International Projects Corporation

About this Item
Speakers - Chappell Mr Raymond
Business - Private Members Statements

INTERNATIONAL PROJECTS CORPORATION

Mr CHAPPELL (Northern Tablelands) [7.15 p.m.]: Major opportunities for earning tens of millions of dollars in foreign exchange for New South Wales are being ignored by the Carr Government in violation of one of its own election promises. In March 1995 the Labor Opposition promised to create a New South Wales international projects corporation, a commercial operation whose core business would be to market and manage professionally the overseas activities of State government entities. The models for this were the highly successful Overseas Projects Corporation of Victoria, which has earned over $800 million for the Victorian Government and is one of Australia’s 500 largest exporters, and SAGRIC in South Australia, which since it was formed in 1973 has earned about a billion dollars for that State - much, of course, in foreign exchange.

The core business of both of those highly profitable bodies is running overseas projects. They are not experts in water, health, education or any other technical discipline but professional marketers and project managers. They consolidate in the one place strong commercial expertise in currency management, in the policies and practices of funding sources like the World Bank and the United Nations, in the management of projects in difficult locations, in insurance and in marketing to developing countries and international financing bodies. They recruit the technical experts. They are practical and commercial. If they do not make a profit they do not survive. Their financial statements are transparent, and any failures cannot be buried in other departmental accounts. They embody large economies of scale. This system has worked for decades, and it has worked very well.

In New South Wales, on the other hand, the technical bureaucrats of the individual agencies do their own thing. They each travel, do their own marketing, have their own knowledge of how to do business abroad, or, if they do not have it, they still try anyhow. They each manage their own currency and their own insurance; they bump into each other in the airports of Washington, Geneva and Beijing, and many of them are losing money. For many agencies there is no co-ordination, no transparency and limited professionalism. Numerous doctors, water specialists, teachers, electrical engineers and other technicians, many without business experience or sensitivity to or even knowledge of overseas practices, are jetting about the world, staying in five-star hotels, modestly acknowledging that it is pretty hard work but someone has to do it. Most of it, of course, is being paid for by the taxpayer.

A recent newspaper report indicated that Australian Water Technologies Pty Ltd staff took 136 trips overseas in the financial year 1996-97. The net result - a loss of $300,000. The taxpayer has no idea because it is easy to bury any failures in the larger accounts of the home agency. For most of these officials there are no commercial disciplines, no obligation to report on failures and no bottom-line incentives or sanctions. There are many missed opportunities, either because every agency cannot possibly know what the immense range of funding sources is that is currently offering or because there is no central agency to pull the disparate resources of government together.

For example, the Prime Minister announced late last year an AusAID program worth $20 million over four years to support China’s transition to a market economy by providing Chinese policy-makers with access to leading-edge Australian systems in the public sector. New South Wales is perhaps the best placed State in the sense of having those systems available but the least prepared to co-ordinate a bid for such a project. New South Wales could not even begin to put in a bid for a $12 million project to provide training to a wide range of new public servants in South Africa because there was no-one in this State to co-ordinate the bid.

A wide variety of multidisciplinary projects financed by the World Bank and the United Nations simply have to go by the board. Tens of millions of dollars of opportunities are being lost because New South Wales cannot participate, but in Victoria and South Australia they can, and they do. They even enlist New South Wales government agencies in their bids. The failures in this State are numerous, and it is because we have not proceeded with the development of a New South Wales international projects corporation that was promised by the last Government and recognised by the Public Accounts Committee after an extensive process of investigation. We simply have not done it. We have walked away from the opportunity.

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New South Wales has to learn to think and act at this level, but since the Public Accounts Committee reported on the matter in 1995 and recommended that such a corporation be set up, nothing has happened. It is a failure of nerve, a failure of imagination, a failure of vision, but, most important, it is a failure of financial management by this Government. It is just what the Opposition has come to expect from this Government. But it will be different after March next year.

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