1988 – Celebrations
Surprisingly, at the beginning of 1988 Australians were ready to celebrate. Just three months earlier, a sudden stock market slump saw global share prices fall an average of 25%, and Australia experienced a 40% decline. The first response of the Hawke Government was to defer its national wage case determination! Okay? Commodity prices dropped and so did the Australian dollar, crashing at one point to US51c. In December 1987, Treasurer Paul Keating stated the Australian economy would weather the storm because the Hawke Government had already balanced its Budget and brought down inflation. The Business Council called for wage reductions, decreased government expenditure, a lower dollar and deregulation of the labour market. In the May mini-Budget, payments to the states were cut by $870 million and tax cuts deferred. With this, the Government declared cost cutting was completed.
As it became clear commodity prices were over their peak, economic conditions began decline, leading to high interest rates, a growing current account deficit, declining demand, increasing foreign debt and a wave of corporate collapses. Furthermore, the collapse of the Eastern Bloc economies was to see wool and wheat prices decline, savaging Australia’s agricultural sector. It was promising to be a bad year, and it turned out to be a memorable one, too. In the UK, it will always be remembered for the Lockerbie disaster. A Boeing 747 on a Pan AM flight segment from London to New York was blown up in flight, killing 243 passengers, 16 crew and 11 residents of the small Scottish town. It remains the worst terrorist attack in the history of the UK.
Despite all this gloom, 1988 was Australia’s Bicentennial. At the beginning of the year, my zig-zag career had taken another turn. The previous two years had been unsettling. I’d left my government position at the end of 1986, and overnight I’d become a consultant. With a background in ethnic affairs and multiculturalism, I’d managed to find some worthwhile projects. The hand-to-mouth lifestyle of a consultant wasn’t something I preferred, but the routine of tasks to be undertaken and completed in a few months proved satisfying. One of the more interesting was working for the Australian Bicentennial Authority (ABA) on a proposal to establish what would become known as the Australian Bicentennial Multicultural Foundation, or, as it is now known, the Australian Multicultural Foundation (AMF). The Foundation was formally established in September 1988, but it had been proposed years earlier, and most of the work was close to completion in 1987. I was invited to work on some of the legal issues. It was my largest project that year.
My consulting career lasted exactly one year, as I was appointed as the Executive Director of the Victorian Division of the Australian Institute of Management (AIM) at the end of the year. I took up my new position at the beginning of 1988.
On January 26, 1988, I was in Sydney, watching the Tall Ships coming into the Harbour, one of the key events inaugurating the bicentennial year. I was there at the invitation of one of the AIM Council members, L G C Moyle, or Bill Moyle as he preferred to be known. Bill was the Chairman of the Bicentennial Authority’s Victorian Division, as well as a Councillor for the Authority itself. Quietly spoken, he was a lovely man. At that time, he was Chief Executive Officer, State Bank of Victoria; Director, Tricontinental Group of Companies; Chairman, National Mortgage Market Corporation Ltd and CEDA Inc; Councillor, Australian Institute of Bankers; as well as Councillor and Fellow at AIM. Although I couldn’t have guessed this at the time, he was to prove both a guide and an object lesson in humility.
Bill Moyle’s involvement with the ABA had begun several years earlier. The Authority was established in 1980, set up to plan, fund and coordinate projects that emphasized the nation’s cultural heritage. State Councils were created to ensure cooperation between the federal and state governments, all working to creat a national programme of events and celebrations. Early on, the Federation of Ethnic Communities’ Councils of Australia (FECCA) proposed part of the program should be a foundation, set up to support ethnic diversity. Looking back more than thirty years later, it is one of the outcomes of the Bicentennial that remains visible today. At the time, the biggest event was probably the Brisbane World Expo 88, although some sports enthusiasts would suggest pride of place should go to the 1988 Women’s Cricket World Cup and the 1988 Youth Cricket World Cup!
Lest I sound too cynical, 1988 was also marked by several important physical projects: including the Bicentennial National Trail, and the New Parliament House in Canberra. There was an Australian Bicentennial Road Development Program, but much of what that did has been covered over by subsequent road improvement programs across the continent. There were several areas of controversy. Those Tall Ships coming into Sydney Harbour made for an immensely popular event, but the government refused to endorse it, as it was concerned many indigenous Australians would be affronted by celebrating the first stage of creating a British colony. Indeed, they were. The Government did fund a round-Australia tall ships race: unfortunately, bad weather led to ships retiring and some deaths! I can’t help feeling that proved another kind of reflection on the events two hundred years earlier.
There were two people involved in the ABA and the Bicentennial planning I knew well. One was Bill Moyle, to whom I will return in a moment. The other was David Armstrong, who I had first met when he was the Director of Prahran College of Advanced Education. David was dedicated to service. He had been appointed to run Prahran CAE at the age of 30, and eight years later was appointed CEO of the ABA. The politics surrounding the ABA were to prove treacherous. When Labor replaced the Liberal-Country Party Coalition in 1983, the ABA came under the microscope. Bob Hawke, addressed Parliament in September 1985, outlining the government’s conclusions two years after his electoral success. He stated that while he had “grave reservations about the structure of the ABA and its lack of accountability to both the Government and the Parliament, we as a government would do nothing to put at risk celebrations in 1988 or the long preparation for them. I decided that attempts to change the Authority risked creating a political battlefield around a body that ought to be exempt from the normal partisan struggles that would certainly have flowed from such structural changes. Consequently, no changes were made.”
Despite his comments, pressure grew to make changes at the ABA, and Armstrong was sacked the following year. It was said he spent too much time travelling abroad. However, some observers noted he had been a speech writer for Don Chipp, the ex-Liberal and founder of the Australian Democrats. Also, his wife left him to marry John Reid, the Chairman of the ABA, the man who was to sack him. Completely irrelevant, of course; it was just the travel!
Whatever the truth of the matter, David Armstrong was a man committed to improving education and not-for-profit welfare. After the ABA, he was appointed as chief executive of Community Aid Abroad, successfully growing its annual budget fourfold in six years. He returned to academia as director of the University of Melbourne’s international office and then warden of its graduate centre, reversing the declining numbers of international students and supervising vibrant courses for the university’s 8000 postgraduate students. It’s not just his achievements. I found him inspirational because he didn’t publicise his work successes: his time at the ABA was the only period when he was a ‘public’ figure. Today it’s hard to find out much about him.
Like David Armstrong, Bill Moyle’s career was also marked by one public event. When I first got to meet him, it was through his role at the ABA and AIM. However, he was well known in business circles, following his 1984 appointment as the CEO of Victoria’s State Bank, the fifth largest bank in Australia. One of his earliest decisions was to sell the bank’s 26% ownership of Tricontinental, a merchant banking operation that had been established fifteen years earlier by the bank, together with several other partners including the Rural & Industry Bank of WA, Security Pacific of the US, Credit Lyonnais, Mitsui Bank and Sir Ian Potter. On hearing it was for sale, Mitsui was interested in the chance to buy Tricontinental, and carried out appropriate due diligence, only to discover that Tricontinental had extensive loans that were significantly in arrears. Mitsui bowed out, and Moyle and the State Bank were forced into a U-turn. Now they decided to become the sole owners, converting Tricontinental into a State Bank subsidiary.
The Tricontinental story has been told often, a telling example of how entrepreneurial behaviour isn’t just about taking on exciting and different initiatives, but is also predicated on risk, sometimes very high risk. There are many other lessons in the story, but one key decision, early in the process, centred around a disagreement between Bill Moyle as CEO of the State Bank, and his Chairman, Arnold Hancock. The dispute was over how the wholly owned merchant bank should be managed. Moyle wanted the Tricontinental board to include State Bank and Tricontinental executives, who would report to the full State Bank board. He believed the State Bank divisional heads and CEO should control it. Hancock wanted a very different composition for the Tricontinental board, effectively leaving it to operate entirely independently. When Hancock put his recommendations to the State Bank board, Moyle did not speak against them, “having already made my views known to him”. The board of the State Bank was therefore unaware of the conflict between its chairman and chief executive over the proposal to effectively turn its chief executive into a non-executive director of the bank’s main subsidiary. Why did he stay quiet? Was this the usual deference to a Chairman, especially one who had been influential in Moyle’s appointment some nine months earlier? We will never know, but Moyle’s silence and Hancock’s decision were to prove fateful.
For those of you who have followed the Tricontinental story, you’ll know events were quite amazing. There are many accounts of the ‘Trico’ years, and they all make fascinating reading. Once acquired, the State Bank appointed Ian Johns, previously the lending manager, as managing director. With Johns in charge, Tricontinental set itself a lending target 20% greater than the year before, at $1.3 billion. It achieved that within a month. The board set a new budget, on the basis lending might rise to $2 billion by the end of the financial year. In fact, it reached $2.4 billion, 89% more than the previous year and 5.5 times the budgeted increase. To justify this, Tricontinental management reported an enormous 175% rise in profit, from $4.7 million to $12.9 million. The State Bank directors must have regarded their $30-million purchase of the whole of Tricontinental a bargain and decided to make a subordinated loan to restore its gearing, but if they had seen all the figures, they would have known the group’s four largest borrowers owed Tricontinental $489.5 million, seven times Tricontinental’s capital base and more than the capital of the whole State Bank operation.
Why was this happening? The group’s business philosophy explained the rapid growth, based on buoyant feelings and government encouragement at the time. “Tricontinental has a philosophy of supporting entrepreneurial starters and growing with them. When people have an idea, cashflow and potential, and the idea makes sense, Tricontinental will support them. Tricontinental is different from most other merchant banks in that it stays close to its clients and ‘gets its hands dirty’ by being supportive.” Yay! But what this meant in practice was Tricontinental funded the family companies of Alan Bond and Christopher Skase, John Avram’s Interwest, Abe Goldberg, Allan Hawkins in New Zealand, Spedley, Thompson Land, Quatro, Pro-Image, Bob Ansett, Hartogen, Crestwin, George Herscu, Duke Securities and Barrack. All that stellar list would soon become known as failed entrepreneurs, and many as criminals, but at the time, they were lauded as the entrepreneurs leading Australian business. As 1988 began, even though he had no direct control, Bill Moyle was celebrating more than the Bicentennial, given the reported outstanding performance of Tricontinental.
Unaware of problems, the bank saw continued high profits for the year to June 30, 1988, and decided it was a good time to sell Tricontinental. While they were talking to potential buyers, Trico’s clients were crumbling in the aftermath of the stock market collapse. Pouring good money after bad, Tricontinental loaned a further $552 million to its 13 biggest clients, most of whom were going broke, and its troubles began to eat into The State Bank’s performance. In August 1990, the State Government agreed to sell the State Bank to the Commonwealth Bank for $1.6 billion. Tricontinental disappeared, and Bill Moyle had departed.
Like David Armstrong, Bill Moyle’s career was marked by one very public issue. For me, he was an excellent guide as a Board Member at the Australian Institute of Management, thoughtful, considerate, and very perceptive. If he asked a question, it was for good reason; if he offered advice, it was worth heeding. Little did I know that his behaviour must have been influenced by his own career, and the time he failed to argue with his Chairman. The other side of his character was his reticence. Well before the Tricontinental disaster, he was never anxious to promote himself, or talk about his achievements. In that sense, he and David Armstrong offered models of how to behave that I have never forgotten. A good indication of Bill Moyle is to search for information about him on the internet: there’s almost nothing there, except this brief funeral notice: ‘Loved husband of Judy, loving father and father-in-law of David (dec), Sally, Richard, Vivienne and Richard, cherished grandpa of Tallulah, Evan and Spencer, passed away on 11 August 2021, peacefully.’ I hope the last thirty years of his life were peaceful and personally rewarding. I have been lucky to have learnt from those two. No, not perfect, but despite their mistakes and downfalls, both David Armstrong and Bill Moyle impressed me with their consideration and humility.
1988 was a year of celebration. Brash, youthful, a larrikin nation, Australia had much of which it could be proud. At the same time, it missed the opportunity to bring about a meaningful reconciliation with the indigenous people of the country, a task that is still waiting to be properly completed. Around Australia, the aftermath of the stock market crash continued to reverberate, leading to a recession followed by spectacular economic growth.
My last comment takes me back to the Bicentennial’s Australian Multicultural Foundation. It’s first Chairman was Sir James Gobbo. Australian born, he spent his early childhood in Italy, and then returned to become a Rhodes Scholar, successful barrister, Judge of the Supreme Court and Governor of Victoria. He was also President of Co.As.It., the largest Italian community organisation in Australia, and he contributed to such areas as artisanship training, the Australian honours system, hospital administration and philanthropy. Like Armstrong and Moyle, he suffered some blows and personal slights; like them, he never gave up on serving the community. Three inspirational people, outstanding examples of how to serve and how to accept failure: three I will always remember from the 1988 celebrations.
