• Pete Jonson

Henry Thornton News@Views No 32

AFR, P1 and P4, Weekend August 27 and 28, John Kehoe and two others, ‘Dividends splash’.

‘Business, unions in summit showdown’, although ‘The Insiders’ saw the leading business lady and the ACTU lady. Both tried to behave well but I presume there will be some differences that spoil the event.


May I say, that the key issue that needs fixing is ‘Productivity’.

Other issues are on the front page of the AFR are as follows:

· ‘Earnings season’. ‘Big miners, banks deliver windfall for shareholders’. (P 19)

· ‘M&A back in town’. ‘Why the deal flow is set to gain pace’, (P 20)

· ‘Results round-up’. ‘Westfarmers, Lynas, Austral, Whitehaven’. (P 19 @P 21)

P2, George Moore, ‘Long COVID ‘smashed’ the labour market.’

I agree with this, suffering as I am to get my brain to operate properly and for my legs to work well. Fortunately these issues seem to be improving but it has been a few bad months.


P 3, Angela Macdonald-Smith and Mark Ludlow, Snowy CEO in shock exit amid tensions’.

Paul broad has suddenly quit as chief executive of Snowy Hydro amid an escalation of tensions Energy Minister Chris Bowen, most recently over Labor’s insistence that the new Kurri Kurri gas plant in NSW uses green hydrogen from day one.


‘The sudden departure of the veteran executive, 70, who has led the federal government owned Snowy since 2013, comes in the middle of a costly expansion of the Snowy Mountains hydropower, which is running late and over budget.’


CEO Paul Broad went gently but will be missed by his staff, and possibly the Labor government.


I recently was the recipient of a presentation about the history and current state of the Snowy outfit, and I bought two excellent books. Maybe ‘Green hydrogen’ is a stage too far and if Mr Bowen insists and fails, he will have damaged one of Australia’s vital business units.

A business to watch.


P 8, Michael Read, ‘Top central banker’s ‘sobering’ rates warning’.

‘In a speech at the annual Jackson Hole gathering of global central bankers on Friday , Bank for International Settlements head Agustin Carstens said policymakers were navigating a ‘hostile supply environment ‘ with ‘sobering implications’ for how governments and central banks conducted economic policy’.

Bottom line effect – higher interest rates.

Watch this space.


P 11, Michael Smith, Tokyo, ‘Great drought of China forces return to coal’.

‘Faced with crippling power cuts and the worst drought in modern history, China is shelving plans to reduce its reliance on coal, as cities and factories around the country struggles to keep the lights on and stay open’. …


‘Images of mountain bushfires on the outskirts of the giant south-western city of Chonqing, dried up riverbeds, parched crops and office workers using huge blocks of ice to stay cool have flooded Chinese social media this week. To add to the frustration, residents in many cities are still being forced to queue outside in searing heat for mandatory COVID-19 tests. …


‘There is nothing in world climate history which is even minimally comparable to what is happening in China,’ weather historian Maximilaino Herrera told New Scientist this week. ‘This combines the most extreme intensity with the most extreme length with an incredibly huge area all at the same time’.


As an Aussie bloke, I feel sorry for China and its people. Not much we can do but wish them solace.


P 12, Tom Balforth and Natalia, ‘Near disaster’ at key nuclear plant’.

Kyiv. ‘President Zelinsky said the world narrowly avoided a radiation disaster as the last regular line supplying electricity to Ukraine’s Russian held Zaporizhzhia Russian-held nuclear plant was restored hours after being cut for the first time.’


A mad, I assume, Russian appointed official said this was the fault of provocations by Mr Zelensky’s fighters.


P 38, says ‘The AFR View’ says that ‘Democracies must honour Ukraine’s heroic resistance.

Hear, hear!


And in conclusion, Stephan Roach, also P 38, ‘Under Xi, dogma trumps all else’.

‘The China slowdown is more than an arithmetic event. ‘Three powerful forces are also at work: the economy’s structural transformation, payback for past excesses, and a profound shift in the ideological underpinnings of Chinese governance.’ …


‘There is a good reason to believe that China’s slowdown may also be more of an unavoidable payback for the excesses of the hyper-growth era. …


This was telegraphed by a high profile ’authoritative person’ in 2016.

‘an overly leveraged Chinese property sector fits this script, as does the debt-fuelled expansion of state-owned enterprises since the 2008-09. …


‘finally, a big reversal in the ideological underpinning of governance is also at play. As the revolutionary founder of a new Chinese state, Mao emphasised ideology over development.


For Deng and his successors, de-emplasis of ideology was viewed as the way to boost

Economic growth through ‘market-based ‘reform and opening up’.

I shall leave Mr Roach to finish his excellent coverage of Mr Xi.’

AFR, P1 and P4, August 29, Phillip Coorey and John Kehoe, ‘Industry-wide pay claims in play’.

‘Prime Minister Albanese says this week’s jobs summit must achieve an Accord-style ‘culture of cooperation between business and unions, as the federal Treasurer all but confirmed the Labor government would support industry-wide bargaining in some sectors.


‘But NSW Liberal Premier said: ‘he was ‘disappointed’. ‘This is not what we need here. We need a productivity discussion’.


I must say I agree with the NSW Premier.


Monday, P 1 and P25, August 29, Vesna Poljak, ‘Fed’s Powell sinks stocks, raises heat and beating inflation’.

Mr Powell’s resolve to avoid the mistakes of the late 1970s and crush inflation before it sinks the world's largest economy tanks US stocks on Friday, as traders realised the Fed would not back down from its mandate in the face of slowing growth.


‘Investors believe it will galvanise other central banks to keep raising interest rates despite warnings it will drag the world into recession’.

P3, August 29, Tess Bennett and John Kehoe, ‘Job ad review shows 4.1pc rise in wages’.

‘Salaries for jobs advertised on online hiring platform Seek surged 4.1 per cent in July, compared to a year earlier, adding to the growth across 200,000 listings postings each month, suggests the ultra-low 3.4 per cent unemployment rate is forcing employers to offer fatter pay packets to secure workers.’

P 15 and P 20, August 29, Yolanda Redrup, ‘How Pro Medicus turned $US3.5 m into $5.5b in value’.

What a ripper result. Sam Hupert and Anthony Hall showed their genius, which seems to be due to Sam Hupert finding a ‘revolutionary new technology, developed by a team out of a research and development lab in Germany’.


I was a non-executive for around ten years with their modest team. Foolishly I left the team, and sold my shares, whose price had been practically unchanged. A great way to waste one’s effort with two blokes that seemed to be not very energetic. How wrong can you be!

Well done Sam and Anthony!

P 39, August 29, Dan Adam and Andrews Triggs, ‘Business as usual won’t fix stagnant economy and wages’.

Again two blokes with the ‘business as usual’ approach to business.


‘An economy is stagnant when few new firms are entering the market. Firms are older. Competition is weaker. Incumbent unproductive firms remain unchallenged. Workers get trapped in the wrong jobs.


‘This is the Australian story – and it’s a big problem.


‘The least dynamic industries are the ones where the pass-through of productivity to wages has fallen by the most, suggesting a decline in the worker bargaining power’.


P 40, August 29, James Thompson, ‘Investors still at risk of hard landing’.

‘There are three very different economies running at three different speeds. But they serve as a reminder to investors that the fight against inflation will be long, complex and possibly painful, and that the potential for a hard landing for the global economy still in play.’


Well worth a careful read. And there is a splendid shot of Mr Powell and Philip Lowe, who is must be said looks pretty confused.

Tuesday, P1 and 27, August 30, Cecile Lefort, ‘Market tips cash rate at 4pc in 2023’.

‘Financial markets predict the Reserve Bank of Australia will be past 4 per cent in 2023 after surging retail sales and a recasting of interest rate expectations in the wake of the US Federal Reserve’s harkish stand against inflation’.

Hear, hear!

P2, August 30, Jennifer Hewett, ‘Theatre battles reality at jobs summit.’

‘Four decades ago, business leaders found themselves ill-prepared and outplayed and outplayed by former ACTU secretary Bill Kelty and Treasurer Paul Keating.


‘A labor government and union leadership had agreed on what they wanted before the summit, yet this agenda also included Hawke and ACTU stressing the need for wage ‘restraint’ in exchange for improvements in the social wage – such as Medicare.


‘This time is all about the needs, reflecting a much changed economy, including a dramatically reduced percentage of union membership’.


Tuesday, 30 August, P38, The AFR View, ‘Political stitch-up cloaked in talk of consensus?

‘United States Federal Reserve chairman Jerome Powell’s hawkish warning that he will lift for long enough to defeat inflation should be the reality check that frames the discussion at the Jobs and skills Summit on Thursday and Friday.


‘The prospect of a hard landing slowdown in the US that pitches the global economy into recession would threaten hopes for a soft landing in Australia that would preserve the 50-year-low, sub-4 per cent jobless rate.


‘Even by the official soft-landing forecasts, Australia’s economic growth will slow to less than 2 per cent next year. This should focus the summit discussion on an incentive sharpening agenda that would drive jobs, investment , productivity and wages Instead, it’s looking like a preordained stitch-up and union power grab cloaked in the language of consensus.’


Wednesday, 31 August, P 1 and P 4, David Marin-Guzman, ‘Business pushes back’.

‘Major employers have put on a united front ahead of the jobs summit to counter the ACTU’s attempt to pick them off with side deals , instead of pushing for contentious workplace issues to be dealt with after this week’s gathering of business, union and community representatives.


‘Seeking to rebut suggestions of division within business, the Business Co of Australia, the Australian Chamber of Commerce and Industry and the Australian Industry Group released a ‘joint statement of ambition’ yesterday that stressed post-summit talks, rather than union-employer deals, as key to advancing their shared interests.


Wednesday, 31 August, P 1 and p 46, The AFR view, ‘History lesson: Labor jobs summit lacks genuine productivity purpose.’

’Anthony Albanese’s Jobs and Skills draws its ‘consensus’ inspiration from Bob Hawke’s national economic summit of nearly 40 years ago. The summit of April 1983 laid down an institutional framework that stabilised macro-economy at the depth of the worst recession in half a century and facilitated the great liberalisation that opened up Australia and helped transform a second-rate nation into one of the most prosperous.


‘The question is whether tomorrow’s summit can build on this kick-start to productivity revival needed to help Australia compete better in the disrupted post-pandemic world …’

Edward O. Wilson, The Future of Life.

‘Humanity is ageing fast in 2100. The means have been provided to eliminate most diseases, including those caused by genetic defects. Medical delivery has improved dramatically almost everywhere. The big news is the lengthening lifespan , …


‘The genetic homogenisation of the world population by intermarriage, already well advanced by 2000, has accelerated. There is more genetic variation within local populations but less between the populations that was the case back in 2000. Biological races grow fainter with the passage of each generation.’


Buy this book and read it. You will find a wonderful set of good and bad developments.


More bad than good unless things are different.


Thursday, P1 and P 4, September 1, Phillip Coorey, ‘Government flips in ROOT rule.’

‘The Albanese government is poised to soften the ‘Better off Overall Test’ in a bid to rescue the ailing enterprise bargaining system, accepting its previous outright opposition to change has been flawed.


‘Facilitating the change will be an agreemen between the Business Council of Australia and the ACTU to ‘maintain but simplify the BOOT’ to help reform the bargaining system ‘so it is simpler, fairer and more accessible.


‘The two groups also agree to an up-front increase in migration to address the immediate skilled labor crisis in return for longer-term in skills and training for locals, and they echoed calls by the Prime Minister for a shift towards permanent migration.’


Also, on P 1, increased on P 6, September 1, ‘Stop unfunded budget calls’, says Chambers.

The Treasurer is battling consistent calls for large amounts of money, amounts that cannot be found. Give Mr Chalmers a fair go, at least until the Morrison pile is being reduced strongly.

Thursday, September 1, Danielle Wood and Brendan Coates, ‘Three fast fixes for jobs summit’.

‘’Migration targets, female participation and the employment of older workers are all speedy ways for the government to relieve workforce and inflationary pressures’.

Go for it Danielle and Brendan!

Thursday, P 40, September 1, Joe Aston & Michael Roddan ‘Rear Window’s jobs summit preview’.

‘The Albanese government’s Jobs and Skills Summit has so much been written about so little’.


‘Welcome to the main non-event, where 142 painstaking selected rent seekers huff and puff and … rubber-stamp the government’s pre-ordained policy path. Someone change the channel already.


‘The participants are already delirious with self-satisfaction at their momentary relevance to the political agenda, a menagerie of government welfare recipients, the vast majority plucked from the grey secretariats of interest groups.


And what an inspired roles for a jobs summit’.

· Australian Banking Association CEO Anna Bligh.

· Rio’s Kellie Parker.

· Major retailers.

· Premiers Andrews and Palaszczuk.

· Christine Holgate.

· My old mate Ross Garnaut, unfairly described as ‘That clapped out old doomsayer. He wants the world to end, so he’ll be right for once’. Fair go, Joe and Michelle.

· A full quarter of the delegates are representing trade unions.


I can’t go on. I will after the next two days are over send an article showing the first burst of productivity, and a set of productivity proposals written in 2014, and widely ignored.

with thanks to David Rowe

KULTURE

Fiona Prior sees the shatteringly brilliant stage play of ABC journalist Anne Deveson's memoir 'Tell Me I'm Here' at Belvoir St Theatre. More here.

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