Speaker: Bran Black, Chief Executive, Business Council of Australia

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Thank you very much for having me here today. 

This happens to be my first regional speech in my relatively new role as Chief Executive of the Business Council of Australia. 

And I will say that it’s no coincidence that this is the first regional invitation which I have accepted. 

At the Business Council we represent around 130 of the largest Australian businesses. 

When people think about these companies geographically, they inevitably think about the major capital cities. 

That ignores the deep roots that our members have in regions like yours—companies like Downer, GrainCorp, Qube and the Port of Newcastle. 

But it’s not just about presence. 

The CEOs and boards I work with understand that there is an economic dynamism in places like Newcastle that drives national prosperity more broadly. 

There are new industries coming to life here, there are innovators and entrepreneurs. 

I had the pleasure of starting my morning here with a swim down at the ocean pool. That’s the way I start the day whenever I wake up in Newcastle.  

I’ve always loved the energy and optimism of those early rising swimmers, runners and walkers that I see when I’m here.  

Really, that energy and optimism is the impression I always take away when I visit. 

And that’s why if you want to see what the future Australian economy looks like, right here is a good place to start. 

In a previous life I worked as the Chief Executive of the NUW Alliance, comprising research-intensive universities—including the University of Newcastle. 

That role brought me here regularly. 

It opened my eyes to what’s happening here, and it’s why I jumped at the opportunity to speak with you today. 

It struck me then, as others have observed, that there are many similarities between this city, and the City of Sheffield in the United Kingdom. 

I think it’s helpful to look back at their transformation, and yours, in order to look forward. 

Once upon a time Sheffield was known as the Steel City, just as the Hunter was Coal Country. 

Long after the foundries of Sheffield went cold, that hard knocks setting for the classic film “The Full Monty” is now host to one of the top UK institutions for engineering research, education and investment. 

A city once best known for its steel and cutlery is now home to the Sheffield Advanced Manufacturing Research Centre, created in 2001 in collaboration with one of our BCA members, Boeing.

I had the opportunity to visit the centre, where university academics now collaborate alongside literally hundreds of businesses. 

This, and other efforts, put Sheffield at the forefront of new materials technology even as the steelmakers of yesterday closed their doors. 

Just as Sheffield transitioned from a city of steel to the global hub for high tech materials it has become—powered by world-class university research—that same kind of transition is happening in the Hunter. 

Since the Hunter River was discovered in 1797, this region has been synonymous with fuel and energy. 

Back then it was the source for timber and coal that powered the steamship trade. 

Today, energy—both fuel and generation—is still the most important economic activity in what is Australia’s biggest regional economy. 

But like Sheffield’s materials industry, the nature of that energy industry is changing. 

And with that change comes new opportunities and investment in skills, research, defence, manufacturing and engineering. 

There was more than $100 billion of potential investment in renewable generation and storage projects registered for the Hunter-Central Coast Renewable Energy Zone. 

Twenty minutes from here the Williamtown Special Activation Precinct is bringing large international contractors in defence and aerospace together with small local businesses, and local research institutions. 

The Hunter Medical Research Institute is world-class, with 1600 researchers, students and staff striving to improve world health. 

As with Sheffield, the education sector is playing an important role in this story of renewal. 

The Hunter’s innovation network has more than 150 higher education, science and research facilities, including the CSIRO Energy Centre and the Newcastle Institute for Energy and Resources. 

The University of Newcastle’s strength in engineering and sciences has seen it climb the global rankings. 

And, I think, nothing says that Newcastle sees itself as an innovation city better than the decision the university took to build out its new campus in the heart of Newcastle’s CBD. 

There are few more exciting regions to be found in Australia. Or, indeed, in the world. 

And I think Newcastle and the Hunter region are a model for what we need to achieve as a nation, and for who we need to become. 

And so, what I really want to talk to you about today is reinvention, and what it takes to make it happen. 

Let me be clear: 

What is happening here in the Hunter, and more broadly across Australia—the process of reinventing and reinvigorating our economy—does not happen without a nurturing environment. 

We have to get the investment fundamentals right. 

Because it doesn’t matter how juicy the bait is—you won’t catch much if you aren’t using the right hook. 

For instance, the transition to a net zero future for Australia is going to require vast amounts of capital—and that certainly won’t all be government funds, although I note last week that the Coalition announced its intentions for government-funded nuclear power, including in the Hunter region. 

To attract that investment our business sector, our education sector and government will need to work together to build an investment-friendly environment. 

That’s the only way we can reinvent ourselves as a nation, just as the Hunter is doing. 

I also want to be clear about the fact that this economic reinvention is about more than seizing opportunity. It’s about necessity.  

The Hunter had to. Australia now has to, as well. 

So why do we need to reinvent ourselves? 

Well, we have domestic pressures like an ageing population and declining tax base. We also have overwhelming global pressures. 

I believe there are several great global shifts which are pulling us towards the need for reinvention of our national economy: 

1. Digitalisation. 

• Advances such as computing power, data capabilities, 3D printing, new battery technology and driverless vehicles on mines and farms are changing how Australians do their jobs and make the goods we sell to the world. 

• Artificial Intelligence, in particular, is already creating more meaningful opportunities for us to deploy our people—bypassing more mundane or dangerous tasks. 

1. Value chains and the role of componentry. 

• High value manufacturing is now driven by research, skills and global supply chains. 

• About 70 per cent of global trade involves integrated value chains. 

• Apple has supply chains for its products in over 50 countries. 

• Boeing procures 783 million aviation parts in a single year, with work done by 500,000 people at 5,400 factories around the world. 

1. The global shift to clean energy.  

• Almost half of our exports rely on fossil fuels and one in four jobs is in a carbon-intensive industry. 

• You’re all too familiar with this challenge here.

1.  The rise of the Asian middle class. 

• We are living in the Asian Century, and Australia is well placed to take advantage of it. Asia’s middle class is forecast to reach 3.5 billion people by 2030. 

• These are new consumers on our doorstep, with disposable income and demands for quality products and services. 

1. Increased geopolitical instability. 

• As recent and ongoing conflicts are showing us, the world is becoming less safe, and expected norms of commerce are changing. 

• One-third of global CEOs have stopped a planned investment because of geopolitical challenges. 

Other countries have observed these global forces at play and are taking urgent, decisive action to reshape their economies, deploy new technologies, and increase their productive capacity.

In short, national security policy and economic policy have collided and are now visibly moving forward arm in arm.

If we don’t do likewise, we risk being left behind.

Of course, there are big incentives on offer around the world, too, to attract the investment and talent needed for this economic reinvention.

The US Inflation Reduction Act isn’t the only such incentive program, but it is certainly the most significant.

It directs over $600 billion in federal funds to support clean energy in tax breaks, grants and loan guarantees.

This policy and similar policies in other countries are already acting as magnets for the capital and talent flowing throughout the world.

However, and very importantly, it is not just the incentive framework driving this activity.

It is the overall competitiveness of these economies, built on their tax structures, access to skilled and affordable labour, the availability of affordable and reliable energy, and their regulatory regimes.

These are the fundamentals which I’m going to return to.

The Future Made in Australia policy is the Australian Government’s response to the US IRA.

It is our proposed framework for investment to reinvent our economy at a national level, and in regions around the country, such as the Hunter.

As leader of the Business Council, I called for such a response—although the successful execution remains to be seen.

What we know so far is that the government has developed a National Interest Framework and two streams to help identify priority industries and investment. They are the:

• Net zero transformation stream, which includes renewable hydrogen, green metals and low carbon liquid fuels; and the 

• Economic resilience and security stream, which includes critical minerals processing and clean energy manufacturing, and is intended to develop sovereign manufacturing capabilities. 

Support will be delivered through a range of policy measures, including a new front door for investors, streamlining approvals, production tax credits, subsidies, grants and financing.

As the Government’s policy develops—and this is critical—there is a need for firm guardrails:

• All investments must be expert-led, with expert advice provided to government as the origination point. 

• The process must be open, transparent, evidence-based and unimpeachably independent. 

• It should be carefully targeted and avoid parameters which can be broadly interpreted. 

• There must be the scope to withdraw, or limit, funds based on outcomes achieved or not. 

• We must not invest in projects that CAN stand alone with private investment, or ones which will NEVER stand alone without government support. 

• All our investments must be in areas in which we have a comparative advantage and where the investment helps those projects get to market faster, or there is clear national interest in making that investment. 

These are high bars. And so they should be, with taxpayer dollars at stake.

The framework proposed would help select priority industries. Broadly speaking, I believe quantum computing and critical minerals would likely fit.

All of that said, we need a Future Made in Australia to work, and to work well. We cannot sit still while other nations are acting.

But just as we cannot sit still while other countries are increasing their incentives, nor can we sit still while they are growing their competitiveness at a foundational level.

Our competitors (think Canada, the US, and across Asia) are more investment-friendly environments based on old-fashioned fundamentals like tax and regulation.

To reinvent our economy we must, as a point of national urgency, become a more competitive place to do business.

Business Hunter has a mission to “make the Hunter a better place to live, work and do business.”

Those are essentially the fundamentals I am talking about at a national level.

In global competitiveness rankings we have dropped from fourth in 2004 to 13th this year.

Stunningly we have been a net exporter of capital for five years. That means we’re sending more money out than we are bringing in.

That hasn’t been the case in more than a century.

And it is an alarm bell that we are not getting the investment fundamentals right.

Folks, part of the nature of my role is to speak regularly with our CEO members and their boards.

One of the interesting—indeed, concerning—things I have been consistently hearing is that they are struggling to justify further investments in Australia.

This often happens at a global board level.

I have one member whose global company has had a policy of encouraging reinvestment of local revenue in local markets. 

They told me that their board no longer allows this for Australia—and just for Australia—and is instead greenlighting overseas projects and investments. 

The reason for this is simple. 

It’s become too hard, too unattractive to do business here—despite the fabulous natural advantages we have. 

Now, there are of course many contributors to this challenge. 

The complexity, duplication, inconsistency and weight of our tax system upon businesses is one of them. 

The difficulty to hire and pay staff in the midst of an increasingly anti-business workplace relations landscape is yet another. 

Our planning system is keeping projects on hold for years upon years, and proposed EPBC reforms may worsen this. 

In an Olympic year, our duplicated and overwhelming regulatory requirements get a gold medal for complexity. 

All of this adds up to poor productivity outcomes. 

If we aren’t competitive, we can’t attract investment to innovate, and if we aren’t innovating, we aren’t growing productivity. 

So, what are we doing about it? 

Well, we’re trying to do a few things.  

The Business Council of Australia is advocating for a clear requirement for new policies to be assessed with a productivity lens, through the Productivity Commission. 

We are advocating for a national reform fund, which uses federal money to incentivise states to tear up red tape and simplify barriers like payroll tax and planning regulation. 

We are advocating for a whole-of-government review of our investment attractiveness, modelled on the United Kingdom’s Harrington Review. 

We are advocating for new investment in, and approaches to, skills and training to set our future generations up for success. 

We are advocating for a long-term energy plan that gives us certainty and investment confidence as we head into the transition. 

And we are advocating for a serious productivity-enhancing national conversation on meaningful tax reform that sets us up for the next century and beyond. 

These are the sort of steps we need to explore, and to take, in order to get the fundamentals right. 

And getting the fundamentals right is the only way we can reinvent our economy and allow policies like a Future Made in Australia to truly succeed. 

If we don’t, no industry policy we create can unilaterally do the heavy lifting. 

Lastly, I think that just as the Hunter’s model for reinvention can be used at a national level, the quest to get the national fundamentals right can be translated to a regional level too. 

I started by talking about some of the fabulous advantages the Hunter investment environment has already. 

We are a long way down the path of making the Hunter an energy super-region. You are already an innovation hub. 

So, the question is what are we going to do now to ensure that investment can continue to flow into this region? 

I’ve canvassed national opportunities. 

But I’d love to hear your ideas on improving the Hunter’s own fundamentals and talk about how we can work together to advocate for them. 

Thankfully, as I’ve pointed out, the Hunter has many of the fundamentals already in place. 

Businesses working hand in hand with education, supported by government policy at local, state and federal levels. 

Research centres and a real innovation culture. 

A growing capability to develop new skills. 

A labour market ready for new opportunities. 

A culture determined to look forwards not backwards. 

I hope these are settings which we can translate together across the rest of our national economy. 

And so, I look to the Hunter region as a model for national reinvention. 

And I have all the confidence in the world that if we—as a nation—can get the fundamentals right, the process of reinvention that will then be spurred will make the next Australian century even more prosperous than the last. 

Thank you very much.