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Local support will support us

MEGA mergers like that proposed between Australia’s BHP and South African-based Billiton are real food for thought.

Just as the Australian Govern-ment has been sweating on the comparably miniscule takeover battle between Shell and Woodside, along came BHP-Billiton and gave John Howard the fright of his life with the possibility that the Big Australian could shift to London.

The relief in Canberra was almost palpable when BHP and Billiton announced that it would remain rooted in Melbourne, at least for now. So what is all this about, this concern for national interest and sovereignty.

On the grand scale, the main consideration is strategic. Whether or not decisions made in The Hague or London will be to the benefit of Australia.

If Australian assets are simply part of a global montage then whether they are developed now or later simply comes down to how much shareholder return they generate compared to a rival project elsewhere.

This is a real issue when you start talking about resource-dependent economies like WA or Australia.

But there is another, smaller element to this.

Losing a HQ like Woodside from Perth or BHP from Melbourne has a significant impact on the economy in a different way. Having a Woodside here is similar to the much heralded benefits of having a convention centre.

A business of that scale attracts experts, technicians, bankers and bidders to WA throughout the year.

By visiting here these people learn about what Perth has to offer, visit wineries down south and may even come to understand we have a wheat industry which is affected by subsidies in their countries.

And they take that knowledge and understanding with them. That is the positive side of globalisation.

But there is also a negative. It has as much to do with the fact that globalisation is fast becoming a disguise for concentration of wealth and resources in a few key cities.

As BHP’s Paul Anderson said, nothing beats being near the capital markets. And as BHP creeps up to become a global giant, the only bankers and investors that count are in London and New York.

Okay, so that is the obvious stuff. As globalisation creates centralisation of services it becomes increasingly tougher for outlying outposts like Perth to fight for attention.

To some, allowing WA to be bypassed by the rest of the world may seem blissful, but the reality is that where commercial power lies so too does political power, with the obvious problems that brings.

Do you want someone in the US deciding the next nuclear waste dump will be in WA? I think not.

These issues are not new. Wheatbelt dwellers know about the devastation such change has had on their local economies – even at a time when WA farmers reaped record crops.

Those regions have learnt from their mistakes and those of government. Many are frantically trying to attract new businesses in a bid to revive their communities.

Perth faces many of these issues, as does Australia in general.

The truth is we need to fight to retain what we can. Using legislation is one tool, but it should be used sparingly. There is considerable merit in blocking the Shell takeover of Woodside, though it is unlikely to do more than delay the inevitable.

There is also a danger that such legislation ends up simply protecting the weak. Instead, the best way to protect our economy is to do business with WA companies and foster homegrown success.

That way we will always have another Woodside or BHP ready to take their place when such icons leave our shores.

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