The political right would have us believe that the Gillard government's efforts are threatening our recession-beating mining industry. Whatever your opinion may be, The Australian Financial Review’s Chanticleer columnist Tony Boyd shares some important details this morning about Nexus Energy’s deal with oil giant Shell that reveal a deft hand doing more than shuffling papers in the resources portfolio. Industry Minister Kim Carr doesn’t receive the same glowing treatment for his protectionist tendencies towards the auto industry in another commentary, while one business writer finds an influential figure in France promoting former Prime Minister Paul Keating as an example of leadership in times of economic strain.
Firstly, The Australian Financial Review’s Chanticleer columnist, Tony Boyd, gives a fascinating insight to Nexus Energy’s deal with Royal Dutch Shell to pursue the integrated Crux gas and liquids development in the Timor Sea.
"The deal is significant because it removes the last barrier to the sensible development of the world’s first floating liquefied natural gas facility in a remote gas field called Prelude. This is located in the Browse Basin about 475 kilometres north-northeast of Broome, Western Australia. It is believed Resources Minister Martin Ferguson played a leading role behind the scenes ensuring the deal got over the line. That is a further sign that there is some commercial nous in a government that is not highly regarded by business.”
But no sooner does the government come in for some praise another commentator takes them to task – quite justifiably too. In the second piece from this edition of Distillery, The Australian’s John Durie asks what hope is there that Ken Henry’s report on Australia in an Asian century can instil some rationality into the highly politicised issue of handouts to the car industry?
"If the report is aimed at helping to adjust to the opportunities from Asia, both in terms of Asian investment in Australia and increased opportunities in Asia, then throwing money at the car industry is surely an anathema. Its investment policy is set outside Australia, its scale is substandard on an individual plant level globally, and it has continued to shrink no matter how much protection it is afforded. Still, protectionism is seen by some in government ranks as smart politics. The punters like to see local industry supported no matter what the consequences.”
If only Labor was like it was in the old days. The Australian’s Emma Kate-Symons finds old Labor winning plaudits in Paris as French government and private enterprise tries to steady from the shock of losing the AAA rating from Standard & Poor’s.
"Jean-Marc Daniel, professor at the prestigious ESCP (ecole Superieure de Commerce de Paris) business school and economic commentator at Le Monde and BFM radio, is a vocal advocate of change. France should even consider an Australian-style Paul Keating-like response to the loss of the treasured AAA credit rating, and how to regain it, he says. Daniel again cited Keating on French radio this week. He explained how the then-treasurer famously warned in 1986 of the risk of Australia becoming a "banana republic" and then acted on his warnings with reforms that deregulated swathes of the economy, opened it up to increased competition and led to a long-term reduction in foreign debt. Australia eventually won back its AAA crown in 2003.”
Turning to resources for the rest of this morning’s business musings, Fairfax’s Ian McIlwraith prods at the multi-million dollar reduction in royalty payments that Beach Energy will have to pay to ExxonMobil for its Cooper Basin operations, asking if there’s something more to it. The Age’s Barry Fitzgerald points out that the top gear of Australia’s two-speed economy, the mining sector, has its own two-speed dichotomy at the moment due to the sluggish performance of the base metals amid European turmoil.
Meanwhile, The Australian’s John Durie suggests in a separate piece that Goldman Sachs traders might be a little red-faced at the moment, having placed losing bets on the investment bank’s own stock to the tune of $US6.04 billion. And finally, Matt Murphy writes in the Fairfax pages that Goldman Sachs is losing some talent as bonus cheques get cut down to size, but those deserters have to look a bit harder than they would have in the past to find another employer with more cash on offer.