Ian Smith: South Australians have no reason to celebrate BP’s decision not to drill in Great Australian Bight

THE decision by BP not to proceed with exploration in the Great Australian Bight isn’t cause for jubilation by anyone with an interest in the future prosperity of South Australia, writes Ian Smith.

Opponents to offshore drilling in the Great Australian Bight may be jubilant about BP’s decision to withdraw but South Australians have little to celebrate, writes Ian Smith. Picture: Roger Wyman

• BP pulls out of controversial $1.4bn Bight oil project
• BP told more environmental work needed on Bight oil drilling plan
• Worst-case spill from Bight oil drilling would affect SA shorelines

THE decision by BP not to proceed with exploration in the Great Australian Bight isn’t cause for jubilation by anyone with an interest in the future prosperity of South Australia.

It is simply dreadful news.

The reality is that the climate for large-scale, prosperity-shifting global investment in South Australia is as bleak as our recent energy-sapping weather. We are in deep peril without non-subsidised and substantial foreign interests putting their money into South Australia.

While global factors were hugely significant, not least the price of oil, we need to understand honestly why South Australia was a priority no longer.

Rigs were just weeks away from being sent here, highlighting the project will have cost BP a massive amount of money already.

Without these clues and a truly herculean effort to respond from all sectors of the community our relevance will decline even further.

In the short term, we need to keep what we can. Both Chevron and Santos must be given every indication that their potential exploration in The Bight is both valued by South Australia and part of a balanced debate.

While appreciating everyone’s right to express their concerns, environmentalists should at least acknowledge the 3800 offshore wells that have been drilled in Australian waters since the 1960s without incident.

Meanwhile, with this latest economic shock to a State already in strife, we must be bold if we are to become relevant to big business again.

A fearless discussion about South Australia’s future needs to engage people from both inside and outside the State. Too often we appear to talk among ourselves rather than reaching out among that South Australian diaspora that is in boardrooms around the world.

We need to look to other jurisdictions where public sector reform and private sector initiatives revitalised economies.

More than 20 years have passed since my old boss Jeff Kennett led Victoria back from the brink, but so much of his model is relevant today for South Australia.

Consider a fundamental restructuring where public sector jobs outside the core services shift to the more flexible, competitive and efficient private sector. Rid ourselves of jingoistic “buy SA” campaigns and focus more on addressing barriers to entry. Embrace increased migration to stimulate more local demand.

How do we improve access for people through the airport and for our goods through seaports? How do we stimulate an infrastructure rollout that considers toll roads or other forms of user-pays systems? How do we release more enterprise through less burdensome regulation?

What is so frustrating is that South Australia is a remarkable and wonderful place to live; but even the Garden of Eden had no future without a functioning economy.

A city of more than one million people cannot survive on government jobs, corporate welfare and small businesses.

We have some brilliant start-ups but most of our wonderful young entrepreneurs will be lured interstate or overseas if there is not a cadre of bigger businesses here to incubate and promote them.

Big business is critical to a city of Adelaide’s size. It feeds medium and small firms through outsourcing, contracts and additional services.

And publicly-listed businesses are particularly important with their targeted programs of community support.

Indeed, given Adelaide’s proud and pioneering past, the decision by BP pre-empts something else particularly worrying; a city with diminished galleries, museums and libraries.

A vibrant artistic and cultural scene cannot be sponsored by small and medium sized business and it should not fall to government to step in, given their priorities should be in the core services of health, education, transport and law and order.

BP did not, therefore, just foreshadow employment and increased revenues for South Australians. It would have also been a source of support for many of those places that made Adelaide what it once was but, without urgent action, stands little chance of being so again.

So if you are celebrating the departure of “big oil” from the seas off Ceduna and believe we can do without big business, think again.

Ian Smith is a partner in Bespoke Approach, a corporate and political advisory firm