Event: Strong Australia Hunter 2023 panel interview

Speakers: Kieran Gilbert, host, Afternoon Agenda, Jennifer Westacott, Chief Executive, Business Council of Australia; Bob Hawes, Chief Executive, Business Hunter; Craig Carmody, Chief Executive Officer, Port of Newcastle; Guy Templeton, Chief Executive Officer, WSP

Topics: Federal Budget, the Hunter region, energy, diversification, skills, infrastructure, inland rail, defence

E&O

Kieran Gilbert, host, Afternoon Agenda: Welcome to Strong Australia in the Hunter, great to have your company. Joining me this afternoon is Jennifer Westacott, CEO of the Business Council of Australia; Bob Hawes Chief Executive of Business Hunter; Craig Carmody, Chief Executive Officer of the Port of Newcastle and Guy Templeton, Chief Executive Officer at WSP. Great to have you all here in Newcastle this afternoon. A beautiful day in a thriving part of the world. Jennifer, we are three weeks out from the budget, what's your message to the federal government for regions like the Hunter? What needs to happen?

Jennifer Westacott, Chief Executive, Business Council of Australia: Well, first of all, we’ve got to think about the national picture, we’ve got to get the investment going in the country again. I'm here and I can see so much potential, whether it's agribusiness, whether it's manufacturing, whether it's the clean energy transition. But if we don't get investment going again then that won't happen. So, getting investment going. Then there is obviously the big infrastructure play, the infrastructure projects that are needed. Getting moving with the fast train strategy. Then I think there's some things that could be done in the Hunter that are very important. I would be doing a skills guarantee as part of that energy transition, so that we get ahead of that. So people can start acquiring those new skills, start thinking about new industries. And of course, outside of the budget, I'd be really focusing that National Reconstruction Fund money on places like the Hunter, places like Western Sydney so that we really get to scale these new industries, these new capabilities for the country.

Kieran: Bob Hawes, there is a good story to tell isn’t there in terms of innovation and skills in the Hunter region?

Bob Hawes, Chief Executive, Business Hunter: There is a great story. It's not only a business as usual that we have at the moment here and we've had a tough time through COVID, like every other part of Australia. But we've had industries that have really done well and continue to do well. As we move into the new energy economy, growth in defence and other industries that are already here, but we've got challenges ahead of us in developing those skills. But I think we've got the right base to work from, not only to contribute here to what the region has to offer, but also the ambitions for the nation.

Kieran: Craig Carmody the Port of Newcastle, the largest coal port in the world, as Jennifer said she would argue that the government use the National Reconstruction Fund in areas like the Hunter, do you see scope for that here?

Craig Carmody, Chief Executive Officer, Port of Newcastle: Yes, I do. You are quite right we are the largest coal port, we see containers and a clean energy precinct as our future. We're already the hydrogen hub for the Commonwealth in New South Wales. But that's just the start. We've actually got to build that business, we've got to build the manufacturing that comes with it and we’ve got to find the workforce who's skilled and trained. That's what that money should be used for.

Kieran: We talk about the Hunter we think of coal, understandably. Guy I know in your business you're looking really in a big way at clean energy, things like offshore wind?

Guy Templeton, Chief Executive Officer, WSP: Absolutely. So offshore wind is one of the designated areas and the whole energy grid needs to transition. I think there is a really valuable role for Newcastle offshore and also proximity to the renewable energy zones around wind and solar onshore. So, there's a lot of potential in this area around energy.

Kieran: Craig, when you talk about the future of this region, there's still 10,000 direct jobs due to coal and 30,000 indirect jobs, and what is it, 25 per cent of the local economy? So, it's still a big part of this region. You don't like to talk about transition, you talk about diversification. Explain that to our viewers?

Craig: Yeah, putting it literally, transitioning is moving from one state to another. We are a port that does 160 million tonnes of coal, we are at the end of a valley that is one of the major exporting coal locations in the world. You cannot overnight change that. You have to diversify, so our whole strategy and indeed the strategy in the region is let's create new businesses, let's fund them while we can afford to do so. Which the current demand for coal overseas allows us to do. Let's do it now and not wait 10 years or so when we are in a crisis and goodness knows what happens.

Kieran: Bob, you represent the whole business community in this region. What's the mindset when they think about that history? The history with coal, the Liddell power station closing in the next few weeks, it's part of the change, how is the mindset towards that change?

Bob: I think there's a positive attitude in working out how we can build on it. There's a lot of talk about the economy, about transition authorities and working out ways and plans and communication networks to make sure that we are taking the entire community along for the ride. Our community up here really believes in the skills and the industries that have been developed. And we're not talking about a substitution or an instead of, we're talking about an in addition to, with all these new ideas that are coming through for the economy, particularly in the energy economy. It’s an enormous task and challenge that we have ahead. But it's also an enormous opportunity. I think that the region up here, the businesses up here believe that they can play a part in that. If we can do that, we can keep our communities coherent and that would be a good outcome if we can achieve that.

Kieran: Jennifer, when you look at that skills story from the resources sector. But then, more broadly, the John Hunter Hospital, there are others, the University of Newcastle a world class institution, there's a good foundation upon which to build that labour market?

Jennifer: Absolutely, so one of the things I would do in the budget, as I said, is I’d have skills guarantee so that people can start acquiring those new skills and courses can be developed. Whether it's in defence, whether it's in advanced manufacturing, whether it's in the incredible opportunity around agribusiness, obviously medical research. So there's a lot here. I think it's really important not to think about the Hunter and Newcastle as a coal centre. Clearly, it's been a huge part of the economy, but when were at the port this morning, the opportunities around agribusiness, the opportunities around cargo. It's not like the demand is not going to be there. The world is growing, we are all at the proximity of the world's biggest middle class in Asia. There is so much potential and what we need is the skill systems to come together to give people that opportunity to reskill. But we also need, I’d love to see in the budget a STEM initiative. Because if we don't get kids coming through year 9,10,11 and 12 with those STEM skills, they won't be competitive for those jobs. And so we've got to start thinking about this in a 10, 20 year horizon and not let's just try and catch up in two years when things have started to go wrong.

Kieran: There are other industries we have spoken about medical, energy, what about defence? The Joint Strike Fighter expansion at Williamtown nearby. So that skills story that Jennifer talks about Bob, that’s important to bring kids through STEM capacity, in order to fill those workforce gaps that will inevitably be there?

Bob: Absolutely, the defence story is going to be huge and the Joint Strike Fighter base up at Williamtown there, is already well indentured and we're already seeing businesses that are up there making moves to expand to grow their footprint up here. That is going to be on top of our business-as-usual case. So, the opportunity that the region has to do that and timing is going to be critical. As these jobs emerge, as Jennifer says, we need the frameworks in place around education and skilling, so that they can move into those jobs. The timing is critical on the basis that you've got to be able to show the kids and the people that are being retrained what they are going into. Not having them have to imagine that by themselves. So, we are at that period of time, that is next four to eight years, is super critical for a number of industries up here in the region and defence just being one of them.

Kieran: It is an exciting time but it needs to be seized upon doesn't it Craig? When you talk about this port behind us, there is a latent capacity. I mean, you've got room to grow the offering here?

Craig: Yeah, we are very unique in Australian ports. So it's 777 hectares of land out there, 388 of it is empty, and the channel is only 50 per cent utilised.  So put that in raw numbers, we can do about 10,000 ships a year, currently we do 4,600. When you look at Australia, or even Southeast Asia, there are very few ports with that latent capacity. So our view has been we don't have to build new stuff, we can just use what we've got as these new industries emerge. That is a real opportunity globally, we should keep costs down, which of course makes Australia competitive internationally.

Kieran: Guy, I know your business WSP is involved in some of the future planning for the port including in future clean energy export?

Guy: That's right. So I think you've got an opportunity there around clean energy. If you need to take any products out like ammonia through a port. Then, if you've got access to renewables to do that in a carbon friendly way, then you've got capacity alongside the docks to be able to produce it, then to be able to get it on a ship, then I think that's a great opportunity. Then the other resource, if you think about inland rail, then the Schott Review has said that Parkes to Brisbane is questionable, there's been a massive investment in the area that is already operational, we'd look at this as being a good opportunity to look at upgrading from Parkes through to Newcastle to be able to take all of those products Jennifer has mentioned, put it through Craig’s port and you've got over 5,000 ships a year could be shipped. You've got to connect it up better and I think it is a fantastic opportunity to look at that route harder.

Kieran: That does make a lot of sense doesn’t it, to get that freight in and that fuels that story that we've heard so many times about the food bowl for Asia. You can get that agribusiness, those agricultural products through to this port and into the region.

Jennifer: Yes and the demand for our goods and our services as well is just going to be huge. We saw a boat this morning going out on its way to Indonesia being filled with incredibly valuable grain from Australia, coming out of Moree and Narrabri and those areas. You just think about that supply chain. Where someone is driving the train, someone is driving the truck, someone is operating the port, someone is doing the checking, someone is on the farm, someone is servicing the farm. It's just an ecosystem that is going to create a lot of jobs, a lot of high paid jobs, a lot of jobs in regions. That demand for our grain, our agribusiness products is insatiable. Indonesia is set to be the fifth biggest economy in the world. India, now the biggest country in the world. We've got to get into those markets. And we've got things that people want to buy, it's just a question of coordinating to get it on scale. Craig was telling me 25 per cent of products go past this port, why aren’t they going through this port in the initiative that Guy is talking about?

Kieran: In terms of the government policies, Craig, we've heard from Joe Biden and his administration. They’ve got what's known as the Inflation Reduction Act, trying to drive clean energy investments. What needs to happen from the Albanese government to try and match that?

Craig: First thing I'd say is we won’t be able to match the US. That Reduction Act is all about manufacturing and they are spending just incredible amounts of money. Europeans looking at trying to respond to it. We are not big enough or have deep enough pockets for an across the board response. We have to look at where we are best suited to play at. Bob has already talked about this region building on its strengths and Jennifer's talked about that we need to pick what we're good at and build on what we're good at. That's our best way. Instead of trying to find billions to be good at everything let's pick out what we can play to and just do it, but back ourselves to do it.

Kieran: One thing we are good at - and I will just finish with you Bob from Business Hunter - is the people. What I've picked up spending some time in Newcastle is the brightest and the best are staying here now, they are not leaving.

Bob: Yes that's been a really notable and fantastic trend, something the regions been working at for a long time. It also shows the resilience of the ones that did stay here to keep at it. Contemporaneously, we can now offer the young the jobs they qualify for as they come through the TAFE and the university system. I think that will continue to grow. That doesn't mean that we'll keep everybody, there's certainly trades up here that are provided the capital cities that we can't compete with that we want to complement. But the opportunity for people to learn here and stay here is really attractive. We want to do that with our people, we want to do that with our research that we can bring in our medical and energy and other areas up here to try and keep those industries growing here locally, that build our sovereignty, not just here in the region, but across the nation.

Kieran: Bob Hawes, Guy Templeton, Craig Carmody, Jennifer Westacott great to see you all. Thanks.