THE DISTILLERY: Treasury tricks

One jotter highlights Treasury's lack of transparency on critical insolvency submissions, while another looks at a paradox in retail.

From the lofty ambitions that accompanied Kevin Rudd’s victory over John Howard in 2007, Labor has strayed as far as it’s conceivable to imagine. During that campaign Rudd spoke of, among many other things, aspiring to increase the level of transparency in government. Now, The Age’s Adele Ferguson has discovered that the Treasury is making a mockery of such ambitions by sitting on submissions into improving the insolvency industry for three weeks without making them public. Elsewhere, The Sydney Morning Herald’s Malcolm Maiden explains the reason why retail is suffering with shopping centre occupancy staying put, while there’s a reminder for an Aussie dollar bump from the European Central Bank.

But first, The Age’s Adele Ferguson spots the Treasury still sitting on submissions to improving the insolvency industry three weeks after the deadline.

"Despite there having been several emails sent by various parties to Treasury asking why the various submissions are yet to be made public, Treasury has chosen to throw transparency out the window. Hardly surprising. Many of the submissions, which this columnist has seen, are highly critical of the government's proposals paper, A Modernisation and Harmonisation of the Regulatory Framework Applying to Insolvency Practitioners in Australia. The key criticism is it ignores the Senate inquiry's key finding: that the Australian Securities and Investments Commission, even by its own admission, has been asleep at the wheel when it comes to regulating the insolvency industry. Without an overhaul of ASIC and its process-driven culture, little will change. ASIC has demonstrated time and again it won't act until it is too late.”

The Sydney Morning Herald’s Malcolm Maiden offers an explanation of the apparent inconsistency of a downtrodden retail sector and stubbornly high shopping centre occupancy rates – consumers are buying less, and shifting their spending to services like gyms and food rather than stuff ‘n junk.

"GPT's chief executive, Michael Cameron, served up an example of the trend when he presented GPT's December year profit result – a 7 per cent rise in underlying earnings to $439 million – this week. During 2011 the group's Rouse Hill shopping centre in Sydney's north-west lost a Borders book store that was generating $735,000 of rental income a year. It filled the space with a gym, two restaurants and a couple of small outlets, and the new tenants combined are paying annual rent of $786,000. You wouldn't want to bet on the retail landlords holding on to exceptionally high occupancy rates indefinitely. Consumers have been spending less of their income and saving more of it for several years now, and it shows up in GPT's portfolio most obviously in a 10.1 per cent decline in department store sales in 2011.”

The Australian’s David Uren says investors should watch out for yet another bump to the Aussie dollar courtesy of the ECB (a few commentators have had their eye on this development).

"The European Central Bank will open the credit floodgates again on Wednesday, offering banks as much cheap funding as they want. Over the past two weeks, the Bank of England and Bank of Japan have both increased their programs of expanding the money supply by buying their own governments' bonds. A provocative report from Morgan Stanley contends there will be further European monetary support and that the US Fed will be printing money again before the year is out.”

And fourthly, The Australian Financial Review’s Chanticleer columnist Tony Boyd explains billionaire James Packer’s vision for Echo Entertainment, after Crown bumped up its stake in its fellow casino company.

"Packer wants to use Echo, which owns casinos in Sydney, Brisbane and the Gold Coast, as the vehicle for building a $750 million six-star hotel at the $6 billion Barangaroo development on the north-west tip of the Sydney central business district. He wants to mimic the stunningly successful integrated resorts in Singapore and Macau that are magnets for rich Chinese gamblers known as high rollers. Packer is convinced that a world-class hotel and gaming venue at Barangaroo will fill the gap in Sydney’s tourist offering and prove a powerful drawcard. However, he will face stiff opposition from politicians and community groups that hate gambling. He must convince the NSW Casino, Liquor and Gaming Control Authority to lift a 10 per cent ownership cap at Echo, convince NSW Premier Barry O’Farrell to change gambling regulations limiting the number of venues under one licence, and get O’Farrell to give assurances about the future taxation of gambling.”

Starting with international news for the rest of this morning’s Distillery samples, The Age’s Michael West discovers there’s an uncanny relationship between five-year credit default swaps of distressed European nations and the number of young adult men living at home with their parents. West reiterates his call for Greece to be allowed to default and drop the euro for the drachma.

Meanwhile, The Sydney Morning Herald’s Ross Gittins continued the education of his readers over the weekend by explaining why it’s not, in the long run, such a loss to watch our manufacturing industry decline to make way for the mining boom. What we must do is make it easier for workers to transition from one to the other. Gittins hits similar notes in a separate piece this morning. His colleague Jessica Irvine also seeks to enlighten readers by urging them to realise that the notion that prices are getting away from consumers is simply nonsense.

The Sydney Morning Herald’s Ian Verrender entertains the enticing possibility – for the mining industry at least – that the Labor government could implode, potentially consigning the mining tax to the history books. The Herald Sun’s Terry McCrann urges his readers to take their eyes off the Labor leadership battle for just a moment and look at what Reserve Bank of Australia Governor Glenn Stevens said on Friday about the Australian economy. Elsewhere, The Sydney Morning Herald’s Michael Pascoe suggests that the federal government could save the states $1.5 billion a year by borrowing their debt for them on the international markets at a cheaper rate, though he concedes the chances of Canberra dropping its ridiculous aversion to debt is low.

The Australian’s John Durie expects AGL Energy to succeed in its bid for a larger slice of the Loy Yang power generator.

And finally, The Australian’s Paul Garvey shines a light on one of the world’s brightening uranium hotspots – Namibia – while, his colleague Robin Bromby says Canada is the place to be at the moment for mining companies.

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