Terry McCrann: Prime Minister Malcolm Turnbull goes one, two and maybe three

GOOD Mark Two. Or three. The Turnbull government is beginning to make a habit of making important decisions in the national interest, writes Terry McCrann.

The Turnbull government is beginning to make a habit of making important decisions in the national interest. Picture: AAP

GOOD Mark Two. Or three.

The Turnbull government is beginning to make a habit of making important decisions in the national interest.

On Tuesday it did exactly the right thing in committing to build the second Sydney airport. It did have to wait, on tenterhooks, for Sydney Airport — that’s the first airport — to decide not to build and own it instead.

So we got a “good decision” only because a (very) “bad decision” — the one in 2002 to give Sydney Airport the right to maintain an exclusive monopoly of airports in and around Sydney through to the 22nd century — wasn’t triggered.

It’s also not that great that Sydney Airport didn’t “trigger it” because it’s making such ludicrously excessive profits out of the current monopoly that it couldn’t “afford” to dilute its profitability by building the second airport.

It’ll keep shamelessly gouging Australian travellers and foreign tourists for at least the next 10 years.

Now, as I wrote on Wednesday, arguably a second airport shouldn’t be built or at least not now and for the next decade or so, if only the existing airport was run efficiently.

Which incidentally, shows you can be less than efficient but still super-profitable: if you have a special monopoly.

But as it is not going to be allowed to operate thus, a second airport has to be built; and better — indeed best — that it’s being done the way the federal government is going to do it.

Just don’t (let’s hope) repeat the mistake of 2002 and sell the second airport to private investors too quickly or too cheaply. And certainly, absolutely certainly, not to Sydney Airport. Ever.

THAT’S Good One. Good Two is the announcement from Treasurer Scott Morrison that mainchancing vulture Elliott Partners won’t be allowed to steal BHP Billiton away to London.

What Elliott wants to do is to destroy a great Australian business to reap some short-term multi-billion dollar profit; and having gorged itself, move on to the next opportunity where it can sprinkle some financial fairy dust.

This is not some blundering inappropriate interference with the market; it is a government acting entirely within its legislative rights and its most fundamental mandate to ensure the national interest.

Treasurer Scott Morrison has announced that mainchancing vulture Elliott Partners won’t be allowed to steal BHP Billiton away to London.

It’s also to be applauded for doing so publicly and upfront. It could have simply let the process play out to — if Elliott got the transaction — a formal application to the treasurer under the foreign takeover rules; and just knocked it on the head.

Anyone who starts spouting nonsense about “markets” and “sovereign risk” should be laughed at as a complete idiot. They could also be instructed to look at what governments — what every government (and central banks) — have done through the GFC and subsequently.

Now the Elliott proposal was actually fundamentally incoherent, to say nothing of its deceitfulness. For starters it purported to leave BHP Billiton as an Australian company taxpayer at our 30 per cent tax rate and not move it to London and its 17 per cent.

Oh yeah? When the whole point of it was to get more British shareholders into the “new BHP?”

If you “announce” that you think that a PM and a treasurer came down in the last shower, don’t be surprised if they “shower” all over you.

Now all this said, Elliott has fingered two BHPB “sore points:” the dual listing and its $20 billion-plus play into US shale. BHPB is going to have to revisit both.

The dual listing “works” on one level — the ability to stream franked dividend credits to Australian investors. But in a broader international investment context it is clunky, it is locked in the 20th century.

We’ll come back to the issue of oil shale, but let me briefly state what I see as the problem: the disconnect of the very short-term operating dynamics of the shale business from the very long-life cycles of all the other BHPB first-tier assets.

Crudely, the shale would fit more appropriately in ‘somebody else’s BHP’ — like Ivan Glasenberg’s transactional Glencore.

The Good Three, incidentally was the move to keep some of “Australia’s gas” in Australia, for Australians.

It did sit within the broader (and deeper) incoherence of energy and electricity policy. But narrowly it was undeniably in our interest.

Originally published as Terry McCrann: Prime Minister Malcolm Turnbull goes one, two and maybe three