Former Liberal Party bagman Ron Walker wants the Federal Government to buy WMC’s Olympic Dam “in the national interest”. WMC is under a takeover offer from Swiss company Xstrata. This is the same company that recently took over MIM, and more pertinently also bought a vanadium resource from PMA in Western Australia.
The stock in trade of bagmen, and particularly this one, is wheels and deals (Albert Park pun intended). That’s not too much of a problem, as long as you keep them away from making policy. Not a good look for the anti-socialist party to start socialising public assets. Ron would have got on well with Rex Connor and maybe should even be advising Putin on Yukos!
But in the case of Xstrata he is on to something, I think. Apparently the ACCC has given Xstrata a tick, but I think in the case of Xstrata there is something in the national interest case.
Xstrata are canny investors and very good at taking Australian investors to the cleaners. They bought MIM for a bargain basement price, largely because of the incompetence of the local yokels up here in Brisbane. They paid $1.70 a share (or thereabouts), but if MIM was still listed I suspect the shares would currently be trading north of $3.00. There is nothing wrong or dubious about this, and from all accounts Xstrata is doing a much better job of managing the assets than the previous owners.
The same thing can’t be said about the Windimurra assets formerly owned by PMA. This was a vanadium mine with somewhere around 10% of the world’s vanadium. It was a greenfields development which basically failed because of plant blow-outs and a slump in the price of vanadium. However, at current prices it should be more than viable. Xstrata already had South African vanadium interests, and Windimurra should have been a good fit. Too snug in fact, because Xstrata closed the mine down, much to the disgust of the vendor, PMA, who had taken consideration in the form of a royalty from the sale of the vanadium ore as it came out of the ground.
To bone up on PMA’s view of the world click here.
I’m not aware of Xstrata owning any uranium mines, but until they make good the WA situation, I don’t think they should be rewarded with a larger share of Australian dirt. The Australian government doesn’t need to buy it, it already has a perfectly good owner in WMC, which should continue in Australian hands.
Of course I might be biased. I should declare that companies with which I am associated have shares in PMA and had shares in MIM. One holding proved profitable, and the other not. But even the profitable one should have been much more monetarily rewarding.

Still waiting to see whether Lawrence Springborg is prepared to discuss alternative futures to marrying his estranged Liberal Party “sweetheart”, but in the meantime her oldest living relic – John Howard – has bought into the fray again.
In an article by Dennis Atkins in yesterday’s Courier Mail Howard both rules out and rules in a merger between the Liberal and National Parties. The headline says “Howard buries merger hopes”, yet the second par says “But if the Nationals wanted to talk about a merger federally, Mr Howard would be happy to discuss it.”
Acute readers will understand that what Howard is doing is simultaneously trying to look reasonable, say “No”, as well as giving Springborg a parachute, or “exit strategy”. He’s sending Springborg off to the maiden aunt at federal National Party HQ to discuss it. We know what the answer will be – it’s a way of letting him down gently and saving his face.
Howard needs to be more blunt when talking to those of us north of the Tweed.
Apparently the amalgamation proponents are either not acute, or still think the bride will find their shotgun irresistible. Latest rumours are that the Nationals are going for a long hot and passionate summer trying to strong-arm their intended into submission. Local Liberals expect the CM to play along.
Not that rumours are always true. Steve Austin put my gossip from Los Trios Amigos to each of the three – Santoro, Caltabiano and Nicholls – and they all denied it. State Liberal Leader Bob Quinn is copying the Howard style and was apparently hopeful – he’d be happy to enhance the talents of his parliamentary line-up.
While on the subject of rumours, critics of the Courier Mail say that they are looking to match their format with their content. Yes, they could be the next of the Murdoch publications to shrink from a broadsheet to a tabloid. Good idea I would think. My favourite Australian newspaper, the Fin Review, has always been a tabloid and generally manages more news on the front page than many broadsheets do in their entire front section! What’s more you can read it anywhere without having to continually karate chop it on the fold to make it manageable and stop it from flopping over like a Labrador’s ear when you try to read it.

According to The Courier Mail two days ago, the Queensland National Party is compiling a wish list of infrastructure projects on which to spend the $30 billion predicted from the sale of Telstra.
From the news item it looks like they intend to spend the whole of the sale proceeds on “dam, road and irrigation projects”, as well as a Darwin to Gladstone railway. Sounds like the Bradfield scheme (which proposed turning the coastal rivers west) has been pulled out of its cupboard in National Party Headquarters. And if you were going for a rail scheme, why not Everald Compton’s ATEC scheme – at least it makes sense?
You can see some reasons from this why John Howard opposes the “Pineapple Party” merger proposal of Lawrence Springborg. The Queensland Nationals have form, denying Howard the prime ministership in the 80s with their Joh for PM push. Howard doesn’t want a repeat of the madness, and this item, along with statements from new Queensland senator-elect Barnaby Joyce that the Nationals are a ” balance of power” party, will remind him that wildness and wackiness are still haulmarks of the Queensland Nats.
Since 1998 the Queensland Nats have been a much diminished force. Imagine all the strife they could cause if they effectively got control of the strongest part of Howard’s Liberal Party – the federal Queensland representatives? The upheavals might be so volcanic as to force the rivers to all run west of their own accord!

While I’m waiting for Lawrence Springborg to post a reply I thought I might run some Queensland gossip. Latest and hottest rumour in the Queensland Liberal Party is that Senator Santo Santoro and Councillors Caltabiano and Nicholls are heading to state parliament. The three are factional allies and exercise significant influence over the party, but do they really want to ride into State Parliament together and shoot the place up?
Some parts of this rumour have more substance than others, such as the one involving Caltabiano. There is a general expectation that MLA for Chatsworth, Terry MacKenroth will retire some time before the next state election. Michael Caltabiano, who is also the Liberal Party State President, represents the ward of Carindale which includes much of MacKenroth’s territory. Caltabiano’s vote is north of 60% and the Liberal Party won two of the three federal seats in the area. Caltabiano is jaded with council. He is ambitious, but with Campbell Newman as Lord Mayor his options in council are limited.
He could be interested in getting out altogether and going back into the engineering business. According to some of his colleagues on a recent trip to China he made business contacts in the road paving industry. Before entering the council he had been a civil engineer with a company thats business was laying hot bitumen from recycled pavement.
But political ambition is still said to burn brightly, so a move into state politics could also be on the cards, which makes sense of the Chatsworth option. If he wins the seat, he would have a position on the Liberals’ frontbench and prospects of becoming leader, and maybe even premier, one day. If he loses he would go out on a high note, attempting to wrest a much needed seat from Labor, and he could settle down to make a mint.
Nicholls is the councillor for Hamilton, and would be expected to run for the state seat of Clayfield. While this is held by Liddy Clark it used to be blue ribbon territory before Santo Santoro lost it in the 2001 state election. Nicholl’s council margin is also quite substantial. However, he has only been a councillor for one and a half terms, so I’m not sure why he would run the risk of shifting.
The Santoro leg of the theory is the weakest. It rests on the assumption that he is finding life difficult in Canberra and would like an opporunity to re-engage in state politics. The rumours have him running for the seat of Indooroopilly, held narrowly by Ronan Lee for the ALP. He would have to win the preselection first, which would mean relying on the numbers of Michael Johnson, the local MHR. Johnson might not be keen on having another heavy on his patch, but then, Santoro is also rumoured to be moving his senator’s office into the area so perhaps Johnson and he are almost neighbours already.
Santoro certainly isn’t producing much publicity in his new role as a Senator, but it is a big leap to see him sacrificing his senate term to run for a seat where he does not live. The rumour says that he still has ambitions to be premier of Queensland one day. They’d have to be pretty strong ambitions for this rumour to be true. It would also see him potentially facing off against Caltabiano if the totality of the rumour was true. Not a case of all for one and one for all.
Still, this is the Queensland Liberal Party, and strange things do happen. I haven’t checked with any of the three, but I’d be happy to host their denials and other musings on their futures on the blog. And if there aren’t denials? Well, maybe we can get back to discussing amalgamation.

What’s the problem with the wool industry? Two competing theories have run in the papers over the last two days. An opinion piece (subscribers only, so no link) in yesterday’s Fin Review by the former communications manager of the Australian Wool Corporation essentially claims it’s a lack of promotion by a central marketing authority. The solution? A marketing strategy.
In today’s Australian an article indirectly fingers mulesing – a practice that has led to PETA organising a ban on Australian wool by some international fashion houses. Mulesing involves cutting the wool and skin, without anaesthetic, from around the backside of sheep to prevent fly-strike. The solution? Genetic engineering to stop the blow-fly using proteins produced by the sheep.
Somehow I think both diagnoses are wrong, and both solutions at best partial, and one at worst a mercenary pitch for a scientific grant.
The articles however bring together a few themes currently circulating around our civil conversations. One is “conspicuous compassion“. PETA would have to be a prime example. It is an organisation that wants us all to become vegetarians, which is quite happy to harness the energies of those who can afford to wear wool to further its agenda by playing on their guilt at a level which essentially costs them nothing. Nice work when you can get it.
Mulesing is a pretty savage practice, but at least it saves the beast from dying of fly strike. PETA obviously doesn’t mind carnivores, just as long as they only scavenge dead carcasses and are not human.
At the same time we have a genetic researcher pitching a fairly speculative scenario as the recipe for rescuing the industry. According to the AFR article, volumes of wool exports have halved since centralised marketing to 500 million kilograms, and the value of the clip has fallen from $6 billion to $3.5 b. Australian Wool Innovation has provided the researcher with a $1.4 million grant. So, this is a good example of scientific boosterism – a practice which is worrying the science community. Its fear is that science is becoming degraded by scientists lending themselves to public relations exercises where the potential for success is exaggerated in an attempt to secure funding and public support, but with a tendency to bring science into disrepute and rob more worthwhile projects of funding if the projected results don’t occur.
The technique generally consists of piggy-backing off a real or potential catastrophe. Greenhouse is the most commonly used one, but fly-strike will obviously do instead. Come to think of it, some scientist may need to manipulate the genes of sheep to make them less aquaeous as well, just to deal with the droughts that Greenhouse will bring! So I’ve found another opening.
The marketing man’s pitch is an example of disingenuous disinformation. He volunteers that the price of wool has fallen from 1200 cents a kilo to 700, making you think that the fall in the value of the wool clip is due to a decrease in price and volume. But when you do the sums you realise that peak production of $6 billion with 1000 million kilograms of wool equals a price of only 600 cents a kilo. In other words, wool is now more expensive than it was at its absolute peak as an export earner.
He also forgets to mention that when wool was at its export earning peak it was being sold not via a sophisticated marketing programme to foreigners, but by an entrenched scam on wool producers. France might have its wine and cheese lakes, but we had a fleece mountain, the maintenance of which almost sent the industry broke!
I’m not an expert in this industry, but my guess is its greatest threat actually comes from other fibres. It’s a commodity that can only really be priced on the basis of supply and demand. Neither genetic engineering, nor marketing programmes will change that, and product boycotts by upmarket clothing retailers will have only marginal effect as well.

Lawrence, welcome to our blog. I think we may well be making some sort of history here. It’s rare for political leaders to consent to any form of one on one debate. I’m sure it’s never been done north of the Tweed in an online forum.
I’m hoping that you will stick around to see this one out. As you say, it is a serious issue that ought to be debated. You may not know this, but I actually support the issue being debated by the Liberal Party at a special convention. I think the logic of the pro-Coalition case is clear, and I don’t have any concerns about putting both that case and yours to a vote.
I don’t, however, think there will be a convention. One reason is that John Howard has quite clearly said that he is not interested in an amalgamated party in Queensland, and believes in a coalition. There’s a lot of respect in the Liberal Party for John Howard. People accept that he knows what he is talking about.
I have respect for Howard, but I think people should make up their own mind. That’s one thing I think we both agree on. I’d like to agree on a few other things. I’ve said some harsh things about you, and I apologise. Can we just stick to arguing the factual issues in future?
Can we also agree that the information in Toby’s research is accurate? If there is more to the research than the power point presentation, could you also please post it to the site?
One other thing. I should make it clear that I’m not primarily interested in winning government. I’m interested in providing electors with good representation. Winning government is the reward you get for doing your job. So I’m not going to buy a “solution” to win government unless it also provides good representation, because it will fail.
So, if we are still in agreement, let’s have a look at Toby’s research. On slide 34 he puts his recommendations and says that to be successful you must “Get both Parties to co-operate fully now…no public disagreements”. That hasn’t happened. He says you need to engage John Howard and John Anderson and “Without their endorsement and involvement the plan will certainly fail.” John Howard and John Anderson have both rejected your plan. He says that you have to “Cut the merger deal and get a ‘no bickering’ agreement from all State and Federal factions.” There does not appear to be any chance of that.
As you can’t or haven’t done those things, then Toby’s advice is “Unless all four stages can be assured, the process is extremely likely to be a catalyst that drives many current and potential voters away, thus utterly disastrous for the Coalition and suicidal for its political advocates.” That’s really the take out message from the research. On the written advice of the researcher the merger will not succeed.
So, the issue ought to be now, how do we salvage our respective situations – the National and Liberal Parties. Fortunately I think there are some guides in the research, and I’d like to run through some of them.

Bickering

The research appears to me to be very clear that one of the problems for the non-Labor parties is their continual bickering. Slides 7 and 8 contain quotes such as “[A merger] might stop all the infighting,” “They’ve never worked together properly, and couldn’t now”. Or slide 12 “They couldn’t agree on what to take to a picnic, let alone what to do if they ran the place.” It is also implicit in some of Toby’s analysis. Slide 23 “People want a decent opposition, but the fragmented Nationals and Liberals are not judged to be one…”.
In 1995 we were able to forge a winning cohesive team between the two parties. It was driven by perceptions of the two leaders – Rob Borbidge and Joan Sheldon were seen to co-operate most closely, to the stage where almost every press conference was a joint one.
You need to repair your relationship with Bob Quinn. It was damaged when you unilaterally broke the coalition after the last election and evicted the Liberals from the coalition offices. I wouldn’t think that it would be easy to make up. Wounds like that don’t heal overnight, and as a result of your actions the Liberals are desperately short of resources.
You also need to change your rhetoric. I’m not sure where you got your “world domination” view that some Liberals want to wipe the Nationals out – both parties have aggressively taken on the other from time to time. Many will interpret this claim as just more unnecessary aggression. Your threat to run in every seat in the state is also going to add to the perception that the Liberals and Nationals can’t agree on anything. In the light of this research that would be one of the things most likely to destroy public confidence in both parties.

Putting constituents first

The research also says that both parties are self-interested and not serving their constituents well. Slide 12 gives a hint of this when it discusses why the merged parties might be a less effective Opposition “Thinking too much about themselves, not the people they’re supposed to represent.” It’s a theme that is visible in Toby’s research, just not often stated. It was also present in the research that we did from the On Line Opinion site during the last state election.
I’d suggest that the first thing both parties need to do is get closer to their respective constituencies. You didn’t lose the last election merely on the basis of your campaign – you lost it because people regard the government as doing a better job for them than you would. I wouldn’t get Toby back to do this research. It is something that you and Bob Quinn need to personally do yourselves.
Next step would be to define exactly who your constituencies are. This will be firstly geographical. The Liberal party has mostly an urban footprint, while yours is rural and regional. There are areas of dispute and I think both of you have to look really closely at the Gold and Sunshine Coasts, as well as Cairns, Townsville and Toowoomba. There is evidence in Toby’s research (Slide 25) that your respective “brands” are not as attractive to each other’s voters as to your own. Using the language of marketing, you have to “segment your market” in order to maximise your vote – that is one of the advantages of a coalition or alliance over a merged party. Three-cornered contests should be a last resort, to be used in areas where there is a real question as to what voters want and which party would be better able to provide it.
Of course, segmentation only works if you are servicing voter needs. Third step would be to better define what you stand for, what electors demand of you, and how you communicate with them. I’d be holding workshops and meetings around your constituencies to find out what people want you to do, and to tell them what you intend to do. I’d also review your tactics and strategy on issues. For example I’m critical of the opposition parties in their response to the infrastructure crisis in this state, particularly in electricity. You’ve also failed to put the SEQ regional plan under any sort of decent scrutiny. That’s for starters. There is a whole swag of other missed opportunities.
I’m not sure what you are doing to recruit potential candidates, but that should be another high priority from which this whole campaign on amalgamation must be a huge distraction. Of course, you’ll need to agree with the Liberal Party on where you are running first so that you can offer potential candidates a clean opportunity. I’ve seen a number of good candidates pressured not to run by one non-Labor party or the other in the negotiations over seats. You need to try and avoid that.

Summary

If we both accept the research, then we both have to accept that your merger proposal is dead, and that your current efforts to force the Liberal Party to negotiate on it are making things worse for you and the Liberals, but in particular you. The question then is how do we rescue your position? I’m suggesting you do this by re-investing in your relationship with your erstwhile coalition partner and with your electorate. What do you think?
Of course, I’m happy to argue about the rights and wrongs of a coalition from a more philosophical and less public relations focused position, but I think current circumstances make that a waste of effort as the public relations considerations make an amalgamation impossible.