Business leader Kerry Stokes says the Western Australian economy is heading for its toughest period in two decades, but expects the state will resume healthy growth within a couple of years.
Business leader Kerry Stokes says the Western Australian economy is heading for its toughest period in two decades, but expects the state will resume healthy growth within a couple of years.
“We’re in a tough period, and probably this is as tough as I’ve seen since ’91,” Mr Stokes told journalists after the launch of his biography this morning.
“In 1991, the three (television) networks in Australia all lost money. I think WesTrac had a horrible year, it hardly made any money at all. This is shaping up like that period.”
Mr Stokes emphasised the current difficulties need to be kept in perspective.
“The thing I keep on saying is we’ve had 20 years of a good run. We might have one or two years of difficult times, they will come again,” he said.
“We’re still exporting 600 million tonnes of iron ore. We’ve still got a pretty good economy.”
Mr Stokes said Australian businesses needed to cut operating costs.
“If we do that, within two years we’ll be back on the road again.”
In a similar vein, Mr Stokes, who has had business interests in China for nearly two decades, said that country was also going through some difficulties.
“I’m confident about its future; the current circumstances are a bit more opaque,” Mr Stokes said.
“It’s going through some social change that’s affecting its economic performance, but they will come out of that.
“I still have great confidence in China.
“The thing about China that most people fail to recognize (is) it’s got 94 per cent literacy.
“When people are educated, they are going to find better ways of doing things, they are going to make a better society.”
Mr Stokes said improving education and prosperity also brought challenges for China, as evidenced by the democracy protests in Hong Kong.
“It’s going to have more and more challenges as a result of its own success, as Hong Kong is proving.”
He contrasted China’s outlook with that of India, which he said had 650 million illiterate people.
“It’s hard to see how they are going to lift themselves up when they are not educated,” Mr Stokes said.
Asked about Premier Colin Barnett’s recent criticism of Rio Tinto and BHP Billiton over their strategy of lifting iron ore production in a weak market, Mr Stokes said “they’re pretty big smart cats, they know what they’re doing”.
“Frankly if you can sell something for $80 a tonne and it costs you $20 a tonne, you might want to sell as much as you can, and I understand that,” he said.
“That means everybody else who competes has got to get more efficient.”
Mr Stokes said the publication of his authorised biography, The Boy From Nowhere, was not a signal of impending retirement.
He noted that his businesses were in the hands of a good executive team, including Don Voelte at Seven Group Holdings, his son Ryan Stokes at Australian Capital Equity, and Tim Worner at Seven West Media.
“They don’t need me as much now, so I only get involved out of choice, not necessity.”
