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Australia might have had a record 26 years of economic growth, but now is not the time for timid leadership.
Australia might have achieved a world record, with 26 years of unbroken economic growth, but we’ve been flirting with recession regularly since the Global Financial Crisis.
The Australian economy grew by just 1.7 per cent year-on-year in the first quarter of 2017 — so confident leadership is more important than ever. Yet there seems to be a huge gap between the desire for real economic transformation and the ability of those in politics to deliver it.
This week, at least, surely, it’s time to be grateful for the small wins — after all the big day is nearly here. The Federal Government’s reduction of the corporate tax rate for small business comes into force on 1 July is particularly welcome. It’s a start, at least — and even more favourable changes will roll out over the next decade.
For many smaller and mid-size recruitment firms and for many junior miners and explorers, the drop in the tax rate to 27.5 per cent is welcome. Any small business with a turnover of under $10 million now has a little clear air to make new investments, employ more staff, and do their bit to help grow the national economy. This said, there aren’t many small mining companies with a turnover of $10million, that are turning any profit, so there probably isn’t much in it for that group.
I can’t help but think about how much more could be achieved for businesses and the national economy if our politicians had been able to find it in themselves to be a little bolder — to dig deeper and provide the kind of economic leadership and vision that will truly help transform our country. All the same, the tax cut is welcome.
I have argued previously that industry associations needed to be bold (if the pollies won’t) and propose their own new royalty regimes in return for some really big tax breaks. These would be seriously game-changing events, but alas the cynic in me realises they’re unlikely or, at best, a long way off.
Instead we seem to play around the edges and sometimes even the seemingly correct decisions aren’t popular
Here in WA our new State Government has decided to bring back a ban on uranium mining.
While our new premier might feel like he’s providing bold leadership by announcing a populist decision, it’s not the kind of bold leadership that is good for investment, job creation and our economy.
It’s also a nothing decision really because the ‘ban’ won’t affect the four uranium projects that have been approved already (Wiluna, Mulga Rock, Kintyre and Yeelirrie) — although it’s unclear what impact it will have on any secondary approvals these projects require when their current approvals lapse in a few years’ time.
Consider the effect of this decision on the industry. Cameco, which owns Kintyre and Yeelirrie, has already invested $1 billion in its projects — and is trying to develop them at a time when uranium prices have halved since 2011 and showing no signs of picking up.
The market is the market and there’s not much we can do about prices. But what does the WA Government’s decision do for confidence? At a time when we should be encouraging exploration and investment, we’re not just turning our back on a potentially lucrative industry and telling them they’re not welcome, we’re creating a climate of uncertainty that will reverberate across the wider resources sector — especially across the ‘unpopular’ commodities, including coal. Last month we commissioned a research piece on the touchy subject of Adani’s Carmichael mine. Read about the on again/off again process here. It’s a prime example.
Where’s the leadership in that? Sometimes the correct decisions aren’t the popular ones.
Leadership is certainty, the opposite of timidity.
Does 99 per cent of your staff approve of you?
But let’s end on a positive note. Let’s look at how good leadership can be transformative for an organisation.
Glassdoor recently announced its 2017 list of Highest Rated CEOs. The winner was the chief executive of US-based cleaning products company, Clorox — Benno Dorer.
Dorer received a 99 per cent approval rating from his employees, who rated him for his “focus on professional development, transparency, and his vision for the company.”
“What I care about is results, versus how many hours you put in,” Dorer said.
“I think all of our employees take great ownership of the work and the results, but I don’t care if you achieve those results working from home or working in the office or if you sent an email at 11pm or 11am — that is up to you.”
Challenging the norms of business operation, trusting your team, creating innovative work solutions to get the best results from your team – now that’s bold leadership.
A bold leader is someone who looks for opportunity, someone who sees the need for a change and makes that change. A bold leader takes on difficult challenges and makes the big and sometimes unpopular decisions. A bold leader is constantly looking for new ways to increase productivity and quality.
If only our political leadership could be as bold as our industry requires, imagine what we could achieve. In the meantime, it’s up to all of us to be bold leaders within our own organisation.
Steve Heather
Managing Director & Principal Executive Search
