Leading executives from some of Australia’s largest businesses are fleeing east in response to ongoing delays to re-opening the Western Australian (WA) border.
Rob Scott, CEO of AU$60 billion retail group Wesfarmers, will base himself out of the group’s Melbourne office for an “extended period” after saying it was “virtually impossible” to run the conglomerate—which owns national retail brands Officeworks, Bunnings, Kmart, and Target—from Perth.
Key executives will also be making a move east, following an announcement from WA Premier Mark McGowan to delay the re-opening of the state’s border—slated for Feb. 5—due to the outbreak of the Omicron strain of COVID-19 in eastern Australia states.
“The uncertainty around when the border might re-open and the continuing inflexibility towards business-critical travel means that it is now virtually impossible to run a national business from Perth,” Scott said in comments obtained by the Australian Financial Review.
“It’s no longer just an inconvenience, it’s a serious challenge,” he added.
“We’ve benefited in the past from attracting some great talent to WA, with families relocating to create a life here. This is becoming increasingly difficult and is currently almost impossible, and I am concerned that this sentiment will linger.”
Meanwhile, Wesfarmers will remain headquartered in Perth.
Richard Goyder, chairman at oil giant Woodside Petroleum, national carrier Qantas, and the Australian Football League (AFL) Commission is also heading east.
“It’s just been too hard for me to do my job with Qantas and the AFL, based here with the border rules, the way they’ve been and the recent change,” he told 6PR radio on Jan. 31.
He also said it was unviable for AFL teams—hugely popular in the west—to continue operating under strict 14-day quarantine requirements.
“I don’t think there’s going to be a great appetite for players outside WA to be quarantining,” he said.
“There’s a very significant cost to the AFL in doing some of the things we’ve had to do over the last couple of years,” he added. “It’s a significant issue for both (AFL teams) West Coast and Fremantle because they need home games, and they need their crowds, but it’s also a big issue for the AFL.”
WA Premier McGowan’s decision to keep the borders shut, while popular among the public and some mining companies, has left business groups frustrated.
Peak industry body Australia Industry Group (Ai Group) accused the WA government of not engaging with business before shelving its plans to re-open.
“The indefinite closure of Western Australia from the rest of the country and the world will have severe and long-lasting ramifications for the state and the nation,” Innes Willox, CEO of the Australian Industry Group, said.
“The decision was taken with no meaningful consultation with industry and with clearly little understanding of the strain that big parts of the state economy are already under given a lack of staff, virtually no labour mobility, deeply stressed supply chains, and the significant reputational damage as a place to do business that WA is already suffering.”
The Chamber of Commerce and Industry WA said nearly a third of businesses they surveyed admitted they would experience a “negative” impact because of the continued border restrictions.
Of the 372 respondents to the survey, 82 percent said they would struggle with accessing workers, 82 percent said they would face wage pressures, 72 percent expected supply chain disruptions, and 71 percent expected rising input costs in production.