News and published articles in 2020 to 2017
Thursday, 17 September, 2020Close Article
Australia’s metropolitan capital cities continue to face escalating population growth presenting significant challenges for sustainable urban planning and development. Increasingly, the focus is turning to our major regional cities to better understand their economic and social contribution and to develop strategies for growth.
The Gateway Cities Webinar Series brings together thought leaders across academia, all levels of government, and the private sector to examine the opportunities for the Gateway Cities of Wollongong, Newcastle and Geelong.
The 2020 series comprises:
How supply chains are contributing to the growth of our regions
Tues. 22 September - 10-11am | Hosted by Deakin University
Hear about current issues surrounding supply chain and logistics, what challenges need to be overcome and how can these be achieved within our Gateway Cities.
The presentations will be followed by an interactive conversation.
Gateway Cities: Population Post Covid-19
Tues. 20 October - Time TBC | Hosted by the University of Newcastle
What does the data say about the attractions of the Gateway Cities in a post-COVID world compared to Sydney, Melbourne and Brisbane?
Hear presentations on the combination of qualities that can attract big city residents and businesses. Hear also about how best to make the case – providing data, examples and a more unified voice from each region.
The presentations will be followed by an interactive conversation.
The Future of Work - Who, How and Where
Tues. 24 November - 11am-12noon | Hosted by the University of Wollongong
Join us to discuss the jobs of the future, employment pathways and the ability to work from anywhere.
The presentations will be followed by an interactive conversation led by the Lord Mayor of Wollongong, Cr Gordon Bradbery AM.
The Gateway Cities Alliance works together to provide a collaborative and collective approach to ease population pressures on Australia’s Gateway cities. The shared and unique characteristics and strategic assets of the cities of Wollongong, Newcastle and Geelong can be deployed to maximise national economic growth, regional resilience and job creation for Australia’s long-term settlement strategy.
Australia’s Gateway Cities share the following characteristics: geographically well-defined jurisdictions that are predominantly urban while still allowing for a significant agricultural economic base. Gateway Cities also undertake significant public administration and public policy functions, which may have a direct impact on the governance and well-being of the nation in addition to the relevant Capital City.
Monday, 10 August, 2020Close Article
How can the Hunter accelerate its recovery from COVID-19 shutdowns and flourish in the 'new normal'?
We can become a 'visible region' to drive more astute decision-making by business and government here and in Sydney, Canberra and elsewhere.
This visibility means sharing data on trends over time as well as case studies explaining cause and effect to reflect our experiences.
Visibility can highlight opportunities more clearly to those who are considering visiting, living, working or investing here.
How do we make the Hunter more visible?
That requires describing in an accurate and compelling way what is happening in our communities and enterprises socially and economically. Agreement on what information to gather and share necessitates the enhancement of working relationships and common understandings across sectors and the region. That should result in stories of recognised success and ongoing disadvantage, but also agreement on judicious use of the growing array of data.
We hunger for information, particularly in a time of high uncertainty. We want the latest data on trends, what we can expect in the future, and identification of those with great need. To represent the region, we can adapt recent work on quality of life indicators and smart city data analytics.
Traditional measures of how our communities and people are faring are being augmented by emerging sources, such as location data from smart phones, which can tells us about how people move throughout the day.
Familiar metrics, such as unemployment rates, are masking under-employment and not clearly describing the situation for those who have been stood down temporarily or who have given up looking for work.
Infection rates and counts of jobs lost suggest the more visible and immediate impacts of COVID-19 and associated shutdowns. There are also long-term effects, with studies indicating that extended unemployment in early years can have effects throughout one's career.
Within the home, largely hidden impacts on mental health and levels of family violence need attention. Data indicates disproportionate effects on those who live alone or in poorly-resourced areas or are caring for dependent family members.
Particularly at risk are members of marginalised minorities, working mothers and other women, and those in younger age groups.
This difference in vulnerability among sectors, social groups, and communities make localised data essential.
This data can guide governments, community organisations and private enterprises to determine what to do for the people they serve as well as for their own staff. Businesses and individuals want to know how to make their savings last.
Such insight is particularly important when the light at the end of the tunnel seems to flicker with the threat of virus outbreaks and renewed lockdowns.
Fortunately, such 'transparency' is becoming more accessible. Location data from smart phones provided by Apple, Google and others has enabled assessing how effectively people are social distancing, as alluded to above. The HRF Centre has been analysing traffic volumes collated by Transport for NSW, which led to a write up in the Herald on when to shop in order to avoid the crowds on a busy Saturday.
However, too much data can alienate those who are not enamoured with numbers. The person in the street and the business operator may already be experiencing the effects that the data are meant to represent.
They can respond to such information with a shrug, explaining, "I know that is what's happening. I am living it."
It makes little sense to quote unemployment figures to the unemployed. To identify those facing adversity and those on the threshold of success, high-level decision-makers in the capital cities can benefit from newly available data, effectively presented.
Which indicators can best measure impacts, resilience and changes over time are contested. What works locally is often determined by local factors. That can stymie benchmarking between cities or regions.
Nonetheless, one can make provisional choices on what to measure, reflecting agreement here and now where we live and work. Then, update those choices as needed.
The HRF Centre has been seeking such agreement over the past two years through a range of projects, and we convened a 'data tent' group. This sharing of information across organisations, as noted above, is essential to make the region more transparent.
We have developed a dashboard including traffic volumes alongside COVID-19 infections, plus long-term trends in population growth, unemployment rates, housing costs and crime rates across different locations.
The importance of up-to-date, accessible and transparent information has been one lesson from the COVID-19 era. Recovery of both the economic and the social capital that the pandemic has claimed can be accelerated by a collaborative effort to create a visible region.
Opinion Piece by Will Rifkin appeared in the Newcastle Herald on 8 August 2020
Sunday, 21 June, 2020Close Article
When a business hits tough times, there are often lifelines available to help them through. But many Australian businesses are currently facing significant hardship at the same time. So, who gets to borrow, and how can the system adapt to enable more businesses to ‘bounce back’ over time?
The familiar rules and relationships around lending have shifted. Today, tenants are negotiating with landlords, and businesses with their bank managers. The economic impacts of COVID-19 are turning our understanding of accepted credit terms and timeframes on their head – in both practical and moral terms.
Recent data from the Australian Bureau of Statistics (ABS) survey on Business Impacts of COVID-19 showed that 72 per cent of Australian businesses reported an expected decrease in cash flow over the coming two months.
That is a major concern because small businesses provide 35 per cent of Australia’s gross domestic product and employ 44 per cent of the workforce. They were already experiencing a soft economy, with a reported 10 per cent decline in January and February in the number small businesses registering for an ABN. Since COVID-19 hit Australia in February, new business registrations have fallen 43 per cent below the three-year average.
When this economic situation shifts toward recovery, we are likely to need new rules of engagement between small business and lenders. Who gets to borrow? What level of default will be tolerated? What security is sufficient, particularly for those with relatively little equity? Can repayments be delayed for years?
Economic recovery in Australia requires a serious rethink on the internal workings and culture of the lending sector, as well as the overarching regulations.
Until now, the risk of non-payment of a loan could be assessed based on formulas informed by history. It is imperative that these formulas are revisited to reflect the ‘new normal’. There needs to be a much greater appetite for risk in light of both a decline in the equity in the hands of many business operators and the uncertainty of the marketplace.
Lending is already a risk-based industry, and it seems destined to become more risk-aware in today’s fluid environment. Exacerbating factors include social distancing that can result in less of the face-to-face interaction that is essential to trust building. Changes of internal processes in a lending organisation can lead to shifts in lines of authority, which can in turn generate more conservative outcomes.
Any tightening within bank culture is likely to be felt most among those who have historically noted challenges in obtaining credit. These groups generally include small business owners and entrepreneurs, businesses operated by women, businesses operated by international migrants and businesses in regional areas.
The hurdles faced by small businesses seeking to borrow during the eventual upswing in the economy as COVID-19 lockdowns end can be as daunting as they have been during the ‘bust’. That is due to the rapidly changing context and associated uncertainty.
An example of the impact of such uncertainty occurred in Queensland’s Darling Downs during the coal seam gas construction period from 2011 to 2014. Landholders receiving a conduct and compensation agreement from a gas company could see an additional income stream of tens or hundreds of thousands of dollars per year guaranteed for the 20-30 year life of the gas wells on their property. This cash flow represented an opportunity to expand their enterprises. Banks responded by offering a few points off loan terms but no access to additional capital. As a result, land sales did not occur, and farms did not grow. Landholders voiced frustration with policies apparently formulated in Brisbane, Sydney or Melbourne that did not seem to take into account their local opportunities.
Decisions made in capital cities, predetermined formulas for assessing risk and timeframes for repayment may no longer be appropriate. They can result in a lack of capital for capable business operators whose operations are poised for growth. That would include small business owners, businesses operated by women and international migrants, and businesses in regional areas.
We must rethink credit and repayment timeframes to ensure that there is access to the resources needed to help kick-start Australia’s economy.
Opinion Piece from the Newcastle Herald, 21 June 2020
Will Rifkin, Director - Hunter Research Foundation Centre
Saturday, 11 April, 2020Close Article
As the COVID-19 crisis unfolds, the economic implications are deepening. Disturbing reports of rising unemployment have sadly become commonplace in recent weeks.
A recurring observation by economists and officials is that the COVID-19 crisis has different economic implications than the global financial crisis (GFC). But what does that really mean?
As many of us know, the GFC began with the collapse of the US housing market. As the crisis escalated, households attempted to bring down their own levels of debt. This decline in household spending saw US economic activity grind to a halt as demand for goods and overall spending by the community sharply declined. Remember: one person’s spending is another’s income.
What started as a ripple ultimately turned into a tsunami that rolled across the entire globe.
We are facing another global economic shock spurred by COVID-19 – but the nature of this crisis differs from the GFC in two important areas.
First, the global economy is absorbing this shock from a less than robust base because many countries and households are still recovering from the GFC hit in 2007-08. That includes Australia as evidenced through the country’s persistent underemployment, job insecurity, rising wealth inequality and stagnant household consumption. More startling is that many countries within the Eurozone, including in Greece, Spain, Portugal and Italy, have not recovered from the GFC at all.
The second point of difference is that, through COVID-19, the global economy is feeling the combined effects of shocks to both supply and demand. By contrast, the GFC was primarily a ‘demand’ shock. Households and industry pulled back on consumption, and the economy suffered as a result.
Under COVID-19, demand for some goods is thriving to the point where supply cannot keep pace – think medical supplies and basic household items (toilet paper, cleaning products, pasta, etc.). Compounding this supply shock is that production worldwide has slowed significantly as a result of lock-downs of whole regions and countries – the World Trade Organisation has estimated that global trade flows will contract by 32%. (Source)
Unsurprisingly, economic uncertainty means that most people are also holding back their spending on ‘non-essential’ items until we are in safer waters. So, on the flipside of the supply shock, we are facing a reduction in demand for many goods and services, and that demand is what keeps the economy strong. Notably, history tells us that austerity does not work as a response – failing both during the Great Depression and in the aftermath of the GFC. While an inclination to sharply pull in our belts is understandable, it spells a potential increase in the duration and intensity of economic pain.
The swing of the pendulum between these supply and demand shocks needs to be balanced as quickly as possible to recalibrate the continuum and minimise the economic hit. That is what governments are working feverishly to address. The challenge is to fill the gap in aggregate spending and generate confidence to encourage broader, more sustained economic activity.
Our saving grace will be for the Federal Government to spend, and spend big for a prolonged period.
The Federal Government’s recent stimulus packages are a strong step in that direction, but will it be enough? The Rudd government injected around $40 billion in its initial response to the GFC. Given the current state of the Australian economy – with 50% of Australian businesses already reporting adverse impacts during March (Source) – a direct fiscal response is imperative, and that is what we are seeing, including this week’s welcome instalment of a $130 billion wage subsidy.
In designing and implementing the stimulus, a first priority has been a sugar hit through large cash injections to households and tax relief for businesses. Although both are helpful, such measures will only be effective if these dollars are channelled back into the economy through spending rather than pocketed to safeguard against an uncertain future. Our economy will only thrive when firms are hiring staff and investing in new assets. But hiring and buying will not occur without direct, sustained cash flow support to households over the longer term, as it is household demand for goods and services that underpins strong economic activity.
Admittedly, we are only at the start of this economic crisis, and the playbook is unwritten. Balancing the budget as the prevailing mantra has been parked for now as the Government throws as much as possible toward keeping the economy moving.
Yes, the path ahead is unknown. One certainty is that the effects of prolonged lock-downs will continue to reverberate across every home and business for months – and possibly years – to come. This recast future compels governments and indeed all sectors to rethink their approaches to sustainable economic management and growth.
George Pantelopoulos, Researcher, HRF Centre
11 April 2020
Monday, 18 November, 2019Close Article
Australia is on track for substantial population growth in the coming decades. How much of that growth will be seen by Greater Newcastle and the Hunter region?
The country will add 19 million people by 2056, a 75 per cent increase in the population forecast by the Australian Bureau of Statistics. Current trends and current policy will turn the major capital cities into megacities, says the Regional Australia Institute (RAI) in their recently released, National Population Plan for Regional Australia.
There are options, though, according to the RAI’s co-CEO Liz Ritchie. She will be the guest speaker sharing results of RAI’s research at the HRF Centre’s Hunter Economic breakfast on 15 November.
Under the ‘business as usual’ scenario, the RAI estimates that an additional 270,000 people will call Greater Newcastle home by 2056. This figure is in line with the growth forecast seen in the NSW government’s Greater Newcastle Metropolitan Plan.
What is the ideal size for the city and the region? What if Greater Newcastle became home to two-million people - one scenario modelled in the RAI’s report?
The RAI’s national study examined alternative patterns of population growth in Sydney and NSW in terms of three scenarios:
- ‘Business as usual’ – a continuation of current policies and trends;
- Growth concentrated not just in Sydney but also in Greater Newcastle, Shoalhaven and Wollongong; and
- Growth dispersed across the regional centres of Greater Newcastle, Wollongong, Shoalhaven, Canberra, Port Macquarie-Hastings, Tamworth Regional, and Wagga Wagga.
Under the RAI’s business-as-usual base case, commute distances in outer Sydney – a proxy measure for urban congestion – will increase by about 60 per cent by 2056.
Those figures would rise by just 15 per cent under the ‘alternative distributed’ population scenario (option 2 above), where growth was distributed to Greater Newcastle, Wollongong and the Shoalhaven.
A compelling vision for a single economic powerhouse region – incorporating Wollongong, Sydney and Newcastle – is offered in the Committee for Sydney’s 2018 Sandstone Megaregion report. The report recommends a network of rail connections coupled with a coherent strategy that promotes complementary economic roles for each of the centres.
There is no significant economic penalty for such strategies that distribute population growth, according to the RAI analysis. Only small differences are forecast in the unemployment rate, income and house prices across the two alternative scenarios. However, policies to maximise education and employment opportunities in regions would be needed, the report explains.
That is due to a chicken-and-egg question in relation to population growth in a city or region. Which comes first, the higher population – which can provide a skilled workforce - or the jobs to attract people? Either way, education and training must assure that employees are suited to future market needs and modes of working.
Population growth was addressed in the recent Smaller & Smarter Cities: International Symposium, held in Newcastle in October. This second annual symposium was organisedby the HRF Centre with lead partners - the City of Newcastle, Hunter and Central Coast Development Corporation, Hunter Water and AECOM.
Regional development expert, the University of South Australia’s Professor Andrew Beer, shed light on the drivers of economic growth, based on research for the RAI. He found that economic diversification succeeded where it occurred within a region’s general areas of specialisation. For example, underlying strengths in steelmaking have enabled growth in Whyalla, South Australia, he noted. This success in specialisation was also highlighted in examples provided by Dr Stefan Hajkowicz, a specialist in megatrends and Director of CSIRO’s Data61.
In a symposium keynote, Hajkowicz described megatrends related to health, business, technology, and climate. He related a tale of two US cities – Pittsburgh and Detroit – that had very different outcomes in transitioning their economies from heavy industry bases.
Pittsburgh made what is recognised as a successful transition. Pittsburgh was supported by government programs and internal initiatives to shift from manufacturing and selling steel to selling steel know-how. Over a 20-year period, the city attracted two academic and eight corporate centres for steel-related research.
Detroit appeared to have no coherent Plan B beyond car manufacturing. Changing markets and international competition led to huge job losses. The City of Detroit filed for bankruptcy with a $US24 billion debt. Recovery of Detroit’s economy, now beginning, will be based in reinvention, Hajkowicz argued.
Areas of strength for the Hunter were identified by symposium participants. The list includes the natural environment, infrastructure, energy, technology, medical and health research, education and advanced manufacturing. In these areas, job clusters could stimulate and support the population growth that the RAI says is possible. Steps toward such growth or to pursue alternatives,the experts and international examples suggest, can be realised through collaboration and vision - the HRF Centre’s theme for 2019.
This opinion piece was published in the Newcastle Herald on 9 November, 2019.
Thursday, 3 October, 2019Close Article
Small businesses aren’t just decoration - they’re essential to creating a thriving city.
What makes a city great? We don’t fully know all the ingredients, and assembling them together in a way that makes the urban environment buzz is an inexact art.
But we do know some of the things we can’t do without.
Coffee to start the day. Hairdressers. Pharmacists. That cute little bespoke clothing shop. Quirky new restaurants. Second hand bookshops. Novelties and necessities, made available by people who are prepared to put their own money, their own effort and their own ideas on the line.
These, and so many more things, are some of the tangible benefits that a vibrant small business sector provides us with.
It’s something that big corporations aren’t going to do. Ever been into a Coles, a Woolworths, a Bunnings, or any other large-scale retailer and felt that you were just part of an increasingly commoditised business model?
There are other, less obvious, functions that small firms also perform for a city. Jobs. Wealth creation. A spirit of entrepreneurialism. New ideas. The sense of ’giving it a go’. They even create the next generation of successful big businesses. Without these, small cities have little vibrancy and little hope of a better future.
Our small and medium-sized enterprise (SME) businesses are an important part of any successful local economy. Newcastle has a long and proud history of great local firms that have gone on to become leading national brands.
Yet there are many things that most of us don’t realise about SMEs. They may be small, but collectively they carry significant weight. More than 97 per cent of businesses in Australia are small or medium sized. In fact, the most common type of business is one that employs very few, if any, people besides the owner(s).
A surprisingly large number are also based out of peoples’ homes. Most of them make only modest amounts of money. The typical business turns over less than $200,000 a year, and profits are even smaller again. They have short life spans and only a handful last more than 10-15 years. Success is rarely guaranteed, and failure an ever-present threat.
Many of these businesses are surprisingly fragile. It takes clever policy to encourage them, and only a few thoughtless government decisions to destroy many entrepreneurial ventures.
What do we need to do to make this work?
First of all, we need to avoid over-relying on the ’white knight syndrome‘ - where bringing in one or two large companies is seen as the solution to all of a region’s economic uncertainties. Cities can’t base themselves, or be anchored, on just a handful of big corporations. Such enterprises are important, but these solutions make us dangerously over-reliant on introducing big businesses whose primary loyalties are rarely to the local town, and who will leave once the cost-benefit equation shifts against the local community.
We also need to regulate our local businesses carefully and cleverly. Many local governments, for example, have encouraged a thriving micro-business and self-employment culture by making it easy to operate a business from home. They’ve made sure that their zoning and planning rules are easy to understand, reliable and stable, backed up by decision-making processes that are prompt and predictable.
Policy makers in smart cities also recognise that new innovative businesses aren’t just found in the technology sector. Whilst the latest app-based business may grab the most media profile, they know that most small businesses are found in much less glamorous, but equally important, fields. They also ensure that there are advisory support services available to all of these SMEs.
We need to constantly look at the latest tools being used elsewhere to encourage SMEs, and be prepared to adopt them quickly if they have shown their worth. Business incubators, shared workstations, free access to business start-up advice, mentoring and help to grow are all innovative tools local regions around the world have used.
In short, there’s a world of difference between communities that regard local businesses as something to be nurtured and valued, and those cities that treat SMEs as a nuisance that must be tolerated at best, regulated at all times, and charged the highest possible fees.
Finally, there’s the invisible but crucially important issue of attitudes towards entrepreneurs. Do our community and government leaders celebrate our local small businesses in their words and actions? Do we foster a conducive climate that encourages people to take the risks and try their hand at being their own boss?
Building a successful, vibrant city that provides plenty of jobs, great retail and customer experiences, and creates a new generation of entrepreneurs isn’t easy. But if we don’t try, we’re all going to be much poorer.
Dr Michael Schaper is CEO of the Canberra Business Chamber and former deputy chairman of the Australian Competition & Consumer Commission. He is hosting a panel discussion - Can SMEs save small cities? - at the Smaller & Smarter Cities International Symposium in Newcastle on 10 October. This opinion piece was published in the Newcastle Herald on Saturday, 5 October 2019