Limestone Coast Economic Diversification Report (2012)

Limestone Coast Economic Diversification Building a more prosperous future DRAFT October 2012

Contents

1 Background ...... 1 2 Potential short-term actions ...... 3 2.1 Planning ...... 3 2.2 Infrastructure ...... 3 2.3 Collaboration and Innovation...... 3 2.4 Capability Building ...... 3 2.5 Financing Opportunities ...... 4 2.6 Market Development ...... 4 2.7 Enhanced Government Presence ...... 4 3 Opportunities ...... 5 3.1 High value manufacturing and agribusiness ...... 5 3.2 Leverage natural resources to develop existing and build new industries ..... 5 3.3 Target high value product and service development focusing on regional strengths ...... 5 3.4 Target development of emerging industries ...... 5 4 Challenges and constraints ...... 6 4.1 Cost competition ...... 6 4.2 Commodity focus ...... 6 4.3 Infrastructure and resources ...... 6 4.4 Education and training options ...... 6 4.5 Targeted and applicable research and development ...... 6 4.6 Access to skills and expertise ...... 6 4.7 Market intelligence ...... 7 4.8 Apprehension towards change ...... 7 4.9 Role clarity of Government ...... 7 4.10 Industry collaboration and coordination ...... 7 4.11 Policy settings, process and regulation ...... 7 5 Potential next steps to maximise opportunities ...... 8 5.1 State Government Taskforces ...... 8 5.1 Role of Government and Industry ...... 8 6 Appendices ...... 9 6.1 Ideas received regarding how we can maximise opportunities ...... 9

6.2 Information Package for 11 September 2012 Forum ...... 14 6.3 Findings from the Limestone Coast Economic Diversification Pre-Forum Survey ...... 15

1 Background The Limestone Coast Economic Diversification Engagement Process is being undertaken across the Limestone Coast. The purpose of this engagement is to enable the community to provide input into the process of working through the South Australian (SA) State Government strategic priorities, specifically Premium food and wine from our clean environment and Growing advanced manufacturing.

Objectives for this process have been identified as:  Identify and discuss emerging and future economic development opportunities that can build on the region‟s competitive advantages  Use outcomes to inform the work of the SA Government Taskforces into Premium food and wine from our clean environment and Growing advanced manufacturing

The engagement process has included a targeted Forum, online survey, targeted telephone interviews, and meetings with regional representatives (including local government Mayors and Chief Executives from the Limestone Coast region). Broader community engagement has been undertaken by a number of the Limestone Coast councils and a survey offering wider input opportunities from across the community has been available at the SA Plan - YourSay website www.saplan.org.au/yoursay.

The following is a draft compilation of the ideas received to date throughout the engagement process. It outlines potential short-term actions that could be implemented within a 12 – 18 month period, a summary of the opportunities, challenges and constraints and potential next steps to maximise opportunities. Additionally the appendices include a summary of the ideas generated throughout the engagement process regarding maximising opportunities, the initial background information package prepared for the Limestone Coast Economic Diversification Forum (held on 11 September 2012) and the Findings from the Limestone Coast Economic Diversification Pre - Forum Survey. Feedback received from the surveys filled out through the SA Plan –YourSay website has been incorporated into the body of this draft report.

Figure 1, on page 4, provides a high-level summary of the community feedback received to date. These ideas have been identified by Limestone Coast community members and will be included in the report to be provided to the Government Taskforces.

This draft report is being circulated to the wider Forum group for comment prior to the final gathering, to be held on 29 October 2012 in Mount Gambier, where a final report will be presented.

Limestone Coast Economic Diversification – Summary of Community Feedback 2

Figure 1: Limestone Coast Economic Diversification – Summary of Community Feedback

2 Potential short-term actions 2.1 Planning  Consolidate existing opportunities that are not being adequately addressed and identify actions to be taken. For example intensifying agriculture, cross sector hubs, diversifying forest products  Development of a “blueprint” for the Limestone Coast that outlines achievable results in the short-term while identifying opportunities that could be explored to establish a long term vision for the economy  Enhance capacity of the South East Resource Information Centre (SERIC) to provide comprehensive data/ information/ modelling  Short-term project to be undertaken by SERIC to integrate research, knowledge and data largely generated in the last decade on land capability for a variety of crops (this would provide a resource for existing and future players and fill significant gaps)  Harmonisation of planning approaches to build confidence for business and developers  Explore opportunities for industry hubs to take advantage of economies of scale and potential cross-sector opportunities and consider what can be done and where  Identify and promote liveability factors that attract people to regions to build critical mass of human capital to meet growth opportunities 2.2 Infrastructure  Critical Needs List to stimulate economy  Integrated case management across sectors for investment attraction 2.3 Collaboration and Innovation  Establish or reinvigorate regional clusters in forest products, education, manufacturing, food and wine, alternative energy  A funded regional task force to lead the “blueprint”, oversee implementation of short-term actions and explore opportunities at a high level including across sectors  Identify sources of intellectual property and research that could be the basis of new industries in the region 2.4 Capability Building  Identify and formalise a way to build, attract and retain business related skills in the region  Establish a Young Leaders Program and utilise case studies around future opportunities as part of program design  Explore opportunities with tertiary education sector to build capacity with relevance to development opportunities in the region. Such opportunities include through research and development and establishing the South East as a desirable education destination and alternative to city based campuses

 Establish a business mentoring program particularly for small and medium sized enterprises (SME‟s) to assist companies to identify opportunities and skill sets for growth 2.5 Financing Opportunities  Develop a portfolio to aggressively promote points of difference of the Limestone Coast Region to potential investors  Build strategic relationships with potential financing sources at least in South Australia and with East Coast institutions as a first step  Work with these institutions and local business to better understand the requirements for access to capital 2.6 Market Development  Regional branding and image development in terms of both attracting new industries and packaging existing and potential offerings  Establish points of difference through Quality Assurance and other initiatives  Explore innovative ways to connect with and distribute to customers and consumers. This includes electronically (websites and online sales portals, etc.) but also focuses on personalising the sales process  Build a targeted tourism attraction package based around point of difference and experiences (food, wine, Saint Mary McKillop, and unique attractions such as caves, lakes and coast)  Explore opportunities in the convention/event space  Regional trends and information is provided to inform and support industry development and to facilitate access to national and international market intelligence through data bases and briefings 2.7 Enhanced Government Presence  Increase regional services and presence  Provide case management capability to facilitate business development and market access  Cooperation at all levels of Government to actively support sustainable development through sound planning, reducing red tape and duplication, and integrating and joining up government services to improve efficiency and effectiveness  Establish a Memorandum of Understanding (based on the Whyalla model) between Australian, South Australian and Local Governments to articulate the partnership approach and commitment to regional development and to collectively map ways forward where governments have responsibility  Commit to collaborate and coordinate resources required for infrastructure that have impeded sustainable development

3 Opportunities 3.1 High value manufacturing and agribusiness  Value-adding for existing industries - including forestry, timber, horticulture, fresh and salt water aquaculture, and dairy  Diversify forestry production - including in a range of potential higher margin products  Engineering and high-tech industries - including those related to alternative energy  Establishment of industry hubs and clusters – including those that take advantage of integration and cross servicing 3.2 Leverage natural resources to develop existing and build new industries (including forestry)

 Forestry – Capitalise on market demand and supply gaps to develop new products and opportunities  Renewable energy - including wind, wave, geothermal, solar and biomass/biofuel based power  Intensive agriculture – sustainable use of groundwater resources, controlled atmosphere growing capability, intensive livestock production  Agriculture and horticulture - maximise region‟s potential as a „salad bowl‟ and capitalise on global food demand and preferences (through market differentiation and tools such as regional branding. The Eyre Peninsula is an example of a region in South Australia building global positioning through its brand: „Eyre Peninsula: Australia‟s Seafood Frontier‟). 3.3 Target high value product and service development focusing on regional strengths  Premium, high-value food and wine  Integrate product development and service delivery – build the „food and wine tourism experience‟  Build Education Centre focused on region’s strengths, existing investments and intellectual property - agribusiness, natural resources, emerging industries  Limestone Coast as a premium, experience-focused tourism destination natural resources, food, wine, fisheries/seafood (crayfish tourism), Saint Mary McKillop  Limestone Coast as a Convention/Event Destination 3.4 Target development of emerging industries  Mining - Limestone and gypsum products, Glass factory (2 dolomite quarries), Fly-In-Fly-Out  Feasibility for wave rider project and other energy projects - new capability, develop new maintenance expertise, research and development and training

4 Challenges and constraints 4.1 Cost competition  Difficulty competing internationally given high costs of production and high Australian dollar 4.2 Commodity focus  The region, like Australia more generally, is confronted with significant production costs and competition pressures. If we continue our current focus on commodity products we will experience ongoing difficulties competing in domestic and international markets 4.3 Infrastructure and resources  Inadequacy and security of infrastructure including; power, gas, transport (roads, rail, port, freight and airports), water, wastewater treatment facilities, telecommunications  Costing framework for infrastructure including power  Freeing up the water market and encouraging trade 4.4 Education and training options  Delivery of a greater number of and diverse industry aligned training programs  Integration between education providers and building partnerships with industry  Attracting students to the region and building student understanding of the advantages and opportunities presented by studying outside capital cities 4.5 Targeted and applicable research and development  Limited resources to undertake research and development. Some very large companies are capable of sustaining a level of research and development, but in most cases this is too expensive and long term for individuals to undertake, yet it is vital to remaining competitive  Building a capability/resource to benefit industry generally  Government as champion. It was perceived widely that research and development requires government partnering to be successful  Partnerships between industry and tertiary institutions to deliver research into practice 4.6 Access to skills and expertise  Staff expertise and skill levels available in regions  Attraction and retention  Technological understanding  Financial and logistical support  Business planning

 Risk aversion by governments and financial institutions 4.7 Market intelligence  Awareness and knowledge of market opportunities, technologies, competitors  Openness to innovation and a willingness to look beyond traditional approaches. The world has become globalised and so non-traditional markets (tourism, produce) such as South East Asia are much „closer‟ than they once were. Real-time information and modern technology can play a much larger role than in the past 4.8 Apprehension towards change  Risk aversion  There is a need for the region as a whole to become more proactive, and to lose the historical sense of „being the underdog‟  Need for stronger leadership and for leadership to act regionally 4.9 Role clarity of Government  Government, particularly the South Australian Government, is seen as unsupportive in regions, with excessive red tape, limited investment and lack of business advice and support, seriously hampering diversification and expansion  Metrocentricity. There is a strong perception that the South Australian Government has a „metrocentric‟ stance  Planning issues, which include a lack of structured, strategic planning at all levels of government. There is a need for cultural change around planning to reduce the „silo‟ mentality found between some industries and institutions  There needs to be a strong commitment from Government to build community engagement and ownership. People treat surveys with some degree of suspicion - 'We‟ve said this before- where is this going to lead?' 4.10 Industry collaboration and coordination  A collective vision that is aspirational  Cultural challenges including overcoming the fear of collaboration (perceived threat)  A perceived absence of leadership. An example mentioned was that all sectors of forestry are inter-dependent but they do not demonstrate strategic collective thinking 4.11 Policy settings, process and regulation  Policy settings that do not encourage growth  Red tape  Different regulations and processes for different jurisdictions

5 Potential next steps to maximise opportunities 5.1 State Government Taskforces  The outcomes from the Forum and the broader engagement process will inform the work of the State Government Taskforces into Premium food and wine from our clean environment and Growing advanced manufacturing and inform the government response  It is planned to brief the Taskforces at their next available meetings on the outcomes and proposed actions from the Forum that will be confirmed with Forum participants on 29 October 2012 5.1 Role of Government and Industry  Participants at the Forum discussed the role of government and industry. A key role of the three levels of government will be to act as the catalyst, facilitator and advocate across government for progressing the outcomes of the Forum, together with industry  The success of the Forum will be achieved through local partnerships with the South East Local Government Association (SELGA), Regional Development Australia Limestone Coast (RDA), industry and the regional community  Leveraging opportunities from the Premium food and wine from our clean environment priority is consistent with PIRSA‟s Strategic Direction of growing sustainable regions. This approach will see a renewed focus on three key areas for PIRSA: agribusiness development, regional development and strategic policy delivery  This approach will be supported by the creation of seven Agribusiness Account Manager Roles with a focus on horticulture, seafood, grape and wine, meat and livestock, grains, food and beverage processing and forestry  This will also be supported by five new Regional Managers, with one based in the Limestone Coast region  The Regional Manager will be the resident “go to” person for assistance with the range of PIRSA related activities important to the Limestone Coast. They will provide access to an extensive range of government contacts and information that can help regional businesses and communities meet the challenges and opportunities of growing the region  They will also provide a central point of contact for PIRSA‟s interaction with SELGA and RDA in progressing the actions of the Forum

6 Appendices 6.1 Ideas received regarding how we can maximise opportunities The following section provides a summary of ideas received throughout the engagement process regarding how opportunities can be maximised and challenges and constraints addressed. 6.1.a Infrastructure that supports industry growth and the emergence of new industries  Public-private investment approach required  High speed rail for both passengers and freight  Improved power production  Upgrade of inadequate systems which are impediments to value adding and food processing industry expansion/development  Cold storage and a transport hub to support the agricultural and horticultural industries  Telecommunications including bringing forward the fibre optic roll-out  Waste water treatment including the upgrade of inadequate systems. Inadequate systems are an impediment to value adding and food processing industry expansion/development  Accommodation, particularly the development of four star and boutique accommodation  Multi-purpose function centre  Road improvements and development including; Mount Gambier/Penola “bypass”, national road carrying system, “one” system for double road trains, b-doubles access to south of Adelaide  Coastal road that links the coastal towns and which could be an extension of the Great Ocean Road  Upgrading of roads and reduction of red tape, particularly around tourist hotspots like the Coonawarra (signage to the Coonawarra has not been upgraded because it is considered that the roads are unable to carry more traffic)  Regional airline upgrades. A second operator would encourage business development, population attraction and improve access to a broad level of services  Water, particularly the development of a functioning water market. Need for Government to put pressure on power and water suppliers regarding high costs  State and Australian Government encouragement of investment in alternative schemes that deliver regional power and water services  State of the art timber mill capable of best practice timber cuts from all log sizes to enable the production of top quality material at very competitive prices  Authorised aircraft engine repair/overhaul centre, aircraft manufacturing, aerial photogrammetry collection and processing

6.1.b Build regional capabilities  Improved local education  Improved educational content  Educational content is more industry relevant  A means to reduce the loss of young people to the city for education  Establish a University (Limestone Coast). Explore a virtual university, particularly in agricultural and aquaculture  Build Education Centre focused on regional strengths and existing investments and intellectual property. Two examples of current success in this area are: − Lucindale Area School and the agricultural program that is supported by student boarding arrangements − Renewable energy training site, wind power technology at the TAFE SE campus in Mount Gambier with its interstate education linkages  Improved staff. Attract and retain skilled and committed people to work in the region  Mining simulator for the education sector to ensure staff are industry-ready 6.1.c Stimulate business opportunities and entrepreneurship  Use of latest technologies and techniques to secure improved agricultural and horticultural production  Improved industry intelligence that is systematically gathered and systematically utilised  Tailored financial plans for local conditions and industries. Local financial knowledge and local support  Venture capital or other forms of seed funding to enable local business ventures to adapt, improve infrastructure, or adopt new technologies  Foreign investment  Address risk aversion, particularly in Government and Finance (Banks, Superannuation funds)  Effective market development through: − Targeting new and existing markets more effectively, with specific reference to Adelaide, Melbourne and South East Asia − Access to market intelligence particularly regarding consumer/ customer behaviour and needs  Information on marketing options. There is an opportunity to create a position for someone who can more effectively „prospect‟ for industry  Effective, accurate business plans for those businesses/industries  Direct support, both financial and logistical, that is provided in a timely fashion to businesses and industries  State of the art simulator to instruct operators and train staff to use graders, scrapers, big dump trucks, excavators, conveyors and to enable trouble shooting and training regarding all operational aspects of the machinery [for the mining industry]

6.1.d Champion relevant research and development  Integrate research, education, industry and market opportunities  Inject research into local businesses to spark innovation  Develop business case for attracting research and development funds  Outcome based, project based, supported by science and sustained by partnerships  Finance, particularly venture capital linkages 6.1.e Greater innovation in connecting and communicating with markets  Document the „clean and green‟ environment with proof. Driven by Government  Recognised regional brand that is supported by credible documentation/transparency  Split the South East into two marketable regions which can be branded according to similarities in each area: „Limestone Coast – the coastal route‟ and „Limestone Country – the inland route‟  Reduce red tape in line with regional brand  Quality Assurance labelling and the development of a government supported website to facilitate community understanding of labelling jargon  Communicate „quality‟ not price  More innovative ways to connect with and distribute to customers through the internet and sites such as „banana blue‟  Value our heritage and connect in unique ways to international markets 6.1.f Embrace change and innovation  Attitudinal and cultural change. The Limestone Coast is diverse and productive and we „punch above our weight‟, good resource managers, an attractive and liveable part of Australia  We have the largest centre (outside of Adelaide) in South Australia and we should trade on it. We need to embrace it and promote it  Establish the precedents for successful action and promote success stories. Several respondents noted that small wins are often followed by larger ones, as confidence builds 6.1.g Collaboration within and across industry  Industry hubs/ „symbiotic‟ estates/ cogeneration. For example timber processor with horticulture or other industries with reasons to co-exist, cogeneration  Wood residues. Using what we have in abundance and applying this to benefit other industries through “symbiotic” development  Industry co-ops to enhance market presence  Clusters to enable; the sharing of best practice, new ideas, product development, symbiotic development, applied research. Within sectors and between sectors. Achieve a collective approach  Establishment of mechanism to coordinate collaboration efforts across a number of sectors and restore “connection” across primary industries. This

addresses an existing gap where government and industry associations can play a role through an industry liaison officer  Defining a shared future through collaborative planning and the establishment of a long term vision for the region with buy-in from all stakeholders, including individuals, industry and Local Government  Identify leaders for key roles who take a regional perspective 6.1.h Industry as the driver of business and regional development  Collective voice  Generate the ideas and drive change  Lobbying role that is active not passive. Links to the industry voice  Sense of positivity (clear aspirational message)  To promote the economic, social and environmental importance of industry in the Limestone Coast region 6.1.i Government as a catalyst and facilitator to achieving regional growth  Cooperation by and between the various tiers of government in order to make it easier for companies to meet requirements. This includes faster approval processes, less red tape, and more practical assistance. Abolish land transfer fee  Local Governments take more of a „regional‟ focus  Further review of the structure of Local Government  Decentralise − The focus is not just on larger regional centres − All regional areas want to be attractive to workers − Government offices/education facilities  How do we ensure that Government facilitates but does not cross over into ownership? − Have a framework − Clearly identify the needs − Sense of positivity (clear aspirational message)  Regulations and red tape across three tiers of Government. A call for realistic compliance that is consistent and generates a level playing field that enables business growth  Reduce bureaucratic approach: − Collapse silos to enable coordination − Project based/ case management approach with one point of entry and one point of exit − Embrace and encourage the need for South East Councils to adopt the same set of development plans − Government provides the policy direction but this must be in partnership with industry and unions − Creates supportive environment that enables legislation − Resources - PIRSA/expertise/fast tracking projects/forecasting data and information

 Commitment from South Australian Government to reinvest in the region. This should not be a „one off‟ and not necessarily conditional to using the proceeds of the forward sale of Forestry SA rotations, but an ongoing commitment recognising the opportunities the Limestone Coast has for sustainable development  Improved planning, accurate and „real-time‟ baseline data (including better business intelligence to the South Australian Government), and less red tape  A more substantial local presence by the State Government  Initiate a review of the commercial and near commercial ready opportunities for high value offerings out of the cellulose chain given the existing raw material. Combine with the identification of the international players who are able [and willing] to engage in activities [directly or indirectly] in the region and information around existing and emerging value chains. (A draft proposal for the review regarding cellulose has been developed with a proposed cost of $1 million. If Tasmania is included they would share 50% of the cost, increasing the total cost to $1.5M but dropping SA’s share to $750,000.)  Forestry and Wood products − Government provides the policy direction but this must be in partnership with industry and unions − Creates supportive environment that enables legislation − Resources - PIRSA/expertise/fast tracking projects/forecasting data and information  An atlas of short, medium and long term opportunities

6.2 Information Package for 11 September 2012 Forum

Limestone Coast Economic Diversification Forum

BACKGR OUND INFORMATION

11 SEPTEMBER 2012

TABLE OF CONTENTS

1. INTRODUCTION AND FORUM OVERVIEW 3

1.1 BACKGROUND TO THE FORUM

1.2 FORUM AND COMMUNITY ENGAGEMENT PROCESS

1.3 INFORMATION PACKAGE 2. LIMESTONE COAST OVERVIEW 5

2.1 GEOGRAPHY

2.2 POPULATION

2.3 LABOUR FORCE

2.4 ECONOMY

2.5 MAJOR INDUSTRIES 3. POTENTIAL OPPORTUNITIES FOR FUTURE GROWTH 10

3.1 OVERVIEW

3.2 POTENTIAL OPPORTUNITIES 4. POTENTIAL BARRIERS FOR FUTURE GROWTH 14

4.1 OVERVIEW

4.2 POTENTIAL BARRIERS 5. REFERENCE LIST 16

1 INTRODUCTION AND FORUM OVERVIEW

1.1 BACKGROUND TO THE FORUM

The Premier of South Australia, The Hon Jay Weatherill, recently outlined the Seven Strategic Priorities of this Government as:

 Creating a vibrant city;  Safe communities, healthy neighbourhoods;  An affordable place to live;  Every chance for every child;  Growing advanced manufacturing;  Realising the benefits of the mining boom for all;  Premium food and wine from our clean environment.

In order to work towards achieving these priorities the Premier committed to holding an Economic Diversification Forum in the Limestone Coast. A key focus of this Forum will be to address the priorities Premium food and wine from our clean environment and Growing advanced manufacturing.

1.2 FORUM AND COMMUNITY ENGAGEMENT PROCESS

The Forum is part of broader engagement being undertaken across the Limestone Coast, which aims to enable the community to provide input into the process of working through the State Government strategic priorities. This process, outlined in the diagram below, aims to facilitate the generation of innovative ideas from diverse stakeholders across the region.

*Reflects possible activities that may be undertaken following the Forum

1.2.1 Forum Objectives

Forum objectives have been identified as:

 Identify and discuss emerging and future economic development opportunities that can build on the region‟s competitive advantages;  Use outcomes from the Forum to inform the work of the Government Taskforces into Premium food and wine from our clean environment and Growing advanced manufacturing.

The Forum and the broader engagement process will enable the identification of priorities and key opportunities for building economic diversification and how this may be achieved.

1.2.2 Forum Participants

The Forum is only the first step in a process and others (not included in the Forum) will also have the opportunity to contribute in the future. Given the purpose and objectives of the Forum, we have taken a targeted approach where we will be inviting between 15 and 20 participants. Participants have been suggested jointly by the local government, the RDA and other stakeholders.

Some ideas have already been canvassed from key people in the community and input from the wider Limestone Coast community will be sought following the Forum and in the development of local outcomes.

The Forum will enable participants to collectively participate in free flowing conversations and provide innovative ideas that go beyond the status quo, target lateral thinking and identify emerging opportunities regarding the economic and social development of the Limestone Coast.

It is hoped that participants will approach the Forum with ideas around „what is possible‟ and how potential constraints could be addressed in order to maximise these possibilities.

1.2.3 Forum Guest Speaker

The manufacturing industry in South Australia continues to represent a high proportion of South Australia‟s economic activity. Globally, manufacturing is undergoing a transformation and South Australia needs to be ready to adapt to these changes. Professor Göran Roos, a world leader in business model innovation in manufacturing, worked with South Australian manufacturers and policy makers to build a successful manufacturing future for SA. The outcome of this work was a final report entitled Manufacturing into the future. It provides an assessment of the current state of manufacturing in South Australia and internationally, and identifies the opportunities for the development of the manufacturing sector and longer term economic growth. In addition, Göran Roos, together with Professor Roy Green, prepared the Australia’s Manufacturing Future report for the Prime Minister‟s Manufacturing Taskforce. PIRSA has secured Göran Roos as the Forum guest speaker.

1.2.4 Forum Convenor

Mr Dennis Mutton, Chair of the Council of Rural Research and Development Corporations, will convene the Forum. Mr Mutton has previously held positions as: Chief Executive, Department of Primary Industries and Resources South Australia; Chief Executive, Department of Environment and Natural Resources and; Chief Executive, Woods and Forests Department.

Mr Mutton is currently an independent consultant in the fields of natural resource management, industry development, primary industries and resources, regional growth initiatives, business-government relations, leadership and human resource development (including coaching and mentoring of senior executives). He is a Board Member and Director of various companies and organisations, has conducted major reviews at both State and National level and established major projects and Government to Government relations in East Timor.

Mr Mutton is a Councillor of the Royal Agricultural and Horticulture Society of SA, Fellow of the Australian Institute of Management, Fellow of the Australian Institute of Company Directors, Foundation Member of the Leadership Institute of SA and Honorary Fellow of the Australian Rural Leadership Foundation.

1.3 INFORMATION PACKAGE

In order to gain greatest value for all Forum participants, an information package has been prepared. This information is not intended to be a comprehensive analysis, but rather a brief overview that provides background and contextual information. The information outlined in the following pages is largely a compilation of key points taken from planning, analysis and reports prepared by Regional Development Australia Limestone Coast (RDALC), the South Australian Centre for Economic Studies (SACES), the South East Local Government Association (SELGA) and Primary Industries and Regions South Australia (PIRSA).

In addition to the compilation of information, a summary of the targeted Pre-Forum survey results has been added.

Attached to the Information Package are a number of highly relevant documents, such as the Manufacturing into the future Summary of Recommendations by Göran Roos and an overview of the Seven Strategic Priorities of this Government.

2 LIMESTONE COAST OVERVIEW

The following provides a brief overview of the geographic, demographic and economic indicators for the limestone coast.

2.1 GEOGRAPHY

The RDALC covers an area of 21,330 square kilometres or 2.2 per cent of the State‟s land mass. The area designated as agricultural land is 82 per cent of the region (SACES 2012, p1). Local government areas are: District Council of Grant, Kingston District Council, City of Mount Gambier, Naracoorte Lucindale Council, District Council of Robe, Tatiara District Council and Wattle Range Council.

2.2 POPULATION

As at 30th June 2010, the region had a population of 66,724 persons or 4.1 per cent of the State‟s population. The Indigenous population was 1.2 per cent (SACES 2012, p1).

The estimated population of the Limestone Coast experienced growth at a rate of 0.3 per cent between June 2006 and June 2007, which was just below the State average (RDA 2010, p6).The working age population of the region was expected to peak in 2011 and slowly decline in the years that follow. Population growth is not even across the region, with decreases in the Upper South East areas and increases in the Lower South East (RDA 2010, p6).

2.3 LABOUR FORCE

The unemployment rate is currently 0.5 per cent below the State average and the labour force participation rate is 9.4 per cent above the State average (SACES 2012, p1).

Participation in secondary school education is close to the State average and for VET courses, well above the State average per 1,000 persons (SACES 2012, p1). NAPLAN results for years 3 and 7 approximate the State average or better (SACES 2012, p1).

2.4 ECONOMY

The region contributed $2,681 million to the State economy in 2006/07 or 3.9 per cent of Gross State Product (SACES 2012, p3). The total estimated value of exports in 2006/2007 was $2.2 billion and the total estimated value of imports was $2.2 billion (value of imports and exports includes intrastate, interstate and international trade) (SACES 2012, p3).

Structural and cyclical challenges in the agricultural and manufacturing sectors include an oversupply of wine grapes, milk price reductions, high Australian dollar, reduced timber product sales, changes in land use, decline in private investment and the closure of Kimberly-Clark Australia (KCA) pulping operations (allowing KCA to focus on its papermaking) (SACES 2012, p1).

Key employers in the Limestone Coast are:

 Carter Holt Harvey;  Kimberly-Clark Australia;  Gunns Limited;  Safries Pty Ltd;  Scotts Transport Industries;  K&S Corporation Limited;  Teys Australia;  JBS Australia;  Mount Gambier and District Health Services;  Kraft Foods.

2.5 MAJOR INDUSTRIES

Overview of major industries - gross value added and employment by industry (SACES 2012, p3)

2.5.1 Agriculture, Forestry and Fishing

The gross value add of agriculture, forestry and fishing (includes sheep, cattle, grain and dairy farming, forestry and logging, fishing, horticulture, viticulture and fruit) in 2006/2007 was $521 million and the sector employed 20.9% of workers (SACES 2012, p3). SACES (2012, p16) suggests that most agricultural enterprises employ less than 20 employees and total employment in the sector declined by 7.2 per cent between 2001 and 2006 (RDALC 2010, p17).

According to PIRSA (2010, p7), in 2010 the major agricultural products had the following dollar term values:  In beef, cattle was the most significant product, accounting for nearly 20%, or around $185 million of the $950 million total estimated value of agricultural and forestry production in the region;  Forestry was the second largest product accounting for 17% ($160 million);  Sheep and lambs accounted for a further 14% (around $135 million);  Wine grapes accounted for 13% (nearly $120 million);  Milk Production accounted for 8% (around $75 million).

Analysis undertaken by PIRSA (2010, p8) suggests that, based on land use, livestock grazing or modified pastures is by far the predominant agricultural activity in the South East (58% of land use in 2008), followed by cropping (9%) and forestry (7%).

2.5.2 Manufacturing

Manufacturing of food product, beverage, wood, pulp, paper, converted paper, primary metal, metal, fabricated metal and machinery had a gross value add of $490 million in 2006/ 2007 and employed 16.7% of the region‟s workers (SACES 2012, p3).

Demand for employment remained steady in the census period 2001 to 2006 with a 0.1% increase. In the long term, employment is expected to continue to decline overall (RDALC 2010, p17).

Food product, beverage, wood and paper pulp have slight employment growth projections, while metal product and machinery manufacturing are projected to decline. These projections do not take the global financial crisis into account (RDALC 2010, p17).

2.5.3 Retail Trade

Retail trade, which includes food, personal and household goods, motor vehicles and services to timber products, had a gross value add of $161 million in 2006/2007 and employed 14.5% of the working population (SACES 2012, p3). Demand for employment rose in the census period 2001 to 2006 by 5.2% (RDALC 2010, p18).

2.5.4 Health and Community

The gross value add of health and community services, including hospitals and nursing homes, medical and dental services, veterinary services and childcare services, was $119 million in 2006/2007. The sector employed 8.2% of workers (SACES 2012, p3) and demand for employment increased by 23.1% in the census period 2001 to 2006 (RDALC 2010, p18).

The establishment of the Mount Gambier Hospital as one of four regional hospitals in South Australia, an aging community, child care needs, growth in community and home based services, and higher expectations and possibilities for health care, all contributed to the increase (RDALC 2010, p18).

2.5.5 Construction

Construction had a gross value add of $180 million in 2006/2007 and employed 6.5% of the workforce (SACES 2012, p3). This industry includes general construction, construction trade services and civil works. Demand for employment grew by 28.1% in the census period 2001 to 2006 (RDALC 2010, p19).

A strong economic cycle, residential property strength and low interest rates contributed to the growth however, the current economic climate has slowed the growth (RDALC 2010, p19).

2.5.6 Education

The Education sector, which includes pre-school, school and post school education facilities, had a gross value add of $104 million in 2006/2007 and employed 5.9% of workers (SACES 2012, p3). Demand for employment increased by 15.8% in the census period 2001 to 2006 (RDALC 2010, p18).

The establishment of a Centre for the University of South Australia and university courses by Southern Cross University in Mount Gambier, the rise in age for compulsory school attendance and the delivery of a range of training by Registered Training Organisations, influenced the increases (RDALC 2010, p18).

Mount Gambier is the region‟s education centre housing Southern Cross University, campuses of TAFE SA, Flinders University and a campus of the University of South Australia.

The University of South Australia provides undergraduate courses in nursing and rural health, social work and rural practice, business and regional enterprise and foundation courses in writing and study skills (SACES 2012, p17).

TAFE SA provides vocational education and training in forestry, transport, retail, hospitality, business and agriculture at its main campus in Mount Gambier in addition to smaller centres in Millicent, Naracoorte, Bordertown and Kingston (SACES 2012, p17).

Flinders University runs a Rural Clinical School (FURCS) that aims to serve the rural and remote communities of South Australia through high quality health professional education, research, and clinical service. The Parallel Rural Community Curriculum (PRCC) was initiated in 1997 and pioneered the concept of longitudinal Community- Based Medical Education (CBME) as a successful strategy to address rural medical workforce shortages. Staff are based in Mount Gambier and the students are located in Mount Gambier, Millicent and Hamilton (Western Victoria). Suggest deletion to balance contribution with overall contributions from contributions from others mentioned earlier in this doc.

2.5.7 Accommodation, Cafes, Restaurants

In 2006/2007 accommodation, cafes and restaurants had a gross value add of $60 million and employed 4.7% of the workforce (RDA, 2010). Demand for employment in this sector increased by 7.9% in the census period 2001 to 2006, with increases reflecting trends to eat out and to buy prepared food (RDA, 2010).

2.5.8 Transport and storage

The Transport and Storage industry (including road and air transport, services to transport and storage facilities) employs 4.1% of workers in the region and had a gross value add of $126 million in 2006/2007 (SACES 2012, p3).

Demand for employment in this sector grew by 6.8% in the census period 2001 to 2006 (RDALC 2010, p19). With an increased freight load in the region as the blue gum plantations are harvested, this growth can be expected to rise strongly (RDALC 2010, p19).

2.5.9 Mining

The gross value add of mining in 2006/2007 was $13 million and the sector contributes to a small number of employment opportunities (SACES 2012, p3). The region is a significant contributor to a mobile workforce (FIFO) both in Australia and internationally.

2.5.10 Renewable Energy

A number of renewable energy projects, largely in geothermal, wind and biomass technologies are either in place, planned and committed or under consideration. Wave energy is being investigated for areas off the southern coast of the region (RDALC 2010, p19).

Wind projects are extremely important to the Limestone Coast, which already hosts one of the largest wind farm development in the Southern Hemisphere at Canunda and Lake Bonney. According to SACES (2012, p14), in excess of 200 wind turbines operate throughout the region (most are located near Lake Bonney) and additional wind farms are under construction or planned for construction.

2.6 LAND USE

Land use within the region has changed over time, with resultant changes to employment needs. The land use generating the highest employment numbers per 100 hectares at farm gate from a survey of sheep grazing, beef grazing, cropping, dairy farming, blue gum plantations and grape growing; was grape growing followed by dairy farming. The land use generating the highest employment beyond farm gate is grape growing (winemaking) (RDALC 2010, p33).

PIRSA is currently undertaking an analysis of and mapping Limestone Coast infrastructure and land suitability for different enterprises. Further details will be provided at the Forum.

3 POTENTIAL OPPORTUNITIES FOR FUTURE GROWTH

3.1 OVERVIEW

There are very strong prospects for future economic growth in the Limestone Coast particularly as the regional economy is more diversified than other regions of the

State. According to SACES (2012, p1) this fact needs to be highlighted to strengthen the “supply capability and reputation” of the region.

The RDALC (2010, p20) suggests that growth will arise from strengthening existing industry sectors and retaining agriculture and food production, forestry and wood processing as key drivers, complimented by enhanced investment in modern value adding processes, business services and community facilities. New business and industry investment are likely to be in the areas of renewable energy, especially aimed at capitalising on the region‟s key natural advantages (RDA 2010, p20).

Opportunities for future growth and economic diversification are reinforced by the Limestone Coast‟s strengths, some of which, according to SELGA (2012) include:

 Water (availability and reliability);  Natural resources;  Diversity of economic base;  Productive soil types;  Location (midway between Adelaide and Melbourne);  Access to Port of Portland;  Largest regional city (Mount Gambier) outside of Adelaide;  World Heritage Naracoorte Caves and Blue Lake.

3.2 POTENTIAL OPPORTUNITIES

There are many potential opportunities and innovative solutions that may contribute to greater economic diversity and future growth on the Limestone Coast. Feedback received from stakeholders and outlined in recent reports suggests the following industries may provide potential opportunities.

3.2.1 Renewable Energy

The Limestone Coast is seen as an energy hotspot. Wind, geothermal and ocean wave capabilities, together with an abundance of bio-mass fuels coming from the extensive plantation forest base and possibly from purpose grown fibre crops have the region well placed as a renewable energy hub (RDALC 2010, p33). Existing infrastructure would make it easy to connect additional renewable power stations to the national grid (SACES 2012, p14).

A 2010 report by McLennan Magasanik Associates (MMA) and commissioned by the Climate Institute anticipates the growth of:

 497 permanent jobs (both existing and new for operation and maintenance);  2,858 peak new construction jobs and new local expenditure of $1202 million (goods and services, purchase of biomass materials, payments of rent to farmers for wind turbines);  Indirect employment opportunities in the manufacturing of equipment and the provision of services and materials, some of which will be within the region. (RDALC 2010, p33).

It has been suggested that to facilitate growth in the renewable energy industry the following initiatives could be undertaken:

 Development of a maintenance centre for sustainable, renewable energy;  Development of a hub for innovation and research and development (RDALC 2010, p33).

3.2.2 Energy

The Natural Gas pipeline to Teys Australia in Naracoorte provides opportunities.

3.2.3 Agriculture, Fishing and Forestry

The challenges faced internationally as a result of climate change, particularly decreases in rainfall and the resulting lack of water and food security, generate opportunities for the Limestone Coast, which has significant water resources and prime agricultural land. The RDALC (2010, p20) suggests that intensive agriculture, including horticulture expansion and food production and processing, is likely to expand as other regions face water security issues.

According to SACES (2012, p1) the Limestone Coast has an opportunity to grow and strengthen its “food bowl” reputation, which is critical to establishing an international reputation as a guaranteed supplier.

Aquaculture/seafood/marron, specialty field crops, high value irrigated produce, niche crops, dairy, horticulture, gourmet meat and cool climate crops are all suggested value adding processes. Bottling, contract packaging and distribution and consolidators for marketing produce, are seen as important to lift these sectors from “hobby” to profitable and sustainable business levels (RDALC 2010, p33).

The RDALC raised regional branding of produce as an opportunity to further increase the value of the regional food, wine and tourism sectors (RDALC 2010, p33).

3.2.4 Tourism

There is potential, according to the RDALC (2010, p34), to look at an expanded mix of options for tourists to the region. Gourmet food and wine, five star accommodation and associated conference/events and hospitality services, niche tours (sink holes, diving, wine, gardens, forests, coastline and beaches, 4 wheel drive, surf school, sailing), festivals, cultural tourism, environmental tourism, geopark (Kanawinka) and Mary MacKillop‟s canonisation are all seen as opportunities (RDALC 2010, p34).

There is an opportunity to increase the awareness and positioning of different tourism destinations across the Limestone Coast and place a greater focus on the high-end tourist market.

SACES (2012, p15) advises that the designation of marine parks in coastal waters is likely to increase tourism by increasing fish stocks and creating a positive image of the area as clean and green.

The creation of a regional branding strategy, development of more tourism products around regional icons and infrastructure such as Cape Jaffa and Robe Marinas, and the establishment of outlets for local produce, including more centralised and regular hosting of farmers markets, have been highlighted as potential opportunities to increase tourism in the Region (RDALC 2010, p34).

Large Cruise Ships to Robe provide another potential opportunity.

3.2.5 Water

The most prominent development opportunity from the groundwater resources within the South East is from unused allocations. Unused allocations within the South East make up a significant part of water resources that can be developed within sustainable usage limits. Current levels of extraction within the Lower Limestone Coast Prescribed Wells Area from both the unconfined and confined aquifers are well below the limits permitted for extraction. Actual development potential will be determined by the local conditions where groundwater is available, (e.g. salinity, yield constraints).

Whilst the groundwater resources within the South East are effectively committed to allocations, there is still considerable scope for further development of this water resource through the introduction of volumetric allocations that will allow for an improved operation of the water allocation transfer market.

There are opportunities to further build on capabilities in water management and to use and target green industries and the greening of existing industries (RDA 2010, p33).

There are also potential opportunities for more efficient and effective utilisation of recycled water which currently has relatively limited application within the region.

3.2.6 Manufacturing

New opportunities for investment in forest products include engineered wood products plywood, oriented strand board and cross laminated panels. The Kimberly Clark Australia pulp mill is currently for sale and offers an excellent site for pre- existing use and a stable wood supply.

During sawmill upgrades, there are opportunities to increase small sawlog diameter intake with associated energy generation and to manufacture biofuel products such as wood pellets. Modelling work indicates there is 1 million tonnes of woody material from South East plantations that could be used for bioenergy within 100 km of potential processing sites.

In recent years, due to structural changes in the forest industry, the concept of a „Forestry Centre of Excellence‟ in Mount Gambier has been proposed. It would provide a regional focal point for the industry and an opportunity for forest industry stakeholders (companies, organisations, researchers, universities and other training providers) to share facilities, network, display interpretive information, and a provide a clear forestry presence for the community.

There are additional opportunities in manufacturing that should be explored, by adding new product lines to existing manufacturing operations or introducing new products altogether.

3.2.7 Infrastructure

Recent upgrades to the Mount Gambier Airport have resulted in the doubling of the airport‟s Pavement Classification Number (PCN) rating from six to twelve. As a result the airport can now land Q400s, with three to four services per week. Pending a testing phase, the airport will be able to manage an unlimited number of services.

These upgrades have significantly enhanced tourism and business opportunities for the region as a greater number of domestic and international services access the Limestone Coast through Mount Gambier Airport. Additional upgrades, particularly relating to security, secure parking and runway lighting, will further build the airport‟s capacity.

Enhanced usage and the value of the upgrade is demonstrated through the recent landing of Captain‟s Choice Q300s, 2 Fokker 50s, business jets and a National flight from China.

4 POTENTIAL BARRIERS TO FUTURE GROWTH

4.1 OVERVIEW

There are a number of potential barriers to growth that have been raised by stakeholders across the Limestone Coast. SACES (2012, p1) suggests that:

The region has continued to gradually adjust to the impact of globalisation, higher trade volumes (and hence competitiveness) but has lost some manufacturing capacity. The challenge, because the region has the potential for world class intra-industry value chains, is how to build a high wage, high productivity, internationally exporting, intra-industry and industry-to-industry set of linkages.

Some potential barriers are outlined below.

4.2 POTENTIAL BARRIERS

4.2.1 Aging Workforce

The RDALC (2010, p10) suggests that the industries most at risk in terms of an aging workforce are Agriculture, Forestry and Fishing, Education, Health and Community Services and Transport, which all have around 50% of their workforce aged 45 years or over.

4.2.2 Skills and Workforce Development

The shortage of skilled labour, particularly in the number of trades, residents with tertiary qualifications and what the community perceives as a lack of educational opportunities (SACES 2012, p17) are key potential barriers for growth. According to the RDALC (2010, p34) attracting professional people, particularly in the health services areas, into the region is often difficult and there is a need for marketing and promotional strategies to overcome that difficulty.

In order to help sustain a high labour force participation rate, there is a need to build workforce skills that are transferable or mobile between industries (SACES 2012, p1).

4.2.3 Infrastructure

SACES (2012, p15) emphasises that to support economic development there is a need to upgrade key transport infrastructure including road, rail and ports, to enable the efficient movement of timber plantation products and other key commodities throughout the region as outlined in the Green Triangle Freight Action Plan (GTFAP).

The RDALC suggests that complementary investments should be made in the areas of enhanced infrastructure across all forms and in a collaborative response to an education, training and skills development program, which would move the Limestone Coast towards having one of the most advanced workforces in regional Australia (RDA 2010, 20).

Additional potential infrastructure barriers are the National Broadband Network (NBN) Rollout, black spots and power brown-outs. Energy related issues are heightened as a result of high installation costs, particularly high connection fees.

Capacity of Finger Point Waste Water Treatment Plant is seen as a major inhibitor to industry and business growth. It has been suggested that re-use of waste water from Finger Point should also be considered.

Effluent systems are at full capacity and cannot handle additional volumes. This potentially limits expansions and the establishment of new businesses, particularly food processors.

There is a reported lack of large cold room storage facilities.

Conflicting and different road transport regulations between States cause major problems.

4.2.4 Other

The following have also been raised as potential barriers:

 Water allocation issues;  Uncertainty around marine parks;

 Lack of equity capital to expand business;  Need to link the mining industry into the local industry. There is an opportunity for the establishment of a “Mining Participation Office”;  Concern from industry regarding “red tape” and how long State Government Departments can take to respond to industry requests;  Withdrawal of local State Government Staff who provide support and advice to local business;  Differences in cross border legislative and policy arrangements with South West Victoria. PIRSA is currently scoping a project to harmonise legislative and other differences in cross border arrangements with South West Victoria that affect primary industry and its‟ processing sectors.

5 APPENDICES

5.1 REFERENCE LIST

1. South Australian Centre for Economic Studies 2012, „Regional Development Australia Limestone Coast‟, Regional Profiles, South Australia 2. Regional Development Australia – Limestone Coast 2010, Regional Roadmap 2010 – 2015, South Australia 3. South East Local Government Association 2012, Presentation to the Regional Communities Consultative Council, South Australia 4. Department of Primary Industries and Regions South Australia 2010, South East of South Australia Regional Profile, South Australia 5. Department of Planning and Local Government 2011, Limestone Coast Region Plan, South Australia

6.3 Findings from the Limestone Coast Economic Diversification Pre-Forum Survey

The Limestone Coast – Possibilities for Economic Diversification Findings from the Limestone Coast Economic Diversification Pre-forum Survey

TABLE OF CONTENTS

1 INTRODUCTION 3

2 PRELIMINARY FINDINGS 4

2.1 Economic diversification 4

2.2 Constraints 6

2.3 Acchieving and supporting economic diversification 8

2.4 Facilitating development 10

2.5 The top five development ideas 13

2.6 The economic development wish list 15

3 CONCLUSION 18

1 INTRODUCTION

A brief survey was carried out amongst those key community members who were invited to the Limestone Coast Economic Diversification Forum, held on 11 September 2012. The survey was intended to collect data to provide the basis for further discussion during the forum itself.

The Forum Objectives were identified as being the following –

 Identify and discuss emerging and future economic development opportunities that can build on the region’s competitive advantages  Use outcomes from the Forum to inform the work of the Government Taskforces into Growing Advanced Manufacturing and Premium food and wine from our clean environment

The following results were drawn from the 26 complete responses received from the 41 individuals invited to participate in this forum. The themes and concepts noted below are drawn from the survey transcripts and are representative of the themes and ideas that respondents provided.

For ease of reading, the report has been presented in the same format as the survey, and it closely follows the structure of the questions contained in the survey. Direct quotes are given in italics.

2 PRELIMINARY FINDINGS

2.1 ECONOMIC DIVERSIFICATION

2.1.1 What economic diversification do you see as being possible for the Limestone Coast?

Responses included an emphasis on the traditional economic cornerstones of the region, largely due to the perception that there is a plentiful supply of land and water available, and the strategic location of the region between the Adelaide and Melbourne markets. The area is widely considered to be already quite economically diverse.

There was a strong emphasis on the traditional industries of the region, and the key issues were -

 Value adding  Agriculture  Forestry and timber  Horticulture  Renewable energy

Value adding was the niche where most respondents saw an opportunity to readily diversify the local economy of the Limestone Coast. Suggestions ranged from an expansion of the tourist market horizon to embrace South-East Asia, through to engineering and service support for the mining industry, as well as a broad suite of more conventional value-adds to the horticulture and agricultural industries. More non- traditional value-adds included biochar and biofuel power generation (both dependent on timber industry by- product) and seed-oil processing.

Both agriculture and horticulture were seen as solid industries with a strong future, especially if marketing and processing issues could be overcome. Several respondents also had positive things to say about the future of aquaculture, given the value of this niche product, and the opportunity to market both a premium product and a premium tourist experience.

Opinions were divided regarding manufacturing, with some seeing it as a useful method of value-adding, while other respondents felt that it was not facing a very strong future in the region, and therefore could not be fully relied upon into the future.

A similar division was expressed regarding forestry, with some respondents believing it was a strong industry with considerable scope for value adding and the uptake of new technologies, while others felt that the recent changes in this industry have produced an opportunity for other industries to become more ascendant, and for the region to diversify and move away from its traditional ‘safe’ base of forestry.

Renewable energy – including wind, wave, geothermal, solar and the biofuel option noted above – was frequently mentioned as a possible diversification option. Multiple respondents mentioned the unique potential of the region in terms of geothermal energy and also biofuels, although it was noted that bio-fuel and biochar would utilise the same resource and so research would be needed to determine the most effective use of this resource.

Other suggestions included -

 Tourism - both local and drawn from SE Asia, with an emphasis on premium markets.  Fly in/Fly out infrastructure and services to support the mining industry.  Agriculture and horticulture, in order to maximise the regions’ potential as a ‘salad bowl’.  Targeting new and existing markets more effectively, with specific reference to Adelaide, Melbourne and SE Asia.  Value-adding for existing industries, including horticulture, dairy and timber.  Expansion of aquaculture, to include more diverse species, and also tourism.  The potential of entirely new industries such as formalised carbon sequestration programs.  The unification of some industries for marketing purposes, such as premium food and wine, along with tourism.

Comments included –

„This area already has a diverse economic basis. It has food production -horticulture, dairy, fishing etc. Tourism - especially from south-east Asia, the tiger economies, is the way to go. There is a massive shift happening as people transition from lower to middle class and are prepared to travel more. There are huge future opportunities as long as the correct systems are in place to enable it to happen. It would be strategically beneficial to combine with other regions to improve to overall tourism offering. It must be of appropriate quality, too.‟

„[there is] potential for carbon sequestration – the economic advantages of storing carbon as we move in to a low carbon economy. The potential for storing carbon is a big one. The SE can do well by using bio-char. This region can also quickly identify the tonnage rate going out and the unitification of carbon being sequestered. These ideas are difficult for Govt to get its head around.... [there is] massive potential here. Companies will be looking to offset carbon from all around the world-- carbon credits- and it can be done in the SE.‟

„A restructured Forest & Wood Products Industry which maximises biomass residue for renewable energy [cost effectively for] the Industry. The development of a long term blueprint for the Industry (30-40yrs), to identify the requirements for an internationally competitive Industry, providing import replacement as well as export opportunities.‟

„Tourism - especially from south-east Asia, the tiger economies, is the way to go. There is a massive shift happening as people [there] transition from lower to middle class and are prepared to travel more. There are huge future opportunities as long as the correct systems are in place to enable it to happen. It would be strategically beneficial to combine with other regions to improve the overall tourism offering. It must be of appropriate quality, too.‟

2.2 CONSTRAINTS

2.2.1 What constraints to successful economic diversification can you either identify at present, or anticipate for future developments?

There were a wide variety of specific constraints identified by respondents. Many of these were mentioned in an industry-specific context; however certain themes were readily identified as being common across multiple examples.

The key constraints were considered to be –

 Infrastructure  Transport  Government  Venture capital and investment  Government policy

The inadequacy of local infrastructure was the most frequently noted issue, including the inadequacy of existing physical infrastructure, the long-term lack of expansion capacity relating to infrastructure, and the expense of power, gas and water.

Transport and distance related problems were next most frequently noted, with the road and rail systems considered inadequate, cold storage and refrigerated transport seen as problematic, and a perceived need for major transport infrastructure investment such as a seaport facility, and improved airport facilities.

The role of government, and government policy, was considered to be a significant barrier to diversification. Government appears to have become too centred on the metropolitan population and does not appear to have a long term interest in the issues that affect the Limestone Coast. Excessive red tape, unhelpful business-related policy, and poor planning processes were identified as posing specific difficulties. There was also a strong common perception that it is easier to establish and maintain a business ‘over the border’ in Victoria; a state of affairs that is both demoralising for South Australian businesses and also damaging in a practical sense, as it is therefore difficult to attract new businesses to the region.

A lack of financial support and the difficulty of attracting venture capital were also frequently raised as posing real problems to businesses that wish to expand or diversify, and to businesses that may wish to relocate to the region. Incentives and/or drivers supported by government were seen as being desirable to enable change in the region. In many cases, infrastructure that could usefully underpin an industry cannot be funded from within that industry alone, which necessitates either subsidisation via government, or venture capital. However, venture capital is hard to gain in a region where return on investment may lag by years.

Other suggestions included -

 Planning issues. There is a need for structured, strategic planning at all levels of government. There is also a need for a cultural change around planning, to reduce the ‘silo’ mentality found between some industries and institutions.

 There is room for improvement in the attitude, or mindset, of the region. There is a perception that the area is the ‘underdog’ – and there does not appear to be the will to overcome this. There is also a strong traditional reliance on forestry as a kind of economic ‘safety net’ for the region, which may have acted as a disincentive to seek out new industries and opportunities. There is a need for both leadership and a ‘can-do’ attitude.  Infrastructure. Many respondents have grave concerns regarding the adequacy of infrastructure, including power, gas, transport (roads, rail, freight and airports) and even water and wastewater treatment.  Venture capital. There is a significant need for venture capital or other forms of seed funding to enable local business ventures to adapt, improve infrastructure, or adopt new technologies.  It is difficult to locate trained labour, and even more difficult to retain it. There are a number of key roles vacant across the region, and a strong underlying demand for both skilled and unskilled labour.  Existing business models have worked in the past, but there is a need for them to be updated to enable the region to compete more effectively in what is now a thoroughly global environment.

Comments -

„Paperwork! The local council is not sympathetic to the needs of small producers. Nitpicking about things that are not mission critical, like parking. The state and national governments also inundate businesses with forms to be filled in, and now the bigger buyers such as Coles and Woollies are also asking about issues such as wages and OH&S - which is duplication of existing structures such as unions and state government, and is time consuming (time is money!)‟

‘Transport is poor. The region is NOT attractive to medium to large food manufacturers for that reason. There is also difficulty in recruiting and maintaining skilled people in this kind of area - process engineers, operations managers, factory managers, other engineers. SA is NOT business friendly and that is a deterrent - there are key costs within manufacturing such as the high long service leave requirements - 13 weeks in SA, far higher than elsewhere. These costs add up, especially when there is a higher proportion of long-term, well paid employees (at 100k+ salaries)‟

‘The mindset of the region - there is tendency to consider the area as an underdog rather than the leader and this is the wrong attitude.’

2.3 ACCHIEVING AND SUPPORTING ECONOMIC DIVERSIFICATION

2.3.1 How best can economic diversification be acchieved and supported for the Limestone Coast?

The greatest need in terms of support for economic diversification appears to be institutional. There was a widely expressed view that government has become introspective and unresponsive to the broader needs of industry. There is also a perceived requirement to revisit the ‘culture’ of the region, and begin to encourage a can- do, best-practice approach to local initiatives.

The five most significant factors in achieving and supporting economic diversification were considered to be –

 Planning processes  State Government  Funding  Local Government  Existing business models

Respondents were very clear in expressing a need for structured planning processes to enable effective economic progress and development. Many respondents suggested there is a need for a long term vision for the region, with buy-in from all aspects of the local community, including individuals, industry and Local Government. The smaller, more manageable, component parts of this vision could then be effectively addressed individually over time. It was also seen that State Government has a role to perform in this process as well.

The State Government is not seen as performing particularly well in its support of economic diversification in this region. There is a significant need for stronger leadership, and also improved funding and practical support for start-ups and new ventures. There is a significant perceived need to overcome barriers such as slow approvals processes, superfluous red tape and a metropolitan mind-set. There is also a perceived need for effective community consultation by government prior to acting.

There is an urgent requirement for funding to enable new industries, or established industries or businesses that are considering substantial innovation, to undertake expensive but strategically valuable adaptations. This degree of investment is often beyond the ability of an individual business to sustain. Consequently there is also the need for effective, accurate business plans for those businesses/industries.

Respondents noted that there is a perceptible lack of co-ordination between Local Government areas in this region. This makes some business initiatives difficult to undertake due to the variation in planning laws and council processes. It would be of benefit if these requirements could be harmonised between council regions, and if positive initiatives such as the ‘land use overlay’ developed by the Rural City of Murray Bridge – which itemises all the requirements of industry, such as land use types, gas, power and water supply lines, zoning restrictions, etc – could be extended to other parts of the area.

In addition, the existing business models in use by many industries and businesses would benefit from restructuring. Issues such as supply, distribution and marketing

9 relationships, advice with managing red tape, access to new technologies, and improved financial incentives would all be of value in assisting existing businesses.

Other suggestions included -

 Communication and collaboration. This is closely allied to the planning requirement, there is a need for the harmonisation of goals and expectations – e.g. across council boundaries, or between industries with similar infrastructure/transport requirements.  Cooperation by and between the various tiers of government, in order to make it easier for companies to meet requirements. This includes faster approval processes, less red tape, and more practical assistance.  Mindset. There is a need for the region as whole to become more proactive, and to lose a historical sense of ‘being the underdog’. It may be possible to do this by providing a structure where small wins form the basis of subsequent, larger successful developments.  Openness to innovation and a willingness to look beyond traditional approaches. The world has become globalised and so non-traditional markets as SE Asia for products such as tourism, horticultural produce and dairy such are much ‘closer’ than they once were. Real-time information and modern technology can play a much larger role than they have done in the past.

Comments -

„I am a big advocate of significant stakeholder engagement however, given the critical nature of the speed of change happening in the area I suggest create the vision, spread the message and work to an 80/20- get activity happening and build enthusiasm. Supported - lots of energy from enthusiastic people who spread the message continually both in the region and outside to build pride and drive people to the region.‟

„Coordination from all tiers of government formation of a simple plan, a way forward. This is not a further strategic plan. Commitment from the State to fund a number of specific projects.‟

„Strategic planning is lacking. Most local governments lack a formal economic development capacity. There needs to be some thought given to the development of a package and/or incentives for businesses that want to establish in the LGA. Companies need assistance with the red tape and the development processes. This is a service that is provided by shires in Victoria. Whereas here in SA the state government limits its role to the RDA - there is little in the way of funds and assistance. EG there are two businesses that are moving interstate, and they needed support to be retained in SA. There are many add-ons that get lost if businesses leave, it is more complex than just the absolute numbers of FTEs lost. There are at least three more businesses looking at closing/relocating, due to carbon tax removing their profit margin, or as flow-on consequences of Olympic dam being on hold.‟

„It's about how to support the value-add. Infrastructure - there is an on-going problem with distance and transport - transport infrastructure needs improvement. Improved road infrastructure would improve efficiency and safety. Education needs to be improved. [We need] proper partnerships with universities etc to enable people to get skills that they can use locally. There is also the problem that youth move to the city for an education and do not come back again. Work-readiness is a problem. People need more basic practical skills - a work ethic, and a realistic sense of promotional paths. Smart people come through, but they are not punctual or reliable. Leadership is not particularly appealing to these people as they do not want to work hard (just be well paid).‟

2.4 FACILITATING DEVELOPMENT

2.4.1 What needs to be done to facilitate the development of the ideas and issues that you have identified?

There was widespread support for greater commitment and involvement – in a responsive and timely fashion – by the State Government. This was both on-ground, in terms of business advisors and other industry advisory staff, and institutional, in terms of less red tape and more supportive processes. Several respondents compared South Australian government processes unfavourably with those found across the border in Victoria.

The top five issues commented upon were –

 The role of Government  Planning  Incentives and funding  Mindset  Regional Development Australia

The role of government was seen as being critical. The State Government in particular was perceived as needing to be both more responsive to regional needs and more forthcoming with incentives and financial support. There is also a need to be able to facilitate government processes more swiftly. Lengthy planning approval times were mentioned repeatedly; sometimes involving periods of up to nine years for approvals to be completed. There needs to be commitment from the top, in the form of public support for regional initiatives by the State Premier. A stronger regional presence by the State Government is also seen as being advisable by many respondents.

Planning is a significant area that is in need of urgent improvement. There is a need for coordinated activity between all agencies in order to speed up and facilitate planning activities. Both Local Councils and State Government appear to have work to do in this regard, and there is scope for improvement in every facet of planning. There is a need for planning with respect to economic diversification. There is a need for more effective planning processes such as zoning and planning approvals. Finally, there is a need for stronger data (such as economic data and marketing intelligence) to enable businesses to plan more effectively for the future.

Incentives and funding are another area which was widely viewed as underutilised at best, and ineffective at worst. It was considered that direct support was required by producers to enable them to maximise productivity. Incentives are required to being more, and more skilled, people into the region. Support funding is required for expensive but essential case studies, business feasibility studies and business plans. Investment is required to enable existing businesses to expand in strategic and effective ways and to enable them to incorporate new technologies. Young people need support in order to retain them in the region, and to harness their innovation and enthusiasm. Funding is also required to support the research and development that industry needs in order to effectively face the challenges of the future.

The local mindset was also noted as being an issue with regard to economic development. More than a third of respondents noted that the attitude of individuals and agencies in the region was of significant importance to the future of the area.

Commitments must be made and upheld, there must be a reduction in short-term thinking, and there must be an improvement in the self-image of the region. Some of this can be achieved through an incremental but positive approach to economic development. It was suggested that the most effective way to do this might be through the use of an overarching economic plan, itself composed of smaller components that can be relatively easily achieved. This would result in a series of smaller ‘wins’, acting to inspire others and then in turn encouraging them to play their part in the development process. It was also noted that it is of critical importance that any initial activities are successful – otherwise failures might negatively influence future potential activity in this area.

The Regional Development Australia Board was frequently mentioned for the potential or actual role that it could play in the process of economic diversification within the region. Some respondents identified it as a potential pivot around which much of the future planning for this process could occur. Others, however, felt that it was not functioning as effectively as it could be, and that there was room for another player, or for a substantial upgrade of its existing roles and responsibilities. Key roles were seen as being communication with the region, a proactive approach, a source for funding, and the identification and promotion of an appropriate brand for the region.

Other suggestions included -

 Direct support – both financial and in an advisory capacity – provided in a timely fashion to businesses and industries that require it.  Establishing the precedents for successful action. Several respondents noted that small wins are often followed by larger ones, as confidence builds. Planning processes must be implemented in a way that encourages successful follow- through, and commitments must be made and adhered to, in order to convince the region that ‘this time, it’s for real’.  Security regarding infrastructure. Basic needs such as power, water and transport must be met in a reliable and timely manner.  Targeted and applicable Research and Development. Some very large companies are capable of sustaining a low level of R&D, but in most cases this is too expensive and long term for individuals to undertake, yet it is vital to remaining competitive. This is widely perceived as requiring government partnering to be successful.  A reduction in bureaucracy. Many respondents mentioned red tape as being a significant hindrance within their businesses.  Business models may be in need of support or improvement. A greater sense of certainly regarding the future would encourage greater investment. New approaches to business structures that will promote specialisation along the chain need to be developed and supported.

Comments –

„The state government needs to have a regional presence. There is no point in trying to liaise from Adelaide, people need to be on the ground and living and breathing the experience right here. The region needs to see something happen quickly - a plan or a vision - that has been thought through but which is implemented swiftly. Perhaps it could start with envisioning what the LSC could look like in 15-20 years time. Then develop a plan in the next 6-12 months, which can be implemented in bite-size pieces. there needs to be solid local ownership. people need to be able to see what is possible, they also need to have leadership initially. case studies would help - engineering, food and wine, tourism. And it needs funding.‟

„Commitment has to be there. People treat surveys with some degree of suspicion. 'we‟ve said this before- where is this going to lead?' It has been outlined that this survey is not going to add to collection of report but that short term actions might be taken. If these suggestions are carried on and executed in the short-term, then it gives people confidence in an easy win and for the in long-term.‟

„Government policies need to be in line with objectives for the region. From a Council point of view- the prompt processing of development plan amendments so that re-zoning can happen quickly so business can be set up. Currently this process can take years. The Government needs to understand that there is more to SA than Adelaide. One of the objectives is for vibrant cities, well we want vibrant regions as well.‟

„Large manufacturers as a whole are not going very well in Australia. There is too much competition from other parts of the world where governments give better support in funding (R&D etc) and also in terms of policy. Fifty years ago it was friendly government policy that brought Kimberley Clarke in to the region. Investment is too low and wages are too high. We need investment in technology, capital, R&D. We need supportive government policy.‟

„Community engagement [needs to be] done properly. There are a few squeaky wheels locally who manage to get most of the oil. The community at large contains many individuals and groups who have intelligent ideas about the future of the region and they must be heard.‟

2.5 THE TOP FIVE DEVELOPMENT IDEAS

2.5.1 Could you please itemise the top five development ideas and/or opportunities for your industry or community?

This question brought forth a significant diversity of industry specific suggestions, some innovative and some reflecting an obvious need. Once again, however, there were clear common themes.

 Tourism – Improved accommodation. Innovative use of natural resources. Focus on fisheries/seafood. Focus on a premium tourism experience. Focus on SE Asian clientele.  Bio-energy utilisation.  Biochar as the basis for an entirely new industry. (Note this may be in conflict with the bio-energy goal).  Renewable energy generally – wind, wave, geothermal, solar.  Tailored financial plans for local conditions and industries. Local financial knowledge and local support.  Various forms of value adding – forestry, dairy, horticulture, timber.  Intensive agriculture incorporating sensitive use of groundwater.  Improved local education. Improved educational content. Improved industry- relevant educational content. A means to reduce the loss of young people to the city for education.  Cold storage and a transport hub to support the agricultural and horticultural industries.  Improved roads. Improved airport(s).  Targeted marketing. A better understanding of domestic and international markets.  Increased emphasis on aquaculture, both in terms of direct productivity and tourism.  Improved staff. Attract and retain skilled and committed people to work in the region.

A representative sample of the many topics raised by this question includes –

 Airport enhancement  Advanced value-adding  Aquaculture  Biochar  Biomass energy generation  Decentralisation of government offices  Enhance R&D  Enhance tourist accommodation (sensitively)  Enhance transport networks  Enhanced regional tourism  FIFO hub  Financial planning  Fishing  Foreign investment  Groundwater management  Improved cold storage

 Integrated regional planning  Investment  Land transfer fees abolished  Maintaining and enhancing local communication  Marketing  More competitive air fares  New market development  New port  Oil crops  Old market management  Pelletised timber waste  Processing  Production  Promotion of the region  Pulp mill  Pursuing export opportunities  R&D opportunities  Reduce barriers to development  Reduce bureaucratic barriers  Regional transport hub  Regional University  Renewable energy  Speciality Crops  Speciality products – multi-story timber framing and other timber products  Staff attraction and retention  Strengthen links with SE Asia  Telecommuting  Tourism  Training and education opportunities  Use of information technologies  Value adding  Water infrastructure

Comments included –

„It is critical to underpinning the development that bankers and financiers are engaged and have a genuine understanding and commitment to the vision. This means the banks underwriting policies need to reflect any tailoring for local conditions and timing.‟

„It‟s a horse and cart situation - if we don't have people it is hard for industry to set up but if we don't have industry it is hard for people to come to the area. They need to work in tandem.‟

„State government almost gave approval to a pulp mill, which would have completely destroyed the regions "clean and green” credentials. This is at cross-purposes with their own goals.‟

„City people do not understand the local dynamic regarding bureaucratic barriers - the Green Paper is advocating that people “get smarter” but there is no mechanism by which smaller producers can do this as there is no R&D mechanism. Some larger producers may be able to do their own R&D but they do not necessarily share this with others. Industries such as wine, seafood, and farming need this help.‟

2.6 THE ECONOMIC DEVELOPMENT WISH LIST

2.6.1 If there were no practical restraints on economic development for the Limestone Coast, what would be the first item on your economic development wish list?

This question drew a variety of responses, with most respondents choosing to discuss a novel but logical expansion of their industry or area of interest. Frequently these suggestions covered ideas that had been discussed in previous questions. There were relatively few entirely new ideas.

A comprehensive sample of the concepts discussed is provided below.

 A system for selling and marketing of a range of produce e.g. co-operatives.

 Make better use of the water we have.

 Wind farms and alternative energy via wave action.

 We need more people as our population is aging.

 Multi story timber framing production.

 The establishment of crayfish tourism which allowed people to see how the crays were caught, processed and then provided for purchase.

 Food production - this has both domestic and international benefits.

 Development of a strategic Blueprint that will visualise the Industry in 2040.

 State of the Art Simulator to instruct operators and train staff to use graders, scrapers, big dump trucks, excavators, conveyors and be able to trouble shoot and learn all operational aspects of the machinery [for the mining industry].

 State of the art timber mill capable of best practise timber cuts from all log sizes to allow us to produce top quality material at very competitive prices.

 Horticultural product, e.g. potatoes, onions, carrots, peas, beans, broccoli, corn, to again be grown and packed in the area for the Australian market.

 Industry Co-ops - The Limestone Coast has extensive industries (beef, dairy, fishing, food growth, etc) and we should capitalise on our position in the supply chain rather than be dictated to by larger corporations.

 Niche marketing, promotion of the region and our values through our product. If it is produced here - the Limestone Coast should achieve significant promotion and benefits, as well as increasing competiveness and viability.

 Infrastructure upgrades to underpin any new development. These include, power (access and capacity), drainage and bridge networks, roads, rail and air.

 Indoor aquaculture with yabbies utilising controlled water temperature.

 Decentralization of Govt Departments and all types of industries from the city.

 Biofuel utilizing forest by-products.

 Horticulture in glasshouses.

 Remove red tape.

 Mt Gambier people are complaining because sewerage can't handle new industry- it would take $10M to dispose of their own waste so it's in the too hard basket.

 Cheap power production. It is the essential ingredient needed by ALL industries and communities that is guaranteed to increase substantially and be one of the biggest impediments to everyone in years to come.

 Increase and expand Regional Development Boards so businesses have ready access to advice.

 I would like to see a large multi-purpose function centre in the city that could be used for conferences etc, seating up to 500 people. There are places where this number of people can currently go but they are not equipped for professional conferences. The Limestone Coast is a tourist destination and would compare favourably with other conference cities around Australia. Professionals attending conferences often bring partners/families with them and the injection of funds into the region would be considerable.

 We need better industry intelligence. There needs to be a degree of confidence in the knowledge we have. There used to be business advisors in SA who spend a portion of their time in contacting businesses and seeing how they were progressing. at present the only time you ever hear from businesses is if they are at a point of crisis, and at times this is too late to be of assistance.

 Developing the food-wine bowl. We need to get it up and running; develop the competitive edge. We have natural resources as well, wide open spaces as well as productivity. There is huge diversity - cheese, herbs, wine, food, aquaculture etc. This would lend itself to a natural spin-off for tourism.

 Cost of power and cost to access water and waste- government can lean on suppliers and say 'this is not tolerable', I would like to see the barriers lifted. People out there saying 'we’ve looked at viability, looked in to this. When we did our homework, we said it's not worth it'.

 Bio-char is innovative thinking, and it is within the realms of possibility. It will be done somewhere in the country at some stage. There is talk that it has been done near Bundaberg and they use waste from Sugar Cane. Forestry timber waste can be an opportunity for the SE. Ag and Forestry are big employers and the economic drivers for the SE- bio-char will link the two in positive way.

 There is opportunity for a coastal road that links the coastal towns and which could be an extension of the Great Ocean Road, which is a tourism Mecca. Many people currently end their journey at Portland. We can build strong linkages by extending the coastal route- joining the dots on our map. It could be a future gold mine.

 [Seed] oil processing- the manufacturing side but also using the clean green.

 Climate and environmental situation down there (Limestone Coast area).

 For this region, producing electricity via geothermal techniques. The SE has a geology that lends itself to this. It would need government involvement and support, however.

 High-tech industries- we could become world leaders in a high tech field. High quality manufacturing- we can diversify from poor quality imports from China and make a quality product that can supply the rest of the world.

 High speed rail, both passenger and freight, particularly to Adelaide.

 Day spas and other attractions to bring tourists into the area and get them to stay for a while.

 A tourist trail or passport that highlights the life and work of Mary MacKillop.

 The roads need improving. The signage to the Coonawarra has not been upgraded because the roads are considered to be unable to carry any more traffic. So tourists can't find the place and the roads remain poor. It's a political decision by a government department that affects the marketing of the region.

 The transportation links. Light aircraft, smaller aerodromes.

 Link [our tourism offering] in with other [tourist] regions - i.e. Limestone Coast - Finders outback experience - Kakadu rainforest experience and then home [to SE Asia]. This is taking the 10-20 year view; it won't happen overnight.

3 CONCLUSION

The response rate demonstrates the interest that exists within the Limestone Coast community in participating in the process of defining how they can ensure a strong, prosperous future for their region.

The results of the Pre-Forum survey were obtained from a highly targeted group. Adding the responses from the broader community engagement, to occur following the Forum, will build a report that is more representative and inclusive of the wider community.

Expectations on the part of the participants regarding the outcomes of the Forum, survey and broader community engagement process were reasonably high. Clarification of how it will be demonstrated to participants that their ideas and feedback have been considered in the final report that will go to the Premier and the Taskforces will be important in maintaining engagement and the credibility of the process.