Regional Hearings Ballarat & Geelong

Parliament of Victoria Rural and Regional Committee

Regional Hearings

Ballarat & Geelong

29-30 APRIL 2014

MR CHRISTOPHER GRIBBIN

EXECUTIVE OFFICER

This document is confidential to the Rural and Regional Committee Terms of Reference Members

INQUIRY INTO THE OPPORTUNITIES FOR INCREASING EXPORTS Mr David O’Brien MLC Chair OF GOODS AND SERVICES FROM REGIONAL VICTORIA Mr Geoff Howard MP Deputy Chair That under section 33 of the Parliamentary Committees Act Mr Andrew Katos MP 2003, the following matters be referred to the Rural and Mr Ian Trezise MP Regional Committee for inquiry, consideration and report no Mr Paul Weller MP later than 4 September 2014 on the opportunities for increasing exports of goods and services from regional Victoria, and the Secretariat Contacts Committee is asked to do this through an examination of: a) the identification and volume of Victorian agricultural, Parliament House, Spring Street East Melbourne Victoria 3002 resource, manufacturing and service industry exports to overseas markets originating in regional Victoria;  (03) 8682 2884 b) regional Victoria’s competitive advantages in meeting the  (03) 8682 2858 demands of world markets;  www.parliament.vic.gov.au/rrc c) innovative approaches to exporting and lessons to be shared from successful exporters; Christopher Gribbin d) impediments and barriers creating difficulties for regional Executive Officer  (03) 8682 2882 exporters; and 0408 678 971 e) the current and future roles of government in supporting regional businesses in their export endeavours. [email protected]

Patrick O’Brien Research Officer  (03) 8682 2881

[email protected]

Laura Ollington Administrative Officer  (03) 8682 2884

[email protected]

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Logistics Information Monday 28 April

Time Details 12 pm Budget cars arrive Ref# 4062 8589 AU1 4062 8589 AU2 Hansard depart Melbourne for Ballarat 1.5 hours travel time 4 pm Hansard access to venue for set up

City Council Chambers Sturt St Contact: Rob 5320 5538 Accommodation Ansonia on Lydiard 32 Lydiard St South Contact: Terry 5332 4678 Paul Weller, Patrick Spillane & Sue Kebbe. Room and breakfast

Tuesday 29 April

Time Details Staff depart Melbourne for Ballarat 1.5 hours travel time Staff arrive Ballarat Hansard access to venue for set up Public Hearing 9 am-2 pm Public Hearing Ballarat Catering: Sweet Decadence City Council Chambers Contact Melissa 5340 0131 Sturt St Contact: Rob 5320 5538 Site Visits 2 pm Depart 2.15-3.15 pm Site Visit: MaxiTRANS Manufacturing, 233–243 Learmonth Road, Wendouree 3.30-4.30 Site Visit: McCain, Ring Road, Wendouree 4.30 pm Depart for Geelong 5.45 pm Arrive Geelong Accommodation Four Points Sheraton Geelong 10-14 Eastern Beach Rd Contact: 5223 1377 Paul Weller, Christopher Gribbin, Patrick O’Brien, Patrick Spillane & Sue Kebbe. Room and breakfast.

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Wednesday 30 April

Time 8.30 am Check-out of hotel NOTE: Accommodation to be paid by members Public Hearing 9 am – 4 pm Public Hearing Geelong Catering: Room D2.204 Waterfront Deakin University Waterfront Campus Kitchen (Uni) 1 Gheringhap St Contact Claire Contact: Claire 5227 8121 or 0439 113 865

Computer login Username: mkhirers Password: DEM#2013

4 pm Depart for home

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Maps and Locations

Parliament House to Ballarat City Council Chambers, Sturt St

1. Drive to Ballarat along Western Freeway 2. Continue on to Sturt St from Victoria St. Venue is on the left.

Ansonia on Lydiard

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Ballarat City Council Chambers to MaxiTRANS Manufacturing, 233-243 Learmonth Road, Wendouree

1. Turn left onto Sturt St 2. Turn right onto Gilles St North 3. Slight left onto Learmonth Rd

MaxiTRANS Manufacturing to McCain Foods, Ring Road, Wendouree 1. Continue along Learmonth St 2. At the roundabout, take the third exit onto the Ring Road. Location is on the left

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Four Points Sheraton Hotel to Deakin University Waterfront Campus

Room D2.204, Deakin University Waterfront Campus, 1 Gheringhap St

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Tuesday 29 April

Public Hearing Ballarat Ballarat City Council Chambers, Sturt St Time Witness Organisation 9 am Mr Jeremy Johnson – Chief Executive Officer Sovereign Hill 9.30 am Professor Mike Willis – Pro-Vice Chancellor Federation University Australia (International and Partnerships) 10 am Dr Paul McPhee – Lecturer in Economics Federation University Australia 10.30 am Mr Jim Fraser – Deputy Chair Central Highlands Agribusiness Forum 11 am Mr Andrew Edmondston – Sales &Commercial Gekko Systems Manager – Company Secretary 11.30 am Mr Anthony Schinck – Chief Executive Officer Ballarat City Council 12 pm Break 12.30 pm Mr Tim Grandfield - Business Development & Ballarat Regional Tourism Events 1 pm Dr Timothy James – Manager SED Advisory 1.30 pm Mr Bruce Edward – Managing Director Ferndale Confectionery

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Wednesday 30 April

Public Hearing Geelong Room D2.204, Deakin University Waterfront Campus, 1 Gheringhap St Time Witness Organisation 9 am Ms Keelie Hamilton – Co‐Ordinator, Economic Greater Geeelong City Council Development Unit 9.30 am Mr David Thornton ‐ Mannager Thornton Engineering 10 am Ms Elaine Carbines – Chief Executive Officer G21

‐ Member Regional Development Mr Nigel Harper – Regional Strategic Manager Australia Barwon South West Ms Clare Cartledge – Development Officer 10.30 am Mr Nick Stanley – Chief Executive Officer Sky Software 11 am Mr Sandy Harman – TradeStart Adviser Export Counncil of Australia 11.30 am Mr Peter Dorling – Business Manager Avalon Airport 12 pm Prof Jane den Hollander – Vice‐Chancellor Deakin University

Mr Gary Heyden, Director Deakin Research Commercial

Mr John Moloney – Executive Director Deakin International 12.30 pm Break 1 pm Mr David Owen – General Manager Victorian Centre for Advance Ms Lisa Ratcliffe – Commercial Manager Materials Manufacturing 1.30 pm Mr Roger Grant – Director Great Southern Touring Route 2 pm Mr Russell Coad – Chair G21 Agribusiness Forum 2.30 pm TBC 3 pm Mr Jake Dingle – Chief Executive Officer Carbon Revolution 3.30 pm Bernard Brussow – Chief Executive Officer IXL Group 4 pm Comments 4.15 pm Close

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Appearing Before a Parliamentary Committee

Guidelines for the Rights and Responsibilities of Witnesses January 2008

In their dealings with witnesses, parliamentary committees observe the following procedures:

1. A witness will first be invited to attend a committee meeting to give evidence. A witness will be summoned to appear (whether or not the witness was previously invited to appear) only where the committee has made a decision that the circumstances warrant the issue of a summons.

2. A witness will be given adequate notice of a meeting at which the witness is to appear, and supplied with a copy of the committee’s terms of reference, a general outline of the matters expected to be dealt with during the witness’s appearance, and a copy of these Guidelines. A witness can be supplied with relevant evidence already received, or directed to evidence published online.

3. Where a committee desires that a witness produce documents relevant to the committee’s inquiry, the witness may either be invited to do so, or an order may be made that the documents be produced (whether or not an invitation to produce documents has previously been made) where the committee has made a decision that the circumstances warrant such an order.

4. Witnesses who do not attend in response to a committee’s summons or fail to produce documents ordered to be produced to a committee may be reported to the Parliament which may order their attendance at the Bar of the House.

5. A witness defying an order may be censured or declared guilty of contempt.

6. A witness should be given opportunity to make a submission in writing before appearing to give oral evidence.

7. Where appropriate, reasonable opportunity will be given for a witness to raise any matters of concern relating to the witness’s submission or the evidence the witness is to give before the witness appears at a meeting.

8. All evidence will be taken in public, unless a committee otherwise resolves. Evidence may also be taken under oath or affirmation if required by the committee. A witness can request this of the committee, though the decision rests with the committee.

9. A witness is entitled to request, before or during the hearing of the witness’s evidence, for any or all of his/her evidence to be heard in private session. If the request is not approved, the Committee may give the witness reasons for that decision.

10. The Chair of a Committee must take care to ensure that all questions put to witnesses are relevant to the Committee’s inquiry and that the information sought by those questions is necessary for the purpose of that inquiry. Where a member of a Committee requests

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discussion of a ruling of the Chair on this matter the Committee will deliberate in private session and determine whether any question which is the subject of the ruling is to be permitted. It is for the Committee to define its terms of reference, and the relevance of material associated with the inquiry.

11. In general, a witness must answer all questions put, as fully and frankly as before a court, inquest, royal commission or board of inquiry. Any person giving false evidence may be found guilty of contempt.

12. Where a witness objects to answering any question put to him or her on any ground, including the ground that the question is not relevant or that the answer may incriminate the witness, the witness may explain his or her objection to answering the question. Unless the Committee determines immediately that the question should not be pressed, the Committee will then consider in private session whether it will insist upon an answer.

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Questions

For bodies representing geographic areas (e.g. councils, Committee for Portland)

• What challenges do exporters in this area face? • What work does the Council/your organisation do to facilitate exports? • What industries in this area have grown in terms of exports recently? How has this been achieved? • What public infrastructure projects would be most valuable in assisting exporters in this area? • What competitive advantages does this area have compared to other parts of Victoria, the rest of Australia and overseas?

How are exports facilitated?

• How have you made contact with overseas markets? • Have you used any Victorian Government services – such as Victorian Government Business Offices, Trade Missions or Export Grants – to help you export? If yes, were they helpful? If you haven’t used any government services, why not? • Have you used any non-government services to facilitate access to overseas markets, such as peak bodies or private businesses?

Victoria’s competitive advantages

• What competitive advantages does Victoria have in your industry? • What challenges does your industry face in Victoria in being competitive internationally and with other Australian states? • Have any Free Trade Agreements impacted on exports for your industry?

State of the industry

• How easy is it for you to access overseas markets? • What are the current challenges and opportunities for your industry with regard to exports? • What markets do you see as potential growth areas for your industry? What would assist your industry to access potential growth markets?

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• Have you had to make any changes to your products to facilitate exports? How have you worked out what changes to make?

Infrastructure

• What challenges does your industry face with respect to transport and logistics? • What future public infrastructure projects would be most valuable in assisting your industry with exports? • What ports do you export through? If not the Port of Portland, why not?

Regulation

• How has government regulation impacted on your ability to export? Do you know of any legislation or regulations that act as impediments to exporting? • How easy is it for you to get access to government officials that you need to assist you with meeting regulatory requirements?

Productivity and capital investment

• What could be done to improve productivity in your industry? • Is there a need for capital investment to make your industry more productive? What sources of capital are available? Are there any challenges for your industry in accessing capital? • How important is research and development to improve the productivity of your industry? Are research and development needs being met? • Should an opportunity arise to increase your exports, would you be able to access the necessary investment to increase production / modernise your practices? • Have you considered investing overseas to facilitate exports? What barriers prevent you from doing this?

Workforce

• Have you encountered challenges getting the workforce you need – either from difficulties accessing enough workers or difficulties accessing the right skills?

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Regional Public Hearing Program:

Witness Information

Witness Mr Jeremy Johnson, Chief Executive Officer Association Sovereign Hill Date & Time 9.00 am Tuesday 29 April 2014

Jeremy Johnson

Jeremy was appointed CEO in December 2002 following senior management positions. He is a member and Honorary Treasurer of the Council of Australasian Museum Directors; a Past President of the Board and the Executive Council of VECCI; Chairman of the Victorian Tourism Industry Council; and was Chair of the Tourism Excellence Working Group, Victoria. Jeremy was awarded an Honorary Doctorate by the University of Ballarat (2011) in recognition of his business and community service and a 2012 Victorian Tourism Award for Outstanding Contribution by an Individual. Jeremy’s previous roles include senior management in local government.

Sovereign Hill

The Sovereign Hill museum re-creates Ballarat’s first ten years after the discovery of gold in 1851, including historical re-enactments of day-to-day life and gold mine tours. By night, it presents a sound- and-light show, ‘Blood on the Southern Cross’. In 2009, it was judged as Australia’s Best Historic and Cultural Experience by Travelling in Australia Magazine.

Sovereign Hill has undertaken substantial efforts to market to Chinese tourists, including opening a sales office in Shanghai and participating in Super Trade Missions. According to its submission to this Inquiry (p3), the number of Chinese visitors has grown substantially since 1999, although visitors from other backgrounds have declined in recent years.

In its submission (see attached), Sovereign Hill Museums Association states (p5):

‘Lack of high-quality, international brand reach hotel accommodation facilities in regional Victoria is a serious impediment to regional overnight dispersal of international visitors, particularly the group markets. There is market failure in this aspect which requires Government intervention and financial stimulus.’

It adds that it currently has an Expression of Interest for development of a hotel but that it will require State Government infrastructure capital support and marketing assistance in the early years.

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The submission also suggests that Tourism Victoria has ‘a predominant focus … on marketing the sophisticated tourism experiences in the Melbourne CBD at the expense of the total product offering in the 2-hour radius around Melbourne.’ (p6)

Other recommendations are included on page 6 of the submission.

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SUBMISSION BY THE SOVEREIGN HILL MUSEUMS ASSOCIATION

INQUIRY INTO THE OPPORTUNITIES FOR INCREASING EXPORTS OF GOODS AND SERVICES FROM REGIONAL VICTORIA

BY THE RURAL AND REGIONAL COMMITTEE, PARLIAMENT OF VICTORIA

1. BACKGROUND

The Sovereign Hill Museums Association is a not-for-profit, community-based company limited by guarantee under Australian corporate law. It operates the internationally acclaimed Sovereign Hill outdoor museum at Ballarat which currently enjoys annual ticketed visitation of over 700,000 at its museum and farm campuses.

It employs 380 staff (220 EFT) and has almost 300 volunteers to help activate the museum. Almost 25% of its visitor numbers originate from international markets, making it a very successful exporter of Australian tourism product.

In particular, Sovereign Hill presently attracts one in three mainland Chinese visitors to Victoria and has a marketing and sales office in Shanghai, with five Chinese nationals employed.

It is a major driver of regional dispersal of tourism into Victoria. On two occasions, 1992 and 2005, it has won the award as Australia’s Major Tourist Attraction at the National Tourism Awards. Sovereign Hill opened in 1970 and generates over 98% of its operating income from entrance admissions and its commercial operations; therefore it makes very little call on the State Government for operating funds and does not receive any Federal or local government operational funds.

Its capital has come approximately one-third from retained earnings, one-third from its own fund-raising and one-third from accessing capital grants from government.

Sovereign Hill operates independently from all three spheres of government and has never made an operating loss in its forty-four year trading history.

Ultimately, its assets would revert to the Crown; making it a most successful investment by the State Government in the development of an abandoned Crown land mining area in Ballarat in the 1960s leased on a 50-year term to the Association.

Submission to Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria Page 1 of 6

2. TERMS OF REFERENCE: COMMENTS

(a) The identification and volume of Victorian Agricultural, Resource, Manufacturing and Service Industry exports to overseas markets originating in regional Victoria.

Sovereign Hill generates the following visitation numbers from international markets to its outdoor museum:

Approximately 70% of these visitors also pay to attend the separate Sovereign Hill Gold Museum, adjacent to the outdoor museum. A further 5% attend the nightly sound and light show “Blood on the Southern Cross” at Sovereign Hill.

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The proportion of Chinese visitor numbers has rapidly grown over the past two decades:

The total gross export income generated by international visitors, based on the annual per capita gross average, is estimated at $6m p.a.

Other international markets serviced by Sovereign Hill include New Zealand, Europe and UK, North America and India.

(b) Regional Victoria’s competitive advantages in meeting the demands of world markets.

The major competitive advantage that Victoria enjoys, in terms of inbound tourism, is the curfew-free Melbourne Airport.

It has very cleverly developed its facilities and expanded its accessibility to key and growing overseas markets. Under present CEO, Chris Woodruff, it has in particular extended its reach into China and Asia and has positioned itself as the premier inbound airport service destination for Australia.

Submission to Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria Page 3 of 6

The VFR (Visiting Friends & Relatives) market in regional Victoria is stimulated by the significant reach of institutions such as Federation University Ballarat, into markets in China and India.

The facilities provided by the Crown Complex in Melbourne are of the highest quality and the relatively easy access to day tours to regional areas is strongly supported by Crown as a huge driver of international tourism. Sovereign Hill and Phillip Island Nature Park between them have developed high quality tourism experiences which are in high demand from all international markets, in particular China and Asia. Accessibility from the Melbourne CBD is relatively easy on freeways and each has developed products specifically for China and Asia.

In fact, all tourism product within a 2-hour radius of the Melbourne CBD is readily accessible to inbound markets for day trips.

The excellent international work done by Tourism Victoria under the recent leadership of CEO, Leigh Harry and Tourism Australia, under former MD Andrew McEvoy, has enabled regional tourism products like Sovereign Hill, Phillip Island, the Yarra Valley Wineries, the Mornington Peninsula, the Surf Coast and the Twelve Apostles/Great Ocean Road experiences to flourish.

International visitors view Melbourne as a 2-hour radius destination and do not necessarily differentiate regional products in this offering as being separate to the CBD experience. Future marketing strategies for Tourism Victoria need to incorporate this aspect in their application.

Road, rail and aviation assets are working to regional Victoria’s advantage to the extent that day tours are expanding. However, the downside is that there is a lack of international reach branded accommodation at desired capacities. More hotels are needed in key regional Victorian destinations to encourage and provide for overnight stays by the group markets in particular.

Sovereign Hill has been a key player in developing the inbound China tourism market since the late-1980s when mainland visitors, mainly Government officials, commenced their interest in coming to the Victorian gold rush heritage region as depicted by the outdoor museum.

Following a Federal Government report into Australian cultural tourism opportunities in 1993, Sovereign Hill appointed Mandarin and Cantonese speaking guides and initiated serious marketing activities to grow this emerging market. We now have over 25 such guides employed.

Submission to Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria Page 4 of 6

By the time the 1998 decision to introduce the Approved Destination Status Visa scheme, Sovereign Hill was firmly established as a “must see” destination for this market.

Trade Mission and marketing activities were very well coordinated by Tourism Victoria and Tourism Australia and Sovereign Hill’s marketing staff participated in each one, with positive results for visitation.

A strong working relationship was put in place with the Melbourne Convention & Visitors Bureau to align the inbound MICE market with what regional tourism products like Sovereign Hill could offer.

Sovereign Hill’s capacity to handle large inbound groups, such as the South Pacific School Games (3500 students) in 2003 and later AMWAY and insurance MICE groups of up to 7000 international visitors in a short visitation cycle, is a regional advantage. Our caterers are Delaware North Companies Australian (DNCA) which also contracts for operation of the Australian Tennis Open and Melbourne Park, as well as Etihad Stadium. It has the capability of supporting huge events.

Catering resources need to be innovative and flexible to cope with widely varying and very demanding international market requirements and DNCA has that capacity. It has a long-term contract for Sovereign Hill’s catering requirements and is able to marshall all of the necessary resources to meet the markets’ demands.

Presentation of Sovereign Hill’s museum experiences in Mandarin is a point of difference for our product. The Gold Mountain Tour, Secret Chamber, Woah Hawp Mine Tour, the Chinese Village, the Gold Pour and the Gold Museum all add critical mass to the tourism product being exported into the China and Asian markets.

(d) Impediment and barriers creating difficulties for regional exporters.

Lack of high-quality, international brand reach hotel accommodation facilities in regional Victoria is a serious impediment to regional overnight dispersal of international visitors, particularly the group markets.

There is market failure in this aspect which requires Government intervention and financial stimulus.

Sovereign Hill currently has an Expression of Interest proposal in market for development of a 100+ room, international brand hotel on freehold land it owns, immediately abutting the outdoor museum. It is correctly zoned and the project is “shovel ready”.

If successful, this project could deliver an additional 50,000 visitors p.a. (at a 70% hotel occupancy rate) and generate significant new employment growth in the Ballarat region’s tourism sector.

Submission to Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria Page 5 of 6

This project will require State Government infrastructure capital support, as well as marketing assistance in its initial years, if it is successfully negotiated.

Other barriers include a predominant focus by Tourism Victoria on marketing the sophisticated tourism experiences in the Melbourne CBD at the expense of the total product offering in the 2-hour radius around Melbourne. Additional marketing funds are required by Tourism Victoria to maintain its current level of investment in marketing of Melbourne as the “City-State” in effect, but also to grow its emphasis on the quality, accessible tourism opportunities in regional Victoria.

(e) The current and future roles of government in supporting regional businesses in their export endeavours.

Expansion of the Export Market Development Grant Scheme (EMDG Federal Government scheme) beyond its 8-year maximum term is required to support existing products which have used their entitlements to expand into new markets.

Local Government should be encouraged to continue or implement special rate levies that support tourism marketing in regional areas. Investment in this work has a profound multiplier effect in regional economies. It supports growth of export income and supports job growth as traditional manufacturing sector jobs reduce.

Continuation of the Super Trade Mission concept, introduced under the Baillieu State Government, should be a primary recommendation of this Inquiry. Sovereign Hill has benefitted immensely from its participation in this activity.

The State Government should actively engage with the tourism industry and the Chinese Consulate in Melbourne to develop strong partnership for business connections, visa issues and cultural awareness training for staff and volunteers.

Celebration of multi-cultural events, national days etc (e.g. Chinese New Year) should be expanded into regional centres, with involvement of local community organisations such as the Ballarat Chinese Community Association, and the Ballarat Multicultural Committee. In turn, these events need to be marketed effectively by Tourism Victoria in its international campaigns, especially in China and Asia.

The Victorian Multicultural Affairs Commissioner is an excellent resource for the tourism sector and is often overlooked or underused when strategies to grow inbound markets are being considered.

One point also worth making is that international tourists do make a considerable contribution to the GST pool by their consumption of goods and services purchased in market. This is an added incentive for State and Federal governments to support the sector’s growth.

Submission to Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria Page 6 of 6

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Regional Public Hearing Program:

Witness Information

Witness Professor Mike Willis, Pro Vice-Chancellor (International and Partnerships) Association Federation University Australia Date & Time 9.30 am Tuesday 29 April 2014

Mike Willis

Mike commenced at the University of Ballarat in 2008 as a marketing lecturer at the School of Business, and has been acting Head for twelve months. Prior to this, Mike was employed for ten years at Monash University, where he taught in a range of marketing areas in Australia and Hong Kong. He has worked with companies from Australia, Europe, Asia and USA in China, and has also taught across China over a ten-year period. He has spent more than 15 years travelling China undertaking research into business and cultural issues, including foreign business activities, modes of market entry and educational collaboration.

Federation University Australia

Federation University Australia was created in 2013 with the merger of the University of Ballarat and the Monash University Gippsland Campus. It is the only regional, multi-sector university in Victoria and the third oldest site of higher learning in Australia. It offers access to higher education, TAFE, secondary schooling and research opportunities.

Federation University has campuses in Ballarat, Churchill and Horsham, and programs are also delivered online and via a range of partner institutes across Australia and around the world.

The University has a strong emphasis on international education. In 2013, the University of Ballarat had 18,800 students, of which 23% were international students (with 43% of higher education students being international).

In its submission to this Inquiry (see attached), Federation University recommended the Committee (p15):

1. Emphasise to the Victorian Government the value of educational exports that currently stem from regional Victoria, which in the case of Federation University Australia in 2013, was a $67.2M industry

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2. Seeks from the Victorian Government financial and institutional support for regional educational exports not as a by-product of on-going teaching and learning programs developed by the University, but as a specific, income-generating business in its own right and therefore no less worthy of support than other regional Victorian businesses dedicated solely or in part to export activities 3. Requests that the Victorian Government actively address the regulatory burden imposed on the University by virtue of its dual-sector status and regional location which has the effect within the University of shifting scarce resources away from teaching, learning, research and export generating initiatives 4. Promotes greater understanding within the Victorian Government and its agencies of the regional environment within which Federation University Australia must operate — thin markets in particular — in order to secure greater financial and institutional support for the University's export initiatives. The submission provides a number of examples of areas where it considers the regulatory burden could be reduced (pp13-14).

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PARLIAMENT OF VICTORIA | RURAL AND REGIONAL COMMITTEE This document is confidential to the Rural and Regional Committee 28 Submission to the Parliament of Victoria's Rural and Regional Committee's Inquiry into the opportunities for increasing exports of goods and services from regional Victoria

In 2013 as the University of Ballarat, Federation University Australia earned $67.2M by exporting educational services. It is from within this context that Federation University Australia makes the following submission to the Rural and Regional Committee's Inquiry into opportunities for increasing exports of goods and services from regional Victoria.

Federation University Australia Federation University Australia was created on 1 January 2014. The University was formed through an amalgamation of the University of Ballarat and the Monash University Gippsland Campus as mandated by the University of Ballarat Amendment (Federation University Australia) Act 2013.

Federation University Australia is Australia's only regionally-headquartered, regionally-located and regionally-focused multi-sector university. It is the only university in regional Australia spanning the full range of the Australian Qualifications Framework from senior secondary VCAL to Vocational Education and Training (VET) certificate and diploma programs to Higher Education (HE) graduate and postgraduate studies. Its Technology Park at Mt Helen, Ballarat, is Australia's leading regional ICT hub. It is the only tertiary education provider in Victoria to be awarded the highest-rating five gold stars for teaching quality by the Good Universities Guide for the past five years (2009; 2010; 2011; 2012; 2013). In 2013 it was the only University in Victoria from which 80% of its graduates found employment within three months of qualification.

In 2013 the University of Ballarat had 18,800 students (Figure 1). Some 54% were enrolled in HE programs, and 48% in VET programs. International students comprised 23% of the student body. Of this number, 80% were taught on-shore and 17% off-shore (Figure 2). International students comprised 43% of the University's total HE enrolment. In 2014 it is anticipated that the Churchill Campus in Gippsland will add a further 2,700 domestic HE students and 100 international students bringing the total student body of Federation University Australia to approximately 21,640 students.

HE Student Enrolments

Dom Int Total 14,000 12,000 10,000 8,000 students 6,000 Of

4,000 No 2,000 ‐ 2010 Actual 2011 Actual 2012 Actual 2013 Actual TAFE Student Enrolments

Dom Int Total

14,000 12,000 10,000 8,000

Students 6,000 of

4,000 No 2,000 ‐ 2010 Actual 2011 Actual 2012 Actual 2013 Actual

Total student enrolments 30,000 25,000 20,000 15,000 10,000 5,000 ‐ 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Forecast

HE Domestic TAFE Domestic International Total

Figure 1 Higher Education, TAFE and International Student Enrolments, University of Ballarat, 2007-13 (Source: University of Ballarat, Pocket Statistics, 2007-12; Federation University Australia internal data, 2014).

Figure 2 International Student Enrolments, University of Ballarat, 2013.

Federation University Australia is regional in focus, national in scope and international in reach. University programs are delivered —

 regionally through campuses in Ballarat (Mt. Helen; School of Mines and Industries Ballarat; Camp Street Arts Academy), Ararat, Stawell, Horsham and Churchill;  cross-regionally in Victoria through seven TAFE Institutes known as the Victorian Regional Dual-Sector Partnership;

 nationally through accredited partner providers located in Melbourne, Geelong, Sydney and Adelaide; and

 internationally through accredited partner providers in China Hong Kong, Malaysia, Singapore, Sri Lanka, Vietnam, Mongolia, Austria and France, with programs currently in development for India, Korea and Greece.

Federation University Australia teaches on-shore and off-shore international students from some 40 countries including China, Malaysia, Singapore, Sri Lanka, Pakistan, Vietnam and India. This is a component of the University's wider commitment to internationalisation, the purpose of which is to integrate international, intercultural or a global dimension into all activities of the University. Expressed as a formal University policy (Policy Code LT1460), internationalisation serves as a guiding principle for all teaching, learning, student support, research and commercial endeavours, including the export of educational services, of Federation University Australia.

3 Identification and volume of exports to overseas markets originating in regional Victoria from Federation University Australia

Export of educational services Federation University Australia exports educational services from regional Victoria.

Within the Australian post-secondary education sector, the export of educational services is defined largely in terms of attracting international students to Australia. International students come to Australia, study, qualify and return to their countries of origin. This results in participating Australian education providers earning revenue from fee-paying students, and in local economies benefitting from the income international on-shore students expend in support of their studies while in Australia (accommodation, food, transport, utilities, resources, entertainment).

Federation University Australia is distinctive in not only teaching international students on-shore, but also in exporting educational programs, skills training, research, and intellectual property, and in facilitating private sector commercial exchanges, to off-shore markets and locations.

Federation University Australia's export activities therefore comprise —

1. Off-shore educational programs. In 2013 the University of Ballarat, exported degree and post-graduate degree programs to 1,154 students located in partner universities and colleges in China, Malaysia, Sri Lanka, Vietnam and Singapore. The most popular programs taught to off-shore international students were —  Bachelor of Commerce;  Bachelor of Information Technology;  Master of Commerce (Professional Accounting);  Bachelor of Nursing (Post Registration);  Bachelor of Business;  Advanced Diploma of Business; and  Master of Professional Accounting. These programs are full-fee paying and are delivered by accredited partner providers of the University.

2. Off-shore corporate and skills training. In addition to accredited degree programs taught at international locations, the University conducts short courses, training instruction, and corporate and government skills development programs in a variety of locations. In Malaysia, for example, the University has a government contract with the Department of Skills Development to assess and recognise prior training.

4 3. On-shore educational programs taught to international and domestic students. Federation University Australia attracts international students to its campuses in Churchill, Ballarat and Horsham, and to partner provider college locations in Melbourne, Geelong, Sydney and Adelaide. It also teaches a suite of programs though members of the Victorian Regional Dual-Sector Partnership.

In 2013 the University taught 5,598 HE students on-shore including 682 on- campus at Mt Helen, Ballarat and 195 domestic students taught through partner providers. As a result in 2013, 51% of the University's HE students "earned" export income. This is the conventional model of educational services "exported" to international students, or exported off-campus (intra-Victoria; interstate) to domestic students unable to attend the University's campuses.

4. Off-shore research activities. Researchers across the Federation University Australia campus network visit, collaborate, share and exchange information, data and ideas with numerous colleagues and institutions overseas. In 2014, for example, University researchers are currently undertaking funded research with international partners in such countries as China, the Czech Republic, India, Spain, Japan, the United States and Singapore. Illustrative examples of the nature of such collaborations is cited in Table 1. The University regularly hosts visits from visiting international government and peak body representatives, and academics. Such exchanges attract funding for overseas organisations (Table 1) and have commercial consequences. They also reinforce the University's international connections and provide potential for later and stronger linkages between regional Victoria and diverse international governments, agencies, organisations and locations.

5. Federation University Australia Technology Park. The University hosts 30 tenants on its Ballarat Technology Park located adjacent to the Mt Helen Campus. They include IBM, ID Research, Emergency Services Telecommunications Authority, the Victorian State Revenue Office, Primary Health Care Limited, together with other technology-based enterprises located in the Park's Greenhill Enterprise Centre and Global Innovation Centre. Many enjoy international connections and serve international clients. While the financial details of such private commercial arrangements fall outside the University's purview, they constitute another source of service exports relevant to the Committee's Terms of Reference that is regionally located but international in export coverage. The University directs the Committee to the Ballarat Technology Park website for further information and listings of tenants (http://federation.edu.au/industry-and-community/partnerships/technology-park).

5 Table 1 Examples of research as an "educational export", Federation University Australia, 2014

Information Technology

Information Technology researchers from Federation University Australia's Centre for Informatics and Applied Optimization (CIAO) and Centre for Multimedia Computing, Communications and Applications Research have ongoing research and publication collaborations with leading researchers in Europe, China, Japan, North America, South America, and the Middle East. The two centres have earned substantial overseas research funding in recent years through the US Air Force Awards scheme, the Australia-India Strategic Research Fund and the Chinese Government’s 111 program, and have pending applications through the AISRF and the US National Institute of Health. CIAO hosted 18 visitors during 2013 for collaborative research from 10 different countries. In addition CIAO organises the biennial Australia-China Workshop on Optimization.

Environmental Management

The University's Centre for Environmental Management (CEM) plays a significant role in international research in environmental management and climate change, with representation on the Scientific Steering Committee of the International Geosphere Biosphere Program project PAGES (Past Global Changes). In 2013 CEM hosted the Ramsar Convention Workshop which brought eminent paleoecology researchers from overseas to Queenscliff, and also led to the formation of the Australia-China Wetland Network Research Partnership. CEM researchers maintain ongoing research collaborations with researchers from many nations including France, the UK, Japan and China.

Sports Injury and Prevention

Federation University Australia's Australian Centre for Research into Injury in Sport and its Prevention (ACRISP) conducts research across a range of sports injury and sports injury prevention projects. The aim of the research is to ensure sport and physical activity is safe, with a minimal risk of injury. The ACRISP structure enables new and ongoing collaborative opportunities with local, national, and international research partners. ACRISP has been recognised as Australia's premier sports injury prevention research centre, being only one of four such centres worldwide to be selected by the International Olympic Committee (IOC) as a member of the IOC Medical Research Network.

6 Value of educational services exports The University advises the Committee that the recency of the University of Ballarat's merger with the Monash University Gippsland Campus precludes any assessment of the Churchill Campus' contributions to Victorian regional exports. The commentary below is therefore restricted to University of Ballarat activities in 2013.

As noted above, 51 per cent (6,752) of the University's HE students earned "export income". Several TAFE business programs also contributed to the University's overall export earnings. In 2013, educational services exported by the University of Ballarat earned $67.2M (Table 2).

Table 2 Educational services exports, gross revenue, University of Ballarat 2013

EDUCATIONAL EXPORTS GROSS REVENUE ($M)

International off-shore programs (HE) 2.1

International on-shore programs (HE) 53.7

International students at UB campuses (HE) 6.7

International TAFE activities 3.2

Victorian Regional Dual-Sector Partnership (on-shore HE) 1.5

TOTAL EXPORT INCOME 67.2

The University emphasises that this summary does not include "research export earnings" that are difficult to value, nor commercial-in-confidence export earnings generated by Ballarat Technology Park tenants. The data in Table 1 therefore understate the total regional export earnings generated by Federation University Australia and affiliate activities.

The University observes that the export of education in a variety of forms and models is indicative of the move in Australia from a product and/or manufacturing base to a services orientation. This is particularly the case with universities in general and, at the local level, in Churchill, Horsham or Ballarat in particular. It also means that local students and teachers have the benefit of being part of an internationalised educational experience, mixing with students from all over the world. It might be suggested that this is a component of the University's regional export program from which all Victorians receive a benefit.

Finally, the University advises the Committee that Federation University Australia operates in a regional setting characterised by low aspiration, participation and attainment rates, by high deferment rates, and by an above-average proportion of

7 students from low socio-economic status (SES) backgrounds. The University's domestic student profile reflects these characteristics —

 three out of every four domestic HE students come from regional and remote backgrounds;  the majority are the first in their family to undertake HE studies;  nine out of ten HE students are studying via Commonwealth Supported Places; and  more than one-fifth of students come from low SES backgrounds.

Knowledge of how best to assist Victorian regional domestic students directly informs the University's conduct as an international exporter. Experience of what is required to assist regional students from backgrounds unfamiliar with tertiary education opportunities has enabled the University to put in place numerous support mechanisms, infrastructure and "safety nets" to assist international students both overseas and in Australia who are similarly confronted by challenging and unfamiliar circumstances.

Victorian competitive advantages in meeting the demands of world markets

A University-centric interpretation of regional Victorian competitive advantage suggests that the University itself provides a competitive edge from which other Victorian regional exporters could benefit via partnership arrangements. Viewed from this perspective, and from the more specialised vantage point of the export of educational services, regional Victoria therefore offers —  opportunities for export agility and versatility. Victoria is the only Australian state in which a dual-sector university is located in a non-metropolitan setting. The integration of HE and VET, linked by accessible pathways and conferring employable qualifications, represents a fundamental advantage not available to stand-alone universities and TAFEs, or to other Australian regions. The University can respond quickly to often rapidly changing international, national and regional circumstances. The educational and economic advantages of such agility are now becoming apparent to other Australian universities and TAFEs with several now seeking to become dual-sector. Governments are also actively and financially encouraging partnerships between universities and TAFE Institutes.

 international knowledge and connectivity. Regional Victoria is connected internationally via the auspices of the University and its Ballarat Technology Park, and through the educational and commercial networks laid by the University over some 14 years of export activity. The University is therefore a regional resource capable of offering commercial advice and assistance to other actual or prospective Victorian regional exporters.

8  educational quality and credibility. Victorian and Australian tertiary providers are highly regarded overseas. This reputation stems from a now-long history of teaching and learning quality, the application of known-standards that protect the education sector's reputation, the availability of extensive support mechanisms for international students developed by universities, and in the case of Victoria, a reputation for a supportive, peaceful environment within which international students can study. More particularly, high-quality teaching and graduate employability have become associated with Federation University Australia and its regional Victorian location.  cultural environment. Regional Victoria offers a stable, predictable, safe, accessible and high quality environment within which on-shore international students can be welcomed, supported and engaged in their studies.  known export product quality. The quality of teaching, learning, research and commercial programs provides regional Victoria with a competitive advantage when sold overseas, particularly compared with other international competitors. Federation University Australia's quality management, based on close supervision of partner providers, close moderation of teaching and learning results, and extensive practical experience, ensures quality outcomes. Regional Victoria therefore provides a competitive advantage in terms of educational service exports though the quality of its vocational and HE products, the nature of its location, its cultural background, and its reputation for welcoming international students in a safe, secure and supportive environment.

Approaches to exporting and lessons to be shared from Federation University Australia

As the University of Ballarat, Federation University Australia has been exporting educational services since 2000. Over this time the University has developed a successful and sustainable delivery model. This comprises — 1. International operating experience. The University employs a partner provider model in which it uses international and domestic partner providers to deliver Federation University Australia HE and TAFE programs. The University emphasises that this is not a franchise model. Partners use their own teachers, teaching resources, recruitment, administration, and physical and virtual infrastructure. The University provides governance, curriculum, and quality assurance to ensure consistency and legitimacy of academic standards and outcomes, application of professional operating practices, and minimisation of financial risk. Federation University Australia does not invest in infrastructure in overseas locations. The partner provider model is financially structured so that 75% of revenue is returned to the University's partner provider and 25% is retained by the University. A key feature of this model is that it limits the University's exposure to the vagaries of the international market.

9 2. Sustained scholarship. The University has developed, in collaboration with its partner providers, a 10-point plan to ensure a culture of sustained scholarship. Implemented in 2010 this strategy specifies expected conduct, techniques and outcomes of all partner providers thereby ensuring quality of exported services and programs. 3. Quality control. The University "moderates" the quality of teaching, adherence to curriculum, student learning outcomes, student support, infrastructure quality, IT arrangements and whatever else is necessary to ensure that the program being exported and the qualification being earned is identical to that being taught at the University's Victorian campuses. Moderation applies equally to on- shore and off-shore partner providers and includes extensive documentation, communication, on-line tracking of outcomes, and adoption of guidelines to which partner providers must adhere. 4. Delivery consistency. In 2011 the University created a Centre for University Partnerships to manage all on-shore and off-shore relationships including DIIAC VISA requirements. The Centre provides "a unified and consistent approach to managing key alliances with the University's partners" (UB Blueprint, 2010, 22); 5. Communication. The University has numerous strategies to ensure that on- shore and off-shore students and partners understand the nature of the programs being offered, financial expectations, government regulations, cultural characteristics, safety-net arrangements, and the many other circumstances involved with off-shore or on-shore study. These include —  direct communication with international providers and students through the University's Centre for University Partnerships;  creation of University positions dedicated to international and partnership arrangements including such senior positions as Deputy Vice-Chancellor Engagement (Professor Todd Walker) and Pro Vice-Chancellor International and Partners (Professor Mike Willis). These senior positions add credibility and weight to discussions with governments, businesses and educators in the international context, ensure that programs are introduced and delivered according to the University's standards, maintain Victoria's and Australia's educational reputation, and explore opportunities for further increasing the University's export activities;  establishment, in 2012, of a Federation University Australia India Office in New Delhi, India, to ensure that student recruitment meets Australian Government and University eligibility criteria;  development of extensive printed and on-line materials for international and partner provider staff, and for students, often in foreign languages (see, for example, Figure 3). 6. Program relevance. The University collaborates with off-shore partners to ensure that program subject matter is relevant to local circumstances, teachers and students. At Shenzhen Polytechnic in China, for example, a 16 subject Advanced Diploma of Business is offered. Half of the program is taught by

Figure 3 Federation University Australia Home Page, Chinese and English Languages, 2014.

11 Shenzhen personnel using China-relevant materials, the other half by Federation University Australia personnel who fly from Australia to China. Shenzhen teaching staff in turn visit the University's Business School at Ballarat to ensure they are fully involved in the program and that the program is being taught to maximum effect. Induction programs for staff and students are an important component of this focus. In another example, the Federation University Australia Business School and Shenzhen Polythechnic recently researched perceptions of Chinese brands amongst consumers by examining how Chinese and Australian consumers reacted to Chinese brands such as TCL, Konka, Hisense, etc. It was a collaborative research effort which blended Australian and Chinese research knowhow. Federation University Australia employs this collaborative approach as a general principle as a means of building engagement, relevance, relationships and shared ownership of teaching, learning and research export outcomes. 7. Professional presentation. The University is conscious of its responsibilities to Australia, Victoria, and the wider tertiary education sector. As noted above it has appointed two of its most senior staff members to ensure that its "export business" is conducted ethically, professionally, legally and in the best interests of the University, its teachers and its students. The quest to always improve has recently, for example, been given new impetus by the change of name from the University of Ballarat to Federation University Australia. Overt reference to Australia, and use of the word "Federation" (which in China is considered to be a term of consequence) have already been noted overseas as presenting an institution of greater significance than was previously the case. 8. Professional exchanges. The University encourages its overseas partners to visit Victoria. The University regularly hosts exchanges, visits, delegations, workshops and conferences from international universities and partners, participates in events conducted by such providers, and in every way possible seeks to strengthen partnership connections. In summary, the University is selling and exporting educational quality. Without that quality, the University would not earn $67.2M in Victorian exports. The measures outlined above are designed to ensure that Federation University Australia educational exports are, and continue to be, of the highest quality.

Impediments and barriers creating difficulties for Federation University Australia as a regional educational exporter

In 2013 the University was asked to submit comments to the Australian Government's Inquiry into Assuring the Quality while Reducing the Higher Education Regulatory Burden (Red Tape Inquiry). Its submission outlined difficulties associated with dual-sector regulation and red tape, over-regulation associated with Victorian and Australian agencies which are themselves obliged to

12 seek information or assess education provider conduct often without reference to each other, and diverse other matters that impede the conduct of providers. The University does not here wish to rehearse the comments it made to the Inquiry other than to observe that the submission itemises diverse obstacles confronting a regional dual-sector university. A copy of the University's submission can be made available to the Committee if required. As an international exporter of educational services, the University would welcome the Committee's assistance in removing some of the regulatory burdens imposed on the University as a self-accrediting provider and educational services exporter. Examples include —  Dual-sector integration. Federation University Australia acknowledges the legal and jurisdictional difficulties associated with dual-sector regulatory reporting. HE is largely controlled by the Australian Government, VET by the Victorian Government. This results in a range and scale of obligatory reporting that is not required by single sector universities or TAFE Institutes. Such obligatory reporting at this scale is not funded by governments despite involving considerable staff commitment and resources. Nor are universities in a position to challenge the duplication of reporting obligations imposed by diverse government agencies meeting their own mandated responsibilities, which are not always co-ordinated with other agencies but which in total impose a considerable workload on individual universities (see, for example, PhillipsKPA, Review of Reporting Requirements for Universities, 2012, passim). Duplication in reporting thus requires the deployment of financial and personnel resources that might be more profitably directed at the University's teaching, learning, research and commercial enterprises including enlargement of its regional educational services export markets and activities.

The University suggests that the Committee gives consideration to recommending to the Victorian Government that it discusses with the Australian Government the need to provide regulatory reporting funding to universities that enables them to meet unfunded reporting obligations and that a special case in this regard be made for the “double load” carried by dual-sector institutions such as Federation University Australia.

 Registering of programs for delivery to international students. Federation University Australia is a self-accrediting provider. Its programs are therefore self-accredited for delivery to domestic students. The Australian Government requires that programs to be taught internationally must negotiate a new application and accreditation process. The University recommends that if a program is already accredited for delivery to domestic students and is delivered full-time, then such a program should also be considered fully accredited for international students. Universities already list programs on their websites that are registered for delivery to international students so this practice would continue. The process for registering on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) for self-accrediting universities has been simplified by the Tertiary Education Quality and Standards

13 Agency (TEQSA) but even so can take time for current registration approval. Further, if programs are required to be on CRICOS the University suggests that providers should be able to access CRICOS and list their own programs.

 Update of tuition fees. The University considers that providers should be able to access the Provider Registration and International Students Management System (PRISMS) to change their fees. The University again emphasises that the engagement process with TEQSA is straightforward but could be avoided in the interests of necessity, efficiency and effectiveness.

 Withdrawing programs. The University cites this as another example of a task that could be undertaken directly by providers subject to appropriate assessment criteria, rather than via unnecessary bureaucratic procedures. Thus, for example, a program could not be withdrawn in which students are enrolled.

 Annual declaration of confirmation. The University questions the necessity of this declaration.

These instances are indicative only. Examples not relevant to the export concerns of the Committee but important in the conduct of the University include activities re- registration processes associated with dual-sector institutions (five different re- registration processes in a five year period), scope of registration requirements (Australian Skills Quality Authority), Victorian and Australia cross-departmental data collection complexity and duplication, and inconsistent risk assessment.

The University contends to the Committee that such obstacles are no less important to the successful export of educational services from regional Victorian than more visible regional impediments such as road and rail transport difficulties, differing levels of regional technological access, closure of government and professional support services, or the many other problems challenging businesses in non-metropolitan Victoria. Federation University Australia is generating $67.2M in export earnings for Victoria. It would therefore welcome the Committee's assistance in recommending the removal of export impediments and obstacles — in this case, unnecessary regulatory reporting — in order to lessen the time, personnel, resource and financial costs imposed on the University.

Current and future roles of government in supporting Federation University Australia in its export endeavours

The tertiary education sector in Australia is changing rapidly. The introduction of demand driven funding, changes to the Victorian TAFE funding model, the introduction of Victorian and Australian government mandated participation and attainment goals, non-ATAR/open access entry programs to tertiary programs, innovations in education delivery models including blended learning, on-line and

14 distance education, flipped learning and MOOCS, the wider impacts of ICT innovations, the development of teaching, learning and research partnerships (e.g. Victorian Regional Dual-Sector Partnership; Regional Universities Network; Federation University Australia Collaborative Research Network), and the growing importance of international education markets scarcely indicate the range of changes with which the Australian tertiary sector must contend. For a university located in regional Victoria in a setting characterised by thin markets, by the financial obligation to provide teaching resources and infrastructure to dispersed populations which are themselves experiencing major structural change, and by the difficulties associated with competing with metropolitan providers with direct market access, any impediment has the capacity to undermine export potential. In these circumstances Federation University Australia would welcome the Committee's assistance in addressing concerns associated with the Victorian and Australian government regulatory environment. To this end Federation University Australia would recommend that the Rural and Regional Committee — 1. Emphasise to the Victorian Government the value of educational exports that currently stem from regional Victoria, which in the case of Federation University Australia in 2013, was a $67.2M industry; 2. Seeks from the Victorian Government financial and institutional support for regional educational exports not as a by-product of on-going teaching and learning programs developed by the University, but as a specific, income- generating business in its own right and therefore no less worthy of support than other regional Victorian businesses dedicated solely or in part to export activities; 3. Requests that the Victorian Government actively address the regulatory burden imposed on the University by virtue of its dual-sector status and regional location which has the effect within the University of shifting scarce resources away from teaching, learning, research and export generating initiatives; and 4. Promotes greater understanding within the Victorian Government and its agencies of the regional environment within which Federation University Australia must operate — thin markets in particular — in order to secure greater financial and institutional support for the University's export initiatives.

Federation University Australia thanks the Rural and Regional Committee for the opportunity to make a submission to its Inquiry into opportunities for increasing exports of goods and services from regional Victoria, and commends to the Committee its suggestions on how to facilitate the export of educational services from regional Victoria.

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Regional Public Hearing Program:

Witness Information

Witness Dr Paul McPhee, Lecturer in Economics Association Federation University Australia Date & Time 10.00 am Tuesday 29 April 2014

Paul McPhee

Paul’s professional experience includes: developing and analysing economic indicators, survey design and analysis within the Australian Bureau of Statistics; policy advice and economic analysis within the Federal treasury; serving on Federal Government Economic Forecasting Committees; and various teaching and research positions at the universities of Queensland and Wollongong.

Prior to joining the University, Paul modelled various demand and supply induced policy simulations which facilitate the networking and information sharing of regional small to medium-sized firms and exporters within New South Wales. The purpose of this project was to develop policies that enhance export performance, and specific policy recommendations are forwarded to the New South Wales Department of Regional Development.

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Regional Public Hearing Program:

Witness Information

Witness Mr Jim Fraser, Deputy Chair Association Central Highlands Agribusiness Forum Date & Time 10.30 am Tuesday 29 April 2014

Jim Fraser

Jim is an engineer who farms outside Bacchus Marsh. He is experienced in water use and management, innovative business development, engineering design, and macro algae production and use. Jim is also Director at Aqua Focus, a company working on sustainable biomass conversion.

Central Highlands Agribusiness Forum

Central Highlands Agribusiness Forum is a not-for-profit association whose purpose is:

• To support the creation of wealth and improved quality of life for people involved in the agricultural production and services industries • To assist agribusiness to make a positive contribution to the condition of the economic, social and physical environments in the region and beyond.

Central Highlands Agribusiness Forum has arranged for the participation of two people from the region to access the State Government's Trade Mission Assistance Grants to participate in a Super Trade Mission – one to South East Asia and one to China. It is also participating in the Victorian–South East Asian Executive Chef's Mission, where executive chefs from Malaysia and Singapore tour the Central Highlands region and meet with producers to discuss export opportunities.

The Central Highlands Agribusiness Forum is part of the Victorian Agribusiness Council (submission attached). In its submission, the Council noted the importance of inbound and outbound trade missions, and provided details about The Inward Chef’s Mission held by the Council, which brought Asian chefs to Melbourne and regional Victoria to sample produce for potentially exporting. The Council also noted the potential for capability development programs to be delivered through agribusiness forums.

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Victorian Agribusinesss Council Inc ABN: 12 150 249 554

17th April 2014

Mr Chris Gribbin Executive Officer Rural and Regional Committee Parliament House East Melbourne VIC 3002 [email protected] [email protected]

Dear Mr Gribbin,

Re: Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

The role of the Victorian Agribusiness Council Inc., is to act as a peak body that represents and supports Victorian agribusiness forums and coordinate their statewide interests

The Viictorian Agribusiness Council Inc., represents six Victorian regionally based agribusiness forums. Agribusiness Forums are not for profit entities which consist of a volluntary Board. The individual forums have their own strategic agribusiness development planss which guide their activity. Each forum has a member position on the VAC Board.

As a not for profit organisation, the Victtorian Agribusiness Council Inc., conducts its activities through the development of focused agriibusiness projects. We also hold the annual Victorian Agribusiness Summit, usually in a Victorian regional area. This year’s Summit will be held in Bendigo, hosted by the Central Victorian Agribusiness Forum and the theme will be “The Food Boom Summit’‐ Growing the Value Chain to Asia.” The projects managed by the Victorian Agribusiness Council Inc., are for the benefit of agribusiness development in regional Victoria.

The Victorian Agribusiness Council Inc., has recently partnered with MLA Malaysia, represented by Ms Rose Yong, to hold “The Inward Chef’s Mission 4 – 13 March 2014”. This became a major project for the VAC and associated forums. It brought together Eight Leadiing Asian Executive Chefs, organised by Ms Yong, Victorian regional food producers, exporterss and organisations intending to export.

The Executive Chefs were guests of the Victorian government to the International Food and Beverage Trade Week, then toured regional Victoria, sampling food export offerings.

This project has delivered above and beyond the expectations of the Board. We were able to attract major partnerships from the Victorian government, the ANZ bank, MLA Malaysia, and the Australian Broadcasting Corporation. Each of our partners has been delighted with the outcomes of the project.

PO Box 187 Leongatha Vic 3953 Agribusiness Gippsland Inc, Executive Officer: 0439 337 597 Agribusiness Yarra Valley Inc, President: 0414 242 710 Central Highlland Agribusiness Forum Inc, [email protected] Central Victorian Agribusiness Forum Inc, www.victorianagribusiness.com.au G21 Agribusinness Forum Inc, AgriWest Inc.

Victorian Agribusinesss Council Inc ABN: 12 150 249 554

Our noot for profit Agribusiness Forums, whilst challenged by minimal ffinancial resources, delivered exceptional value to the project. In all, about 400 people in regional aareas were brought together by the Agribusiness Forums to meet the Chefs, dine with them and hear their viewpoints on the product they were sampling.

The ABC’s Australia Network has made a film, “Chefs on Tour”. It is about the group travelling through Victoria, with Chef Richmond Lim, Executive Chef of the Malaysian Convention Centre, as their leader. The Chefs see the product on farm, collect samples as they travel,, then prepare it for a meal at the conclusion of the trip. It is a wonderful promotional representaation of the variety and quality of food offered by Victoria. This film was viewed throughout Asia last week and is scheduled for another appearance later in tthe year.

The project has delivered above and beyond the initial expectations of the Victorian Agribusiness Council Inc. Our partners are delighted with the outcomes.

Based on our experiences with this project and knowledge from the Victorian Agribusiness Council Inc., Strategy 2013 – 2016, , pleasee find listed below comments on the TTerms of Reference as requested.

a) the identification and volume of Victorian agricultural, resource, manuffacturing and service industry exports to overseas markets originating in regional Victoria;

Our consultations of the SME agribusiness sector have clearly identified a need to develop a source for repeatable, reliable and extensive agribusiness statistics which describe agribusiness activity in Victoria’s regions. This has been documented in the “Victorian Agribusiness Council Strategy 2013 – 2016.”

Currently relevant datasets exist and maybe sourced from organizaations such as the Australian Bureau of Statistics and ABARES. They are however disparrate and need to be collated to describe Victoria’s regional and state agribusiness activity.

(b) regional Victoria’s competitive advantages in meeting the demands of world markets;

By definition, Victorian export produce is competitive in world marketss if it is purchased ahead of competing product. Product characteristics such as price, reputation, physical attributes, efficiency of delivery etc are just some ways product differentiation can be used to the advantage of the seller in the export market. Based on ourr current group of Chefs who have decision making capability on product, Victorian food production quality standards, innovative product and product variety are characteristics the buyers understand to be associated with Victorian food product.

Delivery of product to market by means of least cost is imperative. Infrastructure projects to aid efficiency in production therefor are necessary to remain world competitive.

Victorian Agribusinesss Council Inc ABN: 12 150 249 554

The Executive Chefs Inward Mission Project is proposed as an innovative way to improve communication between the buyers and sellers of Victorian produce.

(d) impediments and barriers creating difficulties for regional exporters;

We have found there is a need to further develop the export business capability of SMEs. Often the Chefs were presented with superb product, which they weree interested in importing and the seller / producer did not have a developed knowledge of how to export. There is a need for a targeted program to increase the export development skills of the producers.

(e) the current and future roles of government in supporting regional businesses in their export endeavours

The role of government is to support the development of business where there is market failure. In the case of export development, the role of government is to enable SMEs, developing exporters and exporterrs to conduct their business in export markets. This may occur through a range of programs such as Inward and Outward Trade Missions, providing export development and capability development programs to regional businesses and assisting with attending the market such as the current trade development program.

Agribusiness Forums are regionally based “chambers of commerce” for the regional agribusiness sector. They are not for profit groups with excellent linkages into the regional communities and agribusinnesses. A targeted export capability development program through the regional agribusiness forum as the vehicle to deliver the program will provide a targeted approach to the export program development.

Thank you for the opportunity to comment on this important issue for Rural annd Regional Victorian agribusiness development. We would welcome the opportunity to present in person.

Yours faithfully,

Clive Larkman Bronwyn Debenham Chair Executive Officer Victorian Agribusiness Council Inc.,

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Regional Public Hearing Program:

Witness Information

Witness Mr Andrew Edmondston, Sales and Commercial Manager and Company Secretary Association Gekko Systems Date & Time 11.00 am Tuesday 29 April 2014

Gekko Systems

Gekko Systems specialises in the design, development and distribution of innovative mineral processing equipment and systems with a particular focus on gravity separation. Gekko Systems’ head office is in Ballarat, with other offices in Canada, Chile and South Africa. Since commercialisation in 1996, over 400 units have been manufactured and installed in 35 countries worldwide to recover gold, sulphides, silver and other heavy minerals.

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Regional Public Hearing Program:

Witness Information

Witness Anthony Schinck, Chief Executive Officer Association Ballarat City Council Date & Time 11.30 am Tuesday 29 April 2014

Ballarat City Council

According to the City of Ballarat’s submission, international exports from Ballarat in 2012 totalled around $600 million, with around $350 million of that coming from manufacturing. Education ($50 million), accommodation and food ($50 million), mining ($40 million) and transport and logistics ($40 million) were other major contributors.

Implementation Action 4 of the City of Ballarat’s Economic Strategy 2010–2014 was: ‘Explore opportunities to develop an Advanced Business Services Cluster with a focus on export market opportunities and assisting industry development.’ The City of Ballarat in partnership with Major Projects Victoria, is developing a freight hub that that will support exports.

The City’s submission notes a number of areas where Government action would be beneficial, including:

• supporting inbound and outbound delegations • funding to local government to participate in trade delegations • marketing support • financial support and incentives, including facilitating financing • long-term infrastructure investment plans • free trade agreements and support to exporters to leverage them • building cultural awareness in communities.

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City of Ballarat Submission

Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

Anthony Schinck Chief Executive Officer City of Ballarat

City of Ballarat Submission______Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

(a) The identification and volume of Victorian agricultural, resource, manufacturing and service industry exports to overseas markets originating in regional Victoria.

It is difficult to assess the goods and services exported internationally based on existing data sets. Austrade do not produce statistical data and the ABS makes the data available only at Federal and State levels. To identify the level of goods and services exported from a region requires economic analysis to be undertaken.

Research undertaken by the National Institute of Economics and Industry Research (NIEIR)1 indicates that 28% of total regional exports (i.e. goods and services exported from Ballarat, both interregional and internationally) are international.

NIEIR estimates Ballarat’s international exports in 2012 total around $600m, with the major contributors outlined in Figure 1.

Ballarat Exports (2012), $m - Major sectors

Manufacturing

International education

Accomodation and food

Mining

Transport and logistics

0 50 100 150 200 250 300 350 400

Figure 1: Regional exports for Ballarat (January, 2014) Source: NIEIR, 2012

Tourism, an industry sector facilitates exports in multiple other sectors, for example food and accommodation and transport, is responsible for around $50m of exports from Ballarat.

The analysis highlights the significance of manufacturing to the Ballarat economy as a source of economic value and international competitiveness.

Interestingly, NIEIR’s research showed no international export earnings from the health and social services sector – a sector in which Ballarat is very well regarded and represented.

Consultation with some of Ballarat’s major exporting organisations supports both the nature and type of goods and services being exported.

 Gekko Systems is a regional Victorian export success story. Gekko is a world leader in the design, development and distribution of innovative mineral

1 National Economics, Central Highlands Regional Economic Profile (2013)

City of Ballarat Submission______Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

processing equipment and systems with a particular focus on gravity separation. Over the last 18 years Gekko has manufactured more than 620 mining units in over 40 countries and currently exports about 75% of its products and services. In recent years, Gekko has captured new markets such as Brazil. Gekko’s growth in export markets means the company now employs over 130 staff across its offices in Ballarat, Perth, Vancouver, Johannesburg and Santiago.

 Sovereign Hill has been promoting in international markets for over 40 years. For the past 15 years, strong focus has been placed on Asian markets (i.e. China, South Korea, India). Today, Sovereign Hill operates an office in Shanghai, China hosting five fulltime staff. In 2012, 25% of Sovereign Hill’s 700,000 ticketed entries (i.e. 175,000) were from overseas visitors. Although the high A$ has impacted international markets, Sovereign Hill’s targeted Asian strategy has resulted in growth in patronage, particularly from Chinese visitors. According to Tourism Research Australia, international visitors have an average overnight stay of 12 nights and spend $1,176 per trip.2 According to Sovereign Hill CEO, Jeremy Johnson, ‘one-third of all international tourists to regional Victoria visit Sovereign Hill’, however their stay in Ballarat is usually limited to a day, or perhaps an overnight stay.

 In 2012 international student commencements at Federation University Australia (formerly the University of Ballarat) showed a decline compared to previous years. This continues a declining trend as a result of the global financial crisis, high A$, student visa integrity issues, changes to Australian Government immigration policies and a global shift in delivery of education to online platforms. Consistent with previous years, students from India and China constitute the majority of international students for both on-campus and on-shore partner providers. Federation University Australia had 1,406 international students enrolled in 2012, a 17.2% decline on 2011.3

 Broadbent Grains is a grains handling business based outside Beaufort. Annually this company handles around 80,000 tonnes of grain from Western Victoria, predominantly wheat and barley, destined for overseas markets. Current market value of these exports is around $20m annually. Principal markets for these commodities are China, Indonesia, Malaysia, Taiwan and Thailand.

 Albins Off Road Gear specialises in the design and manufacture of driveline components for high performance vehicles. Albins employ 40 highly skilled staff at their base in Delacombe. This year they will export products worth around $4.8m, predominantly to the United States. Albins see opportunity for their transmission and gear products in Europe, the United Kingdom and emerging markets in Asia. The company anticipates working with the State Government during this period of expansion, accessing support for marketing and attendance at trade shows.

 Mars Chocolate Australia is responsible for annual sales of $350m, a significant portion of which is exported to over 30 countries including New Zealand, South Africa, China, Japan, Sri Lanka and the Middle East. This accounts for one third of Australia’s total confectionery exports.

2 REMPLAN (January, 2014) 3 University of Ballarat 2012 Annual Report

City of Ballarat Submission______Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

(b) Regional Victoria’s competitive advantages in meeting the demands of world markets.

The Ballarat region presents a number of competitive advantages in meeting the demands to world markets. These include:

Access to markets, airports and ports This is a relative strength for the region when compared with other regional Victorian centres such as Bendigo and the Latrobe Valley. Ballarat is developing high performance freight vehicle (HPFV) access and has approximately 60 minute travel times via direct freeway to Melbourne and its international airport and ports. Ballarat is also in a good strategic position to service both Metropolitan and Western District regions.

The City of Ballarat, in partnership with Major Projects Victoria, is currently developing a freight hub (Stage 1 - $18m) that will deliver HPFV intermodal road and freight handling capability4. When completed, this facility will support the movement of goods for export from Ballarat and the wider region as well as supporting the further development of Ballarat’s growing transport, storage and logistics industries.

Access to arable land The Ballarat region is located on a relatively large land mass of approximately 10,300km2, or 4.5% of Victoria’s total area. The total land held by farm businesses was estimated to be 804,239 hectares in the Ballarat region in 2010–115. The Ballarat region has significant areas of productive land for primary industries, predominantly grazing, cropping, horticulture, beef, sheep and forestry.

Access to reliable water supply The Ballarat municipality is fortunate to be situated in a typically reliable rainfall area. Although the average annual rainfall for the decade 1999-2009 was 549mm due to prolonged period of drought6, the long term average annual rainfall for Ballarat is 694mm. This positions the region well to support agribusiness activities in dry land pasture, horticulture and forestry

In addition to rainfall, Ballarat has significant water supply (approx. 65ML) and recently had an additional 14ML/year added to this (total 79ML) through the addition of the Goldfields Superpipe. The access and reliability of Ballarat’s water supply is a major competitive advantage to the region, and provides the basis for the region to develop export industries that require water security as part of their value proposition such as intensive horticulture and food processing.

Skilled and reliable workforce Ballarat has one of regional Victoria’s most skilled and stable workforces. Of those living in Ballarat, 53.9% of people aged 25 years and over have tertiary or TAFE qualifications, compared to 50.5% in the Grampians Region.7 The reliability of the workforce is an additional competitive advantage.

Ballarat is also home to internationally recognised education institutions such as Federation University Australia and the Australian Catholic University. According to the City of Ballarat’s Economic Strategy, the city’s educational institutions are well placed to contribute to the local economy through building local workforce skills, delivering regional services and developing partnerships with industry.

4 Ballarat Regional Capital Plan (2013) 5 Agriculture and Forestry in the Ballarat region of Victoria, ABARES (2013) 6 City of Ballarat Environmental Sustainability Strategy 2012-2014 7 ABS, 2011 Census

City of Ballarat Submission______Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

Housing affordability and lifestyle When compared to other major cities, the Ballarat region has among the most affordable residential real estate in Victoria. According to the ABS, 18.7% of households in Ballarat were spending 30% or more of gross household income on rent or mortgage payments, compared to the Victorian State average of 20.4% of households.8 This should assist Ballarat to maintain its wage and salary differential advantage with Melbourne and other capital cities.

The region also has lifestyle attractors driving population growth, including proximity to employment, comprehensive health services, educational and sports facilities and cultural and community assets.

Business cost competitiveness According to research commissioned by the City of Ballarat9, the City is one of the most cost competitive regions in Victoria when comparing labour, facility, transportation, electricity and gas, telecommunications costs and state and local taxes.

In addition, Ballarat enjoys major competitive advantages when it comes to costs associated with accessing land and land related infrastructure. These factors reduce the cost of construction, which can be a major impediment to the investment required to develop export scale industries.

Further, the Ballarat region possesses a number of industry-specific competitive advantages. These include, but are not limited to:  food safety and access to downstream food processing and manufacturing / value adding;  access to Asian markets putting food producers at a freight cost advantage over international competitors (e.g. in South America). Air freight for perishable produce also puts producers at a significant quality advantage;  ability to ensure counter seasonal supply to food markets in the Northern Hemisphere;  developing industry clusters in agriculture, ICT and manufacturing;  access to renewable energy resources;  ICT support, research and development through the Ballarat Technology Park;  a manufacturing sector with a reputation for adopting high technology and best practice standards in quality and environmental management systems; and  the Ballarat region having an internationally recognised brand developed through mature tourism and education sectors.

8 ABS, 2011 Census 9 Benchmarking Business Costs, City of Ballarat, 2012.

City of Ballarat Submission______Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

Consultation with industry has revealed a number of innovative approaches to export. These include SMEs developing marketing cooperatives with an export focus; industry associations providing leadership and knowledge that assists SMEs build capabilities; supply chain innovation; and creating flexible business structures that ‘change with the times’ (e.g., the shift in delivery of education to online platforms).

Key lessons learnt by regional exporters are; understanding the importance of culture; building capabilities; and implementing long term strategies – ‘You can’t be a fair-weather friend, you have to take the hit, and stay in for the long haul.’10

Following are case studies highlighting innovative approaches to exporting from regional Victoria.

Case study: Grampians Pyrenees Wine Co-operative Regional businesses, particularly SMEs, find it difficult to export goods and services overseas principally due to cost and economies of scale. An innovative approach used by some SMEs is to establish a marketing cooperative. Marketing cooperatives are quite common in agriculture, allowing members to process, package, brand, distribute and market food and beverage products. They are formed where farmers can collectively rather than individually, access markets, services and products more cost-effectively and efficiently.

An example of an agricultural marketing cooperative operating in the Ballarat region is the Grampians Pyrenees Wine Co-operative. This co-operative is an innovative wine production and marketing initiative aimed at the Chinese market, especially the City of Ararat’s sister city, Taishan. As a result of the sister city relationship, Ararat now receives between 10–15 Chinese government delegations each year.

The Grampians-Pyrenees Wine Co-operative is a local government-business partnership including nine small to medium sized vineyards from the Grampians and Pyrenees wine regions and the Northern Melbourne Institute of TAFE (NMIT).

The co-operative’s flagship red wine, Ararat Gold Shiraz, was introduced in China at a tasting in June 2008 at the Taishan Phoenix Country Hotel, an event attended by around 200 wine retailers and resellers. Following this event, the cooperative sent a shipment of around 10,000 litres of Ararat Gold Shiraz to China.

Since 2008 a number of significant milestones have been reached by the cooperative, including:  the appointment of a Taishan-based agent  co-operative members attending the Wine Expo 2012 in Guangzhou, China  the cooperative welcoming a delegation of 90 people from China interested in purchasing Australian red wines for import.

Case Study: Central Highlands Agribusiness Forum (CHAF) The City of Ballarat recognises the importance of the agribusiness sector to deliver export opportunities and as such, Council supports the Central Highlands Agribusiness Forum (CHAF). Council provides CHAF with annual support of $10,000. CHAF is also supported by other participating municipalities within the Central Highlands region to bring together and deliver outcomes for the agribusiness sector.

10 Quote from industry consultation

City of Ballarat Submission______Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

CHAF has sought to develop an international development strategy for the Central Highlands Agribusiness sector to work together to harness future growth by presenting a planned and coordinated approach across the region in response to the changing agri environment.

CHAF has identified a number of strategic priorities that guide the development of their programs and projects. Key elements include developing alternative international markets for farm produce.

CHAF provides direct exporter support through supporting trade missions, accessing a range of local networks and knowledge, creating promotional materials and international marketing collateral, national and international networks and regional product branding.

Case Study – Federation University Branding “Australia”

When the University of Ballarat renamed to Federation University, it branded its international units Federation University Australia. The inclusion of ‘Australia’ in the naming has been well received internationally, with the international market being able to better connect to the ‘Australia’.

It is worth noting that the international connection to “Australia” is not confined to the education sector. Numerous exporters have noted: being able to include some reference to Australia results in greater international customer engagement through a range of brand values that act across sectors, from food (clean, quality), tourism (outdoors, gold and indigenous) and education (value for money).

Case Study – International Licencing

Many manufacturing firms do not possess the requisite skills to export goods, and for a variety of reasons perceive the export of goods as high risk. Some manufacturers have adopted licencing as a way to export and in doing so have overcome skills deficits and reduce export related risks. This approach aligns a company’s skills around design, development and quality and allows them to access international markets without the types of risks associated with goods export.

The licencing export model does not necessarily result in significant additional industry development, but it does provide the incentive to continue to develop new and improved products which involve more knowledge based activities.

City of Ballarat Submission______Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

(d) Impediments and barriers creating difficulties for regional exporters.

Exporters face many hurdles, including access to foreign markets, transport costs and regulatory barriers. Some of these barriers are due to ‘tyranny of distance’, but others are due to Australia’s own regulatory and procedural arrangements for outbound and inbound trade.

Consultation with local industry has highlighted a number of impediments and barriers for regional exporters.

Scale A significant impediment to exporting is the lack of scale of many regional firms. Traditionally many firms exist to service local markets, which are themselves smaller than metropolitan markets, and as such the firms never develop sufficient scale and sophistication to be able to export. When considered in terms of tourism, scale means having ‘product mass’, a range of tourism options that will entice overseas visitors to remain in the region for longer periods of time (yield).

Small size means costs of establishing markets and developing internal capabilities are relatively high and therefore present excessive risks. For many, to export means to sell goods and service outside their immediate geographical area, not to overseas markets.

Financial commitment Building strong international relationships requires a long term strategy and financial commitment. It also requires consistency and a commitment to spending time ‘on the ground’. This is often out of reach for many regional SMEs and is where Government incentives, trade missions and in-market support play an important role in facilitation international trade (See section ‘e’).

International finance and support Despite many financiers offering international finance and insurance / bonding type products, the reality is that this type of finance cannot be accessed by many firms as financiers perceive providing funds to support export related expansion is too high. There is a perception smaller firms present higher levels of risk to financers, making it very hard for many to secure the capital needed to develop export markets and turn their businesses into ‘export ready’ firms.

Financiers are extremely reluctant to provide financial support for early stage market development and product development / modification related activities, and only slightly less reluctant to provide contract / project finance and other working capital needs. If such support is provided, it is often done on very onerous terms (high interest rates, suffocating guarantees and obligations) rendering it extremely risky to the exporting firm.

The difficulties and complexities many firms experience in this area is a significant impediment to international market development. Some firms have had positive experiences with Export Market Insurance Corporation (EFIC). However there is a perception that EFIC also favours larger firms and contracts as well as being city centric.

Cultural understanding Many businesses fail to realise the importance of culture when conducting international business. Often critical to success in international markets is having capabilities and people with firsthand experience in international trade and fluency in

City of Ballarat Submission______Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria the language of the marketplace the company wishes to enter. Access to these skills and capabilities can be an impediment to the exporting success of regional businesses.

Identifying potential markets and buyers Identifying potential markets and buyers is an impediment to regional businesses. This can be attributed to: 1. a lack of an international vision within the firm brought about by risk aversion or export being outside of management’s comfort zone; 2. a lack of capability and/or experience in developing international business; or 3. limited understanding of the opportunities new markets present and how to develop these opportunities.

Anecdotally we have heard some businesses are unaware of support services available from Government.

Transport and logistics and impact on International Competitiveness The relative cost of transporting goods from Ballarat to an overseas market is high (i.e., freight, port fees, etc.), and can puts companies at a cost disadvantage. Further, any delays along the supply chain caused by international transportation can increase costs substantially.

Australia is a high cost economy and since regional areas produce many of the nation’s goods for export, they’re particularly exposed to international competitiveness factors.

Many of regional Australia’s exports primarily compete on price, and while the argument can be made the basis of the region’s competitiveness should change, the reality is that for the foreseeable future, much of regional Australia’s volume based exports will continue to compete on price creating a higher relative impact on regional areas.

High input costs associated with wages and salaries, taxation (particularly payroll based taxation), insurances, regulation and energy related costs have all been nominated as reducing the cost competitiveness of regional areas.

Intellectual Property Intellectual property related issues remain an impediment to export for many SME businesses. There is a general concern new ideas and ways of doing business will be lost if taken offshore. This concern is further exacerbated by:  fundamental misunderstandings amongst many as to the nature of international intellectual property protection and how it works in practice  unwillingness to incur the perceived high costs of protecting intellectual property through international protection mechanisms  understanding that to enforce intellectual property rights in overseas markets is complex, time consuming and expensive  very limited exposure to intellectual property and patent attorney services in regional markets.

Economic conditions Economic conditions present a risk to exporters. This has been evident in recent times with the relatively strong A$ which limits potential growth in export markets.

City of Ballarat Submission______Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

Regulatory burden Red tape and the perceived bureaucratic processes involved with international trade often dissuade regional businesses from exporting, particularly in food-related businesses (i.e., AQIS documentation, road transport regulations and fees). For example there are various road transport and haulage regulations across Victoria that require different standards and practices when transporting goods. These regulations increase costs and reduce transport efficiencies). Again, this can come back to a lack of understanding of the Government support available to companies.

Further, both tariff and non-tariff barriers are expected to reduce as trade agreements are met with key trade partners (i.e., China, South Korea, Trans-Pacific Partnership).

City centric institutions Many banks, other intuitions and export related service providers do not have a regional presence, making access to export related capability difficult for regional exporters. Moreover there is a perception that much export related business is city centric and does not cater for regional and rural export development. The majority of banks do not have international trade experts located in regions, requiring either visits to metropolitan based personal or waiting for scheduled (one a quarter) visits to regional areas by these experts. Government agencies are subject to the same cultural issues, with Tradestart representatives and EFIC being subject to similar criticism from many regional exporters.

City of Ballarat Submission______Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

(e) The current and future roles of government in supporting regional businesses in their export endeavours.

Consultation with industry has revealed a number of areas where Government can support regional businesses in their export endeavours. These include:

Supporting inbound and outbound delegations There is a role for State Government to continue to support inbound and outbound delegations. All local exporting companies consulted for this report have attended international trade missions. The value of trade missions is in growing your understanding of a market and meeting potential partners and customers. Sovereign Hill is an example of a local business that sees great value in international trade missions, ‘we attend all of them’.11

Many businesses perceive great value from such delegations. Increasingly and particularly, Asian countries expect all-of-Government representation in country (and in Australia) before and during business delegations. Government is perceived as having a key role in establishing credibility in these countries. Export markets will not develop unless this credibility is created.

Unfortunately this role is not seen as primary role of Local Government by many in the community (whereas the business community understands the role as being critical) and when costs are incurred completing this work, Local Government can be subject to community criticism. This criticism can limit the effectiveness of Local Government work in international business relations and in some cases, inhibit its continuation.

State (and Federal) Government therefore, can assist Local Governments with advocating for and supporting regional participation in international trade development and promoting the benefits and outcomes of their participation. This should also include providing support funding to Local Government (as well as regional businesses) to participate in trade delegations. For example this could include providing a Local Government component to the Export Market Development Grant (EMDG).

Marketing support Marketing support includes assistance with preparation of promotional material appropriate for that market, in-market support, market research and facilitating networks. All tiers of Government provide marketing support to some degree. For example, in partnership with CHAF, the City of Ballarat produced marketing collateral for the South East Asia Super Trade Mission designed to promote the benefits and advantages of the Ballarat and wider Central Highlands Regional Agricultural sector.

Anecdotally we have heard that regional exporting businesses value the Victorian Government international business offices and the export and investment facilitation provided by Austrade. Feedback however suggests that the Tradestart network is vastly under-resourced.

Local Governments can also act as a conduit to these services by providing introductions to key people, educating local businesses on the services and networks that are available in-market, fostering export development activity through workshops and support for cooperatives.

11 Sovereign Hill CEO, Jeremy Johnson

City of Ballarat Submission______Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

Financial support and incentives The Federal Government’s EMDG plays an important enabling role in developing international trade. However larger exporters feel that new products should attract support separate from EMDG.

State Government often provides a support stipend when attending official international trade missions. This incentive is certainly encouraged by regional businesses. Further export-related funding initiatives would also be welcomed.

Foreign investment Foreign investment is also seen as playing an important role in maintaining and improving Australia’s competitiveness in global markets. International investment at a local level in industries such as agriculture, which requires long term investment strategies, is fairly limited. Companies and cooperatives are increasingly looking overseas for direct investment, particularly to China. China appears to be the preferred source of foreign investment for the perceived level of funding available, their interest in Australia and their long term strategic thinking.

However, consultation with industry indicated that strict government control should be maintained on large foreign investment (e.g., ADM’s takeover bid for GrainCorp). Government must also show leadership: preparing long term infrastructure investment plans for industry; making long term strategic decisions on what and where to invest. Fragmentation and a lack of continuity will not encourage business investment.

Government-to-Government agreements The City of Ballarat maintains a number of sister city relationships. These include Kunshan (China), Inagawa-cho (Japan) and Ainaro (East Timor). The City also has a Memorandum of Understanding with Yangzhou in China. These relationships are predicated on the basis of generating mutual economic, cultural and social benefits between the parties.

Free trade agreements are also seen as helping regional exporter’s access new markets and expand trade in existing ones. Those consulted were certainly supportive of FTAs, particularly within the agriculture sector. Strong support for an FTA with China seems to be evident. China is currently viewed as a major source for Victorian investment, migration and knowledge, with two-way trade in goods and services continuing to rise. That said, any agreements struck must provide positive, long term value for Australia.

The key to turning these agreements into positive export outcomes is to provide a range of support to firms seeking to develop within these markets. A full strategy / program which aims to leverage FTA’s into ‘on the ground’ export outcomes would be welcomed.

Building cultural awareness in communities

Many communities in regional Victoria are growing and diversifying, and presenting a more multi-cultural profile. Improving and enhancing community cultural understanding and awareness should continue to be supported. Initiatives such as training in cultural awareness (e.g., at TAFE level), events such as Harmony day and multicultural groups are all important resources in building cultural awareness amongst regional communities.

City of Ballarat Submission______Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

Regional Public Hearing Program:

Witness Information

Witness Mr Tim Grandfield, Business Development and Events Association Ballarat Regional Tourism Date & Time 12.30 pm Tuesday 29 April 2014

Ballarat Regional Tourism

Ballarat Regional Tourism is the separate, relatively autonomous tourism arm of the City of Ballarat. The board was created on 27 January 2011, to enable the local tourism sector to take ownership of destination promotion of Greater Ballarat. The new organisation commenced operations on 1 February 2011 when it took over key tourism management responsibilities formerly handled by the City of Ballarat. Responsibilities of the new tourism arm include promotion of Ballarat and surrounding areas as a tourist destination; providing visitor information through the visitor information centre, and developing and attracting tourism and business events.

During its first year, the organisation was managed by a private sector board with the city council retaining ownership. On 14 March 2012, the council voted to transfer Ballarat Regional Tourism's ownership to the private sector. The council will still continue to fund the board contingent on it meeting key performance indicators.

Ballarat's tourism industry generates $400 million annually and accounts for approximately 2,000 local jobs. Another $170 million is created for other local businesses from the tourist activities generated in the city.

Events promoted include:

• Ballarat Beer Festival • Victorian PGA Golf Championship • Jayco Herald Sun Bike Tour.

The Committee will be speaking to Mr Tim Grandfield, Business Development and Events.

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Regional Public Hearing Program:

Witness Information

Witness Dr Timothy James Association SED Advisory Date & Time 1.00 pm Tuesday 29 April 2014

SED Advisory

Founded in 1996 (as Strategic Enterprise Development), SED is an advisory firm for organisations operating in regional Australia. SED offers a range of development, strategic and management services, specialising in improving organisations, strategic regional planning, and creating and enhancing asset value. SED has eight offices throughout western Victoria, South Australia and the Northern Territory.

In November 2012, SED Advisory participated in a Victorian Government Trade Mission to Chile and Brazil.

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Regional Public Hearing Program:

Witness Information

Witness Mr Bruce Edward, Managing Director Association Ferndale Confectionery Date & Time 1.30 pm, Tuesday 29 April 2014

Bruce Edward

Bruce was the founder of Ferndale Confectionary in 1995 and remains the Managing Director, though he has now largely retired. Before founding Ferndale, he worked in Mars Confectionary for a number of years. His son Jarrod is now General Manager.

Ferndale Confectionery

Ferndale Confectionery is a family-owned business specialising in ‘high quality, low guilt confectionery, generally sugar free, with natural colours, natural flavours and 100% safe for teeth’. Its brands include JILA mints, JOLS fruit pastilles and LICORETTE. The company also manufactures and packages for other companies.

The company’s Delacombe factory has been continually upgraded and produces in excess of 20 million packs per annum. Ferndale products are distributed in Indonesia, Japan, South Africa, India, Singapore, USA, Hong Kong, Korea, UK, Brunei, China, Malaysia and the Middle East.

Ferndale Confectionary was used as a case study in exporting by Business Victoria. As part of the case study, Jarrod and Leigh Edward explained their approach to exporting:

‘There are many uncontrollable factors at play when dealing with other countries. They try to minimise risk with foreign currency fluctuations, for instance, by purchasing currency six months ahead to lock in a rate.

‘The brothers take a conservative approach to building their brands overseas. "You cannot expect to have a quality product in Australia and then stick to the same costing principles or margin exceptions when you export."’

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Regional Public Hearing Program:

Site Visit

Organisation MaxiTRANS Manufacturing Contact TBC Date & Time 2.15 pm Tuesday 29 April 2014

MaxiTRANS

MaxiTRANS is a domestic manufacturer and supplier of semi-trailers and road transport equipment for freight, both general and temperature-controlled, as well as for bulk transport. It also services its vehicles in its after-sales market. It operates 12 brand names such as Skeletal, Freighter, Maxi-CUBE, Hamelex White and Lusty EMS.

MaxiTRANS products serve many industries including Transport and Logistics, Fresh Produce, Food and Beverage, Building and Construction, Agriculture and Natural Resources – many of which export. In 2012, MaxiTRANS purchased trailer manufacturer AZMEB, which builds Bowl Door Tippers, Flex Tippers and High Volume Side Tippers for the Australian market and also exports its products to countries such as Africa, China and Indonesia.

In addition to its manufacturing facilities in Ballarat, MaxiTRANS also has a manufacturing facility in China, from which it sells to the Chinese market.

The company has been growing earnings since 2009, up from $5.77 million in 2010 to $26.22 million in 2013. In September 2013, the company was added to the S&P ASX 300 Index, which will give it exposure to larger institutional investors that may have restrictions on buying stock in companies that are not in the index.

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Regional Public Hearing Program:

Site Visit

Organisation McCain Foods (Australia) Contact David Leevers, Export Manager Date & Time 3.30 pm Tuesday 29 April 2014

McCain Australia

McCain began processing locally grown potatoes in Daylesford in 1968 at a rate of 20,000 tonnes per year. Construction of a 7 hectare site in Ballarat began in 1974, which was able to process 48,000 tonnes of potatoes annually. McCain plants are now located in Victoria, Tasmania and South Australia with the company supplying a range of French fries, vegetables, pizza, meals, fruit and potato-specialty products for both the retail and food service markets. The Ballarat site now covers an area of almost 48 hectares and houses a cold store with storage capacity of approximately 1.2 million cartons of food.

In 2013, McCain closed its potato processing plant in Penola, South Australia, citing a combination of rising input costs and cheaper imports as the reason for the closure.

McCain currently exports relatively little from Ballarat, but is looking to increase its exports from Australia. McCain products are currently exported from NSW to the Middle East (with the Sarah Lee brand) and from New Zealand to the Pacific.

In its submission to the Inquiry (see attached), McCain raised two issues:

‘Does the Victorian Government have relationships with the overseas major retailers and credible distributors? If these relationships exist, can these be disclosed to suppliers so that the suppliers can get introductions quickly instead of having to find agents / consolidators / brokers to represent them?’ and

‘If the Victorian Government has funding support for exporters, this should be clearly documented and sent to all exporters on a yearly basis given that this funding is somewhat dependent on budget allocations. I believe that exporters need to go and search for this information and at times, the process is not that clear.’

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Regional Public Hearing Program:

Witness Information

Witness Ms Keelie Hamilton, Co-ordinator Economic Development Unit Association Greater Geelong City Council Date & Time 9.00 am Wednesday 30 April 2014

Keelie Hamilton

Keelie holds portfolio responsibilities of BioGeelong (supporting biotechnology in Geelong), NBN development, major industry, business facilitation and investment attraction. In addition, Keelie is: Secretary of Economic Development Australia Victorian Chapter; Member of the G21 Economic Development Pillar; a G21 Economic Development Strategy working group member; and G21 Land Use Plan working group member.

The City of Greater Geelong’s Economic Development Unit is Geelong’s peak agency for business and investment support.

City of Greater Geelong

The City of Geelong’s population of around 215,000 people makes it Victoria’s largest regional centre. The city is a major centre for investment with over 15,000 businesses and a highly skilled labour force of over 90,000.

Geelong has sister city relations with Viquequ (East Timor), Lianyungan (China) and Izumiotsu (Japan).

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Regional Public Hearing Program:

Witneess Information

Witness Mr David Thornton, Manager Association Thornton Engineering Date & Time 9.30 am Wednesday 30 April 2014

Thornton Engineering

Thornton Engineering offers design, steel fabrication, construction and maintenance services, and site installation services. Established in 1975, it has three factories in Geelong and Penshurst.

It specialises in:

 Platework fabrication  Structural steel  Modular assembly. Clients have included mining companies in WA and NSW as well as wool scourers exported to Libya.

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Regional Public Hearing Program:

Witneess Information

Witnesses Ms Elaine Carbines, Chieef Executive Officer (G21), Membeer (RDA) Niigel Harper,, Regional Strategic Maanager (RDA)A Clare Cartledge, Development Officer (RDA) Association G221 and RDA Barwon Soouth West Date & Time 100.00e am Wednesday 300 April 2014

Elaine CCarbines

From 19999–2006, Elaine held the Victoriaan state seata of Geelongn Provincee. As Parliamentary Secretary for Education and Environment, Elaine ovversaw projects includinng The Greata Ocean Road Reegional Strategy and The Coastal Spaces Report. In 2007,7 Elaine commenced work as Parks Victoria’s Maanager of Sttrategic Relations and commenced her role aat G21 in 20010.

G21

G21 is aan alliance ofo government, business and community organisationsg working together to improve the livese of people within the Geelong reegion across five municcipalities – Colac Otway, Golden Plains, Greater Geelong, QQueenscliffef and Surf Coast. G21 is also the official Strategic Planning Committee for the G221 region annd, as such, works closely with, and providees advice to, Regional Developmennt Australia (RDA), the Regional Managementn Forum and the State and Federal governments on thhe region’s needs and priorities.

RDA Baarwon South West

In its suubmission, the RDA identified seveen areas where State Government action woould facilitatte exports:

 Increased or more targeted promotion of the Export Finance Insurrance Corporation  Build on existingx supply chains byy adding new products  Lead trade missions too cities wheere existing cultural relations (e.g. sister cities)s can be leveragede  Use DSDBI international offices to locate niche buyers ofo Victorian products and identify overseas investors  Lobby the Federal Government too change visa restrictions for skilleed workers  Review red tape  Invest in infrastructure (especially intermodala facilities, roads and bbridges)

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Regional Public Hearing Program:

Witneess Information

Witness Mr Nick Stanley, Chief Executive Officer Association Sky Software Date & Time 10.30 am Wednesday 30 April 2014

Nick Stanley

In March 2014, Sky Software was bought by the Tribal Group. Speaking at the time of the acquisition, Nick said of Geelong:

“Sky Software has proven that Geelonng is emerging as Australia’s Silicon Valley. We have the right skills, infrastructure and people for an IT software company to compete and expand globally. We continue to remain committed to Geelong and our global expansion, with Tribal, will allow us to continue creating and maintaining jobs in Victoria over the coming years.”

Sky Software

Sky Software is a privately held and whollly‐owned Australian software company in cloud‐ based student, learning, finance and customer management systems for the education and training sector. Sky Software employs 42 people in its Sydney and Geelong offices and has reseller partners in the United Kingdom, Singapore, Philippines and Malaysia. Sky Software’s products are developed by its in‐house teeam in Geelong. It serves its global customers out of Australia directly and in collaboration witth its partner network.

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Regional Public Hearing Program:

Witneess Information

Witness Mr Sandy Harman, Trade Start Advisor Association Export Council of Austraalia Date & Time 11.00 am Wednesday 30 April 2014

Sandy Harman

Sandy was appointed to his role in June 2013. A marketing and negotiation professional, he founded and ran his own successful service‐oriented business in Melbournne for 15 years and has been involved in export business development in regional Victoria forr over ten years. He was recently the Head of International Sales at VEA Group (one of the worrld’s largest education‐specific audio‐visual producers).

Sandy has extensive experience in exportting to the United States, Asia, Europe and Africa, as well as specialising in intellectual property licensing (film, software and publishing) along with businesses exporting physical goods. He is also a volunteer at the Couuntry Fire Authority.

Export Council of Australia

The Export Council of Australia (ECA) is thhe peak Industry body for the Australian export community. The ECA is a not‐for‐profit organisation that has the development of Australia’s resources via the promotion of Australian industry in international markets as its primary goal. The ECA represents all exporters: large, medium and small.

In its submission to this Inquiry (see attacched), the ECA notes government’s role in providing access to market information, financial support and in‐market contacts. Thhe submission states (p6):

‘One way government can cost effectively assist exporters is by partnering with industry bodies and industry/market specialists to deliver programs thhat provide practical tools to help exporters overcome export barriers and minimise business risk. By way of example, informative eevents including market briefingss and practical export workshops facilitated by trade professionals can be an effective way to increase the skills and knowledge of exporters.’

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April 17, 2014

Executive Officer Rural and Regional Committee Parliament House East Melbourne VIC 3002

Sent by email to: [email protected]

Submission to inquiry into opportunities for Increasing exports of goods and services from Regional Victoria

The Export Council of Australia (ECA) is pleased to have the opportunity to put forward a submission to the Rural and Regional Committee for the Parliament of Victoria in relation to the Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria.

A not-for-profit, membership based organisaation, the ECAC represents exporters and importers of all sizes and across a wide range of industry sectors. As trade is a key driver of joobs, innovation and long term prosperity, the ECA strongly supports this inquiry and encourages all necessary measures to be taken to help facilitate the growth of exports from Regional Victoria.

This submisssion addresses all of the terms oof reference in varying levels of detail based on existing data and evidence gathered by the ECA’s Victoria based staff that interface regularly with the export community.

a) The identification and volume of Victorian agricultural, resource, manufacturing and service industry exports to overseeas markets originating in regionnal Victoria

The Victorian economy constitutes 22.2 per cent of Australia’s gross domestic product. In 2012/13 goods exports from the state were valued at 23 billion—9.3 per cent of Austraalia’s total goods exports— with the top exports including woool, motor cars, aluminum, milk andd cream, and meat. In the same year, service exports were valued at 12.6 billion—24 per cent of Australia’s total services exports. The major service exports from the state were education related travel and personal travel.

Victoria’s major export destinations in 2012/13

$AUD million % Share

China 3,748 17.3%

New Zealand 1,932 8.9%

Japan 1,741 8.0%

United States 1,553 7.1%

Republic of Korea 1,025 4.7%

Source: DFAT

Over 25 per cent of Australia’s farms are situated in Victoria with over 60 per cent of Victoria’s land mass used for agricultural activity. This is aided by the fact that over 620 000 hectares of land in Victoria is irrigated.

The value of food and fibre, exported from Victoria increased 5 per cent in 2012/13 to reach a record $9.4 billion, accounting for 29 per cent of all farm exports from Australia. Grain and dairy are key, accounting for 43 per cent of the total value of food and fibre exports.

Victoria is Australia’s biggest dairy producing state with almost two thirds of all national dairy production coming out of Victoria, while Victoria also produces 54 per cent of Australia’s animal fibre exports.

Key agricultural exports figures for Victoria 2012-13

Product Top Export Market Export Value % Total Australian

Grains Indonesia $2,200 17%

Dairy Japan $1,850 86%

Meat United States $1,780 22%

Animal Fibre China $1,340 54%

Pre-prepared food New Zealand $878 46% products

Horticulture Hong Kong $563 46%

Skins and Hides China $452 43%

Wine China $197 10%

Seafood Hong Kong $141 14%

As can be seen form the table above, Asian markets, namely China, Hong Kong, Indonesia and Japan, are the major buyers of Victorian agricultural products. The United States and New Zealand are the top Western market buyers. b) Regional Victoria’s competitive advantages in meeting the demands of world markets

Regional Victoria is responsible for producing some of the world’s highest quality agricultural products. There is global demand for fresh, clean, safe food products and Regional Victoria is uniquely placed to deliver superior quality fruit, vegetables and meat.

Some of the key factors that contribute to Victoria’s competitive advantage in agriculture are its:

 Temperate climate

 Variety of soil and climate types in different regions

 Clean supply of water

 Skilled farm management

 Environmentally responsible framers

 Low input farming systems

 Well-developed farming technology

Regional Victoria also has distinct competitive advantages when it comes to the dairy industry, the region’s second largest agricultural export industry. The dairy industry in Regional Victoria is dynamic, varied and innovative. As a general trend, dairy farms are increasing in size and there are now a number of large dairy processors in the region. Employment is said to be growing in this sector and there is evidence of medium sized dairy farms investing in new plants to produce milk powder for export to China. The dairy industry is particularly important in Goulburn Valley where the fruit and vegetable industry is going through some challenging and transformative times.

Important factors that contribute to Regional Victoria’s competitive advantage in dairy are:

 The development of innovative ways to extend the shelf life of fresh milk (up to 26 days), allowing for sea freighting to closer markets and air freighting with long shelf life remaining to China and more distant markets.

 Exporting bulk shipments (via bladders in refrigerated containers) for private label.

 The availability of consultants with extensive experience in the Asian region and who understand the particular requirements of the Asian “White Revolution”.

 The freshness of Australian genetics products, which are often fresher than older material being sold in Asia from North America.

Not only is Regional Victoria an agribusiness powerhouse, Geelong in particular is a vibrant manufacturing hub; rapidly moving from traditional manufacturing to world-class advanced manufacturing. In 2012 the manufacturing industry was responsible for annual value-add of $1.7

3 billion or 18.3% of total value-add in the City of Greater Geelong. The region’s competitive advantage in manufacturing can be largely attributed to1:

 Geelong’s excellent education, training, R&D facilities that complement existing industry. These facilities include:

o CSIRO Materials Science and Engineering

o Deakin University, including the Institute of Technology Research and innovation

o International Fibre Centre

o CSIRO Division of Animal Health

o CSIRO Marine Sciences

o Gordon Institute of TAFE

o Geelong Technical Education Centre

 The ability of regionally based education institutions, such as Deakin University, to adapt to the needs and demands of local industry possibly quicker than what might occur in metropolitan centres.

 The diverse industry base –there are roughly 500 manufacturers in Geelong across industries including automotive, transport equipment, metals, extractive industries, chemicals and petroleum, cement, engineering, textiles, timber and food.

 Geelong is well served by surrounding infrastructure including rail, air and port infrastructure.

 Access to supply chains and the areas skills base advantage.

 The Australian Future Fibre Research and Innovation Centre (AFFRIC), which is a collaborative relationship between Deakin University, CSIRO and the Victorian Centre for Advanced Materials Manufacturing (VCAMM).

c) Innovative approaches to exporting and lessons to be shared from successful exporters

Below is a summary of some examples of innovation displayed by exporters from regional Victoria. The full case studies can be found in Appendix 1.

 The creation of an “Innovation Centre” where a team of designers and engineers are engaged solely in creating innovation in design and product performance.

 Adapting a product to suit a diverse range of applications such as domestic installations, retail showrooms, logistics and warehousing centres, revolving restaurants and now, mining.

 Developing a process that extended the shelf life of fresh milk to 26 days

1 Input provided by the Australian Automotive Aftermarket Association and the Geelong Manufacturing Council.

 Using the latest technology to provide a controlled environment for stock which is fully automated across all operations

 Upgrading production facilities to create a state-of-the-art, eco-friendly powder manufacturing facility, resulting in the company being rated the fastest growing business in Australia in 2008 by business magazine BRW.

 Partnering with local regional university, Deakin, undertaking R&D and using cutting-edge technology to become the world’s first commercial maker of carbon fibre automotive wheels—a product with global demand.

In order to increase exports from Regional Victoria, it is essential that opportunities are created whereby businesses can learn from each other’s successes and failures; where innovative ideas can be born and shared. These forums are most effective when organised and promoted by an organisation who understands international trade and the challenges and opportunities faced by exporters in that particular region.

d) Impediments and barriers creating difficulties for regional exporters

The following is a summary of issues faced by Victorian agribusiness exporters (based on anecdotal evidence):

 Environmental issues, such as drought, fire, soil fertility, weeds

 Bio threats from imported food and livestock

 Tariffs on exported produce, particularly in Japan2 and Europe

 Subsidies to farmers in other countries

 Market access, including quarantine and protocol requirements

 Lack of adequate information on markets and market opportunities

 Lack of information on regulatory requirements in potential export markets; it would be advantageous to have a centralised knowledge bank of known certification, protocols, and bureaucratic requirements for entry of any product to any market.

 Import quotas in potential export markets, which can raise the price of the goods in-market

 Currency fluctuations, for example the appreciation of the Australian dollar

 Cost of freight: quite a few exporters say it is more expensive to get products from their premises to Melbourne Port than it is to then ship them to their destination market.

 Cost of shipping internationally

 Cost of hiring labour in Regional Victoria

2 Note this comment was provided before the Economic Partnership Agreement was signed between Australia and Japan.

 Poor international recognition of quality and characteristics of Australian Olive Oil in Asian markets

 In the case of small goods, AQIS can be slow to process applications for export certification

In the case of manufacturing companies, some of the key barriers to export that have been expressed include:

 Logistics costs (as mentioned above)

 The cost of inputs such as power

 The availability of skilled labour

 Lack of access to export markets

 The high Australian dollar

 The high cost base

The ECA understands that education and training is crucial to breaking down barriers to trade. Australia’s International Business Survey 2013 (attached) found that the top five barriers to export noted by respondents were:

 A lack of information about local culture, business practices and language.

 Lack of information on local regulation

 Problems in obtaining customer payment

 Tariffs, quotas and import duties

 Licenses, permits and product standards

These barriers, although not specific to Regional Victoria, are representative of the Australian export community generally. It is therefore important that companies have access to the information and contacts they need to build a successful and sustainable export businesses.

e) The current and future roles of government in supporting regional businesses in their export endeavours

Governments play an important role in export support and promotion. There are market failures that impact on companies’ (especially SMEs) ability to overcome barriers to export, including access to market information, financial support and links to in-market contacts. Governments can and should play a role in assisting businesses wanting to start exporting and those businesses looking to expand their export footprint into new cities and/or markets.

One way government can cost effectively assist exporters is by partnering with industry bodies and industry/market specialists to deliver programs that provide practical tools to help exporters overcome export barriers and minimise business risk. By way of example, informative events including market briefings and practical export workshops facilitated by trade professionals can be an effective way to increase the skills and knowledge of exporters.

In 2010/11, the Department of Innovation, Industry and Regional Deveopment (now the Department of State Development, Business & Innovation) lead by a peak industry body, ran 21 events attracting 815 attendees, and 10 events, attracting 577 attendees in 2012/13. ‘Effective Negotiation for Export Success’ was another workshop that was run successfully in Regional Victoria. Testimonies and full details of the events program run with DSDBI can be found in Appendices 2 and 3.

There are of course other ways in which the government can help facilitate an increase in exports from Regional Victoria and the ECA looks forward to discussing these in more detail with the Regional and Rural Committee if so desired. We stand willing and able to provide input and assistance where required.

Appendices

Appendix 1 – Innovative Exporter Case Studies

Keech Castings Keech maintains an “Innovation Centre” where a team of designers and engineers are engaged solely in creating innovation in design and product performance. Keech CEO Herbert Hermens says, “Without our Innovation Centre we would not be getting anywhere in the global market.”

Keech is successfully developing an export market in Chile and has been working with Austrade to take part in Expomin in Santiago in late April. Keech has also recently been made a Hitachi Original Equipment Manufacturer, allowing Keech to produce Hitachi branded products for the mining industry. This was achieved after a very demanding quality assurance process and assessment by Hitachi.

Australian Turntable Company The Australian Turntable Company (ATC) produces (as their name suggests) turntables for a diverse range of applications such as domestic installations, retail showrooms, logistics and warehousing centres, revolving restaurants and now, mining.

Their mining product is truly innovative and can increase overall mine efficiency by as much as 5%, saving time, fuel, tyres and wear & tear on mining trucks. It also increases workplace safety and with the new weighbridge facility more quickly and accurately measures ore delivery than ever before.

ATC are currently pursuing export success in the Chile mining industry. Previous successes include installing a 50m diameter revolving restaurant deck, in a 435m tower in Tehran, Iran.

Kyvalley Dairy Kyvalley Dairy has innovated for export success by developing a process to extend shelf life for fresh milk to 26 days. This allows for bulk sea freighting of fresh milk to South-East Asian markets and longer shelf life in retail stores by air freighting to mainland China.

Hazeldene’s Chickens Hazeldene’s Chickens is a family owned business based in Bendigo and Bald Hill that has been operating since 1957. The company produces a range of chicken products for domestic sale and export. The farms use the very latest technology to provide a controlled environment for stock, which is fully automated across all operations.

All products are produced from birds bred, reared and processed on Hazeldene’s farms. Every phase of the process is carried out in accordance with Commonwealth and State Government legislated guidelines and regulation and all products are tested under the HACCP Food Safety System.

Ulupna Winery Ulupna Winery is in an area quite unsuitable for wine production due to the fact it’s too hot year round. Yet the company manages to produce award winning wines against all odds with most of their production exported to China.

Ulupna Winery’s marketing material strategically capitalises on their Australian location with even the company logo designed to look uniquely Australian.

Longwarry Food Park Longwarry Food Park has won several awards for environmental best practice and sustainability as well as Export Awards, including Victorian Exporter of the Year in 2012.

The Saurin Group of Companies purchased the plant from Bonlac Foods in 2001 and renamed it “Longwarry Food Park” to re-establish the plant's heritage and link to the local community. The plant has since been upgraded, turning it into a state-of-the-art and eco-friendly powder manufacturing facility.

Longwarry Food Park’s milk intake has grown by 30 per cent per annum since beginning milk powder production. The company is now a substantial exporter to several markets, including in Asia and the Middle East. In 2008, Longwarry Food Park was rated the fastest growing business in Australia by business magazine BRW.

Albins Off Road Gear Albins Off Road Gear is an Australian Proprietary Limited Company that specialises in the design and manufacture of drivetrain components. Their capabilities include the ability to produce; individual gears, axles, drive flanges and ring and pinions right through to complete unit, sequential shift transmissions.

Albins has a 30 year history of motorsport drivetrain manufacture and is currently the largest high performance transition manufacturer in the Southern Hemisphere.

Utilising ISO 9001 2008 certified manufacturing techniques, the team of over 40 employees implements up to the minute design trends to create product that is currently in use in such places as Dakar Rally, Baja 1000, Australian V8 Supercars as well as various European and Australasian Rally Championships.

Carbon Revolution Carbon Revolution has delivered an innovation step change in automotive performance and efficiency.

Carbon Revolution’s award-winning “one-piece” carbon fiber wheels are highly engineered products that represent the cutting edge in design and manufacturing with composite materials. The result is a weight savings of 40-50% over aluminum equivalents in an area of the vehicle where weight is the most critical.

Since its inception nearly a decade ago, Carbon Revolution has developed and validated this proprietary technology to the toughest OEM standards. Production of the “CR-9” wheel series has now commenced with product currently shipping in limited numbers for Porsche, BMW M3, Audi R8, Lamborghini and McLaren MP4-12C within Europe, Japan and North America, with new designs and fitments to come as manufacturing capacity increases.

Carbon Revolution recently received a $5 million grant from the Victorian Government’s Geelong Region Innovation and Investment Fund, which will allow the company to build a $23.8 million carbon wheel manufacturing facility.

Appendix 2 – DIIRD/DBI/DSDBI Export Events Program

2010/11

CLEANTECH IN THE USA: OPPORTUNITIES FOR VICTORIAN BUSINESS 07 MAY 2010

This event featured a panel of visiting USA investors who sketched the cleantech landscape in North America and highlighted opportunities for Victorian companies, in the wake of the US stimulus package. The event was presented in association with Austrade.

Venue: Investment Centre Victoria, 55 Collins St, Melbourne

Number of registered delegates: 78

TECHNOLOGY: BRIDGING THE GLOBAL GAP 20 MAY 2010

Aimed at helping Victorian companies understand the importance of implementing technological solutions to streamline their export processes, this event showed how time and money can be saved by including technology in international business strategies.

Venue: The John Scott Meeting House, La Trobe University, Bundoora

Number of registered delegates: 62

STORIES FROM THE TRENCHES: REGIONAL VICTORIA TAKING THE WORLD BY STORM! 30 JULY 2010

This luncheon highlighted the achievements of Victorian regional exporters, from large manufacturing to small agricultural.

Venue: Silks @ the Bendigo Jockey Club, Bendigo

Number of registered delegates: 85

MANAGING FOREIGN EXCHANGE & EXCHANGE RATES FOR SMALL BUSINESS 19 AUGUST 2010

Presented as part of the Energise Enterprise festival, this event provided practical, hands-on advice for small exporters grappling with the effects of the high AUD.

Venue: Conference Room, 121 Exhibition St, Melbourne

Number of registered delegates: 50

DON’T GET CAUGHT IN THE FX TRAP: PROTECTING YOUR BUSINESS FROM FOREIGN EXCHANGE FLUCTUATIONS 16 SEPTEMBER 2010

This panel discussion focused on helping exporters minimise FX risk, while maximising profits. The importance of having a sound FX policy was emphasised by a panel of experts, including a well- regarded Victorian exporter.

Venue: Nuevo 37, Hilton South Wharf, Melbourne

Number of registered delegates: 95

SCORING FOR AUSTRALIA: THE BUSINESS OF EXPORTING SPORT 23 SEPTEMBER 2010

Opportunities for Victoria companies to participate in major international sporting events were highlighted and exporters shared their stories. Delegates were also given a behind-the-scenes tour of Etihad Stadium.

Venue: Etihad Stadium, Melbourne

Number of registered delegates: 64

PAST IMPERFECT, FUTURE TENSE: EXPLORING THE YEAR THAT WAS & THE ONE AHEAD 01 DECEMBER 2010

Presented in association with EFIC, the final event of 2010 assembled a panel of top economists to dissect the year that was and discuss the year to come.

Venue: Queen’s Room, Parliament of Victoria, Melbourne

Number of registered delegates: 100

WELCOME TO 2011! PAKISTAN SNAPSHOT 24 JANUARY 2011

Building on the success of the inaugural start of year networking event held in 2010, this year a high profile speaker was invited to address guests on the challenges and opportunities of doing business in Pakistan.

Venue: Conference room, 121 Exhibition St, Melbourne

Number of registered delegates: 41

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Regional Public Hearing Program:

Witneess Information

Witness Mr Peter Dorling, Business Manager Association Avalon Airport Date & Time 11.30 am Wednesday 30 April 2014

Peter Dorling

Peter is the Business Manager at Avalon Airport. In 2013, announcing the trial of live cattle export from Avalon he said:

"A freight forwarder found us and realised it would be far better to use Avalon because it is not a crowded airport and we can do freight any time of the day or night because we don't have a curfew or peeople problem."

Avalon Airport

Avalon Airport sits on a 1,700 hectare site with a 3,000 metre runway, five kilometres of taxiways and 32 hectares of sealed surfaces. It is a 24‐hour airport with no curfew. Air traffic control tower which operates from 7am–8pm and on an ‘as required’ basiis outside these hours. Unlike Melbourne Airport, which is governed by the Commonwealth Airports Act, Avalon Airport falls under the jurisdiction of the Department of Defence, and is privately leased by Linfox Group on a 99 year lease.

The most notable freight operations incluude the Melbourne Formula 1 Grand Prix, V8 Supercars and Superbikes, plus some specialist charters including livestock race horses, fresh produce, military hardware and touring musicians. The airport can facilitate loads on all aircraft types from Boeing 747‐8 series down, with equipment available to load via the main deck, lower deck, nose or tail end of the Aircraft, with a maximum lift of 16 tonnes.

Avalon Airport has international airport status, including ‘first port of entry’ rights for handling freight, meaning it can process international freight in and out of the country, coordinating paperwork and permissions with the freighter or freight forwarder on site. It has three dedicated freighter parking positions. An Airport Master Plan is currently being reviewed by the Commonwealth Governnment.

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Regional Public Hearing Program:

Witneess Information

Witness Professor Jane den Hollander, Vice‐Chancellor Mr Gary Heyden, Director, Deakin Research Commercial Mr John Molony, Executive Director, Deakin International Association Deakin University Date & Time 12.00 pm Wednesday 30 April 2014

Jane den Hollander

Jane has been Vice‐Chancellor and President of Deakin University since 2010. Prior to that she was Deputy Vice‐Chancellor (Academic) and Pro Vice‐Chancellor Acaddemic Services at Curtin University in Western Australia.

At Deakin, Jane introduced LIVE the future, ‘an aspiration for Deakin to driive the digital frontier in higher education, harnessing the power, opportunity and reach of new and emerging technologies in all that it does.’

She is also a board member of Universities Australia, Education Australia Limited, UniSuper Limited and the Advisory Board of the Office of Learning and Teaching. Shhe is Deputy Chair and trustee of the Geelong Performing Arts Council and Chair of the Regional Education and Skills Advisory Group.

Deakin University

Established in 1974, Deakin University has campuses in Geelong, Warrnambool and Melbourne. It has approximately 44,000 students. This figure includes around 8,000 internattional students from over 100 countries. The majority of these study in the Melbourne campus, though an increasing proportion have been studying in the regional campuses in recent years.

In its submission, the University indicated that its research facilities (such as Carbon Nexus) have been important to draw students, and that continued investment from the Government in these is essential.

The submission also considers that a speecific regional focus should be added the ‘Study Melbourne’ strategy. To achieve this, the University recommends that the Government (p7):

1. Appoints regional representatives on the Study Melbourne Advisory Booard.

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2. Establishes and supports a regional sub‐brand under Study Melbourne.

3. Conducts a comprehensive audit on Viictoria’s regional education offerings to enable these to be systematically incorporated in DSDBIs marketing efforts within a framework of established and monitored Key Performance Indicators.

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Deakin University

Submission

Victorian Parliament Rural and Regional Committee

Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

17 April 2014

Preamble

Deakin University is pleased to contribute to the Victorian Parliament’s Regional and Rural Affairs Committee’s Inquiry into Increasing Exports of Goods and Services from Regional Victoria

As Victoria’s largest regional university and one with an international reputation for the quality of its teaching and research, Deakin believes this is a timely and relevant Inquiry. Deakin’s focus on community engagement in the Geelong, Barwon and Western Victorian districts ensures that it is in tune with community sentiment and concerns.

While Deakin’s full range of activities extend from engagement in agriculture and regional bio- security, through to regional manufacturing and job security, this submission will focus on the University’s role in creating and developing an international market in higher education based on the University’s regional campuses in Geelong –Waterfront and Waurn Ponds, and Warrnambool as well as a network of medical training facilities throughout Western Victoria.

Whilst the growth of the international student market provides the focus for this submission, we believe that the observations contained in this submission reflect upon other aspects of the economic and social resilience of regional Victoria as well.

Deakin University Submission to Inquiry into Increasing Exports of Goods and Services from Regional Victoria | 1 Responses to the Terms of Reference

(a) The identification and volume of Victorian agricultural, resource, manufacturing and service industry exports to overseas markets originating in regional Victoria (i.e. what is exported from Victoria and in what quantities?)

I. The proportion of students choosing to study regionally is growing at Deakin

As Table 1 demonstrates, the percentage of Deakin’s international students choosing to study at a regional campus (i.e. Geelong Waterfront, Waurn Ponds or Warrnambool) has increased steadily from 11% in 2010 to 19% in 2014.1

Table 1: International Enrolments in Deakin’s Regional Campuses as a Percentage of Total International On & Off Campus Enrolments Course Enrolment 2010 2011 2012 2013 2014 YTD TOTAL REGIONAL CAMPUSES 880 1,024 1,007 1,273 1,145 TOTAL ALL ON & OFF CAMPUS ENROLMENTS 8,190 8,372 7,839 7,784 6,183 Proportion of International On-Campus enrolments in Regional Campuses 11% 12% 13% 16% 19%

II. Deakin’s key markets for regionally-based students are China and India

Table 2 demonstrates that Deakin’s key international markets for regionally-based students are China and India followed by Malaysia, Iran, Sri Lanka and Vietnam. Deakin International is also of the view that significant growth opportunities exist in other countries in our region.

Table 2: Regionally-based International Students: Top 20 Home Countries (based on Total Enrolments in 2014 ytd)

Home Country 2010 2011 2012 2013 2014 Total INDIA 225 167 138 280 342 1,151 CHINA (EXCLUDES SARS AND TAIWAN PROVINCE) 150 230 241 279 211 1,111 MALAYSIA 124 137 137 120 91 609 IRAN 35 46 49 73 64 267 VIETNAM 19 19 26 33 37 133 SRI LANKA 37 40 43 43 32 194 HONG KONG (SAR OF CHINA) 26 34 26 31 28 145 SAUDI ARABIA 2 12 12 24 24 74 PAKISTAN 19 24 24 25 21 113 BRAZIL 1 1 2 2 20 26 UNITED STATES OF AMERICA2 37 59 55 55 20 226 BANGLADESH 4 10 11 19 19 63 UNITED ARAB EMIRATES 9 31 27 22 18 106 INDONESIA 15 15 14 13 15 72 PHILIPPINES 1 7 9 11 15 43 MAURITIUS 9 8 10 10 11 48 CANADA 19 14 12 11 10 66 GERMANY 8 9 8 15 10 50 KOREA, REPUBLIC OF (SOUTH) 3 7 5 24 9 48 CHINESE ASIA (INCLUDES MONGOLIA) 1 3 8 10 8 30

1 NB. 2014 figures provided are YTD representing enrolments as at 15 April 2014 and do not yet reflect T2 and T3 enrolments. 2 These figures, in the main, represent the Study Abroad program.

Deakin University Submission to Inquiry into Increasing Exports of Goods and Services from Regional Victoria | 2

III. Regional international students contribute $50M p.a. and 345 jobs to Geelong

The economic impact of international students is significant for regional economies. The Victorian Government’s International Education Strategy on page 8 sets out:

 International education is Victoria's largest single export industry;  The industry was valued at $4.365 Billion in 2012;  This includes spend on fees and goods and services;  Of this, fees account for just under half; and,  Deloitte Access Economics estimates that every $145,000 spent by international students in Australia generates one full-time equivalent job.

Based on Deakin’s Geelong enrolment (see Table 3), applying the Victorian Government’s formula and assuming average fees of $25,000 per annum the estimated economic impact of international students for Geelong is just over $50 million per annum for Geelong and 345 jobs.

Table 3: International Enrolments - Geelong 2010-2014 Course Enrolment 2010 2011 2012 2013 2014 GEELONG WAURN PONDS ON CROSS INSTITUTION 29 16 9 5 4 CAMPUS CAMPUS FACULTY OF ARTS AND EDUCATION 54 40 29 30 24 FACULTY OF BUSINESS AND LAW 56 61 64 FACULTY OF HEALTH 25 28 44 64 59 FACULTY OF SCIENCE, ENGINEERING AND BUILT 451 692 650 ENVIRONMENT 365 437 NON-AWARD 1 1 ON CAMPUS 530 581 596 791 738 GEELONG WAURN PONDS CAMPUS 530 581 596 791 738 GEELONG WATERFRONT ON CROSS INSTITUTION 3 38 35 49 19 CAMPUS CAMPUS FACULTY OF ARTS AND EDUCATION 2 3 3 FACULTY OF BUSINESS AND LAW 61 48 FACULTY OF HEALTH 101 112 83 74 59 FACULTY OF SCIENCE, ENGINEERING AND BUILT 269 269 251 ENVIRONMENT 215 258 NON-AWARD 1 ON CAMPUS 319 408 389 456 381 GEELONG WATERFRONT CAMPUS 319 408 389 456 381 Summary 849 990 986 1,247 1,119

(b) Regional Victoria’s competitive advantages in meeting the demands of world markets

Regional Victoria’s competitive advantage is that the long term investment in infrastructure in regional Victoria, particularly in transport, sub-tertiary education, public health and communications provides a platform from which Victorian higher education providers can locate and deliver both degree and post-graduate programs in regional Victoria.

Secondly, Victoria has an internationally recognised network of higher education providers supplemented by a range of both Commonwealth and State research agencies that collectively provide fertile ground for advanced learning and research. Many of these, such as agricultural research facilities, CSIRO’s advanced textile laboratories and the Australian Animal Health

Deakin University Submission to Inquiry into Increasing Exports of Goods and Services from Regional Victoria | 3 Laboratories, are located in regional Victoria which serves to emphasise the potential for growing the market for international students outside of Melbourne.

Deakin’s unique structure lends it a competitive advantage in this regard. While Australia’s ninth largest university in terms of student enrolments, it is essentially a regional university, headquartered in Geelong as prescribed in its enabling Act in 1974 and interestingly also maintains a significant metropolitan presence primarily through its Burwood campus in Melbourne’s inner- eastern suburbs. As a University with both teaching and research capabilities across four faculties (Science, Engineering and the Built Environment; Business and Law; Arts and Education; and, Health Sciences) this means that Deakin University can, and does, leverage its size and scale as well as its teaching and research strengths to support and promote growth of its regional activities.

One example is the University’s program in Marine Science and Aquaculture located at its Warrnambool campus. This expanding program involving both undergraduate teaching and postgraduate and postdoctoral research, attracts an increasing percentage of its students from overseas. The recent appointment of a second Chair in Marine Science in Warrnambool, by an eminent biologist recruited from Swansea University in the UK, confirmed the global reach of this program. The quality of the program relies not only on the facilities and staff at Warrnambool but upon Deakin’s capacity to draw on a range of skills in Burwood and Geelong to teach into the Warrnambool course. This strategic application of both metropolitan and regional capabilities to develop regional teaching and research programs is a core Deakin asset.

(c) Innovative approaches to exporting and lessons to be shared from successful exporters (i.e. what are the success stories from regional exporters?)

While Deakin has grown the number of international students enrolled in its regional campuses an equally important aspect of its program has been its focus on recruitment in strategic economic disciplines. An example of this has been the recent growth in engineering students from India at the University’s Geelong Waurn Ponds campus (see Table 4). This is as a result of Deakin’s India Office deploying an institutional marketing strategy to leverage value from the University’s extensive research and industry partners throughout India and Sri Lanka.

Table 4: India Enrolments in Engineering: Waurn Ponds

HOME COUNTRY = INDIA 2010 2011 2012 2013 2014 YTD S367 BACHELOR OF ENGINEERING 21 15 9 13 7 S460 BACHELOR OF CIVIL ENGINEERING (HONOURS) 3 S462 BACHELOR OF MECHANICAL ENGINEERING (HONOURS) 4 S463 BACHELOR OF MECHATRONICS ENGINEERING (HONOURS) 1 S650 GRADUATE DIPLOMA OF ENGINEERING 1 1 S750 MASTER OF ENGINEERING 9 7 4 1 3 S751 MASTER OF ENGINEERING (PROFESSIONAL) 49 27 24 106 185 TOTAL 80 50 37 120 203

Deakin was the first foreign University to open an office in India in 1996. Success in student recruitment since that time reflects the success of Deakin’s long term belief in the importance of growing the international student market and using its reputation for teaching and research excellence as a primary point of difference.

Deakin University Submission to Inquiry into Increasing Exports of Goods and Services from Regional Victoria | 4

As the presentation at Attachment 1 demonstrates, Deakin has made significant investments to create the world class Innovation Precinct on its Waurn Ponds campus with particular focus on engineering, advanced materials science, information technology and health sciences including medicine. This is an outstanding example of the value to a region of developing above world standard research reputation and marketing undergraduate programs in those fields. Consequently, Deakin also offers a seamless transition for international students from undergraduate to postgraduate qualifications, all based in regional Victoria. Facilities such as Carbon Nexus, the world’s leading carbon fibre research facility, also reflect the long-term value of coordinated Commonwealth, State and University investment in regionally-based research assets. Such continued investment from both Victorian and Commonwealth Governments in this area is essential. A current snapshot of Carbon Nexus reveals postgraduate students and postdoctoral researchers from Iran, China, India, France, Germany and Portugal comprising 23 out of 37 personnel (62%).

(d) Impediments and barriers creating difficulties for regional exporters (i.e. what are the difficulties faced by potential and existing regional exporters?)

AND

(e) The current and future roles of government in supporting regional businesses in their export endeavours (i.e. what can government do to support regional exporters?)

Terms of Reference (d) and (e) are considered jointly in the context of the Department of State Development, Business and Innovation’s (DSDBI) International Education Strategy for Victoria 2013- 2018 (the Strategy) which is available at http://dsdbi.vic.gov.au/our-department/strategies-and- initiatives/international-education-strategy-for-victoria.

The Strategy emphasises that international education is Victoria’s leading single export industry and articulates the Victorian Government’s plan for strengthening its position in the international education market. Deakin University applauds the government’s initiative and was pleased to contribute to the broad consultations that underpinned the development of the Strategy.

It could be argued that Regional Victoria is adequately covered in the Strategy as much of the document refers to 'Victoria'. However, the reality is that in the implementation of the plan 'Victoria' is at risk of automatic default to 'Melbourne', particularly in light of the development and support of the ‘Study Melbourne’ brand.

Deakin University understands the importance of leveraging value from the ‘Melbourne’ brand in a very competitive international market. Notwithstanding our support for ‘Study Melbourne’, Deakin University believes that the addition of specific regional focus to the Strategy and in the operations of the facilitating international office at DSDBI and throughout its offshore network would be the most effective way to support regional educational providers to increase recruitment and thus, export revenue.

Considerations for regional Victoria that Deakin proposes can be set against some of the Strategy’s key initiatives, as follows:

Initiative 1. Establish a Victoria international education advisory body.

Appoint specific representation with delegation for the oversight of regional issues.

Deakin University Submission to Inquiry into Increasing Exports of Goods and Services from Regional Victoria | 5 Initiative 2. Extend the support provided by Victoria’s Network of Education Services Managers in key markets.

These offices need to have a strategy, action plans and Key Performance Indicators (KPIs) specific to regional Victoria that are set in partnership with the regional institutions. DSDBI should conduct an audit of the higher education offering available to international audiences in regional Victoria.

This information could be used to inform plans at Post and populate marketing material that promotes regional offerings as a supplement to the Study Melbourne initiative.

Initiative 4. Continue to support collaborative models for Victorian providers … to leverage commercial opportunities in new markets.

To ensure that it gets the attention and resources necessary for impact, regional Victoria requires separate consideration in this process.

Initiative 9. Showcase Victoria's quality international education through events such as the Victorian Government International Education Awards.

Regional Victoria should be considered as a separate category in any events conducted. Appropriate award categories could include 'outstanding achievement by an international student in regional Victoria’ or 'Delivery of excellent international student support at a regional campus.'

Initiative 10. Establish the Study Melbourne Student Centre.

The Centre should promote its services to international student at regional campuses and ensure that it is taking into consideration the needs specific to regionally located students in the delivery of its services in both online and face-to-face modes as regional students will often pass in and out of Southern Cross as they visit Melbourne. The University strongly supports DSBDI’s intention for the Centre to develop an outreach program which takes staff to regional campuses.

Initiative 12. Expand work experience opportunities for international students including the establishment of a Study Melbourne Internship Program, offering up to 150 international student internships per annum.

Work integrated learning opportunities are a very important component in attracting students to study in Australia and this program must make provision for students in regional Victoria. Ideally that would include not just promoting the Study in Melbourne Internship Program to regional students but would extend to sourcing internships in the regions. Where regional students do take up internships in Melbourne the program should make provision for their transport and accommodation costs.

Initiative 13. Establish the Study Melbourne Experience Program.

Whilst this program aims to welcome international students into the Melbourne community, regional local governments work at welcoming international students and have the advantage of working on a more intimate scale. Consideration needs to be given to this program allocating budget to local governments to support their international student support programs.

Deakin University Submission to Inquiry into Increasing Exports of Goods and Services from Regional Victoria | 6 Initiative 14. Improve channels for communication with, and feedback from, international students on their experience in Victoria.

Ensure that the unique experience of regionally located students are taken in to consideration in the communications plan and that outcomes for regional students are reported separately so that experience is being monitored as distinct from the majority of students in Melbourne.

Initiative 15. Broaden the reach of the Study Melbourne brand to integrate all Victoria's international education activities under one brand.

The brand presents a dilemma for Victoria’s regions because on the one hand Brand Melbourne has international resonance, and the city is one of the world's leading higher education hubs with a very high proportion of international students, on the other, the brand ignores regional Victoria. Consideration needs to be given to how regional Victoria is supported through the prime brand and how to extend it to support a 'Study Beyond Melbourne' sub-brand.

Initiative 16. Ensure that the Study Melbourne website is a top global international student website … including social media.

Regional Victoria must not be ignored or treated as an after-thought in this project. A compelling case needs to be branded and presented in conjunction with Study Melbourne.

Initiative 17. Develop a Business-to-Business marketing strategy to promote Victoria's education and training capacity/providers overseas.

As for Initiatives 2 and 4 above.

Initiative 18. Increase awareness of Victoria's strengths in international education and training, including awareness of the Study Melbourne brand, through stronger marketing efforts.

As for initiatives 15 and 16 above.

Initiative 19. Strengthen engagement with Victoria's international student alumni.

Ensure that regional students are adequately considered in this program. Conclusion and recommendations

Deakin believes that its successes over the past decade amply demonstrate the importance of the international student market to the economic and social resilience of regional Victoria. Deakin will continue its efforts to grow both this market and its market share. There are, however, a number of improvements that will materially assist Deakin University in this endeavour and by so doing, effectively support economic growth beyond metropolitan Melbourne.

Deakin University recommends that the Victorian Government:

1. Appoints regional representatives on the Study Melbourne Advisory Board. 2. Establishes and supports a regional sub-brand under Study Melbourne. 3. Conducts a comprehensive audit on Victoria’s regional education offerings to enable these to be systematically incorporated in DSDBIs marketing efforts within a framework of established and monitored Key Performance Indicators.

Deakin University Submission to Inquiry into Increasing Exports of Goods and Services from Regional Victoria | 7 GEELONG INNOVATION PRECINCT

Deakin University CRICOS Provider Code: 00113B Geelong Innovation Precinct – Delivered: the foundations for innovation at Waurn Ponds

CSIRO Fibre Carbon Processing Nexus AFFRIC IFM CISR School of IT School of Engineering

School of Medicine REACH Regional Community Health Hub Geelong Innovation Precinct Delivered: Deakin has laid the foundations for innovation at Waurn Ponds

• Australian Future Fibres Research and Innovation Centre (AFFRIC) – collaborative research into innovative fibre and textile products in partnership with CSIRO and VCAMM • CarbonNexus –the world’s leading carbon fibre research facility • The Institute of Frontier Materials (IFM) – addressing major challenges through high tech materials, design and performance • The Centre for Intelligent Systems Research (CISR) – major robotics, sensor and haptics facility partnering with a wide range of industries including defence • School of Information Technology – includes major corporate and big data capability • School of Engineering – civil, electronic, mechatronics and renewable energy engineering • Regional Community Health Hub (REACH) – state of the art facilities for medical and allied health training in rural and regional Victoria • School of Medicine – Victoria’s first rural and regional medical school Deakin University CRICOS Provider Code: 00113B Geelong Innovation Precinct – Underway: supporting Geelong’s transition

Epworth CADET Hospital

Carbon Revolution Phase 1 Geelong Innovation Precinct Underway: Deakin is already supporting Geelong’s transition

• Centre for Advanced Design in Engineering Training (CADET) – $55M engineering training facility under construction –in partnership with The Gordon TAFE

• Carbon Revolution phase 1 –Carbon fibre wheel manufacturing facility: a model for sustainable, high tech manufacturing for Australia’s future. CADET

• Epworth Hospital –A major new private hospital integrating research and training with Deakin’s medical school. Geelong Innovation Precinct –Next steps: creating high tech jobs of the future

Carbon Composites Revolution Future Phase 2 CSIRO Fibre Centre Processing Carbon Revolution Carbon Phase 1 Nexus ManuFuture Geelong AFFRIC

IFM CISR

CADET School of Engineering Geelong Innovation Precinct Next Steps: Deakin is focused on creating high tech jobs of the future

• ManuFuture Geelong – Deakin propose to invest $10m toward a $30M advanced manufacturing innovation hub

• Composite Futures Centre – an advanced business development incubator building scale in composite manufacturing

• Carbon Revolution phase 2 – Deakin and ManuFuture Geelong Carbon Revolution are planning to allow for future expansion of workforce and production levels.

Regional Public Hearing Program:

Witneess Information

Witnesses Mr David Owen, Generaal Manager; Ms Lisa Ratcliffe, Commercial Manager Association Victorian Centre for Advance Materials Manufacturing Date & Time 1.00 pm Wednesday 30 April 2014

David Owen

David is responsible for the day to day operations of VCAMM including technology research project management and commercialisattion activities. He has more than 25 years’ experience within the manufacturing industry, including product development, operational and financial management and business strategy, gained both in Australia and overseas. Prior to joining VCAMM, David held senior positions in industry working with Holden Special Vehicles and has served on the boards of several manufacturing and tech start‐up companies.

Lisa Ratcliffe

Lisa has extensive experience in finance, administration and corporate government with more than 20 years’ experience in accounting and the financial sector, both in the private and public sectors. More recently, she was the Finance Manager for the International Fibre Centre and has extensive experience in the not‐for‐profit sector. As VCAMM’s Commercial Manager, Lisa oversees and directs all significant aspects of VCAMM’s finance, administration, accounting, treasury, risk management and financial compliance operations as well as leading a financial team providing support services to a number of start‐up and VCAMM‐incubated businesses.

Victorian Centre for Advance Materials Manufacturing (VCAMM)

VCAMM is a not‐for‐profit company established specifically to improve the competitiveness and sustainability of the state and the national advanced manufacturing industries, through orchestrating innovation and development of leading businesses and technologies. VCAMM was formed in 2002 and is backed by a coonsortium of leading public reseaarch and development organisations, with support from government. VCAMM alsoo provides a wider role in the development of strategic capability within the Australian advanced materials and manufacturing sector.

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Regional Public Hearing Program:

Witneess Information

Witness Mr Roger Grant, Director Association Great Southern Touring Route Date & Time 1.30 pm Wednesday 30 April 2014

Roger Grant

Roger has been the Executive Director of Geelong Otway Tourism for over 20 years and has also sat on numerous boards and been Chairman of: Great Ocean Road Marketing; Tourism Alliance Victoria; Geelong Area Consultative Committee; and Victoria’s Grreat Southern Touring Route. Roger is also a director on the Geelong Major Events Committee and is currently on the Panel of Experts for the United Nations World Tourism Organisation.

Roger was awarded the Victorian Tourism Award for Outstanding Contribuution by an Individual in 2004, a Churchill Fellowship in 1994, an ANZAC Fellowship in 1987 and a Life Membership from Tourism Alliance Victoria (now VTIC).

Great Southern Touring Route

The Great Southern Touring Route (GSTR) is a not‐for‐profit association established to market tourism across south‐west Victoria, including: Geelong and the Greeat Ocean Road; The Twelve Apostles and the Great Oceaan Road; Grampians National Park and surrounds; and the Ballarat Goldfields. Its objectives include growing international visitation and the length of stay visitors make in the area. Information is provided directly to tourists and through international wholesalers and inbound tour operators.

The submission provides a great deal of detail about the organisation. No specific recommendations for the Government are identified. Included in these papers is the body of the submission – additional appendices were provided.

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PARLIAMENT OF VICTORIA | RURAL AND REGIONAL COMMITTEE This document is confidential to the Rural and Regional Committee 128 Rural and Regional Committee Parliament of Victoria Parliament House East Melbourne VIC 3002

Dear Committee Members,

It is with pleasure that I make this submission on behalf of Victoria’s Great Southern Touring Route as part of the Inquiry into Opportunities for Increasing Exports of Goods and Services from Regional Victoria.

Tourism is considered an export industry because International visitors who travel to Victoria purchase the visitor experience and pay for it with their money from their Country of origin. International tourism along the Great Southern Touring Route is a significant source of export earnings but, unlike commodity exports, the consumption is in situ: the consumer, rather than the product, has to move, so the economic contribution enabled by tourism has implications for other sectors in the economy.

By comparison with other export industries Tourism has several specific advantages. Firstly because the experience is consumed within the destination (Australia) it also is subject to GST (additional revenue to the Government). Secondly Tourism if managed in a responsible manner the experience can be “sold” on a daily basis without diminishing the primary resource. As such tourism can be considered as a renewal export that generates foreign exchange and by definition it can not be shipped off shore like the recent trends in manufacturing in Victoria and elsewhere.

As you will note in the following attached submission the Great Southern Touring Route attracts 754,000 international visitors that spend 2.2 million nights along the Touring Route. This visitation alone delivers in excess of $148 Million in visitor expenditure. Further to this a summary chart details relevant tourism multiplier effects and the total flow on to Tourism employment.

We believe the attached submission demonstrates the often overlooked impact of Tourism as an export industry into Regional Victoria. In addition to considering this submission we would like the opportunity to discuss the points raised at one of the public hearings proposed to be held throughout April 2014.

Great Southern Touring Route Trade Manual 2013‐2014 http://greatsoutherntouring.com.au/brochures

We thank the Committee for considering our submission and look forward to providing further detail during the public hearing process.

Yours sincerely,

Roger Grant Director Great Southern Touring Rout A general overview of the nature and history of Great Southern Touring Route

The Great Southern Touring Route (GSTR) is a not-for-profit, incorporated association established to co-operatively market its member regions and participating tourism products to over 1500 members of the international travel trade, who continue to remain the primary provider of high yield international bookings for Victoria. Renowned as Australia’s first and one of the best touring experiences, the Great Southern Touring Route is a circular touring route linking Melbourne to the internationally acclaimed Great Ocean Road, the natural wonders of the Grampians National Park and the majestic heritage of the Ballarat Goldfields and Spa Country. The organisation comprises representatives of member associations of the City of Ballarat, Geelong Otway Tourism, Shipwreck Coast Marketing, Grampians Tourism, and is independently administered by an Executive Officer. “The Great Southern Touring Route is perhaps the best example in Australia of a group of regions working together for the sake of a commercial tourism outcome. The Route puts together some of the best and most diverse tourism experiences in Australia and makes it easier for the consumer to see this wonderful part of our country. The consistency of effort over the last 20 years means that it appears in almost every travel agents, wholesaler and online distribution program I see. It has given small operators a way into the global travel distribution system.” Andrew McEvoy – Managing Director, Tourism Australia The GSTR began in 1991 to provide for the trade demand of new experiences and itineraries, a circular journey, leveraging off the strength of the internationally recognised Icon of The 12 Apostles, through the surrounding regions of The Grampians and Ballarat Goldfields was developed. In 1993, the Great Southern Touring Route was officially established as a marketing association, funding through shires and member contributions, along with support from Tourism Victoria. The continued promotion and marketing of GSTR led to product improvements, higher standards of products and services as well as new tourism product developments. Industry participation in GSTR continued to grow and in 1999 the first product manual for the GSTR was produced, consolidating the GSTR’s position and reputation as a bookable product with the international trade. (latest Product Manual attached) “Twenty years ago I held the position of Global Sales and Marketing Manager for Flag International Hotels - the largest hotel group in Australia, with accommodation throughout the entire region covered by GSTR. This concept offered an opportunity for regional marketing that was unique to any other regional areas throughout the country. Without doubt GSTR is a model copied by many Australian tourist regions. Victoria has benefited by such a visionary and professional concept that is supported by an ongoing strategy and professional team.” Denise Scrafton, Business Development Manager, Tourism & Hospitality Support Network Further innovation by GSTR led it to promote itself as part of the Great Downunder Tour in association with the Great New Zealand Touring Route, increasing its appeal to international consumers. In 2003 the GSTR again continued its market growth by working in partnership with other touring routes, in particular the Melbourne to Adelaide Touring Route, encouraging visitors travelling between these two capital cities to incorporate some or all of the GSTR. For 20 years The GSTR has built a professional reputation with travel trade, featuring in many major wholesale programs covering Australia, around the world, leading to greater visitation to the GSTR region by international travellers. The Great Southern Touring Route is a market leader and innovator and this has been achieved by representing our member products and regions through our core values of Partnership, Respect, Excellence, Passion, and Sustainability. Objectives and Philosophies and the rationale behind marketing initiatives. Some key issues for attracting international tourists to the GSTR region was the lack of product knowledge from the international trade to prepare itineraries beyond the one day experience and from the tourism products understanding how to work with the international markets. The typical programs being offered were a one day trip to the 12 Apostles returning to Melbourne to stay overnight, and then departing to do a one day trip to Ballarat and Sovereign Hill the next day. This meant that the visitor was spending the majority of time travelling and very little time experiencing the region. The GSTR created opportunities for the international trade to include 3-4 day itineraries that would allow tourists more time to explore each region, slow down and enjoy the experience each region offered. Objectives: • Fill market demand for extended touring product and itineraries • Grow international visitation to each campaign region • Grow international visitor length of stay to each campaign region • Grow international visitor expenditure in each campaign region • Increase the number of tourism products sold through international distribution systems • Increase awareness and create demand for GSTR products amongst international trade • Attract new and upgraded tourism products and infrastructure Philosophies: Partnership – work in collaboration to grow the industry Respect – honour the community values of the regions that we represent Excellence – encourage leadership through sharing industry knowledge Passion – love what we do! Sustainability – support the environmental and economic viability of our regions The initial opportunity for the product which is The Great Southern Touring Route was born from demand by international trade partners wanting a product that went beyond the tried and true day trip experience. International trade partners wanted to extend the experience for their customers; they wanted something new to offer them. The idea of extended touring itineraries to create greater regional dispersal and visitor expenditure assisted; return visitors to Victoria who were more comfortable exploring regional areas and undertaking self-drive holidays rather than group tours, and long haul markets who were spending a longer time in Australia and were interested in exploring at their own pace. The Great Southern Touring Route provided the answer to these consumer trends. “I have been selling travel and tour packages to Australia in the United States for 25 years now, and I have been working with GSTR since inception as the drives of Australia have been so important to our business. Americans love to drive themselves on their trips, the location of the drives makes the routes special and unique, and each client has a different perception, desire and need, so with the many options that GSTR have, there is something there for everyone.” Ian Swain, President, Swain Tours, Philadelphia, USA The GSTR created new opportunities for products to promote their business and service, opened up new markets for the regions, and provided greater value for money for the regions marketing bodies by pooling their resources for international trade activities. “Flag International Hotels partnered up with GSTR at the start. It proved to be a very successful partnership with the regional hotels growing their international and domestic business.” Denise Scrafton, (former Global Sales and Marketing Manager for Flag International Hotels)

Use of online portals and applications for pre-planning of holidays has become the preferred tools and are more widely available to consumers. The Sustainable Tourism Cooperative Research Centre (STCRC) in their Case Study of the Great Southern Touring Route in 2008, quotes “The internet is the main source of travel planning information”. It is important for GSTR to have a professional presence in this online space where trade and consumers are accessing information about travel destinations to help them choose their holiday destination and plan their itinerary. In the past 12 months, the GSTR strategy has been to implement new marketing tools in the online and mobile spaces to target those consumers searching and planning their holiday destinations and activities. Marketing tools the GSTR has developed include: • Re-developing the GSTR website • iPhone and iPad applications • Video vignettes and YouTube Channel How marketing initiatives contribute to and grow tourism within the Region, State and Nationally. • Locally GSTR shows leadership by providing support, low cost entry to international marketing and training for the industry with the ultimate goal of increasing visitor numbers and spend in the GSTR regions • Statewide GSTR creates a compelling reason to travel to Victoria, explore the region, stay longer and spend more - this has helped to increase Victoria’s market share and presence in travel packages around the world • Nationally GSTR supports the industry and adds to the diversity of Australia’s tourism offering to encourage repeat visitation, greater regional dispersal, expenditure, and length of stay. The key to GSTR’s success has been collaboration. The marketing of the Great Southern Touring Route is at its core, to deliver tourism growth to the four separate regions of Geelong Otway Tourism, Shipwreck Coast Marketing, Grampians Tourism and the City of Ballarat. The board members are representative of the four regions and volunteer their time, work collaboratively and share information to develop and implement the Marketing Action Plan for GSTR. By working together this has ultimately created an increase in international visitation to each region. Getting ‘buy in’ from the industry in regional areas can be a challenge and one of the key areas of success for GSTR and subsequent growth can be attributed to GSTR’s ability to nurture the involvement and participation of the local industry. At inception, there were only a handful of products participating in the GSTR program, today there are more than 60 tourism products. Showcasing the diversity and abundance of tourism experiences found along the Great Southern Touring Route. We have Memorandum of Understanding’s with Melbourne to Adelaide Touring Route and Sydney-Melbourne Touring, allowing the Great Southern Touring Route to expand and draw visitors coming to Melbourne from interstate. The three parties produce joint collateral, including touring maps, and undertake joint marketing activities which provide fantastic return on investment due to the shared costs. The promotion of more regions and products provides seamless itinerary design across state borders and further increases the appeal of GSTR to our target audience. “Sydney-Melbourne Touring has been absolutely delighted with our partnership with the Great Southern Touring Route. The joint map that we produced was a major hit at ATE (Australian Tourism Exchange) with many of our key wholesalers in the UK and Europe It is most refreshing that our marketing organisations put politics and parochialism aside and focus on our customer and client needs. We at Sydney Melbourne Touring look forward to many more joint marketing activities with GSTR.” Paul Cooper, Marketing & Business Development Manager, Sydney Melbourne Touring GSTR has helped attract new tourism products and developments to the regions, such as Oscars Waterfront Boutique Hotel in Port Fairy, launched in 2000, and the Otway Fly developments including the Tree Top Walk (the world’s longest and highest) opened in 2003 and their Zip Line Tour which launched in 2010, all of which became members of GSTR as soon as their product was operational. “GSTR is our key international marketing link, and has been since our launch in 2000. The success of Oscars in the international market, is due, in no uncertain terms to the work of GSTR, allowing us to build on the working relationships with our ITO’s and wholesalers throughout the World” Richard Douglas, Owner, Oscars Waterfront Boutique Hotel As it did in promoting itself as part of the Great Downunder Tour in association with the Great New Zealand Touring Route, the GSTR continues to be a market leader and innovator, by establishing and presenting the idea of a Great Touring Routes of The World campaign, to the United Nations World Tourism Organisation (UNWTO) in Madrid in September 2010. This concept again promotes and grows the GSTR on a worldwide scale, linking touring routes across the globe. Since being formed, the Great Southern Touring Route has helped deliver increased visitation and expenditure to the regions from international markets. “Without question, GSTR’s development as a Victorian touring option has been instrumental in growing international visitation to the three regions and is a major reason that the three destinations lead the rest of Victoria’s regions in relation to international profile and visitation.” Tom Smith, Regional Tourism Advisor, Tourism Victoria The additional visitation and visitor nights created by the GSTR has also assisted in Victoria’s increased market share over other states in Australia. Direct comparative figures are not available but as an indicator of this growth the figures from the Australian Bureau of Statistics for 1990/1991 shows the regions of the GSTR accounted for 28.17% of guest arrivals to regional Victoria, in recent data based on the International Visitor Survey IVS for the period to Dec 2010 further refined by ‘Data Insights’* shows that the total International Visitation to the GSTR accounted for 72% of all international visitors to regional Victoria. The GSTR performance in the period (Dec 2009 to 2010) shows continued success with recorded 3.8% growth* for international arrivals compared to 1.4% for regional Victoria. The figures end March 2011 show average growth across the regions of GSTR of 6.7%*. “The GSTR is a core tourism offering for Victoria in key international tourism markets, it encapsulates some of the finest tourism experiences on offer in the state and is part of the overall compelling offering that has seen Victoria capture a growth in international market share of 5.4% over the last decade.” Melanie de Souza, General Manager International Marketing, Tourism Victoria

Target markets and we have identified them.

The purpose of GSTR is to promote our regions internationally. Our key target markets are Groups and Free Independent Travellers (FIT’s) across a range of International Markets. Our main focus is to attract them by marketing through our trade partners – International Wholesalers, and Inbound Tour Operators Primary Western Markets - UK, Europe (Germany), North America, New Zealand For the Great Southern Touring Route, the Western markets of Europe, UK, North America provide travellers whose typical profile is high-yield, offer greater length of stay and whose dispersal to regional areas is also higher, whilst New Zealand offers high repeat visitation which is ideal for a regional touring route. We target large well established wholesale companies as well as niche wholesalers who have a strong focus on self-drive programs.

Germany - Market Profile: Groups and FIT’s This market is one of Australia’s top markets for length of stay and regional dispersal. So it is ideal for the GSTR as the German traveller has the time and interest in exploring regions. The German economic outlook remains strong and forward forecasts for this market are for continued growth. This is a high detail orientated market with consumers conducting extensive research on the destination prior to travel. Most of the research by the consumer is conducted online however most bookings still coming through traditional distribution partners.

Market Interests and GSTR Product Strengths: Icons, Indigenous Culture, Nature, Food and Wine, Self Drive Itinerary options

United Kingdom - Market Profile: FIT’s This is one of the largest markets for arrivals into Australia; Victoria has a high market share. The main market segments are Holiday and Visiting Friends and Relatives (VFR) and this market has a good length of stay and regional dispersal as well as a comparatively high proportion of arrivals being repeat visitors. This makes the diversity of product on the GSTR attractive for this market. A high proportion of first time visitors research their holiday online with traditional distribution partners remaining one of the main sources for bookings. Market Interests and GSTR Product Strengths: Icons, Beaches, Nature, Food and Wine, Self Drive Itinerary options

Secondary European Markets: Switzerland, Benelux, Scandinavia, France, Italy, Austria - Market Profile: FIT’s Market Interests and GSTR Product Strengths: Icons, Indigenous Culture, Nature, Food and Wine, Customised itineraries, Self Drive Itinerary options

North America Canada - Market Profile: Groups and FIT’s Canadians are highly seasoned travellers with a good length of stay and regional dispersal. The Canadian travel distribution system remains relatively traditional, with a few key operators handling the majority of outbound travel to Australia. Whilst Canadian consumers are increasingly using online channels for planning and booking travel, retail agencies still play a key role in developing customised itineraries.

Market Interests and GSTR Product Strengths: Icons, Nature, Food and Wine, Self Drive Itinerary options.

USA - Market Profile: Groups, FIT’s The USA is one of Australia’s top markets for arrivals, and Victoria maintains good market share. This market’s average length of stay is less compared to some other Western Markets due to US employees receiving only two weeks of annual leave. The holiday segment makes up the majority of arrivals and the GSTR offers opportunities to maximise travel times by offering the circular touring route. Although the economic outlook in the USA remains uncertain and the strength of the AUD has reduced buying power, the forecasts for growth of this market remain good due to increased aviation capacity and lower airfares. Customised holiday experiences continue to be very important for Americans who often research elements of their Australian holiday online, then work with a travel agent for planning and bookings. Whilst the travel trade in the USA is large and complex there are several key wholesalers that specialise in Australia. Market Interests and GSTR Product Strengths: Icons, Nature, Food and Wine, Self Drive Itinerary options

New Zealand - Market Profile: Special Interest (Events) Groups, FIT’s New Zealand is a key target market, the consistently high volume of visitation to Victoria and relative proximity make marketing the diversity of the product on the GSTR to the New Zealand trade important to provide appeal for return visitors. Market Interests and GSTR Product Strengths: Icons, Nature, Food and Wine, Self Drive Itinerary options

Eastern Markets - Asia The Asian region offers great opportunities for growth with some of our mature markets continuing to show good growth figures, China fast becoming one of Australia’s major markets and continued growth out of emerging markets like India. This region offers good opportunities for groups and FIT business and helps to continue a good market mix for GSTR and production for our members.

China - Market Profile: Leisure (Approved Destination Status - ADS) Groups, Business Groups, FIT’s. China is still largely a group market due to language, food, and visa requirements. Leisure travellers from China can only travel on an ADS visa which historically due to restrictions has only allowed for group travel. Recent changes to the ADS visa regulations will create new opportunities for FIT travel. The high volume market of China is now the number one source market for visitor expenditure and Tourism Victoria forecasts to be Victoria’s number one source market for International visitors by 2012. Market Interests and GSTR Product Strengths: Icons, Australian/Chinese History, Gold Rush

India - Market Profile: Leisure Groups, Family Groups, FIT’s. India is still largely an emerging market which typically requires Indian food for most or all meals. Therefore this market still tends to travel in the comfort and safety of a group. Market Interests and GSTR Product Strengths: Icons, Australian History, Nature

Singapore & Malaysia - Market Profile: Study Tour Groups, Family Groups, FIT’s. The targeting of mature Asian markets of Singapore and, Malaysia is very important as these markets offer high return visitation and are exploring regional areas and self-drive holidays in much higher numbers as they seek new Australian experiences. Market Interests and GSTR Product Strengths: Icons, Nature, Food and Wine, Self Drive Itinerary options

Eastern Markets - Asia (continued) Japan - Market Profile: Study Tour Groups, FIT’s. Whilst the size of the Japanese market has diminished in recent years this market still offers regular group business with study tours and repeat visitation with regional disbursement for FIT’s. We have an in-market representative in Japan who provides fantastic value for money in targeting the key wholesalers and other opportunities for GSTR. Market Interests and GSTR Product Strengths: Icons, Nature, Food and Wine, Self Drive Itinerary options Experience Seekers Within these markets we target consumers whom Tourism Australia identifies as Experience Seekers. This target market is highly predisposed to Australia’s offer and is more likely to stay longer, spend more and disperse to regional areas. They are long haul travellers who are less affected by the traditional barriers to travel of distance, time and cost. They are more informed, interested and curious about potential travel destinations. Experience Seekers constitute around 30 to 50 per cent of all potential long haul outbound travellers from our key source markets, and can be found among all age groups, income levels and geographic locations. GSTR Product Strengths: Icons, Nature, Adventure, Food and Wine, Immersion in Local Culture, Self Drive Itinerary options Inbound Tour Operators (ITO’s) We work closely with ITO’s within Australia as these organisations provide the link to many of the international wholesalers in our target markets, they are responsible for liaising with the wholesalers in regard to itinerary planning and are the key local contact for the international travellers once they are in Australia. We target those ITO’s who handle clients in our key target markets and particularly those whose clients target Experience Seekers. “The GSTR is important for us as our clients (German speaking market) are independent travellers and a strong self-drive market. They are interested in that Region and like to discover new places and attractions. They are not too much interested in mainstream products but in experiences which offer them the real Australian experience. GSTR offers them this mix, getting to know great landscapes, experience different places, with the help of a well-organised Touring Route with products which suit them.” Anneli Buehrle - Product Manager, Terra Nova Coach Tours (ITO), North Sydney NSW Consumers One of the key findings in a survey undertaken by EC3 Global on the GSTR was the methods used by the travellers surveyed to book their trips. With 79% of those people surveyed saying they made their own arrangements whilst 21% of people booked through a travel agent or a combination of utilising a travel agent and their own arrangements for bookings. Members We market ourselves to our existing and potential new members as this is a funding source for our activities and it also provides diversity of experiences in the GSTR product. How we identify our Markets Tourism Victoria Given our target markets are mostly international Great Southern Touring Route has worked very closely and aligned marketing activities with Tourism Victoria. • International Team – we liaise with the International Marketing Team based in Melbourne and with Tourism Victoria’s Overseas Offices in UK, Europe, North America, New Zealand, North & South Asia and marketing representatives in Japan and India. • Industry Briefings – Victorian International Exchange (VIE) – and Annual International Market update provided by Tourism Victoria’s International Managers for the industry. Research • Market Profile reports – Tourism Victoria publish a Market Profile report for each of the three Campaign Regions that make up the Great Southern Touring Route; Great Ocean Road, Grampians, and Goldfields. These provide information for International and Domestic Markets, and include important statistical data on: • Origin of Overnight Visitors • Overnight Visitation numbers • Purpose of Visit • Length of Stay • Market segment information • Make-up of the travelling party • What activities were undertaken during the visit The statistics are tracked against previous year’s results, helping to highlight growth markets and changes to market visitation trends. These regular reports provide GSTR with accurate tracking of visitation from our target markets to assist us to measure our marketing activities. Tourism Australia International Team - we liaise with the International Marketing Team based in Sydney and with the Tourism Australia Overseas Offices in UK, Europe, North America, New Zealand, North & South Asia and Japan. Research - we refer to and utilise the following research available through Tourism Australia: • Tourism Forecasts • Global Market Monitor • International Market Profiles • Industry Briefings • International Visitor Profile • Market Segmentation (Experience Seeker Profiles per Market) Internal Research EC3 Global In 2010 the GSTR committee in partnership with EC3 Global commenced an International Traveller Survey (ITS) to help identify travel patterns of visitors along the GSTR. During the period July – September 2010 the research undertaken was a survey of self-drive visitors at Visitor Information Centres situated along the GSTR, including Lorne, Geelong, Warrnambool, Hamilton, Halls Gap, Ballarat and Dunkeld. Data collected in the ITS included: • Origins of International Travellers on the GSTR. • The method through which they planned and booked their trip. • The direction that they travelled during their time on the GSTR. Results of this survey have confirmed our international market profile and helped us learn more about those travellers; particularly their booking patterns which have lead us to producing new marketing tools. Data Insights The regions contract Data Insights an independant consultancy company to interpret data from IVS and other research to produce relevant reports for the regions. GSTR utilise this data to track and monitor our markets. (latest Data Insights report attached) Relationships with Distribution Partners We have close relationship with wholesalers and ITO’s in our target markets which assist us to identify new opportunities and trends. “As a leading travel wholesaler in Denmark established in 1988, we have been working with GSTR since its inception. They provide us with all that we need to know in terms of products and so on, which are provided to us in a very professional and friendly form! The GSTR is an important product for us as it is one the most popular self-drives in the world! GSTR always provides us with neutral and objective information about products, as well as helping us put together new itineraries, which is very important”. Steen Grosen Andersen, Nyhavn Rejser A/S, Denmark Marketing strategies used the outcome of those strategies. Responsibility for the GSTR target markets are split individually between the Executive Officer, Gaby Robinson, in-market representatives – Gaby Robinson for Europe and Izumi Nagai for Japan, and the regions which make up the organisation; City of Ballarat, represented by George Sossi and Tim Grandfield, Tourism Greater Geelong and The Bellarine, represented by Roger Grant and Brett Ince, Grampians Tourism, represented by Kylie Schurmann and Will Flamstead, and Great Ocean Road Regional Tourism, represented by Carole Reid. Having defined markets of responsibility means the organisation can effectively target a wider range of markets with a greater focus. We contract Great Southern Destinations Marketing (GSDM), for a number of projects including website development and maintenance, online marketing developments and member sales activity. In our marketing strategy for 2010/2011 we made a dedicated move, backed by internal and external research, to develop new marketing tools accessed through new technologies. This included: • Launched iPhone & iPad applications • Re-designed and re-launched our website • Production of video vignettes of our partner’s products • Launched a new YouTube channel - GSTRAustralia. We recognised through the EC3 Global survey that a large proportion of travellers were making their own arrangements, whilst other research confirmed use of Apple iPhone and iPad technology is very high and still growing rapidly in Australia and overseas: Smartphone sales to end users were up 72.1% from 2009. Apple sold 46.6 million units in 2010, 87.2% growth from 2009. Source: Gartner (February 2011). We also continued our ongoing commitment to working with trade partners and utilising traditional marketing activities and tools, in A Case Study of the Great Southern Touring Route by the STCRC in 2008, 53% of survey respondent’s claimed Maps and 43% claimed Brochures, as sources of travel planning information. So for GSTR it is still important for us to print collateral such as our yearly Trade Product Manual and touring maps. Printing of collateral in various languages has also been very useful particularly in the Asian markets such as Japan and China, where English is less familiar. Our traditional marketing activities to trade partners include: • Sales calls • Trade events • Brochures • Touring maps

How we are funded The primary source of funding for GSTR since it was incorporated has been from four regional organisations / councils (City of Ballarat, Grampians Tourism, Shipwreck Coast Marketing and Geelong Otway Tourism) and industry membership. This amount of funding committed by the four regional organisations / councils has historically been matched by a similar amount from industry participation in GSTR. Combined these sources of funding have historically provided between 50- 70% of total funding of GSTR’s activities. Representation in markets is mainly done by the board members, being the representatives of the campaign regions, at no additional cost to GSTR. Since 2007/2008 GSTR has received an annual funding amount from Tourism Victoria, this amount has provided approximately 20-30% of total funding to GSTR over these years. In the last 12 months GSTR has also been eligible for funding through the Export Marketing Development Grant (EMDG), which reimburses organisations and business’ up to 50% of the eligible export promotion expenses. For the 2010/2011 year we forecast this amount of funding to represent approximately 25% of GSTR’s funding for the year, whilst looking ahead to future years we expect this amount to continue to provide around 12% of total funding. EMDG funding is for a period of 7 years, with the first time application allowed to combine 2 years of expenses, hence the higher amount of funding for 2010/2011 compared to future forecasted funding.

Unique attributes of Great Southern Touring Route Relationships • Trade Partners: GSTR has built a strong reputation over the two decades it has been working with the trade. The creation of the GSTR was a result of trade requests and by continuing to collaborate on new ideas the support for GSTR is shown through acceptance in wholesale programs around the world. To strengthen our relationships with trade partners we provide quarterly e newsletters (75% open rate), specific trade pages on our website and have in- market representatives for Japan and Europe that conduct sales calls activities. “We have been working with GSTR for more than 12 years. The support given to us by GSTR helps us to undertake additional marketing projects and to win more customers. GSTR always offers key contact persons who are open minded, very helpful and are specialized in and have a good understanding of the German market.” Joachim Voss - Product Manager Australia / New Zealand / South Pacific, Meier’s Weltreisen, Frankfurt, Germany • Member product suppliers: strong relationships with our member product suppliers have also played a big part in the success of GSTR. This is strengthened through quarterly member e- newsletters (88% open rate) with updates on our activities, and a series of workshops for member products and potential new member products to network and reflect on GSTR’s activities throughout the year. • External: relationships with other organisations have also created unique partnerships for GSTR. Establishing MOU’s with Melbourne to Adelaide Touring and Sydney to Melbourne Touring, has taken GSTR from a stand-alone touring route with limitations to its immediate region, into two different states, helping link together to form greater self drive experiences. The GSTR was the first touring route in Australia to be marketed internationally, an innovation that continues to expand, from the partnership with the Great New Zealand Touring Route to form the Great Downunder Tour, through to the concept of the Great Touring Routes of The World campaign, which was presented to the United Nations World Tourism Organisation in Madrid in 2010. Technology GSTR has embraced further use of modern technology in the marketing of its product range. Marketing tools launched in the past year by GSTR: • iPhone and iPad applications: GSTR is one of the first regional touring routes in Australia to have developed these applications for consumer and trade use. The GSTR application of these mobile tools are used by agents and the traveller, as a way of accessing information quickly and easily whilst on the go or at home or office. Only launched at the start of June 2011, the GSTR application had at 30th June 2011 been downloaded 485 times. Some of the application’s key features include: • Detailed regional information • GSTR Product information and contact details • Dynamic video content • Detailed mapping • Itinerary planner • Image gallery • Video vignettes and YouTube: dedicated YouTube channel GSTRAustralia launched at the end of March 2011 following the production of video vignettes of GSTR member products, 52 product videos are available for viewing as well as our Christmas 2010 message to the trade. The member product videos also feature on their pages on the new website. Since the GSTRAustralia channel was launched on YouTube, we have received over 5000 views in 3 months. • New website: our redesigned website has kept GSTR fresh and accessible to consumers around the world, including language translation of the website into Chinese, Japanese, German, French and Italian. Our re-launched website has been live since April 2011 and has already seen very positive numbers of unique visitors (2500) from our key markets. Additional features such as the video vignettes of the products and trade resources pages to support our partners has helped the GSTR website’s Google ranking increase from three to number one when searching for Great Southern Touring Route. Ensuring information is reliable and accurate

As we produce online and a number of printed collateral including our Product Manual, Touring Map, New Product Flyer and Foreign Language Maps in Japanese and Chinese, it is important all information we produce is accurate as it is used by the travel trade to sell and promote the GSTR. GSTR Website • Project Manager – GSDM conducted the relaunch of our new website, they ensure all information is accurate and updated as required. • Member products – provide us with all the information for their product listings. Any new developments or changes to their products are updated by GSDM on the GSTR website within 48 hours of being advised. • Google Translate – is used for the foreign language conversion of our website ensuring an accurate and immediate translation, of our webpages. Product Manual, Touring Maps, New Product Flyer • Member products – provide us with all the information for their product listings. Each piece of collateral is printed annually, with changes to product information being updated each year. Proofs are sent to the members prior to going to print. • GSTR Directors – are tasked with the responsibility of planning and developing each piece of collateral, with proofs checked by all Directors. • Foreign Language collateral – Accuracy of translation of our touring map into Japanese is undertaken by our Japanese in-market representative who is a Japanese national and who has over 20 years’ experience in tourism marketing. The Chinese translation of our touring map is done and checked by eTranslate. Member Product Information • Member Products - it is a mandatory policy as a member of the GSTR that products advise us of the sale or change of their business so that we can advise Trade partners. • GSTR Directors - are tasked with the responsibility of visiting each potential new member prior to their membership approval to see the product first hand to ensure suitability and to ensure accuracy of information provided. Trade Partners • Marketing Activities - GSTR Directors are responsible for ensuring trade partners in their assigned markets have correct information of GSTR in any brochures, campaign activity or websites. • Agent Training - Regular agent and wholesale training is achieved by sales calls and trade training events in our target markets. This ensures that GSTR product is understood and further promoted accurately in sales to consumers and in marketing collateral such as brochures and websites. • Familiarisations - The GSTR actively seeks to participate in trade and media familiarisation opportunities that arise through Tourism Victoria, Tourism Australia and its own activities. Having trade experience the GSTR product first hand is the best way to ensure the trade understands the product accurately.

Risk issues identified. We have identified risk issues for GSTR which are listed in the matrix below, it should be noted that GSTR is a marketing association with no direct employees, representatives of the regions are covered by GSTR insurance policies during their travels however are not employees of GSTR. The Executive officer and in market reps are self-employed contractors covered by their own workcover and insurance policies.

Risk Management Matrix Risk Level Business Consequence Mitigation Strategy

Financial

Global Economic Med Ability to provide business to Market Mix spread to cover a members through marketing broad range of markets, activities, affecting relevance of continue to monitor results in GSTR to members markets

Currency fluctuation Med Additional cost to undertake Payments to wholesalers for change to AUD marketing activities affecting brochure inclusion or other budgets activities undertaken in AUD

Risk Level Business Consequence Mitigation Strategy

Member Retention High Reduced funding to GSTR Member retention and affecting budgets and planned Marketing strategy marketing activities, reduced product offering to wholesalers lowering appeal of GSTR

External Funding High Reduced funding to GSTR Funding secured in advance Sources affecting budgets and planned from Regional Tourism marketing activities Bodies/Councils, and Tourism Victoria

Financial Accountability Low Spending of funding outside of GSTR Finance Policy covers budgeted activity or over Directors responsibilities, c/card budget and expense authority

Contracts Low Spending more than budgeted GSTR Finance Policy covers for certain marketing activities requirements for supplier quotes and contracts

Intellectual Property

Retention of IP from Low Loss/leaking of private Secure documents - Contractors information/documents to procedures manuals, reporting outside sources/competitors

GSTR Representatives

Third party damages on Low Litigation against GSTR and its GSTR Public Liability Sales Trips Directors

Overseas Travel Low GSTR to pay for incidents that Travel Insurance /loss/theft/injury occur whilst travelling

Injury to contractors Low GSTR responsibility to cover External Contractors covered within Australia costs of contractors injuries by their own workcover insurance policies

Professional Liability Low Litigation against GSTR and GSTR Professional Liability its Directors

Directors Liability Low Litigation against GSTR and GSTR Public/Professional its Directors Liability

Quality Assurance

Member Product Med GSTR image and brand Mandatory business policies reputation affected required to be a part of GSTR as outlined in prospectus

IT- Technology

Data Recovery/Back Med Loss of important information, All files are backed up daily and ups databases, contracts etc these backed up files stored off- site

Document Storage Low Loss of important information, Electronic copies of all key databases, contracts etc. documents are saved

Web hosting Low Key marketing tool being Security profiles of the website compromised / ineffective, trade are regularly updated. A back- and consumer confidence up version of the website is affected maintained. iPhone/iPad apps Low Investment in these The app is only distributed applications being through the iTunes App Store. compromised, brand, reputation This strategy ensure risk is and consumer confidence minimised and consumer affected confidence maximised.

Risk Level Business Consequence Mitigation Strategy

Trade Distribution

GSTR Brand Med Misuse of GSTR Brand by trade GSTR Market Representative Management partners affecting reputation to oversee and check all use of and industry relationships GSTR brand by wholesale partners

Contracts Low GSTR committed to partnership GSTR Market Representative activity with wholesale partners to ensure all wholesale partnership commitments remain within budget and are delivered as per contract

Brochure inclusions Low Wrong information of GSTR GSTR Market Representative product in brochures, affecting to oversee and check all use of reputation and brand, consumer GSTR product by wholesale confidence partners

Natural Disaster Eg. Bushfire, flood Med Loss of GSTR product, Communications plan accessibility, media and consumer reaction resulting in reduced visitor numbers

In Jan 2011 the communications plan for natural disasters was implemented when the floods occurred in the Grampians region. GSTR immediately advised our trade partners through an E- news update in which links were provided to Grampians Tourism and Parks Victoria to manage the chain of communication and ensure correct and up to date advice to trade and consumers. In addition GSTR provided alternative driving routes by updating and reprinting our maps for distribution to the trade.

Sustainability. Our values of Partnership, Respect, Excellence, Passion, and Sustainability are key to how we support our members and promote GSTR. At the very heart of GSTR is the sustainable stewardship of the community, environment and economic viability of the regions and products that we represent. The longevity of our members businesses and the pristine natural environments that are available for our markets to explore is the foundation of our operations. We align with the environmental commitment of the regions that we represent. Two of our regions have Earthcheck (formerly Green Globe) credentials: • In 2005 Geelong Otway Tourism adopted the Green Globe 21 program as a means to work towards a sustainable industry. Geelong Otway Tourism was the first tourism association in Australia to achieve Green Globe 21 benchmarking status. • Shipwreck Coast Marketing adopted the Green Globe program with a Bronze Certificate in 2008. GSTR endeavours to provide respectful and responsible promotion of our regions. By creating and promoting itineraries that encourage exploration allowing the visitor to experience natural areas this helps to foster an environmental and cultural appreciation and understanding, thus nurturing a positive impact from visitors to the region. Our strong focus on the natural environment as the core of the experiences on offer competitively positions us in our marketplace and encourages new and repeat visitation. In particular our environmental commitment is shown by: • Leadership and innovation – creating opportunities for regional dispersal • Encouraging visitors to slow down and explore • We request and display our members green credentials in trade manuals • Our member products include award winning Eco Tourism Experiences • Our regions encompass pristine environments, National and State Parks which include 3 of Australia’s iconic National Parks (Great Otways, Port Campbell and Grampians) that is over 280,000 hectares of the areas we promote being National Parks • In April 2011 the Great Ocean Road was added to the National Heritage List which recognises and protects Australia’s most valued natural, Indigenous and historic heritage sites. Places listed in the National Heritage List are protected under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999. In making the announcement The Hon Tony Burke MP, Minister for Sustainability, Environment, Water, Population and Communities said “The Great Ocean Road is one of the most powerful, spectacular and distinctive landscapes in Australia and the nation’s most famous coastal drive,” GSTR leveraged this opportunity by giving local Radio interviews with ABC and 3YB Warrnambool, and local press with the Warrnambool Standard. Information was sent to our international partners by E Newsletters and information provided at ATE. In addition further promotion of this status was achieved through the newsletters and websites of Tourism Australia, and Tourism Victoria. • The Great Ocean Road is one of Australia’s 12 most iconic landscapes currently part of the National Landscapes program • The imagery and promotions that we use are motivational to respect and explore natural environments • Video Vignettes highlighting Eco experiences • The collateral – this year with a focus on new technologies we have managed to reduce the amount of printed information that we provide to our partners by 20%. This has resulted in a saving on printing and distribution costs of more than $10,000. • By promoting and featuring Ecotourism experiences of an International Standard GSTR helps to raise the profile of Victoria as an Ecotourism destination. Some of our Award winning Eco experiences include: The Great Ocean Ecolodge The Great Ocean Ecolodge is a social enterprise, established and operated by The Cape Otway Centre for Conservation Ecology. All profits are reinvested into wildlife conservation and the Ecolodge itself is entirely solar powered and ecologically responsible, resting gently in the landscape of Cape Otway. The lodge has Advanced Ecotourism Accreditation by Ecotourism Australia and in 2005 Lizzie was named the Prime Minister’s Environmentalist of the Year, the first female and youngest-ever recipient of the award. In 2007 The Australian Geographic Society bestowed the Conservation Award on the couple. Lizzie has also been a member of the National Environmental Education Council and the Otways Landscape Community Council The Great Ocean Walk The Great Ocean Walk, from Apollo Bay to the iconic 12 Apostles, has attracted hikers from across Australia and around the world, keen to meet the unique challenge of Victoria’s iconic long distance walk. “There is so much about the Walk you don’t expect to find and with the track hugging the rugged coastline it takes hikers to places rarely experienced,” Peter Burns, Parks Victoria Ranger-in-Charge, Great Ocean Walk.

Benefits to the local community values and culture

Our values are representative of the regions that make up the Great Southern Touring Route. By working in Partnership with industry we have been able to leverage and achieve greater results for our members. We represent our communities in our marketing with Respect and honour the values of our regions. Through sharing industry knowledge we work to raise industry standards, encourage leadership and Excellence. We are Passionate about where we come from and we love what we do. We strive to support the environmental and economic Sustainability of our members and communities. The purpose of the inception of the Great Southern Touring Route was to create regional dispersal, and offer more opportunities for the growth of the tourism industry in the coverage areas of GSTR and beyond. “The Shire has been a long standing participant in the Great Southern Touring Route. The Council understands that this collective approach to international destination marketing is the most cost effective means for the exposure of Council’s tourism assets in these key markets. While the industry continues to maintain volatility across both domestic and international sectors we are aware that without GSTR’s capacity to provide linkage with other key attractions in Victoria – aka Great Ocean Road and Ballarat our regional industry would be less sustainable.” Samantha Magill, Director Marketing and Community, Northern Grampians Shire Council The communities that make up the regions of the GSTR have similarity and cultural diversity at the same time. The indigenous history in the area dates back more than 40,000 years and GSTR features three of Victoria’s top Indigenous experiences in Worn Gundidj, Narana Creations and Tourism Award Winning Brambuk Cultural Centre. These Indigenous experiences provide interest for many of our key international markets and helps to foster an understanding of the historic and contemporary indigenous culture of the region. Just as the opening of the Great Ocean Road in 1932 connected towns that were previously only accessed by sea, GSTR has been about connecting communities through tourism experiences. The contemporary culture and history of the communities and the experiences in the GSTR include indigenous, nature based, adventure, agriculture, gold rush, Chinese history, maritime, surfing, arts, music, food and wine. By promoting itineraries that encourage exploration, a diverse range of experiences and immersion in local communities we not only provide for our target markets but create opportunities for greater regional disbursement, which allows us to fulfil our commitment to our members and regions by creating economic benefits and business growth. ‘Since Great Southern Touring Route (GSTR) commenced in 1991 we have experienced a significant growth in international tourism. We have no hesitation in attributing the growth in this region to the initial vision of GSTR to create awareness of the beauty of the Great Ocean Road which subsequently converted to visitation which means economic growth for our region. Warrnambool City Council as a financial supporter of GSTR for the total 20 years congratulates GSTR for the professional and effective marketing’. Bill Millard, Director City Growth, Warrnambool City Council In addition to providing opportunities for tourism growth and therefore growth of regional economies GSTR also contributes in the following ways: • Promotion on cultural and regional events in our international markets, for example in 2010/2011 we did a special promotion for the Falls Festival (Lorne - Dec/Jan) with STA in the UK and the Great Ocean Road Marathon (May) in particular in the Japanese market • Provide our international marketing material to groups (Schools, Business and Community) that are hosting or going to visit international schools, cities, sporting events • Our directors speak to community groups about the GSTR partnership and demonstrate how we market their region to the world. Groups include Rotary, Probus, and Community Foundations. This helps to foster an understanding of the importance and benefits of tourism to the region.

Marketing innovations and results achieved. From its inception, the GSTR has been an innovator and continues to be so today. During the qualifying period we introduced the following: New Technology iPhone & iPad Applications With the rapid growth of smart phones and tablet computers GSTR quickly identified the importance of developing applications suitable for such products as the iPhone and iPad. The early adoption and creation of these applications which were launched at the start of June 2011, to promote member products to our markets that have an ever increasing appetite for “instant information” at their fingertips. These tools that effectively market GSTR and assist in the pre-planning of itineraries are also extremely helpful for “on tour” assistance with mapping tools and specific tour directions. To our trade partners it reinforces the point that GSTR is, even after 20 years, a modern and developing product capable of producing new and innovative product training tools to help their staff achieve more sales. “As a Product Planner and Aussie Specialist that promotes Victoria it is important to have the tools to support us, we have been working with GSTR for more than 4yrs, and the key things that they do to assist are the informative product updates, information and up to date highlights & news. Compared to other regions/touring routes the support that we receive is much better than anywhere else. They are very up to date and now with only one touch I can get all the info I need through my iPad (just download GSTR product) which makes it easy for me as a planner & consultant.” Al Chan - Tour Consultant, Malaysian Harmony Tour & Travel Sdn Bhd Website Re-launched in April 2011 the GSTR website features new initiatives resulting in more than 2500 unique visitors. • Language translation tools for Chinese, Japanese, German, French and Italian. Making it easier for trade and consumers to access GSTR information in the comfort of their own language. • Trade Resources pages that include: GSTR image gallery, market contact details, e-newsletter archives. This provides quick and efficient access for our partners to trade specific information, downloadable images and updates. Video Vignettes and YouTube Producing the video vignettes of GSTR product members and the creation of the GSTRAustralia YouTube channel at the end of March 2011 has proven remarkably successful in showcasing its products in a new format. The GSTR is a unique visual experience and the videos are highly effective tools in training trade partners who due to distance may not have the opportunity to experience the product first hand. This allows trade and consumers to view the products when deciding on brochure inclusions, pre- planning itineraries, making accommodation choices and deciding on activities to undertake on a visit. The interest in the GSTRAustralia YouTube channel has been well above expectation receiving over 3500 views in its first 3 months, the Google ranking has also markedly improved from three to one. “It is always important to be “up to speed” and get information about the latest developments in a region which I cannot visit on a regular basis. In addition we get the support to do additional marketing here in Germany for GSTR. It is definitely a very good service, and you, the representatives, are very active and helpful. Looking at touring routes you are definitely the only ones which are that pro-active. So I hope you don´t mind if I just say: I am very very very happy with your support!” Peter Just, Dertour, Germany New Trade Initiative Japan In Market Rep In July 2010 we appointed Izumi Nagai as an in-market representative for Japan. This initiative has provided a value for money opportunity to strengthen our relationships with trade partners in this market. United Nations World Tourism Organisation In September 2010 GSTR presented the innovative concept of a ‘Great Touring Routes of The World’ campaign, to the United Nations World Tourism Organisation based in Madrid. This presentation at such a high level within the world tourism body is testament to GSTR’s proven innovative techniques. It has played a major part in GSTR being recognised as a global benchmark in the successful marketing of a touring route and being featured in such prestigious publications like the UNWTO Silk Road Action Plan 2010/2011.

Measuring the impact of Great Southern Touring Route

$260m $2,000m $148 m mm mm

$2,480m mm

$2,100m $196m $156m mm

$1,700m $400m

$118m $78m $862m 11,405

$940m

$3927m

$236m $1,770m 19,389

$2,006m

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PARLIAMENT OF VICTORIA | RURAL AND REGIONAL COMMITTEE This document is confidential to the Rural and Regional Committee 157

PARLIAMENT OF VICTORIA | RURAL AND REGIONAL COMMITTEE This document is confidential to the Rural and Regional Committee 158

Regional Public Hearing Program:

Witneess Information

Witness Mr Russell Coad, Chair Association G21 Agribusiness Forum Date & Time 2.00 pm Wednesday 30 April 2014

G21 Agribusiness Forum

The G21 Agribusiness Forum represents agribusiness and associated suppply chains in the G21 region (Greater Geelong, Golden Plains, Colac‐Otway, Surf Coast and Queenscliffe).

In its submission to this Inquiry (see attacched), the G21 Agribusiness Forum states (p3):

‘The G21 Agribusiness Forum considers that ongoing efforts to improvve competitiveness are vital to expanding exports from agribusinesses in the region. The Forum sees two major components to facilitating enhanced competitiveness:

 Creating an environment that facilitates the growth of innovativve, entrepreneurial and globally focussed agribusinesses in the region  Investing in economic infrastructure to enhance cost effective supply chains and market access.

The Forum sees a clear role for government in both of these componeents.’

The submission indicates that the Government’s role includes facilitating and supporting:

 The development of innovation skills in agribusiness managers  Supply of trained labour  Cluster development  Collaboration between researchers and industry

The submission also notes the importance of Government investment in infrastructure.

The G21 Agribusiness Forum is part of the Victorian Agribusiness Council (submission attached). In its submission, the Council noted the importance of inbound and outbound trade missions, and provided details aboout The Inward Chef’s Mission held by the Council, which brought Asian chefs to Melbourne and regional Victoria to sample produce for potentially exporting. The Council also noted the potential for capability development programs to be delivered through agribusiness forums.

PARLIAMENT OF VICTORIA | RURAL AND REGIONAL COMMITTEE This document is confidential to the Rural and Regional Committee 159

PARLIAMENT OF VICTORIA | RURAL AND REGIONAL COMMITTEE This document is confidential to the Rural and Regional Committee 160

G21 Agribusiness Forum Submission

Inquiry into the opportunities for increasing exports of goods and services from regional Victoria

The G21 Agribusiness Forum is pleased to make this submission to the Regional and Rural Committee of the Parliament of Victoria. The Forum considers increasing eexports of goods and services from the agribusiness sector as vital to the future of the G21 region economy.

Summary of key issues

 Agriibusinesses make a strong contribution to the economy of the G211 region.  Groowth and development of agribusiinesses can provide an important source of new investment, employment and income generation for the G21 economy, which is particularly significant as the economy undergoes substantial structuraal change.  Existing businesses provide a strong base on which to develop innovative, entrepreneurial agriibusinesses focussed on global market growth opportunities, especially in Asia.  Governments can assist in developing the agribusiness sector by creatting an environment to develop innovation and entrepreneurial skills in existing and new firrms.  Governments also have a role in delivering infrastructure that enhances competitiveness andd access to markets that are vital to global competitiveness.  Thee G21 Agribusiness Forum is working with all parties to facilitate these outcomes.

What is the G21 Agribusiness Forum?

The G21 Agribusiness Forum provides a coordinated voice for the whole agribusiness sector and associated supply chains in the G21 region. The G21 region includes thhe local government areas of the City of Greater Geelong, Golden Plains, Colac‐Otway, Surf Coast and the Borough of Queenscliffe. The G21 Agribusiness Forum is part of the Victorian Agribbusiness Council, which advocates and promotes Victorian agribusiness development.

Facilitating the growth and development of dynamic, innovative and resiliient agribusinesses will play an important role in the future development of the G21 region. The G21 Agribusiness Forum aims to assist growth and development of agribusinesses through:

 Connecting agribusiness to organisations that can assist their growth and development;  Facilitating collaboration amongst aggribusiness supply chains and othher sectors to enhance the creation of value by agriibusinesses in the region; and  Building entrepreneurial and innovative capacity of agribusiness owners and employees.

G21 Agribusiness Forum Submission

Agribusiness plays an important role in the G21 economy

Agribusiness is a major driver of the G21 region economy1. In calendar year 2012 it:  Employed around 10,000 people in pprimary production, manufacturing, wholesale and retail;  Accounted for 37% of manufacturinng employment;  Produced 9% of the region’s output value ($2.7 bn of $30 bn); and  Accounted for 17.6% of the region’s manufacturing outputu

Table 1: Contribution of agribusiness to the G21 economy

Agribusiness also has strong in‐region linkages, accounting for 11% of local expenditure in 2012. Each dollar of output from the agribusiness sector generates 35 cents in local sales, 48 cents of exports and 16 cents of household consumption. These contributions to the well being of the G21 economy come from a diiverse range of businesses in the region including:  primary production e.g. beef, sheep, pig, poultry and dairy farming, cropping, wine grape growing, olive growing and vegetablle farming;  manufacturing of food and beverages e.g. milk and other dairy products, meat, wine making, olive oil, wool and grain transport and storage, malt manufacturing, textile manufacturing, and food product manufacturing; and  wholesale and retail activities e.g. grain storage and export, wool storage, food service businesses, transport and logistics.

There is also a considerable education and research presence in the region including Marcus Oldham College, Deakin University, The Gordon TAFE, CSIRO and a newly establishing Agriculture Trade Training Centre at Coveenant College in Geelong.

Opportunities for development

Ongoing development of the agribusiness sector will provide a significant source of future economic growth for the G21 region. In particular ongoing development of high value agribusinesses is an important component of the future employment, investment and income for the Geelong economy as it undergoes significant structural adjustmentt. This includes significant opportunities that will arise from growth in Asian markets.

1 (1 For further information see: http://www.g21agforum.com.au/2779/downloads/Agribusiness%20in%20the%20G21REGION).pdf

G21 Agribusiness Forum Submission

The G21 Agribusiness Forum considers that ongoing efforts to improve competitiveness are vital to expanding exports from agribusinesses in the region. The Forum sees two major components to facilitating enhanced competitiveness:

 Creating an environment that facilitates the growth of innovative, entrepreneurial and globally focussed agribusinesses in the region; and  Investing in economic infrastructure to enhance cost effective supply chains and market access.

The Forum sees a clear role for government in both of these components.

Facilitating innovative, entrepreneurial and globally focussed agribusinesses

As noted above the diverse range of agribusinesses in the G21 region provide a strong base from which to expand investment, employment and income. By way of example of the opportunities that entrepreneurial businesses provide, the G21 Agribusiness Forum is preparing case studies of such businesses in the region. 2

It needs to be recognised that being globally competitive within a high cost environment requires the development of world class innovation skills within firms and across whole supply chains. Characteristics of successful firms in this type of environment include a high capacity for innovation through value creation, a strong focus on global market niches, highly experienced and knowledgeable management, strong customer relationships and close relations with knowledge institutions.3

Ongoing improvements to deliver efficient supply chains are a vital complement to allowing innovative and entrepreneurial agribusinesses to take advantage of Australia’s proximity to major Asian markets. Further, efficient supply chians are vital to capitalising of our competitive advantage in food safety and food security. There is also a need for enhanced promotion of our ability to deliver safe and secure food products in a timely manner to Asian consumers.

The G21 Agribusiness Forum sees key components of creating an environment for innovation as being:

 Developing innovation skills of agribusinesses managers – to equip existing and new firms to develop the characteristics outlined above. Innovation skills include leadership, active management, employee skills, collaboration skills and skills in customer relationships.  Developing skilled workforces – there is a need to ensure a supply of appropriately trained labour for growing agribusiness industries. This requires strong, practical links

2 See: http://www.g21agforum.com.au/2779/downloads/Agribusiness%20newsletter%20March%202014.pdf 3 Ref: Goran Roos, The Role of Intellectual Capital in Business Model Innovation: An Empirical Study in Pablos PO, Tennyson R & Shao J Intellectual Capital Strategy Management for Knowledge‐Based Organisations.

G21 Agribusiness Forum Submission

between education providers and industry e.g. in the G21 region this is being pursued through a number of avenues including the newly establishing Covenant College Agriculture Trade Training Centre, Marcus Oldham College, The Gordon TAFE and Deakin University’s Centre for Regional and Rural Futures.  Cluster development for collaboration – clusters of agribusinesses already exist in the G21 region. There is significant potential to use these clusters to facilitate collaboration as a source of innovation for industry development. This potential is illustrated in the success of the Geelong Food Co‐Products Cluster in working with a group of agribusiness firms to develop an organic based fertiliser utilising waste from fish processors in the region as well as a range of other industry developments. 4 Similarly, development of the Golden Plains Food Production Precinct for intensive agriculture and livestock production will provide significant economic benefits to the region. The Australia China Business Council has also recently undertaken a project aimed at building collaborative networks to assist regional agribusinesses to develop and enhance export relationships with China. This type of collaborative approach to building export markets is considered to have significant potential to assist export growth.  Collaboration between researchers and industry – stronger, direct relationships between researchers and industry provides an important component of innovation. The challenge here is to ensure that applied research activities are strongly related to practical agriculture and related supply chain business issues. This helps ensure adoption of new technologies and practices as part of innovative business operations. In the G21 region Southern Farming Systems and Deakin University’s Centre for Regional and Rural Futures is an example of how these links are developing.

Government support for these types of activities e.g. through programs such as Enterprise Connect provides a low cost means of developing innovation skills across the value chain.

Investing in economic infrastructure for cost effective supply chains

Geelong provides a natural hub for transport infrastructure that services the G21 region, key agricultural regions of south west and western Victoria and areas beyond. This includes road, rail, the Port of Geelong and Avalon Airport. It includes:

 major grain export though the Port of Geelong;  major wool and other fibre handling and storage through Australian Wool Handlers;  a number of major transport and logistics operators e.g. Wettenhalls, Riordan Grain Services and K & S Freighters;  access to Melbourne and Victorian markets and the Port of Melbourne for dairy production and a wide range of manufactured foods e.g. Geelong is the home of olive oil

4 See www.gfcc.com.au

G21 Agribusiness Forum Submission

production operations of Boundary Bend Olives that account for 75% of the Australian olive oil market (through its Cobram Estate brand); and  significant potential for export of high value perishable agricultural and seafood products though Avalon Airport e.g. dairy, aquaculture and live animal exports.

Ongoing development of this infrastructure is vital for cost efficient market access both domestically as well for export markets and will directly facilitate investment in existing and new agribusinesses. There is considerable planning underway to identify key infrastructure investments in Geelong. For instance, the City of Geelong in association with key industry partners has completed a study that identified a series of investments that would significantly enhance cost effectiveness of the Port of Geelong operations .5 This outlines road, rail and marine investments.

The next step will be to expand this study to develop detailed business cases for infrastructure investments related to specific agribusiness supply chains relevant to the Geelong region. This will lead to a clear basis for investing in improved market access infrastructure in Geelong and the G21 region more broadly.

Government investments in infrastructure planning and delivery in association with industry will be vital to ensuring these goals are met and will strongly complement the development of innovative agribusinesses in the region.

Further information:

We would be happy to elaborate on any aspect of our submission. Contact: Russell Coad, Chair, G21 Agribusiness Forum e: [email protected] p: 0429 430 599

5 See: https://www.geelongaustralia.com.au/common/public/documents/8d06715d363ea38‐ Geelong%20Port%20and%20Land%20Freight%20Infrastructure%20Plan.pdf

Victorian Agribusinesss Council Inc ABN: 12 150 249 554

17th April 2014

Mr Chris Gribbin Executive Officer Rural and Regional Committee Parliament House East Melbourne VIC 3002 [email protected] [email protected]

Dear Mr Gribbin,

Re: Inquiry into the Opportunities for Increasing Exports of Goods and Services from Regional Victoria

The role of the Victorian Agribusiness Council Inc., is to act as a peak body that represents and supports Victorian agribusiness forums and coordinate their statewide interests

The Executive Chefs were guests of the Victorian government to the International Food and Beverage Trade Week, then toured regional Victoria, sampling food export offerings.

Victorian Agribusinesss Council Inc ABN: 12 150 249 554

The project has delivered above and beyond the initial expectations of the Victorian Agribusiness Council Inc. Our partners are delighted with the outcomes.

a) the identification and volume of Victorian agricultural, resource, manuffacturing and service industry exports to overseas markets originating in regional Victoria;

(b) regional Victoria’s competitive advantages in meeting the demands of world markets;

Delivery of product to market by means of least cost is imperative. Infrastructure projects to aid efficiency in production therefor are necessary to remain world competitive.

Victorian Agribusinesss Council Inc ABN: 12 150 249 554

The Executive Chefs Inward Mission Project is proposed as an innovative way to improve communication between the buyers and sellers of Victorian produce.

(d) impediments and barriers creating difficulties for regional exporters;

(e) the current and future roles of government in supporting regional businesses in their export endeavours

Thank you for the opportunity to comment on this important issue for Rural annd Regional Victorian agribusiness development. We would welcome the opportunity to present in person.

Yours faithfully,

Clive Larkman Bronwyn Debenham Chair Executive Officer Victorian Agribusiness Council Inc.,

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PARLIAMENT OF VICTORIA | RURAL AND REGIONAL COMMITTEE This document is confidential to the Rural and Regional Committee 169

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PARLIAMENT OF VICTORIA | RURAL AND REGIONAL COMMITTEE This document is confidential to the Rural and Regional Committee 170

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Witness Mr Jake Dingle, Chief Exeecutive Officer Association Carbon Revolution Date & Time 3.00 pm Wednesday 30 April 2014

Carbon Revolution

Carbon Revolution is a privately owned Australian company. The company emerged from an independent R&D program providing technology mentoring to university tteams involved in Formula SAE (student design competitions). The first composite wheels developed by the founders appeared in 2004 on SAE vehicles.

The team expanded to add the skills and experience necessary to commercialize this technology and take it to the various global markets.

Carbon Revolution also has numerous foormal partnerships for technology development and product testing around the world. This includes Deakin University and RMIT University in Australia, both globally recognized institutions in their respective fields off materials sciences and aerospace technology.

In March 2014, a $23.8 million project to expand production from 4,000 to 50,000 wheels per annum was announced. The State Government provided $5 million of funding for this project through the Geelong Region Innovation and Investment Fund. The new factory is expected to be completed in 2016.

PARLIAMENT OF VICTORIA | RURAL AND REGIONAL COMMITTEE This document is confidential to the Rural and Regional Committee 171

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PARLIAMENT OF VICTORIA | RURAL AND REGIONAL COMMITTEE This document is confidential to the Rural and Regional Committee 172

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Witness Mr Bernard Brussow, Chief Executive Officer Association IXL Group Date & Time 3.30 pm Wednesday 30 April 2014

Bernard Brussow

Bernard became CEO of the IXL Group in March 2014. Prior to that, he worked in a number of similar firms in South Africa.

IXL Grooup

The IXL Group is an engineering and manufacturing group based in Geelong. The company was founded in 1858 when Ebenezer Backwell migrated to Australia and began a whitesmith and stoove repairing business. The group currently employs over 200 people.

Backwell IXL P/L is part of the IXL Group. The company's manufacturing capabilities include metal stamping, metal finishing, roll forming and assembly. Backwell IXL supplies to a range of customers in Australia and overseas, including automotive OEMs (original equipment manufacturers), mining and smelting operations, heating and cooling industries and electriccal supply utilities. Major customeers of Backwell IXL include Toyota,, GM Holden and Ford.

Other areas of the IXL Group include IXL Metal Castings and Sampford IXL (kitchens, bathrooms etc).

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PARLIAMENT OF VICTORIA | RURAL AND REGIONAL COMMITTEE This document is confidential to the Rural and Regional Committee 174