Olympic city Brisbane still struggling to beat country town reputation

Brisbane may be the Olympic city, but corporate Australia still considers it a branch office at best with only a sliver of major ASX companies calling the river city home.

Brisbane may be the Olympic city, but corporate Australia still considers it a branch office at best.

Companies representing less than 5 per cent of the ASX in terms of market cap have their headquarters in the city, a distant fourth behind Perth and cementing Brisbane‘s long reputation as an afterthought in the boardrooms of Sydney and Melbourne.

The poor showing is despite Queensland representing 20 per cent of the Australian population and being a major mining, tourism and agricultural centre.

Thirty years ago Brisbane was derided as a big country town with a parochial mentality. The city’s tiny stock exchange, which still used chalk boards to write up quotes by hand, had only 26 companies worth more than $50m, a fraction of the wealth of southern cities.

A report in The Courier-Mail in May 1986 noted a “lack of control” of corporate and financial resources was a major obstacle to growth for Brisbane.

For veteran stockbroker Charlie Green, director of Hunter Green Institutional Broking, little has changed. “Queensland continues to punch well below its weight in corporate terms,” said Mr Green. Suncorp, Dominos, Aurizon, ALS, BOQ and NextDC remain Queensland’s top ranked companies in term of market cap. “It’s a pretty motley crew and other than Domino’s, and lesser extent NextDC, all pretty low growth,” he said.

Not everyone is convinced Brisbane needs to aim for more blue chip corporate HQs. LGIAsuper chief executive Kate Farrar said Brisbane’s economy was not underpinned by head offices but small businesses and start-ups. ”These businesses have the ability to pivot,” said Ms Farrar.

LGIA Super chief executiuve Kate Farrar.

The growing number of homegrown unicorns in the city — tech parlance for start-up firms valued at more than a $1bn — attests to Brisbane’s growing attraction for such firms.

Go1 co-founder Andrew Barnes, whose online education provider reached unicorn status last year, says Queensland’s great weather and lifestyle made it an ideal place to attract the talent necessary to build a billion dollar tech company.

The Sunshine State’s natural beauty, its good universities and relaxed lifestyle are seen as strengths that overcome its traditional role as a branch office location for southern firms.

The growth of the digital economy where offices can operate effectively anywhere on the planet is working in Brisbane’s favour, according to some.

Go1 chief ececutive Andrew Barnes.

BDO director of start-ups Marc Orchard says that while Queensland does not rival big tech centres such as Sydney, London or Silicon Valley, it was an increasingly attractive place for start-ups.

“The biggest things holding back Queensland in the past has been lack of capital, talent and the support of mentors,” said Mr Orchard. ”But now companies like Go1 are seeing their future in southeast Queensland. They have access to great quality graduates and people who want a more balanced lifestyle.”

Brisbane-based electric vehicle charging company Tritium, which last year sealed a $US1.4 billion ($1.8 billion) merger deal with a US investment firm, says it will retain its Brisbane HQ even when it lists on Nasdaq.

Tritium chief executive Jane Hunter.

The Queensland Government said the state had the right environment to attract leading companies, including better housing affordability, stronger population growth, lower commercial rental costs and more competitive tax arrangements.

A spokesman for Queensland Treasurer Cameron Dick said companies that had relocated their corporate headquarters or functions to Queensland in recent years include Rheinmetal, Boeing Australia, Kerry Food and Neogen Australia.

In June’s budget, the government launched a new $500m fund, Invested in Queensland, to attract more business to the state.

“We’ve also been able to ensure that companies including Virgin Australia and Ellume have remained based in Queensland despite overtures for them to move interstate or overseas,” said the spokesman.

He added Australian Bureau of Statistic data shows that by turnover or workforce size, the number of large national firms based in Queensland was roughly proportional to its size.

Ellume chief executuve Sean Parsons at the Ellume Production Facility in Brisbane.

Nationally there are 4336 firms in Australia with more than 200 employees. Of this number, 736 have their main operations in Queensland, or 17 per cent of the total.

Mr Green said Covid-19 might also give Queensland companies a boost, if the recent success of Brisbane based Ellume is anything to go by.

Ellume is currently pumping out 10,000 rapid antigen tests a day for the export market at its Brisbane factory.

Overall, Mr Green says Queensland remains a net importer of capital but hopes that will change.

“Queensland was late out of the blocks when Sydney and Melbourne were getting going in the 19th century,” he said. “There is so much opportunity for us to bridge the gap between our share of the national population, and share of the ASX. Maybe the Olympics is just the tonic we need to make that happen so we achieve a podium finish.”