Report on the Trade Mission to the People’s Republic of ...€¦ · the Welcome Reception,...

Report on the Trade Mission to the People’s Republic of China and Japan

The Honourable Andrew Fraser MP Treasurer and Minister for Employment

and Economic Development

18-25 June 2010

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TRADE MISSION OVERVIEW .................................................................................. 4

WHY THIS MARKET? CHINA .................................................................................. 5

WHY THIS MARKET? JAPAN ................................................................................. 6

OFFICIAL DELEGATION MEMBERS ....................................................................... 7

TRADE AND INVESTMENT QUEENSLAND REPRESENTATIVES IN-MARKET ..... 7

BUSINESS DELEGATION MEMBERS – CHINA ...................................................... 8

LAUNCH OF HEAT FASHION EVENT ................................................................... 12

MEETING WITH EXECUTIVES FROM MOTION PICTURE ASSOCIATION .......... 13

LAUNCH OF THE 2010 ASIA PACIFIC SCREEN AWARDS (APSA) ...................... 14

INSPECTION OF SHANGHAI WORLD EXPO 2010 SITE ...................................... 15

OFFICIAL LAUNCH OF QUEENSLAND WEEK AND STATE LUNCHEON ........... 16

OFFICIAL OPENING OF PHOTO EXHIBITION: POST-EXPO REDEVELOPMENT OF BRISBANE SINCE WORLD EXPO 1988........................................................... 17

QUEENSLAND GOVERNMENT RECEPTION........................................................ 18

CHINA EXECUTIVE LEADERSHIP ACADEMY, PUDONG (CELAP) DIALOGUE .. 19

QUEENSLAND GOVERNMENT TRADE & INVESTMENT FORUM ON ENERGY AND RESOURCES - SHANGHAI ........................................................................... 20

MEETING WITH MR TANG DENGJIE, VICE MAYOR OF SHANGHAI MUNICIPAL PEOPLE'S GOVERNMENT, SIGNING OF MEMORANDUM OF AGREED COOPERATION (MOAC) ........................................................................................ 21

SIGNING OF FOUR COLLABORATIVE AGREEMENTS BETWEEN QUEENSLAND INSTITUTES AND SHANGHAI ............................................................................... 22

TOTAL ENERGY SOLUTIONS (TES) SIGNING CEREMONY WITH XUHUI DISTRICT SHANGHAI ............................................................................................ 23

QUEENSLAND GOVERNMENT RECEPTION PROFILING HEAT ARCHITECTURE ................................................................................................................................ 24

TOURISM QUEENSLAND GOLD COAST MARATHON FUNCTION ...................... 25

OFFICIAL OPENING OF TRADE AND INVESTMENT QUEENSLAND'S NEW PREMISES IN TOKYO ............................................................................................ 26

MEETING WITH MR AKIO MIMURA, REPRESENTATIVE DIRECTOR AND CHAIRMAN, NIPPON STEEL CORPORATION ...................................................... 27

MEETING WITH MR YOSHITARO IWASAKI, PRESIDENT, IWASAKI GROUP ..... 28

QUEENSLAND GOVERNMENT RECEPTION........................................................ 29

MEETING WITH MR EIJI HAYASHIDA, PRESIDENT AND CHIEF EXECUTIVE OFFICER, JFE STEEL CORPORATION ................................................................. 30

LUNCH MEETING WITH TOKYO GAS CO LTD ..................................................... 32

MEETING WITH MR HIDEAKI OHNO, DIRECTOR GENERAL, INTERNATIONAL DEPARTMENT, BANK OF JAPAN .......................................................................... 33

LAUNCH OF "PURE HEAVEN" PRODUCTS IN JAPAN ......................................... 34

QUEENSLAND TREASURY CORPORATION COMMITMENTS ............................ 35

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TRADE MISSION OVERVIEW

Summary

The aim of this trip was to reinforce the utmost priority the State places on trade and investment relationships with key trading partners of China and Japan. I promoted Queensland as a trade and investment destination, promoting specific skills and capabilities at targeted events and meetings in each market. During the trip, I also gathered intelligence to assist Queensland businesses to take advantage of emerging opportunities in these markets.

China

In China I officially launched Queensland Week at Shanghai World Expo, reinforcing Queensland’s commitment to China and promoting the State’s capabilities under the global spotlight of Expo. I met with the Vice Mayor of Shanghai and re-signed the 9th Memorandum of Agreed Cooperation between Queensland and Shanghai for 2011-2013, now in its 21st year.

During Queensland Week, I promoted the HEAT initiative for creative industries in fashion and architecture, opened a photo exhibition on Brisbane’s Development since World Expo 88 at Shanghai Urban Planning Exhibition Centre in People’s Square.

I addressed attendees at the Queensland China Trade and Investment Forum focusing on Energy and Resources, outlined investment opportunities in Queensland, reinforced our existing cooperation with China and reaffirmed the Queensland Government’s position to welcome the Chinese investment. The Forum attracted over 100 senior executives from all over China.

I observed a number of signings on collaborative science and technology related agreements between Queensland universities and their Chinese counterparts, and also observed Queensland company, Total Energy Solutions, sign a preferred supplier agreement with Xuhui District Government of Shanghai.

I addressed future leaders of China on the topic of “Innovation in the Australian Public Sector using Queensland as a case study“ at the China Executive Leadership Academy Pudong (CELAP) – the address was the second annual Australia China Futures Dialogue, the first of which was an address by Bob Hawke in December 2009.

Japan

In Japan I met with key clients of Queensland industry – namely JFE Steel, Nippon Steel and Tokyo Gas, and reassured them of Queensland’s commitment to our significant relationships and encouraged further investment.

I officially opened Trade and Investment Queensland’s new office in Tokyo and provided assistance and support to Queensland company Pure Heaven at their promotional campaign.

I addressed 300 attendees at the Queensland Government Reception in Tokyo, an excellent platform to network with key Queensland clients and reaffirm the State’s support for them.

The remainder of my time in Japan was spent undertaking numerous Queensland Treasury Corporation (QTC) related meetings as part of the annual QTC Roadshow.

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WHY THIS MARKET? CHINA

China - the world’s third largest economy, third largest exporter of goods and services, and Australia’s biggest trading partner. China’s strategic influence will naturally grow with its expanding economy. China is one of Queensland’s most important markets and its importance will only increase in the future. The Queensland Government recognises that China is a major contributor to the current global order and has Trade and Investment offices strategically located in Shanghai, Guangzhou and Hong Kong and a presence in Beijing to nurture our bilateral trade and investment relationship and spearhead opportunities for Queensland businesses.

The objective of the mission was to strategically position Queensland as a reliable source of future trade and investment for China. Queensland’s commitment to China is highlighted through its involvement in Shanghai World Expo 2010 – this year’s biggest international event and the world’s largest ever Expo. The mission reinforced Queensland’s relationship with the Chinese government and business communities at the highest levels through targeted meetings, events and activities that took place during Queensland Week.

Another key element of the visit was the re-signing of the Memorandum of Agreed Cooperation between Queensland and Shanghai, the Sister-State agreement which has already been in effect for 21 years. In doing so, I reaffirmed the State’s commitment to its long-standing bilateral relationship with China, particularly the Queensland-Shanghai Sister State relationship. More than two decades of growth at around 10 per cent every year has raised living standards significantly, with nearly half of China’s population now living in urban centres. These advances present significant opportunities for Queensland businesses, with key sectors identified for trade and investment focus including:

Food and Agribusiness

Education and Training

Green Building and Infrastructure

Energy and Resources

Creative Industries

Tourism

Queensland Week events focused on these key sectors. These events facilitated introductions and business matching which will lead to trade and investment outcomes over the coming months in each of the abovementioned sectors.

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WHY THIS MARKET? JAPAN

Japan is Queensland's largest merchandise export market. This trade mission reinforced Queensland's relationship with Japan and the State's commitment to strengthening business ties with major Japanese corporations investing in Queensland. The overall objective of the visit to Tokyo was to encourage business activity in Queensland and further investment in existing and emerging, yet strategically important industries, such as coal and Liquefied Natural Gas (LNG). I reassured major Japanese corporations that Queensland is committed to providing the necessary infrastructure and services to support their investment interests in Queensland. The trip to Tokyo involved a series of meetings with Queensland Treasury Corporation (QTC) investors and representatives of QTC’s Fixed-Interest Distribution Group (FIDG) members. These meetings, undertaken on an annual basis, were on this occasion designed to provide participants with a timely overview of the 2010-11 Queensland budget and QTC borrowing program and to answer, first hand, any questions that they had. Personal interaction between the Treasurer of the day and QTC’s largest investors has occurred since QTC’s inception, involving Treasurers from both sides of politics. It is this interaction that has helped build QTC’s enviable reputation and ensure Queensland has remained a stable destination for international investment. This visit also provided the opportunity to highlight Queensland's capabilities in emerging sectors, including clean technology and encouraged Japanese organisations to consider partnership and technology demonstration opportunities in Queensland. Japan's energy security needs from Queensland and its push for technology transfer overseas can be well complemented with Queensland's needs for capital for new industry development, such as LNG and renewable energy. During the visit I highlighted two recent developments:

The signing of a Memorandum of Understanding (MOU) between JFE Holdings and QCoal in Brisbane in May 2010. The agreement formalised JFE Steel's acquisition of a twenty per cent interest in the Byerwen Coal Project with an investment of $560 million and the expected creation of 500 jobs for Queensland.

The deal between British Gas (BG) Group and Tokyo Gas to take effect from 2015, could be worth more than A$20 billion over 20 years, and support up to 8,500 jobs for Queensland. The agreement is part of Tokyo Gas' strategy to reduce its reliance on Western Australia and to develop a renewable energy business base in Queensland.

I also noted that Queensland would be taking a key role in the 48th Annual Australia-Japan Joint Business Conference in Brisbane from 10 - 12 October 2010 by hosting the Welcome Reception, Conference Dinner and Technology Showcase at the event.

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OFFICIAL DELEGATION MEMBERS

The Honourable Andrew Fraser MP Treasurer and Minister for Employment and Economic Development

Mr Brendan Connell

Principal Media Advisor Office of the Treasurer and Minister for Employment and Economic Development

TRADE AND INVESTMENT QUEENSLAND REPRESENTATIVES IN-MARKET

Mr Zijian Zhang

Queensland Government Trade and Investment Commissioner, China

Mr Take Adachi Queensland Government Trade and Investment Commissioner, Japan

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BUSINESS DELEGATION MEMBERS – CHINA

Associate Professor Leigh Shutter Griffith University

Associate Professor Peter Skinner FRAIA President, Australian Institute of Architects

Associate Professor Xiangdong Yao Associate Professor University of Queensland - Micro and Nanotechnology Centre

Cr Peter Young Councillor, Gold Coast Tourism

Dr Kathy Holt-Damant Urban Design Coordinator, QUT

Dr Len Walker Managing Director, Cougar Energy Limited

Dr Paul Messenger Chief Executive Officer, Club Alumina

Mr Allen Rielly Senior Associate, Architectus

Mr Andrew Gutteridge Director, Arkhefield

Mr Barry Lee Director, DBI Design

Mr Ben Tait Chief Executive Officer, Urban Art Projects

Mr Bruce Wolfe Director, Conrad Gragett Lyons

Mr Chris Evason Managing Director International Education Services

Mr Craig Porter Business Development Manager Link Energy

Mr Daren Greenway BDA Architects

Mr Fan Chen General Director Mountsharp International

Mr Gary Casey Director of Client Services Brisbane North Institute of TAFE

Mr Hames Tuma Director, Urbis

Mr Ian Mitchell Conrad Gragett Lyons

Mr Kai Ming (Tony) Law City Smart Education

Mr Liam Proberts Director, Fairweather Proberts

Mr Lindsay Thorpe Chairman, Place Design

Mr Malcolm Snow Executive Director South Bank Corporation

Mr Mark Jones Director, Architectus

Mr Mark Loughan Principal, Hassell

Mr Martin Winter Director, Gold Coast Tourism

Mr Michael Back Partner, Freehills

Mr Michael Rayner Managing Director, Cox Rayner Architects

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Mr Michael van Baarle Director of Business Development Ambre Energy

Mr Paul Jones Director, Donovan Hill

Mr Peter Skinner General Manager Australian Institute of Architects

Mr Ralph De Lacey Managing Director Consolidated Tin Mines

Mr Renato Paladino Chief Marketing Officer Hancock Coal Pty Ltd

Mr Richard Kirk Director, Richard Kirk Architects

Mr Richard Lange Managing Director Australian Mirror News Media Group

Mr Robert Riddel Easton Pearson

Mr Ron Nankervis Regional Director – International James Cook University Brisbane

Mr Scott Miller Marketing Manager, Urban Art Projects

Mr Shane Thompson Principal, BVN Architecture

Mr Shaun Munday Managing Director, Place Design

Mr Terry McQuillan Director, Fairweather Proberts

Mr Thomas Toh Regional Director, Greater China Griffith International

Mr Timothy Hill Director, Donovan Hill

Mr Vimal Sharma Managing Director Waratha Coal & Queensland Nickel

Mr Warren Coyle Director, DBI Design

Mr Wei He Chief Executive Officer, AREN Quest

Mr William Ellyett BVN Architecture

Mrs Elizabeth Watson-Brown Director, EWB Architects

Mrs Fung Ping (Irene) Kwok City Smart Education

Mrs Judith Gilmore Business Manager Australian Institute of Architects

Mrs Kay Ganley Chief Executive Officer, Charlton Brown

Mrs Linda Lau China Director, Hancock Prospecting

Mrs Suse Kirk Richard Kirk Architects

Ms Holly Qi Regional Marketing Manager International Education Services

Ms Janet Gervais Teacher, Stuartholme School

Ms Jenny Peng Fairweather Proberts

Ms Lorna Zhang Business Development Manager Populous

Ms Lydia Pearson Designer, Easton Pearson

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Ms Mary Martin Director, Market & Business Development Southbank Institute of Technology

Ms Natasha Vary Event and Publications Manager Griffith Asian Institute Griffith University

Ms Pamela Easton Designer, Easton Pearson

Ms Renee Winton Regional Manager, Market Development University of Queensland

Professor Cordia Chu Director, International Centre for Development, Environment and Population Health Griffith University

Professor Cheng Zhong (Michael) Yu Australian Future Fellow Australian Institute of Bioengineering and Nanotechnology University of Queensland

Ms Sangeeta Mahajan Chief Executive Officer Nudgee International College

Professor Ian O’Connor Vice-Chancellor, Griffith University

Professor Jennifer Taylor Adjunct Professor, QUT

Professor Jim O’Connor QUT

Professor Jin Zou Australian Future Fellow School of Mechanical and Mining Engineering and Centre for Microscopy and Microanalysis University of Queensland

Professor John Byrne Adjunct Professor QUT

Professor Justin O’Connor Professor Queensland University of Technology

Professor Mark Von Itzstein Executive Director, Institute of Glynomics Griffith University

Professor Martin Betts Executive Dean, QUT

Professor Michael Keniger Senior Deputy Vice Chancellor University of Queensland

Ms Jane Grewly Accompanying Senior Deputy Vice Chancellor of University of Queensland

Professor Michael Powell Pro Vice-Chancellor, Griffith University

Professor Pei Yi Ding Senior Research Officer University of Queensland

Professor Perry Bartlett Director, University of Queensland

Professor Peter Coaldrake Vice-Chancellor Queensland University of Technology

Professor Peter Gresshoff Director University of Queensland – Centre for Excellence in Integrative Legume Research

Mrs Lynn Hu Lawyer McKelvey & Hu Lawyers

Professor Max Lu Deputy Vice-Chancellor (Research) University of Queensland

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Ms Yvonne Chu Australian Multicultural Education Centre

Mr Karl Young Australian Multicultural Education Centre

Dr Lian Liu University of Queensland

Mr Elvin Lu University of Queensland

Professor Susan Street Executive Dean, Creative Industries Queensland University of Technology

Professor Xing Ruan University of Southern Queensland

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LAUNCH OF HEAT FASHION EVENT

Date: Saturday 19 June 2010

Time: 2:30pm - 3:30pm

Venue: 6/F, No 5 The Bund (corner of Guangdong Lu) Shanghai 200002 China

ATTENDEES

Ms Pamela Easton

Leading Queensland Fashion Designer (Easton Pearson)

Ms Lydia Pearson

Leading Queensland Fashion Designer (Easton Pearson)

MEETING SYNOPSIS

The launch of HEAT Fashion in Shanghai provided a unique opportunity to alert an international audience of fashion journalists and industry influencers to the HEAT Fashion program. The centrepiece of the event was the world premiere of the new Easton Pearson range.

KEY POINTS

Growing consumption of imported luxury goods is anticipated to be a critical driver for future Chinese economic growth. For this reason China is an important emerging market for the Queensland fashion design industry.

The HEAT Fashion program, an initiative of the Creative Industries Unit, DEEDI, raised the profile of Queensland fashion design and will potentially increase export sales both nationally and internationally.

As the centrepiece, the HEAT Fashion launch showcased the world premiere of Easton Pearson's latest collection "Cruise 10/11". Outstanding Queensland designers Pamela Easton and Lydia Pearson whose label is sold in stores in 21 countries were ambassadors for HEAT Fashion.

The HEAT Fashion launch promoted at least 20 Queensland fashion design businesses from established businesses to emerging talent.

Attending guests included international fashion media, fashion buyers and agents and fashion academics.

The HEAT Fashion launch used a mix of speeches, AV, printed collateral, garment displays and venue dressing to create the event and sell HEAT Fashion.

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MEETING WITH EXECUTIVES FROM MOTION PICTURE ASSOCIATION


Time: 4:40pm - 5:00pm

Venue: Holiday Inn Crowne Plaza Hotel 400 Fanyu Road Changning District Shanghai

ATTENDEES

Mr Mike Ellis President and MD, Motion Picture Association, Asia Pacific

Mr Bob Pisano President, MPAA, America

Mr Stephen Jenner MPA Consultant

Mr Des Power Chairman, APSA

Mr Richard Watson General Manager, APSA

MEETING SYNOPSIS

I met with the executives of the Motion Pictures Association (MPA), the Chair and General Manager of APSA, prior to announcing MPA's $100,000 contribution to a new partnership to establish the MPA Asia Pacific Screen Awards (APSA) Academy Development Fund.

KEY POINTS

This meeting demonstrated the Queensland Government’s commitment, through APSA, to developing business opportunities for the growing Asia-Pacific film industry and the film practitioners of the region.

The announcement of the $100,000 fund for Asia-Pacific film makers supports the Asia Pacific Screen Awards, an initiative of the Queensland Government. The fund is designed to support new projects and foster collaboration among filmmakers in the burgeoning Asia-Pacific film industry.

Mr Ellis paid tribute to the Government to the film industry through APSA. The Gold Coast hosts the APSA film awards every year, bringing together filmmakers and industry participants from approximately 70 countries.

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LAUNCH OF THE 2010 ASIA PACIFIC SCREEN AWARDS (APSA)


Time: 5:00pm - 9:00pm

Venue: Holiday Inn Crowne Plaza Hotel 400 Fanyu Road Changning District Shanghai

ATTENDEES

Mr Mike Ellis

President and MD, Motion Picture Association, Asia Pacific

Mr Des Power Chairman, APSA

Mr Richard Watson General Manager, APSA

Mr Huang Jianxin 2009 APSA Jury President

KEY POINTS

I announced the formation of a US$100,000 film fund exclusive to filmmakers in the Asia-Pacific region supported by the Motion Picture Association (MPA) and the Asia Pacific Screen Awards (APSA).

I demonstrated the Queensland Government’s commitment, through APSA, to developing business opportunities for the growing Asia-Pacific film industry and the film practitioners of the region.

I brought international attention towards the Queensland Government’s presence at the Shanghai World Expo 2010 and the Shanghai International Film Festival. I also promoted Queensland's support of an internationally acclaimed awards initiative.

I demonstrated the Queensland Government’s support for the objectives of the Queensland-Shanghai Sister State Agreement by further developing strong ties between the two governments and communities and by promoting collaborative programs in the arts, education, creative industries, health and tourism.

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INSPECTION OF SHANGHAI WORLD EXPO 2010 SITE

Date: Sunday 20 June 2010

Time: 9:20am - 11:50am

Venue: China Pavilion, Japan Pavilion and Australia Pavilion Shanghai World Expo 2010 site

ATTENDEES

Ms Lyndall Sachs PSM

Commissioner General for Australia, Australian Pavilion, Shanghai World Expo

MEETING SYNOPSIS

Inspections of Expo site, the Chinese and Japanese Pavilions provided points for discussion for meetings during the mission.

KEY POINTS

Shanghai World Expo 2010 is the largest World Expo ever to be staged and the first time China has hosted the event. China states that it attaches as much importance to the Shanghai World Expo 2010 as it did to the Beijing Olympic Games and is using the event to reinforce the nation as a global leader into the future. China is taking its place on the world stage very seriously.

Ms Lyndall Sachs provided an introduction to the Australian Pavilion, particularly in relation to the Queensland elements, guided by Queensland recruits working in the Pavilion.

As Treasurer, it was my role to support the Australian Government at Shanghai World Expo 2010, which provided an unprecedented opportunity to promote Queensland, particularly in Shanghai.

Queensland's participation in the Australian Pavilion as a platinum partner sent a strong signal to China of the State's commitment to one of its key trading partners.

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OFFICIAL LAUNCH OF QUEENSLAND WEEK AND STATE LUNCHEON


Time: 12:00pm - 2:00pm

Venue: Wattle Room Level 3, Australian Pavilion Shanghai World Expo 2010 Site

KEY POINTS

The launch celebrated the start of Queensland Week at Shanghai World Expo 2010 and the State’s participation at Expo. The launch provided an opportunity to raise awareness of Queensland, develop business networks and promote the State’s industry strengths in China.

At the launch, the Government announced $1.7M of Queensland Government funding to advanced research collaborations with China under the Smart Futures Fund National and International Research Alliances Program. Professors Perry Bartlett of the Queensland Brain Institute (QBI) and Professor Anton Middleberg of the Australian Institute for Bioengineering and Nanotechnology (AIBN) have been successful in their funding bids to jointly work with the Chinese Academy of Sciences and Tianjin University to advance research into brain disorders and vaccine development.

Queensland artists William Barton (one of Australia's leading didgeridoo players and composers) and Elly Hoyt (jazz singer and winner of the prestigious Generation in Jazz Scholarship in 2008) performed at the event.

Queensland Ambassador Chef, Mr David Pugh of Brisbane eatery Restaurant Two, was in Shanghai to showcase Queensland's food and wine and was responsible for creating and preparing the menu.

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OFFICIAL OPENING OF PHOTO EXHIBITION: POST-EXPO REDEVELOPMENT OF BRISBANE SINCE WORLD EXPO 1988


Time: 3:15pm - 4:15pm

Venue: Level 5, Shanghai Urban Planning Exhibition Centre 100 Renmin Da Dao (People's Avenue)

KEY POINTS

This exhibition featured images of World Expo 88, subsequent development at South Bank and other recent urban infrastructure projects in Brisbane.

The Partnering organisations of the exhibition were the Queensland Government, Shanghai Urban Planning Exhibition Centre and South Bank Corporation.

Brisbane's hosting of World Expo 88 produced wide-ranging economic and cultural benefits to the city, which enabled significant new investment opportunities and increased urbanisation in the region. Expo 88 attracted millions of people to visit Queensland and encouraged many people to study or move to the State.

Given Queensland’s redevelopment of the former World Expo 88 site as the South Bank precinct for leisure, education and business pursuits, there was interest in Shanghai about our experiences. The redevelopment of the site to South Bank reflects Shanghai World Expo 2010's theme 'Better City, Better Life'.

Queensland architects, urban planners and designers (including master planning, interior design, landscape design and public art) have great expertise in working with the environment and the community's needs to produce sustainable and appropriate development and are well placed to provide advice, services and other assistance to Shanghai to redevelop its Expo site.

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QUEENSLAND GOVERNMENT RECEPTION


Time: 6:00pm – 7:30pm

Venue: Diamond Ballroom, The Westin Bund Center, Shanghai 3rd Floor, Bund Center 88 Henan Central Road Shanghai

THE RECEPTION

Approximately 70 guests, including Chinese business officials, attended the Queensland Government Reception, which was an opprortunity for me to meet with attending Queensland delegates. The reception also provided the opportunity for Queensland delegates to meet each other and network with their key clients and Chinese business officials.

The reception also included the signing of a MOU regarding a health city training program signed by Griffith University and the Office of Shanghai Municipal Committee for Health Promotion.

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CHINA EXECUTIVE LEADERSHIP ACADEMY, PUDONG (CELAP) DIALOGUE

Date: Monday 21 June 2010

Time: 9:15am - 11:30am

Venue: Multifunction Room Level 2, Conference Centre China Executive Leadership Academy Pudong (CELAP) 99 Qiancheng Road, Pudong New Area, Shanghai

ATTENDEES

Professor Peter Coaldrake Vice Chancellor, Queensland University of Technology

Mr Jiang Haishan Director- General, Department of International Exchange and Program Development, CELAP

Professor Feng Jun Executive Vice-President, China Executive Leadership Academy, Pudong

Professor Ian O'Connor

Vice Chancellor and President, Griffith University

Professor Zhou Qi Feng President, Peking University

KEY POINTS

I delivered a lecture to the CELAP students (future leaders of China) on the topic of innovation in the public sector. (Appendix B)

This lecture contributed to the students’ approved study curriculum and was assessed by students via a survey.

ISSUES

China Executive Leadership Academy, Pudong (CELAP), officially opened on 18 March 2005 and is supervised by the Central Organisation Department of the Communist Party of China.

CELAP students are intermediate and top-level government officials (Ministers and high-level officials from the central government, Governors, mayors and executives from local governments and State Owned Enterprises, managing directors and business executives).

CELAP lectures consist of 80 Director Generals, regional mayors of Chinese Government agencies, including 40 from Xin Jiang Uyghur Autonomous Region (one of the western provinces), and another 40 senior officials from the Yangtze River Delta which accounts for approx. one fifth of China’s GDP (including Shanghai, Jiangsu and Zhejiang Provinces) and other parts of China.

The CELAP lecture was part of the Australia China Futures Dialogues and was the second Annual Leader's Lecture. The Australia China Futures Dialogue is a collaboration between the Queensland State Government, the Griffith Asia Institute, Griffith University, and Peking University.

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QUEENSLAND GOVERNMENT TRADE & INVESTMENT FORUM ON ENERGY AND RESOURCES - SHANGHAI


Time: 12:10pm - 12:20pm Forum closing address 12:20pm - 1:00pm Lunch

Venue: Shangri-La Hotel

SUMMARY

I provided a keynote address at the Queensland Government Trade and Investment Forum, which attracted 100 senior executives from China. These executives represented more than 50 major Chinese companies across the sectors of energy, resources, engineering, infrastructure, banking and legal services. The Forum promoted Queensland's energy and resources sector and highlighted Queensland-based mining projects and investment opportunities.

Representatives of British Gas, China National Offshore Oil Corporation (CNOOC), Macquarie Capital Group and Blake Dawson discussed energy projects including those utilising coal seam gas and liquid natural gas and how the Chinese industry could invest in them.

The Forum then focused on several Queensland-based projects.

The emphasis was on the Queensland Government’s support of exploration, mining and petroleum industries, and openness to investment, noting that foreign investment has been a major factor in the development of the State’s mining and petroleum industries.

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MEETING WITH MR TANG DENGJIE, VICE MAYOR OF SHANGHAI MUNICIPAL PEOPLE'S GOVERNMENT, SIGNING OF MEMORANDUM OF AGREED COOPERATION (MOAC)


Time: 1:30pm – 2:15pm

Venue: Shanghai Government Building

ATTENDEES

Mr Tang Dengjie Vice Mayor of Shanghai Municipal People’s Government

Mr Tom Connor Australian Consul General to Shanghai

Professor Peter Andrews Chief Scientist, Qld Government

Professor Ian O’Connor Vice Chancellor and President, Griffith University

Professor Max Lu Deputy Vice-Chancellor (Research), The University of Queensland

MEETING SYNOPSIS

I met with the Shanghai Vice Mayor to re-sign the Sister State Agreement for a further three years. This agreement of 21 years is one of the longest continuous international agreements held by Queensland. The meeting with the Vice Mayor re-affirmed Queensland's commitment and support for the Sister State relationship.

KEY POINTS

On behalf of Queensland, I congratulated the Vice Mayor on the impressive opening of the Shanghai World Expo and conveyed my best wishes for a successful World Expo event.

During the meeting, we highlighted the importance of the Chinese market to Queensland.

We discussed areas of mutual collaboration under the 9th Memorandum of Agreed Cooperation, which has broadened to include green building, environmental management and clean energy and related technologies.

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SIGNING OF FOUR COLLABORATIVE AGREEMENTS BETWEEN QUEENSLAND INSTITUTES AND SHANGHAI


Time: 2:45pm – 3:30pm

Venue: Nanjing Room 3 Level 2 Shangri-La Hotel

ATTENDEES

Dr CHEN Jie Chief Engineer of the Science and Technology Commission of Shanghai Municipality

KEY POINTS

Dr Chen Jie and I observed the signing of four collaborative agreements between Queensland Institutes and their Shanghai counterparts.

On behalf of Queensland, I took the opportunity to meet with Dr Chen to thank him and the Shanghai Science and Technology Commission (SSTC) for hosting the Queensland-Shanghai science and innovation workshop, which took place on Tuesday 22 June 2010. The workshop was a reciprocal event to the Innovation Forum held in Queensland during Shanghai Week in Queensland in June 2009, attended by a SSTC delegation.

During the signing I highlighted the $1.7 million of Queensland Government funding to advance research collaborations with China under the Smart Futures Fund National and International Research Alliances Program, which I announced at the launch of Queensland Week. Professors Perry Bartlett of the Queensland Brain Institute (QBI) and Professor Anton Middleberg of the Australian Institute for Bioengineering and Nanotechnology (AIBN) have been successful in their funding bids to jointly work with the Chinese Academy of Sciences and Tianjin University to advance research into brain disorders and vaccine development.

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TOTAL ENERGY SOLUTIONS (TES) SIGNING CEREMONY WITH XUHUI DISTRICT SHANGHAI


Time: 3:30pm - 4:15pm

Venue: The Changchun Room River Wing Level 2 Shangri La Hotel

ATTENDEES

Mr MAO Minggui

CPC Secretary General, Xuhui District Government

Mr Guo Jianfei Deputy District Mayor, Xuhui District Government

Mr Wynne Henderson Managing Director, Total Energy Solutions

KEY POINTS

Total Energy Solutions (TES) is a consultancy firm (located at Chermside) that conducts energy and water audits of major public facilities such as hospitals and government buildings.

I observed the signing of a "Preferred Supplier" Agreement between TES and the Xuhui District Government of Shanghai and addressed attendees, thanking the Xuhui District Government for awarding TES the preferred supplier status.

TES is the first international firm to be appointed by the Xuhui District to be a preferred supplier to conduct future energy efficiency audits on their Government buildings.

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QUEENSLAND GOVERNMENT RECEPTION PROFILING HEAT ARCHITECTURE


Time: 6:00pm - 7:30pm

Venue: Australian Pavilion

ATTENDEES

Mr Cao Jiaming Vice President & Secretary General, Architectural Society of Shanghai China

Mr Timothy Hill Director, Donovan Hill

Mr Huang Rong Director General, Shanghai Urban Construction and Communications Commission

Mr Michael Rayner Principal Director, Cox Rayner

Ms Lyndall Sachs Commissioner General for Australia, Shanghai World Expo 2010

Mr Shane Thompson Principal, BVN Architecture

Mr Matthew Tobin Director, Urban Art Projects

Mr Tong Jisheng Deputy Vice President, Shanghai Construction Group General

Prof Wu Jiang Vice President, Tongji University

Prof Wu Zhiqiang Chief Planner, Shanghai World Expo 2010

Ms Zhang Zailing General Engineer, Datong Housing and Urban-Rural Development Commission

Mr Zhu Bangfan Deputy President, Shanghai Urban Construction Design and Research Institute

THE RECEPTION

The Queensland Government Reception profiling HEAT Architecture was attended by approximately 80 Chinese key influencers, buyers and commissioners of architecture in China and was supported by a cohort of 50 Queensland architecture and related design professionals, academics and industry figures.

The HEAT Reception provided an opportunity for 18 leading firms from Queensland's architectural and related design industries to meet with China’s architectural and urban planning decision makers and potential collaborators and featured an exhibition of recent projects by Queensland firms to showcase Queensland's architectural expertise.

HEAT: Queensland's new wave of environmental architects (HEAT) is a Queensland Government initiative developed in 2008 to increase the exports of Queensland architectural and related design services (including master planning, urban design, interior design, landscape design, and public art).

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TOURISM QUEENSLAND GOLD COAST MARATHON FUNCTION

Date: Wednesday, 23 June 2010

Time: 9:00am - 9:30am

Venue: Trade and Investment Queensland Tokyo Office 15F Shiroyama Trust Tower 4-3-1, Toranomon Minato-ku, Tokyo

ATTENDEES

Mr Toshiaki Nishizawa Tourism Queensland Regional Director, Japan

Ms Shiori Futatsugi Registered runner, Gold Coast Marathon

Ms Yukiko Takashima Registered runner, Gold Coast Marathon (first-time runner)

Mr Gordon Price Gold Coast Tourism

Mr Anthony Hayes CEO, Tourism Queensland

SYNOPSIS

Tourism Queensland, Gold Coast Marathon staff and Japanese runners held a photo and media opportunity to promote the annual Gold Coast Marathon (3 - 4 July 2010).

Interviews were conducted with Japan travel trade media, including Travel Journal, Travel Vision and Wing Travel.

KEY POINTS

Tourism Queensland has an office in Tokyo which works closely with the Japanese travel industry to promote Queensland.

The Gold Coast Airport Marathon is growing in popularity as an international running event, and is the second largest overseas marathon event following Honolulu Marathon in Hawaii in terms of the number of participants from Japan. In 2009, of the 24,000 participants who competed, 2,000 were from overseas and Japan had the largest number of overseas participants. Around 1,000 Japanese runners had registered for the 2010 marathon.

Tourism Queensland, jointly with Tourism Australia and Gold Coast Tourism, undertook a wide range of promotional activities with running clubs, online websites, a FM station, magazines and free papers to promote the 2010 Gold Coast Airport Marathon.

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OFFICIAL OPENING OF TRADE AND INVESTMENT QUEENSLAND'S NEW PREMISES IN TOKYO

Date: Wednesday 23 June 2010

Time: 9:30am – 10:00am

Venue: 15F Shiroyama Trust Tower 4-3-1 Toranomon Minato-ku, Tokyo 105-6015

ATTENDEES

Mr Kazuhiko Oiwa Executive Managing Director, Mori Trust Co Ltd

MEETING SYNOPSIS

I officially opened the new Trade Queensland premises in Tokyo in the presence of the Executive Managing Director of Mori Trust, the company managing the new premises.

KEY POINTS

The new location realises synergies of co-location of Trade and Investment Queensland and Tourism Queensland and highlights the importance that overseas offices play in promoting Queensland merchandise and services and attracting valuable investment into the State.

In addition to major cost savings, the move will provide advantages and efficiencies in business operations and the delivery of services to clients.

The new office in Shiroyama Trust Tower is close to the new business centres in Tokyo, adjacent to hotels and public transport. Tourism Queensland benefits from the close proximity to Jetstar and Qantas offices.

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MEETING WITH MR AKIO MIMURA, REPRESENTATIVE DIRECTOR AND CHAIRMAN, NIPPON STEEL CORPORATION


Time: 3:30pm – 4:30pm

Venue: Nippon Steel Headquarters Marunouchi Building 2-6-1 Marunouchi, Chiyoda-ku Tokyo 100-8071

ATTENDEES

Mr Akio Mimura

Representative Director and Chairman, Nippon Steel Corporation

Mr Tooru Obata Managing Director, Nippon Steel Corporation

Mr Toshiharu Sakae General Manager, Raw Materials Division 1, Nippon Steel Corporation

Mr Yoshihiro Okabe Executive Secretary General, JABCC (Executive Director, Tokyo Chamber of Commerce and Industry)

Mr Hidefumi Kobayashi Deputy General Manager, International Division, Japan Chamber of Commerce and Industry and Tokyo Chamber of Commerce and Industry

MEETING SYNOPSIS

Nippon Steel is one of the largest export clients for Queensland and the Premier, the Honourable Anna Bligh MP, has in the past hosted lunch with the top 5 steel producers when visiting Japan.

This meeting also provided the opportunity to discuss the 48th Australia-Japan Joint Business Conference of which Mr Mimura is the current president, which will be held in Brisbane from 10 - 12 October 2010 and the involvement of the Japan Australia Business Cooperation Committee (JABCC) in this conference.

KEY POINTS

Nippon Steel is the largest steel company in Japan and the meeting provided a platform to reassure Nippon Steel that the Queensland Government is aware of, and highly values the significant contribution that Nippon Steel's coal purchases make to the Queensland economy.

The Queensland Government has agreed to support the 48th Annual Australia-Japan Joint Business Conference in 2010, to be held in Brisbane. It is anticipated that approximately 110 to 130 Senior Japanese and 90 to 100 Senior Australian business delegates will attend, as well as other government and diplomatic representatives. Members of the JABCC consist of representatives from Japan's leading and most influential companies, including Nippon Steel.

28

MEETING WITH MR YOSHITARO IWASAKI, PRESIDENT, IWASAKI GROUP


Time: 5:30pm – 6:00pm

Venue: The Saloon 5F, Imperial Hotel – Main building

ATTENDEES

Mr Yoshitaro Iwasaki President of Iwasaki Group

MEETING SYNOPSIS

I met with Mr Iwasaki to acknowledge Iwasaki Group’s contribution to Queensland.

Mr Iwasaki confirmed his commitment to Queensland and the company’s interest in further developing their Capricorn Yeppoon Resort, near Rockhampton. I advised that the Queensland Government would continue to work with Iwasaki Group to identify an appropriate strategy to facilitate the proposed redevelopment of the Capricorn Resort.

29

QUEENSLAND GOVERNMENT RECEPTION


Time: 6:30pm - 8:30pm

Venue: Kujaku-no-ma, Imperial Hotel Main Building 2F 1-1, Uchisaiwaicho 1-chome, Chiyoda-ku, Tokyo 100-8558, Japan

THE RECEPTION

Over 300 of Queensland's key trade and investment partners in Japan attended the function hosted by the Treasurer. Many of the attendees have played a key role in enabling Trade and Investment Queensland’s Japan office surpass its annual export target of $36 million with over $61.8 million in export outcomes for the 2009 - 2010 financial year.

This function was also attended by the Australian Ambassador to Japan.

Companies that were represented included key partners for many of the 300 Queensland companies that the Trade and Investment Queensland Japan office has provided market assistance to this financial year.

At the reception I announced the relocation of the Trade and Investment Queensland Japan Office and encouraged attendees and delegates to visit and utilise the services available in the new premises.

30

MEETING WITH MR EIJI HAYASHIDA, PRESIDENT AND CHIEF EXECUTIVE OFFICER, JFE STEEL CORPORATION

Date: Thursday 24 June 2010

Time: 11:00am – 11:45am

Venue: JFE Steel Corporation Headquarters Hibiya Kokusai Building 2-2-3 Uchisaiwaicho, Chiyoda-ku Tokyo

ATTENDEES

Mr Eiji Hayashida President and Chief Executive Officer, JFE Steel Corporation

Mr Yoshihide Fujii

Senior Vice President, Raw Materials Purchasing, Materials and Machinery Purchasing, JFE Steel Corporation

Mr Hajime Bada President of JFE Holdings

Mr Akira Suzuki General Manager, Raw Materials Department, JFE Steel Corporation

Mr Satoru Hashizume Deputy General Manager, Coal Section, JFE Steel Corporation

MEETING SYNOPSIS

I met with JFE Group to acknowledge their recent acquisition from QCoal in the Byerwen and Sonoma coal projects and in turn, the contribution that JFE is making to Queensland in terms of the creation of jobs for Queenslanders. The Byerwen Project alone is expected to create 500 jobs.

KEY POINTS

JFE Steel is the single largest export client for Queensland, regardless of product or country, and the majority of the coking coal that they procure is sourced from Queensland. JFE Steel as well as their group company, JFE Shoji, has shown a strong commitment to Queensland by establishing their Australian headquarters in Brisbane in 2008.

I highlighted the success of the MOU signing event in Brisbane in May between JFE Steel and QCoal and conveyed my pleasure in being able to meet with Mr Fujii again.

I acknowledged JFE Group’s need to ensure a steady coal supply and confirmed the Queensland Government is working to strengthen mining industry infrastructure to ensure the optimum environment for the JFE Group's business interests in Queensland.

I acknowledged the fact that subsidiaries of JFE Steel, JFE Engineering and JFE Shoji are also making a significant contribution to Queensland through investment and joint projects with Queensland stakeholders. For example, JFE Engineering, together with Urban Water Security Alliance and Nomura Research Institute, through The New Energy and Industrial Technology Development

31

Organisation (NEDO) has secured feasibility funding for the application of a decentralised water recycling system in Queensland, with a view to construct its demonstration project in 2010 at Urban Land Development Authority's (ULDA) Fitzgibbon site.

32

LUNCH MEETING WITH TOKYO GAS CO LTD


Time: 12:30pm – 2:00pm

Venue: Shibuya Cross Tower 32F 2-15-1 Shibuya, Shibuya-ku, Tokyo

ATTENDEES

Mr Yutaka Kunigo Managing Director, Tokyo Gas Co. Ltd

Mr Tomoo Okada

General Manager, Procurement and Trading, Gas Resources Department, Tokyo Gas Co Ltd

Mr Yosunobu Ohno Manager, Procurement and Trading, Gas Resources Department, Tokyo Gas Co Ltd

MEETING SYNOPSIS

The purpose of this meeting was to celebrate Tokyo Gas Co Ltd's recent long-term commitment to purchase Liquefied Natural Gas (LNG) from Queensland. Tokyo Gas, Japan's largest gas utility, is one of the first Japanese companies to commit to procure a significant quantity of LNG from Queensland over 20 years from 2015. Tokyo Gas has indicated that it is actively seeking further investment and off-take opportunities in the developing Coal Seam Gas (CSG) industry in Queensland.

KEY POINTS

I acknowledged the Heads of Agreement between British Gas (BG) Group and Tokyo Gas and the economic injection that the estimated $20 billion deal will have on the Queensland economy, including the creation of about 8,500 jobs.

I encouraged Tokyo Gas to seek further demonstration/investment opportunities in Queensland, in the CSG/LNG and clean technology sector, in particular renewable energy (wind, solar, biofuels) as well as the application of technologies such as fuel cells and smart grids.

I advised Trade and Investment Queensland could provide Tokyo Gas with assistance on their next Queensland visit and encouraged them to open an office in Brisbane as the first Japanese gas utility firm in Queensland.

Japan is the largest liquefied Natural Gas (LNG) market in the world and Tokyo Gas is the largest gas utility company in Japan. The investment by Tokyo Gas represents the first substantial commitment by a Japanese utility in the Queensland LNG industry and this provides encouragement for other Japanese utility companies to seek out opportunities in Queensland.

Tokyo Gas advised of their areas of interest in smart grid technology and renewable energy (wind, solar, biofuels). The Trade and Investment Queensland Japan office will provide advice to Tokyo Gas on opportunities in these areas.

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MEETING WITH MR HIDEAKI OHNO, DIRECTOR GENERAL, INTERNATIONAL DEPARTMENT, BANK OF JAPAN


Time: 3:30pm – 4:00pm

Venue: 2-1-1 Nihonbashi Hongokucho Chuo-ku, Tokyo 103-0021

MEETING SUMMARY

This meeting enabled me to obtain Mr Ono's view on the Japanese economy as well as the global economic outlook.

It was an opportunity to hear first hand the challenges and issues facing the Japanese economy, particularly its trade outlook.

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LAUNCH OF "PURE HEAVEN" PRODUCTS IN JAPAN


Time: 4:30pm – 5:00pm

Venue: Ginza Branch, Tokyu Hands Marronnier Gate Building, 5F 2-2-14 Ginza, Chuo-ku, Tokyo

ATTENDEES

Mr Justin Heaven Managing Director, Eco Cosmetics Australia

Mr Koji Higashikawa

Managing Director, Seven Seas International Co Ltd

Mr Hideo Kaneko Manager, Tokyu Hands Department Store, Ginza Branch

MEETING SYNOPSIS

I provided support to one of Queensland's up and coming cosmetic brands, Pure Heaven and their Japanese distributors at their retail promotion of a new organic face care range at leading Japanese retail outlet, Tokyu Hands in the Ginza, Tokyo.

I undertook a number of media interviews with Japanese journalists to promote Pure Heaven and met with the senior management of Tokyu Hands Group and the Japanese importer of Pure Heaven cosmetics in Japan and China, Seven Seas International.

KEY POINTS

I congratulated Justin Heaven, Managing Director of Eco Cosmetics Australia, on the launch of his new organic face care range in Japan and the success of the Pure Heaven brand in both Japan and China to date, and acknowledged Seven Seas International for seeking out business opportunities within the Queensland organic beauty industry.

Further success in the Japan market for the Pure Heaven brand will continue to enhance the profile of Queensland in the beauty industry and open the doors for Queensland beauty companies across Asia. Other Australian companies in this industry such as Jurlique, Red Earth and Perfect Potion are already making inroads into the Japanese market.

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QUEENSLAND TREASURY CORPORATION COMMITMENTS

While in Tokyo, I took the opportunity to conduct several meetings and functions with senior executives of the Queensland Treasury Corporation. These were held in between my Trade commitments. The travelling party consisted of Sir Leo Hielscher (Chairman), Mr Alex Beavers (Deputy Under-Treasurer and Deputy Chairman of QTC), Mr Richard Jackson (QTC’s General Manager of Financial Markets), and Mr Brendan Connell (Advisor to the Treasurer). Importantly, this was the last international roadshow to be lead by Sir Leo as Chairman of QTC. Sir Leo was a long-serving Queensland Under-Treasurer, and was founding Chairman of QTC. His years of service have underpinned Queensland’s excellent reputation in global markets. Sir Leo officially retired as Chairman of QTC on 30 July. He has kindly offered to continue serving the state and has accepted the position of Foundation Chairman of QTC. Queensland has had a long-standing relationship with the nation of Japan. Initially centred on coal, as trading partners Queensland now exports other commodities such as beef and sugar, and many Japanese institutions are major investors in QTC bonds.

Meetings undertaken

Tuesday, 22 June:

Briefing for AFLAC (Citi)

Fixed Interest Distribution Group (FIDG) dinner

Wednesday, 23 June:

Economist Briefing from Citi

QTC Investor lunch

Dinner meeting with Royal Bank of Canada

Thursday, 24 June:

Briefing with Daiwa Asset Management

Observations

Most Japanese investors have a strong knowledge of Queensland and its economy, largely through the efforts of QTC and Governments of both political persuasions over many years. The purpose of these meetings is to ensure that this knowledge base is maintained through a full briefing on the 2010-11 State Budget by me and Mr Beavers. Mr Jackson was on hand to provide details surrounding QTC’s borrowing program going forward.

36

There were several issues that were consistently raised with me throughout my meetings with investors: the Federal Government’s then-proposed Resource Super-Profits Tax (RSPT), the end of the Australian Government Guarantee, and the State’s determination to regain its AAA credit rating. At the time, there was a great amount of uncertainty around the details of the RSPT and the timeline for its implementation. While at no stage was there an indication that anyone had anything other than extreme optimism about the future of both the Queensland and Australian economies, tax reform on one of our largest sectors was of great interest to the Japanese. Of course, since then the Federal Government has resolved the issue by compromising with industry on the introduction of a Mineral Resource Rent Tax. The certainty and industry consensus that has been achieved by the Federal Government will ensure our nation’s reputation as a strong, stable destination for investment will be maintained. These meetings were also the first opportunity I have had to discuss the withdrawal of the Australian Government Guarantee (AGG) with some of our largest international investors. At the time, in an unstable global environment, the AGG provided investors with the certainty they needed when assessing their investments. Since taking up the offer, QTC has also issued several unguaranteed lines, diversifying QTC’s holdings and offering alternative products to the market. I was also able to report on the Government’s progress regarding the implementation of our economic agenda that will drive the state back towards a AAA credit rating. During my last briefings of the Japanese market in October 2009, I was able to provide details surrounding the policies the Government implemented in the 2009-10 Budget, including the Government’s real per capita expenditure cap and the Government’s asset sales program. During these briefings I reported to investors that the Government had stayed the course on its economic agenda, implementing every single one of the policies designed to put the Queensland economy back on the path towards AAA. Specifically, investors welcomed news that the Government had successfully completed the transaction for Forestry Plantations Queensland, and that progress had been made on the sale of the Port of Brisbane and the proposed public listing of QR National. The Government is committed to ensuring Queensland remains an attractive, stable investment destination for Japanese and other global investors into the future.

37

APPENDIX A

TREASURER’S PROGRAM

Time Zones Time in bold indicates local time Time in normal font indicates Brisbane time Time Differences Hong Kong 2 hours behind Brisbane Shanghai 2 hours behind Brisbane Tokyo 1 hour behind Brisbane Friday 18 June 2010 – Melbourne/Hong Kong 10:50pm Depart Melbourne for Hong Kong on Qantas Flight

QF29 Travel time: 9h

Saturday 19 June 2010 – Hong Kong/Shanghai

5:50am 7:50am

Arrive Hong Kong

8:00am 10:00am

Depart Hong Kong for Shanghai on Dragon Airlines KA802 Travel time: 2h 30mins

10:30am 12:30pm

Arrive Shanghai (Pudong Airport) VIP Facilitation arranged by Shanghai Foreign Affairs Office. Met by Mr Zijian Zhang, Queensland Government Trade and Investment Commissioner, Shanghai

am Transfer to the hotel Travel time:

12:00noon 2:00pm

Check in at hotel Shangri-La Hotel 33 Fu Cheng Lu, Pudong, Shanghai 200120, China Tel: 0011 8621 6882 8888 Fax: 0011 8621 6882 6688

1:30pm – 2:00pm 3:30pm – 4:00pm

Briefing by Mr Zijian Zhang, Queensland Government Trade and Investment Commissioner, Shanghai Venue: Executive Conference Room

29th

Floor, Shangri-La Hotel

38

2:00pm – 2:30pm 4:00pm – 4:30pm

Travel to next meeting Travel time: 30mins

2:30pm – 3:30pm 4:30pm – 5:30pm

Launch of HEAT Fashion event Venue: 6/F, No.5 The Bund (corner of Guangdong Lu) Shanghai 200002 China

4:00pm – 4:30pm 6:00pm – 6:30pm

Travel to next meeting Travel time: 30 mins

4:40pm – 5:00pm 6:40pm – 7:00pm

Meeting with Executives from Motion Picture Association Venue:4

th Floor, VIP Room

Holiday Inn Crowne Plaza Hotel 400 Fanyu Road Changning District

5:00pm – 6:30pm 7:00pm – 8:30pm

Launch of the 2010 Asia Pacific Screen Awards (APSA) Venue: 4

th Floor, Yin Xing Room

Holiday Inn Crowne Plaza Hotel 400 Fanyu Road Changning District

6:30pm 8:30pm

Travel to the hotel Travel time:

Overnight Shanghai

Shangri-La Hotel 33 Fu Cheng Lu, Pudong, Shanghai 200120, China Tel: 0011 8621 6882 8888 Fax: 0011 8621 6882 6688

Sunday 20 June 2010 – Shanghai

9:00am – 9:20am 11:00am – 11:20am

Depart hotel and travel to Expo site Travel time: 20mins

9:20am – 9:30am 11:20am – 11:30am

Travel to China Pavilion Travel time: 10mins

9:30am – 10:15am 11:30am – 12:15pm

Inspection of the Shanghai World Expo 2010 site

39

Inspection of the China Pavilion *The Shanghai Foreign Affairs Office will make VIP arrangements for visit the Chinese Pavilion.

10:15am – 10:25am 12:15pm – 12:25pm

Travel to Japan Pavilion Travel time: 10mins

DFAT will make VIP arrangements for the Japanese Pavilion visit.

10:25am – 11:10am 12:25pm – 1:10pm

Inspection of the Japan Pavilion

11:10am – 11:20am 1:10pm – 1:20pm

Travel to the Australian Pavilion by Expo shuttle mini bus Travel time: 10mins

11:20am – 11:50am 1:20pm – 1:50pm

Meet with Commissioner-General, Ms Lyndall Sachs and Queensland staff from the Australian Pavilion (includes tour) Venue: Australian Pavilion Shanghai World Expo

11:50am – 12:00noon 1:50pm – 2:00pm

Escorted to the Wattle Room, Level 3 for the State Luncheon

12:00noon – 2:00pm 2:00pm – 4:00pm

Official launch of Queensland Week and State Luncheon Venue: Wattle Room Level 3 Australian Pavilion

2:00pm – 2:30pm 4:00pm – 4:30pm

Media Conference

Venue: Eucalyptus Room Level 2, Australian Pavilion VIP Area

2:30pm – 3:10 pm 4:30pm – 5:10pm

Travel to Shanghai Urban Planning Exhibition Centre Travel time: 40 mins

3:15pm – 4:15pm 5:15pm – 6:15pm

Official opening of the photo Exhibition: Post-Expo re-development of Brisbane since World Expo 1988

Venue: Level 5 Shanghai Urban Planning Exhibition Centre 100 Renmind Da Dao (People’s Avenue)

40

4:15pm – 4:45pm 6:15pm - 6:45pm

Travel to Shangri-La Hotel Travel time: 30 mins

5:25pm – 5:55pm 7:25pm – 7:55pm

Travel to Queensland Government Reception Travel time: 30 mins

5:55pm 7:55pm

Arrive at the Reception

6:00pm – 7:30pm 8:30pm – 9:30pm

Queensland Government Reception Venue: Diamond Ballroom, The Westin Bund Center, Shanghai 3

rd Floor, Bund Center

88 Henan Central Road Shanghai

overnight Shanghai Shangri-La Hotel 33 Fu Cheng Lu, Pudong, Shanghai 200120, China Tel: 0011 8621 6882 8888 Fax: 0011 8621 6882 6688

Monday 21 June 2010 – Shanghai 8:30am 10:30am

Depart hotel for next meeting Travel time: 30-40 mins

9:15am – 11:30am 11:15am – 1:30pm

China Executive Leadership Academy, Pudong (CELAP) Dialogue

Venue: Multifunction Room Level 2, Conference Centre China Executive Leadership Academy Pudong (CELAP) 99 Qiancheng Road, Pudong New Area, Shanghai

11:30am – 11:50am 1:30pm – 1:50pm


12:05pm – 12:15pm 2:05pm – 2:15pm

Queensland Government Trade & Investment Forum on Energy and Resources - Shanghai Venue:3

rd Kaifeng Room

Shangri-La Hotel

12:30pm – 1:00pm 2:30pm – 3:00pm

Queensland China Trade and Investment Forum Lunch

41

Venue: 2nd

floor, Dalian Room Shangri-La Hotel

1:00pm – 1:30 pm 3:00pm – 3:30pm

Travel to Shanghai Municipal People’s Government Travel time: 30 mins

1:30pm – 2:10 pm 3:30pm – 4:10 pm

Meeting with Mr Tang Dengjie, Vice Mayor, Shanghai Municipal People’s Government and signing of the 9th Sister-State MOU Venue: Shanghai Government Building

2:15pm – 2:45 pm 4:15 pm – 4:45 pm

Travel back to Shangri-La Hotel Travel time: 30 mins

2:45pm – 3:30pm 4:45pm – 5:30pm

Signing of Three Collaborative Agreements between Queensland Institutes and Shanghai

Venue: Nanjing Room 3 Level 3 Shangri-La Hotel

3:30pm – 4:30pm 5:30pm – 6:30pm

Total Energy Solutions (TES) Signing Ceremony with Xuhui District Shanghai Venue: The Changchun Room River Wing Level 2 Shangri La Hotel

4:30pm – 5:00pm 6:30pm – 7:00pm

Travel to Tourism Queensland Electronic billboards in the Super Brand Mall, Pudong with photo opportunity Travel time: 30 mins

5:00pm – 5:30 pm 7:00pm – 7:30 pm

Travel to the next meeting, Gate 8 of Australian Pavilion Travel time: 30 mins

5:30pm – 5:50pm 7:30pm – 7:50pm

Change bus to the Australian Pavilion Travel time: 20mins

6:00pm – 7:30pm 8:00pm – 9:30pm

Queensland Government Reception profiling “Heat” Architecture

Venue: Wattle Room 3

rd Floor, Australian Pavilion

Expo site

42

7:30pm – 8:30pm 9:30pm – 10:30pm

Return to the hotel Travel time: 1h

overnight Shanghai

Shangri-La Hotel 33 Fu Cheng Lu, Pudong, Shanghai 200120, China Tel: 0011 8621 6882 8888 Fax: 0011 8621 6882 6688

Tuesday 22 June 2010 – Shanghai/Tokyo 7:00am 9:00am

Check out of hotel

7:10am 9:10am

Depart hotel for Hongqiao airport Travel time: 1 hour

8:15am 10:15am

Check in at airport VIP Facilitation at the airport

8:55am 10:55am

Depart Shanghai (Hongqiao Airport (SHA) for Tokyo on China Eastern Airlines MU537 Travel time: 2h 45mins

12:30pm 1:30pm

Arrive Tokyo (Haneda airport) Mr by Mr Take Adachi, Queensland Government Trade and Investment Commissioner, Japan

1:30pm – 2:15pm 2:30pm – 3:15pm

Travel to hotel Travel time: 45mins

2:15pm 3:15pm

Check in at hotel Imperial Hotel 1-1-1m Uchisaiwai-cho Chiyoda-ku Tokyo Tel: +81 3 3504 1111 Fax: +81 3 3581 9146

3:15pm 4:15pm

Meet Hiroko Ogiso (Citi Host) at the Imperial Hotel transportation desk

QTC Party Treasurer Mr Brendan Connell, Principal Media Advisor, Office of the Treasurer and Minister for Employment and Economic Development Mr Richard Jackson, General Manager, Funding & Markets Sir Leo Hielscher AC, Chairman Mr Alex Beavers, Deputy Under Treasurer

43

4:00pm – 5:00pm 5:00pm – 6:00pm

Meeting AFLAC (Citi) Venue: Shinjuku Mitsui Building (1/2 hr drive) 2-1-1, Nishi-Shinjuku-ku, Tokyo Japan

Mr Satoshi Hamada, General Manager, Credit Analysis Sect. Investment, Risk Management Dept. (Several other Investment Analysts will be in attendance as well

5:15pm – 5:45pm 6:15pm – 6:45pm

Return to the hotel Travel time: 30mins

6:30pm 7:30pm

FIDG Dinner Venue: Sakura Room – 4F Imperial Hotel 1-1-1 Uchisaiwai-cho Chiyoda-ku Tokyo Tel: +81 3 3504 1111 Fax: +81 3 3581 9146

Overnight Tokyo Imperial Hotel 1-1-1m Uchisaiwai-cho Chiyoda-ku Tokyo Tel: +81 3 3504 1111 Fax: +81 3 3581 9146

Wednesday 23 June 2010 – Tokyo

7:30am – 8:30am 8:30am – 9:30am

Citi Economist Briefing with Mr Kiichi Murashima

Venue:

Imperial Hotel (main restaurant) 1-1-1 Uchisaiwai-cho

Chiyoda-ku Tokyo Tel: +81 3 3504 1111 Fax: +81 3 3581 9146

44

8:30am 9:30am

Depart hotel for next meeting Travel time: 30mins

9:00am – 9:30am 10:00am – 10:30am

Meeting and media opportunity (Tourism Queensland) - Gold Coast Marathon promotion Venue: Trade and Investment Queensland Office Tokyo, Japan 15F Shiroyama Trust Tower 4-3-1 Toranomon Minato-ku, Tokyo 105-6015

9:30am – 10:00am 10:30am – 11:00am

Official opening of Trade and Investment Queensland’s new premises in Tokyo

Venue: 15F Shiroyama Trust Tower 4-3-1 Toranomon Minato-ku, Tokyo 105-6015

10:30am – 11:00am 11:30am -12:00noon

Travel to the hotel Travel time: 30mins

11:15am 12:15pm

Pre–lunch briefing with translator

Venue: Imperial Hotel

12:00noon – 2:00pm 1:00pm – 3:00pm

QTC Investor Lunch Venue: Kiku Room then Ran Room Imperial Hotel 1-1-1 Uchisaiwai-cho Chiyoda-ku Tokyo Tel: +81 3 3504 1111 Fax: +81 3 3581 9146

3:10pm 4:10pm

Depart for next meeting Travel time: 20mins

3:30pm – 4:30pm 4:30pm – 5:30pm

Meeting with Mr Akio Mimura, Representative Director and Chairman, Nippon Steel Corporation Venue: Nippon Steel Corporation Headquarters Marunouchi Tower Bldg. 2-6-1, Marunouchi, Chiyoda Ward, Tokyo

4:30pm – 5:00pm Travel to next meeting

45

5:30pm – 6:00pm Travel time: 30mins

5:30pm – 6:00pm 6:30pm – 7:00pm

Meeting with Mr Yoshitaro Iwasaki, Iwasaki Sangyo Venue: The Saloon 5F, Imperial Hotel Main building

6:00pm – 6:30pm 7:00pm – 7:30pm

Travel to the hotel Travel time: 30mins

6:30pm – 7:30pm 7:30pm – 8:30pm

Queensland Government Reception

Venue: Kujaku-no-ma Imperial Hotel Main building, 2F 1-1-1 Uchisaiwai-cho Chiyoda-ku Tokyo

8:30pm 9:30pm

Dinner with Mr Andrew Nemec, RBC Capital Markets

overnight Tokyo Imperial Hotel 1-1-1 Uchisaiwai-cho Chiyoda-ku Tokyo Tel: +81 3 3504 1111 Fax: +81 3 3581 9146

Thursday 24 June 2010 – Tokyo 8:00am 9:00am

Meet at Transport Desk, Imperial Hotel

8:30am 9:30am

Depart hotel Travel time: 30mins

9:00am - 10:30am 10:00am – 11:30am

Meeting with Daiwa AM – hosted by Westpac Mr Kazuya MORI Venue: 2-10-5 Nihonbashi, Kayabacho Chuo-ku Tokyo 103-0025

10:30am – 11:00am 11:30am – 12:00noon


46

11:00am – 11:45am 12:00noon – 12:45pm

Meeting with Mr Eiji Hayashida, President and Chief Executive Officer, JFE Steel Corporation Venue: JFE Steel Corp. Headquarters Hibiya Kokusai Bldg. 2-2-3 Uchisaiwaicho, Chiyoda-ku, Tokyo

11:45am – 12:20pm 12:45pm – 1:20pm


12:30pm – 2:00pm 1:30pm – 3:00pm

Lunch meeting with Tokyo Gas Co. Ltd

Venue: Shibuya Cross Tower 32F 2-15-1 Shibuya Shibuya-ku, Tokyo

2:00pm – 2:10pm 3:00pm – 3:10pm

Return to hotel Travel time: 10mins

2:10pm – 2:40pm 3:10pm – 3:40pm

Brisbane office liaison time

2:40pm – 3:00pm 3:40pm – 4:00pm


3:30pm – 4:00pm 4:30pm – 5:00pm

Meeting with Mr Hideak Ohno, Director General, International Bureau, Bank of Japan Venue: Director General, International Bureau Bank of Japan Headquesters 2-1-1 Nihonbashi Hongokucho, Chuo-Ku

4:00pm – 4:30pm 5:00pm – 5:30pm

Return to the hotel and check out

4:30pm – 5:00pm 5:30pm – 6:00pm


5:00pm – 5:40pm 6:00pm – 6:40pm

Launch of “Pure Heaven” products in Japan

Venue: Ginza Branch, Tokyu Hands Marronnier Gate Bldg. 5F 2-2-14 Ginza, Chuo-ku, Tokyo

5:40pm – 7:10pm 7:40pm – 9:10pm

Travel to airport Travel time: 1h 30mins

7:10pm Check in at airport

47

9:10pm

9:10pm 11:10pm

Depart Tokyo (Narita airport) for Brisbane on Qantas Flight QF390 Travel time: 9h

Friday 25 June 2010 – Brisbane 7:05am Arrive Brisbane

48

APPENDIX B

Innovation in the Public Sector

Hon Andrew Fraser MP

Treasurer of Queensland

Minister for Employment and Economic Development

49

Ladies and Gentleman

It is indeed a rare privilege to be invited to the China

Executive Leadership Academy of Pudong.

I particularly want to acknowledge Professor Feng Jun,

Executive Vice President of CELAP and Mr Jiang Haishan

Director-General of International Exchange and Program

Development at CELAP, with whom I had the fortune of

sharing lunch yesterday at the Australian Pavilion.

Please allow me also to acknowledge the President of Peking

University, Professor Zhou Qi Feng. I, and the State of

Queensland, are honoured by your attendance. To

Professor Ian O‟Connor, Vice Chancellor and President of

Griffith University, Professor Peter Coaldrake Vice

Chancellor and President of QUT and Professor Peter

Andrews, Queensland Chief Scientist - I welcome your

presence on our State‟s delegation and your attendance here

today.

To be invited here, at this moment, to address such a

distinguished audience is of course an honour.

50

I am aware that I follow many an exceptional mind and

speak today to an audience of exceptional intellects and

future leaders.

I am also acutely conscious that I speak today in front of the

Vice-Chancellor of my alma mater and in fact to an audience

that includes one of my former lecturers. My sense of

occasion is therefore multi-dimensional.

Ladies and Gentleman:

There is, within this room and within this moment, an

almost overwhelming sense of potential.

It‟s a pervasive, inescapable conclusion that seems to me to

presently dominate the discourse and indeed hang in the

very air of Shanghai.

It is this thematic of potential that I want to use today in my

remarks on the quest for innovation, not just by but

through the public sector.

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These remarks are necessarily premised, as all are, on the

context of this time and this place.

It occurred to me, sharply, during the course of the weekend

that it might just be a little presumptuous to deliver a

lecture on innovation in this place at this time.

I do not seem to find myself in a city that is shy or wary of

innovation. I do not seem to detect in the urban landscape

and amongst your citizens a debilitating inertia or

conservatism. Change, it seems to me, is not so much

resisted as craved. Innovation is a religion with legions of

followers.

It doesn‟t quite seem appropriate to lecture on the

desirability or normative qualities of innovation within a

context that has so plainly purchased the ticket to ride.

However the dynamism at play here might still be worthy of

reflection. From the perspective of the invited topic of today

let us not just accelerate into the wonders of the next, all of

which seem fantastic and alluring … just like the concept of

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email must surely be to citizen of 1978 were we able to

reach back a moment and put the concept to them. In a

droplet of time, suddenly email is just a given, it‟s expected

by the citizen of 2010. So today I want to dwell less on the

ephemeral desire to pick like a bower-bird across the menu

of the next big ideas, and reflect on the more enduring

challenges that our pursuit of innovation encounters much

more perennially.

Public sector innovation is an attractive idea.

This is because we often think “innovation” as an exciting

thing, and associate it with new possibilities, technologies,

and a sense of shared improvement in our lives.

“Public sector”, at least in the west, is a much less attractive

idea. It conveys the sense of torpor, lack of imagination,

cost rather than profit, and a dusty adherence to the things

of the past, to the lowest common denominator.

In the west, the public sector is often seen as less morally

valuable than the private sector. Elsewhere one is

encouraged to know the virtues of good public

administration are better understood and better respected.

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Let us firstly consider what we know about innovation.

Let me start by saying that it‟s not just about

technology. It‟s really about changing

behaviour. Innovation is about the changes a business or

organisation makes to its processes, technology, investment,

staff, or other characteristics in order to better succeed in

its environment.

In the private sector, motivated by profit, this can be

summed up with an attractive simplicity: turning ideas into

money.

If it makes a quid or a dollar then, axiomatically, it‟s not

just innovative it‟s normatively desirable.

The wider definition is reflected in innovation measures

used in The EU, UK and Australia by statistical and policy

making authorities.

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How then does innovation work? It‟s more than just

research. We know from excellent studies on successful

innovation that companies who successfully adopt new

ideas have two characteristics: they have a purpose, and a

customer.

Having a purpose means they have a strong sense of what

problem they‟re trying to solve. It might be technical, or

financial, or related to environmental impact. But it‟s never

just idle curiosity.

Secondly, successful commercial innovation always has a

customer. Someone willing to adopt the idea, try the

technology, benefit from the improvement, and often

contribute to its success. The Danish company Lego uses

internet forums to allow its customers to design its new

products. It‟s a powerfully simple notion. It redefines in

hindsight the hours spent assembling and reassembling the

building blocks of imagination … at least for me it does.

But it is this sort of user generated innovation has attracted

a lot of research in recent years, and is a growing

phenomenon around the world.

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This was reflected in a recent survey of innovation in

emerging markets published by The Economist, which

highlighted companies designing goods and services

specifically for consumers in emerging markets.

Examples ranged from the Indian Nano car, to African

mobile phones with many separate phone books, so they

can be shared.

That‟s innovation in a commercial context, motivated by a

profit desire, undertaken in the context of a competitive

market, and constantly changing global supply chains.

What about the public sector?

Government is complicated. Doing it well is hard, but not

impossible. If government is done well, there are real

benefits: people‟s lives are better; the economy works as it

should, and crime is lower and so on. So it‟s worth learning

from experience and from others, to make government

better. In principle, public sector innovation is a good thing.

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It seems plain to remark upon this, but simultaneously

necessary to be explicit.

Against the weight of inertia often encountered, we should

declare our desire of innovation.

Yet the evidence suggests that Governments, like other

organisations and even individuals, are poor learners. A

sobering book, Why Most Things Fail sets out the problems

organisations have when they try to learn.

Sometimes countries and governments learn best from

times of failure, like the economic reconstruction of

Germany and Japan after World War 2. Indeed, for

important political and cultural reasons, a past period of

economic, military or political success can seem to make

learning more difficult (“Why change a winning formula?”)

even when external circumstances have changed a lot,

calling for new or even radical changes in response. Success

makes for poor learning; it leads to repetition and to

superstition (“We always follow these procedures”, even

when they‟re not helpful).

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We should take note that we have sayings such as

“celebrate your success” and “learn from your

failures”. They are sayings designed to reassure and

encourage. They presume a time horizon that is, on

reflection, perhaps altogether too short.

How long should one celebrate, before returning to the

task? How long should one be stuck in attempting to learn

from a failure?

For without innovation the record is jammed, we atrophy in

our recycling of current achievement which quickly becomes

past glory. We are mired in our attempts to undertake the

same task the same way while hoping for different results.

Innovation then should not be the province of the private

sector. All that will achieve is profit, necessary but hardly

satiating the complete desires of human endeavour.

Good government is important, and bad government can be

very destructive, and not just when being bad amounts to

intellectual sloppiness which begets problems in service

delivery and policy development. This is the narrow

discourse of “bad” government in Australia, free of a

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perspective that contemplates rather more serious failures

of government, like truly systemic corruption or despotic

behaviour.

It is worth remembering that the ordinary business of

government is very complicated. Government faces

competing, often conflicting objectives. Resources are

constrained (there is never enough money to go around),

and in democracies at least, politicians might find it easier

to say yes to interest groups than to say no.

Generally, governments work through broadly hierarchic

organisations. In the theory, instructions enter the system

at the top of the structure, and are intended to be carried

out by those further “down”. But there are always

complications.

In some countries, federated systems of government mean

that there are multiple layers of decision-taking. Often too

the “front line” knows more, and is inclined to think more

independently than the political bosses would like. In

China, I have learnt that there is a saying that “The

mountains are high and the Emperor is far away”. This is

true everywhere.

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And some problems are just intractable. They have no

“solution” that resolves the issue, just options to manage

the symptoms, or dare I say it, the political pressures.

For example, health systems need to ration scarce resources

against uncontrolled, immeasurable demand, and thence do

it in a way which is seen to be fair between regions, and

generations, and at different types of health need. The

visible crisis of the queue eight people deep attracts the

dollars, while the silent tsunami of preventable disease

draws up the water before us.

Our health system also needs to be able to pay for ever more

expensive treatment – the desirability of which is inarguable

and incontestable. Some of us might have attempted to

navigate the moral dilemma around whether the beloved

family dog warranted the two thousand dollar veterinarian‟s

bill and reconciled our guilt with the primacy of another

more worthy invoice for dance or language lessons for our

daughter. If it was our daughter, all of us would liquidate

every asset for the mere chance that a treatment would

preserve their life for a day.

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It is impossible to attempt allocative efficiency – a worthy

but dehumanized concept – in this context. Policy makers

might conclude a design for a “rational” health system. In

matters of life and death for loved ones, we all are revealed

as firstly and foremostly humans capable of immensely

large emotions a long way beyond the cold discipline of

rationality.

And this assessment of the challenge for innovation within

the health service delivery dilemma has not yet

contemplated the requirement to tolerate a different sort of

behaviour by doctors, who often enjoy more trust and public

confidence than governments do.

Education has similarly intractable problems, related to

resources, parental and social expectations, and the fact

that children from different backgrounds do more or less

well at school. Government efforts to overcome these

inequalities often failed in the face of parental resistance:

parents will pay, move house, or even lie to secure or keep

the educational version of social status.

None of these problems is new. History shows debates

about health, education, and pensions and welfare going

back to Biblical times. “Intractable” in many cases is not

hyperbole; it is the literal truth. And these are just

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examples. There are others in just about every area of

public activity. Crime and justice, housing, local

government, regional economic development, defence all

throw up issues just as difficult and just as long-

lasting. It‟s perhaps what attracts some of us to the

apparent futility of policy determination. That one idea that

cracks the code and pushes us beyond the present

paradigm.

What do these examples show? Governments face truly

difficult problems, defined by the impossibility of complex

and irreconcilable desires and demands of those people it is

trying to help.

Before looking at how governments behave, and how they

might do better through innovation, it is worth noting that

some governments do better than others. This is not about

the differences between broadly democratic and non-

democratic governments, or corrupt and non-corrupt

governments.

Rather, this is about differences between governments with

broadly similar political systems. Some of this might be

said to be a matter of taste or preference. But there is some

objective evidence too. The OECD‟s work on federal versus

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unity systems of government suggests that federal systems

do better, partly because there is more policy innovation,

spurred on by competition within Federal systems.

Competitive markets innovate, because of the profit

imperative, competitive policy markets are less simplistically

explained but are evidently encouraging of innovation.

This seems to be true in Australia, where interstate and

federal rivalry is certainly a motivating factor. It‟s my

estimation, and my hope, that nobler desires are at play.

Governing is like learning to manage any large organisation

or complex system: it‟s a difficult task. Physiological and

psychological research shows humans find it especially

difficult to manage systems with time lags and non-linear

feedback systems, where cause and effect are indirect,

delayed and where causes can have disproportionate

effects. This is an accurate description of how public sector

organisations work.

And public sector organisations, and their customers are

made up of people. The problem with managing people, as

employees or customers is not that they‟re inert. It‟s that

they‟re smart. Thus public sector improvement is triply

hard:- not only do individuals learn relatively poorly in

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complex situations, and organisations learn poorly at a

collective level, but the individual may well go off and have

ideas of her own.

The truth is, that in an age when governments talk a lot

about public service leadership, what many politicians

actually want is people who will just do as they are

told. The resulting feeling of mutual frustration can be very

corrosive in public sector organisations, as they would be in

any situation.

In any organisation, the individuals, or groups of individuals

are likely to have their own ideas, as well as their own

motivations and aspirations. If they‟re specialists or

professionals (like lawyers or accountants) they will have

wider professional interests, loyalties and a wider culture

with which to identify as well. And the plain fact is that

people think for themselves, talk to their colleagues, form

shared views of their work together, and will begin to act on

their shared perception. Innovation may happen but it may

not be what is wanted.

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The truth is that the human side of organisational

leadership and innovation in the public service anywhere in

the world is hard, relentless work, involving a disciplined

focus on consistent communication, feedback, persuasion

and problem solving. Ministers will never have the time and

sometimes will not have the skill. This is not fatal – it is in

fact at the base of the design of many systems of

government. It is no accident that the globe‟s most

enduring, robust and successful systems of government

have not presumed the infallibility of the individual. Being

elected is a consequence, not generally a destiny.

Ministers have – in most counties – access to the advice and

support of a professional, permanent public service whose

role is to provide the professionalism, the continuity and the

fundamental means of delivery to allow politicians to

execute their mandate, what they have been elected to do.

But the fact that public servants form a cadre of people with

long-standing skills and experience means they have a

particularly well-developed set of “cultures” – shared

attitudes, opinions, beliefs and preferences, as well as an

interior (and indeed increasingly internalized) language, all

of which makes them especially hard to change, even when

the case for that change is clear and strong.

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Lacking support and consistency from above, public

servants can retreat into an intellectually and emotionally

barricaded perspective. The preservation instinct begins to

dominate the aspirations that have driven us collectively to

this point in our ultimately shared human endeavour.

Perhaps we should not rush to wonder why? They attract

criticism from above, are managed inconsistently, are the

butt of political jokes and of public criticism, and they

respond as any of us would: noting the inconsistency of the

attacks made against them, observing that however much

they are cut and reorganised and harangued, they are never

quite abolished, they conclude that it‟s a matter of seeing

out this government, or this boss, and hunkering down for

better times.

So, against this unpromising start, what does public sector

innovation really mean, and how might we make it work?

Firstly, there are two separate issues: innovation in policy

(better ideas) and innovation in delivery. Policy innovation

and policy making is one of the core functions of

government departments. The conventional approach to this

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problem is to start from the belief that making policy should

be firmly based on evidence, used to define and then solve a

particular problem.

Governments routinely now set out to build capability in

this way so as to design a consistent „policy framework‟

model. Like good project management skills, the aim here is

to be able to repeat a policy development process across a

range of problems.

Is this innovation? Well, probably not. It‟s basically just

good execution of a standard process. Nothing wrong with

that, but it doesn‟t get to genuinely new ideas, as opposed to

well-executed derivative policies.

No, the best evidence for policy innovation seems to come

from decentralised organisations where there is a high level

of local autonomy in both policy and execution, and where

the two are closely linked. New ideas require customer

input – just like Lego – and the autonomy to experiment (ie

set one‟s own policy) close to the customer. This is a

cultural question as well as a skills one.

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Historical researchers claim – with some evidence – that

naval powers can develop more innovative administrative

cultures than land powers, because, in the days before

instant communications, naval officers had the trust and

the cultural empowerment to experiment.

Some of this research may be self serving (especially if it‟s

British or Dutch, for example), but the evidence for this is

supported in countries like Switzerland and Belgium, where

local autonomy is very high.

What about delivery? Here, the focus is on public service

tasks, like health, education, policing and the

judiciary. These are areas where substantive decisions (on

clinical treatment, or judicial sentencing, or what to teach

for example) are divorced from resource decisions. The

whole debate over “reform” of the NHS in the UK, and health

reform in Australia is dominated by the challenge of trying

to get doctors to behave like managers (that is, getting them

to make clinical decisions which may be less optimal for the

individual patient so that resources can go further).

Of course, doctors have little incentive, ethically, personally,

culturally or organisationally to co-operate. Indeed, they

have a powerful incentive to complain that resources are

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never enough and to enlist the support of patients

(including prospective patients, the not yet sick) to maintain

their clinical independence.

This leads to an important conclusion: public sector

innovation in delivery requires a measure of co-operation

from the deliverer, and the support of the customer. These

are not – you all appreciate - trivial conditions. We are

asking here for the reconciliation between the government

and the governed, between what is always defined as “them”

and “us”. “They should fix the road” and “They should do

something about the hospitals” because all of “us” demand

and deserve it.

Similar, albeit less dramatic, examples exist in education,

policing and justice. All are areas where the state

(government) with the imperatives of constrained resources

delegates tasks to professionals, like teachers, police officers

or judges, who in turn have either statutory or social claims

to independence of judgement, or at least independence

from government control in their dealings with individuals.

The underlying political problem is that the teacher, police

officer or judge (and there are other examples) sees his/her

“client” as the person in front of them. Yet this may not be

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their true “client”. Nor may it reflect political

accountabilities: children may be the real beneficiaries of

education, but it is their parents (present taxpayers) who

pay, and who must be pleased.

The police may take steps to tackle crime, but in almost all

societies most people are not immediate victims of crime at

any given time. However it is their fear of future criminality

and their feelings of safety (or lack of safety) that may drive

the political debate and so determine government

decisions. Can we thus truly hope for innovation in this

context or perhaps should we expect bread and

circuses? Does our irrational fear deserve irrational policy

making? It might beget it, but we surely must hope for

more.

From the perspective within, it is often exasperating for

governments who promise “better” education, or health, or

policing, when their efforts at reform are frustrated by the

fact that the very professionals they rely on for the provision

of these services don‟t do what governments want – leaving

aside that generally this is not very clearly spelled out, apart

from the key performance measure of making it – the

problem – go away … for today, for now.

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In recent years governments in many countries have sought

to tackle this problem of apparent dilatory behaviour by two

related steps. The first has been to use frameworks of

targets to specify what activities they want

undertaken. This is innovation by command: “Just do it!”

The second step governments have taken has been to start

to use different language to describe public services and the

role of public servants in terms of customer service.

This has sought to tackle the initial problem of

misalignment in interests between government and its

public service agents by claiming an alignment between

government and the public. This is intuitively attractive:

governments have a democratic mandate, and thus claim to

articulate a wider public interest.

But this argument only works at a very high level of

generalisation: once it gets to the detail of health, education

or other public service provision, the public are inclined to

believe the professionals more than the government. Any

government‟s claim to know what people want is

unsustainable at any level of detail or complexity. The mere

fact of election does not divine unique, pervasive and

complete insight despite what many a politician has

71

thought … and worse still proclaimed or heaven forbid,

acted upon.

Innovation in the monolithic public sector is hard because

local improvements are hard to capture and apply elsewhere;

a climate of uncertainty and emotional, as well as political,

distance makes innovation furtive. “We just do it this way

here, it works, and we haven‟t been told to do it another way”

might be the remark at the coffee machine. It‟s also an

admission that innovation can and should be desired, but

we seem pre-destined to snuff it out lest it challenge the

ordained system which despite its ineffectiveness provides

the rules and reduces the questions we must ask of

ourselves. Is this the right thing to do? or can we do it

better? are much harder questions to provide the answer

when a ready made “that‟s what it says we must do” reply is

at hand.

All this lets us conclude that innovation in the public sector

by command has not been a great success. There have been

variations on this approach in some countries, including

outsourcing – moving functions to the private sector in the

belief that they will be more efficient or more

innovative. This policy has had mixed impact, but rather

than prove that the private sector is more innovative, it has

often proved that the private sector were better negotiators.

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What about other forms of innovation? Let‟s look at

technology.

Technology in the public sector has had a pretty poor record.

Much of it has involved what used to be called

“computerisation” of established functions and processes,

especially transactional ones. Skills and technology (except

in a very few areas, like encryption and, curiously, patent

searching) has come from the private sector. Technology

was often derivative, too. Costs were underestimated and

often badly controlled. Innovation it was not.

Indeed, there have been a number of instances across the

globe where IT projects of this sort have gone badly wrong,

and brought the wider use of IT in the public sector into

disrepute in some instances.

In many of these cases, IT projects have been seen as a

means of cutting costs (or at least controlling their

growth). There has been less effort than there should have

been at getting the people side of the business right, and

less learning than there should have been that IT platforms

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require a reshaped process, not just the automation of

existing processes.

But this is perhaps not as bleak as the standardized

newspaper reports the world over might suggest.

Studies of the public sector in Australia (by the Australian

Institute for Commercialisation, a Queensland Government

entity), and in the UK (by the NHS Centre for Innovation)

both reveal a vital, but usually hidden story: innovative,

successful use of technology in public services, usually at

local level, often with limited budgets, informal skills, and

often without much support or even knowledge from the

bosses.

Examples include software for the better management of

public housing (in Australia), and a number of patient care

tools and some pieces of technology, in the UK. A similar

example from New Zealand is the software for oblique-

projection TV weather maps, now in common use around

the world.

74

Indeed, in Australia, AIC has made a quid out of working

with public sector organisations to protect, and then to

commercialise this sort of innovation.

Each of these cases point to some common conditions for

successful public sector innovation, reminiscent of the

conditions for private sector innovation I started with.

Firstly, the innovators faced a real problem. Better

management of public housing arose because the older

systems were obviously inadequate, and rising house prices

were giving rise to increasing demand.

Secondly, they knew a lot about the problem. Innovation

used local expertise. These were not problems sent up the

line, or out to consultants.

Thirdly, their resources were constrained. The innovators

were not budget determiners. They innovated their way out

of the situation, rather than declared themselves stuck

without further funding being applied liberally. Indeed

innovation is rarely a function of a budget increase. There

is evidence (such as the famous study in 2002 looking at

the UK‟s NHS as a system at the edge of mathematical

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chaos) that big public sector organisations‟ behaviour hardly

respond to any but the biggest resource shifts.

This is a valuable study, which should be taken further, the

implicit conclusion that starving public sector organisations

of funds can be an effective spur to better management,

performance and innovation might be outrageous. It

however might be true.

And finally, the evidence suggests that successful public

sector innovators had a high degree of autonomy, to

experiment, and also to develop a genuine feeling of

ownership over the problem they were tackling. Humans in

organisations have a natural urge to get the boss off their

back (autonomy is a major goal for individuals in

organisations). When that is realised, and when those

involved at the same time feel a real engagement with their

work and its problems, then the social conditions for

successful innovation are realised.

Deliberately creating these conditions is needless to say a

difficult challenge for management.

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This leads us to the last point I wanted to cover: the people

and skills aspects of public sector innovation.

In any public sector organisation, there is necessarily a high

value placed on conformity (or at least consistency) and on

good risk management (although it may be called by other

names). This is for good reasons: public funds are involved,

and the public rightly wants to know how those funds are

used. Ministers have an ambivalent relationship to risk: we

pay a high price when someone gets it wrong. Jack Straw, a

veteran UK politician once summed it up well: “I now know

that somewhere in the department there are 100 people

working on projects which, if they came to light, would ruin

my career. But I only know 50 of them”.

Given that, how do we encourage innovation, which can

lead to better services, even to lives saved, as well as better

resource use? Formal tools, like prizes, awards, and even

cash payments have been tried with only limited success.

As I have set out we know the ingredients for limited, local

success: a real problem, real expertise, autonomy, and some

resource constraint. But these are isolated, exceptions to

the wider culture. Can that wider culture be modified?

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We know from studies in Australia, the UK, and the US that

this is a private sector problem too. Innovators are actually

rare everywhere (it‟s just that the rewards – and reputation

– in the private sector can be so much more). The key point

here is that innovation is applied creativity: in the private

sector, ideas must become a commercial reality; in the

public sector they must become at least an operational

one. It‟s not enough to have a dream; you have to make it

work in practice.

Something like 90 per cent of companies in advanced

economies have no IP policy or strategy – they often just

avoid the question as being too hard, too expensive or too

distracting. Even bigger companies have a gap here – one

UK study found that only 47 per cent had an IP strategy. IP

is not the same as innovation, but it is a sign that an

organisation is consciously thinking about knowledge and

ideas.

The only conclusion is that there is, yet, no magic bullet to

make the public sector more innovative. Yet let me end with

three pointers to a more innovative public sector; trends we

should welcome, even if we politicians find them

uncomfortable.

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The first is the rise of social networking sites and the

growing use of Web 2 technologies. The institution of

government might bristle at these developments, as they

transfer power from government to society. But they also

allow communities of the like minded to grow up and start

to share ideas and their application. London‟s Metropolitan

Police shared techniques with the RCMP in Calgary some

years ago, using social networks, and were able to vastly

improve their success against cannabis growers using

home-grown RCMP technology. There are many other

examples.

These networks reduce innovative isolation, allow more

rapid sharing of problems and solutions, and improve take-

up of new ideas, helping make them legitimate. Innovation

is always a social process, and these tools help that process

work better.

The second trend is the growing fiscal crunch facing

governments. Just as expectations rise, populations age,

health demands rise, and the environment calls for urgent

action, governments have less money to use to solve these

issues. Innovative solutions will be needed, and we know

that necessity – or poverty – is a great spur to invention.

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And the third trend is the growing desperation of

governments. The old risk aversion is dying, as

governments come to recognise they cannot afford to stand

still, but need to look for new ways of delivering, of making

policy and of relating to society. The management task,

which is really just a proxy for containment, looks

increasingly unsustainable as a political

orthodoxy. Something‟s got to give – and perhaps our

potential to innovate stands as the remaining hope.

If this builds it can mean a greater tolerance of ideas that

don‟t work, or prove to be blind alleys. As a politician,

that‟s an uncomfortable thought.

The task here then is to celebrate our failures, and learn

from our success. Not to dwell vaingloriously in our past

successes like clapped out footballers reliving an

increasingly distant achievement. To spurn the instinctive

urge to avoid risk and paper over failures literally through

converting them into a future process (if never finished it

cannot be a failure, it‟s just a work in progress) or abort the

attempts at the first whiff of grapeshot.

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If we value public service and if we value innovation then we

have the intellectual framework that can sustain the

reversal of the old orthodoxy. The failure is noble, pursued

in good faith. It is rationalized and accepted as a step along

the path to the next success, which should always be in

front of us, not just behind us.

Shanghai

21 June 2010

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