15 May 2026
Wry & Dry: a cynical and irreverent review of the week in politics, economics and life. For intelligent Readers who disdain the trivial.
Investment Matters
This week Craig reviews:
- the budget – a compact summary
- the bank stocks’ mini melt down – why?
- Metcash
- Inghams
- CSL
Read this week’s Investment Matters.
1. Wry & Dry’s ponderings…
It was a week when (a) Trumpster showed-off his new passport with his own image on page 4 to Emperor Eleven; (b) Grim Jim brought down a budget with massive broken promises (can he be bound by promises made by Uncle Albo?); (c) Iran continued to keep winning at the game of chicken; (d) the UK Reform party caused the Starmer government to split like Yugoslavia after the fall of communism1; and…
…(e) the Liberal Party could muster only 12% of the vote in seat it had held for 25 years. And the media in Melbourne focused on a major issue: the resignation of an AFL coach (i.e. manager) was the lead news item for the week.
1 Yugoslavia was formed in 1922 after centuries of foreign rule under the Ottoman Empire and Habsburg monarchy. It was formed from land essentially occupied by Serbs, Croats and Slovenes. After the Second World War, it came under communist rule as a federation of six republics. After the fall of communism and some awful ethnic cleansing and civil wars, the former Yugoslavia split into what are now seven independent republics.
2. One Nation One Policy reap a harvest of discontent
In an outcome that surprised no-one except the Liberal Party, last weekend the Liberal Party picked up a mere 12% of the primary vote in a seat that former Liberal Head Girl Sussan Ley had held for 25 years.
It has taken two decades or more of monumental conservative coalition (i.e. Libs + Gnats) incompetence to achieve this Hall of Fame (Legend Status) achievement. Allow Wry & Dry to revisit the still smoldering ashes of the bonfire that Pauline lit.
The last decent Liberal leader was John Howard, who was in the chair for 12 years. The corresponding Gnats were Tim Fischer and John Anderson (14 years between them). Stability was strength. Since then, there has been Coalition stability reminiscent of post-war Italy. The Gnats have had 6 leaders, with only Warren Truss lasting more than 4 years. The Liberals have had 7 leaders, with only Mad Monk Abbott lasting more than 4 years.
Each new leader failed to respond to the changing electorate mood and failed to keep to each party’s principles. Ambition was greater than competence. Which leads to the problem of the parties’ ‘pre-selection’ process. How is that so many dufuses get elected?
Curiously, it will be a burr under Uncle Albo’s saddle if the anti-Labor parties get their preference act together. Labor has 15 seats with a margin under 4%; and has a majority of 19 seats.
3. Only two things to do
Treasurer Grim Jim had only two things to do with the budget: (a) present a realistic plan to improve the nation’s productivity; and (b) reduce ‘demand’ in the economy. He achieved neither.
So, Australians’ standards of living will keep falling and inflation will keep rising.
There were some sensible actions. Changes to negative gearing were relentlessly signalled and came to pass. Given the generous (and politically wise) grandfathering and transition arrangements planned, the only groups adversely affected seem to be shareholders of the major banks (this week’s Investment Matters is a must read) and those state governments that rely on property stamp duty.
Gloom
There was one gloomy proposal that Wry & Dry is struggling to digest, namely the changes to taxation of capital gains and of family (i.e. discretionary) trusts. He suspects that Readers are also reaching for the Gaviscon. If not the gin.
At first blush, the news is not good. And on deeper reading, the news is still not good.
The considerable changes to taxation of capital gains and of family trusts, and their interaction with each other and other parts of the tax act, has added a layer of complexity that will delight accountants and dismay investors. But those investors whose wealth manager does not charge extra for further advice should be relieved.
One of the larger disappointments is that the CGT (especially) and trust changes treat passive investments the same as SME investments or ownership. There is no reward for risk taking in the latter. The former do not directly add to productivity, whereas the latter enhances productivity (otherwise the small business dies). And in the latter case, the realised gain on sale in some way compensates income forgone during the business building phase. Sigh.
Passive economic management
No matter which way Readers look at it, Grim Jim’s feel-good forecasts are not the result of his sound economic management. He should thank China’s massive demand for iron ore: 90% of budget’s ‘improvement’ came from windfall gains.
Grim Jim should also thank the tax structure’s in-built ‘bracket creep’ (surely the most uncomfortable description of a taxation concept), that sneakily increases individual taxpayers’ average tax rates as incomes rise. If it is good enough to index taxable capital gains, why not index personal income tax brackets?
Intergenerational and what promises?
Separately, what is this about this marketing term: intergenerational inequity? Aside from the admittedly significant problem of excessive housing costs for home buyers, Wry & Dry’s is struggling to find where else Gen-Y and Gen-Z have reason to whinge. That’s not to say they wouldn’t, would they?
By the way, of course Uncle Albo broke his election promises about tax. Readers: get over it. After all, he is a politician.
Readers will remember Paul Keating’s ‘core’ and ‘non-core’ promises (honour the former, toss the latter), Julia Gillard’s “there will be no carbon tax under a government that I lead” and Tony Abbott’s that “there would be no cuts to education, no cuts to health.”2
2 Readers will also remember John Howard’s pledge not to introduce a GST. But he did. However, when he was persuaded that it was a sensible action, he openly changed his mind and took the GST proposal to an election. He won the election.
4. Starmer couldn’t run a bath
Two years ago, Sir Keir Starmer was elected UK PM with a stonking majority. He now has the worst net approval rating of any UK PM since the mood of the public was tapped. The reasons why no longer matter. But, in precis: it wasn’t that he was too left wing or too right wing, he just couldn’t govern.
After the UK elections last weekend, the writing was on the wall that he should schedule an appointment at Centrelink. And check that his removal van driver has 10 Downing Street in his Google Maps.
But he’s a stubborn and proud man. And he’s thrown out the sheet anchor and is willing to die in a ditch (how’s that for a mixed metaphor?). But that hasn’t stopped the seeping spread of Labour discontent. The majority of his party want him to pursue a career in something else. None of the party’s affiliated trade unions want him to stay.
He’d rather have a messy pub fight than go with dignity. The underlying problem is that the British Labour party is a confederation of tribes, with memories and allegiances going back 125 years. A pub fight will not bring out the best outcome.
Only the ambitious Wes Streeting, the Health Secretary, has so far said he will challenge, or will do so. Streeting is the most attractive of putative candidates to succeed Starmer. Well, attractive to those who prefer sensible centre-left government to some of the weirder further-left loonies. Now that HMRC (the UK tax office) has decided not to pursue former deputy PM Angela Rayner for tax avoidance, she might toss her hat into the ring.
Interestingly, Liz Truss, the former Conservative PM who didn’t outlast a lettuce, got the DCM essentially because of the massive negative response by UK gilt (i.e. bond) investors to her policies. The Financial Times tested the gilt market, so to speak, for their feelings about the putative challengers to Starmer. Some 90% stated that Wes Streeting was the ‘most market friendly’.
There’s a lot yet to happen. But, make no mistake, there’s nothing the media loves more than the blood of a leadership challenge. And so the headlines will be exaggerated and large. In the meantime, Starmer is not worrying. He went back to 10 Downing Street after parliament – and put the kettle on.
5. Sadness
All the fuss about elections, budgets and Trumpster’s follies have a hidden increasingly shocking and sad revelations of The Royal Commission on Anti-semitism and Social Cohesion.
Uncle Albo created the Royal Commission following the Bondi Massacre last December (in which 15 Jews were killed), when the penny dropped that there was raging and increasing anti-semitism across Australia.
The Commission is now hearing the very human stories of how individual Jews and their families have been the subject of unprovoked violence, attacks, discrimination, abuse and humiliation. The saddest stories are from the children.
If Readers wish a reality check on a part of life in Australia that might give a sense of the hatred that has become normalised, then the daily media has reports.
6. Tsar Vlad has two problems
Tsar Vlad’s government has shredded its 1.3% economic growth forecast for this year. And plonked 0.4% in its place.
The economy shrank in the first three months of this year. Inflation was 5.9% at the end of March. The central bank’s key lending rate is 14.5% (albeit coming down). Russia’s earnings from oil and gas have been truncated, down 40% for the first three months year-on-year. Not a good story.
The costs of Tsar Vlad’s Adventures in Ukraineland are beginning to rot into the economy.
Then there is of Tsar Vlad’s Adventures in Ukraineland itself. It’s bogged down. In fact, in April, Ukraine regained some territory. Tsar Vlad is losing soldiers at about 35,000 per month, exceeding the rate of recruitment. Ukraine now surpasses Russia in the number of long-range drone attacks; apparently economic and military targets almost 2,000km from the Ukrainian border are regularly being hit.
And then there is the humiliation in Moscow. Tsar Vlad’s annual Victory Day4 military parade had no military this year. It seems that Tsar Vlad was worried about Ukraine landing a swam of drones on Tsar Vlad’s kit. Rubbing in the insult, Volodymyr Zelensky issued a decree to “permit” the parade to proceed.
The question now, who can outlast the other in the modern-day version of trench warfare?
4Commemorating Russia’s victory in the 1941-45 war. Tsar Vlad has seemingly forgotten that on 17 September 1939, the Soviet Union (essentially Russia) invaded Poland. On 30 November 1939, it invaded Finland. In June 1940, it invaded the Baltic states and eastern Romania.
7. Emperor Eleven doesn’t need a deal
As Wry & dry quills this missive, Trumpster is showing his new passport all around Beijing. And enjoying all the pomp and military ceremony. And so rigid were the movements of the unsmiling marching soldiers that it was difficult to see if they were humans or robots.
Emperor Eleven told Trumpster that avoiding conflict between them depended on Trumpster’s Taiwan policy. Trouble is, Trumpster doesn’t have one. Which is a worry. Especially if you’re Taiwanese.
Expectations are low for the outcome of the talks. This can be seen from the different interpretations of the initial meetings.
Trumpster’s media team:
“President Xi also made clear China’s opposition to the militarisation of the Strait and any effort to charge a toll for its use, and he expressed interest in purchasing more American oil to reduce China’s dependence on the strait in the future. Both countries agreed that Iran can never have a nuclear weapon.”
Emperor Eleven’s media team:
“The two presidents exchanged views on major international and regional issues, such as the Middle East situation, the Ukraine crisis, and the Korean Peninsula.”
The contrast between the two told the story.
8. Trump Gold Coast Tower
The announcement foretold the end. In February, David Young announced that his company, Altus Property Group, had completed a deal with Trumpster for a $1 billion Gold Coast development, with 91 floors and 270 apartments. The terms of the deal were not clear.
On Tuesday, the deal went OTD, because:
- Trumpster found out that the Gold Coast was not a gold mining opportunity;
- Trumpster thought the deal was to buy the land, in exchange for Tsar Vlad getting all of Ukraine;
- The nearest airport was too small for Trumpster’s private jet; or
- David Young’s project was a chimera; he had not approached investors for finance nor the local council for discussions.
Close, but no cigar. The correct answer is d. What wasn’t disclosed at the announcement was that Altus was a residential property development company, with just one development under its belt, and that was ‘now selling’. But Mr Young has also been twice bankrupted (which would make him an ideal partner for Trumpster).
9. Trumpster’s policies’ approvals
Trumpster may be happy with his body of work, so to speak. But he is in a minority. A poll undertaken by the Financial Times asked they-the-people-of-those-united-states for their opinions.
Approval of inflation and Iran hovered around 30%. Immigration was his big winner – with just 42% approving. Is he losing sleep?
Snippets from all over
Royal navy warships built back to front. Sort of.
Work on a fleet of new Royal Navy warships has suffered a setback after two of them were assembled incorrectly. (UK Telegraph 14 May)
Wry & Dry comments: Will the government Bring back keelhauling?
Iran’s missile sites reincarnated
The Trump administration’s public portrayal of a shattered Iranian military is sharply at odds with what U.S. intelligence agencies are telling policymakers behind closed doors. (New York Times 8 May)
Wry & Dry comments: Iran has restored operational access to 30 of the 33 missile sites it maintains along the Strait of Hormuz.
Circumventing the Strait
In a mechanized revival of the caravans of goods-laden camels that once sustained Arabian commerce, highways, railroads and ports in Saudi Arabia, the United Arab Emirates and Oman have been transformed into an emergency logistics lifeline, circumventing the Strait of Hormuz waterway. (Wall Street Journal 13 May)
Wry & Dry comments: It will take a lot of road trains to equal the capacity of a super tanker.
Facial recognition reduces assaults
Offences involving violence against women and girls fell by a fifth during a Metropolitan Police [London’s police force] live facial recognition (LFR) pilot that led to more than 170 arrests. (The Times 13 May)
Wry & Dry comments: Perhaps the Victorian government should consider. Just askin’.
Profit from the war
Saudi Aramco, the world’s biggest oil company, said its profits rose to $33.6bn in the first quarter of 2026, up 26% year on year. (Economist 11 May)
Wry & Dry comments: The firm has been pumping as much as 7m barrels of oil per day through its east-west pipeline, allowing it to export via Saudi Arabia’s west coast, even as war has gummed up flows going through the Strait of Hormuz.
It figures
- 3.8%: USA. Inflation to end April. Highest in 3 years, above expectations. Americans not happy.
- 5.81%: UK. 30-year government bond (gilts) rate. Highest since 1998.
- 5.046%: USA. 30-year government bond rate on a new issue. Highest since 2007.
And to soothe your troubled mind…
“He’s rapidly becoming Joe Biden because he’s basically in a bunker with his wife saying, ‘It’s all going to be fine.’” Rory Stewart, a British journalist, speaking of Starmer going to the mattresses.
Wry & Dry comments: The clock is ticking.
Disclaimer
The comments in Wry & Dry do not necessarily reflect those of First Samuel, its Directors or Associates.
Cheers!