SYDNEY -(Dow Jones)- The chief executive of one of Australia's big four banks on Friday echoed BHP Billiton Ltd.'s (BHP) chairman in calling for more flexible working practices, but said he remains confident in the long-term sustainability of the mining boom.
Mike Smith, head of Australia & New Zealand Banking Group Ltd. (ANZ.AU), told a business conference that Asian investment will be key to driving the 1.8 trillion of investment the resources sector will need over the next 20 years, as well as the development of Australia's broader economy.
But he argued that for Australia to "manage and to maximize the opportunities" presented by Asia's development, businesses must "add value by innovating and investing in infrastructure, productivity, marketing and skills" to spread the wealth of the resources boom throughout the economy.
"As BHP Billiton Chairman Jac Nasser outlined earlier this week, in a highly competitive and globalized world, the opportunity is also ours to lose," he said.
"As a nation we need to encourage resources to move into higher value industries rather than try to preserve the past...That means flexible labor practices, retraining of skills and encouraging people to move to where the jobs are," Smith added.
On Wednesday, Nasser delivered a blistering attack on the Australian government's industrial relations and tax policies, saying they were fuelling investment uncertainty.
Australia's industrial relations framework "pits labor against capital" to create a system that "is just not appropriate and doesn't recognize today's realities," he said at a lunch this week.
Higher costs and lower prices for commodities have meant the world's largest miner has ditched plans to invest A$80 billion in growth projects over the next five years, he added.
Smith presented a more upbeat view on the prospects for Australia's economy, arguing that the recent rise in demand from China and other developing Asian countries is "not a volatile commodities 'boom' of the type we saw in the late 1960s and early 1980s" but a reflection of a structural shift in the world economy.
"The traditional view that commodities were over-supplied no longer holds true," he said. "It's now clear that we are looking at decades of rising demand despite volatility which will occur from time to time."
But he cautioned that politicians and investors need to learn from the examples of other commodity-driven economies, such as Brazil and Chile, and business must seek a more two-way interchange with Asia to ensure Australia makes the most of its economic opportunity.
-By Caroline Henshaw, Dow Jones Newswires; 61-2-8272-4689; caroline.henshaw@dowjones.com
(END) Dow Jones Newswires
May 17, 2012 23:32 ET (03:32 GMT)
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