Interview with: The Honourable
Lindsay Tanner, Former Federal
Minister for Finance & Deregulation
of Australia (2007-2010)
CFOs should not overreact but be fully
aware of all the economic and political
consequences that Brexit, President
Trump and populist upheavals in Europe
can bring about, recommends The
Honourable Lindsay Tanner, Former
Federal Minister for Finance & Deregula-
tion of Australia (2007-2010). “Many
issues challenging CFOs have just
become more complicated,” he says.
The Honourable Lindsay Tanner is a
keynote speaker at the marcus evans
CFO Summit 2017, in the Gold Coast,
Queensland, 22 - 24 March.
What are the economic and political
consequences of Brexit, Donald
Trump as President of the US and
populist upheavals in Europe?
To me they are all different versions of
the same theme, although there are
specific circumstances in each case.
They come from the same source,
massive structural and economic
changes in Western societies primarily
driven by technology. Technology has
had many consequences, particularly for
less skilled workers who perform routine
jobs. Not just blue collar jobs but also
white collar office and administrative
type of roles. Computers and digital
technologies are directly supplanting
what people used to do while opening
up possibilities for people from poorer
countries to do the same job for a much
lower price. The back office data
processing and analysis of one
Australian stockbroker is undertaken by
people in India, who start work at 3am
local time because that is 8am in
Melbourne. In the past, these roles
would have been done by locals.
The economic consequence is that a
large number of people have seen a
drop in their standard of living and
opportunities that in the past were still
reasonable at the lower end of the
spectrum.
The things that produce that outcome
are falling apart, whether it is redis-
tributive taxation, spend on government
services or social payment labour
market regulation, immigration
restriction, and so on. Many people are
on the wage level they were on 15
years ago, while others with higher
skills and education has seen massive
increases in their earnings. In Britain
and parts of Europe this problem is
concentrated in regions that used to rely
on industries that have declined.
The problem politically is that we have
major traditional political parties that
reflected the industrial world, for
example the Social Democrats and
Christian Democrats in Germany, who
now are hard to tell apart, and who
since have signed up to a set of changes
that are hard to reject, but in doing so
they have increasingly alienated many
people who feel they are going
backwards.
The end result is that when extremists
or populists come along in these
countries people listen because they feel
the major parties no longer understand
them nor reflect their needs.
The big concerns about President Trump
are about global security and stability. It
is difficult to predict the economic
impact of his position, as many of the
things he has committed to are
contradictory or unlikely to eventuate.
Will he increase investment in infra-
structure? I do not know.
The area of great concern is his position
on a number of sensitive issues and
international relationships that could
create unintended consequences.
What do these changes mean for
CFOs in Australia? Will these have a
direct impact on the Australian
economy?
As soon as Trump was elected, the IPO
market in Australia pretty much froze.
Markets, investors and large companies
hate uncertainty and external risk
factors they cannot influence or control,
so clearly for people managing the
finances of large companies it means a
great level of uncertainty and risks.
It is important that CFOs do not
overreact, but they do need to be very
aware of possibilities that may occur.
Many issues challenging CFOs have just
become more complicated.
The economic conditions in Australia are
reasonable but fragile. The investments
and activities the mining boom
generated have faded, and substantial
parts of the country are now under
considerable stress and risk. The risk of
us going into much more troubling
economic times is real and CFOs should
be prepared.
Many issues
challenging
CFOs have
just become
more
complicated
What the Future Holds for CFOs:
Honourable Lindsay Tanner’s Perspective

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