7 questions asked at 2024 Transurban hybrid AGM
October 23, 2024
Below is the text of the 7 written questions submitted at the 90 minute Transurban hybrid AGM held on October 22, 2024, plus a brief summary of the answers. The proxies weren't disclosed early with the formal addresses and the debate was handled as one job lot, disappointingly. No major protest votes or extra voting transparency.
Q1. Two quick questions on tax on the accounts. How is it that we're still not paying corporate tax and that we were able to distribute $1.9b to shareholders despite only reporting a net profit of $260m. Also, when reporting toll revenue in our accounts, does this include GST? Is there an argument for doing it the other way?
Answer: The chair explained the connection with depreciation and said some corporate tax would kick in over time. Watch video of exchange via Twitter.
Q2. Did Gary Lennon watch Four Corners last night? What did he think of it and does he agree with Alan Fels and Tony Shepherd that there should be far more public disclosure of the various contracts covering our 11 tollroads in Sydney? Does the chair also have a view on this contract disclosure issue?
Answer: The chair said all of the directors watched Four Corners but he couldn't say much on contract disclosure. Watch video of exchange via Twitter.
Q3. As chair of the board and an experienced former CEO and given what is happening in NSW, could Craig Drummond offer his perspective on the question of sovereign risk and the reliability of contracts, particularly when dealing with state governments. The Queensland Government dramatically increased coal royalties 3 years ago, costing the industry more than $10 billion a year in extra taxes at the top of the cycle. Similarly, the Queensland, Victorian and NSW government all effectively tore up casino contracts with Star and Crown, significantly impairing value. How vulnerable are we in terms of suffering at the hands of these 3 governments and are you confident our tollroad concession contracts will stand up in court. Finally, is it correct that these governments could just legislate our contracts out of existence, if they wanted to run the guantlet of sovereign risk. If that happened, who would be standing in the trenches with us?
Answer: The chair said all stakeholders said they would respect contracts, but they wish to be collaborative and pragmatic with the NSW Government which will hopefully lead to sensible outcome. He pointed out they had spent $36 billion in Sydney over the past 15 years and then rattled off various benefits to motorists on travel time, carbon and safety, things that need to be better explained going forward. Watch video of exchange via Twitter, plus these additional comments by the chair..
Q4. We seem to have a lot of senior Big Four 4 bankers on the board, which is probably appropriate given that we have the largest overall debt of any ASX listed company, albeit largely secured against individual tollroad assets as opposed to at the corporate level. Rob Whitfield spent 30 years at Westpac but also chaired the NSW Government's central borrowing authority, TCorp. Could Rob provide his perspective on whether we should be carrying so much debt whilst paying out almost $2 billion a year in distributions to shareholders. And could he also address the sovereign risk issue, particularly in terms of the current situation in NSW where the government is attempting to renegotiate our long term contracts after we paid them tens of billions of dollars for control of these infrastructure assets.
Answer: The chair allowed Rob Whitfield to comment after he agreed the board was finance-heavy. Rob explained the importance of debt management but said this was manageable given the debt is supported by great assets and contracts with "great governments". Watch video of exchange via Twitter.
Q5. The Transurban annual report says we have 130,702 shareholders. How many of them have voted or participated in today's hybrid meeting? If you don't know now, please answer the question when disclosing the poll results to the ASX later today, by including the data on how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment and insight into the chronically low retail shareholder voting participation rates in Australia, particularly since the move away from paper. Others have already blazed the trail as this was a voluntary disclosure initiative adopted by the likes of Qantas, ASX, Metcash, Altium, AUI, Dexus, Webjet, Tabcorp and Myer in recent years. Finally, on AGM process for next year, please stick with the excellent hybrid model, disclose the proxies to the ASX earlier along with the formal addresses as many others now do and return to the normal process of taking questions on each resolution sequentially, rather than this job lot model. You don't throw the agenda out at board meetings and ask directors if they have any issues to raise on any item all at once, so please don't do it at the AGM. It disrespects retail shareholder and reduces the focus on important individual items of business.
Answer: The chair only dealt with some of these points and defended the job lot approach to questions from an "efficiency" point of view. He resisted shareholder number disclosure on the basis it is not yet market practice, but said would keep it on the agenda. Watch video of exchange via Twitter, plus these additional points by the chair.
Q6. As a former President of the Business Council of Australia, how deep are Tim Reed's political contacts, particularly at the state government level. Big business has never been more on the nose in western democracies, with even supposedly pro-business conservative governments and parties happy to join pile ons, as seen with Qantas, PwC, Coles and Woolworths in recent years. After Tim has provided his perspective on the political environment and his political connections, could the CEO also summarise what steps we are taking to build close and trusting relationships with the various state governments we contract with. Does this include making political donations or paying to attend political events?
Answer: The chair protected Tim Reed from answering and then the CEO explained the influencing approach, including that Transurban doesn't make political donations and doesn't pay to access political events. She said the benefits are starting to come through from demonstrating they can be a good partner, as demonstrated with the Logan developments. Watch video of exchange via Twitter, plus these additional comments by the CEO.
Q7. What is our history with the CFMEU and have we noticed any change on construction sites since they were placed into administration?
Answer: The CEO said Transurban is "one up, one back" from the CFMEU and this was more an issue for their contractors. Watch video of exchange via Twitter.
Copyright © 2024 The Mayne Report. All rights reserved
