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Hedge Clippings | Friday, 03 June 2022
Once an election is done and dusted - or in this case lost and won - it's usual for the incoming government to switch from promising how well - or much better - they'll be at managing the economy, to suddenly trying to dampen voters' expectations. So it was this week, as the incoming treasurer, Dr. Jim Chalmers, warned of inflation "almost out of control" and "skyrocketing", at the same time as GDP growth came in ahead of forecasts, and a trade surplus of $10.5 billion, more than $1 billion ahead of consensus expectations. It's no wonder then to discover that Treasurer Chalmers' Ph.D. was not awarded in economics, but in political science, writing his doctoral thesis on none other than Paul Keating, the great political brawler. Blaming the previous mob for the problems facing the incoming government is as old as the hills - just ask Tony Abbott, who reminded us of the perils of the Rudd/Gillard/Rudd years for as long as he could until even his own party grew tired of it and gave him the heave-ho. For an incoming Treasurer, and a Dr. of Political Science to boot, it was pretty inevitable, but we're not sure it fooled too many, other than his own diehard supporters. Generally we haven't noticed too much of such political point scoring to date, with PM Albanese a refreshing change from "Bulldozer" Scomo. However, new energy minister Chris Bowen, last time around a hopeful treasurer himself until he and Bill Shorten shot themselves in their collective feet, couldn't help himself when talking about the unfolding gas crisis, which we understood in the immediate term might have more to do with the problems in Ukraine. Which leads us away from politics to finance and ESG investing, or at least consideration of ESG in funds management. This trend has been building for some time, and AGL's well publicised issues at the hands of Mike Cannon-Brookes, supported by big super, is - if you'll excuse the analogy - the canary in the coal mine. With climate and the environment front and centre (perhaps not all the way to the right) both nationally and globally, ESG credentials and investing will be one of the dominant fund management themes of the future. Rightfully, the incoming government has a clear mandate (particularly if you add in the Green and Teal vote) to act on energy/climate change and the environment. The challenge will be the speed and cost - in all its forms - of the transition away from fossil fuels, particularly coal. Meanwhile, there's been little to nothing heard about a push to nuclear energy as a reliable source of base load power. It's unlikely to happen under a Labour government, particularly one with the presence of the Greens in the Senate, but support for at least the investigation of Small Scale Nuclear should be on the table. If the Labour party can support nuclear powered submarines, and their small scale nuclear powered propellers, surely there's a precedent? News & Insights New Funds on FundMonitors.com Market Insights & Fund Performance | L1 Capital 10k Words | Equitable Investors Natural gas and midstream assets | 4D Infrastructure |
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April 2022 Performance News Bennelong Australian Equities Fund May 2022 Performance News |
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