Diane Pentz, Regional Development Australia - Fostering sustainable regional development in the Pilbara in the midst of shifting commodity market conditions - Weathering the booms and busts

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Information about Diane Pentz, Regional Development Australia - Fostering sustainable...
News & Politics

Published on March 17, 2014

Author: informaoz

Source: slideshare.net


Diane Pentz, Chief Executive Officer, Pilbara, Regional Development Australia delivered this presentation at the Mining the Pilbara 2013 conference. The conference aims to promote the sustainable development of mineral resources and the Pilbara region.

For more information, visit http://www.informa.com.au/miningthepilbara

Fostering sustainable regional development in the Pilbara Weathering the booms and busts

Minerals and Energy Projects: • Reduced construction activity; • Transition to operations; • Fewer FIFO workers

Proposition 1: The heavy reliance of the Pilbara on minerals and energy industries carries many areas of vulnerability • Technology changes • The vagaries of commodity prices • Changes in the project lifecycle • Competing supply for both gas and ore products from other global locations, often with a lower cost base. • Over the very long term resources have a lifespan

Proposition 2: The resources industry is a good base but it will not support the population size of the Pilbara cities vision

Proposition 3: Move beyond resources to resilience Build on the strong resource base but do not rely on it: • A diversified economy – more economic resilience; • Services and life-style features to support a large and more diverse population.

Factors that influence individual decisions to live in or leave a community: • Economic opportunity and employment prospects, for all members of the family; • Education services; • Health services, particularly access to a reasonable range of specialist services; • Access to a reasonable range of cultural and recreation activities.

-1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1 Access to allied health services Access to technical or further… Access to GP services Access to hospital services Access to tertiary education services Police services Relative Strengths: Essential Services Relative Strength Pilbara Region Relative Ranking (Regional Australia Institute: Insight Competiveness Index)

Pilbara Region Relative Ranking (Regional Australia Institute: Insight Competiveness Index) -1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1 English proficiency Early childhood performance School performance - Primary School performance - Secondary University qualifications Technical qualifications Lifelong learning participation Health Early school leavers Relative Strengths: Human Capital Relative Strength

Pilbara Region Relative Ranking (Regional Australia Institute: Insight Competiveness Index) -1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1 Skilled labour: (% managers and professionals) Participation rate Welfare dependence Unemployment rate Young unemployment Relative Strengths: Labour Market Efficiency Relative Strength

Pilbara Region Relative Ranking (Regional Australia Institute: Insight Competiveness Index) -1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1 Businesses in technology and related industries Households with internet connection Workers in ICT and electronics Households and businesses with broadband internet Relative Strengths: Technological Readiness Relative Strength

Pilbara Region Relative Ranking (Regional Australia Institute: Insight Competiveness Index) -1 -0.75 -0.5 -0.25 0 0.25 0.5 0.75 1 Dominance of large employers Exporters, importers, wholesalers: % employed Access to local finance: Number of banks/lending institutions as a share of… Economic diversification Income source - Own business Exports: % business sales revenue earned from exports Relative Strengths: Business Sophistication Relative Strength

RDA Report : COST OF DOING BUSINESS IN THE PILBARA • The price indexes for the Pilbara are the highest of any region in WA and in Australia; • In 2012 in the Pilbara the level of remuneration for employees would need to be a minimum of 37% higher than that in Perth; • There is often a need to provide subsidised or free accommodation to attract or retain employees. • Costs of operating a business is up to 120% higher than in Perth. • Faced with such substantial costs and with a small market size, some businesses are struggling to survive, while NGOs continually deal with considerable programme funding challenges. • Businesses and NGOs face high costs for staff training, staff recruitment and turnover, travel, professional services and consumables. • The cost of doing business in the Pilbara for SMEs and NGOs has risen primarily as a result of the high demand for labour, accommodation and other services by the resources sector.

RDA Report : MAP AND GAP ANALYSIS: PILBARA NON GOVERNMENT ORGANISATIONS 2012 The cost levels particularly affect NGOs: • Escalating costs faced by NGOs in the Pilbara are not taken into account in providing adequate and secure funding. • Numerous NGOs based in Perth have very little on the ground presence in the Pilbara due to the affordability and staffing challenges of the region. • NGOs have difficulties in attracting and retaining staff unless they make significant contributions to their accommodation costs. • Staff and volunteers – Difficulties in recruiting and retaining staff due to wages competition from the resource and government sectors • Governance – Small pool of people willing to volunteer on Boards resulting in concurrency in board membership and potential conflicts of interest

NGOs: Possible Measures A coordinated approach to planning services for the Region: • Development of a 10 year Pilbara Region Community Plan and a 10 year NGO Accommodation and facilities Plan; • Allocation of NGO office and service delivery accommodation; • Allocation of government funding for services that reflect the real cost of doing business in the Pilbara with contracts aligned to the Regional Price Index; • Development of sustainable organisational models, including potential streamlining or merging of services; • Communications strategy to raise the profile of the NGO sector, highlighting its value and contribution; • Action research to evaluate and implement ICT, potentially for virtual board membership and for professional supervision and/or development; • Mixed model of housing and security of tenure; and • Expansion of PANGO's role and resourcing

Possible Diversification Projects Project: Prospective Employment (operations) Skilled professional Skilled technical and semi- skilled Bio-fuels Project 5 - 10 20 - 30 Hi-Tech Greenhouse 5 - 10 20 - 30 Aquaculture fish farm 4 10 Fish processing factory 2 10 - 20 Algae Farm 200

Other possibilities: • Education • Tourism

Summary: towards resilience • Greater diversity in the economy • Education services at a high level to keep people in place longer: – better quality secondary school education; – More diversity, including private secondary schools: – Much upgraded tertiary education and development of research specialities. • Health services that meet all of the health needs of all the community. • A richer cultural life, with cultural activities more than pubs and movie downloads • Well supported and vibrant community groups • An wide range of formal and informal sporting and recreation opportunities; • Places for people to meet – this means paying attention to the liveability of the major centres (This is where the population expansion will occur): • Attending to cost issues – lowering the cost base for accommodation and key services.

More specifically: • Regional governance and coordination – more local autonomy and regional decision making , – better coordination between three tiers of government, – specific assistance to the local governments as primary providers of services and facilities; – locating more government agencies in the region. • Reducing the cost structure, starting with the costs of both residential and commercial accommodation. • Education – establishment of a substantial full-service tertiary education capacity and improved secondary school education with a wider choice and variety. • Upgraded services infrastructure, including a move to international capability at Karratha airport and a common user facility to service extra-regional projects. • Formulating a digital strategy for the region to enable: – Remote and tele-working – Improved viability of basing regional services and administration in Karratha – Improved e-health and e-education services • Health: further expansion of health services; incorporation of areas of specialisation; Promoting the expansion of aged care services and facilities.

And finally: • Actively supporting the NGO sector. • Promoting the SME sector: – Fostering the further development of SMEs in mining and resources support services and the resources value chain; – Support to small business development programs; – Fostering incubation projects and support services; – Fostering the development of SMEs in agri-business support services. • Tourism: Formulate a comprehensive tourism strategy addressing: – Product; – Accommodation; – Marketing. • Promoting cultural activities and facilities. • Upgrading the urban environment of key population centres; completing the Karratha town centre upgrade project. • Investigate the creation of a Special Economic Zone (SEZ) for the Pilbara in order to reduce costs and increase required investments in the non-resources sector. • Making FIFO internal to the Pilbara, with the growth of the major centres as a residential base for FIFO workers working on remote projects.

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