Following the Business Council of Australia’s tradition of having only the finest scolds head up the big business peak body, incoming chairman Grant King, who is replacing Catherine Livingstone, is hardly in a strong position to adopt the BCA’s traditional role of scold and primary complainant to the rest of us about our slack, self-indulgent ways.
King recently stepped down as head of Origin Energy, which posted an impressive 2015-16 loss of $589 million. Still, that wasn’t as bad as the $658 million loss last year, when the company urgently raised $2.5 billion in equity to ward off a further trashing of its credit status.
Origin’s share price is currently trading at a 12-year low. The share price has fallen more than 50% in the past few years to $5.45 yesterday — a particularly nasty destruction of value. The company was worth around $13.9 billion at the start of 2015, and at the close yesterday that had shrunk to $9.42 billion — a loss of around $4.7 billion. Much of the company’s problems stem from the huge debt burden it has taken on for its multibillion-dollar central Queensland coal seam gas natural gas project APLNG, which came on line just in time for the collapse in oil prices. It’s one of three separate liquefied natural gas projects in Queensland, which bid against each other for construction resources in their development. There’s been talk of one of the LNG trains being mothballed and of a far slower production ramp-up than planned. According to Australian Electoral Commission data, Origin has handed over $412,000 to political parties since 2011, with around 60% going to the Coalition.
But King — who takes the role at the BCA’s annual dinner on November 17 — is rare in the history of Business Council presidents in that he is not a heavy hitter. He doesn’t yet have a major board chairmanship, so his mates will have to round one up for him so he can have a second pulpit from which to hector us from — maybe Wesfarmers, which already has an iron grip on the BCA? Or perhaps the Commonwealth Bank can find a slot — his predecessor, Catherine Livingstone, is about to become chair from today ,and the bank’s CEO, Ian Narev, is on the BCA board. Livingstone, in comparison, was chair of Telstra and is about to become the chair of the Commonwealth Bank from today (now there’s a hospital pass). And her BCA predecessor, Tony Shepherd, was chairman of Transfield (remember them?) for part of his reign at the BCA.
While we’re on the BCA itself, why is Foxtel a member? It is not an independent company — its owners, News Corp and Telstra, are also BCA members and would have votes on issues. This means on issues such as media and communication and technology questions, they are three votes — News, Telstra and their joint venture, Foxtel. Cosy, no? Throw in that News Corp’s main banker in Australia, the Commonwealth Bank has BCA membership, and its CEO is a board member. In contrast, Fairfax Media is not a member of the BCA, according to its website.
It was under King that Origin — once a strong investor in renewable energy — pushed hard for the Renewable Energy Target to be cut. And King immediately attacked renewables in his first interview as incoming BCA chair, criticising state-based renewable energy targets (adopted because of the unwillingness of the Coalition to adopt meaningful targets at the federal level) and slamming solar subsidies as “iniquitous”. King was one of the more hysterical critics of the Rudd government’s mining tax in 2010, claiming it would triple electricity prices.
But whatever King’s shifting positions on high-profile issues, there’s one important consistency about him — he’s another standard-issue business executive from a traditional industry given the gig of representing Australia’s mediocre corporate sector in its continuing rent-seeking and self-interested pleading. He even restores the tradition of the old white male BCA chair, after the interregnum of Catherine Livingstone, who hailed from a much more tech-intensive and export-oriented business background than the usual BCA luminary.
The Business Council has reached a point of such irrelevance that even its Liberal allies publicly ridicule it. It is in desperate need of new thinking — thinking that starts from the principle that the next half-year bottom line does not automatically equal the national interest, that workers and unions are not enemies to be smitten hip and thigh and that paying a reasonable share of tax is a basic expectation in a civilized society. Who knows — perhaps King will surprise by demonstrating some capacity for innovative thinking in the role. But on his preliminary comments, he’s the same old, same old.