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Playing catch up in a changing world

ONE commentator at last week’s meeting to ratify the BHP-Billiton deal described chief executive officer Paul Anderson’s role as being more like holding a four-hour counselling session.

The counselling was a response to the grieving many of the share-holders in the room were going through, as they saw the face and the shape of the Big Australian – their company – change forever.

All the comments we have read about alleged shortcomings of the deal were put, but for many people the meeting seemed to be about a great deal of mourning for the loss of a friendly face, for the loss of a sure thing.

Given BHP’s breathtaking record over the past decade or more in purchasing dud companies, selling holdings at the wrong time and watching too many of its own projects go off the rails – to the sound of billions of dollars sliding down the chute – you have to say this level of continuing affection is a little bewildering.

There are billions of reasons for these unhappy campers to realise that: the world is changing; and maybe the clique in charge is not up to it.

Bringing the motorcycle-loving American, Anderson, in seemed to address the second problem, but the meeting underlined the number of punters who do not seem to have really put their thinking hats on to tackle the ‘changing world’ part.

Last month it was Woodside and Shell, then Foster’s grabs the headlines for a few days as rumours of a takeover bid do the rounds, while the Optus/SingTel deal was just changing one foreign owner for another. The list stretches back far further and will be repeated many times in the future.

Business is different and it is getting very serious.

In this environment it is hardly surprising that some investors on BHP’s share register yearn for a return to the steady and (largely) predictable dividends they remem-ber the company paying in the early years.

Earlier in the week of BHP’s Extraordinary General Meeting, Peter Brain, a bit of a black sheep of the economists’ profession, was giving a speech as part of the Deakin lecture at another Melbourne venue.

Mr Brain is unusual in his profession because he does not believe the market can cure every-thing and he is not a big fan of economic rationalism.

In fact his basic argument was that, for the past 30 years, successive Australian governments have completely ignored the approaches taken by other governments around the world, including the US, to protect and develop industry, and instead have fallen irrationally for the market fundamentalist line.

As a result, today we have got ourselves into a very serious hole. It is a hole which has left us with what the Treasurer likes to call the “super competitive” half dollar and the problems which flow from that – and we are not just talking about the cost of an overseas holiday.

In his speech, Dr Brain said: “Australia now has no concept of strategic industries, and the prevailing conventional wisdom is that a million dollars worth of output from any of the computer chip, wood chip and potato chip industries is of equal benefit to the economy.”

That is a level playing field. A dollar equals a dollar equals a dollar. It does not matter where it comes from or how it is made.

The idea seems simple enough but the evidence would suggest that the world is no longer that simple – just take a closer look at some of the BHP “successes” mentioned earlier.

When the world wants smarts, and is prepared to pay good money for them, we can tell them how clever we are, but have surprisingly little to show for it that we can sell them.

Just as Ziggy Switkowski and Telstra have become the bogey men for globalisation in rural Australia, Paul Anderson has had his introduction to the role in front of a different group over the past couple of months.

The real challenge is how to change the national habits of a lifetime, take a break from the beach and really look at who we are, where we are and where we want to go. And let Paul Anderson off his counselling duties.

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