07/06/2013 - 14:32

WA’s future fund should be larger: Landry

07/06/2013 - 14:32


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ATCO Australia managing director Steven Landry says Western Australia should focus on generating revenue from its resources to bolster the state's future fund.

In an interview that ranged from doing business in Perth to the future of Australia's automotive industry, Mr Landry said WA's future fund, which takes a portion of the state's royalties derived from resources, was small considering the state's mineral wealth and that governments should do more to generate revenue for it.

When asked what he would do if he were premier, Mr Landry responded: "I would focus on the resources in WA and boosting up that heritage fund because WA is rich in resources and the future fund here is so small but I would maximise the revenue opportunities from those resources."

Mr Landry made a comparison between WA's future fund, which is estimated by the government to have a balance of $4.7 billion in 20 years, and the heritage fund of the resource-rich Canadian province of Alberta, which had a 2012 balance of $C16.7 billion.

He said WA should do this as opposed to generating revenue from taxing the population.

''You're not going to get that from the people that live here because you don't have the scale there and once you do you can't tax the tax base in order to make these things happen it has to come from resources and, guess what, lots of them,'' Mr Landry said.

ATCO recently started construction in January of a $15 million donga factory in Kwinana that, when completed, will be the largest facility of its type in the world for ATCO.

Despite talk of recession in the state economy and of an end to the resources boom, Mr Landry remained optimistic about the future of business in WA, saying the base case for business in WA remained strong.

"Business cases are made off the base case not off the booms, booms are the extra frosting that you get on particular long term deals", he said.

Mr Landry also said that there would always be good business on the other side of a downturn but that companies had to plan, be persistent and on the lookout for opportunities.

He said that 'doomsday' talk had to be kept in perspective with Australia, and WA in particular, doing better than most of the world, adding that "things are pretty darn good here in Australia, and really good here in WA".

In his discussion of doing business in WA Mr Landry also encouraged businesses to stop viewing WA from a 'dollars per hour' perspective and instead view it as a place to invest and become part of the fabric of the community.

Mr Landry, who before joining ATCO spent 27 years with US car manufacturer Chrysler, was also asked for his opinion on the state of the Australian automotive industry.

He emphasised that, while he did not support handouts, manufacturing sectors like the auto industry were an important part of the economy with wide-ranging influence on other aspects like suppliers and customers and that if the auto industry in Australia could be saved, it should be.

"My own feeling is that maybe Ford didn't have to pull out as quickly as it did," Mr Landry said, while acknowledging there were significant differences between the Australian and American industries.

He said that in the US car companies make commitments to build facilities and employ people and in return the government makes commitments to provide training assistance.

These 'deals' come with terms and conditions such as volume of employment and facility life with Mr Landry stating "if those terms of the agreement are not met the car company takes penalties, financial penalties".

He added that he did not know how car deals in Australia between manufacturers and governments were arranged, and whether they were done to the extent and detail they were in the US.

ATCO owns and operates numerous assets in Australia including three power stations; the most efficient of them located in Karratha.

The company also owns 13,000km of natural gas pipeline in WA and is currently constructing a large donga factory in the state.


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