Sleepers Awake: an economic model for Canberra to follow

While Canberra’s jousting politicians try to figure a strategy to continue economic growth without blowing out the budget and jeopardising Australia’s AAA credit rating, a connected group of enterprising farmers and businesses in Queensland’s second city, Toowoomba, has created a model that appears to work.

The success story of the Toowoomba and Surat Basin Enterprise (TSBE) is testimony to what can be achieved when like-minded individuals and a local authority drive a concept forward. It also casts doubt on the hollowness of party leaders in Canberra who seem bereft of ideas and spend much of their time trading insults.

The Coalition’s plan for a small reduction in company taxes will shortly be introduced into the Senate, where it will probably fail. Ten years ago, there were only eight major countries with a lower corporate tax rate than Australia; now there are 29. The Opposition, ahead in the polls, are now embracing protectionism – economic suicide for a trading nation and a departure from policy in Labor’s successful years under Hawke and Keating.

Produce from Toowoomba loaded into the weekly Cathay Pacific flight to China

What TSBE has done within a decade would take a bureaucracy a generation to achieve, and probably not even then. Put simply, this not-for-profit organisation has coalesced ambitious farmers and entrepreneurs in a geographically small chunk of Australia to invest in an export-driven concept where China and the rest of Asia is the target market.  This has made it possible for the group to create a wealthy and growing Australian community, where unemployment has fallen, new public infrastructure has been created from private investment, and potential new global partners are queuing up to join.

TSBE is now hoping that Toowoomba can be declared a special economic zone, on the lines of those that exist overseas in places like Schenzhen and Dubai.

The man that has led TSBE since 2012 is Shane Charles, a former lobbyist for the resources industry and one-time president of the Toowoomba Chamber of Commerce. He articulated the case for decent infrastructure in a high-potential region hampered by poor road, rail and air connections to Australia’s ports and major cities, let alone connections to overseas

markets.

Shane Charles

“When we started this, when I was president of the Toowoomba Chamber of Commerce, we were struggling”, Charles tells Australian Strategies. “But we got business people together, some heavy hitters, and asked ourselves, ‘What’s wrong with Toowoomba? The city was not connected to the Surat Basin, it had missed out on about $60 million of infrastructure spending, we had a council that was hard to do business with, and we wanted business to have a real say in economic development. We went to the council with an economic proposition, and they said ‘no’.”

In fact Toowoomba Council decided they wanted to handle economic development themselves, appointing their own staff. They did, however, set up an economic advisory council, and asked Charles and some other business people to be members. “It lasted two years, and was not effective”, Charles recalls.

Entrepreneurs, resource companies and farmers in the area were becoming increasingly frustrated with the logistics of doing business in the area. Then John Wagner, one of four brothers who founded the eponymous 25-year-old construction and logistics company, decided to step in to finance and build Australia’s first new commercial airport in 44 years, at a cost of around $100 million.

This decision reignited interest in an independent economic partnership. The council reversed its earlier decision and put up a generous $450,000 to help establish TSBE, delegating some economic development powers to it.

Says Charles: “Our mission became to be the ‘go to’ organisation linking business with opportunity, and to provide sustainable growth and diversity to the region. It’s really all about building the economy. Infrastructure has been the key, and developing export opportunities.

Charles attracted a wide range of significant businesses to membership, some of them paying fees of up to $50,000 a year. TSBE now has funds of around $2.5 million and has used money to improve the poor transport infrastructure, encourage private investment, and exploit export-led opportunities, mostly around agriculture and agri-technology.

Charles lost some friends by refusing to deal with what he termed ‘mediocrities’ but, as he put it, “We’re trying to get business into town, we’re getting politicians to sit round the table, and that’s been largely successful. We’re not trying to replicate the good work of the National Farmers’ Federation, but we saw a gap in transport logistics, and have concentrated on helping highly innovative farmers who are looking at major opportunities; we want to help them get a better return at the farm gate for their products.”

Once completed, the privately-built Brisbane West Wellcome Airport provided a huge infrastructure boost, with daily Qantas flights to and from Sydney, and flights to Melbourne, Townsville and Cairns by Air North.

Its greatest impact, though, is the weekly freight service introduced by Cathay Pacific to shift beef, fruit, lettuce and much else to Hong Kong and on to other destinations in China, the rest of Asia and the Middle East. This service, started in November, is expected to become daily in the near future. Not only is it saving trucking costs across New South Wales to Sydney, but it enables members of TSBE and others to deliver fresh produce from Queensland to prime customers.

This came about after TSBE persuaded Qantas to divert one of its Sydney to Shanghai flights via Toowoomba, picking up 200 delegates for a brainstorming meeting with enthusiastic potential Chinese customers.

“The airport is a catalytic piece of infrastructure”, says Charles, “because it allows us to connect and export to the whole world. We are now getting three or four delegations a month – we’ve just had one from India – from people who want to deal with us. Our problem is going to be meeting demand.”

This is where another Toowoomba enterprise comes in. Food Leaders Australia, is a subsidiary of TSBE formed in association with the University of Southern Queensland. Headed by Dr Ben Lyons, who spent two decades in China including five years as deputy chairman of the Australian Chamber of Commerce in Shanghai, it seeks to help Australia’s food producers benefit from the rising middle-class in China, which is forecast to increase sixfold to 3.5 billion people by 2030. FLA now has a full-time office in Shanghai run by Wen Liu, a former DFAT officer and Australian embassy staffer in Beijing.

With Charles, Lyons can help build a supply chain to grow the Toowoomba hub, and with it its export conduit to Asia.  When chasing votes in the coming Queensland election, it would seem appropriate for Canberra’s front and cross benchers to spend some time in Queensland’s second city to check out a model that really works.

Published by admin@Strategies

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