Kroger should say 'yes', Kennet legacy, bring Rio back, Crikey army submission

1. Jeff says "no" – so why doesn't Kroger say "yes"?

By Stephen Mayne, who's no longer preparing to relaunch www.jeffed.com and run in a Warrandyte by-election

Late this morning, after less than a day of frenzied speculation, Jeff Kennett formally withdrew from the Victorian Liberal Party leadership race. Which is the worst possible outcome for the state opposition and leaves them almost certain to go further backwards at the 25 November election.

Rather than someone like Ted Baillieu emerging as the consensus great white hope after Robert Doyle's resignation yesterday, the electorate now knows that most Liberal powerbrokers believe he was a worse alternative than recycling a controversial premier. For the Labor Party of course, he's a much better alternative – to fend off Jeff, they might have needed to dig into their cash pit with a well-resourced scare campaign. With Baillieu, the Bracks spin machine will hardly need to get out of second gear, let along go into overdraft, to retain office.

Imagine the scenario if Jeff had come out yesterday and immediately ruled out a comeback on the basis that Ted Baillieu would make an outstanding Premier. Instead, we had all this frenzied expectation – and now nothing more than deflation.

The story now returns to rats leaving a sinking ship and the Liberal Party being a disorganised rabble, unable or unwilling to land a decent punch on the Bracks government.

Kennett has made the right decision for his family and the influence of wife Felicity should not be underestimated. She'd walked before and many observers were predicting she would walk again if Jeff made a political comeback. However, it is the wrong decision for the party because only Jeff could have averted the inevitable train wreck – but still fallen short of winning office.

With everyone from the Prime Minister down effectively admitting the next Liberal Premier is not yet in the Victorian Parliament, the best solution now would be to draft some other big name. There's only one who would have a realistic chance and that is Michael Kroger.

The Kroger-Costello forces were about to suffer a major blow if Jeff returned and it looks like that was exactly what John Howard was hoping for with his extraordinary endorsement of his old foe last night. Have a listen to that notorious phone call between Jeff and Andrew Peacock again if you need any reminding about this.

Surely it is time for Michael Kroger to step out of the shadows and take the leadership. There are seats available, it would stop Kennett allies Ted Baillieu and Louise Asher from getting the job and Kroger would have a much better chance of pulling off a miracle win than Jeff.

Sometimes backroom string pullers need to step up and be counted. The ruling Kroger-Costello faction has helped make a mess of the Victorian Liberal Party, so maybe Kroger should take some responsibility and now try and turn things around.




10. Getting the Kennett legacy right

By Stephen Mayne, former spinner to Victorian Treasurer Alan Stockdale

There was a huge amount of coverage on Jeff Kennett this morning and plenty of analysis of his political legacy. However, it is important to get history right.

For instance, Kennett did not "sack" 10,000 teachers – the vast majority took voluntary departure packages. He did, however, downsize the Victorian public sector from about 260,000 workers to 160,000.

The Herald Sun today blamed Jeff for Victoria's gambling explosion which is partly true, but it was the Kirner government which actually introduced poker machines and started the casino tendering process. The paper also said Jeff "sacked several councils". Err, he actually sacked the lot – almost 200.

The Herald Sun also said public transport privatisation produced "mixed results". It was actually a huge success in that foreign operators paid way too much for the franchises, saving taxpayers at least $500 million whilst still delivering a reasonable service.

Some privatisations were great, but others were terrible and the final figure was actually close to $40 billion. The $30 billion raised from energy sell-offs was the government's most important achievement because it completely rebuilt the state's balance sheet – something Steve Bracks has been enjoying ever since.

However, flogging Tabcorp at just $2.25-a-share was a disaster and the Transurban contract, then the world's biggest tollroad deal, was equally bad because investors have made almost 1000% on their equity despite major construction blowouts and still not reaching prospectus forecasts. Macquarie Bank certainly got the better of Jeff on that deal.

Driving efficiency in public hospitals through the revolutionary case-mix funding formula – you only get paid for operations performed – was another brave and successful reform.

Similarly, another plus was the way former AWB CEO Andrew Lindberg knocked Victoria's bankrupt workers' compensation scheme into shape – saving employers more than $500 million a year whilst still providing more generous compensation than a state like Queensland.

However, it is the broader rejuvenation of the Victorian economy which was Jeff's crowning glory. He turned around decades of net interstate migration and Australians choosing to come to Victoria is surely the most basic test of a government's success.

On the downside, there was all the arrogance and abuse of critics, including many journalists. The 7.30 Report was boycotted for his entire seven year premiership. There was also a major ethical blind spot, whether it be secret defamation settlements with Kerry Packer, dodgy share dealings, hounding the DPP, huge conflicts of interest and contracting out the Auditor General's function. Even symbolic things like forgetting to return a portrait of Sir Henry Bolte to the National Gallery of Victoria after he left office and commissioning a $100,000 hagiography of his achievements count on the debits ledger.

The Kennett Government was one of the bravest reformers any modern democracy has seen in the past 50 years. It was just a shame that Jeff couldn't be humble about it, polite to his critics and remain on the right side of the ethical line.

That said, Victoria is today a better place after the Kennett revolution but he was very much a leader for the crisis, not someone who can manage steady service delivery in an inclusive way when the economy and state budget are in good shape.



17. Crikey Army produces pokies submission deluge

By Stephen Mayne, anti-pokies obsessive

Several hundred members of the Crikey Army swelled the Victorian's Government's Gaming Licence Review yesterday on the last day for submissions and some of the commentary was very strong. My full four-page rave is on the Crikey website here.

Try these for size from Crikey subscribers:

An ex-worker at Tabcorp (left of my own accord) writes: I would be dismayed if any further loosening of gaming licences was allowed. There are already far too many poker machines in Victoria and they are aimed at two constituencies – welfare recipients and superannuants. The amount of money gambled on pokies doubles on pension day, and the 1c, 2c and 5c machines are an absolute disgrace. Pokies have killed the pub as a venue and replaced it with rows of pensioners pretending to be "socialising" with each other as they spend the shopping money. There needs to be a thorough investigation into problem gambling, the amount of super being lost into the pokies and the targeting of poor areas for increased pokie numbers. There is a massive discrepancy between the machine numbers in leafy Kew and those in poorer Maribyrnong. This is income redistribution at its most regressive.

Ali writes: Hardly a day goes by without the newspapers reporting a court case based on problem gambling. Yesterday's choice tale concerned a Commonwealth Bank employee who stole hundreds of thousands of dollars from a dead woman's account to finance his gambling habits. Given the impact of what has become an urgent social issue, how is it, then, that the Gambling Licences Review is not even considering problem gambling within its ambit? Or examining the ridiculous accessibility (and oversupply) of poker machines? My flatmate's sister, a single mother, died recently and unexpectedly. Turns out that, even though she was on a good wage and was paying a peppercorn rent at her mother's house, she left nothing for her orphaned teenage daughter except massive debts. The debts included fees owed to the nursing home in which her mother lives. Yep, she had even been embezzling her mother's pension. However, she was not a bad person; quite the opposite. She was a good person but she had developed a raging addiction to the poker machines at her local. Sure, you can argue personal responsibility, but that doesn't stop us from regulating other harmful addictive substances. The difference here is that a smoker or boozer or junkie generally hurts themselves but gambling hurts whole families and, indeed, the community.

However, one life member has objected to the deployment on the following grounds: I find the term “Crikey Army” offensive. The great strength of Crikey is its independence, and I suspect I'm not the only subscriber who supports you because of a desire for independent information. We subscribers are not an army, Crikey's or anyone else's. We are individuals. I'm sure our political views run the complete spectrum, and while I'm in favour of Stephen's stance on gambling, it's mad to assume all subscribers are too.



25. Time to bring Rio Tinto back to Melbourne

By Stephen Mayne

Australian shareholders are fast developing a reputation for pursuing good corporate governance – something that mining giant Rio Tinto learnt the hard way yesterday when it was forced to withdraw a resolution changing its constitution and restricting the possibility of shareholder class-actions in the US.

Rio chairman Paul Skinner told the meeting yesterday that UK and US shareholders had no problem with the proposal when it was voted on at the London AGM on 12 April, although these figures have never been publicly released. This was a peculiarly Australian revolt and, once again, those corporate governance kingmakers at Corporate Governance International and Institutional Shareholder Services have delivered another scalp.

Rupert Murdoch said the same thing when News Corp's executive options were voted down in 2003 – a move that I believe triggered the company's departure to more shareholder unfriendly Delaware.

With an average of 790 million Rio Tinto Ltd shares being voted yesterday and 637 million Rio Tinto PLC shares at the London AGM on 14 April, the controversial resolution was clearly opposed by at least 357 million shares – 25% of the 1.427 billion shares voted overall.

The dual-listed company structure really is quite lax when it comes to governance. Shareholders were not even advised of the PLC vote before yesterday's Ltd meeting and the withdrawal of the resolution means now we'll never know. Can you imagine a political election being cancelled on the day just because the pre-poll votes were going badly?

Yesterday's performance was a good example of why corporate voting should remain open until the day after the AGM – a move that would end the "dead rubber" effect of meetings and would allow wavering shareholders to listen to the debate before casting a final ballot.

Finally, Rio Tinto was quick to dismiss calls to unbundle its DLC structure yesterday, even though finance director Guy Elliott admitted the Australian shares always trade at a premium to their UK counterparts.

Given that Rio has no operations in the UK, more than $30 billion worth of assets in Australia, an Australian CEO, several Australian directors and a stronger share price Down Under, surely it makes sense to shift the global headquarters back to Melbourne, just like the old days with CRA.

Yesterday's dropped resolution was all about forcing shareholders to only sue in the Victorian courts. If Victoria is so good, shift the whole company here. Brambles have dropped its cumbersome DLC structure and its chairman, Don Argus, also chairs BHP-Billiton so presumably Rio's giant Australian rival is having a look at doing the same.

The two-tiered AGM process is most unsatisfactory and the different voting patterns show how hard it is for Rio's two sets of shareholders to get organised. With so much index-hugging and superannuation cash sloshing around Australia, Rio's share price would probably rise even more if it unwound the DLC and made Melbourne its primary home.

Maybe it's time for a few state governments to start insisting on such a move before Rio gets its next sweetheart deal to further exploit our huge dowry of mineral resources.

Copyright © 2024 The Mayne Report. All rights reserved

• share
  Share
  • 
    Facebook
  • 
    Twitter
  • email
    Email
  • print
    Print
  • link
    Copy Link
  • cancel
    Cancel