Australasia: More than luck, mate

03 March 2003 00:00  [Source: ACN]

Businessmen want to be posted there. Asians want to migrate there. What is Australia’s attraction? Lifestyle – helped by a climate that enables farmers to grow anything and produces sportsmen who have shone on the world stage, suggests James Dallmeyer

Sydney, December 1979. The sky is so blue, it hurts. The colours are so vivid, the entire bush seems to vibrate, especially when the light is reflected off the harbour. Out of a drab London winter after a 36-hour flight, we are picked up at the airport by friends and taken back to their home for breakfast - eggs, bacon, lamb's liver, kidneys, steak, tomatoes, beans and coffee or beer. They're all so healthy-looking, fit and tanned. We are translucently white. We comment on the size of the breakfast. 'For us Australians, a three-course meal is a pie, a pint and ketchup,' our host jokes. Actually, as we realise later, he's not joking.

First impressions. That was almost 25 years ago - at a time when Australians were only just starting to throw off the 'cultural cringe' - an inferiority complex that was a legacy from their convict and colonial past. Now they were beginning to emerge from the aridity of the 'whites only' immigration policy that had endured for the first half of the century as a new wave of European and Asian migrants began enriching every aspect of Australian life.

We were rare birds then - voluntary immigrants who were not running from political persecution or poverty - only from the dreadful British weather. Now it seems that every second person we meet in Asia has applied for permanent residence or citizenship, or is considering doing so.

What is more, in a recent global survey of business executives, Melbourne and Sydney emerged in the first four of the top ten cities where businessmen wanted to be posted. The question is why?

The simple answer is 'lifestyle'. This is helped immeasurably by the climate - Darwin in the tropics, the semi-tropical heat of Brisbane and the Gold Coast, the balmy Mediterranean weather of Sydney, the sometimes barmy weather of Melbourne and the temperate climate of Tasmania.

Australia's weather has two major effects. It means the farmers can grow everything - from tropical fruits, citrus, stone fruits, apples, tomatoes, avocados, grapes and strawberries to vegetables of all sorts, not to mention grains such as rice and wheat. Australians are now producing and consuming excellent fresh produce, including a wide variety of breads, cheeses and dips which were not on the market even a decade ago. It will not escape anyone's notice that this produce, as well as Australian meat and seafood, is highly prized when it appears on Asian supermarket shelves or in Asian restaurants.

And what about Australia's excellent wines? Don't tell me you still buy French or Italian wines when you go to the supermarket? Worse still - Californian wines!

Many of the winegrowers, farmers and fishermen producing this cornucopia of goodies are first-, second- and third-generation families from as far afield as Italy, Chile, China and Greece. While they have demonstrably become 'dinky-di' Aussies in the years they have been in the country, most have retained the habits, social mores and skills of their forefathers. Without them, Aussies would still be eating pies and drinking pints, which many still do anyway, especially at sporting events - comfort food, perhaps, in case their team is on the losing side?

These same immigrant families were also responsible for opening a myriad restaurants in all the major cities during the 1980s and 1990s. Believe it or not in 1979, Sydney had only one restaurant where you could dine outdoors on the harbour - Doyles. I know because we researched it. Now there are thousands of them around the harbour and elsewhere across the city.

To give an idea of how much of a melting pot Australia has become, immigrants from some 120 countries across the world now call the country home, and over half of the 20m population were born overseas.

Australia's clement weather is also responsible for the fact that most Australians spend much of their time in the healthy outdoors, swimming, surfing, playing tennis or team games such as cricket, rugby or hockey. Sport being something of a religion in Australia, it is impossible to avoid the conclusion that Australians regularly hit far above their weight on the world sporting scene. The Aussie parade of world sporting champions is endless, and in just about all sports, teams and individuals display a grittiness and mental toughness which gives them the edge over their rivals, while demonstrating a natural athletic ability which seems to be in-bred.

This mental and physical resilience - the 'can do' attitude - almost certainly has its roots in the ability of the early settlers and their descendants to overcome the sub-continent's vast distances, to settle the land in spite of its harshness and unpredictability, and to adjust to a life that was never easy.

Distances in Australia are mind-boggling - the entire country being the same size as the 48 states of the continental US, albeit with desert dominating much of its red centre. Those early settlers, mostly Anglo-Saxons, Scots, Irish and Chinese, were hardy pioneers in a vast and difficult landscape that was impossible to subdue - yet they endured to hand down this legacy of toughness to successive generations.

This would appear to be at odds with the popular perception in many parts of the world that Australians would rather be downing another drop of the amber liquid in the pub or heading for the beach rather than staying back in the office to work.

While most Australians do project a friendly, egalitarian, easy-going attitude to life, friends, work and strangers, it would be a mistake to misinterpret this approach to life as laziness. Since Australia went through its last recession in 1989-91, when the then Prime Minister Paul Keating warned that the country was in danger of becoming a 'banana republic', the work ethic across the nation has picked up markedly. Your average Australian may still work for only eight or nine hours a day, but he or she works damned hard during that time.

Certainly, the dozens of Australian chief executive officers currently running multinational businesses in the US, Europe and elsewhere seem to be able to find the mental steeliness they need to be able to do their jobs effectively.

If Australians are making their mark in world business, winning at sport and expanding their food and wine exports, they are also showing the kind of creativity that was largely missing in the first half of the last century through their current contribution to the global film industry, literature, the arts and entertainment.

Australian film stars, directors and cameramen now accumulate top awards with monotonous regularity. Hollywood apparently likes them because they are hard-working, down-to-earth and have few airs and graces, unlike many of their home-grown stars.

Australian writers such as Peter Carey, David Malouf and Tim Winton regularly feature in the latest Booker Awards - it is a little known fact that Australians read more books per capita than any other nation. Meanwhile artists such as John Ohlsen, Colin Lanceley and Mike Parr are beginning to receive the worldwide acclaim they deserve.

Most migrants and visitors to Australia gravitate to the big cities on the eastern seaboard - Brisbane, Sydney and Melbourne - where almost 90% of the population live. The cities are supported largely by the burgeoning services sector which now accounts for about 70% of the country's GDP (gross domestic product). Four out of five Australians are employed in an estimated 1.1m services businesses, including business, finance, property, health, education, hospitality, recreation and tourism, with the latter making a particularly significant contribution.

After the services sector, commodities play a big role in underpinning the strength of the Australian economy. Annual exports of all commodities have more than doubled in value over the past decade to around the Aus$120bn (US$71bn)mark and there appears to be no limit to the country's potential as the world's leading miner for decades to come.

Australia holds the world's largest known resources of bauxite, iron ore, lead, zinc, silver, uranium, industrial diamonds and mineral sand. Known reserves include 69bn tonne of black coal, 18bn tonne of iron ore, 2.5bn tonne of bauxite and 3400 tonne of gold.

In Western Australia, which has a land mass about the same size as the whole of Europe with a population of just 1.5m, vast tracts of desert have yet to be prospected. The state has more than three-quarters of Australia's identified natural gas resources, with the value of sales of minerals, gas and petroleum products currently standing at more than Aus$25bn annually.

Australia finished the 1990s as the world's second fastest-growing developed economy - behind Ireland, averaging growth over the decade of nearly 4%. The Australian economy entered the new millennium in its best shape for 30 years, with a rare convergence of strong growth, low inflation, low interest rates and falling unemployment.

The result was that the Australian economy continued to perform better than most in the aftermath of 11 September 2001, although growth is expected to slow slightly in the first half of 2003 before a gradual pick-up later in the year.

Domestic demand has been fuelled by rapidly rising housing prices. This has enabled consumers to raise second or third mortgages to sustain their preferred lifestyles.

How long this will last is anybody's guess, but Australia is currently one of the few countries in the world where there is a genuine sense of optimism about the future direction of the economy.

In 1964, author and academic Donald Horne wrote a famous book entitled 'The Lucky Country.'He used the term 'lucky' ironically, meaning that Australia had had the good luck to develop as a nation at a time when it could benefit from the technological, economic, social and political innovations that had been developed by other countries. The book was essentially a trenchant criticism of the country's social and political values at that time, insisting that Australia was a lucky country run mainly by second-rate people who shared its luck.

The book was widely misinterpreted by journalists and commentators, to the point where they adopted 'The Lucky Country' as a synonym for Australia, taking it literally.

In the book, Horne warned that the nation would never graduate to being the 'Clever Country' and later the 'Knowledge Nation' unless there was a fundamental change in the way Australians thought and the way they made their living.

Looking back, he now acknowledges that the necessary changes have been made.

For anyone who still believes Australia is fundamentally a racist country, Horne responds: 'There is diversity and tolerance (in Australia) with almost no inter-group violence. With ethnic violence on the rise elsewhere, Australia may well show the world the way to harmony. There is a very low level of civil or political violence. Things work despite a relative absence of public displays of patriotism. Governments seldom attempt to manipulate patriotic sentiments to maintain unity or contain dissent.'

Forty years after 'The Lucky Country' was published, there is ample evidence to believe that those misguided souls who missed Horne's irony have now turned out to be right.

Where you play by the rules or pay the cost

Writing about 'Doing Business' in most Asian countries is a pretty simple business - first tell an anecdote to illustrate how, in Western eyes, corruption is endemic in the business culture , then go on to outline all the pluses and minuses of doing business in the country in question.

Australia is the exception to the rule. Indeed many would argue that it is not even a part of Asia, no matter how much successive federal governments would like Australians and their Asian neighbours to believe otherwise.

Of course corruption and malpractice does exist 'down under', as such high-profile cases as those involving the likes of Alan Bond and Christopher Skase clearly illustrate.

The fact is that the Australian legal system is extremely stringent and rigorous when it comes to winkling out such 'wide boys' and corruption is not generally allowed to go on for long before the law intervenes.

The wrongdoings of Bond and Skase would probably have gone undetected in most Asian environments.

Businesses in Australia are hedged in by a raft of regulations, enforced and policed by federal and state watchdogs.

If large-scale fraud is suspected, the government frequently resorts to setting up a special Royal Commission with even more sweeping powers to investigate the allegations. This rigorous approach does have its detractors.

'Sometimes I wish the b***** would just pull their heads in and leave us alone. There's far more corruption at all levels of government with MPs and councillors taking backhanders for okaying contracts. Why don't they go after that lot?' asks one senior executive in frustration.

Nonetheless, the result is that Australian business is carried out in one of the most open environments in the world with the kind of visibility that would be unthinkable in most of Asia.

Lesson number one for Asians wanting to do business in Australia - play it straight, abide by the rules, otherwise pay the cost. This could be interpreted either as a plus or a minus.

Another minus for Asians considering doing business 'down under' is that there is relatively little business to do.

Australia has a tiny domestic market with a population of under 20m. Stack this up against the giant markets of China or India, both of them around or above the 1bn mark, and you will see why foreign investors tend to focus on the larger markets - even if the spending power in these markets is at a lower base than Australia's.

Add to this high wage costs, bolstered by decades of strong trade union bargaining, and you begin to understand why there is little foreign investment in greenfield projects.

A case in point is the proposed development of a gas-processing centre on the Burrup Peninsula in Western Australia. A number of major overseas methanol and ammonia/urea players have been attracted to the site by the offer of a plentiful and relatively cheap supply of natural gas from the North West Shelf and adjacent fields.

However, all the players - among them Canada's Methanex, Dampier Nitrogen which includes Agrium, Burrup Fertilisers, part of India's Oswal group, and GTL Resources from the UK - are faced with capital construction costs which are two or three times higher than those in other parts of the world.

'The Burrup is attractive because of its location close to Asian markets and the cheap supply of high-quality gas,' says a senior executive of one of the companies considering building a greenfield site. 'However, construction costs are prohibitive.'

Notwithstanding, all four of these companies have pressed ahead with their plans, having negotiated their way past Australia's stringent environmental protection requirements and settled the often thorny issue of Aboriginal Land Rights.

'We thought these hurdles would be much tougher to get over than they actually were,' comments another executive.

Just as Australia's strict legal system is a legacy of its colonial past, so is its highly combatitive political system.

Parliamentary question time in Canberra often deteriorates into an orgy of mudslinging with government ministers and their opposition counterparts hurling colourful epithets at one another across the chamber.

This appears to allow politicians an outlet to vent their spleen. Political violence has been almost non-existent in Australia, which is widely regarded as one of the most politically stable nations on earth.

Australian taxes do seem inordinately high - corporate tax stands at 30% and personal income tax has a top marginal rate of 47% cutting in at Aus$60 000/year.

The reason for these high taxes is that a relatively low base of taxpayers supports an ageing population, as well as Australia's costly welfare and health systems.

In addition, maintaining infrastructure - roads, railways, bridges etc - over such vast land is a very expensive business.

Cynics would also say too many legislators and bureaucrats are being supported by the federal and state governments. It is just possible that they have a point.

Against these negatives must be balanced the positives that Australia is a developed western nation, with sophisticated financial institutions and an excellent infrastructure, a thoroughly efficient communications system and a well-educated workforce with a high degree of technological know-how.

Oh...and there's also that highly desirable lifestyle to consider!

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