Wesfarmers chief warns against interest rate rises

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Wesfarmers Ltd chief executive Richard Goyder says he is confident Australia is through the worst of the global economic downturn but warns against rapid interest rate rises.

“I’m reasonably confident that we’re through the worst of things,” Mr Goyder told an Australian Institute of Company Directors (AICD) function in Sydney.

“I think there’s at least some challenges still ahead.”

Mr Goyder later told journalists one of those challenges was the threat of interest rate rises, particularly in the retail sector.

Wesfarmers’ Bunnings business has recently seen an increase in activity on weekdays, he said, indicating more people were working nine day fortnights or taking leave to ease the stress on employers.

“I think if interest rates were to go up, that and reduced take home pay would have an effect on the economy,” he said.

“I think we do have to recognise there is still some fragility here and we are not out of the woods yet.”

Mr Goyder reiterated the group’s guidance of improvements in its industrial businesses in the current financial year.

The conglomerate last month posted a 44 per cent rise in annual net profit to $1.535 billion.

Asked about the prospect of Wesfarmers making offshore acquisitions in the future, Mr Goyder said an international acquisition would happen – but maybe not for several decades.

“I suspect we will go offshore at some point down the road, but it could be some time in the next 20 or 30 years, who knows,” he said.

“If it stacked up financially and we felt we had the management capacity to do it then we would do it, but only if we had some big ticks in those areas.

“I look forward to it whenever we can.”

Mr Goyder also defended senior executive pay after the issue again drew criticism following the release of several corporate annual reports earlier this week.

“I think what gets reported people automatically assume `oh, that’s what they take home’,” he said.

“The actual take home salary I think would be considerably less than what is reported.”

Mr Goyder’s remuneration for 2008/09 is yet to be made public, but is expected to be higher than the $5.1 million he received in 2007/08 due to the integration of Coles into the Wesfarmers business.

Wesfarmers shares closed down six cents at $26.19.

AAP

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