Jobs for New South Wales hits back at media jibes

| March 13, 2018

David Thodey, the under fire head of the NSW government’s Jobs for New South Wales fund, has hit back at media claims that the $190 million scheme had directly contributed to the creation of just 413 new jobs in the last financial year and just 1,058 since its creation.

The Daily Telegraph has criticised the fund’s ‘drastically low results’ while lavishing $10 million on staff, contractors and consultants and doling out $23.7 million in grants, loans and guarantees. It may be no coincidence that the fund’s founding chief executive, Karen Borg, stepped down from her post in February.

The state’s Labor opposition, which unearthed the damning figures through a Freedom on Information request, described the fund as a ‘white elephant.’

However acting CEO of Jobs for NSW Geoff White was the first off the mark to dismiss the Daily Telegraph story as misleading and, in a statement, he claimed that “to suggest that investments like this generate jobs overnight is to completely misunderstand how business works.”

The fund says it is on track to help create close to 20,000 jobs for NSW by 2021/22.

Mr Thodey, who chairs Jobs for NSW and CSIRO, and is a former managing director of IBM Australia and former chief executive of Telstra, has now also underlines that the fund’s products and investments aim to create sustainable businesses and ensure the fund can become self-sustaining over time.

In an interview with Innovation Aus, he argues that “The Jobs for NSW fund replaced an earlier grants scheme where there was little accountability for the grants and where measuring value for money was difficult.”

The new structure creates “a more sustainable program” through a series of financial products which include loans, loan guarantees and equity funding. Mr Thodey thought it was ‘harsh’ to judge the fund’s performance when some of the financial instruments for helping to create jobs were only launched 8 months ago.

“A number of these new financial products only came into the market last August, and we have continued to refine them. But it’s too early in the cycle to understand the impact. We’ve got a growth plan out to 2021-22.”

He cited an equity program created in partnership with First State Super which has yet to take an equity position in any company.

“The aim is to make it [the Jobs for NSW model] as sustainable as possible and so that the program becomes as a self-funding to the maximum extent possible,” he claimed, arguing that “This is a good, responsible use of taxpayers’ money.”

“Our investments through Jobs for NSW were never intended to be short term sugar hits – they will take a few years to realise fully their job creation targets,” he argued in a media statement.

“Instead of using the $190 million to hand over cash in the form of one-off grants, the Board and team at Jobs for NSW have developed innovative products, services and investments that support startups and companies to create jobs over the long term.”

The fund is also involved in the new Sydney Start Up Hub, which could employ up to 2,500 people, and a new industry precinct in Westmead in Sydney’s west.

The NSW Government had originally set itself the task of creating 150,000 new jobs by 2019 and claims the figure has already been ‘smashed’ with 246,000 posts created between April 2015 and January 2018, according to the Australian Bureau of Statistics.