Home owners and small businesses can take a breath, says David
Bassanese in the Financial Review
(not online). The consumer price index rose 0.9% for the year, but underlying
inflation remained close to the centre of the RBA’s
target zone of 2-3% (although according to the SMH, it’s at the “very limit of the Reserve Bank’s comfort zone”). So despite
the strong rise in petrol prices over the year, any spillover effects on the
rest of the economy remain contained. The upshot is, there won’t be an increase in interest rates
next week when the Reserve Bank’s board meets, says Corinne Lim in the Fin. But there is enough uncertainty in
the outlook to continue among economists in coming months.

If ever the benefits of globalisation and competitive reform
were in doubt, yesterday’s consumer price index should have put these to rest,
says the Fin’s editorial. Our economy is absorbing high
energy prices much better than it could have 20-years-ago. But we still
need to inoculate our economy against the inflation virus with periodic doses
of tough, supply-boosting reform and by safeguarding the independence and
credibility of the Reserve Bank as an inflation fighter. Failure to do so puts
our record of sustained economic growth at risk. Otherwise, says Mark Crosby, there are plenty of reasons to believe inflation
is not about to get too far above the Reserve Bank’s target range for some time
yet.

And while things might be looking good for the economy, the
picture’s is not so rosy on the power front, says The Age‘s Rod Myer, who reports that Victorians and South Australians should expect electricity
blackouts this summer, with sky-rocketing demand for power creating an ongoing
crisis in electricity generation and leaving power companies unable to keep up
with demand.

The Age also reports that Australian retail giant Woolworths has
cemented its position as the No. 1 player in the $11 billion retail liquor
market by buying the Taverner Hotel Group for $380 million through its Bruandwo
joint venture with Bruce Mathieson. With his 926 bottleshop network, Woolies
chief Roger Corbett is really applying the blowtorch
to John Fletcher over at Coles Myer, says Elizabeth Knight in The Sydney Morning Herald. In
fact, all retailers will be feeling this pressure. The particularly interesting
aspect to the Taverner acquisition is that it appears to be more of a play on
gaming than on property.

Meanwhile, Roger “Sugar Daddy” Corbett’s corporate
governance nightmare just got worse, says John Durie in the Fin (not online). When big corporations
hold selective briefings on $380 million acquisitions, as Woolies did
yesterday, red warning flags start waving. This latest deal adds 2000 poker
machines to Woolies’ assets and potential for five new Dan Murphy’s sites, but
when these are built, who owns what and how profits or costs are shared is a
total mystery.

Something peculiar is happening on the other side of the
Tasman, says Stephen Bartholomeusz in The
Smage.
Big forestry products group Carter Holt Harvey has just issued its third profit
downgrade in six months and its second during the currency of the bid from
Graeme Hart’s Rank Group. Yet its independent directors still maintain that
shareholders shouldn’t accept the Rank bid.

Meanwhile, The Australian reports that Burns Philp has predicted double-digit earnings growth for its
$2.8 billion Goodman Fielder spin-off as it prepares to brave a choppy
Australian share market for what should be the year’s biggest float. Graeme
Hart’s Burns Philp is racing to get it off by December, against a market that’s
fallen 4% from its peak, and may come up against a $2 billion-plus float of the
Cheung Kong Infrastructure power assets, also slated for this year.

And on the Coopers/Lion Nathan saga, The Oz‘s Bryan Frith reports that new information has come to hand about the 2000 sale by Industrial
Equity of its shareholding in Coopers Brewery, which casts a disturbing light on
how the board of the South Australian brewer administers the sale of shares in
the company, through the pre-emptive rights regime.

On Wall Street, stocks closed lower after an attempt at a
rally was thwarted by worries over higher borrowing costs and disappointing
earnings from companies including Boeing and Amazon. The Dow Jones ended down
32.89 points at 10,344.98. MarketWatch has the full report here.