WA’s resources heads question need to diversify the state’s economy
The West Australian
Wednesday, 1 January 2020 2:00AM
Mining company bosses have questioned the need to diversify the WA economy, suggesting the State double-down on its most successful industry rather than “trying to be something that we are not” by chasing opportunities elsewhere.
“You don’t hear anyone in Silicon Valley saying ‘we need to diversify out of tech’, so why should WA have to become less reliant on the resources sector?” Mineral Resources chief executive Chris Ellison said in response to WestBusiness’ annual survey of business leaders.
“For me, diversification is less about having to shift away from resources than building value-adding capacity into an industry that has served this State so well for more than a century.”
Fortescue Metals chief executive Elizabeth Gaines said talk of any need for economic diversification was “short-sighted” when “in fact, WA is considered the world’s most diversified mining and energy region”, producing 51 commodities and hosting eight of the globe’s top 14 energy companies.
“As much as we like to talk about diversifying the WA economy, this State really hums when the resources industry is strong,” mining contractor Perenti Global’s chief executive Mark Norwell said.
Gold Road Resources chief executive Duncan Gibbs argued that “perhaps we should stick at what we are good at, rather than trying to be something we are not,” citing WA’s endowment of natural resources and its industry and labour skills.
The survey polled nearly 50 business leaders and decision-makers, seeking their thoughts on business issues, including a more diversified State economy.
Mining bosses, including Pilbara Minerals’ Ken Brinsden, said the State should be doing more to promote WA as a safe, stable and innovative investment environment for resources companies.
Non-resources respondents acknowledge the heavy lifting done by mining and energy, but Curtin University vice-chancellor Deborah Terry said the State’s “heavy reliance on our traditional strengths in the mining and resources sectors indicate the need to future-proof our economy through the development of new industries”.
There was plenty of references to the State’s emergence as a centre of resources technology and the development of the value-adding processing of lithium as examples of how the State’s resource sector is levering into new areas and countering the “shovel and ship” perception some still have of it.
“All the big miners are here, developing and applying world-leading technologies at industrial scale,” Woodside Petroleum boss Peter Coleman said.
“That’s a great platform for WA to build on and create knowledge hubs across cybersecurity, automation and artificial intelligence.”
WA School of Mines director Sabina Shugg said “sometimes we forget how strong and deep the contribution of WA METS (mining, energy, technology and services) companies and innovators is across the world”.
Deloitte WA managing partner Michael McNulty said it should be less about sector diversification than chasing “clusters” of opportunity. “For example, harnessing our existing competitive advantage in mineral and energy extraction to tap new new opportunities in hydrogen, the battery supply chain or digital innovation,” he said.
While the survey respondents acknowledged the importance of mining, however, some took a broader perspective.
Azure Capital joint managing partner Adrian Arundell wants a long-term “masterplan” for WA, “highlighting industries it wishes to incubate, themes it wishes to exploit and a staged development of Statewide infrastructure”.
MinterEllison WA managing partner Matthew Knox said the political stability at both State and Federal levels should encourage government to make “bolder long-term decisions”.
PwC WA managing partner Michelle Tremain said “sometimes we overplay the narrative that resources is the only game in town”, pointing to strong growth among the firm’s clients in the healthcare, aged-care, agriculture and education sectors.
Recruitment firm Gerard Daniels’ chief executive Alison Gaines cited the potential for more technology and data-driven industries to form around the Pawsey Supercomputer and the planned upgrade of the Square Kilometre Array.
Others are concerned that despite WA’s ambitions, it does not invest enough to get any meaningful traction in non-resources industries.
Spacecubed chief executive Brodie McCulloch said the 2019 StartupWA report showed WA spent just $16 million over four years on innovation and new industries, compared with spending of $450 million and $650 million by South Australia and Queensland respectively.
“We also need to find better ways to drive an innovation culture and encourage young people to start businesses, rather than continuing to push traditional pathways into a career,” Kristen Turnbull
Others emphasise the failure to properly address the State’s opportunities in tourism and international education, including by revitalising Perth’s CBD, securing cheaper regional airline flights or, as the Committee for Perth, has sought, developing a major attraction such as a world centre for indigenous culture.
For Tribis and Iris Residential managing director Simon Trevisan and Hartleys chairman Ian Parker, it is about the need for better tourism infrastructure in the South West and remote areas such as the Gascoyne and the Kimberley, where some of the State’s best attractions are. Mr Trevisan wants to see a string of resorts and tourism packages along the length of WA to enable tourists “to jump from one to the other comfortably”.
Company director Diane Smith-Gander drilled down further, calling for “some brave policy reforms on the housing front”, including a land tax to replace stamp duty, to support infill living in Perth.
“New jobs only make sense if people can get to them,” she said.