Rudd v Gillard, council referendum, iselect tanks, Packer-Echo, Shorten flaws, Rich List, back in the ASA saddle, Macquarie, Batman, Newcrest and then some

June 24, 2013

Dear Mayne Report readers,

Greetings for the first time since our last email edition on May 19. If you'd rather not receive occasional email missives from this independent governance journal, click here to unsubscribe.

First up today, City of Melbourne continues to go well and we've got the biggest meeting of the year tomorrow night when the 2012-13 budget and the 4 year council plan will both be approved. Check out the agenda here. Why not come along and watch from 5.30pm. The most interesting debate will be over Cr Cathy Oke's motion that we use Melbourne's sister city relationship with St Petersburg to take a stand on increasingly homophobic laws being rolled out across Russia.

As for the kerfuffle over the new bike lane on Princes Bridge, please, Jon Faine et al, give the trial a chance.

Rudd vs Gillard and the dark side of Bill Shorten

The biggest problem faced by the Federal Labor Party is that they haven't served up a quality Federal leader since Paul Keating was defeated. Great leaders are hard to find and it is certainly not clear that Tony Abbott will cut the mustard. Competent and successful east coast premiers such as Bob Carr, Steve Bracks, John Brumby and Peter Beattie would probably all have performed better as Prime Minister than Kim Beazley, Simon Crean, Mark Latham, Kevin Rudd and Julia Gillard, although the top job is obviously harder than being a state leader.

The unfortunate reality facing Federal Labor is that revenge is a huge motivator in politics, especially if it includes a breach of personal trust. The ruthlessly unfair sacking of Kevin Rudd followed by his three year campaign of revenge has created a set of circumstances which has crippled the government and permanently tarnished all those who were involved.

This is why both Kevin Rudd and Julia Gillard will need to leave the Parliament before Labor will be trusted to form a viable government again.

Rudd was a bit of a control freak as Prime Minister, but he was delivered the job by Julia Gillard and she happily went along with the concentrated power of the so-called "gang of four" Kitchen Cabinet.

In my view, Julia Gillard should resign for the good of the party to let Kevin Rudd chase the 20% chance of being re-elected on a platform of cleaning up the sleaze of Labor's factional system and its gerrymandered relationship with the union movement.

Peter Beattie showed how to do it in 2001 when the public gave him a huge mandate to clean up Labor corruption after the Shepherdson Inquiry. Check out Graham Young's explanation at the time.

Imagine if Rudd and Abbott were competing in terms of who went in harder against Peter Slipper, Craig Thompson, Eddie Obeid, Ian McDonald, the HSU, the AWU and the colourful associations of the CFMEU.

Rudd would do the labour movement a huge favour if he received a mandate to do nothing more than democratise the ALP by embracing one vote one value in preselections and for party positions, along with a very firm regime to stamp out branch stacking and vet the spivs and cockroaches who prosper in the current environment, such as Bill Shorten's great mate Andrew Landeryou, publisher of Vexnews.

For mine, Shorten is completely inappropriate and unelectable as Labor leader until he publically denounces the sleaze, defamation, concoctions, standover tactics and skulduggery that Landeryou deploys with Shorten's support.

For instance, after I opposed Shorten's push to have Landeryou's wife, Kimberley Kitching, installed into the safe Federal Labor seat of Gellibrand, Landeryou produced a completely concocted report claiming serial rorting of free lunches at the City of Melbourne. Truth be known, I've had just one lunch in the office over the first 8 months of this term.

And unlike former City of Melbourne councillor Kimberley Kitching, who racked up $6600 in unpaid parking fines during her time on council, this councillor has promptly paid 7 parking fines over the past 8 months without complaint. How on earth respectable ALP people can even tolerate Shorten pushing former bankrupt Kitching as a potential successor to David Feeney in the Senate is just staggering.

More will be revealed on all of this when Phil Coorey launches Aaron Patrick's forensic book on the ALP's ethical failings on Friday night in Sydney. No wonder the untrustworthy Shorten is desperately trying to secure the top job for himself on Thursday. The lad's closet is bulging courtesy of his long-term role as the unethical faceless man behind Vexnews.

The fact that Landeryou's crew now has control of the "reformed HSU" in Victoria says it all about what is wrong with the ALP. Bring on the Rudd reforms and the launch of Downfall: How the Labor Party Ripped Itself Apart, which, strangely enough for a book written by a Fairfax journalist, is being published by Rupert's book division, Harper Collins.

Earliest preparation in history for main AGM season

We're still in the process of resolving the Australian Shareholders' Association's staffing and resourcing of research, so the consultancy to act as "Policy and Engagement Coordinator" has been extended behind its original end date of May 31. One useful project completed in June involved producing a listing for the July edition of our ASA's monthly magazine, Equity, of nearly 200 companies we anticipate monitoring in 2013, along with the names of ASA monitors, the number of retail investors and AGM details where they are available.

In 2013, ASA is preparing well in advance for the complicated logistical operation of the main season in October and November. We've scoured websites and directly emailed dozens of companies in order to produce a comprehensive listing of the dates of upcoming AGMs, along with the cities they are being held in. Check out the online version of Equity, which was released today. The print version is being distributed to members later this week.

For instance, we know the Newcrest AGM will be in Melbourne on October 24 and that ASA will be taking a strong stand after up to $6 billion in write-offs, as can be gauged from this recent Bloomberg story.

Join ASA today to beat the price rise and score a tax break for 2012-13

ASA membership fees will be rising modestly next week, so why not go here and join today, scoring yourself a 2012-13 tax deduction along the way.

ASA conducted a highly successful national conference in Sydney last month and we've just completed an office move from Chatswood to Pitt St in the heart of Sydney's CBD. We're also in the midst of a crucial redevelopment of our entire IT and website management which should be completed by the end of year and will significantly improve our capacity to execute the mandate of "standing up for shareholders".

We receive more than $5 billion worth of proxies from retail investors each year, enliven AGMs across the country and engage extensively with major companies on governance, performance and remuneration issues.

Despite Australia having a uniquely paternalistic system of compulsory superannuation which leaves every worker exposed to the share market, we receive no government funding but are in the process of making a pitch for this to change.

Whilst the Australian Institute of Company Directors generates annual revenues of about $25 million, has close to 200 staff and even received project-specific government funding last year, we hold them to account with 4 staff and a volunteer army of company monitors.

All this is funded by member subscriptions and given the fact that every retail investors benefits from our work, it really is worth pitching in with a small annual contribution.

Macquarie leads the interstate AGMs in 2013

The Macquarie Group AGM will be in Melbourne on July 25 in what will be the first major "interstate" AGM for ASA to handle this year.

For this reason, I'm monitoring the Millionaire Factory for ASA in 2013, so chairman Kevin McCann is coming along to the Melbourne Town Hall tomorrow with some colleagues, including remuneration committee chair Helen Nugent, for the traditional pre-AGM consultation.

Few people realise the depth and breadth of ASA's engagement with representatives of more than 150 listed companies each year. The system gets more complicated when a company moves its AGM interstate. Our early research on AGM dates for 2013 has identified the following interstate AGMs later this year:

Macquarie Group: Sydney-based with Melbourne AGM on July 25
Telstra: Melbourne-based with Sydney AGM on October 15.
Qantas: Sydney-based with Brisbane AGM on October 18.
Commonwealth Bank: Sydney-based with Adelaide AGM on November 8.
Mirvac: Sydney-based with Melbourne AGM on November 15.
Westpac: Sydney-based with Melbourne AGM on December 15.
ANZ: Melbourne-based with Brisbane AGM on December 18.

Should councils launch an advertising boycott on News Ltd?

Below is the story Crikey carried last week on the upcoming referendum to secure direct Federal funding for local communities, a practice which is already widespread. After yet another News Ltd opinion piece today slamming the proposal, some of us are pushing ahead with a campaign to encourage councils to threaten the poorly governed media company with an advertising boycott. I was the Manningham councillor who successfully advocated that we double our ad spent on Rupert's Manningham Leader in 2010, but if the company's dominant newspaper interests are going to run unfounded attacks on councils, then the sector should step up and hit them where it hurts with an advertising boycott:

Crikey: Inside the ALGA National General Assembly

By Stephen Mayne

Wednesday, June 19, 2013

The biggest national local government event in recent history wrapped up in Canberra today as more than 1000 delegates at the 2013 Australian Local Government Association national general assembly headed back to their respective shires and councils. But the argy bargy continues.

The event started on Sunday night when about 200 mayors and lord mayors had dinner with Prime Minister Julia Gillard, Local Government Minister Anthony Albanese and several other cabinet ministers in Parliament's Great Hall. The highlight was Barnaby Joyce and Albo hugging on stage, signalling the much-needed bipartisan support that is needed to succeed in a referendum campaign.

The leaders of the main political parties traditionally address the general assembly, and it was at this event two years ago that Opposition Leader Tony Abbott made his solid pledge to back constitutional recognition for local government provided it was a minimalist and practical change that secured future federal funding without undermining a state's ability to create and sack councils.

After then-minister Simon Crean procrastinated for two years, that is precisely what Albanese did when he reclaimed the local government portfolio in March this year and proposed adding just 17 words to the constitution.

Some state governments were always going to oppose such a move to protect their turf so that the federal government could not directly fund councils without so-called double handling by state bureaucrats. The Victorians have led the charge on this, culminating in an extraordinary beat-up in the Herald Sun on Monday, where the page one splash screamed "SACK PROOF" with a double-page spread plus an editorial urging a vote against.

The anti-government Institute of Public Affairs dancing bears plus a couple of washed up city-based Liberals, Peter Reith and Nick Minchin, have been leading the hysterical against campaign and are clearly looking to get on the government teat for funding.

However, their campaign was completely ineffective because the House of Representatives voted 133-2 in favour of the minimalist amendment. Dennis Jensen and Alex Hawke do not constitute a parliamentary groundswell.

While Albanese told the conference he had worked extremely hard with Abbott and Joyce to secure bipartisan support, his efforts with the states and the Senate have been less deft. In denouncing the Herald Sun hysteria on Monday, he professed to not even knowing the name of Victoria's local government minister, former Shepparton mayor Jeanette Powell.

Joyce, Powell's National Party colleague and federal local government spokesman, turned up at 4.30pm yesterday to deliver delegates a rocket, complaining councillors had failed to counter state government lobbying of Coalition senators. Joyce professed to have burned up political capital during ongoing screaming matches with colleagues and then bluntly declared: "If it wasn't for me, the Coalition would be opposing the referendum."

The funding question is interesting. The Ku Klux Klan won't be given equal funding to oppose the referendum on indigenous recognition, which has bipartisan support to be put during the next Parliament. However, Albanese erred in announcing just $500,000 in funding for the "no" case before the Senate had voted. This disrespect for the Senate will trigger more floor-crossings and no-shows by Coalition senators later today.

The ALGA has appointed veteran advertising guru Digby Nancarrow as campaign director. After signing the contract on Monday he was singularly impressive during two hours of presentations and panels yesterday afternoon.

Having worked on the successful Republican No campaign in 1999, Nancarrow understands what works. And with $20 million to play with, plus 564 councils from across Australian on board, this should be a reasonably straightforward exercise.

Albanese honed in on the winning line of the campaign when he returned to the ALGA general assembly this morning to announce another $150 million worth of federal grants for council infrastructure projects across Australia. Over the coming 86 days, voters will be reminded of the thousands of pools, libraries, parks, roads and sporting fields that are owned by councils but paid for with direct federal grants.

With the High Court moving determinedly towards declaring unconstitutional the beloved "Roads to Recovery" program approved by then-ministers Reith and Minchin and announced by John Howard in March 2001, it is hard to see voters opposing the amendment and consciously shutting down direct access to Canberra cash. Surely nobody wants even higher council rates.

Iselect float tanks, further secures Melbourne's place in online markets

Whilst the major media companies such as Ten, Nine, Seven, News Ltd, APN and Fairfax are all head-quartered in Sydney, Melbourne has done very well with the emerging internet plays and online markets.

Seek, REA Group and are now collectively capitalised at more than $8 billion and all are based in Melbourne.

Webjet is another emerging Melbourne-based internet play that has performed well to now be capitalised at $350 million.

And today it was the turn of comparison website iselect which commenced trading at noon. With 260 million shares on issue after a partial float priced at $1.85, the company was capitalised at $421 million when its shares settled at $1.62 in early trading. The range in the first half an hour was $1.55 to $1.78 so the investors who paid $1.85 for 62.35 million existing shares and 54.05 million new shares have had a pretty ordinary day. See more from the ASX circular about iselect and here's the Top 20 shareholder list if you want to work out who's dropped cash today.

Why Packer should have moved conventionally on Echo

Incumbency is a powerful thing, especially when it comes to monopoly casino licences in major international cities.

Having tried and failed for 20 years to secure a casino presence in his home town of Sydney, James Packer erred in not making a full takeover bid for Echo Entertainment after it entered the lucrative high-roller market in competition with Crown, Burswood and Macau.

Instead, Packer crept onto the Echo share register, hinted at an unfair Sydney joint venture to neutralise the competitive threat and then launched a media-driven campaign of denigration which resulted in the departure of independent Echo chairman John Story.

After lining up all the political and media ducks in a row, Packer forgot that Echo's directors have an obligation to maximise value for all shareholders and they have fought back strongly with attractive proposals for the government to consider.

The NSW government also has an obligation to maximise returns to taxpayers and with Echo waving its cheque book around, it will be very difficult for Packer and Barry O'Farrell to make the numbers stack up in way that shafts Echo and maximises returns for their own constituents.

Incidentally, it is still not a good look that former Commonwealth Bank CEO David Murray accepted the gig as independent umpire when he was a guest at James Packer's 1999 wedding to Jodie Meares.

The Mayne Report Rich List and Clive Palmer

BRW magazine historically did a great job with its various Australian Rich Lists but the recent 2013 edition generated the smallest amount of publicity I can remember.

We've broadened BRW's efforts to track any Australian who has ever been worth more than $10 million and we've got more than 1500 names with those who've fallen back below $10 million italicised.

Now that Nathan Tinkler has fallen off the BRW Rich list, the next question surrounds Clive Palmer, who is copping a sustained campaign from News Ltd after he went from being the Coalition's biggest donor to a political opponent. It's an enjoyable stoush to observe with both sides having a long history of bullying, litigation and sensationalism.

Big Clive is burning millions on various ill-disciplined indulgences, so he'd want to make sure he successfully sues the China government over iron-ore royalties because there's not too much else to prop him up without that.

With China refusing to write any more cheques after huge cost blowouts and delays in WA, there is a big cloud hanging over BRW's claimed $2.2 billion valuation for Clive, just as the $915 million valuation of Nathan Tinkler just 12 months ago was ridiculously overblown.

Crikey yarns so far in 2013

How Citi and the cabal of billionaires shafted Network Ten shareholders
Crikey, Thursday, January 18, 2013

Time is right to bring Rio Tinto HQ Down Under
Crikey, Wednesday, January 23, 2013

Another year of media failure on campaign finance
Crikey, Monday, February 4, 2013

Mayne: Lachlan Murdoch firing bullets in all directions
Crikey, Monday, February 25, 2013

Gina Rinehart gets behind campaign to bring Rio Tinto to Australia
Crikey, Monday, April 8, 2013

News Ltd bites the hand that feeds on local government recognition
Crikey, Monday, April 29, 2013

Are the Lowys worth their $300m in salaries?
Crikey, Thursday, May 23, 2013

How Murdochs, Packers and Lowys play power and control
Crikey, Monday, May 27, 2013

How to reform pay rates for Lowy labour at Westfield
Crikey, Thursday, May 30, 2013

Feeney battling several fronts in Batman
Crikey, Monday, June 3, 2013

Holy factions Batman: preselection battle hots up
Crikey, Friday, June 7, 2013

Barnaby and Albo hug hides referendum divisions
Crikey, Wednesday, June 19, 2013

Strange trading in News Corp demerger
Crikey, Friday, June 21, 2013

Sign up on Twitter for campaign and governance Tweets

Click on the image above to join more than 16,000 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:

June 22
Dear , your relationship with councils is fraught at the best of times, so why kick sand in our faces over the referendum too?

June 21
Bunnings did a great job with neighbour and objector consultation on its giant Doncaster Hill development. Tiny complaints when approved.

June 19
Surprised and disappointed by Faine's early attacks on Princes Bridge bike lane. Then again, he's conflicted by high car radio market share.

June 18
Great commentary by Robert Doyle in Herald Sun today comparing city of Melbourne's 80k spend on referendum with state's $43m fire slug.

June 17
Erica Betz has taken time out from his campaign to steal Defence portfolio off David Johnston to choke off council funding on referendum.

"If I wasn't there, the Coalition wouldn't be supporting the referendum," Barnaby Joyce tells 700 delegates at ALGA in Canberra.

Republic referendum was 69 changes to 69 sections. Council referendum inserts a mere 17 words to preserve existing practice of fed funding.

From the member edition archive

The Mayne Report goes to more than 16,000 people but if you're a relatively new reader, here are links to some of the more interesting email editions sent out over the past five years.


Backing Rudd, Lachlan Murdoch, Bob Brown media debate, Manningham governance, Gunns, Darebin, Lend Lease and St Kilda AGM appearance
Monday, February 20, 2012

The OZ goes mad, Murdoch piracy, AFR, pokies double rate, Gina unfit for Ten, council super blowout, BoQ rip-off, power speech and AGM mini-season
Wednesday, April 4, 2012


Murdoch special, media inquiry, pokies, Manningham win, Zara, secretive Shortenite councillors and a Vodafone take-down
Thursday, September 15, 2011

Elected to ASA board, pokies, Rio, Santos, RHG, Hartigan, Manningham, capital raisings and Rich List
Thursday, May 19, 2011


Election wash-up, Mayne Report strategic review, Manningham, Ten, Gina, Falloon for Fairfax, Orica AGM, ABC year-ender, Cornwall, Rich List and then some
Friday, December 17, 2010

Woolies anti-pokies campaign speech, Manningham mayor boxes on, campaigning for women, Bob Brown, pokies forum, HTVs, Rich List and then some
Thursday, November 18, 2010

Paperlinx, Packer, Murdoch, Manningham, pokies, Rich ex wives, foreign takeovers and much more
Saturday, October 23, 2010

DJs, legislate women on boards, ex Lib goes no pokies, preferences, Pratt-Shorten, Labor's debt, AG's report, Manningham council audio and then some
August 3, 2010

Director rankings, Rio, Westfield, New Matilda, MAP, Manningham, Paatsch, state election, Darebin, Moreland, rich list, pokies and much more
June 9, 2010

Political donations, Stokes, Westfield tower, Richard Colless, Manningham nursing home, state debt, Rich List, Grand Prix and more
February 23, 2010


Woolies, Higgins, Manningham, upcoming elections, Fairfax, Centro, Rich List, Rams, Fitzie and much more
December 6, 2009

Seven AGM, crazy Perth visit, Fairfax, Telstra, Transfield, capital raisings and much more
November 9, 2009

News Corp AGM, Packer, Fairfax, James Strong, Woolies, Eastern Golf, Kohler-Gatto and much more
October 20, 2009

Bad Bendigo, Mark Day, Manningham, pokies, NAB, Asciano, Rich List, Paladin, hostile EGMs and much more
September 15, 2009

Macquarie AGM, Melbourne's decline, Asciano EGM, capital raisings, Goyder's pokies, speeches, fire, AGM diary and much more
July 28, 2009


Collingwood AGM, Rizzo survives, ANZ shareholders MIA and Qantas delusions
December 19, 2008

ABC Learning, CBA's Centro brutality, sworn in, pokies, PacBrands and SPP plays
December 10, 2008

After 37 straight defeats, the drought is broken
December 1, 2008

71% backing at Centro, $11bn backing at BHP and huge Qantas protest
November 28, 2008

BHP backflip after $7bn backed our tilt
November 26, 2008

Combank's $700m ABC Learning debacle
November 13, 2008


Fortescue Metals AGM: time for Twiggy and FMG to grow up
Sunday, November 8, 2007, 10.30pm

How $5bn worth of votes backed us against Rupert's dodgy gerrymander
Saturday, 20 October, 2007, 7.20am

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.