The Productivity Commission, relative capacity metrics and the future of regional Australia

 

Today 31 July 2017 was the closing date for comment and submissions on the initial report by the Productivity Commission of its study into “the regional geography of Australia’s economic transition since the mining investment boom”.  Below is the response I drafted for  USQ’s Institute for Resilient Regions.

The Institute for Resilient Regions is a specialist and strategic research initiative of the University of Southern Queensland focused on research collaborations with industry, community and government that assist regional Australia to be innovative and thrive and a great place to work and live.

Launched in 2014, our mission specifically is to deliver research excellence that enables regional communities to be resilient and adaptive, liveable and prosperous, healthy, active and well and connected and collaborative.

Limited scope of the study 

A study by the Productivity Commission into “the geographic impacts of the transition of the Australian economy following the resources investment boom” is highly relevant to a raft of policy agenda shaping the future of our regions.

But those wanting a comprehensive multidisciplinary study of the processes and challenges of change in regional Australia (beyond the major metropolitan centres) will not find it in the Initial Report Transitioning Regional Economies.

What they will get instead is an economic analysis of the most recent adjustments arising from the resource boom and some preliminary musings about how to measure social and economic change.

For the purposes of this Inquiry, ‘regions’ are a place-focused ABS statistical unit of analysis that excludes specific socio-cultural connotation and extends to city suburbs where many of the resources companies are based and where the FIFO workers are domiciled.

Sifting amidst the patchwork of regional economies across the country, the Commission was tasked with identifying the winners (those “successfully transitioning”) and losers (those with “significant challenges”) of the resources boom.

To enable comparative analysis between regions, the Commission was asked to assess “the scope for economic and social development” and produce a “single economic metric” that would enable regional rankings and identify those “most at risk of failing to adjust.”

Beyond this the Inquiry was also to identify the key drivers and inhibitors of adaptive capacity in at risk regions with a view to better targeting policies that might assist them deal with changing economic conditions.

Besides revealing that the least adaptive parts of Australia economically predominate in the poorer parts of the major cities and most remote regions, the resultant interim report confirmed several truisms about the importance of depth and diversity as foundations for economic resilience.

The major themes of the modern Australian economic narrative were re-visited with the Inquiry finding mining regions tending to have the greatest economic volatility, agricultural economies growing steadily with employment consolidation through innovation, and manufacturing dependent regions scoring low on growth and adaptability.

Nothing new or controversial there but a useful tabling of empirical evidence to support the view.

While the specific brief of its terms of reference meant the Inquiry would not develop a regional ‘resilience index’, the feasibility of creating such a useful tool is made more difficult by the lack of robust multi-disciplinary frameworks for mapping, measuring and analysing complex regional social and economic systems.

Complex systems are difficult to reduce to a single meaningful metric, but this should not prevent further attempts to do so – especially involving cross-sectoral collaboration.

A major implication of the current Inquiry is that in acknowledging that its measure of ‘relative adaptive capacity’ was “an unobservable attribute of a region” inferred only through proxy factors, the Commission points to why a national multidisciplinary research project should be undertaken which empirically models comprehensively the resilience and adaptivity of regional systems.

We are not too critical here, because the Inquiry acknowledged the limited “suitability of the metric as a guide for policy decisions”.

This research problem can be resolved only with further research and development involving multidisciplinary and inter-institutional collaboration.

So rather predictably, in choosing to restrict the criteria for regional adaptive economic capacity to a “summary” of factors spanning employment, infrastructure, business and natural resources, the Commission concluded that “regions with higher adaptive capacity” had the attributes which meant they were more likely to “transition successfully following an economic disruption”.

Significantly, the Inquiry also found that the wherewithal of adaptive capacity in itself was not necessarily an accurate predictor of the nature and scale of such transition.

With so many other critical determinants of regional adaptivity omitted from the Inquiry’s analysis again no surprises here.

While the economic bases are essential, regional transitions are shaped substantially also by the health and well-being of the people and other psycho-social factors like community integration, capacity for learning and cultural dynamism.

And if a regional resilience or adaptive capacity index is to be developed, it will require data at an individual and local level with a granularity not yet published by government.

The Inquiry’s Table 2.1 (p56) “Indicators of adaptive capacity” is just a start in highlighting the dearth of data informing change processes in regional Australia.

Crucial for the current Inquiry is the Commission’s acknowledgment that its findings are made in a field which it sees as largely unresolved when it comes to defining and measuring regional resilience and adaptive capacity.

In this uncertain context, there are risks associated with the Inquiry’s rather orthodox citation of disruption as a prerequisite “event” for analysis of regional resilience and adaptive capacity.

Arguably, in the resource-dependent regions of Australia, it is the volatile, uncertain and disruptive nature of the commodity cycle, including especially the scope and speed of the investment and construction stages, which shapes local economic systems.

Beyond the resources regions themselves, in broader rural Australia episodic disruptive events are more likely to be associated with climatic impacts such as floods and drought which, while impacting on regional resilience, have attracted policy interventions enabling a viable, innovative and highly competitive farming sector.

Indeed, much of the narrative of regional Australia suggests subtler longer-term patterns of change.

Social-economic-technological megatrends have greater formative impact on the adaptive capacities of most regional economies than have droughts or mining booms.

These changes, many of them of a global magnitude, also suggest that the adaptive capacity of a particular region is likely to be determined as much by how it enmeshes with the world beyond as by it what it does locally.

So, in its scope the interim Inquiry report tells us little new about the complexities of change in rural and regional Australia, but importantly it demonstrates clearly the economic impact of the resources cycle and the critical pathway risks associated with it in both metropolitan and regional Australia.

In so far as adaptive capacity is concerned, with top end city suburbs coming out on top of this measure, the Inquiry leaves us with a definitional dilemma.

Clearly, the impression is given that cash flow, power and networks matter most in determining a region’s capacity for change, so the reader can be forgiven for asking: “Has the Commission devised a metric of regional adaptive capacity or of regional influence, status and privilege?”  Are they one and the same?

Framing transitions – moving regional Australia forward

There are many possible or plausible futures for a region. Regional development and transition is the outcome of a complex interplay of a myriad of factors, reflecting the various sources of capital in play as well as local leadership and decision-making and community understanding and involvement in developing the narrative and exploring the possibilities.

Compounding these considerations is the magnitude of innovation happening more generally in the world which bears directly on the future for regional communities.

The human capital factor is crucial to building sustainable development, making regions resilient and achieving a preferred future for the people.

In itself resilience (or adaptive capacity for the purposes of this Inquiry) is not an end, but is actually a function of a thriving regional system. To build resilience, crucial enabling factors in a region or community have to be assured and developed.

To that end, the Commission’s recommendation that Governments “should avoid providing ‘ad hoc’ support to regions without an underpinning framework that aligns with clear principles focused on supporting people in regional communities to transition to ever changing circumstances” is strongly supported by the Institute for Resilient Regions.

In its guiding principles “to support transition and development of regional communities”, the Commission lists:

  • A locally owned, strategic and coordinated approach
  • Building on a region’s strengths and endowments
  • Investing in the capabilities of people and regional connectivity
  • Achieving sustainable regional development.

The Institute for Resilient Regions agrees with the Commission’s Initial Finding 5.1 (p33) that “The best strategies are those that:

  • are identified and led by the regional community itself, in partnership with all levels of government
  • remove barriers to people or businesses relocating, both within or to other regions
  • are aligned with the region’s relative strengths and inherent advantages
  • are supported by targeted investment in developing the capability of the people to deal with adjustment and the connectivity of the region to other regions and markets
  • facilitate private economic activity that is not dependent on ongoing government financial support (beyond general government transfers)”.

To this list could be added:

  • Leverage regional identity and position where it creates value and opportunity;
  • Invest in community development and deliberation so people can be aware, learn, consider and agree on new directions (cf Inquiry Finding 5.4);
  • Create new links, relationships and opportunities and better integrate existing ones;
  • Ensure regional governance that is accountable and accessible and facilitating of adaptivity and self-initiative and organisation;
  • Make the health and wellbeing of the people part of the plan;
  • Reward and recognise entrepreneurship and innovation in regional enterprise;
  • Orient the future-focus inwardly and outwardly and engage local to global.

The Commission argues that “Governments cannot and should not shield people in regional communities from all possible adverse events or ongoing pressures for change”.

This Institute for Resilient Regions would add that confusing regional development and transition with interventions designed to camouflage or minimise the implications of change are actually counter-productive and encourage “deficit”, “hand-out” and mendicant behaviours.

There is nothing to be gained long term by government policies that attempt to prop up unsustainable economies or regions.

Government policy intervention should be constructive of sustainable social and economic transition in Australia’s regions and promote change where it delivers benefit.

There is a difference between assisting some “squeaky wheel” regional economies in need of limited structural adjustment or supportive policies assisting diversification, for example, and other regions whose challenges beg a fundamental review of the basics or what we might expect in some parts of the continent beyond management of the biosphere, effective border control and defence security.

Back in the mainstream, a virtual doubling of the services sector in Australia over the past 30 years to 10 million people suggests that regional non-metropolitan Australia will not fully participate in future economic development if cannot access a good slice of the services pie and the digitalisation megatrend.

It will also not fully participate and maximise its potential if it is not as healthy and well as urban Australia.

This is why the business agenda for the Institute for Resilient Regions specifically includes behavioural and social sciences research that aims to help build adaptive capacity to enable regional Australian communities:

  • create and exploit new development options, navigate transitions and live healthier lives;
  • realise additional economic value through knowledge-based digitally enabled initiatives; and
  • frame governance and decision-making processes to support regional resilience.

Salvaging Australia’s energy schmozzle

Today in response to the Prime Minister’s announcement of a feasibility assessment of expanding the Snowy Mountains scheme role in the national energy grid, the Australian Science Media Centre sought comment from a range of academic experts in fields related to the issue.  My response appears below:

The Prime Minister’s vision to turn the Snowy scheme into a massive renewable energy battery represents on the one hand resourceful sustainable energy innovation and on the other national policy failure.

That a country that once billed itself as the next energy superpower of the Asia Pacific could get to a point where affordable energy security is no longer assured reflects a decade of cheap point scoring by both sides of politics.

The loser has been Australia’s national interest and well-being.

In their rush to a clean energy world, perversely the left will secure higher emissions outcomes.

The setting of accelerated mandatory renewable energy targets is killing off the possibility of a gas fuelled lower emissions transition and locking in longer lives for coal fired power stations.

In terminating a carbon price, the Coalition parties have scuttled the potential technological and economic efficiency to be played by markets in facilitating lower emissions power generation.

The upshot is an energy policy schmozzle likely to generate more energy system fragmentation, government intervention, loss of investor confidence and higher prices for consumers.

It is essential that the major parties stop the buck passing and achieve a workable bi-partisan consensus on how to stage a technological and economic transition to a low carbon future.”

Other responses can be found at the Australian Science Media Centre at https://www.scimex.org/newsfeed/expert-reaction-snowy-river-hydro-2.0

Smart planning to shape a resilient and sustainable South East Queensland

Today 3 March 2017 is the deadline for public submissions on the Queensland Government’s draft South East Queensland Plan.  The following article outlines the Institute for Resilient Region’s view on how to strengthen and implement the regional plan.

How to double an already significant urban population of 3.4 million and not turn a region renowned for its mix of amenity and lifestyle qualities into a massive commuter grid-lock is the challenge faced by the South-East Queensland Regional Plan.

The draft response comes with a sweeping 50-year vision for the region, structured by a 25-year land use planning framework that emphasises densification in settlement patterns and a relatively marginal further decentralisation of the regional economy outside of Brisbane.

Substantial population growth to a total of 5.3 million people is the core assumption of the draft Regional Plan with expectations of up to an extra 2 million people living in south-east Queensland by 2041 with the possibility of a near doubling again by 2061.

Grounded in five organising themes and goals, the draft Plan presents a vision for South East Queensland (SEQ) as a globally competitive “smart region”, a model of “sub-tropical” lifestyle and “climate resilient living”, settled in a “network of well-defined cities” inter-connected as “complete communities.”

Constant change is identified as a critical feature of the future of SEQ reflecting in changing population, economic restructure and technological innovation.

Climate change, the resource footprint of the region, multiculturalism and globalisation are seen too as key shaping factors of our future.

In its vision, scoping embrace of the key factors shaping SEQ’s future, in its methodology and proposed land use directions, as well as recognition of the vital role of enabling infrastructure in creating the region of 2041, the SEQRP is endorsed by the Institute for Resilient Regions as providing an essential and constructive planning framework.

Beyond the acceptance of high population growth over the next half century, other assumptions underpinning the SEQRP include:

  • creation of an additional 1 million new jobs over the next quarter century;
  • enhanced connectivity through better transport, mobility and communications infrastructure;
  • clear delineation between built and natural environments with a focus on biodiversity protection, and green spaces; and
  • international profiling as a top end savvy and sophisticated “highly liveable region”.

It is an attractive world class vision – but can and how will it be realised?

Policy, technology, investment, infrastructure, and people will determine the outcome.

More importantly, the degree to which Queenslanders think outside the box, promote new ideas and higher levels of collaboration between governments of all levels as well as the private sector – these will shape the quality of the future region.

In this respect, the most important requirement for the success of the SEQRP will be the proactive engagement by the people living in south-east Queensland in the processes of planning and creating tomorrow’s SEQ.

The vision becomes possible when the regional community in all its diversity owns it and participates.

Sustainability and resilience should be core principles

To ensure future SEQ generations are not short-changed in lifestyle, amenity, and opportunity, the principles of sustainability and resilience must be uppermost in the planning process, framing a holistic view of the regional system and its future and underscoring essential processes and colouring every major development decision.

Mention is made in the draft of “managing growth sensibly and sustainably”, but the principles of sustainable development should be more embedded explicitly in the format of the Plan and its processes.  These include:

  • intragenerational equity – planning for socially equitable outcomes in development;
  • intergenerational equity – thinking long term about development which will impact future generations;
  • prudential use of non-renewable resources and protection of nature – understanding and acknowledging the systems basis of life in designing development;
  • precautionary principle – avoiding irreversible development impacts that would degrade the region;
  • heritage preservation – recognising the importance of cultural inheritance, valuing people, identity, local character, history and aspiration in planning and framing development;
  • full cost accounting – ensuring the full costs of development including externalities are factored into decisions and costed appropriately so as not to result in long term pain for short term gain.

These core organising principles are well reflected in the Planning Systems Principles of the Planning Institute of Australia (PIA) and are commended for continued active utilisation in all aspects of the SEQ Regional Plan going forward.

The SEQ Plan will succeed if it shapes a future for the region in which affordable living and employment opportunity are integrated (not balanced) with a sustainable built and natural environment.

With 40% of new development projected to occur in greenfield sites, it is important that natural environmental values and functions are protected and preserved.

Green space is a vital factor in defining the amenity of SEQ and stronger emphasis needs to be given in the Plan to protecting, stewarding and enhancing the region’s natural capital, including particularly water supply catchments and areas providing vital ecosystem services in support of water and air quality and biodiversity.

The Property Council’s call for a regional biodiversity conservation strategy is a good idea and such a strategy grounded in scientific rigour should be closely embedded in the regional plan.

The best communities are local communities

The SEQ Regional Plan must also ensure that future regional settlement does not become so scattered as to explode the economic cost of transport infrastructure while diminishing the quality of life of tens of thousands of commuters chasing employment far from home.

Land use maps might anticipate an orderly and rationale development of settlement, but the real challenge will be to grow a SEQ with more jobs decentralised out into the larger regional hubs such as Gold Coast, Sunshine Coast, Toowoomba, and Ipswich.

Current projections are not ambitious enough to ensure broader regional equity in economic development.

If SEQ is to boast an inclusive, equitable and productive society into the future, infrastructure investment should be mapped and channelled to encourage the clustering of opportunity and capacity.

A strategic approach to the develop of high growth sectors like health, social wellbeing and education can ensure the development of a regional system of a professional services and other high value occupations outside of Brisbane.

Economic decentralisation within the SEQ region has to be a stronger tenet of government policy and planning than is reflected in the current draft.

A sprawling urban SEQ in which the Gold and Sunshine Coasts and the peri-urban hinterland serve essentially as dormitories for greater Brisbane would represent a gravely inefficient regional future.

The comparative advantage of all regions is the quality of life they afford.

In pitching the SEQ Regional Plan it is important that the Queensland Government recognise that sub-regions on the peri-urban fringe, manifesting disadvantaged socio-economic characteristics, struggle to attract investment and social diversity.

Rather than entrench existing geo-spatial patterns of community deficit, engagement, investment and diversification strategies should be implemented to revitalise peri-urban centres, ensuring SEQ does not find itself with a ring of marginalised and mendicant districts on its periphery.

Fast efficient public transport will be a crucial ingredient in remedying a current shortcoming that sees as many as one in three in the peri-urban precincts without employment and those with jobs working elsewhere.

The strongest and most resilient communities are inevitably grounded deeply in informed and enabled local social capital.

To secure equity as an ingredient of regional sustainability, there is a vital role to be played by good planning policy and practice, including the timely roll-out of so-called ‘soft (human services) infrastructure’ in new developments.

The Institute for Resilient Regions endorses the principles of sustainable regional planning promoted by the Planning Institute of Australia (PIA) noting that planning integrity is essential for managing growth and settlement, staging infrastructure development and investment, and framing the sustainable integration of natural systems with human economy.

Walking the talk on infrastructure

The current draft SEQRP can be improved by clearer prioritisation and projected staging of the infrastructure that will be required to realise the vision.

A truly regional world class smart economy, for example, will falter without super-fast public transport between major centres.

It is vital that the State Government enable the SEQRP by ‘walking the talk’ on investment – whether that be by the provisioning of a seed project fund, private sector partnerships, or engagement with the Federal Government’s programs such as City Deals.

There is no point to a plan without appropriate resourcing and governance prerogatives underpinning it.

If, for example, dwelling targets are to be mandated for local authorities to achieve, then it behoves the State Government to ensure the necessary infrastructure (where provided by government or by public-private partnerships) is in place to facilitate development consistent with the vision and the core values of the SEQRP.

The SEQ Regional Plan is a state instrument with the power of mandate –  but a regional future cannot be achieved as a compliance outcome.

The State approach through SEQRP should be articulated through an array of complementary initiatives, including the State Infrastructure Plan (SIP) that encourage timely investigation of future urban tracts, public-private partnerships, master planned communities in preference to ad hoc sub-divisions, and reward and reinforcement for local authorities willing to experiment with new business models delivering least cost sustainable development.

A fast-growing mixed conurbation of diverse landscapes and populations will need fit-for-purpose core utilities – energy, water and sewerage, communications – as well as systematic staging in both the timing of the roll-out and upgrading of such infrastructure and in the proportional investment in infill and greenfield precincts within the SEQ.

Innovative new technologies in water and energy systems are likely to perform better and cost less in a distributed, decentralised, and closed local formats and networks.

Current thinking in government still inclines too much to the centralised-bigger-economies of scale models.

Both the SEQRP and State Infrastructure Plan require the flexibility in their essential commissioning to be as “future relevant” as possible in thinking about ownership and business models, procurement, design and delivery of new infrastructure.

Indeed, the simple dichotomy between infill and greenfield development is a secondary consideration to the “least cost best value” versus “what we know, what we’ve always done” approaches to infrastructure provision.

This applies equally to crucial utility management strategies like energy demand management and total water cycle management which is also missing from the SEQRP and should be included – as should strong links to the State’s forthcoming Climate Change Adaptation Strategy.

Least cost planning as a principle should be embedded in performance targets so that where and when efficiency in resource utilisation is possible it should be encouraged to avoid unnecessary investment, costs and impacts.

The same principle applies to housing. Low cost housing on the urban fringe is not so affordable socially or even personally if the housing is long distant from jobs, commuting is extensive, and social welfare impacts are considerable.

Least cost planning means factoring in full costs, including social and environmental externalities.  And timing the staging of new and upgraded infrastructure is crucial.

Built-in redundancy is a factor in planning regional resilience, but under-utilised and untimely infrastructure represents massive economic opportunity costs that can be avoided.

Adaptive governance needed to integrate vision, planning and action

For such a dynamic internationally important region, it is also imperative that the top end planning strategy, framed by the State Government in consultation with all key stakeholders, guide the delivery of outcomes.

Importantly, this approach will be most effective and productive if it is administered through a responsive, integrated and adaptable governance framework that takes close account of ongoing feedback, innovation, and a changing world.

In a long term 25-50-year context when governments (at different levels) are dealing with a region’s future at multiple scales – a regional future which will be characterised by transformation, innovation, occasional sudden disruptions, and from time to time, disputed and conflicted politics and stakeholder needs – the one thing government should never do is establish the settings and put the governance process on auto-pilot.

Regional systems are dynamic – as is the future – and planning policy and practice has to reflect that – informed by current data and robust stakeholder input and manifested in evidence-based transparent decision-making.

Effective application of the ‘subsidiarity principle’ also means the SEQ Regional Plan has to be framed to align with the respective capacities of the different levels of government to deliver on their core functional contributions.

This will require strong leadership and close coordination between levels of government and with the private sector to deliver agreed goals in timely and efficient fashion.  A mal-alignment of role and resourcing capacity can only result in poor development outcomes and a failure of the Plan.

A complaint of industry looking to invest in SEQ has been the common divergence in State regional planning and that of local authority town plans.

The challenge here is to simplify and make coherent a regional development process while respecting the integrity of local government and the legitimacy of community diversity with the region.

Monocultures, including planning monocultures, do little for resilient regions.

Equally, a planning process that is overly prescriptive and grounded in bureaucratic constraint is unlikely to be sufficiently forward-looking and responsive to the pace of technological change as to facilitate the most efficient least cost development.

To that end, the private sector should be incentivised for innovation and efficiency in providing new infrastructure, commercial precincts, housing and community developments.

The current model of local government building a business model around development charges penalises private sector initiative, drives up the cost of development unnecessarily, and essentially cross-subsidises other local government functions under-resourced because of State legislative and fiscal conditions.

Many trends, themes, and factors shaping the future of SEQ are identified in the draft SEQRP that suggest the importance of agility and adaptability in our processes, starting indeed with a need for stronger community understanding and engagement with current and likely future directions.

How smart SEQ turns out to be will be seen in how well it makes the most of digital infrastructure technology, electric cars, new forms of mobility and communication, cleaner energy and transportation, and of meeting the over-riding demands of climate change and a low carbon economy.

If all this is to be addressed and the SEQ Plan is to be realised, policy formulation in the State Government will have to be ahead of the game, adaptive and outward looking in encouraging initiative, partnership, investment, and innovation from other levels of government and the private sector.

And that begs a governance culture in our public processes that is willing to introduce and evaluate complex ideas, identify and manage risks, engage and communicate constructively, and build consensus for a shared vision of our grandchildren’s SEQ.

It also means that State and Local Government should be very clear about what they can and cannot do to promote affordable housing, ensuring, too, that the community is fully appraised of the role to be played by the Federal Government in framing tomorrow’s home ownership and rental prospects.

Finally, we in the community have a role, too, in reminding governments of all political persuasions and at all levels not to waste time unnecessarily ‘re-inventing wheels’ just to supersede work done during a different administration.

Too much corporate and community memory essential to effective planning and development is lost simply through political change.

Several years ago, in 2013-2014, more than 80,000 Queenslanders participated in a community engagement process that resulted in the 30-year vision of the Queensland Plan.

One of the crucial foundations of the Queensland Plan is the importance it attaches to regional development, especially outside of SEQ, to the extent that a target of doubling the population outside of SEQ by 2044 was a hallmark of that earlier process.

As a State planning instrument the SEQ Regional Plan has to be viewed in the broader context of Queensland’s future and competing development needs in other regions.

And to this end, and notwithstanding that the Queensland Plan is enshrined in legislation, it is disappointing to find no reference in the draft SEQRP to the Queensland Plan and its foundations.

Inter-governmental alignment and collaboration is essential to SEQRP going forward but so too is intra-governmental coherence, consistency, and continuity.

Developing a climate adaptation strategy for a resilient Queensland

The Queensland Government through its Department of Environment and Heritage is developing a climate adaptation strategy for Queensland and recently invited public submissions on its directions statement.  Here is an edited version of   the submission made by the Institute for Resilient Regions at the University of Southern Queensland.

The Institute for Resilient Regions undertakes applied research helping regional communities build resilience and adapt successfully to change. Regional resilience refers to the capacity of regional communities to deal with risk and adapt to change so as to preserve the core values and attributes of their region while exploiting new opportunities relevant to the future.  With an emphasis on people, culture, and innovation, our research is helping communities build their social and economic capital and well-being.  Climate change is a global challenge already impacting fundamentally the regional social and economic development of Queensland.  To that end, the Institute seeks to work with other stakeholders in assisting regional communities undertake the transition to law carbon economies while also simultaneously adapting to climate change.  Our essential argument is that these two major themes are best addressed practically at the level of the regional physical, economic and social system.  The aim should be to achieve ecological, social and economic resilience in all Queensland’s regions when dealing with the disturbance of climate change.

General Observations on the Directions Statement

The  Climate Adaptation Directions Statement would be clearer with the inclusion of a statement of underlying principles and key assumptions about climate adaptation and its importance.  What is being asked of Queenslanders to achieve through climate adaptation?  How is the transition to a low carbon economy in Queensland linked to climate adaptation?  How important is that transition in the climate adaptation strategy?  What will be the key markers of success in setting a direction for climate adaptation in Queensland?

  1. How should the Queensland Government engage and work with communities, local governments and economic sectors to facilitate planning for climate adaptation?

If the community is to be effectively engaged and involved in a successful climate adaptation strategy, it will require a:

  • Broad political consensus on the causes of climate change and appropriate responses by the people of Queensland;
  • Strong, consistent and clear government leadership presenting a vision and a practical strategy for achieving a climate resilient Queensland;
  • Extensive community involvement, ensuring that the responsibility for emissions mitigation and climate adaptation is shared fairly across Queensland’s society and economy;
  • Compelling science and evidence base for action, clearly and widely presented, including detailed analysis of various climate impact and adaptation scenarios at the regional level;
  • Culture of innovation and willingness to seek economically competitive and socially equitable ways to achieve adaptation;
  • Continuing public education and effective feedback from initiatives and programs comprising the strategy to ensure it evolves and remains relevant to the adaptation challenge;
  • Close integration and coordination of the efforts of different sectors, regions, and all levels of government;
  • Planning and development consistent with the aims of achieving climate resilience through adaptation;
  • Partnerships and collaboration, including with universities, research institutions, media, business and industry, NGOs, community and government;
  • Public and private investment in enabling infrastructure and technology;
  • Continuing research and development in climate adaptation for Queensland.

A climate adaptation strategy for our state should also take account of and align with The Queensland Plan with its 30-year vision for creating opportunity, promoting liveability and connected communities, fostering regional development and decentralisation, generating new skills for new types of economy, achieving world class environmental management and sustainable development, and delivering infrastructure fit for purpose and time.

  1. What infrastructure, assets, services and functions are most threatened by climate change?

Depending on the extent and pace of climate change, all elements of Queensland’s infrastructure and facilities are at risk.  Although the impacts of climate change are likely to be regionally variable in nature and scale, warming, drying and severe weather events will disturb Queensland’s:

  • Natural systems, ecosystems services, and biodiversity (including the protected estate)
  • Key regional economic sectors including agriculture, energy and resources and tourism;
  • Water supply, storage, allocation and management;
  • Transport networks and infrastructure including road, rail, and bridges;
  • Telecommunications, aviation and shipping;
  • Energy infrastructure, especially transmission networks;
  • Public and commercial buildings and housing – especially in tropical regions;
  • Coastal human settlements, ports and tourism facilities;
  • Urban design and infrastructure functionality;
  • Cultural heritage;
  • Health, education, and community services, especially aged care;
  • Emergency and disaster management services, especially severe weather response and fire management;
  • Regional development, population patterns and decentralisation;
  • Economic and social well-being and potential adaptive capacity.
  1. How can the Queensland Government support effective climate adaptation?

The Queensland Government has to do more than support effective climate adaptation.  Recognising that at issue is a complex though necessary social, economic and behavioural transition, government should mobilise action for climate adaptation and lead from the front:

  • Working through COAG to achieve a national strategy for addressing climate change mitigation and adaptation;
  • ‘Walking the talk’ on adaptation, implementing whole of state and local government strategies for public sector climate adaptation;
  • Aligning planning and development policies and programs to be consistent with the goals of effective climate action and adaptation;
  • Partnering industries, local government and communities to develop regional climate adaptation strategies and programs;
  • Promoting and encourage economic diversification in regional economies, emphasising smart agriculture, new services industries, tourism, education, smart manufacturing, low carbon, biotech, cleantech and digital industries;
  • Ensuring building and infrastructure standards are sufficiently robust and resilient to provide facility and amenity in a warmer and drier climate punctuated by more severe weather events;
  • Encouraging investment in R&D and education and training in climate action and adaptation equipment, systems and technology;
  • Formulating and coordinating climate adaptation regional strategies across government agencies targeting the most vulnerable, remote and disadvantaged in personal and social health and wellbeing;
  • Developing world class emergency, disaster and hazard management services invested regionally;
  • Actively showcasing and recognising regional and local initiatives delivering on the climate adaptation strategy building stronger more resilient regions and communities;
  • Building economic opportunity and prosperity for Queenslanders from the climate action and adaptation process. 
  1. How should the Queensland Government work with regions to promote adaptation action?

Climate adaptation strategies should be developed at the regional level with relevant stakeholders including local government, industry sectors, businesses and community groups and Commonwealth supported initiatives like Regional Development Australia and the Natural Resource Management groups.

Core to its policy response, the Queensland Government should launch a regional climate adaptation strategy and program that would:

  • Integrate a Whole of Government approach ensuring policy and program alignment across the State Government and its government owned corporations;
  • Ensure State planning and policy frameworks align and concur with the achievement of the Queensland Government’s stated goals on climate action and adaptation;
  • Draw on the creative capacities of Queensland regions and communities by funding a rolling program of competitive grants for local government and community groups and matching investments for public-private projects advanced by the private sector;
  • Implement capacity building strategies specific to each region and report and be reviewed in alignment with government fiscal planning and projections;
  • Manage through a regional governance framework akin to the current regional health management boards ensuring local accountability and alignment with the broader state strategy;
  • Include not only all infrastructure, assets, services and functions likely to be affected by climate change, but also address development opportunities arising from investment in adaptation;
  • Emphasise the development of new technical standards, technologies, services, skills and knowledge facilitating efficient climate adaptation.
  1. What are the priority economic sectors with which the Queensland Government should build adaptation partnerships?

Those economic sectors that should be prioritised for adaptation partnerships constitute the core of the Queensland economy now and into the future.  Industries to be superseded by the low carbon economy or by emergent technologies and customs should not be prioritised. Priority partners should demonstrate eligibility by:

  • Reflecting vulnerability to climate change impacts and the need for adaptation;
  • Evidencing capacity for risk reduction and continuing capacity to deliver sustainable economic and/or social and ecological value;
  • Generating public awareness and knowledge of the value of climate action and adaptation;
  • Grounding action in as diverse a group of stakeholders as is practical, including value chains;
  • Integrating climate adaptation as part of organisational mission and business strategy;
  • Stimulating diffusion of new ideas by evidencing capacity for initiative, innovation and leadership; and
  • Profiling innovation for climate adaptation in measurable and reportable actions and outcomes;
  • Demonstrating a commitment to continuing learning, collaboration and development in climate action and adaptation.

Priority sectors should include those capable of contributing to sustainable development, enhanced resilience and increased adaptive capacity:

  • Cleaner energy – to facilitate the mitigation of carbon emissions from electricity generation, transmission and consumption and to provide regional development opportunities through energy systems disaggregation and localisation;
  • Agriculture – to ensure continuing farm productivity and adaptive capacity, new business opportunities through carbon sequestration, and long term food security;
  • Tourism – regional level adaptation strategies for facilities, natural attractions, travel and transport, and seasonal cycles;
  • Building and construction – to ensure products and service standards delivering an emission efficient and climate resilient built environment;
  • Education and training – to ensure curriculum, skills and qualifications are abreast of and delivering on climate adaptation;
  • Health and community services – to ensure equitable and timely strategies are in place to assist Queenslanders irrespective of where they live maintain good health and wellbeing in the face of climate change impacts;
  • Logistics and transport – to ensure efficient and reliable supply chain management accounting for variable climate, weather extremes, and changes to production and consumption;
  • Natural estate management – focussed on vulnerable and protected areas including Great Barrier Reef and regions most susceptible to natural systems impacts;
  • Utilities and essential services – to ensure water, energy, waste services and other civic functions are planned, developed and managed in the dynamic context of climate change;
  • Research and Development – to ensure Queensland benefits from new products and services in the 21st century economy – for example, new materials, digital manufacturing, biotechnology, personal health and well-being, education, renewable energy.

In view of the fact that much work has already be undertaken in climate adaptation strategy by local government especially, it is important the Queensland Government draws on the lessons of past experience, integrates insights from current best practice here and elsewhere, while setting a strategic direction that translates into tangible initiatives, implemented with the active collaboration of regional and local stakeholders.   To delay such an approach would be to deny potentially future Queenslanders the opportunities in amenity, facility and prosperity our current generation has enjoyed.

Future Australian federation needs regionally representative States

Queensland Premier Anastacia Palaszczuk rightly suggests that northern New South Wales would be better served by a state government based in Brisbane, but she is far less persuasive arguing that it should be Queensland – at least in its current shape.

Recent rumblings about the inadequacy of government delivered by our federation are not new, but a debate that focuses only on fiscal imbalances and removing duplication of function between the Commonwealth and the States is only part of the story.

For all Australians to share in the opportunities of future prosperity, the current urban-centric model of national development should be superseded by a fairer and more democratic arrangement that sees regional people, especially in northern Australia, given the right to self-determination and responsibility for their own futures.

In many rural districts of Queensland, discontent with government is likely only to escalate in future, spurred by decisions pandering politically to city voters that trample all over the rights and views of regional industries and communities.

Think vegetation management laws divesting farmers of property rights without compensation, Fly-In Fly-Out (FIFO) resources projects marginalising and reducing regional communities,  landholder conflict with miners and gas companies, and export bans that destroy livelihoods – and you get the drift.

At the same time a contrary trend of industry internationalisation through increasing foreign investment and export development coupled with the rise of the digital economy is enabling regional Australia to form its own strong and direct links with the world.

Already the source of two thirds of our national exports, understandably regional Australia is wanting a greater say in shaping its own future and wonders about the usefulness, efficiency and fairness of a federal structure of government which is essentially a federation of ‘city-states’.

The 1773 Boston Tea Party precipitated the American Revolution because Americans would no longer tolerate taxation without representation.

Those Australians living in the ‘flown-over’ regional and rural areas between the capital cities could be forgiven for feeling the same way – figuring disproportionately as they do in all the main indicators of disadvantage.

So here’s the point that seems to escape most discussion on the Australian federation: in the 21st century we should become more than a metropolitan federation.

For our nation to be developed sustainably on a genuinely continental platform of regional sovereignty and self-determination, the number of states should be increased to be more representative of Australia’s regions.

Talk back radio chatter calling for the abolition of the States in favour of having just Federal and Local Government ignores the reality of sovereignty beginning with the States.

Can anyone seriously see the States abolishing themselves?

Senator Matt Canavan quite rightly suggests that northern development would be better helped by a federation that more fairly reflected regional diversity, the size of our country, and the legitimate rights of regional people for government that acted on their aspirations not just the priorities of urban interests.

Why should the number of states and their boundaries be immutable?

There is nothing in the Constitution that prohibits increasing the number of Australia states and history reminds us that the best forms of governance are adaptable – as should be our state boundaries.

For continental nations like Australia, America and Canada, regional diversity in itself dictates that development that fairly reflects the will of the people will be most likely when sovereignty of government is grounded close to where people live.

After the 13 former crown colonies ratified the American Constitution and became the United States of America, another 37 states joined the union, the most recent being Hawaii in 1959.

The same was the case in Canada which added another six provinces to its original four after it achieved dominion status in 1867.

And yet here in Australia, boundaries conceived by a middle level English civil servant in the mid-19th century endure as the essential geographic structure of government.

Proponents of the status quo argue that new states would not be economically viable requiring fiscal transfers from the Commonwealth – much like Tasmania and South Australia.

In the short term, the national interest might well be served by start-up investment from the Commonwealth, but over the coming decades the development of Northern Australia will more than pay for itself, sustain more Australians and justify statehood.

In 1900 Queenslanders barely endorsed the current arrangement and there is much to suggest that most who voted for it came from central and northern Queensland believing that the reality of federation would eventually deliver them their own states.

Back then it was inconceivable that a State roughly the size of Western Europe could presume to reflect communities of interest a thousand or more kilometres away from the capital.

And all the changes of the past 116 years have not altered that essential premise of human democracy and regional development.

End of the beginning on global response to climate change

Australian Science Media Centre is collating and publishing responses from expert scientists, academics, and interested policy advisers on the UNFCCC climate deal in Paris last night.  Here is my response:

“Last night’s agreement in Paris of the parties to the UNFCCC to limit the increase in the global average temperature to well below 2 °C above pre-industrial levels gives added imperative and momentum to the Federal Government’s new emphasis on innovation and entrepreneurship.

Achieving a phase out of fossil fuels in a time prescribed by the science of climate change will require massive technological transformation globally.

It will also deliver enormous opportunities to a new cohort of innovative clean technology creators and businesses that will generate new economies along the way.

For regional Australia it means invigorated economic development in the form of renewable local energy and new jobs in the industries that will follow.

Last night we arrived  at the end of the beginning in humanity’s quest to mount an effective response to man-made climate change.”

Professor John Cole is the Executive Director of the Institute of Resilient Regions at the University of Southern Queensland and is an Honorary Professor at the UQ Business School.

 

Building a resilient and innovative Australian farm sector

Outback CEO Summit Comes to Town Plenary Summary Remarks*, Parliament House, Brisbane 13 November 2015

* edited and in part re-formatted

Thanks Nicole and good afternoon ladies and gentlemen

…..I have been asked to review what I have heard today and suggest some key themes and actions that will help moving forward on the agenda presented by today’s speakers about what will be needed to shape the recapitalisation of the pastoral industry in western Queensland.

What a great start to the day it was hearing Olympian Cate Campbell reflect on what it took to reach the very pinnacle of her sport.

What stood out for me was Cate’s  absolutely disciplined commitment to success, matched by her wilingness to  innovate in her training regime,  to try new things and prevail, sometimes in the face of critics who kept to a more orthodox view.

IMG_2925

Instead of just swimming along the long black line at the bottom of the pool Cate and her coach follow a regime that is strategic with very clear performance benchmarks and goals in mind.

There are lessons from Cate’s story we can apply in thinking about building a winning strategy for future farming,

Much of what we’ve heard today is  part of an emerging consensus on changes that have to come if Australia’s rural sector is to make the most of future opportunities.

When I think of the future what comes to mind is that acronym ‘VUCA’ – Volatility, Uncertainty, Complexity and Ambiguity.

And I suggest we have to keep that in mind because today I certainly heard distracting calls for the “silver bullet” solution, that is, government intervention and initiative to provide facility and certainty.

Achieving the facility outcome is feasible, delivering on certainty is not possible.

The issues that confront Australian agriculture, particularly in marginal rangelands like western Queensland, are complex and the future will always be uncertain.

And indeed if I think of one thing all of us would agree on it is that the issues of drought and farmer emergency are quite different to the longer term structural and sectoral strategic issues we have canvassed in this forum.
There were five key messages I heard in today’s presentations and discussion:

  1. Let’s be clear about what to expect from government and what it should do;
  2. Mainstream urban Australia needs a clearer and more consistent rural message;
  3. Professionalism and new farming cultures is needed for innovation to succeed;
  4. Resilience should be a strategy as much as a characteristic of farming systems;
  5. The power of one times many – we can all make change happen.

IMG_2953

Panellists at the Outback CEO Summit included (l-r) Tim McGavin, Laguna Bay Pastoral, James McLean from Allied Beef, Ben Cameron from Bentley’s Agribusiness and Don Chandler from UBS Wealth Management

 

1.  Let’s be clear about what to expect from government and what it should do

It was Ben Cameron from Bentleys Agribusiness who said that “west of the Great Dividing Range it was Armageddon and on the eastern side they were all pigs in mud”.

That simple description starkly contrasted operating conditions in different parts of Queensland and it reminds us that there is no one size fits all to an industry that spans the continent.

In a big country like Australia someone somewhere is getting rain and elsewhere someone is in drought.

So we need to be quite specific and clear about who and what it is we are talking about when we talk of sector reform and innovation.

Indeed because as Shadow Minister for Agriculture Deb Frecklington admitted earlier this afternoon, “government cannot be the fix-all for everything”, rural industries have to be much clearer and more realistic about what they expect of government.

I think it was Thomas Jefferson who said “Government is the last resort of civilised mankind,” not because he wished to trivialise the vital function of government, but because government should only attend to the most important things that by ourselves we cannot do for ourselves.

But here in Australia we still tend to see government as ‘the great commissariat’ to which to we attend for sustenance and direction. It is an historical overhang which Australians should not let define or brand us further.

We can help it best focus its resources for regions by having clear priorities ourselves.

What are the priorities expected from different levels of government and how in some cases, like the northern Australia strategy, would we like to see the three levels of government cooperate?

A delegate spoke of the need for digital infrastructure and efficient communications in the bush and she is right.

One of the essentials we need from government is basic enabling infrastructure and there is nothing more important than affordable efficient digital infrastructure for regional Australians.

In a number of graphic examples speaker Tim McGavin also reminded us of the importance of government getting rid of perverse policies and regulation that discourage investment and actually achieve the opposite of employment and economic growth by diminishing business opportunity, degrading efficiency, and minimising markets.

So let us not be distracted from the core issues.

Effective engagement is fundamental – engaging with new markets, new sources of investment, and importantly with urban voters who are the main shapers of the national body politic.

I remember a decade ago being at a talk given by then Opposition Leader Mike Horan who was acknowledging that the challenges for rural MPs would only get more difficult as time went on because the number of people living in cities continued to increase at the expense of the regions.

The demographics of rural electorates are not encouraging. They keep diminishing.

Recently we saw here in Queensland the LNP Opposition attempt to legislate for four new regional seats only to be rebuffed by the metropolitan dominated ALP Government.

Farmers improving their numbers in Parliament is simply not going to happen.

So this idea that we can advance the interests of the rural sector simply through the efforts of elected political representatives from regional areas doesn’t stack up.

We will need the political buy-in or people in the cities to succeed in promoting the strategic importance of the food and fibre sector and viable rural communities.

2.  Mainstream urban Australia needs a clearer and more consistent rural message

Years ago when one of my younger Brisbane colleagues was unable to identify the location of a SEQ regional centre just 75 kms west of the capital, it struck me then that regional Australia really had a problem in registering on the radar of city born and bred people.

A generation of globetrotting metro Australians is growing up without the slightest knowledge of rural and regional Australia and that lack of knowledge is matched seemingly only by their lack of interest.

There is much to be done in re-calibrating and re-setting the mainstream understanding of rural issues.

Firstly, the image that people have of Australian agriculture of course is romantic and not realistic.

And it finds expression, for example, in drought policy which has been pretty much unchanged since the 1930s.

Drought policy is still all about emergency and politicians running to the rescue with taxpayer funds to bail out struggling farmers – irrespective of what party is in power.

I am not blaming farmers for the lack of innovation in drought policy, but I am suggesting that drought relief payments are seen as a form of rural welfare which is not helping change the way people in the cities, including asset fund managers, perceive farming and farmers.

In pitching its message to government and the broader community, at times the farm sector seems and sounds a bit schizophrenic.

The dominant images of rural Australia city people see on the 6 o’clock news are short snippets of drought, rural desperation and despair.

Can I suggest that those images, real and as compelling as they are in some quarters, are not helping the rural brand in mainstream middle Australia?

And it certainly does little to underscore a politically palatable proposition suggesting Australian agriculture is highly investable going forward.

I think it is quite possible that those domestic super funds that don’t invest in Australian agriculture, (putting aside their risk formula and expectations of short term return) are being influenced also by the dominant urban view of farming as risky and unattractive.

Fortunately, foreign investors have no such inhibition and yet the prospect of “selling the farm” to overseas interests sends tremors through the national psyche and results in political veto of major commercial development of the kind we know is needed to effectively capitalise the sector.

On the domestic front if mainstream urban Australians are to be more effectively engaged in the cause of rural development, farming Australia has to be out there more vigorously promoting the examples of its success.

Professor Steve Raine from the University of Southern Queensland who heads our Institute for Agriculture and Environment is here today.

His researchers are doing amazing things in state-of-the-art irrigation, robotics, automation, drones and the like – innovation worth hundreds of millions in agricultural productivity.

They are but a small part of the enormous investment being made in technology in the farm sector presenting a picture of high tech innovation that challenges the stereotype.

The truth is agriculture remains one of the smartest Australian industries and one of our most competitive internationally.

And yet it is the image of the weathered skull of a steer in a desert paddock in western Queensland that captures the urban imagination.

Real as that image maybe, it cannot be left to define our rural future.

We should all be mindful of the great challenge of just getting clarity in the agri message.

In making representations to government, leaders of agri-representative organisations like the NFF’s Brent Findlay here today  have to align the interests of 60,000 farmers and 30 organisations within its membership.

In contrast the Minerals Council of Australia probably has less than 10 key CEO decision-makers among its membership who need to be accounted for before that sector launches a campaign or targets a government as it did so successfully with the Rudd Government and the mining super profits tax.

3.  Professionalism and new farming cultures are needed for innovation to succeed

That’s the front end story. The back end remains back in Ben’s presentation and his talk of the debt levels of beef producers in regional Queensland.

When you talk about having a debt to gross value of production ratio that makes Greece look like a model of financial rectitude, you have to say there are some fundamentally challenging issues there that are going to require innovation – and transformative innovation of the disruptive kind (not the incremental stuff).

Come the rains farm financing strategies will have to be more robust than getting someone other than banks to put money into enterprises already overladen with debt.

Undeniably there will be some consolidation.

No one in this room needs to be reminded that agriculture operates in economic and ecological cycles.

But as Bruce Gunn from the BOM acknowledged, when we talk about weather cycles shaping farming futures, we also need to deal with the big wheel of climate change and its uncertainties.

I think everyone was heartened by Bruce’s suggestion that it looked like the El Nino was peaking this month and that there was some reason to be hopeful for some rain over the summer.

But even if it rains like mad for the next six months and the grass comes back in western Queensland I still haven’t heard the answer to one of the questions posed in the forum invitation: “Where will the cows come from?”

Record prices seemed to be the common refrain when mention was made of re-stocking at a cost of about a million to one and a half million dollars for each 30,000 acres of country.

IMG_2928

Bentley’s Ben Cameron reminded us first up today just how much the financials of beef cattle had changed in the past 12 months as production becomes restricted because of drought.

Over morning tea, I heard a delegate suggest that farmers in other regions with cattle could possibly enter into forward contracts with producers in regions likely to see some recovering rains.

Besides begging the question of how confident producers can be in the scientific information they receive from agencies like the BOM, this suggestion takes us to the issue of producer cooperation and the horizons that have to be attached to such activity.

In the Kidworth Station case study, delegates will recall when the rains came and the Kidworths had some money and ambition, they bought their neighbour’s property in western Queensland.

In so doing Bob and Marg Kidworth doubled their vulnerability to the climatic conditions in that region when more prudently they might have been better served by purchasing a property outside the region – or entering into a partnership with a producer similarly distant.

In scoping enterprise level cooperation, Australian farmers should be thinking about arrangements that extend beyond one region. We can do that. It’s what Sidney Kidman did a hundred years ago.

There are always some abiding lessons from the past to be re-learned.

Collier Internationals chief value Shaun Hendy spoke of the challenges of re-stocking in a restricted supply setting because it will inevitably necessitate drought recovering producers securing capital from somewhere and paying top dollar for stock.

IMG_2943Collier’s Shaun Hendy says producers need to be “investment ready

Some like James McLean from Allied Beef said that the issue confronting many producers was not so much debt, but generating cash flow – and by implication building capacity to service debt.

This cash flow versus debt focus is a really crucial point because I am still trying to get my head around how a business which has a cash flow four years out of ten can be a sustainable proposition, unless it has revenue options outside the farm gate – or makes so much money when times are good as to see it through the bad times.

Besides suggesting possible flaws in existing methods of asset valuation, it also begs questions about strategies for business diversification and how other opportunities in value creation might be initiated.

Shaun Hendy talked about the need for producers to be “investment ready” with the information, plans, and projections that investors, whether they be banks or equity sources, will want before making any commitment to fund.

IMG_2948

When it comes to diversification the challenge of maintaining asset value in the land and creating a sustainable rural is more problematic than improvising to pay bills during the drought through the likes of farm tourism.

Don Chandler didn’t seem confident about a lot of producers being comfortable in promoting the level of innovation speakers today have indicated will be necessary for a future industry in western Queensland.

So what are the longer term avenues for diversifying cash flow sources in rural and regional enterprises?

Will we end up with a ‘drive-in drive-out’ pastoral industry depending on the stage of the climatic cycle?

Certainly building cooperative capacity will be core to enabling business diversification for some producers.

To that end there will be higher levels of professionalism expected of our producers as some, like Troy Constance from Suncorp Bank, suggested earlier.

Today in our discussions we have confirmed that the horizons of change in the farming sector have to be set well beyond the farm boundary and include a range of factors and players conventionally excluded from consideration.

It reminds me of the talk I gave to LGAQ Bush Councils recently around the theme of taking responsibility for your own future and working cooperatively.

The Local Government Association of Queensland in itself reminds us of the power and potential of cooperatives – a $2 billion business which in itself is a classic example of cooperatives at work.

So mindful of such powerful examples, we should not resile from working cooperatively.   Palpably we can.

Indeed through the afternoon while there was much talk about cooperation, but I didn’t’ hear the word “collaborate”.

I can say that coming from a university while also being mindful that Australian industry derives something like a minuscule 3% of its innovation from universities.

It’s no secret that  we Australians don’t do ‘collaboration’ real well.

It’s not just a sectoral issue, our inability to build collaboration between enterprises and between sectors is a national impediment to development that we must overcome.

And I think it was Boyd down the back who got up and reminded us that while cooperation was a good idea, he was sceptical of farmers giving up on the prerogatives of ownership and control.

And that begs that question of culture. We have to be honest with ourselves and acknowledge that ‘culture’ often stands in the way of collaboration and building business structures beyond the farm gate.

Thankfully there are encouraging examples providing what collaboration can achieve.

The other day in the Queensland Country Life, I saw a story about two large southern Queensland chick pea growers who had decided to collaborate and co-invest in their own rail depot to invigorate the efficiency of their harvest and reduce the risks of stockpiles being exposed to the weather.

This is the alternative model that must prevail over the old culturally constrained narrow gaze that has meant also Australian farmers have missed out on opportunities to secure new sources of investment.

Every speaker today has pressed the need for and the opportunity to partner with foreign investors.

And more latterly in the day the panel focussed too on the emerging focus of the Australian superannuation sector on agriculture.

Lamentably, with just 0.3% of its funds invested in Australian agriculture, our domestic pension funds have a long way to go to be underwriting the potential of our future farm sector.

Indeed the indifference of the asset managers to country Australia leads me to return to that earlier theme of engagement, that is, how rural Australia engages with the great majority of Australians who live in the cities.

4.  Resilience should be a strategy as much as a characteristic of farming systems

I know I have traversed some fairly broad themes in this summary, but everything we talked about today is actually happening. That’s the encouraging thing.

We are hearing about alternative sources of investment and new examples of cooperation.

Today I don’t think we moved any closer in this forum to resolving the cash-flow issues of the ‘broke cocky’, because quite frankly, in many such cases the tipping point toward insolvency has been passed.

And this is the crux of it, I guess, this idea of self-regulation, being able to do things for yourself, taking the initiative at your own volition – it is a key element of resilience.

In talking to communities and local government, especially in regional Australia, one of my main messages is that we have to do more for ourselves and that is not something many people want to hear.

Right now in western Queensland I am working with the remote area shires running workshops not on the drought but the future of central western Queensland and the ideas coming from people reflects not only the depth of human capital we have in our regions, but also their unyielding optimism for the longer term.

And this takes us to the issue of farm succession which, as I said to Growcom yesterday, seems to be characterised by a mix of demographic factors ie aging farmers and low levels of young age entrants.

Tim McGavin pointed to a cohort of smart young professional people who would come into agriculture if they could secure the capital to underwrite their vision.

That being the case work is needed to match those people with the sources of investment and capital and the practical experience of farmers who wish to retire but still have much to contribute in practical production wisdom.

The most important adaptive function of Australian agriculture is to facilitate the entry of the next generation of farmers.

Turning to the emergence of new markets, it was the MLA’s Richard Norton who said that all roads would lead to China by 2020 – notwithstanding demand from the US, Japan and Korea.

IMG_2935MLA’s Richard Norton “all roads lead to China”

But we should also work to maintain diversity in our export markets so as to not to become vulnerable to just one market.

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Richard Norton’s slide shows the US and Japan as dominant markets for Australian beef.

Another key element of resilience by the way is diversity. Strategy for resilience needs options, because just like monocultures, single path strategies ultimately end at a brick wall.

The most important thing about resilience is the capacity to change. And I still think we have some way to go there but I am encouraged by forums like this.

5.  The power of one times many – we can all make change happen

My coming on board last year with James Walker happened serendipitously as a result of a mis-directed phone call between strangers.

He told me about his plan for a CEO summit at Longreach to address industry issues related to the drought.

I was so taken by this young man’s optimism and self-belief that he could make a difference through individual effort – that I got on a plane and went out to the summit and to learn more about his Agrihive initiative.

For someone who has been around government and public affairs for as long as I have been, it is refreshing to meet people who still believe in the primacy of individual initiative and accountability.

We need more people like James willing to ask questions, mobilise ideas and people and have a go.

Each one of us today can take from this forum and do in our own place the things we have discussed as being necessary.

We can talk to our friends and colleagues in industry and in the communities and advocate for greater enterprise-level cooperation, new sources of investment, savvier engagement with cities and consumers and so on.

Importantly, individuals and initiatives like this forum must also engage with the formal apparatus of sector organisations because collective effort is essential in compounding individual initiatives into industry policy.

Brent Finlay and the NFF as well as all the member organisations like Agforce are the fulcrum points for continuing development, advocacy and presentation of innovative ideas that lead reform.

And I think again it is this collaboration thing. We have to look long and broad and James is to be commended for his initiative in looking beyond the farm sector for answers and input.

That’s one of the great things about using the case study methodology borrowed from the Harvard Business School.

The CEO Summit’s Kidworth Station case study presents information and context and then invites suggested strategies from different parties and points of view.

It’s a great way to test a proposition, engender innovative thinking, and draw on the wisdom of the crowd – including those well beyond the conventional supply chain.

The point of the case study is to generate analysis, discussion, and thinking that leads to actionable ideas.

Agrihive is not an industry association nor is it a government department, so today does not have to artificially construct an agenda list or a communiqué. Its enough that the participants share ideas, knowledge and learn from each other.

We leave here today knowing that for the most climatically variable region on the most climatically variable continent, the future means a warmer and drier region with drought a regular if unpredictable feature of life.

In that future there are challenges and opportunities, winners and losers.

For the things that need to be done to be accomplished, leadership and initiative is required.

And it certainly requires thinking that goes beyond business as usual and a return to ‘the same old same old’ as soon as the rains come.

Self-organisation starting at the farm enterprise level is where we start.

And indeed with those concepts in mind and with strategies of the kind discussed here today, innovative development is possible. So thank you.

 

 

Building a resilient innovative Australian farm sector: 5 key pointers