Kerry Packer’s decision in 1995 to ditch Paul Keating and publicly back John Howard has proven to be his best ever political investment.

If Kerry Packer had said instead that Keating was a visionary and John Howard didn’t have the political goods, there is little prospect that PBL would be announcing the extraordinary $5.6 billion sale of its old media assets today.

The slavishly pro-Packer regulatory environment pursued by the Howard government has delivered enormous returns to the Packers through Nine’s ongoing annual profits. Now, the Packer family is about to have its greatest ever pay day and John Howard is the man they should be thanking.

CVC Asia Pacific has agreed to stump up $2.8 billion for a half share of PBL’s old media magazine and television interests – plus the 50% interest in Ninemsn which is inextricably linked to the titles and programs in ACP and Nine.

Of course, under the old laws it was illegal for any foreign entity to own more than 25% of an Australian television licence, but John Howard has opened the door for a long line of foreign bidders with his new media ownership laws.

This is all about the laws of demand and supply. By abolishing foreign ownership restrictions, the demand for Australian media assets dramatically expanded.

However, more importantly, supply was curtained by the regulatory protections afforded to Australia’s cosseted free-to-air television oligopoly. This ensured the Packers could extract a huge price.

Paul Keating got it all wrong when he suggested Labor should announce a policy to force any media mergers to be unwound if it wins next year’s election. The smarter move would be to announce an intention to auction off a new free-to-air licence to the highest bidder in 2008. That would instantly wipe many hundreds of millions off the PBL deal – and ensure even more slavishly pro-Howard campaigning from the Packers at next year’s election.

At one level, you can argue this is the highest level of corruption in the land – mogul provides media and political support for Prime Minister who uses regulatory power to make mogul richer.

All of this puts last year’s taxpayer-funded memorial service for Kerry Packer into stark relief. Who can forget John Howard describing Kerry Packer as Australia’s greatest businessman. Greatest when it comes to working politicians, that’s for sure.