THE DISTILLERY: Canberra contingencies

Scribes consider what Kevin Rudd's second coming will mean for business, with one saying pre-election uncertainty has been magnified.

The business commentary pages are pretty bare this morning because, well, after the events in Canberra last night, no one cares about business stories at the moment.

Nonetheless, a small handful of journalists have managed to produce some good business yarns this morning, two of which take into account the returning former prime minister.

Fairfax’s Malcolm Maiden puts the ALP into business terms, with reference to the comments earlier this month from National Australia Bank and Woodside Petroleum chairman Michael Chaney that the end of the resources boom and the political jostling in Canberra amounted to a “perfect storm” for business.

“When Chaney offered his perfect storm analogy, a September 14 election date had been known for more than four months, and the result, a landslide loss for Labor, was considered a foregone conclusion. The usual end-of-term glut of bills was looming in Canberra and it contained some things that businesses didn't like – Australian labour market testing as a precondition for 457 worker visas, for example – but there was no anti-business legislative tsunami looming. Now there is more uncertainty, about the election result, and the lead-in to it. On Wednesday night, Kevin Rudd was expected to confirm that he would go to the polls early, on August 24, to capture a honeymoon swing to Labor. An early election could have been triggered anyway if the independent bloc that anchored the Gillard minority government fell apart after the coup.”

The Australian’s John Durie successfully manages to use yesterday’s events in his piece this morning by looking at the bickering between the telcos over the fairness of the Australian communications market (aka Telstra bashing).

“As the circus played out in Canberra yesterday, the telco minnows were trying to set the scene for the incoming government, starting with the need to control Telstra to create a level playing field where innovation can thrive. Vodafone Australia's Bill Morrow argues Australia is in danger of missing out on the $12 billion in productivity rewards available through the digital revolution because of structural problems in the economy. He has a point. His aim is to redirect the debate away from the national broadband network and to what the future structure of the industry should be.”

The Australian Financial Review’s Chanticleer columnist Tony Boyd reports that the up to $US35 billion ($37.6 billion) in asset sales that are about to come from the two big miners is going to make some investors very rich.

“There may even be an opportunity for the man in the street to get a slice of the action as orphan assets fall into the hands of those who can manage them more efficiently in separate listed vehicles. It is possible that assets which have been crying out for rationalisation for years, such as BHP Billiton’s aluminium, will end up merging with equally unloved global bauxite and aluminium assets to create an industry giant. Bankers will tell you there is no shortage of money sloshing around the world’s capital markets but it is clear from what has been happening on the asset sale front that the path to disposals is rocky…One banker told Chanticleer potential buyers are trying to make their way through all the hoops to the point of being classified as ‘preferred buyer’ but then holding back and waiting for the sellers to capitulate.”

And finally, The Australian’s Asia-Pacific editor Rowan Callick makes the point that the vulnerability of global sharemarkets to the strange, but understandable, aversion to strong economic performance because it will bring about the end of money printing means it’s advantageous to be a private business.

As obvious as that point feels, The Distiller can’t think of a single Australian business writer to have made it. Well done Mr Callick.

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