1.3 Innovation support – Economic Development

Mr FINCH - I want to look at a couple of things from the summary of financial information on page 24. I notice that entitlements are up 16.2 per cent and salaries and wages are up 20 per cent. I am just wondering how many FTEs in the department those salaries and wages and entitlements affect; and how does that compare with 2004-05?

Ms GIDDINGS - I will ask Craig to answer those specific questions for you.

Mr WATSON - In terms of total employees of the department, as at 3 May we employed 222 staff, being 217 FTEs. Our full establishment is approximately 242 staff. It obviously varies up and down as we have fixed-term staff to undertake some projects. The increase between the two years would be approximately six positions.

Mr FINCH - Do you have any contract people involved there; do you draw people in on contracts?

Mr WATSON - We have a mixture of employment. The majority are obviously employed as permanent public servants, but we have a number of positions where we employ people on a fixed-term basis under the State Service Act to cover projects that are of a limited life. So it may be a 12-month project, and we will supplement the resources with a 12-month position.

Mr FINCH - Thank you. On page 27 there is an entry down the bottom of expanding the Tasmanian science and technology program to support 15 market-led partnerships. What are those market-led partnerships; what types of programs are they; and what is the amount allocated to each? If I can get some detail on that line item please.

Ms GIDDINGS - I will introduce Wendy Spencer who is director of science and technology.

Mr FINCH - I am curious about the mention of the 15 market-led partnerships that have been developed or expanded to maximise the full economic benefit from investment in research and development activities and I am just wondering if I can get some information about those partnerships.

Ms SPENCER - In December 2004 the minister launched our Science and Technology Industry Development Program, which is a small grants program designed to encourage industry and the research institutes to work with each other to develop or to commercialise their research and development. Our aim is to have up to 15 consortia developed, promoted and supported through this program.

Mr FINCH - How many partnerships have been developed?

Ms SPENCER - At the moment we have funded four.

Mr FINCH - To what extent?

Ms SPENCER - These are grants of up to $10 000, but it also requires equal cash support from the partners.

Mr FINCH - What type of programs are they? Any points of interest in those partnerships? What sorts of things are they doing?

Ms SPENCER - They are all partnerships between industry and research institutes. One of the ones that we have supported is between a company called Marinova, the University of Tasmania and the Royal Hobart Hospital. They are working on some potential cancer therapies from natural products available in Tasmanian waters.
Another one we have supported is a bull ant vaccine, and that is between Botanical Resources Australia and again the university and the Royal Hobart Hospital looking to commercialise a bull ant vaccine. There is another project that we have supported between industry, AquaAssist, other aquaculture companies and the school of aquaculture at the university to commercialise a fish-feeding piece of software. And the latest one is a consortia of growers in the agricultural space who are looking to exploit opportunities from oils from the nuts and kernels of fruit and nuts. This includes a consortia of apricot growers, grape harvesters and so forth.

Mr FINCH - So you have a budget allocation for 15 at this time. How do you market that? How do you let people know what you are doing?

Ms SPENCER - After the program was launched by the minister in December, we developed a communications strategy which we implemented during the months of January, February and March where we spoke to each of our collaborators at the universities and the CSIRO with the Australian Antarctic Division. We did that through the Science and Technology Industry Council that provides support to government on these matters. We also spoke to the Tasmanian enterprise centres that the department supports, our regional offices, the industry chapter of Aus Biotech Tasmanian branch and a number of agencies. I must say that we have a further 10 projects in various stages of application and development at the moment.

Mr FINCH - Thanks very much. At the top of page 28 there is a mention of a framework for supporting research partnerships such as cooperative research centres and centres of excellence. I just want to flesh that out a bit too. How many CRCs and centres of excellence do we have?

Ms GIDDINGS - We have the forestry CRC and the Antarctic climate and ecosystems CRC and we have -

Ms SPENCER - Codes centre of excellence.

Ms GIDDINGS - So that is three. Are there more?

Ms SPENCER - We have a strong collaboration with the sustainable fin fish aquaculture CRC, but it is not headquartered in Tasmania. There are three that are headquartered in Tasmania.

Mr FINCH - Is there any Federal government funding for that?

Ms GIDDINGS - Yes, those cooperative research centres are mostly Federal government funded.

Mr FINCH - To what extent? What sort of money are we talking about?

Ms GIDDINGS - I will ask Greg Johannes to answer that.

Mr JOHANNES - The Antarctic Cooperative Research Centre as an example drags in about $24 million worth of Commonwealth funding over seven years, and that is a typical level of funding for a cooperative research centre. Centres of excellence are of an order of magnitude lower, but it is still a significant investment by the Australian Government.

Ms GIDDINGS - They leverage those funds of course to get additional research dollars from other partner institutes in those CRCs. So it is not their total budget, but the Federal Government is a significant provider.

Mr FINCH - So we look to develop more in the State? Are there opportunities for the development of more of these?

Ms GIDDINGS - There are. We have certainly worked very hard to secure the future of the ACE CRC, that is the Antarctic climate and ecosystems CRC. We were able to show State government support for that cooperative research centre by providing funding for a commercialisation officer. The consortium believes that that helped tip that particular request for a CRC our way. We would look at other ways that we can assist in that sense. It might well be that a commercialisation officer might not be the appropriate way of assisting next time around, but we will look at how we can help attract those sorts of industries here.
However we also want CRCs that fit with what we have here. The beauty of the ACE CRC is that we have such a strong scientific community here based around maritime industries and marine research. So it makes sense to have that here. It also makes sense to have the forestry CRC here. You do not want to just open the big hat up to anything. You do want to look at what expertise we have on the ground and what is going to be of interest to Tasmania. Obviously that makes for a stronger bid as well. You are not going to bid for tropical fish CRCs down here.

Mr FINCH - Thanks. At what stage of development is the Tasmanian innovation showcase of the Queen Victoria Museum and Art Gallery?

Ms GIDDINGS - I just launched that recently. That is up at Inveresk. In fact, I was there only a couple of weeks ago launching that innovation showcase, and at the moment it is an old shed that needs a lot of work done on it. But I am confident having seen -

[12.15 p.m.]

Mr DEAN - It is a heritage building.

Ms GIDDINGS - It is a beautiful old shed.

Laughter .

Ms GIDDINGS - I was very impressed with the Inveresk site. It was the first time I had an opportunity to actually have a look at some of those old buildings, and particularly the blacksmith's shop was just fascinating and so well done. But I was also impressed with the sport gallery they have there now, which was shown to me as being what the innovations gallery will be similar to.

Mr FINCH - Did you see what it was like before?

Ms GIDDINGS - No, I did not but I have seen what the innovations one is like now. There is a lot of work to be done. But it is, believe you me, a very impressive and great set of heritage buildings on that site.

Mr FINCH - What is the projection for the completion or development of that innovations site?

Ms GIDDINGS - You would have to ask the Queen Victoria Museum as to what their projected time frame is, but I would hope that within 12 months perhaps. It is a fascinating display. I am really pleased we are doing it, because there are so many hidden secrets in Tasmania and we should wear these things on our sleeve. We should get out there and promote exactly what has happened in Tasmania. To take an example of the humidicrib, the first humidicrib was innovated here in Tasmania. We have the first test model of it.
There have been a number of developments. Some of them certain people would not be so pleased about with pellets for snails, for instance. Some people might not like that actual invention. There is a whole lot of little things like that which have come out of Tasmania, and we should be out there promoting it. Why we should be out there promoting it is that what we want to foster is this feeling of innovation, a culture of innovation in Tasmania. It is through that culture of innovation that people are going to be prepared to speak up about their ideas.
Most ideas will probably end up going nowhere but, you never know, out of the 100 ideas there might be that one gem that actually works through the system and ends up becoming a product down the other end. That is what we want to see happen. It is going to be that area of the economy that will really take us forward into the future. If we can look at where we have been in the past with innovation and where we are heading with it, so much the better.

Mr FINCH - I think we developed the jump-start plough in Tassie - is that one of ours? What is Economic Development providing towards the cost of renovating the pavilion?

Ms GIDDINGS - We have provided $263 000 as a grant to help establish that exhibition space.

Mr FINCH - Will that be for the display inside or the building as well?

Ms GIDDINGS - It is for the whole display.

Mr McILFATRICK - It is for the display and for some of the capital works. There has been a slight delay, because originally our innovations board supported this project to the maximum of $150 000. That is a board that we take advice from, and that was subject to the Federal Government putting in additional funds, an amount of $113 000, I believe. But that did not come through, through decisions in Canberra, and we subsequently took it back to our Tasmanian Development Board and said, 'This project is worth doing,' on the back of going around all the local shows in the last period and showcasing some of our inventions just proved to us there was a public response to it. That reinforced the need to do this as a permanent display, which can be updated as we develop new innovations.

Mr FINCH - Sure. Thanks very much.

Ms GIDDINGS - It is dynamic.

Mr FINCH - Under major issues and initiatives for 2005-06 you list the assistance of development for 150 innovative companies through various government programs. Are these 150 new companies coming online or are they existing companies that are undergoing further development?

Ms GIDDINGS - They are existing companies, I would believe. Examples of Tasmanian companies that have gone through our Tasmanian Innovations Program, for instance, include Van Ek Contracting Pty Limited who were funded $150 000 in 2002 to commercialise their bridge load rating system. They have been successful in getting clients now in Samoa and the Philippines whilst managing their company from Ulverstone. They have also been able to expand into the Victorian market and have now opened an office in Victoria as well. Van Ek Contracting has achieved a total of $2 480 000 interstate and overseas sales, created three new full-time jobs, initiated one partnership and invested a further $660 000 into their bridge loading rating system.
Another example is Ortech Research Pty Limited who were also funded $150 000 to commercialise their product called the paint wizard. They have been able to secure contracts worth $1 million with Dunn-Edwards in the United States and a further $1 million development contract with Degussa Inc. in New York has also been secured. They have also achieved a total of $1 500 000 in sales, 100 per cent overseas, created four new full-time jobs, invested $100 000 into product research and development, and initiated the one partnership with Degussa Inc. in New York.
We have other companies: Roar Films is another one as well as KW McCulloch Pty Limited. There are four that I can tell you details about in relation to the success that they have had through use of our program.

Mr FINCH - Minister, does the department keep tabs on just how much wealth they generate and how many people they employ? Do they have a reporting process so that you can collate that?

Ms GIDDINGS - They do. Since 1999, the Government has committed over $4.1 million in grants to 51 Tasmanian companies. Over the past two-and-a-half years, we have committed $2 376 525 to 19 Tasmanian companies through this Innovations Program. Ten companies have already started to report outcomes directly related to this investment. These include $4.6 million earned in revenue, representing $3.57 of sales revenue for every $1 of innovations funding we have put in; 84 per cent of these sales were made to markets outside of Tasmania; 31.5 new full-time jobs were created; and $2.9 million of additional investment was leveraged from the innovations funding. These companies have gone on to invest an additional $1.1 million in new research and development activities, which is equally as important, because government is really seed funding to help push and encourage companies to do their own R&D as well.

Mr FINCH - So do you have the 150 companies or is that a target?

Ms GIDDINGS - Do you want a list?

Ms SPENCER - That is the target.

Mr FINCH - What do you have now, 50 or 60?

Ms GIDDINGS - As I say, 51 Tasmanian companies have been assisted since 1999.

Mr McILFATRICK - That is through the Innovations Program. There will be a range of others that would be assisted through the market-ready and the commercial-ready programs. You could say there is a phase that companies go through from establishing, and that might be the enterprise workshop. Certainly over the last five or six years we have had a number of people go through the workshop and decide whether they want to be in business or whether they have a good idea. Then they might have a product in development but it is not ready to be marketed, so they go through the market-ready program. And then there are people that have an existing business and want to go into a new market or have a new idea and take it somewhere else. So there is another set of programs, which is more likely the Innovations Program; it is not necessarily a start-up. And then we have the incubators where people can go in and get start-up capital. There is a range of opportunities right across the board, from existing to new players to expanding market players. So we could probably provide a very impressive list, but the list we have just talked about was the actual Innovations Program which has grants of up to $150 000.

Mr FINCH - I am wondering if I can get a list of those companies just for curiosity to see what sort of projects we are supporting. It may be able to encourage others to perhaps join in.

Ms GIDDINGS - Absolutely.

Mr WATSON - If I could add something, Minister: it is important to be aware that the $150 000 includes participants and events that we may not actually be financially supporting in a direct sense. As Norm alluded to, there is a range of programs and, in terms of the outputs we are referring to, we generally measure those within our key performance indicators where we either have financial assistance or a very active assistance in doing something with a company. A lot of the type of interactive forums and the I cube network that Wendy's area operates, those companies often get benefits from interacting with each other but they are sufficiently remote from us that we do not always capture those. There are very strict guidelines on what we actually capture based on the amount of effort we have invested in the activity.

Mr FINCH - Thanks, Chair.

CHAIR - There being no other questions on innovation support, we will move on to 1.4 Labour and employment.