With excellent growth in the resources industry in recent years people are saying that the influence of Melbourne and Sydney is fading as the new growth states of Queensland and Western Australia take centre stage.
Unfortunately for Queensland, this is not the case as it is losing corporate head offices faster than any other state in the country.
This has serious implications in the state for those with career aspirations, with the loss of high level executive head office positions; for corporate sponsorship with decisions being made elsewhere; and for cultural and artistic endeavour.
If you examine a list of the top 500 companies in Australia 25 years ago, 15 years ago, five years ago, and to-day, you will find there are less Queensland-based companies on the list now than at any other time during the past 25 years. This is despite the incredible growth in the Queensland economy in this period.
The list of head offices we have lost in Queensland makes interesting reading. Included are such companies as Allgas, Allied Queensland Coalfields, Arco Coal, Australian Provincial Newspapers, Besser Queensland, Bundaberg Sugar, Castlemaine Perkins, Crusader, Evans Deakin, Grainco, Incitec, Kern Corporation, Leuteneggers, Lloyd’s Ships, MIM Holdings, Pioneer Sugar, Primac, Queensland Nickel, QUF, Queensland Cement, QCT Resources, Queensland Rubber Company, Qintex, Telecasters North Queensland, Thiess, Utah and more.
As a result, decisions are now taken in boardrooms in Sydney, Melbourne and elsewhere with, at times, little understanding of the Queensland environment. Of course during this time we have gained substantial organisations such as Flight Centre and Virgin Blue but we have lost many more companies than we have gained.
Concern is now being expressed that we will soon be losing the head office of UNITAB. This former government-owned corporation was privatised a few years ago and is now the centre of a takeover battle between Tabcorp Holdings and Tattersall’s. Whatever the outcome of the battle, it is likely, if one of them is successful, that the new head office will not be based in Brisbane.
Statistics indicate that Queensland, with around 20 per cent of the population of Australia, has only 2.2 per cent of the market capitalisation of the top 100 companies on the Australian Stock Exchange (ASX) and only four head offices. Whereas New South Wales with 33.3 per cent of the population has 48.4 per cent of the market capitalisation and 54 head offices, and Victoria with 24.7 per cent of the population has 41.1 per cent of the market capitalisation and 30 head offices.
In addition, as a consequence, we have lost a large number of executive positions that are normally found in a company’s corporate headquarters, for example, chief executive officers, finance directors, heads of treasury, marketing directors, brand managers, corporate PR executives, company secretaries and many other senior corporate executive roles, together with their supporting staff.
A classic example of what has happened is Castlemaine Perkins, known more affectionately as XXXX. Twenty years ago it was an iconic Queensland company. Its chairman and members of the board lived here and as did all of its senior executive team. To-day it is just a brewing factory and sales force; everything else has gone. Major functions along with major decisions are based and made elsewhere.
These losses of senior executive roles have serious implications for Queensland with regard to career opportunities and the roles these types of individuals play in our society. These are the people with high disposable incomes and spending power that can have a great influence on the economy of the state. They are the individuals who support the arts, attend orchestral concerts, the theatre and opera, and visit art galleries. They tend to be well educated and support strongly the development of our secondary and tertiary institutions.
The trend is dangerous: for promotional opportunities people developing their careers now have to move to Sydney or Melbourne. A number reject these opportunities for the sake of their families and the lifestyle here.
We wish the loss of these corporate head offices was not so and hope the present growth in resources will reverse these trends and encourage boards of companies, with substantial interests in Queensland, to locate their head offices here also. One would have thought there would be an excellent case for the CSR head office to be located in Brisbane rather than Sydney. For a start it would be considerably cheaper for them in the long run, but their board is unlikely to make this decision since they are all comfortably ensconced in Sydney.
We need a concerted effort from the Queensland Government and the current corporate sector to market strongly the advantages of having corporate head offices based in Queensland and to sell the opportunities here.
In addition, major corporate and other organisations, both private and public, must be encouraged and shown the benefits of utilising locally owned and managed organisations for a range of services including legal, accounting, stock broking, public relations, advertising, executive search and selection and many others. This will encourage the local business environment and ensure that we have a highly professional and expert group of organisations that can provide a range of services at least as good, if not better, than those found in Sydney and Melbourne.