Good morning, and welcome to Tuesday.
Here’s what you need to know:
- The future for Qantas remains uncertain after the Federal Government’s decision to open up the national airline to majority foreign ownership and remove the requirements that it base maintenance and corporate services in Australia. The months of lobbying by Qantas for a form of debt guarantee have proved futile, and with the Greens and Labor currently opposed to the Government’s proposals it’s doubtful the current proposal can make through the parliament. The Government is trying to shunt some of the blame for Qantas’s predicament onto the carbon tax, which was a $107 million cost for the airline in its latest results, but the problems for the airline are also industry-wide structural ones, not least Virgin Australia’s greater ability to raise capital. There’s some way to go on this yet, with Qantas potentially remaining in regulatory limbo for months awaiting a political resolution.
- Russian troops are massing on the border with Ukraine following its capture of the Crimean peninsula over the weekend. The UN Security Council, on which Australia currently sits, is holding another crisis meeting this morning in Luxembourg. Australia may also find itself playing a significant role in the diplomatic effort through its current presidency of the G20. Here’s a map of gas lines that shows why Ukraine is so strategically and economically important.
- Global markets have been spooked by the uncertainty in Ukraine, with the major US indices all down overnight and more exposed countries in Europe seeing even bigger falls – Germany was down 3.4%. In Australia, the Reserve Bank holds its monthly meeting and will announce its target cash rate at 2.30pm AEDT, with no change expected from the current 2.5%. TD Securities has a neat summary of what to expect in the statement here.
- Australia is in total control of the series-deciding third Test in Newlands, after bowling out South Africa for 287 and ending the day on 0-27. Ryan Harris, at 23, is just one wicket away of claiming his 100th Test wicket. A win would be South Africa’s first loss of a home series for five years.
- Telstra chief executive David Thodey believes that culture – not the common bugbears of a lack of capital or problems with tax arrangements – is what’s really holding back Australia’s innovations and start-up sector. He told the Australia-Israel Chamber of Commerce that Australian business culture doesn’t accept failure and celebrate success in ways that would allow entrepreneurs to thrive. “Why is it that when you go to Silicon Valley, you’re just overcome by the incredible energy?” he said. “There is undoubtedly this energy and this flow of people saying, ‘I am going to change the way things are done, and failure is accepted.'”
- The annual Forbes rich list is out and Bill Gates has reclaimed the No.1 spot from Carlos Slim. Zara owner Amancio Ortega, Warren Buffett and Oracle’s Larry Ellison round out the world’s wealthiest five people. There’s a full list here.
- One of the most powerful figures in Australian political circles is retiring. Joe de Bruyn, the head of Australia’s largest union – the Shop, Distributive and Allied Employees Association, or “shoppies” – has been a gatekeeper for aspiring Labor politicians for decades; The Australian reports he will stand down next year. As well as being an ALP powerbroker, de Bruyn has been one of the most trenchant opponents to same-sex marriage within the Labor movement.
- Tony Abbott is preparing for a three-day trip to China next month following a period of strain in the relationship with Australia’s biggest trading partner.
- Scientists have been doing some full-scale research on hangovers and hair of the dog.
- The decision by the Duke and Duchess of Cambridge to make Adelaide one of their stops on their tour of Australia and New Zealand has upset Victorians. State Opposition Leader Daniel Andrews is stunned by the snub. “Who would want to be going to Adelaide?” he said. “Apparently the royal family do,” he said.
Bonus item: Australia just squeaks in to the top 20 countries in wine consumption per capita, according to a new report from the Wine Institute of California. The surprise country that ranks top of the list by a considerable stretch, with a woozy 74 litres consumed for every person, is Vatican City. Religious experiences, and all that.
Have a cracker day. I’m on Twitter: @colgo
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