16 May 2025
Wry & Dry: a cynical and irreverent review of the week in politics, economics and life. For intelligent Readers who disdain the trivial.
But firstly, a snapshot of this week’s Investment Matters:
- ParagonCare – the virtue of new management and new business lines
Wry & Dry’s musings
The election postmortems continue. And Wry & Dry is exhausted, but feels duty bound to add his tuppence worth. However, inevitably, Trumpster dominates the literature. And has added a new meaning to “token gifts from overseas.”
A gift from Qatar of a $400m 747-800 aircraft to use as Air Force One, until the much-delayed new kit from Boeing is built. No strings attached, of course. Of course.
1. Trumpster blinks
Trumpster’s Liberation Day tariff scheme achieved Hall of Fame – Legend status for two reasons this week. It suffered what is probably the fastest rejection ever of a major government’s significant economic policy. And at the hand of its implementer.
Of course, either (a) it was always planned that way; or (b) Trumpster out-negotiated Emperor Eleven.
Of the 8.2 billion people on Earth, only about 55,000 people (all Americans) believe either (a) or (b). The reality is (c): Trumpster blinked. No major concessions were won from Emperor Eleven. The global markets’ crisis cost plenty for nowt.
The rejection was his scaling back of tariffs on Chinese imports, reciprocated by Emperor Eleven. This is actually a sort-of-win-win for economic reality. American consumers were facing widespread shortages and price increases; Emperor Eleven feared rising unemployment.
The other reality is that Trumpster has shot America in the foot. The commendable motive of attacking Emperor Eleven’s increasing mercantilism was diluted by him also raising tariffs on every other trading nation. Surely better to present a united front with large economic allies?
It was also diluted by his capricious decisions: exemptions for many goods from Canada and Mexico; a 90-day pause on his reciprocal tariffs against everyone except China; exemptions on China tariffs for iPhones and electronics; the mini-deal with the UK; and now the 90-day rollback on China tariffs.
Trumpster, as The Wall Street Journal put it, started a trade war with Adam Smith and lost.
2. If you want something done well, ask…
… a woman. Or so said Wry & Dry’s mother. And on that pithy phrase rests the Liberal Party’s decision to recognise that men have recently failed the party. And so, it’s time to turn to a woman, the curious Sussan Ley.
But of course, the Liberal party men, having put her in the race, have handicapped her like a great stayer in the Melbourne Cup. The lead in the saddle bags is plenty. Consider losing 17 seats two weeks ago, after losing 19 seats in the 2022 election; having to deal with the flat-earthers in the National Party; and having 40% of her own party wishing her to fall at the first hurdle.
Not only are the knives (silver, of course) already out, they are being sharpened and dipped in death-cap mushroom sauce in readiness. The poor woman hasn’t a chance of lasting the distance.
3. Albo washes his hands
Like Pontius Pilate washing his hands of responsibility for Jesus’ execution,1 Albo washed his hands of the “factional assassinations” of two of his cabinet ministers (so egalitarian: a Muslim and a Jew) from his Second Ministry. And allowed factional leaders to dictate to him who’s who in the Albo Zoo.
He said that he was following accepted Labor practice. Which shows who wears the pants. Err, a bit of kick in the teeth to the man who provided a very steady hand on the tiller during a massive election win.
Much older Readers will remember the Labor Party’s so-called ’36 faceless men’ of 1963. And the photo of Labor Leader Arthur Calwell and his Deputy Leader Gough Whitlam standing outside the Kingston Hotel in Canberra, where the Labor Party’s Federal Conference was meeting. The duo was waiting to be told the policies they would use in the 1963 election. Neither Calwell nor Whitlam were delegates to the Conference, which then consisted of six delegates from each of the six states (one of whom was a woman).
Labor’s modern factions have come in from the cold and are no longer faceless. But still pull the strings. And revenge will be served cold. The hapless Richard Marles, deputy PM because of a factional deal, was the multicultural factional assassin. And he will find that his prime ministerial ambitions will fade faster than a winter’s sun on his Geelong based electorate.
1According the Matthew 27:24: “When Pilate saw that he was getting nowhere, but that instead an uproar was starting, he took water and washed his hands in front of the crowd. “I am innocent of this man’s blood,” he said. “It is your responsibility!”
4. Sleepy Joe unmasked
What were they thinking?
It was only 90 seconds into the pre-election presidential debate last year between Sleepy Joe and Trumpster that the world knew. Sleepy Joe was a sandwich short of a picnic. As sharp as a bowling ball. Not the brightest light in the chandelier, etc.
How was it that this man ran the greatest country on earth when he couldn’t remember the day of the week?
Who managed the four-year cover-up? And who possibly thought that this demented man could be re-elected?
The outcome of the cover-up was that Sleepy Joe didn’t announce his retirement until it was too late to run a decent primary campaign. Hence no time for outstanding Democrats (e.g. Gretchen Whitmer) to get a chance to run. And hence the dreaded Kamala Harris got the gig as she was Veep.
All will be revealed next week, when a book titled Original Sin is published. The book tells of the ill-fated 2024 Democratic Party presidential campaign. Wry & Dry is like a child on Christmas Eve.
And how long before the Netflix series is released?
5. Much ado about the Cook
There’s a bit of fuss going on in the inner Melbourne suburb of North Fitzroy. Therein resides a memorial to British naval person James Cook (erroneously called Captain Cook, he was a lieutenant when he visited Australia). The memorial has repeatedly been vandalised, to the extent that the local council wishes to remove the memorial.
The reason for the vandalising is, according to anonymous social media items, that Lieutenant Cook was responsible for the introduction of colonialists (some of whom were chosen by some of the finest judges in England) to Australia.
Err, wrong. Cook was an explorer and navigator. And one of the finest of both. To suggest that he was responsible for the colonisation of Australia by essentially English people shows a disgraceful disregard of history by the vandals.
This in turn reflects very badly on Australia’s education system. And its history curriculum and the teaching thereof.
Wry & Dry suggest that when the vandals are found, they be transported to England in a slow, creaky sailing boat, and fed on rations. And on the voyage be taught the facts of Australian history.
6. Magna Carta said what?
The discovery of a copy of the Magna Carta, dated about 1300, at Harvard University, has caused much excitement.
The Magna Carta was a 1215 contract between King John and the barons (and by extension the people) of England. It promised the protection of church rights, protection from illegal imprisonment, access to swift and impartial justice, and limitations on taxation. From its articles emerged the concept that nobody, not even the king, is above the rule of law.2
Wry & Dry muses that Trumpster will demand the copy be given to They The People of Those United States. In exchange for which he will repeal his withholding of billions of dollars of grants to Harvard.
One is given to thinking that Trumpster would not understand the critical concept of the Charter, that nobody, not even the king, is above the rule of law.
2 Magna Carta still forms an important symbol of liberty today, often cited by politicians and campaigners, and is held in great respect by the British and American legal communities. Lord Denning, the great British jurist, describing it in 1956 as “the greatest constitutional document of all times—the foundation of the freedom of the individual against the arbitrary authority of the despot”.
Four exemplifications of the original 1215 Charter remain in existence. There are four copies of the subsequent 1297 Charter, two in the UK, one in the US, the other is in Parliament House, in Canberra. That copy was ordered to be purchased by former Prime Minister Robert Menzies.
7. Wot now, Albo? Part 1
There has been much said about what Albo’s government should next do? Universal child-care? Dental costs on Medicare? Free universities?
Each of these are answers to the wrong questions, typically a variation on How to Win the Next Election?
The correct, and only, question is how to arrest the slide, and then increase, in Australians’ standard of living? With population growing faster than GDP, it follows that GPD per capita is falling. GDP per capita is falling because productivity is falling.
The simple way to view this is to view the below chart (captured from First Samuel’s CIO’s monthly investment video). Look at the blue line. Australia’s productivity is now below where it was in 2016! The USA has leapt ahead.
This has been a problem kicked down the road by both Coalition (mostly) and Labor governments.
Source: First Samuel
Treasurer Grim Jim will get little thanks from voters in the short-term if the blue line turns upwards, but later generations will.
8. Wot now, Albo? Part 2
Another way to look at Australia’s standard of living is to use UN data across 193 countries. In the ranking of Gross National Income per capita, excluding oil rich principalities, Australia ranks 18th, with some US$58,000.
But curiously, on other development indices, Australia ranks very well.
- Human Development: 7th, after Iceland, Norway, Switzerland, Denmark, Germany & Sweden.
- Life expectancy: 7th (83.9 years), after San Marino, Hong Kong, Japan, South Korea, Switzerland & Andorra.
- Expected years of schooling: 2nd, after Greece.
The problem is, of course, that two of the above three metrics are trailing indicators, significantly depending upon gross national income per capita growth in earlier years.
Grim Jim’s major task, and that of Albo, is not to frame policies around answering How Do We Win the Next Election? But more sensibly, How Do We Increase Australia’s Productivity?
9. Tax warning #1: Additional superannuation tax
There was some media this week about superannuation fund members panic selling assets ahead of the reintroduction and possible enactment of the 15% additional tax that might apply. The extra tax would hit member accounts greater than $3m and, among other things would tax unrealised capital gains.
Nasty stuff.
For the avoidance of doubt, the proposed tax was withdrawn from the last parliament, in the face of crossbench opposition in the Senate. With the election result, the government, supported by the Greens, would control the Senate.
The original legislation had a planned start date of 1 July 2025, with new tax assessments being issued from 1 July 2026. However:
- The enabling legislation has not been finalised, and there may be changes to the initial Bill; and
- There is a massive amount of data collection required, requiring new systems and software.
This has led leading superannuation lawyers DBA Lawyers to point out that:
“Even if the legislation is passed soon, the commencement date of 1 July 2025 appears ambitious and could prove difficult for many digital service providers and possibly even the ATO. Moreover, every impacted superannuation fund will need to change its systems and communicate to members the outline of this new and complex tax.”3
Wry & Dry suggests that Readers contact their qualified advisers to take advice.
3 Source: Div 296 will tax unrealised gains and more | Leading SMSF Law Firm
10. Tax warning #2: Victoria
The government of Victoria will bring down its FY-26 budget next week. In view of the banana republic state of Victoria’s finances, Victorian Readers should be afraid. Very afraid.
The new state Treasurer, Jaclyn Symes, to whom was passed the poisoned chalice from the hapless Tim Pallas, is, apparently, a bright, capable and sensible person. She will have a difficult task painting an optimistic picture.
Doubtless, the books will be dressed up to display a surplus for the year ahead. But the amount of red ink underlying the budget would be enough to paint a thousand towns red.
Ms Symes is facing a Gordian Knot4 without a sword to untie it.
4 The Gordian Knot is a legendary symbol from ancient Greek mythology, representing a complex problem that can be solved through bold action. According to the myth, King Gordius of Phrygia tied an intricate knot, and an oracle prophesied that whoever could untie it would become the ruler of Asia. Alexander the Great famously “solved” the problem by cutting the knot with his sword, demonstrating that sometimes unconventional solutions are necessary for seemingly impossible challenges.
11. And the winner is…
…both sides.
India and Pakistan exchanged serious cross-border fire last week. But cooler heads prevailed. And the respective army chiefs held talks after an America-brokered ceasefire was agreed.
Narenda Modi, India’s prime minister, said that India had “proved its superiority.”
Shehbaz Sharif, Pakistan’s prime minister, claimed a “historic victory.”
Just like a children’s game, everyone’s a winner!
Snippets from all over
1. Tsar Vlad’s no show
Russian President Vladimir Putin has announced he will not take part in peace talks in Turkey between Moscow and Kyiv on Thursday, despite pleas from Ukrainian President Volodymyr Zelenskyy to attend. (Financial Times)
Wry & Dry comments: No surprise there.
2. German kings
German police arrested members of an extreme-right group, the Reichsbürger (or “citizens of the Reich”), and banned it for attempting to overthrow the state. Those arrested included Peter Fitzek, a self-declared “King of Germany”. (The Economist)
Wry & Dry comments: now, there’s an idea for Trumpster: King of America.
3. “Island of strangers”
Sir Keir Starmer, Britain’s Prime Minister, unveiled new immigration policies, warning the country risked becoming “an island of strangers”. Migrants will have to wait ten years to settle unless they prove long-term economic and societal value. (The Economist)
Wry & Dry comments: This is one of a raft of policies to reduce net immigration, which reached 906,000 two years ago.
4. Trumpster
Donald Trump’s top negotiator broke with long-standing protocol by using the Kremlin’s translators for three high-level meetings with Vladimir Putin, officials have claimed.
Steve Witkoff, a real estate tycoon and cryptocurrency trader, has been tasked with negotiating an end to the war in Ukraine and has met with Putin four times in three months. (UK Telegraph)
Wry & Dry comments: Either way, diplomacy is all Greek to Witkoff.
5. Saudi Aramco slashes dividend
Saudi Aramco reported a fall in first-quarter profits, resulting in a $10bn cut to its dividend and lowering a key source of funds for Saudi Arabia’s budget amid an uncertain outlook for oil prices. (Financial Times)
Wry & Dry comments: Saudi Aramco is the world’s largest oil company.
It figures
- 4.1%: Australia. Unemployment rate in April. Unchanged, but 64,000 more jobs created than expected. Perhaps
- 2.3%: USA. Inflation in year to end April. Down from 2.4%.
And to soothe your troubled mind…
“The French gave us the Statue of Liberty, and no-one complained.”
A Republican Senator responding to criticism of Trumpster for indicating he will accept a gift of a $400m aeroplane from Qatar.
Wry & Dry comments: Thereby suggesting that Trumpster’s aeroplane will be a beacon for the “tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore.”
Disclaimer
The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.
Cheers!
Read this week’s edition of Investment Matters.
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