D E PA R T M E N T O F B U S I N E S S, E C O N O M I C A N D R E G I O N A L D E V E L O P M E N T. Annual Report 2006/2007

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1 D E PA R T M E N T O F B U S I N E S S, E C O N O M I C A N D R E G I O N A L D E V E L O P M E N T Annual Report 2006/2007

2

3 Purpose of this report This report is designed with two purposes in mind. Primarily it meets the annual reporting requirements for public sector agencies as set out in the Public Sector Employment and Management Act and the Financial Management Act. The report also provides insight into activities undertaken by the Department towards achieving its business outcomes as identified in the Budget. It provides qualitative and quantitative commentary on progress towards achieving its goals. Purpose The report aims to provide Government, employees, organisations and individuals with an understanding of the Department s objectives, measures of its performance and an insight into its future directions.

4 Transmittal Letter Chief Executive s Transmittal Letter The Hon Konstantine Vatskalis MLA Minister for Business and Economic Development Minister for Regional Development Minister for Defence Support Parliament House Darwin NT 0800 Chief Executive Department of Business, Economic and Regional Development 2 nd Floor Development House 76 the Esplanade DARWIN NT 0800 AUSTRALIA Dear Minister It is with pleasure that I present the Department of Business, Economic and Regional Development s annual report for the year ending 30 June 2007, in accordance with the provision of Section 28 of the Public Sector Employment and Management Act. In respect of my duties as an accountable officer pursuant to Section 13 of the Financial Management Act, I advise that to the best of my knowledge and belief, the system of internal control within the agency provides reasonable assurances that: a) Proper records of all transactions affecting the Department are kept and the employees under my control observe the provisions of the Financial Management Act, the Financial Management Regulations and the Treasurer s Directions. b) In the interests of all Government agencies, the Department, in accordance with the requirements of the Financial Management Act, has progressively enhanced internal control procedures and further developed its Accounting and Property Manual. c) There is no indication of fraud, malpractice, major breach of legislation or delegation, major error in or omission from the accounts or records. d) In accordance with Section 15 of the Financial Management Act, the internal audit capacity available to the Department is adequate. e) The financial statements included in the annual report have been prepared in accordance with Part 2 Section 5 and Part 2 Section 6 of the Treasurer s Directions where appropriate. f) All Employment Instructions issued by the Commissioner of Public Employment have been satisfied. g) In respect of my responsibilities pursuant to Section 131 of the Information Act, I advise that to the best of my knowledge and belief, the agency has implemented processes to achieve compliance with the archives and records management provisions as prescribed in Part 9 of the Information Act. Yours sincerely RICHARD GALTON Chief Executive 31/08/2007 2

5 Contents Chief Executive s Foreward...4 Highlights Northern Territory Economic Performance and Outlook...8 Contents Corporate Plan...9 Organisational Chart Output Performance...12 Regional Development 13 Business and Industry Development 26 Economic Development 41 Regional Highlights...48 Our People...51 Governance Committees...58 Our Organisation...63 Financial Statement Overview...68 Notes to Financial Statements...75 Appendix 1: Acronyms...96 Appendix 2: Members...98 Appendix 3: Grant Funding Appendix 4: Economic Development Framework - Action Plan Appendix 5: Marketing and Communication Activities Appendix 6: Strategic Partnerships Appendix 7: Report on Partnership Agreements Appendix 8: Legislation Administered by DBERD Contact Details...117

6 Foreword Chief Executive s Foreword Since the formation of the Department of Business, Economic and Regional Development (DBERD) in July 2005, incremental progress has been made in refining the Department s future direction and corporate objectives. When I took over the helm as Chief Executive in October 2006, I distilled the key objectives to just three: Competitive Businesses Thriving Regional Communities A Broader Economic Base These simple objectives have provided a clear focus for our efforts and the delivery of these was the primary driver for the year. It was a challenging task. In the second year of this agency s existence we continue to demonstrate that we benefit business and industry by tailoring support, targeting selected business and industry and building credibility to enable businesses from all regions the opportunity to influence government decisions. I inherited the 2006 Northern Territory Economic Development Framework and its associated Action Plan. It focuses on skilling our workforce, regional development and the public and private sectors working together. In carrying out the Government s commitment to developing the regions, a further four Economic Development Committiees were formed bringing the total number to eight. Each Committee has worked hard to identify issues and priorities important to their communities of interest for inclusion in their economic development plans. These plans will form an important part of the overall Northern Territory Economic Development Framework, with a specific focus on job creation and sustainable economic development opportunities for all Territorians to share in our prosperity. Increased support for the growth of regional economies is crucial to our future. Those businesses/industries offering the greatest opportunities for local jobs and investment will be of most interest to us. This year was a year of significant achievement for DBERD. Some highlights include: The successful conclusion to negotiations with McArthur River Mine (MRM) and the Borroloola and Gulf community with the formation of the MRM Community Benefits Trust. Implemented and monitored the Indigenous Economic Development (IED) Strategy through the Northern Territory IED Taskforce, the Interdepartmental Committee on IED, the Bilateral Steering Group and the Measuring IED Steering Committee. Worked closely with the Australian Industry and Defence Network NT Branch (AIDN-NT) and delivered financial support to assist the Defence support industry to grow and align its capabilities to capture Defence related contracts. Increased the number of skilled migrants to the Northern Territory by approximately 70%.

7 The Department focused efforts in all the major areas of our business and staff have worked very hard over the past twelve months to build a good reputation with business, industry and other government agencies. Over this time we have provided strategic advice and assistance to maintain momentum in the economy and pursue better economic outcomes in the regions. We expect to develop new directions for the machinery through which we offer support. As next year progresses, the collocation of DBERD and Tourism NT will become a priority as we prepare not only to share office space with our Tourism NT colleagues in Development House but as we also prepare for the challenging months of the refurbishment. The refurbishment will occur in stages with construction expected to commence in early Foreword Following the 2006 Priorities Review, the public sector invested significant time in identifying the best way to deliver corporate services across agencies. It involved the review of accounts payable and receivable processes. DBERD and Tourism NT were two of the first agencies to review corporate structures and practices. This led to the development of a new structure to meet the needs and to support the core business of the agencies divisions. The past year s reviews provide us with a solid basis from which to address the more longterm challenges and opportunities facing the Territory s economy. More change lies ahead, but it is right to acknowledge that we have achieved a great deal this year. RICHARD GALTON Chief Executive 5

8 Highlights Highlights Negotiated the McArthur River Mine Community (MRM) Benefits Trust at Borroloola leading to an agreement between the Northern Territory Government and MRM to bring social and economic benefits to the Gulf region with the expansion of mining operations. The Trust will support enterprise and job creation, education, social and community development, the environment, health and culture and art projects in the region. MRM will contribute to the Trust $1.35 million each year for the first eight years and $1.25 million for each of the following years (CPI indexed) for the life of the mine. It is anticipated the Trust will provide $32 million over the life of the mine to benefit the people and communities of the Gulf region. Led a delegation of Northern Territory Defence support businesses to the Land Warfare Conference and Exhibit in Brisbane to exhibit and promote their capability to Defence and Defence prime contractors, which enabled them to establish business and contractual relationships to undertake Defence related work in the Territory. Processed 644 visas for migrants seeking to work and live in the Northern Territory; and promoted the Northern Territory as a business and skilled migration destination at 15 events held in six key migration market countries. Awarded 18 project grants by the Northern Territory Research and Innovation Board through the Northern Territory Research and Innovation Fund. Grants were allocated to 10 business innovation projects ($ ) and eight research and development projects ($ over three years). More than contacts with people accessing information about business and licences through Territory Business Centres. Provided Business Growth grants to assist 35 small to medium sized Northern Territory businesses with business planning. Client Managers had approximately client contacts by telephone, visits, and presentations at business association meetings across all regions. Drafted the Biological Resources Act 2006 and associated regulations. Provided industry development financial assistance to nine industry associations and non-profit organisations with funding totalling $1.149 million to ensure continuity of their services to the Territory s business and industry sectors. Supported the achievement of a number of Indigenous employment and business outcomes by developing policy frameworks that adopt and share Indigenous employment strategy learnings across sectors: job placements by Job Networks apprentices and trainees transitioned from Community Development Employment Programs (CDEP) to employment - 61 NTPS employees identifying as Indigenous - 35 jobs in 18 businesses from DBERD s Indigenous Business Development Program (IBDP) - 34 jobs in the Indigenous Pastoral Program - 25 Tiwi Island people at Great Southern Plantations 6

9 - 100 Indigenous workers in Northern Territory mines. This figure is based on information collected by telephone and from mining companies. Partnered with the Australian Government to establish four Economic Development Officer positions. DBERD delivers the service in East Arnhem, and has contracted three host organisations to deliver the service in Alice Springs, Katherine and Darwin. Developed, in partnership with Tourism NT, a tourism hub model, and secured funding from Department of Employment and Workplace Relations for piloting the model in East Arnhem. The tourism hub model will establish a central business unit at Yirrkala to provide business support services for a range of Indigenous tourism product in the region. Highlights Formed a working relationship with the Northern Land Council and the Defence Support Group of the Department of Defence aimed at leveraging Indigenous employment opportunities from the development and operation of the Bradshaw Field Training Area. Implemented an election commitment to establish a Defence community liaison function within the Department s Defence Support Division. The Defence Support Division in partnership with the Land Development Corporation, organised the rezoning of 60 hectares of land close to Robertson Barracks and associated feasibility and engineering studies to develop a Defence support hub. The hub will make available land for prime contractors and SMEs to cluster, grow and align their capabilities to support Defence. Developed a series of online Business Information Kits and an online Planning Scheme Business Information Finder with funding ($ ) provided through the AusIndustry Regulation Reduction Incentive Fund. Staged the 2007 Northern Territory Research and Innovation Awards, with 37 nominations across five categories, and over 200 participants at the presentation dinner. 7

10 Economic Performance & Outlook Northern Territory Economic Performance and Outlook DBERD routinely monitors, assesses and advises on the performance, outlook and opportunities of Territory business and industry sectors. The following overview of the Northern Territory s economic performance for was crafted in conjunction with Access Economics. It offers key information about the environment in which the Department operates. Overview The broad picture of the Northern Territory s current economic performance is a healthy one. On most economic measures, the Territory s economy has performed better than the Australian economy as a whole has performed over the past year, and indeed over the past three years. Business investment has surged and that is starting to translate into a substantial lift in exports. Jobs growth is very strong, which brings with it a low overall unemployment rate and a solid rate of spending. Some of the economic concerns which are apparent are concerns related to rapid growth skill shortages, escalating prices, and housing affordability problems. While overall demand in the Territory is strong (driven in large part by a healthy global economic performance) the growing pains mentioned above will need careful management. Beyond the short term macroeconomic picture, the longer term economic performance of the Territory may need to focus less on the demand side and more on the supply side. That means ongoing investment in education and skills development, continued harnessing of productivity, growth and a significant improvement in socio-economic outcomes, particularly for Indigenous Australians. Economic performance In Territory industry sectors grew at an average rate of 14.0%. The fastest growth rates were recorded in the Mining (35%) and Ownership of dwellings (28%) sectors, reflecting the resources boom and increases in the house rental market. Economic outlook Access Economics forecasts the value of the Territory economy to grow by 13.3% in with the volume growing by 4.8% largely driven by the increasing value and volume of exports, such as LNG, and decreasing imports. Smaller increases are forecast for DBERD also expects the value of industry output will continue to rise at a much faster rate than the volume of output as resource commodity prices rise in response to increasing global demand. In the domestic NT economy, housing and private equipment investment is expected to decrease in and before increasing again the following year. DBERD forecasts minerals and petroleum production to rise by 30% in and a further 4.4% in the following year. Construction is expected to fall in as the Alcan G3 mega-project winds up. This sector is expected to continue falling in , but still at historically high levels, before rising from Agriculture is forecast to rise 5.6% in followed by a smaller increase the following year. Business outlook Sensis, as part of its quarterly national survey, closely monitors the Northern Territory situation and outlook as viewed by business operators in small to medium sized enterprises. Business operators in the NT continue to have more confidence than the national average, just behind Western Australia.

11 Corporate Plan DBERD developed a new Corporate Plan at the beginning of 2007 so as to define what our role is within Government and, importantly, how we can contribute to a continuing growing economy. The Corporate Plan focuses on three objectives Competitive Businesses, Thriving Regional Communities, and a Broader Economic Base all critical for ongoing economic development. Our Vision A strong, vibrant and expanding Northern Territory economy Our Mission To work with our partners to secure substantial and lasting economic benefits for business and the broader community Corporate Plan Our Objectives Competitive Businesses DBERD does this by: Influencing government decisions to establish a competitive environment Supporting industry groups Advocating nationally on business issues Encouraging business exports Leveraging local industry participation Delivering business improvement programs Providing information services to business Encouraging businesses to embrace new technologies Releasing land for industry use Thriving Regional Communities DBERD does this by: Delivering programs and services in regional centres Co-ordinating projects that contribute to economic growth Partnering across governments Supporting Economic Development Committees (EDC) Linking EDC priorities to Government budget development Promoting an enterprise culture in Indigenous communities

12 A Broader Economic Base Corporate Plan DBERD does this by: Encouraging investment in research and innovation Advising Government on its research priorities Researching and developing new economic opportunities Encouraging strategic partnerships Facilitating sectoral investment Providing project facilitation Leading project development Participating in Government s Capital Works Program development Developing new business parks The following organisational chart illustrates our corporate structure designed to support the delivery of our corporate plan. 10

13 OrgANISATIONAL chart Areas of Activity Chief Executive Regional Development Responsible for overall business direction and priorities and ultimately for meeting the financial and service delivery expectations of our customers, the community, and our stakeholders. Core Business Areas Business and Industry Development Economic Development Business Support Organisational Chart Regions Business Services Policy Communications Projects Defence Support Analysis Human Resources Work Units Indigenous Central Australia Industry Development Investment Services Research Finance Desert Knowledge Commercial Services Business and Skilled Migration Key Responsibilties Support activities to develop Indigenous business. Promote regional economic development. Coordination of economic development committees. Development of community benefit packages. Provision of business registration and support licences. Business education and skilled migration awareness activities. Support the development of a Defence industry. Attract external investment in the manufacturing, mining and energy supply and services sector. Provide financial assistance to Territory businesses. Monitor progress against the 2006 Economic Development Framework. Provide economic analysis and advice to government projects. Facilitate Business Round Table meetings. Promote the development of a Territory innovation and knowledge economy. Promote research as an opportunity to improve business competitiveness. Manage the delivery of corporate services and support across DBERD, Tourism NT and the Land Development Corporation. 11

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