SmartHub closure gains attention of Queensland Government departments who fund facility

The popular Rockhampton SmartHub is often spruiked about by the council and is always being visited by ministers - so why is it on the chopping block?

Techstars startup weekend participants at SmartHub.

Rockhampton Regional Council’s proposal to close innovative co-working facility, SmartHub Rockhampton, at Customs House has gained the attention of the Queensland Government which may step in to help.

The council announced on February 18 it was proposing to cease the Smart Regional Centre Initiative, of which Smart Hub is a part of, in an effort to come up with extra cash after shock funding cuts from the Local Government Grants Commission.

The cuts will cause council to lose $13.5 million in funding in the next three years and $6.8 million less in funding each year.

Questions have been raised over how much money council would actually save in closing the Smart Hub and what other options are being explored to come up with the shortfall of money.

Council reported the net budget for FY 21/22 for operating the Smart Hub was $462,000, with an income of $146,000.

Council told this publication it projected to receive around $90,000 from Smart Hub memberships, rental and lease fees and any other income has been through non-recurrent grant programs.

It is estimated if the Smart Hub was to close, council would only be saving about $500,000.

The Smart Hub itself was built from Queensland Government grants and programs are regularly funded by the government.

This publication reached out to the Department of State Development, Infrastructure, Local Government and Planning, informing it of the potential closure and received the following statement.

“The Queensland Government is committed to advocating with the Commonwealth Government for a better funding deal for Queensland Councils from the Financial Assistance Grant,” a spokesperson said.

“The responsibility for allocating the Commonwealth Government’s Financial Assistance Grant to Queensland Councils falls with the independent Queensland Local Government Grants Commission.

“The Smart Hub opened in 2018 and project construction, including the installation of all Smart Technology solutions for the CBD riverfront area, was completed in February 2019.

“Councils control their budgets and are responsible for making decisions about future operations and funding of their facilities.”

Smart Hub is often touted and spruiked about by council and in just the year of 2021, there were 14 media releases about the facility.

Smart Hub is also regularly visited by politicians and ministers, and is normally one of the key places they are taken to when they visit Rockhampton, which again raises questions why council would close the space.

“I had the opportunity to visit the Smart Hub in November and was blown away by the innovation and collaboration being fostered in this space,” Small Business Minister Di Farmer said.

“Losing it would be a real shame for the local small business and start-up community.”

The Smart Regional Centre Initiative was introduced in 2015 and includes the SmartHub, along with Smart City technologies like free wi-fi, digital information boards and smart CCTV cameras.

At the time, the initiative was spruiked as creating at least 288 full time equivalent jobs and helping grow local business, increase public safety, grow population and use underutilised areas.

The ground floor of Customs House was refurbished, with $250,000 in state government funding and $440,000 in council funding, and was opened in 2018.

The Smart Hub was the final element of council‘s $4.5 million Rockhampton CBD Smart Technologies and Working Hub program.

Programs held in the upstairs space at SmartHub

The Smart Hub has been home to many successful programs including Turbo Traction Lab, which has helped 35 businesses grow, accelerator programs for businesses in the mining and resources industry, entrepreneurs and female founder programs and weekly and monthly business development and support events.

Membership increased from 35 members in 2018 to 100 members in 2020.

A survey by 35 SmartHub members reported 155 jobs had been created and the total revenue as a result of Smart Hub members was $9.2m.

When asked how much money council would save in closing Smart Hub, Mayor Tony Williams said it would only be “the tip of the iceberg”.

“We’ve got $6.7 million we have to find for every year going forward and we can’t put rates up to that extent,” he said.

The reason Smart Hub is on the table is because it is one of the more recent items in council’s budget, as opposed to the standard roads, sewerage and waste services which are council’s core business.

“It’s a new addition to the council, we are looking at what has come recently that we have added compared to something we traditionally do,” Mr Williams said.

“As we said it’s only a drop in the ocean with that, we still have a lot more funds to come up with.

“A final decision hasn’t been made.”

When asked what other ideas to save money were being discussed, Mayor Tony Williams wasn’t able to disclose any details.

“Everything is on the table at the moment,” hje said.

“We can’t put rates up to the extent we have been reduced in our funding so we have to look at our services, streamlining and slimming down the organisation.

“They are going to be tough decisions that none of us want to make.

“Unfortunately we are the worst council in Queensland that has been reduced…without any consultation.

“I’d like to see someone step up to the plate and answer these questions that I have been asking about why these decisions have been made without proper consultation and to the degree that our council has been impacted.

“We are working through options and scenarios but again, these decisions don’t come lightly.

“We will be trying to get as much information to the public.”

While it is only a proposal at this stage, members have been encouraged to find alternate premises to operate from.

If the proposal to close the facility was to go ahead, the Smart Hub would close on June 30, 2022.

“This is not a proposal to close a council service providing a few work desks, deleting a line from the budget spreadsheet to save a paltry sum of money,” SmartHub member Matthew Doyle said.

“This is a proposal to close the door and walk away from being an innovative city at the same time as every other major - including regional - centre recognises the need to embrace it.”

As a heritage listed building, Customs House won’t be sold.

Mr Williams said if the coworking facility was closed, council would maintain the building and lease it out for functions.

Originally published as SmartHub closure gains attention of Queensland Government departments who fund facility