Politics, projects and people – panel discussion
L–R: Terry Moran AC, Margaret Jackson AC, David Gonski AC and Brendan Lyon
Key points:
Politics, projects and people Chair: Brendan Lyon, Chief Executive Officer, Infrastructure Partnerships Australia Panellists: • David Gonski AC, Chairman, ANZ • Margaret Jackson AC, Independent Non-executive Chairman, Spotless • Terry Moran AC, Former Secretary of the Department of the Prime Minister and Cabinet
Brendan Lyon (BL): With governments serving threeor four-year terms, and private sector companies reporting on a quarterly basis, have we got the right ingredients for reform, or has Australia become too short term? David Gonski (DG): Well, the answer’s yes. I would say three things. Firstly, it’s not just the government; I think our whole way of doing business, whether that be in the private sector or the government sector, is short term. When I look at quarterly reporting, I look at how our investing shareholders have to compete in terms of what they do each quarter, and so on. The whole system is seen with a short-term approach. You feel this most intensely if, as I’ve done, you sit on a board in Singapore or elsewhere in Asia. The main difference of those boards is that they are longer term in their thinking. I have to be honest, I’m tired of people coming to me and saying, ‘I’m from private equity. You should privatise this or that because it allows you a longer-term vision’. I think that big companies, and indeed government, have to think longer term. The final point I’d make is that those of us who have been involved in big companies know how difficult it is to put the money up front to buy or to invest in infrastructure when the returns are at the backend. We also know what it’s like to write off 12
futurebuilding
• Better infrastructure relies on consensus between public and private sectors about best long-term market and regulatory structures. • Public sector should set clear expectations about what they want from infrastructure projects – and political government must honour contracts. • Infrastructure is largely controlled by states, so the new Senate should have marginal impacts on infrastructure projects.
legacy systems. As a whole, we have to look at a new approach and seek understanding that if there’s a clear articulation of what we’re doing in the long term, then if we perform to that, it is okay, rather than needing to make short-term gains all the time. BL: Thank you. And Margaret, your views? Margaret Jackson (MJ): In Australia at the moment, apart from the fact that we’ve got short terms of government, right now we’ve got a problem with a lack of mandate. It feels like, federally, we’re sitting, waiting for decisions and waiting for action. It was fantastic to hear from Tim Pallas earlier; definitely in the state of Victoria, you get a feeling that things are actually moving. But look at the companies that are involved in very long-term decisions – mining companies, aviation and telecommunications companies: companies with pressure for results. You have to make decisions that are based on what the right thing is for 25 or 30 years, and the infrastructure to support these investments, knowing that often the length of time that you’re going to make returns in is 30 to 40 years. In aviation, when you’re buying aircraft, you’re making a decision as to which aircraft you’re going to operate for 25 years. So, whatever it costs in the short term – and it is very short term – you have to make the decision, the correct decision, to get a fabulous benefit over a very
Volume 7 Number 1
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29/11/2016 3:59 PM
