Event: Strong Australia panel interview with Kieran Gilbert

Speaker: Jennifer Westacott, Business Council chief executive; Stuart Irvine, Lion chief executive officer; Patricia O'Callaghan, Townsville Enterprise chief executive; Jeff Reibel North Queensland Cowboys chief executive; Kieran Gilbert, Host

Date: 3 March 2020

Kieran Gilbert, host: Good afternoon and welcome to the program from Townsville. As Annelise mentioned, there are a lot of concerns around the Australian economy right now. Today we're getting a sense of what things are like in this region of North Queensland and with me to start the program, we have Jennifer Westacott, the chief of the Business Council of Australia, Stuart Irvine, chief executive officer of Lion, Patricia O'Callaghan, chief executive of Townsville Enterprise and Jeff Reibel, the chief executive officer of the North Queensland Cowboys. Great to have you all here. Jennifer, first to you, your reaction to the fact that the RBA has cut rates today, your thoughts on that?

Jennifer, Business Council chief executive: Look, I think they've taken this a very important action to buffer the economy and they've made it very clear this is about the coronavirus and you know, we should take that as a kind of quite a severe signal that our economy is struggling and that this virus has added even more pressure. What has to happen now of course, is we need those mid-term reforms to get our economy to be stronger and to grow faster. Things like getting private sector investment back on track. Things like getting the regulation pressures off businesses, be they large or small, particularly in regional centres. But they, I think, have read that correctly and made the correct decision and they've got to give the economy some buffer now.

Kieran:  And I’ll get you to elaborate on that in a moment. First, I want to get to Patricia O'Callahan as the chief of Townsville Enterprise, what's your sense of what needs to be done in the region in North Queensland, to help boost the economic performance here because as we said, this is a national issue, but right now, one that Townsville has to grapple with as well?

Patricia O’Callaghan, Townsville Enterprise chief executive: Yeah, and I think, you know, it's really important to remember that it was only 12 months ago Kieran, that we were drying out from a monsoonal flood that hit us for six. So our community 12 months later is recovering from that. I've got to say that infrastructure has been key to that. It was only last weekend we opened our Queensland Country Bank Stadium, 20,000 people filled our CBD, traders reported tripling their trade on what it would be normally the week before. So, it is about now moving forward but economic infrastructure is important and you know, projects such as the Hells Gates Dam which will open up agriculture in the North, will be very important to our future as well.

Kieran:  And as a brewer Lion, Stuart Irvine, I want you to reflect on the regional economy because obviously you as a local producer and employer, you access local products. The supply chain is basically here, isn't it?

Stuart Irvine, Lion chief executive officer: Yeah. So the supply chain for beer is fundamentally Australian. So, you know, we spend nearly $40 million on Australian agricultural products like malt and barley for example, every year. But it's not just the supply chain, of course, all of our customers are here too and consumers. So we get a real feel for how things are going and regional economies are really important to us, to support them.

Kieran:  And when we look at this region, one of the massive things that drives passion in this part of the world I know is the great North Queensland Cowboys. And you had the first match at the new stadium at the weekend, no sorry first event, the Elton John concert. The first match is coming up in a couple of weeks?

Jeff Reibel, North Queensland Cowboys chief executive: Yeah, first event is coming up for us on Friday the 13th, our traditional rivals the Broncos. And look, we take what we do in our part of the world quite seriously, and we know that the Cowboys, we are part of the contribution to our community but also the contribution to our local economy. You know we account for around $200 million of the gross regional product of North Queensland and having now the stadium in the middle of the city, you know following so many other stadiums before us, into that area that can only grow. Off the 12 events of the Cowboys along with other events that our region can attract.

Kieran:  What do you think is the way forward then Jennifer on stimulus, The Prime Minister has been talking about it today and he says it's not going to be like the GFC, this is going to be "scalable" is the way that he put it. What do you want to see?

Jennifer:  I think that's the right approach. We're not in the 2008 situation, we don't have, an unemployment spectre hanging over our heads. What has to happen is those quite targeted interventions potentially in some sectors that are very hard hit like tourism but we've also got to do the macro-economic work of getting the economy to go harder. I mean, we've got to remember that the economy was growing pretty slowly before we had the bushfires, before we had coronavirus. So we've got to really get the private sector economy going and that's why we're calling for an investment allowance to make that kind of return on investment decision that companies are going to make easier.

Kieran:  And should that be economy wide?

Jennifer:  Yes. Because as soon as you start kind of carving things out, and you can design these things in ways that attract some investments more than others, but you know we've got to get the whole economy moving here. But you see it when you're in Townsville, you know, there are these small businesses that if they just had a bit more capital, they could really get going. They've got the demand but they need the capital to really get cracking. So we've got to take that economy wide approach. We've got to get the kind of regulation, red tape off people's backs. We've got to be careful that we don't do anything now that kind of limits the supply to credit, particularly to small business, now you know we can't have a regulatory overreaction particularly now when we are going to need to prime the pump on some parts of the economy. But I think the Prime Minister is right. We're not in a 2008 situation. We need the medium term actions to get the economy faster. We do not need that short term kind of stimulus that people are talking about.

Kieran:  Stuart, some would say that the brewers are recession proof but obviously you've got to face the same challenges as the rest of the economy does. What would you like to see in terms of the response to what is not just a health crisis but a massive economic one as well?

Stuart:  I think first of all, we've got to recognise that there are some downsides. We're going to get a few less tourists coming from overseas but we're also going to get the benefit of maybe some Australians taking holidays at home and some of the cruiseships that were going somewhere else are now coming here to Townsville, we were talking about. So, it's a balance but I think our tourism industry needs a bit of support. So, if I was to look at the hospitality industry, that's going to be one of the places where we're hit. On the other hand, you know, when I reflect on Jeff's comments about the stadium that's here in Townsville, there are some regional ways where we can actually build business. Because with the concert that was on Saturday the little brewery that we've built here was completely full. The local traders that were outside, they sold out. And that's no doubt going to happen at the weekend as well when the Cowboys play the Broncos. So I think in Townsville we can see the start of a good hospitality business here, we can feed that a little bit and help that along. That will go a long way to helping some of these regional areas which do need diversification in their economy.

Kieran:  Patricia, we've had a lot of focus on Adani in the last few years in the national debate but locally it's up and running in terms of the business, its presence here at least. What can you say about the flow on effects of that particular business? Because it's not actually just coal mining, is it?

Patricia:  No and you know we always forgot, around this narrative that was being broadcast, that they are a major infrastructure and energy company as well and they're rolling out renewable projects across the country. They have a headquarters, literally just a stone's throw away from where we are now. It is full of people and families that have good, paying jobs and are now part of our social fabric. The flow on effects are absolutely wide spread through the community. It's not just the contracts to support the development of the mine but it's also just, you know, filling out an entire office space.

Kieran:  So, it's been criticised as we know in the capital cities and certainly a lot of criticism and campaigns against it but locally in central and North Queensland where we are today in North Queensland, it's very popular?

Patricia:  They're part of our family here, so they're part of our community. They are local people with local jobs and that is what's really, really important.

Kieran:  Speaking of local jobs, Jeff, with the Cowboys, there is a big focus of course with employment and youth unemployment in this city. What do you see as the Cowboys contribution to skills and the opportunity for employment here?

Jeff:  One of the things we are doing is we're building the Cowboys community training and high-performance centre. And as part of that, it's a three level facility, up on level two we're building an ecosystem of sports science research along with sports medicine. With the sports science research with James Cook university, we have the opportunity to bring unskilled people here to skill-up in that area but also with the allied health opportunities here, bringing skilled people to Townsville and to North Queensland. What that also does is, Some of the times what happens is people have to leave here and go down South, so we're going to plug that drain of people moving as well. That'll give us that opportunity and with our centre as well, it will attract players, it'll attract our staff and it will attract people every day to that precinct in and around the stadium.

Kieran:  Jennifer Westacott, one of the things that we've found from talking to businesses locally and representatives is frustration at the connectivity challenges and it's not just the online connectivity of course, it's the flights in and out of Townsville, to give direct flights to major capitals. How does a city like this grapple with a problem?

Jennifer:  Well, I think it's sort of some of the plans that Patricia's working on. How do we get the whole economy here working well? So you know, there's the hospitality industry that will come off the back of the stadium. Then we've got to look at things like the Hells Gates Dam which will open up this incredible irrigated agriculture opportunity. And of course with that comes this incredible freight opportunity, which of course, you know, most freight leaves Australia or its origin in the belly of a passenger plane, and suddenly the economics of direct flights, more direct flights starts to stack up. I mean, you can't ask people to run uneconomic economic flights, you just simply can't. But it's about getting the whole of the economy going, and things like getting the defence industries here becoming a centre for excellence for defence training which this area is absolutely set up to do it. And then you get tech startups starting, then you get machining starting, then you get equipment starting. That creates a stronger economy. It creates the demand for the skilled jobs, then you get the universities creating those new skills packages. Then you can say to companies, actually, why don't you think about putting some of your central operations, your traditional head office operations in Townsville? But you've got to get all things working together and then you create the economics to make it worthwhile to run direct flights.

Kieran:  So effectively you're talking about backing the strengths of the local region. With that military base, the largest in the country.

Jennifer:  We need across the country, through these City Deals in particular, and the city deal is up for review this year, to back what we're good at and remember that in making Townsville stronger, the country gets stronger. We're opening up big opportunities for the whole of the country, not just in Townsville. So we've got to back ourselves as a country and then the private sector will come in behind that, particularu if they've got the right incentives, and they will run those direct flights, they will put the money in. I mean they'll do what's Stuart is doing. They'll put the micro investments in and creates, you know the Tiny Mountain brewery, which employs quite a lot of people. They will do it because they can see the opportunity.

Kieran:  Stuart, I was interested in the comparison that we discussed earlier between a city of comparable size in New Zealand, Dunedin. A university town, great football team with the Highlanders and you've got two breweries there apparently?

Stuart:  Yeah, we've got a Speights Brewery and an Emerson's Brewery both there and I was just reflecting with Jeff and with Patricia, talking about how that city, using that stadium as a centrepiece and making sure they have not just the great footy games but all the other concerts that go on, they've created a year round hospitality industry alongside the university that they've got there, which we've got here to, does really create a vibrant centre. So people don't just come for the football game or the concert. They come for three or four or five days because they're doing other things, they could be going to magnetic Island, they could be going inland, you know, all the great things that you've got to do here. So you're creating a really different, vibrant culture here just around having that stadium and that's what I think you've learned from Dunedin. So, that's why when I come here i really think that Townsville going to have a really vibrant future because you can see all these little pieces coming together. To Jennifer's point it just takes time. You know, you need consistent effort, bit by bit over years and that's what builds that momentum. It's unlikely to be one flash that suddenly does it. It's the continued effort that's going to make the difference.

Kieran:   And that's something you've been in consultations with the Dunedin authorities about because as Stuart rightly points out that stadium is a wonderful piece infrastructure. I guess the challenge is, it's a much smaller geography and travel time to New Zealand than it is here?

Patricia:  Yeah. And brought the leaders from Dunedin to share their experiences with us. But what we always said when the Prime Minister, then Malcolm Turnbull, announced the city deal as part of the stadium we knew that we had to get our act together as a community and make the most of it. So whilst the stadium has been built, we have now secured funding for a museum of underwater art that has been installed. It will be a global hit and that will launch within weeks. So as to what Stuart's saying, we're not using the stadium as the be all and end all. It was the catalyst. We're building a tourism industry around it, with drive and motor-sports precincts, walks. But on top of that it's about then leveraging the profile to attract more people to the region. Because Kieran, if there is a problem that we have at the moment, as much as our unemployment dropped from 13 to 7%, we are now have a tale of two cities where we have screaming skills shortages. So we are crying out for doctors, we're crying out for teachers. We want those engineers here. And what a wonderful, spectacular lifestyle you can have in North Queensland. If they know about these jobs and that's our story that we need to tell Australia.

Kieran:  Well, it's certainly a spectacular lifestyle that's for sure, and you've got with with the footy team a wonderful initiative that people are getting behind, they love their Cowboys and they're up against the Broncos in the first game of the season. From what I was hearing today there are a number of people who are coming here not just for the match and then heading home on the next day but for three or four days?

Jeff:  I think that's one of the elements of playing on the Friday night, people are able to come in on Friday and stay and enjoy the weekend and you look at it, we have 200,000 people in the one hour drive market of Townsville, 30% of our crowd come from that market but then 10% of our crowd actually come from a four hour plus drive market. So people are coming all of that way in here, they're not just coming here, for the four hours, for the game. They're staying here. They're coming in looking at and enjoying all of the other activities in and around the region.

Kieran:  One of the things that you've been focusing on a lot in recent years at the BCA is skills and education broadly, how do you deal with this gap that we're seeing in a city like Townsville between the shortage on the one hand, but the young unemployed, 17% youth unemployment here?

Jennifer:  Well there's two things. One, to Patricia's point, we've got to make it really attractive for people to come and live here and you know the median house price here of $305,000 if you're sitting on a house in Sydney or Melbourne, that's worth say, $800 to $900,000 and you can get a kind of well-paid job in Townsville, there's, there's a lot to that. In terms of young people and indeed people who are existing workers, we need to find a faster way of getting people skills up. And that's why we've been advocating that people get a lifelong skills account that allows them to buy a module of training or another module of training. So they might buy artificial intelligence or robotics, the things that companies need rather than having to go and do a full computer science degree or a full engineering degree and then they're going to be employable much more quickly. And then for people who are often vulnerable to losing their jobs, we need to put support services around some of those kids who struggle to stay in work. But you know, it seems to me here the opportunities are there. If we can get the skill system working, if we can promote the region to the southern states for people to come and work here, you've got the labour force that's actually going to be, in it's own right, and economic booster.

Kieran:  Patricia, is that your sense of things? Are people getting it right in Townsville or can those improvements be achieved here?

Patricia:  I think they can, and I think it's starting to happen. It's also the partnerships with our universities and business and that was raised today. We have a wonderful university with James Cook University here, central Queensland university but we hear that businesses need to be talking to our tertiary sectors as well to let them know what are the skills that they're going to be needing in the future. You know, we heard today that our next generation of millennials don't want five year degrees. They want micro-degrees where they can be in and out and travelling the world at the same time. So we're going through a huge disruption and shift and there's no better way than to test some of those pilot initiatives in a regional community and one that is open to fixing a problem that we currently have.

Kieran:  Stuart, something you've argued as well in terms of that lifelong learning. It's not just the regions, it's across the board isn't it, the need to be flexible and to adapt?

Stuart:  Well, it's interesting listening to those two comments there because actually when you join a business like Lion, actually that's what you're going to get. You're going to get those micro-degrees because that's how people will learn and change over time. If you joined Lion 25 years ago and where you sit now and where you're going to go in the future, you're going to have to be retrained on a lot of technologies and it won't be a four year or three years MBA that you'll get in the middle, you'll get micro bits to keep you up to speed. So actually that's what you're going to get once you join a top class company. So, why wouldn't you start like that? And then the opportunity in regional Australia is that you could join Lion here. So you could join from James Cook University into the Tiny Mountain Brewery as a brewer but then you could end up in any of the locations we've got in Australian, New Zealand and across the world. So it also provides links if you like, a channel to move talent in different ways, in different places and people's careers over time.

Kieran:  And we spoke to you earlier just in terms of the disadvantaged cohort, and as we said 17 per cent unemployment, youth unemployment in Townsville. But really interested in one of your initiatives, Cowboy's House. Explain to our viewers what that's all about.

Jeff:  NRL Cowboy's House is one of our proudest of things as a club, a boarding house for a hundred students, 50 young men and 50 young women from remote Indigenous communities. And what it does, it takes away the barrier of distance from education. So in those communities, they do not have access to secondary education. We bring them in, we partner with eight local schools here in Townsville and we offer them a wrap-around service of care, education, social and health wellbeing.

Kieran:  Jeff Reibel from the Cowboys, Patricia O'Callaghan from Townsville Enterprise, Stuart Irvine from Lion and Jennifer Westacott chief of the BCA. Great to chat. Thank you so much for your time.