Much of the rhetoric coming out of the Coalition about Labor’s abject dereliction of duty to the Australian people and our economy was comprehensively undermined by the sharemarket’s reaction to yesterday’s leadership spill. It did bugger all.
The fact is that the market has been preparing for a Coalition victory for some time. Despite the ALP’s behaviour resembling that of a wounded animal, big business is unconvinced that the government can do much damage to the economy on the way out.
The Australian’s economics correspondent Adam Creighton was, from what The Distillery can see, the only business commentator to point out that the ASX200 couldn’t give a toss what Labor was up to yesterday.
“The Australian sharemarket tracked sideways, as futures markets had anticipated earlier in the day, while a scheduled flurry of options hedging activity hobbled the Australian dollar's rise following better than expected manufacturing production data from China. The financial markets' collective shrug is apt: it is irrelevant whether Kevin Rudd or Gillard leads the government. So anodyne and superficial has politics become under Labor, the likelihood of dramatic changes to the federal cabinet has all the impact of a pin drop. Business has already factored in a Coalition victory this year.”
The Australian’s Glenda Korporaal points out that General Electric chief executive Jeff Immelt and Canadian Pension Plan Investment Board chief executive Mark Wiseman – two global investment titans – have expressed their confidence in the Australian economy in recent weeks. They’d be well aware of how tumultuous the current government is and will continue to be until it falls, and they don’t care.
“It may be that Julia Gillard has settled the leadership issue once and for all and Wayne Swan can get back to working on the May budget. It may be that by not putting his hand up for the ballot yesterday, former prime minister Kevin Rudd has forever consigned himself to the backbenches. But Australian business, and foreign investors in the country, are now faced with another six months of uncertainty, wondering what measures may next come from a weakened and possibly embittered Gillard government. Both Wiseman and Immelt have put their money where their mouth is when it comes to Australia.”
The Australian’s John Durie makes one observation about the wash-up from the ructions yesterday, outside the Labor Party, that could have implications for its long-term survival as a minority government. It’s funny – in this context long-term means getting to the September elections.
“Australian business leaders were briefly breathing a massive sigh of relief yesterday at the prospect of an end to Canberra instability, but at least for the moment the torture will continue. Simon Crean may have looked clumsy in his execution, but the moral high ground he took in wanting to bring the fight to a climax won him support outside for those who can't understand why the independents didn't take a similar stance. Tony Windsor and Rob Oakeshott did vote against the government in the no-confidence motion, which must raise doubts about their long-term support.”
Just as an aside, The Distillery is for business commentary, not political commentary, so we don’t do summations of the Canberra commentators – especially today, because it can be wrapped in one sentence. The ALP is deader today than it was yesterday.
However, we would like to draw your attention to commentary of one of Australia’s most amusing business figures, mining magnate Clive Palmer.
Fairfax’s Peter Ker has managed to grab some quotes from Captain Coal from Queensland.
“It’s absolutely clear the polls are overwhelming that she doesn’t have the support of the Australian people, so if she doesn’t heed that message it just means she is staying there for selfish reasons. What she should do is resign the Prime Ministership immediately and not recontest it.’”
Might he apply that same logic to Tony Abbott, who has never been liked by the Australian people? He’s prime minister in waiting, after all.
Business Spectator’s Stephen Bartholomeusz highlighted what a miserable day it must have been for Communications Minister Stephen Conroy – who only recently watched the spectrum auction delayed – because his media reforms fell apart and NBN Co confirmed it was behind on construction. All this culminated in this one, fantastic paragraph.
“The NBN was supposed to be a major electoral plus for Labor in need of positives as it lurches its way towards the September election. Instead the Coalition can use the further delay as another example of the government’s inability to execute anything effectively, including its leader.”
Can you feel it? That’s the feeling of good business writing
The Australian Financial Review’s Chanticleer columnist Tony Boyd makes the point that NBN Co chief Mike Quigley would have been given a verbal assault from outgoing chairman Harrison Young for failing to meet the company’s production targets if it was a publically traded company. But it’s government-owned, so, nup.
In a day where corporate stories were hijacked entirely by political ructions n the Labor Party – a much more deserving political story also fell by the wayside – Fairfax’s Malcolm Maiden noticed that the results from Solomon Lew’s Just Group fly in the face of the narrative from the big department stores that it’s hard to make a fashion retail dollar at the moment.
Meanwhile, Fairfax’s Elizabeth Knight reports that, contrary to the market moves, Billabong International’s two bidders are still in the data room.
And finally, The Australian’s Criterion columnist Tim Boreham looks at the latest incarnation of the arguments from Brickworks to continue the cross-shareholding arrangement with Washington H Soul Pattinson.