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Speaker 1: Welcome to Fear and Greed Sunday feature o Michael Thompson.

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Speaker 1: Today's interview comes well from deep within the Fear and

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Speaker 1: Greed Vault. It is a really good one. Daniel Petrie

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Speaker 1: Ao is a bit of a legend in the technology industry.

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Speaker 1: He was a very senior executive at Microsoft, reporting directly

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Speaker 1: to Bill Gates at a time when Microsoft was the

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Speaker 1: most powerful tech company in the world. Since then, though,

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Speaker 1: he's focused on backing other businesses through a series of

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Speaker 1: investment vehicles, the most recent of which is Airtree a Ventures.

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Speaker 1: He's clearly got a very good eye. Airtree was one

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Speaker 1: of the first investors in Canva and look how that's done.

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Speaker 1: Through his career, he's learned a lot about tech, a

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Speaker 1: lot about business, and in part because of his friendship

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Speaker 1: with Bill Gates, a lot about philanthropy. And that's the

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Speaker 1: topic of this interview. Sean Almer interviewing Daniel Petrie Ao

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Speaker 1: back in June of twenty twenty one. It's a great one.

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Speaker 1: I hope you enjoy it.

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Speaker 2: Welcome to the Fear and Greed Daily Interview. I'm Sean Elmer.

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Speaker 2: More than a decade ago, Bill and Melinda Gates and

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Speaker 2: led generally, investor Warren Buffett started something called the Giving Pledge.

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Speaker 2: They were asking those worth more than a billion dollars

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Speaker 2: to donate more than half their wealth, preferably before they die.

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Speaker 2: Around two hundred billionaires have so far answered the call,

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Speaker 2: and Warren Buffett himself has declared he'll give away ninety

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Speaker 2: nine percent of his fortune. Buffett has already donated more

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Speaker 2: than thirty seven billion dollars in the last fifteen years,

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Speaker 2: and since its inception, the Bill and Melinda Gates Foundation

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Speaker 2: has seen almost fifty five billion US dollars donated to

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Speaker 2: causes ranging from vaccination to education. The numbers are staggering,

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Speaker 2: but it's highlighted a major difference between the United States

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Speaker 2: and Australia. In the US, philanthropy has been normalized, almost expected,

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Speaker 2: and certainly in Australia there have been some incredible instances

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Speaker 2: of generosity, for example businessman Paul Ramsey who left his

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Speaker 2: four billion dollar fortune to his foundation when he died.

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Speaker 2: But it's hard to you with the fact that we

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Speaker 2: just don't have the same culture of philanthropy as the US.

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Speaker 2: Daniel Petrie Ao is a co founder and chairman of

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Speaker 2: venture capital group air Tree ventures and it reads. An

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Speaker 2: article for the Australian Financial Review, Daniel wrote about whyite's

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Speaker 2: time for an overhaul of philanthropy in this country. Daniel,

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Speaker 2: welcome to fear and greed.

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Speaker 3: Thanks Jean, glad to be here.

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Speaker 2: So why is it Australia doesn't have that philanthropic sense

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Speaker 2: that the US does well?

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Speaker 3: I mean, in reality, the US filanthropic sort of virtual

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Speaker 3: cycle came out of two things. One was this religious

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Speaker 3: tithing that had a foothold in America, but also a

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Speaker 3: state taxes, and there was this sense that why die

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Speaker 3: with a bunch of money and they get taxed at

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Speaker 3: that point in time by the government, why not set

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Speaker 3: up giving ahead of dying and give some away and

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Speaker 3: therefore see the benefits of being filmthropic in your normal life.

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Speaker 3: So really it's kind of a cultural thing through tithing

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Speaker 3: in the religious context. But then it was a structural

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Speaker 3: reform in the sense of estate taxes that now created

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Speaker 3: this sort of virtuous cycle, which is, if you're in

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Speaker 3: America and I've obviously worked in America for a number

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Speaker 3: of years, and you go to a dinner party with

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Speaker 3: wealthy people, ninety percent of the conversation is about the

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Speaker 3: filmthropic efforts that they pursue, and quite honestly, in the US,

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Speaker 3: if you are wealthy and you don't give, you're seen

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Speaker 3: as a social pariah.

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Speaker 2: So why do you think the wealthy should donate?

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Speaker 3: Look to me, you can arrive at this one of

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Speaker 3: two ways. So Bill Gates's mum spoke to him at

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Speaker 3: length about this concept of if you're successful in life,

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Speaker 3: it's your responsibility to give that. We are all lucky

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Speaker 3: in our lives, and those of us who are born

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Speaker 3: with IQ that comes from our parents and grandparents, that

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Speaker 3: have live in countries that are free of violence, that

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Speaker 3: go to good schools, that have good healthcare systems, and

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Speaker 3: maybe have capital markets allow us to fund our businesses.

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Speaker 3: You know, we're lucky. We haven't just got successful by

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Speaker 3: our pure own effort, where we're standing on the shoulders

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Speaker 3: of others, be it genetics, or be it schooling, or

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Speaker 3: be it health systems that allowed us to succeed. So

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Speaker 3: the concept then of well, you have a responsibility now

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Speaker 3: to give back, and that's what drove Bill was a

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Speaker 3: sense of responsibility. The Warren Buffett, which is a sort

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Speaker 3: of a different take on the same concept, is the

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Speaker 3: lucky gene pool, which is he or I or you

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Speaker 3: could have just easily been born to parents of low

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Speaker 3: iq in dirt pool parts of Africa, and our chance

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Speaker 3: of success is very very low. It would not be

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Speaker 3: just a function of hard work. That would be an

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Speaker 3: insult to suggest that anyone in the world has the

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Speaker 3: same opportunity to be successful. So you can come at

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Speaker 3: it from either the just feel a responsibility because you've

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Speaker 3: done well in a society that's allowed you to be successful,

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Speaker 3: or you come at it from the lucky gene pool,

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Speaker 3: or you come at it from just seeing heartache. You

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Speaker 3: don't need to look very far outside your own front

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Speaker 3: door to see someone who's doing it tough for no reason.

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Speaker 3: They haven't brought this upon themselves. And I feel you

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Speaker 3: can't walk past these people these causes every day without

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Speaker 3: trying to do something.

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Speaker 2: Yeah, I mean, it certainly seems sometimes it seems very arbitrary,

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Speaker 2: the people who were fortunate and the people who are unfortunate.

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Speaker 2: I'm in the middle somewhere, and I think that's probably

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Speaker 2: the perfect place to be, and that means I'm incredibly lucky.

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Speaker 2: But it is amazing how arbitrary sometimes people's positions in

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Speaker 2: life end up.

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Speaker 3: Yeah, it's true, and I think we all admit ourselves

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Speaker 3: so much of our success in life is luck. I mean,

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Speaker 3: I happen to be reasonably good at technology, but if

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Speaker 3: I was born a thousand years ago, I would have

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Speaker 3: been some lion's meal on the savannah, right, you know,

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Speaker 3: there wasn't much There wasn't much so scope for coating

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Speaker 3: skills in the savannah about years ago. I'm just kind

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Speaker 3: of lucky I arrived at a certain time. But I

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Speaker 3: guess the thing that the thing I struggle with, and

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Speaker 3: we come back to the point about that all the

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Speaker 3: data shows we should be breckly. All the data shows

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Speaker 3: that Australia is not a philanthropic country. Whether you look

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Speaker 3: at giving a puberstantial duty just overall giving, whether you

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Speaker 3: look at high net worth giving as a percentage of GDP,

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Speaker 3: whichever way you cut it, the data shows very clearly

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Speaker 3: that Australians are not very philanthropical and overagiving. So we

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Speaker 3: don't need to have that discussion about the data. It's

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Speaker 3: very clear. It comes out to you, well why, And

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Speaker 3: I guess that's the thing I struggle with is, in particular,

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Speaker 3: if you've been financially lucky, you've you've ended up with

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Speaker 3: more in your pile than somebody else. I just genuinely

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Speaker 3: don't understand how you can sit there comfortably see suffering

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Speaker 3: in the world and not find something some cause that

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Speaker 3: you feel you can maybe attend to and help alleviate suffering.

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Speaker 3: And then you know, I say, also, We've been doing

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Speaker 3: this my family for quite a long time now. I've

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Speaker 3: been giving a reasonable chunks of money. And the sheer

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Speaker 3: joy you feel and sense of fulfillment when you see

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Speaker 3: that you've impacted someone's life. There aren't words that can

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Speaker 3: adequately describe how good it makes you feel to have

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Speaker 3: done something that has really impacted some one's life that's

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Speaker 3: outside of a normal you gave someone a job in

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Speaker 3: your company kind of thing.

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Speaker 2: Say with me, Daniel. We'll be back in a minute.

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Speaker 2: My guest this morning is Daniel Petrie, AO, co founder

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Speaker 2: and chair of Air Tree Ventures. Is there a sense

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Speaker 2: in Australia that I used to run the Bow Rich List. Yes,

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Speaker 2: and we tried to do a philanthropic list, and Dick

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Speaker 2: Smith was pushing it because he's always been a great

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Speaker 2: philanthropist himself. Yes, but what we kept running up against,

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Speaker 2: and I remember this kind of email exchange with James Packer.

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Speaker 2: James Packet gives away a lot of money, or he

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Speaker 2: did certainly give away a huge amount of money. He

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Speaker 2: didn't want people to know about it. And I think

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Speaker 2: there are quite a few rich lists, to be honest,

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Speaker 2: who actually gave away a lot of money. But it's

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Speaker 2: almost like a tall poppy syndrome thing or something.

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Speaker 3: Well, first, I think when you're unpack the day at first,

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Speaker 3: he so the Packers haven't given a lot of money away, right,

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Speaker 3: I think it depends on you call a lot of money. Yeah,

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Speaker 3: if you look at the sort of general maths around philanthy,

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Speaker 3: which is, you know, if someone allocated twenty percent of

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Speaker 3: their wealth to a Philopic fund and that gave away

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Speaker 3: the required five percent effectively, means are giving around one

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Speaker 3: percent of their wealth per year away. Okay, Now, most

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Speaker 3: of one at wealth is growing at somewhere between seven

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Speaker 3: to twelve percent per year compound, So give me away

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Speaker 3: one percent is not going to get you any trouble

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Speaker 3: anytime soon. There's no way that they were giving one

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Speaker 3: percent of their worth per year. So I think what

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Speaker 3: you see is this massive smoke screen, which is people

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Speaker 3: fall into that trap quite frankly, which is they're told

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Speaker 3: the people are giving away enormous amounts of money but

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Speaker 3: don't want to be recognized. It's just not true. It's

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Speaker 3: just simply not true, because if it was true, the

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Speaker 3: numbers would appear, they'd appear in Flanty Australia as analysis,

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Speaker 3: they would appear in the donations of major charities. So

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Speaker 3: the fact that someone could be secretly giving twenty thirty

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Speaker 3: forty fifty million dollars a year and it not appears

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Speaker 3: somewhere is just kind of nonsensical. And so what actually

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Speaker 3: happens is a lot of wealthy families give very little

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Speaker 3: away but either make a sort of offhand comment we

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Speaker 3: give a lot, but we don't want to talk about it,

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Speaker 3: which is a smoke screen to not giving very much. All.

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Speaker 3: They set up a foundation with a tiny mountainous and

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Speaker 3: I've seen this happen. I've seen families with three four

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Speaker 3: five hundred million dollars set up a path, a private

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Speaker 3: ancillary fund with two million dollars in it, which gives

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Speaker 3: away one hundred grand a year, and the family talks

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Speaker 3: about all the work they're doing in indigenous education, all

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Speaker 3: the work they're doing in remote nursing and you know them,

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Speaker 3: you know how much money they've got. You're assuming they're

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Speaker 3: giving a drug loads and in fact they're just trying

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Speaker 3: to set the dogs off the scent by having spake structure.

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Speaker 3: So no, it is not true that there are legions

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Speaker 3: of super wealthy Australians who are giving tens of million

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Speaker 3: dollars away and it's all been done secretly. Just not true.

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Speaker 2: So how do we get them to do it? Talk

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Speaker 2: about it more?

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Speaker 3: Yeah, I think I think we've got to confront you know,

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Speaker 3: I've discussed this with friends of mine in the space

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Speaker 3: and they say, no, we've got to all the carrots.

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Speaker 3: We can't upset people. And so I think we've done

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Speaker 3: a lot of carrot work, which is creating the tax

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Speaker 3: structures that make it very easy to give the public

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Speaker 3: ancillary funds and the private ancalary funds and paths. Is

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Speaker 3: a super easy way to get tax effective treatment of

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Speaker 3: asset allocations to philanthropy. You get tax deduction. It's all

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Speaker 3: very easy. You've all very simple. You can move assets,

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Speaker 3: you can move cash whatever you want. So I think

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Speaker 3: we've probably done enough on the carrots make it easy.

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Speaker 3: Then I think the other two tax or approaches are

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Speaker 3: one this whole sense of fairness. Do you really think

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Speaker 3: it is fair and right that all this money has

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Speaker 3: appeared in your bank account and that you have no

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Speaker 3: responsibility to give now? I think that's a worthwhile conversation

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Speaker 3: to have and try and unpack with people and take

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Speaker 3: them down and we might touch on these some of

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Speaker 3: the comments they make about why they don't give. But

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Speaker 3: frankly we also need, which exists in all other OECD

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Speaker 3: countries is an inheritance tax, and basic that says, look,

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Speaker 3: if you're not going to give a reagonal chunk away

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Speaker 3: through your life for someone who's got more than twenty

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Speaker 3: million dollars in assets, not talking about missus Smith in

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Speaker 3: Geelong or Campbelltown with a home worth four or five

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Speaker 3: hundred grand, we're talking about with twenty million dollars. If

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Speaker 3: you're not going to give away some doing your life,

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Speaker 3: then when you die, we're going to take twenty percent

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Speaker 3: of that and that's going to be an inheritance tax

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Speaker 3: that goes to charities through some charity fund. And remembering

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Speaker 3: that the UK has an inheritance tax, it cuts in

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Speaker 3: at four hundred thousand pounds, it's forty percent the US

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Speaker 3: has an inheritance tax that cuts in at five and

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Speaker 3: a quarter million. You know, all the major ACD countries

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Speaker 3: have some for of inheritance tax, which is either a

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Speaker 3: catch all for those that are greed and don't want

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Speaker 3: to give, or a motivator, as it was in the US,

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Speaker 3: to help people say well, I might as well give

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Speaker 3: some way before I die.

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Speaker 2: Okay, do you think the government will do it?

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Speaker 3: Look? No, because the governments don't want to be seen

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Speaker 3: to increasing taxes, particularly unwealthy and influential people who can

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Speaker 3: take full page ads out in the papers and say

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Speaker 3: how outrageous is So this requires bipartisan conscience. Vot. You

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Speaker 3: talk to anyone on the street and you do the

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Speaker 3: numbers that my article or I've done a medium post

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Speaker 3: which is a longer version, and you look at the numbers.

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Speaker 3: You know, someone with four hundred million dollars and you're saying, hey,

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Speaker 3: why don't you just take twenty percent eighty million dollars,

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Speaker 3: put it in a foundation and it donates to whatever

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Speaker 3: you care about. No government has to say about that.

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Speaker 3: You're left to live on three hundred and twenty million dollars.

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Speaker 3: Is it true to say that someone with four hundred

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Speaker 3: million dollars can just as easily live their complete same

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Speaker 3: lifestyle and do whatever they want on three hundred and twenty.

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Speaker 3: Of course they can. And that you said at three hundred,

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Speaker 3: five hundred and two hundred and one hundred and probably

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Speaker 3: even at fifty or sixty or forty million. Can someone

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Speaker 3: who's got forty million dollars move eight million dollars into

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Speaker 3: a foundation and live just as happily on thirty two million,

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Speaker 3: Of course they can. So I think it's that discussion

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Speaker 3: that we have to have with governments to say, well,

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Speaker 3: let's put an inheritance tax in that cuts in at

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Speaker 3: a high net wealth and has a low tax rate,

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Speaker 3: so twenty or thirty percent. As I'm motivated to get

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Speaker 3: people to think, and let's call out the wealthy, I should.

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Speaker 3: I remember when you tried to do this at BRW.

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Speaker 3: Do you remember I was a huge supporter of the

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Speaker 3: idea let's have the reach two hundred and the next

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Speaker 3: column how much they're donating?

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Speaker 2: Yes, I do remember that.

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Speaker 3: And then if you're worth five hundred and give nothing away,

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Speaker 3: then put your hand up and say, look, I'm a

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Speaker 3: greedy bars so I don't care. That's fine. It's fine

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Speaker 3: to have that view, but don't pretend you care. Don't

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Speaker 3: pretend you have any sense of responsibility to the society

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Speaker 3: from which you agree or fortune because you don't.

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Speaker 2: Okay. The other side of it is do charities use

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Speaker 2: the money?

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Speaker 3: Well, well, this is one of the good points. Its

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Speaker 3: one of the great sort of comebacks as well. I'd

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Speaker 3: love to give charities, but they're inefficient. Well, there's two

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Speaker 3: answers to that. Well, firstly, there are some that are efficient.

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Speaker 3: Pick one of the efficient ones and back them. Or two,

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Speaker 3: why don't you start a charity that's more efficient, or

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Speaker 3: put your intellectual processes into the charity as well as

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Speaker 3: money to help make them more efficient. Or three there

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Speaker 3: are groups like give well dot org whose job it

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Speaker 3: is to search out the most effective or efficient charities

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Speaker 3: within particular need areas, and they find for you, for

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Speaker 3: any donor, which is the most efficient charity in a

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Speaker 3: particular disease condition or charitable area. So you can get

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Speaker 3: around it in many many ways, and it becomes an excuse.

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Speaker 3: It doesn't really hold water if someone's prepared you a

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Speaker 3: little bit of effort.

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Speaker 2: And then finally on that, I mean I've certainly been

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Speaker 2: involved in charities where people have given money and great

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Speaker 2: philanthropists have given money with conditions, and there's always a

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Speaker 2: bit of a challenge there for the charity who has

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Speaker 2: a charter, who is setting out to do something fairly

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Speaker 2: specific generally, and then the philanthropist is giving money but saying,

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Speaker 2: but I actually want to make sure it happens in

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Speaker 2: Western Australia or something like that.

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Speaker 3: Yeah, I think that's wrong. I think you pick a

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Speaker 3: charity that's delivering a service in an area geographic and

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Speaker 3: in a need area that you agree with, and you're

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Speaker 3: prepared to fund them. Now you may offer to try

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Speaker 3: and help them a bit, but you don't have the

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Speaker 3: right to direct them. If you want to direct them,

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Speaker 3: set up your own charity to do that. I think

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Speaker 3: the sort of directed philanthropy where you're highly the money

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Speaker 3: is highly conditional on how the charity uses the money

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Speaker 3: isn't very helpful because in reality, the charity probably knows

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Speaker 3: more about how best to use the money and we're

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Speaker 3: best to deploy it than you do. So if you

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Speaker 3: want to do it we Australia and find a Westralian

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Speaker 3: charity right, do your own. Don't use this as a

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Speaker 3: power mechanism to get people who are desperate for your

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Speaker 3: support to do what you want them to do.

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Speaker 2: Daniel, thanks for talking to Fear.

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Speaker 3: And Greed, Pleasure Shaw and take care.

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Speaker 2: That was Daniel Petrie, AO, philanthropist and founder of Airtree Ventures.

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Speaker 2: This is a Fear and Greed daily interview. Join me

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Speaker 2: every morning for the full Fear and Greed podcast with

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Speaker 2: all the business news you need to know. I'm Sean Almer.

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Speaker 2: Enjoy your day