SMH - Rann's vision shows the way in economic renewal

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#1 Post by **Ben** » Tue May 31, 2011 1:38 pm

Rann's vision shows the way in economic renewal

Gareth Hutchens

May 28, 2011

The image of the entangled bank in the last passage of Charles Darwin's The Origin of Species is impossible to forget.

Birds singing in bushes, insects flitting about, worms crawling through the damp earth.

And it is striking how the language Darwin uses to describe the struggle for life fits so naturally with economics - "growth" and "reproduction" and "adaptability".

Advertisement: Story continues below Reserve Bank officials have been talking recently about how our economy is changing - why huge chunks of resources are being reallocated from some parts of the economy (manufacturing and tourism) to others (mining).

As an assistant governor at the Reserve Bank, Dr Philip Lowe, has pointed out, one reason for the change is that workers and businesses are adapting to changes in "relative prices" - the price of one thing compared with another.

The combination of rising global commodity prices and the high level of the exchange rate has encouraged large increases in mining investment. Over the last year, mining sector investment accounted for nearly 20 per cent of total investment in Australia (including both the public and private sectors). It is expected to increase by more than 50 per cent in 2011-12, to account for over a quarter of all investment spending next financial year.

That level of investment is expected to have a massive effect on the structure of the economy.

But that is not necessarily a bad thing. As Dr Lowe has said, "structural change" is something that is occurring all the time. Economies are always evolving.

Those that can adapt to changing conditions are likelier to survive and grow. Those that cannot are likelier to fossilise.

It was partly for that reason the South Australian Premier, Mike Rann, was in Sydney this week as part of an open-for-business pitch to investors on behalf of his state.

Elected to office nearly a decade ago, Rann has seen the number of mines in South Australia quadruple from four to 16. He has unlocked the giant Woomera area (which is bigger than England) to mining, and he is now anticipating a "boom" in the mining industry - already his state's largest exporter - with 30 new projects in the pipeline. He is consciously comparing his state to the Western Australia of 25 years ago.

But he is also talking about plans to redevelop old manufacturing sites in Adelaide. He wants to turn a Clipsal factory and its surrounds into a "green urban village" to house 3500 people, with space for business and retail.

He also wants the old Mitsubishi Motors site at Tonsley Park (which employed about 1700 workers when it was shut in 2008) to become a clean-tech hub and "magnet" for innovation and investment in renewable technologies.

To pique investor interest, Rann has been talking up his state's renewable energy credentials.

By the end of 2009 South Australia had more than 90 per cent of a total $455 million invested in geothermal projects nationally; by the end of this year 20 per cent of the state's power will come from renewable sources; the state generates 15 per cent of Australia's residential grid-connected solar power; and it has more wind power than the rest of the country combined, with just over 50 per cent of total investment in wind power technology.

That does not sound bad.

Why doesn't NSW have a renewable energy re´sume´ like that (particularly when it comes to wind)? Rann says: "One of the reasons that people [came] to South Australia to invest in wind power and other areas is not because there was particularly more wind … it's because we made it easier for them. We don't have that not-in-my-backyard syndrome which has basically caused problems for the wind industry in NSW and Victoria. We were hungry for it."

Rann said he expected the Tonsley Park site to attract $1 billion worth of investment over the next 15 years, with plans to employ 8600 workers by 2026.

As part of the redevelopment, a $125 million Sustainable Industries Education Centre will be built. In partnership with TAFE SA, it will house more than 8000 students and 210 teaching staff every year. Flinders University wants to get involved.

The plan is for the site to become a "clean-tech industry zone" that drives economic development in the region.

Rann said he had recently been to China, where he promoted the idea, and he'll soon leave for India, and Europe later in the year, where he will do the same thing.

A study was completed last year by Macquarie Capital, WorleyParsons and Baker & McKenzie to see if an Eyre Peninsula wind farm could provide 2000 megawatts of power to the eastern states.

Rann said he wanted South Australia to create so much energy from renewable sources that it could help other states meet their renewable energy targets.

The state has form when it comes to building dedicated "technology parks" and things like the green urban village.

In 1990 a futuristic planned community, called the Multi-Function Polis, was supposed to be built in northern Adelaide, with help from Japanese investors.

The idea copped such a thrashing that no investor wanted to touch it, and the federal government withdrew all funding in 1996.

The then South Australian premier, John Olsen, killed the thing in 1998. More than $100 million was lost.

But if the Rann government pulls off the Tonsley Park redevelopment, South Australia may one day have a "competitive advantage" in renewable technologies and energy production - with a bit of effort, they could have economies of scale in high-quality goods that can be sold for a high price.

Rather than relying on the sale of primary goods and raw materials (in which they would have a ''comparative advantage''), they will have created a competitive advantage for themselves.

On the grave of a dying industry, a nascent industry will rise.

It is a great idea in principle. Adapt, reproduce, and grow.

Read more: http://www.smh.com.au/business/ranns-vi ... z1NtqNc13b

#2 Post by **UrbanSG** » Tue May 31, 2011 2:07 pm

I've also noticed frequent advertising for the SA Biz website on The Australian website lately:

http://www.southaustralia.biz/Investing ... t-Now.aspx

The new video posted on this site whilst a bit spin orientated is a good idea and promotes a positive image for SA which is very important when it comes to confidence and investment.

Nathan · #3 Post by **Nathan** » Tue May 31, 2011 2:22 pm

Good to see SA Biz investing in some high quality stock photography too:

Now, back on topic...

Waewick · #4 Post by **Waewick** » Thu Jul 12, 2012 3:02 pm

http://www.adelaidenow.com.au/business/ ... 6424381264

Hi Mike!

Huge jump in South Australia's unemployment rate

dsriggs · #5 Post by **dsriggs** » Thu Jul 12, 2012 8:14 pm

In trend terms, where seasonal factors are stripped off, the state's jobless rate was up 0.1 per cent to 5.7 per cent in June.

OH THE HUMANITY!!

Waewick · #6 Post by **Waewick** » Fri Jul 13, 2012 9:43 am

tell that the people who are unemployed.

It's liike Juliars reposnse that we are "better off" than other countries.

worst response ever.

Nort · #7 Post by **Nort** » Fri Jul 13, 2012 12:13 pm

Waewick wrote:Juliar

Oh, you're one of them.

Waewick · #8 Post by **Waewick** » Fri Jul 13, 2012 1:09 pm

no seriously, that was a typo

funnily enough, what craps me up about our current pollies is the pure level of hatred out there for them on both sides of the party.

metro · #9 Post by **metro** » Fri Jul 13, 2012 1:33 pm

I remember this one: "working families in Australia have never been better off" - then Prime Minister, John Howard, 2007

a classic out-of-touch line from pollies.

Waewick · #10 Post by **Waewick** » Mon Jul 23, 2012 8:57 am

http://www.adelaidenow.com.au/business/ ... 6432292897

SOUTH Australia is the only state without a stand-out economic strength, a key quarterly economic report shows.

CommSec's State of the States report, released today, ranks SA alongside New South Wales as the worst performing economies in mainland Australia.

There is another article stating the "mining boom" has 2 years left to run

It really does highlight that SA needs to look at ways of modernising it's economy or realise we are reliant on cyclical manufaucturing and agricultural endevours and re-focus that way.

claybro · #11 Post by **claybro** » Mon Jul 23, 2012 9:06 pm

metro wrote:I remember this one: "working families in Australia have never been better off" - then Prime Minister, John Howard, 2007

a classic out-of-touch line from pollies.

.
I am a working family, and if I remember rightly, things were better off back then- probably the best ever....until Kevin07 and then Juliar got hold of us all!

metro · #12 Post by **metro** » Mon Jul 23, 2012 10:08 pm

claybro wrote:until Kevin07 and then Juliar got hold of us all!

yeah so Kevin07 and Juliar created the Global Financial Crisis and the European Debt Crisis?

claybro · #13 Post by **claybro** » Mon Jul 23, 2012 10:35 pm

No, but the pair of them have spent tens of BILLIONS on useless non economically viable projects instead of better infastructure and handed out cash for people to buy flat screen TV's in response.It is only the mines that keep us afloat. At least Jerry Harvey was happy with the result.

jk1237 · #14 Post by **jk1237** » Mon Jul 23, 2012 10:45 pm

claybro wrote:No, but the pair of them have spent tens of BILLIONS on useless non economically viable projects instead of better infastructure and handed out cash for people to buy flat screen TV's in response.It is only the mines that keep us afloat. At least Jerry Harvey was happy with the result.

oh my god

dumb posts attacking the govt in power get sooooo cringeworthy. I'm not saying its just the pro-liberal nut jobs. When liberal get into power the same thing will happen in reverse

rev · #15 Post by **rev** » Tue Jul 24, 2012 4:24 am

claybro wrote:No, but the pair of them have spent tens of BILLIONS on useless non economically viable projects instead of better infastructure and handed out cash for people to buy flat screen TV's in response.It is only the mines that keep us afloat. At least Jerry Harvey was happy with the result.

Kevin Rudd actually did a pretty decent job of things.
Julia Gillard is the screw up and liar. And for that, Labor will be punished at the next elections, even if Rudd returns as leader before then. The damage is done.

You say things were better back then, when Howard was in power.
Didn't the Howard government give out free cash as well?
Didn't he give out baby bonuses, which the feral bogans took as an invitation to root and pop out more kids, so they can have some free money from Howard so they can blow it on pokies, smokes, and beer?

How come you don't have a problem with Howards free money schemes?

Do you know why things "seemed" to be so good under Howard? Because of the mining boom which was directly related to China's and India's growth. Howard might have claimed his government was responsible for Australia's growth during his time in power, but the reality is different.
Take away the growth from the mining boom which was only possible because of demand from China and India, and what exactly would have driven the Australian economy?

Howard gave us the GST. Gillard has given us the carbon tax.
Both of them can go to hell hand in hand.

Neither Howard, Rudd & Gillard are not responsible for the global economic conditions which have both benefited Australia, and have been and will be detrimental to Australia.