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Impact of the global financial crisis on regional Australia

CHAIR —Welcome. We have a large cast here. Thank you for taking the time to present for us today. Thank you also for the submission that you provided to the committee. I do need to remind you that these are formal proceedings of the parliament and, whilst you are not required to give evidence under oath, you should treat these proceedings with the respect that would be given to the House of Representatives. It is also customary for the chair to remind witnesses that giving false or misleading evidence is a very serious matter and may be considered as a contempt of parliament. I am required to let you know that before you give evidence.

As I said, we have received your submission. Would you like to make some introductory comments or give a brief summary of the points in your submission?

Mr Perkins —I think the best thing to do is to give you a summary of our submission. We undertook to provide a submission to make sure that we were informed and also to gather as quickly as we could a brief snapshot of the current economic climate across Tasmania. We spoke to people in local government, state government agencies and local business and community organisations to understand the areas in which they work and what might be going on in them. We also attempted to ensure that we went into all regions of Tasmania. As a result of that contact we came to focus on four areas that we consider address the terms of reference of the committee, and we have highlighted those areas in our executive summary.

In terms of how we work to encourage economic development and employment, I think it is fair to say that some of the initiatives have started to be addressed in part, particularly with the last lot of funding for jobs and other things. Any investment in Tasmania should be focused on current strategies, particularly those of the state government through its work on skills, infrastructure and innovation plans. We believe that we should work alongside those plans, tap into them and say where opportunities arise out of them. We want to make sure that investment goes into those plans so that it is targeted and strategic. While this may mean a delay in investment by a number of months, at least in three to five years time we will be able to look back and say, ‘It was worth taking the time to consider that.’ This is particularly the case in the three regional areas. While planning is being done on a state-wide basis, there might be some localisation of those plans in the three specific regions. We might be able to bring forward some activities or some actions once the planning has been done. This might enable us to implement some activities ahead of the plans, if you like, because we know that they will come through.

The other area is the retention of skills in industries. As we come through the economic downturn, it is important that skills are retained within industries. While a lot of investment might be going into building and construction to keep that sector up and running, we do not want to necessarily lose people out of mining and its associated industries. The committee would have been down in Burnie yesterday. The last thing that Caterpillar would want is to lose their employees to another sector or trade area. If their industry were to build up again, they might not be able to get them back because they are employed somewhere else. This area is about making sure that people are being retrained and that this time of lower productivity is used to invest in some training activities within industries.

The third area is the cash handouts. It was considered that maybe from now on the government should focus on tax incentives for small businesses to keep their people employed rather than on cash handouts for people to spend. So this area is about keeping people in employment in small business, given the higher proportion of small businesses in the region. Those are the areas involved in the encouragement of economic development and employment.

The fourth area of focus is on social infrastructure to enhance liveability and essential services. While we acknowledge that some immediate money has been put out to support local community infrastructure programs in both stimulus packages, there has not necessarily been a focus on the replacement of the Regional Partnerships funding program and sustainable region committees—that is, the new funding for communities. We know that there are communities with good infrastructure projects that will not necessarily be able to access some of the current funding that is available. They would still like to access some of that funding. And I am still trying to get my head around the jobs fund. There are communities that still have good projects and they are looking for some funding. Funding for community projects is important for two reasons: the first one is the investment in the community for whatever project they might want—whether it be for social infrastructure or something else; the second is that many of these projects have developed as a result of a lot of commitment by community organisations and volunteers. The impact on communities from money not being put into their projects is that the energy and commitment in the community wane and dissipates because people lose faith; they cannot see the end point and they start to step out. In terms of social liveability and energy within communities, it is important to continue to support their projects. It is important to put that funding back into communities and get that momentum going quickly. The areas of focus in our report have come from the feedback that we received from all the people who spoke to us. It was not a matter of our views as a committee being endorsed. We wanted to make sure that our report recognised the Tasmanian community and the people we spoke to.

The other things that came out of our consultations targeted infrastructure such as information technology. There is some good broadband and other stuff coming through now. Improvement to the road infrastructure between Launceston and Hobart was highlighted as a way of increasing transport efficiency. The higher cost of power in remote communities, particularly the islands, was noted. Also, there is an opportunity now to support business in the transition towards the new carbon economy and also to provide people with the skills to become green collar workers. It is about how you might help businesses through that.

Development is a state issue but the Commonwealth can continue to provide support and encouragement to the states—and the Tasmanian government has taken a role in the school infrastructure program, in particular—by helping councils get development applications through more quickly. This is not to say that there should be short-cuts or that applications should be pushed through without consideration of whether they are appropriate. But where projects are ready to go and can go, support should be provided to local councils. This might be by way of providing them with some financial resources to employ more planners or whatever else to do the assessments. If projects can get through this process more quickly, the building industry can begin work on them more quickly. We call it ‘triaging’ in our report.

I think they are the main areas. A lot of the information that we collected in our area consultative committee consultations was in terms of what we were required to do for the department last year, and that has fed into this report. We have provided some information on that as well.

CHAIR —Thank you very much for taking the time not only to provide a submission but to canvass a range of views across the entire state. It is extremely helpful for the committee to have that. Thank you very much for your hard work in putting that together. I have got a number of specific questions about the submission that you have put in. More generally, this is only our second day of hearings. We kicked off our inquiry in Tasmania, starting yesterday in Burnie, where there is a larger concentration of manufacturing. Today we are hearing a lot more around tourism and agriculture, and a bit on forestry as well. The picture seems quite mixed here in Tasmania. We are certainly hearing some really positive news about how you are fairing right at the moment. Obviously there are some areas of concern. Could you paint a picture about what you actually see happening in the Tasmanian economy at the moment? I will open that up to whoever wishes to answer.

Mr Perkins —I will start again. It is a really good question. I make a point, particularly to people in business that I talk to around the state in various different industries—and I talk to them all the time—about asking what is going on, to try to get that feel. One of the first things that came out of our consultation period is: let’s not build a report on anecdotal information. Let’s try and focus on the facts as best we can. Also, let’s be clear that businesses are travelling okay. Let’s not put fear into the consumer, through media and other comments and however they get through, that things are going to be bad, so buckle down and get ready for it because things are going to get tough. There are businesses that might be in construction that are talking about developments and they say: ‘We just want to see what is going on before we are ready to commit again. We are not sure where things are going. Things apparently are going to go bad in our region, so we have to be careful about our investment.’ That seemed to be the theme.

Generally, I feel that businesses are doing okay, which I guess is the picture that we generally get. But, within that, no doubt there are some sectors and some industries that are going to suffer more. There are probably some that were challenged through good economic times that get caught out a bit when things turn around. Certainly the north-west coast has got some of the industries that are affected because of the global climate, and you would have spoken to them and got an indication of that yesterday. The businesses were probably challenged, I assume, and this has probably just made it harder for them. The economic downturn starts to see a few fall off because the business is struggling anyway. So it is a combination of both.

CHAIR —Thank you. Does anyone else want to comment?

Dr Cory —If I may, yes. I am the chairman of the ACC but I am also the president of the local chamber of commerce, a local councillor and a local businessman.

CHAIR —You are a busy person.

Dr Cory —So my family tell me!

Mr NEVILLE —Which chamber?

Dr Cory —Georgetown. Looking around Georgetown, it has been said before—I will probably get shot for this—that Tasmania is not doing too badly at the moment. Yes, we have had redundancies in Georgetown from Rio, who have laid off people. But the impact has not been felt just yet. It will be. What has been felt is that the money is not seeping through for small business. What we are finding is that big business and offshore business are the guys who are benefiting quite nicely thank you at the moment. We have got a fairly active chamber, and the small business people are asking me, ‘When is it going to happen?’ The good news is that they do not see a downturn. So that is good.

From a tourism perspective—I run a small tourism business—it is bobbing along quite nicely, thank you. We like to think that Tasmania is the new overseas trip that Australians will make. But the small B&Bs seem to be missing out on cash injections. There is no real incentive for them to employ more people to take up the slack, so to speak, as yet. Skilling up in our area will be fantastic in two years time. We are in the process of building a skills trade centre that will do some fantastic stuff, but it will be two years before it is really rocking and rolling.

I guess we are lucky. We live in the best part of Australia and as such we are still chugging along quite nicely—and a lot is happening up there. A heap of money is being thrown at the local schools. If the pulp mill comes, that will be fantastic employment. If they get into the port extension, that will mean amazing employment. The opportunities are there if they really fire up properly.

What we are noticing is that there are a lot of strangers in town who go away at weekends—we do not see them around at weekends. They are all working on the new power station, so there is quite a significant fly in, fly out community there now. It is a shame they do not stay over the weekends; they go home, and I suggest that is probably where some of this money is going. So it is mixed news—mainly good; very little bad, apart from some of the unemployment that has just hit us.

Mr Gordon —One of the sleepers is potentially rural communities, particularly where the drought is having an effect. A lot of mainland people do not understand that drought happens in Tasmania too. Particularly in the Midlands, the Southern Midlands and, to an extent, the east coast, the link between the small towns that service the farming community and economy, I think, is something that is a bit of a sleeper in Tasmania because employment numbers on farms are down, wool prices are down and, due to the drought, stock numbers are down. The lead time, once the seasons come right again, for farmers to build up and the impact on the newsagent and the little shops in the little towns is an area that needs considering in the Tasmanian economy.

CHAIR —Is anyone in that space at the moment actually looking at that? I assume some of the local councils in those areas are.

Mr Gordon —To what extent I am not sure.

CHAIR —I have some other questions, but I will open it up to other committee members.

Mr NEVILLE —I note your comments about the need for a program like Regional Partnerships or Sustainable Regions. You talk about the need for community projects. Firstly, notwithstanding the government’s stated aim that RDA will concentrate heavily on community type projects, do you see them happening or in what form do you think they should happen? Secondly, what suggestion would you make to us for the more commercial type of projects? If they are not going to be contained within this organisation, where should they be contained and how should those sorts of grants be administered?

Mr Perkins —Good questions. In terms of community projects, one of the great things about Regional Partnerships was that it was a really broad program, which made it difficult to assess, I guess, and to compare project to project. Different communities have different needs. Programs that allow localisation and a framework for how programs should be used would be useful. When it gets into a small community, we would like to be able to say, ‘This is how actually we need to make it work for us, and these are the benefits.’ The benefits might be building some physical infrastructure to enable a sporting team to do something, but it also might just enable people to get together and talk and work on a project together and support the cohesiveness.

Mr NEVILLE —You are not talking about physical infrastructure, more social infrastructure?

Mr Perkins —It can be a bit of both.

Mr NEVILLE —You were saying in your submission that you saw this as being important for consolidation and morale boosting. Is that really as important as doing up the local hall or the playground or—

Mr Perkins —Absolutely.

Mr NEVILLE —I do not think we have heard that before anywhere, have we?

CHAIR —We certainly heard some of that yesterday.


Mr Perkins —Two things happen. One is that the amenity of the region and the town improves and people say, ‘We are proud about this now. We are happy to be here. We are not looking like the sad cousin, like we used to be.’ The other thing is that if a community works together to build a project they actually work together and talk together and become a better community. Just the process itself delivers some really good outcomes. Sometimes it is not even the expensive projects that do that. You might end up with something that does not quite have the numbers of usage that you thought it did or it might have an alternative use than that which you originally planned, but the process itself has been really important for the community to go through. The cohesiveness might not have been as strong and there might have been some local politics in the community. All of a sudden people start talking to each other and they say, ‘He is not a bad bloke actually; we just cooked sausages together’—whatever it might be. So the process itself works pretty well.

Mr NEVILLE —Are most of you members of the former ACC?

Dr Cory —Yes.

Mr NEVILLE —What was your consultative process to flush out those projects? Did you just wait for applications or did you take a proactive role in going into each community and trying to identify the morale-boosting component?

Mr Perkins —We are very lucky that we have a really strong relationship with local government in the main and with the state government. Our role was not about identifying projects to get funding; it was about working with communities on a project that developed a project that ended up getting funding.

Mr NEVILLE —So you would help them work up their side of the funding package, get some from the local authority as well and then go to government and say, ‘This is what we want to try to complete.’

Mr Perkins —Absolutely. We would help them develop the project, which resulted in a funding project. That is the approach we took, if it were a skate park or if it were a hall, for example. We would make sure that they were talking to their local council. We would make sure they talked to their state government. If they needed some service delivery from Education or Health we made sure that they were talking to those people. So it was about developing a project. Councils generally came to us. We were kept pretty busy—we were kept flat out—just through people knowing what we used to deliver. That is how that worked.

CHAIR —I want to ask a question about this. Each local government area has dealt with their regional and local community infrastructure funding differently. The largest council in my electorate advertised the money and they put out an expression of interest process for all community organisations to submit projects. My council is a large one; it got $1.5 million. Some of the projects that did get up are community organisation projects. The council themselves would argue that the projects that they have funded are all about community amenity. They are about community halls, local footpaths. I think your submission says that that money has dried up for community organisations. That has certainly not been my experience in my own local council area. Whether local councils in this district have operated very differently I do not know, but I did ask that of the councils who appeared before us previously. I think it is a bit disingenuous to say that money has entirely dried up for community organisations, because it certainly has not been the experience in my electorate.

Mr Boughey —I think in Tasmania we have actually got 29 local government areas and we have probably had 29 different approaches to the first package that the Rudd government put forward, where every council had a certain allocation, and they would have all gone through different processes. So some of the councils in Tasmania may have followed a similar process to that which your council followed. Then we have had the second tranche for the strategic projects. I think nearly $100 million of projects has been put up from Tasmania. Some councils have consulted with their community. Some councils have put up their pet project that they have been trying to get funded for years and years. So I think that is fantastic. Some of the feedback we are getting from our staff on the ground is that community groups who do not have a good relationship with their local council are still missing out in relation to ideas that they might like to put forward.

If I could just go down to the Southern Midlands Council, I think there are three types of projects. There is a great local government project. Previously there was funding for the Callington Mill of $1.2 million. That was an election promise of the state government. There are the community projects that have been put up under the regional community infrastructure program. Also, in the previous program under Regional Partnerships we were able to talk with local businesses that were value adding in that rural community so that we could provide them with infrastructure to increase their business. The McShanes of Casaveen Knitwear are a great example. They started off doing spinning, knitting and a whole range of things in relation to woollen products. They decided that they wanted to become involved more in tourism and roadside sales, so the Regional Partnerships program provided them with the money to build a facility for a cafe and a shop.

CHAIR —Whereas now they could apply under the TQUAL Grants which have just been announced, and there is Enterprise Connect as well.

Mr Boughey —I think it comes back to Mr Neville’s comment about other programs. One of the great things we have been able to do in Tasmania—if it was not under Regional Partnerships—is that our staff and the board members out in the communities could say, ‘It may not suit us but you could apply under AusIndustry; you could apply under Tourism;  you could apply under a whole range of programs.’ That has been one of our great strengths—being able to filter community projects or business projects through the maze of bureaucracy and programs. We have been very successful in getting programs funded across a whole range of other programs, not only the old Regional Partnerships.

Mr NEVILLE —By the way, my inference was not that the government was not providing community type projects—quite the contrary. That is to be part of the new focus of the RDA. What I was trying to lead to is that this whole inquiry is about how you consolidate regions to withstand the downturn. One of the things where you can put a bulwark up against a downturn is if you can create a new industry of 100, 150, 200 people, whatever it might be, or expand another industry in your town. That is not going to be the focus of RDA. I am asking you, on a broad regional development basis, what you are recommending to this committee that might be a mechanism to seed fund or assist those medium sized industries that can provide jobs almost immediately or within, say, six months of a grant? Do you have a view on that?

Dr Cory —I guess we do. Tasmania is a nation of small shops. There are a lot of small shops out there and a lot of communities rely on their little shop. If the shop closes the community dies; it is as simple as that. Unfortunately in many of the communities there is not the wherewithal to apply for grants.

Mr NEVILLE —To do what?

Dr Cory —To do whatever—if you want to build a local community hall, if you want to increase the size of your business to employ one or two more people.

Mr NEVILLE —I do not agree with you. The chair just mentioned the government’s recent program, and there was the old ACC and now the RDA—

Dr Cory —What I am saying is that they do not know how to do it.

Mr NEVILLE —I see.

Dr Cory —That is one of our biggest challenges. How do we get out to the communities to say, ‘This is what you need to do’? That is what the board and the staff members of the old ACC were very good at doing—coaching people right at the beginning. They have got all the information out there, they have got just causes, but they do not know how to put it together. That is a huge stumbling block. That is why some small communities just do not put in—because they do not know how to or where to.

Mr NEVILLE —The second part of my question is: what do you see as the mechanism for that medium sized industry or seed funding a new industry or an expanded industry? I should declare my interest here. Under the old ACC program, my ACC spent probably more than half its funds not on community projects but on seed funding medium industry. If that mechanism is now removed from RDA, what do you see is the next funding source for that style of project—a mechanism that you could suggest to this committee and that we in turn can suggest to the government?

Mr Perkins —Our answer lies in response, I think, to the last inquiry that came around on the replacement program for Regional Partnerships. We spoke there about that. My personal view is that whether it sits under the Department of Infrastructure, Transport, Regional Development and Local Government, the local Community Infrastructure Program or whatever, there is an opportunity out there for government to invest in business and provide bricks-and-mortar funding where it is going to create jobs. I do not know the answer to where it sits or who should do it, but there is certainly a need for it.

One of the greatest projects that I was involved in—I do not know whether you spoke about it yesterday in Burnie—is the Hellyers Road Distillery. It employs 25 to 30 people. We put it as a case study in our last submission. The business down there is Australia’s biggest whisky producer and was always going to be Australia’s biggest whisky producer. It would have a cellar door maybe as big as this room. People have bought it for those who like whisky. The Australian government invested about $750,000, from memory, into that business to help establish the visitor centre, restaurant and a viewing platform over the distillery. It employs 25 to 35 people now. It has 15 people in tourism and hospitality training that otherwise would not have been delivered in Burnie, and there is so much more that has come out of it as a result. Where that program sits does not really matter, but there is an opportunity there for it. The new tourism program may provide that supportive assistance; I do not know.

One of the most important things is that people come to us in the RDA committee and say, ‘Have you got funding yet? I have a project.’ They can tell us about their project. It does not matter where it sits; let us know about it and we can help to deliver some of these initiatives. People come to us with opportunities—probably not so much in the last six months, because they know that we are in a transition process, but they were waiting for it to happen and we—

Mr NEVILLE —Are you saying we have to go beyond the cold-turkey application process?

Mr Perkins —You need local knowledge. You need people going around and talking.

Mr NEVILLE —Doesn’t your executive officer do that sort of thing?

Mr Perkins —That is me. That is right. That is what we do.

Mr NEVILLE —Sorry, I do not know the local—

Mr Perkins —But if you have relationships with your state agencies and local councils they are the people that talk. It is about bringing that through. People in communities see Canberra sitting up there with lots of money, and it can be daunting for some people. How do they build and work around that playing a role?

CHAIR —Yes, there is no doubt about that. When ACCs were originally established they had a role which was very much around economic development and around jobs and employment and training. With the advent of Regional Partnerships they became—not wholly; there were lots of different things that you did—largely a grants body. They were never established to do that. That was not their purpose. We heard this morning from Northern Tasmania Development. Over time here in Tasmania a gap emerged in relation to economic development in industry and those sorts of things, and they have occupied some of that space now. The challenge for you as RDA TAS is: where is your space now in relation to that? To some extent, I think looking to government for that answer is going to be very difficult. You obviously have to determine where you sit with all of those things if there is not a fund that you can go to that is specific in the way that it was previously.

What we as a committee are interested in is: in that regional development, particularly in relation to the global financial crisis, what can government do to assist? Who on the ground is best placed and what are some of the things that organisations on the ground are doing that we can grab some lessons from so that we can say: ‘This works really well here in Tasmania. This is what they’re doing. It would be really good if government actually got behind that nationally and thought about it’? That is why you are getting this line of questioning from us around those things.

Mr Perkins —If I could jump onto the Jobs Fund, the local employment coordinator—

CHAIR —Yes, the Jobs Fund, for which the guidelines came out yesterday.

Mr Perkins —Yes, the local employment coordinator. The Jobs Fund and the local employment coordinator role are our bread and butter. That is the position we have sat in for the last five or six years. So, in terms of addressing the current needs—and from my relationship with other RDA committees around the country I gather that they have a similar relationship in their community understanding as we do—here is a program and here is a committee so that it could be delivered quickly straight back through the RDA committees at a statewide level. We would certainly be working with NTD. We would certainly be working with the Cradle Coast Authority. In Tasmania, there are the southern councils, which play a different role again, so there is not really a third regional development body in the south. So, as a coordination role over the whole of the state—and Tasmania is a region, although I guess specifically in terms of the economic crisis the north-west has the hardest impact—here is a committee that is saying, ‘Tell us how you want us to go and engage and we will do it straightaway.’ I still refer to us as ACCs because we have only today officially started the changing name process. We have the capacity, the resources, the skills and the knowledge to get out there and do it really quickly. Give this to us, and we will go and do it for you. And, if we cannot do it, we will tell you what gaps we have. Certainly we have a good relationship with DEEWR, and I have spoken to the interim local employment coordinator and said, ‘We’ll help you where we can, where you need us to.’ There is an example. We know the local needs. We have an ACC member at Queenstown who works in the mining industry and knows completely all about it. Rod Tremayne, who you met yesterday—

CHAIR —Yesterday; that is correct.

Mr Perkins —is on our board. We have the connections to be able to take the whole-of-state connection and have access straight into all the various agencies. That is where I see our role sitting in there. We can coordinate those activities. As Simon was saying before, we have that connection in bringing together Canberra and the pool of funding—all the different funding out there at the moment—playing that coordination role, understanding what is going on and providing that good support back up the line.

Mr NEVILLE —I agree with everything you have said. What we want to hear from you is what mechanism you would like to see government provide so that you can have access to those funds.

Mr Perkins —I think what we need is the information about the various different programs and what support Canberra needs. I will give you an example. What information is needed? We will go out there and we will just do it. How do we help Canberra and others manage all this money? Develop the applications, make sure it is an easy process so that when the information gets to whichever agency it needs to for assessment there are not too many questions that need to be asked—we have helped them through that, got the portfolio of information and the application filled out and got the project ready to go.

With the first lot of money that went to the councils, the $250 million, the department said to me, ‘Why don’t you go and talk to some of the councils, particularly those that we know don’t necessarily have the resources and have been challenged in looking for funding and helping in that project management previously?’ So I said: ‘Okay, I’ll go and do that. I’ll find out what the guidelines for the program are.’ So I rang up the helpline and said, ‘I’m happy to go out and help you with these councils to provide you with the information.’ I was told, pretty much: ‘You’ve got nothing to do with this. Why would you bother ringing us in Canberra to give you help? You shouldn’t be ringing us. They’ve got to ring us direct. It’s got nothing to do with you guys.’ Yet—

Mr Sawford —In your opening comments you talked about how you have discovered that Tasmania is a paradox and Tasmania has the potential to be six months in front, because we are so highly connected, and six months behind. The recession might not have hit here yet. We are not really sure. I think one of the roles that we play is that we can help government hold that paradox. We are both top down and bottom up. We are global and local. We are short and long term. So there is a real role that we can play in holding that paradox.

CHAIR —Thanks very much. We might—

Mr Gordon —The government needs confidence by business and the community that there are high chances of success in what they participate in and that there are levels of support being provided that they can access. So one of the things government does not want is organisations putting their hand up for funding and being knocked back—and, in part, that is because their application is not well enough put together. That is one of the things that we can offer. We can give organisations a much higher chance of success in their funding applications, particularly the private sector, where you want to build confidence about them seeing that they put their hand up to work with government on a project that has been supported. We can contribute to that level of success, and our past performance illustrates that.

One of the things that government is doing is sector based support—local government support, private sector support, community support. That is one line of strategy. There is also a need for holistic support where local government, the private sector and the community sector are working together. Regional Partnerships was one program where that could happen. One of the things that government needs to think about in this new regime is where those holistic projects happen with the private sector working with local government and other sectors. That, in the past, is where the Area Consultative Committee could contribute to stimulating and facilitating some of those projects. If that is not part of the new world, government needs another place where that can happen and it needs to consider whether Regional Development Australia can have a role in supporting that, because our experience in the past is that we could contribute to success and assist the government in that area.

CHAIR —I just need to note that we have ABC Television present at the moment. They are just seeking to know whether it is okay for them to film any footage. I am okay and committee members are okay—I am assuming that, if witnesses are not, you will flag to the ABC that you do not wish to appear on camera. It is resolved that it is fine to go ahead with that.

I will just open it up to some of the other members to ask some questions. I do not want to get too bogged down. There is obviously a lot of history in these particular issues, and I think the world has probably moved on somewhat from some of the discussions that we are having.

Mr RAGUSE —I will just comment briefly on that last transaction of information, very much about what the role of the organisation is in the transition. Certainly in my region there is a very active ACC, and in their conversion they have concerns about what their role is—and I think it is typified in the discussion today, and questions from our deputy chair, about what you see your role to be and the fact that there was a mention of it being a service provider. From my perspective, I do not believe that to be the case at all. It is very much about the move towards a very strategic position. I think for us as a committee looking for information and tapping into a local community your role as an organisation is probably very important. I think we are trying to get a handle on where you were and where you are transitioning to. Certainly determining who should get certain funds for community projects was a role that you undertook, but I think it has seriously moved on from there. From my understanding, I would have seen the new RDA to be very much a strategic group. We as a committee come here and say: ‘What is it we need to do? How can we better support the community, whether you are or are not being affected directly at this point in time by the global issues?’ It is more of a statement than a question, but I do understand the transition in my own electorate. We have had this ongoing discussion with the RDAs, but I do see it as being future directed, in terms of being very, very strategic, not about delivering services or providing but about making those connections and being part of a network that we as a government can tap into and get information.

Mr Boughey —I can answer that. Let us take the Australian government: there are probably 250 programs that have been funded out to industry, community and local government. If you go on to the grants link website you will find a plethora of programs. Coming down to the state government level, there are probably another 100 programs. Some of them have been adapted to the GFC—certainly our Department of Economic Development and Tourism have a small- and medium-business loans program. If you come down to the local government level there is a range of small grants that local councils provide.

What we have been very good at in Tasmania—and I am sure the same applies to other area consultative committees—is that if the six of you came to us from six different communities in Tasmania with six different projects, our staff and our board would be able to get you into the right channels for funding for your particular project. If it is tourism, we can direct you down that line; if it is regional food production we can advise you to go to DAFF; if it is AusIndustry we can get you involved with that. It may not even be federal funding; it may just be that we could put you on to the Tasmanian community fund because they have specific targets there as well. I am sure we are not the only body in Australia that has those networks but one of the strengths that we have had is to be that filter.

The fisheries management program came down here. We were asked to do it quickly. We ended up giving close to $5 million to the fishing and marine industry. It is a matter of us having networks to get seven or eight projects funded very quickly. We were very good at discarding projects. A lot of projects never even made it to Canberra because people had the nuance of knowing what was happening in the community. If you are looking for a strategic role for RDA, I think we can provide strategic policy with the other levels of government and the community and industry but at the same time we can act as that filter so that people in the community do not waste their time. You get these groups that apply and apply and apply for funding and they are always knocked back.

I can give you another example. Recently the federal government funded the redevelopment of a community centre on north Bruny Island, which is one of our more rural communities. Part of that project was that the local shop closed down on north Bruny so the local community got together to develop a bit of a co-op. So they are going to run the shop inside the community centre. What that might actually equate to in the future no-one knows but at least the community has a facility whereby they can actually make money that can go back to the community. They might employ two or three people and things start to build. All I can say is that around Australia you have four-and-a-half thousand different communities. You have got to listen to what your communities are trying to develop right from the grass roots up. Some of them can adapt very quickly. Some of them take a lot longer. The other thing about the regional partnerships is that having an open application process gave us the chance to develop projects. The Callington mill project in southern midlands took 25 years to come to fruition.

CHAIR —That is fine. To some extent some of the comments you are making were part of the previous inquiry that the committee undertook, but thank you for providing those. I want to focus on one of the comments that you made—I cannot remember who made it—that in terms of the economy in Tasmania we are hearing some good news, which is okay, but there are obviously some sectors that you are concerned about. We heard evidence yesterday in relation to the manufacturing workers and I think someone gave some evidence just before. The real crux is going to be that if there is a downturn, which we expect there will be, how do you retain those skilled workers here in Tasmania? We heard some suggestions yesterday. Given there is lots of money going, via the stimulus package, into the building and construction sector maybe we need to work on the portability of skills with those workers there. But, from what you were saying, I think the concern will be not to lose those workers from those sectors. If Caterpillar has an increase in its workforce at some point it is going to need workers from somewhere and you have had a pretty tight labour market here for a long time. Have you turned your mind at all to that area of skills and retraining and what Tasmania, statewide, might need to do in relation to that and how the federal government can operate in that space?

Mr Perkins —It probably goes back to the first focus point in our submission. Skills Tasmania is currently doing work in that area. My advice is to invest and help them move through that quickly and provide support on the outcomes. You have a whole organisation there that focuses on that. How can you help them find out quickly what the endgame might be so you can start to invest in it? I do not know the answer to it but make sure that what they are doing is targeted. That is my response.

CHAIR —Does anyone else have any comments on that?

Mr Sawford —There is also an opportunity, in all that money that is going out into communities at the moment, to make sure that some of that money is used for innovation and for new skill development. One of the things that we always did was to look at the employment opportunities that a particular project or idea brought forward.

CHAIR —So what are you doing now in that space, because $14 billion is going into infrastructure in primary schools and secondary schools across the country? Tasmania is getting a substantial share of that as well. What are you doing in relation to that?

Mr Sawford —What is RDA Tasmania doing?


Mr Sawford —At the moment I would say we are probably not doing a lot in that field because we are getting mixed messages. We are not sure of the role that is being asked of us out there.

Mr Perkins —Tell us how we can help—

CHAIR —It goes back to whether you sit and wait for government to tell you what you should be doing or whether you go and do it, I guess, to some extent.

Mr Perkins —From an organisation point of view, I have had numerous questions and requests: ‘How can we help?’ ‘What do you need us to do?’ I do not know what needs to be done, let alone trying to do something. It is needle-in-the-haystack kind of stuff. I do not want to go—

CHAIR —That sounded like an idea, in something that you have some skills in: making sure that some of the opportunities that are available currently through the stimulus package is used to develop skills and training programs. It sounds like a good idea.

Mr Sawford —Yes, but is it built into the program? Is it built into the process by which the money is being put out there at the moment? I am not sure that it is.

CHAIR —Each state is doing it differently so I cannot answer that question, but that may be a question worth asking.

Mr Gordon —To what extent is the government able to prescribe the criteria when it issues funding—for example, preference towards local employment in some of larger infrastructure projects—because, as Tim mentioned earlier, there is a lot of fly-in, fly-out labour forces who come in for bigger projects in Tasmania? The potential for the road works in some of those big infrastructure projects is that the bigger national companies are going to win a lot of that work and not necessarily use local labour. So if that can be prescribed as a desirable criterion when funding, it can contribute to holding that labour force.

CHAIR —Again, I think different state governments are doing different things in terms of procurement policies so I guess engaging with them around that is really important.

Mr NEVILLE —But that last suggestion is quite good, isn’t it? Make it part of the terms of reference for getting the grant that you must employ a certain percentage of local people.

Mr Gordon —Or that you must take on three trainees or three apprentices as part of that project, and that they are local people. So there are a whole range of ways that the guidelines can incorporate supporting a local labour force.

CHAIR —Obviously, the state education department is responsible for the rollout of the infrastructure for schools program and local government is responsible for the rollout of the regional local community infrastructure fund. I know that my own local council is voting on its procurement policy and putting in place exactly those sorts of things. Are you having discussions with them about that, as a body?

Dr Cory —Yes.

CHAIR —Great.

Dr Cory —We are talking to anybody we can—everybody from the Premier downwards.

CHAIR —Great; thank you.

Mr CHEESEMAN —My observations have been that the quality of regional plans varies significantly right across the nation and, no doubt, right across Tasmania as well. It occurs to me that your organisation is quite well placed to work with local government and other sectors to ensure that regional planning is done in a thorough way. Are you working in that space at the moment?

Mr Boughey —Under our current Local Government Act, each of the 29 councils needs to develop their own strategic plan, which looks at economic, environmental and social implications over a five-year stretch. Over time, our board and our staff have been involved with particular councils looking at particular issues. At a state level the state government has tended very much to go down a three-region approach: Cradle Coast, the northern development area and the southern councils. So we have regional planning processes in place.

We are just about to go to a regional water and sewerage process. Most of our state agencies are based on the three regions, which coincidentally happen to be around our three telephone codes. That has been a cultural nuance since the early 20th century. Our three NRM regions are based on our three codes, so, depending on whether the regional planning process is economic, environmental or social, we can tap into particular regional planning areas that we may be able to work with in projects. We are quite happy to get involved in the regional planning process across the spectrum.

Mr Perkins —The response is: we do not drive it but we participate in it.

Mr Sawford —Tim is with local council so he is closely involved in doing that sort of work. One of the advantages of this group is that we are a disparate group and we come from many different backgrounds.

CHAIR —Yes, that is helpful. In your submission you say that there should be Commonwealth government funds to support Tasmanian strategic planning. Can you expand a little on what that would look like, where it would go and how it would operate.

Mr Perkins —Yes. The Tasmanian government is currently focused on three planning exercises—innovation, skills and infrastructure. Our submission is that investment in those areas needs to be consistent with what the Tasmanian government planning process is going to suggest at the end and that immediate investment to enable economic activity as the outcome should tap into that. We should say, ‘What are you doing as a state that we should make our investment in? If we are going to provide funding for infrastructure, whether it be IT, roads or community, what is currently going on in that area now?’ We will make sure that is consistently spent and not be inconsistent with the approach the Tasmanian government has.

Also, the Tasmanian government is doing whole-of-state planning, so what are the impacts in the various regions? They are going to say, ‘In Northern Tasmania the innovation plan is going to show different needs, so how do we need to tailor and vary our investment into those regions to suit that region rather than the state as a whole and how do we bring that forward quickly?’ That is about investment in those areas, understanding what the state government is doing and then supporting their planning.

Mr CHEESEMAN —As I said earlier, in terms of the regional planning processes, certainly from my observations, the quality of plans varies significantly across states and across regions. It occurs to me that the three distinct regions within Tasmania all have their own distinct industries, skill sets, investment patterns and the like. Is RDA down here in Tasmania playing a role with each of those regions to build on the skills and the strengths of each of those regions?

Mr Perkins —A couple of things—yes and no to the variance across the regions. You get regions. For example, farming goes across the Cradle Coast, Northern Tasmania and southern Tasmania. The aquaculture industry goes right around Tasmania. While you can get some specifics in regions you also get industries that cover the whole of the state. Tourism covers the whole of the state. We can provide the connection of the three from time to time.

In terms of our role in that, one of the most important things is that if we are going to ask people to give of their time to prepare, if we are going to be involved in planning and development and asked to participate in that, they want to know what the outcome will be. It is good when you have an inquiry because they know what the outcome is: it is about putting a submission to a standing committee. I know this discussion is not about the future of RDA, although we have spent a lot of time on it today, but if at the end of it they say, ‘What’s the purpose of this?’ and if they do not know the role we are going to play and how we are going to be the connection back into the Australian government—and the Tasmanian government, to an extent, as the integration takes place—then they are not sure, I guess—they are time-poor, very busy people—why they would commit time to planning.

There is regional planning going on at the moment anyway. So that is why I say we do not necessarily drive it in the region; we participate. We can do a holistic state plan, I guess, and understand where the focus needs to be, but if we are to ask people to start committing time and resources to it, they will want to know what the outcome of it is going to be and what the purpose is.

Mr CHEESEMAN —We have partially touched on this earlier today with some of the other groups that have appeared before us, but very clearly there are some significant opportunities coming to Tasmania, particularly with the rollout of the economic stimulus into schools and also with broadband. I want to know whether there has been any consideration given at this stage to how industry might be supported to capture that investment and to develop the necessary skills if they do not already exist—or, at least, to identify the skills that are missing in terms of being able to maximise the opportunities that will come from both of those two very significant Commonwealth investments here in Tasmania.

Dr Cory —I can comment on the industry involvement, specifically in my area where we have two huge smelters and a lot of engineering activity. In that area, industry is very active with the schools. They have always had programs to include schoolchildren in their activities. Then, starting about four years ago, we had a huge program to bring into George Town a skills training and trade training centre. And we have got it now, after four years. That has been a combined effort with industry. The Bell Bay industry group were a huge force behind it, as were the schools and local businesses. This is, in my opinion, a prime example of how a community can work together to achieve a notable end. We know it will take two years to get it up; we can wait that long.

We will have a facility which will make sure that our grade 11 and 12 children do not disappear from our part of the earth—and that is quite significant in Tasmania. Children in grades 11 and 12 are bussed to school. My children are bussed an hour each way in the day. Now that will not necessarily have to happen. If you have to bus kids around the countryside, they soon drop off; they soon lose interest. Now they can stay home and learn their skills locally. I cannot emphasise enough how significant that is, certainly in our environment.

CHAIR —Thank you. It is good to hear about the trades training centre. I was not aware that you had actually received one in this district. That is terrific. We are running very tightly to time, but, Ally, if you wish to make a comment you may, of course.

Mrs Mercer —On the trade training centre: in my region, the north-east of Tasmania, we have gone through some significant upheavals with our main area of industry, which is forestry. We lost a very significant mill and lots of people lost their jobs. One of our main problems was with retaining our people in our community, let alone in Tasmania.

CHAIR —So what did you do? What has happened?

Mrs Mercer —We have been working with our community. We were lucky enough that the federal government gave us an innovations fund for the SMEs. They were able to look at long-term opportunities. We have been able to look at employing nearly 70 more people within our community—and they will be local people—and that will expand more. We have also been lucky enough to get a trade training centre, just like George Town.

The trade training areas we are looking at are not in forestry itself but are looking at being able to expand our regional opportunities in the sense of things like electricians, plumbers, carpenters and things like that, where our younger people would actually have to go to either Hobart, which is at least three hours away, or the west coast to undertake that training. So our younger people and our people who have lost their jobs in the forestry area are now going to be able to update their skills and we will retain those people.

CHAIR —And do that locally. That is terrific. I would not mind hearing a little more about that. If you could send us something in writing about what you have done there, that would be really interesting for us to hear about.

Mr SULLIVAN —The thing that has been impressed most on me is that we may have come to Tasmania a bit early because, apart from some significant single industries, the place seems to be going pretty well. We have, as Craig indicated, spent a fair bit of time talking about something that is not a matter before the committee, the structure of RDA. My best advice to you guys is to use some initiative. But Mr Gordon talked about something which is probably his passion within your group and something about which I am very interested—that is, funding that the government may give to business that has been lost as a consequence of a decision made by the government but a direction that was flagged by this committee in our interim report on the Regional Partnerships program. Mr Gordon, could you please give me an idea of what your view is of a suite of assistance that government could give to business—whether by grant, by loan or by whatever arrangement—as a replacement for what might have been available to them under the old Regional Partnerships program?

Mr Gordon —When I think about the old world, one thing that jumps into my mind is a project that we were involved in with a large tomato producer in which we were able to work with that organisation to help them grow their business and grow their employment. In the new world, I am not sure that that is necessarily the way that the programs would go, but I think business, particularly small business, responds well to incentives. So, dangling carrots to businesses, saying, ‘If you do this, the government can do that,’ is a way forward in that, particularly with young people. Employment with traineeships and apprenticeships is an area that is good for the economy and good for the long term of the community. In saying to businesses, ‘If you do this and put on this trainee or this apprentice then the government will support you in this way’ is, I think, one way to do it at a very micro level. At a more medium level, there needs to be incentives for medium-sized businesses to grow their business. If there is a direct link for businesses to say, ‘We might be able to access these resources to help us,’ in a very concrete and specific way, that in many ways helps businesses realise those opportunities more than a fairly broad guideline-type program that takes a whole lot of understanding and interrogation about what we actually need to do to be able to do that stuff. Clearly, from the government’s point of view, employment growth is a good thing. To name it up in terms of saying, ‘If you do this, we can help you by doing that,’ I think is a way that businesses respond well to. I am not sure that I have necessarily answered your question.

Mr SULLIVAN —It is a good answer, just the same.

Mr Gordon —That is it in part, I think. If we go back to the old world and that tomato producer, I think very much that the success of applications like that is about someone holding their hand and walking them through the system to maximise the outcome from that program. To have people out there, whether it is Regional Development Australia or the local department of economic development or whoever, walking alongside people to make sure that they are putting well put together applications forward that have a high chance of success, as I mentioned before, I think is part of developing confidence within the business community, because they then tell their mates. They tell them, ‘We put in for this and we got this support’, so they are more likely to do it as well, which means more businesses are likely to put more people on.

It is also good from the government’s brand point of view and the credibility of government that a high proportion of the applications that go forward are funded, because, again, that is about saying that you are not wasting time by putting these applications in to government. To have a filtering process where the weak ones or the ones that do not meet guidelines never get put forward for assessment is an important part of the process as well, because that stops a lot of that disillusion and a lot of wasting of time and resources. They are some very general comments but I think, as far as principles go, they are things that need to be considered.

CHAIR —Thank you. Did you wish to make a concluding comment, Dr Cory?

Dr Cory —One of my closing comments was exactly what Michael was just saying. Let us not forget small business because there are so many of them. If each one of them was to employ and train two or three people, that would be an awful lot of people. And I shall probably make myself fairly unpopular here but, historically, we have been seen as the honest broker. People do not trust local government. They trust state government even less and they trust federal government even less. What we have managed to do is build bridges. People have been able to come to the old ACCT because we had no axe to grind and we were able to help them through a very sticky process. I think that is where we got a lot of our brownie points from: helping people.

CHAIR —Thanks very much for appearing before the committee today and for your evidence. I am sorry we got a little bogged down along the way, but I think we have certainly managed to get out some of the issues that I wanted to tease out from your submission. We may have some further questions in relation to both your submission and your evidence. The secretariat will write to you with those and hopefully you will see your way clear to answering them if you are able to do so. If you do want to make a further submission on the basis of your presentation here today, you are also most welcome to do that as well. You will receive a proof transcript of the Hansard from today’s hearing for editorial changes as well. Again, I thank you very much for taking the time to put together the submission that you put in to us—the amount of people that you have talked to will save us an enormous amount of work—and also for the energy that you have put into coming in and putting your submission to us today. Thank you.

Proceedings suspended from 12.57 pm to 2.01 pm