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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-09-29 Daily Xml
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MINING, REGIONAL DEVELOPMENT

The Hon. M. PARNELL (14:55): I seek leave to make a brief explanation before asking the Minister for Regional Development a question about the creation of regional manufacturing on the back of the Olympic Dam expansion.

Leave granted.

The Hon. M. PARNELL: Yesterday, I had the pleasure to attend a presentation by the current Thinker in Residence, Professor Göran Roos, on the future of manufacturing in South Australia, and I thank the Academy of Technological Sciences and Engineering and the Friends of the Parliament Research Library for organising this event.

One of the key points that Professor Roos has been making when speaking to groups around our state is that our manufacturing sector is at significant risk from the emergence of what is often called the Dutch disease. Dutch disease is the phenomenon where a significant decline in the manufacturing sector follows a resource boom. An economy becomes so inflated by revenues from the resource industry, which leads to a sharp increase in foreign currency that throws the exchange rate out of kilter, that exports from other industries are prohibitively expensive.

Professor Roos argued strongly that there was a cure at a state level to stop this occurring, and he said South Australia needed to look to Ontario, Canada, and Norway to see how they have responded to a major resource boom through government-led industry intervention. In particular, Professor Roos said that Ontario has actually used the resources boom to create new local manufacturing.

Members will be aware that the government here is currently finalising negotiations with the world's richest resource company on one of the world's largest resource projects in our state's north. My questions to the minister are:

1. What are you doing as Minister for Regional Development to ensure that a strong local industry intervention policy, including preferential procurement, is one of the key outcomes of the final negotiations over the Olympic Dam expansion?

2. How, as Minister for Regional Development, are you ensuring that, rather than regional economies in South Australia suffering from Dutch disease, a new, stronger regional manufacturing base is created on the back of the Olympic Dam expansion?

The Hon. G.E. GAGO (Minister for Regional Development, Minister for Public Sector Management, Minister for the Status of Women, Minister for Consumer Affairs, Minister for Government Enterprises, Minister for Gambling) (14:57): I thank the honourable member for his most important questions. These are, indeed, very important issues and issues that this government has put its mind to. I know it is an issue that the whole of government is wrestling with and I know that not only our Treasurer but also our minister for mining, minister for trade and I have been and continue to be involved in matters around the issues that the honourable member has raised.

In terms of my own portfolio areas, there are a number of ways that I have been working with businesses and also mining interests to attempt to advance the involvement of local communities in mining and resource development initiatives. I spoke recently at a conference and raised those very themes. I have talked publicly in many forums about the importance of not relying on a trickle down effect from these advances and that it is most important that we attempt to develop real partnerships, particularly partnerships that involve local regional communities, in meaningful ways.

Some of the work that is being done involves things like, for instance, the Upper Spencer Gulf feasibility fund and grants initiatives, which is grant moneys that have been made available to help businesses and industries in those areas attempt to maximise and take full advantage of mining and resource development opportunities. So, that fund I am responsible for, and there have been a number of successful proponents for that; it is still fairly early days. I was recently up at Whyalla and, in fact, announced a grant to the Whyalla council for some wastewater re-use as part of some initiatives there. Engaging with local communities in relation to using that fund in a strategic way to enhance local business to develop themselves to be able to fully maximise the mining developments to assist in attracting new industries is all part of that grant proposal.

There is also the federal grants arrangements around the Regional Development Australia Fund. The last round was significant in that it was about $150 million, and another round has been announced for November. Those grants are about assisting regional Australia to advance regional communities, in particular, to be able to advance and develop businesses. Those funds are very much designed to encourage regions to develop their economies in a long-term, sustainable way.

So, in relation to those funds and the establishment of the RDAs, the state government provides funding to those RDAs, and we work with them. They have developed road maps to help provide guidance on where there are opportunities for these sorts of initiatives and to help identify local partners and to help bring those partners together to work towards program initiatives to develop both business and industry initiatives.

So, they are a couple of initiatives. As I said, the minister for mining is also very much engaged, and I have also met with some mining and resource companies as well and given out the same message. I know the minister for mining has a very strong commitment as well to ensuring that engagement and supporting the long-term sustainability of regional communities.

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