THE DISTILLERY: Labor fodder

Jotters jostle to have their say on the latest Labor leadership crisis, while one sees the Reserve Bank fixated on May jobs data.

Even the strictly business pages have been infiltrated with speculation about the Labor leadership. It could be the rapidly evaporating time journalists have to write about it, the diminished topics you can stretch over a long weekend, or some genuine movement in Canberra. Whatever it is, we’re talking about it (again!) this morning.

The Australian’s John Durie says the only conditions under which a leadership change would be good for business is if it happens quickly and, more to the point, an election is called quickly.

“The reasoning behind renewed speculation about a bid to topple Julia Gillard is a major cause for community angst, given any move would be inspired by blatant and misguided self-interest. Opinion polls show some members would have a better chance of holding their seats in what still will be a landslide defeat for the government. This doesn't inspire much confidence outside Canberra. The decision at the end of January to call a September 14 election has served to put an effective brake on the local economy when it was already slowing and momentum in the resources sector was falling, exposing the real weakness in the economy.”

The Australian Financial Review’s Jennifer Hewett, the newspaper’s national affairs correspondent, reports that the reality of an electoral whitewash has simply overwhelmed the Labor Party.

“The main question is whether it will also overwhelm Julia Gillard’s conviction she will not go without a fight. A majority of her party colleagues now want her to accept her prime ministership is over – along with any lingering hope the election won’t be quite as bad as the polls suggest. But wanting is different from doing. The latest lousy numbers ­re-enforce the growing panic that Labor’s already grim prospects are actually deteriorating as the election gets closer. Such logic means persuading Gillard it is better to resign than risk being executed – either by a despairing party as early as next week or by the voters in September. ‘But that assumes she’s rational,’ says one senior MP.”

Rudd ain’t exactly the most balanced, reasonable or rational person going around either. And just how ‘rational’ will it appear to voters drifting away from Labor to have someone elevated to the leadership we all know most of the party caucus despises?

In economics news, Fairfax’s Elizabeth Knight concludes that US markets are somewhat stuck between two narratives. Too much bad news implies the recovery is stalling. Too much good news has investors thinking of the Federal Reserve’s musings about when to pull back QE3, meaning risk will once again be off.

Fairfax’s Ross Gittins says the new buzzword that Australians, even the relative economic novices amongst us, will have to store away is ‘transition’. The veteran economics writer is increasingly noting how rocky the process of transitioning from the mining boom to whatever’s next will be.

The Australian’s economics editor David Uren says the Reserve Bank of Australia, always wary about large revisions to national accounts numbers, will have a keen eye for the May jobs numbers. The main reason is the national accounts numbers from last week were a damn sight weaker than you’d expect given the latest set of labour force data.

Fairfax’s Tim Colebatch does a little economics-101 to put the debate about the Australian dollar and its relevance to the discussion about the Australian economy’s competitiveness into its proper context.

In company news, The Australian’s Andrew Main says the collapse in Newcrest Mining late last week, preceded by five analysts hitting the company with a downgrade a week before, has a terrible smell about it.

Meanwhile over at BHP Billiton, a much better manager of expectations, The Australian’s Barry Fitzgerald writes that chief executive Andrew Mackenzie was effectively saying the same thing as his counterpart at Newcrest, but it was handled immeasurably better.

The Australian Financial Review’s Chanticleer columnist Michael Smith expects the battle between Crown billionaire James Packer and Echo Entertainment should heat up this week as both companies prepared to submit their proposals for Sydney’s next casino project.

Fairfax’s Adele Ferguson writes that an inquiry is being conducted to establish why the corporate regulator took 16 months to formally investigate allegations of misconduct at Commonwealth Bank of Australia, after receiving detailed accounts from company insiders.

It was Fairfax that broke the story, with Ferguson sharing the byline. Congrats to Ferguson!

And finally, the Herald Sun’s Terry McCrann runs through some potentially significant implications of Air New Zealand’s conditional acquisition of another 3 per cent in Virgin Australia.

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