Minister Crean's Speech to the Strategic Regional Leadership for Innovation Conference

PORT MACQUARIE
Friday, 18 November 2011

It is a great pleasure to be back in Port Macquarie for this important conference.

I spoke here 12 months ago about the future of regional Australia.

I outlined our proposed agenda – and our aim to drive a new regional policy based on local ownership and local empowerment.

We have made a big start.

We have laid a solid foundation.

Building on that foundation needs more than resources – it needs to creative, innovative applications.

It also needs the strengthening of partnerships and a renewed confident energy.

My engagement over the past 12 months as Minister convinces me those ingredients exist.

Australia is poised on the cusp of a new era of strength, diversity and prosperity – and the regions are crucial to shaping it.

The future of our regions will be determined by a range of factors, including education and skills, population growth, services and liveability, access to international and regional markets and through diversification, capitalising on our comparative advantage and competitiveness.

Local leadership and innovative capacity will be also fundamental.

So will be the 'mindset' of the communities in our regions.

Our Government has delivered a massive commitment to regional Australia – $4.3 billion in investments to regional hospitals, health care, universities, skills and infrastructure.

We strengthened the Regional Development Australia committees and challenged them to revisit their regional agendas – to be emboldened by the new resources, think creatively about the future and join the dots.

Two common themes emerge from these regional agendas.

1. They recognise the need to diversify their economic base;
2. And they accept the need to shift to a cleaner and more sustainable future – for liveability and opportunity, with practically every local government already setting targets to cut emissions.

Through their leadership, the RDAs have determined the 'what'.

Now they want facilitation with the 'how'.

EMBRACING THE CHALLENGE
The regions' time has come, and the opportunities suit them.

Embracing the challenge of a patchwork economy means embracing the regions, because they are the patches.

Embracing the challenge of an economy in transition means embracing the regions' agenda to diversify their economic base.

Embracing the challenge of climate change means embracing the other key regional priority – a cleaner, more sustainable environment.

And embracing the global challenges around food, water, energy, resources and skills plays to the nation's strengths – with the regions already responsible for two-thirds of our export income.

Embracing these challenges takes collaboration and partnerships.

It takes innovative thinking – new thinking.

New thinking about regional development tells us that innovation – and economic development more broadly – are regional in their nature, not national.

The 2010 OECD Innovation Strategy emphasizes the need to set economic priorities at a regional level, as well as the national level, to build long-term investments and strategies around unique local capabilities.

The report was more direct with reference to the United States, saying: "There is no national economy … but a series of regional economies that trade with each other and the rest of the world."

That's true of Australia.

The difference is we are better positioned than anyone else to seize the opportunities ahead.

The reason we are better placed is because of hard decisions taken by Labor in the 1980s and ‘90s – floating the dollar, cutting tariffs, wage restraint, compulsory superannuation, Medicare.

These bold reforms were not always popular, but were taken with the nation's best interests at heart.

Together with our early engagement with Asia, they laid the foundations for our prosperity.

They kept us out of recession, they made us the envy of the developed world.

We must continue the path of bold reforms.

Our comparative advantage is not enough – to stay ahead we must also be competitive.

That's why all of our Budgets have invested in the key drivers of economic growth – education, skills, infrastructure, innovation and the National Broadband Network.

That's why our Government has taken a number of hard decisions – to position us for the future.
In the case of carbon pricing, we want to help create a market that rewards good behaviour, drives innovation and lifts productivity – a market that plays to our strengths.

In the case of the mining tax, we want to take the proceeds of the mining boom and invest them back into the community so regions can diversify their economic base.

Through lower company taxes, improved regional infrastructure and boosting the nation's savings.

Both have drawn strong opposition.

But both have been pursued, because in the challenge we see opportunity – to better secure our future.

GROWING THE FOOD BOWL
One of the great opportunities for the regions is growing Australia's food bowl.

Our proximity to established links in the Asian economic region – the fastest-growing region in the world – presents huge opportunities.

With the growing middle classes in Asia, the demand for safe, quality, nutritional food is increasing Australia's strengths.

There is also huge potential to contribute to global food security.

Our agricultural industries all have the ability to position themselves to make the most of that opportunity.

We need to be ready to meet emerging risks and opportunities like the changing global food market, population growth and climate change.

That's why we are developing Australia’s first National Food Plan.

A plan to deal with the growing challenge of food security.

Not just here but globally, particularly in our region.

It's another opportunity, given our strength not just as the world’s most efficient commodity producer but its recognised strength in value-adding in quality and safety and nutrition and land and water management.

That means manufacturing, services and investment-based trade opportunities, not just commodity-based opportunities.

MURRAY DARLING BASIN
But positioning our country to become the food bowl for Asia depends on how well we manage our water and soil.

It is critical that we learn how to live in a water-constrained environment.

That's what we are working towards in the Murray Darling Basin.

We are aiming for a healthy working basin – a sustainable river system that supports communities, irrigators and the river itself.

If the debate is simply about the amount of water to be returned, there will be conflict.

However, if the debate is about how we meet the challenge of living in a water-constrained environment, through innovation and diversification we can build consensus and lay a strong foundation for a prosperous, sustainable future.

Again, that challenge brings together the things this conference is about – innovation, creativity, engaging with communities to get the result.

With my colleagues, I look forward to working with communities to identify and secure practical solutions.

CARBON FARMING
It is critical the regions access existing markets – and explore new ones.

That's what our carbon farming initiative is about.

Carbon farming can be a win-win for agriculture.

Farmers and landowners won’t pay a price on carbon – but they will have access to new economic opportunities from their existing assets.

We want to develop and encourage a market that rewards good behaviour on the environment.

Carbon farming can improve productivity by enriching the soil through improved nutrient management, reducing fertilizer and labour costs.

The enriched soil captures more CO2 and the credits are a potential income stream to be traded from the carbon market – and there’s $1.7 billion to assist in biodiversity practice and carbon farming.

Australia's always been a leader in the innovation stakes in agriculture.

Now we have the newest market of all:

• A market potentially worth hundreds of millions of dollars to Australian farmers each year by 2020;
• a market that improves productivity;
• a market that encourages the trading of credits;
• a market that drives smarter solutions and values competitiveness, and
• a market that rewards cleaner energy solutions.

So why wouldn’t you embrace it and become advocates for it?

There is more work to do – particularly around measurement and methodologies – but the framework and support is there and this Government will get it done.

COAL SEAM GAS
We are also confronted with potential conflicts around land use.

The debate around coal seam gas is one of those issues.

Again, to manage the conflict we need to find the basis for resolution.
Starting with the facts is a good beginning – facts based on the proper science.

You need the proper science base – which is why we are supporting studies to establish the facts.

It's not agriculture versus mining.

It need not be about conflict.

It's how we can co-exist.

It's about partnerships.

A balanced, measured approach that keeps the dialogue open – one that looks again for innovative solutions.

If we can do that, we can preserve the quality, richness and productive nature of the nation's prime agricultural land.

DEVELOPING COMPETITIVENESS
These three elements – better water management … better soil management … better resolution of the land use conflict – lay the foundation for strengthening our agricultural and resource bases.

Not just from the perspective of the commodity alone, but how – through innovation and cooperation – we develop their competitiveness.

Innovation through unique local capabilities enables not just efficiency and improved productivity, but value-adding a whole new set of services-related activities.

Localism is a vital input.

So too are the practical programs that support the innovation:

The initiatives under the Clean Energy Future provide significant resources:

It's a market that compensates nine out of ten households and provides billions of dollars to help industry and communities make the adjustment – we don’t expect them to it on their own.

The additional infrastructure spend from the yet-to-be-passed Minerals Resource Rent Tax will also go towards regional Australia, underpinning:

• $6 billion for nation-building projects in local mining communities and
• $573 million for future rounds of the Regional Development Australia Fund over the next two years.

CONCLUSION
Our goal is to embed regionalism into the way we govern in a way that can’t be unpicked – like Labor's reforms to superannuation and Medicare.

Australia is one of the world’s great creative nations – we have unlimited capacity for new ideas, new ways of doing things.

But to succeed in the future, we need to do more to be ahead of the curve.

We need to become more creative and more innovative to build a more liveable and sustainable future.

Of all the challenges and opportunities we face, this is the greatest.

I am confident that we have the leadership and drive to do this.

And together there is nothing we can't achieve.