Pursuing big defence reform. Well now we know. Australia is going to have “big” defence reform. Don’t you worry about those submarines that can’t go to sea because there’s no crew. Never mind the helicopters that are too risky to fly. The payroll system for the Special Air Service is going to be made to work. The Defence Minister told us so this morning. Professing to be angry and frustrated with his Department, Joel Fitzgibbon believes he has done such a good job at being the responsible Minister over the last 17 months that he even has to call in an outside accountancy firm to do an audit of the pay office for him. The man should pack his bag and return to the backbench immediately. And his successor would do well to put an end to the absurdity which has seen a massive transfer of power within the defence departmental structure away from civilians towards those in uniform. The place needs another Sir Arthur Tange and needs it quickly.

Down go the profits. This morning’s official figures showing a marked fall in profits in the December quarter have left the “experts” somewhat uncertain about what will happen when the Reserve Bank meets tomorrow and considers what to do with interest rates. The Australian Bureau of Statistics says gross operating profits for the slipped 6.5 percent from the September quarter, when they gained a revised 7.3 percent. The fall was greater than the median estimate of the 16 economists surveyed by Bloomberg.

The Crikey Interest Rate Indicator, based on the last trades at Betfair, this morning had a half a percent cut by the Reserve Bank as the most likely outcome at a 36% chance with a quarter of a percent fall rated an 18% chance. No change was rated as a 27% chance but according to the offered prices after the release of the ABS figures it would be the favoured outcome. Work all that out if you can but I can’t!
What the ABS figures do show is how tough things are getting for manufacturing industry.

The seasonally adjusted estimate for manufacturing profits in December was down a massive 18.2% on the September figure. That there is little or no prospect of an immediate improvement is suggested by the The Australian Industry Group/PriceWaterhouseCoopers Performance of Manufacturing Index (PMI) also out this morning. It slid slid 4.9 points to 31.7 in February, far below the 50 threshold separating growth from contraction. The weakness was broad based with falls in 10 of the 12 manufacturing subsectors.

Burn a banker. It was just London’s Sunday Express but it was a bit worrying to read that MI5 are worried about the potential for an outbreak of violence as the impact of the recession in the UK gets worse. The excuse for the Express ‘s hysteria was this headline on one of the country’s anarchist publications and websites.

There are no signs yet of even jocular hatred of bankers in Australia but we are still at the stage of getting warning signals ab out un employment to come. Further down the track I am sure that having a past as a merchant banker will not be a vote getting asset for Malcolm Turnbull.

Just give us a cross word. When the New York Times starts live blogging details of a cross word competition the editor of Crikey should start taking notice.

When he cannot get through to the competition site itself he should make the decision to include cross word tournaments in the next revamp of a better, brighter Crikey !

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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