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17 Mar 2023 - Hedge Clippings | 17 March 2023



Hedge Clippings | 17 March 2023

With friends like Keating, Albo doesn't need enemies!

This week saw former PM Paul Keating, the Labor Party's elder statesman, and in his day chief head-kicker of the Liberal Party, give an almighty serve to PM Anthony Albanese, his deputy and Minister for Defence, Richard Marles, and Foreign Minister Penny Wong. This was vintage Keating, except it seems he's become a grumpy old man. Once upon a time he mixed sarcasm and humour to make his point. This time it was pure bile, and all the more extraordinary as it was aimed at his own troops. With friends like that, who needs enemies?

In our view it was also hypocritical of Keating to say of Penny Wong: "Running around the Pacific Islands with a lei around your neck handing out money, which is what Penny does, is not foreign policy. It's a consular task." For the record, below is a photo of the then PM wearing what looks like a cross between - we're not even sure how to describe it - and wearing a lei around his neck, back in the day when he thought he was the Messiah. An opinion of himself he obviously still holds.

Both the photo above and Wednesday's verbal spew were of course theatrics, but what's apparent is that Xi Jinping's hand is seriously manipulating somewhere up the back of the Keating puppet. He seems to think China is blameless, faultless, and just a benign and growing power in the Pacific, and around the globe. Forget human rights abuses, forget the facts, forget playing the ball - play the man, or in this case the woman. And when Keating was asked a question he didn't want to answer - by a young (female) journalist - he used the old get-out-of-jail put down response: "the question is so dumb, it's hardly worth an answer." And to another journalist's question on human rights and the treatment of Uyghur minorities in Xinjiang, he said it was open to debate, and deflected the question by referring to India's treatment of Muslims. Here's what Amnesty International say about China's approach to Ethnic Autonomous Regions:

"The (Chinese) government took extreme measures to prevent free communications, independent investigations, and accurate reporting from the Xinjiang Uyghur Autonomous Region (Xinjiang) and Tibet Autonomous Region (Tibet). The government continued to implement far-reaching policies that severely restricted the freedoms of Muslims in Xinjiang. These policies violated multiple human rights, including the rights to liberty and security of person; privacy; freedom of movement, opinion, and expression, thought, conscience, religion, and belief; participation in cultural life; and to equality and non-discrimination."

Keating's approach is, and always has been, to tip a bucket on anyone with the temerity to challenge his bigoted view of whatever subject he chooses to be an expert on. And there aren't many he doesn't! He obviously loves China, and equally hates America.

As for the cost of the submarines under the AUKUS deal, it is budgeted at A$368 bn. in total through to the mid 2050's. China's announced defense budget this year alone is US$224.8bn. (A$321bn.) up 7.2% in 2022, although the Center for Strategic and International Sudies (CSIS) reports the actual figure maybe 1.1 to 2 times higher than the official budget. According to this search of Google, China has 79 submarines, 12 of which are nuclear powered and armed. China's defense spending in 2021 was higher than the next 13 Indo-Pacific countries combined. No doubt Keating will pooh pooh those figures as well.

One can argue the cost and the strategic and military wisdom of the AUKUS deal, but while Keating's kow-towing to China might win Xi's praise, it won't win his respect. And while there's some months to go yet, it's our guess he's off Albo's Christmas card list this year!

Moving right along...

Good to see Ken Henry re-enter the fray, arguing for a complete re-think of Australia's over complex and outdated tax structure. However, as we argued in last week's Hedge Clippings, finding politicians of any persuasion to grapple with the issue won't be easy. But maybe if there's bi-partisan support for AUKUS submarines, there's a chance?

Contagion in the banking system has been front and centre of the financial pages since SVB ran out of cash last week, thanks to rumours that spread virally via social media and Silicon Valley's IT savvy elite, with the problem spreading to First Republic Bank. At this stage, it seems that the contagion, while real, will be contained by all banks standing shoulder to shoulder, but it's a clear reminder that when faced with the potential for loss of capital, bank depositors large and small will act first, and ask questions later.

And finally, Happy St Patrick's Day to the (reported) 70 million people of Irish heritage who live outside Ireland, and to the 7 million who still inhabit the Emerald Isle. Ireland plays England in the six nations rugby in Dublin tomorrow, and based on form should win hands down, as long as the Irish team didn't overdo their St Patrick's day celebrations beforehand.

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