Tasmanian Business Reporter November 2018

Tasmanian Business Reporter - NOVEMBER 2018 5
THOUGHT LEADERSHIP
www.tcci.com.au
‘Accidental’ life in economics
FORMER top public servant
Donald Challen AM
FAICD traces the beginning
of his distinguished
career in academia, the
public service and in corporate
governance back
to what he calls “a bit of
an accident, really”.
When his initial postschool
plans fell through,
a friend nudged him towards
economics at the
University of Tasmania.
“My father was a great
believer in careful due
diligence and he helped
me find out a bit more
about economics. It reinforced
my thinking that
it sounded worth having
a crack at. So, I enrolled
in economics at the university
and – within a
couple of months – it felt
like someone had turned
the lights on.”
Challen believes that
what he learned has had a
far-reaching influence on
his thinking throughout
his career.
“They say that economics
changes your life
– rewires your brain. I
think that’s right. Economists
do tend to think
a bit differently from the
rest of society. I was introduced
to a series of
concepts that really resonated
with me – it’s been
a part of my life ever
since.”
After graduating from
the university with firstclass
Honours and a
Master of Economics,
Challen was 15 years an
academic economist.
In 1980, he was instrumental
in obtaining government
funding for the
Centre for Regional Economic
Analysis (CREA)
where he was Founding
Director. He also served
as Chair of CREA’s
board for a decade from
1993.
After a two-year stint
at the Office of the Economic
Planning Advisory
Council in Canberra,
Challen returned to Tasmania
in 1986 as Deputy
Under-Treasurer at the
Tasmanian Treasury.
He was Managing Director
of the Tasmanian
Development Authority
for two years and then
appointed Secretary of
the Department of Treasury
and Finance in 1993.
He served as Secretary
for 17 years, working
with six Premiers and six
Tasmanian Governor Kate Warner with Donald Challen.
Treasurers of Liberal and
Labor governments.
While he was in the
public sector, particularly
throughout his stint
as head of the Treasury,
he was asked to serve on
several boards, both private
and government.
Challen says, “That really
whet my appetite for
a career as a non-executive
director…and what
I’ve been able to do has
been very rewarding. Initially,
there were opportunities
that were thrust
on me, but it opened my
eyes to the fascinating
spectrum of activities
that you can get involved
in through a non-executive
director role.”
He is currently Chair
of the Motor Accidents
Insurance Board and
is Deputy Chair of the
board of the Tasmanian
Symphony Orchestra.
In 2013 he was made a
Member of the Order of
Australia.
Looking to the future
of Australian corporate
governance, Challen
notes that driving an appropriate
and positive organisational
culture will
be a particular challenge.
“Cultures are exceedingly
difficult to change,”
he says. “We tend to forget
that human beings
respond to the incentives
presented to them. If you
see behavior that you
don’t like in groups of
people or in companies,
the best way to cure it is
to change the incentives
for people. Regulation is
a very blunt instrument.”
Organisational culture
has been brought into the
spotlight by the Royal
Commission into Misconduct
in the Banking,
Superannuation and Financial
Services Industry.
In his Interim Report,
Commissioner Kenneth
Hayne AC QC posed
that further regulation
would add “an extra
layer of complexity” to
an already complex regulatory
regime. Challen
agrees. “Individuals respond
to incentives and
the cultures of companies
are the amalgam
of the behaviours of the
individuals working in
them. Thus, in a fairly
direct way, a company’s
culture is the result of
the incentives provided
to its employees.”
While Challen’s career
path has veered to
take him through such a
variety of professional
experiences, his changing
roles allowed him
the opportunity to contribute
throughout the
development of one of
Tasmania’s largest infrastructure
projects:
the Basslink electricity
connection.
He was involved in
the project’s conception
as chair of the public
service steering committee,
and then sat on
the Basslink Development
Board, which
found the private developer,
National Grid
PLC, to design, construct
and operate the
project.
Later, as a member of
the board of Hydro Tasmania,
he had a hand in
the negotiation of the
contractual arrangements
between Hydro Tasmania
and National Grid, which
were essential for the
project to proceed.
As Hydro Tasmania’s
Battery of the Nation initiative
investigates future
expansion of Tasmania’s
clean energy capacity,
this piece of infrastructure
could further embed
Tasmania’s place in supporting
energy supply to
mainland Australia.
Infrastructure
surcharge angst
INFRASTRUCTURE
surcharges got the attention
of everyone in
Tasmania recently with
the announcement of DP
World pretty much doubling
their fees at West
Swanson terminal from
January 2019.
There is a lot of angst
about this charge as there
is no control or regulation
as to what can be
charged – it is set and issued
and the fear is that
once one charges it (or
even increases it) they
all will.
It is a reasonable fear
as this is has increased a
number of times over the
year and on the back of
the Melbourne port levy,
peak season charges
for inward freight, toll
charges, bio security
surcharge additions and
booking slot increases
you could be forgiven
for thinking that there is
a lot of clipping of the
ticket going on.
Bringing it back to
Tasmania, however, in
relation to the infrastructure
surcharges, it is important
to understand
how our freight is currently
moving.
Presently the majority
of our exported and
imported international
cargo goes one of two
Brett
Charlton
Agility Logistics
ways – direct ex Bell Bay
on the MSC vessel or via
Melbourne with the trans
bass carriers (Tolls or
Searoad).
In relation to MSC,
the cargoes either do not
touch Melbourne port or
if they do, they are done
within the port infrastructure
– therefore there is
no port infrastructure surcharge
applied.
In regards to the via
Bass Strait cargoes, the
infrastructure surcharge is
billed to the line by their
nominated cartage company
and I am advised
that presently this is being
absorbed into the terrific
revenue that the lines are
making on the terminal
handling charges (a story
for another day).
I will be keeping a close
eye on this as it evolves,
but Tasmanian exporters
and importers need to review
all options in their
considerations – including
where the cargo is received
in Australian ports
and the costs associated.
The Brown Marmorated
Stink Bug (BMSB)
risk season is something
that importers would
have heard of if they are
importing from those
countries at risk.
Importers are bearing
costs for fumigation or
heat treatment as well as
facing delays in inspections,
cost burdens of
demurrage and detention
and other costs as a result
of the strict enforcement
of the protocols for importation
from countries
affected by this creature.
The issue is difficult
because of our lack of
infrastructure and the
costs involved for treatment
and the volume
of cargo relevant to the
BMSB risk – but please
take some time to look
up what is happening
in Europe and America
with this bug – it is an
infestation of mammoth
proportions and something
we need to avoid
coming to Australia at all
costs.
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