Committee Communiqué

Kathryn Fagg, Director, Reserve Bank of Australia

Yesterday, the Committee had the great pleasure to welcome distinguished Leading Thinker Kathryn Fagg for a breakfast discussion on the 'Future Economy'. With an executive career encompassing key executive roles with ANZ, BHP Billiton and Linfox, and as a nonexecutive director of the Reserve Bank, Incitec Pivot and Djerriwarrh Investments, Kathryn brought a wealth of knowledge and experience to the conversation. Kathryn’s talk was titled ‘Clever and Collaborative’, and during the course of conversation she provided us with some insightful thoughts on the potential economic opportunities that could be realised by developing stronger collaborative relationships between academic institutions, research organisations – like the CSIRO – and business. Current OECD statistics on innovation and collaboration place Australia at the bottom of the list at less than five per cent lower than countries like Mexico and Brazil – and a long way behind top ranked country Finland. One of the reasons for our low level of collaboration may well be the lack of policy stability at the government level, meaning that long-term investments into researchstyle collaborations are not seen to be secure. Whatever the case may be, from Kathryn’s talk it was clear Australia certainly needs to work a lot harder at improving our collaborative efforts.

Q&A with Alan Joyce

On Tuesday night, I had the pleasure of facilitating an hour long Q&A session with Qantas CEO Alan Joyce as part of a TransTasman Business Circle and Opera Australia hosted leadership session. During the course of conversation, Alan spoke about the challenges of being in the CEO role at a time when Qantas had to introduce significant changes to its traditional business model which, as Damon Kitney reported in The Australian today, had many calling for his resignation. Acknowledging that he was never a CEO who was ‘content to just kick a can down a road’, Alan noted that crucial elements of success are a need to take measured risks and expect failures at times – something Australians traditionally do not do well. My conversation with Alan Joyce was without a doubt one of the most interesting I have had in some time. Given that Alan was speaking on a day when Qantas had just regained its highly valued investment grade credit rating from Standard and Poor's and the share price rose to $3.80 (a major rise from the 2013 price which sat at less than $1), there were certainly many valuable business lessons to be learned from the conversation.

Melbourne Lovability Index

This morning the Melbourne Lovability Index (MLI), a new tool developed by participants of the Future Focus Group (FFG), the Committee for Melbourne's twoyear business leadership program, was launched. The MLI was developed to find out more about what a broad crosssection of residents around Greater Melbourne love about where they live. We know that Melbourne is consistently rated as the 'World’s Most Liveable City' in the Economist Intelligence Unit rankings, and we also know that the concept of 'liveability' varies depending on where people live, what transport infrastructure they have access to, how easy it is to commute between their home and place of work, and how connected they feel to their local community. In what was a very positive outcome – although residents' level of satisfaction with ‘lovability’ of their local area did vary – across the board, 'lovability' was relatively high. The MLI has been handed over to Deakin University who will further refine and develop this tool into a robust industry relevant metric that can be applied to other cities, regional centres and rural areas in Australia as well as internationally.

Public Private Partnerships the go for Metro

The Andrews Government will look to the private sector to bridge the funding gap for the Melbourne Metro rail project. A conservative estimate places the full cost of the project at around $911 billion, and in the current absence of large budget surpluses or guaranteed investment from the Federal Government, the State Government is hoping to finance much of the total cost from Public Private Partnership arrangements. We commonly see PPPs used as a funding mechanism for tolled roadways, but we have not yet used this model to fund a major urban rail project. This procurement model will potentially see theprivate sector designing and building Metro’s twin nine kilometre tunnels and five underground stations. In exchange, investors will be entitled to capture value realised from development opportunities above ground. As a strong advocate of alternative funding mechanisms, the Committee actively promotes the use of value capture opportunities to increase the funding pool, so this willingness to embrace change is a positive step forward. There is however still a very interesting journey to undertake to see how this concept will stack up in the eyes of the investor. We will continue to watch with great interest.

CodeFest to spark digital innovation

From Friday 27 to Sunday 29 November, the Herald Sun and the Melbourne Accelerator Program (MAP) will host CodeFest, a hackathonstyle opportunity for innovative young entrepreneurs to develop digital products that can potentially lead to real commercialisation opportunities. CodeFest is supported by MAP, a program launched by The University of Melbourne in 2012 to promote entrepreneurship. Since 2012, 16 companies have graduated from the MAP and between them, have raised $10 million in funding, created over 120 jobs and generated $5 million in revenue. In 2016, MAP will award ten startups with $20,000 in funding and other support. For the duration of CodeFest, the Herald Sun and Herald Weekly Times will offer its local, rural, national and international news, sport and lifestyle data along with its advertising network to CodeFest teams to develop innovative new digital products or bolster existing products. Those involved in CodeFest have a genuine opportunity to see their concepts commercialised.

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