South Australia's economy is transforming and a new mind-set is emerging. The State Government is supporting the economy to become much more efficient and competitive.
It’s a pleasure to be able to address an AmCham lunch again.
I acknowledge that we are meeting on the traditional land of the Kaurna People and that we respect their spiritual relationship with their country.
Today I want to talk about how the South Australian economy is transforming.
What the government is doing to support this transformation.
And importantly, the positive response we are getting.
From the people who will make it happen.
Investors – here and from elsewhere.
Businesses – existing and new.
Venture capitalists and angel investors.
There is a new mind-set emerging in South Australia.
It will lead transformation the likes of which our State hasn’t seen for almost 100 years.
Since our economy began to diversify from primary production into secondary industry.
If you think I’m excited and energised about our future prospects and opportunities, you are right.
I hope you are as well.
CURRENT ECONOMIC CONDITIONS
As a scene-setter, here’s a brief, unbiased overview of the South Australian economy today.
From leading economists and the ABS.
They say that our State is currently experiencing above trend growth.
With business confidence leading the nation.
New business investment is up by 6.3%.
And private new capital expenditure by 9%.
MARKET RESPONDING TO POLICY CHANGE AND GLOBAL DISRUPTION
The market is responding to change.
Government policy change.
To put much more emphasis on our State’s overall competitiveness and investment attraction across the economy.
And much less on government handouts to select businesses.
The market is also responding to global disruption.
Like rapid technological change.
An ageing population.
DISRUPTION EQUALS OPPORTUNITY - BLOCKCHAIN
For optimists, disruption provides opportunity.
I’m an optimist.
I firmly believe South Australia has the people, businesses and industry sectors that can effectively adapt to and seize this opportunity.
Just last week, South Australia hosted an international blockchain summit.
To bring the summit here, my government partnered with the Australian Davos Connection Forum.
Because I want to encourage local entrepreneurs, start-ups and blockchain enthusiasts to help develop the potential of this technology for both our own use and to export it elsewhere.
And to do this here – not by having to move elsewhere to pursue their plans and ambitions.
There were 400 participants in the summit, representing 33 countries.
Leaders from all over the world, of different ages and backgrounds.
All confronting change on a daily basis.
It was only 10 years ago that bitcoin emerged.
Now we can contemplate how the underlying technology of digital assets, distributed ledgers and blockchain can profoundly impact nearly every industry.
As a result of discussions during the summit, I am looking forward to participants in the blockchain industry embedding themselves at Lot 14 just along North Terrace from here, on the site of the old Royal Adelaide Hospital.
It’s a place where entrepreneurs, investors, businesses, global industries, universities and other research institutions are coming together.
To share ideas and collaborate.
To create and invest in the innovation economy.
I want them all to have confidence that South Australia is the right place to do this.
FIRST YEAR – BUILDING CONFIDENCE BY DOING WHAT WE PROMISED AND MATURE FEDERAL GOVERNMENT RELATIONS
In my government’s first year, we started to create that confidence by doing what we said we would do.
Winning the election was important.
Much more important however, is how we turn that outcome into opportunity for all those we have been elected to serve.
By matching words with actions.
By supporting our economy to become much more efficient and competitive.
We promised to cut taxes.
We have abolished payroll tax on small businesses.
We have halved the Emergency Services Levy for businesses and households.
Next year land tax will come down as well.
In all, a record cut in taxes during our first term.
We promised more productive infrastructure.
There is $11.3 billion committed to new roads and other projects in our first budget.
We promised better services.
In education, we are making a record investment in our schools as we begin the transition of year 7 into high school to give our students the best possible start to their participation in the future economy.
In skills and training, we are rejuvenating TAFE and we have a program to create 20,800 apprenticeships and traineeships over four years as a pathway into defence and other industry sectors set to grow.
In health, we have reactivated the Repat while upgrades are underway to the Queen Elizabeth, Noarlunga and Modbury Hospitals.
There is also significant investment in country hospitals and health services.
Some of this progress has been made possible through a much more mature relationship with the Federal Government.
As a result, we have also secured the headquarters of the Australian Space Agency and a City Deal for Adelaide.
LOT 14 – A WINDOW INTO A NEW ECONOMC FUTURE
This brings me back to Lot 14 – our rapidly developing new CBD neighbourhood.
A unique neighbourhood.
A place already making a bold statement about what we can be as a State.
South Australia is envied around the world for our lifestyle.
But not yet for innovation and a high-tech culture.
What is happening on this prime seven-hectare site now called Lot 14 is a window into an economic future filled with much more opportunity.
Let me explain why.
At Lot 14 we’ll soon have, in addition to the headquarters of our nation’s new space agency:
- Start-ups and entrepreneurs generating new ideas to take to global markets;
- High-growth businesses exploring new technologies to build on their established success;
- Investors with a solid pipeline of opportunities to back emerging and growing businesses; and
- Successful entrepreneurs mentoring and guiding future entrepreneurs.
Density is vital to the success of an ecosystem like this.
Density encourages frequent collisions between start-ups, entrepreneurs, investors, advisors, mentors, researchers, businesses and corporations.
This enables learnings to be rapidly shared and highly effective networks to operate in a seamless physical and digital environment, allowing occupants to work closely and collaboratively.
Last week, with the Prime Minister and the Lord Mayor of Adelaide, I signed a $551 million Adelaide City Deal.
It paves the way for the transformation of Lot 14 into an innovation precinct right in the heart of our capital city.
The City Deal will fund an Innovation Hub enabling joint research between the public sector, business and universities and the provision of secure environments for government defence and space entities.
Through joint Federal-State funding, the City Deal adds to the Space Agency a mission control facility and the Australian Space Discovery Centre, providing a major opening for South Australia to the US$345 billion global space industry.
Building cars was South Australia’s entrée to manufacturing almost 100 years ago.
Building the means to explore and work in space can now take us beyond the final frontier.
Lot 14 provides the lift-off needed to triple Australia’s space economy to $12 billion and create up to 20,000 jobs by 2030.
What is it about Lot 14 that is attracting so much interest?
So much government investment to make things to happen.
Why is the energy and creativity being generated around Lot 14 so important to our future?
Let me focus on what it means for entrepreneurship.
Entrepreneurship underpins the growth of existing businesses and the establishment of new ones.
Young, growing firms can create jobs quickly.
South Australia has the highest business survival rate in our nation.
But one of the lowest rates of business entries.
This indicates a level of conservatism in our business culture.
We must inspire would-be entrepreneurs to start younger.
We need to accelerate the participation of people aged between 18 and 24 in early stage entrepreneurship.
We’re starting in our schools as we seek to provide a pathway to career success.
We are giving four of our public schools funding to teach students entrepreneurial skills through taking on specialist staff, having dedicated entrepreneurial spaces and piloting business ventures.
Apart from anything else, encouraging budding entrepreneurs is important if we are to reverse the flow of young South Australians interstate and overseas.
Last year I appointed South Australia’s first Chief Entrepreneur, Jim Whalley.
I asked Jim to help raise the profile of our State as the place to be if you want to start and grow a business.
Jim is an outstanding businessman.
He is co-founder and chairman of innovative defence industry company, Nova Systems, as well as being a former fighter pilot.
Under Jim’s leadership, Lot 14 is becoming a neighbourhood that will create high-value jobs and industry.
The neighbourhood is enabled as a GigCity precinct with very high-speed internet connection.
The market response to Lot 14 is already very strong.
Seventy percent of available commercial space is committed or under negotiation.
Five tenants have moved in and more than 175 people are already collaborating in the neighbourhood.
An estimated 1,000 people will be working at Lot Fourteen by later this year.
What is unfolding at Lot 14 meshes with our population growth agenda to retain more South Australians in their home state and to attract more business and skilled migration.
One important source of new entrepreneurial talent is business migration.
Attracting more migrants with entrepreneurial talent can provide access to vital skills over the shorter term and a source of globally oriented start-ups with high growth potential.
Last week, I signed with the Federal Government, the Adelaide Technology and Innovation Advancement Agreement.
This is a five-year Designated Area Migration Agreement.
It covers 60 occupations and will allow up to 300 people per year to be sponsored.
This is in addition to the Supporting Innovation in South Australia visa program being piloted in our State which connects overseas entrepreneurs with investment opportunities in our economy.
The Federal Government has also recognised the need to attract more migrants to regional South Australia, with a second Designated Area Migration Agreement to allow up to 750 people per year to be sponsored.
The two migration agreements we have negotiated with Canberra allow businesses to access the skills they need to meet specific workforce requirements.
I welcome the Federal Government’s backing for our population growth agenda.
Our aim is to get South Australia’s population growing by at least the national average after more than half a century of lagging behind the rest of mainland Australia.
People of my age and younger haven’t experienced a time yet when our State has been the leader it once was in population and economic growth.
Then, strong population growth was a foundation for economic success.
I’m determined to see this happen again.
TRAINING AND SKILLING SOUTH AUSTRALIANS
As we use business and skilled migration as a strategic tool to unlock new economic activity and new opportunities, we are also doing all we can to train and skill South Australians to be job ready for emerging and growth industries.
With the establishment of the National Space Agency, the pace quickening on the Naval Ships project and the revitalisation of the Whyalla steelworks, there has never been a better time to take up an apprenticeship in South Australia.
As I’m sure this audience understands, workforce training and skills development must be closely aligned to the requirements of business.
It must be flexible enough to meet rapidly changing needs and respond to future opportunities.
At almost 64%, the proportion of South Australia’s labour force with a non-school qualification is below the national average.
This is because of a significant drop in vocational training commencements in South Australia in recent years.
We are seeking to reverse this through our Skilling South Australians program.
This program, jointly funded with the Commonwealth, is aimed at creating 20,800 apprenticeships and traineeships over four years.
We’ve revitalised the Training and Skills Commission to provide industry with a stronger voice in ensuring sufficiently trained and skilled workers are available when and where they are needed.
We’re also establishing Industry Skills Councils to ensure we receive direct feedback on priorities for skills, training and workforce development.
Ladies and Gentlemen
I have shared with you some of the things my government is doing to ensure South Australia has more economic opportunity, more prosperity, than we have had in recent years.
The High-Tech sector.
Food and Agribusiness.
Energy and Minerals.
Health and medical industries.
Digital – including machine learning and artificial intelligence, cyber and creative industries.
They all offer major opportunity.
And we’re determined that many more South Australians seize these opportunities by growing our skilled workforce.
As I said earlier, our State has many natural attractions offering a great lifestyle.
But we also need to be seen as an equally attractive place to create and build a business.
Our people remain our greatest asset.
As our economy transforms, I’m confident they will adapt to the challenges and opportunities ahead.
My government is determined to provide the conditions that encourage and enable them to do so.