And that is linked to another outcome of recent changes. Today, a major corporation's intangible assets are often more important than its physical assets. To deliver the required shareholder returns over the long term, corporations will need operational scale. There is a clear necessity for major corporations to have both global and local capabilities. Australia's local market will not provide the growth, the turnover and the profitability to sustain companies of any significant size.
Geographic diversity provides the market size required to sustain growth.
I should note at this point that the current level of the Australian dollar puts a total value on our major companies well within the acquisition reach of large and medium-sized international groups. Globalisation, technological advance and deregulation are interacting to both accelerate and facilitate corporate change, creating tension points. Companies need to meet the needs of regional and local markets. It has been argued that Australian companies do not have the critical mass to enable them to achieve economies of scale from globalising activities. This is simply not true.