End the ‘insane’ border shutdown: Paul Lederer

Paul Lederer’s investments have survived the COVID-19 shutdown, though one business got ‘smashed’.

Paul Lederer, chairman of Western Sydney Wanderers. Picture: Britta Campion

Paul Lederer has called for governments to quicken the pace of opening up restrictions to the economy, arguing it is “insanity” to still have several state borders closed in Australia when the number of coronavirus infections is low compared to many other countries.

The billionaire owns a collection of businesses that have had mixed times since the COVID-19 pandemic saw most businesses shut down from early March.

His dairy business has continued to trade reasonably and even his shopping centres have not been hit as hard as others, given they are anchored mainly by large supermarkets.

On the other hand, a hospitality industry supplier he owns has been “smashed”.

Lederer is now heading to his office in Sydney’s CBD every day and has noted an increase in traffic and activity around the city.

People are starting to return to offices, he says, and heading out to eat and drink. So he is impatient for restrictions to be lifted further and for business activity to take off around the country as soon as possible.

R I C H I E

“I think the shutdown of the (state) borders is insanity. This is not based on science, I think. It is political. The cure is becoming worse than the cause,” Lederer tells The Australian.

“Look, I think they have done very well from a health point of view but I think the governments have to open up things now. Not tomorrow, not next week. Today. Let’s try to get back to some sort of normality as soon as we can.”

Lederer made his fortune firstly with the part-sale and then an eventual full exit from the Primo smallgoods business he had built up with his late uncle Andrew before growth accelerated under his stewardship. Primo was sold in a $1.45bn transaction in 2015 to Brazilian company JSB.

His fortune was estimated to be $1.31bn on this year’s edition of The List — Australia’s Richest 250, published by The Australian.

He famously attempted to retire after the Primo sale, only to last about four days before deciding to look for opportunities in the food industry. He bought a dairy business in Sydney and after some other bolt-on acquisitions created Real Dairy Australia, now one of Australia’s biggest independent cheese processors.

While that has held up reasonably well, Lederer says another business — Tomkin, which supplies kitchenware and cutlery to the hospitality sector — did not.

“They got smashed, though probably not as bad as I thought would happen. Maybe it was down 70 per cent at the worst. Slowly things are starting to get better; there are small signs. The restaurants, clubs and pubs are starting to open, so it is beginning to get back to normal.”

Concern for economic recovery

Lederer also owns several shopping centres, many of which are in the south of Sydney or in regional centres across NSW. While the decline of physical retail assets is a clear trend, Lederer says his centres have performed at reasonable levels given the big supermarket chains continued trading.

“Most of them have a Coles and Woolworths, or an Aldi, in them. They’re probably 40-50 per cent of the turnover in those centres. The specialty shops have been slower, but again they’re starting to open again.”

Otherwise, Lederer has seen employees start to trickle back to the commercial buildings he owns, though he reiterates his concern that the economic recovery needs to quicken.

“I’m a positive person. I thought to myself you’ve got to get out and about. I’m the sort of person who likes to go out for a coffee or to see people. You’re starting to see more people around now. The offices are starting to get people back. Yes, it is slow. But there is a bit more optimism now.

“Everything depends on one thing: employment. If people are employed then they will have money to spend. One thing we can do is try to keep as many employees as possible, and we can start (on the recovery) today.”

Lederer is chairman of A-League soccer club Western Sydney Wanderers and heads the association of the owners of the competition’s clubs. The league announced plans on Monday to resume its 2019-20 season next month and finish in August.