SPECIAL REPORT: Economic diversity is just one of the region’s attractions.
Economic diversity is just one of the region’s attractions.
Bunbury may be a port city but it still comes as a surprise to find a sea container parked on the main drag.
Long past its use in the cargo business, the container has been refashioned as an al fresco dining area extension for upmarket local restaurant Mojo’s.
The Crate, as the venue dubbed it, is one of a variety of new enclosures popping up on the city’s main street, Victoria Street, part of a generous campaign to hospitality groups allowing them to spill across the kerb and takeover adjacent parking spaces.
Try that in Perth and most councils would be too deeply perturbed by the loss of car parking space and revenue to even consider such an idea.
The South West is different, clearly.
Despite primary industries dominating the local economy, the region has long focused on lifestyle, creating a diversified environment that can ride out the current challenges in resources, despite the significant fly-in, fly-out workforce based there.
That has generated significant population growth, which creates both opportunities and threats, according to regional leaders of the region who spoke to Business News at a roundtable discussion convened by the Bunbury Wellington Economic Alliance, led by CEO Matt Granger.
A similar forum held five years ago highlighted a region that was suffering from a form of neglect, as the state focused on the north and its nation-building riches.
This time, as the region emerges from a tough period of skills shortages and a high Australian dollar, which hurt most of its key industries, its leaders are optimistic that the diversity of the South West economy and stability of its more processing-intensive resources sector will ensure its rides out the mining downturn better than much of Western Australia.
“While the mining downturn is hurting, businesses are resilient and staff shortages have eased for many in the region,” City of Bunbury Mayor Gary Brennan said.
Mr Brennan, like many in the discussion, highlighted the diversified nature of the economy and two key developments: the upgrading of Busselton to handle direct interstate flights; and a recently launched waterfront development proposal, which would create a Hillarys Marina-style development at Casuarina boat harbour.
Population growth
However, underlying this is seemingly unstoppable population growth in the wider region.
“Dunsborough Primary School has 700 kids,” Mr Brennan points out, underscoring the point that people have come to South West to live.
Those involved in planning the region’s future certainly expect the growth to continue.
A state and federal government-funded study called the ‘South West Regional Blueprint’ expects the region to have as many as 500,000 people by 2050, up from around 165,000 last year, a growth spurt that outpaces anything predicted for Perth in the same period.
The region’s leaders see this trend as creating significant opportunities, even if the current population growth has been a little demographically uneven; with young families and older tree changers creating needs today and in the future that may be hard to balance.
Like many in the discussion, South West Institute of Technology managing director Duncan Anderson believes there are both current and potential issues arising from this skewed population growth, but overall feels the increase in retirees shifting to the region is positive.
“I think it is a benefit,” Mr Anderson told the roundtable.
“You are getting an entire cohort moving down here for a tree change and looking for their last job before retirement.”
He said this created a pool of very experienced and talented people, which the existing community could benefit from, pointing out that the number of retired PhDs in the South West was well above the state’s average.
Edith Cowan University dean, regional professional studies, Lyn Farrell, also saw opportunities for jobs and businesses in aged care and personal services.
Social challenges
However, Ms Farrell noted that, in contrast to those arriving in the region at or near retirement, the South West had relatively lower education attainment levels, creating a challenge if future employment was to be in high-skilled services fields.
“Those jobs of the future are what we have to look at,” she said.
Intriguingly, the mining boom’s legacy is not all negative. The need to train for future demand and the desirability of qualifications were not entirely lost on a generation of young, high-income earners during the construction phase of the Pilbara’s expansion.
“During the boom young people were seduced by the north; commitment to a degree qualification seemed like forever,” Ms Farrell said, acknowledging that many people put off higher education but, as the big wages disappeared for low-skilled work, they were now resuming their career development.
“They are used to earning a lot of money,” she said.
“That is one of the reasons we have put on a first year engineering course.
“Engineering has high visibility for people who worked up north.”
Mr Anderson, who is also Regional Development Australia South West chair, said it was part of a broader question many were grappling with – how to engage younger people, plug them into the workforce and prepare them for jobs of the future.
MIXED BAG: Duncan Anderson welcomed more retirees, while Dan Perkins (right) criticised bureaucratic paralysis.
“The people are coming whether the region wants them or not,” he said of population growth.
“What is not working so well are the broader social issues.”
WA Plantation Resources CEO Ian Telfer is one who raises mental health and other community services as a regional concern. He believes there has been a lack of strategic approach, driven in part by high population growth, including a big Fifo demographic in the area, which has its own peculiar needs.
Mr Telfer said these ‘soft’ issues – which included alcohol and drug use – affected his forestry management, logging and woodchip export business, which, for instance, had a significant number of truck drivers utilising public roads.
“It impacts on our business,” he said.
Big-ticket items
In terms of thinking about opportunities for the future, Mr Telfer added to what was a rich list of ideas, some very public, others less well formulated.
Perhaps none so neatly fitted the challenges of the future as his view that bio-energy ought to be a focus of the region, with the potential to ease the anticipated shift away from coal, notably in areas such as Collie where the traditional fuel is both mined and used to generate the South West’s power.
The forestry executive said there was a considerable amount of wood waste that could be diverted to bio-energy for electricity generation.
“One of Collie’s transition plans has to be what happens after coal,” Mr Telfer said.
“There’s a huge opportunity based around Collie.”
Creative industry leader and Vue Group founder Alan Lindsay said his company had located suitable land for a $65 million, 140-room hotel and movie studio backed by a diverse group Chinese investors, who had already supported production of several films by his business.
Mr Lindsay said there was no local market for what his group did; rather it was a completely export-focused production business that had attracted international partners on the basis of its professional approach.
“It is important to be seen as a manufacturing industry, not a cottage arts industry,” he said, pointing out that Vue was also involved in developing movie infrastructure in China.
Perhaps few items were as glamorous as the proposed waterfront development at Bunbury, which includes high-rise and marina developments, reviving much of a plan dropped after Labor lost the state election. The proposal could involve closing the final remnants of the industrial outer harbour as part of a bigger inner harbour expansion.
Bunbury Chamber of Commerce and Industries president David Kerr, who also runs the tourist-focused Dolphin Discovery Centre, would like to see the city attract more head offices.
“We need to position Bunbury as an alternative headquarters to Perth,” Mr Kerr said, citing the port as a key catalyst to that.
The state government has given credence to that idea, with funding of $18 million over three years to construct an office and science complex to relocate the Department of Parks and Wildlife head office to Bunbury.
Strategic approach
One Bunbury-based business that has grown beyond the region is Perkins Builders, a second-generation business that is ranked in BNiQ as WA’s 25th biggest private company by revenue.
Perkins managing director Dan Perkins is critical of the region’s ability to think big, but under-deliver.
“Strategically, we have always been good at identifying the big-picture opportunities,” Mr Perkins said.
But he believes power has increasingly fallen into the hands of bureaucrats in both the public and private sector who will not make decisions, leading to paralysis.
Mr Perkins, who is preparing to become national president of Master Builders Australia, cites utilities as a prime example.
“We have a good idea … but that is where I start to get worried,” he said.
“We effectively sabotage it ourselves.”
Mr Perkins highlights two service station projects he has been working on along the Forrest Highway, long promised as part of the route’s infrastructure. Both are mired in red tape.
“It is essential we get better in the delivery phase,” he said. “It doesn’t cost anyone, it’s free, but it needs leadership.”
South West Development Commission chief executive Don Punch doesn’t accept that all good ideas fall victim to this syndrome.
Mr Punch points out the Royalties for Regions funding has been critical to getting some key projects over the line.
UPSKILL: Don Punch and Lyn Farrell are optimistic about the region’s future.
An example is the Busselton Airport expansion, which will allow big jets to fly from the east coast and even Singapore, circumventing the tedious transit at Perth and the road journey required for those wishing to visit Margaret River and the like.
Leadership
Mr Telfer agreed with Mr Perkins’ earlier comments that follow-through was often lacking at a decision-making level, and process often got in the way of sound policy.
For example, he that it was hard to get engagement on forestry issues from the state government because that portfolio is not seen as important.
He believes politicians making waves over Chinese investment in agribusiness, were ignoring the fundamentals of Australia’s traditional reliance on foreign capital.
“They are not here to take it over, they are here to put capital in,” said Mr Telfer, who runs a business controlled by Japanese giant Marubeni.
“Dan’s point, well made, is that one of the things that will turn that away is if it is too hard.”
Export
One area of furious agreement in the discussion was that Bunbury’s export-focused port was a hub for a diversified and value-added resources sector that was markedly different from the Pilbara.
Southern Ports Authority CEO Nicolas Fertin said the port had provided continuous growth leading to step changes in capacity during its lifetime.
FOLLOW THROUGH: Nicolas Fertin (left) and Ian Telfer back strong policy initiatives.
Mr Fertin said that, in looking to meet future demand, the authority was looking to recruit the next cohort of exporters to deliver the demand to realise the next step change, which would require a major expansion to take place.
While some of that could come from containerisation to provide for food exporters, such as milk products, which currently go to Fremantle, the port was open to all opportunities.
One example could be bauxite.
Alcoa of Australia Wagerup refinery manager Mark Hodgson said a restructuring of the global group’s entire business from vertically integrated geographic centres into product segments meant that the bauxite reserves were no longer managed just for the benefit of local processing.
GO FOR GROWTH: Mark Hodgson (left), Matt Granger, Alan Lindsay, David Kerr and Gary Brennan acknowledged the potential offered by population growth.
This uncoupling of mining from refining is significant change to a business that has been major player in the region for decades.
As a result, Alcoa’s mine managers are looking to export ore that, to date, has not been suitable for local processing.
“We have huge resources of bauxite that our plants are not designed to process,” Mr Hodgson said.
“We are looking at markets externally for new revenue streams.”
