Chairman’s welcome
President Roy Garrett welcomed a total of 108 Rotarians, guests and friends to the inaugural Business Leaders’ Breakfast. He stated that proceeds from this fund raising event will help pay for Silk Miller scholarships provided by RCCMS to members of Victoria Police, to study adolescent health and wellbeing at the University of Melbourne, through the Centre for Adolescent Health.
Special guests
Guest Speaker Leigh Clifford AO and Suzie Clifford. Actg. Sergeant LizToffoletti.
DG Dr Murray Verso.
Toast to Rotary International
DG Murray, declaring that Rotary is a remarkable force for good in the world and that Rotarians are proud to practice Service Above Self, led the toast to Rotary International.
Acting Police Sergeant Liz Toffoletti
President Roy introduced Liz Toffoletti, the 2014 Silk Miller Scholar, now in the 2
nd year of her Masters of Adolescent Health course and currently seconded to the Community Safety Group in the Corporate Strategy & Operational Improvement Department, Victoria Police.
Liz stated that she was representing past recipients of the Silk Miller scholarship and also commented that through Rotary she had previously participated in a Group Study Exchange (GSE). She offered insights into how her university training, where she learnt developmental theories, melded with her work experience. Liz’ particular field of interest is the interaction of young people with the police and her Masters course is helping her to take her understanding to a new level.
Guest Speaker
President Roy introduced Leigh Clifford AO, between 2000 and 2007 Chief Executive of Rio Tinto Group and currently Chairman of Qantas Airways Limited. Roy recounted how he and Leigh have been friends for many years and remembers him as being intensely competitive on the tennis court.
President Roy stated that Leigh was impeccably qualified to speak at the inaugural Business Leaders’ Breakfast on the subject of “Current Challenges facing Australian business”.
Leigh Clifford started his address by offering to provide a tour of areas he had been involved in during his career. He said that he had been with Rio Tinto for 37 years before becoming Chairman of Qantas and described himself as a mining engineer on the wingtips of aviation.
Leigh said that Australians are experiencing a lot of uncertainty at present and that the Government is having difficulty getting the message across about the seriousness of the very high household debt to GDP ratio, which is rising rapidly. The resources boom, the biggest since the 1850s, insulated Australia from the GFC due to demand from China and the young, in particular, remain unconvinced about the problem.
Now, although resources production is booming, the construction boom has come to an end and prices are falling. The very high prices for iron ore experienced last year were a spike and $60/tonne is a good price. So second tier producers are feeling the squeeze and private equity potential buyers are in the wings. But with minerals, timing is everything and Australia’s rule of law stands it in good stead in the eyes of investors. Leigh said he currently favours chromium, copper, lithium, coking coal and uranium as investment opportunities.
Turning to aviation, Leigh stated that Australians are lucky to have a strong Qantas and that last week’s profit announcement vindicated actions taken by Alan Joyce in stripping $2B in costs out of the airline. He acknowledged that Qantas had failed to tackle the big issue of labour, not helped by the collapse of Ansett, which made life too easy for Qantas. However, recent competition has helped to strengthen the airline, which is now benefitting from cheaper oil and a weaker Australian dollar.
Leigh stated that Qantas has four focus areas: cost reduction, customer satisfaction, fixing the balance sheet and rewarding shareholders.
Leigh then answered questions from the floor. To the question of what is a chairman’s role, he said that a chairmen needs to ensure that boards keeps out of the weeds. They should focus on strategy, major capital applications, key personnel and Governments. He maintained that boards need diversity of experience and quoted the appointment to the Qantas Board of Todd Sampson, with his consumer viewpoint, as an excellent example.
Asked about inbound tourism, Leigh said that tourist numbers from China are increasing dramatically, unlike Europe although the US numbers are encouraging. However, in contrast to New Zealand, Australia is not well endowed with 5 star tourist destinations and China is going to demand higher standards, especially with city based tourism.
In response to a question on free trade agreements, Leigh stated that benefits are already flowing, especially in agriculture. He also pointed out that increased trade is a good way of minimising conflict between countries, due to interdependencies built up. Nonetheless, he acknowledged that Australia is a high cost manufacturing country, so the emphasis needs to be on skills rather than labour. He pointed to education of international students as being a good example of such an export industry.
President Roy’s closing
President Roy thanked Leigh Clifford for his insightful address and presented him with a copy of Jeremy Scott’s book “The Long Road from a Broken Heart”. He thanked visitors for attending and closed the meeting.
We look forward to hearing from the Group Study Exchange team from District 6840 which serves southeast Louisiana, including New Orleans and the Mississippi and the Gulf Coast. Team Leader Carl Michel and team members Alex Michael, Kait Sukiennik, Chris Vignes and Matthew Winterkorn will share with us their experiences so far and tell us about there lives back home.
Business Leaders Breakfast -108 Guests, $2700 raised for the Silk Miller Scholarship.
