Home' Future Building: The Australian Infrastructure Review : December 2010 Contents futurebuilding 39
economies, it's evident that the leadership
void must be flled.
'The greatest challenge facing Australia
is the rapidly changing nature of the global
economy,' King says.
'As Australia becomes more integrated
with Asia, Australia will have to change.'
King has said that by 2040, China's
GDP will account for 40 per cent of the
world's economic output, compared with
14 per cent for the United States. By 2030,
the numbers of middle-class consumers in
the developing world will triple to about
1.2 billion people, he expects, citing World
'Australia is ready to participate in the
Asian century,' King says. 'The Asian century
is upon us.'
According to King, the trouble is that
Australian governments all too often fail to
act on the economic and population growth
that policy-makers know are imminent, and
instead play catch-up, struggling to free the
economy of bottlenecks.
'Australia is great at building
infrastructure in arrears,' King says. 'When
the demand is there and the roads are
crowded and hospitals don't work, they
'China decides it wants a new airport,
and it builds a new airport. In Sydney, we've
been debating for 30 years about a second
airport and we still can't decide. They select
a location, and 20 years later it's been
absorbed into the city and they have to fnd
But the biggest surprise of King's career,
he says, is just how important Australia's
stores of minerals and energy have proved
to be, and the extent to which Australia
has benefted from the global resources
boom as China and India industrialise and
modernise their economies with rail links,
airports and other infrastructure.
'Australia has done surprisingly well for
such a small nation,' King says.
'20 years ago, it was an open question
whether China was going to modernise to
the extent that it said it was going to.
'That question has now moved on to
India, then to Indonesia and Thailand.'
The boom in Asia has helped to drive
rapid growth at Leighton, whose subsidiaries
and joint ventures span from the Middle
East to Mongolia.
Leighton, the world's largest contract
miner, clocked up nearly $19 billion in
annual revenue last year, compared with
the $1.3 billion that the company was
turning over annually when King took over
as managing director and chief executive
offcer 23 ½ years ago. When he frst joined
the company in 1968, the company was a
minnow, with annual sales of $17 million.
While much of Europe and the United
States firted with recession during the last
fscal year, Leighton notched up record
earnings of $612 million, and boasts an
order backlog of nearly $42 billion.
As well as tapping into Asian growth,
King has been credited with populating
senior management with heavy hitters. Last
year he hired former Qantas chief fnancial
offcer, Peter Gregg, to take up the CFO
position at Leighton. Former John Holland
boss, and current co-chief operating offcer,
David Stewart, a 25-year veteran at the
company, will replace King on January 1.
Mining contracts in Australia, civil
engineering in Hong Kong, and oil and gas
operations in the Middle East are expected
to help drive net proft at Leighton to as
much as $900 million over the next fve
years. The company's order book will swell
to $50 billion during that time, King has
Leighton’s confdence comes from a tide
of economic development that is sweeping
across much of Asia, lifting large swathes of
people out of poverty and turning them into
middle-class consumers who want reliable
transport and social services to match, King
Less clear is how signifcant Japan’s
energy and infrastructure markets will be to
Australia in coming decades as the country
battles with the twin scourges of defation
and a dwindling population.
Most economies have been based on
growing populations," King says. "How do
you provide growth in an economy where
you need fewer schools, fewer hospitals,
and fewer roads?
Australia is ready to participate in
the Asian century, ' King says.
'The Asian century is upon us.
The end of King's reign
Wal King, Chief Executive, Leighton
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