KGB: Richard Goyder

B20 chair and Wesfarmers managing director Richard Goyder outlines the challenges and objectives for corporate Australia's policy agenda across the areas of trade, financial flows, infrastructure and human capital.

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Wesfarmers managing director and leader of the B20 advisory group Richard Goyder talks to Alan Kohler, Robert Gottliebsen and Stephen Bartholomeusz about:

-- What outcomes the B20 hopes to achieve

-- Why greater global consistency is needed on financial regulation and red tape

-- How the B20 will reach out to small business

-- Why a narrow, targeted policy approach will achieve better results

-- How technology can facilitate the movement of human capital

-- Lessons learned from previous B20 summits

Alan Kohler: Welcome to Business Spectator again. It’s good to talk to you.

Richard Goyder: Thanks, Alan.

AK: Now Richard, you’re chairman of the B20, which is attached to the G20. And at the meeting in September of the B20, you said the new government – with the G20 next year – has a brilliant opportunity to showcase Australia as a destination for foreign investment. So, how do you feel about the GrainCorp decision?

Goyder: Well, I stand by those comments. I think it is a brilliant opportunity to showcase Australia. Alan, I’m not going to get into the politics of GrainCorp. I think we need to be open for business, as the government has said, and be encouraging foreign investment.

AK: No. But they’re not open for business, are they?

Goyder: I don’t know the full details of the work that’s been done on the Archer Daniels Midland acquisition of GrainCorp, so I’m not going to get into the details of that particular one. But, yeah I think on balance Australia has been open for foreign investment and it’s really important that that continues.

Stephen Bartholomeusz: Since 2010, there has been a number of these B20 meetings. Do they produce real and effective outcomes?

Goyder: That’s our aim, obviously. Our aim is to ensure that we get some recommendations to the G20 leaders for the meeting in Brisbane next year, which leads to some definitive policy outcomes, particularly around trade, infrastructure and financial flows and human capital. I think the world is rightly saying at the moment is the G20 fulfilling what it was set up to do, which was to create roads and jobs? And I think it’s a great opportunity under Australia’s leadership to ensure that that happens and that we get some outcomes next November.

SB: There have been four or five of these B20 meetings previously. Have they produced anything tangible? And if they haven’t, why will your one be different?

Goyder: I think the answer is yes – but not enough. There’ve been agreements to have standstills on any measures that would restrict trade. There’ve also been some movement on trade facilitation and hopefully that’ll progress in its entirety this week. The thing about the G20, and the B20, is that it’s a policy advisory body. It’s not something that actually has a secretariat, or anything like that. 

Our aim is to get the G20 leaders to agree on some policies that will generate growth and therefore jobs. And I think it is worthwhile because last week in London, we had about sixty CEOs and chairs from businesses around the world. There’s a really strong view from those people that we need to get these policies right to generate growth in a low-growth world. I think we should be ambitious and optimistic.

Robert Gottliebsen: Richard, you’ve set up probably the best business panel I’ve seen in Australia with Messrs Smith and Sargent and Thodey and Mackenzie. To what extent will they be focusing on the local situation and to what extent will they be focusing on the global situation?

Goyder: Yeah, I think, Robert, a bit of both. You know, each of those gentlemen is running a significant business in Australia and for most of them with significant offshore operations. I think Andrew Mackenzie will bring a terrific global perspective to trade as well as, you know, obviously BHP Billiton has a significant domestic presence. 

On infrastructure I think Dave Thodey’s really well placed and Steve Sargent on human capital and Mike Smith on finance. So, I think some of both. But we’ve got a leadership group in Australia that will work with those individuals. They will also have on their taskforces a significant presence from overseas in terms of chief executives of other businesses, so I think we’ll get a good mix. But hopefully one key aspect that the Australian coordinating chairs of these businesses will bring will be a healthy dose of Australian pragmatism and desire to get things done.

SB: Richard, red tape has been something of great debate in Australia and recently it’s been elevated. In one of those work streams, at least the finance and growth one, there is a desire to try and get some greater global consistency and maybe less regulation or at least less regulatory creep. Is the global red tape an issue for business and is there anything the B20 can actually do to get that on the agenda?

Goyder: Yes, it is, Steve. And the reason is that, for good reasons after the global financial crisis, regulations were put in place, particularly around banks, in order to stabilise the financial situation. The unintended consequences of some of those regulations have been to restrict the flow of capital because of capital adequacy ratios, because of the risk ratios that are associated with some places where that capital is to go. 

There’s a lot of work being done right now on what those unintended consequences are. I think actually a key thing that B20 can do is: business can go to governments and say these are the issues. Not necessarily the banks, but businesses can go to governments and say these are the issues that have come about through these regulations and we need them either modified or lifted to ensure that capital can flow, so that we can get infrastructure. There’s a chronic shortage of infrastructure globally at the moment, but we can get that infrastructure investment starting to happen. 

RG: It is as good a panel as you’ll get in terms of large corporations, but where it’s weak is that the enormous part of our business community – and even the global business community – is in medium and smaller businesses.

A lot of the things that governments will have to do, whether it be here or overseas, will be tackling their employment-creating smaller enterprises. How are you going to fill that gap?

Goyder: I totally agree with you, Robert. I think it’s a really key issue and area. There is a bias to large business on the Australian B20 leadership group, although we’ve recently brought on Andrew Crane, who represents cooperatives. We’re also bringing on a representative of small- to medium-sized enterprises.

But it is really significant and we’re just going to have to make sure that we get input from business groups where there are small to medium-sized enterprises as members and, if necessary, we’ll go to some individuals to help us out. Because ensuring that there’s growth in that SME sector is critical and it’s critical to the economies of the G20, but it’s also really important for the larger businesses as well.

RG: In Australia, of course, we have an extra dimension in that our biggest superannuation player is now the self-managed funds. It’s not the institutions, so that too has gone into the smaller sector.

Goyder: I agree. We’re really acutely aware of it and we’ll be, as best we can, incorporating the views through those sectors.

AK: Richard, your press release said that you’ve reached a consensus on an approach to addressing existing and new ideas. Firstly, can you tell us what the approach is? What are you actually going to do, you and the four leaders of those four streams? And how will we know whether you’ve actually achieved anything?

Goyder: Good question, Alan. We’ve done a lot of work, and Robert Milliner’s done a lot of work, talking to business people, business groups and political leaders around the world over the past few months to get a view on what the priorities are. 

There are seven taskforces and the Russian President said the B20 will be reducing that to four. That’s the four you know about, which are: trade, infrastructure, financial flows and human capital. And that’s the consensus. The consensus from everyone has been: narrow the focus so that we can get things done. We’re likely to have achieved anything if we get a breakthrough on trade and trade facilitation – and hopefully that happens this week – in which case we’ll aim for more over the next twelve months.

AK: What do you mean by a breakthrough on trade facilitation? What does that mean?

Goyder: There’s a meeting in Bali this week, Alan, and hopefully we’ll get a breakthrough and countries will sign up to a reduction in red tape and all the things that they put in place to create barriers to trade – non-tariff barriers, if you like. 

It’s really significant. Bain and the World Economic Forum did some work last year, which indicated that there’s something like a 4.7 per cent global growth GDP opportunity by removing about half the trade facilitation barriers that countries have put in place. Effectively, it’s getting rid of all this red tape that stops product flowing across borders. That’s one. Increasing infrastructure spend is another, and that will be totally linked to financial flows. And then on the human capital side, there are some significant issues around the world with high youth unemployment. There are also businesses around the world that want access to well-educated people, and if we can break down those barriers – possibly through the use of technology – then I think that will be a great outcome as well.

SB: And are you talking about a kind of a global 457 visa program, are we, Richard?

Goyder: That’s really hard, Stephen, because countries protect their borders in many ways. But it may be that we can use technology, the digital world…

I’ve had business leaders, for example, in Silicon Valley saying they need more capabilities. Those capabilities may well be in Spain, but for various reasons they can’t access them. And it may be that we can work out ways where those human resource capabilities can be accessed for growth businesses in other parts of the world.

RG: Can I suggest to you that you could have fifth panel – and you might actually head it. And that is that the development of businesses in the next five years will be concentrated on the three-dimensional understanding of customers, of a much better understanding of where products and crops are doing and bringing together. Not just the ordinary data that you currently get, but actually making it live in terms of business strategies and in terms of customers. At Wesfarmers, you have the chance to do that by integrating Coles, Bunnings, Kmart and Target in terms of understanding your customers on a three-dimensional basis.

Goyder: I think I’ll take that on board as a Wesfarmers task, not a B20 task, because we’ve set ourselves some strong objectives for the next twelve months and that time will go pretty quickly. Our B20 summit will be in Sydney in July next year and the leaders’ summit is less than 12 months away. I don’t disagree with you – I think that’s a key issue – but I think I’ll tackle that with my Wesfarmers hat on.

AK: Smith, Sargent, Thodey and Mackenzie: are they going to work towards presenting to the G20 Summit or the B20 Summit next July?

Goyder: What will happen is that their taskforces will meet and agree on recommendations, and they will be tested at the B20 Summit in Sydney next year in July. And after that Summit, we’ll finalise our recommendations. We’ll have several months of advocacy back into the G20 political leaders and then we will put those recommendations also to the Australian government. Hopefully we’ll have an opportunity to put those recommendations to the G20 leaders in Brisbane in November next year.

AK: I must say that’s a bit less certain than I would’ve expected – that ‘’hopefully’’ you’ll have an opportunity to put it to G20.

Goyder: We’ll certainly have an opportunity.

AK: So, you will certainly have an opportunity?

Goyder: Yeah. And we’re working with the G20 ‘Sherpas’. We’ll have good access to the G20 finance ministers meetings that our treasurer will be chairing. The first one is in February next year in Sydney and I think Treasurer Hockey will be chairing at least three G20 finance ministers meetings. I think we’ll have access to each one of those, and we’ll certainly have access to the G20 leaders meeting in Brisbane next November.

AK: So the B20 recommendations will go onto the agenda of the G20. Is that right?

Goyder: Yes. And obviously it’s our strong desire that those recommendations are very focussed and outcome oriented. 

AK: As Bob was suggesting, the four people at the head of the taskforce and yourself are practically minded people; everyone’s going to want to come up with something specific. Is that right? You’re going to specifically recommend things that the G20 people ought to do?

Goyder: That’s absolutely right, Alan. The business world is hoping that, through a focus on getting things done and a good healthy dose of pragmatism, we can get some outcomes next year.

AK: What did you learn, if anything, from the Russian B20? Did they get anything done at all?

RG: They did some terrific work in their taskforces, but they had something like 80 recommendations. Over the last four or five years, Alan, there have been about four or five hundred recommendations. Frankly, that’s just too many.

We may be more like a handful, but we’ve got a very strong focus on getting some things done. So, we’d say that the Russians and their predecessors, the Mexicans, did a very good job, and they’ve done a lot of the ground work in terms of the research for these taskforces. And our approach now is a lot of the work’s been done – let’s get some action happening.

AK: I suppose the danger with only having a handful of recommendations as opposed to a bucket load is, at least if you’ve got a bucket load of manure. If you’re throwing it against the wall, some of it might stick; you might actually miss out with only a handful.

Goyder: There’s a risk, Alan. In the past, people have judged the success of B20 by the number of words that have been transcribed from the B20 recommendations to the G20 communicators, and frankly I’m not interested in that.

 I’m interested in some real action and that’s what we’ll have a good hard go at. The other risk if something happens globally, that takes the attention of the G20 leaders meeting when that occurs. That’s always a risk – we may have to adapt as the year unfolds.

RG: I can’t recall Australian CEOs being involved in anything like this before. 

Goyder: Mike Smith has been involved on the finance group for a while. Mike Burrows has been involved. So there’s been some involvement. But, you know, the business community’s really stepped up in Australia on this one.

SB: Richard, you and the four taskforce leaders all have rather big day jobs. How do you cope with the demands of this, or aren’t these work streams as demanding as we might think they would be?

Goyder: The answer, Stephen, is you get a Sherpa. Robert Milliner is doing a brilliant job heading up the B20 effectively as a chief executive officer. There will be some time commitments for me next year, but we’re managing that really carefully and I’m very clear that my priority is Wesfarmers. I’ve no doubt that the other four taskforce leaders are very clear on their priorities as well. But they’re very capable people who will be good leaders at these taskforces and they’ll also get support from our B20 office, from government – where the government can help us – and from the B20 leadership group in Australia.

AK: I suppose it’s the old saying: that if you want something done, give it to a busy person to do.

Goyder: There’s a bit of that in the taskforce leaders that we’ve selected. But they were really keen to be involved as well.

AK: Thanks for joining us, Richard.

Goyder: It’s a pleasure. Thank you

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Wesfarmers managing director and leader of the B20 advisory group Richard Goyder talks to Alan Kohler, Robert Gottliebsen and Stephen Bartholomeusz about:

-- What outcomes the B20 hopes to achieve

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