Economic diversity and Australia's path to net zero

Fossil fuel-exposed regions will need to get creative in sustaining their populations and economies as Australia transitions from traditional energy sources.

The Centre for Policy Development Making Our Way: Adaptive capacity and climate transition in Australia’s regional economies report says identifying the implications of the net zero transition for workers in Australia’s fossil fuel-exposed regions is a first step, but the transition will affect entire regions, not just workers.

“These regions contain fossil fuel workers, but also large groups of people whose industries depend on the income brought to the region by the fossil fuel sector and its workers, for example through education, retail, healthcare and public administration,” the report says.

“The new national Net Zero Authority offers a unique opportunity for a coordinated approach to a just transition for Australia’s fossil fuel-exposed regions. A successful transition depends on the overall resilience and adaptability of these affected communities.”

The report says that it is not as simple as “identifying a single anchor industry to replace fossil-fuel intensive activities, but requires investing in the adaptive capacity of these affected regions — from economic diversity to social capital. Doing so will help local communities, state governments and the Commonwealth identify the types of targeted investments to help communities thrive.”

Coal and natural gas production hubs in Australia will need high levels of innovation and entrepreneurship to provide a strong base for regional economic diversification. Population decline, as workers emigrate from a region, will impact the skills and income levels of the remaining population.

“The need for different types of investments should be calibrated as time passes and as Australia undergoes its net zero transition,” the report notes.

AICD Board Statement

As the board of Australia’s leading governance institute, we support effective national governance. Having respectful and trusted relationships with First Nations peoples is widely accepted as a core element of effective governance in Australia.

Supporting the legitimate aspirations of First Nations peoples to have a direct voice in the laws and policies that impact them is a concrete demonstration of our nation’s commitment to reconciliation. That is why the AICD board supports a constitutionally enshrined Voice to Parliament.

The upcoming referendum offers an opportunity to take an important step forward to strengthen our national system of governance. We will continue to encourage everyone to engage in respectful conversations as we seek to come together as a nation in our understanding of the diverse perspectives on this important issue. We respect that some stakeholders, including some of our members and employees, will hold a different view.

Each of us must make our own decisions independently at the ballot box, as is our democratic right. Irrespective of the outcome of the referendum, the AICD will continue to embrace the spirit of reconciliation and walk with First Nations Australians in a movement towards a better future

Cyber Transformers

Being proactive in implementing cybersecurity is key to a positive digital transformation strategy, according to recent Accenture analysis.

Research from Accenture — State of Cybersecurity Resilience 2023 — reveals that organisations that closely align their cybersecurity programs to business objectives are 18 per cent more likely to increase their ability to drive revenue growth, increase market share and improve customer satisfaction, trust and employee productivity. Successful cyber transformers are embedding crucial cybersecurity actions into their digital transformations, says the report.

However, too many organisations (18 per cent) still deploy security controls after they have made digital changes to the business — and then only if vulnerabilities are detected. Too little, too late.

Three actions to accelerate transformation:

1. Require cybersecurity controls before all new solutions are deployed
2. Apply cybersecurity incrementally as each digital transformation milestone is achieved
3. Assign a cybersecurity representative to the core transformation team and a point person to orchestrate cybersecurity across all transformation initiatives.

Sold on AI

About 75 per cent of the value that generative AI use cases could deliver falls across four areas — customer operations, marketing and sales, software engineering and R&D.

McKinsey & Company research — The economic potential of generative AI: The next productivity frontier — says of 63 use cases analysed, generative AI has the potential to generate US$2.6–$4.4 trillion in value across industries.

Its precise impact will depend on a variety of factors.

AI could contribute roughly US$310b in additional value for the retail industry (including vehicle dealerships) by boosting performance in functions such as marketing and customer interactions.

By comparison, the bulk of potential value in high-tech comes from generative AI’s ability to increase the speed and efficiency of software development.

Worker Entitlement Reforms

Workplace legislation changes will add more complexity to the Australian wage system, according to Ai Group CEO Innes Willox.

The federal government’s second round of workplace reforms in the Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023 was passed in June and contains reforms on:

• Enhanced migrant worker protection
• Expansion of the circumstances in which employees can authorise employers to make a valid deduction from payments
• New minimum superannuation contributions entitlement under National Employment Standards
• Stronger and more flexible access to unpaid parental leave under the Fair Work Act 2009.

According to MinterEllison, “These changes are positive for employees, but add another layer to Australia’s complex system of employee entitlements.”

Government should note the “significant burden it’s imposing on employers through waves of changes... and adopt a more reasonable approach to affording employers time to implement the changes,” says Willox.

Scammer Scourge

The new National Anti-Scam Centre (NASC) will coordinate an investment scam fusion cell to combat what has become a growing problem.

Investment scams cost Australians more than $1.5 billion last year. The fusion cell will be led by the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission, and includes representatives from the banks, telecommunications industry and digital platforms.

It will be the first fusion cell coordinated by the new National Anti-Scam Centre (NASC), which was launched on 1 July, and will run initially for six months to identify methods for disrupting investment scams to minimise scam losses.

For support to help with emotional distress, anxiety or depression about investment scams, contact Lifeline on 13 11 14 or lifeline.org.au, or Beyond Blue on 1300 22 4636 or beyondblue.org.au

King’s Birthday Honours List 2023

AICD congratulates these members who were recognised in the 2023 King’s Birthday Honours.

ACT

Ashley Howell CSC GAICD
Belinda Moss OAM FAICD
Heidi Prowse OAM MAICD
Group Capt Catherine Wallis CSM GAICD

NSW

Vivienne Allanson OAM GAICD
Dr Tony Badrick AM GAICD
Fiona Balfour AM FAICD
Suzanne Becker AM MAICD
Prof Louisa Degenhardt AO MAICD
Robert Fitzgerald OAM MAICD
Graham Ford AO FAICD
Sunita Gloster AM GAICD
Marina Go AM MAICD
Warren Gould AM GAICD
Noel Graham AM FAICD
Prof Michael Kidd AO FAICD
Stephen Leahy OAM MAICD
Anne Loveridge AM GAICD
Andrew Macdonald AFSM GAICD
Robert Millner AO FAICD
Fiona Robertson AM FAICD
Dr Diana Robinson AM MAICD
Gary Smith AM FAICD
Jane Spring AM FAICD
Prof Carla Treloar AM GAICD
Edwin Tucker AM FAICD
Prof Donald Wilson AO AAICD
Amanda Wilson AM GAICD

QLD

John Allpass AM FAICDLife
Theodore Bacalakis OAM FAICD
Brett Clark AM GAICD
Allan Davies OAM GAICD
Dr Genevieve Goulding AM FAICD
Penelope Hamilton OAM GAICD
Malcolm Letts PSM GAICD
Salvatore Petroccitto OAM GAICD
Julie Russell OAM GAICD
Dushyanthi Thangiah OAM GAICD

TAS

Michelle Ewington OAM GAICD
Michael Lowe CDS MAICD

SA

Jane Jeffreys AM FAICD
Assoc Prof Sharon Liberali AO AAICD
Michele Smith OAM MAICD

VIC

Miriam Bass OAM GAICD
Robyn Batten AM FAICD
Jane Bell AM FAICD
Timothy Connolly AM MAICD
Patricia Cross AM FAICDLife
Patricia Crossin AM MAICD
Dr Margaret Grigg OAM GAICD
Kathleen Grigg AM FAICD
Prof Jane Gunn AO MAICD
Michaela Healey AM MAICD
Kate Jenkins AO GAICD
Lisa Kennett OAM GAICD
Quentin Kilian OAM GAICD
Peter Lewis OAM FAICD
Stephen Marks OAM FAICD
Prof Danielle Mazza AM GAICD
Jane McAloon AM FAICD
Prof Grant McArthur AO MAICD
Hon Patrick McNamara AM MAICD
Shane Neaves OAM GAICD
Dr David Newman AM FAICD
Anne-Marie O’Loghlin AM GAICD
Kris Peach AM GAICD
Prof Alice Pebay AM AAICD
Prof Anna Peeters AM GAICD
Ruth Picker AM MAICD
Jillian Riseley AM GAICD
Ajay Satyan PSM MAICD
Dayle Stevens OAM GAICD
Jayne Sunbird OAM MAICD
Sharon Turner ACM MAICD
John Turner OAM FAICD

WA

Dr Rosanna Capolingua AM FAICD
Karen Chappel AM GAICD
Terry Hill AM FAICD
Kelly Howlett AM GAICD
Elizabeth MacLeod PSM GAICD
Miriam Stanborough AM GAICD
Pia Turcinov AM GAICD

This article first appeared under the headline 'Economic Diversity and the Path to Net Zero' in the August 2023 issue of Company Director magazine.