Saturday, 29 May 2010

Whaling show business

Australia's legal challenge to Japanese whaling is nothing more than show business. Our Government is taking a case to the International Court of Justice knowing that there is little chance of succeeding. The charade is being played out so Labor can pretend to those who actually care about whaling that it is keeping its promise before the last election.
Proof of the complete cynicism of this legal action is that launching it was delayed long enough for the case not to actually be heard before the forthcoming election. The Government did not want the embarrassment of being defeated in the International court before people voted.

Positioning himself for a return

The extracts this morning from a lengthy interview with Malcolm Turnbull to go to air tomorrow on the ABC suggest that all of the man's leadership ambitions are not yet dead. While clearly taking care not to directly confront his replacement as Liberal Leader, there are still some very apparent differences with Tony Abbott. In the interview Turnbull gently positions himself to appeal to the remaining small "l" section of the party that will attempt to reassert itself should Abbott be unsuccessful at the coming election.

Top of the top 500 - the Rolling Stone selection


Out today in the United States - Rolling Stone magazine's list of the all time greatest 500 songs. And top of the list is its namesake - Bob Dylan singing Like a Rolling Stone.

Friday, 28 May 2010

Bringing back a Hapsburg connection

If noble predicates were not banned by law in the Czech Republic, Karl Johannes Nepomuk Josef Norbert Friedrich Antonius Wratislaw Mena von Schwarzenberg would be known as His Serene Highness The Prince of Schwarzenberg, Count of Sulz, Princely Landgrave in Klettgau, and Duke of Krumlov. As there is a ban they simply know him in Prague as Karel Schwarzenberg, a former Czech Foreign Minister and current leader of the Tradition Responsibility Prosperity 09 (TOP 09). And after a national election being held today and tomorrow this Prince may well emerge as the "king maker."
To an outsider like me the politics of the Czech Republic seem as complicated as the TOP 09 leader's name but a few themes about this ballot are clear. The Republic has a recent history of financial scandals involving government ministers and Karel Schwrzenberg has pledged to battle rampant corruption with his newly formed party. The message of this nobleman with the Hapsburg connection is, reporters Der Spiegel, that "I am just as disgusted with the politicians as you are -- and that is why you can trust me."
The latest opinion poll I can find - that published by the Angus Reid Global Monitor - suggests that there certainly are many who do trust him. 
Support of over 9% is a good start for a fledgling party and well above the 5% minimum needed to gain seats in the 200 member lower house under its D'Hondt system of proportional representation.

Thursday, 27 May 2010

Funny about that — politicians bow to self-interest first


The theory behind that Euro joint currency is that all the participating nations will stick to the rules, two of which are that government debt must not exceed 60% of GDP at the end of the fiscal year and the annual government deficit must not exceed 3% of GDP. It is not just Greece where the politicians have ignored this harsh fiscal discipline. Only two nations — Finland and Luxembourg — stuck by the agreement as their peers broke ranks in an effort to save their own electoral necks.
27-05-2010 eurozoneperformance
With that record to look at it’s little wonder that there is so much scepticism about Europe’s economic ffuture.

Following the Seven News example

Perhaps the Seven Network News keeps better company than I thought! It’s recent story on the outing of a NSW Cabinet Minister for frequenting a gay club would clearly have been newsworthy for the supposedly very proper New York Times. That paper today covers at length the claim by a former staff member to once having had an “inappropriate physical relationship” with his female politician boss who is now seeking to become Governor of South Carolina. If that activity is ever deemed in Australia to make a person unfit for high office there will be a lot of vacancies in Federal Parliament!

Tales of drinking habits

Blame a Benedictine is the Scottish Labour Party’s latest catch-cry. The tonic wine produced by the monks of Buckfast Abbey is facing prohibition. Members of the Scottish Parliament are soon to vote on the Buckfast ban after Labour made the measure the keystone of its plans to tackle the country’s binge drinking epidemic.

The problem, says Labour, is the caffeine content of the drink. Jackie Baillie, the Party’s health spokesman, said: “Caffeine in alcohol creates wired, wide-awake drunks and that’s where the problems are. If you don’t take the early opportunity to do this then you will end up as America where there is a huge number of drinks with caffeine added.”
While he’s on the subject of drinking and health, spokesman Baillie might like to consider what to do with the latest Californian fad drink — the “PB&C” which a Daily Telegraph reporter describes as “a monstrosity of a milkshake” that is a “heart stopping ensemble of ice cream, peanut butter and heavy cream” that is “presented in a giant 24 ounce cup the whole gloopy, gooey mess contain[ing] 2,010 calories, the total recommended daily allowance for a woman and only slightly fewer calories than are suggested for men.”

Prolonging the agony


Perhaps the Labor Party should keep away from Ross Garnaut for a while. The Party’s economic thinker of choice has a tendency to come up with plans that are complex to explain — like the emissions trading scheme and the resource rental tax — and complexity clearly is a difficult thing for politicians to handle. Not that the politicians make things easier when they start meddling with the purity of an economist’s  idea and start tossing in compromises for this pressure group or that.
The fate of emissions trading showed us that with the Government ending up with a scheme that pleased no one and was eventually put where the electoral strategists hope it is out of sight and hopefully out of the electorate’s mind. Now Labor is having similar difficulties in handling the mining super profits tax or resource rental tax or whatever it wants to call it.
Surely Treasurer Wayne Swan and Prime Minister Kevin Rudd are not surprised by the reaction to their proposal. Groups hit with a tax increase always scream. Presumably the pair and their small coterie of ministerial colleagues in the inner circle believed they could sell benefits from hitting miners that outweighed any electoral cost. The problem, then, comes in the salesmanship with the biggest mistake probably being too cute in specifying what the extra revenue gained would be spent on.
Lowering company tax rates has no appeal at all to most voters and goodness knows what this infrastructure stuff means to a couple struggling out in Blacktown. No kudos either for telling me I will be paying less tax on my savings bank interest when I don’t have any money in the account. And as for a few extra per cent at some time in the future in a superannuation account well most people are less concerned about the better future than the better now.
The best message is the simple one. When it comes to tax would you rather the mining companies paid or you paid? Toss in, by all means, the argument that the Government has at last started to use that the resource dug up by miners is not theirs but ours.
But don’t confuse things by getting into an argument about actual tax rates by different kinds of companies and certainly stop giving the impression that you are open to any substantial compromise. That kind of talk is just making the Government look like it doesn’t know what it is doing.

And they wonder why Malcolm left

Anyone who thought Malcolm Fraser was wrong in thinking that the Liberal Party was no longer a liberal party was disabused today when the Opposition Leader Tony Abbott released his policy on combating illegal immigration. The Abbott plan goes right back to the Howard Government proposals which first made former Prime Minister Fraser think about leading the Party he once led. It is a policy that will certainly split the parliamentary Liberal Party but that will not matter very much given that the rump of small "l" Liberals is now so small.

Labo(u)r's international trend

It is not just in Australia that a once great political party of the working class has turned to a new kind of leadership that is a long way removed from the kind of people it still claims to represent. This is from today's London Daily Telegraph:
The Opposition is embarked on a leadership contest in which the four front-runners are male, white, forty-something, Oxbridge-educated, football-daft former special advisers, who worked for either Gordon Brown or Tony Blair before becoming MPs. They all have dark hair. Westminster is having fun with rumours that they even once shared a girlfriend.

Tuesday, 25 May 2010

A mystery story: An uncontrollable Rudd and the newspaper editors

Checking my Google Reader page around 10.30pm I came across this intriguing item apparently posted on the news.com.au website at 6.37PM
Click to enlarge
Naturally I clicked on the item to see the story but all I found was this:
What can it mean?
The Sydney Morning Herald website provides an answer. It runs an AAP report of a Senate estimates committee report quoting shadow attorney-general George Brandis seeking to find out whether AFP protective security officers guarding the prime minister would as a matter of procedure record any security incidents in their diaries or logbooks. Senator Brandis suggested the incident occurred in Melbourne on March 30 when Mr Rudd attended a private dinner at Nobu Japanese restaurant at the Crown Casino with a group of News Limited newspaper editors and journalists. "The nature of the incident involved an altercation in which officers standing outside the private dining room heard the prime minister yelling at such volume that they were concerned that an incident affecting him or potentially his safety was taking place within, and they entered the room to make sure that he was all right," Senator Brandis asked.
Australian Federal Police (AFP) commissioner Tony Negus told the committee he would take that on notice and consider whether it was appropriate to respond. "I would have grave concerns in divulging the methodology or the activities of how we may or may not respond to particular incidents," he said.

My kind of politician

Balanced news, fearless views. What an appropriate newspaper motto to appear alongside the brave declaration by the new Philippines President-in-waiting Benino "Noynoy" Aquino.

Aquino, 50, brushed aside calls from health groups that quitting smoking would set a good example for the country, reports the Philippine Daily Inquirer. “People knew when I ran for president that I smoke,” Aquino said in reply to a nongovernmental organization who had asked him to be its antismoking poster boy. “So as long as I don’t violate any laws and I don’t disturb anyone [I should be free to smoke]. This is one of my few remaining freedoms,” he said.
Oh that that secret smoker in the United States White House had the courage of his convictions!

You can keep your alfalfa

Never having been one to eat those alfalfa and other kinds of bean sprouts I take this news as confirmation of my good culinary sense.
That announcement of yet another sprout recall is on the FoodSafety website of the US Food and Drug Administration.

An icy update

The evidence of a warming world keeps coming. The extent (area) of sea ice in the Arctic is now below that of the record low year in 2007.

A good news morning for an old fellow

A pleasant surprise this morning for this old fellow when doing the daily survey of what the world's newspapers are saying. First a report in The Guardian.
A pity about that women and -non-smokers bit but some good news is better than no good news.
And then there was this finding when I visited the Journal of Alzheimer's Disease website where you can find the press statement on which The Guardian based its story:
That's the kind of press release to make the coffee go down comfortably.

Monday, 24 May 2010

But no sign of doom and gloom here


There's no sign of doom and gloom in the figures this morning from the Australian Bureau of Statistics. Sales of new motor vehicles in April  recovered from a downward blip in March with the seasonally adjusted figure of 90,935 being more than 20,000 higher than a year ago.
24-05-2010 new motor vehiclesalesapril

A change in the seasons

Leadership challenge stories are on the way out. Election date speculation is upon us. Like the first cuckoo in spring The Daily Telegraph this morning had Early election clue found in MP speeches

Grave risks for Labor

The signal from Resources and Energy Minister Martin Ferguson on possible adjustments to the mining super profits tax was decidedly unhelpful. The last thing the Government needs now is anything that looks like backing down in the face of opposition from the mining industry. Nerves must be kept. If Prime Minister Kevin Rudd does back down his reputation as a weak leader not prepared to stand up for anything will be irrevocably confirmed. And weak leaders don't win elections.

Words of political realism in a quote of the day

The 51-year-old economist Nouriel Robini, widely known as Dr Doom, having predicted a US housing market crash, financial crisis and partial collapse of the banking sector, turns his attention to sovereign debt.
"In the US there is a lack of bipartisanship between Democrats and Republicans, in Germany Merkel has just lost the majority in her legislature, in Japan you have a weak and ineffective government, in Greece you have riots and strikes. The point is that a lot of sacrifices will have to be made in these countries but many of the governments are weak or divided. It is that political strain that markets are worried about. The view is: you can announce anything, we'll see whether you're going to implement it."
"People asked me why I saw there was a bubble and my question was why others didn't. During the bubble everybody was benefiting and losing a sense of reality. And now, since there is the beginning of economic recovery – however bumpy that might be – in some sense people are already starting to forget what happened two years ago. Banks are going back to business as usual and bonuses are back to levels that are outrageous by any standards. There is actually a backlash against even moderate reforms that governments are trying to pass."
From an interview published in the London Daily Telegraph.

Sunday, 23 May 2010

Profiteering by iron ore miners - India's windfall tax proposal

India's Mines Minister B.K. Handique calls it "profiteering" by the merchant miners as iron ore prices have risen by about 170 per cent between 2003-04 and 2009-10. Hence Mr Handique's letter to the nation's Finance Minister Pranab Mukherjee a week ago calling for the imposition of a Windfall Tax on mining profits.
The Indian Express newspaper reported that the intensified pitch for the tax "comes close on the heels of Australian Premier Kevin Rudd recently announcing his government’s determination to impose a Resource Rent Tax, which is also understandably aimed at curbing the profiteering of Aussie mining behemoths like Rio Tinto, BHP Billiton etc."
Minister Handique told The Express:
“We have told the Finance Ministry that while ore prices continue to surge, its cost of production hasn’t changed much. So, iron ore mining remains highly attractive for the miner. It is also a fact that higher returns have not translated into higher spends on CSR for local communities. What’s more, it has fuelled a rapid growth in ore production along with corresponding increases in boundary disputes, acrimonious litigation, misuse of transport permits of illegally mined minerals and recently in mafia activities.”
The India website of The Wall Street Journal said the proposed windfall tax on non-fuel minerals such as iron ore was to claim part of what the government considers high profits earned by the mining sector. "Our proposal is to levy a windfall tax on domestic sales as well as exports of minerals when their (prices) are substantially higher than the cost of production,"Minister Handique said in an interview with the Journal. 
"On the lines of a similar proposal in Australia, the new tax is also meant to raise additional revenue for the government. But unlike in the former, India has a predominantly captive production model where mining leases are mostly given out to producers with their own plants to make finished products such as steel. The plan will need to be approved by the Finance Ministry before it can be implemented although it doesn't need parliamentary approval, as is the case in Australia."

An ingenious political solution

Reading a lengthy New York Times feature on what Julia Gillard might call an American education revolution, I came across an ingenious device get politicians in New York State to confront the teachers unions and introduce the system of charter schools that are publicly financed schools open to any child by lottery but run by entities other than the conventional local school district.
Those who run these charter schools, normally non-profit organisations, are accountable for the school’s performance, says the article, but they are free to manage as they wish. That includes the freedom to hire teachers who are not union members.
Then came the interesting bit about how that opposition was overcome:
A law allowing charter schools in New York was passed in 1998 over intense opposition from the teachers’ union. It survived because there was a Republican governor, George Pataki, and then only because Pataki attached it to a bill giving a pay raise to legislators.
 Perhaps when Ms Gillard becomes Prime Minister we might see a repeat of this tactic! And don't be surprised if she is instead still Education Minister to see more changes to our education system based on what the Obama administration has named "The Race to the Top". The article outlining some of the recent changes to government schools is well worth a read,

The Murdoch forum for racists

Late last week John Stossel, an employee of the Murdoch empire's Fox News, used Megyn Kelly's Fox News show to defend the right to discriminate based on race. "Private businesses ought to get to discriminate," he said "And I won't won't ever go to a place that's racist and I will tell everybody else not to and I'll speak against them. But it should be their right to be racist."
The website MediaMatters for America reports that Stossel didn't just argue for the right to discriminate. He went a step further, suggesting the "public accommodations" section of the Civil Rights Act should be repealed, thus allowing businesses to practice racial discrimination. This is the section of the law that prohibits a lunch counter from refusing to serve African-Americans -- a practice which was commonplace when the law was passed. The government, Stossel says, should be protecting the rights of businesses that want to discriminate -- not the rights of minorities facing pervasive discrimination.

Have a listen for yourself and if you are offended as I am why not suggest to your industry superannuation fund that you hope they are not investing your funds in a company that gives a forum to a commentator with these views.

A deflationary horror story

So you are  prudent Japanese saver and have carefully invested your savings in shares for the past 25 years and now you find yourself, admittedly after receiving a small earn from dividends, with exactly the amount of money you contributed. It's the kind of record that should be frightening Americans when they read the Nobel prize winning economist Paul Krugman writing that as the core rate of inflation in the US is now clearly below 1 percent; it’s not hard to see Japan-style deflation emerging if the economy stays weak. The danger of a lost decade, writes Krugman on his New York Times blog, remains quite real.
Click to enlarge
That blue line at the bottom is the Japanese Nikkei 225 Index from 1985 onwards tells part of the deflationary story and a depressing one it is. Not that the British (the FTSE is the red line)or American (the S&P 500 is in purple) experience for share buyers has been all that flash over the last decade either. They have essentially been profitless markets since the late 1990s as well. By comparison investors in the Australian market have only had four years of a stagnant ASX All Ordinaries index (the green line).

Friday, 21 May 2010

My own pointless protest


I don't have one of those television watching meters in my house so my little protest will not affect the ratings which makes it quite pointless really. Nevertheless the futile gesture of not watching the Seven Network News will make me feel better.
All I can hope for is that those on the TV survey panel are as disgusted as I am with the new form of queer bashing that went to air on 7 in Sydney last night. Quite frankly I don't care how politicians get their sexual kicks in private and I don't think reporting a visit by a Cabinet Minister to a gay club is legitimate news either.
As to the newspapers this morning, well, they had to report the resignation from the Ministry of David Campbell but most of them crossed the line into promoting homophobia. I mean, how come it is a scandal for the NSW Government that the former Transport Minister was embarrassed about being ambushed by an unprincipled television station news crew?
21-05-2010 dailytelegraph
The only scandal was the action of Network Seven. Bring in some fair dinkum protection of privacy laws is what I say

How about blaming China?


I'm not a share owner -- no, not even indirectly through a super fund -- so at least I'm not writing through my pocket like some commentators of late clearly are.
Thus I am unconvinced of the certainty with which some of my journalist colleagues have been asserting that the fall in Australian share prices and the welcome fall in the value of the Australian dollar is all the fault of the Federal Government and its planned mining super profits tax.
Could it not be that in the last few months Australian share prices have fallen slightly more than those in the United States because of the increasing concern about the immediate future prospects of China as shown by the fall in the Shanghai Stock index?
21-05-2010chinaaustralias&p
And what about comparing what has happened on the Australian market with the course of share prices in Brazil, a country which, if you believe those crying wolf will be a  big beneficiary of the Australian government's wrong headedness?
21-05-2010 australiabrazilindexcomparison
Funny that. The Brazilians seem to be doing worse than us.

Big Brother keeps marching on


Big Brother wowserism is running wild with this Labor Government. First it wants to censor what people can see on the internet in their own home. Now the Customs Department is setting out to embarrass travellers when they arrive in the country by mounting a p-rnography check.
Where will the influence of our goody, goody too shoes Prime Minister go next?

Labor's election advertising begins and the public is paying

Taxpayers are footing the bill for the start of Labor's re-election advertising campaign. Television spots extolling the virtues of what is called "the new health reform" are now appearing and the internet is full of pointers to the party's propaganda website that masquerades as the Health Department providing information.
The whole thing makes a mockery of Labor's promise to end the practice of incumbent governments delving into the public purse to further their own political ends.

Thursday, 20 May 2010

The real fear of mining companies emerges

It has taken a few weeks but the stock market analysts are beginning to wake up to the real fear that the BHP Billitons and Rio Tintos of the world are really worried about when it comes to the proposed Australian super profits tax. It is not just the extra dollars that will be paid in Australia that concerns them. The miners realise that the increased share of mineral wealth going to the host country here at the expense of those that dig it up will quickly spread to other countries around the world. If and when that happens the stock market valuations based as they are on growing future earnings will come crashing down.
The likelihood of this happening was something I alluded to when the Australian tax was first announced earlier this month. I wrote then:
"Some things about politicians are universal and seizing an opportunity for extra tax revenue is one of them. Hence the idle nature of the threats by the mining industry in Australia to take future developments somewhere else if the resources tax is finally imposed. It will not be long before the international mining taxation playing field is level again."
This morning the Bloomberg news service has taken up this theme with a story saying that Australia’s planned 40 percent tax on mining profits has set a benchmark for other countries weighing higher levies, reducing earnings forecasts for BHP Billiton Ltd and Rio Tinto Group and the attraction of mining stocks. It quotes, among others, Tom Price, commodities analyst with UBS AG in Sydney, as saying “it could create what the miners are now describing at a global level as a type of tax contagion. They might levy a new tax at the miners in Brazil. Canada is another mineral province and South Africa.”

News the sufferer as TV profits fall


The figures released yesterday by the Australian Communications and Media Authority are getting on for two years out of date now but they confirm that it is news and current affairs programs that are suffering from the decline in the television industry’s profitability. ACMA’s publication Broadcasting Financial Results 2007-08 shows the commercial television sector reported $4159.3 million in revenue that year for a reported broadcasting service profit of $317.9 million. Back in 2003/04 profit was just under $600 million.
19-05-2010 televisionprogramspending
Spending on news and current affairs programs in 2007-08 was down considerably with light entertainment and sport being the big growth areas.

Very, very modest


As US authorities expanded the no-fishing zone in the Gulf of Mexico and began fretting about the oil spill off Louisiana reaching currents that would take it to the Florida coast, the chief executive of BP was taking a much more sanguine view of the potential environmental disaster. The massive Gulf of Mexico oil spill, Dr Tony Hayward told Britain’s Sky News, will end up having only a “very, very modest” environmental impact.
I think the environmental impact of this disaster is likely to have been very, very modest,” he said. “It is impossible to say and we will mount, as part of the aftermath, a very detailed environmental assessment but everything we can see at the moment suggests that the overall environmental impact will be very, very modest.”
19-05-2010 BPchiefonSkyNews
Believe Dr Hayward and you would wonder why President Barack Obama is bothering to set up his commission of inquiry into how this accident happened. And you might also believe in flying pigs.

Calling the miner’s bluff

Perhaps the next step for a government apparently set on its new resources tax will be to remind miners that if they don’t like the system, they will have taken back the leases they refuse to develop because of it. My guess is that there would be plenty of willing takers to develop what BHP and Rio Tinto are talking about leaving in limbo.

Fearless advice


That Treasury secretary Ken Henry is clearly prepared to give fearless advice was shown by his speech yesterday to a group of business economists. He not only defended the proposed super profits tax on mining companies but did so in a way that will make it very difficult for the Labor government to retreat from it if it ever wanted to. The best the mining industry can hope for now is that the government changes before legislation is actually passed.
But given that the opposition has indicated it is against the introduction of what it calls a big new tax, Dr Henry’s direct intervention into the political process should raise a few questions as to what kind of public service we now have. In the old theory, fearless advice was delivered in an independent and impartial fashion and in private. That convention has clearly gone by the board without new rules about the roles of departmental secretaries being enunciated. That is not a healthy development.

Wednesday, 19 May 2010

Repeating a warning - don't bother listening

I tried, I promise I really tried, to work out what Joe Hockey was trying to tell us at the National Press Club today about what the Coalition would do with economic policy if it was the government. I just failed to grasp it that's all. I gathered that there would be less spending than Labor proposes and the new tax on mining company profits would be done away with but then I got confused when the shadow Finance Minister Andrew Robb started counting as spending cuts the abolition of tax changes by Labor that would only apply if there was a new tax on mining company profits. What the ...?
I should have known better than  to even listen to the speech. Politicians are in election mode where they think the only way to treat the public is as fools. Words from now until election day are cheap and mean nothing.
And it's not just Messrs Hockey and Robb who are speaking in riddles. I am still waiting for someone in the Labor Government to explain in terms I can understand how this mining super profits tax will actually work.

Bailing out the banks

The action of the German Government in curbing the short selling of German bank shares sends me the message that things really must be crook in European economies. The recent pledge of all those hundreds of billions of Euros supposedly to help the nations that borrowed beyond their means must have more to do with the banks that lent the money than the countries they provided it to.

Tuesday, 18 May 2010

Don’t threaten with Pinocchio’s nose.

I refuse to join in the verbal punishment of Tony Abbott for admitting that he sometimes tells untruths. My research this morning tells me that if a child confesses, I should thank him for telling me the truth. So thank you Tony for being so frank on the 7.30 Report. I understand that the academic studies show that if kids are only punished for lying, they will be more likely to lie in the future. Not for me to start telling you punishment stories like how Pinocchio’s nose grows longer when he lies. I’ve got the message that yarns with an ending that shows truth-telling as a good thing appear more effective at damping lying than fear.
So let me tell the Leader of the Opposition not to worry about the mock indignation this morning that has greeted his truthfulness about his lying. We the people understand because we all do it and we know that politicians are no different than the rest of us. Whether we’re two years old or 62, I read in the Wall Street Journal recently, our reasons for lying are mostly the same: to get out of trouble, for personal gain and to make ourselves look better in the eyes of others.
That definition seems to fit political lying pretty well. And I noted in that Wall Street Journal article that the ability to lie — and lie successfully — is thought to be related to development of brain regions that allow so-called “executive functioning,” or higher order thinking and reasoning abilities. That’s not a bad thing for a leader to have.

Chinese reference to an economic Titanic

When the Chinese Premier Wen Jiabao starts warning that his country faces tough challenges in balancing economic growth and tightening policies, Australians should at least start pondering just how rosy is our own economic future. When Chinese economic commentators start using a comparison with the Titanic to describe their conditions we perhaps have a reason to be seriously concerned.
At the weekend during a trip to the northern port city of Tianjin, Premier Wen warned that China must avoid piling on adjustment policies, which carry risks of "negative consequences", amid complex domestic and international conditions. "At present, the national economy continues to improve, but domestic and external conditions remain extremely complex, and macro adjustment faces many dilemmas," he said.
The China Daily in its report of the speech had analysts saying his remarks show the tough choices policymakers are facing as rising inflation and signs of slowing economic growth are intertwined complicating the situation. This morning the paper had this commentary:
Xin Zhiming argues that rising inflation and surging inflation make the current circumstances more difficult for the country's economic policy makers than when they reacted to the global financial crisis. Given the already lax liquidity and exorbitantly high house prices, the government has few choices but to keep them under control. "Tightening measures, meanwhile, risk dragging on economic growth, as reflected by the stock market reaction."
I have referred recently in these political snippets to what is happening to the Shanghai Stock Exchange Composite Index being a rough guide to what the market thinks of China's immediate prospects and yesterday's five percent fall just increases my apprehension about what it foretells.

It seems to me that the market has serious doubts about the ability of Premier Wen pulling off the difficult feat of stopping housing and other price rises without stifling economic growth. The risk of a European and global economic slowdown affecting Chinese exports compounds the problem.
Which is what led Xin Zhiming to this Titanic allusion:

Monday, 17 May 2010

The politician's creed: lie or at least obfuscate

Whatever you do, don't say what you really think. That was the clear message from Germany's economics and technology minister Rainder Bruderle to any of her nation's bankers thinking of talking about the current crisis in Greece and its impact on the Euro.
Last week Deutsche Bank Chief Executive Josef Ackermann in a TV interview cast doubt on Greece's ability to repay its debt. As Reuters reported it, Ackermann, one of Europe's top bankers who has helped to put together a private-sector bailout package for Greece, questioned the country's ability to turn itself around, according to excerpts of a transcript for the Maybrit Illner talkshow set to be broadcast on German television ZDF "Whether Greece over this time period is really in a position, to bring up the strength , I have my doubts," Ackermann said in the transcript, adding that this requires "unbelievable efforts". If Greece were to "fall down" this could spread to other countries and lead to "a sort of meltdown," Ackermann told ZDF.
It was probably a pretty accurate assessment and not much different to what many economic commentators have predicted., But for German Minister Bruderle such frankness should not occur. The English language version of the Greek newspaper Kathinerini reported his comments this way:



.

Alas, poor Kevin

Our Prime Minister quit the fight too early but there’s still time for him to get back into the role of being the defender of action against global warming. The evidence for him to use that the world is getting warmer is mounting again with the latest figures showing that it was the hottest April on record in the NASA dataset.

The April high follows the hottest March on record and makes the January to April period the hottest NASA has recorded as well.
Paul Krugman on his blog this morning has plotted the temperature anomaly — the difference, in hundredths of a degree centigrade, from the average over 1951-80:


As Krugman comments: “So much for the ‘global cooling’ talking point. What I’m wondering is what excuse the deniers will come up with.”

The price of early popularity

You could almost detect the glee with which another set of bad opinion poll numbers for Kevin Rudd were greeted by some journalists this morning. After all, Newspoll had given them another excuse to write on their favourite topic — leadership speculation. Hence, Julia Gillard’s face was on front pages everywhere. But perhaps the following graph will give a bit of perspective to all the analysis of what Labor and Rudd’s decline in the polls actually means. It plots the advantage/disadvantage that prime ministers Keating, Howard and Rudd had on the Newspoll question of who would make the best PM during their first term in office:


What is very clear is that Rudd had an extraordinarily good response early on in his prime ministership but that even though his lead has declined substantially he is still doing very much better than his two predecessors. There is no evidence there to support Labor changing its leader.

Sunday, 16 May 2010

The way the political world works - limiting the liability of oil explorers

The liability of offshore oil explorers in the United States for environmental damage is limited by current legislation to $US75 million. That's hardly a figure to stop companies from taking a risk or two. BP probably earns that amount every hour of the day. So it was last week that Sen. Robert Menendez (D-NJ) introduced a bill to increase the maximum liability to a more realistic $10 billion.
The American Petroleum Institute (API) quickly sprang into action expressing its opposition to the proposal arging that doing so would "threaten the viability of deep-water operations, significantly reduce U.S. domestic oil production and harm U.S. energy security." Alaska's Sen. Lisa Murkowski agreed and found a procedural way to stopping the bill.
The website TPMmuckraker reports that like numerous Alaska lawmakers, Murkowski counts the oil and gas industry as a major backer. According to online records, it has contributed over $426,000 -- more than any other industry aside from electric utilities -- to her campaigns over the course of her career.

Saturday, 15 May 2010

A media note: In praise of The Oz on Aboriginal affairs

My guess is that when people like me put on their pundit's hat and criticise The Australian for some of its strange editorial twists and turns it is really nothing more than an acknowledgement of the importance we attach to this one national daily. The conservative streak might not be appreciated but it is the one newspaper in the country that takes a broad look at our society without the local city blinkers of the other dailies.
And as this morning's edition proves yet again, there are some national issues which only The Australian even attempts to cover on a consistent basis with Aboriginal affairs being one of them. For month after month - year after year really - there has been a critical questioning of the actions of the Queensland police in investigating the death in custody of Mulrunji Doomadgee. This morning's summary of the reaction to the latest coronial inquiry should be a must read.
Sure we get the stories about welfare bludging and the horrific stories of alcohol addiction and domestic violence but the good news is covered as well. Like the story of Donald "Duck" Chulung this morning who hopes he is the first of many Aboriginal entrepreneurs in his home town of Kununurra, the Kimberley outpost that has started to boom on the back of a $415 million expansion of the Ord River scheme. Along with criticism of the pace with which the Federal Government is acting to try and solve the Aboriginal housing crisis we find as well in The Australian stories like this one for which I could not find a link on the website:


All my friends are saying it

Sympathy this morning for my old boss Bob Hawke having to try and clarify his way out of that report based on an overheard airport conversation with a Labor MP. (See the earlier post on Airport ears). Bewilderment at the decline in Kevin Rudd's standing is not confined to Hawkie. I hardly have a friend who is not making the kind of comment that the eavesdropper reported.

The courageous Tony Abbott

What a surprise! There are parts of the review of the Australian taxation system by Ken Henry that the Liberal Leader likes. The Australian this morning contains this extract from an interview on the subject by Tony Abbott:

Yes folks, it's true. Income tax cuts and work for the dole are okay.

Friday, 14 May 2010

Even airports have ears - lovely leadership speculation

There's nothing the media likes more than a leadership story and normally journalists either base them on off-the-record chats or simply make them up. How exciting then for Seven Network News tonight being able to pin speculation about Kevin Rudd being replaced by Julia Gillard onto an actual, real and named former Prime Minister!
Bob Hawke, we were told, is unhappy with the PM's performance and would want him replaced with his deputy, Julia Gillard, except that it would burn both of them if they lost the election. To further add authenticity to the gossip, Labor backbencher Daryl Melham was the other party to the Hawke chatter.
One thing we can be sure of is that the pair were not expecting a version of whatever they did say to be the stuff of the evening news bulletin. As Melham puts it in a statement tonight: "Bob and myself were doing nothing more than discussing the usual Canberra press gallery rumour mill. The fact that some Liberal staffer has deliberately eavesdropped on this conversation and misrepresented it to the media just shows how desperate the Liberal Party has become."
Another certainty is that this statement will not put an end to a new bout of Labor leadership speculation. Journalists love the subject too much to let a denial or two get in the way.

Politics of desperation

The time has come to stop listening. From now until the election is over politicians will not be telling us the truth. Tony Abbott led the way into the meaningless zone with his budget speech reply and the Government will soon follow his example. Our would-be leaders and our leaders all fear that honesty is not a good policy. Hence the Opposition Leader wants us to believe that getting rid of thousands of public servants will not affect the services they deliver. And rather than having the courage to announce the cutting of some specific programs he pretended he will solve the nation’s budget deficit by waving his magic efficiency wand. Sad but inevitable I guess.

It's just tiny really - quote of the day


"The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume."
- Tony Hayward, CEO of BP, does his "don't worry, be happy" impersonation in an interview with The Guardian

Mac-breakfast to the rescue

I knew the Sydney Daily Telegraph was in circulation trouble when I started getting the paper free with my hangover sausage and egg McMuffin breakfast. This morning came the proof. "Weekday sales of the other main NSW newspaper, The Daily Telegraph, fell nearly 11,000, or 3 per cent of its sales," reported the Sydney Morning Herald. Goodness knows what the decline would have been without the week or so of freebies but McDonald's sure sells a lot of breakfasts.

Taking the PM's advice

Readers will note from my reference to today's Cairns Post  story about the price of prawns that I am taking very seriously the chastising given by the Prime Minister to Kerry O'Brien on the 7.30 Report this week about seeing what is reported in the provincial press. Hence I can also tell you that the Geelong Advertiser thinks that Mathew Stokes returning from exile this weekend when the Cats take on the Lions, while star forward James Podsiadly is out injured, is the most important news of the day. Meanwhile up in Townsville The Bulletin reports that a taxi driver was forced to push his panic button in his locked cab after he was confronted by a man wielding a tomahawk. But the story of the morning just has to go once again to the Northern Territory News for this contribution:

BP oil spill gets serious

So you haven't been too worried by that oil spill of the Louisiana coast eh? Out of sight, out of mind kind of thing, eh? Well have a look at this from today's Cairns Post and start worrying:

Wednesday, 12 May 2010

Media wrap - Budget reception will make Government happy

POLITICS AND ECONOMICS

The Budget



Wayne Swan rides tax wave - Wayne Swan is banking on surging company tax revenue and the revitalised mining boom, backed by government spending discipline, to drive the federal budget back into surplus three years ahead of forecasts and cement Labor's case for re-election - The Australian

Lucky country returns to bounty - Michael Stutchbury in The Australian says Wayne Swan's Lucky Country has come up trumps again thanks to the same China-fuelled mining boom that powered the economy through the global recession.

The only number that counts - There's only one number that counts in Wayne Swan's pre-election budget - $1 billion - that's the surplus in 2013 and the foundation for the 2010 election campaign - Dennis Shanahan in The Australian

Accounts deliver an election narrative - concludes Paul Kelly in The Australian

Full Budget coverage - The Australian

Wayne Swan's Budget 2010 speech: Riding the resources boom - The Australian

Hard times forge a steely Treasurer - Tom Dusevic in The Australian believes if a near-death experience with cancer fortified Wayne Swan as a man, Labor's planned escape from the global financial crisis to the next boom will define him as a politician.

Pledges slow down return to surplus - Geporge Megalogenis in The Australian writes that the global financial crisis has offered Labor more excuses than hard choices.



Swan's Budget is Operation Save Kevin - He promised a workmanlike Budget but Wayne Swan looked more like a combat surgeon conducting Operation Save Kevin Rudd today, attending to the deficit while he stitched together an election strategy based on health reform and economic management - Sydney Daily Telegraph

Treasurer Wayne Swan's shave and a haircut Budget - Malcolm Farr in the Sydney Daily Telegraph writes that the Federal Government is offering a massive income tax cut in its "shave and a haircut" Budget, along with a promise to double the speed at which its debt will disappear.

What it means for you - More cash in your savings account and less headaches at tax time key features of this year's Budget - Sydney Daily Telegraph

Nation keeps getting stronger - Australia's miracle economy will create an estimated 250,000 jobs next year and growth is tipped to reach 4 per cent by 2011, fed by continued Chinese demand for our minerals - Sydney Daily Telegraph

Ensuring there is always a doctor in the house - Getting to see a doctor after hours will become easier, with a 24-hour emergency helpline manned by a GP who'll diagnose your health problem and organise an after-hours appointment in your local area - Sydney Daily Telegraph

Humbled Kevin Rudd takes aim at your vote with safety-first budget - Melbourne Herald Sun



Wayne Swan delivers 'responsible' federal budget to get economy back in black - Brisbane Courier Mail

Wayne Swan plays the same song in Budget 2010 - Dennis Atkins in the Brisbane Courier Mail says Wayne Swan was forced to return to his 2007 election theme of "reckless spending must stop".



Back to black, and proud of it - A rapid return to surplus and the prospect of full employment underpin a restrained federal budget aimed at showcasing the Rudd government's economic management and health reforms ahead of this year's election - Melbourne Age

The bullet dodged, now going for glory - Michelle Grattan in the Melbourne Age writes that Labor's third and pre-election budget puts a stake in the ground of economic credibility. The government that successfully held off the recession seeks to show it can responsibly manage the return to prosperity.

Banking on the power of prudence - A modest pre-election budget helps Labor sell its message that it's the better party on economic management says Shaun Carney in the Melbourne Age

'We are the envy of the world' - Tim Colebatch in the Melbourne Age szays good resolutions make for boring budgets. The big story in this budget is not what it does, but what it doesn't. It doesn't have tax cuts. It doesn't have much new spending. It doesn't even have much in spending cuts.

Windfalls made the difference in Wayne's World - Malcolm Maiden in the Melbourne Age finds that since the previous budget was handed down a year ago, what the boffins call parameter variations and the layman might call windfall gains are estimated to have put an extra $95 billion of tax revenue into the pipeline in the four years to 2012-2013, and to have improved the projected underlying budget balance in that period by no less than $83.3 billion.

With $46bn taken out, growth rests on private spending - The huge turnaround in cash balance generates deflationary pressures - Kenneth Davidson in the Melbourne Age

That's Swan in the spotlight, getting his religion - ''Tonight we meet the highest standards of responsible economic management.'' You could very nearly stop listening right there. That single sentence contained the Treasurer's whole budget - Tony Wright in the Melbourne Age

Winners and losers - What the budget means for you - Melbourne Age

Cashed up and ready for action - Ther government has set itself up for this year's election - and possibly the one after - with an upbeat federal budget that will see the deficit wiped out within three years and a vastly reduced national debt paid off much earlier than forecast, while still funding tax cuts and $7.3 billion in health measures - Sydney Morning Herald

The budget conjurer waves his magic cheque book again - The Prime Minister goes flat out all year, every year promising to spend money. Then the budget reckoning comes around. Will wonders never cease? Economic rectitude with only a modicum of pain. With one leap Labor gets the budget back on track - Ross Gittins in the Sydney Morning Herald

Every dollar spent is offset by tax rise or spending cuts - The government talked tough beforehand, but the reality isn't so severe writes Jessica Irvine in the Sydney Morning Herald

Back in the black with a touch of restraint - writes Peter Hartcher in the Sydney Morning Herald

Kevin07 stages election comeback - The narrative of this year's budget is the return of the Labor we voted for in 2007 is the verdict of Lenore Taylor in the Sydney Morning Herald

Ignore the Treasurer's denials, this absolutely is an election budget - Sydney Morning Herald

Swan says we're envy of the world - The West Australian



A no-frills Budget to make or break Rudd - Adelaide Advertiser

Aboriginal affairs

Aboriginal pupils in sharp focus in education plan - Teachers will need to learn how to teach Aboriginal children as part of their training before they can register to work in public and private schools under national plans to lift the standard of indigenous education - Sydney Morning Herald

Elections

No more dodgy how to vote cards - The Rann Government will introduce legislation to stop the use of dodgy how-to-vote cards at state elections - Adelaide Advertiser

Opinions

Gillard sees beyond school bricks and mortar - It's been a week of potent political juxtapositions. The Prime Minister has revealed himself as a political butterfly fast losing support in the community, writes Janet Albrechtsen in The Australian. In contrast, the Deputy Prime Minister has put on the boxing gloves.

Tax grabs to hide waste - This is a Budget worth boasting about - if it didn't rely so crucially on desperate tax grabs, heroic assumptions and broken promises claims Andrew Bolt in the Melbourne Herald Sun

LIFE

Education

Schools cheating on national tests-The father of a struggling year 7 student at Vermont Secondary College says his son was told he did not have to sit the NAPLAN tests - meaning the school would perform better on the My School website - Melbourne Age