Economist.com Cities Guide: Sydney Briefing - February 2006

News this month

Wheat and chaff

One of Australia’s biggest-ever corruption scandals is unfolding in Sydney. Terence Cole, a former judge, is examining allegations that AWB, an Australian wheat seller, paid kickbacks to Saddam Hussein’s regime in Iraq to secure contracts under the UN’s oil-for-food programme. Between 1999 and 2003, AWB sold Iraq wheat worth more than $2.3 billion. Allegations of impropriety surfaced in a UN report last year, which listed AWB among companies that had paid the Iraqi government. The report found AWB paid more than $221m to Alia, a Jordanian trucking company, to distribute its wheat in Iraq between 1999 and 2003; these payments were then remitted to the Iraqi government. AWB has denied knowledge that these payments were going to Mr Hussein’s regime, but new evidence has made such denials look thin.

Heads began rolling on February 9th when Andrew Lindberg resigned as AWB’s managing director after four days of intense questioning; a company statement said his resignation was “in the best interests of the company”. The inquiry is also proving to be an embarrassment for Australia’s coalition government, led by John Howard. One of the loudest critics of Mr Hussein’s regime, Mr Howard was quick to commit troops to the American-led invasion of Iraq. The Cole inquiry is due to report on March 31st.

Up in the air

Plans by the owners of Sydney Airport to build a giant mall of shops, cinemas and car parks near the airport’s busy runways have unleashed a torrent of opposition from the city’s authorities. The Sydney Airport Corporation (SAC), controlled by a subsidiary of Macquarie Bank, Australia’s biggest investment bank, wants to build the complex over the next five years to generate revenue from vacant land adjacent to Botany Bay. But Clover Moore, Sydney’s Lord Mayor, is considering a legal challenge, saying the land should be kept for future airport expansion. Her blunt-speaking predecessor, Frank Sartor, now minister for planning in the New South Wales state government, said the airport's “willy-nilly, stuff-you attitude is over the top”. The snag is that state and local governments have little hold over airport land, which is controlled by the federal government in Canberra.

Since it won control in a 2002 privatisation, the Macquarie Bank consortium has turned Sydney Airport, Australia’s largest, into a profitable business by cutting costs and raising charges to the airport’s users. Max Moore-Wilton, the SAC’s chief executive (known as “Max the Axe” from his former role as a senior civil servant in Canberra), was recently appointed chairman of Macquarie Airports, whose holdings also include airports in Brussels, Rome and Birmingham. Mr Moore-Wilton is due to be succeeded in April by Russell Balding, managing director of the publicly owned Australian Broadcasting Corporation.

Island hoping

Sydneysiders are gripped by the murder of Janelle Patton, whose battered body was found in March 2002 on Norfolk Island. A 29-year-old from Sydney, she worked as a temporary resident on the island, a speck in the Pacific Ocean about 1,500km north-east of the city. Hers was the first known murder in the island’s history. The trail seemed to have gone cold until February 1st, when police in New Zealand arrested Glenn McNeill, a 28-year-old New Zealander. A chef who once worked on the island, Mr McNeill was extradited and appeared in a Norfolk Island court on February 9th on murder charges. He did not enter a plea, and has been held in custody pending a further hearing.

The case has strained relations between Australia and the island, a self-governing territory. First a British penal colony, Norfolk Island then became home to the descendants of sailors who committed the mutiny on the Bounty in 1789. Islanders argue that Queen Victoria gave them the territory, and accuse Australia of imposing authority. In 2004 an Australian magistrate upset locals when he publicly named 16 “persons of interest” in the case, mainly island residents; Mr NcNeill was not among them. Some news reports then inflamed the situation by suggesting islanders could be protecting Ms Patton’s killer.

Republic opinion

A long-running campaign to make Australia a republic got a shot in the arm in late January, when supporters gathered at Sydney's Bondi Beach under the banner of their new slogan, “A Mate for Head of State”. Similar rallies took place in other cities, to draw public attention to the republican call for an Australian head of state to replace Britain's Queen Elizabeth. But an opinion poll that came out around the same time showed support for a republic had fallen to 46% from majority support earlier this decade. In the same poll, support rose to 52% in the event of Prince Charles succeeding the Queen as monarch.

The issue has lain dormant since a 1999 referendum was defeated, 55% to 45%. Republicans have blamed John Howard, the prime minister and a fervent monarchist, for manipulating the result by offering an unpopular republic model: a head of state chosen by parliament. Polls indicate a referendum has no chance of succeeding unless Australians are offered the option of electing the head of state themselves.

Gowings gone

In a city that rarely lets nostalgia stand in the way of progress, Gowings department store survived defiantly for 138 years. Its art-deco building on the corner of George and Market Streets has been as recognisable a landmark among Sydneysiders as the Sydney Opera House. Yet on January 29th the company's neon sign finally stopped twinkling, and Gowings ceased trading. Two other company stores, on Oxford Street and in the northern suburb of Hornsby, had closed some months earlier. An administrator, appointed last November to try to stem heavy financial losses, decided to shut down the business after failing to find a buyer.

The demise of Gowings is a cruel irony at a time when Australians are enjoying the fruits of a booming economy driven largely by consumer spending. But that may have been part of its problem. The store’s mixture of casual, own-brand clothes once attracted a loyal following, but as younger shoppers flocked to suburban shopping centres, chasing designer clothes and computer gadgetry, Gowings’ formula seemed increasingly out of kilter. The end was nigh when John Gowing, great-grandson of the founder, floated the retail business as a separate company in 2001, in order to concentrate on his family’s more lucrative stockmarket investments.

Catch if you can

February 2006

Mozart’s Masterpieces

March 1st-4th 2006

The Sydney Symphony Orchestra (SSO) marks the 250th anniversary of Mozart’s birth with this concert of two contrasting works from the composer’s repertoire: his Symphony No.40 and Concerto for Two Pianos K 365. Michele Campanella and Monica Leone, two virtuoso pianists from Italy, will perform the second piece, in an evening conducted by Gianluigi Gelmetti, the orchestra’s chief conductor and artistic director. Suite No.2 from Ravel’s “Daphnis et Chloe” will finish the evening.

The SSO plans a series of four more concerts, called “Mozart in the City”, for April, June, August and November at Sydney's City Recital Hall in Angel Place.

Sydney Opera House, Bennelong Point. Tel: +61 (02) 9250 7777. March 1st, 3rd & 4th at 8pm; March 2nd at 1.30pm. See the opera house's website for further details.

More from the Sydney cultural calendar