Terry McCrann: BHP remains business foundation of our economy

BHP is not quite as big as it was a few years ago but, even with today’s much lower profit, it remains the ­absolute business foundation of our future prosperity, writes Terry McCrann.

BHP is not quite as big as it was a few years ago but, even with today’s much lower profit, it remains the ­absolute business foundation of our future prosperity. Picture: Aaron Bunch/BHP

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BHP really is the “Big ­Australian”.

It’s not quite as big as it was a few years ago — at the peak of the China-driven resources boom, it briefly made as much profit as all four big banks combined. And it made that money from foreigners, not ­locals. But that’s another story.

But even with today’s much lower profit, it remains the ­absolute business foundation of our economy and our future prosperity. “Take BHP out of Australia” and we really would be heading for an Argentinian — or Venezuelan — future.

That’s why it is difficult to think of anything that’s more in the fundamental national interest than ensuring that BHP is not “taken out of Australia”; that it remains first and foremost “Australia’s BHP”.

This means largely owned by Australians, headquartered in and operated out of Australia, and certainly controlled by Australians — even if it draws its top executives from the ­global talent pool.

This is why what the Treasurer has announced is fundamentally in the national interest — indirectly but clearly in every one of your interests.

It is also very reassuring that “keeping BHP Australian” is one of the few things where we’ve got genuine bipartisan consensus. Two weeks ago, Opposition Leader Bill Shorten made ­exactly this call on the government. He will obviously now endorse it.

Let’s head two things off at the pass, assuming the statement from the Treasurer is ­attacked for “interfering with the market”, overriding the interests and rights of BHP shareholders, and indeed raising so-called “sovereign risk” concerns in global financial and investment markets.

There’s a two-word ­response: absolute poppycock.

First off, all Scott Morrison has done is to repeat the conditions of the approval process in 2001, which allowed the old BHP to merge with the British-South African Billiton.

BHP chief executive Andrew Mackenzie and federal Treasurer Scott Morrison at an AFR business summit in March last year. Picture: David Geraghty

Certainly, he’s repeated them very “robustly” — talking of “criminal sanctions”; and it’s unusual, if not unique, to rule out a specific foreign ­investment proposal before it has even been made.

But it’s not only justifiable but indeed appropriate. Better to make it absolutely crystal clear now, so that the market for BHP shares is fully informed — especially given the opportunistic, if not outrightly manipulative, nature of the ­investor stalking BHP.

Second point, Morrison — and by clear implication prime minister Malcolm Turnbull — have not gone all hairy-chested “Donald Trump”.

Yes, they’ve “built a wall” — around BHP. But it’s fully in accord with a normally functioning market. Just like the also sensible decision to keep some of our gas — shock horror — for Australians.

Originally published as Terry McCrann: BHP remains business foundation of our economy