Do divestment campaigns only make target companies cheaper to buy?


Further proof that divestment campaigns are not strategically sound, with news that Spanish firm Ferrovial has launched a new takeover bid for Australian detention centre operator Broadspectrum (formerly known as Transfield).

However, Ferrovial’s offer of $1.35 per share is well down on its previous takeover offer of $2 a share which was rejected last year by the Transfield board.

In August, FreedomWatch covered the divestment of Transfield shares by industry superannuation fund HESTA following a campaign by the Australian Nursing Federation and Australian Services Union. Even Gillian Triggs has criticized the business.

While many advocates believe a divestment campaign ‘punishes’ a business they don’t agree with, successfully lobbying a person, company or superannuation fund to divest shares simply transfers ownership from one entity to another. If a divestment campaign is successful in helping to reduce a share price all it does is make it cheaper for someone else to buy.

Given that yesterday’s Australian Financial Review noted that Ferrovial “as a large foreign company…would be insulated from the social backlash in Australia around the (detention centre) issue”, it would be ironic if all the unions and human rights lobby achieve is to help push ownership offshore, and at a lower price for Australian shareholders.


Top 3 recent articles you must read


Niall Ferguson

1. Wall Street Journal – 30 November 2015: Bret Stephens on the many imaginary enemies of modern liberals

2. Boston Globe – 30 November 2015: Niall Ferguson compares the revulsion against rational discussion from modern student activists to the attitudes of 17th century Puritans

3. New York Times Magazine – 24 November 2015: Wes Enzinna describes the noble efforts to create a “secular utopia” in the backyard of the Islamic State.


Innovation statement: picking winners revisited


The Turnbull government has today released its long‑awaited plan to bolster Australian innovation and scientific capacities, which it hopes will unleash an ‘ideas boom’.

The innovation statement is being packaged by the government as, essentially, a four‑pronged plan to boost entrepreneurship, increase industry‑research collaboration, attracting skilled labour, and positioning government as an innovation leader (seriously!).

But getting past the spin, and not to mention the slick website, the reality is altogether something different.

With the package estimated to add another $1 billion to the overspending burden, think of the innovation statement, in truth, as a recombination of tired, old public sector strategies to override the market process by picking winners.

If anybody is looking for significant measures that bolster bottom‑up innovative activities through economic freedom, smaller government, unambiguously lower taxes for all, or even sentiments supporting the legalisation of the sharing economy, one will be out of luck if the paltry returns on the website’s search engine is of any guidance.

Another disappointing feature of the statement is that additional funding will be directed to the Australian science establishment, including the effective reversal of recent funding reductions for CSIRO, but without any detailed cost‑benefit analysis to show that the big‑spending package will be worthwhile.

All in all, mark this innovation statement down as a win for resurgent industrial policy at the expense of economic reform.


IPA welcomes Indigenous recognition council announcement

The Institute of Public Affairs welcomes the announcement of a bipartisan advisory council on constitutional recognition of Aboriginal and Torres Strait Islander people.

“The IPA believes that all Australians are equal. The Australian Constitution should make no reference to race or ethnicity,” says Simon Breheny, Director of Race Has No Place at free market think tank the Institute of Public Affairs.

“Two current sections in the Constitution refer to race – sections 25 and 51(26). These sections should be deleted, and no new sections referring to race should be added into the Constitution.”

The IPA has produced a booklet – Race has no place – which outlines the positive case for equality in the Australian Constitution.

“Australia’s success as a free and prosperous country is founded on the idea that all humans are of equal worth. All Australians, regardless of their ethnic background, must be treated equally by government and the law. The Australian Constitution should reflect this,” says Mr Breheny.

The IPA is looking forward to actively engaging with the council ahead of a potential referendum regarding the recognition of Aboriginal and Torres Strait Islander people.

To find out more, visit

For media and comment: Simon Breheny, Director, Race Has No Place, Institute of Public Affairs, [email protected] or 0400 967 382.


The green energy contradiction

Bjorn Lomborg makes a very good point about renweable energy activists in The Australian:

Here in Paris, there are many well-meaning people who believe that we need strong carbon cuts and green energy production subsidies now and for many years to come, to get the world to move towards tackling climate change.

But at the same time, these same people argue that solar and wind is already competitive, or that this moment is just around the corner.

Those two arguments are incompatible and many people who seem to be making both points are simply wrong on one or the other.


Opposition to the Adani mine falters: locals want jobs


The Australian reported this week significant discontent within the Indigenous group opposing Queensland’s proposed Adani coal mine, with elders now apparently passing a resolution to support the project.

The news will undoubtedly come as a blow to millionaire environmentalist Graeme Wood who, according to these earlier pieces in the Australian and the Financial Review has bankrolled local Indigenous opposition. Mr Wood is well known for making Australia’s largest ever single donation to a political party – to the Greens back in 2011 and for the purchase in 2014 of the former Gunns woodchip mill which was subsequently made inoperable.

While Indigenous representative Adrian Burragubba is disputing the vote, this latest development comes only a week after a Federal Court judge made scathing comments about Mr Burragubba’s current court action, describing the process as ‘shambolic’.

The Adani process has a while to run, but it is great to see that local Indigenous representatives are bravely standing up to put economic development before the interests of professional environmentalists. But the last word should probably rest with another local Indigenous representative Irene White:

This is about a future for our people… We want the opportunity to get a job, earn a living, buy a car and save up for a house just like any other Australians.


“Unreasonable”, “unjust”, “oppressive maladministration”: ICAC slammed in this latest report


Inspector of the ICAC, David Levine

ICAC Inspector David Levine issued a scathing review of the New South Wales anti-corruption watchdog, in a report tabled in NSW parliament today.

In particular, ICAC Commissioner Margaret Latham is taken to task for the Commission’s conduct surrounding the controversial investigation of Margaret Cunneen.

Frankly, it is fascinating reading. Here are just some of the quotes from the report:

… It is of concern that the Commissioner issued the Notices… “to attend and produce forthwith” [mobile phones already in ICAC’s possession] given that this in fact rendered them unlawful. This amounts to an abuse of power and serious maladministration. [Page 18]

… I did not yield to the Commissioner’s expectation, I am not subject to the Commission in any respect… [Page 23]

… I can only assume that the Commission at that time had a view that its “independence” was particularly fragile if just stating its obligations to keep the public informed of the steps it proposed to take…  was seen as threatening. [Page 34]

… I find the ICAC email to be insulting, condescending and to border on insolent and reinforces views I have late I have lately expressed as to the breathtaking arrogance of the Commission [Page 34]

… a total lack of understanding of the role of the Inspector… [Page 39]

… This aspect of the conduct of the ICAC I describe, and I believe any ordinary reasonable person would describe, as unreasonable, unjust and oppressive. [Page 51]

… it is another example of unreasonable, unjust, oppressive maladministration on the part of the ICAC. It was a last ditch stance of defiance and… reflects poorly on its standing and objectivity. It is an abuse of the powers reposed in it. [Page 56-7]

To read these quotes in context, read Levine’s report here. Or you can read more ICAC coverage on FreedomWatch here.


Uber now illegal in Victoria


Today in Melbourne, a court deemed Uber driver Nathan Brenner guilty of driving a hire car without a commercial licence or registration (reported in The Age).

Put simply, Uber has now been clarified as illegal.

Just when we thought the ridesharing momentum was shifting – ACT legalised the service one month ago – Victoria has taken a further step backwards.

This year-long test case sends a strong signal against the growing ridesharing tech giant. There are 11 other drivers facing similar charges. But the real losers here are the Victorian economy and the rights of Australian producers and consumers. As I wrote in the West Australian earlier this year:

Australians should be appalled at this latest government intrusion on exchange. Acceptance of an Uber ride is a voluntary exchange. As with any other free market transaction, both parties understand the risks and agree to the conditions. To require permission to willingly trade private property flies in the face of a free society.

Although the court is simply interpreting the law, these rules are outdated and desperately in need of change. The Victorian government needs to get out of the way of this potential economic revolution.


On e-cigs, it’s don’t ask; don’t question; just ban and regulate


We already know that in Australia, it’s ban first, don’t bother questioning later. If they were to ask, they might learn many things:

There have been hundreds of studies testing the quality and safety of e-cigarettes. Any search in a medical journal database yields countless results. Some people have even helpfully summarised and provided links to the various studies, and published them online (like this one covering the hundreds of studies published in 2014 and 2015).

Studies which show that for current smokers, e-cigarettes are a significantly beneficial. Last month, more evidence came out challenging the consensus that e-cigarettes entice users to take up cigarettes. From Reason:

never-smokers rarely become regular vapers… there is no evidence that never-smokers who vape are therefore more likely to become smokers or that the rising popularity of e-cigarettes has given a boost to conventional cigarettes. To the contrary, vaping and smoking rates are moving in opposite directions.

That is why it is so sad to see the growth in the US e-cigarette market slowing significantly. The reason is predictable; confusion propagated by public health experts, and the regulatory regimes that follow:

The industry also is awaiting final rules from the Food and Drug Administration, which could require federal approval for nearly all flavored liquid nicotine juices and e-cig devices.

“That’s creating stagnation,” said Dimitris Agrafiotis, chief operations officer at Mountain Oak Vapors, referring to the relative safety of his products when compared to cigarettes. “We have a big uphill battle if we can’t accurately describe our product.”

E-cigarettes is the free market solution for those that wish to quit smoking. But thanks to an abundance of laws, such as new laws in New South Wales coming into effect this week, the effectiveness of e-cigarettes in Australia is all the more limited.


Perspective on what people want

While I’m not one to normally cite the United Nations, Bjørn Lomborg in today’s Australian has mentioned a current UN survey into the issues that are the most important to people around the world.

Climate change is currently rating 16th out of 16 issues, and is a long way behind A Good Education, Better Healthcare, Better Job Opportunities, An Honest and Responsive Government and eleven others.

The results certainly gives a good sense of perspective about the priorities of a majority of people in developing nations.


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