COUNCIL of Small Business of Australia (COSBOA) CEO Peter Strong has rejected claims that there is currently “an anti-big business narrative” in Australia – in fact, he said, the pressure remains on small business.

He made his comments in response to a July 26 editorial in the Australian Financial Review which referred to a dominant “anti-big business narrative” in Australia (Let competition work its magic).

COSBOA’s experience, he said, was rather there is an “anti-dominant oligopolies campaign” and with good reason, “because competition is not working”.

“An Organisation for Economic Co-operation and Development (OECD) report from 2014, available from the Australian Office of the Chief Economist, shows Australian small and medium businesses are the fifth most innovative in the world and Australia’s large businesses are the 21st most innovative in the world,” Mr Strong said. “The report goes on to outline that Australian businesses perform poorly on ‘new to market’ innovation when compared globally. 

“This is both illuminating and disturbing,” he said.

“While it is good to see Australia’s SME’s confirmed as among the most innovative in the world, it is also not surprising to see our big business sector struggling as innovators. This is because it is widely accepted that the bigger a business becomes, the less agile it becomes in responding to changing market and consumer needs.

“When these two facts are combined however, we find that the big oligopolies have become bottlenecks for taking innovation to the market. They are holding back productivity. They, not the market, decide what products and services will be sold into national markets.

“While this is worrying, it can also be easily explained, and hopefully fixed, with changes to the policies, beliefs and practices that have created dominant oligopolies in Australia,” Mr Strong said.

“It is due to extreme market dominance that the boards of dominant businesses have no motivation and no reason to innovate. They do believe they are innovative but that is delusion based on power not fact.

“In the end, their boards act purely to increase profit and maintain dominance by hitting hard on the SMEs in their large supply chains, rather than doing anything innovative. There is no reason for the oligopolies to foster imagination and reward those who do things differently and better. They behave in this way as a result of the failure of competition policy.

“These oligopolies increase market share by misuse of their market power through bullying, price discrimination, and covert manipulation of government policy – not by being particularly innovative or clever,” Mr Strong said.

“Recently the shadow assistant Treasurer, Dr Andrew Leigh, a noted laissez-faire economist, stated that the domination by oligopolies is holding Australia back, in a speech for the John Freebairn Lecture in Public Policy, at the University of Melbourne in May.” 
In his speech, Dr Leigh said: “Like a large tree that overshadows the saplings around it, firms that abuse their market power prevent newer competitors from growing. They hurt entrepreneurs and often reduce the scope for innovation. Consumers suffer through higher prices, lower quality and less choice.”

Mr Strong said this kind of statement had been argued in various forms by most small and medium business representatives in Australia for decades, “but has been rejected by government policy makers –  normally from Treasury – political parties beholden to donations from the oligopolies and unions, the text book driven laissez-faire economists, and from big business lobbyists”.

“To justify these opinions these representatives normally make shallow statements like ‘the market will decide’ or ‘that is our policy and it is not up for debate’, which detrimentally limits intellectual conversation and collaboration,” Mr Strong said.

“Dr Leigh also highlights the depth and breadth of the problem. He mentions that oligopolies dominate markets in newspapers, banking, health insurance, supermarkets, domestic airlines, internet service providers, credit unions, liquor retailing, hardware among many others. In petrol retailing and telecommunications, the largest four companies control more than two-thirds of the market.

“In addition, Dr Leigh’s speech delved into the problem apparent when economists and politicians pick and choose arguments to highlight their particular needs, while ignoring the same rationale for other important arguments.”

Dr Leigh had made the point in his speech: “In 2009, Chris Bowen, as Minister for Competition Policy and Consumer Affairs, criminalised cartel conduct with a jail term of up to 10 years. This put Australia in line with the United States, United Kingdom, Germany, Ireland and Canada.”

However, Mr Strong said, “So it appears we need to be in line on one policy (cartels) yet we cannot put Australia in line with the same countries when it comes to other important competition policies, such as the controversial but desperately needed Effects Test?
“Why the difference?” he asked.

“Simply put Labor’s Competition Policy is written by the unions who often work in close partnership with oligopolies in specific industries where their union members are to be found. 

“One such example is the Labor Government’s ‘Road Safety Remuneration Tribunal’ where evidence of communications between the Transport Workers Union and some of Australia’s largest trucking companies could be construed as working together to make it harder for small trucking enterprises to operate.

“It is to the advantage of unions to maintain dominance by their big business friends.  This is at a cost to innovation, to productivity and to the economy,” Mr Strong said.

“COSBOA hopes if both major political parties can ignore the threats and misinformation coming from big unions and dominant businesses, this will see more opportunity for people who run SMEs to get their clever ideas to market. Certainly the Liberal-National Coalition has shown readiness to embrace competition as have the Greens and Nick Xenophon, it is only Labor that cannot confront this issue beyond words.

“It is worth remembering that most big businesses in Australia are good, efficient and fair; it is only the biggest most dominant businesses – about 12 of them – and the biggest unions, three, maybe four, who are the problem,” Mr Strong said.

“COSBOA calls for changes to section 46 of the Competition Act to break the chains on innovation holding Australia back.”

http://www.cosboa.org.au

ends

Managing director of SG Partners, Michael Lang, almost says it as an aside – but he says it often because it is a truth all business leaders instinctively know: if you don’t have sales, you don’t have a business.  Yet as Mr Lang well knows – it is his business to know – effective leadership, sales training and long-term sales team building is woefully low on the budget line and list of priorities for Australian business leaders. He argues a major problem facing Australian business right now, especially in the financial services sector, is the mind-set of business leadership. Here is how Michael Lang and his SG Partners team are there to help.

By Mike Sullivan >>

IS IT ALL in the mind? SG Partners managing director Michael Lang has a mind to say so, about Australian business success.

In fact, it is Mr Lang’s extensive observation over many years of how successful business people guide their companies, by understanding what drives their people, that led to his study of neuro linguistic programming (NLP). Now Mr Lang and his SG Partners teams apply NLP to their training courses and positive business change programs.

While Mr Lang and SG Partners started in the field of sales training, lately he has focused on chief executives, managing directors and key executive leaders – because their leadership skills and behaviours have been empowered by his programs.

Too many business leaders, he believes, have been guilty of harbouring mindsets that were limiting innovation within their own organisations. And, stifling revenue generating opportunities along the way.

Michael Lang believes great business leaders must know their own minds, know how to stimulate the mind sets of others, read the aspirations of those who work for them – and they effectively ‘mind the shop’ by placing customer service and sales at the top of everyone’s minds and agendas.

Great business leaders, often without realising it, are tapping in to the science that underpins SP Partners training programs: NLP. 

 “If you want to change someone’s behaviour, skills alone will not do this,” Mr Lang said. “Nor will putting them in a new environment – it will not change people’s behaviour”.

“How many times have we heard from people who come up from Melbourne to the Gold Coast and say, ‘My life sucks in Melbourne, so I’ve come up to a warmer environment’. And after a while they go, ‘Oh, the Gold Coast sucks, I’m going back to Melbourne.’?

“Because they have bought their baggage with them. The environment doesn’t change you. What changes you are your rules, or beliefs, that allow you to keep your values.

“And that is all about neuroscience. How the mind is wired, and how you change that wiring”

NLP techniques, often applied to sports people and high-performance professionals in the entertainment and military spheres, are surprisingly easy to learn for business leaders. The often difficult requirement for success is that you must change your own mindset first. This is where SG Partners comes in.

“You can change it (the mind) just by changing your language. Simple,” Mr Lang said. “It starts with changing your state.”

“If someone is in a negative state, as in their posture is closed, you find their breathing becomes shallower, therefore less oxygen goes to their head, the brain starts to shut down and creates a protective mentality,” he said. “It releases certain chemicals that allow you to be protected, but what it doesn’t do is engage the frontal lobe. The frontal lobe is where all the ideas and thinking comes from.

“That’s how we could get into a depressive state. Because by feeling down to start with, the chemicals released to keep us safe, those chemicals don’t allow the thinking of choices, so then we start to spiral and spiral and spiral.”

“By managing your state – by getting oxygen to flow – you now have your brain working at full capacity. It’s that simple.”

While Mr Lang observes sporting coaches applying NLP techniques with their players at various levels, for a business leader a much deeper understanding is required to achieve a sustained outcome”

“Highly trained sporting individuals and teams go on the field every week, but they don’t win every week. Isn’t that interesting?” he said. “Here’s the thing … they might get into peak state, but do they really understand why they are doing it? They are doing it because their coach has told them.”

“If you understood why you are doing it, then you would be able to tap into it consciously, consistently”

“We want to get into an ‘unconscious competence’. Just like when we drive … we often arrive somewhere and we go, I don’t know how I got here. That is an unconscious competence – you know how to drive so well that you don’t even think about it. You make the right choices automatically.”

“That’s why when we train people we provide them tools and strategies to implement,” Mr Lang said. “We may have the tool, but what is the strategy of using that tool? A lot of people just get the tools. That’s not good enough in business.”

LEADING BY EXAMPLE

Understanding what drives people and what their fundamental needs are, at work, underpins successful leadership, Mr Lang said.

“As a leader it is, more often than not, about giving people certainty,” Mr Lang said. “Certainty can be in many things to many people.”

“There are people who live in, ‘I need certainty’. There are people who live in ‘I need variety’. When you think about it, if you are investing eight hours a day in your job, you don’t want to be doing the same thing every day, year after year. That is why some organisations rotate their people with the task they perform when it is repetitive”

“Some people need significance. They want to be heard and they will conduct themselves in a way that will either be positive or negative.”

“You take some people consistently seen in the media. They demand significance. And they will bully people, they will go to court, they will engage the media. That is their way of saying I want acknowledgement . That’s the way they comes across. Whereas other people might say I can get my significance by tapping into the hearts of other people.” Mr Lang said.

“Then there is connection and love. People want to have connection to a tribe. We are all tribal. We want to be connected to something. Some people dwell in that space more than other spaces.”

“Then there is growth. People want to grow. We actually need to grow. “

“We also want to contribute. Most successful people in their heart, as well as their mind, want to contribute back.

“So it is about finding where you resonate both in a personal and professional environment.”

 This is what business leaders must come to grips with and interpret so they can shape a successful business direction.

“Neuroscience is about understanding how our mind map is created and how what our model the world is,” Mr Lang said.

CHANGES OVER TIME

It is complicated, Mr Lang admits, but business leaders can learn the tools and strategies that make decisions around these states of mind instinctive.

“When you are a baby, you want certainty. That is your highest priority,” he said. “Be fed, that is a priority, for sure. And there is love as well, love and connection.

“Teenager. It’s variety. It’s connection to peer groups. And there is some significance. They are not into contribution so much.

“When you get older, when you are my age, 50, you want to probably say, how can I give more back? I’m doing the CEO Sleepout this year, for instance. I have wanted to that for years. I am an ambassador of Opportunity International. I jumped off a 35 story building a couple of years ago for Save the Children, and I raised some money to do that.

“But then you look at young people who do want to contribute … often it is about the environment they live in.

“So is it is an age thing or it is about something that just strikes a chord with some people?

“There are some people who just get stuck in certainty. Why do you come to work? It gives me food on the table. That’s it. Who am I to judge them?

“I love growth. I love helping and succeeding and helping others to grow. That’s just me,” Mr Lang said.

“What we want to do is get the balance right. We run professional workshops for business people – and what we know is, that if we can help them personally, it will make it easier for their professional lives to change.

“If you can change someone’s rules or beliefs, then you will get a change of behaviour.”

GETTING TO THIS POINT

Michael Lang’s journey in this area was shaped by his close observations of businesses and business leaders – some winning, some losing – over decades.

He started to assist sales teams in the mining and resources sectors, first through a period at Brisbane-based Mincom – a world leader in mining and public infrastructure management technologies that is now part of the multi-national ABB group – and then through a specially-created arm of the Australian Industry Group (Ai Group) the Mining Equipment and Services Council of Australia (MESCA).

Mr Lang focused at MESCA on helping mining supply companies to develop better sales systems, strategies and people. During his time there, he was instrumental in doubling MESCA’s membership.

“Through that time, I saw that the mining industry was changing. They were learning. The suppliers weren’t,” Mr Lang said. “Why would they? They were getting so much business, they didn’t have to do anything differently.

“So I started challenging the members and I started bringing training in. Through that, I got quite passionate about people engaging differently to get even better outcomes. So I later moved on to start the company (SG Partners) in just training.

“Then we learnt along the way that training in a workshop is not sustainable. You are just giving them a shot in the arm and the adrenalin wears off. That’s because, in a stressful environment, we will always go back to what is comfortable.

“Change only happens when we become uncomfortable. When we are consistently stretched.”

 “So I studied neuro linguistic programming.”

SALES BLOCKAGE: LEADERSHIP

SG Partners found it was on a winner. The sales teams it assisted in its early days were measuring solid improvement, and SG Partners was rapidly building its business successfully through word-of-mouth based on these results.

Michael Lang, however, was not satisfied. He found while the NLP techniques were clearly effective, the sales teams were regularly encountering resistance from their management.

“We are doing all this sales improvement,” Mr Lang said. “And we are doing all these long term and short term and we were seeing change – but you know what, along the way I thought, you know, change could be even more if leadership changed their mind sets. That’s where I started getting involved more in leadership.

“Australia struggles with leadership. It not something at the forefront of our minds.”

“Look at the Americans. Americans strive and aspire to be like (significant) people. Here in Australia, don’t get too confident, I’ll cut you down.”

 “What is it like to be a true leader?” Mr Lang pondered. “Ask any Australian: name me a great leader. They probably wouldn’t name an Australian. Richard Branson would come to mind. Obama. Many other people, but not many great Australians, really. Certainly our Prime Minister would not come up, because we don’t defer to his leadership. We actually take the mickey out of our politicians.”

“We don’t congratulate leadership in Australia. If we want greatness in our country, then we have to understand that we have to embrace it. Not import leadership. We have to want it.

“If we are not used to being around it, then it is a scary thing.”

TECH STARTUPS AFFECTED

Mr Lang felt this problem was playing out right now across Australia in the sphere of early-stage technology companies and ‘tech start-ups’. Venture capital and seed funding is more of a focus that sales and growth strategies.

“You start looking at the Apple’s and the Amazons and you say, okay, what type of leadership and what type of management system have you got?” Mr Lang said, remarking that these companies were adept at constant evolution.

“The trouble with start-ups is, when they look other models of leadership, they look once only. If you are emulating other start-ups, they are changing all the time. You have got to follow that journey. You have to change constantly.

“Companies will only grow when you continuously innovate: processes, systems, products, people and the way to engage with the marketplace.

“Is there a culture of innovation? Is there a culture of dialogue around innovation? So many companies I go to that aren’t here (at that point)… they live in denial or hope. They still think that something outside their sphere of influence is going to change their fortunes. It’s very sad.

“Or they are waiting for the government? Or they are waiting for their friends or they are waiting for another company to change their fortunes?

“I find that the leadership of many companies comes from the backgrounds of logistics, finance or manufacturing or engineering – not from sales.”

Although sales is the life blood of business, Mr Lang believes that in Australia the sector is maligned and that is a mind-set which must change.

“So they (leadership) actually see sales, or revenue generation as a black art,” Mr Lang said. “Even sales people … they actually have a negative identity around sales.

“Pushy, slimy used car salesman, right? So they don’t want to be part of that.

“When I’m engaging with leaders, I’m saying unless you are willing to get on board this isn’t going to work, because you are actually going to undermine it unconsciously,” Mr Lang said.

SUCCESS SESSION

SG Partners recently opened its new leadership workshop series at Central Dockside in Brisbane, with inductees ranging from industrial to internet and other services company leaders. That workshop focused on Improving Leadership.

It is evidence that SG Partners practises what it preaches on diversity and innovation. One of its new clients, for example, is a major aged care company.

After learning about using NLP tools and strategies to change their own ‘state’ and moving on to influence others in their organisation, SG Partners trainers moved workshop participants through realistic scenarios, offering personal advice and questioning individual habits. A lot of time and effort was spent on workshopping how to conduct and manage a successful and energising team.

“We now have a diverse group of clients,” Mr Lang said. “Contractors, industrial suppliers, IT, engineering firms … and we did some work for a retirement home company and a nursing contracting company.”

Never content to leave a looming problem alone, Mr Lang is now turning SG Partners’ expertise to address the financial services sector.

“I am looking at the financial services sector because there is a dramatic trigger point coming,” Mr Lang said. That trigger point is the changes to the financial services sector by Federal Government legislation, focused on ethical behaviour. 

Mr Lang said changes included an independent Standards Board and a precedent for professionals employed in the industry to first undertake a degree, professional year and exam (for new advisers) or an appropriate degree equivalent (for existing advisers).

The challenge was large, because of the recent track record of the industry in Australia and the imperative to change the mind-set of financial advisors towards earning their livings from great client service rather than ‘hidden’ commissions from financial institutions.

“It is the most highly regulated industry. It’s fascinating really,” Mr Lang said. “The trigger point the government is bringing via further regulations will change the way financial services people are remunerated, requiring even more transparency, which means they will have to engage even better with their clients.”

Mr Lang said the 451,000 Australian jobs in the sector makes it crucial to the economy – and therefore it needed to provide the highest standards of service to customers.

“As one of Australia’s fastest growing industries, it is important that employees in financial services are receiving the training they need,” Mr Lang said. “What we will see is young graduates coming into the industry, who although qualified, have not had client engagement training and do not have the skillset to engage with clientele and get the very best outcome from them. That’s where SG Partners can help.”

Mr Lang outlined the fundamental challenge ahead for the sector.

“If I am selling you a financial plan which is going to grow your assets, and your wealth, before you used to pay for over time,” he said

 “Now, if I am selling to you, I’ve got to ask you to pay for my advice. There is a whole different conversation going to happen there.

“The people in the industry have not been used to that so they are scared about bringing it up and talking about you having to pay upfront. Or they are scared about having to get you to commit. They have never had to do it before, they do not have the skills. They don’t have the culture. They don’t have the leadership that understands how to do that.”

Mr Lang sees the key challenge as being how to educate the sector’s leadership to guide that change.

“I listen to the financial services industry and they still use words, “we are not the trusted advisor”. “We have to train our people on integrity”.

“Really? It’s 2016! What type of culture do you have in the company that you believe you have to train on integrity? Where are they learning about integrity? Where are they learning about trust?

Mr Lang said the fundamental problem was the sector to date operated in a ‘high risk, high reward’ ecosystem.

“With high risk comes different value systems,” he said. “We reward people’s behaviour. If we are going to reward people’s behaviour for taking risks, therefore that is the culture we are creating, isn’t it?

“And then if you get caught, don’t complain … you created that culture.

 “Part of the challenge with public companies is that they usually have a 3-5 year mandate before the CEO or MD changes. Is that long enough to change a culture? No. That is why they have to be given some depth and breadth to do that.

“I wonder, are they (the leaders) incentivised to do it? Are the leaders incentivised to say, you know, we’ve got a culture problem, this is what we need you to focus on? You fix that and everything else will follow.”

Mr Lang said SG Partners has long realised that changing behaviour is about understanding ‘patterns’ – and changing them. That was what the recent workshop focused upon.

“Everything we do is about patterns,” Mr Lang said. “Patterns of individuals in that workshop: here is your pattern, here is your outcome. If you want to change your outcome, here is where you need to change your patterns.”

The workshop’s role playing inspired participants to imagine what they were going to do differently in their businesses and how they were going to behave differently once they got back to their organisations.

Mr Lang said SG Partners training was practical

“At the end of the workshop I will ask them: you need to pick three things. Go and do those three things within your organisation,” he said.

“You are not going to do everything, but just pick three things. And the human spirit kicks in … once they start to see some traction they will want more and the snowball forms and suddenly it gets momentum.”

“Great leadership is about giving a shift,” Mr Lang said he tells those in his workshops. “It is about caring for the individual in front of you, asking questions, listening and tapping into them. Then they feel that you care and they will follow you.

“So, I’ve got to learn to care. I’ve got to learn to slow down. I’ve got to ask some great questions. I’ve got to give feedback so that the individual is actually being heard.”

Mr Lang’s second piece of advice at the workshop was to focus on ‘pay it forward leadership’.

“I challenge them to go forward and share what they are doing with others. Because life is a lot easier when everyone rises to the next level,

“Spread the word. Because when we spread the word we re-learn as well. Too many times training is seen as, I’ve learnt something now, all I have to do is practise it.

“No. Go and share it with others. Get everyone else on board. It will be a lot easier.”

While the workshops focus on equipping participants with the tools and strategies to succeed in boosting revenue across the board while building organisational effectiveness, putting that into practice often requires follow-through from SG Partners.

“Typically our engagement is over about a two-year period with a company, to turn the ship around, to get people aligned, to improve their mind sets and give them some new skills. And then embed it.”

The way to accomplish that is simple.

“If you really want to be good at it, you need to be practising and be coached,” Mr Lang said. “Dare I say it, the top golfers have four coaches, one focussed on every aspect of their game.

“In my experience, the best and most successful leaders take an elevated view and look for where they themselves may be falling short and then they are more able to see where others in their organisations can benefit from some assistance.”

It’s not mind over matter, it’s minding over what really matters.

www.sgpartners.com.au

THE Council of Small Business of Australia (COSBOA)’s Vodafone National Small Business Summit brought together key players who represent thousands of small businesses and individuals who shape policy in Australia. It began on July 7 at the Brisbane Hilton Hotel.

Those representing the small business community, including the Australian Hairdressing Council and Master Grocers Australia, heard from thought leaders who addressed some of the key issues that are affecting small business now. 

The summit addressed how policy makers and the government can provide solutions, resources and legislation that will influence small business growth in Australia.

The first day's discussions included Brexit, small business innovation, ecommerce and technology, and the mental health of the small business owner.

Kicking-off the Summit, Peter Munckton, the Chief Economist for Bank of Queensland, discussed the impact of Brexit across the globe, Australia and small business.

He said, naturally, Brexit will have a significant impact on UK business, especially those who have offices in other parts of Europe. They will now have to deal with different legislations across country boundaries in the same way that Australian businesses have to work in Europe.

On Australia, he said, “On the whole Australia is doing well, but it could be doing better,” and his data revealed the general public's biggest concern was job security. On the whole he said the direct consequences of Brexit should be manageable for small business in Australia.

The presentation was then followed by a Q&A session: Who are the Innovators? with Andrew Chanmugam, general manager of Businessat Vodafone Australia, Robert Gerrish founder of Flying Solo and Kim Houghton, general manager of policy and research at Regional Australia Institute.

The trio took questions from the floor about the importance of small businesses being innovative. Vodafone Australia’s Mr Chanmugan commented that the way we use technology has changed significantly over the last 20 years and for small businesses to be innovative, they must become more operationally agile, better connected to employees and better engaged with customers.

Vodafone wants to enable small business through technology, app partners and offerings so they can become what the carrier call a Ready Business.

Robert Gerrish added that innovation assists with a work-life balance for small business and can create business efficiency via systems such as online training and remote working.

However, Kim Hougton interpreted the question ‘who are the innovators?’ a little differently and asked ‘where are the innovators?’ He praised Vodafone for its actions connecting regional Australia, which will aid competition in the market place as they become better connected.

Mr Houghton hopes that technical innovation will bring together communities too, encouraging them to do business with their neighbours rather than looking further afield.

“This network is strong in the cities, but not outside of them," he said.

Australian Securities and Investment Commission (ASIC)’s Commissioner, Greg Tanzer, provided a regulator update, specifically for small business and also echoed the statements made in the ‘who are the innovators' session, that ASIC has the systems in place to make business operations seamless via an online platform, which will be launched later in the year.

The theme of online business continued at the Summit with Ben Laurie, from American Express, Michael Cooley, from Google Australia, and Emma Dobson, from the Digital Business Council discussing eCommerce and Small Business.

All agreed that the growth of the National Broadband Network was a great opportunity for small businesses, both regionally and city-based, and that doing efficient business online is key for future success. The importance of ensuring your website is mobile ready cannot be underestimated, especially given that individuals now look at smart phones at least 150 times a day.

The afternoon saw Sandy Chong, CEO of the Hairdressing Council of Australia and Mark McKenzie, from ACAPMA lead a session called ‘Vent on VET.’ The duo voiced their concerns with the current VET program and how it is not meeting the needs of the industry, especially small businesses owners.

Talking about the current system, Sandy Chong said, “We have to pay a 21 year old, who is training almost the same amount of money as a qualified stylist and there are salons out there that can’t afford to do that, which leads to less apprentices being taken on.

“We have an industry of unemployable qualified hairdressers based on our education and training system and small business has lost confidence in VET. Apprentices need to have skills: knowledge and experience before deemed qualified,” Ms Chong said.

The Vodafone National Small Business Summit continues on Friday July 8

www.nationalsmallbusinesssummit.com.au

Hashtag: #NSBS16

ends

CSIRO research on future agriculture prospects across Australia’s north is underpinning early action in the region.

The CSIRO reports are being used to help drive investment in Northern Australia agricultural development, at events such as the Northern Australia Food Futures conference in Darwin on April 12, attracting more than 300 industry and government representatives. 

Northern Australia, comprising 40 percent of Australia’s land mass, is already the world’s fifth largest beef and sugar exporter, with 12 million cattle and 3000 sugar farms bringing in more than $3 billion each year. 

According to the CSIRO, this represents a only fraction of the region’s agricultural potential.

"With its highly variable landmass and four distinct climatic zones, northern Australia can support all sorts of agriculture and horticulture," CSIRO research director Peter Stone said.

Dr Stone said following the release of the Federal Government's Developing Northern Australia and Agricultural Productivity White Papers in June last year, CSIRO has been focussed on unlocking the potential of the area that stretches from the Pilbara to Rockhampton.

“More than 100 researchers are currently supporting the Australian Government to deliver on these commitments – looking at opportunities to innovate along the entire value chain, from the soil and water availability through to expanding market opportunities,” Dr Stone said.

The Northern Territory Farmers Association convened the Darwin conference, featuring expert panellists discussing topics such as regional and global investment, crop production and supply chains.

CSIRO chief research scientist Andrew Ash said a number of opportunities had stimulated renewed interest in agricultural development for Northern Australia.

“These include proximity to Asian markets, increasing global demand for food and natural fibre as well as the development of economically sustainable regional communities,” Dr Ash said.

"Understanding the agronomic opportunities and constraints in conjunction with development and operating costs and market drivers is crucial for northern Australia’s developing irrigated agriculture sector to be competitive and profitable.”

Dr Ash and his team are currently investigating development opportunities for irrigated agriculture in the region including sugarcane, cotton, peanuts and grains.

The inaugural Northern Australia Food Futures Conference was staged in 2014.

www.csiro.au

www.ntfarmers.org.au

ends

By Mike Sullivan >>

AN INTEGRATED food and energy agribusiness project, storing overflow water from abundant Cape York river systems, looks like trailblazing a pathway to sustainable development for Northern Australia.

The Etheridge Integrated Agriculture Project (EIAP), based around the Einasleigh and Etheridge Rivers integrates deep lake water storage with cattle pastures, sugar, guar bean and stock feed production, electricity generation from bagasse, and aquaculture. 

The project is the brainchild of a group of Queensland business leaders: chemical engineer and manufacturing and resources specialist Stewart Peters; water harvesting specialist John Grabbe who was joint managing director of Australia’s largest private irrigator Cubbie Group Ltd; infrastructure finance specialist and InterFinancial director David Hassum; and former Queensland Treasurer and Macarthur Coal chairman Keith De Lacy.

Their company, Integrated Food and Energy Developments (IFED), is currently raising funds to commence work in 2017.

If their EIAP development is successful – and Mr De Lacy believes with its versatility in production and foundation of sustainability it is probably the most bankable agribusiness project in Australia – then it will be a model for further development in Northern Australia.

“Developing Northern Australia has been a challenge for the last 100 years,” Mr De Lacy said. “There has been some major development in resource projects from time to time. The beef industry, of course, is spread right through Northern Australia. On the coast there is the sugar industry, other horticultural industries as well as tourism.

“But most of Northern Australia is poorer now and has less population than what it had 50 or 100 years ago. Therein lies the challenge.”

ETHERIDGE INTEGRATED AGRICULTURE PROJECT (EIAP)

The Etheridge Integrated Agriculture Project is founded on 65,000 hectares of irrigated cropping on the Far North Queensland in the Etheridge Shire, in the southern Gulf country, with cattle on a further 200,000ha and aquaculture incorporated. It is underpinned by the development of a series of gravity flow deep water lakes which store water away from the river system itself. In total, there will be 18,000ha devoted to deep water storage, minimising evaporation.

“This, in my view, is the way to get high intensity agricultural projects going in Northern Australia,” Mr De Lacy said.

“We are going to harvest mostly from the Einasleigh River (north of the Etheridge River) but it flows into the Gilbert, so it is part of the Gilbert system. There is a fairly natural water storage area quite close, so it’s just gravity diversion. The first storage is 1.6 million megalitres, which is about the size of Wivenhoe and has an average depth of 14 metres which makes it highly efficient. We will gravity feed it down to a smaller one in the cropping area which has got 400,000 megalitres. So that is about 2 million megalitres we would store.” 

“On 100 years of river flow data, we would have got a full crop every year. So it is 100 percent sustainable. That’s because we are storing about four times what we need.”

The products of the EIAP are also an innovative mix of sugar, guar gum (from the guar bean legume), meat and electricity from the sugar bagasse.

The project generates its own power and exports electricity to the grid. There is also a supply of sugar for possible ethanol production.

Mr De Lacy said guar is used as a food thickener and also has a special use in the shale fracking process. “That sort of underwrites its price and volume,” he said.

The EIAP will also produce about 400,000 tonnes of stock feed a year.

“Which then means we can run a meat processing plant because we can feed the stock in the off-season,” Mr De Lacy said. “There is a million cattle in that region, but they all lose weight in the off season, so they stop going to abattoirs, and because abattoirs only work eight months of the year they are never viable. With our stock food we can get 12 months supply.

“We produce all of our own electricity and some – it’s all bagasse, it’s all coking. We justify the capital spend on the co-gen (power co-generation) by what we can sell into the grid. The rest of it we use ourselves – it is effectively free to us.”

WASTE-NOT WANT-NOT

Another EIAP innovation is the utilisation of lake-fed ponds for the production of redclaw, a crayfish native to the region.

“But we also found that the wastewater from our processing plants, the sugar mill and the abattoir and so forth, we feed in to an anaerobic digester, which creates methane, which is energy, but what is left in the water is a sort of a carbohydrate enzyme which is food for redclaw,” Mr De Lacy said.

“So we effectively feed them for free. We are only using the water one more time and, when they are finished with the water, we use it for irrigation and they actually add nutrient to the water which helps the irrigation as well.

“We did a quick exercise on that and we would produce 7500 tonnes of redclaw, which is worth $100 million. And that is just an add-on. As is the abattoir.”

Because of the backgrounds of the IFED founders, the plan to integrate processes, as they flowed from having a sound water supply, drove the decisions on the eventual production mix.

“The reason our project works so well is its scale to start off with,” Mr De Lacy said. “You have got to be big enough to do your own processing, in those isolated regions.

“Our project is a billion dollars of production each year and 1000 employees.”

IFED has secured agreements with the four required properties in the region and is concurrently conducting both environmental impact studies and fund raising.

“The environmental assessment process is the main part, to ensure sustainability,” Mr De Lacy said.

“We are confident, as we are only proposing to use only 10 percent of the river flow. We will be subject to the most rigorous environmental assessment program that any project has ever been subjected to. But we are confident about it. We have done a lot of work and a lot of science on it.”

As a showcase for what might be achieved in terms of sustainable development in Northern Australia, the project has attracted initial support from both the Federal Government and the Queensland Government.

“In round terms, the value of our production is around $1 billion (a year), and our profit each year is around $350 million, so there’s $600 million in consumables – labour, consumables, services, what-have-you – in Northern Australia,” Mr De Lacy said. “So everybody benefits.”

Mr De Lacy said the major advantage needed for successful agriculture in Northern Australia is “scale”.

“You can produce so much biomass in the tropics – you have got masses of water, sunshine, soil – which is really stored energy,” he said. “That overcomes a major economic disadvantage of being out there, when you have got all of your own electricity.”

What Mr De Lacy and the IFED team hope is that their Northern Australia project will be a catalyst for other intelligent sustainable developments that will help the region realise its true potential.

Mr De Lacy said the old ways of developing the North were ripe for failure.

“The old system was government did the water infrastructure, then they had farmers, a whole range of farmers, usually supervised by government, resuming land and cutting it up. And then you had separate processing,” Mr De Lacy said.

“So you really just did not have that integration that we believe is necessary. For example, in the Ord, the price of sugar went down and the farmers started growing something else. So how does the mill carry on? Whereas what we are talking about is one owner of the water, the farming and all the infrastructure.

PLUGGING IN AGBOTS

Mr De Lacy said the EIAP was planning to take advantage of the latest technologies from day one – including keeping an eye on agricultural robot systems being developed in Queensland by QUT and Swarm Farm.

“(Agricultural robots) that go along and zap a feral plant with insecticide, or microwave or whatever, and just get the one that is growing, that’s all. We would be looking at those,” Mr De Lacy said.

“And drones … they are using those now in the cattle industry. They fly around the fence and just photograph if the fence is good … but we would have other uses for those too. And all automation as well.

“Starting from scratch, you’ve got a great opportunity. I keep saying to our mob, you have got one chance to make this really efficient. It’s the first one.”

“I reckon we will grow sugar cheaper than anywhere in the world, simply because of technology and our production systems. I think our production will be just extraordinary.”

www.i-fed.com.au

  • A more detailed story on the Etheridge Integrated Agriculture Project will appear in the next edition, Business Acumen #85, in part two of our Special Report: Northern Australia.

 

ends


TOWNSVILLE Enterprise is loudly backing several major projects the city claims are “critical to the future of Northern Australia” including the Carmichael Coal Mine and rail system.

Townsville Enterprise chief executive officer Patricia O’Callaghan said at last year’s Northern Australia Forum in Darwin that the “current opportunities for the North are unprecedented”. 

At two events – the Northern Economic Summit in Cairns and at the Northern Australia Forum – Townsville Enterprise highlighted projects ready to go that would “create jobs this region needs, attract additional investment and provide the critical road, rail and water infrastructure that will move the Townsville North Queensland region forward”.

“But while we are trying to get a number of projects off the ground there is one project that is ready to go and has the potential to be a game changer for not only this region but also the entire country,” Ms O’Callaghan  said.

The Indian mining and industrial conglomerate Adani’s drive to open up its resources  holdings in the Galilee Basin near Townsville are the foundation for much greater sustainable growth, Ms O’Callaghan said – and legal and official delays to its commencement were hurting the region.

“The most recent attempt by another environmental group to stall the project is extremely disheartening,” she said.

“This will be the largest project this region has seen for decades and stands to deliver thousands of vital jobs for Townsville and the region as well as $22 billion in taxes and royalties to the State.

“This is not just about one project, this is about opening up the Galilee Basin, creating economic infrastructure and cementing our reputation as an investment destination. We can’t do that if legal loopholes continue to stall game changing projects.

“Coal equates to 75 percent of Queensland’s electricity supply and is Australia’s second largest export commodity – the benefits of this project are ten-fold.

“We are a democratic society and we applaud the ability for all stakeholders to have a say in major projects but there comes a time when a firm decision needs to be made. There needs to be a process in place whereby once an Environmental Impact Statement has been signed off by the Environment Minister it cannot be challenged.

“Australia has the most comprehensive environmental protections and regulations in the world and we need to let investors like Adani meet those requirements and then proceed. We cannot afford these continual delays – we need action.”

Northern Australia Alliance spokesperson Trent Twomey said the Carmichael project was vital to the development of Northern Australia.

“We cannot underestimate the significance of this project and what we stand to lose if we don’t get this right,” Mr Twomey said.

“The Northern Australia Alliance has been established and we’ve spent the best part of a week working towards the development of Northern Australia – that work will go to waste if Green groups continue to attempt to stall projects like this one.

“We are talking about thousands of jobs and the livelihoods of people across Northern Australia.

“The development of Northern Australia depends on projects like this one and if we are serious about developing the North we need to get this project off the ground or we risk losing our reputation as a solid investment destination.”

www.tel.com.au

ends

EXTRA >> By Mike Sullivan

RARELY has a Federal Government initiative been so well received as the National Innovation and Science Agenda (NISA).

Sure, it had a master salesman with an anticipant presence: Prime Minister Malcolm Turnbull. And, sure, business leaders – especially those at the innovative leading edge – have been calling for many reforms that were announced in the package for several years. 

The fact that so many of those reforms, to assist businesses trying to innovate, have been written into the package is surprising enough – but the fact that several other announcements had an innovative edge about them was a major surprise.

Australian business is not used to that. It is used to moribund governments who make decisions based on short-term electoral concerns. Governments that will not admit when something is not working and, so, change it.

Initially, it is about changing the mood of Australian business from sombre and weary to imaginative and energetic. In that respect, NISA is a nicer start.

The fact that the announcement was made at CSIRO headquarters in Canberra shows a deft touch.

Mr Turnbull has to paint a big inspirational picture – “our innovation agenda is going to help create the modern, dynamic, 21st-century economy Australia needs” – but must draw in multi-various elements of detail for success.

He has drafted a landscape that features subjects as diverse as new finance systems, immigration, education, R&D, regulatory and taxation innovation. And he stretched the canvas symbolically, and politically, by re-instating and re-organising funding to the CSIRO that had been removed under previous Prime Minister Tony Abbott – and making that announcement at the CSIRO headquarters.

INNOVATIVE LANGUAGE

The Prime Minister Turnbull couched what is a complex shift in the Australian business environment in simple terms. He called it “ushering in the ideas boom”.

With his introduction of the National Innovation and Science Agenda (NISA) Mr Turnbull also drew a line under the mining construction boom that has advantaged and elevated Australia’s fiscal security for more than a decade. The thing about drawing a line under an era is that you now have a choice: look above the line or below it.

The challenge for Mr Turnbull is to keep challenging Australian business leaders to peer long and hard high above that line – business leaders that are used to being disappointed

Through the new innovation agenda, Mr Turnbull is clearly urging Australian business leaders to look way above the line for what will underpin the country’s prosperity well into the future: ideas and effort. While these qualities have always underpinned Australia’s leading industries – and will continue to do so in mining, where mining services technologies and know-how have become one of Australia’s great exports – in the digital age they need to drive all industries.

“That is the next boom for Australia and, you know something, unlike a mining boom, it is a boom that can continue for ever,” Mr Turnbull said. “It is limited only by our imagination and I know that Australians believe in themselves, I know that we are a creative and imaginative nation and inspired, led, incentivised, we will have a very long ideas boom in the 21st-century.”

The problem with ‘industrialising’ ideas is that it is extremely complicated. There are lots of good ideas, but getting them to become good commercial ideas that create jobs and wealth is where Australia has fallen down regularly in the past.

Australian ‘ideas men and women’ created the refrigeration of food, the world’s first feature film, the black box flight recorder, wi-fi and, arguably, the technology behind controlled flight. But how many of those ideas are now commercially dominated by Australian firms?

Americans the Wright Brothers made the first powered flight utilising systems they acknowledged were created by Australian Lawrence Hargrave. Today, America has Boeing, Lockheed and, lately, SpaceX. Australia had the Commonwealth Aircraft Corporation, now owned by Boeing.

Americans created the Internet and sent it mobile through wireless fidelity (wi-fi). Australians developed wi-fi through the CSIRO. Americans today have Google, Apple, and Facebook. Australia has some great second and third tier internet-based companies – most of which have had to go to the US to be funded – and to scale up.

THE VISION

“Although there are challenges, there has never been a better time to start and grow a business from Australia, which can now compete for customers located anywhere in the world,” Mr Turnbull said at the launch in Canberra.

“We are on the doorstep of Asia, the world’s economic engine room and our new trade agreements with China, Japan and Korea are opening up more doors in Asia for our business,” he said, elevating the public perception of those trade agreements won by Mr Abbott.

“The internet and the technologies it enables mean we are now part of a truly global marketplace. It means there are fewer barriers to entry for Australian businesses, no matter where they are located, right across Australia they can sell their products and services to just about every corner of the globe.”

THE STARTING POINT

To figure out where you are going, you have to know where you are at. This has been a delusional problem for Australia in recent years, where many government initiatives have happily called themselves “world class”. This has often been wishful thinking.

The Prime Minister did draw a line in the sand about where Australia was beached on innovation and where it had its toes in the water.

“Our universities, our research organisations like the CSIRO, where we are today and our workforce are world-class but, Australia is falling behind when it comes to commercialising good ideas and collaborating with industry,” he said.

“Australia consistently ranks last or second last among OECD countries for business research collaboration. Increasing collaboration between businesses, universities and the research sector is absolutely critical for our businesses to remain competitive.

“To commercialise an idea, a great invention, a great innovation, a great piece of research and then grow it into new sources of revenue, new jobs, new opportunities and new industries.

“Companies that embrace innovation, that are agile and prepared to approach change confidently and with a sense of optimism are more competitive, more able to grow market share and more likely to increase their employment. More jobs, more growth – that is the focus of my government.

“And, we are absolutely committed to ensuring that our students have the skills to find high wage and rewarding jobs, regardless of their qualifications or career path. We are going to do this by promoting coding and computing in schools, to ensure our students have the problem-solving and critical reasoning skills for the jobs of the future.

“We cannot future-proof ourselves from change, nor should we seek to do so. But, we can ensure that our students are graduating with the skills and the agility to identify opportunities and embrace risk.”

The Prime Minister outlined how the agenda was organised: “The government’s innovation package that we are releasing today will incentivise and reward innovation, entrepreneurship and risk-taking by focusing on four key areas.”

1: CULTURE AND CAPITAL

Mr Turnbull said changing the business culture and capital systems would help Australian business to embrace risk and incentivise early stage investment in start-ups.

“You will see in this package there will be new incentives, new drivers to ensure that Australians with new business ideas, with new enterprises will be better able to find the capital that gets them started,” he said. “And, you know something? Even if their businesses don't succeed, we all benefit. We learned so much from the failure of new businesses.

“We want to be a culture, a national culture of innovation, of risk-taking, because as we do that, we grow the whole ecosystem of innovation right across the economy. It is believing in our human capital and remembering that the best assets we have, the most important assets we have in this country are not to be found under the ground, but walking around on top of it is the 24 million Australians, the men and women of Australia, these and their ideas are what secures our future. And, this package will incentivise, dynamise, energise that enormous opportunity.”

2: BUSINESS RESEARCH COLLABORATION

The government is restructuring to help drive business research collaboration, Mr Turnbull said. “ensuring that there is greater collaboration between organisations like the CSIRO, universities, other research institutions and business to commercialise ideas and solve problems”.

Mr Turnbull said NISA was designed to encourage “every single business, large or small to be more innovative, to be more prepared to have a go at something new because in the world of the 21st-century, in 2015, that is how you prosper”.

3: TALENT AND SKILLS

The emphasis needed to be on training and preparing Australians for the jobs of the future, Mr Turnbull said.

“We are going to focus on talent and skills, training our students for the jobs of the future and ensuring that we attract the world's best innovative talent to Australia,” he said.

“I said that our best assets are walking around on top of the earth, you know something, so are everybody else’s and we want to have the best talent come to Australia, whether they come to Australia for the first time, or whether they are a foreign student that has done postgraduate work here and wants to stay here and develop new businesses, contribute to the innovative economy of Australia.

“We want to make sure we retain and gain the best human capital that we can.”

4: GOVERNMENT TECH LEAD

A bold shift by Mr Turnbull was announced as the fourth pillar of the innovation strategy: “government leading by example in the way it invests in and uses technology”

This aim is for both economic advantage and to give Australia’s leading technology companies a ‘home ground advantage’. Governments around Australia have been widely criticised for being slow to adopt useful new technologies and for dis-favouring Australian technology leadership and favouring multi-national brands.

“Right across the board you will see there are measures to ensure that government is digitally transformed, so that it is nimble, so that you can deal with government as easily as you can with eBay or with one of the big financial institutions,” Mr Turnbull said. “We should be able to transact with government for most of our engagement on our smartphone.

“Digital works, it transforms, it makes it easier for business, easier for government.

“The other thing that we must do is ensure that we embrace small business and you will see here measures that are going to make it much easier for smaller Australian businesses to sell to government and for government to buy from them,” Mr Turnbull said.

“There have been too many barriers, it has been too hard, too much red tape, too many forms. We can sweep that aside. In 2015, we don’t need that. We need to work swiftly and nimbly and government has to lead the way.

“This is the opportunity of the 21st-century. This is a century of ideas, this is a time when Australia’s growth, when our living standards, when our incomes will be determined by the human capital, the intellectual capital that all of us have.

“By unleashing our innovation, unleashing our imagination, being prepared to embrace change, we usher in the ideas boom.”

But while highlighting the vision, Mr Turnbull has flavoured it with a practicality that is rare: the government is prepared to ‘fail fast’ in its initiatives as well.

“We have got to be prepared to take risks. That is why one of the aspects of the political paradigm I’m seeking to change is the old politics where politicians felt that they had to guarantee that every policy would work, they had water everything down so there was no element of risk,” Mr Turnbull said. “Let me tell you: I’m not guaranteeing that all of these policies will be as successful as we hope they will be.

“Actually, I'm very confident about it because we've worked very hard on it. We had a great team, a lot of good collaboration, but if some of these policies are not as successful as we like, we will change them. We will learn from them.

“Because that is what a 21st century government has got to be. It has got to be as agile as the start-up businesses it seeks to inspire.”

www.innovation.gov.au

ends

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