On 26 March 2021 at The Kwinana Local, a group of senior representatives from Defence, industry, and government, met to discuss the implications for the state on the area designated as the Western Trade Coast (WTC). The event was the second in WA DEFENCE REVIEW’s VIP Luncheon series and was sponsored by Defence West, Regional Development Australia-Perth and Kwinana Industries Council. It was the first defence sector event held in the City of Kwinana.
Introduction
Chaired by WA Defence Advocate, RADM Raydon W Gates AO CSM, the VIP Luncheon hosted senior decision-makers and representatives from the ADF, AMC Management, Austal, City of Cockburn, City of Kwinana, City of Rockingham, Defence West, RDA-Perth, South Metro TAFE, South West Group and the Western Roads Federation. The gathering was posed the questions ‘Why is the Western Trade Coast important and how is it likely to impact upon the future of economic and infrastructure development in Western Australia? Further, how can the Western Trade Coast enhance prospects for Defence and defence industry utilisation, engagement, investment and growth?’
The WTC consists of 6000ha of land designated for industrial use, located on the eastern shore of Cockburn Sound and spanning the suburbs of Henderson, Kwinana and Rockingham. It consists of four estates known as Kwinana Industrial Area, Latitude 32 Industry Zone, Rockingham Industry Zone and the Australian Marine Complex. The provision and management of these estates falls under the authority of Development WA and its business unit, the Industrial Lands Authority.
In March 2021, the WA government committed to consolidating the existing southern industrial precinct to create a global Strategic Industrial Hub and to support high-tech manufacturing. It is estimated the WTC could add 22,000 jobs and $28bn to the WA economy, roughly doubling the current employment and annual economic contribution. This timely announcement highlights the state government’s commitment to developing major industries and compliments other investments across Defence and defence industry.
Discussions fell into three main categories, as summarised below.
Opportunity and Potential
Participants commented on the sense of excitement and the expectation of economic growth that the Western Trade Coast concept engenders, providing, as it does, appropriate places to accommodate both the expansion of existing and future industries. In particular, the group identified the following initiatives and industries as credible future options to generate economic development:
- Full Cycle Docking of Collins class submarines. WA is awaiting the Australian Government’s decision on where this sustainment work will be located, but strong representation by the WA government has been made in the national interest to relocate it to Henderson.
- Large Vessel Dry Dock. The construction of this facility would be a game-changer for WA, attracting substantial shipbuilding and sustainment revenue to WA with a corresponding surge in jobs growth.
- Developing the Battery Value Chain. The processing of WA-mined critical raw materials to more advanced stages, including battery manufacture, should continue to be pursued. Efforts are currently underway to establish a Battery Value Chain Innovation Hub in the WTC.
- Renewable energy projects. The potential for clean energy industry to establish and grow is likely to increase. While much emphasis is currently being placed on hydrogen development, the opportunity exists to build on the technologies for microgrids for power, water and telecommunications.
- HMAS Stirling’s expansion and sustainment. At present the base hosts approximately 2400 personnel and 500 supporting contractor staff. By 2040, the combined ADF, Australian Public Service and contractor workforce on Garden Island and adjacent region is anticipated to increase to 7000 personnel. The visible impact of this will be the construction of many more buildings, wharf extensions and facilities at the base. The Rockingham-Kwinana region will also see the impact, with more Defence families living in the nearby suburbs, retail developments, and social facilities such as gymnasiums.
Noting that HMAS Stirling has been in existence for over 40 years, and has grown commensurately in that time, the majority of salaried Defence personnel that work on the base tend to reside in the City of Rockingham. However, there is a growing residential presence of Defence personnel and contractors (who are often former serving ADF members) in the City of Kwinana, particularly in the suburb of Wellard. According to the Royal Australian Navy, it is estimated that Defence personnel and contractors who reside in the City of Kwinana inject around $50m annually to the local economy.
Repositioning for Best Advantage
The view was expressed that now is the time to reposition WA’s economy, taking account of:
- Trade tensions with China, which in the long-term can be expected ultimately to impact upon the future growth potential of WA’s resources industry, as new sources of sought-after raw materials are exploited across the globe at internationally competitive rates.
- Targeting Advanced Manufacturing. Most of WA’s income comes from exporting raw materials, downstream processing thereof would significantly multiply the economic benefit to the state. WA needs to encourage high-tech industries to capitalise on these advantages.
- Best Use of Land. This will be achieved by making good decisions early, providing industries with clear and considered land use planning information, creating eco-systems or industry precincts, and incentivising industry to locate on the Western Trade Coast. Whole-of-government collaboration to this end is seen as essential.
Challenges and solutions
- Workforce
As always when WA experiences growth surges, skills shortages loom as a factor, exacerbated, this time, by the global pandemic placing constraints on the use of 457 visas for overseas workers. This is a phenomenon that is not only unique to WA of course, but an ongoing challenge for countries worldwide.
Training takes time, and potential tradespersons have to be apprenticed to an employer before being college trained. To a large extent, therefore, the solution is in the hands of industry, and as an outstanding example Kwinana Industries Council (KIC) has stepped up, engaging with around 300 high school students annually, with many of these being trainees through its member companies – a program for which it draws no government funding assistance.
The WA government has committed more than $18m to develop the defence industry workforce, with South Metro TAFE leading the way to identify and train the next generation of workers.
The idea was floated to form an umbrella organisation to pull industry together to ensure the skills challenges are met. What KIC has achieved is an example, as are other group training/apprenticeship schemes, which collectively engage apprentices/trainees and take responsibility for placing them with a range of participating companies over the duration of their training for up to four years.
- Industrial land availability
Streamlining the approval process to ensure that land is available will increasingly be a paramount factor given that Latitude 32 land for heavy and general industry remains unavailable at this time and the AMC is near capacity, leaving limited space available for new entrants to locate.
It was noted the Industrial Lands Authority has statutory powers to develop and sell Latitude 32. However, the idea was advanced that a new organisation be created along the lines of the Rotterdam Port model, to actively market the land both domestically and internationally, and provide a concierge service to potential buyers. Its costs could be covered by taking a percentage of sales revenue.
- Traffic access to HMAS Stirling
Planned growth at HMAS Stirling will require upgraded traffic infrastructure into the base. Thought has been given to a ferry service and to what is being called, a Garden Island Freeway. It is important to address these matters sooner rather than later.
- Western Trade Coast Governance
The complexity that comes with the governance arrangements where numerous departmental interests may often compete is widely seen as a major hinderance to the development of the WTC. Models to address this in the past have been unsuccessful, as exemplified by the Western Trade Coast Industries Committee which was raised by the previous state government. However, the creation of a WTC-specific Regional Development Board model is considered a more effective approach. This was identified as the top priority in the recently released RDA Perth report ‘Enabling the Western Trade Coast: Creating WA’s World Class Industrial Destination A Perspective from Industry’.
Conclusion
As with all WA DEFENCE REVIEW luncheon discussions, this summary serves to feed into any existing committees or policy deliberations in which our readership is engaged. WA DEFENCE REVIEW is pleased to have brought senior decision-makers together to consider a subject vital to the state’s future economic development, and intends to host similar sessions on various other topics in the months ahead.