Pollies, Packer, Sons of Gwalia and Doug Flynn

22. From local government to Parliament

By Stephen Mayne, failed candidate for Melbourne Lord Mayor in 2001

By jingo, there's been an avalanche of emails for a list of state and federal politicians who started out in local government and at this stage it looks like we'll finish up with more than 200 names, depending on how far back into history we go.

The Australian Local Government Association have saved us a good deal of time by pointing to their 2003-04 federal budget submission which listed every Federal MP in 2003 who hailed from a council. There were 31 in the Reps and 10 in the Senate and the split was broadly 50-50 in terms of which major party they represented.

Clearly, local government is the largest source of talent for the Liberal and National parties, but the interesting question will be whether councils are a bigger overall source of Parliamentary talent than the union movement. Therefore, we've dusted off and slightly updated our unionists in Parliaments lists from 2003 to enable a true comparison. This now excludes student unionism, which will be a separate list that we'll start next week.

Away from the Federal Parliament, here is just 20 of the new names of councillors in Parliament supplied by Crikey readers. There's no need to advise any more until you see the mega-list that should be on the site by Monday:

Denver Beanland: was Deputy Mayor of Brisbane before winning the state seat of Indooroopilly.

Peter Black: Virginia Judge's harasser in the NSW parliament was mayor of Broken Hill for many years and is now Labor's big drinking member for Murray Darling.

Lionel Bowen: Bob Hawke's initial Deputy PM was several times Mayor of Randwick before moving on to be Federal MP for Kingsford-Smith.

Ben Chifley: was still on the Abercrombie Shire Council while PM until he lost an election in 1947.

Helen Buckingham: former mayor of Whitehorse in Melbourne's east and now currently ALP MLC for Koonung province.

Nita Cunningham: Labor Member for Bundaberg, was Mayor of Bundaberg City Council from 1991 until 1998.

Terry Martin: former Mayor of the City of Glenorchy in Tasmania, now Member for Elwick in theTasmanian Legislative Council.

John Goss: Alderman in Brisbane City Council, then became member for Aspley in the Queensland Parliament.

Howard Hobbs: Nats MP for Warrego in south west Queensland, was chairman of Tambo Shire Council from 1980-87 and a councillor since 1975.

Virginia Judge: former Strathfield Mayor, now NSW Labor MP for Strathfield.

Ted Mack: Mayor of North Sydney and then legendary independent Federal Member for North Sydney.

Judy Maddigan: former mayor of Moonee Valley and now speaker of the Legislative Assembly for the Bracks Government in Victoria.

Alex McTaggart: the independent member for John Brogden's old seat of Pittwater remains the local mayor, something which is no longer allowed in Queensland.

Tim Nicholls: the Brisbane City Councillor has been pre-selected by the Liberals for the State seat of Clayfield.

Michael Pengilly: the current mayor of Kangaroo Island is the forthcoming Liberal candidate for Dean Brown's seat of Finniss in the South Australian parliament.

Gary Punch: former Labor MP for Barton and Minister in the Hawke and Keating governments, was the junior mayor for Hurstville having taken up an interest in local politics whilst at Hurstville Boys' High School. He later became a councillor and subsequently Mayor of Hurstville at the ripe old age of 21.

Richard Torbay: former Mayor of Armidale in Northern NSW, now state independent Member for Northern Tablelands.

John Watkins: Hunter's Hill deputy mayor to deputy premier in the Iemma Government.

Peter Wellington: independent MP for Nicklin in Queensland was previously a Maroochy Shire Councillor.

Richard Wynne: MP for Richmond and Cabinet Secretary for Steve Bracks, was Lord Mayor of Melbourne in 1990-91.


23. The Bulletin finally finds a way to make a profit – death of the boss

By Stephen Mayne

The Bulletin's editor Garry Linnell was a dedicated Fairfax man for most of his career but he's certainly taken to the Packer memorabilia industry with great gusto and is receiving all sorts of tributes for the magazine's tribute issue to Kerry Packer.

"I got a note from the family saying that they really love it," Linnell told industry newsletter Mediaweek, whilst also suggesting the big man had approved it before his death: "Basically it was his parting gift to the magazine – allowing us to come out with this tribute."

Amazingly, The Bulletin will probably end up making a profit from the death of its owner. Whilst originally expecting to sell no ads in the 98-page issue because of the 48-hour turnaround, Linnell told Mediaweek: "The ad team came in and Harold Mitchell was sensational and really helped us out. We figured we'd lose money, but it's not going to be a loss-maker for us, it will probably make money, not that we did it to make a profit."

Mitchell was all over the media paying tribute to Packer in the hours after his death was announced, which was not surprising given that in a globalised advertising world, he has emerged as arguably the biggest independent media buyer in any major market thanks to the support of people like the Packers.

Linnell suggested that the only criticism of the issue came from our bunker, which remains banned by all parts of the Packer empire even after the death of the man who ordered the ban:

"Some of the journos at some companies would have liked us to have been tougher and I think Crikey had a couple of punts at us for being sycophantic – that's a danger when you are bringing out a magazine about a guy who ran your own company."

Don't get me wrong, it was a fascinating edition which I read cover to cover and Linnell is right about Les Carlyon's fabulous effort: "Twelve hours later (after commissioning) he filed 4,000 untouchable words, not one spelling error, beautiful copy, that's what he's like."

One of the small problems with the tribute issue is that everything in there will now be treated as fact. One of the greatest Packer sycophants of them all, Alan Jones, wrote that he donated "hundreds of millions" to hospitals over the years. That's more than $200 million, which really is hard to believe.

Finally, Linnell claimed that he would also put out a special tribute issue if Rupert Murdoch died. Err, that might struggle to get past PBL management given the state of relations after the One-Tel hearings and The Australian's rather charmless editorial on December 29 focusing on Packer's ability to make money out of government favours.


28. Sons of Gwalia to emerge from the ashes

By Stephen Mayne

The incredible China-driven global resources boom will enable the disgraced Perth-based miner Sons of Gwalia to emerge from administration in what The Australian is today billing as a $1 billion float, which raises the question of why it needed to go into administration in the first place.

In a carbon copy of what happened to the world's biggest lead and zinc producer, Pasminco, corporate undertaker Ferrier Hodgson was appointed administrator of SoG when it collapsed in late 2004 with debts of $864 million.

As usual, SoG's original shareholders will recover little if any value even though the assets being floated could emerge to be more valuable than the liabilities which were owed at the time of the collapse. This is partly because the administrators and advisers will undoubtedly cream off millions in fees and the banks will charge the usual full-throttle penalty interest rates.

Pasminco is a classic example of this situation, when a group of about 13 banks couldn't agree amongst themselves over a new facility, so the board handed the keys to Ferrier Hodgson.

Pasminco had debts of almost $3 billion at the time it collapsed in 2001 but the stupid banks then closed out most of the ill-fated hedging positions at the wrong time. The business raised $960 million in a float two years ago and is now worth a staggering $4 billion, including about $140 million in debt, thanks to record zinc prices.

Of course, the original Pasminco shareholders who lost everything received diddly squat from this process, but the new shareholders, who bought from the dopey banks, have copped a 400% profit on the $1.95 float price after the stock gained another 14c to $7.62 this morning.

Let's hope Ferrier Hodgson this time chooses to leave something decent on the table for the original SoG shareholders as there have been poorly timed decisions in this administration as well. How's this from The Australian recently:

St Barbara Mines, up 406% to 39c, is basking in the approbation of the market for its new management style and for acquiring the gold assets of the stricken Sons of Gwalia.

Yep, the sale of SoG's gold division last March for less than $40 million was a shocker and shares in the buyer have taken off.


29. Doug Flynn, Macquarie Bank and the Fairfax dreams

By Stephen Mayne, Fairfax and Macquarie Bank shareholder

The Australian is running hard on the line being pushed by media buyer Harold Mitchell that his London-based mate Doug Flynn has been approached by Macquarie Bank to help take over the struggling John Fairfax empire.

Flynn sort-of denied the move in The Australian, although this only extended to professing commitment to his current job running Rentokil, not repudiating Mitchell's claims about an approach from Macquarie. The market clearly believes it is credible as Fairfax shares shot-up another 28c to $4.20 this morning, although it was at almost $4.70 four months ago.

It should come as no surprise that Macquarie Bank and its offshoot Macquarie Media is looking at Fairfax because the Millionaire Factory has been scouring the world for assets and going on a spending spree, which last week included splurging $5.1 billion on an Indiana tollroad in the US.

However, there's a very big difference between running the ruler and launching a bid and I very much doubt they'll progress any further on Fairfax. Shares in Macquarie Media recovered 2c to $2.72 in a strong market this morning but it remains at a small discount to its $2.75 float price last November, which was at the bottom of the range pushed by the bank at the time.

This means Macquarie Media hasn't exactly set the market alight and it is only capitalised at $540 million, compared with $4 billion for Fairfax and $5.1 billion when you include debt, as you always should when valuing a takeover.

Macquarie Airports learnt the hard way about the dangers of pursuing a large acquisition before shareholders have coughed up all the dough when it paid 480m euros for 44% of Rome Airport in July 2002 and the share price was routed to just 80c. All that gouging has lifted it to $3.15 today.

Macquarie Media shareholders owe their second $2-a-share instalment, a total of $400 million, in November this year and they've just gone hurtling into debt by committing $411 million in equity to the $1.2 billion bid for Taiwan Broadband Communications which was unveiled on 19 December. In other words, it has no capacity to fund anything major at the moment. Let alone a $5 billion tilt for Fairfax.

Macquarie Bank was the 40% minority bid partner for Macquarie Media in Taiwan which gives some insight into how a tilt at Fairfax could be structured. However, Fairfax is so big that Macquarie Media could only buy it with scrip and would need board approval, something considered highly unlikely.

That said, Fairfax's board and management are on the nose with the all-important institutional shareholders and the stock has plunged almost 15% in a rising market since the new team of chairman Ron Walker and CEO David Kirk took over.

Buy why would Macquarie want to buy a declining, low-growth business like Fairfax? Besides, any takeover would also cause big problems on editorial independence because of the sheer scale and controversy of Macquarie's burgeoning empire and Fairfax's treasured place as the only genuinely independent quality commercial media outlet. All up, it simply wouldn't be worth the grief for Macquarie – let alone the $5 billion-plus required.

It just sounds like the embittered Doug Flynn, a former Murdoch head-kicker, exacting some revenge on Fairfax by disseminating takeover tittle tattle through his media buying mate.

Copyright © 2022 The Mayne Report. All rights reserved

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