L to R: Cameron Edwards, Winnie Lai Hadad and Steve Herlihy at the Asian Development Bank in February 2019.
Welcome to our first newsletter for 2019.
WA is without doubt a land of extremes. Although there are plenty of bad news stories out there, WA also produces world class companies operating in so many fields and most are unknown outside their industry, ‘Stealth SMEs’. In our business we meet these companies like Magellan Powertronics, Hofmann Engineering, Coogee Chemicals, Center West, Lepidico, Neometals, Lithium Australia, Silverhorse, Linc and others. These companies play a crucial role in transforming the WA economy to a more sustainable basis and creating new jobs needed for future generations. Champions of industry are the core of where future jobs will be created and support in streamlining approvals for developments would add to economic and social development.
We are still waiting for the Market-led proposal legislation.
The Westport: What we have found so far report in December was an interesting read. There are many items we could comment on, some strategic and some minor. In this newsletter we have focused on just one point, which is the forecast 2.8% growth rate over 50 years, more about that later on.
Show me the money
It is admirable that the current State government is proving to be a worthy custodian of the State’s finances. We are very supportive of WA’s traditional thriftiness. However, there is a time and a place for everything and we believe this is the time for investment. Our feedback from companies and various stakeholders can be summarised as “WA’s shoestring approach to business investment is hurting the State. How can we expect the Federal Government to contribute funds when the State will not show the colour of its money?” This is a fair point especially considering neighbouring countries and states are investing heavily in infrastructure and preparing for Industry 4.0.
Even the SA government has pledged $150m that can be borrowed against to provide $700m of funding for a new deep-water port along the Eyre Peninsula. (Isn’t that great, SA is powering ahead with not one but three proposed new ports along the Eyre Peninsula!) The economic development that will be generated from a new modernised deepwater port will be immense and it is becoming very tempting for companies to focus their expansion plans on SA due to the favourable business environment and a government that is eager to support innovation and new industries.
Are the powers that be focused too much on the costs of infrastructure without properly considering the value and benefits generated by the investment? Have the economic and social benefits been appropriately considered (including comparisons) together with the costs over the life of the investment? As we’ve seen with some past infrastructure projects, when you miss an investment window it’s gone, sometimes for a generation or more. From our perspective significant investment is required to prepare for future businesses and industry.
Future Battery Industry Strategy
January saw the WA State Government release its Future Battery Industry Strategy document. It is terrific to see that the State Government has recognised just how important the Future Battery Industry will be to WA. The Future Battery Industry Strategy clearly communicates to everyone - industry and the various State Government departments - that WA has to grab this opportunity with both hands.
The next step is for the State Government to realise that the key target market for export is not Asia but rather Europe (in particular Germany) and the USA. There needs to be a fundamental shift in the procurement strategy for European companies as the only way to ensure that they will have access to the new energy materials that they require for manufacture is to invest much earlier in the supply chain.
The Future Battery Industry Strategy is a very promising start but only time will tell whether the State Government chooses to support industry where necessary to develop and sustain the future battery industry in WA.
Fulbright Scholar Caitlin Cain
We have had the pleasure of working with Caitlin Cain, CEcD, economic development specialist and former CEO of the World Trade Center, New Orleans, USA. Caitlin is undertaking a Fulbright Industry Fellowship with Curtin University. At the end of her fellowship, Caitlin will deliver the report Accelerating Global Competitiveness: Western Trade Coast to the WA State Government. On a foundation of the world's best practise for economic development and her own world-class experience, Caitlin will outline a plan to drive WA’s economy forward and increase international trade.
The report will detail the case for developing a Special Economic Zone (SEZ) as part of the Western Trade Coast and simplify the steps to a future-focused secondary processing and value-adding environment. The report will also show that we can significantly improve the efficiency and effectiveness of our regulatory environment without sacrificing compliance or integrity.
Caitlin brings a wealth of knowledge and experience to this subject area and we look forward to the release of her report on 13th March 2019. Tickets are available at:
On 19th February the WA State Government launched Infrastructure WA (IWA) as part of its Plan for Jobs election commitment to create 150,000 jobs. Assuming the legislation passes Parliament, IWA will be chaired by John Langoulant AO and the first priority of the IWA will be to develop a 20-year State Infrastructure Strategy. If executed well, IWA will be a valuable body acting as an independent advisor that evaluates infrastructure proposals based on merit, economic rationality and strategic importance. We will see whether it becomes a political vehicle or is truly independent. Properly run, IWA has the potential to attract increased funding from Infrastructure Australia and should improve the allocation of scarce resources across terms and changes of government.
If executed poorly, IWA will be a proverbial toothless tiger that consumes more value than it generates and the status quo will remain. Again, time will tell.