Bumper July edition: Melbourne tilt, dirt sheets, media mayhem, Q&A, Manningham, takeover laws, memoir, pokies, Darebin, Kohler and McCrann

July 12, 2012

Dear 15,000+ Mayne Report Readers,

Belated greetings for the first time since our last bumper email edition on April 4. If you'd rather not receive these monthly newsletters, click here to unsubscribe. But if you like it, click here for the weblink and share it with your friends.

ASA corporate governance lecture tomorrow

First up today, all are welcome to attend tomorrow's one hour lunch-time lecture on corporate governance at the ASA Investor Hour.

After 27 years, the ASX has withdrawn from the Investor Hour lectures it has been running on a monthly basis with the Australian Shareholders' Association in Australia's major cities.

ASA has decided to pick up the program and we've got a new venue for the Melbourne leg, the Telstra Theatrette at 242 Exhibition St.

Proceedings start at midday, just like the old gatherings at RMIT's Storey Hall, and it is free for ASA members and $5 for non-members.

As an ASA director and the inaugural speaker in Melbourne, the pressure is on deliver a lively presentation.

Memoir delay, Melbourne by-election tilt and volunteering

There's plenty of material below on the Melbourne by-election campaign, but the better half is getting stuck in about the logistics and insists that be dealt with first.

Therefore, if anyone fancies handing out how-to-vote cards on July 21 or manning the booming early voting centres in the last week of the campaign, reply to this email or drop Paula a line to Paula@maynereport.com.

After some ALP supporters distributed a vicious dirt sheet we're also looking to hand deliver up to 10,000 flyers in the last week, as there is no Labor-style budget for a paid mailout.

Donations would also be welcome and anyone who gives $40 or more, will get a signed copy of the forthcoming memoir, which has now been pushed back into next year.

Apologies for the delay to those who pre-purchased a copy expecting an October arrival. We've also under-delivered in producing only two "memoir sealed sections" so far, including one this week.

There will be more once the by-election is done and dusted and the serious writing begins.

It has been nice to receive more than $20,000 worth of donations over the past three years and if you fancy giving us a hand to help fund our activism and keep us going on the political and AGM circuit, just click on the image below:

Crazy times in the media world

There has never been a time like this in Australia's media sector and it has led to an unprecedented flurry of media appearances about Fairfax, Gina, News Corp's demerger, job losses, pay walls and disappearing broadsheets.

Through it all, the Murdoch family's reach has never been bigger. With the acquisition of the Kohler stable, for the first time they now have a majority of the top 10 business commentators on the payroll. Even worse, they are headed for monopoly control of pay-TV in Australia, to complement their existing majority share of the agenda setting newspaper market.

Throw in Lachlan Murdoch's chairmanship of Network Ten and it's as if the Leveson inquiry never happened.

It was good that The AFR ran this letter last month:

The AFR must keep its independence

Now that News Ltd has made Alan Kohler, Robert Gottliebsen and Stephen Bartholomeusz instant millionaires with the purchase of their Australian Independent Business Media, it is more important than ever that The Australian Financial Review remain independent of all corporate and political interests.

Journalists in Australia understand that Rupert Murdoch is a proprietor with an unprecedented record of requiring and receiving loyalty and favourable editorial treatment from his employees.

Will these doyens of business journalism now pull their punches on News Corp's appalling corporate governance, nepotism, stacked board, Murdoch family gerrymander, abuses of corporate power? Sadly, this is the price you pay when you agree to take Rupert's shilling.

When I ran for the News Corp board in 2002 on a platform that Mr Murdoch end his policy of demanding only positive coverage from his journalists, News Corp's founder and executive chairman refused to include it in the notice of meeting. This is the same company which warns that regulatory reform arising from the Finkelstein Inquiry could inhibit free speech.

Long live The AFR and its ability to independently cover the affairs of all players, including Gina Rinehart.

Stephen Mayne
Templestowe, Vic

Scarey times on Q&A

As GetUp!'s Simon Sheikh possibly discovered last week, it doesn't get any scarier than appearing on Q&A.

Maybe I'm getting old, but the stress of unpredictable live television is quite extreme and I'd be perfectly happy not to be invited back onto Q&A after 3 experiences over 4 years.

Former Herald Sun editor Bruce Guthrie said the same in his Sunday Age column last week.

After 3 days of swatting the fast-paced 55 minute live session on Monday, May 14, turned out okay.

The full episode ended up being head-lined "Morals and politics" as we traversed Craig Thomson, nannies, political codes of conduct, accounting fiddles with the Federal Budget, Tony Abbott's negativity and, most memorably, gay marriage.

I was sitting next to Joe Hockey who felt he was ambushed by the gay marriage question at the end which sparked a powerful and emotional response from Penny Wong which was later described as a "watershed moment" in this Fairfax story.

The ratings finished at 620,000 which was okay, but well below that remarkable Sydney Writers Festival panel the following week which crossed a few boundaries but attracted more than 700,000 viewers.

The ABC's Jonathan Green had a good piece defending the likes of Barry Humphries from the outraged attacks by people such as chief Gina Rinehart defender, Andrew Bolt.

The back story of appearing on Q&A

A lot of people have asked whether panellists get any sort of warning about possible topics. Below is an example of the Friday email which goes around to both the panellists and the studio audience. This was for the May 14 show:

Dear panellists, as is our custom at Q&A we have a meeting on Fridays and assess what parts of the news agenda might make for good Q&A material. This does not mean that all, or any, of these subjects will come up because the audience asks the actual questions, but our guess is that these topics will be part of the mix. We also send a similar message to audience members to remind them of the range of issues that are around when they are thinking about questions for the show. Our website runs a lot of web/video questions that give a guide to what the audience has in its mind. Subjects that look promising thus far, in no particular order, include:

The Budget – Will it be enough to improve Labor's abysmal standing in the polls? Is it, as Tony Abbott alleges, class warfare, or do low-to-middle income earners deserve cash-in-hand assistance more than corporate Australia deserves a tax cut? Can the recipients be trusted as parents or will they waste it on the pokies? Are those who live on Sydney's North Shore ‘cossetted', as Julia Gillard maintains, or are they real people too?

Foreign aid – Should Australia maintain its commitment to increasing foreign aid to 0.5% of GNI, or is the decision to delay that increase justified?

Single parents – The cuts to single parent payments have been presented as a way of encouraging parents into work, but welfare groups say they will impose hardship on an already struggling group in society without putting them into jobs.

Abbott's reply –Tony Abbott's Budget reply speech was light on economic detail. We know already that the coalition will increase company tax to pay for a parental leave scheme, will sack 12 000 public servants and has aspirational goals for dental care, disability insurance and payments for nannies when these are affordable. At the same time they will scrap the carbon tax and the mining tax. What does this tell voters about an Abbott government's economic management? How will they find billions of dollars in savings and pay for these new measures?

Craig Thomson – The explosive report from Fair Work Australia, outlining allegations of improper use of union funds by Labor's Craig Thomson, almost overshadowed the Budget this week. Thomson has promised to make a statement to Parliament and Independent MP Rob Oakeshott will subsequently decide whether to support a motion to suspend him from the House – with possibly catastrophic consequences for the Gillard minority government. It has now emerged that the Labor Party has been paying Thomson's legal fees to prevent him becoming a bankrupt and thus ineligible to sit in Parliament. Can Labor withstand the heat of this scandal and survive or are its days numbered?

Liberal brawl – Former Liberal powerbroker Michael Kroger has launched a blistering attack on his one-time friend Peter Costello, accusing him of seeking a return to Parliament, of holding grudges against John Howard and Tony Abbott and damaging the Liberal Party. Will the deep and long-standing divisions in the party impact on the coalition's electoral standing and provide Labor some relief? Kroger and Q&A panellist Joe Hockey exchanged words after the interview. What might have been said?

The entitlement disease – In a recent speech and subsequent Lateline interview Joe Hockey attacked the sense of entitlement that saw people expecting government to support them through most facets of their lives. He said the cost of this support was beyond governments and suggested the West could learn lessons from Asia. The recent elections in France and Greece, where incumbent governments were punished for imposing austerity measures and trying to wind back the reliance on hand-outs, suggest the entitlement disease is well-entrenched and will not be easily overcome.

Not fit and proper – The Leveson inquiry in Britain is continuing to reveal the dubious practices of newspapers in Rupert Murdoch's company News International. A committee of the UK Parliament recently found Murdoch to be not a fit and proper person to lead a major international corporation. There is a possibility that he might be forced to divest major assets in the UK and the USA. Announcing soaring profits Murdoch's 2IC Chase Carey rejected the criticism. Is the end of the Murdoch empire in sight? Is Rupert Murdoch fit to own major media assets in Australia?

Turn back the boats – In his Budget reply Tony Abbott, talking about the first days of an incoming coalition government, said that ‘Within a week, the navy would have new orders to turn around illegal boats.' Given the opposition from important regional neighbour Indonesia to sending boats back, the dangers it presents and the fact that naval experts have expressed reservations about it, would the Opposition be wise to consider shelving this policy?

That's all for now. If you have any queries please get in touch.

Kind regards, Lindsay
Senior Producer, Q&A

It was certainly worth clicking on all the links in preparation for the evening, but as the least credentialled panellist sitting on the far left, it was always going to be a case of butting in to get heard.

Tim Costello and I conferred before hand about potentially hitting both Joe Hockey and Penny Wong for being soft on the pokies, but neither of us took the opportunity to quote Abbott's line about all this budget cash eventually being spent on the pokies.

The pre-show banter was good fun and I turned up a bit early to find both Judith Sloan and Penny Wong in make-up. The opportunity was taken to briefly chat with Penny Wong and Joe Hockey about this crazy ASX proposal to make it easier for smaller listed companies to do selective placements.

As we walked out to the set, Joe also cracked a gag about making himself a hero with the bid end of town as Tony Abbott's Treasurer by changing the law to make it harder for gadflies to run for public company boards. The requirement for a single shareholder signature to run is a beautiful thing and Joe was told that if he changes chat, I'll run against him in North Sydney at the following election.

Big Joe was upset afterwards about the gay marriage question and made a speedy exit and Penny Wong, who'd spent the morning with her daughter in an Adelaide library reading Intzy Wintzy Spider, also didn't stick around for a drink afterwards.

The best thing about the post-show drinks was meeting Rhys Muldoon, the everywhere man who somehow became very close Kevin Rudd during his prime ministership.

Rhys played my old mate Julian Burnside in the ABC tele-movie about the 1998 waterfront dispute and was very engaging company.

His recent essay in The Monthly about last drinks at The Lodge with Kevin Rudd was also most enlightening.

Having a crack at the Melbourne by-election

With the Liberals not standing, the decision was taken to contest the July 21 by-election in the state seat of Melbourne. We had an excellent candidates forum in Carlton last night and will be backing up in Docklands this evening.

It is proving to be a good dry run for the City of Melbourne elections in October, covering much of the same territory and many of the same issues.

The overlap with council issues is accentuated by the fact that the two frontrunners, Labor candidate Jennifer Kanis and Greens candidate Cathy Oke, are both first term councillors in the City of Melbourne.

The planned City of Melbourne tilt was first explained in this story in the Melbourne Leader in March.

Ted Baillieu delayed the Melbourne by-election for as long as possible, thereby maximising his advantage in the finely balanced Legislative Assembly.

The Greens have come close in the last three elections but this will be their best opportunity, especially if the Liberals do not contest, as is widely expected.

Check out the previous results from the state seat of Melbourne on the VEC website for 2010, 2006 and 2002.

Richard di Natale got within 2% in both 2002 and 2006, courtesy of Liberal Party preferences.

However, the Liberal vote jumped to 28% in 2010, so Ted Baillieu's decision to preference the Greens last led to Labor retaining the seat with a 6% two party preferred margin over the Greens.

A tougher line on poker machines is my important policy platform in the by-election and the candidacy is supported by anti-pokies Senator, Nick Xenophon.

It was bitterly disappointing when Julia Gillard walked away from meaningful pokies reform after being pressed by cynical NSW ALP Right elements, including Craig Thomson and Mark Arbib, into doing her sleazy deal with Peter Slipper to shore up the numbers.

It is appalling that Arbib has since resigned and taken a job with James Packer, who was instrumental in the aggressive campaign by the poker machine industry to nobble the Wilkie reforms. Former ALP National Secretary Karl Bitar has also been made a millionaire courtesy of Packer's largesse.

Both of the major parties have proved ineffective in the Federal and Victorian Parliaments when it comes to poker machine reform.

Indeed, only the Greens are supporting the introduction of $1 maximum bets which was one of the key recommendations of the Productivity Commission.

I offered my preferences to Labor if Julia Gillard committed to $1 maximum bets, but ALP Victorian State Secretary Noah Carroll cut the conversation short by declaring the party never discussed policy positions when negotiating preferences.

After that, it was a very simple decision to preference the Greens ahead of Labor and I'm hoping the Greens win their first Victorian lower house seat because of their principled position on poker machines which cause enormous damage amongst battlers who get hooked in traditional working class Labor areas.

Seeing as the ALP actually owns and operates more than 1000 poker machines in venues across NSW and the ACT, it is probably a bit much to expect them to consider the victims of this insidious industry which drains $12 billion from punters every year.

Media coverage of Melbourne by-election campaign

For some strange reason, the Herald Sun has virtually ignored the fascinating Melbourne by-election campaign. Maybe this will change now that Simon Pristel, who never covered state politics and took Australia's biggest selling paper down market with a diet of crime, celebrity and animal stories, has been summarily removed as editor and completely punted from News Ltd.

The new editor, Damon Johnston, made his name covering state rounds very well during the Kennett years. Indeed, it was Damon's famous 1999 front page splash - "The order is SILENCE" - about Jeff Kennett's ban on all debates with ALP candidates, which did more than any other media intervention to bring down the all-conquering Liberal Premier.

Whilst I've regularly criticised the Herald Sun's hard-charging editorial boss Peter Blunden for being too soft on Kennett, it was his call to pull on that gagging splash which did enormous damage to the arrogant Liberal campaign.

Meanwhile, with the Herald Sun absent from the field, here are links to some of the media coverage of our latest contested election tilt:

Links to media coverage and polls

June 4
Melbourne Leader on announcement

Moonee Valley Weekly on announcement

June 5
ABC online on announcement

June 12
Moonee Valley Weekly on pokies debate

Melbourne Times on pokies and preferences

Gary Morgan poll predicting 7% primary and Green win

June 18
Moonee Valley Weekly on pokies negotiations and Morgan poll

June 19
Melbourne Weekly reports $1 bet preferences offer to Labor

June 24
Sunday Age profile about Manningham

Melbourne Weekly Eastern on tweets

July 1
Bruce Guthrie's Sunday Age column on Melbourne campaign

July 2
ALP dirt sheet distributed in East Melbourne and Docklands

July 3
Crikey breaks story on ALP dirt sheet

Moonee Valley Weekly on ALP preference snub

Melbourne Times on ALP deal with Sex Party

July 4
Interview with Jon Faine on ALP dirt sheet, plus ALP boss condemns tactic

Comprehensive New Matilda piece on by-election campaign

Bill Shorten's mate claims I produced dirt sheet

Manningham matters drive preference decision

When ALP state secretary Noah Carroll rang two weeks ago, I asked him whether the Gillard Government would be prepared to embrace $1 maximum bets on poker machines, as recommended by the Productivity Commission.

He immediately said that Labor refuses to discuss policy when negotiating preferences. That would be news to minor players such as the Sex Party and the various shooting and fishing interests over the years.

It was therefore a very short conversation as I explained that Labor needed to be taught a lesson about the need for pokies reform, and losing the state seat of Melbourne would ram home that message.

The trouble with Labor's Manningham branch secretary

The other reason for not preferencing Labor was the awful experience of working with their local functionaries on Manningham council.

Take ALP branch secretary in Manningham Ivan Reid, as an example.

After only just taking out citizenship a short period before the 2008 elections, Ivan decided the local council needed a shake-up after being involved in a planning dispute at VCAT.

Courtesy of all sorts of preferences acrobatics, he got up despite having the lowest primary vote of the 9 elected councillors. This is how we all ranked in terms of primary votes:

1. Geoff Gough: 4708 votes or 20.3% (highest primary and first elected in Heide ward)

2. Stephen Mayne: 4205 votes or 18.78% (second highest primary and third elected in Heide)

3. Charles Pick: 4005 votes or 19.1% (highest primary and first elected in Koonung ward)

4. David Ellis: 3584 votes or 16.83% (highest primary and second elected in Mullum Mullum)

5. Grace La Vella: 3132 votes or 13.9% (third highest primary and second elected in Heide)

6. Graeme Macmillan: 2687 votes or 13.46% (second highest primary and third elected in Mullum Mullum)

7. Meg Downie: 2445 votes or 11.48% (fourth highest primary and first elected in Mullum Mullum)

8. Fred Chuah: 1978 votes or 9.43% (third highest primary and third elected in Koonung ward)

9. Ivan Reid: 1406 votes or 6.7% (equal sixth primary and second elected in Koonung ward)

Despite having no experience in politics, getting the lowest primary vote of any councillor and barely being elligible to stand, Ivan was one of 5 candidates who nominated for mayor in the first year as he looked for full-time work. He got 1 vote, his own. He nominated for mayor again last year and once again, only got 1 vote. The same thing happened when he nominated for deputy mayor last year. Even his factional mates won't support him.

Reid's published platform talked about managing $20 million IT budgets for global banks and the local Murdoch paper later reported he was once "the vice president of Deutsche Bank". These days he's an entrepreneur involved with an education franchise in Footscray.

With few local networks and little understanding of politics, Ivan fell under the spell of our manipulative former Labor mayor Charles Pick, who persuaded him to join the ALP in mid-2009.

Pick felt he was a persecuted minority in the previous conservative council and he just loves lighting fires and playing political games. He was also hell-bent on revenge and managed to put together a formal ruling coalition of 5, complete with a bizarre written manifesto which was full of negativity and used the word "abhor" 9 times.

Those of us not in the left wing "reform faction" - a Green, a Liberal and two independents - were treated with complete disdain, as were the officers.

At one stage I had Cr Graeme Macmillan literally standing over me gesticulating with 5 fingers at close range as to why his obsessive campaign against council's well-regarded nursing home provider would prevail.

Cr Reid was the most arrogant of the clique, often declaring: "Suck it up guys, you don't have the numbers, get used to it, that's democracy."

He later ran in the 2010 State election as the Labor candidate in the seat of Bulleen, but suffered a 9% swing, as did Pick in the adjacent seat of Doncaster. The average state-wide swing against Labor was 6%, so council antics clearly didn't help the cause.

After this electoral drubbing, Pick and Reid recognised the error of their ways and supported Liberal Geoff Gough as mayor, side-lining Crs Graeme Macmillan and Meg Downie, the two most negative councillors whose colourful running mates have long had disputes with council.

Pick and Reid then started taking business trips to the Philippines together and announced they were going into business as lobbyists for developers. In early 2011 they were both regularly declaring conflicts of interest on planning matters and when the local paper started asking questions, Pick headed off any concerns by resigning. The count back saw his sister, Jessica Villareal, sworn in and Pick retained his ability to manipulate outcomes on council.

The Pick-Reid lobbying proposition never progressed and after Pick resigned, Reid lost interest in council and quickly earned the record as the councillor with the worst attendance record. However, he then burst back onto the scene last December, nominating for mayor again in a six-horse field.

It took a lot of hard work but the dangers presented by the Pick-led faction were finally neutralised after the recent resignation of Cr Villareal. Pick told me on several occasions that she didn't enjoy being pressured by the 3 residual members of his old faction, being Reid, Cr Meg Downie and Cr Graeme Macmillan.

When councillors voted not to replace Villareal, it was a huge relief as for the first time in 3 years, there was a clear 5-3 majority of moderate and sensible councillors.

And didn't the 3 residual members of the Pick faction scream like stuck pigs when that happened. Cr Reid somehow claimed he was going to initiate a Council Conduct Panel against me for doing something that was legal - voting not to replace a councillor who resigned within 6 months of the next election.

Dealing with The Sunday Age and Labor dirt sheet allegations

Some off their bile finished up in John Elder's Sunday Age piece, which then made it into the ALP dirt sheet distributed in East Melbourne, Flemington and Docklands.

Whilst ALP State Secretary Noah Carroll condemned anonymous dirt sheets as cowardly and illegal when interviewed by Jon Faine last Wednesday, this is how the ALP's inexperienced Manningham branch secretary responded in an email exchange:

On Tuesday, July 3, 2012 at 10:18 AM, Stephen Mayne wrote:

Hi Meg and Ivan,

the attached material quoting both of you has been anonymously distributed to households in Melbourne ahead of the July 21 by-election.

I'm lodging a formal complaint with the VEC and was wondering if you would both support me to the extent that you disapprove of your names being associated with political material which is clearly in breach of the Electoral Act because there is no "authorised by" statement.

I'll be in at the VEC this afternoon so would appreciate a reply before then if possible.

Am just after something like: "This has nothing to do with me and I'm concerned that my name has been used in unauthorised material which breaches Victoria's electoral laws."

Regards, Stephen M

Cr Reid replied with the following which he sent to all Manningham councillors and the senior executive team, presumably to then provide cover for a subsequent leak to the favourite Labor smear vehicle, Vexnews:


I do hope this reaches you in time ....

Thank you for forwarding this interesting flyer. You suffer from the worst case of cognitive dissonance I have ever encountered!

The only thing I'm annoyed about is that 30,000 people now think I cannot spell, since I would never misspell "ingrained" as "engrained". Sigh!

Cr Reid

Ivan hasn't said boo since being named with part of this email read out on ABC radio, presumably having being swatted by head office.

He's also dealing with the embarrassment of being booted off the board of Doncare, the biggest charity in Manningham, after failing to turn up to 3 successive board meetings without submitting an apology.

See how the local Fairfax paper covered the story: Ivan Reid sacked from Doncare board

And this is the guy publicly describing me as a "cancer". When you ask for the detail, Ivan and his mates keep coming up empty handed.

All this talk of defamation actions, Councillor Conduct Panels and calling in the Municipal Inspector has so far produced....nothing.

The Sunday Age were very sheepish about giving air time to Reid, Downie and some of their controversial fellow travellers, one of whom is a backyard panel beater with a history of conflict with council and councillors. Changes were made to the online version of The Sunday Age story and they also published this letter in print the following week:

Mayne corrects the record

Whilst some changes have been to the
online version of John Elder's piece last week about Manningham City Council, readers of the print edition ought to be aware of the following:

* I was never expelled from People Power after the 2006 Victorian election - that unilateral claim was made by a director who was subsequently removed from the board by members.

* There is a very big difference between publicly criticising the conduct of some councillors and leaking "confidential information". I have never leaked information formally designated as confidential by the Manningham chief executive. That would be a breach of the Local Government Act.

* It is all very well to report threats of a Councillor Conduct Panel process being initiated against me by political opponents, but in doing that you should also report that former Manningham deputy mayor Fred Chuah, a factional colleague of those making these claims, was indeed found guilty of three counts of misconduct after the longest and most comprehensive CCP hearing ever conducted. I played a key role in this process and Mr Chuah's factional colleagues have never accepted the umpire's decision.

* I grew up and live in Templestowe, not Doncaster.

The facts of the matter are that I have taken a principled position at Manningham to defend our senior officers in very difficult political circumstances. We are now arguably the most open and transparent council in Victoria and it was disappointing to have The Sunday Age give prominence to a group of individuals who have opposed many of the positive reforms that have been implemented and have a fundamentally negative outlook on a well run council.

Stephen Mayne

Sorry to put you all through that detail, but between The Sunday Age and the Labor dirt sheet, a response had to be produced and that is only about 20% of what needs to come out in due course.

Most of the rest will come after I resign from Manningham in September to focus on the City of Melbourne campaign.

Gold-plating the power network

We've run a few stories about SP Ausnet's proposed $271 million Brunswick Terminal Station investment over the past two years but were most impressed with this Michael West story on Fairfax's businessday.com.au last week.

This is what finance journalism on the net should be all about - long, investigative pieces on issues that affect everyone.

Tony Abbott might blame the carbon tax but, truth be known, it is surging network infrastructure costs which is the main cause of power price rises.

If you read the comments about Michael West's story, there is an awful lot of whingeing about privatisation. I still reckon Kennett's $30 billion energy sell-out was his single greatest achievement because a bunch of foreign wood-ducks collectively paid about $10 billion too much.

That capital was then recycled into debt repayments, schools, hospitals and the like, while the lights stayed on, albeit with rising prices.

Few people realise that Victoria has had the lowest power price rises in Australia, largely because the competitive privatised system has produced the greatest efficiencies.

A chat with Jane Hutcheon on One Plus One

The past few weeks has been extremely busy on the media front and it seems like months ago that ABC1 broadcast this interview with Jane Hutcheon on One Plus One.

Aunty's lawyers advised that some comments about Jeff Kennett were excised but apart from that, it's a lively profile interview.

Is the Baillieu government going to pull the rug on pokies double rates?

There is never a dull moment in the poker machine debate.

The Federal Government is still trying to legislate its poxy ACT trial and GetUp! found itself in court last Friday fighting Woolworths over whether its anti-pokies EGM requisition could be delayed and included in the November 22 AGM.

The judge ended up producing a 1-1 draw as GetUp! got their EGM, but it will be on the same day as the AGM.

Manningham City Council recently passed its budget and I was delighted that it included additional revenues of $112,000 from a double rate on pokies venues.

However, after our friends at Darebin flagged the possibility of a special rate on fast food venues, the Baillieu government decided to act with a local government legislative tidy-up which opens the door to banning special rates on pokies venues.

MAV President Bill McArthur covered this issue in his most recent monthly newsletter when he wrote the following on June 27:

Last week we saw Minister Powell announce legislative changes on the appropriate use of differential rates that will see guidelines released for consultation over a six month period. While we welcome councils' input to this process, it's with some concern I note the Minister's commentary about the need to limit differential rates for pokies venues, which a number of councils have in place to fund gambling harm minimisation programs in their communities. The Age has covered this issue today. And confusingly, the VFF has welcomed this reform despite farmers currently being the largest beneficiary of differential rates and the proposed reforms seek to limit their use.

It would be most disappointing to see the Coalition break its pre-election promise to leave rate setting on pokies venues to councils. However, I'm confident common sense will prevail during the consultation period as Minister Powell is a former councillor who is sympathetic to the sector and open to reasoned argument.

Finally on the pokies, check out the latest from Paul Bendat's Pokieact website and this package of our past pokies coverage.

And try watching this 30 second anti-pokies ad made by Paul Bendat almost three years ago featuring our daughter Alice, who was 6 at the time:

How to reform Australia's takeover laws

From today's Crikey

ASIC boss Greg Medcraft is making plenty of noise about reviewing Australia's takeover provisions to protect minority shareholders from so-called creeping takeover bids.

Small shareholders in Seven West Media and Ten Network Holdings are the two best examples of losers when control has passed without a full bid from the likes of Kerry Stokes, James Packer and Gina Rinehart. There are also substantial concerns that Gina Rinehart and James Packer aspire to do the same at Fairfax Media and Echo Entertainment Group respectively.

So precisely what sort of changes should be contemplated?

At the moment, investors are limited to owning 20% of an ASX-listed company without launching a full bid that treats everyone equally. However, a predator can creep up the register buying an additional 3% every six months, eventually getting to a controlling position after two or three years.

When Kerry Stokes first raided the share register of WA News in October 2006 after Family First's Steve Fielding delivered watered down media diversity laws, Seven paid the lucky exiting investors $343 million or $11 a share to secure a 14.9% stake. A full takeover bid at that price would have cost $2.3 billion for the equity, before considering the company's $400 million-plus debt at the time.

These days, shares in the debt-laden Seven West Media are wallowing at just $1.69, valuing the expanded equity base after the Channel Seven merger at $1.2 billion.

When share market raids are on, it is rare for retail investors to benefit. Listed fund manager Perpetual has become the best practitioner in the market at profitably delivering strategic stakes to predators. It happily sold its entire stake in Echo Entertainment Group to Malaysian predator Genting last month and also benefitted selling into Kerry Stokes' raid on Consolidated Media Holdings and the over-priced 2010 raids by RPM (Rinehart-Packer-Murdoch) on Ten Network Holdings.

Medcraft's intervention looks a little opportunistic. He's talking things up before a parliamentary committee after some big media stories and we've subsequently had a fairly shallow public debate.

Canberra's fragmenting ruling Coalition of Labor, Greens and independents have a little over a year left before control is likely to pass courtesy of a Tony Abbott takeover bid. Minorities are getting nervous, so here is a list of reforms the current controlling groups might want to consider:

  1. Retain the 20% takeover threshold but marginally reduce creeping to 5% every year, rather than 3% every six months.
  2. Mandate that all creeping must take place on-market so there are no repeats of the recent creep by the controlling Cash Converters shareholder through an off-market placement.
  3. Limit the ability to change control through under-writing capital raisings as recently occurred with Abacus Property Group.
  4. Limit the scope of buybacks and share placements to 10% of the total shares on issue per year.
  5. Mandate disclosure of institutional voting and extend disclosure of voting outcomes to include shareholders as well as shares, as currently occurs with schemes of arrangement.
  6. Extend the definition of related parties so that various directors, insiders or strategic shareholders are unable to vote on proposals which change control dynamics within a company.
Unlike the Americans, Australia has a strong record of equality in takeover bids and protection for minorities. When Rupert Murdoch shifted News Corp's domicile to the shareholder unfriendly US state of Delaware in 2004, it further legitimised his undemocratic dual class voting structure and also opened the door for poison pills to cement family control.

However, Australian investors, supported by key proxy advisers at the time, extracted commitments from the Murdoch family that they would never deal their shares without insisting on a follow-through offer on the same terms to all shareholders.

Any other strategic shareholder in a US-listed company can pocket a control premium for themselves without all shareholders benefitting. It's a “no rules” approach which punishes minorities.

Australian takeover targets have enjoyed many windfall gains down the years from predators deciding to pay inflated control premiums. But that is no reason to dramatically change or reform a system which has worked well, save for high profile recent example involving some colourful power players in the media sector.

Whilst the system should be tightened at the margins – especially with off-market share dealing – there is no need for an over-reach that excessively restricts the ability of investors to purchase property rights on the open market.

The Mayne Report Rich List

BRW magazine does a great job with its various Australian Rich Lists but we've broadened their efforts to track any Australian who has ever been worth more than $10 million. We've got more than 1500 names with those who've fallen back below $10 million now italicised. Below is just one new entry:

Alan Kohler: Crikey reported that he'll pocket about $8 million of News Corp's cash from the sale of his 28% stake in Business Spectator and The Eureka Report.

Crikey yarns since last edition

There have been plenty of Crikey stories since the last bumper email edition on April 4. Click on the links below to soak them up and enjoy the focus on the Murdochs and James Packer.

How to reform Australia's takeover laws
Crikey, Tuesday, July 10, 2012

Herald Sun unfairly maligns Victorian councillors
Crikey, Monday, July 9, 2012

Rupert, Packer, Woolies and the use of power
Crikey, Thursday, July 5, 2012

News Corp de-merger cements Rupert's control
Crikey, Friday, June 29, 2012

Are Bolt and McCrann writing Gina's lines?
Crikey, Thursday, June 28, 2012

News Corp break-up bad news for newspaper journalists
Crikey, Wednesday, June 27, 2012

GetUp borrows from Packer playbook with Woolies EGM
Crikey, Tuesday, June 26, 2012

As News and Fairfax vacate, councils should step in for local news
Crikey, Monday, June 25, 2012

Would Gina oppress minority Fairfax shareholders?
Crikey, Wednesday, June 20, 2012

Can the independent KGB survive in News Corp gulag?
Crikey, Tuesday, June 19, 2012

What deals did James Packer and Kerry Stokes cook up in Broome?
Crikey, Tuesday, June 12, 2012

James Packer's misleading campaign against John Story
Crikey, Wednesday, June 6, 2012

Mark Arbib the latest Minister to cash in quickly
Crikey, Monday, June 4, 2012

Is Kennett really independent of James Packer?
Crikey, Thursday, May 31

James Packer's audacious Kennett casino play
Crikey, Wednesday, May 30

New Fairfax director should force massive write-downs on his old firm
Crikey, Thursday, May 24, 2012

As Thomson teeters, Gillard could still embrace $1 poker machine bets
Crikey, Tuesday, May 22, 2012

If only Facebook was a Greek company
Crikey, Monday, May 21, 2012

Did Joe Hockey and Barry O'Farrell watch Packer puff piece on 60 Minutes?
Crikey, Monday, May 14, 2012

Swan's various rorts, fiddles and dodges to get a surplus
Crikey, Wednesday, May 9, 2012

Oz and The AFR in new round of the in pay-TV piracy wars
Crikey, Monday, May 7, 2012

ASX asleep at the wheel as Packer seeks Murdoch exit on Foxtel
Crikey, Friday, May 4, 2012

Rupert at the cross roads - jail time or a Packer pay-TV mop-up
Crikey, Thursday, May 3, 2012

How Robert Jay QC should play day two with Rupert
Crikey, Thursday, April 26, 2012

Gillard and Wilkie should put the band back together
Crikey, Tuesday, April 24, 2012

Time to improve disclosure of union, council and super fund pay
Crikey, Monday, April 16

Herald Sun's premature endorsement of Robert Doyle
Crikey, Friday, April 13

Sign up for campaign and governance Tweets

Click on the image above to join more than 11,000 followers on Twitter. We are regularly dropping out observations about journalism, politics, breaking stories, local government and shareholder activism and here are some of the more recent Tweets:

Sunday, June 10
That was a petty pre-emptive attack on Joan Kirner by Piers Akerman on Insiders this morning. It's been 20 years, Piers. Move on, son.

Saturday, June 9
Genting is getting some bad publicity around big money casino politics in New York. Will it bid for Echo? See:

Crony Capitalism in Australia: Kennett & Lloyd Williams on Packer's boat in Europe whilst Packer rolls Story & stays with Stokes in Broome.

Friday, June 8
Very disturbing to hear that the two executive directors of Echo voted to roll their independent chairman John Story. Only 5 NEDS in all.

Thursday, June 7
Yessss. We finally got comprehensive executive pay disclosure up at Manningham. Here's the Fairfax take:

Looking forward to hear Raphael Epstein on 774 ABC Melbourne explaining how Big Tobacco got hold of Foster's and is pouring cash everywhere.

Wednesday, June 6
Always love reading The AFR's Jemima Whyte on Network Ten - her dad Robert made a fortune from Turnbull-packaged buyout in 1992.

Crown director Harold Mitchell is great mates with Lord Mayor Rob Doyle. Will Doyle vote to double Crown's rates bill at June council meet?

Echo chair John Story should put out a press release laughing at all the money James Packer has lost at Ten with One-tel mate Lachy in charge

Having barely attended in 6 months, departing Manningham Labor Cr, Jessica Villareal, should decline this week's final $5000 pay cheque.

Bizarre that Network Ten has 4 billionaires with 43% who agree to support $200m entitlement offer, yet still pay Citigroup 2.35% fee. Why?

Blink and you'll miss it - that was a very fast AGM of the Melbourne Press Club. All done in 11 minutes. Like one big happy family.

Absolutely right that David "News Ltd man" Gallop be replaced as CEO by the NRL's new "independent commission". See:

Tuesday, June 5
Go Cr Shanahan! James Packer should absolutely pay a double rate on his pokies at Crown. Will Crs Oke and Kanis agree?

Monday, June 4
Really enjoyed giving Mark Arbib a solid spray on The Drum about his sleazy decision to join gambling billionaire James Packer's payroll.

Sunday, June 3
Dreadful effort by Alexander Downer on Bolt Report to heap praise on Rinehart while not disclosing his firm acted for her. Gina on Ten board too.

Here is audio from last Tuesday's hard won victory in getting senior exec pay disclosure in Manningham annual report: http://www.manningham.vic.gov.au/maccwr/_assets/main/lib90295/29%20may%202012%20council%20meeting%20audio%20-%20notices%20of%20motions%2014.1.mp3

Reckon the Greens will win the Melbourne by-election partly due to backlash against Labor sleaze, jobs for boys and pokies industry capture.

Friday, June 1
Have filed for Crikey on Mark Arbib's new job with James Packer. It includes a list of other inappropriately speedy post-Ministerial gigs.

Exhausted after giving longest speech ever - on feet for over 100mins at Pitcher Partners conference. Now off to extended school mates lunch

Thursday, May 31
Surely Herald Sun should give Jeff Kennett a holiday from his column whilst this Packer casino fight rages. Not right to be paying him now.

Is Kennett paid for his weekly spot with Neil Mitchell? Here is the audio of today's soft interview about Packer play:

Packer is so brazen in gloating about his "competent management of regulatory risk and relationships with relevant government authorities".

Is the Herald Sun massively underplaying Kennett's treacherous deal with a Sydney billionaire because Kennett is a well paid columnist?

Wednesday, May 30
How about that. AFR ran my Kennett-Packer-Echo spray as lead letter today. Got in early on a strike day. Not a word cut or changed.

Good to see Spectator running Crikey Packer Kennett piece. Would this happen if News Ltd owned it? Anyway, here it is:

Australia as a Russian-style oligarch-driven crony capitalism economy. Please retweet this Crikey piece to yr friends:

Have written millions of words for Crikey over 12 years. Today's piece on Packer-Kennett-Echo is an all time favourite:

Still recovering from last night's 5 and a half hour council meeting. Crs Reid, Macmillan & Downie are all threatening to resign. Good idea.

Tuesday, May 29
Cr Ivan Reid just gave a big speech about why he refuses to turn up to council briefings. This meeting can't finish soon enough.

Just finished session with Fran Bailey and John Thwaites at Communities in Control conference answering oursay generated questions.

Sunday, May 27
The ILGA has confirmed receipt of my 2500 word submission arguing James Packer's Crown Ltd should not be able to buy Echo.

Update from Darebin council

Darebin deputy mayor and former HSU official Diana Asmar has been in touch in recent days belatedly contesting some of the material from our February 20 edition. Whilst we don't believe there is merit in her demands for a payment, we've taken on board her representations and have now rejigged that edition so it reads as follows:

Interesting times at Darebin

Further to issues raised in our last missive, Darebin Mayor Steven Tsitas unleashed a furious attack on the press attending the council meeting on February 6. His response was directed at the Melbourne Times for daring to publish a story headlined Darebin Green Leads Move for Openness on January 31.

Neither the mayor or his main political supporter, Cr Diana Asmar, were clearly identified in the article as having supported the eight storey proposal (see p245 of these minutes) in Bent Street, Northcote, so one wonders why the attack on the press was necessary?

Meanwhile, debate continues about the voting patterns of the ALP Right councillors.

It is clear that the applicant for the 1 Bent street application was not just an ALP member but a long standing one in the same ALP Branch as deputy mayor Asmar, who did the right thing in declaring a conflict. In this same branch is the whole Kairouz family, including upper house member and Diana's uncle Nazih El Asmar. Also in the ALP High Street Branch you will find Martin Ferguson's electoral officer Heam El Asmar.

With memberships dating back to 1998, some critics assumed deputy mayor Asmar must know the Bent Street applicant, architect Chahid Kairouz, quite well, but we're categorically assured this is not the case.

Indeed, Cr Asmar explicitly did not declare a conflict due to any relationship with the developer, but instead because her uncle lived in nearby Elm Street. (again, see p245 of the minutes)

Critics argue that other applicants in Darebin have received different treatment from what happened at Bent Street. For instance, a developer applied to build on the old Windsor Smith site but had an 8 storey application rejected.

This application was next door to Martin Ferguson's electorate office and he was a vocal objector - making comments in the paper, hosting objectors meetings in his office and resourcing the objectors.

Indeed, this is what Mr Ferguson told the Preston Leader last July: “I hope this sends a message to councillors and officers if you want to maintain support for reasonable development you've got to give proper regard to the amenity of existing residents.”

Yet when an application is made for 8 storeys in Bent Street by associates of a well-known local Labor family, the federal member for Batman falls silent. So too is the ALP state member for Northcote, Fiona Richardson, who employs the wife of Mayor Tsitas as an electorate officer. Cr Asmar's husband, David Asmar, is a staffer for ALP Right faction heavyweight Steve Conroy.

By voting for the 8 storey application, the 'Bent Street 5' councillors, all of whom hail from the ALP Right, would need to approve similiar applications if they wish to to appear consistent.

The strongest argument they have is that officers recommended the Bent St proposal, even though there are references in the structure plan to indicative limits of 5 storeys and criticism from independent consultants retained by officers (see p250 on of the minutes).

As a councillor who has never voted against an officer recommendation on planning matters at Manningham, I'm quite sympathetic to the position of the "Bent Street 5". It is all too easy to wilt in the face of community pressure and leave the professional officers high and dry. With Melbourne's population growing by about 75,000 a year, we need to encourage development near activity centres and along main roads, which is what the Bent Street approval did.

However, as members of the ALP seeking party endorsement going into the next council elections, these incumbent councillors need to be very careful about perception issues. There needs to be consistency. It certainly won't help them electorally to be publically supporting intense development in Northcote in the lead up to council elections, although there were only 14 objectors to the Bent St application.

At least Cr Asmar is being consistent as she was recently the only councillor to support the officer recommendation to approve a permit for a development in Thornbury, where the applicant was also architect Chahid Kairouz, as with the Bent Street proposal. See the Northcote Leader's account of the Thornbury vote.

Mayor Tsitas or deputy mayor Asmar are welcome to submit a response for publication in our next edition.

Post Script: We didn't hear from either of them for four months, but in late June it has been brought to our attention that deputy mayor Asmar is an outstanding individual whose background is as follows:

Diana Asmar is a Councillor at the City of Darebin, in the state of Victoria. She is currently deputy mayor of that City and has been the Mayor of that City on three occasions. She has been recognised with numerous awards for her community service, and enjoys an outstanding reputation as an honest, respected and compassionate member of her community. Indeed the high regard in which she is held in the community is shown by her continuous election to the office of Councillor for fourteen years.

Further, she is an active and successful volunteer fundraiser for a number of charities, most notably charities associated with Multiple Sclerosis. This charitable work, along with that on the Council, has placed her in ongoing positions of trust and responsibility where her honesty and reliability as been of the utmost importance.

Professionally, she has held leadership positions in the union movement where her reputation for fair dealing and good character has been very significant.

News Ltd stable-mates Kohler and McCrann - and the ABC

Andrew Bolt and Terry McCrann are Australia's two loudest mainstream media climate change deniers. They also happen to be best mates.

I used to be close to both of them, especially McCrann during the three years working as business editor of the Herald Sun from 1994 until 1997. But that was a long time ago.

Relations aren't so flash these days. For instance, check out what McCrann wrote in his column on June 27 attacking new colleague Alan Kohler for apparently displaying "the unknowing self-absorption of the modern journalist".

Kohler wrote this perfectly sensible column in Business Spectator pointing out that Alcoa workers were copping a $42 million taxpayer funded bailout while there was no support for all those Fairfax and News journalists being given the boot, yet McCrann thought it was terrible because Kohler wasn't fretting about printers losing their jobs too. This is how he phrased the sledge:

But apparently in the Kohler view of things – and trust me, on this he ain't Robinson Crusoe – those unidentified 2300 are not only non-journalists but non-persons. Apart from filling in the big number, they simply don't exist. Anywhere in his piece. Indeed, he even repeated later: "the journalists are on their own.'' Only the journalists, Alan?

True, I have to concede that Kohler got the, ahem, perfect endorsement from serial twit
Stephen Mayne who tweeted the column was "excellent''.

While on the subject of Kohler, it is completely unacceptable for him to be the driver and the face of ABC-TV's business coverage. It's always been unacceptable, just increasingly more so in his peregrinations from Fairfax columnist to Spectator proprietor and columnist, to now part of News Ltd.

We're hearing that both Bolt and McCrann are not exactly flavour of the month with Kim Williams, and this petty attempt by McCrann to get Kohler booted off the ABC won't improve things because that hefty AIBM sales price assumes the continuation of all that free publicity from Aunty.

For mine, Kohler should continue doing the 7pm bulletin, but move on from Inside Business where many subjective editorial decisions have to be made. However, those graphs seen by close to 1 million people a night should not include a gratuitous plug for his twitter account, @alankohler, which links straight back to his payment gateway for Eureka, rather than the ABC website.

Kohler was clearly unimpressed with the McCrann column.

I tweeted the following on June 27: "About to write a letter to Kim Williams offering to replace Terry McCrann for 25% of his bloated salary. Better content, lower cost."

And Kohler immediately replied with a tweet: "I'd be a buyer Stephen"

Maybe Alan could lobby new Herald Sun editor Damon Johnston as I texted the following offer to him on Friday: "Congratulations comrade. If you need some cost savings, would be happy to do McCrann's job for 25% of what he's on. Good luck. Stephen Mayne."

Alas, there was no bite.

That's all for now.

Do ya best, Stephen Mayne

* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.