Business Weekend | 2 November

Key Concepts

• Back Australia Campaign: An initiative by News Corporation to empower consumers to choose Australian goods and for businesses to promote their local credentials.
• Australian Competitiveness: Challenges faced by Australia in energy pricing, corporate tax rates, labor costs, and project approval times.
• Global Contest for Capital: Increased competition for investment due to a shift from a global savings glut to an intense global contest.
• Australian Competitive Advantages: Macro fundamentals, energy and resources, digital economy strengths, and geography.
• Buy Local Mandate: The question of whether government (state and federal) should prioritize purchasing local goods and services.
• Consumer Choice and Information: The need for consumers to be better informed about what is Australian-made, created, or produced, and what stays in Australia.
• Economic Impact of Spending Local: Redirecting $100 per household to Australian goods and services could generate $16 billion in value and create 40,000 jobs.
• Australian Innovation: The inherent innovative nature of Australians and the importance of supporting local innovators and businesses.
• Mateship: A core Australian cultural concept of mutual support and being there for each other.
• Cost of Living Crisis: The current economic situation where affordability is a primary concern for consumers.
• Value Proposition: Consumers seeking value, which includes quality, affordability, and discoverability.
• Global Business Operations: The reality of Australian companies operating internationally while maintaining a commitment to Australia.
• Policy Settings: The need for appropriate government policies to foster innovation, employment, and competitiveness.
• State vs. Federal Government: The ongoing need to bridge the divide between state and federal policies in a globalized world.
• Australian Retail Sector: A significant contributor to the economy, supporting jobs and often facing the dilemma of importing cheaper goods.
• Australian Manufacturing: The importance of supporting local manufacturers, even if it means a slight premium for consumers.
• Supply Chain Resilience: The advantage of local manufacturing in terms of quicker market access and sustainability.
• Entrepreneurship: The drive of Australian individuals and families to create businesses and produce goods locally.
• Trusted Brands: The significance of brands like Bunnings being recognized for their community involvement and trustworthiness.
• Regulatory Burden: The complexity and challenges faced by businesses due to tax, process, and layers of government.
• Skilled Labor Shortage: A critical issue impacting industries like housing construction.
• Development Approval Times: The lengthy and complex processes for approving residential and commercial properties.
• Australian Tech Sector: The growing importance of technology companies in creating value, IP, and high-paying jobs.
• Procurement Policy: The role of government purchasing decisions in supporting local industries and innovation.
• Australian Made Logo: A certification mark that provides consumers with clarity and confidence about the Australian origin of products.
• Economic Growth: The need to stimulate economic growth in Australia, which has been slower in recent years.
• Onshoring Industries: Encouraging the return of industries to Australia for greater self-sufficiency and economic benefit.

Back Australia: A Campaign for Local Goods and Global Competitiveness

This special edition of Business Weekend, hosted by Ross Greenwood, focuses on News Corporation's "Back Australia" campaign. The initiative aims to empower consumers to make informed choices about Australian goods and services, and to encourage businesses to highlight their local credentials. The program features interviews with several Australian chief executives who support the campaign, discussing their connections to Australia, the impact of consumer support, and the inherent conflicts that arise from operating in a globalized market.

The Challenge of Australian Competitiveness

Ross Greenwood opens by highlighting Australia's perceived loss of international competitiveness, citing issues such as high energy pricing (with electricity prices rising 26% due to the end of state subsidies), uncompetitive corporate tax rates, high labor costs, and slow approval times for major projects. He argues that the "Back Australia" campaign offers an opportunity to overcome cynicism, improve government support for businesses, and foster genuine pride in local products and services.

The program notes recent government efforts to attract investment, with New South Wales Treasurer Daniel Mookie, Federal Treasurer Jim Chalmers, and former Prime Minister Kevin Rudd collaborating to pitch for capital. Chalmers emphasizes the increasing global competition for investment, identifying Australia's four key competitive advantages: macro fundamentals, energy and resources, digital economy strengths, and geography. The overarching message is the need to continuously strive for greater competitiveness to attract and retain capital and innovative ideas within Australia.

News Corporation's "Back Australia" Initiative

Michael Miller, Executive Chairman of News Corporation Australia, explains the genesis of the "Back Australia" campaign. He states that the company received significant feedback from Australians and Australian companies indicating a desire to support each other's products, especially during a period of uncertainty. Miller acknowledges that consumers have been overwhelmed by choice, leading to a loss of clarity about what is truly Australian. The campaign aims to provide better information, foster collaboration, and create unity, leveraging the inherent pride Australians have in their own products and innovation.

Miller emphasizes that while Australians seek cost benefits, they also value quality. He highlights a Westpac Economics report suggesting that if every Australian household redirected $100 to Australian goods or services, it would generate $16 billion in value and create 40,000 jobs. The campaign's role is to inform consumers, advocate for better outcomes, and celebrate national events, teams, and community initiatives, embodying the Australian spirit of "mateship."

Regarding the perception that Australian products might be more expensive, Miller clarifies that while some may be willing to pay a premium for quality or service, often Australian products are of equal quality and better value than international counterparts. The campaign's media role is to ensure consumers are informed to make the best decisions. He also points out the importance of supporting the approximately 40,000 small and medium-sized businesses that operate in local communities, ensuring that local spending stays local and builds better communities.

Addressing News Corporation's global operations, Miller asserts that the company's origins are in Australia, and its culture globally is Australian. Their focus remains on what is best for Australia, recognizing that great businesses can start with an Australian focus and then expand globally. The campaign is multi-faceted, encouraging everyday Australians to identify and support Australian products, backing Australian workers and innovation, and prompting a review of policy settings.

Miller hopes the campaign will be a stepping stone towards a "better, brighter, and happier Australia," advocating for and celebrating Australian people, companies, and workers.

Westpac: A 200-Year Commitment to Australia

Anthony Miller, CEO of Westpac, Australia's first bank, emphasizes the bank's 200-year history and its inextricable link to Australia's success. He views his role and Westpac's operation as being with and supporting the community. The "Back Australia" campaign is seen as a tremendous initiative to reinforce and support the Australian economy and community.

Miller acknowledges a potential "slight degree of cynicism or perhaps indifference" among Australians regarding the quality of local products compared to overseas alternatives. He believes the campaign can reignite national pride, drawing on the inherent pride Australians have in their country and its achievements. He highlights Australia's current opportunity as a location of consistency, good transparency, and sound regulation, attracting talent and investment.

Westpac, as a bank, witnesses firsthand the innovation, resilience, and tenacity of Australian businesses, particularly in regional areas where businesses find innovative solutions to challenges. Miller asserts that the quality of Australian-made and grown products and services is "second to none," often superior to international alternatives. He points to initiatives like a fund supporting women-owned startups as an example of the bank's commitment to fostering Australian enterprise.

Miller suggests that government procurement arrangements should incorporate localization content, similar to the defense program. He also advocates for businesses to prioritize local service providers and for government and regulators to encourage and prioritize local suppliers. He reiterates the economic impact of consumers spending more on Australian businesses, citing Westpac Economics data on job creation and GDP growth.

Retailers: Balancing Local and Global

Harvey Norman: Katie Paige, CEO of Harvey Norman, states that the company has backed Australian-made products since its inception in 1982. While the proportion of Australian-made goods has decreased over time, Harvey Norman has consistently supported manufacturers to maintain local factories and employment. She highlights the quality of Australian-made mattresses and the thriving nature of family-operated businesses that supply them. Paige emphasizes the importance of Australian-owned retailers for the economy and the need to offer consumers state-of-the-art products.

Paige believes that Australian manufacturers produce quality products, and consumers are willing to pay more for Australian-made goods if they understand the value and quality involved. She also points out the logistical advantages of local manufacturing, with quicker market access compared to overseas shipping, making it more sustainable. She stresses the importance of supporting Australian entrepreneurs and the broader economic impact of their businesses. Paige notes that consumers will inquire about and are willing to pay more for Australian-made products once they are aware of their origin.

Regarding policy, Paige suggests that policymakers need to understand the ground-level realities of product sourcing by visiting stores and interacting with staff and customers. This firsthand experience can influence their decisions to support Australian-made initiatives.

Bunnings: Mike Schneider, CEO of Bunnings, emphasizes the company's role at the heart of Australian homes and communities, supporting over a million small businesses and tradespeople. He highlights that Bunnings sells millions of liters of paint manufactured in Australia, tens of thousands of plants grown in Australia, and significant amounts of timber milled in Australia, creating real manufacturing and production jobs.

Schneider acknowledges that while Australian-made goods are fantastic and world-class, the current economic climate makes affordability a key concern for customers. He states that Australian-made products must be priced competitively against imported goods, as some Australian manufacturing comes with higher production costs. He believes customers are more focused on "value" than just the lowest price, and they will back Australian-made products if the value proposition is strong.

"Backing Australia" for Schneider means creating jobs, growing the business, investing capital, and reinvesting in existing stores. Bunnings also plays a role in driving housing needs by manufacturing frames and trusses and supplying trades. The company's extensive community programs and fundraising efforts underscore its commitment to local communities.

Schneider notes that Bunnings, an Australian-owned and created company, has a deep connection to Australia, from its origins in Western Australia to its current operations. He acknowledges the complexity and regulatory burden of running a business in Australia, including tax, process, and layers of government. Challenges in accessing skilled labor and lengthy development approval times are identified as significant hurdles, particularly for driving housing growth. He calls for the removal of regulatory burdens to allow businesses to operate more successfully.

Despite these challenges, Schneider asserts that Australia is an "awesome place" to do business, with amazing communities, customers, team members, and suppliers. He believes Australia is striving to be better and stronger, and this requires appropriate policy and regulatory settings.

Innovation and the Tech Sector

Technology 1: Ed Chung, CEO of Technology 1, a Brisbane-based software company, highlights that they "manufacture or write our own software here in Australia." The company has been exporting its products and solutions globally for 20 years, showcasing Australian ingenuity. Chung points to the significant value created by tech unicorns in Australia, citing a report of 20 tech unicorns in Melbourne creating $100 billion in value.

Chung emphasizes that ingenuity and skills, rather than vast capital, are key to building tech businesses like Technology 1. He coined the phrase "Fortitude Valley, not Silicon Valley," suggesting that Australia has the necessary components: excellent universities, abundant venture capital funding, and a need for supportive government procurement policies to turbocharge the local tech sector. He argues that government should prioritize buying local and supporting the Australian tech ecosystem.

Chung believes that the current environment, especially with AI, presents unprecedented opportunities for bright graduates with innovative ideas. He stresses the importance of government procurement policy as a crucial factor in supporting the tech sector and backing local businesses. He also notes that campaigns like "Back Australia" resonate with politicians and the community, highlighting the importance of local capability, wealth generation, and IP generation.

Australia Made: Ben Lazaro, CEO of the not-for-profit organization Australia Made, explains that the "Back Australia" initiative aligns perfectly with their mission to provide consumers with clarity about genuine Australian products, create jobs, and contribute to the economy. He states that 90% of Australians want to buy Australian products and will buy more if they know they are genuinely Australian.

Lazaro highlights that the Australia Made logo is registered across 34 classes of goods, with 4,500 businesses selling tens of thousands of products carrying the brand, representing over 40,000 jobs and $8 billion in combined revenue. Businesses see an uplift in sales when using the logo, driven by consumer demand for Aussie products.

He acknowledges that while there isn't always an Australian option, there are generally one or two in most categories, with particular strength in health and beauty, building products, and industrial products where safety and standards are critical. Australia Made ensures that products carrying its logo undergo a third-party certification process, giving consumers confidence in their Australian origin and their positive impact on the economy.

Lazaro emphasizes the tangible economic benefit for consumers: if every Australian household spent $10 a week on Aussie products, it would generate 10,000 jobs and $5 billion for the economy. He also stresses the need for a communal effort involving ideas, funding, and a supportive environment from government and industry to commercialize Australian innovations and keep them in Australia.

Lazaro is encouraged by the government's "Future Made in Australia" policy platform and advocates for realistic and definitive "buy Australia first" procurement policies. He points to the 2032 Brisbane Games as an example of a directive to seek Aussie products and businesses. He also calls for making the business environment friendlier for onshoring industries, creating an environment that supports Australian industry without picking winners.

Conclusion

The "Back Australia" campaign serves as a powerful call to action for consumers and businesses alike. It highlights the critical need to enhance Australia's international competitiveness by addressing structural issues like energy costs and regulatory burdens. The campaign underscores the significant economic benefits of supporting local industries, from job creation and value generation to fostering innovation and national pride. While acknowledging the complexities of global markets and consumer price sensitivity, the overarching message is that a collective commitment to backing Australian products, services, and innovation can lead to a stronger, more prosperous future for the nation. The interviews with CEOs from diverse sectors – media, banking, retail, technology, and certification – collectively paint a picture of a nation with immense potential, driven by ingenuity and a deep-seated desire to support its own.