Australia – Budget funding focus on infrastructure, water, fellowships

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The Australian Treasurer has handed down the 2008-09 Budget

The stand-out in the Australian Government’s Budget, from an economic development perspective, are significant budgetary surpluses to address perceived inflationary pressures and to inject $40 billion in three nation‑building funds — a Building Australia Fund, an Education Investment Fund and a Health and Hospitals Fund.

 

The main industry-related measures announced are: 

§ Clean Business Australia initiatives ($240m over 4 years) – includes Climate Ready (see below), Re-tooling for Climate Change; Green Building Fund; Green Car Innovation Fund ($500m, commencing 2011)

§ Australian Postgraduate Award Scholarships ($209m)

§ Future Fellowships – to attract/retain mid-career researchers ($326m over 4 years)

§ Business Enterprise Centres – 30 one-stop-shops for small businesses ($42m over 4 years)

§ National network of Manufacturing Centres ($100m) – part of the Enterprise Connect initiative.

 

The main programs affected are:

 

§ Commercial Ready program and the Renewable Energy Development Initiative – closed. CR program expected to return in some form in 2009-10 Budget following Cutler Review.

§ Invest Australia disbanded – functions go to Austrade. Very strange decision.

§ Global Opportunities program – the $254m promised by Howard Government is withdrawn. Some funds to Austrade for salaries.  

§ Australian Industry Productivity Centres (AIPC) – replaced by Enterprise Connect.

§ Intermediary Access Program – never got off the ground. Might be resuscitated following Cutler Review? 

§ National Nanotechnology Strategy – closed from July 2009.  

 

Regional Development – Budget highlights

Almost $200 million has been cut from regional programs, although the infrastructure agenda will more than offset this. Axed are the controversial Regional Partnerships program ($236m), and the dubious Growing Regions Program ($200m), a pre-election promise by Howard.

Better Regions Program ($176 million) – to fund towns’ main streets, community and sporting centres, and community transport. Some of this funding appears to be already committed to pre-election promises in the Hunter Region, Kempsey, Geelong, Townsville, Bendigo, Alice Springs, Mandurah, Sunshine Coast, northern Tasmania.

Regional Development Australia (RDA) – replaces the Area Consultative Committees. The RDA apparatus will ostensibly take on a broader role to provide strategic input into national programs, improve the coordination of the Government’s regional development initiatives, and link closely to local governments and other regional organisations. The RDA’s final structure will be developed during 2008.

Regional Development Fund ($74m) – for ‘effective engagement with communities’ – details to be agreed, but $17m in 2008-09. Does not appear to be a Fund as such – rather small-scale funding for RDA initiatives.

Regional and Local Community Infrastructure Program – from July 2009 – to deliver major investments in regional and local community, recreational and environmental infrastructure initiatives. No $ details.

Agriculture – Budget highlights

Farmers – $130m over 4 years to help farmers tackle climate change. Grants of up to $5,500 to farmers for advice, training or preparing for a career change. And $760m for drought-afflicted farmers for 2008-09.

Forestry ($20m over 4 years) – for preparing the forestry industry for the future, including the impact of climate change and skills shortages.

Regional food producers’ program ($35m) – this is timely. Details next month.

**Cockatoo members** should note these three new initiatives

 

The ‘Water for the Future — National Urban Water and Desalination Plan’ – for cities to diversify their water supplies through desalination, recycling and stormwater harvesting. This is complemented by $254.8m in new funding to increase the security of water supplies in smaller cities and towns through Water for the Future — National Water Security Plan for Cities and Towns.

Climate Ready competitive grants ($75m) – to encourage Australian businesses to develop and commercialise products, processes & services that save energy and water, reduce pollution, use waste products in innovative ways. Examples – water recycling, waste recovery, small-scale renewable energy; green building materials to make homes more energy-efficient; reduced energy use in appliances. Grants on $ for $ basis – across R&D, proof-of-concept and pre-commercialisation activities. Grants from $10,000 to $500,000. Funding starts July 2008.

Future Fellowships scheme ($326 m over 4 years) – for 1,000 Australian and international mid-career researchers –up to $140k a year. Host organisations also receive up to $50k a year for  infrastructure/equipment – for pure basic, strategic basic and applied research. Australian Research Council to administer – first round to commence in 2009.

Should you require further information on how to access these grants, you need to join the Cockatoo Network – please contact us at apd@orac.net.au

Role for regional clusters, says US study

Hi Cockatoo,

I wanted to pass this along in case you missed it. ‘Clusters and Competitiveness: A New Federal Role for Stimulating Regional Economies’ by Karen G. Mills, Elisabeth B. Reynolds, and Andrew Reamer.

A key point is that regional industry clusters – geographic concentrations of interconnected firms and supporting organizations – are a potent source of productivity at a moment of national vulnerability to global economic competition.

For that reason, the federal government should establish an industry clusters program that stimulates the collaborative interactions of firms and supporting organizations in regional economies to produce more commercial innovation and higher wage employment.  

Full Report: http://www.brookings.edu/~/media/Fil … 0Report.pdf

Contributed by Russ Fletcher russ@MATR.net (Founder of Montana Associated Technology Roundtables)

Stu Rosenfeld (North Carolina) also reports that he was in Washington DC last month to attend the roll-out of two new studies at the National Press Club, one of which was covered by Russ Fletcher above.

Stu says ‘interesting ideas, but obviously will have to wait for new administration.’  The other document is ‘Boosting productivity, innovation, and growth through a national innovation foundation’ by Robert Atkinson and Howard Wial.

Contact Cockatoo for a copy! Go to apd@orac.net.au

Paying for patent protection

 

Question:

 

Cockatoo, really enjoy your newsletters. I learn something with each edition. I’m working on a problem here and I hope you’ll have some ideas. We have some good R&D at our universities but few funds to pay for patents.  Do you know of any creative ways that researchers in your area have been able to get their patents registered when funding is short? Any ideas appreciated.

 

Best,

Russ Fletcher (Montana Technology Roundtable)

 

Answer No. 1

 

Hi Russ,

I’m afraid I have no magic solution to your dilemma, just a couple of comments/suggestions.

 

The first obvious comment is that future research proposals from universities etc should contain a funding provision for protecting generated IP. I know that that’s not much help in the current situation but my very limited understanding of the 1980 Bayh-Dole Act in the US puts the onus on  universities to protect foreground IP and it seems logical then to provide some financial support within granting programs or in university appropriations to do this. The other side of the act is that it encourages universities to work with the private sector for the commercialisation of any IP generated. This I guess would be where your RoundTable comes in.

 

I’ve attached a European paper on IPR management for Public Research organisations.  It’s got a short analysis of the US situation on Page 9 including the view that most of these Public Research organisations now have a technology Transfer Office.  This might be a good avenue to explore.

 

Of course, if a technology is considered to be worth patenting, all the good economists will tell us that the research & subsequent IP was developed in response to a demand. The trick often is to identify the source of that
demand or alternatively to discover whether the research outcomes are simply a solution looking for a problem (or demand). 

 

So again the Roundtable would seem to be a good place to start looking for a partner to fund the IP protection in return for a share of the spoils down the track.  Many researchers & firms alike are worried about going into such partnerships without appropriate protection and sharing arrangements.  A set of IPR provisions developed some years ago for a program called IMS (for  Intelligent Manufacturing Systems) was designed to provide just such
protection and comfort 

 

The web address is www.ims.org and follow the links  to find the IPR provisions and a draft template for a consortium cooperation agreement. The US is a partner in this international Program and helped in the development of the IPR provisions. That’s all from me, if you think I can add any more or want some clarifications, let me or Rod know.

 

Best regards, Michael Parker (Wattle Hill, Canberra)

 

Answer No. 2

 

IP costs are normally seen as a full commercialization cost and therefore outside the ambit of the Commercial Ready program. This has always been a contentious issue, and as a pragmatic concession CR now allows partial allowance for IP costs – see quote from the CR guidelines below. Under the R&D Tax Concession program, IP costs are still not allowable.

 

‘Reasonable costs to protect intellectual property related to the agreed project up to the lesser of 10 per cent of eligible project expenditure or $100,000. These include fees to a national patent office for the cost of filing an application, search and examination fees and annual patent maintenance fees. Only costs incurred during the period of the Commercial Ready Grant Agreement will be supported and Commercial Ready will not support the cost of defending intellectual property, with the exception of legal expenses insurance.’

 

Denis Taylor

 

 

South Australia’s investment hubs

 

Each month we have been identifying the main hubs that could be positioned as a national investment attraction framework – to date we have 12 in Queensland, 20 in NSW, 11 in Victoria, 5 in Tasmania. So far, no violent disagreement, and our blog has had many hits from overseas folk.

 

Turning to the land of the crow, its defining feature is space, and the dominance of Adelaide. But there are sizeable production nodes outside Adelaide, and some could be attractive investment hubs given the food industry take-off, and the feds and state government get their act together – see article above.

 

Northern Adelaide – the hot spot, almost 70% of SA’s manufacturing industry. Various industrial parks and serious players e.g. defence (ASC, Tenix, BAE); automotive (Holden, Bridgestone, Futuris); electronics (Codan, Clipsal); food processing; optics & opthalmics; chemicals & mineral products (Adelaide Brighton).

 

Southern Adelaide – significant capacity in automotive (Tenneco, BSTG, Wylie); mining services (Minsup, Amdel); food and wine. World-class lifestyle attributes.

 

Adelaide CBD – quality education & research infrastructure, well-entrenched mining services and ICT and biotech companies, and a suite of new companies coming through. A natural for a creative industries hub.

Barossa Valley – processing centre for wine industry. Includes Roseworthy research centre and

Waite Institute spin-offs. World-class food, tourism and lifestyle. Gawler and Adelaide Hills provide the bookends.

 

Fleurieu Peninsula – fast growing region, adjacent to southern Adelaide. Tourism, food & wine, aged care. Includes Murray Bridge, an increasingly attractive home for agricultural equipment and transport services.

 

Upper Spencer Gulf – has a lease of life by virtue of the mining boom and Roxby Downs. Four nodes: Port Pirie – lead, zinc, silver and services; southern Flinders Ranges – tourism, arts. Whyalla – steel & rolled products, heavy engineering maintenance, iron ore, chemicals (Santos, OneSteel). Port Augusta – transport, mining services, retail centre. Downer EDI and Transfield.

 

Eyre Peninsula – Port Lincoln is a nationally significant aquaculture hub (tuna, oysters, kingfish). Region is also a substantial grain producer. Adventure tourism.

 

South East – relatively self-contained region with strong linkages to Victoria – runs from Mount Gambier to the Coonawarra and Limestone Coast. Competitive advantages lie in timber, pulp, horticulture and wine.

SA Riverland – previously covered under ‘Victoria’s investment hubs’ on this blog.

 

Investment incentives in Europe – an update

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Belgium’s 40% investment subsidies!

SPL INFO has brought some interesting mapping activity to our attention. It maps companies, business and science parks and clusters – all supported by the Directorate General for Economy and Employment of the Walloon Region. The database is also now online – gives information about facilities, geographical location and business parks in Wallonia.  http://www.investinwallonia.be./ofi-belgium/accueil.php

BUT of most significance is the information on investment incentives available on the website – it makes us non-Europeans weep! The European and regional financial incentives are up to 21% of the investment (large companies) and 18% (SMEs). Depending on the location (e.g. tax incentive zone or redevelopment area), a regional support measure supplemented by a European support measure can cover up to 30% to 40% of the investment – this can also be increased by an employment grant.

And EC subsidises 30% of Poland’s investment projects…

 

And to rub more salt into the wound, according to a study by the Wroclaw Agency of Regional Development in Poland, EC subsidies are helping to increase the country’s GDP. Polish entrepreneurs have started 14,500 subsidised projects worth 4.7 billion euros since 2004. Investment in new projects will peak in 2013, when European subsidies will help to implement almost 30% more projects. Chief economist for BZ WBK said: “Even if the world slows down, Poland will have a relatively high investment level. As long as companies can count on EU subsidies, investments will be profitable.”

 

www.bizpoland.pl/news/index.php?contentid=161781

2020 Summit – now a slow waltz?

We’ve just had 1,000 passionate citizens pushing their barrows at the 2020 Summit. Fantastic. It has really got the federal bureaucracy rocking’ – working out how to handle these ideas, particularly Ministers’ desires to accommodate as many ideas as possible. My bet is that the rocking’ will become slow waltzing’ as the dreams of the citizens hit the realities of Treasury-dominated Canberra.   

A couple of shadow ministers opposed the 2020 Summit as a matter of course, and came away looking extremely mean-spirited. Indeed a feature of the Howard Government in its last two terms was the squeezing of ideas and scope e.g. land and housing, regional development, health, education. This was accompanied by a tight control over departments – I recall many instances of good bureaucrats avoiding any proposals faintly at odds with the existing orthodoxy.  

Anyway, congrats to the conservative politicians who got involved? The headline recommendations – a review of the tax system and the resuscitation of the republican debate – were no-brainers. I wish the Summit had provided more pointers on manufacturing and value-adding industry. And the regional debate was a bit lame. Here’s my take on the Summit’s regional priorities.

1. Climate change and impact on food/fibres/forestry – a predictable but important issue.

2. Harmonization of regulations – an old chestnut. Not an issue in our regular regional debates.

3. Incentives to promote environmental sustainability – yes, but needs to be linked to 1, 4 and 5.

4. Attraction of people and business to regional Australia – recommended a business mentoring program, encouraging young entrepreneurs, national rural education program, centres of excellence in agricultural studies, major tourist festivals. All laudable activities.

5. Parity of access to infrastructure and services for regional Australia – unrealistic, although the availability of decent telecoms to the Bush should not be negotiable. 

 

My quibble is that the 100 regional leaders should have gone in harder by recommending a strong, COAG-driven agenda to align federal and state policies for regional Australia. To explain, if the federal government is genuine, it should be, jointly with the states, aligning both its policies and expenditure on roads, water infrastructure, health, education, housing, community development etc. and thereby laying out a framework for investors.

 

This should be overlaid with the provision of modest investment subsidies for rural regions to at least get investors thinking about alternatives to investing in the outer suburbs. Before I’m accused of heresy, be aware that Invest Australia is in the process of being emasculated, and several states are in the process of cutbacks in agricultural and community advisers.

THIS ARTICLE APPEARS IN THE GOOD OIL COLUMN – LOCAL GOVERNMENT FOCUS – MAY 2008 EDITION