00:00 Do you know what the return on equity was for the Woolworths Group in the last financial year?
00:10 Senator, thank you for the question.
00:14 I'm here to be constructive and to be helpful because we have important issues before us
00:18 on the cost of living of Australians.
00:21 I have been authentic and clear in answering the question that as we assess profitability
00:25 in our sector, I look at return on investment and total shareholder returns.
00:30 Those are the numbers we look at.
00:32 Those are the numbers in our remuneration system and that's where I focus.
00:35 Return on equity actually does vary, as you would be aware, by month or depending on where share prices are
00:41 and I don't focus on that.
00:42 I don't know it because that's not where the focus is.
00:45 The focus is you put a dollar in, what return do you get out?
00:49 And that's where we focus and that's what we are focused on doing.
00:52 And when you look at it that way, you see us making a fair return
00:56 and it's the 10% return of funds employed after tax.
01:00 And you see us making a fair return in the context of the stock market,
01:04 a 10% total shareholder return over five years,
01:07 which is the average of the ASX top 100 over that period.
01:12 In that reasonably lengthy response, Mr Banducci, did I hear you say that you didn't know
01:19 what the return on equity is for the Woolworths Group in the last financial year?
01:25 Since you heard me say I do not focus on it given it changes over time
01:29 and therefore it's just not where our focus is, as it shouldn't be.
01:32 It's return on investment.
01:33 I do understand that's not where your focus is, Mr Banducci.
01:37 You've repeatedly made that statement to the committee.
01:42 I'm asking you very simply, do you know what the return on equity was
01:50 over the last financial year for the Woolworths Group?
01:54 Do you know that?
01:55 Senator, I focus on our return on investment and our total shareholder return.
01:59 Those are the numbers I know, those are the numbers I focus on
02:01 and those are the numbers we should be judged on.
02:04 Yes. Thank you, Mr Banducci.
02:06 I know that you know those other numbers.
02:10 I've repeatedly asked you whether you know the ROE.
02:16 You haven't answered that question.
02:19 I want to advise you that if you don't know what the return on equity is for -
02:26 was for your group on average over the last financial year,
02:31 you can just simply say so.
02:34 You can just say that to the committee and if you do that,
02:38 I will simply ask you to take the question on notice
02:41 and come back to the committee with the answer.
02:44 So I'm asking you again, do you know what the return on equity
02:50 for your corporation was in the last financial year?
02:55 Senator, that is not what I focus on.
02:57 I don't know what the number is specifically.
02:59 Happy to take the question on notice.
03:00 You don't know?
03:01 I focus on what is key for us.
03:04 Please, this is important, Mr Banducci.
03:06 This is very important because it is open to the Senate
03:10 to hold you in contempt and that carries potential sanctions,
03:14 including up to six months' imprisonment for you.
03:17 That's why this is a critical matter.
03:19 So I just ask you to address your mind with absolute clarity, please,
03:24 to the question I am asking.
03:27 I'm not asking what you focus on, Mr Banducci.
03:30 That's not relevant to this discussion.
03:33 What is relevant is what you know.
03:36 Do you know what your return on equity was
03:41 in the last full financial year?
03:44 Just yes or no, please, Mr Banducci.
03:46 Senator, I've tried to be very specific in saying what we focus on.
03:49 That is where my focus is.
03:51 It's our return on investment, the dollar rent and what our return is,
03:54 and what is our shareholder return.
03:56 Those are the numbers I focus on.
03:58 Do you know what your ROE was?
04:01 Just yes or no. Do you know or not, Mr Banducci?
04:04 Senator, I will take the question on notice.
04:06 I don't focus on it. I don't focus on it.
04:08 No, in order to take it on notice,
04:10 you'll have to inform the committee that you don't know the answer.
04:14 That's the point I'm making.
04:16 So I want to be clear with you.
04:18 If you simply say that you don't know
04:21 and you'll take the question on notice, we can move on.
04:24 We can move on.
04:26 But you will need to explicitly inform the committee
04:30 that you don't know the answer.
04:33 Do you know the answer to that question or not?
04:36 Senator, I don't focus on it.
04:39 It will probably be in a document somewhere,
04:42 but it's not a number I focus on and therefore know in detail.
04:45 You don't know it?
04:47 I don't focus on it, Senator. I focus on return on investment.
04:50 I think we're getting somewhere. Just before you come in, Senator Pratt.
04:53 Just to be clear, your evidence is you don't know the answer to that question.
04:56 Senator, I told you I don't focus on it.
04:58 It's not the numbers that drive our industry.
05:01 The way our industry should be assessed is the total return on investment
05:06 and total shareholder return.
05:08 That is the way our industry should be assessed.
05:10 I can't comment on other sectors like the banking industry
05:12 and how they think about it.
05:14 I'm not asking you to do it.
05:16 I'm just saying that's what we focus on.
05:18 Those are the key metrics I get on a half-year and a full-year basis,
05:21 and that's where my focus is.
05:23 If I may interject, please, Chair.
05:25 Mr Banducci, this is a very, very important Senate inquiry.
05:29 We're in the midst of a significant cost-of-living crisis
05:33 where people can't afford to pay their rent,
05:36 they can't afford to pay their mortgages,
05:38 and they're struggling to fill up their shopping trolley.
05:42 Our question, what Senator McKim is asking is very simple.
05:46 Do you know the answer?
05:48 If you do, tell us.
05:50 If you don't know the answer, tell us and take it on notice.
05:54 So what we are seeking is,
05:56 "Yes, I know it is X.
05:58 "No, I do not know.
06:00 "I will take it on notice."
06:02 They're the two options.
06:04 We're not wanting to know what you focus on.
06:07 We're wanting to know the answer to that simple question.
06:11 Thank you, Senator.
06:13 The heart of the question is how we assess the performance of our business.
06:16 The heart of the question is how we measure it.
06:18 Sorry, Senator Kovacic, thank you very much for your assistance.
06:23 Mr Banducci, the heart of the question
06:25 is not how you or your executive team or the board assess anything.
06:31 That is not... Not only is that not the heart of the question,
06:34 it's not even vaguely relevant to the question.
06:37 The question is, just to be clear,
06:40 do you personally, Mr Brad Banducci,
06:44 do you know what the return on equity was
06:50 for Woolworths in the last financial year?
06:55 Do you know the answer to that?
06:57 Do you know what the ROE was for Woolworths in the last financial year or not?
07:01 That's... It's an abundantly simple question.
07:04 It would really assist the committee, Mr Banducci,
07:07 if you would simply answer it with clarity for the committee.
07:11 Senator, I said I don't focus on that number.
07:14 It is not a number we focus on and not a number we report to.
07:18 We focus on these numbers that I've talked to.
07:20 If it helps the committee in terms of us moving on,
07:23 I don't know that number and I'm happy to take it on.
07:25 OK, so I'll take that that you have answered that question now
07:29 by saying that you don't know the return on equity for your...
07:34 ..for Woolworths in the last financial year.
07:37 That's what you've just said, isn't it?
07:39 Within the context of assessing the performance of Woolworths,
07:41 and the number way we assess performance...
07:43 No, there's no context around this, Mr Banducci.
07:45 ..the return on investment for women?
07:47 Sorry, please don't...please don't hedge here.
07:49 There's no context to this question,
07:51 apart from the context where you are giving evidence
07:54 to a Senate committee and it is open to the Senate
07:57 to hold you in contempt and imprison you for up to six months
08:01 if you do not comply with an order of this committee.
08:03 That is the context of this question.
08:06 So, I think you have said, and I'm just asking you to confirm this,
08:12 I think your evidence to the committee is you don't know
08:16 what the return on equity was for Woolworths in the last financial year
08:21 and you would like to take the question on notice.
08:23 Could you please just answer yes or no,
08:25 whether that is your evidence to the committee?
08:28 Senator, yes, I will take it on notice and we will come back and provide...
08:33 No, no, but yes, just to be clear, yes, when you say yes,
08:37 that is yes, I do not know, and yes, you'll take it on notice.
08:41 Are you answering yes to both parts of that question?
08:45 Yes, Senator.
08:46 Okay, thank you, Mr Banducci.
08:48 You don't know what the ROE for Woolworths is in the last financial year.
08:57 year.
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