, in helping someone, it does not take away from someone else? I think when you look at it in that context you cannot actually be broad. Government has to be very conscious of the negativity.

Mr Wallace —Absolutely. I talked in a general sense about building on a region’s natural distinctive advantages. If I could use the example of tourism, Cairns has a barrier reef; Tasmania does not. The strengths that Tasmania has are in three key areas. This is both for international travel and for domestic travel. Those three key areas are our natural heritage and built heritage—let us lump those together as one—and our integrity of product. If I could turn those couple of statements into actions, our natural heritage includes our animals—we have some distinctive animals here, and it is very easy to see them. In other words, you could have someone from Asia come here and quickly get into nature. If you walked last night up the gorge you would have had wallabies, wombats, possums and all sorts of things around you. It is very easy to access nature, particularly for Asians who are interested in our nature.

Our natural built heritage is our convict past, and most people would immediately think of Port Arthur. Approximately 10 per cent of convicts went to Port Arthur; the rest, the majority, came to the north and worked on large pastoral properties. There is some magnificent historic stock here that is not even open to the public. So that is part of our distinctive advantage.

The second key area is the integrity of our product, as in we do not have replicas of historic buildings; we actually have the buildings. The other area of product integrity is in our produce, with our food and wine. People can come here very quickly, for a one-day or a half-day tour around our vineyards and wineries where they can actually see the product.

If support were given to tourism operators both in Cairns and in Tasmania, I would suggest that there is no way they would be competing for the same market. What we would be doing would be building on our distinctive advantages, and I think that is what the policies that are put in place by government should allow: they should allow individual companies to create their own competition.

CHAIR —Thank you. You were going to make some concluding comments, and I am assuming that that was them. Thank you very much for taking the time to appear before us today. This is a challenging inquiry and, as we go around, it is terrific to hear some of the great things that are happening. But we are also conscious of the fact that there are a number of particular challenges being faced by some of our more rural councils. So I do thank you for taking the time to provide evidence before us today. You will receive a proof transcript of today’s hearing to which you can make some editorial changes if you need to—if we have your name or your title spelt incorrectly, for example. Again, thank you very much for appearing before us. We may also write to you if we have further questions or things we would like to know. I do not think we have received a formal submission from any of you, but we would certainly welcome one if you do wish to do that. Certainly, if you wanted to put your concluding comments in by way of submission, we would welcome those. Thank you again.

Proceedings suspended from 10.37 am to 11.04 am