2019 CEO Survey: Harry Debney, Costa Group

Costa Group chief executive Harry Debney. Picture: Supplied.

Every year The Australian’s John Durie asks some of the biggest names in Australian business five key questions about what’s coming in the year ahead.

Here is what Costa Group’s Harry Debney sees ahead in 2020.

Read more from the CEO Survey.

How is your company affected by low-interest rates and what is needed to boost the economy?

Lower interest rates have not appeared to significantly stimulate consumer spending, which is what is needed. To stimulate demand and further growth, the government may need to revisit the timing of their tax cut program and bring forward those cuts.

What is the impact of government regulations on your company, including those applying to the financial sector?

There are regulations relating to water, environment, planning and interstate trade that are inconsistent across states. This has a regulatory and cost impact on a business such as ours, which operates in every state. There needs to be a renewed focus on making federalism work, in particular ensuring the Murray-Darling Basin Plan operates as efficiently as it possibly can, and to ensure a level of security around water allocation and use for productive agricultural purposes.

What percentage of company revenues are spent on research and development, and how is your company using technology to improve performance?

On specific R&D, spend is $8m-$10m and much more on a range of ag-tech innovation projects aimed at improving crop yield, quality and levels of automation in production, harvest and post-harvest activities. Research and development is vital to our operations and growth objectives, as we continually seek innovative solutions to technical agronomic challenges and opportunities to maximise the quality and variety of our product. The current R&D tax incentive benefit of 8.5 per cent of R&D expenditure has been an important financial incentive for the industry to continue to undertake research and development activities while being able to absorb some of this risk through the tax system. This must remain in place.

What are the three major policy issues facing the country and what should be done about them?

● Trade and market access: There needs to be a whole of government focus on opening up export markets. The current approach has not been effective or timely enough in removing barriers. Free trade agreements only do part of the job, but they don’t deal with removing the remaining technical and non-tariff barriers. The economy is missing out on significant export market opportunities which are being taken up by other countries who have an inferior product but put significant resources into gaining market access for their fresh produce industry.

● Climate Change: While individual companies such as ours are heavily involved and committed to mitigating and adapting to climate change, there needs to be a more cohesive policy at the national level to assist and incentivise the private sector to address climate change and achieve positive outcomes. Once again, this is another area where a productive and cooperative approach to federalism needs to come to the fore.

●Regional Development: If we are going to grow agriculture to become a $100bn sector, then sufficient resources must be put into building the productive capacity of the regions. This includes roads and transport infrastructure, including rail which establishes direct access to market routes; IT infrastructure that will allow business to utilise twenty-first-century communications, including cloud-based and blockchain technology, both in the field and office; and reliable and affordable energy infrastructure including solar and battery storage that recognises the critical importance of cold chain management in the fresh produce supply chain.

What are the major impediments to long-term growth facing your company, and what can or is being done about them?

Lack of export market access is at the top of our list.