THE DISTILLERY: Asciano angst

One jotter predicts a Qantas style IR blow-up at Asciano, while another highlights property market fragility.

The global grounding of the Qantas fleet demonstrated that Australia can make world headlines that don’t involve a devastating flood or bushfire. While the simmering industrial dispute at Asciano will never receive such attention, The Australian Financial Review’s Matthew Stevens says there’s serious potential for a similar outcome at ports around the country. Meanwhile, The Australian’s David Uren cautions readers to expect a big downturn in property prices if unemployment goes up – they’re weak enough at almost full employment. Also in this morning’s Distillery, the comparatively disappointing performance of the Australian sharemarket against the US – when you factor in the respective strength of both economies – gets a logical explanation, while the state-by-state economic figures from last week fall short of one commentator’s standards.

But first, The Australian Financial Review’s Matthew Stevens foresees a Qantas-style blow-up at ports and rail operator Asciano as the crippling industrial dispute drags on.

"Now, it would seem very likely Asciano approached government knowing full well that pre-emptive intervention was unlikely given the unnerving height of the hurdles for justifying an economic loss case necessary to trigger Fair Work Australia’s powers to order an end of strikes and order parties to conciliation. In other words, this was the opening of the necessary political theatre before the dockside storm that might be triggered by locking out workers in what is, under the Fair Work Act, recognised as a legitimate response to strike action. Asciano’s calls to federal industrial relations spokesman Bill Shorten and state governments is plainly about preparing the ground necessary to sustain a repeat of the Qantas endgame.”

The Australian’s David Uren reminds the bulls that the Australian property market is in touchy condition when unemployment is low. If it rises noticeably, prices will suffer accordingly.

"The Reserve Bank and the government expect unemployment to rise slightly from 5.3 per cent to 5.5 per cent. The Reserve Bank is unlikely to be spooked into interest rate cuts by a couple of poor labour force reports, as it already expects them. The danger for the bank is that it leaves rates too high for too long, and the jobless rate rises further than it expects. Rising unemployment could unleash a wave of distressed sales in the housing market. With the fundamentals of housing supply and demand already so weak, the price movement could be much larger than the present downward drift, with which the Reserve Bank appears comfortable.”

The Australian’s John Durie explains why the Australian sharemarket can’t break out of its range while equities in the US, which doesn’t have an economy as strong as ours at its base, thrive.

"The lack of momentum on the bourse has clear links to what is happening in the real economy, with relatively high interest rates another negative on many level. If you can earn 5.5 per cent with a bank term deposit, the incentive to have a flutter on stocks is diminished. US investors don't have the same choice because interest rates are close to zero and they also have stocks like Apple.”

The Sydney Morning Herald’s Ross Gittins doesn’t doubt that the economies of Western Australia and Queensland are firing, which to some extent is coming at the expense of NSW and Victoria. But the flurry of commentary last week from the latest state-by-state figures are crucially misleading.

"We focus on production because it's production that creates jobs and generates income. The equivalent of GDP at state level is gross state product. So if you want to compare how the states are travelling you compare the growth in their GSP. Trouble is, the Bureau of Statistics doesn't publish GSP quarterly, only annually. What it does publish quarterly is state final demand. Because these are the only figures available, the media have fallen into the habit of assuming state final demand and GSP are much the same thing. Wrong. State final demand differs from GSP in one major respect: it takes no account of exports and imports – whether they're from overseas or just other states. Forget that and you get misleading results.”

With similar devotion to the integrity of statistics, The Sydney Morning Herald’sJessica Irvine explains how climate sceptics can use stats to imply that there isn’t a casual relationship between rising global temperatures and human activity. The writer shows why they’re misleading. The same newspaper’s Michael Pascoe urges his readers, once again, to not take much of the "breaking” economic news too seriously.

The Sydney Morning Herald’s Ross Gittins says Secretary to the Treasury Dr Martin Parkinson has revealed what we all know deep down – the budgetary promises of both sides of politics are a farce. The Australian’s David Uren encourages his readers to see the benefits of the mining boom because they are far more numerous and substantial than the price we pay. Uren’s colleague Robin Bromby looks at the changing face of the global tin market.

Meanwhile, The Sydney Morning Herald’s Malcolm Maiden gives the most concise retelling of the events that prompted three of Gina Rinehart’s children to take legal action against their loaded mother. It’s not so much that she extended the life of the trust – in all likelihood to delay certain tax obligations – but the fact that she acted without their consent and went much further than they’d ever hope.

The Age’s Michael West reveals himself to be an avid Jim Henson fan – an endearing quality to this column – by jumping all over claims that clients of Goldman Sachs are muppets. In other company news, The Age’s Adele Ferguson says more questions need to be asked of Leighton Holdings’ situation with the corporate regulator.

The Sydney Morning Herald’s Ian Verrender says the markets are at a crossroads, while The Australian’s Paul Garvey previews two headline conferences in Hong Kong.

And finally, The Australian Financial Review’s Chanticleer columnist Tony Boyd wonders if Rupert Murdoch pulled off another coup with the sale of NDS Group to Cisco Systems.

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