Already a subscriber?Australian politics seems utterly confused about the importance, value and necessity of thriving, profitable big businesses.
So, to make money, they need to risk much more money. While it sounds like a really big profit when you add all those two-dollars together, it has to be put in the context of the size of the operation and the money at risk to achieve that profit. Our banks borrow billions and are highly leveraged, mining and energy profits reflect massive capex, and all these companies manage multi-faceted risks over a long time period.
Finally, what’s left over is kept by the company so it can invest in more stores, more people, better service, upgrading systems and processes, as well as retaining some earnings in case there is a period where profit dips and it needs a buffer to ensure it can pay staff and suppliers.So, being profitable is a good thing. John Howard once told me that there are certain industries where no one objects to good profits –which is in the public interest.
Big company profits don’t compromise our social welfare desires, they fund them. Not only do big businesses contribute billions in taxes which support our welfare objectives, they also all haveand play their part in addressing climate change, domestic violence, inclusion and diversity, mental wellness and various other causes cohesive to our social fabric.