“We’re uncompetitive and soft”: Rob Millner on why companies won’t list, and houses don’t get built

Ask Robert Millner AO, the Chair of the 120-year-old investment powerhouse Washington H. Soul Pattinson (ASX: SOL), what the root of the problem in Australia is, and he doesn’t mince words:

“We spend half our bloody time at board meetings talking about compliance, ESG, risk – you name it,” he tells Euroz Hartley's Finding the Front podcast.

“The Rio annual report is 340 pages long. How can anyone read and understand that? Mum and dad investors have 12% of their income going into super, much of that into equities – but how do they make sense of that level of complexity?”

That right there, says Millner, is why many great mid-market companies don’t want to list.

“We’re seeing it in private equity – people don’t want to go into the listed world anymore. Too much compliance, too many boxes to tick. If they stay private, they can just get on with running the business.”

And it’s the same bureaucracy that’s paralysing the housing market.

“Thirty years ago, I could lodge building plans on a Monday and pick them up by Friday. Now it takes 300 days.”

Big costs

Millner doesn’t sugar-coat it, pointing to key holding Brickworks (ASX: BKW) and how its domestic cost base has exploded.

“We've got brick investments in the U.S. – six plants cost us $800 in gas last month. The same number of plants in New South Wales? $2,400. That’s three times more. How do you compete with that?”

Meanwhile, labour is expensive and hard to find. 

These factors, he argues, are why it is next-to-impossible for Australia revive any type of large-scale manufacturing.

“We used to have a car industry – that’s gone. We're uncompetitive and people don’t want to roll up their sleeves anymore. Unfortunately, we've all become so soft.”

But he gives credit to Donald Trump for at least trying to rebuild America’s industrial might.

“He’s trying to get manufacturing back into America. When he was there last time, Intel built a magnificent big chip factory, so they're not so reliant on the Chinese. But with our cost base here [in Australia], we can't compete.”

Too much bureaucracy

Millner’s solution? Cut the red tape.

“We’re so over-governed. People need to be allowed to run their businesses without someone in Canberra or Perth or Sydney telling them how.”

That’s one of the big reasons Soul Patts is continuing to lean into its $1.58 billion private equity portfolio (28% of its overall allocation), which spat out nearly $30 million in cashflow in 2024, up 97.9% in the prior year, according to company's latest annual report.

It’s backing businesses like Aquatic Achievers – a swim school group – and Redland Premium Fruit, a vertically integrated fruit operation in NSW and Victoria.

“We’re not like KKR or some of those guys who come in, slash and burn, and flip it. We want to grow these businesses over the long term. The swim school started with eight or ten locations – now we’ve got over 30," he says.

What’s Millner doing in the equities right now?

Millner also touched on recent market volatility. He’s taken some money off the table amid the recent volatility and as ASX valuations got out of hand, pointing to Commonwealth Bank of Australia (ASX: CBA) as a prime example.

"The brokers had a valuation of $90-100 in Commonwealth Bank and they were trading at $150. Great business, great bank, but overvalued."

He’s worried about valuations – not just in the U.S., but right here at home.

“Look at Pro Medicus, WiseTech, TechnologyOne. Great companies, but those multiples are unsustainable."

Trump’s tariffs might be the trigger, but Millner says these hot growth stocks were overdue for a pullback.

“We’re expecting volatility. Maybe even a U.S. recession. The biggest issue is that while a lot of people agree with what Trump’s doing, he’s inconsistent – and that rattles markets.”

Still, Soul Patts is cashed up and ready to pounce.

“We’ve got a war chest ready. If there’s some turmoil, we’ll move.”

Advice for younger investors

Millner has seen it all before and preaches what he teaches. The two enduring keys to building wealth are simple: keep some cash on hand and ride out the market cycles.

“Always have cash. That way, when opportunities come up, you can move. And don’t expect to get rich overnight. You’ve got to be patient and ride out the cycles."

“In the GFC, Commonwealth Bank dropped to $27. Macquarie got to $14. Look where they are now.”

Over to you

Do you agree with Millner? Is red tape killing entrepreneurship in Australia? Are we doing enough to stay globally competitive – or are we too soft?

Let us know in the comments below.

You can listen to the full cracking interview with Euroz's Tim Banfield and Rob Millner below.