More energetic effort needed

HOW often do you hear a Federal minister accept criticism, apologise for government foot dragging and promise to do better? That is what Industry, Tourism and Resources Minister Macfarlane virtually did when he fronted a somewhat stroppy audience at the recent Australian Petroleum Production and Exploration Association Conference.

The oil men have repeatedly warned the Government that Australia is facing an energy crisis within 10 years, with self-reliance on oil likely to more than halve to 40 per cent. They want an urgent policy study of the economic, military and diplomatic consequences of such a disaster. They claim the country is already running out of local supplies of oil to produce petrol, diesel and aviation fuel.

There is also a policy vacuum on encouraging the development of our vast gas resources.

Mr Macfarlane bleated something about the Government never working fast enough for business. Remarkably, he said: “The main thing I am seeing is a growing awareness of the importance of finding more oil”. If events in the Middle East in recent months have not concentrated official minds, you have to wonder what would.

It is true the energy industry lobby is about self-interest and profits.

However, finding oil and gas beneath the oceans is a high-risk venture for companies, workers, and shareholders alike. Mr Macfarlane promised the industry would be thrown some bones in the upcoming budget by way of fine tuning the petroleum rent resource tax – which cost Woodside more than $80 million last year. He also hinted the Government might look at introducing so called ‘flow through’ share schemes, giving investors a tax break for putting their money in exploration ventures.

The hated move to scrap accelerated depreciation allowances also might be revisited.

The Shell bid for Woodside was blocked because energy resources were seen as crucial to the national interest.

It is time Canberra acted as if it believes that.



Cup flows over for the flying kangaroo

IF you want to buy shares in a company that will benefit from the newly muscular Australian dollar, look no further than Qantas. The airline is back in a cozy duopoly, it is no virgin in attracting corporate fliers and management has hedged aviation fuel at $US19 a barrel (why do so many of our resource companies make such a beggar’s muddle of hedging?)

Moreover, Qantas will hit the jackpot in October 2003 when we host the Rugby World Cup. For reasons best known to itself, New Zealand dropped the ball of jointly staging the event and we have jolly well got it to ourselves. The 48-match tournament is expected to attract around 50,000 international spectators.

That is nearly half as many as turned up for the Olympics. And the rugger crowds are not your bucket of chips and sleep under the bridge type of tourists. They get stuck into the stout and oysters, and most have thick wallets. Qantas is particularly strong on lucrative long-haul routes from rugby union playing places like the UK, France, Italy and South Africa.

Qantas shares have climbed from a low of $2.50 to $4.55 in the past six months. Brokers Salomon Smith Barney have a $5.65 price tag on the stock, and say they will be raising their earnings predictions in line with the climbing dollar, domestic passenger growth and enhanced cash flow.