As the host state for this year’s AICD Conference ‘Catch the Future’, Company Director salutes Queensland, its forward-looking policies, its industry and its lifestyle.
Beattie is changing the Sunshine State to the Smart State. To do this he will need all the determination and political support he can muster. In this interview with John Arbouw, Peter Beattie outlines his vision.
In the US television drama West Wing, US Democratic President Josiah Bartlett (played by Martin Sheen) exudes a country-lawyer charisma that masks his brilliance, his deep conviction and devotion to what he believes is right for the country. The description could easily fit Queensland Premier Peter Beattie, who, following his convincing election win, is busy convincing aspirational voters on the Gold Coast and in Brisbane as well as National Party faithful in the bush that the Sunshine State can also become the Smart State. The transition will require smart politics, apart from embracing new technology. The economic cycle is on Beattie's side with Queenslanders on the coast basking in the national property boom and the rural economy benefiting from a low Australian dollar.
Historically, agricultural commodities such as beef, wool and grains have underpinned Queensland's economy. Sugar cane, tropical and citrus fruits, dairy products, vegetables, cotton, livestock and tobacco have also grown in importance. With the mining boom and the availability of cheap coal-generated electricity, mineral processing and mining-related manufacturing helped diversify the economy. Over the past few years, Queensland has made a concerted effort to position itself in information and telecommunications sectors.
A strong economy certainly helps, but leadership and vision is needed to leverage an economy for future growth. What is the Queensland's Premier "deep conviction and devotion"? "My Government has vigorously driven strategies to establish Queensland as Australia's Smart State," says Beattie. "We have to do this if we are to create the new jobs of the 21st century for our children and retain our high standard of living.
"I am determined to also ensure Queensland has a first class education system and maintains world class health services. I want every Queensland child to have the best possible opportunity to participate in our Smart State future and I want every family to have ready access to high quality medical care when they need it.
"Over and above that, our aim is to develop Queensland as an Asia-Pacific hub for the new industries of the 21st century - industries such as biotechnology, information technology, nanotechnology and communication technology. Queensland leads Australia in encouraging the growth of these new-age industries and has invested heavily in research and development in these areas." The Government has had some recent successes in attracting talent, with the Queensland Institute of Medical Research and the new $100 million Institute for Molecular Bioscience housing more than 1500 scientists. A recent audit of Queensland's biotechnology industry by Ernst & Young shows job numbers, research and revenue all on the rise. There's been a 67 percent overall growth in employment in the industry since 1999.
It is also crucial to apply Smart State solutions in traditional industries, such as mining, manufacturing, construction and farming, to ensure that they remain ultra-competitive in the world marketplace. But these strategies will not work unless a highly educated and skilled workforce develops. Beattie says that's why his Government is radically modernising the education and training systems to make them more relevant to the needs of young job seekers in the new millennium. "We will give Queenslanders the education and training that will enable them to reach their full potential so they are ready for a lifetime of learning and earning," he says. "This climate of innovation, education and training, coupled with our low State taxes, high standard of living, great lifestyle and sunny climate has resulted in the Government attracting many existing hi-tech companies to establish their Asia-Pacific headquarters in Queensland - companies such as Boeing, Red Hat, GE Medical Systems, Sequenom and Mincom.
"Our economic growth leads Australia," says Beattie, "and we are perfectly placed to do business with the rest of Asia, with first-class communication systems and air links, and a time difference of two hours or less with most major cities."
Individual leadership and vision can only do so much. Government and politics is also driven by the competence or incompetence of the ministerial team. Beattie has recognised that accountability is a key to success and has implemented procedures unique to state politics. "A prime example is the way Question Time operated under the previous coalition government compared to my own. Ministers often refused to answer questions and would sometimes filibuster for 15-20 minutes without giving a proper answer.
"We reformed Question Time so ministers can't speak for longer than three minutes and I insist that my ministers answer the question asked. This is typical of the way in which we have made ourselves more accountable to Parliament.
"We have also made ourselves more available and more accountable to the electorate through 47 Community Cabinet meetings. These are held throughout Queensland about once a month. I require that every member of my Cabinet and their directors-general must attend these meetings and be available to meet both formal and informal delegations.
"There is an open forum at every Community Cabinet where any member of the public can ask me a question on any topic that is important to them and anyone can walk in off the street and meet with a cabinet minister without an appointment.
"We have held Community Cabinet meetings in every geographic region of Queensland. More than 20,500 people have attended these meetings, there have been more than 4000 formal deputations and an estimated 3350 informal deputations.
"But if Parliament and ministers are becoming more accountable what about government businesses? Queensland has a mixed record in terms of the corporatisation of government-owned businesses. In the past, appointments to government-owned businesses was used as payback to loyal supporters. So what is the system that is in place at the moment for selecting candidates?
TThe Queensland Government superintends more than 20 government-owned corporations (GOCs), which operate in areas as diverse as energy, transport, funds management, gaming, fresh produce marketing and natural resources," says Beattie.
"GOC directors sit on a variety of public and private sector boards. This provides a high level of experience at the board level. In addition, the Government has been holding an annual forum for GOC directors.
"The second annual GOC directors forum was held on 12 and 13 November 2001, with more than 110 GOC directors and CEOs attending the two-day event. The forum allows an annual meeting of shareholding ministers, and departmental and GOC representatives, to discuss performance and corporate governance issues.
"Importantly, it also incorporates an expert education program on director roles and responsibilities which is presented by the Australian Institute of Company Directors." When Federal Treasurer Peter Costello patted NSW Treasurer Michael Egan on the head during a press conference outside Parliament House just before a meeting with State Treasurers, it symbolised what the states feel is the prevailing attitude of Canberra toward the states. Federal/state relations have never been ideal, but the fact that all states and territories are now Labor is not helping the situation. GST revenues to the states were supposed to alleviate some of the problems. It is not working to everyone's satisfaction.
"The Commonwealth and all State and Territory Governments signed the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations (IGA). The IGA details the revised Commonwealth-State financial arrangements that were part of national tax reform," says Beattie. "One issue agreed under the IGA is the arrangements for the return of GST collected by the Commonwealth to States and Territories, including agreement the Commonwealth will distribute GST revenue grants among the States and Territories in accordance with the Commonwealth Grants Commission's horizontal fiscal equalisation (HFE) principles.
"Queensland is a strong supporter of the HFE principle. It takes account of each state and territory's capacity to raise revenue and their relative cost advantages in providing services. As a result, I consider GST revenue is distributed in an equitable way.
"While the Government is generally satisfied with the current Commonwealth-state financial arrangements, there are areas in which Queensland has been disadvantaged.
"Under the IGA, the Commonwealth agreed to provide Budget Balancing Assistance (BBA) to ensure States would not be worse off during the transition period of the new tax arrangements. States receive BBA until their share of the GST revenue exceeds the budget position they would have had without tax reform.
"One of the main factors taken into account is the revenue forgone by the abolition under the IGA of a number of State taxes. States that had higher taxes are compensated for the higher revenue forgone.
"Queensland is disadvantaged because it is a low-taxing State. For example, other States receive BBA to compensate them for the abolition of Financial Institutions Duty (FID), but Queensland, which never levied FID, receives nothing.
"While Queensland receives marginally more than a per capita share of GST revenue through the HFE distribution, it receives less than a per capita share of BBA and also less than a per capita share of Commonwealth Specific Purpose Payments. "Overall, Queensland is estimated to receive 3.2 percent less than a per capita share of Commonwealth funding in 2001-02."
When John Olsen was Premier of South Australia he encouraged Motorola to set up shop in Adelaide. The details of what was offered by whom and why to encourage Motorola to come to South Australia became a political controversy that ended Olsen's career. The rivalry between states to attract investment particularly from overseas has enabled international corporations to play off one state against the other in a bidding war. Queensland has never been shy to encourage foreign investment.
"There will always be competition between regional governments for new major projects because these projects create a lot of new jobs and a lot of economic activity around them," Beattie says.
"But we have to be sensible about it and make sure any financial incentives result in a demonstrated net economic gain to the State and that flow-on benefits exceed the level of any assistance package offered to a particular firm.
"In seeking to attract investment to Queensland, the Government's strategy is to focus on those industries specifically identified as being of strategic importance to the State and those industries which might be attracted to the State due to Queensland's existing comparative advantages.
"For example, we've had great success in attracting major investment in aviation. Virgin Blue is headquartered in Brisbane, Qantas's new Australian Airline hub for international flights from Asia is being established in Cairns, Boeing's Australian HQ is here in Brisbane. They also have some operations at Amberley - all up about 700 jobs. Earthworks have started on stage one of a new Qantas maintenance facility in Brisbane and planning for stage two is underway. That's 500 new jobs."
As our photo shows, Beattie is also determined to expand the Queensland film industry, and has just come back from the US where he announced an expansion of the Gold Coast's Movie World film studio. His Government is providing an $8 million loan for the expansion but not everyone is happy.
"Some Opposition politicians have complained about the deal," says Beattie. "All I say to those whingers is that the $8 million Government loan will inject $640 million into the economy over the next three years. That's a good return for the taxpayer because the expansion is expected to generate 2500 new jobs.
"If we hadn't offered incentives those jobs would go to Canada or Mexico or Texas. They wouldn't be coming to Queensland.
"Queensland only engages in competition to secure global investments when the net economic benefit argument is strong and the new investment will act as a catalyst project in attracting other businesses to Queensland."
When he fought the latest Queensland election, his enemies, apart from the Opposition, were the diehards of the Queensland union movement who wanted control of the Queensland Labor Party. Beattie won the fight and the election but the issue will not go away. The Federal Labor party is currently experiencing problems with some of the unions in terms of their membership of the ALP. Has the ALP outgrown the union movement or has the union movement become prisoner to ambitions of the management that leads it?
"Let's get some perspective into this debate," he replies. "It is historical fact that the union movement played an important part in the formation of the ALP and continues to play an important role in the party.
"My Government has gone out of its way to engage the whole community, and that includes trade unions. We have delivered new, fair industrial laws that have given Queensland its most stable industrial climate ever. I repeat, ever.
"Queensland's new Industrial Relations Act 1999 and the subsequent amendments in the past 12 months have helped stabilise Queensland's industrial climate and helped foster increased investment and economic prosperity for the State.
"The year-on-year figures to November 2001 show that lost working days in Queensland were at a historical low. For every 1000 employees, only 39 working days were lost. This is significantly lower than the national average of 50.
"Queensland continues to have a significantly lower rate of lost working days in comparison to New South Wales and Victoria, directly reflecting our more stable industrial relations climate. Most importantly, of all working days lost in Queensland during the year 2001, at least two-thirds are attributed to workplaces under the federal jurisdiction such as coal mining.
"The union movement and the ALP will always have some differences but we also share many common views on the legitimate rights of workers and the constructive role trade unions can play in the community, the economy and the party."
While the Queensland economy is changing, much of it is still driven by small to medium-sized enterprises. A common complaint of SMEs is the red tape and bureaucracy they encounter in their dealings with government. So how big are the Beattie red tape scissors?
"Queensland has an excellent record in cutting through red tape and there is a lot more in the pipeline," he says. "During the past three years business licences have been rationalised, halving the total number of business licences and extending the terms of over 100 licences. That means less paperwork, time and cost to business to obtain licences.
"SmartLicence has also been expanded to incorporate local government licences, so that business now has ready access to information on the licensing requirements of all three tiers of government from one location.
"Our Red Tape Reduction Task Force has published Guidelines for Improving Service Delivery in Government Agencies and a pilot project implementing the Guidelines is underway within the Environmental Protection Agency.
"The Minister for State Development, Tom Barton, has recently extended the term of the Red Tape Reduction Task Force to help business in dealing with the bureaucracy.
"One of these is the Regulatory Communication Project which will introduce a regulatory communication system in Queensland to provide business and the community with advance notice of upcoming proposals to amend or develop regulations The system will be launched in the near future."
If Beattie does indeed share the characteristics of the fictional US President, what does he expect to have achieved when the next election rolls around?
"Queensland already has a well-educated and highly-skilled workforce that adds to our competitive edge and makes us a more attractive place for international corporations and investors.
"But we can do a lot more to improve our education system. As part of my Smart State vision we recently released a bold package of reforms and proposals, Queensland the Smart State - Education and Training Reforms for the Future. An element of this package is a proposal that all Queenslanders should be "learning or earning" until they are 16 or 17. In other words, they should be at school, undertaking training, working - or a combination of these.
"We are also making a huge investment in our schools' Information and Communication Technologies - spending an additional $23 million in 2002-03. This will rise in 2003-04 to $35 million - an investment that will continue on an annual basis. "These reforms will build the Queensland workforce of the future, sharpen the State's competitive edge, and make Queensland an even more desirable location for national and international corporations, and for investment"
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