LAST GASP: Jac and the bean counters
Jac Nasser's back and on the attack, there's something fishy about the trawler saga and words bring tears in the supermarket wars.
The Last Gasp is a wry take on the week’s news, every week. This week, mining royalty Jac Nasser gets mad about mining royalties, Queensland picks a fight it literally can’t afford to lose, and the federal government gets into a big blue over the big blue.
A right royal mess
Jac Nasser is mad. The BHP Billiton chairman hurled scorn at the Queensland state government this week after it lifted coal royalties as part of it annual budget, the first by the new Liberal National regime. Nasser said the move was akin to shooting an elite athlete in the foot, presumably where BHP is the athlete. Like an elite athlete that has recently postponed one of its key performances and lopped off part of its foot to stay afloat. Under the changes, Queensland royalties will jump to 12.5 per cent for every tonne of coal sold between $100 and $150, in a move aimed at raising $1.6 billion over four years and digging it out of trouble. The plan has also angered the federal government, in a rare case of the ALP and the major miners being on the same side. Who knew getting screwed over financially could bring opponents together? Labor also targeted the federal opposition on the issue, with Finance Minister Penny Wong calling the Libs hypocritical for staying silent on the future of mining jobs now that it was their political brethren doing the damage. She then slammed Queensland for imposing one of the largest taxes on mining in the world. It is unknown if she sensed the irony.
Where else but Queensland
How much trouble is Queensland in? About $10.768 billion worth of trouble, specifically. The state government has forecast a massive deficit for this financial year and made changes across the board to keep it from getting deeper. Queensland Treasurer Tim Nicholls has forecast the state will return to surplus in 2014/15, in possibly the most ambitious return to surplus pledge ever seen in Australia. Which is a fantastic effort given some recent attempts. The royalty move is an important part of the surplus plan, and comes from a suggestion from former federal treasurer Peter Costello in his recent audit of Queensland's finances. Under current laws, Canberra will get less money from its mining tax as a result of the royalty increase. If the thought was not so outlandish, it would seem as if Costello had some kind of grudge against the federal government. But of course, such a thing is very unlike him.
The federal government left jaws gaping all over Australia this week when it actually stood up to a large enterprise and banned the 142m FV Abel Tasman from fishing in Australian waters. It took the force of public opinion and the prospect of cheap votes to lure environment minister Tony Burke to put an end to ship’s Australian adventure, which was expected to see it catch some 18,000 tonnes of fish from Australia’s waters. And presumably the same amount in plantlife, those pesky endangered species and old boots. The ban was a bold move from Burke, partially because it sets an interesting precedent for the fishing industry but mostly because he was the bloke who invited the Dutch-Australian joint venture here in the first place.
Jack of all tradies, Masters of none
In the latest edition of the supermarket wars, Woolworths has accused rival hardware player Bunnings of ‘dirty tricks’ after a broker report was sent to media outlets saying the fledgling hardware chain Masters was alienating tradies with its feminine wiles. The accusation led to a spate of muffled guffaws throughout the market, because everyone knows Woolworths is a beacon of piety in an overly angelic industry. The report said bright lighting, polished floors and strategically placed decor products was putting off male tradesman, who, like frogs, evidently enjoy a dark, dank natural environment. Woolworths dismissed the report entirely and promised to complain to the ACCC, and swore it would tell its mum the other boys were mean to it if it happened again.
The weekly Clive
Billionaire mining magnate Clive Palmer has labelled the Queensland royalties hike ‘madness’, claiming the plan will kill the state’s economy and drive thousands out of work. He reportedly urged the government to be more like him: always calm, collected and sensible. Palmer said the decision has created such a division in the Queensland government that Newman would be gone from the job by Christmas. It's a strong warning from Newman, as Palmer has proved over the past year that his knowledge of the inner working of politics is one of his key strengths.
Opposition Leader Tony Abbott did his best to calm tensions within the Coalition this week, telling colleagues that it is okay to have differing views on foreign investment. However, he reportedly urged his colleagues to handle the debate more effectively. Like, internally. And in a way that results in the leader always being right. The debate has centred on opposition support for the government's decision to allow the sale of Cubbie Station to Chinese interests. Abbott told a Coalition meeting this week that the party needed to show voters that they were ‘the adults in the room’. Because as we all know, Abbott’s regular question time performances, which have seen him booted from the house a number of times, are the pinnacle of maturity.
– The New South Wales government has announced 800 TAFE jobs will be cut over the next four years. Given the rate of education job cuts in Australia, the staff are expected to immediately enrol at TAFE.
– Elmer Funke Kupper took a $3 million handshake from Tabcorp last year when he left the group, making him one of Australia's highest paid executives as well as the one with the most awesome name.
– And finally, former UBS banker Bradley Birkenfeld has received a $US104 million reward from the Internal Revenue Service for dobbing his employer into the watchdog for tax evasion. It was a great career move by Birkenfeld, as he likely would never have made that kind of money when involved in improper backing practices.
Want access to our latest research and new buy ideas?
Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.Sign up for free