Thursday, April 29, 2010
Still no problem with Australian banks
ANZ first-half profit soars. I have quite a lot of ANZ stock so this is very pleasing -- JR
ANZ posted a 36 per cent rise in first-half profit today, boosted by lower charges for bad loans and higher profit margins amid improving economic conditions in its home market.
With a war chest of over $4 billion, Australia's third-largest bank by market value also said it was considering whether to bid for Lone Star Fund's controlling stake in Korea Exchange Bank.
The stake would give ANZ a significant foothold in South Korea as part of its ambitions to become a "super-regional" bank in Asia.
The Melbourne-based lender said net profit for the six months ended March 31 rose to $1.93 billion from $1.42bn a year ago and the group declared an interim dividend of 52 cents a share, up from 46c last year.
The group's net interest income rose 8 per cent to $5.19bn while its net interest margin widened to 2.43 per cent from 2.22 per cent last year.
Chief executive Mike Smith said: "The backdrop to our improving business performance is a considerably better outlook for provisions, which reflects the strength of the economic recovery, particularly in Australia and Asia."
Australia's banks held up well during the global financial crisis, with provisions for problem loans among the only major blemishes during the downturn. Executives at the major banks have said they believe that provisions have passed their peak.
ANZ's provisions for problem loans came in at $1.08bn for the first half, down 23 per cent.
The group's cash profit -- a smoothed measure closely watched by investors -- was $2.38bn, up from $954 million last year and ahead of the average forecast of $2.29bn of six analysts polled by Dow Jones Newswires.
Its underlying profit, which strips out other items including credit intermediation trades and other one off items, rose 20 per cent on year to $2.3bn....
There was a threat that the Greek debt crisis would impact on credit spreads globally, Nr Smith said. "I think the contagion issue is now very real", he told reporters.
Still, the problems in Greece were unlikely to affect underlying economic growth globally and were not going to be very significant for Australia, with Asia still projected to grow solidly, Mr Smith said.
Kevin Rudd's Department of Hot Air costing taxpayers $90m
TAXPAYERS will fork out $90 million a year to keep more than 400 public servants employed within the Federal Climate Change Department - despite most of them now having nothing to do until 2013.
More than 60 of them are classified as senior executive staff on salaries between $168,000 and $298,000 a year. Their salary bill alone will cost an estimated $12 million every year.
A further $8 million will also be paid in rent for plush offices at Canberra's Constitution Place until 2012, where it is believed 500 new computers will be delivered this week.
It can be revealed that despite Prime Minister Kevin Rudd's decision on Tuesday to suspend the failed Carbon Pollution Reduction Scheme until at least 2013, the department has ruled out plans to cut back staff.
A formal response by department secretary Martin Parkinson to a Senate estimates hearing on Tuesday - the same day as the scheme's suspension - claimed the department would not offer redundancies.
The formal response, obtained by The Daily Telegraph, said there were no plans for "the immediate future" of any scaling back of staff, despite the agency losing its core function.
According to official figures, the number of top-paid bureaucrats being paid up to $298,000 a year has almost doubled since January this year from 39 to 61. That was to gear up for establishment of the Australian Climate Change Regulatory Authority, which will also now have no function.
Overall agency staff has also been ramped up since last year with total climate change employees having risen from an initial 246 to 408.
Of the 61 senior agency officials, only nine have been inherited from the scrapped home insulation scheme. The majority, 38, were employed on the CPRS and a further 19 were employed on the renewable energy scheme which has also been axed.
But none of the 408 staff within the department will be shed even though the department's key function, the CPRS, has been axed.
Its own tender documents reveal a lease contract of $16 million for its offices which expires in 2012.
"The hundreds of public servants who have been beavering away on this policy, the 114 public servants who they took to Copenhagen for that matter in support of this policy . . . none of that's changed," Opposition Leader Tony Abbott said yesterday.
"Which is why I think that Mr Rudd for political reasons doesn't want to talk about his great big new tax on everything but as sure as night follows day, if he gets re-elected, we'll be stuck with it."
Greatest moral challenge turns out to be Rudd's dearest folly
Despite all the denials, we now see in black and white how the defunct - or in Kevin Rudd's language "extended" - emissions trading scheme already has an impact on electricity prices.
No sooner had the Prime Minister announced he was scrapping - sorry, "extending" - the scheme, all the energy companies came out to say the extra cost factored in for a scheme that hadn't even passed the Senate was, miraculously, no longer necessary. So now they'll only increase our already inflated bills by 36 per cent instead of 60 per cent, in EnergyAustralia's case.
There you have it - a glimpse at the tip of the iceberg that was Rudd's dearest folly, that had him prancing around the world stage and which he pitched as the defining achievement of his first term.
Rudd's mission to rush out in front of the rest of the world with an ETS because climate change was "the greatest moral challenge of our time" has finally been exposed as flimflam. "It's very plain that the correct course is to extend the implementation date and to assess the action by other states at the end of 2012" was Rudd's way of announcing his backflip this week.
It vindicates the Opposition Leader, Tony Abbott, and his backer, Senator Nick Minchin, in their refusal last year to be coerced by their former leader Malcolm Turnbull into supporting the ETS.
In hindsight, it is even more extraordinary Turnbull was so obstinate. From the moment he rolled his hapless predecessor Brendan Nelson for articulating the exact wait-and-see position Rudd has now adopted, Turnbull and his supporters claimed the Coalition had no choice but to back Rudd.
They were supposedly terrified of handing Rudd a trigger for a double dissolution election on climate change. But even before Climategate, before the flop at Copenhagen, it was obvious that wasn't the case. As I wrote last August, Turnbull should have called Rudd's bluff, and embraced an election on a new energy tax.
Well, sure enough, Rudd blinked. He never wanted to go to voters with a new tax. He wanted to walk to the polls hand in hand with Turnbull, as a great statesman with his patsy, having pulled a fast one on an electorate soon to be burdened with the costs.
Yet one of the ABC's political sages, Alison Carabine, was claiming yesterday Turnbull was the only politician to emerge from the ETS with any "credibility". Hello?
Now all the ETS boosters in the business community, the rent-seekers whom Danish statistician Bjorn Lomborg has dubbed the "climate-industrial complex", who stood to profit the most from carbon regulations, are right behind Rudd's backflip. It's business as usual, with a reported $2.5 billion saved to the economy.
Rudd is clearing the decks of anything smelly before the election, in that curiously Zen way he has of ignoring the fallout.
He is banking on the electorate forgetting his astonishing catalogue of flops and fiascos, from home insulation, school halls and his mishandling of the asylum seeker issue that has led to an influx of boats, to GroceryWatch, Fuel Watch, the 2020 Summit, Aboriginal housing, solar rebates, green loans and so on.
Even his much-promised Mandarin-speaking new relationship with China, our biggest trading partner, is a flop, with China's People's Daily last September stating "relations between China and Australia have now hit their lowest point in a decade, since John Howard met the Dalai Lama".
Rudd hopes the electorate will remember only the images of him visiting hospital after hospital, plonking his bottom on the bed of another astonished sick person.
There are very real human costs for all his posturing policy wonkery. The ABC's Four Corners reminded us on Monday night of another of Rudd's green-tinged follies, the catastrophic home insulation scheme, which resulted in the deaths of four young insulators. That's not to mention the $2.5 billion spent - almost half of it on fixing the bungles. That's half of the $5 billion he's thrown at the states to get them to agree to his hospitals funding rejig.
Even when he sat down next to the father of Matthew Fuller, the 26-year-old insulation installer who was the first to die under the scheme, Rudd could not bring himself to apologise.
As Kevin Fuller, Matthew's father, told Four Corners: "Kevin Rudd burst into the meeting after about 15 minutes and sat right next to me and he didn't, he didn't remember my name, so I shook his hand and said it's Kevin, it's not that difficult to remember."
There was no apology to the Fullers, "no looking in my eyes or Christine's eyes and saying I'm sorry. Even sorry for your loss would've been good."
Rudd seems to be one of those people whose self-belief never falters, even while everything is falling down around him. But he has few cheerleaders left, outside of the increasingly unhinged Crikey blog. Even the ABC's Chris Uhlmann was scathing this week: "If you really believe that climate change is the greatest moral and economic challenge of our age, then you wouldn't retreat, would you, because if you did, people might begin to wonder what you actually believe in?"
Perhaps the best assessment of the Prime Minister this week comes from the Roman senator Tacitus, via letter writer Harry Gelber, of Hobart: "Omnium consensu capax imperii nisi imperasset."
Roughly, it means: everyone agrees he would have been thought capable of governing, if he had not already governed.
Rudd retreats on web filter legislation
Another retreat! And again a welcome one
KEVIN Rudd has put another election promise on the backburner with his controversial internet filtering legislation set to be shelved until after the next election.
A spokeswoman for Communications Minister Stephen Conroy said yesterday the legislation would not be introduced next month's or the June sittings of parliament.
With parliament not sitting again until the last week of August, the laws are unlikely to be passed before the election.
Labor promised before the last election it would force internet service providers to block access to illegal content such as child pornography and X-rated images.
But the US government, Google and free speech advocates have said any efforts to censor the internet would slow download speeds, stop the free flow of information and be ineffective.
Senator Conroy's spokeswoman said the government was not deterred by this criticism.
The government was still consulting with internet service providers and considering public submissions; once that process was complete, it would introduce the legislation into parliament, the spokeswoman said.
Australian Christian Lobby managing director Jim Wallace was disappointed. "The minister has done an excellent job on this . . . and I would like to see it legislated because it was an election promise," he said.
Opposition communications spokesman Tony Smith said Senator Conroy should come clean on when he would release the legislation.
Negligent bureaucracy behind big payroll meltdown
Queensland Health broke basic safety net in payroll push, experts say
QUEENSLAND Health has been savaged over its rushed rollout of the failed payroll system by the co-developer of the software. Workbrain co-founder Scott Morrell claims Queensland Health ignored the most basic of safety nets, seeing the department drop 75,000 workers into an untested system and hoping for the best.
Speaking from Toronto, Canada, Mr Morrell said clients implementing the system – or any new payroll system – should transfer employees gradually into the new system, after running several parallel pay cycles with the old system.
Queensland Health took neither precaution, instead just testing 10 per cent of employees in three "dry runs", where no one was actually paid. But a department spokesman said the results of the 10 per cent dry runs were "within the average range and were considered acceptable by auditors".
Thousands of Queensland Health workers have missed out on pay during three fortnightly cycles.
Two Australian payroll companies also slammed the Government for the rollout, labelling the decisions to ignore safety procedures "amateur hour".
Mr Morrell co-founded the Workbrain system in 1999 and ran the project development team. He said after spearheading the Workbrain project for six years, he was stunned by the Queensland Health rollout. "Yes, things can go wrong, but the usual issues that occur in a client rollout are typically addressed quite quickly," he said.
With staff of about 75,000, Mr Morrell said Queensland Health should have transferred just 100 to the Workbrain/Sap system first. "Any problems are then isolated and you then grow slowly as you get a comfort level," Mr Morrell said.
Australian payroll software companies also expressed dismay at the rushed rollout. The chief executive of Aussie Pay, Dean Morelli, said it was unheard of for any company to launch a new system without testing it on population subsets. "The level of risk taken indicates a complete amateur show – it is not the software at fault," Mr Morelli said.
HR3 payroll software provider general manager Frank Rizzeri labelled the rollout "reckless". "If one of our project managers did it that way, they would be terminated," Mr Rizzeri said. "To bypass those basic safety nets shows a complete and utter lack of due care."
A spokeswoman for Acting Premier Paul Lucas said the decision not to take a parallel pay run was made by the IT expert project board.
The decisions to bypass safety nets are under investigation by KPMG.