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Australian Financial Review : October 17th 2006
FBA 004 I.T. ACQUISITIONS WANTED Are you: An owner or stakeholder of a business: - in the I.T. sector; - with maintainable earnings of >$3M; - who is interested in extracting maximum value for your enterprise through a sale or partnership; and - who is interested in remaining involved in the affairs of the business Only prepared to sell to or partner a group: - who can build on the success you have created and grow the business over time; - who has the financial resources to support growth of the business; and - who will allow you to extract maximum value from the business We represent an ASX listed company committed to helping you achieve these objectives. For further details, please contact Simon Ward of Kennedy Needham Corporate Advisors on (03) 9602 5555. The Australian Financial Review Tuesday 17 October 2006 www.afr.com 4 Energex chief executive forced out From page 1 '' The embarrassing admission will do little to boost morale.'' unsubstantiated allegations over rorted expenses, the resignation of former chairman Ross Dunning, who is in court on child sex charges, and a major political uproar over blackouts and crumbling infrastructure. It was revealed yesterday the Energex chief executive bought a total of about $15,000 worth of shares, including 1600 Origin shares ± 800 of which were bought in his wife's name ± and 250 AGL shares, between May and June this year. They were sold on June 21 although he is understood not to have made much profit on the trades. But both Origin and AGL, which are the two biggest bidders for the Energex retail business, are on the list of nine companies Energex executives are banned from investing in. Newly appointed Energy Minister Geoff Wilson has ordered a full report into the matter, including whether any issues should be referred to the Australian Securities and Investment Commission. Premier Peter Beattie refused to comment on the issue yesterday. The embarrassing admission will do little to boost morale in the company, which has been plagued by incidents including the suicide of former chief executive Greg Maddock in 2004. It will also reignite the debate about the level of corporate governance in government- owned corporations, especially in Queensland. ''I am gobsmacked. He's done the right thing by resigning, but how can these people be running companies if they're that naive,'' a senior Queensland company director told The Australian Financial Review. ''It really is off for somebody in a decision-making position at Energex to buy shares in a company that might buy the retail operations.'' There were potential ethical issues when an executive in any business bought shares in a direct rival, according to another senior Queensland company director. ''You have to be very careful because if it's a competitive industry and you know things other people don't, then you could come close to having inside information,'' the director said. Queensland Liberal leader Bruce Flegg said a senior executive would not buy shares in his competitors by mistake. He said the matter should be investigated by the state's Crime and Misconduct Commission. Mr Wilson, a first-time minister who has been in the job less than a month, said the government expected high standards from senior executives in its GOCs. He has referred the matter to the Auditor-General. ''The full understanding of what's taken place on this particular occasion will be possible when the report is available from Energex,'' he said. Energex chairman Khory McCormick said an acting chief executive would be named this week and a permanent replacement appointed as soon as possible. He said the resignation would not affect Energex's operations, the sale of its retail operations or preparations for full retail competition next July. Weather crisis brings change in political climate COMMENT Laura Tingle '' The coalition is realising its sceptical position is not sustainable.'' Drought, combined with the freakish weather of the sort most Australian capital cities have been experiencing over the past week, is rapidly changing the politics of the climate change debate. Once something derided as an (shudder) environmental issue, even the Prime Minister has been forced to concede that there might just be some link between a decade-long drought and whatever is happening to the world's climate. With voter alarm at the weather they are experiencing and global warming, along with dire predictions about continuing and increasing water restrictions, the race is now on on both sides of politics for what could potentially be the make or break issue of next year's federal election campaign. For the past year we've seen the coalition gradually coming to the realisation that its aggressively sceptical position on climate change ± with all that that has encompassed ± was not a sustainable political position. And it has raced to find a new position, driven heavily by the sudden love affair with nuclear power, to give it a more reputable platform. The new aspect that the drought delivers, however, is that it bends the climate change issue into a matrix driven by the Nationals and rural interests and which becomes uncomfortably entangled with the sort of jingoistic nonsense we've heard from the Prime Minister over the past few days. Announcing yesterday's ''first instalment'' of extra drought relief for farmers, John Howard dismissed any suggestion the government should get involved in making decisions about whether farms were viable or not. But at the same time, he committed the federal government to what is essentially an open-ended package of financial support for the farm sector on the basis that ''not only would we lose massively from an economic point of view, we would lose something of our character, we would lose something of our identification as Australians, if we ever allow the number of farmers in our nation to fall below a critical mass''. This is the sort of nonsense that Australia once criticised the Europeans for promoting in the interests of their massive farm subsidies. Yes, of course, Australia has a great economic interest in preserving a viable agricultural sector. But the climate crisis that sector ± along with the rest of us ± is now facing will require much more pragmatic politics than was on display yesterday. It will also require some very tough decisions to be made on water, possibly on a long-term plan to embark on a major restructuring of our agricultural sector that recognises something really is changing. It is not a good start to put the people at the centre of this process on an untouchable pedestal. Parched bush promised relief into 2008 Angus Grigg Doing it tough . . . the worst drought in 100 years is expected to cut farmers' incomes by 60 per cent this year. Photo: WAYNE TAYLOR THE BIG DRY ' Farmers are not helped in the long run by policies which because of misplaced sentimentality do not make it an absolute priority to increase the long term viability and resilience of their industry.' -- Editorial, page 62 GrainCorp confirms $20m to $30m loss for 2007, page 14 Canberra's costly global warming inertia, Opinion, page 63 Prime Minister John Howard yester- day provided an extra $350 million to extend drought relief payments beyond the next election and said the government would consider expanding assistance to cover small businesses in rural areas. Mr Howard flagged more changes to drought relief policy shortly and said Australia would lose some of its national identity by not supporting farmers, who were ''part of the psyche of this country''. If Australia failed to support its farmers, ''we would lose something of our character''. The changes announced yester- day will allow the country's1 8 drought-declared areas to receive income and interest rates assistance until March 2008. A federal election is expected by the end of 2007. Under the old system, farmers were required to reapply for assist- ance every six to nine months. The changes also allow all far- mers in drought-declared areas to access assistance, where previously some irrigators or dairy farmers might have been excluded. This comes as Australia battles its worst drought in 100 years, which is expected to reduce farm incomes by 60 per cent this year and wipe up to 0.8 percentage points from GDP growth. This follows heatwaves and bushfires over the weekend after one of the driest winters on record. ''This nation owes to the farmers of Australia the support they need to get through this terrible drought,'' Mr Howard said. ''Clearly this is an area where, within reason, the government will commit the resources that are needed to help people.'' Since 2001 the government has spent $1.2 billion on drought relief and said yesterday that 38 per cent of the country's agriculture land was affected. Agriculture Minister Peter McGauran said 53,000 farmers had received assistance since 2001 and that the changes would increase this number by a ''few thousand''. He also flagged that areas in Western Australia and South Aust- ralia would be added to the excep- tional circumstances list. ''We will make it easier for areas to become drought declared,'' he told ABC radio. National Farmers' Federation president David Crombie welcomed the changes as providing some certainly for rural communities. Mr Crombie flagged the need for further changes to drought relief policy saying there were plenty of farmers ''doing it tough'' who did not qualify for assistance. ''We need to make the system more flexible,'' he said. The Prime Minister gave guarded support to a radical plan by Liberal Senator Bill Heffernan to move much of Australia's agricultural production to the country's north. ''There's an element of truth and validity [to the proposal],'' he said. But he said cabinet had not dis- cussed a structural adjustment fund to encourage the relocation of farmers. The Prime Minister also softened previous links he'd made between the drought and climate change. ''As to the broader issue of drought and climate change, obviously you can't totally separate the two, but I think its important that we don't overdo the link,'' he said.