Canberra correspondent Bernard Keane writes:

A short while ago Joe Hockey went to Malcolm Turnbull’s office in Parliament House. Despite repeatedly saying that he would not challenge his leader, he is expected to announce this afternoon that he will be challenging Turnbull for the leadership of their party tomorrow.

There’s an outside chance Turnbull will stand aside, but don’t bet on it.  The Liberals have nothing Turnbull wants except the leadership.  He won’t have any interest in being Hockey’s foreign affairs minister.

And in that case, Hockey will win the ballot comfortably, bringing Malcolm Turnbull’s tumultuous period as leader to an end.

But he will get no honeymoon.  There will be a bounce in the polls for the Coalition, but Hockey enters his leadership as damaged goods – and not because he breached his commitment to his leader.

Hockey will be exactly what Nick Greiner and Malcolm Turnbull said yesterday – a puppet of Nick Minchin and the party’s conservatives.  Hockey lacks the intellectual heft and political nous to be anything but a figurehead in what will assuredly be a Minchin Regency.

But it’s more than that.  Minchin and the party’s conservative wing have sent a powerful signal.  While accusing Turnbull of wrecking the party, they themselves have demonstrated that they will inflict any amount of damage on the party, its leader and its brand if they don’t like a decision.  They lost the debate last week, refused to accept the result, tried to move a spill, lost that too, then resorted to mass resignations to get their way.

Malcolm Turnbull has been lashed for hitting back hard at them yesterday but he’s a model of decorum compared to a number of rightwingers in the party.  These are men and women who plainly think the rules only apply when it’s convenient for them.

Hockey will not be their leader, he will be their hostage.  Anything statement short of a repeat of Hockey’s statements last week that the CPRS will be passed will be like one of those dreadful hostage videos, in which captives are forced to say whatever those holding them insist on.  Hockey may as well be holding up a newspaper.

The only catch is that Hockey himself may not make it to the election, to the dismay of his captors.  He is undoubtedly popular with punters, much more so than Abbott.  But his indiscipline, his inability to master a detailed brief, his tendency to resort to bullying when he doesn’t like what someone says, all will be the object of a concerted attack from the Labor machine over the next twelve months, starting the very day he gets the leadership.

While he’s not the goose that Alexander Downer was in 1994, the possibility of a Downer-style flame-out can’t be ignored.  That would leave the party to turn to Abbott, which is what Minchin and the conservatives may want in the long term, but it would also leave them a laughing-stock.  Well, more so than they currently are.

Turnbull has alienated friend and foe alike with his arrogance, high-handedness and inability to engage constructively and consultatively with his backbench.  But he’s a genuine leader, committed to taking the Liberal Party forward and making it competitive.  Hockey will lead them to a disaster far worse than Turnbull would have managed.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Canberra correspondent Bernard Keane writes:

What will Malcolm Turnbull do if he loses tomorrow, as seems likely?

The conventional wisdom is he’d pull the pin, resigning from Parliament and exiting politics.  The ensuing by-election would be extremely difficult for a divided and disrupted Liberal Party to win.  Wentworth voters would see the Liberals as the climate denialists who forced their bloke out.

You can bet Labor would definitely stand a candidate this time.

But not so fast.

Yesterday Christopher Joye offered an intriguing take on the Turnbull leadership and his problems.  This morning, Joye floated a fascinating thought bubble on what Turnbull might do: establish his own political party, freed from the encumbrance and historic problems of the Liberal Party.

The idea has apparently occurred to others.  David Speers tweeted this morning that the idea of Turnbull establishing a new party was being discussed amongst Liberal MPs.  It is not coming from Turnbull or his camp.  You can bet Turnbull is focused entirely on the challenge of defeating Nick Minchin and whatever candidate the conservatives throw at him.

New parties have not had a great track record in Australia of late.  Putting aside the death of the Democrats, One Nation, Meg Lees’s Australian Progressive Alliance and Family First are (with apologies to our friends at the Australian S-x Party) the most significant new parties in the last decade.  One National flamed out, Meg Lees’s cranky reaction to being turfed from the Democrat leadership never got off the ground, and Steve Fielding, who regularly shames the Senate with his asinine and offensive comments, is only there because of Stephen Conroy’s lunatic preference deals.

But Turnbull has several things going for him that others don’t have.  He has a huge profile, he has the financial resources to start things rolling, and a capacity to tap into the business sector for financial support.

A Turnbull party – possibly the Australian Republican Party – would be committed to action on climate change, an Australian republic, a low-tax, small-government economic philosophy and a progressive social policy.  “Warm and dry”, to use Nick Greiner’s classic self-description.

The target would clearly be the moderate wing of the Liberal Party.  The first task would be to retain Wentworth next year.  His main opponent there would be Labor, not his Liberal successor, but he would pick up preferences from both and if he outpolled the Liberal candidate would have a strong chance of getting over the line on preferences, keeping the seat he spent so much treasure on snatching from Peter King six years ago.

Labor might even run dead to keep him in Parliament, making life difficult for the Liberals.

The next challenge would be to build a membership base.  The goal would be to lure moderate Liberal members, hostile to the Minchin-led party’s climate change denialism and Tony Abbott’s monarchism – wealthy and leafy suburban seats.

The biggest problem would be perceptions that the party was entirely a vehicle for Turnbull’s ego and fury at his former party.  He would need to recruit substantial figures to provide a counterweight to the image of it being all about Malcolm.  The business community would be first port of call.  With Joe Hockey as Nick Minchin’s puppet leading the Liberal Party, business might not be as enthusiastic about donating to the Liberals as they are under Turnbull.

Turnbull is not a dyed-in-the-wool Liberal, although he married into the Hughes clan.  He flirted with joining Labor.  In truth, he does not entirely belong in either party.  And while we know Turnbull is politically-motivated by his own ego, he is also genuinely committed to public life, and passionately wants to change and improve his country.  His record on the republic demonstrates that.  Setting up a new party, without the baggage and conservative deadweight of the Liberals, could yet allow him to make a major contribution.

Becoming Prime Minister is the highest achievement in Australian politics.  But successfully establishing a new party?  Who has really done that since Robert Menzies?  That’s a challenge big enough to intrigue Turnbull.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Guy Rundle writes:

If there isn't a bunch of metropolitan Libs with a blueprint for a split in a desk drawer somewhere, they aren't doing their job.

Given the last week's performance, that probably means there isn't.

But there should be of course. There's up to 20 sitting Liberal MHRs who would have nothing to lose from a sudden split should Krudd bring down a double dissolution.

Should a Hockey-Dutton ticket be established on a deal with the Right to reject the ETS, the power of the irrationalist Right to dictate policy and leadership to the party will be laid bare for all to see.

At that point, urban Lib MHRs are effectively being asked to commit to the political equivalent of the Somme, Day 1 – marching towards the enemy guns led by an amiable fool and a man about to lose his seat (having, unbelievably switched back to it after trying for a bolthole), for a cause they don't believe in, to defend a faction that many of them quietly loathe.

Rural Libs will survive to continue their diminished careers as the bench warmers of a long-term opposition. Meanwhile the Liberal Leninists – Minchin, Abbott et al – will have at least one scenario they wanted, come to realisation, that of a party they control, more moderates driven out, lurking in Opposition for 12, 15, 20 years if necessary until the Ellis-Soutphommasane Labor government is so tired and bedraggled that the voters are willing to make Alex Hawke prime minister.

Yes, it's not their plan A. Their plan A is the delusional idea that the Australian public will emerge from hypnosis and vote for the true Australian knights of Christianity etc. If not, they will.

Minchin said, in response to Turnbull's Dr Strangelove act on the weekend, that he had been in the Liberal Party too long to want to destroy it.

Maybe, but he's also a stalwart Right-wing warrior, the Bill Hartley of his team. For the Liberals to win in their current constellation, or even for it to become the standard set-up, would be to cement in a politics that excludes the world-vision ably expressed by Minchin's remark that climate change politics was "communism by other means".

So the moderate Libs should jump or be ready to turn into a genuine liberal party – the only chance that moderate liberals would have to fight such a battle from a position of incumbency.

The great strength of such a party would be that they would get preference flows from both the other major parties – the existing Libs, who might well merge with the Nationals – and they would be in a position to negotiate with the Greens, who would then have someone they could first preference to ahead of Labor.

Quite aside from holding a fair brace of their own seats, they would be real competition for the ALP in a number of metro seats – especially if, freed of their country cousins, they could offer a more genuinely liberal social policy. That would scoop a bunch of prosperous social liberal voters who continue to vote ALP despite the party's increasingly socially conservative rhetoric and appetite for state censorship and repression.

Will they do it? Do they dare disturb the universe? History to the defeated may say alas but cannot help nor pardon, and there will always be children who do not particularly want it to happen, and they f-ck you up your mum and dad they don't mean to but they do, they ... (that's enough poetry – ed).

They probably won't.

And what would you call such a party? Moderate Party (a la Sweden)? Sensible Party (a la Python)? The Real IRA (may lead to misunderstanding)? Touching Cloth? Answers on a postcard please.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Mungo MacCallum writes:

The trouble with Malcolm Turnbull, said an old and wise friend of mine, is that he’s in the wrong party. Well, apparently; but the real trouble is that there is no right party for him to join.

My friend’s implication was that Turnbull really belonged in the ALP, and it is true that he agrees with much of what Kevin Rudd is trying to do. Apart from the ETS, Turnbull is an environmental activist, a nationalist impatient with the general incompetence of state governments, a strong advocate for Australia’s involvement in international issues and, last but definitely not least, a staunch republican. Last week he even described himself as a progressive. From a policy point of view he would not be out of place in today’s ALP.

But on a personal level he would find it intolerable. He has shown himself incapable of massaging the fuzzy and largely impotent factions within the Liberal Party; his attempts at domination have proved totally ineffective, and finally counterproductive. Obviously he would find the far more robust democratic traditions and the intractable stubbornness of Labor’s heavyweights too much for his notoriously low tolerance level. After all, they induce the odd brain snap in Rudd, and he has been virtually brought up in the culture. Turnbull would self-destruct in about a week-and-a-half.

But more importantly, he could never achieve his ambition, which was and is the top job. Turnbull is in politics to be prime minister; no lesser post will suffice. But the party elects the leader, and even the modern, non-socialist ALP has not got to the point where it would contemplate placing its future in the hands of a millionaire merchant banker from Vaucluse. For Turnbull, the Libs were always his only chance and he knew it.

But he has always been an uncomfortable fit, and not only on policy grounds, although as the above list shows, his wish list -- and particularly his republicanism -- is hardly designed to appeal to a party that over the past 15 years has been moving slowly but remorselessly to the right-hand edge of the political spectrum.

To achieve his avowed aim of modernising his party and dragging the Libs into the 21^st century was always going to be a tough job, and one requiring immense reserves of tact and patience. It needs hardly be said that neither quality is among Turnbull’s many strengths. Thus the schism, part policy, part personality.

Some breathless commentators have described it as a "battle for the soul of the Liberal Party", which is frankly hogwash. The Liberal Party is a purely pragmatic body formed with just one purpose in mind: to oppose the Labor Party.

Until 1909 the conservative forces in Australia were split into two warring groups: the Free Traders and the Protectionists. But with a vigorous Labor Party on the rise, the sworn enemies united in a pact against the common threat. The recriminations were so severe, even violent, that they killed the speaker, Sir Frederick Holder, who fell from his chair with a cry of "Dreadful! Dreadful!" This was the inauspicious start of the Liberal Party Mark I, whose centenary was celebrated a few weeks ago.

When the first of the great Labor rats, Billy Hughes, joined them in 1916, the name was changed to the National Party. When the second of the great Labor rats, Joseph Lyons, came aboard in 1931 the name changed again, this time to the United Australia Party. Hughes and Lyons were  given the post of Prime Minister; rewarding treachery is a long-standing tradition in the anti-Labor ranks, proving yet again that power trumps policy every time, with "soul" finishing nowhere.

The UAP became impotent and irrelevant during the war years but in 1945 Robert Menzies cobbled together a motley group of anti-Labor leftovers to form the Liberal Party Mark II, which endured in its current incarnation until last week. Like all its predecessors, its sole purpose is to keep Labor out of power, or at least unable to implement its policies. Where it has policies of its own (the GST, WorkChoices) these are more often that not arrived at by looking at what Labor would do and then proposing the reverse.

Turnbull, a genuine liberal (as opposed to Liberal) is an exception, and it is not surprising that he has been targeted by some of the most unpleasant relics of his party. Nick Minchin, the sinister minister, the conspirator senator, is an ageing factional warlord who has long since abandoned his party’s interests for those of himself and his cronies. Kevin Andrews, the sea green inconceivable, is more concerned with the welfare of the Vatican than of Australia. His fellow Catholic Tony Abbott has taken as his model the Vicar of Bray, elevating political pragmatism to a total lack of principle.

And on the sidelines they are egged on by the likes of Wilson Tuckey and Alby Schultz, both barking mad. This is supposed to be a contest about the soul of the Liberal Party? The arsehole, perhaps. In retrospect, Malcolm Turnbull must be wondering why he ever bothered.

However, there was some cheering news last week with the release of the Senate privileges committee report on the capers of Godwin Gretch. Emails from his time in Treasury reveal that he saw himself as the centre of a vast secret network, which included not only Turnbull and other active politicians, but background figures such as the Liberals’ bagman, John O’Sullivan, of Credit Suisse, who received special, and possibly corrupt, favours from the Gretch.

But best of all, he was an endless font of ideas for O’Sullivan’s wife, Janet Albrechtsen. How pleasing to find that The Australian’s resident dominatrix is actually Godwin Gretch’s ghost writer. Of course, with her inspiration and source now "undergoing treatment", as it euphemistically described, the Libs might have to send around the hat to buy her a new set of alphabet blocks. They need all the help they can get.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Glenn Dyer writes:

Credit figures for October actually tell us there's no reason for the Reserve Bank to lift interest rates tomorrow.

Except for housing, especially owner-occupied dwellings, there's no action anywhere for lenders, though perhaps there's an upturn in margin lending for shares with a rise in personal lending.

But business lending remains very subdued, despite the re-emerging resources boom.

But the RBA looks at more than just the growth in credit, which is still be influenced by the billions of dollars raised by companies in the first nine months of the year, which has helped depress business lending.

Seventeen of 18 economists surveyed by Reuters last week said they expected the central bank to lift rates by 0.25% to 3.75% tomorrow.

But credit figures from the RBA today showed a still slow economy with no growth in October from September when total credit eased 0.1%. Over the year to October, total credit was up 1.1%, slowing from the 1.7% in the year to September and 9.7% annual growth rate in the year to October 2008.

"Housing credit rose 0.7% in October, after a similar rise in October, to be up 8% for the year to October," the RBA said in its release.

Owner-occupied housing rose 0.8% for a second month, and was up 10% for the 12 months to October, the highest annual rate since the 10.1% in the year to July, 2008.

Investor housing credit rose 0.5% in October, to be up 3.4% for the year. That was the highest annual rise since the 12 months ending may this year.

Over the year to October, housing credit rose by 8%. Housing credit rose over October due to growth in lending to both owner-occupiers and investors.

Other personal credit rose by 0.6% in October, following a rise of 0.2% in September.

The monthly rise for October was the highest since December, 2007, when the financial crunch intensified as shares fell and the likes of Centro Properties and Centro Retail Estate Trust collapsed in price terms, starting the slump in the local market that intensified in the early months of 2008.

Over the year to October, other personal credit fell by 3.6%, the slowest rate of fall for a year.

Business credit declined by 1.3% in October 2009, following a similar sized fall in September.

Over the year to October, business credit dropped 6.8%, the biggest annual fall for years.

But the drop is slightly misleading because during the year to October, hundreds of major companies, including our big banks, have raised about $100 billion from sharemarkets in fresh capital, as well as restructuring debts.

Those debt revamps led to many companies cutting debt levels in their new packages or curtailing credit lines (much of it at the insistence of the banks).

That's plus the continuing downturn in demand for many goods, saw private capital spending fall surprisingly in the September quarter by around 3%.

But projected spending for the full year rose 5.9% from the estimate in the June quarter figures, pointing to a possible upturn in business lending in 2010.

Over the month of October, M3 fell by 0.3% and broad money fell by 0.2%. Over the year to October, broad money grew by 5.7%.

Meanwhile, the business indicators for the September quarter showed a seasonally adjusted fall in company profits of 2.1% in current prices, and a rise in sales by manufacturers and wholesalers and a rise in business inventories of 0.8% in seasonally adjusted terms (on a chain volume basis).

Economists had been looking for a fall of 1% in business inventories in the quarter.

The fall in gross operating profits was the fourth quarter in a row they have fallen, a real indication of the impact of the economic slowdown here and offshore. The fall in the June quarter was revised to a 7% fall from the 7.8% originally reported.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Stephen Downes writes:

The Fairfax Press, and especially The Age, is seen to write the gospel according to food. The opinions of its reviewers are believed, and the annual Age Good Food Guide is perceived to be Melbourne’s bible of eating out. On things gastronomic, the Fairfax Press has form. One PR consultant told me about a bar client that preferred publicity in the Age over the Herald Sun because the former brought in a better class of person. Reviewers are supposed to be reporters, and by its very nature what is written on editorial pages is believed by readers to be unbiased, independent and unaffected by anything other than serious-minded fact-finding and analysis.

A journalist’s word is worth much more than an advertiser’s. It’s trusted. I once read marketing research concluding that the value of editorial over advertising copy was something like three to one. And while this kind of gross and unquantified generalisation is perhaps dubious, there is no doubt that restaurant critics are highly influential.

But take Fairfax’s recent review of current culinary darling and Masterchef star George Calombaris’ Hellenic Republic, based in Brunswick, Melbourne.

Chef–restaurateur George Calombaris had either “his own personal Delphic oracle” or a “canny understanding” of the world economy, Larissa Dubecki wrote in the Age early in 2009. His new restaurant Hellenic Republic was “cheap(ish)”, “cheeky” and “cheerful” and it served “gutsy, uncomplicated, home-style Greek cooking”. This encomium — if I may be Greek about it — for Calombaris and his latest venture effulged ever more brilliantly, sounding to me more like a hyperventilated media release than a restaurant review. (Ms Dubecki, it should be added, was at the time the paper’s fairly new restaurant critic.)

The restaurant’s exposed central grill added to the “whole Greek theatre feel”, she wrote. A spit-roast of “yielding, gelatinous flesh is revelatory”, and although a moussaka was too rich and a touch too salty for one or two people it “works splendidly as a … side dish for four”. Hellenic’s customers were more diverse than most, which implied that you or I could go there and not feel out of place. And wine is served from “aluminium tankards”, which Dubecki considered to be a “nice touch”.

The following month on the Fairfax Digital Executive Style website, John Lethlean, who preceded Ms Dubecki as Age restaurant critic, began his piece: ‘Subtle, Aegean blues. The high gloss sparkle of white tiled walls. Lobster pots for light shades and a distinct smell of burning charcoal in the air. Those kooky little red anodised aluminium pitchers used for cheap table wine nowhere else in the world.” (In the March edition of Gourmet Traveller magazine, Lethlean found Hellenic, “absolutely infectious”.)

Nothing in either of these two nugatory assessments could be considered seriously critical, in my view. Aided and abetted by copious plugs written by others in glossy food magazines, similar boosts in daily newspapers’ weekly magazines, an editorial in the local Moreland Leader and a plethora of cyber postings by excited food bloggers, the Hellenic Republic would have needed to become Stalin’s Russia to fail. Calombaris would have trouble buying such publicity.

In April in the Herald Sun I failed Hellenic Republic, giving it 24 out of 50. I said I wouldn’t spend my own money there because Melbourne offered better Greek food in more comfortable and more hospitable surroundings elsewhere. Calombaris’s new restaurant subverted hospitality, I argued, by telling diners that they had to leave at a specified hour and by threatening to fine them if they cancelled bookings too soon before they were due to sit down.

The Hellenic Republic’s arrogance winds you. An informant made a booking for his birthday—a party of sixteen. Because his group was larger than ten, they would be served a ‘banquet dinner’, the restaurant insisted, meaning everyone would choose from a menu that the restaurant mandated. Moreover, there would be a ‘minimum spend’ of $2000 ($125 a head), and they would have only two hours in which to enjoy themselves: their table would be needed at 9 p.m. He cancelled the booking.

In my review, I wrote that the restaurant served ‘OK and sometimes better’ simple Greek dishes in a canteen ambience. Calamari had delicate flavour but had been grilled too long, in my view. Slow-cooked pork in celery was a watery but passable stew, and the offerings overall amounted to home cooking you did when you didn’t want to cook. The wine list was very limited and expensive, I wrote, citing examples, and I pointed out that wine should never be poured into and served from metal containers. Acids—they’re in wine—and metals can react to make bad-tasting babies.

Even if the metal had been treated to render it inert, Lethlean and Dubecki should have questioned the little ‘tankards’ and ‘pitchers’ that so beguiled them. Hellenic Republic was noisy and uncomfortable. You sat on rush-woven seats with two-rung backs. Plates were not changed, so red meat went on seafood slicks. When we booked, we were told we had to sit at a communal table. We were put on one for eighteen, even though several tables for two, which we’d requested, were available throughout our entire meal.

Now, who’s got it right? After more than three decades of reviewing restaurants am I taking the job too seriously? Or, on the other hand, is it possible that the job itself has changed? Is analysis out? And, if that’s the case, why? Have the relationships between some journalists and restaurateurs, their chefs and their professional marketers brought that about? It alarms me, for instance, that in conversations I’ve had lately with ordinary eaters-out they consider me to be ‘part’ of the hospitality industry, the sector that promotes eating places.

The work of restaurant critics impinges on what restaurants do and how they trade, yes. And, over time, on standards, of course. (I believe that until fairly recently good criticism played an important role in improving standards.) But critics work—or should work—for their readers, determining the best eating at the best price. They should give detailed explanations of how they have reached a conclusion, given a rating or a score. That’s the theory, at least.

Unfortunately, though, in recent years tens of thousands of words written by food ‘journalists’ simply promote fashionable restaurants and their owners and chefs. (The reviews I have quoted are typical and their style is ubiquitous.) The same names recur vomitously. You know them. The chefs and restaurateurs who cook at and own these places, it would be fair to say, see their venues as chic gourmand utopias, the places in which to be seen dining out. They will saddle up and ride the gift horse of promotion whatever its breed.

Read the full essay here.

This is an edited extract of an essay that first appeared in the latest edition of Meanjin Quarterly. Volume 68 Number 4, 2009 is out now. 

Back to the top  |   Forward article to a friend  |   Comment on article

Back to the top  |   Forward article to a friend  |   Comment on article

Senior News Corporation figures in the US are openly discussing the unthinkable, that the marriage between Rupert Murdoch and Wendi Deng has broken down and the couple have separated. If Wendi  has left Rupert that means there will be two less children to be pushed into the inheritance pot joining four from his first two marriages. There's supposed to be a trust that contains assets and shares for the four kids. There has been talk that the two children by Wendi were going to be made beneficiaries of part of that trust. But now?  Lachie sold News Corp shares last week and is spending money -- $112 million on half of DMG Radio Australia, $23 million on a Bellevue Hill mansion in Sydney and now some media assets in the US, led by Hollywood Reporter according to the Financial Times. Elisabeth is building her Shine production company business in the UK, US and next year, Australia. James of course wants to run the family company. Prudence has bowed out and is not active in the media. (Given the nature of this tip, we approached News's Australian corporate spinner Greg Baxter this morning for comment. He did not reply to our emails.)

If two new Liberals come in as a result of the by elections on December 5,  shouldn't they have a say in party room vote?  Turnbull has been advised to hold off till then.

The internal Liberal battles are getting personal. Looks like the two  Sunshine Coast Liberals (Somlyay and Slipper) are in outright war.

Return of the Entsch. Just when it looked as though it was safe to go back into the water here in Far North Queensland (inside the stinger nets of course) -- who should rise from the primeval ooze but Warren Entsch -- former federal LNP member for Leichhardt -- and recently preselected LNP candidate for his old seat at the next federal election.

On November 21 in Mossman, Entsch revealed his grand plan to mark his political comeback ... "I'm very excited by the idea of building a monorail from the Daintree River crossing to Cape Tribulation," he enthused. "It would be absolutely iconic, unique."

And ours, it seems, for just $360 million -- give or take a few hundred cassowaries, spotted quolls, tree kangaroos and other desperately endangered species of fauna and flora inhabiting this world-heritage rain forest.

Happily the community meeting he convened to listen to this antediluvian, mind-numbing claptrap attracted just nine people. Ten if you count Warren.

The Age has signed two big fish -- according to mediaspy.org's The Spy Report -- in Rafael Epstein and Tim Lester. It seems The Age has money for hiring now; a far cry from 12 months ago. But where are the staff pay rises?

A review has been going on for at least three months. And don't get us started on newsroom resources ... some days there are no (yes, none) general reporters. Has all the money gone to Epstein and Lester?

The launch of the good ship Clayton's digital newsroom at SBS , i.e. the-digital-newsroom-you-have-when-you-don't-actually-have-a-digital newsroom! Anyway crack that champagne bottle over that engineless hull -- the SBS analogue news ship is about to set sail! She'll have to sail as there's no bloody motor, skipper ... skipper? Where's the bloody skipper? Here's to a job-bloody-well-not-done!

I've been told that the teachers at Lynwood High School are currently in pay disputes over being short-payed, but the teacher union's attempts to set up meetings with the education department has seen the education department cancel the meeting each time.

Since teachers apparently aren't allowed to talk to the media about internal disputes, if the education department wants, it can pointlessly string out the issue.  A few thousand dollars for teachers isn't a lot, so maybe they think they can just ignore it.

Meanwhile in SA:

Newsagents are pretty upset about The Advertiser taking over their databases and forcing them to take the prices they're given during specials. See here. You certainly won't read much about it in The Advertiser or The Australian's Media section.

A rumour the newsagents have started is that an SA version of The Age might start but when in Adelaide on Thursday and Friday, Fairfax CEO Brian McCarthy said this was not the case, but they could set a version of WA Today and Brisbane Times in the future.

Apparently this is happening all over country SA, newsagents being pressured into giving out the contact details of their own delivery rounds so the 'Tiser can instead be the ones to charge for delivery. Desperate times, desperate measures ...? Wouldn't have thought there'd be much extra profit in it for them.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

A great animated data visualisation shows the decline of the world's four biggest maritime empires over the 19th and 20th centuries.

View our Video of the Day gallery

Back to the top  |   Forward article to a friend  |   Comment on article

Andrew Crook writes:

It was born through a famous split in 1955 and has seen off a more recent putsch from the religious right. Now the Victorian branch of the Democratic Labor Party is facing more turmoil in the form of a high-stakes stoush between party stalwart John Mulholland and Peter Kavanagh, the party's sole parliamentary representative.

On Saturday, Mulholland will run in the Higgins by-election with the official DLP imprimatur next to his name on the ballot paper, despite a bitter falling out with Kavanagh-aligned forces who claim on the party's official website that it "is not running a candidate in Higgins ... due to anomaly in the registration of candidates."

Kavanagh, whose grandparents Bill and Mary Barry founded the DLP after the ALP split over communism, confirmed to Crikey this morning that the 65-year-old Mulholland had exploited a loophole as the party's official Australian Electoral Commission contact to nominate himself for the seat, against the wishes of the state executive.

The Western Victoria MLC said the DLP hierarchy had initially selected 20-something teaching graduate Dominic Farrell as its candidate but that Mulholland had intervened to ensure his own name appeared instead. Under AEC guidelines, an official party contact is not required to be a member of a party or apparently even to be alive.

However, after securing his spot, Mulholland is believed to have completed little in the way of official campaigning in Higgins, with grassroots members having abandoned him in droves.

On Saturday, the DLP held its inaugural federal conference in Brisbane and elected a new federal secretary in Tony Zeganhagen, who is believed to be hostile to Mulholland's quest to retain his influence within the Victorian branch.

Late last year, Mulholland was tipped out as the party's Victorian secretary and critics say he has been clinging to the last vestiges of control ever since. His dwindling support base is said to revolve around NSW branch president Michael Webb and about 10 family members in the 1500-strong party.

Next week, the Victorian Civil and Administrative Tribunal will rule on the spat, with Kavanagh confident Mulholland will be stripped of his official party endorsement.

Kavanagh told Crikey that Mulholland's candidacy in Higgins was "disappointing" and that he was welcoming next week's VCAT decision.

"We're getting over our problems and we're getting ready to offer the voters of Australia a real alternative", he said.

"It's just disgusting that one person's fixation can stuff so many people's lives up", another prominent party member, who did not want to be named, told Crikey.

In 2006, Mulholland and Kavanagh came close to becoming parliamentary colleagues after securing favorable preference flows following ALP-endorsed reforms to the Victorian upper house. Mulholland narrowly missed out on a seat in Northern Metropolitan after alert scrutineers noticed one pile of votes had been counted twice.

The new split follows months of turmoil in the party following reports in August that fringe elements of the religious right were stacking out DLP branches in Melbourne's northern suburbs in an ugly attempt to assume control.

However, the resignation of the chief instigator of that putsch, Right to Life President Marcel White, has returned control of the party to "moderate" forces led by Kavanagh. White, a talented soccer goalie, is now rumoured to be starting a new conservative outfit with the working title of the "Christ the King" party.

The DLP is expected to receive between 1-3% of the vote on Saturday, with a large proportion of that owing to voter confusion with the ALP, who have refused to run a candidate on strategic grounds.

Mulholland did not return Crikey's calls before deadline.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Professor David Penington writes:

On Monday  December 7, Kevin Rudd will present to COAG what recommendations of the National Health and Hospitals Reform Commission (NHHRC) or what alternatives should be adopted. COAG will reach final decisions at a further meeting in March 2010.  In 1987, he had promised to "fix" the public hospitals, taking them over if the states had not fixed them in a year.

The fundamental problem for public hospitals across Australia is that for nearly 15 years they have been managed, at political and bureaucratic direction, against cleverly developed financial and throughput "derivatives" and politically mandated figures on waiting lists or emergency waiting times. These take no account of what the community expects in terms of quality, safety and appropriateness of medical services they need to provide and the culture of hospital management has changed.

The NHHRC wants to retain this system, with central agencies telling hospitals how to treat their patients rather than using the fundamental drive of testing the value of treatment and introducing innovation through the clinical research associated with medical faculties in major teaching hospitals. To make things worse, a new Health Workforce Agency is to intrude between the faculties and their teaching hospitals controlling medical education on the basis of a model derived from TAFE and manufacturing industries, abandoned for university purposes as long ago as 1993 by the Hawke government.  The recommendations will make performance of hospitals worse rather than better and jeopardise the future of the medical profession.

The profound problems that emerged in Bundaberg and then at the Royal North Shore Hospital and in the road trauma unit at the Alfred Hospital in Melbourne reflect just these shortcomings in hospitals performing well on bureaucratic yardsticks.  Peter Garling SC stated, in his 2008 NSW review:

I have identified one impediment to good, safe care which infects the whole public hospital system. I liken it to the Great Schism of 1054.  It is the breakdown of good working relations between clinicians and management which is very detrimental to patients.

The British National Health Service had suffered a similar fate from control by central bureaucratic regulation, with deteriorating services.  Gordon Brown intervened. Remarkable reforms, led by Lord Darzi, a brilliant academic surgeon, brought the system back from the brink, with dramatic improvement in quality over just 2-3 years.  Medical faculties played the key role to bring medical expertise into partnership with administration at every level. Medical professionals take pride in the quality of services for sick people if given the chance to contribute.

We believe the PM should recommend:

• Measures to bring clinical doctors to interface with health administration at every level.
• Measures to assess quality of services, to be used alongside current KPIs for hospitals.
• Safeguard the relationship between the medical faculties and their teaching hospitals.
• Encourage development of Academic Health Science Centres around major teaching hospitals, as recommended in the 2008 International Review of NHMRC, to secure continuing advances in quality of health care for Australia.
• Bring together the various "silos" of primary care, public hospitals, preventive strategies and aged care in regional clusters, using the resources already present in university faculties, to further enhance regional and remote health-care as new intern and training positions are urgently developed for new medical and nursing graduates.

David Penington AC, is a senior fellow of the Grattan Institute.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Charles Richardson writes:

"Liberal Party Death Spiral" -- the headline was in Thursday's Crikey, but it could have been anywhere in the media over the past few days. There's been near unanimity that not only is Malcolm Turnbull's leadership doomed, but the Liberal Party  is facing the prospect of fragmentation and irrelevance.

My colleague Guy Rundle, who wrote the article so headlined, correctly traces the party's problems to the amorphous nature with which it was founded, as a philosophically disparate coalition -- "at its worst," as he puts it, "simply a cloud of atoms pointed in roughly the same direction."

But I think Rundle underestimates the extent to which the core of the party has always been illiberal, hostile to free thought and free trade (part of the reason is that he doesn't see these so closely connected as I do). The task of making it an even moderately liberal party, and breaking the conservative hegemony that John Howard in particular had established, was always going to be incredibly messy and against the odds.

There were times when it seemed the Liberals, perhaps under Peter Costello, could settle down as a moderate-conservative force in opposition to a more liberal, market-friendly ALP, as it was under Paul Keating and later Mark Latham. But Kevin Rudd's conservatism, coupled with the inability of the Liberal centre to throw up a leadership contender post-Costello, has put paid to that option.

The truth is that the Liberal Party's whole history, and particularly its past 17 years (since the silencing of John Hewson), have meant it was always likely to reach a point at which all the available options were bad. That point has now been reached.

Even so, some are worse than others. For Joe Hockey to take the leadership now would base the party directly on betrayal -- his personal betrayal of Turnbull and the party's betrayal of the ETS deal -- and commit him to a position on emissions trading that, whatever its intrinsic merits, can only be seen as a surrender to the denialists.

An Abbott leadership has more potential, in that the explicitness of the right's victory might finally force a critical mass from the centre-left to leave the party and start afresh. But the precedents are discouraging in the extreme; the party's left has repeatedly stayed put through outrages of every sort. As Hockey's career shows, it has horizons that never stretch beyond the next election, and rarely beyond about lunchtime.

Turnbull evidently understands that an ideological attack has to be met in kind. Abbott and Minchin at least believe in something, and believers will always outlast non-believers. The task is to give the Liberal Party a philosophical centre that provides a coherent alternative to denialism and obscurantism.

Is Malcolm Turnbull the ideal person to be attempting this? Of course not -- but is there ever an "ideal person"? Revolutions are not made by saints, and historical turning points turn on whatever the available talent is at the time. Someone had to try, and Turnbull at least is someone.

If not him, who? If not now, when?

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Fake Stephen Fielding writes:

Let me tell you, weeks like last week don't come along every week. Calling it extraordinary would be the understatement of the century, as even seasoned political observers would attest. For starters, this nation's government considered several highly important issues and my speeches in the Senate were some of the most passionate, articulate and emotional presentations the Parliament has ever seen. They had everything: shouty voice, soft voice, pauses for effect, graphs as props, and moral appeals to right and wrong. I'm exhausted just thinking about them. One of my speeches was so powerful that I went to do it again for Susan and the staff back in the office but Susan yelled at me to get down off the desk.

Those speeches, on a range of topics, were also highly effective. Sometimes I can't believe how many words people waste trying to prove a point, like that something is wrong, when that thing is just self-evidently wrong. For instance, men shouldn't have relations with other men for no more complicated reason than they just shouldn't; it's unnatural. Even a 12-year-old has enough anatomical knowledge to know that if God intended one piece of the jigsaw to connect naturally, without awkward and unnecessary force, to another piece of the jigsaw, he would've made the sticky-out bits and the gappy bits match up. It's not rocket surgery.

But there was obviously one event last week that eclipsed even my speeches for sheer extraordinariness: the coalition leadership explosion. No matter where you sit on the political horseshoe there was no possible reaction to the Liberal meltdown last week other than disbelief and shock. As I write this article, Malcolm Turnbull seems to be a dead man walking, and there's even a chance that by the time you read this article he won't be leader of the opposition anymore. Momentous times, these are; history in the making.

And I have tried as hard as possible to write myself into that history. After it became clear that Turnbull was being rejected by his own party I sent him an email proposing that he quit the Liberals and join Family First, offering him the incentive of deputy leadership of the Parliamentary Family First party. Malcolm's wealth and fundraising prowess is well known and Family First could really do with a bit of help in the cash department. I felt quite pleased with myself for having such a good idea and taking the initiative so I excitedly told Susan about it, however she informed me that Turnbull is a follower of the anthropomorphic global warming faith -- a faith I simply cannot share. I have very little time and respect for people who throw themselves so fully into something for which there is no actual proof, letting it shape their lives, guide their thinking, and act as their intellectual and moral compass. The global warming faith, as we all now know after the shocking revelations of ClimateGate, revolves around nothing more than some words and symbols of dubious authorship and authenticity masquerading as fact. Kicking myself for defying my scientific training (did you know I'm an engineer?) and letting my impulses run away with me, I called the IT department and asked them to intercept the email before its delivery. It's lucky I sent it after 5pm.

But then I had a better idea: why not run for the opposition leadership myself? I'm a global-warming sceptic, I've got lots of leadership experience, and I scrub up pretty good on the telly. I decided not to let Susan in on this one because my name already had two crosses next to it on the whiteboard so I ran it past Nick Xzennophone instead. Nick said it was an awesome idea and I should totally throw my hat in the ring, and even though he wouldn't be able to say anything publicly I had his complete and total support. He said that Australian democracy had been waiting for a leader such as me since Federation in 2001. Buoyed by Xzennophone's words, I launched myself instantly into campaigning and networking, going from office to office through the House. None of the secretaries would let me through to see their respective MPs or Senators so I just left each of them one of the "Vote 1 Steve Fielding" posters that I made on Xzennophone's photocopier (Susan deleted my code from the one in our office.) On the back of each poster I wrote a personal message, thanking the recipient in advance for their support and promising them a Big M next time I see them at the cafe.

Looking through the numbers I can obviously rely on Xzennophone's vote, while the Greens wouldn't want me even if they put down their bongs long enough to vote. Barnaby is a possible while the rest are totally up in the air. That makes two definites, half-a-dozen negatives, one possible, and lots of unknowns (I must remember to go and count the chairs in the green and the red chambers.) One thing I am definite about, however, is that a lot of people are disinfected by their own parties' policies and I reckon I stand a decent chance of picking up their support.

So now I wait. The media seems to believe that Joe Hockey and Tony Abbott are the frontrunners, going so far as to give them affections such as as "cuddly" and "avuncular" (they're just euphemisms for "fat") and "pugilist" (I don't know what that means but I can be it, too), but as usual the overwhelming Leftist bias of Australia's political journalists means that they refuse to even consider the chances of a humble boy from Resevoir, despite the fact that the boy from Resevoir fought his way into Parliament against the odds. The media has had many good laughs at my expense over the years, but I think there's a fairly decent chance that come 10am tomorrow morning I'll be the one having the last laugh.

Until next time.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Richard Farmer writes:

Hockey favourite but still backable. The bookmakers on Friday had Joe Hockey paying $1.50 for a $1 to be leader of the Liberal Party when the next federal election is held. At midday today he was $1.35 at Centrebet, which would be stealing money if you believed the almost unanimous predictions by the press gallery pundits that Malcolm Turnbull will be ousted at tomorrow's party meeting.

Clearly some people still have their doubts about what will happen and I am in that category. I cannot believe that an ambitious man such as Joe Hockey would offer himself up for sacrifice to appease people whose views he does not agree with. Still, sensible people have done silly things in the past. Just look at Turnbull. He was stupid enough to challenge Brendan Nelson for the job in the first place.

While the bookmakers are offering prices about other candidates as well, if there is a party room ballot tomorrow there will only be three contenders. Taking out the profit margin provides the following Crikey Liberal Leader Election Indicator:

Tomorr0w's other big meeting. The board of the Reserve Bank will meet tomorrow to decide if there should be any further change in official interest rates and opinions are almost evenly divided between no change and a quarter of one per cent rise.

The ABC gets serious. First day today for the ABC's new written word political correspondent. Annabel Crabb leaves behind the Sydney Morning Herald to provide her commentary on the ABC News website where I am sure she will continue to be amusing while having more scope to show that she is a first-rate political analyst as well as a humourist.

Tiger Woods a clear world winner.

Readers of internet news sites around the world have no doubt about what is the biggest news story of the day. Forget about Iran and nuclear weapons, US health-care proposals, more troops for Afghanistan and the new financial crisis caused by Dubai -- Tiger Woods and his relationship with his wife is a clear winner.

On radio, television, newspapers and the internet, this is surely the most covered minor traffic accident in history. And the people are lapping it up. This what I found in the last hour as I surveyed those "Most Popular" reports on internet news sites:

• BBC News -- a Tiger Woods story the most read
• ABC News Australia -- most read
• New Zealand Herald -- most read
• The Times, London -- second most read after leading yesterday
• The Guardian, London -- most viewed
• USA Today -- most read
• Globe and Mail, Canada -- most viewed
• Washington Post -- most read
• New York Times -- most searched
• Melbourne Age, Australia -- most read
• Sydney Morning Herald, Australia -- most read
• Times of India -- second most read

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

A picture might tell 1000 words, but sometimes that's not enough. Add your own to this priceless image and win a selection of prized First Dog On The Moon Crikey merchandise. What did Mr Howard say when he saw that nice young Joe Hockey off the premises at the weekend?

Send your thoughts to boss@crikey.com.au with "caption comp" in the subject field. We'll announce a winner by the end of the week.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Greg Barns writes:

Do Victoria’s police minister Bob Cameron and that state’s police commissioner Simon Overland like policy to be evidence-based or are they more interested in political point-scoring and window-dressing?  If you judge their decision to introduce into law this week new powers that will allow police officers the power to stop and search anyone they find without having to justify their actions, then its definitely the latter that exercises their minds.  The use of a similar power in the UK has been abandoned this year because, surprise, surprise, it has been found to undermine relations between the police and communities.

Under the Summary Offences and Control of Weapons Acts Amendment Bill, which by the way is predictably supported by the law-and-order crazies in the Liberal and National parties in Victoria, police can search anyone without having to show reasonable cause in areas where violence has taken place or where police intelligence indicates it might be an area where violence will occur.  The law is designed to enable police to search for weapons such as knives.

The problem with such a law is that it will be abused.  Homeless people, people with mental illness and young people will find themselves being forcibly searched by inexperienced officers or those police who have a grudge against individuals.  And one can easily imagine how police will, on a Saturday night, line up a group of young people and search them simply because they are congregated in a public place.

The UK police have a similar power under that country’s anti-terror laws.  But in May this year the assistant commissioner of police for Scotland Yard, John Yates, told Lord Carlisle, the independent reviewer of anti-terror laws, that consultations police had with communities "confirmed suggestions that the power is seen as controversial and has the potential to have a negative impact, particularly on minority communities".  Lord Carlisle had previously said that the stop-and-search power is used inappropriately by police.  London police can now only use stop-and-search procedures without having any reasonable cause around iconic buildings such as Westminster.

The misuse of the draconian power such as the one proposed by Cameron and Overland is what forced the UK police authorities to tell their officers to stop using it.  As The Guardian reported on June 6 this year since the middle of 2007 "the number of black people stopped under the powers rose by 322%, compared with a rise of 277% for Asian people and 185% for white people".  And the law has had no impact on crime detection.

Cameron and Overland, and all legislators in the Victorian parliament debating this ill-conceived and dangerous proposal, would be well advised to heed the words of Yates, who rightly said of the stop-and-search power:  "There is no requirement to have any reasonable grounds to conduct the search. This power reverses a fundamental principle in that no suspicion of wrongdoing is required."

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Unfortunately we know all too well here what's going on ... and the rumor mill is running hot among the expat community.

While we learn more from CNN than from local papers about what has been happening about the financial problems, everyone knows of people who have fled Dubai, leaving cars at the airport, unpaid loans and big debts ... That's all too true and the sea of cars in the past six months at the airport is not new news here.

Those fleeing are mostly with the construction and finance industries.

The two Australian men (associated with Sunland, the Queensland property developer) were held in jail here without charges for past six months and recently released. Their passports and wives' passports are being held.

Things are changing in Dubai and seem to be becoming more conservative.

From a small insignificant level ... more and more Dubai non-state schools are starting to teach Arabic each week and the national anthem is sung every day at many schools schools, even very British-oriented international schools.

Boys sit at the front of the bus and girls at the back on excursions at many Dubai non-state schools, again even at some of the British international schools.

Some parents feel there's a slow move to take all the schools, including the independent schools catering for foreign nationals, under Dubai government control.

Among the expatriates, the gossip mill grinds on with reports that Abu Dhabi is putting the pressure on Dubai to become more conservative as it helps bail it out.

Abu Dhabi is much more conservative with dress code. Things are changing and it's set to become more so.

In the international schools Arabic is not part of the curriculum for young kids (preschoolers) apart from greeting words.

But go up a grade or two and more and more kids are being taught Arabic for 40 minutes, three times a week. But at different times of the day, morning some days, afternoons others.

Dubai kids have to go to Arabic lessons, non-Dubai Arabs, to Islamic studies, as do non-Arab Muslims. At some schools, Western kids are being taught Arabic.

The kids here start at 7.30am and finish at 2.15pm. French has been cut back to 20 minutes a week due to the introduction of more Arabic/Arab studies into the curriculum.

Most children also do Islamic studies, but it's not compulsory for non-Muslim kids.

Kids sing the national anthem in Arabic but not every morning at some schools, but that seems to be changing.

At some of the British schools they have sung it every morning since the KDHA (The Dubai School Inspections Bureau) inspections a month or so ago.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Melissa Sweet writes:

Ever since the news officially broke last week that Jenny Macklin and co are planning to broaden the reach of income management, I’ve been waiting for the usual suspects to start screaming "nanny state"!

By the usual suspects, I mean those who trot out this much abused and overused term whenever there is any attempt to take public health action, especially when it involves taking on powerful interests such as the tobacco, alcohol, and junk food industries.

But, surprise, surprise, nanny has been keeping an extremely low profile.

Yet income management -- unlike efforts to create healthier environments for all people -- is in fact the ultimate in nannyism as it means taking away some fundamental rights.

One type of policy action -- restrictions on advertising of tobacco, alcohol, and junk food, for example -- is about making healthier choices easier for everyone; the other is about bloating bureaucratic power and taking away the choices and freedoms of some individuals.

The public health policies that are so often derided by the nanny-pushing naysayers are usually based on sound evidence that they will improve the population’s health.

On the other hand, some of Australia’s leading health equity experts have warned that there is not strong evidence to support the health or social benefits of income management, and believe there is real potential for it to cause significant harms.

Some in the public health field, such as the University of Sydney’s Professor Stephen Leeder, see the nanny paradox as a reflection of ideological differences. He says: "Those who wish to be conservative in regard to their own freedom to buy what they want without government let or hindrance will also be conservative when it comes to the use of their taxes for income supplementation of others. That's ideology."

But perhaps it also comes to down to an "us" and "them" mentality. It’s OK for the state to intrude roughly into the lives of Aboriginal people and disadvantaged groups.

But the rest of "us" are quite able to manage our own lives, thank you very much, and don’t need any help with problems such as obesity, binge drinking etc (although the stats show that quite obviously we do). And, of course, it’s only those "others" who ever do dreadful things such as abuse their children.

Then there’s the issue of political power. It’s far easier for governments to impose tough sanctions on the powerless than on the powerful industries whose healthy bottom lines come at a cost to the community’s health.

Recently at Croakey, I wrote a plea for us to bury nanny in order to enable a smarter, more sophisticated public debate about health.

Please don’t think that I’m now arguing she should be revived. Rather than invoking nanny, let’s at least have an informed discussion about income management rooted in some sensible analysis of its potential benefits and costs, including the likely harms.

• For the views of leading public health experts on nanny and income management, see Croakey.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

The Seven Network has won the metro TV ratings battle for the third year running, but Network Ten boasted it was the biggest winner with the best increase in audience and  the highest rating TV events of the year, MasterChef Australia and the AFL grand final (which Seven gets next year).

With the official ratings season now wrapped up for the year, Seven was the clear winner in metro markets, scoring the highest audience share across the board, with or without the digital channels included.

In regional areas, a slightly different result, with Nine's NBN and the affiliated WIN group winning the ratings battle by the narrowest of margins: 27.4% to 27.3% for Prime/7 Queensland, Southern Cross (Ten) on 20.9%, the ABC on 17.7% and SBS on 7.2%.

The networks disagree about using multi-channel figures in metro markets, with Nine and Ten keen to use them because it improves their figures, but Seven won with them included, and won without them. Nine and Ten did better in a couple of demographics, only after including their digital shares. Ten for example said it won "the year in prime-time in 16-39 and under 50s".

If Ten and Nine are serious about combining the figures, then can they explain how viewers can watch two channels at once. And, if Nine and Ten are serious, they won't moan (as they do) when pay-TV, especially Foxtel, aggregates all its channels into one audience and share figure and compares it the FTA primary channels.

Nine and Ten would then not object to the pay-TV claim that it was the the top-rating broadcaster.

"Subscription TV was the number one choice for TV viewing around Australia with 22.4% of all metropolitan viewing between 6am and midnight, 21.4% of all regional viewing and 58.2% of all viewing in subscription TV homes. Even when the 2009 summer period is excluded (i.e. looking at weeks 7-48 only), STV was a clear winner," claimed a report from the sector this morning.

That might be so, but ratings are based on 6pm to 10.30pm and 6pm to midnight and there pay-TV finishes fourth or fifth, battling with the ABC on most nights. But pay-TV's metro audiences has fallen since Nine's GO, and then 7TWO started, joining ONE, ABC 2 and SBS TWO.

But the FTA networks do have something to boast about with their digital channels. All five do a lot better than many pay-TV channels and the big three, Nine's GO, 7TWO and Ten's ONE, outrate their pay-TV competition. That's something pay-TV doesn't talk about these days except to disparage the offerings. In fact, in their short time on air, the five FTA digital channels averaged 6.2% by the end of ratings, which is approaching half the primetime share of pay-TV.

Excluding the multichannels, Seven finished the year with a 28.8% share (28.5% in 2008), followed by Nine with 26.8% (27.3% in 2008), Ten with 22.2% (20.7%), ABC on 16.4% (17.4%) and SBS with 5.8% (5.6%).

Seven and Ten pointed out the year-to-year changes yesterday in their end of season statement (Ten's actually screamed). Nine was silent on its fall.

Seven is claiming wins in all the major demographics

"We have more total viewers, 18-49s and 25-54s in primetime than anyone else. And while we love our new channel, 7TWO, we don’t need to add in its expanding audience to make up a story on how well Seven is going," Seven said.

"Seven wins in primetime in total viewers, 18-49s and 25-54s – whether it’s 6pm- 10:30pm or 6pm-midnight and whether or not you include or exclude Easter."

Network Ten scored the most-watched event, thanks to MasterChef Australia, with a record-breaking 3.725 million Australians watching Julie Goodwin crowned the winner.

Ten also scored big with the AFL grand final, with more than 2.8 million tuning in in the five metro markets.

The next most watched event of the year was the Melbourne Cup on Seven (2.67 million), followed by the premiere episode of the second series of gangland crime drama Underbelly (2.58 million)

The rugby league grand final, on the Nine Network, drew 2.582 million viewers. But add in the regional markets and more viewers watched the NRL grand final than watched the AFL.

Seven was No.1  for news and public affairs -- with Seven News and Today Tonight dominating Nine News and A Current Affair for the fifth consecutive year, especially in Sydney and Brisbane. It was closer in Melbourne.

Sunday Night was the standout: its first full year saw it topple 60 Minutes, whose audience slumped badly, especially from September onwards.

Seven was No.1 for breakfast television -- with Sunrise leading Today for the sixth consecutive year, but that gap narrowed again this year by a substantial margin year with Today beating Sunrise several times during the year, the first wins for six years.

The ABC couldn't compete with the commercial networks but did rake in many viewers with the British detective drama Midsomer Murders on Sunday and Friday nights.

Australian programs (led by Packed To The Rafters) dominated the most watched lists for the year. Only 11 of the top 100 highest-rating series were British and 18 were American (seven of which comprised four different time slot showings of Nine's Two And A Half Men and three for Ten's NCIS). At one stage Nine showed Two And A Half Men nine times in a week, such were the holes in its lacklustre schedule. This program was very popular in Melbourne.

Seven's head of programming, Tim Worner, said in a statement the network was looking to local content to build themselves further next year.

"It's great to win again and it's a great reward for the group's hard work but we're not wasting time doing cartwheels in the carpark," Worner said.

Not a mention about the weak Thursday nights in winter when Nine won regularly with the AFL Footy Show. That's why Seven really wants to buy Matthew Johns services, and why Ten has appeared late in the scene. Could Johns allow Ten to rest Idol for a refresh?

Nor a mention of finding a local drama replacement for All Saints. As we have just seen, Australians prefer local dramas over imports.

Nine says it is confident of increasing its audience next year with shows such as Top Gear, which was pinched from SBS, regular Hey Hey It's Saturday specials, US sci-fi series V, its Winter Olympics coverage from February and digital station Go!

"It's been a strong year for Nine where we've put more bricks in the wall. We've now got the structure from which we'll grow in 2010 with the best slate we've enjoyed for years," Nine chief executive David Gyngell said.

That's what he said last year. Not a mention of the third series of Underbelly or Nine's flop, 60 Minutes, or its underperforming News and Current Affair hour from 6-7pm. The collapse in 60 Minutes' audience is the biggest problem facing Nine next year. Solving that will allow the network to start each week more confidently, rather than in second place as it did from October onwards,

Ten will be again counting on MasterChef, with a junior version also added into the mix, the Commonwealth Games and its digital sports channel ONE. Programming head, David Mott:

TEN's 2009 line-up has delivered in spades, providing some of the year's most memorable TV moments and significantly expanding the network's audience profile. We have cemented our position as the clear leader in 16-39 and daytime and we end the year as the only network with year-on-year gains in our total people share and audience.

Not a mention of Idol's late flop. And Celebrity MasterChef hardly set the audience on fire, Junior will be more of the same, The biggest problem for Ten has protecting the strong audiences for the main MasterChef. It won't drag the viewers in as it did last year., Reality programs always peak and fade very early in their lives.

And did we mention failures? Australia's Perfect Couple on Nine, the Spearman Experiment (rip-off more likely) on Ten, Double Take and TV Burp on Seven?

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Margaret Simons oversimplifies my suggestions about future models for publicly funded broadcasting and the role of the ABC.

To say that my ideas would boil the ABC down to "little more than Radio National and perhaps Four Corners" is quite unfair and diminishes the debate.

I reiterate what I said in my recent speech that Simons refers to:

… in the digital age we need to be careful to ensure that public broadcasters like the ABC don’t merely replicate what the private sector is now doing or inadvertently crowd out market-driven creativity and innovation.

If Simons is right and Radio National and Four Corners are the only points of ABC originality then there really is a problem.

I recap what I said in the speech so as not to be misunderstood:

The ABC … should not be seen as the default provider of all publicly funded content. We need to look at new models -- such as making some public funding open to contestability. Because no one is suggesting an end to public broadcasting or free-to-air commercial broadcasting, we’re happy to compete against it.

Note that I said "some" public funding should be open to contest.  And the contestants could be any public or private organisation or combination, including public television, subscription television, commercial television, independent producers, or institutions like universities. The ABC has an important role and strong public support, but it cannot be regarded as the only way to achieve good public broadcasting outcomes, particularly if digital innovation and a creative Australia are to flourish -- and especially if one looks at the television track record over an extended period.

For example, Foxtel, Austar and Sky News from the subscription television sector have provided Australia’s public affairs channel A-PAC on our own initiative on a not-for-profit basis at no cost to taxpayers.  A-PAC is an open church. It recently broadcast ABC managing director Mark Scott’s major speech on the ABC’s pitch to become Australia’s exclusive "soft diplomacy" broadcaster without contest from anyone else.

Our agenda is not to diminish the ABC, but we do think it should be made accountable as with all institutions for any additional taxpayer expenditure on public broadcasting that the government may decide to allot and such decisions should scope possibilities for the best diversity in delivery to audiences. My remarks are very much about television and not about the radio endeavour of the ABC which is clearly entirely different in content, focus and approach.

Ironically in her defence of the ABC’s role in providing equity of access to "quality information", innovation and addressing what she sees as increasing market failure in local content, investigative journalism, and rural and regional reportage, Simons wrote: "Cast forward 20 years, when new business models have emerged, when innovations have been adopted and settled in, then it is easy to see that the justifications for taxpayer-funded media might be different, or even absent."

Australia won’t be moving anywhere if we cling to old ideas about the pre-eminence and wisdom of institutions like the ABC in knowing the public interest and fail to test them against the creativity, innovations and value that other additional approaches may provide. Accepting the reality of pluralism in content and delivery and judging performance on what actually happens -- what the outcomes are rather than on what people say they are -- is fundamental to a sensible and reasoned discussion on public policy. The reference to regional coverage is one case in point where news aside the ABC has almost abandoned the territory on television.

I take no pleasure in the ABC television service having the worst Australian content record on television in terms of hours of local content broadcast over more than the past decade but that is the reality of things and it must be accountable for it. We should all recognise that this has been an outcome deriving not just from "government bogeyman" arguments (which so often are way too facile) but also from deliberate choices on the ABC’s part.

I, like many Australians, welcome the renewal of commitment to Australian content on television by the ABC and the recognition that it needs to lift its game.

I have and will continue to freely acknowledge many of the splendid things Mark Scott has done in leading the ABC, however it is unhelpful to regard the ABC as having purity in the television arena and it has a long way to go before it matches others in their proven level of commitment and delivery of Australian material.  We do Australian audiences and taxpayers no service by misrepresenting the position.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

That scream you heard over the weekend was from UK motoring journalist Jeremy Clarkson as he straddled the conflict of interest barbed wire fence in the debate over making people pay for using internet news websites. In a typical Clarkson rant in The Times, he nodded to one employer, News Corp's News International and its Times and Sun newspapers, and then to the other, the BBC, and Top Gear, all which made Clarkson what he is, a media star with an ego bigger than a Roller.

Clarkson was to accommodate the conflicting objectives of one owner, Rupert Murdoch (make them pay) and the other, the BBC (it will be free). And how did he solve this Gordian knot of conflicting interests? Not by chopping it in half, but by blaming the internet:

''I've decided that the biggest issue in all of this is the internet. It’s a monster. An invisible machine over which mankind has absolutely no control. We can’t even turn it off."

"Companies can build in as many electronic safeguards as they like but the fact is this: somewhere out there in cyberland there is a geek who can pick his way through the electronic locks and steal the booty.

"The debate, then, is not whether the BBC should be allowed to peddle its warnings of global doom on the internet. It’s how you control a monster that seemingly cannot be controlled at all."

So rather than blame either of his employers, he's in effect blaming the messenger (or the medium, if you think about it). How juvenile. The man is horribly conflicted. On the comments section under the story, a Times reader summed up Clarkson's effort in a way that can't be topped. "Gezza - nothing wrong is playing both sides. Bankers do this all the time & they get bonuses." -- Glenn Dyer

Seven wins ratings… again. The Seven Network has won the 2009 ratings year, its third consecutive win. It won the year on the back of sustained success for drama Packed To The Rafters, which maintained the same audience average as last year (1.9 million viewers) and its news and current affairs slate as well as dominance of the observational documentary genre. – The Australian.

Obama gate crashers shop their story. The couple who infamously crashed President Barack Obama's first state dinner are peddling their story to broadcast networks for hundreds of thousands of dollars, a television executive says. Michaele Salahis is a reality TV hopeful trying to get on Bravo's The Real Housewives of DC. -- Newser

Annabel Crabb beats her own drum. There is something madly splendid about the grown-up Turnbull, this past weekend. Having absorbed the sort of assault that would utterly devastate most political leaders (the wholesale resignation of numerous colleagues, and public attacks from some of the most powerful members of his parliamentary team), he remained astonishingly blithe throughout. -- The Drum

Tiger goes public on "a private matter". In a statement posted on his Web site Sunday, Tiger Woods accepted responsibility for what he deemed an "embarrassing" car accident just outside of his driveway at 2:25am. Friday. He said his wife acted "courageously" to help him, but declined to provide further details, calling the incident a "private matter." -- The Washington Post

SBS to launch digital arts channel in 2010. SBS will launch a new Arts and Entertainment channel on Foxtel and Austar in the first half of 2010. SBS says programming will include "exclusive broadcasts of selected major Australian arts and entertainment events; the best international arts content across a range of genres and forms; showcases of major arts events from Australia and around the world; original commissioned programming to engage audiences with the contemporary arts and entertainment scene; and information and reviews about performances and events throughout Australia." -- Media Spy

Is Glenn Beck leading the Obama opposition? Glenn Beck is a TV host, bestselling author and the most influential voice on the rightwing Fox channel. Now, even some Republicans worry that the extreme and maverick views of Beck and his supporters will make their party unelectable. Is the TV tail wagging the political dog? -- The Guardian

Back to the top  |   Forward article to a friend  |   Comment on article

Glenn Dyer writes:

The Winners: Seven's Border Patrol (from NZ) was the top program with 1.492 million people. Seven News with 1.388 million was 2nd and Bones on 1.277 million (a repeat at 8.30pm) was 3rd. Then Outback Live Rescue, 1.230 million at 8pm (a ratings reject doing much better than expected); the Today Tonight special, Unseen 24 hours in 60 Minutes ,at 6.30pm with 1.180 million. Nine's repeat of 20 to 1 at 6.30pm averaged 1.082 million and Nine News averaged 1.033 million in 7th. Ten's Melbourne Comedy Festival at 8.30pm averaged 973,000, Castle at 9.30pm, 887,000. Glee on Ten at 7.30pm averaged 880,000. The repeat of the Dickie Attenborough Life In Cold Blood averaged 887,000 at 7.30 pm.

The Losers: So many candidates. If this was the best the networks can do on the first night of summer ratings, heaven help us. Seven at least had a series of familiar repeats, Bones and Castle from 8.30pm, and old summer standbys in Border Patrol from NZ. Are You Smarter Than A 5th Grader on Ten at 6.30pm: 340,000 viewers . Seven's Band Of Brothers at 10.30pm, 378,000. Firewall, Nine's movie, 714,000 from 8.30pm.

News & CA: Seven News again nationally, but lost Adelaide. Seven News beat Nine in Sydney, 359,000 to just 221,000. In Brisbane the win by Seven was larger: 308,000 to just 167,000 for Nine. The 7pm ABC News averaged 915,000. Ten News, 651,000, SBS News at 6.30pm, 88,000. On Sunday morning, Weekend Sunrise, 334,000, Today on Sunday, 265,000, Insiders, 250,000 at 9am on the ABC; Inside Business, 159,000 at 10am; Offsiders, 128,000 at 10.30am on the ABC. Meet The Press on Ten at 8am, 65,000.

The Stats: Seven won 6pm to Midnight All People with 31.6%, from Nine with 26.9%, Ten with 21.2%, the ABC with 13.7% and SBS with 6.5%. (No comparisons until next week. Last week the networks were trying in the last week of ratings). Seven won all five metro markets.

Digitally: Nine's GO finished with a very high 5% last night, its best so far. (That left its main channel on 22.00%) S7TWO was far behind on 1.90% (Seven's main channel was on 29.70%, a big lead for the week). Ten's ONE averaged 1.10% (Ten's main channel, 20.10%), ABC 2, 0.50% (ABC 1, 13.10%), SBS TWO, 0.30% (SBS ONE, 6.20%). because of Go's strong showing, the FTA digital channels had an aggregated share of 8.80%.

Glenn Dyer's comments: Seven finished the ratings year winning all seven nights, the three key demos and all five metro markets last week.

Yesterday: The first day of summer ratings, no cricket, hot weather in some places. It was like Christmas Day afternoon without the turkey, ham and pudding to sleep off. Boring. Last night's ratings gave us a real taste of what the coming 11 weeks will be like. All I can say is go read a book, flee the country if you can, or catch up on DVDs, learn to Twitter, Facebook, or whatever. The gems will be few and far between.

Nine's GO had its highest ever share last night: 5%. That means quite a few regular Nine viewers preferred what was on GO. Nine might argue that it retained the viewers in its camp, Seven would argue that its audience share wasn't affected last night and it was up with its recent Sunday night figures, even though the night's programming had repeats from 8.30pm to 10.30pm. In fact, apart from the absence of Sunday Night, Seven's schedule was typical of recent Sunday nights. The Today Tonight special at 6.30pm kept the public affairs flavour though and gave us a night that wasn't too far from a week ago, except for Bones and Castle. Seven had the five top programs and six of the top 10.

TONIGHT: Andrew Denton talks (again) to Clive James on Elders. The last time Denton did James on Enough Rope, more than half the interview was left out (especially the interesting stuff on princess Di --  I was in the audience for the taping). Only 29 minutes or so has been set aside for this chat. Will there be a Part 2? Clive James can talk under any wet substance.

Make 'Em Laugh on the ABC at 9.35pm. A series on American humour. SBS of course has Top Gear; it’s a repeat. Seven has the final of FlashForward at 8.30pm. Ten has a repeat of The Mentalist as the highlight for its schedule tonight. Ten has summer standbys, Futurama and Supernatural. The 7pm Project is on at 7pm for an hour and there's a repeat from 11.15pm

Source: OzTAM, TV Networks reports

Back to the top  |   Forward article to a friend  |   Comment on article

Glenn Dyer writes:

A busy week, but one made busier than it should be by the laziness of many listed Australian companies and their boards, starting with Harvey Norman, Goodman Group and Valad Group.

We have more than 80 annual meetings today, an interest rate decision tomorrow, retail sales and building approvals later in the week, credit figures and inventories, but no balance of payments and no national accounts.

Of those events, the rate rise tomorrow will dominate (as will America's jobs figures on Friday night our time), but first we have to get through the last day for June 30 balancing companies to hold their shareholder meetings.

There were more than 90 meetings on Friday and a similar number last Thursday.

It's a peak time for companies large and small to get organised and hold meetings.

There's usually a rough rule of thumb that the later the profit report the worse the result, and the later the AGM, the worse the result, or the more indifferent companies are to seeing shareholders in a timely fashion.

But not always, BHP Billiton, Woolworths (both last Thursday) and Harvey Norman (today) are very solvent and very successful, but very, very slow.

However, standing out are the struggling property groups, Goodman Group and Valad both hold AGMs today.

And with good reason; both have lost heavily in the crunch as their business models of borrowing heavily on expansion plans in Australia, Asia or the UK have collapsed in tears and a flood of red ink. Goodman lost $1.1 billion, Valad, $1.49 billion.

Both have seen the prices of their securities collapse, making their holders that much poorer, both have raised money from the market to try and survive. Goodman has had three recapitalisations. Valad's move into the UK market has been a complete and utter disaster (as has that of rivals Stocklands and Lend Lease)

No wonder the two AGMs have been timed for the last day of the meeting season.

But some make a habit of it and report late and hold their annual meetings later.

Many of the late reporters and late meeters are small companies, with easy-to-prepare accounts and not to much complexity in the business, compared with a BHP Billiton, a Commonwealth Bank or a Woolworths.

And yet BHP only held its Australian AGM last week, a month after the London AGM. Why the meeting dates couldn't be reversed and Australian (where BHP is based and where its key iron ore and coal assets are located) shareholders called together first, has never been explained.

A noted late reporter last week was Woolworths, which might be the country's biggest retailer, but that is no defence for a later meeting date. Rival Wesfarmers held its meeting a couple of weeks earlier and it is a far more complex business than Woolies. Woolies was a later reporter in 2008 as well.

Woolies has an end of June balance date, as does Harvey Norman, which is always among the last to hold its AGM each meeting season.

It holds its AGM in Sydney today at 11, and yet rival retailer David Jones also holds its AGM, also in Sydney today, also at 11 am.

Seeing it closed its books for the 2009 financial year on July 25, that's effectively a month earlier than Harvey Norman. There is not much difference in complexity between the two retailers.

(That will get retail analysts confused as they try and work out which company is worth cultivating by attending, and which is worth possibly offending by not attending and sending an assistant along to show the flag).

But this won't worry chairman Gerry Harvey. For years the company reported its interim and annual profits at the last minute.

He's lifted his game in reporting earnings, now for AGMs. There is simply no reason to delay them as long as he does. He actually found time to update the market on a sales improvement a week ago, something that would have been nice for shareholders to hear at an AGM.

Seek, the Melbourne-based internet jobs group, holds its AGM today at 3pm. That's three weeks later than a year ago when James Packer was still a big shareholder and a director. No more, so the Seek board takes its time and will bury its meeting this afternoon.

Just looking at the 80-90 meetings held Thursday, Friday and today, there will be a meeting roughly every six minutes or so, assuming the meeting day starts about 8.30am and finishes about 5-6pm.

That's a travesty of good governance.

And if anyone is interested, the meeting is roughly even money for tomorrow's RBA board meeting for a record third rate rise in as many months.

The retail sales and building approvals will show there's still some life in the economy and the US jobs figures on Friday will show another solid fall in the number of jobs being lost, and perhaps a small easing in the unemployment rates from the record 10.2%. And no US banks went bust on Friday. Must have been the spirit of Thanksgiving.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Adam Schwab writes:

Australia has a new high-profile property spruiker. But it’s not a real estate agent or buyer’s advocate or even mortgage broker -- no, Australia’s latest high-profile property bull is (worryingly) the deputy governor of the Reserve Bank, Ric Battellino.

Last week Battellino (who has never actually worked outside of the Reserve Bank since graduating from university in 1973) defended Australia’s ever-growing property bubble, telling the National Housing Conference in Melbourne last week that:

… Australians seem to spend less of their income on non-housing consumption then is the case for US households, with a significant part of the difference explained by lower health costs in Australia. Australian households therefore have greater capacity to service housing loans.

While the US spends a greater proportion of income on health costs, (according to the Productivity Commission, in 2005, Australians spent about 8.5% of GDP on health, compared with 15% in the US) that doesn’t actually explain the difference in housing costs. The median cost of a US property is about$US180,000 or 3.5 times median income, compared with $A405,000 in Australia or 7.6 times median income. Battellino is therefore suggesting that because Australians spend a couple of thousand less annually each on health, they are able to spend hundreds of thousands more on property.

Moreover, in global terms, Australia ranks right on the OECD average for health spending, however, Australia’s housing remains expensive compared with other developed nations. For instance, Australia actually spends more on health costs than the UK, however, in Australia property prices are about 7.6 times income, compared with approximately 5.3 times income in Britain. The health-care argument appears to be a convenient furphy.

Battellino continued:

It is certainly the case that the ratio of house prices to income in Australia is higher now than it was 20 years ago. However, this is explained by the fact that the fall in inflation has allowed nominal interest rates to cycle around a lower average level now … that is, lower interest rates have allowed households to take to bigger home loans, without increasing home loan payments.

Inadvertently, Battellino appeared to answer his own question: Why is Australian residential property resembling an asset bubble? The answer is simple -- massive increases in debt. While Battellino argued that the increased leverage is vindicated by lower interest rates, his premise appears based on the optimistic assumption that interest rates (and inflation) will remain indefinitely low. Given the recent tendencies of the US and UK to undertake quantitative easing (which increases the money supply), it would be foolish to declare inflation (especially in the medium to long-term) dead.

Further, the use of debt has created a housing price mirage -- property appears more valuable, but that is simply because banks have been willing to lend buyers more money -- not because rental amounts have increased drastically or Australian’s are far wealthier. For example, the large banks are all willing to lend purchasers up to 90% of the value of a property. In Melbourne, RP Data reports that median prices have increased from $350,000 in 2005 to about $500,000 now. In simple terms that means in 2005, banks were willing to lend the median property buyer $315,000. However, with property prices increasing those very same banks are willing to lend to the very same hypothetical buyer an amount of $450,000 for the same property. Has the intrinsic value of Melbourne property increased in value by 43% in four years? Unlikely, given BIS Shrapnel reported yesterday that rents have increased by an average of just 3.5% annually in recent years.

To put it is in perspective, since 2005, GDP has increased by about 10% (total). In theory, property appreciation should very roughly track increases in GDP (or inflation but the two have been relatively similar in recent years) -- if that had happened, Melbourne median property prices would be about $350,000.  However, currently, property prices bear little resemblance to the value of their rental yield -- instead, their value is largely determined by how much banks are willing to lend to buyers (coupled with external demand factors such as  the first home-owner’s grant).

Leaving aside the issue of whether Battellino’s principles are correct (and there are certainly valid arguments to the contrary), it is arguable that a role of the central bank is to act to prevent a asset bubbles from occurring. In other words, ensuring that an asset class doesn’t deviate dramatically from its intrinsic value (which is the present value of all future cash flows). Recent turmoil in Dubai (where property prices have fallen by 50%) and in the United States (which is down by more than 30%) has indicated that asset bubbles can lead to a dramatic misallocation of wealth -- instead of capital being invested in income-producing assets, it is used for speculation. When prices eventually return to intrinsic levels, not only does that capital evaporate, but the economy’s productive capacity is substantially diminished.

Had Alan Greenspan and the US Federal Reserve not maintained a low interest rate regime after the dot.com crash in the early 2000s, the US would most likely not have experienced such a violent residential property boom. The bubble and subsequent bust in 2008 led to a dramatic slump in GDP and total unemployment exceeding 16%.

Australian properties offer terribly low yields, with returns coming from the "bigger idiot theory"  -- the principle that in the coming years to someone will pay an even higher price for an asset already divorced from its intrinsic value. But this isn’t a concern for our central bankers. It’s probably time someone told the Reserve Bank that the first step for any (debt) addict is to admit that they have problem.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Glenn Dyer writes:

China isn't changing its economic policies for 2010, but it looks as though it is giving itself the room to make subtle changes to handle a different growth outlook next year than it had to face in 2009.

According to reports on Chinese news websites over the weekend, the Chinese government will stick with the current "proactive fiscal policy and moderately easy monetary policy" in 2010, according to its supreme policy-making body, the the Political Bureau of the Communist Party of China (CPC) Central Committee.

"We will maintain the continuity and stability of the macro-economic policy," Xinhua News Agency said, quoting the Political Bureau of the Communist Party of China (CPC) Central Committee. The newsagency reports pointed out the bureau has chaired by President Hu Jintao, to make sure everyone understood just who was driving the policy.

This policy will now be implemented by bodies such as the central bank, The State Council, The People's Bank Of China, the National Development Reform Commission, the Ministry of Finance and The Ministry of Commerce. It will be formally adopted at a meeting of the People's Congress early in 2010.

That means those commentators claiming that bubbling asset values and high inflation would force China to slash spending next year, are wrong.

All this has the feeling of choreographed by the Communist Party. It was a year ago that China revealed its $US585 billion stimulus package in the depths of the post-Lehman Brothers collapse, and many Western commentators said it wouldn't work, would cause inflation, asset bubbles or some other great calamity. A year on and China's economy has rebounded strongly, with no inflation and no sign of an asset bubble.

It was a most difficult year and China’s economy has rebounded (helped by frenetic lending and investment) in a way that has supported the entire Asian region, including Australia.

The US and Europe remain stuck in a wobbly recovery, with unemployment high and bank lending weak to non-existent, and markets outstripping reality.

That's not to say that there won't be problems next year, there could be if the November 2008 policy is followed unchanged. It's very probable China will cut spending next year in some areas, but redirect that to other sectors, especially trying to stimulate domestic consumption.

The Political Bureau meeting, chaired by President  (and CPC Central Committee General Secretary) Hu Jintao, on Friday used the exact wording -- "active fiscal policy and relatively loose monetary setting" -- which it adopted a year ago for its pro-growth policy.

There was no mention of the value of the Yuan in the statement: that's the touchiest question for the government at the moment.

Instead of just more heavy spending on investment, the statement attempts to push the idea that China will switch to promoting consumption. Friday's statement contains enough qualifications to allow that to happen.

That was a policy line supported by a later statement from Ministry of Commerce, which said retail sales would be accelerated in 2010 so that consumption can make a bigger contribution to growth.

The announcement is supposed to set the tone for the upcoming central economic work meeting, where next years' economic growth policies will be decided. The message from the meeting was that China would not adopt an exit strategy from its stimulus package now. Instead, the policies would be "adjusted" according to the demand of different sectors.

More efforts would be made to improve the quality and efficiency of economic growth, to promote the transformation of the economic development pattern and structural adjustments, according to the statement released after the meeting.

But there's a bit of wriggle room for the government and policymakers.

According to the reports on Xinhua and in the China Daily paper, the Political Bureau said in its statement that it would "enhance the focus and flexibility of economic policy in the following year according to new situations. It would also further implement and enrich the economic stimulus package to make the economy grow in a more stable, balanced and sustainable way."

That seems to be giving it room to cut spending, cut credit, perhaps lift interest rates or tighten monetary policy by other means (such as increasing the assert reserve ratios the bank must hold). It could even be read as giving the government room to make the currency more flexible.

The statement from the Political Bureau said that more efforts would be made to promote reform, opening up and innovation, improve people's livelihood and maintain social stability and enhance the vigor and momentum of economic growth.

And next year would see the government would improve policies to spur consumption and ensure investment grow at a reasonable pace in other words, the government aims to boost domestic demand, especially a sustainable increase in consumption.

And media reports from Chinese government department have started fleshing out the statement, with the most interesting being the Ministry for Commerce, which said on Saturday that China will strive for a higher growth rate for retail sales in 2010 with a bigger contribution to next year's growth in GDP.

"According to comments from Jiang Zengwei, vice-minister of commerce, at a forum in Beijing The ministry will take measures to boost both rural and urban consumption next year.

"He said the MOC will expand the 'old-for-new' program to encourage more consumers to buy new cars and home appliances on a basis of discount if they give up their old ones to sellers. Credit consumption and sales promotion, especially those during holidays, will also be encouraged.

"China's retail sales grew by 16.2% in the 10 months to October and there are forecasts this could rise to a rate of 18.2% next year."

As I said all arranged and scripted by the Chinese Communist Party, but so then has the economic recovery in China over the past 12 months, to the continuing surprise of many Western commentators.

Send your tips to boss@crikey.com.au or submit them anonymously here.

Back to the top  |   Forward article to a friend  |   Comment on article

Marcus Padley, sharemarket analyst and author of the Marcus Today daily newsletter, reports:

The market is up 101. The SFE Futures were up 37 this morning.

Wall St. finished down 154 on Friday in a half session. The Dow was down 12 at best and down 233 at worst.  The United Arab Emirates’ central bank attempted to settle markets on the weekend, saying that it stood behind the country’s local and foreign banks. Quite liked the comment that the Dubai issue was "Sandstorm in a tea cup". The main drive in our market today is the recovery in the banks which led the 130 point fall in the market on Friday. Oil and Gold fell and the Aussie dollar crept up to 91.66c.

In the news today…

• OZ Minerals (OZL) has released its Business Strategy -- It will have an M&A focus going forward and has teamed up with IMX Resources (IXR) to explore and develop copper-gold projects in South Australia. OZL will take up 26.15m IMX shares at 38.5c, a 25% premium to the 30 day moving average, as part of the deal. OZL has $1bn cash on its balance sheet and $US105m of debt. It has also released an updated mineral resource for Prominent Hill, it contained copper metal rising 2.6% to 2.5m tons and contained gold falling 19.2% to 3.4m ounces. OZL up 4.5c to 122.5c.
• GUD Holdings is likely to extend its $272m takeover offer for Breville Group (BRG) today as it waits for approval from the ACCC. BRG shareholders have been told to REJECT GUD’s offer with an independent expert’s report valuing the company between 273c and 290c after incorporating 50% of the synergies expected from combining businesses with GUD. GUD up 2c to 843c.
• Street Talk was on the money, Energy Developments (ENE) announces this morning that it expects to receive an improved 275c a share takeover offer ($431m) from Pacific Equity Partners. ENE shares are in a trading halt and last traded at 241c.
• Commonwealth Bank (CBA) confirms it does not expect to incur a material loss through its exposure to Dubai World. CBA rebounds 3.3% to 5228c.
• Goodman Group (GMG) -- AGM -- Expects an operating profit of $310m and declares a dividend in December. It also predicts writedowns of around 5% of total assets. GMG up 2.5% to 60c.
• Telstra (TLS) CEO David Thodey announces a number of organizational changes that he says will help it grow its key markets and provide better customer service. TLS up 3c to 342c.
• Aquarius (AQP) will lift its convertible bond offering to $US300m. AQP down 6c to 619c.
• Connect East (CEU) expects to pay the builders of its Eastlink motorway $55m for its early completion after reaching an out of court settlement. CEU up 1.5c to 41.5c.
• Australian new home sales fell 6% in October, its second consecutive monthly fall.
• Housing sector credit increased 0.7% in October thanks to growth in lending to owner occupiers and investors. Business credit fell 1.3% in October to be down by 6.8%.
• Australian company gross operating profits fell 2.1% to a seasonally adjusted $53.11bn in the 3Q of 2009. Economists were expecting a flat result.
• The inflation gauge increased by 0.3% in October and is up 2.1% in seasonably adjusted terms, within the RBA’s 2-3% inflation target band.

The Dow Futures are down 119 at midday.

MARCUS PADLEY is the author of the MARCUS TODAY Daily Stockmarket Newsletter.

For a free 21-day obligation free trial of the MARCUS TODAY newsletter (and no we won’t ask for a credit card number) please START A FREE TRIAL -- you will receive two daily emails about the stockmarket, our MORNING EMAIL with all the stuff you need to know ahead of the trading day ahead and a DAILY EMAIL with all the midday events, news, comments and Ideas from Marcus and his Team.

You will also be given a password to the MARCUS TODAY website including access to all the emails as well as Educational, Entertaining and Researched Articles from Marcus and his Team and an archive where you can catch up on a whole week or month in just a few minutes. Or Browse at length. We are sure you will enjoy and profit from what we offer.

Back to the top  |   Forward article to a friend  |   Comment on article

Liberals in turmoil:

James Burke writes: Re. "Libs search for their dreamtime martyrs" (Friday). For a while I’d been nursing an idea for a book to be titled Fools on the Hill: The Search For Australia’s Stupidest Federal Parliamentarian. After much procrastination, I spiked the project only days ago, having decided that it would be unfair and distasteful to pick on the apparent frontrunner, now that he had paraded his traumatic history of learning difficulties and sexual abuse before the public.

I was then amazed to see the shortlist so dramatically showcased by the series of dummy-spits (pun intended) that has been unleashed on Malcolm Turnbull in the past week. Joyce, Tuckey, Mirabella, Jensen, Schultz, McGauran, Bernardi, Ferravanti-Wells ... these are some of the biggest dills and dolts in the current or, indeed, any parliament.

I only wish that some of the dear departed  could be here to share in this mass outbreak of feral idiocy (De-Anne Kelly, Ross Lightfoot, Jackie Kelly, Mal Colston, Santo Santoro, Pauline Hanson, Graeme Campbell: gone but not forgotten). OK, some of the dummy-spitters (Abbott, Minchin, Abetz) are more in the category of Crazed Meanies than Feral Dummies, but all up it is a remarkable demonstration of how far the Right of politics has deteriorated, intellectually and morally, into little more than an alliance between the greediest, most vicious and most ignorant members of society.

The Turnbulls of tomorrow are unlikely to look to such a degenerate mob to further their political careers.

Jacqueline Kent writes: Malcolm Turnbull is obviously hoping for a Maurice Sendak-led recovery. From WHERE THE WILD THINGS ARE:

They roared their terrible roars and gnashed their terrible teeth and rolled their terrible eyes and showed their terrible claws till [he] said, "Be still!" and tamed them with the magic trick of staring into all their yellow eyes without blinking once and they were frightened and ... made him king of all wild things.

And if that doesn't work, he can always get into his private boat and sail home.

Ray Quigley writes: I am worried. Politicians, to my eye, are generic egotists. So when our current supreme leader, Kevin Rudd, is confronted by "nothing" his egomania will expand in a commensurate way. Why am I worried?  All Government’s need an organised opposition, or they will ride roughshod over us all, and we ain’t got one.

John Shailer writes: Many commentators maintain the Libs face electoral oblivion, if they don't pass the ETS.   However support for the ETS is declining rapidly, as evidenced by a string of current polls - Galaxy poll (60% for delay); Roy Morgan (47% against, 37% for); Lowy Institute's annual poll (a 23% drop in support since 2006); and Nielsen poll (18% drop since July 2008).

It  will decline further as the voting public overcomes the conspiracy of silence by Kevin Rudd  and his media cheer squad, and they becomes aware that the ETS is simply an Extra Tax Scheme, equivalent to increasing the GST from 10%  to 12.5 % on nearly everything.

If Kevin Rudd wants to force an early election on his flawed ETS, bring it on!

Grant Corderoy writes: Please ask Bernard Keane or Guy Rundle to delve into the Nick Minchin files. Or maybe Stephen Mayne to provide a critique on his performance as Minister for Finance and Administration in the previous government. Why?

Because they will confirm by way of quality journalism and research what we suspect -- that this apologist for the Howard Government who  has never ventured outside the “safe haven” of the party machine and then the senate has no credibility nor role in any public debate about important social and economic issues.

Martin Gordon writes: Re. "So how come an ETS was OK under John Howard? Ask the oldies" (Friday). It astounds me that people if the opinion polls are to be believed don’t understand what an emissions trading scheme means.

Kevin was elected by many of these people now they claim they don’t understand it means higher prices. That’s it. It’s about changing our behaviour by changing prices, all the happy talk about saving the Barrier Reef is fluff.

I support action but people must be foolish that action is costless.

Angus Sharpe writes: Re. "No party lasts forever: split happens" (Friday). Great Article from Greg Barns, who asks: "But who would vote for a genuine liberal party that stood for action on climate change, market-driven economic policies, and new thinking on issues such as drugs, gay marriage and indigenous self-empowerment and refugees?"

I would.

Climate change:

Steve O'Connor writes: Re. Tamas Calderwood (Friday, comments). I'm not a climate scientist, but this is my understanding:

1. You quote a different set of temperature records than the IPCC report uses.
2. Your (Uni of Alabama) records are satellite, not ground measurements.
3. Satellite measurements need a fudge factor applied to transform them to ground records

From what I can see, there seems to be ongoing dispute what the correct fudge factors are, so ground measurements are much more reliable (and applicable, as most people don't live in the troposphere.)

In regard to IPCC author Kevin Trenberth and his leaked email, he was referring to his recent paper, and the travesty that scientists don't have enough measuring devices to adequately monitor the heat flux as it distributes throughout different systems of the earth (e.g., into the oceans etc).

Perhaps someday soon you will experience your own "oh sh*t" moment.

Ken Lambert writes: “S-xing up” a graph to create false certainty is scientific dishonesty. Trenberth, Mann, Briffa and Co are people endlessly quoted in the IPCC Reports and references as *the* authorities on proof for AGW via the CO2 GHG mechanism. Discovery of collusion to "s-x-up" the data, or privately disclose their profound doubts about the observations matching their theories has dealt a huge blow to their credibility.

There is no doubt that the ructions in the Liberal Party over the CPRS and ETS, has been fueled in recent days by these revelations of scientific ‘clay feet’ on the part of leading proponents of alarmist AGW. I believe the email traffic on this matter to politicians involved has been stupendous.

What does Tim Flannery say to a bewildered politician ringing for climate science advice? ... "I don’t know what’s going on mate."

Professor Jon Patrick and the NSW Health:

Jon Patrick, Chair of Language Technology, University of Sydney, writes: As a regular reader of Crikey I am happy to be able to clarify some of the misconceptions present inthe comments made by an anonymous tipster in Friday's "Tips and rumours". The "tip" began with: "Standby for a Stoush between the University of Sydney’s health informatics researcher Professor Jon Patrick and the NSW Health…".

"Anonymous" refers to an article of mine published on my laboratory's website "that has raised concerns about Cerner's eMRs being rollout in NSW." If Anonymous had read the essay they would have known that it is not about eMRs but about a single clinical information system called Firstnet, provided by Cerner. Readers can find the article and assess it for themselves.

Anonymous would have been able to establish that the essay covers the roll out of a state wide use of Firstnet only since 2006 in which NSWHealth is endeavouring, according to clinicians and nurses, to bludgeon unwilling clinical staff into using it, which they say makes their work inefficient, harder to care for patients, and a risk to patient safety.

Readers will find all this substantiated by the quotations from clinicians reproduced in the essay. Readers of the essay will also see a discussion of the systemic issues that have contributed to the failure of this piece of technology, deployment and its serious consequences for many aspects of care in Emergency Medicine. They will notice that Anonymous’s selective choice of content from Garling’s report fails to give attention to his comments that effective clinician engagement is important. This is something the physicians say has failed in the Firstnet roll out, and they have emphasized by voting with their feet by refusing to use it.

Anonymous asserts about me that  "What Professor Patrick does not mention in his essay is that he and his department are developing an alternative electronic medical record system using open source software."

My research is well published on the web site where the essay described by Anonymous is also published. Any reader who has to go through the web site to get to the essay has the opportunity to study all the different types of research we do in our Laboratory. This of course is one of the reasons the essay is only provided as a download. Furthermore the link in Anonymous’s article does not point to a description of my work as they purport but rather points to a general article in which I am a commentator on the value of open source software.

If Anonymous had perused my web site with even a modicum of effort they would have discovered that my research is directed to the use of natural language processing (NLP) to improve the speed of retrieving semantic content from clinical notes in order to assist clinical staff to work more efficiently.

Concomitantly, we research how an NLP paradigm might change the way we design clinical information systems. EMRs are a different technology and I have never written about them.

The possibility that our language processing research might one day be used in a commercial clinical system is an aspiration we have, but suggesting that we can produce a comprehensive hospital wide EMR system is a flight of fancy.

Anonymous accuses me of attending a conference junket. Readers might be interested to know what this conference entailed. I flew out of Sydney on a weekday evening and for the 13 hour flight I spent about 10 hours editing the first 180 pages of a draft thesis of one of my PhD students. I find the time on airflights quite useful for completing a lengthy piece of work like this that requires continued concentration. Having left on a weekday evening, I arrived on a morning of the same day so I felt the University had a got a free day's work out of me. I proceeded to the location of a pre-conference workshop where on the next day I presented a paper to a group of specialist researchers on how we might identify the ideal development environment for engineering clinical information systems. I presented my ideas on my principle of Ockham's Razor of Design and explained how it represented a different paradigm that had natural language processing as the centrepoint of design of these systems.

On the following day I discussed my ideas with researchers from Europe, and the USA along with their own offerings. Oh, I also turned down an offer for a job with a New York research group. On the following day I went to another workshop where I delivered a paper on the methods we used for extracting relevant content from clinical notes.

Oh, I almost forgot to mention, at the same time I also received the winner's award for building the most accurate system for this year's international challenge for information extraction from clinical notes, beating 20 other international competitors, including esteemed institutions and recognised leaders in the field, such as the National Library of Medicine, Vanderbilt University, Manchester University, Humboldt University, and the Mayo Clinic.

It seems it might just be that we are the best in the world at it. On the fourth day, after listening to paper sessions, I attended the meeting of two Working Groups of the American Medical Informatics Association, namely Clinical Information System WG and the Ethics, Legal and Social WG. The former group gave me a copy of the new book just published on clinical information system failures, and the second group had arranged for me to speak to them on the pertinent issues that arose both from the contents of my essay and the University's withdrawal of it after a "complaint" from NSWHealth.

On the fifth day I presented a poster on the work we are doing in our Laboratory on a Clinical Data Analytics Language (CliniDAL). This is a technology that enables a clinician to ask any ad hoc question using their own clinical dialect and jargon that can be answered from content within the clinical information system, and produce an answer even if it has to access multiple information systems and the answer is buried within the prose of the clinical notes. Three organisations (2 from USA and 1 from Canada) discussed my poster in sufficient detail for us to set in train a process of collaboration.

On the sixth day I was engaged in discussion with a number of people about the contents of my essay, using their experience to edit the essay, and collecting more information to verify the international issues in it. I also responded to a request from the US Senate, Finance Committee for a copy of my essay, that had been triggered from my discussions with other interested delegates, who like me lamented the very poor state of the software engineering of clinical information systems.

On the seventh day I must admit to doing no more but having meetings with fellow members of the World Health Organisation's (WHO) Committee for the design of the International Classification of Diseases (ICD), Version 11, which we expect to roll out in 2012. Version 10 is the basis of most health statistics compiled in Australia and more than 150 other countries around the world.

I also met with fellow members of the International Health Terminology Standards Development Organisation (IHTSDO), which has the international responsibility of managing SNOMED CT, the new clinical terminology adopted by all Australian Governments for the future formal recording of clinical notes.

Subsequently, I flew home on my own time on Saturday and Sunday so that I would be able to get back to my Laboratory by Monday morning, but during which time I completed the editing of my student's thesis.

I leave it to the reader to judge my efforts.

Send your comments, corrections, clarifications and c*ck-ups to boss@crikey.com.au. Preference will be given to comments that are short and succinct: maximum length is 200 words (we reserve the right to edit comments for length). Please include your full name — we won’t publish comments anonymously unless there is a very good reason.

Back to the top  |   Forward article to a friend  |   Comment on article