BHP AGM: CEO Mike Henry positive about Australia’s environmental reforms but lashes high energy costs

BHP’s boss is warning high energy prices are crippling Australia’s competitiveness, saying the country is at risk of being left behind by its rivals in the global race for investment.

Speaking at BHP’s annual general meeting held in Melbourne on Thursday, chief executive Mike Henry said the pace of reform was “moving faster in other countries” and called for energy policy to be prioritised.

“Australia can’t afford to be flat-footed in the race for global investment,” he said.

“Every aspect of Australia’s competitiveness — from labour productivity to the time and cost of construction to royalties and taxes – must be examined against competing investment destinations.

“Energy policy needs to be a focus, with electricity costs in Australia two or more times higher than Canada, Indonesia and other countries, and 50 to 100 per cent higher than the US.

“A clear-eyed view of how Australia wants to compete in this shifting global landscape is the starting point for being in the contest at all.”

Speaking on the Federal Government’s highly anticipated environmental reforms, Mr Henry appeared supportive, saying there have been “some encouraging signs in the discussion around productivity and investment attraction” in Australia.

“In particular, we welcome the strong signals from the Australian Government in respect of proposed reforms to environmental laws and permitting,” Mr Henry said.

Those comments come as Environment Minister Murray Watt is expected to imminently reveal changes to the Environment Protection and Biodiversity Conservation Act.

The West Australian understands that many large mining companies and industry lobby groups have already been briefed about portions of the proposed legislation and are broadly happy with the reforms.

This is in stark contrast to the industry’s mood when former environment minister Tanya Plibersek was spearheading the Act’s reforms.

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Ideas her team had floated included 40km an hour speed limits across vast stretches of national and state highways in the Pilbara to “mitigate damage to fauna”.

But Mr Henry warned that high energy prices are destroying Australia’s competitiveness on the international stage, echoing similar comments he’s made numerous times this year.

Mr Henry is widely tipped to stand down as chief executive next year with BHP’s Australia president Geraldine Slattery expected to take over. But there was no talk of leadership succession during the AGM.

The man with a major say in appointing the next CEO is former National Australia Bank boss Ross McEwan, who was chairing his first BHP AGM on Thursday.

Mr McEwan was asked by a shareholder what BHP thinks of a Productivity Commission proposal for a 5 per cent tax on cashflows produced by companies in Australia. The Federal Government is hunting for new streams of tax to fix its budget black hole.

“I won’t comment on the proposal specifically . . . all I’d say is we just need to remain competitive to attract the investment into Australia,” he said.

“And at the moment, even on the current corporate tax rate, we’re probably one of the most expensive corporate tax rates in the developed countries.”