Legislative Council; General Purpose Standing Committees; Regional Development And Rural Affairs

The Hon. I. Cohen (Deputy-Chair)
The Hon. D. J. Gay
The Hon. M. R. Kersten
The Hon. E. M. Obeid



The Hon. H. F. Woods, Minister for Regional Development, and Minister for Rural Affairs

Department of State and Regional Development
Mr L. Harris, Director-General
Mr M. Cullen, Executive Director, Regional Development Division

Surveyor-General’s Department
Mr D. Grant, Surveyor-General
Mr W. Beacroft, General Manager

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DEPUTY-CHAIR: Before the questioning of witnesses commences I remind Committee members that at the hearing on 6 June 1997 the Committee authorised the broadcasting of its public proceedings. Should it be considered that the broadcasting of these proceedings be discontinued a member will be required to move a motion accordingly. I advise that the Leader of the Opposition has written to me to advise that the Hon. D. J. Gay has been nominated as an alternative member in place of the Hon. Dr Marlene Goldsmith and that the Hon. M. R. Kersten has been nominated as an alternative member in place of the Hon. R. B. Rowland Smith. At this meeting the Committee will examine the proposed expenditure from the Consolidated Fund for the portfolio areas of Regional Development and Rural Affairs.

Before questions commence some procedural matters need to be dealt with. Paragraph 7 of the budget estimates reference provides that a member of the Committee and the Minister present to answer questions may have staff present to assist them during the hearing of evidence and may refer to those staff at any time. I remind members’ staff and any other persons that they should take care not to interrupt proceedings and to observe the usual courtesies which apply to a meeting of the House or of a committee. Where possible, messages for members should be given through the attendant on duty or the Committee Clerks. Members of the media, the House resolved on 4 June 1998 that the press and public be admitted to proceedings of the Committee. I wish to explain to you what is required by the standing orders of the Legislative Council in this regard so that you will be aware of the position. Legislative Council Standing Order 252 provides:

Evidence taken by any Select Committee of the House, and documents presented to such Committee which have not been reported to the House, may not, except with the permission of the Committee, be disclosed or published by any Member of such Committee or by any other person.

In reporting the proceedings of this Committee, as with reporting the proceedings of both Houses of Parliament, members of the media must take responsibility for what they publish and what interpretation they place on anything that is said before the Committee. In order to accurately complete the Questions and Answers paper, the Committee Clerk requires that members complete and sign the appropriate form when a question is taken or given on notice. For the benefit of members and Hansard, I ask the departmental officers to identify themselves by name, position and department or agency before answering each question. I will now outline the proposed allocations of time agreed to for questioning: Opposition members, 30 minutes; Independent - myself - 30 minutes; an afternoon tea break; Opposition Members, 30 minutes; and possibly more questions after that. I remind the Minister and members that each question is limited to one minute and that the Minister’s reply is limited to four minutes. I declare the proposed expenditure open for examination. I will call over the program areas as listed in the budget estimates volume by agency. Are there any questions?

The Hon. D. J. GAY: I refer to Budget Paper No. 3, Volume 2, page 698. Minister, how can you justify the jump in spending on assistance to industry? The estimated figure for 1997-98 was $18.996 million and the actual amount was $20.714 million. Can you explain why assistance to industry, according to the actual figure, was overspent?

Mr WOODS: Yes, it is an issue to do with cash flow, but for a more detailed answer I refer the question to the Director-General, Loftus Harris.

Mr HARRIS: It is, as the Minister says, an issue to do with cash flow. The Government or the department has a number of future obligations where support is being provided to companies in order to set up operations or make investments in various parts of New South Wales. The projection is made on the information which is provided by the companies at the beginning of the year and that is where the figure of $18.9 million has come from. If the companies achieve their milestones more quickly than has been anticipated by the companies and therefore become eligible to receive payments which fall due at that time, that cash flow is adjusted during the year. The estimate at the beginning of the year can only be made on the information that is provided by the companies and the contractual obligations which exist between the State and those companies. And it is for that reason that the projection for the coming year is actually about $13 million. It is the rate of the expected cash flow.

The Hon. D. J. GAY: Given the overspending last year, why have you reduced that allocation by nearly $7 million this year?

Mr HARRIS: Because a number of the projects which were receiving support from the Government have either matured - have been completed - or the amounts due to those companies have declined. Generally, payments which are made to companies setting up in the State are on a reducing rebate, generally to do with payroll tax. So, as those projects move further down the track that amount actually declines.

The Hon. D. J. GAY: How much of the $13.14 million has been spent to date?

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Mr HARRIS: None of that $13 million has been spent at the moment. That is a projection for the next financial year.

The Hon. D. J. GAY: Do you believe that will be adequate?

Mr HARRIS: Yes. At the moment on the information we have from the companies we believe that will be sufficient. The process is subject to constant review because, as I suggested before, if companies get ahead of themselves or get ahead of the projections they have made to us in that they are establishing or creating a work force faster than they have originally indicated, that cash flow can vary.

The Hon. M. R. KERSTEN: I refer you to Budget Paper No. 3, page 692, Department of State and Regional Development Operating Statement for 1997 and 1998. I note that no line item is given for budget allocation. Can you give an explanation for that? Can you also explain how you actually estimate budget allocation?

Mr WOODS: I think the answer to that is fairly apparent. The Department of State and Regional Development is the department and the allocation is to that department. Regional development is part of it, and in concept is a particularly important part of it, but there is no differentiation, and I think for good reason. Industry is across the board and many of the department’s programs are across the board for industry.

The Hon. M. R. KERSTEN: Do you have the authority to approve financial assistance?

Mr WOODS: No. Financial assistance to companies is signed off by the director-general.

The Hon. M. R. KERSTEN: Minister, did you approve financial assistance to Grafton abattoir, which is in your own electorate? If so, what conditions have been put on this assistance?

Mr WOODS: To answer the last part of your question first, no, I did not sign off on it. It would have been signed off by the director-general and therefore I think it is more appropriate that the director-general continues with the answer.

Mr HARRIS: We have made an offer of assistance to the Grafton abattoir. That offer has not yet been accepted. It is still with the company. It is my expectation that the offer will be accepted. The offer was calculated on the basis that we have used for similar offers in the past and is much the same as that which has been used for other industries where they have had similar problems or for other abattoirs such as Southern Cross Meats in Goulburn.

The Hon. M. R. KERSTEN: Has that offer of special assistance been made to other abattoirs?

Mr WOODS: To my knowledge it has in the past. There have been offers of assistance to other abattoirs.

The Hon. M. R. KERSTEN: How does your Government justify special assistance to Grafton abattoir when almost every other abattoir in the State is experiencing severe business pressure?

Mr WOODS: The abattoir at Grafton had, in fact, closed down and a new operation had commenced. The Grafton site is approved. It is a modern and well-equipped facility and I think it offers long-term sustainability over a number of other places. It will generate considerable economic and employment growth, and 200 new jobs by the end of the 1998-99 year are expected. That figure is expected to rise further. The project will benefit local beef producers by increasing demand from the local market. In addition, there may be some capacity for increased returns to producers through higher payments for quality hides. There is valuable flow-on benefits for the region which I know well given the depressed nature of the beef industry in the Northern Rivers region. During the 12 months ended 31 May the department provided assistance to four abattoirs totalling $800,000. The abattoir is now killing in the vicinity of 600 or 700 cattle a week. Under Gilbertsons it was killing an average of a bit over 300.

The Hon. M. R. KERSTEN: Which four abattoirs have been offered special assistance?

Mr CULLEN: A number of abattoirs have been offered assistance. Examples would be Yolarno abattoir at Inverell, which has been provided with assistance, as the director-general mentioned, also Southern Meats at Goulburn, as well as a number of others. Monbeef at Cooma is another example. The consistency that is applied in those cases where there is a major upgrade, creation of new jobs or acquisition of a plant that has been closed, is that a consistent approach looks primarily at the assistance package being in the form of payroll tax concessions. So if you like, it is a benefit that goes to those companies in the start-up phase but after they actually demonstrate employment outcomes. There have been a number of precedents for assistance provided and that approach has been consistently applied across the board. Those are but three examples, but there are many others.

The Hon. D. J. GAY: I refer once again to Budget Paper No. 3, Volume 2, page 698. I draw your
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attention to "Regional development assistance". Why was only $9.62 million of the $10.105 million budgeted figure in 1997-98 spent? Why has regional development assistance been increased to $13.733 million in the 1998-99 budget when it was underspent last year? Please itemise what the funding was spent on for the last year and explain why it has been increased.

Mr WOODS: For that detail I will pass the question over to the Director-General. Certainly part of the answer lies in the fact that some new schemes have been announced in the budget.

Mr HARRIS: The underspending in the 1997-98 budget reflects the costs allocated in that budget in relation to 12 regions. As these costs were employee-related the budget was transferred to the employee-related expenses of the budget in 1997-98. Also included in the 1997-98 budget was an amount of $0.97 million towards the establishment of the Tamworth Regional Exhibition Centre. The primary reason for the shortfall was the transfer of those costs relating to the export advisers and the agribusiness officers to employee-related expenses. The second part of the question reflects the budget positioning of funds for the regional economic transition scheme, which was announced as part of this budget at $5 million. That amount has been allocated to the budget for the regions for this financial year. That $5 million lift brings it up to the $13 million.

The Hon. D. J. GAY: As the scheme’s main purpose, as stated in Budget Paper No. 2, page 4-229, is to help companies cope with periods of critical cash flow, what is the criteria for businesses to be accepted under the regional development assistance scheme?

Mr HARRIS: Essentially, the first thing looked at under the regional business development scheme is what employment levels can be sustained by a company that is looking at establishing an investment or expanding in regional New South Wales. The second thing that is looked at is investment size, and the third thing is basically what revenue would be brought into the State as a consequence of a major business establishing here. Those are, if you like, the three operational elements of assessing the size of an assistance package. But as to what can be looked at, the scheme basically relates either to firms that are moving into a location and are able to invest or to employ people, and provide growth and employment, or to major expansion of existing companies in regional New South Wales. Around 70 per cent of existing firms are extending and diversifying their base. The two elements are expansion of existing enterprises or establishing something new that is coming into the area.

The Hon. D. J. GAY: Minister, I refer to Budget Paper No. 3, Volume 2, page 696, "Regional projects facilitated or financially assisted - Investment committed". Please outline why this allocation is triple the funding for 1997-98 and is providing only 2000 more jobs, when in 1997-98 there was a massive reduction in funding and an increase of a thousand jobs?

Mr WOODS: Once again I will ask the director-general if he can throw any light on that.

Mr HARRIS: Does the question concern regional projects facilitated?

The Hon. D. J. GAY: "Regional projects facilitated or financially assisted - Investment committed" and "Jobs attracted". In 1995-96 $243 million was committed, attracting 4,157 jobs; in 1996-97 $1,486 million attracted 3,873 jobs; and in 1997-98 $531 million brought 4,136 jobs.

Mr HARRIS: My understanding is that of the investment committed, particularly in 1996-97, the financial assistance provided relates to capital-intensive projects, two of them being the Port Kembla copper decision and the Cadia goldmine. The Cadia goldmine was the result of a $400 million investment decision and that actually moved committed investment to a fairly high level. The others in 1997-98 reflect a change in investment style. We have seen more call centres, for example, which require lower capital investment by companies but also provide a great number of jobs.

Mr WOODS: The success or desirability of some of these projects are not just judged solely on employment. Profitability, export potential and a whole range of national interest factors need to be looked at. Employment is uppermost in our mind but the sustainability of an operation depends very much on those other aspects of investment, so they need to be regarded as being also of importance. Over the last couple of decades there has been probably a general drift towards higher investment in capital rather than in employment.

The Hon. D. J. GAY: The amount promised in the 1996-97 budget was $1,486 million, and in 1997-98 the amount delivered was $531 million. This year the figure is $1,650 million.

Mr WOODS: The figures given are for each following year.

The Hon. D. J. GAY: My apologies. Some of the other papers show estimated and actual figures.

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Mr WOODS: Yes, I know the mistake you have made but each one of those figures is a separate year.

The Hon. D. J. GAY: Yes.

The Hon. M. R. KERSTEN: Minister, I refer to Budget Paper No. 3, Volume 2, page 698. Why has the AusIndustry program budget been decreased when it was overspent last year? That allocation was $7,700,000 for 1997-98 and the revised figure was $8 million. Why has it been reduced to $5,301,000 for 1998-99? Could you itemise what that funding was spent on and explain why it has been reduced?

Mr WOODS: Part of the answer lies in the Federal Government’s approach to AusIndustry, as I am sure you are aware. The AusIndustry program, a joint program, was cut and then cut out by the Federal Government. The program was decreasing over time and at this stage does not, I think, exist any more as a Federal Government program. I might add that I think that is extremely unfortunate. The AusIndustry program, with the support of the Federal Government, was creating a hell of a lot of jobs, resulting in enormous investment and a lot of it in the regions. A report commissioned by the Federal Government not so long ago described the very success I am talking about. That report was never put out, although it was leaked. That was unfortunate because the report showed how successful the program was and yet it was axed by the Federal Government prior to the report coming out. The 1998-99 budget represents the forecast cash flow of existing commitments administered under the program. The State’s contribution to this program has now been restricted to a new initiative called New South Wales high growth business. I would finally make the point that whilst we in the State Government are continuing what we believe and what has been shown by independent assessors to be extremely successful, the Federal Government is pulling out of that very program. I might ask the director-general whether he has any more information to add to that.

Mr HARRIS: The $5.3 million, as the Minister has said, is essentially the remainder of the funds to cash flow under the AusIndustry assistance program. The program ceased funding new activities for small to medium enterprises on 31 March and ceases to operate as of 30 June. It has been a dollar-for-dollar program. These are funds that are held by us which we will simply flow through to companies who already have agreements with the AusIndustry program. Those funds will eventually simply disappear from the budget. The agreement, I suppose, exists until the program entirely finishes but those funds will eventually disappear from the budget statement of the department.

The Hon. D. J. GAY: Minister, I refer to Budget Paper No. 3, Volume 2, page 617, Surveyor-General’s Department, line item "Other expenses". Could you explain why other expenses, which were over-spent last year, were not increased this year?

Mr WOODS: I will refer that question to the Surveyor-General, Don Grant.

Mr GRANT: The question relates to the difference in other operating expenses. These are principally related to supplementary expenditure beyond the recurrent allocation which was associated with the undertaking of commercial work. It was also due to a net funded position, that is to say that our funding position is allocated to us as a first sum and then reduced by what proposed net income we will make. The balance of that is our net fund. Finally, the additional expenditure is nil or is not seen, rather, in 1998-99 due to the estimated diminished activity in commercial areas. To explain that, we have had a number of impacts on funding over the last few years, such as a change in pricing policy, an absence of windfall opportunities, and concentration or more concentration on public good provision. The pricing policy for spatial information began by virtually looking at what the market would bear.

The impact of that has been that the information has not been readily available to public sector agencies. This has led to a situation where there has been a circular flow of funds whereby Treasury has funded agencies to in fact purchase the information from my department and then that money flows back. So there has been a change of pricing policy to make information more freely available both to the public sector and to local government. The second point is that there has been an absence of windfall opportunities in that in the early 1980s to middle 1980s there were many organisations like Telstra who sought to obtain that information. Those windfall opportunities have now gone. The third point is that we have moved to a concentration of providing public good provision of information rather than concentrate on the commercial opportunities.

The Hon. D. J. GAY: I refer to Budget Paper No. 3, Volume 2, page 621. Why were the 1995-96 outputs for maintenance of geographic data, in square kilometres, half the estimated 1998-99 figure? What does this mean and what is that information used for? Staff numbers have dropped from 493 in 1996-97 to 400 in 1998-99. Will the reduction of staff mean a drop in services by the Surveyor-General’s Department?

Mr WOODS: I will refer that question to the Surveyor-General.

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Mr GRANT: If I could answer the first part of the question and then call for some assistance with the second. I should explain that the square kilometre indicator is not altogether satisfactory because we are talking about a range of themes, that is to say, road patterns, drainage patterns, or contour patterns, and we are talking about them at different scales. But that is about the best we can do to provide an indication of what particular coverage they would be. As to the question about average staffing, I will refer that to Mr Beacroft.

Mr BEACROFT: The EFT numbers referred to there prior to 1998-99 have a factor added in by the previous department which we were a part of, now the Department of Land and Water Conservation, associated with corporate overheads.

The Hon. D. J. GAY: Minister, I refer to Budget Paper No. 3, Volume 2, page 698. Why were grants to non-profit organisations overspent last year by well over $1 million and yet this year they have been reduced by more than $0.5 million compared to last year’s actual figure? Please itemise what the funding was spent on and explain why it has been reduced. Is the reduction in the allocation an indication of the failure of the Government to attract businesses to New South Wales?

Mr WOODS: Before referring that question to the director-general, I should say that we are talking about non-profit organisations, not businesses. The director-general might be able to point out some of the reasons.

Mr HARRIS: Certainly. Two of the reasons that I can give you were related to funds provided to the Advanced Technology Park. There was an obligation within the budget to provide about $370,000 to the Advanced Technology Park in Sydney, an obligation that has been in existence for some time. The additional amount primarily relates to Investment 2000, which was a project that the Government partnered with three other stakeholders. These are Telstra, Westpac and the Department of Industry, Science and Tourism, through Mr Bob Mansfield’s office. This is an organisation that provides support to -

[Time expired.]

DEPUTY-CHAIR: I refer to Budget Paper No. 3, Volume 2, page 617. Minister, why has the estimate for the rural financial counsellors program only increased in real terms by 0.5 per cent, which is less than indicated at 2.5 per cent, when both demand and financial hardship have increased in rural communities, a fact of which I am sure we are both well aware?

Mr WOODS: There is no reference to a rural financial counselling service on that page.

DEPUTY-CHAIR: I think that page has a general statement about it. Can you answer the question?

Mr GRANT: Does the question relate to the dot point at the top of page 4-195 of Budget Paper No. 2, which commences, "a NSW Community Mapping Project in co-operation with Rural Fire Services"?

DEPUTY-CHAIR: No. I am asking about the rural financial counsellors program.

Mr WOODS: I can only say it is not on our budget paper as I look at it.

DEPUTY-CHAIR: You cannot answer the question; you are unaware of the rural financial counsellors program?

Mr WOODS: I will take that question on notice, but I think that program may well be within the Department of Agriculture.

DEPUTY-CHAIR: Can you answer questions on area health services in New South Wales?

Mr WOODS: No. That comes under the Department of Health.

DEPUTY-CHAIR: I refer to Budget Paper No. 3, Volume 2, page 617. The government access program was announced by the Premier in August 1996 to improve the availability of services and information to country towns. A total of seven pilot government access centres have been established. Are any funds allocated under that program for the establishment of additional government access centres?

Mr WOODS: Yes. The access pilot program is trialling integrated service delivery to improve equity in and access to government services for people who live in rural and remote areas of New South Wales. The two-year pilot program has established seven government access centres which have been in operation for 12 months. These centres provide one-stop access to government services including giving information on government activities, organising referrals and appointments, and undertaking agreed transactions on behalf of various agencies. This new way of providing services brings a range of government agencies together in the one service outlet for the convenience of the customer. Government access centres have been established at Grenfell, Kyogle, Oberon, Maclean, Gilgandra, Nambucca Heads and Dorrigo.

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Some of the services that are available through those centres are information on all government services and referrals to appropriate agencies, appointments with the Department of Fisheries, Department of Housing forms and information, Department of Veterans Affairs information, Centrelink services, and community transport bookings. A mid-term review of the program is being finalised which will strengthen the current operational model of the program. I think we can also learn, because some of the centres have been more successful than the others. Criteria for the identification of localities where government access centres are feasible for a whole-of-government service delivery option will be considered in a final review of the program at the end of the pilot phase. Any decisions about the expansion of the program will occur towards the end of the pilot and after a full assessment.

DEPUTY-CHAIR: I refer to Budget Paper No. 3, Volume 2, page 617. In its pre-budget submission NCOSS identified a problem of access to affordable and appropriate transport in rural and remote areas. Are any funds allocated to enable the Office of Rural Communities to conduct a study for the transport needs of rural and remote communities?

Mr WOODS: I think that also is not in my portfolio.

DEPUTY-CHAIR: That is my mistake. Accepting that my question relates generally to the area of expenditure, are you saying that is not in your portfolio or that you cannot answer the question? A pre-budget submission by NCOSS identified a problem of access to affordable and appropriate transport in rural and remote areas. Are any funds allocated to enable the Office of Rural Communities to conduct a study of the transport needs of rural and remote communities? As you would well know, that is a major problem on the north coast and in areas where both you and I live.

Mr WOODS: Some progress has been made with a hail the bus program on the north coast, community taxis up at Kyogle, and various other things, but they are not funded through my office. We have not made allocation for funding for those purposes through my office. However, there is a study under way and it is due for completion in three months.

DEPUTY-CHAIR: Are any other funds allocated in that area of expenditure to fund the Office of Rural Communities?

Mr WOODS: No.

DEPUTY-CHAIR: I refer to Budget Paper No. 3, Volume 2, page 698. Tourism is an increasingly important source of income for regional New South Wales. For example, the Hunter wine industry attracts 900,000 visitors a year. What support is available for promotion of regional tourism from your department?

Mr WOODS: The tourism aspects of regional development are funded through Minister Debus’s department. However, there are important aspects that we look at and there are various ways in which we can assist with regard to business development, if you like, in the tourism industry. That sort of development would be looked at through our normal business assistance schemes as assistance. But the promotional side of tourism is very much within the Department of Tourism. The director-general may like to make a couple of comments on that.

Mr HARRIS: The number of tourism-related businesses in New South Wales is growing. We have 18 regional offices throughout the State and they are increasingly working with companies that are in tourist-related businesses. Tourism is probably moving away from some of the more traditional areas of tourism to areas where people are looking for different experiences. It is not simply the building of hotels and resorts; it is an experience-based area. The department plays a role in sitting on a number of committees with Tourism New South Wales. We look, for example, at major events and at tourism events around the State that we believe will attract business to regional areas. Our Hunter office in Newcastle has done a great deal of work in the Hunter region with people such as Murray Tyrrell when looking at trying to develop experiences throughout the Hunter region and to help companies create a business case to support those activities. We are not so much in the business of providing grants or providing direct funding for these activities, as we see them as part of our core business development activities. So tourism is becoming much more a mainstream function, as far as the department is concerned, in the area of business development. As the Minister has said, promotion, however, continues to remain within the hands of Tourism New South Wales, which undertakes those broad promotional activities.

DEPUTY-CHAIR: Is this support to be ongoing? Do you have plans to augment development of a program to target regional tourism specifically?

Mr WOODS: The support will certainly be ongoing and I hope it will expand in the future because we do see tourism, particularly in some areas, as being a substantial part of business activity in those centres. But I think tourism is changing all the time and we do need, as the director-general mentioned, to
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be looking at where tourism is turning and where tourists are going. There will be significant tourism-related opportunities presenting over the next few years, particularly with the Olympic Games. Yes, support will be ongoing, strategic and as targeted as we can possibly make it. That is a good point. The tourism industry is an area of high employment and investment and it can replace to some extent jobs that are being lost in other areas.

DEPUTY-CHAIR: I refer to Budget Paper No. 3, Volume 2, page 698. Minister, the Hunter region has used the cluster theory to promote co-operative relationships within the 16 major industries in the Hunter region. Have you looked at developing a regional cluster program which fosters industry development in regional areas?

Mr WOODS: I think aspects of that are contained within our country centres growth strategy, a targeted approach which looks at particular regional centres, looks at industries in them, identifies opportunities, and applies a whole-of-government approach developing those opportunities in a model. We have used that strategy in the western Riverina, where about eight significant opportunities were identified. Impediments to those opportunities were brought to us by the proponents of those opportunities. With the whole-of-government approach we were able to satisfy the proponents so they made the commitment to make those opportunities actually happen. That commitment happened very much through the whole-of-government integrated approach, looking at and analysing industry changes and the gaps involved in them as part of the country industry centres growth strategy. We are also looking at the Tumut area where there is potential for development and growth, and we will progress from there and be looking at other centres in that same way. Very much a part of that is about looking at industry, about looking at the networking and all those other ways that can help us identify opportunities and gaps in opportunity for industry.

Mr CULLEN: Whether you call them clusters or networks or whatever, it is actually about producing scale for businesses. Regional New South Wales businesses are often not of a size necessary to satisfy international markets or even large domestic contracts. There are a number of different ways to attain scale, and clusters is an important example. For instance, in the Illawarra we are working with a number of organisations in what is basically a telecommunications industry cluster. There is some capacity in the university there that provides a really important building block to assist in that development. In other locations, as the Minister has mentioned, there are very strong food processing links. We are looking at opportunities for bringing a number of companies together on the scale necessary to attack overseas markets. For instance, in the Hunter region again, the Hunter Export Centre was an important initiative that was funded by us to a reasonable extent to get companies off-shore together, selling goods as a package rather than selling them individually. It is all about scale, and clusters are an important part of that scale exercise.

DEPUTY-CHAIR: I refer to the Budget Speech, page 20, where the Treasurer refers to the launch of the Government’s direction statement on regional growth and lifestyle. Minister, could you expand on the details of that statement?

Mr WOODS: The lifestyles program came about from travelling over the last year and more throughout regional New South Wales. What was coming to us very clearly was that there is a very strong impediment in many regional centres because of the difficulty in getting skilled workers to those centres. There have been well-publicised instances of this and I have seen a couple of them. I went to a stainless steel fabrication business, a reasonably large business employing 100 or more people and manufacturing stainless steel equipment for the wine industry. The manager of that business said that if I ordered the product he makes I would get it delivered in 18 months. I asked him why is that so, and he said that he simply cannot get expert stainless steel welders. That sort of experience we have seen repeated time and again as we have travelled around the State. One of the aims of the lifestyles program is very much to promote country towns and break down negative images of country towns. The negative images are part of the reason people are hesitant to go to the country, part of the reason skilled people are hesitant to go there.

That is apparent across the board but it seems the further people move up the skills ladder the more difficult it becomes for them. Even the shortage of doctors in some country areas can be related to that rationale. The lifestyles program will work in with the other programs we have but it will be aimed at overcoming problems and assisting businesses to be able to attract the sort of labour they need to take advantage of the growth they are able to sustain. In other words, there are opportunities but there are significant impediments to growth in some country areas. I see that program as being integrated with other strategies such as the country centres growth strategy in overcoming those impediments. The western Riverina strategy is proving to be very successful. That was one of the areas the Government addressed in satisfying business people, the proponents of various opportunities, and getting them to commit themselves.

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The Hon. E. M. OBEID: Minister, what is the Government doing to assist in the diversification of our agricultural base?

Mr WOODS: For many agricultural areas part of the answer has to be in looking at an overall plan of diversification, particularly so for many small farmers. A farmer cannot run a 200-cow farm as a separate economic entity any more and survive, so there is a need for diversification. There is no doubt we are under pressure from international competition. It is unlikely that that competition will decrease; it is more likely that it will increase. Rural producers are being forced to diversify. They should be looking to diversifying and moving into value-added production. The State Government is helping them to do so through the agribusiness alternatives program. The program’s aim is to assist producers identify and develop value adding. It is alternative agribusiness opportunities that can take industry forward. Through the Department of State and Regional Development the Government has placed 12 agribusiness development officers throughout New South Wales. The officers advise farmers and other businesses on ways to diversify their operations and to improve their sustainability.

The 12 positions are strategically placed across the State to best service the State as a whole. They are located in Bourke and Broken Hill, Cobar, Buronga, Deniliquin, Wagga Wagga, Goulburn, Dubbo, Port Macquarie, Armidale, Grafton and Bathurst. The Bourke, Broken Hill and Cobar offices are working closely with the team that is managing the West 2000 program in the Western Division. The agribusiness development officers provide practical advice on diversifying and on adding value to agricultural products. They also help facilitate producer networks and co-operatives and build links between producers, processors and markets. The sort of projects being undertaken by the agribusiness development officers are, for example, assisting with the establishment of a consortium of beef producers in the south-west, and looking at ways of evaluating top-quality beef through to the supermarket shelf in a ready-to-use packaged product for domestic and export consumption.

In Bathurst the agribusiness development officer is exploring new product opportunities for the commercial harvesting of St John’s wort, a common weed in Australia which has now been found to have medicinal properties. In scientific studies conducted in Germany it has been discovered to be very effective in combating depression. In fact, St John’s wort is so effective that it is now more prescribed in Germany than Prozac, and unprecedented demand has been created for the product. Significant trial orders have now been placed and I will be in Bathurst on 7 July to promote the initiative. The most recent example of this Government’s endeavours to assist and encourage agriculture diversification was the commercial realities of the cut flower production conference held in Grafton last week. About 200 people attended that conference, which I opened, and almost all were surprised about how many had attended. The cut flower industry is attracting enormous interest and it has a lot of potential if we can get the right things going for it.

The people who attended that conference included existing producers looking to diversify or increase production, potential investors, and farmers seeking alternative crops. Other projects being developed include a strategy for a sustainable goat industry in the far west, the establishment of a transport and distribution network for agricultural produce from the Bega valley, and a considerable expansion of land-based aquaculture on the north coast. The agribusiness alternatives program represents a further example of the Government’s commitment to the people of regional rural New South Wales through the provision of increased business opportunities. There are other aspects of assistance. Only last weekend I released a report which was funded partly through the Department of State and Regional Development into aquaculture on the north coast. That report identifies significant opportunities offered by three crustacea and three fin fish in that north coast area. Given that over the last 10 years wild fish stocks have been decreasing year by year, it is quite clear that if we are going to eat seafood in the future it has to come, at least in part, from aquaculture.

The Hon. E. M. OBEID: What is the Government doing to assist small communities increase their existing business base?

Mr WOODS: During a visit to Goulburn just a little while ago on 9 June I launched a new program, the business retention and expansion program. The program will help small communities in regional New South Wales to grow their existing business base. Five communities will be involved in the initial stages of the program. They are Leeton, Cooma, Milton-Ulladulla, Cabonne shire and Rylstone-Kandos. Further expressions of interest in the program will be sought in the second half of 1998. The Government extended the program based on a successful pilot in the New England area and in the north-west region over the last three years that was completed only six months or so ago. The business retention and expansion program is funded through the Department of State and Regional Development. It is a stand-alone component of the department’s very successful community economic development package, along with the main street and small towns program. The department’s community
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economic development package aims to assist in the flow of positive benefits to a community emanating from planned development which is economically, socially and environmentally sustainable.

The business retention and expansion program is a standardised approach for collecting and collating business information. It provides an up-to-date audit of local business in a town and forms a sound basis for an ongoing strategic plan for the sustainable management of the community. It is a very effective way of identifying and addressing problems and opportunities in a community. The focus of this program is the existing businesses in the community. The needs and opportunities of the local business community are central to any analysis of the local economy and the design of strategies for development. Existing businesses in the community represent the major resource for job creation where there is scope for them to strengthen and expand. To design effective strategies for community economic development it is necessary to gain an accurate understanding of the needs, the weaknesses, the capacities and strengths of the business community and the potential for growth.

[Short adjournment]

The Hon. E. M. OBEID: Minister, in the light of recent Commonwealth Government initiatives for eradication of carp and commercialisation of carp-based products, does the New South Wales Government have a similar initiative for reducing carp numbers in inland rivers and lakes throughout New South Wales?

Mr WOODS: All of us are probably well aware of the problem that carp is presenting in many estuaries, rivers and lakes. The State Government believes that the best avenue to reduce carp numbers in those inland rivers, lakes and dams is to make carp fishing and value adding a profitable business. The Government responded to industry requests and commissioned the development of, through the Department of State and Regional Development, a carp industry investment brief. The brief has identified a broad range of products which could be made from carp. They include products for human consumption ranging from live fish fillets, cutlets, smoked fish and fish mince to dried products for export markets, animal feeds such as pellets and fish meal, and fertilisers. A site for a carp processing factory has been identified at Narrabri. Several overseas investors have expressed interest in investing in the industry. In order to further facilitate carp valuating activities, the department will also be funding from its 1998-99 operating budget further studies to improve carp fishing methods to increase yield and improve quality of the catch.

Whilst developing high value uses for carp the Government has also requested New South Wales Agriculture to investigate the broader use of carp as a fertiliser in horticulture and field crops. Carp is used mostly for fertiliser production but the development of this market will encourage more carp fishing. As another measure to encourage carp fishing, my colleague, the Minister for Fisheries, has recently announced a carp bounty of $0.25 per kilogram. The bounty will ensure that carp fishing will be more profitable pending development of high value added carp products. I have met with a couple of the people involved in this project, including a chap named Cec Hyde, who is a fisherman from Port Macquarie. He and others are absolutely convinced about the potential of this industry. I have also met many people who say that the product is quite edible and nice when treated properly. So along with them I think this is the answer. I know there is some people who do not agree but if you spoke to Mr Hyde and his wife, they say they can cook it and are really into it. So I think there is a potential there. They are certainly convinced of it and I think this may be part of the answer.

The Hon. D. J. GAY: Minister, your departmental officer does not appear convinced.

Mr WOODS: He has probably never tasted it. While on aquaculture, about 10 years ago I tasted one of the very early prawns produced by the prawn farms. I thought that would never take off, because it had that muddy taste about it. But farm prawns now are at least equal to and in many cases are better than the wild variety.

DEPUTY-CHAIR: I could be mistaken but I think carp is used internationally for gefilte fish, a Jewish dish. You should check out New York and Israel, where there would be an unlimited market, especially at certain times of the year.

Mr WOODS: I have met overseas people who are very interested in buying the product. In many overseas countries carp is a very acceptable species.

The Hon. E. M. OBEID: Minister, in line with the great work you are doing out there in the regions, what else is the Government doing to enhance export capabilities of New South Wales business?

Mr WOODS: The New South Wales Government is active across a broad range of programs and services aimed at boosting the exports of the State. The Department of State and Regional Development has adopted a client-focused approach to delivering export program initiatives. The approach is designed to enhance the export capability and the export culture of small and medium enterprises in
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New South Wales. The objective of the program is to increase both the participation and success rates of those small and medium enterprises in international markets. In recognising the challenge and the complexity of these objectives the department works with firms to help them progress through a number of stages as they develop from being a company selling only in the domestic market to becoming a seasoned and experienced exporter. These stages are: one, achieving awareness of export markets with management becoming motivated and committed to developing of foreign markets for its products and services; two, developing an export market plan for selected markets; and achieving market entry in target markets and also achieving export sales and growth in targeted markets.

One of the key initiatives of the New South Wales Government in this regard was the creation of six export adviser positions. They provide hands-on advice to those businesses in the trade and goods and services sectors that are considered capable of winning business in export markets. Five of these advisers are now based in rural New South Wales - in Bathurst, Griffith, Wagga Wagga, Tamworth, Nowra and Coffs Harbour. A sixth export adviser who will be based in Sydney will provide ready access to metropolitan based firms and will also fulfil the role of co-ordinator for the five rural-based advisers. Since the program began in September 1997, 211 new regional-based small and medium enterprise clients have been recruited by the export advisers. On average, 10 new clients are being added each month but a rural export client base will be augmented by small and medium enterprises from the former AusIndustry program which was around 350 and other trade promotion programs managed by the department.

The Department of State and Regional Development continues to service incoming delegations and buyer missions, support the export culture awareness activities such as the Premier’s New South Wales Exporter of the Year Awards, and conduct targeted export seminars in metropolitan and regional New South Wales. In 1997-98 government trade promotions support to 38 companies yielded $3.2 million worth of export sales, with projected sales estimated at $50 million over the next 12 months. Companies in the building products, furniture, information technology, multi-media and food sectors exhibited in Japan, Indonesia, China and the United States. The programs and initiatives outlined strong evidence of the commitment of the New South Wales Government to enhanced exports by New South Wales companies. Once again it is very much a matter of identifying opportunities, and they are there in abundance even for fairly small companies. One that comes to mind is Rudway at Guyra, which manufactures weighing equipment and exports to 38 countries - quite an amazing effort from what is essentially a small enterprise.

The Hon. E. M. OBEID: Minister, further to your answer about export capabilities, what is the Government doing to assist the development of regional businesses and industry?

Mr WOODS: Through the Department of State and Regional Development the New South Wales Government operates financial assistance programs and project facilitation which can help in the establishment and expansion of businesses in regional New South Wales and has the potential of generating many sustainable new jobs. The regional business development scheme is the major vehicle by which the department provides financial assistance to regional business. Since April 1995 over $750 million of new investment has been secured for regional New South Wales through the Government’s regional development programs. This new investment will result in about 7,500 direct new full-time jobs being created across the regions. This is based on project proponents’ estimates of the likely result of their investment and does not include the substantial indirect benefits that can flow from the multiplier impact of these investments.

Examples of recent major projects secured or retained for country New South Wales are Austral Softwoods Processors Limited, which established a plant in Holbrook with an $18 million investment and 70 new jobs. Devro T-Pak, which produces casings for the food industry, put forward a feasibility plan for plant location at Bathurst, which is $28 million investment and 30 new jobs. Monbeef Meatworks is an upgrade of Cooma abattoir, a $10.5 million investment with 80 new jobs. Bioclip Pty Limited, a manufacturer of nets to collect genetically sheared wool, is investing $6.6 million on the establishment of an operation in Lithgow, and producing 100 new jobs. Lockheed Martin, in its establishment of a satellite tracking station at Uralla near Armidale, has made a $25 million investment that will create 40 new jobs.

I might mention that John Ramsay, who I think is the vice-president of Lockheed Martin, came out for the sod turning, as they call it in the United States. He mentioned that they had looked at about 30 countries to establish that satellite tracking station and that there was great competition from Rockhampton, Queensland. When I asked him why they came here, he said it was because they were made welcome by the Government and by the local people at Armidale. Moreover, I look forward to that company considering further investment in New South Wales. Objections raised when the satellite tracking station first mooted
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included concern about rockets taking off from there and UFOs and aliens being attracted to the area, but those suggestions were eventually overcome. Cowra Export Packers, a $2.3 million investment, has created 25 new jobs. Kimberly-Clark Australia, which manufactures non-woven fabrics for disposable nappies and other products, expanded its existing plant in Albury with a $29.5 million investment that is providing export and import replacement opportunities.

Parle Foods at Griffith processes frozen canned vegetables. Tony Parle is expanding his operations in Griffith with a $6.5 million investment, offering 120 new jobs. Bega Co-operative has expanded its dairy activities with a $22 million investment in Bega, creating 70 new jobs. Causmag Ore Company Pty Limited, manufacturers of magnesium oxide, expanded its facility at Young, with a $6.7 million investment, bringing to that town 20 new jobs. Weir Engineering, a pump manufacturer, is undergoing consolidation and expansion at Somersby, with $3.8 million investment, adding 120 jobs. Riverina Wines is expanding at Griffith with a $15.2 million investment, giving 100 new jobs. Moree Seed Graders has proposed expansion at Moree, a $10.6 million investment creating 28 new jobs. Auscott, a cotton producer, is expanding at Narrabri with $19 million investment, bringing eight new jobs.

[Time expired.]

The Hon. E. M. OBEID: What is the Government doing to assist the economic survival of rural and regional communities?

Mr WOODS: Community revitalisation is a step-by-step process which must be driven at the community level. The main street and small towns program is one way the Government is helping communities through this process. That program encourages participation by local people, businesses, the community and local Government in the planning process and in identifying shared priorities. A cohesive approach to local economic development is achievable through the program. In general, the main street and small towns program provides assistance to communities with populations between 1,500 and 15,000. The program is being introduced for a whole local government area and can cover more than two communities. Government assistance is also available. Assistance through the main street and small towns program takes the form of subsidised public workshops to introduce the program and to develop and review community strategic plans.

The Government will also match local cash contributions up to $20,000 to kick-start implementation of business-related projects identified in the plan or for the employment of a local program co-ordinator. Communities are not restricted in the number of times assistance can be accessed. However, a community will need to demonstrate what has been achieved through previous Government assistance. During 1997-98, 30 communities were offered assistance through the main street and small towns program in the form of workshops, projects and/or co-ordinator funding. Typically, this assistance helps the establishment of local partnerships, with fund leverage and a strategic and co-ordinated approach to local development, business and tourism growth and retention, and enhanced community pride. Another effect of this program is reduction of parochialism as the Government actively encourages networking between program participants in different and often neighbouring communities.

Regional forums and annual community economic development conferences and quarterly newsletters funded through the program also encourage networking. The skills of program participants at the local level, particularly co-ordinators, has been improved through training, including training in strategic planning, project management, and community workshop facilitation. Training and marketing and events management will soon be under way. During 1998-99 the Government will develop a series of self-help modules incorporating best practice case studies in aspects of the program. The modules will cover topics ranging from financial sustainability, marketing and promotion, business and economic development, to the operation and structure of local committees. The introduction of a mentoring program is also planned for 1998-99 and this will be of particular assistance to communities with newly appointed co-ordinators and where geographic isolation is a concern.

The Hon. E. M. OBEID: What is the Government doing with plans for the New South Wales Trade and Investment Centre and the Country Embassy?

Mr WOODS: The New South Wales Trade and Investment Centre and the Country Embassy are now being managed as an integrated facility. In 1997 part of the area previously occupied by the New South Wales Country Embassy was reconfigured to accommodate staff in the Olympic business service unit and the Investment 2000 program, both important Government initiatives to attract additional business to New South Wales leading up to the 2000 Olympic Games. This necessary refurbishment provides an opportunity to re-evaluate use of the area and a chance to seek input from both regional users and past visitors. Based on this feedback, the New South Wales Country Embassy has been improved to provide
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greater flexibility for users. Regional clients are now able to utilise the area in a variety of different ways including the holding of seminars for large groups, at the same time staging displays in an adjoining section of the facility.

Up to this point in the 1997-98 financial year the Country Embassy has received around about 5,670 visitors compared to 2,541 in 1995-96 and only 2,333 visitors in 1994-95. I think those figures are clearly an endorsement of the revamped centre. Funds will be available from the department’s 1998-99 budget allocation to continue the upgrading plans for the embassy. In addition, a new brochure has been released to inform regional businesses and associations of the role of the Country Embassy in attracting regional investors or in profiling regional production of goods for domestic use or for export. A permanent display space is available in the reception area ensuring that maximum exposure to all visitors to both the Country Embassy and the Trade and Investment Centre is made use of. Each region has been offered the space for a two to three week period to showcase the strengths of the particular area.

Also, a regional investment profile is in production which will show how regional New South Wales does meet the selection criteria of investors. A specific profile for each region is to be included along with details of the services provided by the department to assist business in regional New South Wales. The department’s First for Business website www.business.nsw.gov.au has already been launched and provides investors with a profile of the regions and the assistance that the department can provide to companies locating in or expanding into the region. To help promote regional strengths the department’s Business First newsletter includes a regular "Around the State" section detailing business successes in the regions. Five editions of the newsletter are published each year and circulated to approximately 10,000 businesses.

The trade and investment centre continues to be the first point of call for overseas visitors because of its ability to offer the most up-to-date information on the economic climate in New South Wales. This is achieved through the use of extensive databases and professional advice from key officers within the department. The centre will be utilised to its absolute maximum between now and the Olympic Games hosting business missions and visiting dignitaries to Sydney. As part of this activity a new trade and business video is being developed. This will complement the regular briefing program detailing the strengths of the New South Wales economy that is available to business groups, national and international media, foreign business chambers, consulates general and other trade delegations.

The Hon. E. M. OBEID: How has the regional co-ordination program improved services for the people of rural and regional New South Wales?

Mr WOODS: Initially located in only Dubbo and Lismore, the program now covers all of regional New South Wales from offices now in Armidale, Newcastle, Wagga Wagga and Goulburn. The aim of the program is to improve and co-ordinate service delivery in a way that meets the needs of regional communities whilst making the best use of resources. The budget for 1998-99 is funded to the extent of $1,658,000 in contributions from State government agencies. The program has achieved positive outcomes for regional communities by better co-ordinating government services and activities and also by improved management of issues. Given the program’s success in regional New South Wales it has been expanded to cover western Sydney. The program has made a major contribution to improving working relations between State government agencies at a reasonable level.

The program is currently managing over 120 projects of significance across regional New South Wales. Its focus is on initiatives that are best undertaken by a central agency with the cross-government imprimatur of the Premier. This is a facilitation role spanning the full range of government activity. The program does not replicate the work of line agencies but achieves positive results and positive outcomes for the community through collaboration and co-ordination between the agencies. Support for the program is strong among participating State government agencies, in common with agencies and local government involved in individual projects as well as community groups. The regional co-ordination program has evolved as a service co-ordination design platform where the strengths of and lessons from the program have informed the development of interagency initiatives across the State. The principles, the structure and the objectives that underpin the RCP have helped the design of across-departmental projects in rural and urban settings.

The Hon. E. M. OBEID: Minister, this is probably a concern of all major political parties because those in the bush have been crying out that politicians have not been listening to them. What is the New South Wales Government doing to demonstrate its commitment to listen to the people of rural New South Wales and respond to the issues they are facing?

The Hon. D. J. GAY: Could a line item be specified for that question?

The Hon. M. R. KERSTEN: I object to the question.

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DEPUTY-CHAIR: I will allow that question to be answered, but I accept the point made about the need to quote line items.

Mr WOODS: The Regional Communities Consultative Council has reconvened for its second term. The RCCC is the key advisory body to the Premier and the Government on issues affecting regional New South Wales and provides a strong communication link between the people of regional New South Wales and the Government. The RCCC advises on the impact of specific Government initiatives, policies and services for rural and regional communities. It advises on opportunities for Government initiatives which advance the social, economic and environmental development of rural and regional New South Wales. It advises on options to improve access to information on Government initiatives, services and programs being delivered to rural and regional New South Wales. It advocates for change to improve the economic and social environmental quality of life of rural and regional communities.

The term of the current RCCC is two years, which commenced in March 1998. A budget allocation of $150,000 allocated to the RCCC in 1997-98 will pay sitting fees and provide funds to allow the RCCC to carry out its proposed work over the next 12 months. The RCCC consists of a chairperson and 13 members, each of whom represents a particular interest group. The minority groups represented on the council include Aboriginal people, ethnic people, youth and women. Other interest groups represented include business and industry, trade unions, farmers, education services, health services, environment services, social services, and local government and religious groups. The RCCC intends to hold a number of forums this year which focus on a particular issue of importance for regional New South Wales.

The aim of the forums will be to generate outcome-based strategies to address the critical constraints associated with the issue and to promote the wider adoption of good practice schemes which have offered better quality services to regional New South Wales. The first forum to cover jobs and investments will be held in Grafton. The RCCC also intends to follow up recommendations included in the 1997 report of the RCCC which aims at improving various economic, social and environmental aspects of regional New South Wales. The role of the Office of Regional Communities has been enhanced with the transfer of the ORC from the Department of Agriculture to the Premier’s Department in October 1997.

The existing functions and responsibilities of the Office of Regional Communities have been fully integrated with the regional activities of the Premier’s Department, which has provided a co-ordinated, strategic and results-oriented focus for the Government’s commitment to regional New South Wales. The Office of Regional Communities has staff in Sydney and Orange and is responsible for facilitating the whole-of-government responses to regional issues and priorities, enhancing the planning and delivery of services to regional communities through the co-ordination and integration of government activities, contributing to strategic cross-government policy and service model development in relation to regional New South Wales, developing and implementing information and consultation strategies for regional communities, and also strengthening agency implementation of rural community impact statements.

The Hon. E. M. OBEID: Finally, how has the New South Wales Government, as part of its regional economic development strategy, addressed the need to attract trades and professional skills to the region to meet the needs of existing and prospective businesses?

Mr WOODS: The lifestyle benefits of regional New South Wales should serve as one of its best assets in attracting skilled and trade professionals, but the common appearance of negative media stories and the negative perceptions that they create are a real impediment. In particular, people in Sydney have the view that all country towns are the same. In some locations this has limited the capacity of industry to attract the type of specialised labour that it needs to develop new investments. The Government has established the country lifestyles program to help overcome that problem. We are providing a million dollars a year in the 1998-99 budget to fund the program. Our aim is to ensure that people with key skills can be attracted to regional centres to ensure that business growth potential can be fully utilised. The program will promote services and facilities available in regional centres and the lifestyle attributes of these areas. In particular, we will be emphasising the specific lifestyle benefits of each town on an individual basis.

For example, in Armidale we would look to promote the strong education base for families and the vibrant arts and cultural life. But in line with our efforts to emphasise the individual virtues of each town other benefits would be highlighted, and the highlights would be different in Griffith and Orange. The emphasis of the program highlights that regional centres offer an attractive alternative to metropolitan living. To illustrate the lifestyle benefits of a regional environment an exercise was undertaken to compare lifestyle options in three regional centres with those available in a cross-section of suburbs in Sydney. Three local government areas, Armidale, Orange and
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Wagga, were contrasted with the Hornsby, Botany and Blacktown local government areas in Sydney. They were examined to identify educational, medical, recreational, real estate, community service, shopping and entertainment opportunities available.

[Time expired.]

DEPUTY-CHAIR: Minister, the integrated rural policy package, IRPP, replaces the rural adjustment scheme as of 1 July 1998. There appears to be no allocation for the IRPP within the Rural Assistance Authority of the Department of Agriculture. Where does the State’s contribution to the IRPP appear in the budget?

Mr WOODS: To my understanding, it would have been covered under agriculture. It is not in my portfolio but, if you like, I will take that question on notice.

DEPUTY-CHAIR: I refer to Budget Paper No. 2, page 4-228, in relation to the regional economic transition scheme. Are you aware that when last year’s budget was released you, as the member for Clarence, were quoted in the Coffs Harbour Advocate of 25 July 1997, as stating that registered clubs were in a privileged position. Minister, given this attitude, if it is correct, what measures are contained in this budget to assist the revival of the north coast club industry?

Mr WOODS: I must first confirm that it was my view that the clubs were in a privileged position as far as taxation goes. That was a reference to the benefits they get from income tax provisions.

The Hon. D. J. GAY: That was not your view as a publican, was it?

Mr WOODS: Certainly not, and I am a former publican. There are no elements in the Department of State and Regional Development to assist the club industry as an industry.

DEPUTY-CHAIR: Given that youth unemployment on the north coast is at the highest rate in the State at 22 per cent, what specific youth unemployment funding is provided in the budget for the north coast region?

Mr WOODS: To answer that question I would firstly draw a distinction between unemployment and economic development. I see the job of this department as being very much in economic development.

DEPUTY-CHAIR: I rephrase the question to refer to the type of economic development needed to help resolve the acute unemployment problem.

Mr WOODS: The idea that economic development by itself is likely, in all cases, to reduce unemployment I think is a fallacy. Time and again I see western towns that have low unemployment but very little economic growth because people move out, and there are no jobs there. On the north coast, for instance, there has been considerable growth over the last decade or two, and yet there is still very high unemployment. Regardless of growth, that is likely to continue. The programs or strategies that are likely to assist reduction of unemployment on the north coast are very much labour market programs, training programs, and similar types of programs. Although that economic growth has gone on over past decades, the unemployment rate has not fallen.

That carries the message that jobs that have become available have not been taken by people already living on the north coast but have more likely been taken by people moving in. So the unemployment level has stayed high. If people are to be assisted to take the jobs that do become available, bearing in mind the growth on the north coast and many other regions in New South Wales, that is very much about training and labour market programs. And I emphasise that that should be the responsibility of the Federal Government. The unemployment rate dropped significantly on the north coast at the end of 1994, or the beginning of 1995, when there was quite an emphasis on those programs, and the rate has risen again since with the dropping off of those programs.

DEPUTY-CHAIR: Supplementary to that question, what measures are in this budget to help north coast employers compete with similar businesses operating nearby in Queensland under far more lenient payroll tax laws?

Mr WOODS: Well, I think we have a raft of programs. But, essentially, the statement we have put out, which is applicable not just to the north coast but to the whole of rural New South Wales, is very much a rejection of reliance on markets to provide the wherewithal for economic growth in the regions. In other words, we say that if markets are allowed to dictate where resources go, that will be ongoing practice with the regions. Rural New South Wales has lower economic growth than the metropolitan areas. It is fairly obvious that that is the result. We are seeing the effects now of that type of policy with the closure of banks and downsizing. I accept that with the ascendancy of market economics the national competition policy undoubtedly has benefits. Within that broad range of benefits are identifiable areas of cost. And our programs are very much about focusing on where those costs are, and then through the country centres growth strategy and other programs being able to intervene to give assistance. Assistance is essential if the aim of increased rural economic activity being equivalent to metropolitan activity is to be achieved.

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DEPUTY-CHAIR: I refer to Budget Paper No. 2, page 4-229. In relation to the Investment 2000 Initiative, are you aware that you told the Sydney Morning Herald that upon your appointment as Minister you would use information technology to foster regional development? What information technology will be funded under this budget, and in what towns and shires will technology be evident?

Mr WOODS: As I understand it, the Government, through the Minister for Information Technology, will be issuing statements shortly and they will encompass those areas of regional New South Wales. We have various means of assisting, and we have done that in various ways, including Norlink on the north coast and in other areas. But I might ask the director-general if he has any further information on that.

Mr HARRIS: The Investment 2000 showcase was actually a program aimed at recruiting inbound investment in the wake of the Olympics, or in the spotlight of the Olympics. The technology that is being used in that is based on a web page which has been established through Investment 2000. Also Investment 2000 has been undertaking recruitment activities talking to companies in Europe and most recently in Asia and later on this year in North America. The program, as I mentioned earlier in the proceedings, has been funded by four equal partners, being Telstra, the Westpac Bank, the Department of Industry, Science and Tourism, through Mr Bob Mansfield’s office, and also through this department. Investment 2000 will concentrate on providing opportunities for overseas investors with particular interests in technology to meet at first hand with New South Wales companies that might provide them with investment opportunities or those companies that provide technologies of particular assistance.

There is also an arrangement through the Australian Technology Showcase, which is another funded program, which will support New South Wales companies involved in new or innovative technology to promote their products to the world through a badging process that has been established through the New South Wales Innovation Council. There have apparently been 37 companies badged through the Technology Showcase and we expect that up to 200 companies will be badged before the Olympics. One of those companies has already reported sales made in North America which it has attributed largely to recognition under the badging program, and other companies believe that this will enhance their opportunities to sell their products on the world market.

One of the big problems with these sorts of companies is that they are often, by their very nature, small to medium enterprises which do not run to particularly large or sophisticated marketing budgets. Often their products are really great but the difficulty is actually getting them into a marketplace and creating sufficient awareness to generate venture capital or indeed opportunities to sell their products. The ATS is aimed at addressing that, and the linkage between them is that the companies that are recognised under the Australian Technology Showcase badging through the Innovation Council will be companies that are included in the programs arranged through Investment 2000. We will not simply have a situation in which companies arrive in New South Wales as potential investors and we work with what can all too easily be the same old list of firms. We actually have the opportunity to provide exposure for new innovative companies to world-class investment.

DEPUTY-CHAIR: How much of the regional development budget is allocated to information technology?

Mr WOODS: I do not think I have a figure for that, but in our department it relates to supporting information technology rather than direct information technology. But the department certainly recognises the role that information technology has to play in the development of regional New South Wales. Given that the policy settings are right, it is one area in which we can be on an equal footing with city areas. In that regard New South Wales was badly ripped off by the Federal Government in the regional technology infrastructure funding. I think the Harradine deal resulted in a disproportionate amount going to Tasmania, and New South Wales got a very small relative amount. Bearing in mind the importance that should be placed on information technology, which we are doing in New South Wales, we are not getting that support from the Federal Government.

The Hon. D. J. GAY: I was interested in your reply to the question from the Hon. E. M. Obeid regarding the main street and small towns program. Whilst there is a reference to that program on page 4-228, I am unable to find a line item in the budget. Can you help me with that?

Mr CULLEN: The line item "Regional development assistance", on page 698 of Budget Paper No. 3, Volume 2, actually includes the regional business development scheme as one item, but the other schemes that the Minister has referred to are included within that line item.

The Hon. D. J. GAY: Minister, you referred to the Regional Communities Consultative Council. Who is the chairperson of that council?

Mr WOODS: Dr Peter Stanley.

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The Hon. D. J. GAY: I refer to Budget Paper No. 2, page 4-229, and Budget Paper No. 3, Volume 2, page 698, line item "Hunter Advantage Fund". I thank your departmental officials for reminding me during the break that the Hunter Advantage Fund, which was off-budget last year, received $10 million from the State Government and that was subsequently matched by $10 million from the Federal Government and I believe $5 million from BHP. Page 4-229 of Budget Paper No. 2 states:

Hunter Advantage Fund - established by the Government as a response to the need for job creation and industry development initiatives in the Newcastle area as a consequence of the closure of BHP’s steelmaking operations by 1999 . . .

Page 698 of Budget Paper No. 3, Volume 2, shows a revised figure for last year of $2.614 million spent but does not show an actual budget figure. This year $553,000 has been allocated to the Hunter Advantage Fund. You have allocated $10 million and you have spent $2.6 million. Why have you allocated only $500,000 this year?

Mr WOODS: I will refer this question to the director-general, but before I do I should say that my understanding is that the $10 million is available but that is the estimate of what will be spent this year.

The Hon. D. J. GAY: Why would you have such a low estimate, given that the crunch is coming to Newcastle like a freight train?

Mr WOODS: I believe the estimate is based on commitments that have been made.

Mr HARRIS: The $2.6 million refers to the funding that was made available in the previous year or the year that is just about to end. The $0.5 million represents the forecast cash flow of existing approved commitments. With the $10 million the draw-down is largely dependent on the rate at which companies or proponents of schemes have the capacity to draw down the funds. Some of these, by their very nature, of course, are related to large infrastructure activities. The most recent example would be the proposal that will be jointly funded by the Commonwealth and State governments to provide additional power capacity on Kooragang Island for Comsteel. That is really dependent on the progress of Comsteel in establishing its operation. The $10 million exists in the fund and is drawn down after an approval process in which the proposal is made to the Hunter Regional Development Fund and those funds are approved. This represents the draw-down rate through the budget.

The Hon. D. J. GAY: What would happen if the Minister and I formed a new company called Acme Investments and wanted to make use of the Hunter Advantage Fund in the next 12 months? How would we gain access to the $7 million that was in the revised budget from last year, which appears to have dropped off the budget this year?

Mr HARRIS: We would seek supplementary funding through the Treasury. It would be held within the Treasury; the funds are not allocated into the department’s budget. If the project involved a large amount of money, following the approval through the fund we would seek supplementation to allow those funds to be paid to the proponent. It is fair to observe, however, that it would be unusual for a project to involve a large sum of money being drawn down within that 12-month period, simply because of the need to undertake feasibility studies. If there were such a project the funds would be drawn down within that year, but it would be more common to expect that the project would receive approval and then the funds would be drawn down at some time in the following financial year.

The Hon. D. J. GAY: Are there other areas within your budget that are treated in the same way, for instance the regional headquarters scheme?

Mr HARRIS: No. Base funding is set at $2 million for regional headquarters funding in any given year . Under the regional headquarters scheme there is a maximum draw-down in most instances of $300,000 in relation to any regional headquarters proposal, so that $2 million and $300,000 draw-down often occurs within the same years.

Mr WOODS: In relation to the Hunter, offers of financial assistance totalling over $3 million have been made to eight companies which together are expected to create 770 permanent jobs over five years and 1,250 temporary construction jobs. As a result of that assistance, investment is expected to be over $300 million.

The Hon. D. J. GAY: Those figures are interesting, but that is not what I asked you.

Mr WOODS: No, but it supports the point that this is about those commitments that were made.

The Hon. D. J. GAY: Yes, but they were commitments for new businesses. I refer to Budget Paper No. 2, page 4-227, to the subheading "Expenditure Trends and Recent Developments". How much money did your department spend on its latest logo, "New South Wales First for Business and Sydney First for Business"? When you spend money on a logo you seek to create a unique identity that will reflect your core business. Why did you select a logo that was almost identical to the logo on Australian
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National Railways’ 1,200 locomotives across the country, and one that is incredibly similar to the Commonwealth Bank’s logo?

Mr WOODS: I refer that question to the Director-General.

Mr HARRIS: The logo was the subject of a program of research that was prompted through the department when we looked at our marketing materials. There was a feeling that there was a need for a specific badging for New South Wales as a product. It is important to point out that the logo is not particularly designed to be the departmental logo. It is a badging logo and works in much the same way as it does in other jurisdictions, I suppose, have done quite successfully. Victoria has done it with "Business Victoria", and Queensland has done it with "Getting on with the Job". There is a range of logos that have supported business activities. It provided us with a common brand.

The research we did indicated that the shape and colour of the logo sat very well with not only our domestic market but also with our international markets and it was considered to be an appropriate one. I am not able to argue the aesthetics, but it was considered to be a pretty useful logo. The cost of all of the activities involved in the development amounted to $40,000, give or take some dollars. That is considered by people in the business to be a relatively inexpensive process, given the focus groups that were involved and the work that was done around it. Having introduced the logo as a brand, we decided that we could actually make considerable savings in our own print runs by using it with the department itself.

The brand was introduced in November last year and we introduced it over the period to the end of April. This allowed the use of all of the stationery material that was in the department over that period, and again allowed us to minimise costs in the introduction. Any additional badging that we have done in relation to offices and signs has run to probably just under $20,000 over that period. Again, we have operated on a replacement-when-necessary basis. The logo itself has also lent itself to a number of different usages. The brand line "First for Business" was considered to clearly identify what the department’s activity was about and what our promotional material was about. People such as Mr Rod McGeoch, for example, have remarked that the material we are now producing is probably the best in Australia and provides that sort of brand identification. It was also covered in an article in one of the Sunday papers.

The additional advantages that have come with the logo are that we can use it not just as a first for business but in some instances we found other organisations picking it up. During Science Week, for example, we found the logo appearing on support from various science-based and technology groups as "New South Wales First for Technology", and "First for Innovation". Most recently, we have also seen usage in rural areas where some of the regional economic development boards are interested in using it as a particular location - "First for Business". We have also seen it used as "First for Regional Business". It is a logo that lends itself to a central brand and a central theme. As I say, I am not wedded to its artistic virtues or otherwise, but it does appear to be very effective.

The Hon. D. J. GAY: When will "Sydney First for Business" be used in preference to "NSW First for Business"? Why was it necessary to have the two? I ask you again, were you aware that this logo is virtually identical to the Australian National Railways logo? Having paid $40,000 for something that should be unique, were you concerned to discover virtually the same logo being used by what was at the time another government department?

Mr WOODS: Before I refer the question to the director-general I might add that this matter has been canvassed in the public arena, I think in May, in the Sunday Telegraph.

Mr HARRIS: In answer to the question about using "Sydney" in preference to "NSW". We have already used "Sydney" on one of our publications - our call centre brochures. The reason we have done that is that all of the work we have done with call centre systems integrators and with major carriers, Telstra and Optus, and indeed a team we have formed named the call centre attraction team, which involves most of the systems integrators, indicated to us that we have a much higher recognition factor in the markets that we are looking at if we brand in that particular area "Sydney First for Business". So on our international telecommunications and our call centre brochures, we have branded "Sydney First for Business". We have also used the "Sydney First for Business" brand with the work we are doing in relation to the Olympics in conjunction with Westpac and Telstra. Again, it was an issue that was discussed with all of those organisations and they felt that it gave a better branding for us.

We were aware of the similarities in the design of the logo. People have also referred to the Commonwealth Bank logo as being not dissimilar, simply, I suppose, because of its general shape. Again, our focus groups in the research that was done for us
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indicated that it was a sufficiently stand-alone logo and that the market we were looking at did not confuse it. We actually had a little more trouble with the previous logo. Japanese and Chinese focus groups indicated that they thought it looked like the logo of a courier company because we had a stylised map of New South Wales with a sort of a rectangle flying around the world. Japanese in particular commented that they thought this looked like a courier company and found it confusing. Whether one ever ends up with exactly the right logo I do not know, but certainly the work that we have done indicates to us that we have ended up with something that is a good, high focus, high recognition commercial product.

The Hon. M. R. KERSTEN: Can you explain line item "Retained Revenue - Grants and Contributions" in Budget Paper No. 3, Volume 2, page 692, which was a one-off revised figure in 1997-98 of $2.9 million?

Mr WOODS: I will refer that question to the director-general.

Mr HARRIS: That is Commonwealth funding that we hold on behalf of the Commonwealth. It primarily comprises grants from the Commonwealth for enterprise improvement and special purpose programs. This is mainly wood and paper, textiles, clothing, footwear and technology diffusion, and these programs were administered by the AusIndustry component of the Department of Industry, Science and Tourism - DIST. The forecast decrease in 1998-99 is a result of the cessation of the AusIndustry program. As the Minister said earlier, the decision to cease the program was made in March and the program will cease at the end of June. We have traditionally worked with DIST and the AusIndustry portion of that department to provide support to small to medium enterprises.

Whilst we have a fairly uniform and simple suite of services and products that we provide, DIST has a much more broad-ranging line of programs. This represents funds which have been provided by DIST which we administer on its behalf to assist companies which are eligible under DIST schemes. The advantage is that the Commonwealth money thus goes further. More of it actually goes to the companies and provides direct support. We are in a position to provide staff to administer that program. We are thus providing something that is immediate and relevant for those companies. It supports our relationships that we develop with the business community because it puts our client managers closer to the companies they are working with.

At the same time it allows us to provide a financial enhancement that we would otherwise not be able to do because we do not have those funds in our budget. From DIST’s point of view, the advantage is that it is charged with moving the funds out directly to industry, and this provides it with a vehicle to do it. The only other mechanisms available to it, of course, are through organisations such as Australian Business Limited, the MTIA, and other peak bodies who provide direct services to their members. The disincentive for them in doing that is that those bodies tend to be very much membership oriented, whereas they can deliver those funds through us or any other State government agency directly to the companies.

Mr WOODS: The question and the answer point out the difference in the point of view of the State Government and the Federal Government. I explained earlier that we reject the notion that the markets alone will be sufficient to accelerate economic growth in regional areas. This is an example of the Federal Government’s view that the markets will look after regional New South Wales. In taking that hard-line economic view, which it continually does, it is not really recognising the realities that we are seeing every day in regional New South Wales.

The Hon. D. J. GAY: I refer to Budget Paper No. 2, page 4-229. Can you itemise the number of regional headquarters that have been attracted to New South Wales in the last 12 months, including company names and number of staff? It may not be possible for you to do that today, if you do not have the information with you.

Mr WOODS: I will take that question on notice.

Mr HARRIS: There are a number that are already committed and we can provide those without any trouble at all.

The Hon. D. J. GAY: I do not expect the names of those that are under negotiation.

The Hon. M. R. KERSTEN: I refer to Budget Paper No. 3, Volume 2, page 698, line item "Payroll tax rebates and other assistance associated with the decentralisation of secondary industry in country areas". The budgeted figure for 1997-98 was $150,000 as against the revised figure of $427,000, yet the figure for this year is again $150,000 in this year’s budget. Can you please itemise the drastic overexpenditure and explain why the allocation was not increased this year?

Mr WOODS: I will refer that question to Mr Harris.

Mr HARRIS: As you know, the payroll tax rebates are paid to eligible employers operating in eligible industries in accordance with the requirements
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of the country’s Payroll Tax Act. The eligibility is automatic for the scheme and the variation between the 1997-98 budget and the revised $427,000 is due to rebates paid to a newly registered company within the scheme. It is an automatic payment, the company has an entitlement to it, and there is an obligation on us to pay that. That reflects that variation. The reason that the budget estimate shows the figure of $150,000 is that this is the formula we have been using to calculate rebates, and it phases down substantial assistance over the next five years. It is really an expectation on our part; we forecast that it would not go past $150,000. The increase last year was an extraordinary issue to do with one company.

The Hon. D. J. GAY: I refer to Budget Paper No. 3, Volume 2, page 698, line item "Asset Acquisitions", which shows an underspending of $100,000 last year, and an increase of over $100,000 in the allocation for this year. Can you itemise the assets that are to be purchased?

Mr HARRIS: The asset acquisition is a relatively small item within the budget. It does move around a little. It is used for the replacement of plant and equipment and minor office refurbishments. The increase in the budget allocation for asset acquisitions for 1998-99 is primarily due to the department’s share of the cost of an essential upgrade to Governor Macquarie Tower computer network. As you know, the department is located in two buildings. One part of the department is located in Governor Macquarie Tower, where we share facilities with other departments, including the Premier’s Department and Treasury. It is simply a sharing of the cost of upgrading the computer network.

The Hon. M. R. KERSTEN: I refer you to Budget Paper No. 3, Volume 2, page 697, line item "Operating expenses - employee related". How many staff are employed by the Department of State and Regional Development? Can you give a breakdown of that staffing, and itemise the number of part-time and full-time staff, where they are located by office, and the role of each staff member?

Mr WOODS: Given the extent of that question, I should take it on notice. We can probably give you part of the answer.

The Hon. M. R. KERSTEN: If you cannot answer the question in full, I am happy for you to take it on notice.

Mr HARRIS: I am in a position to provide numbers on where the staff are located. We have our two offices in the central business district, we have two overseas offices which are quite small, and we have 23 other locations around the State, 18 of which are our primary offices. I am in a position to provide those figures without too much difficulty. There is a uniformity that goes with the tasks of the officers. Most of them are client managers. We have become very much focused on providing expertise and advice to small to medium enterprises so there will be a common thread. In providing a written answer I would expect that we could nominate positions as being, for example, client managers and then detail the typical activities of the client manager, if that is acceptable. I am willing to provide whatever detail is required.

The Hon. D. J. GAY: That is acceptable.

The Hon. M. R. KERSTEN: Again referring to Budget Paper No. 3, Volume 2, page 699, line item "Expenses - Employee related", are you in a position to tell the Committee how many staff are based overseas?

Mr WOODS: I will refer that question to the director-general.

Mr HARRIS: There are two staff within the Tokyo office at present and there are three staff within the London office.

The Hon. M. R. KERSTEN: I refer to the same line item. How many staff are there in the office of the Minister for Regional Development and Rural Affairs, what are their roles and duties, and are they employed part time or full time?

Mr WOODS: There are 10 full-time staff: the chief of staff, a media officer, two policy advisers, four research officers, one private secretary, and one assistant private secretary.

The Hon. D. J. GAY: How many ministerial offices do you have, and where are they located? Do you operate out of departmental offices as well, and if so, where are those departmental offices?

Mr WOODS: There are two ministerial offices, one in Sydney and one in Bathurst. From time to time I visit the departmental offices, and I use my own electorate office in northern New South Wales for regional development issues from time to time.

The Hon. D. J. GAY: Will you provide the Committee with the itemised details of the true cost of the conversion and fit-out of your new offices at Parliament House, Governor Macquarie Tower and Bathurst?

Mr WOODS: I have been provided with a standard ministerial suite in Parliament House. That
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office contains the same facilities as those provided to all Ministers in this Government and previous governments. The combined efforts of the Legislature, the Premier’s Department and my ministerial office ensured that the cost incurred by the Parliament was kept to a minimum. As to the final cost, it was paid for by the Legislature, so the question would be best addressed to the Legislature. The establishment process for the office in Governor Macquarie Tower was carried out with an emphasis on economy.

It was made in accordance with guidelines set in the ministerial handbook and in constant consultation with the Premier’s Department. Further public expense was avoided by occupying office space that was already furnished and under government lease. The annual rental for this ministerial office in Sydney for 1997-98 is based upon the per-area cost in Governor Macquarie Tower of $675 per square metre. The projected annual rental for the regional office in Bathurst for 1998-99 is approximately $9,000. The office is run according to the current ministerial handbook, ensuring that overhead costs are at an appropriate level.

The Hon. D. J. GAY: What was the exact cost of the fit-out? You said that it fitted into the guidelines. You gave a cost per metre for your ministerial office but not a total cost.

Mr WOODS: I have answered that to the best of my ability as I see fit at the moment.

The Hon. D. J. GAY: Will you undertake to find out for me?

Mr WOODS: I will take that consideration on notice.

The Hon. D. J. GAY: It is not a hard question. You gave me the cost per metre. You are a Minister of the Crown. Surely it is not beyond your wit to work out the size of the place.

The Hon. E. M. Obeid: On a point of order. It is well known that the Department of Public Works and Services carries out any major renovations and building works.

The Hon. D. J. GAY: I do not remember asking the Hon. E. M. Obeid to answer the question.

The Hon. E. M. Obeid: Further to the point of order. The question was out of order because it should be directed to the Minister for Public Works and Services.

DEPUTY-CHAIR: The Minister has a right to answer questions by taking them on notice and deferring the answers. Can we move on to the next question please?

The Hon. D. J. GAY: The Minister did not indicate that he was going to do that. Had he done so I would have been perfectly happy. He said he would consider it; he did not say he would do it.

DEPUTY-CHAIR: I ask the Minister if he will take that question on notice and reply.

Mr WOODS: I will take that question on notice.

The Hon. D. J. GAY: I refer to Budget Paper No. 3, Volume 2, page 697, line item "Maintenance". Why was funding for this line item budgeted at $84,000 in 1997-98 and revised at $130,000, but not increased for this year? What was the actual expenditure?

Mr WOODS: I will that question on notice.

The Hon. M. R. KERSTEN: I refer to Budget Paper No. 2, page 4-227, line item "Strategic directions". As reported in the Australian Financial Review on 1 May this year, is it true that the major Korean ANAM group is going to establish a new silicone chip design factory in Victoria, and the Intel group appears also to favour that State? What are you doing, as Minister, to secure such chip plants for New South Wales?

Mr WOODS: I refer that question to the director-general.

Mr HARRIS: I saw the same article. I understand that the ANAM chip design facility is going to establish in Victoria. The company held discussions with the department, and I am happy to provide more information on that. The item in the Australian Financial Review was perhaps a touch more excited than many industry participants would have expected. The silicone chip manufacturer, Intel, has received an extraordinarily large degree of publicity for its proposals to set up chip manufacturing operations outside the United States of America. The company has a record of seeking locations all around the world for these activities, and indeed it is true that it has been considering Australia since about October last year.

The department was working with the Federal Government and with Intel for probably four or five months before this became a public issue and it had been kept reasonably quiet, at Intel’s request. When the managing director designate of Intel, Mr Craig Barrett, visited Australia about six weeks ago, he indicated that the cost of such a plant may be in the region of $2 billion. The initial indications from Intel
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are that it would be interested in locating it in a country where the host government would be willing to contribute up to $800 million towards that $2 billion. Neither the Australian Government nor any State government has indicated a willingness to put up the $800 million at the moment.

The main competition as perceived by people in the industry for Australia in relation to Intel, or as far as we are concerned in New South Wales, is not Victoria; at the moment it is probably Cairo, which appears to have a particularly good proposal. There are also proposals in Eastern Europe, in Poland, and I understand also in Spain. The Intel proposal has quite a long way to run. I have no knowledge of the sources the press are using for the excitement about its possible location in Victoria. In relation to Intel my department deals on a regular and routine basis with Bob Mansfield and his office, representing the Federal Government, and also with Rick Hart, who is my equivalent in Victoria. Whilst we are continuing to look at Intel, I would venture that the view within the industry is that Intel, particularly given some of the difficulties it is having at home at the moment, is not necessarily a project that would happen immediately.

Mr WOODS: New South Wales has been particularly successful in attracting information technology companies to locate here. Over the last four years about 80 of those companies have located here. Three-quarters of Australia’s top 100 IT and T companies have their headquarters located in Sydney. It is worth noting that officers of the Department of State and Regional Development were aware of a substantial offer of assistance by Victoria to ANAM.

[Time expired.]

The Hon. D. J. GAY: Minister, I refer you to Budget Paper No. 2. page 4-228, which refers to the department’s initiatives for 1998-99. Budget Paper No. 3, Volume 2, page 698, shows a reduction in the estimated total expenses for the department from $92.9 million in 1997-98 to $92.6 million this financial year. How many of the new programs in the Government’s recently announced strategy for the economic development of regional New South Wales, rebuilding country New South Wales, will be backed up by new funds, or have the programs been funded by an equal reduction in existing programs?

Mr WOODS: Given that the figures that you quote are overall figures for the Department of State and Regional Development, the regional development initiatives that are quoted there are new funds. In particular I refer to the regional economic transition scheme and the country lifestyles program. The regional economic transition scheme is about a targeted and strategic approach to those centres that have been dealt a particularly severe economic blow in recent times. I have referred to the country lifestyles program and the country centres growth strategy. The country centres growth strategy is about a whole-of-government approach, using resources from all departments. That was successfully done in the western Riverina area, where there was infrastructure used by the Roads and Traffic Authority as part of that approach.

More and more the figures you put on a particular State and regional development program really relate to how it is targeted, how it is strategically used, and how it is used to co-ordinate a whole-of-government approach. I am sure you would agree with me that that whole-of-government approach is absolutely essential if we are to address that aim of accelerating the economic growth of those regional centres. Simple programs, whilst extremely useful, are best used in a targeted way. In regard to the figure of $90 million-odd that you referred to, the new programs are aimed directly at regional areas.

The Hon. M. R. KERSTEN: Having regard to the fact that the Government has allocated $12 million to help construct a football stadium on the central coast, why have you offered the people of rural New South Wales such a small and insulting amount? As the $12 million was referred to in your budget media release, where can we find the line items?

The Hon. I. M. MACDONALD: Is this a One Nation question?

DEPUTY-CHAIR: Let the Hon. M. R. Kersten ask his question.

The Hon. M. R. KERSTEN: As the $12 million was referred to in your budget media release, where can we find the line items?

The Hon. I. M. MACDONALD: Is this from Pauline?

The Hon. M. R. KERSTEN: I do not know. You are the one who seems to be in contact with her, you twit.

The Hon. I. M. MACDONALD: Is this a One Nation question?

DEPUTY-CHAIR: Just a moment, if you do not mind.

The Hon. M. R. KERSTEN: I ask you to call him to order, Mr Deputy-Chairman. If he took some food with his lunch, he would be a little bit better off.

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DEPUTY-CHAIR: Please!

The Hon. I. M. MACDONALD: Come on, what would you know?

The Hon. M. R. KERSTEN: Do you mind, Mr Macdonald?

The Hon. I. M. MACDONALD: You are the One Nation candidate.

The Hon. M. R. KERSTEN: You are a complete idiot.

The Hon. D. J. Gay: On a point of order. The honourable member has arrived almost three hours late for this meeting and is interrupting the proceedings.

The Hon. M. R. KERSTEN: And making insulting and offensive comments. Throw him out!

DEPUTY-CHAIR: I ask the Hon. I. M. Macdonald to desist. If he perseveres, I will ask him to leave.

The Hon. I. M. MACDONALD: In deference to you, Mr Deputy-Chairman, and to you only.

The Hon. M. R. KERSTEN: Is he covered by parliamentary privilege in here?

DEPUTY-CHAIR: Will you please ask the question of the Minister?

The Hon. M. R. KERSTEN: I have already asked the question.

DEPUTY-CHAIR: If the Hon. I. M. Macdonald makes one more comment that is out of order, I will ask him to leave. Will the Minister please answer the question.

Mr WOODS: The first thing I would point out is that the $12 million has nothing to do with the money that is provided in the budget for the regional economic transition scheme and the country lifestyles program. Such a question coming from a coalition member is, to say the least, extremely hypocritical. As you would be well aware the Federal Government, John Howard’s Government, also provided $12 million to Grahame Park. At the same time or shortly afterwards, it cut its whole regional development program of $150 million, and it cut the AusIndustry program, which was of great assistance to country areas. On the one hand the State Government is maintaining and increasing its regional development programs and supplying much-needed infrastructure to the central coast - not only for rugby league but for a wide range of sporting and community events. The Federal Government is doing the same thing, but at the same time it is cutting to the quick its commitment to regional development.

[Interruption]

DEPUTY-CHAIR: Many people have been patiently going through this process. If the Hon. I. M. Macdonald does not allow us to complete this inquiry, I will ask him to leave, because I want the inquiry to be completed appropriately. It was being conducted in a reasonable way until he entered the room. I ask the Minister to continue his answer.

Mr WOODS: At the same time the State Government is increasing its commitment to regional development, both in money terms and in philosophical terms, but supplying this money to a region. The Federal Government is decreasing its commitment to regional development in money terms and supplying this money. The difference is marked. But the real difference is in the philosophy, because the cutting of the regional development programs by the Federal Government underlines a philosophy that it enunciated very early in its term when John Sharp, the then Minister, said, "We have no role in regional development." Is it any wonder that you get reports such as that in the Dubbo Daily Liberal of 16 March, which stated, in regard to the National Party, "They forget where they come from and who they represent."

The Hon. D. J. Gay: On a point of order. I do not remember a line item or a question referring to Federal funding. The question related to the State. The Minister is not answering the question.

The Hon. I. M. Macdonald: On the point of order. As is the practice in any House of this Parliament, including the House that the Honourable D. J. Gay occasionally graces, a Minister is entitled to answer a question as he sees fit.

DEPUTY-CHAIR: On my limited understanding of the process, I believe the Minister has a right to answer as he sees fit. No point of order is involved.

Mr WOODS: I was simply pointing out that it is not only the money difference. We are maintaining our commitment to regional development in money terms, and increasing it. The question underlines that point. We are able to do that for one of the regions but maintain and increase our commitment to the rest, whilst the Federal Government is decreasing its commitment to regional development in marked terms but is still giving this $12 million. If it is hypocritical of this Government to consider the needs of the central coast, how much more hypocritical is it for the
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Federal Government to cut the ground from under the rest of the regions and rural areas while it is considering the needs of the central coast?

The Hon. D. J. GAY: I refer to Budget Paper No. 3, Volume 2, page 697, line item "Expenses - Employee related". How many staff have access to corporate credit cards and can you itemise the guidelines for the use and operation of these credit cards?

Mr WOODS: None of my ministerial staff has access to any corporate credit cards at all.

The Hon. D. J. GAY: I was referring to departmental staff.

Mr WOODS: I will refer the question to the director-general.

Mr HARRIS: I would have to take that on notice. There are standard checks, which are a part of our standard internal and external audit processes, that follow through on the use of credit cards. I could not give you an accurate number as to the number of staff within the department who have access to credit cards, although the process is a controlled one, as you would expect.

The Hon. D. J. GAY: You will provide us with the details?

Mr HARRIS: Absolutely.

Mr WOODS: Victorian Ministers have access to credit cards, and I believe the Victorian Premier has received some severe criticism about his use of credit cards, as well as other Ministers in Victoria.

Mr HARRIS: Can I clarify one thing: you want the numbers, not the names of the individuals?

The Hon. D. J. GAY: No, that would be improper.

Mr HARRIS: I would be reluctant to provide names.

The Hon. M. R. KERSTEN: I refer to Budget Paper No. 3, Volume 2, page 696, subprogram 72.1.1, Development of the New South Wales Economy, line item, "Regional projects facilitated or financially assisted". How much funding is contained within this budget for the development of the Australian Shearers Hall of Fame at Hay? What specific purposes, if any, can the funds be used for?

Mr WOODS: The Government has not committed any funds for the establishment of the Australian Shearers Hall of Fame. We have committed some funds for a feasibility study for the Australian Shearers Hall of Fame, and that was extremely well received by the Hay community. It received considerable publicity. The man with the dream publicised it fairly well at the time also. I note that the line item you refer to is for regional projects facilitated and financially assisted. I do not believe it falls into that line item, but I might ask Michael Cullen to provide further advice on that.

Mr CULLEN: I can confirm that a number of programs, including the one that funded the feasibility study referred to by the Minister, is in the line item relating to regional development assistance. That line item funds a number of programs, as was stated previously, including the main street and small towns program. The particular program here was through resources for regional development and basically that is also captured within the funding and is isolated as the regional development assistance line item.

The Hon. D. J. GAY: I refer to Budget Paper No. 3, Volume 2, page 692, line item "Operating statement", and the reference to employee-related expenses. Is the manager of your Bathurst office part of your ministerial team or is he paid by the department? What are Mr Taylor’s travel and operational expenses and what exactly is his role?

Mr WOODS: Mr Taylor is employed within the administrative and clerical award pay scale. He is employed on a standard salary and superannuation arrangement. Mr Taylor was employed in the classification of research officer from 4 March 1998. He is employed under section 38 of the Public Sector Management Act 1988 and receives the associated entitlements. The Public Sector Management Act 1988, Division 5, Temporary Employees Section 38(1) provides:

The appropriate department head may, if of the opinion, that it is necessary to do so, employ temporarily a person who has appropriate qualifications to carry out work in the department.

I think that answers the question.

The Hon. D. J. GAY: It does not state whether he is employed by you or by the department.

Mr WOODS: He is not the office manager. He is employed by the Premier’s Department, as are all ministerial staff.

The Hon. D. J. GAY: That is why I asked whether he was a ministerial staffer or part of the department.

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Mr WOODS: He is a ministerial staffer. Both staff at Bathurst are answerable to me and the chief of staff. Mr Taylor is not the office manager but a research officer.

The Hon. M. R. KERSTEN: I refer to Budget Paper No. 3, Volume 2, page 696, subprogram 72.1.1 Development of the New South Wales Economy, line item "Regional projects facilitated or financially assisted". In relation to the boarding hostel at Hay, how much has been allocated in the budget to assist the retention of eight permanent jobs in Hay?

Mr WOODS: I will take that question on notice.

The Hon. M. R. KERSTEN: I refer to Budget Paper No. 2, page 4-228. Can you please detail funding for the regional economic transition scheme and itemise how the $5 million per annum will be spent over the next three years? Have certain areas of this State already been pegged to receive this funding?

Mr WOODS: The regional economic transition scheme is aimed at those centres that have had severe economic blows over recent times. About five have been identified at this stage, including Gunnedah, Cobar and Goulburn, and others are under consideration. There have been no approvals yet. In many respects I see the program being supplementary and integrated with other programs in the portfolio, in particular the country centres growth strategy. This is not meant to be money that is just available to chase rainbows; it is additional money to provide additional assistance on top of the other schemes where opportunities are identified and to provide additional assistance in those areas where there is particular need.

The scheme has a potential to make a significant difference to economies that are suffering from that structural adjustment. It fits very well into our philosophy that the regions need intervention and assistance if we are going to achieve the aim of accelerated economic growth. It is a key feature of the scheme that the assistance is location specific and it will be provided on a one-off basis. Assistance will be provided only in cases of clear regional economic distress caused specifically by structural adjustment. Proposals will be selected on the basis of their capacity to improve a region’s economic strength and potential to diversify. The scheme complements the Government’s existing regional economic development programs and provides us with a better method of addressing some of the problems that are emerging.

Mr CULLEN: It is important, as the Minister said, not to chase rainbows but to use the scheme where there is actually a market and a business opportunity at the end. There has already been some work done with some communities that are under stress, but they need to put a case demonstrating what they can do, where business and private sector interests are already there. Many of them have those opportunities. It is about focusing them and getting jobs into the town with things that are real, which build on their strength.

The Hon. D. J. GAY: I refer to Budget Paper No. 2, page 4-227, line item "Strategic directions". Do you agree with the estimate from Bathurst City Council that the extension of the Ben Chifley Dam wall would cost $8 million? How much has been allocated in the budget for this project?

Mr WOODS: This same question was asked in the House recently. At that time I referred it to the Minister for Land and Water Conservation, who subsequently answered it fully. I refer the Hon. D. J. Gay to that answer.

The Hon. D. J. GAY: I refer to Budget Paper No. 3, Volume 2, page 696, subprogram 72.1.1, Development of the New South Wales Economy. This program provides financial assistance to attract investment projects to regional areas.

[Time expired.]

The Committee proceeded to deliberate on the recommendation of the vote.