Royal commission ‘dishonesty’ drags confidence in big business to all-time low: Origin’s Gordon Cairns

Origin chair says confidence in big business has sunk to an all-time low as bank inquiry “dishonesty” tars reputations.

Origin Energy Chairman, Gordon Cairns, prepares for the company's Annual General Meeting, in Sydney on Wednesday, Oct. 19, 2016. (AAP Image/Paul Miller) NO ARCHIVING

Origin Energy had conceded confidence in big business has sunk to an all-time low as the impact of the banking royal commission spreads across corporate Australia.

Chairman Gordon Cairns, also a director of Macquarie Bank and a former board member of Westpac, said it was critical for the energy operator to have the right culture including a “noble purpose”, a vision and appropriate values.

“At a time when confidence in big business is at an all-time low, and when the keynote message coming out of the royal commission into banking is ‘dishonesty’, this is an imperative,” Mr Cairns said at its annual general meeting in Sydney today.

New energy minister Angus Taylor has accused the energy giants of acting like the Big Four banks in breaching the trust of Australian consumers and warned in August the government is prepared to “wield a big stick” to reduce high power prices if needed.

That sparked talk the government may replicate the banks’ royal commission with a similar examination of the energy sector.

However, Mr Taylor struck a more conciliatory tone last week saying electricity prices had declined and the big power companies were starting to listen to both consumer concerns and the threat of government action.

“Work with me to deliver and the big stick can go back into the bag,” Mr Taylor said.

The power company’s boss Frank Calabria reiterated the company’s 2019 financial outlook but warned the sector also faces a combative debate over energy and climate policy.

“We are facing pressures in our operating environment, in particular the threat of increasing regulatory intervention. We will continue to actively engage with governments to inform the development of sensible policy that does not distort the market,” Mr Calabria said. “The past few years have demonstrated what can happen when the objectives of energy policy get out of balance and how affordability is impacted if security isn’t addressed.”

Origin (ORG) said the signal to invest in dispatchable generation has been missing in recent years although it backs the government’s bid to revive the national energy guarantee’s reliability mechanism at a COAG meeting later this month.

The company also reiterated its plan to push ahead with its prospective Beetaloo shale prospect in the Northern Territory. It also plans to clarify its involvement where necessary with industry lobby groups given shareholder interest in understanding whether Origin’s objectives are aligned with public policies.