Archive for December, 2011

Canberra out of touch

December 16, 2011

Example – politicians’ salaries

The Remuneration Tribunal’s recommendation for huge pay rises for politicians has been accepted without amendment. It involves a 31% pay rise for PM Gillard and huge increases for ministers, shadow ministers and backbenchers. Even the top departmental heads get an extra $200k. Public servants down the ladder are actually poring scorn on the decision.

At a time of international belt-tightening, this is clear lack of judgment and leadership. Gillard could have accepted a 10% catch-up, but went instead with her departmental advice. Not surprisingly, the Opposition has toed the line. A cynical electorate will edge towards the Independents and Greens.

Example – water entitlements

In the same week, Water MinisterBurkevisitedGriffithto explain the Murray Darling Basin Authority’s plan to reduce water entitlements by 2750 gigalitres/year. He too was toeing his advisers’ line, which is basically that the Riverina must embrace the same reform that South Australian irrigators have achieved.

TonyBurke’s personality and intelligence saved him from a serious incident with the crowd of 12,000 Riverina residents. But the matter is far from over. If Cockatoo members in the Riverina are looking for a solution, they might dwell on the following:

  • Riverina irrigators have been through 10 years of drought – permanent cutbacks are now seen as totally unreasonable.
  • Burkehas $5.4 billion to spend on water-saving infrastructure.
  • The solution is surely to push the principle of ‘collaborative conditionality’ – by creating a nexus between the federal expenditure and the proposed water cutbacks i.e. if the new pipe systems and irrigation equipment delivers say 8% water savings, this triggers a commensurate reduction in water entitlement.
  • As Otto von Bismarck once said ‘politics is about the art of the possible’.

Canada’s defence industrial policy for national security

December 16, 2011

Arvin Jelliss (Ottawa) has forwarded an interesting item by Tim Page president of Canadian Association of Defence & Security Industries (CADSI).

  • Harper government has taken steps to rebuildCanada’s defence and security brand internationally e.g. Canada First Defence Strategy.
  • Government also commissioned a special report on innovation and defence procurement from an expert panel – Canada to adopt a defence industrial policy to target federal R&D, export and procurement strategies toward key domestic industrial capabilities to help level the playing field for Canadian industry (very interesting!!)
  • National Shipbuilding Procurement Strategy announced – clear manifestation ofCanadaacting in its own strategic national interests.
  • December 2009 report, prepared by the Canadian Association of Defence and Security Industries, identified key domestic industrial capability areas of national interest. e.g. where Canada has established global champions and economic value – so-called C4ISR systems (Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance), geospatial and intelligence systems, sensors, sonar and mission systems, chemical, biological, radiological, and nuclear detection, protection and decontamination, and personal protective clothing and equipment, along with shelters and containers, simulation and training, armoured land vehicles, military-designed aircraft, composites, avionics, aircraft engines and landing gear.
  • CADSI has also identified areas that hold strategic security and sovereign value e.g. systems integration, computer security architectures, ordinance, ammunition and small arms, maritime domain awareness, port and border security.

Smart Specialisation Strategies (S3)

December 16, 2011

The Seville conference sponsored by the OECD, European Commission and Government of Andalusia in November was instructive at numerous levels. Rod Brown of the Cockatoo Network gave a paper proposing that Spanish and EC stakeholders start getting serious about linking with clusters in Asia,North Americaand elsewhere via the Sunrise Project.

 Conference highlights were:

  • Sectors that might be priorities for international collaboration with Andalusia via the Sunrise Project are aerospace, marine, engineering & construction (significant capability – was booming but now in bust phase), solar energy, building materials, new materials, aquaculture, processed food, beef and pork (home of the Iberian pig), education, creative arts and eco-tourism. 
  • The S3 agenda allows the private sector (with academia) to identify development nodes, while providing the means by which governments can facilitate them. An EC speaker said it will also assist it in directing Structural Funds expenditure (interesting message).   
  • S3 is evidence-based and ‘entrepreneurial’ (hence bottom-up) and is designed to identify potential competitive advantages in a global context. It’s about ‘helping a locality to excel in something specific’, and thereby attract investment and develop critical mass.
  • There are 12 countries about to commence case studies to basically understand the S3 processes. The case studies are worth tracking by Cockatoo members. Examples:

–         Australia(focus on rural industries)

–         Austria(mechatronics, Green Buildings)

–         Belgium(nanotechnology for health)

–         Finland(activating R&D in future growth markets, incl. test markets)

–         Germany(healthcare, ICT, creative industries, energy, transport, logistics)

–         Turkey(automotive)

–         UK(electric vehicles)

Rod Brown raised the possibility of EC firms using Australiaas a springboard into Asia. He stressed the importance of connectivity between stakeholders across regions, especially informal contacts to get the ball rolling. The message was to identify potential collaborators and then jump on a plane. This could be a precursor to a formal investment mission, if and when that is required.

Competitive Cities in the 21st Century

December 16, 2011

Professor Brian Roberts has informed us of the release of his latest work, co-authored with the late KyeongAe Choe. The book is basically about clusters inAsia and it is an absolute treasure trove!

The background is that economic challenges in developing Asian countries are now more complex – urban populations are growing at great cost to the environment, climate change has increased risks of natural disasters, and income gaps within and between developing countries are widening. These factors threaten the sustainable growth of urban areas, the drivers ofAsia’s economy. A strategic approach for inclusive growth is therefore needed.

The City Cluster Economic Development approach provides a strategic framework and analytical tools. The approach was developed and tested by the Asian Development Bank to improve the basis for integrated planning and development of urban regions. The chapters include:

  • Factors Shaping the Spatial Agglomeration of Asian Cities.
  • Emerging Factors Accelerating Urban Economic Growth.
  • The Cluster: Theory, Analysis, and Experience in Agglomerated Asian Cities.
  • Building Competitive Local Economies: Approach and Analytical Steps.
  • Cluster-Based City Economic Development in Bangladesh,India and Sri Lanka.
  • A New Paradigm of Local Economic Development for Growing Asian Cities.

Hard copy = $US40 – go to

Blueprint Mississippi: Capitalizing on the Creative Economy

December 16, 2011

CraftNet Sketches has alerted us to a document that is very timely in view of the need for many regions to find new growth areas.

The Mississippi Economic Council has developed a collaborative vision for moving the state’s economy and community forward – known as Blueprint Mississippi 2011 it has led to goals and recommendations on education, the economy, diversity, financial resources, health, infrastructure etc.

A top focus is the creative economy.  The following creative economy strategies are based in large part on the study we completed with the Mississippi Development Authority and the Mississippi Arts Commission Development. The reports are available here and on the Mississippi Creative economy website.

The recommendations relating to the creative economy include:

  • Promotion of entrepreneurship and small business growth among creative firms.
  • Help for communities to preserve and generate added value from cultural and historic heritage.
  • Increased use of art and design in buildings.
  • Enhancement of networking infrastructure for creative talent across the state.
  • Measures to grow and retain creative talent living and working inMississippi.
  • Development of  tools and strategies to support the tourism industry.

 Involved in the creative industries? Why not plan a trip to the Deep South. Dallas is now Qantas’ main USA hub – so fly direct, hire a car and drive east a couple of hours for a coffee with David‘the Preacher’ Dodd (Louisiana) and then onto Mississippi to meet with the CraftNet folk – they are a very collaborative outfit..

 Go to

Rural not synonymous with economic decline, says OECD

December 16, 2011

 Huge regional variations in economic and social conditions within a country require a rethink of the way governments design policies to boost growth and jobs, says a new OECD report.

The economic crisis has hit some areas far harder than others. The OECD’s first Regional Outlook calls on policy makers to pay greater attention to regional factors such as amenities, accessibility, size, infrastructure and demographics, industry specialisations and networks. The report focuses on the need for good governance and coordination of policy around these regional factors and rejects the idea that governments should rely on budget transfers to reallocate resources between rich and poor regions.

The Regional Outlook observes that policy-makers have traditionally looked to major cities to spur economic dynamism. But on average 70% of the economic growth of OECD countries occurs outside the big metropolitan hubs. And although predominantly rural regions can be among the slowest-growing regions in the OECD, they are also over-represented among the most dynamic. Contrary to popular belief, “rural” is by no means synonymous with economic decline, the report says.

 Read the Secretary-General’s speech

Industrial Transformation Research Program

December 16, 2011

This is a new $236 million program to harness university expertise to retool manufacturing and create new skilled jobs. The plan is to:

  • Sponsor up to 20 research hubs in fields such as engineering, communications, nanotechnology, metals, food, energy, textiles, building and automotive.
  • Fund up to 50 training centres, putting 600 PhD students and postdocs on the factory floor.

The new program will be run by the Australian Research Council. The government will put up to $1 million a year into each hub, with matching funds from industry. Also announced were 1000 engineering cadetships over the next 4 years.

Silverhawk comment

1. This is strange timing because it preempts the recently announced review of manufacturing. However in the context of Minister Carr’s demotion from Cabinet a few days later, we suspect that PM Gillard was happy to sign off this as a farewell present.

2. Where wouldAustraliaout 50 research hubs related to manufacturing? We suspect that a broad definition will be applied.

3. These hubs could be much more dynamic if a whole of government approach was taken i.e. ramp them up by incorporating the National Broadband Network, a design program, perhaps some state government infrastructure funding, Austrade research on new market opportunities.

Biodeiversity Fund

December 16, 2011

The Biodiversity Fund will invest around $946m over the next six years to help land managers store carbon, enhance biodiversity and build greater environmental resilience. It funds land managers to restore, manage and better protect biodiversity on public and private land – and to provide support for emerging opportunities in the new carbon market e.g. new or existing carbon stores.

The Biodiversity Fund will invest in three main areas:

  • Biodiverse plantings – to expand native habitat via planting mixed vegetation species.
  • Protecting and enhancing existing native vegetation – to protect, manage and enhance existing native vegetation in high conservation areas for its carbon storage and biodiversity benefits.
  • Managing threats to biodiversity – to control threat of invasive pests and weeds.
  • new biodiverse plantings of mixed species that establish and re-connect native ecosystems.
  • revegetate landscape to improve connections b/w remnant vegetation across public/private lands.
  • restore native habitats in largely intact landscapes in northernAustraliaand/or on the rangelands, or in peri-urban and coastal catchments.
  • enhance the condition of native vegetation adjacent to key assets e.g. World Heritage Areas.
  • establish/restore native wetland and waterway habitats, esp. on cleared lands.
  • reduce the impacts of invasive species across connected landscapes.


One round per year – Years 1 and 2 have around $32m each and the emphasis will be on 30-40 pilots – Years 3 and 4 have $250m each and the last two years have around $170m each. Matching fund required is not required for privately-owned land. Contact us for further details. We are preparing submissions for the first round – closes end January!

Investigate a Tilt Train says Silverhawk

December 16, 2011

The feds are moving to phase two of the $20 million feasibility study for High Speed Rail between Brisbane-Sydney-Canberra-Melbourne.

The phase one report by AECOM puts the construction cost of the proposal at between $61 billion and $108 billion – which is a huge figure in anyone’s language. The sectional breakdowns are a little more palatable however -SydneytoNewcastle($11-18 billion),SydneytoCanberra($11-25 billion),CanberratoMelbourne($20-26 billion) andBrisbanetoNewcastle($20 -41 billion).

Phase two of the study is now going to pin down a preferred alignment and station options, assess the commercial viability (and any subsidies that may be required), potential funding sources and a management model to plan, construct and operate the rail system.

Silverhawk says this is a dead duck. No institutional investor will touch any part of this project given the costs involved, our modest population, the world economic outlook and the lack of infrastructure champions i.e. who in the private sector is matching Minister Albanese’s rhetoric?  

Associate Professor Philip Laird (UniversityofWollongong) has been proposing ‘’off the shelf’ diesel tilt trains capable of 200km. He says the Newcastle-Sydney section is the logical start point. We are also advised that the Sydney-Canberra section, with some straightening of the existing line and a Campbelltown- Mittagong deviation, could be done for less than $1 billion and reduce the travel time by half (to two hours).

Tilt trains are proven inQueensland- theBrisbanetoCairnsroute currently operates at a service speed of around 160 km/h and most Queenslanders are very happy with the service. The infrastructure upgrade to deliver this was a reported $590 million in the 1990s, and a similar amount in the following decade.

Unfortunately, the $20 million of taxpayer funds being spent on the AECOM study is not considering the Tilt Train. We suggest that the ACT Government and councils betweenCanberraandNewcastleshould be lobbying the federal government as a matter of urgency.

P.S. Prof. Laird reports that a recent Canadian assessment of the Quebec-Windsor corridor examined the option of trains moving at 200 km/h as well as 300 km/h.


Industry Minister Carr’s demotion a big error

December 16, 2011

PM Gillard has been under huge pressure to assert her authority and her latest ministerial reshuffle was clearly part of this. Her announcement of the new arrangements was peppered with phrases like ‘I have decided’ or ‘I am committed to’. Rarely did she use the term ‘we’. 

The big shock however was the demotion of Kim Carr as industry minister. The hot goss here inCanberrais that it’s payback for allegedly being the numbers man for former PM Rudd, who is clearly playing mind games with PM Gillard about a run for her job.  

There is much moral support and condolences being offered to Kim Carr, given that he has managed the industry portfolio quite effectively over the last four years. Not one stuff-up and his Green Car program was razored by the Department of Finance to pay for theQueenslandfloods. Cockatoo has been critical at the lack of a proactive industry policy, but Carr had little leeway due to the dry policy settings set by Treasury-Finance.