Panic makes page one. Panic and banks is not a combination that a Treasurer wants to see but the Canberra Times gave it to Wayne Swan this morning. As the ANZ Bank joined the NAB in massive write-offs caused by silly lending decisions, the paper decided that the Rudd Government “is counseling against panic”. The peg on which it hung the comment was a statement Mr Swan made for the television cameras confirming that he and the Prime Minister had spoken to the Reserve Bank and the Australian Prudential Regulatory Authority about the situation at the weekend. Putting on his most reassuring face, the Treasurer declared: “If there was any country in the world that had the capacity to withstand the full force of these developments, particularly on international financial markets, it is this country.”

Fortunately the television audience has not reacted in the same way as the newspaper but the thought must be crossing a few minds as to why the Treasurer thinks it is necessary to be reassuring. I have written in Crikey before that “there is one thing we can rely on government ministers not to tell us about the impact the world financial crisis is having on Australia and that is the truth — the fear of causing a stampede of people deciding that under the mattress is the safest place for their savings is just too great.” I have heard or read nothing to make me change that opinion and there is surely more bad news to come from within the financial system.

Not a good idea. Racing off to court might well end up as one of those things that the National Rugby League thought was a good idea at the time. The Canterbury player Sonny Bill Williams could be in breach of a contract by flying off for a chat in France but the system of restricting player payments by way of a salary cap could be an illegal restraint of trade. It survives as the principal way of keeping some clubs in the NRL competitive only because no-one has had an incentive to test it.

Now that playing rugby union in Europe is better paid than playing rugby league in Australia the incentive to challenge the whole payment system is much more likely to be present. Certainly Williams would have good reason if he is forced to return to play with Canterbury against his will as the NRL is threatening. And lest you southerners think this is just a laughing matter, remember that half those Victorian based AFL clubs would be cactus without a salary cap too!

Ken Cowley might have been right. I remember when signing players for News Limited years ago during the super league kerfuffle that then company boss Ken Cowley was convinced that an international component was vital if rugby league was to reach its potential. In its first season super league in fact incorporated a few games with British super league clubs but the idea was dropped before peace was finally declared with the Australian Rugby League. Now it seems that Ken might have been right all along when he argued that league needed a larger market than just Australia.

Being based just in Australia, the television audience is too small to attract the revenue that the NRL teams need to hold their best players. Whatever happens to Sonny Bill Williams the player exodus from local league and union teams is just beginning. In the short term the Aussie Rules lot do not have to worry as there is no international market for their players but down the track the lure of a bigger pay check will prove attractive to young athletes when they are deciding which code to play.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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