Member lunch with The Hon. Gavin Jennings MP
Today, Special Minister for State and Leader of the Government in the Legislative Council, Gavin Jennings, joined Committee for Melbourne members over lunch to discuss his role as the Minister in charge of the delivery of Infrastructure Victoria. In his comments, Minister Jennings noted the important work done by the Committee and our membership in advocating for independent infrastructure prioritisation and outlined how the ‘Ten Principles for Infrastructure Prioritisation’ outlined in the Committee’s Infrastructure Victoria discussion paper have been strongly reflected in the new entity. This structure will play a critical role in Victoria’s future, and although the legislation has passed, there is still a lot of work to do to ensure Infrastructure Victoria has the structure and powers required to play this critical role effectively, and independently.
Greater Sydney Commission
This week, NSW Planning Minister Rob Stokes announced the structure of the Greater Sydney Commission (GSC) – a new entity that will be responsible for developing and overseeing the city's housing and jobs targets. Additionally, the Commission will be given the power to regularly review major council planning controls, act as the decisionmaker for rezoning proposals currently determined by the Minister, and will also have a say in infrastructure planning. The proposed model aims to depoliticise planning to ensure that decisions around land use and infrastructure development are coordinated in the best longterm interests of Sydney's growth projections. To give some sense of ‘area’ plans, Sydney will be divided into six districts: north, central, south, southwest, west and west central. This is a big step away from the traditional process of independent interdepartmental style planning, but this attempt to take a highlevel wellcoordinated approach to planning seems to make sense on paper. The Commission's role, power and responsibilities are expected to be debated in October, and as always, the true test of the viability of this entity to create genuine change, will lie in the detail.
To lease or not to lease
The Port of Melbourne lease discussion has again sparked debate around the question of whether or not governments should lease or sell stateowned assets as a means of generating revenue. These discussions were key in both the New South Wales and Queensland elections recently, with mixed results. Victoria has had a strong history of asset recycling, and if done sensibly, it does make sense to utilise existing brownfield assets to boost the funding pool. Some key principles should however be followed: the privatisation optimises benefits to the community; all of the proceeds from the sale or lease of the asset are reinvested in the implementation of productive economic infrastructure; and bestpractice regulations are put in place to manage assets with significant market power, in particular in the case of monopoly assets.
Corporate profit growth – end of a 'golden era'?
According to a new report released by McKinsey and Company, although major corporations have enjoyed record profit growth, new market opportunities and declining costs for the past three decades, this unprecedented run may be coming to an end. According to the new McKinsey Global Institute report, Playing to win: The new global competition for corporate profits, part of the slowdown in profit growth will stem from the competitive forces unleashed by two groups of hardcharging competitors. An enormous wave of companies based in emerging economies on one side and on the other, hightech companies introducing new business models and striking into new sectors giving them the reach and resources to challenge larger companies. McKinsey note that as profit growth slows, more companies will fight for slices of a smaller pie. This will create challenges and opportunities in that incumbent industry leaders will not be able to afford to simply defend their current market niche while organisations with vision, optimism, and agility will be able to realise enormous opportunities – if they are willing to disrupt their own operations before a new challenger does it for them.