Profit may have become a dirty word in some quarters, but Wesfarmers chair Michael Chaney says the record earnings of his business play an essential role in a vibrant economy. 

The owner of Kmart, Bunnings Warehouse and Officeworks announced a record $2.6 billion return after posting a $3.6 billion profit before tax.

The pre-eminent businessman says companies like his are essential to the nation’s economic prosperity amid a cost-of-living squeeze, revealing “almost all the profits ended outside the company”.

It pumped 29 per cent of its profits before tax into the government’s coffers, with a majority 61 per cent going to shareholders, leaving the conglomerate with about 10 per cent of the profit.

“For some external parties, profit seems to be a dirty word, but it is important to understand how profitable businesses are essential to our economy and future prosperity,” Mr Chaney will tell the Wesfarmers annual gathering on Thursday.

He took a swipe at Canberra for changes to employment law, payroll taxes and proposed environmental laws.

“It would be good to hear political leaders of all persuasions acknowledge their understanding of these facts – that large companies like ours constitute a vital part of the economy, generate enormous benefits to the community and make a huge contribution to society. Companies, large and small, deserve their support.”

“Such an understanding would, I believe, lessen the chance of governments enacting laws that … work against the national productivity improvements that Australia so urgently needs,” he will say.

“It is only through a prosperous, vibrant, growing sector that Australia is going to be able to provide that sort of support to our children and grandchildren that we have, in the past, taken for granted.”

Department store chain Kmart was a stand-out performer recording a 25 per cent boost in profits as the company recorded a 3.7 per cent boost in profits to generate over $44 billion in revenue. 

This post was originally published on Michael West.