Business bullish on Joe Biden takeover

Joe Biden’s agenda to provide opportunities for Australia, but there’s a warning.

Former Dow Chemicals CEO Andrew Liveris. Picture: Nikki Short

Business leaders are optimistic the Biden administration’s ambitious infrastructure and climate change agenda will provide major opportunities for Australian companies but warn it could usher in an era of higher taxes and stricter regulation.

Former Dow Chemicals chief executive Andrew Liveris predicted the Biden administration would spend on projects such as improving water systems, the electrification of railways, installation of more charging systems for electric vehicles and more renewable energy projects.

“We can expect some $US2 trillion to $US4 trillion in capital expenditure in the next several years under the Biden administration,” Mr Liveris, who is deputy chairman of Worley and a director of IBM, Saudi Aramco and Novonix, said.

He said there was a possibility president-elect Joe Biden could appoint an infrastructure tsar to help co-ordinate big-ticket infrastructure spending, just as he had announced former US secretary of state John Kerry would be a special envoy for climate change.

“This is going to become a big government in terms of the green agenda,” he said. “It could mean that the US becomes a leader in things that are energy-driven in the climate change agenda, whether it be photovoltaics, batteries, renewables, charging stations.”

“This will bring lots of opportunities for Australian companies which have the right products and technologies,” he said.

Mr Liveris said he saw the Biden administration as an experienced team with big ambitions for projects that could “invoke memories of Franklin Delano Roosevelt and the New Deal, and some of the aspirations … (Barack) Obama had.”

“The negative (for business) is that we have to be very conscious of what regulations get rolled back from the Trump era to the Obama era. That is what business is worried about.”

Mr Biden’s policies involve an increase in the US corporate tax rate from 21 per cent to 28 per cent, repealing the 2017 cuts of the Trump administration, a move that could put pressure on the Australian government to cut corporate tax rates.

Rob Scott, chief executive of Wesfarmers, said the Biden administration’s plans to “heal some of the divisions in US society, build greater trust in the institution of government and, hopefully, revert to more constructive alliances internationally, including on climate change policy’’ would be interesting. Progress in these areas would be good for the world and therefore Australia.

Tony Shepherd, chairman of Macquarie Specialised Asset Management and Infrastructure South Australia, said restoring political stability in the US would be essential in rebuilding global business confidence in the pandemic environment. He said a Biden administration focus on stimulating the US economy would be “good for the global economy including Australia”.

The administration would encourage increased investment in green technology “which should be expansionary, provided the outcome is that it lifts productivity, reduces the cost of energy and creates jobs as promised.”

But he said if the Biden administration went ahead with plans to roll back the Trump administration tax cuts, which encouraged business investment and the return of US capital from offshore, it would be negative for business growth and investment in the US, which would have a “knock-on effect on Australia and the rest of the world”.

Joe Hockey, former Australian ambassador to the US, said he expected the US would see a “high-speed recovery most likely around the middle of the year” when the $US1.9 trillion stimulus packaged announced by Mr Biden kicked in.

Business Council of Australia president Tim Reed said the Biden administration would “mean a greater degree of predictability, stability and certainty that gives the US space to problem-solve. He said this would be good for Australian companies that had a “long and positive history” of working with the US and with US companies.

Boral chief executive Zlatko Todorcevski expected the Biden administration would be “overall positive” for Boral’s business in the US: “The No 1 priority for the new administration is to get the spread of COVID under control.”