Packer card game is far from clear
The first conspiracy theory is that Packer's had the wink and nod from the NSW government that his Barangaroo casino proposal is in the bag. Well-placed insiders disagree, saying the government is at least a month away from that decision.
Conspiracy theory two is that selling Echo shares will drive down the price and Packer can buy back in if Crown loses the bid for his Sydney casino/hotel.
That could be a dangerous play, as he would need to buy in from a standing start and take the risk Echo's other large shareholder, Genting, could gain approvals to increase its stake.
Once either are seen as buyers, the Echo share price would immediately spike. (Packer has previously publicly maintained he would hold on to his Echo position because it gave him optionality.)
Packer has already taken a haircut on the Echo stake, which he acquired for an average entry price north of $3.80, compared with Thursday's sale price of $3.20.
Sitting on the 10 per cent parcel until the NSW government reached a decision on Barangaroo made more sense.
Conspiracy theory three (which can't be discounted) is that Packer's Crown either wants or needs the money for a reason that has nothing to do with a second Sydney casino licence.
Inevitable crash
The maths on Australia's car industry are simple enough. The costs of manufacturing a car in Australia are twice that of Europe and four times that of Asia.
Economic Darwinism would have seen Australian car manufacturers extinct years ago but they have been kept on life support by successive state and federal governments.
There was a tide of grief when Ford announced it would disappear from local production in 2016 but it was rightly directed towards the 1200 workers who would lose their jobs.
No one seemed all that surprised. The prevailing view of most economists is that the government should sever the assistance drip and allow the industry to disappear.
But car manufacturing has been a "special consideration" case for governments for many years - protected initially by tariffs and, more lately, subsidies.
Australian governments are not alone in this obsession with retaining a local auto industry.
Indeed, Australia is one of the least profligate countries when it comes to propping up its local carmakers, despite Holden receiving $2.2 billion in subsidies over the past 12 years and Ford picking up $1.1 billion.
Those in favour of continued assistance take the view that the protection was aimed at retaining the infrastructure of small and specialised component manufacturers that support the car industry.
But this is only a part of government's main motivation. The larger part is the retention of jobs.
There is plenty of political logic in this but ultimately it just delays the inevitable, rather than encourage the innovation and skill to find new outlets in other parts of Australian industry.
While there may be some desire in some sections of the government to enhance subsidies to the remaining two local players, the reality is that it won't happen. Wayne Swan was making no such commitments and Tony Abbott has said he will take $500 million out of the green-car fund.
Frequently Asked Questions about this Article…
The article says the move is puzzling and notes Crown sold the 10% parcel only a week after receiving regulatory approval to raise its holding to 23%. It doesn’t give a definitive reason, but highlights several possible explanations (see next FAQ) and points out insiders disagree that the sale reflects a final Barangaroo decision from the NSW government.
The piece outlines three “conspiracy” theories: (1) Crown had a private “wink and nod” from the NSW government that the Barangaroo casino bid was effectively secure; (2) Crown sold to drive the Echo share price down so it could buy back cheaply if it lost the Sydney licence; and (3) Crown needed or wanted the cash for reasons unrelated to the Sydney casino. The article also notes insiders say the government decision is likely at least a month away.
Yes. According to the article, Crown acquired its Echo stake at an average price north of $3.80, while the Thursday sale price was about $3.20, meaning the seller took a haircut on that parcel.
The article warns that selling creates risk: if Crown isn’t in the market to buy back, Echo’s other large shareholder Genting could seek approvals to increase its stake. If either Crown or Genting is seen openly buying, the Echo share price would likely spike.
The article suggests increased uncertainty and potential volatility. It notes that if buyers such as Crown or Genting become visible bidders, Echo’s share price would likely jump. Conversely, a large sale can push prices lower—so investors should be prepared for swings linked to takeover speculation and the Barangaroo licence outcome.
The connection is speculative. One theory is Crown sold because it believed the NSW government had effectively green‑lit its Barangaroo proposal, but the article notes well‑placed insiders disagree and say the government is probably at least a month from making that decision.
The article argues Australian car manufacturing faces tough economics—costs are described as roughly twice European and four times Asian levels—and has been kept alive by state and federal support (tariffs historically, more recently subsidies). It notes that Holden received about $2.2 billion in subsidies over 12 years and Ford about $1.1 billion, and that support has mainly aimed to retain jobs and related supplier infrastructure.
The article’s view is that further large-scale support is unlikely. It points out Wayne Swan made no commitments to boost assistance, and Tony Abbott said he would withdraw $500 million from the green‑car fund, implying limited political appetite for more subsidies.
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