Browse content similar to 20/02/2016. Check below for episodes and series from the same categories and more!
Line | From | To | |
---|---|---|---|
split on the decision. Those are the headlines, we will | :00:00. | :00:00. | |
have more at the top of the hour. Now, Talking Business. | :00:00. | :00:00. | |
It has always been at the heart of Australia's economy. | :00:07. | :00:09. | |
Ever since this country was founded more than 200 years ago, | :00:10. | :00:12. | |
Australians have been getting rich from it. | :00:13. | :00:13. | |
Either through farming, or by digging out what lies | :00:14. | :00:15. | |
But now, as demand for some of what Australia produces slows | :00:16. | :00:19. | |
down, what does this country do next? | :00:20. | :00:45. | |
Welcome to Talking Business, I am Karishma Vaswani, | :00:46. | :00:48. | |
This is a massive country - the world's sixth largest, | :00:49. | :00:53. | |
in fact - and I will be travelling through some parts of it to find out | :00:54. | :00:57. | |
how Australians are faring in the face of a global economic | :00:58. | :01:01. | |
First stop, mining country, where my colleague, Jon Donnison, | :01:02. | :01:07. | |
has been finding out for himself what happens to a community | :01:08. | :01:10. | |
Ground Zero for Australia's coal industry. | :01:11. | :01:26. | |
The state has some of the world's largest coal reserves, | :01:27. | :01:30. | |
and was at the heart of the country's mining boom. | :01:31. | :01:35. | |
It is a boom which maybe yet hasn't gone bust, | :01:36. | :01:37. | |
but which these days is certainly providing a lot less bang | :01:38. | :01:40. | |
Coal continues to be pulled out of the ground here in Queensland | :01:41. | :01:50. | |
But such has been the fall in the price of the product, | :01:51. | :01:57. | |
that many of the big mines are struggling to turn a profit. | :01:58. | :02:01. | |
And that hit mining communities like Moranbah hard. | :02:02. | :02:03. | |
Nearly everyone here is connected to the coal industry. | :02:04. | :02:10. | |
But wages have been cut, and jobs have been lost. | :02:11. | :02:13. | |
I am not quite sure where boom and bust originated from, | :02:14. | :02:17. | |
but it certainly cemented into the mining industry, | :02:18. | :02:30. | |
We do need to work towards sustainability | :02:31. | :02:33. | |
And Moranbah has definitely not seen that. | :02:34. | :02:36. | |
These houses don't look too flash, but during the boom, | :02:37. | :02:41. | |
when miners were flush with cash, this small non-descript town | :02:42. | :02:44. | |
remarkably had some of the most expensive real estate | :02:45. | :02:46. | |
But in the last few years, many people have left, | :02:47. | :02:49. | |
and property prices have dropped by as much as 70%. | :02:50. | :02:54. | |
The town is starting to struggle now because of that impact on the bottom | :02:55. | :02:58. | |
line, so you don't have the general money to spend around the town. | :02:59. | :03:01. | |
I am always concerned about my family and the community's | :03:02. | :03:04. | |
future, hoping it will come back, you will see a flattening | :03:05. | :03:07. | |
and a potential increase in demand, but there is all that worry. | :03:08. | :03:14. | |
Australia's coal reserves are not going to run out any time soon. | :03:15. | :03:20. | |
As you have seen, the resources sector is really taking a beating | :03:21. | :03:32. | |
from the end of the mining boom here, but agriculture has always | :03:33. | :03:36. | |
been an important part of Australia's economy. | :03:37. | :03:39. | |
I am at the third largest meat processing plant in the country, | :03:40. | :03:42. | |
and people here are betting on the growing fortunes | :03:43. | :03:46. | |
This isn't just any old job, it is a lifeline for Scott. | :03:47. | :03:56. | |
He spent 14 years of his life here, before leaving this job | :03:57. | :04:01. | |
When oil prices were high, his salary doubled. | :04:02. | :04:06. | |
But just before Christmas he lost that job, because oil prices | :04:07. | :04:12. | |
In the oil and gas industry I was promised a chance of moving up | :04:13. | :04:21. | |
and progressing in the company further, and then that went bust, | :04:22. | :04:24. | |
The way the company is going here now, I can see it is going to be | :04:25. | :04:29. | |
going very well in the future, so I am happy to have a job. | :04:30. | :04:32. | |
As Asia's middle classes get richer, more of them want what Australia | :04:33. | :04:36. | |
Australian beef exports to China hit a record of $655 million last year, | :04:37. | :04:45. | |
There is more than 50,000 head of cattle in this feed lot alone, | :04:46. | :04:52. | |
and almost half of the meat produced here ends up on plates across Asia. | :04:53. | :04:56. | |
These cows, for example, are destined for supermarkets | :04:57. | :04:58. | |
But it is China, farmers here tell me, where they have seen | :04:59. | :05:02. | |
the biggest demand in increase of orders and inquiries over | :05:03. | :05:05. | |
But it is not all blue skies and sunny days just yet. | :05:06. | :05:12. | |
Australia's beef sales are only worth about a third of the value | :05:13. | :05:15. | |
of what coal and iron ore bring to the economy. | :05:16. | :05:19. | |
The Government says betting on beef is a long-term strategy. | :05:20. | :05:26. | |
Some three billion people in the coming decade will be | :05:27. | :05:29. | |
You have got rapid rates of urbanisation and continued | :05:30. | :05:34. | |
That will lead to a greater demand for services like education | :05:35. | :05:42. | |
services, tourism services, health services. | :05:43. | :05:43. | |
It will lead to a greater demand for high quality agricultural | :05:44. | :05:46. | |
products, which Australia is very well-known for, | :05:47. | :05:48. | |
as well as higher calorie agricultural products, like beef. | :05:49. | :05:54. | |
Supplying Asia's middle classes with high quality agricultural | :05:55. | :05:56. | |
products is how Anne Storey sees her business going, | :05:57. | :05:59. | |
Australia, and businesses like ourselves particularly, | :06:00. | :06:08. | |
need to target carefully what part of the Asian market segment | :06:09. | :06:13. | |
we are trying to serve, because our cost base is high, | :06:14. | :06:17. | |
but we are prepared to put that effort and that work in delivering | :06:18. | :06:20. | |
a consistently high quality product to the customer every time | :06:21. | :06:23. | |
Australia is hitching its fortunes to Asia yet again. | :06:24. | :06:26. | |
First, coal and iron, now lettuce and beef. | :06:27. | :06:28. | |
But Asia is slowing down, and that could hurt farms | :06:29. | :06:33. | |
I am standing in front of Parliament House, | :06:34. | :06:44. | |
where the men and women who run this country sit down to tackle some | :06:45. | :06:48. | |
of the challenges facing its economy. | :06:49. | :06:49. | |
But first, a lighter look at some of those challenges, | :06:50. | :06:51. | |
with the BBC's Colm O'Regan, who has been taking some lessons | :06:52. | :07:01. | |
On this week's Talking Point, if Australia wants to concentrate | :07:02. | :07:04. | |
more on farming, then they have come to the right man. | :07:05. | :07:07. | |
I grew up on a farm - the land is in my bones, | :07:08. | :07:10. | |
I look forward to coming back to my natural habitat. | :07:11. | :07:13. | |
Now, unfortunately there wasn't really time for me to go back | :07:14. | :07:15. | |
all the way to my natural habitat, so instead I have come to a city | :07:16. | :07:19. | |
farm here at Airfield in Dundrum, in Dublin. | :07:20. | :07:21. | |
It exists to give lungs to the landscape and to teach | :07:22. | :07:26. | |
children that milk does not necessarily come from cartons. | :07:27. | :07:30. | |
What better metaphor for an economy trying to rebalance towards a more | :07:31. | :07:34. | |
agricultural means of earning money than a farm in the middle | :07:35. | :07:36. | |
We have been down this agricultural road already ourselves, | :07:37. | :07:48. | |
here in Ireland, there has been huge expansion in our farming industry. | :07:49. | :07:51. | |
Huge targets for growth in output for our farms. | :07:52. | :07:54. | |
There is a huge investment going on in agriculture businesses | :07:55. | :07:57. | |
around the country, where we have seen upwards of about one billion | :07:58. | :07:59. | |
euros being invested at industry level. | :08:00. | :08:01. | |
One of the big drivers for that was the end | :08:02. | :08:04. | |
You see, we can produce as much milk as we want. | :08:05. | :08:11. | |
We decided we would grow our milk output by 50%. | :08:12. | :08:13. | |
And I suppose we are beginning to see the fruits of that labour | :08:14. | :08:16. | |
now, with the lifting of quotas in April last year. | :08:17. | :08:20. | |
We are going to see about 300,000 extra cows being milked every year | :08:21. | :08:24. | |
in Ireland over the next 10-15 years, which is is a massive | :08:25. | :08:29. | |
in Ireland over the next 10-15 years, which is a massive | :08:30. | :08:32. | |
increase on the output we are doing at the moment. | :08:33. | :08:38. | |
Let us go and meet some milk producers. | :08:39. | :08:40. | |
You see, in Ireland now we are in the middle of a milk boom. | :08:41. | :08:43. | |
These Jersey cows behind me are in calf. | :08:44. | :08:45. | |
We don't need Silicon Valley, we have Milking Valley. | :08:46. | :08:49. | |
Ever since the recession back in 2008/9, agriculture, | :08:50. | :08:55. | |
I suppose, has been the driver of the Irish economy since that | :08:56. | :08:58. | |
Agriculture has been identified to have a great potential to drive | :08:59. | :09:01. | |
As it stands, it counts for about 12% of our merchandise export. | :09:02. | :09:09. | |
We export about 10 billion euros worth around the world, | :09:10. | :09:13. | |
and that has grown significantly over the last six years, | :09:14. | :09:15. | |
and there is a target there to grow that to about 19 billion euros | :09:16. | :09:19. | |
So, what can we say about the future about Australia's rebalancing | :09:20. | :09:26. | |
of its economy towards more friendly fellows like this? | :09:27. | :09:31. | |
I think for agro-business today you cannot ignore China - | :09:32. | :09:34. | |
after all, China has about 25% of the world's population, | :09:35. | :09:36. | |
and they are consuming more and more of the products we produce, | :09:37. | :09:39. | |
which are high quality premium end products. | :09:40. | :09:46. | |
Of course cows, like any industry, need inputs. | :09:47. | :09:48. | |
All I can say is I certainly would rather be here, | :09:49. | :09:52. | |
Some Irish takeaways there for Australia from the BBC's | :09:53. | :09:58. | |
If you want to catch more of his material, | :09:59. | :10:03. | |
What is it going to have to do to keep diversifying its growth | :10:04. | :10:14. | |
Joining me to answer some of those questions is Andrew Robb. | :10:15. | :10:22. | |
Tell me, what is Australia's strategy going forward, | :10:23. | :10:24. | |
now the mining boom is almost officially over? | :10:25. | :10:26. | |
We have been blessed for the last 12 years with a very long mining boom. | :10:27. | :10:30. | |
A lot of that has meant we have projects all over Australia | :10:31. | :10:34. | |
I mean, literally $400 billion worth of infrastructure in the oil and gas | :10:35. | :10:43. | |
That will deliver us returns for decades and decades to come. | :10:44. | :10:48. | |
We are selling a lot of those products now. | :10:49. | :10:51. | |
Sure, the price is down on them, but we are selling a hell of a lot | :10:52. | :10:55. | |
more than we had five years ago in the market place, | :10:56. | :10:57. | |
agricultural prices, the dollar is now 30% lower. | :10:58. | :10:59. | |
A whole swag of free trade agreements that we have negotiated. | :11:00. | :11:05. | |
Some which give us access that no-one else has got to places | :11:06. | :11:08. | |
like China, and these things, as well as tourism and education, | :11:09. | :11:14. | |
Services is the next horizon for Australia, | :11:15. | :11:19. | |
We are in a region which is exploding and needing our service. | :11:20. | :11:33. | |
We are in a region which is exploding and needing our services. | :11:34. | :11:36. | |
We are a first world country in a region of emerging countries. | :11:37. | :11:39. | |
We just happen to be there at the right time. | :11:40. | :11:41. | |
For the first time, really, in the right place, as well. | :11:42. | :11:44. | |
There is an ambition to become the food bowlof Asia, | :11:45. | :11:47. | |
There is an ambition to become the food bowl of Asia, | :11:48. | :11:49. | |
but Australia, my understanding is, only produces enough food to feed | :11:50. | :11:52. | |
That is not enough to feed neighbouring Indonesia, | :11:53. | :11:55. | |
If we pitch at the top 1 or 2%, and that is about all we could | :11:56. | :12:00. | |
supply, the top 1 or 2% of all of these emerging markets, | :12:01. | :12:03. | |
and even then we couldn't meet all that demand, | :12:04. | :12:05. | |
but if we get to that premium end we get a premium price which allows | :12:06. | :12:09. | |
us to invest heavily in innovation and remain competitive, | :12:10. | :12:12. | |
keep the quality up, so if we are looking to position | :12:13. | :12:16. | |
ourself, not just with agricultural products, but with our tourism | :12:17. | :12:19. | |
products, education products, with health products, | :12:20. | :12:24. | |
with many other services, if we pitch them at the very high | :12:25. | :12:27. | |
end, which is a big demand for that, we have got great markets. | :12:28. | :12:34. | |
As long as we aim for the top end, we will be in very good shape. | :12:35. | :12:38. | |
It is not an easy sell, frankly, to go from an economy that has been | :12:39. | :12:42. | |
so dependent on land and resources to one that is more focussed | :12:43. | :12:45. | |
on innovation and technology, but it is all part of | :12:46. | :12:47. | |
Prime Minister Malcolm Turnbull's new plan. | :12:48. | :12:49. | |
I am in Sydney now, behind me the financial pulse of this country. | :12:50. | :12:55. | |
I am about to meet some key people in the pillars of this economy, | :12:56. | :12:59. | |
Joining me to answer some of these questions, and have a discussion | :13:00. | :13:20. | |
held the post of CEO at the New South Wales Minerals | :13:21. | :13:23. | |
Council and the Australian Coal Association, and she was recently | :13:24. | :13:26. | |
voted in the top five most influential women in | :13:27. | :13:28. | |
Bill Ferris, recently appointed as the chairman of Innovation | :13:29. | :13:31. | |
He is a 45-year-veteran of private equity in the region, | :13:32. | :13:34. | |
and co-founded Australia's first ever venture capital firm in 1970. | :13:35. | :13:37. | |
Last, but not least, Fiona Simpson, vice president | :13:38. | :13:39. | |
of the National Farmers' Federation, and the past president | :13:40. | :13:43. | |
of New South Wales's Farmers' Association and a farmer herself. | :13:44. | :13:46. | |
There is a lot of talk about how the old Australian economy, | :13:47. | :13:51. | |
the mining boom, that's dead, and that Australia needs to find | :13:52. | :13:53. | |
a way to innovate and move forward in future, to stay | :13:54. | :13:56. | |
Of course any economy and any sector within an economy needs to innovate, | :13:57. | :14:02. | |
The mining sector is obviously in the doldrums at the moment. | :14:03. | :14:08. | |
We have just come off an incredible supercycle, | :14:09. | :14:13. | |
and that supercycle we have effectively seen happen around | :14:14. | :14:17. | |
about every ten years, for as long as I can remember. | :14:18. | :14:23. | |
In other words, where we are today is entirely predictable. | :14:24. | :14:29. | |
A 60% slump in the price of commodities, that is entirely | :14:30. | :14:32. | |
When you are coming off the highs we came off, | :14:33. | :14:35. | |
but I think the main thing for people to focus on is that | :14:36. | :14:38. | |
when you have a crisis in a particular sector, | :14:39. | :14:41. | |
one of two things happens - you either have extinction | :14:42. | :14:43. | |
or you have reinvention, and you know, our industry has been | :14:44. | :14:47. | |
reinventing itself for many, many decades. | :14:48. | :14:53. | |
It is why we are the most technologically advanced mining | :14:54. | :14:56. | |
You are in charge of spearheading this innovation agenda in Australia. | :14:57. | :15:01. | |
How much will that play into the old economy? | :15:02. | :15:08. | |
How much does that have to contribute to that? | :15:09. | :15:10. | |
I think the big issue for us, the excitement for Australia | :15:11. | :15:15. | |
is that we are in a grand position to capitalise on the new technology, | :15:16. | :15:18. | |
the new innovations going forward and commercialise a great deal more | :15:19. | :15:25. | |
I don't think a lot of your viewers would really appreciate the fact | :15:26. | :15:29. | |
that whether it is from penicillin or xerography, which led to Xerox, | :15:30. | :15:32. | |
or the black box flight recorder or vaccines of all sorts, | :15:33. | :15:35. | |
or more recently Wi-Fi, I could go on, all of these things | :15:36. | :15:38. | |
We are an inventive people, what we haven't done too well | :15:39. | :15:49. | |
at is commercialising our fair share of that. | :15:50. | :15:51. | |
Fiona, I think this is an opportune time to bring you in. | :15:52. | :15:57. | |
Would you say that the farming and agricultural sector has been | :15:58. | :16:00. | |
neglected as a result, some of this focus we have had | :16:01. | :16:03. | |
When you think about cycles, there are farmers who would say that. | :16:04. | :16:10. | |
Whether it is just a natural cycle, whether it is not, | :16:11. | :16:13. | |
that the Government, you know, and the community has been focussing | :16:14. | :16:15. | |
on what has been an amazing boom for mining, so I think definitely, | :16:16. | :16:18. | |
where we are at the moment is at a point where we are ready | :16:19. | :16:22. | |
to grow, and we see amazing potential in front of us. | :16:23. | :16:24. | |
We see opportunities and challenges that we haven't seen for many, | :16:25. | :16:27. | |
many years in many generations in agriculture, but certainly | :16:28. | :16:32. | |
we need now some policy settings in place, and we, | :16:33. | :16:34. | |
as a industry, need to do some things to make sure that we actually | :16:35. | :16:38. | |
get some of those gains out of the opportunities that | :16:39. | :16:40. | |
There is a lot of talk about how can Australia become the food bowl, | :16:41. | :16:45. | |
Isn't the reality Australia only produces food enough | :16:46. | :16:48. | |
That is not enough to feed neighbouring Indonesia, | :16:49. | :16:52. | |
Politicians in Australia have been talking about whether it's | :16:53. | :17:00. | |
supermarket or whether it's delicatessen. | :17:01. | :17:01. | |
When you consider we export 60% of what we produce in Australia, | :17:02. | :17:04. | |
it offers some amazing opportunities for who we can actually feed, | :17:05. | :17:07. | |
considering the growing populations in Asia, | :17:08. | :17:14. | |
in China, in India, in Indonesia, and the change in demographics | :17:15. | :17:19. | |
in those countries, so the exploding middle classes in Asia are wanting | :17:20. | :17:24. | |
But does Australia risk making the same mistakes and focus on one | :17:25. | :17:29. | |
country, one market to become the sort of saving grace | :17:30. | :17:32. | |
for the economy, in the same way it did in mining? | :17:33. | :17:34. | |
It is important to understand we are already 75-80% | :17:35. | :17:42. | |
a services-based economy, and some of the new exciting, | :17:43. | :17:44. | |
very high growth, very high growth opportunities for Australian | :17:45. | :17:47. | |
innovation, in worldwide markets where we have been operating | :17:48. | :17:57. | |
for yonks, over and apart and separate from the commodities | :17:58. | :18:00. | |
trade, our rating worldwide in health and medical research | :18:01. | :18:02. | |
We are nowhere in terms of the commercialisation | :18:03. | :18:06. | |
of our own drug discoveries or work, because when you get | :18:07. | :18:09. | |
to the clinical trials phase, you need about $10-20 million | :18:10. | :18:11. | |
of venture capital per project to get into a phase one | :18:12. | :18:14. | |
It gets licensed off too early or goes to people offshore, | :18:15. | :18:22. | |
We are now going to do more of that ourselves. | :18:23. | :18:27. | |
I think it is really important, the flexibility in capital | :18:28. | :18:31. | |
investment in regional Australia at the moment. | :18:32. | :18:36. | |
Our infrastructure is - a lot of it is sadly decayed | :18:37. | :18:39. | |
and lacking, and that means we are not competitive when it comes | :18:40. | :18:43. | |
to other countries we might be competing with. | :18:44. | :18:45. | |
We haven't got, and Government at the moment hasn't got the money | :18:46. | :18:48. | |
to inject into that rail infrastructure, | :18:49. | :18:49. | |
We need to make sure that we have a system in place | :18:50. | :18:54. | |
How can we make sure it goes to where it is needed? | :18:55. | :19:06. | |
If I look at the mineral sector, during the boom, the iron ore supply | :19:07. | :19:11. | |
chain, which was primarily on the west coast, | :19:12. | :19:13. | |
was entirely privately owned - but that doesn't mean | :19:14. | :19:15. | |
anything in particular, except that the whole process | :19:16. | :19:17. | |
was orientated to how you maximise exports on the east coast. | :19:18. | :19:20. | |
On the other hand, you had multiple players owning the railway cars, | :19:21. | :19:23. | |
the tracks, the roads, the tunnels, the boats, the port, | :19:24. | :19:39. | |
The supply chain was completely fragmented, and that meant that | :19:40. | :19:42. | |
while we were able to take advantage of high prices, | :19:43. | :19:45. | |
we lost market share to competitive countries like Indonesia, | :19:46. | :19:47. | |
in certain of our commodities, that infrastructure, | :19:48. | :19:48. | |
the hard infrastructure, and the notion that the infrastructure | :19:49. | :19:50. | |
must be co-ordinated as a supply chain, and the soft infrastructure - | :19:51. | :19:57. | |
the schools, you know, the hospitals, and all the other | :19:58. | :20:01. | |
services, those things have to be put in place. | :20:02. | :20:04. | |
This is where government vision is so critically important. | :20:05. | :20:08. | |
It is not the Government's going to pay for that, | :20:09. | :20:10. | |
but it is going to make it possible by incentives and other things | :20:11. | :20:16. | |
for private industry to build it and deliver it. | :20:17. | :20:18. | |
Finally, how much of an impact do you feel that the ongoing global | :20:19. | :20:23. | |
financial environment will have on Australia's fortune? | :20:24. | :20:25. | |
The resources from the mining boom is what helped us financially, | :20:26. | :20:38. | |
to get through the global financial crisis and other ebbs | :20:39. | :20:41. | |
and flows in the economy, but I think as we digitalise | :20:42. | :20:43. | |
more of our business, whether that is - | :20:44. | :20:45. | |
even if that is attached to a real, a real business, making something | :20:46. | :20:48. | |
or extracting something, that will allow greater flexibility | :20:49. | :20:51. | |
and ability to adapt to, you know, what is pretty | :20:52. | :20:54. | |
We have come through lots of crises and as an economy, surprised | :20:55. | :21:07. | |
the world about now 25, 26 years of unbroken growth. | :21:08. | :21:09. | |
Jury is still out somewhat, but I am convinced that one of the, | :21:10. | :21:15. | |
one of the great virtues will be this sense of what is possible, | :21:16. | :21:18. | |
a sense of innovation, a sense of can do | :21:19. | :21:20. | |
It's the first time ever we have had a cabinet committee of innovation | :21:21. | :21:26. | |
and science under the Prime Minister. | :21:27. | :21:27. | |
That is a big signal, a big message to every sector. | :21:28. | :21:30. | |
Always it is going to have some effect, but for agriculture | :21:31. | :21:41. | |
at the moment, we were wanting trade agreements, we have a whole raft | :21:42. | :21:44. | |
of good trade agreements now, providing a level playing field | :21:45. | :21:47. | |
At the moment, that is what we have got. | :21:48. | :21:52. | |
Everything is right at the moment for agriculture | :21:53. | :21:58. | |
So despite the global economy, I think we are ready to show | :21:59. | :22:05. | |
who we are and to really grow in Australia. | :22:06. | :22:07. | |
We are looking forward to that growth. | :22:08. | :22:09. | |
Thank you very much, ladies and gentleman, | :22:10. | :22:11. | |
It has been a real pleasure speaking to you about some of the issues. | :22:12. | :22:16. | |
That is it for this edition of Talking Business here in Sydney, | :22:17. | :22:19. | |
I am Karishma Vaswani, join us for the next | :22:20. | :22:22. | |
Lic is fairly evenly split on the decision. | :22:23. | :22:29. | |
Those are the it a weekend of huge variety, most | :22:30. | :22:46. | |
of us seeing rain at some stage, otherwise really mixed fortune, it | :22:47. | :22:51. | |
hinges on a weather front. Let me show you, this great big snake of | :22:52. | :22:54. | |
cloud extending out of the | :22:55. | :22:55. |