Lake Macquarie City Economic Development Operational Plan 2020-2021 - dantia.com.au
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Lake Macquarie City
Economic Development Operational Plan
2020-2021
dantia.com.au
dantia.com.au Economic Development Operational Plan 2020-2021 | 01
Introduction and executive summary
The Lake Macquarie City, Economic Development Operational Plan, 2020-2021, is the financial year action plan of the Lake
Macquarie Economic Development Company Limited (LMEDC). LMEDC’s trading name is Dantia.
This year’s Operational Plan articulates tactical actions “tasks” that Dantia will implement to respond to economic issues and
opportunities forecast to be experienced as a result of effects from the government and community’s response to COVID-19
(C19) pandemic. The issues and opportunities are currently emerging and impacting the international, national, state and
local economies in a variety of ways.
The tasks aim to enable Lake Macquarie City to accelerate its recovery from the C19 short and long-term impacts.
Simultaneously Dantia will maintain the strategic targets set by the long-term Lake Macquarie City Economic Development
Strategy, 2018-2038 (LMCEDS). A post C19 impact review has highlighted that the long-term strategy objectives remain
relevant as ever. The long-term strategy was finalised in July 2018 by the LMEDC and endorsed by the company’s sole
member, Lake Macquarie City Council (LMCC) in Oct 2018.
The 2020-2021 Operational Plan focuses on five (5) areas to:
– Provide strategic support for job maintaining Business Support Initiatives;
– Implement Lake Macquarie Investment Attraction Program to:
› maintain momentum of existing Sandbox projects;
› attract new capital investors; and
› develop tourism product and sovereign manufacturing projects;
– Leverage current marketing assets and target expansion of out of area leads;
– Leverage current market disruption to prioritise and progress strategic enabling infrastructure projects; and
– Leverage workplace disruptions to promote the Dashworks innovation facilities offer.
The Operational Plan assigns tasks against LMEDC’s strategic objectives of identity, investment, infrastructure and
innovation. Timeframes for completion of tasks and milestones assume a shutdown period of approximately three (3) months
(until 30 June 2020) and will need to be adjusted if period extends.
This document also details the operational tasks related to governance, leadership, and reporting to ensure LMEDC
continues to operate with administrative excellence and responsibly as a publicly funded organisation.
Bridge across the chasm… “To help us get to the other side we need a bridge. Without that bridge there will be more
damage…to the economy and people’s lives. Dr Lowe, Reserve Bank Governor (March 2020)
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Situation analysis and rationale
The COVID-19 (C19) pandemic, is hopefully, a once in 100-year global event. Unprecedented shutdowns of non-essential
commercial activities have been implemented in an effort to contain the virus spread and enable medical infrastructure,
supplies and personnel to cope with forecast additional demand. As at May 2020, C19 is having, and is expected to continue
to have, a severe impact on the world’s economy and consequently people’s lives.
The shutdowns have negatively impacted major corporations, with tens of thousands of job layoffs coming into effect from
March 2020. The flow on effect to second order suppliers, related industries and small and medium enterprises has been
equally impactful.
With the majority of households having less than 1-month savings buffer, consumer confidence and uncertainty has and will
continue to see disposable income including government JobSeeker and JobKeeper payments held for the essentials
(housing, consumer staples and utilities). This is putting small and medium enterprises operations and jobs under significant
pressure. For the small and medium businesses, that represent 95% of Lake Macquarie businesses, the unavoidable loss of
trade revenues has been particularly devastating to cash flows and commercial viability. Lake Macquarie businesses most
impacted include those in the retail, food and recreation services, construction, trades, manufacturing and professional
services sectors. These enterprises employ ~24,000 (28% of the city’s workforce) representing 22% of disposable income.
The March 2020 decline in capital markets has been extreme at -37%. The world and Australian listed companies have
experienced record loss in equity value, adversely impacting on working capital, cashflows and putting pressure on loan
covenants. The negative impacts are reverberating deep into the economy’s value and services supply chains.
Positive and proactive action in the form of stimulus and unique economic support measures by Federal and State
Governments, the Reserve Bank of Australia and banking and capital institutions have been initiated in order to attempt to
mitigate and or delay the negative impact to businesses, jobs and the inevitable impact on households. The unprecedented
support aims to create a virtual “bridge” designed to assist:
– businesses, regardless of size or scale, to remain solvent until the crisis passes; and
– all employees who are stood down, to access the necessary cash flow to meet essential expenses until the crisis passes.
To underpin the significance of the situation, these initiatives are being described as “measures necessary for survival”.
“The primary response to the virus is to manage the health of the population, but other arms of policy, including
monetary and fiscal policy, play an important role in reducing the economic and financial disruption resulting from the
virus….At some point, the virus will be contained , and the Australian economy will recover, but in the interim, The
Reserve Bank’s priority is to support jobs, incomes and business.” Dr Philip Lowe – Reserve Bank Governor (March
2020)
Notwithstanding these extraordinary efforts, economists and political leaders do expect the effects of the pandemic will
cause the community and the economy to experience a recession (a period of economic decline that lasts for up to 18-24
months). It is widely accepted that the recession will be global in scale especially given the closure of borders and
corresponding impacts on commerce, trade and tourism.
In some economists, worst case, scenarios an extended global recession is forecast characterised by >20% unemployment
and >24 months of no economic growth (technically a depression). Increasingly, this scenario is a possibility as:
- real unemployment becomes apparent;
- wages decrease;
- central banks and government have less stimulus options available;
- repayment of stimulus through taxes reduces expenditure; and
- other destabilising events occur for example: aid, trade, cyber and other state on state disputes, civil disturbance, etc.
Current data and events, as at April 2020, point toward the worst-case scenario and Dantia’s planning is focusing in this
direction.
At April 2020, Ernst & Young and the Australia Institute’s Centre for Future Work estimated the real unemployment in
Australia to be 18-20%. Table 1 illuminates the areas of impact. As shown, the national government has provided, taxpayer
funded, income support through JobSeeker and JobKeeper schemes payable up until September 2020, at this stage,
masking the full damage of C19.
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Table 1 April 2020 National workforce and employment data
Totals % of Aust population % of workforce unemployed
Total population 25m
Workforce (working population) pre C19 13m (52%) Working population (min 1hr per week)
Non-working population 12m (48%) the young and non-working retired
Real unemployment (April 2020)
- Unemployed 0.50m unemployed and not looking for work
- JobSeeker 0.60m unemployed and looking for work
- JobKeeper 0.75m retained on employer books but not working
- Lost hours 0.60m reduced hours full time equivalent impact
2.45m (18% of Workforce)
Current Workforce April 2020 10.3m (41%) Working population (min 1hr per week)
Every employer, employee and household in Lake Macquarie City is and will be impacted by flow on economic impacts of the
pandemic regardless of the timeframe of the impact.
Some sectors in the economy are expected to remain buoyant throughout the shutdown periods – utilities and their supply
sectors, consumer staples (food, groceries and pharmacy), health and social services and some specialist manufacturing
enterprises. For Lake Macquarie, some of our largest employers and industries will be relatively unaffected. Health and aged
care will continue to operate as first line responders. Energy production and related coal mining will continue to be needed to
ensure energy security and the education sector will continue to operate. These sectors employ ~27,283 (32% of the city’s
workforce) representing 33% of disposable income.
Despite the challenges, Dantia has identified that there are some real opportunities for the Lake Macquarie economy
including:
- Regional lower cost, open space living is increasingly being valued – supporting the LMEDC core strategy to grow the
working population;
- Construction sector support given its multiplier benefits is sound;
- Private equity and superfunds appetites for investment opportunities exist with return expectations lowered;
- Corporate offsite working and utilisation of coworking spaces maybe preferable to home offices;
- Domestic tourism will potentially expand and need new product; and
- Sovereign manufacturing, including food production is an emerging opportunity that is receiving attention as
governments realise that the reliance on manufacturing content and finished goods from overseas is not sustainable in
the long-term. Lake Macquarie’s location, rail, road and land assets are conducive to the development of these industries.
When the shutdown ends much of the economy will be reopening from a standing start and will need significant curation and
support. Dantia has responsibility to lead Lake Macquarie City’s strategic and tactical response to the issues and
opportunities summarised below.
dantia.com.au Economic Development Operational Plan 2020-2021 | 04
Furthermore, Dantia has identified that Lake Macquarie City has a genuine capability to respond to the impacts of C19, in
both the short to mid-term (1-4 years) and long-term (>5 years).
The short to mid-term tasks involve Dantia providing commercial and industry insights and feedback directly to the City
Council as it reorientates some of its personnel and resources to deliver Business Support Initiatives to help maintain existing
jobs. Dantia advice is focused on ensuring that Business Support Initiatives:
- create certainty for businesses;
- reduce costs for businesses;
- make it easier to do business;
- support business employing people and/or buying supplies;
- encourage locals or visitors to spend at Lake Macquarie businesses; and
- key driver are within the control of council staff and resources.
The Business Support Initiatives include:
- Expedite Development Applications reviews;
- Expedite infrastructure construction programs;
- Enhancing City’s digital capacity;
- Increasing tourism visitation;
- Support event and hospitality sector (entertainment, nighttime economy, business centre activation); and
- Facilitate sovereign manufacturing.
Dantia will contine to implement the Lake Macquarie Investment Attraction Program and increase marketing and
communications to attract investment from both in and out of region.
The Investment Attraction Program involves customising concierge, facilitation, concept planning and planning pathway
determination processes for high investment and job creating projects. Greater promotion of the program, case studies and
targeted marketing aims to maximise Lake Macquarie’s share of available investment capital.
Dantia’s capability to authentically respond to the coming years challenges exists because the city has developed, in the last
three (3) years, two valuable soft skill assets:
- Dantia an innovative commercial facing economic development company that has successfully secured the confidence
of private and public sector investment utilising its customised methodology; and
- A city council with a courageous, collaborative, best practice culture at the governance and operational levels.
Consistent commercial sector feedback has articulated that this capability is noticeably unique in the local government
landscape. It is these competitive advantages which the City now need to fully utilise and leverage.
The disruption in the market described earlier, has further reinforced the City’s need to maintain its long-term core strategic
objectives articulated in the Lake Macquarie City Economic Development Strategy, 2018-2038 (LMCEDS). The strategy was
underpinned by relieving and capitalising on the cost of living pressures in the greater Sydney conurbation and local area.
These pressures will likely continue albeit for different reasons. High cost of housing due to low cost of borrowing will be
replaced with debt to equity imbalance, value write downs, job seeking challenges, stagnate or declining wages, reduced
disposable income and low level of consumer confidence.
The LMEDCS principally aims to create jobs by:
- attracting and growing the market of working age population in Lake Macquarie City by creating a pipeline of dwelling
construction projects that drive affordable housing supply. In the medium term, the associated construction will have a 4x
multiplier impact by revitalising supply, trade and related professional service industries and the associated jobs.
- The growth of a residing local working population will underpin:
› revitalisation of the discretionary consumption, tourism and related sectors; and
› attract investment capital for services and infrastructure at the back end of the medium term.
Therefore, as noted above, the 2020-2021 Operational Plan focuses on five (5) areas to:
- Provide strategic support for job maintaining Business Support Initiatives;
- Implement Lake Macquarie Investment Attraction Program to:
› maintain momentum of existing Sandbox projects;
› attract new capital investors; and
› develop tourism product and sovereign manufacturing projects;
- Leverage current marketing assets and target expansion of out of area leads;
- Leverage current market disruption to prioritise and progress strategic enabling infrastructure projects; and
- Leverage workplace disruptions to promote the Dashworks innovation facilities offer.
dantia.com.au Economic Development Operational Plan 2020-2021 | 05
It is observable in the annals of history, that the cities that operate with a ‘sense of urgency’ and with ‘strategic intent’:
- attract investment capital by creating confidence and certainty;
- attract human capital who foster new ideas, enquiry, research and education and create “new value”; and
- create jobs rapidly accelerating re/establishment of a diverse and sustainable economy.
Dantia is guiding and facilitating Lake Macquarie’s economic activities in order to repeat lessons from the past.
Peter Francis
CEO
“We recognise that this is a very concerning time for our … community. These are unprecedented times, and they call
for unprecedented measures.” Matt Comyn Commonwealth Bank of Australia Chief Executive (Mar 2020)
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Vision
In 20 years, Lake Macquarie will be one of the top 10 most liveable cities in Australia.
“A liveable city is a place assessed to have a positive quality of life based on reliable access to economic stability,
health, culture, environment and provision of infrastructure. A liveable city attracts people as a destination in which to:
invest and work; create homes; play and rest.” Economist Intelligence Unit 2018
Mission
To embrace, lead, facilitate and collaborate with domestic and international businesses and governments to deliver
investment and long-term employment in Lake Macquarie.
Values and behaviours
- disruptive and challenging analysis
- creative and innovative
- transparent collaborations
- resilient, tenacious and agile
- passionate leadership, with integrity.
Objectives
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Strategic objective - Identity
Note:
1. All budget costs are measured as gross expenses. $153.7k expenses are offset by $50k income from Destination NSW
(DNSW) funding.
Key to Leads (alphabetical)
AC Administration Coordinator
Board The LMEDC Board of Directors and its committees
BD Business Development Manager
Board LMEDC Board of Directors led by the Chair
CEO Chief Executive Officer
CC-MS Community Manager – Makerspace
CC-WS Community Manager – Workspace
Chair Chair of the LMEDC Board
FM Finance, Risk and Compliance Manager
MC Marketing Coordinator - Dashworks
M&C Marketing and Communications Manager
dantia.com.au Economic Development Operational Plan 2020-2021 | 08Strategic objective - Investment Strategic objective - Infrastructure dantia.com.au Economic Development Operational Plan 2020-2021 | 09
Strategic objective – Innovation Note: 1. All budget costs are measured as gross expenses. $1,211.0k expenses are offset by $x507.1k income resulting in net Dasworks budget shortfall of $623.7k. This shortfall represents the effective subsidy that grant funds provides for Dashworks innovation facilities. That is, net cost for innovation facilities is $623.7K. This is an increase of $439.7K due to impacts of Covid-19 on Dashworks forecast revenues. dantia.com.au Economic Development Operational Plan 2020-2021 | 010
Operational Tasks Board and strategy Finance, risk, compliance People and Culture Reporting dantia.com.au Economic Development Operational Plan 2020-2021 | 011
Budget summary and analysis
The following tables, graphs and commentary detail and provide analysis of the 2020-2021 LMEDC budget and provide a
forward view of the financial and operational capacity of LMEDC over the life of the current funding agreement.
Table 2 – Budget summary by task
Income ($) % Expense ($) %
Strategic objectives
50,0001
Identity 3% 153,717 9%
Investment 233,521 14%
1,041,6002 65%
Infrastructure 48,962 3%
Innovation 507,1023 32% 1,121,000 65%
1,598,702 100% 1,557,199 91%
Operational tasks
Board and strategy 91,287 5%
Finance, risk, compliance 40,244 2%
People and culture 13,342 1%
Reporting 20,384 1%
165,259 9%
Totals 1,598,702 1,722,457
Notes to Table 2:
1. Forecast grant from Destination NSW (DNSW) to offset host fee for Superboats Identity event.
2. 2020-2021 value of LMCC funding grant plus $1.2k term deposit interest. Funding is essential to deliver tasks against all
four (4) strategic objectives.
3. Estimated income expected to be derived from Dashworks innovation facility operations.
Table 3 – Expenses summary by business units
Dantia Workspace Makespace Total
Identity 153,716 153,716
Investment 233,520 233,4520
Infrastructure 48,961 48,961
Innovation 14,134 521,869 584,994 1,120,999
Board and strategy 72,887 9,200 9,200 91,287
Finance, secretariat & commercial 34,644 2,400 3,200 40,244
People and culture 13,342 13,342
Reporting 20,384 20,384
591,592 533,469 597,394 1,722,457
34% 31% 35%
“91% of grant funds and expenses are utilised to directly deliver economic development strategic objectives.”
Peter Francis – CEO
dantia.com.au Economic Development Operational Plan 2020-2021 | 012Operational Plan, 2020-2021
Budget summary and analysis
Graph 1 – Revenue sources
1,200.00 , 0% 50,000.00 , 3%
507,102.00 , 32%
1,040,400.00 , 65%
Project contributions Grant funding - LMCC Innovation spaces Cash management
Graph 2 – Expenses by strategic and operational tasks
40,244 , 2% 13,342 , 1% 20,384 , 1% 153,717 , 9%
91,287 , 5%
233,521 , 14%
48,962 , 3%
1,121,000 , 65%
Identitity Investment Infrastructure
Innovation Board and strategy Finance, risk, compliance
People and culture Reporting
dantia.com.au Economic Development Operational Plan 2020-2021 | 013Budget Summary and Analysis Key insights 2020-2021 Budget Grant funding income is being maximised with 91% being utilised to deliver the economic development strategic objectives. The budget is based on a worst-case scenario and assumes impacts of Covid-19 continue to impact income from memberships at Dasworks facilities for the financial year. The carried forward surpluses from prior years will be adequate contingency during 2020-2021 and if necessary throughout 2021-22 to maintain the organisations base level operations. It should be noted upside in Dashworks revenues will enable LMEDC to secure additional resources to support Dantia’s business development activities and expedite and keep projects moving more consistently. LMEDC has three (3) main income sources: - LMCC grant funding $1,040k; - Self-generated income of $507k from innovation facility operations; and - Project specific sponsorship contributions of $50k. The investment by LMCC is further being maximised through short term cash investments made possible through diligent cash management practices. However, investment income is expected to decline in line with softening term deposit interest rates to $1.2k in 2020-2021. The Dashworks innovation facilities have a 45% shortfall forecast. 25% is due to Covid-19 impacts while the remaining 20% is attributable to strategic occupancy and members turnover (the result of member businesses outgrowing the space). The shortfall represents a subsidy/investment of $623.8k which is being used to maintain the facilities so that they can continue to attract and nurture innovation and small business growth in the City. None-the-less, maximising income remains a key strategy in 2020-2021. Current year marketing investment for business development promotions is 9% of budget. Current year marketing expenditure is focused on: expanding case studies, web content development, socials and communications that drive leads for innovation spaces and out of region initiatives to drive leads for major investment and job creating projects. dantia.com.au Economic Development Operational Plan 2020-2021 | 014
Operational Plan, 2020-2021
Budget summary and analysis
Notes to Table 4:
1. Subject to year-end and independent audit finalisation due October 2020
2. Final operating expenses as per approved budget as at 30 May 2020.
3. Surplus in 2020-21 and 2021-22 to be utilised for additional Business Development activities.
4. LMEDC has also calculated and has accounted for terminating liabilities which net $40k. Terminating expenses are made
up of Annual Leave provisions $52k, Long Service Leave $14k, offset by Bank Guarantee return $26k.
Key insights – Balance of funding agreement preliminary forecast
LMEDC has reached the operational capacity of its funding and income. The organisation will need to diligently maintain
income especially from innovation facilities and continue with the rigorous management of expenses which are well
understood and contained.
The operational focus of the next two years will be characterised on maximising the project pipeline of DA ready projects,
incremental progress of current activities and projects and increasing Dashworks Innovation facility memberships.
There is no apparent ability to grow or expand Innovation operations further without additional tenure on the funding
agreement, capital investment or major sponsorship.
dantia.com.au Economic Development Operational Plan 2020-2021 | 015Operational Plan, 2020-2021
Key Performance Measures
Key performance indicator Target
Reach of marketing 200,000 Minimum
(web, socials, media, programs, facilitated 220,000 Target
networking and event attendance) 240,000 Stretch
20+ Minimum
Initiatives including business, industry
>30 Target
IDENTITY networking events facilitated and attended
50+ Stretch
New to City Existing in City
25+ Minimum 25+ Minimum
Number of businesses engaged in projects >50 Target >50 Target
75+ Stretch 75+ Stretch
731+ Minimum
Number of new dwellings constructed1 >1,463 Target
2,926+ Stretch
500+ Minimum
Total local jobs directly and indirectly created2 >1,000 Target
2,000+ Stretch
12+ Minimum
INVESTMENT Businesses assisted to invest, locate,
>25 Target
establish or be retained in Lake Macquarie
35+ Stretch
$20m+ Minimum $2m+ Minimum
Value of actual business delivered investment >$50m Target >$5m Target
$99m+ Stretch $10m+ Stretch
50%+ Minimum
Sandbox initiative milestones completed >75% Target
100% Stretch
5+ Minimum
Infrastructure projects, identified, supported
INFRASTRUCTURE >7 Target
or delivered
10+ Stretch
Businesses that have been assisted to 40+ Minimum
innovate (e.g. startup, undertake R&D, export, >45 Target
co-work) 50+ Stretch
75+ Minimum
INNOVATION Jobs supported by innovation initiatives >100 Target
120+ Stretch
40+ Minimum
Products in development or developed >50 Target
60+ Stretch
$470,000+ Minimum
Operational revenues generated >$630,000 Target
OPERATIONAL
$900,000+ Stretch
TASKS
Compliance with submission of briefings and
100% delivered
reports and calendar
Total population (market) size3 2021 target - 229,657
LMCEDS
Total working population size3 2021 target - 106,094
(2018-2038)
Jobs in Lake Macquarie City3 2021 target - 69,491
5 year KPI’s
Dependency ratio3 2021 target - >63%
Notes to key performance measures
1. Independently provided by LMCC.
2. As calculated using Remplan for Dantia projects (not based on net jobs).
3. Currently measured every 5 years by ABS but may become annual.
dantia.com.au Economic Development Operational Plan 2020-2021 | 016Operational Plan, 2020-2021 Attachments Figure A Lake Macquarie City Local Government Area Disclaimer The information contained in this document should not be relied upon, and users should exercise their own independent skill or judgement or seek professional advice if they choose to reference this document or its contents. LMEDC does not accept any legal liability or responsibility for any loss or damage incurred by the use of, or reliance on, or interpretation of, the information contained in this document. The information contained herein is not a substitute for, and is not intended to replace, independent professional advice. Users should consider the need to obtain any appropriate professional advice relevant to their own particular circumstances. dantia.com.au Economic Development Operational Plan 2020-2021 | 017
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