The federal government’s taxation advisory board has
proposed slashing the tax laws by one third in a bid to eradicate out of date
provisions and create a simpler system, reports the Financial Review (not
online). Treasurer Peter Costello said the board’s 11-month investigation into
the laws had found more than 2100 pages were inoperative and should be removed.

If Costello thinks cutting redundant law from the books is
tax reform, it doesn’t say much for his own efforts in the Treasurer’s chair for
the past nine years, says John Durie in the Fin‘s
Chanticleer. If he’s serious about reform, how about making the actual
operative law section simpler.

But these cuts are a good thing, says the paper’s
editorial – if Costello’s Treasury can do it. And the fact that 2100 pages of the Tax
Act are actually “inoperative,” only shows how far we have to go in cleaning up
the wretched document.

Telstra shares yesterday tumbled to their lowest point since
the day the lumbering telco floated on the share market in 1997, saysThe Australian, casting further doubt
over the government’s ability to offload its majority stake just as it named
three investment banks to manage the sale. The shares dropped to $3.89 before
closing at $3.90, down 11 cents or 2.7%. They’re just 50c higher than when
investors bought the first tranche of government shares eight years ago.

Goldman Sachs JB Were and ABN
AMRO will scoop $12.4 million in project management fees as global
co-ordinators for the planned sale, along with UBS,
the co-author of the scoping study into the Telstra sale released at the end of
June. This sounds like a lot of money, says Elizabeth
Knight in The Sydney Morning Herald, but in
the overall scheme of things it isn’t. All the big boys in investment banking
have invested millions of dollars just to pitch for this role – but they will
barely cover their marketing costs with the fees finance minister Nick
Minchin is prepared to pay. On the plus side, there’s the media attention that
goes along with doing such a large and public deal, to say nothing of better
access to the secondary market. All this might one day help lead to other jobs
that will pay appropriate fees.

Still stuck on the Lion Nathan-Coopers takeover battle, The Oz‘s Bryan Frith says Coopers Brewery shareholders owe LN a huge vote of thanks for launching
its hostile takeover bid after the Coopers directors rebuffed attempts at a
friendly merger. Why? It’s the only reason shareholders now have the chance to
obtain a price approaching fair value for their shares, and it’s shone a
probing searchlight on to the administration of the company’s antediluvian and
inequitable pre-emptive rights regime.

The purchase of not one, but two, distressed retail chains
by two private equity companies marks another stage in the evolution of
Australia’s rapidly growing private equity market, says Stephen Bartholomeusz in The Age. Catalyst Investment
Managers and Castle Harlan Australian Mezzanine Partners have agreed to acquire
the discount variety businesses of Miller’s Retail and Australian assets of New
Zealand’s The Warehouse Group for $212
million.

The transaction is notable not for its size but for its
complexity and for the condition of the assets being acquired, says
Bartholomeusz. Both the discount variety businesses have been struggling and
their parents have made big write-downs in their value, with another $140
million or so to come as a result of the sales. Meanwhile, the new retail group that will emerge from the
$212 million merger may spell the end of the dominance of Coles Myer and
Woolworths over the discount retail sector, says The Age‘s Stephen McMahon.