Tag Archives: business spectator

Strewth! What Is Alan Kohler Doing On “Their” ABC?!

21 Dec

I applauded ABC News Finance commentator Alan Kohler recently, for his brilliantly blunt article on Wayne’s MYEFO.

And here’s Alan speaking more dangerous truths on ABC’s Inside Business, his Sunday morning business show (h/t wakeup2thelies):

I’m shocked.

Wonders will never cease.

Big Truth told, on the government-funded national broadcaster.

If you are inclined to prayer, then you might like to petition for Alan’s personal safety.

Should he persist with commentary like this, he may need it.

Speaking of which, does anyone know how Alessio Rastani is faring these days?





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Who To Believe On Super?

16 Aug

From ABC Insiders:

BILL SHORTEN: Well in the last two years, and whilst the final figures haven’t come out from last year, Chant West who are one of the organisations who monitor [superannuation fund] returns show that the year before last the returns on average for a balanced fund was 8.9 per cent. The year just passed – 9.2 per cent.

From ABC TV’s Alan Kohler in Business Spectator:

For the past five years the market has given nothing. After the 20 per cent correction between April 11 and August 8, the ASX 200 accumulation index (capital return plus dividends) has now produced a zero five-year return.

From ABC Insiders:

BILL SHORTEN: As an actual investment product super’s done reasonably well over the last 20 years.

From Alan Kohler:

The first fifteen years since the superannuation guarantee legislation was first introduced in 1992 went extremely well. The compound annual rate of return provided by the sharemarket – like manna from heaven – was 15.5 per cent…

Of course, not all that return dribbled into the members’ accounts: the superannuation industry, consisting of advisers, platforms, fund managers and the super funds, were furiously skimming the accounts and getting gloriously rich.

Still, anyone retiring in 2007 was a big winner and didn’t begrudge the skimmers their little portion. Everyone was a winner!

But now life has changed completely. The five-year total return from the sharemarket is zero; the 20-year total return is now below 10 per cent; the ten-year return is just 6.6 per cent. The fees skimmed off by the industry – which of course continue even though the balances have gone backwards – now represent a much larger percentage of the long-term return.

Suddenly accumulation super lacks the vital ingredient of accumulation. And there is a clear risk that the bear market will continue for some time yet, with both Europe and the United States mired in debt.

From ABC Insiders:

BARRIE CASSIDY: So what do you say then to people who got a bit of a fright this week, that they’ve just got to hang in there?

BILL SHORTEN: Well certainly if you’re right at making a decision to retire in the very near future, if you’re a self-funded retiree and you’ve got a portfolio of shares, this has been incredibly tough; just as was the first global financial crisis in 2008.

But I would say that now is not the time to make snap decisions. I would say that in the long run superannuation in the last 10 years, say if you’ve been in an industry fund, it’s been 4 per cent each year. I would say that the shares market generally has performed well in Australia. I do believe that things will improve.

Hmmmmmm.

Question.

Why is it that anyone other than politicians who gives financial advice, has to be licenced to do so, or risk facing the full force of the law?

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Kohler: A Surplus Of Political Stupidity

14 Aug

From Business Spectator:

Yesterday’s weak employment figures confirm what my colleague Robert Gottliebsen has been arguing for months: that the economy – global and domestic – is much weaker than anyone thought. Forcing the budget back into surplus by 2013 by cutting spending or raising taxes is probably a stupid idea, just as raising interest rates must now be off the agenda.

But the Opposition and the media will now ensure that the most important issue is not how the settings should be adjusted for changed circumstances, but whether the government breaks a promise.

Same goes for the carbon tax. If Oliver Marc Hartwich in today’s KGB roundtable is only half right about the dire future of the European Union and the euro, introducing a carbon tax next July would be the silliest idea imaginable.

All three of the economists on the roundtable – Hartwich, Warren Hogan of ANZ and Su-Lin Ong of RBC – are pessimistic about the global economy. They are not alone. The very best that can be hoped for is that the European and American economies muddle through this new debt crisis and they end up with low growth rather than a recession.

…

In the circumstances, should the government press on with the planned carbon tax next year? Of course not, unless there is some miraculous renaissance of the developed world economy between now and then.

That looks extremely unlikely. Yet at a Town Hall forum in Perth yesterday, the prime minister vowed to press on with the carbon tax, because Treasury has advised that the economy will continue to grow even if it is imposed.

Right. That’ll be the modelling then. That model on the computers in Langton Crescent, Parkes, in Canberra, a million or so miles from the real world.

Well said.

Very pleasant to see that Alan Kohler has about as much faith in Treasury modelling as I do:

Why Would Any Sane Person Believe Treasury’s Carbon Tax Modelling When Their Budget Forecasting Record Is This Bad?

The Pricing Carbon Choir – Why Should *Any* Sane Person Trust Economists After The GFC?

And as much as Barnaby Joyce does:

Barnaby Bamboozles Chief Of Climate Change Modelling Unit … Again

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Funding For Policy Scandal – Australia Is A Kleptocracy

26 Jul

Do you want to know how deep the rabbit hole goes?

h/t to Twitterer @Kmorefive for bringing the following to my attention.

From Business Spectator (emphasis added) –

An ALP funding horror

Robert Gottliebsen

If an election is held in the next few months, Australian banks will play a big role in the outcome. And unless there is a dramatic change in the fortunes of the parties, the banks will still be key players if (as is likely) the next election is two years away.

Australia has rarely seen such a banking/election event in its history and it certainly did not occur in recent elections. The looming role of the banks could force the ALP into a pre-election leadership change and in extreme situations force it to modify its carbon tax.

To understand the pivotal role of Australian banks in the funding of political parties requires a deep knowledge of how the system works.

For the most part, in the vicinity of three quarters of a major party’s funding in most elections comes from the public purse. The ‘public purse’ amounts are allocated to parties after the election in accordance with the proportion of the votes that are achieved.

But there is no forward allocation of money. The distribution of ‘public purse’ money is strictly governed by the proportion of the votes actually achieved.

ALP organisers are not looking forward to meeting with their bankers as the election nears. They are deeply apprehensive that as a result of current opinion polls, their bankers will slash the amount of election funding available to the ALP and lock it into a low vote.

Conversely, Liberal and National Party organisers believe that as a result of their opinion polling they will receive a huge increase in support from their bankers to fund unprecedented amounts of advertising and promotion.

If, theoretically, an election was to be held in a few months’ time, ALP organisers would go to their bankers and negotiate to borrow the money required to fund the campaign expecting to pay it back when they receive their ‘public purse’ money after the election. This might be the conversation:

Banker: What proportion of the votes do the opinion polls suggest you will gain?

ALP organiser: The current Nielson poll suggests we would gain 26 per cent of the primary vote but we know we will do better.

Banker: Maybe you will, but if I lend you money that represents the amount you will receive from the ‘public purse’ if you attained, say, 40 per cent of the vote, I might bankrupt the ALP if you only receive 26 per cent because you could not pay me back. That would not only give my bank a bad debt but it would be disastrous for Australian democracy.

ALP organiser: But it will be disastrous for Australian democracy if we are decimated at the polls because we have only meagre advertising money.

Banker: I am sorry but I have shareholders and I need a safety margin. I will fund your advertising on the basis that you receive 20 per cent of the votes. You will need to be much more skilled in using non-advertising promotions.

The Coalition conversations with their bankers would be the exact reverse of this.

The ALP organisers fear that the party is going to be much more dependent on union contributions than it has been in recent times. This may tend to spin the party to the left, although many unions are opposed to the carbon tax. Those unions opposed to the carbon tax may require modification before they inject ‘rescue’ money. However, if they see Tony Abbott moving to water down industrial relations legislation they may be tempted to dig deep.

In the case of the Coalition, the parties will depend less on contributions from party members and corporate supporters, assuming they maintain the current lead in the polls.

In reality, if the current opinion poll levels are maintained then it will make it very difficult for the ALP to gain the election funding to change its fortunes at the polls.

As the horror of this outcome becomes apparent to party members, they may seek to replace the prime minister with someone who might either lift the party’s ratings in the polls or who will attract more union rescue money. The ALP has its back to the wall.

There you have it.

The banksters do have a powerful, direct influence over the direction this nation goes.

Now we understand even more clearly, why a Banksters’ Glee Club comprising a clear majority bank-employed “leading” economists has been publicly barracking for the government’s carbon pricing scheme scam.

Mr Gottliebsen’s revelations on how electoral funding really works in practice are seriously troubling, in their implications for what amounts to a clear opening for the perversion of the democratic process.

And yet, I think he is (perhaps naively?) completely misunderstanding what those implications are, in terms of the most controversial public policy right now.

Quite simply, he’s reading the implications backwards.

Because I suspect that the ALP will not have much difficulty in getting the loans they want/need for their election campaign. Especially whilstever they cling to the bankster-driven “pricing carbon” policy.

And in terms of the Liberal Party, in light of the constant appeals for donations that seemingly appear in all of their public communications collateral (emails, newsletters etc), I suspect that the anti-carbon tax Abbott-led Coalition is not sitting as prettily with their bankers as Mr Gottliebsen seems to believe.

Now, to an interesting and directly related front.

If our basic contention – as implied by Mr Gottliebsen’s article – is that our political parties’ policies can be and ultimately are determined by their financial backers’ willingness to loan (or donate) to their election campaign funding, then we only see further supporting evidence for that somewhat chilling reality check in this news story about another of Green-Labor’s proposed policies (emphasis added) –

About 1800 cement industry jobs are at risk from Labor’s carbon tax and proposed new shipping rules, the federal opposition says.

Nationals leader Warren Truss says the $2 billion a year industry is facing a double whammy under the Gillard government.

He says domestic cement manufacturers could be killed off by “dirtier” imports, made cheaper under the carbon tax.

“The paradox is Australian cement production is a leader in low emission technology and any shift to imports will force global CO2 emissions to rise,” Mr Truss said in a statement.

Mr Truss said Australian cement had the world’s second lowest greenhouse gas emissions behind Japan.

“But the carbon tax will price Australia’s cleaner cement out of the market, giving the green light to our international competitors to boost their higher CO2-emitting production and flood Australia with dirty cement,” he said.

“… the Australian cement industry will be crushed by competitors who will not be paying a carbon tax.”

Mr Truss said Labor was also rewriting the Navigation Act to force businesses that ship products around Australia to use local, union-dominated vessels.

He said “unionised shipping” costs significantly more than current market rates, which would be another blow to the industry.

“Right now it costs about the same to ship cement from China to Australia as it does to ship it from Adelaide to Port Kembla,” he said.

“Under the Gillard government’s sop to the maritime union, our biggest competitors in cement – China, Indonesia, Taiwan and Thailand – will dramatically undercut Australian suppliers on shipping costs alone.”

He said a large section of the cement manufacturing sector would not be compensated under the carbon tax plan.

The compensation package only applied to processing clinker, the first stage of making cement, he said.

“The second milling stage to make what we know as cement receives no compensation,” Mr Truss said.

So, the real reason why the Green-Labor Government has been slowly re-regulating (ie, re-unionising) the Australian economy … is because they need their money to finance their election campaign.

The lesson we must learn?

When it comes to the all-important consideration of why a politician or party really adopts the policy/s that they do, the Golden Rule always applies.

Follow The Money.

The following of which will always lead you down the rabbit hole … into the wonderland of global finance.

More honestly and accurately called, “bankstering”.

Ladies and gentlemen … we are not living in a democracy.

We are living in a kleptocracy.

What are you going to do about that?

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I Was Right – Our Banks Begin Preparing Carbon Derivatives Market

14 Jul

It did not take long. Just 3 days.

From Business Spectator (emphasis added):

Australian banks are eyeing opportunities to cash in on the proposed carbon tax by developing new financial products and services that capitalise on a market seen to be worth billions of dollars annually, according to a report by the Australian Financial Review.

Australian financial firms that have experience in European carbon markets, such as Macquarie Group Ltd, Westpac Banking Corp Ltd and ANZ Banking Group Ltd are particularly keen to establish their presence in the Australian market.

The initial three-year fixed carbon tax period from 2012 will serve as time to prepare for the release of ETS permits by 2015, when opportunities will really open up for banks to capitalise on the carbon market.

ANZ’s head of energy trading said the value of the derivatives carbon market would dwarf the $10 billion initially raised by the government, according to the AFR.

I was right.

On Carbon Sunday, I dissected the Government’s newly-announced “carbon pricing mechanism” (see “Our Bankers’ Casino Royale – ‘Carbon Permits’ Really Means ‘A Licence To Print'” ).

Here’s a couple of quotes from that article. The first is in reference to the “initial fixed price period” that the Government would have you believe is “like a tax”:

I was right.

The carbon permits will have no expiry date.

They are an artificial construct – “an electronic entry” – that is deemed by government decree to be a new “financial product”.

Moreover, note carefully the sentence I have bold underlined.

The “creation of equitable interests”, and “taking security over them”, simply means this.  The carbon permits can be used as the basis for bankers to create other, new financial “securities”.

Carbon derivatives, in other words.

Derivatives (or “securities”) are the toxic, wholly-artificial financial “products” that were at the heart of the GFC.  The same bankster-designed “widgets” that the world’s most famous investor, Warren Buffet, spoke of as “a mega-catastrophic risk”, “financial weapons of mass destruction”, and a “time bomb”.

You can stop reading this piece right now if you like.

Because from that Table 6 alone, you now have conclusive proof that this is nothing whatsoever to do with the climate.

It is all – and only – about global bankster profits. At the direct expense of the common people of planet earth.

Note well. The banks do not have to wait until the “flexible price period” commences after 3 years, to begin creating their “securities” (ie, derivatives), based on the notion of the underlying “value” of the “fixed price” carbon permits.

The Government’s scheme allows this from Day 1. Naturally. Because that is what the banksters – and their “leading economist” shills – are all salivating over. A government-decreed excuse, to create a whole new kind of “derivatives” market.  It is the whole point of the scheme.

In specific reference to the “flexible price period” to follow three years later, I wrote this:

Now, why have I bold underlined “borrowing“?

And why have I bold underlined “advance auctions of flexible price permits…”?

Because these are the key words from the “banking and borrowing” section. The words that tell you all you need to know.

That this SCAM is nothing whatsoever to do with the global climate.

And that it is 100% about creating a new, global, CO2 derivatives-trading market for the banksters.

The world’s biggest-ever financial cesspool.

Of toxic, intrinsically-worthless, humanity-raping financial “instruments” called derivatives.

Non-existent, digital “widgets”.

That can be borrowed from the future – ie, before these artificial carbon “widgets” are even issued – and leveraged by scum-of-the-earth banksters.

And then, traded by these parasites at multiples of hundreds and thousands of times more than the underlying, artificially-created “value” of the carbon permit.

Furthermore, the “advance auctions of flexible price permits in the fixed price period” proves beyond all shadow of doubt, that I was right.

That this “carbon pricing mechanism” is the bankers’ CPRS by another name. From Day 1.

Why does it prove it?

The advance auctions of flexible price permits “in the fixed price period” means this.

From Day 1, the government is effectively allowing the setting up of a futures trading market, for Australian CO2 permits.

Futures trading of nothing. Before the nothing is even created.

The banksters’ wet dream.

Australia – you have been monumentally conned.

The Green-Labor-Independent Alliance’s plan to “save the planet”, is a gigantic scam.

It is the bankers’ Casino Royale.

Where “carbon permits” really means, “A Licence to Print”.

Thank you, Australian Financial Review and Business Spectator.

For confirming that I was right.

Oh … just one more thing.

To help give you some idea – a picture in your mind – of how gigantic the new (government-rigged) “market” for the banksters’ carbon derivatives can become, take a look at the following chart, sourced from the RBA’s Statistics data.

It shows the size of our banks’ current holdings of Off-Balance Sheet derivatives bets, on the future of Interest Rates, and Foreign Exchange Rates:

Click to enlarge

Yes, that’s $3.98 Trillion in Foreign Exchange derivatives bets. And a whopping $11.68 Trillion in Interest Rate derivatives bets. Off-Balance Sheet. At March 2011.

Here’s another chart – also sourced from RBA data – showing our banks’ current On-Balance Sheet “Assets” (66% of which are actually loans) – the blue line – compared to their total Off-Balance Sheet “Business” (ie, derivatives) – the red line:

Click to enlarge

Yes, that’s $2.68 Trillion in “Assets” (mostly loans). Compared to … $16.8 Trillion in Off-Balance Sheet derivatives gambling. Mostly on Interest Rates, and Foreign Exchange rates.

Just try to imagine the size of the brand new carbon dioxide “hot air” derivatives market casino that our banksters’ will create, in the form of leveraged bets on the underlying so-called “value” of carbon permits.

It is Armageddon waiting to happen.

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Double Double (Labor) And Trouble

25 May

William Shakespeare (1564-1616)
from Macbeth

Scene: A dark Cave. In the middle, a Caldron boiling. Thunder.

Enter the three Witches…

ALL:

Double, double toil and trouble;
Fire burn, and caldron bubble.

Yes, double Labor equals trouble alright.

Business Spectator’s inimitable Rob Burgess peeks in on a witches brew quietly a-boiling within Federal Labor ranks, now that the detritus of a decimated NSW Labor party machine has begun belly-crawling into Canberra (emphasis added):

Before the NSW election, a senior Labor figure told me of his grave fears for the party nationally once the most important Labor state machine imploded. Suddenly unemployed NSW MPs, and their long-standing staffers – the real machine – would be turning up on Capital Hill in their droves, creeping from chamber to chamber, seeking new power and influence in the federal sphere.

The NSW model of Labor politics would infect Canberra, he warned me, and it could destroy the Labor Party for good…

…Labor’s battles are, so far, silent – like faceless men in the night. Bill Shorten, Greg Combet, Kevin Rudd (in the mind of Kevin Rudd) and Wayne Swan all get a mention from time to time. Of these, only the first two look at all likely to succeed Gillard. Privately, some Labor figures mention Tony Burke, though he has some major battles looming on the Murray Darling Basis to take care of first.

But the point is this: with so many displaced NSW, and now Victorian, Labor operatives on the loose, and with Julia Gillard’s opinion poll figures taking the low road, it is only at a matter of time before we begin to see as much leadership intrigue spilling over on the government benches as we are now seeing on Tony Abbott’s side of the house.

To my mind, a challenge to Gillard’s leadership before the next election would all but finish the Labor Party. But then Labor pessimists tell me that the pent up ambition in the Labor’s factional units is too great to contain. The Bracks/Carr/Faulkner review of Labor’s appalling 2010 and the party’s ‘undemocratic’ structure is yet another source of conflict within the party – a good half of the party wish it had never been conducted.

Certainly the knives are being sharpened for a time when, if miracles do happen, Labor scrapes home to form government again. But that is two years away at least. In the meantime, watch for fault lines – now on both sides of the house.

UPDATE:

From the Age:

Labor in crisis as disenchanted desert the party

Labor fears up to one in four of its Victorian members will not renew their memberships after last year’s devastating state election loss and disenchantment with the Gillard government.

And union heavyweight Joe De Bruyn warned that Labor – and civilisation itself – could cease to exist if the party overhauls its platform later this year to accept same-sex marriage.

Mr De Bruyn, national secretary of the Shop, Distributive and Allied Employees Union and a powerful figure on the Labor Right, has criticised his party for allowing debate on gay marriage to ”fester”.

About 4700 of state Labor’s 12,000 members have not renewed ahead of a deadline on Tuesday. Labor insiders are predicting less than half will make the effort…

One Labor source blamed the federal government for ”trashing the Labor brand”.


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Kohler Agrees – Barnaby Was Right

2 May

It’s getting embarrassing now.  Not only has Standard & Poors, CNBC, Deutsche Bank, and Barack Obama all agreed that Barnaby was right on US debt.  Now our very own ABC News Finance, ABC Inside Business, and Business Spectator heavyweight, Alan Kohler, has conceded it too.

From ABC’s The Drum, buried within comment about the impossibility of Labor achieving their promised surplus budget next year:

The revenue shortfall will be worsened by a rising exchange rate over the next two or three years as the United States approaches an inevitable fiscal crisis.

Barnaby is right.

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Now Or Never To Stop The Carbon Tax?

26 Apr

A great bloke over at Business Spectator, Rob Burgess, has crunched the Senate electoral numbers with a view to the likelihood of Tony Abbott actually being able to repeal the Labor/Green/Oakeshott carbon dioxide tax at any time soon.  It makes for troubling reading (free subscription access) –

Labor is revealing its carbon pricing policy with all the coy teasing of a professional stripper – a glimpse here, a peek there. All Greg Combet showed us yesterday was that 50 per cent of carbon tax revenue would be handed back to households. The rest of his National Press Club speech was old hat.

And all the while Tony Abbott hopes he can get them off stage and close the club before we see ‘everything’.

In an important sense, that’s Abbott’s only hope of triumphing in the highly polarised debate over the carbon tax. The anti-carbon-tax rallies and marches of the past few weeks have elicited rash promises from the Coalition figures who have attended, that they will repeal any carbon tax and get on with reducing emissions their own way. As Abbott put it in February, “we will oppose it in opposition, we will rescind it in government”.

I doubt the thousands of concerned Australians turning up to the rallies know that the Coalition can’t deliver on this promise.

While it’s certainly true an Abbott-lead government would wish to repeal the tax, there is an infinitesimally small chance it would have the Senate numbers to do so in its first term. And it’s pretty clear there would be no help from Labor or the Greens to overturn legislation for which they have so bitterly fought.

The Senate is a tricky beast. Indeed, it’s designed to be that way – the manner in which the house of review is elected virtually ensures a broader range of parties will be represented than in the lower house. Moreover, because only half the 76 seat chamber is elected at each general election, it takes a bit of scribbling on the back of an envelope to work out what’s going to happen (okay, I do it in Excel).

And here’s the results.

The probability of Tony Abbott winning government, whether from the floor of the house, or through an early election, or through a normal general election in 2013, and having enough votes in the Senate to repeal the carbon tax … practically nil.

The odds of Abbott winning government, serving something close to a full term and winning the next election (in 2016, say) with a Senate majority … slim, but not impossible.

…

To win 22 seats at the next election, the Coalition needs to retain the one seat it holds in each of the territories, and win 20 seats in the states. With Tassie likely to repeat its familiar pattern, that means winning:

— four out of six seats in three of the non-Tassie states

— three out of six in the two remaining states

— one seat each in ACT and NT.

That would give the Coalition the 22 votes required to repeal the carbon tax. That would also give bookmakers across the land heart attacks, because the odds of such an electoral coup are so extraordinarily long.

…

That fact remains, therefore, that if Tony Abbott’s team does not find a way to bring down the government before the carbon tax is legislated – most likely in November of this year – the Coalition will be powerless to repeal it until two Senate elections have taken place. That most likely means a carbon tax for four years, and by that time who knows where global carbon politics will have taken us.

Our only other hope would be a double dissolution election – where both houses of parliament are dissolved, and full elections for both houses held:

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Gottliebsen: In The Eye Of GFC Storm

30 Jun

Highly respected business commentator Robert Gottliebsen appears to agree today with what Barnaby Joyce has been saying since October last year – that the GFC is far from over.

From Business Spectator:

Despite a late US Dow index rally, last night was among the more serious sharemarket falls we have experienced since global financial crisis plunged markets in 2009.

We are well above the dismally low levels witnessed on equities markets during the crisis, but last night you could see fear in almost every corner of the world. The forces that are behind each of the fears are probably manageable, but when they occur together, as what happened last night, they triggered waves of selling, including a savaging of the Australian dollar.

And of course Gillard’s mining tax dithering is rekindling global doubts about the sovereign risk of this country which threatens to put Australia and our high house prices in the eye of the storm.

And for most Australians, the global wave of selling will be reflected in our share prices levels at June 30, which means that the value of superannuation funds will be hit on balance day. Many retirees will have their income reduced for the year ahead…

Clearly China is slowing much more rapidly than expected, and as a result the bad property loans that are in its banking portfolios will weigh down future growth.

In the past China has always managed these issues and I think it will do it again, but the markets fear there will be much more pain than had been anticipated.

Meanwhile, in Europe the big banks have been playing the stupid game of borrowing from depositors and then investing in the sovereign debts of European countries that can’t pay.

Tomorrow the banks are supposed to repay €442 billion in emergency loans but they almost certainly will have to be bailed out again. Fears of bank collapses are rife. On top of this dire outlook, Europe’s austerity measures will bring on recessions in countries ranging from Greece to the UK which will make it even harder for the banks. And the strikes in Greece will be repeated in many countries, which could make the spending cuts impossible to deliver.

In the US they are helped because in a crisis money flows to the world currency, so the US dollar rises. Nevertheless, there are still chronic housing problems so consumer confidence is depressed and the US economy is still living on the old stimulus packages. Accordingly Wall Street’s earnings estimates look too optimistic.

Barnaby is right.

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Henry “Dumb”, “Completely Mad”, “Naïve Greenie”

24 Jun

In the wake – literally – of former PM Kevin Rudd, Mike Mangan at Business Spectator predicts the death knell for the RSPT:

The Labor leadership spill ensures the resources super profits tax is dead. While the RSPT started as an investment theme, it’s now just politics…

This (the RSPT) would have to rate as one of the dumbest political moves since Chifley tried to nationalise the banks 60 odd years ago. Labor nick-named Mark Latham “crazy brave”. But I doubt even Latham would have tried this one on…

Happily, Mangan goes on to join the rumblings (that were started right here on this blog back in February) calling for the sacking of Treasury secretary Ken Henry:

Former Labor senator Graham Richardson said earlier this week the miners are now spending a million a week advertising the stupidity of this “super tax on profits”. And he concludes “their ads are 50 times more effective than the government’s ads”. What was Rudd thinking? Who was advising him?

Enter stage left: Ken Henry.

Although Rudd has since rejected the idea, on Monday Rudd’s Treasury Secretary helpfully suggested the RSPT should be extended to all industries, especially banks and retailers. I think there are three possibilities here. Ken Henry is either politically dumb, gone completely mad or he is a secret admirer of Tony Abbott. Surely Kevin Rudd had enough enemies without adding two of Australia’s largest industries to that ever growing list. There is another possibility. Henry is just a naïve greenie. Reportedly he partly drafted his tax review while caring for northern hairy-nosed wombats in central Queensland. Too bad wombats don’t vote.

The spill result is great news for investors, because the mayhem Rudd unleashed over the last six or so months will cease and the RSPT in particular will be consigned to the history books with him. And I strongly suspect Secretary Henry won’t be too far behind.

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