What is wrong with our business leaders when it comes to a little bit of competition? Interviewed on Business Sunday this morning, Roger Corbett poured cold water on suggestion Woolworths was interested in Foodlands New Zealand operations “because New Zealand is a very competitive market”.
Gee, what does that make Australia? A cosy grocery duopoly, perhaps?
Similarly, Crikey watched an interview with Insurance Australian Group (IAG) CEO Michael Hawker last month on Sky Business Report and was amused at the way he kept talking about “irrational pricing”.
Gee, the former Wallaby had just reported a 47 per cent increase in half year profit to a record $446 million, yet it seems a naughty member of the emerging general insurance cartel had dared offer customers a slightly less bad deal.
If Australia is ever going to get its exports back above 1 per cent of world exports and reduce our woeful current account deficit, we need to break the power of the domestic service sector oligopoly.
Woolworths and IAG, both chaired by former Qantas CEO James Strong, generate sod all export income for Australia. All they do is service the domestic economy. Because of their market power, they are able to screw their customers, many of whom are genuinely innovative exporters trying to compete on a tough global stage.
Australia will never be able to create companies like Google, Sony, Nokia, Hilton, Unilever, Toyota, Shell or P&O as long as the economy is dominated by gouging cartels supported by a high-taxed limp-wristed government.
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Roger Corbett is no hero. He won’t even cross the ditch and take on Kiwi retailers. It’s just that he fills the gap left by genuinely globally competitive business leaders who all too few in Australia.
Surprisingly, it is Gerry Harvey who is our biggest foreign retailer with interests in New Zealand, Slovenia, Singapore and Ireland. They are held direct by harvey Norman and not franchised like the Australian stores. For all his faults at least Gerry Harvey is having a go and risking his considerable fortune offshore.
Corbett in particular has talked a lot about taking Woolies skills to Asia, but it’s just that, all talk! For Harvey, it is not time serving CEO or management role designed to boost personal wealth by carefully massaging earnings and the value of shares and options and bonuses!