Speaking at the Adelaide release of CEDA’s EPO, Mr Weatherill said his government was pursuing a clear plan that sets out their economic priorities. “It’s most importantly a plan that will assist us in this task of growing the jobs in the fastest growing sectors of the economy more quickly than those declining sectors of the economy,” he said.
“And make no mistake it is a race,” he said.
Mr Weatherill discussed three South Australian government economic priority issues:
“This proposed unit along with the new Royal Adelaide Hospital (RAH), the medical school, the university health building, the exciting South Australian Health and Medical Research Institute (SAHMRI), will create a powerhouse of research and innovation here in South Australia and it will add to the health and social assistance sector which is already the fastest growing sector of the South Australian economy,” he said.
“It’s not just about the health and wellbeing of our citizens, it’s not just about the technology transfer that such high tech institutions will bring, it is about jobs. It’s about the creation of long-term sustainable jobs.
For example, Mr Weatherill said “If agribusiness had better access to water we estimate it could increase production and create 10,000 new jobs by 2020 and export effectively into the current and new markets in the region around us.”
“Something like one in five jobs that exist in the South Australian economy are directly related to the food industry; it’s a massive number, it is one of our most important sectors and it has massive prospects for growth.
“Absolutely essential for that growth is water.
“Our plan is to essentially upgrade and expand the recycled water systems in the northern areas.
“This is a project to which the State Government is prepared to commit substantial resources over the coming years.
“It’s pleasing to see that this project was listed on the Infrastructure Australia priority list that was released. “Infrastructure Australia also publically backed our plan to expand Adelaide’s tram network.”
Mr Weatherill said that the investment would be essential in Adelaide’s liveability as well as economic development. “Every time we introduce high quality transport, we get consequent urban growth around the edges of that investment,” he said.
Mr Weatherill said the three projects will be transformative for South Australia but partners were needed to complete them. “We think that our best chance of succeeding as a state is if we have willing federal partners…we’re not simply saying write us a cheque we’re saying we’re willing to be a partner,” he said.
“The ideal result is that we go into a Federal (election) campaign with both major parties proposing to support the ideas we wish to advance.”
Also speaking at the event was Minister for Industry, Innovation and Science, the Hon. Christopher Pyne, who discussed Federal action that is working to boost innovation projects within South Australia and across the country.
“There are really tremendous things happening in this state,” he said.
Speaking on the National Science and Innovation Agenda, or the ‘Ideas boom’, Mr Pyne said “We (Australia) are strong in economic fundamentals, we have a stable investment climate, proximity to Asian markets, an excellent reputation as a trusted source of goods and services, and some of the world’s highest quality scientific research organisations. But we are weak in one thing in particular – our appetite for risk.”
“The Australian economy is not quarantined from the structural and technological changes in the global economy, so we must focus on what we can control: productivity, competitiveness and innovation. “Innovative firms are more competitive, more able to capture increased market share and more likely to increase employment.
“Australia has been one of the stellar performers in the OECD, particularly over the last 10 years with GDP growth well above the average of the OECD. While Australia’s GDP growth is strong compared to the OECD average, Treasury recently revised down Australia’s GDP growth to 2.75 per cent over the forward estimates from the initial forecast of 3.5 per cent.
“To maintain or exceed this projection, future growth needs to come from other areas of the economy as commodity prices retreat and global expectations are subdued.
“Food and wine, defence, energy, international education, tourism and, I’m pleased to say, the automotive industry, all these sectors are brimming with opportunities.
“It can be a boom without end, capable of sustaining us indefinitely."
Discussing the growth in the defence sector, Babcock International Group, Chief Executive Officer, Craig Lockhart said that two decades of proactive government announcements encouraging private sector investment in maritime ship building and defence has led to the defence sector today being unrecognisable to what it was 20 years ago.
“We have one of the broadest and deepest defence industrial bases in the modern world, right here in Australia, right here in South Australia,” he said.
“I think we have much to be optimistic about, the Defence sector…is at a very important transition point.
“Our nation has the necessary commitment and experience to deliver successful projects. We all understand the strategic imperative and we’re all collaborating to ensure our national security is assured.”
With a background in nuclear engineering, Mr Lockhart also discussed the future of nuclear energy in Australia.
“It’s important to understand as Australia and South Australia explores the potential opportunities in nuclear lifecycles – what benefits and what economic benefits can be realised from a very mature process and industry, that’s already been well trodden by international countries and companies,” he said.
“Learning to become a responsible nuclear owner and operator and carefully managing our own waste is a very low risk and sensible way to start. “I think there’s a myth that nuclear goes bang – and that’s wrong.
“The incidents that we have seen in Chernobyl and Fukishima clearly because of the worldwide coverage have coloured the judgment of individuals about how safe this industry is…given that it has been highly regulated over the last 50-60 years, it is one of the safest industries in the world.”
Commonwealth Bank of Australia Chief Economist, Managing Director, Economics, and EPO report contributor, Michael Blythe discussed current trends and forecasts for 2016.
“That 20 year period where we built global supply chains, global production chains, global value chains has come to an end and that period where those chains were being built was a very expansionary time and countries that based their growth strategies on getting into those chains and being part of it did very well,” he said.
“That process is now complete and that source of growth for many countries particularly in Asia has gone so growth in those countries will be more about the domestic side of the equation.
“The policy focus I think should shift to how do we protect that domestic source of growth how do we contain it in our own country? Mr Blythe said that while market volatility trends feed into growth and business and consumer confidence, we should also look “beyond the headlines that we’re fed on a daily basis”.
“Most of the risks we see facing the Australian economy this year have come from offshore, but clearly there are some local issues that we’re still working through and need to pay close attention to as well,” he said.
These included the fallout from the resources boom including dropping commodity prices and low income growth. However, Mr Blythe said that these fallouts “hadn’t been as damaging as what they look like on paper.”