by Colin Chapman
You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time’.
This quote is widely attributed to Abraham Lincoln, a rather more distinguished US president than the present one. It to me when I read the speech Boris Johnson, for now Britain’s foreign secretary, delivered last week at the annual dinner of the Lowy Institute.
It seems that Boris – escaping from the mess that he and the Conservative Party are making of the Brexit negotiations with the European Union – managed to pull the wool over the eyes of at least some members of the audience including Greg Sheridan, foreign editor of The Australian.
Sheridan published a so-called exclusive, rambling interview with Johnson in which he contradicted the views of fellow British cabinet ministers, who are trying to hold the fort in London while the damaged prime minister, Theresa May, tramps the Swiss Alp on three weeks’ holiday. Readers may recall that last time she took a ramble, she returned to call a general election that ended in disaster, with Labour’s Jeremy Corbyn now within spitting distance of 10 Downing Street.
Anyone who has spent any time in London recently will know that, like Theresa May, Johnson is on borrowed time. He is out of favour with just about all of the Tory cabinet, not least for his well-publicised remarks that the EU could “whistle” for the billions of pounds Brussels says is owed by Britain. Colleagues like Chancellor Phillip Hammond and Home Secretary Amber Rudd (who this week confirmed that EU immigration would continue on a substantial scale for years after the end of Brexit negotiations) are only too pleased to see the voluble Boris on the far side of the world talking trade deal-twaddle to anyone who will listen. Significantly, international trade secretary Liam Fox was still in the UK and joined Hammond and Rudd in saying that any such deal will have to wait.
As the horrors of Brexit gradually unfold, the British people are starting to apportion blame to those who created the mess, and the finger is pointed at Johnson, who championed the populist arguments, larded them with lies, and failed to explain how it would work out. Matthew Parris, a former long-term Tory MP and now columnist for The Times, a sister newspaper of The Australian (but much more balanced) suggests that the Conservatives are criminally incompetent. “The thing that’s now in charge of Britain’s direction is called a party, the Conservative Party. Do the voters even begin to understand how this mess is entirely of the Conservative Party’s creation? The Tories are turning Brexit into an humiliating shambles”.
And this weekend, as Bill Shorten comes out with yet another assault on the investment community, cannot the same be said of the Australian Liberal Party?
Australia’s Liberals, like Britain’s Tories, are deeply divided but at least it doesn’t include mavericks like Johnson in the cabinet. People are fed up with the Turnbull government’s mindless slogans and want to see sound policies implemented and courageous decisions taken. Three things stand out: the need for an immediate energy security plan (regardless of what Abbott may say); a proper infrastructure policy (stealing Anthony Albanese’s clothes) and a revised tax policy that knocks Shorten’s ‘fairness’ arguments on the head.
It was a fairly tame week on the markets, and while the government continues to drift, so will stocks. We see no reason to buy back shares we put on to the watch list. Superloop (SLC.ax) staged a small recovery, but we will hold off buying in again. House prices continue to defy the AFR’s predictions, and REA gained 1.80% this week.
Qantas had another good week, as its July sale comes to an end tomorrow. It has been pushing up ‘sale’ prices up by hundreds of dollars a day, making its international fares substantially more expensive than those of Virgin Australia, but it still seems to be holdings its ground. There was a fall in Sydney Airport this week but passing through it one morning last week it felt busier than ever, with long queues now at the automated immigration booths. Top stock was A2 Milk, up over 11% in a week.