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I'm not politically biased - just filthy!

Peter Switzer
2 June 2010

A viewer to my program SWITZER on Sky News Business Channel made the point that he was a regular ‘watcher’ of the show but he reckoned the resource super profits tax had made my show slip! That is, he inferred that I have a political bias, which was now showing.

And because I won’t let it go and I have been relentless on the tax, however, a lot more rational than the mining magnate, Clive Palmer, it’s understandable that someone might think I have a secret agenda.

Balanced view

Further, if you wanted to build a case against me, you could recall I had Alan Jones on the program and let him rip, though it’s hard to stop him once he’s on a roll. Then there was Tony Abbott, Joe Hockey and Barnaby Joyce on the program.

But against that, I have had Small Business Minister Craig Emerson, Assistant Treasurer Nick Sherry and Chris Bowen, who is the Minister for Financial Services, Superannuation and Corporate Law.

So there’s balance there and next week I have Trade Minister Simon Crean coming on the program. And for those who think I’m a Liberal Party stooge, I have been pestering Kevin Rudd’s and Wayne Swan’s press secretaries for over a year for the Prime Minister and Treasurer to come on my show. I want them, but they don’t want me — or my audience!

But that’s not why I’m biased and filthy at the Rudd Government. That’s right I’m biased but not politically biased — I am economically- and investment-biased.

By the way, this could be a new term in current affairs journalism — investment-biased. I like it.

Offside with politicians

In my time in this commentary caper, which started in 1985 in The Daily Telegraph, my unique selling proposition or USP was “taking the con out of economics”. It meant that not only did I have the task to simplify and explain the views of economists with their jargon but I also had to de-spin the ‘off-breaks’ and googlies of politicians.

It got me offside with plenty of pollies in my time.

In the late 1980s I put Treasurer Paul Keating on trial for raising interest rates too many times with a jury of top economists. I — or my jury to be more accurate — found him guilty. I don’t think he liked that piece in the Saturday Tele, which came with a great Boo cartoon.

Peter Costello never liked my assessment of his minimal help for small business, though I always gave him praise for his economic contribution over his years as Treasurer. He still has not forgiven me and won’t come on my show, which I think is a bit sooky.

By the way, I don’t think John Howard is a great fan, though I think he did a pretty good job, but I once complained to him as an MC in front of a 1000 financial planners that his GST was difficult and costly for small business to implement. I don’t think JH has a great sense of humour.

Ill-timed tax

Now for my bias and this damn tax.

Anyone who has followed my work for the past two years knows I have worked to convince people I believed a bull market was coming and this is it. I started my campaign, especially when Lehman Brothers collapsed and many people, including my financial planning clients wanted to go to cash. I could see a rebound and didn’t want the people who listened to me to miss it.

After the rebound, stock markets had been going sideways with an upward bias until recently.

The combined hit of the mishandling of the European debt drama, the related euro dumping, the threatened changes to financial regulation in the US, the BP oil leak disaster in the Gulf of Mexico, which is hurting oil companies, the Icelandic volcano, which has hurt airlines, travel and business, and our beloved resource tax have combined to rattle markets with the help of bear traders, short-sellers and hedge funds to make it hard for the bull market to continue its march upwards.

We all know markets don’t rise in a straight line and corrections can be healthy, so don’t get too stressed about the recent market fall but I’m annoyed that this resource tax has been ill-timed.

It didn’t have to come now and its timing has been unfortunate for many mining stocks. And while the other reasons mentioned above are in play forcing share prices down, you would have to be Kevin Rudd’s brother to believe his argument that the resource tax has not hurt share prices.

Investment-biased

The second issue I have with the tax is that it could be a better tax that would not raise the effective tax rate on mining companies so high. I will bet anyone that the Rudd Government will change this aspect of the tax and so what we have is a typical ambit claim approach, which has been made famous by the likes of the ACTU.

By the way, I think this “foreign miners versus Australian working families and small business” line Messrs Rudd and Swan are using is clever politics and could help them get re-elected but it’s bad for share prices.

That’s why I am biased — investment-biased — and filthy about the timing of the tax and the calibre of the tax.

So, please stop calling me politically biased. (By the way, in case you don’t get it, my plea is a bit tongue in cheek — I am pretty thick skinned.) 

 

For advice you can trust, contact Switzer Financial Services.

Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

 

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