Wednesday, 26 September, 2018

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Skills shortages, connectivity and patterns of travel, economic diversity and planning were all raised in a wide-ranging panel discussion at the Upper Hunter economic breakfast in September. Following are edited excerpts of our experts comments.

Jobs – skills, education and training
A growing proportion of Upper Hunter businesses cited finding suitable labour as a key constraint on their business. That is according to a survey by the Hunter Research Foundation (HRF) Centre in June 2018.

Skills shortages were a key issue discussed by the panel. The SEEK website advertised 230 positions available in the Upper Hunter on the date of the breakfast. That is according to panellist Geoff Crews, Managing Director of Forsythes Recruitment.

“One-third of those vacancies are for operators, and another third are in trades,” he said. “These very real skills shortages in trades and non-trade positions are partly caused by changing aspirations of young people.”

Fewer are interested in getting into those areas now, he explained. A short-term solution is difficult to see, as many positions require years of preparation.

Cam Halfpenny, Bengalla Mining Company’s CEO, agreed.

“It is one thing to train an operator – you can do that in two or three weeks. But training a fitter or an electrician takes years,” he said. “Those skills underpin a lot of our industries, not only mining.”

Bengalla has been offering scholarships and apprenticeships to encourage young people to take up mining jobs. They also support school programs that provide opportunities to learn about different career paths.

“It is important for employers to invite students onto sites to have a look at what a surveyor or a farmer does,” Halfpenny said. “We have a diversity of roles and job sets available in the region. We need to plan a way to connect our kids with them, so that they can see what they might be interested in.”

The mining and agricultural industries are cyclical by nature, Halfpenny explained. Effective business planning ensures they can continue to operate through the cycle.

“We are blessed here in the Upper Hunter. A lot of our mineral resources sit at the bottom of the global cost curve. These coal mines should be the last ones in the world to close provided they are managed effectively. It is a matter of deciding, that is what we are going to do. If we need to upgrade the technology in order to achieve it, whatever we need to do, we do it with a strategic mind-set.”

Developments in digital technology and increasing automation in agriculture and mining are likely to attract young people to the Upper Hunter to work, rather than deter them, according to Crews.

“Young people love digitisation and automation. While it may eliminate some of the traditional jobs, it is not going to be feared by young people. I think it is quite exciting and key to attracting young people to the area.”

Another Upper Hunter skills shortage was identified by panellist Elizabeth Bate, Principal of Muswellbrook High School. Her school was having difficulty attracting skilled staff to teach STEM (Science, Technology, Engineering and Mathematics) subjects in an innovative and productive way.

“We are future focussed,” she said. “Most recently we have worked with the University of Newcastle in a Hunter-wide program. It has raised awareness, amongst girls in particular, about how to pursue, and persist at, acquiring STEM skills.”

The program has produced great results for the school. They had previously been unable to sustain a Chemistry class and were lagging in Physics outcomes. They have now boosted numbers in their Chemistry class. They are also offering two STEM electives in Year 9 next year.

“The tide is shifting,” Bate said. “People are aware that education has changed, and that it is about getting some real resources and skills here in the Upper Hunter.”

Infrastructure - connectivity
How new infrastructure can enhance connectivity was discussed at the breakfast. Dr Anthea Bill, HRF Centre’s Lead Economist, presented travel-to-work data from the 2016 Census. The data show whether a local government area (LGA) is a net ‘importer’ or ‘exporter’ of workers.

Singleton has the highest share of in-commuters, followed by Muswellbrook. These figures tend to reflect the availability of jobs in these LGAs. It may also be influenced by the increased connectivity provided by the Hunter Expressway. It allows Singleton and Muswellbrook workers to have residential options outside these LGAs. The Upper Hunter LGA has a substantially lower rate of in-commuting, reflecting its relatively small pool of jobs.

Singleton’s share of in-commuters is higher than in Newcastle or Maitland LGAs. In contrast, over half of Maitland’s employed population work outside the LGA. This rate is higher than for the Newcastle LGA (31%). Dr Bill said that Maitland’s liveability, relative affordability and geographical position have likely contributed.

“The opening of the Hunter Expressway in 2014 helped to reduce travel times and increase connectivity between the Upper Hunter, Newcastle and Sydney.”

The Expressway also opened up opportunities for young people to return to the Upper Hunter, according to Bate.

“A lot of young people are coming back into our area. That is a positive note for the Upper Hunter. They are often very loyal to their families and to the region they have grown up in. If the jobs are here, I have seen that they will come back.”

Innovation, change and planning
Dr Bill stated that long-term business expectations of the regional economy have stayed steady at an elevated level since June 2016. This level of confidence coincides with improvements in the price of thermal coal. Short-term business expectations of the economy jumped in the six months to December to the highest value on record.

“The greater improvement in confidence in the short-term regional outlook, compared to the long-term, reflects a degree of uncertainty around whether movements in global coal prices will be sustained,” she said. “The region’s success in capitalising on the resources boom means that business-as-usual stays as a winning formula.”

Dr Bill explained that this attitude creates a risk that opportunities for regional economic diversification might be missed. One such opportunity is Ethtec’s collaboration with Muswellbrook Shire Council, which could lead to a national bio-renewables hub.

“We need to ensure that opportunities to build and enhance the region’s sustainable competitive advantage are not missed.”

Data presented last quarter show that dependence on mining within the region had not greatly changed from 2013 to 2016, Dr Bill stated. Greater economic diversification would increase the Upper Hunter’s resilience and provide a buffer to the cyclical nature of the resources cycle.

“The lower Australian dollar favours the development of regional tourism and agriculture,” she said.

Dr Gary White, NSW Chief Planner, agreed that the Upper Hunter is well positioned to diversify its economy. Speaking on the breakfast panel, he identified tourism, agriculture, engineering, agricultural technology, and education and training as areas of opportunity to build on. He also warned against ‘legacy bias’.

“A business-as-usual approach could limit the opportunities presented by change and innovation,” he said. “We need to stop looking through the rear-vision mirror for solutions based in the past. Look through the windscreen at what is in front of us, and make your decisions based on those opportunities.”

He explained that people continue to talk about the Hunter as several stories of different parts.

“It is one story about the whole and not a lot of stories competing against each other,” he said. “The recent release of the Greater Newcastle Metropolitan Plan should be leveraged by the Upper Hunter.”

“Newcastle is the only Australian city, outside the capitals, to have a metropolitan plan. Connectivity improvements and the changing metropolitan fabric will provide opportunities to the surrounding region.”

View breakfast presentations by Dr Bill and Dr White

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