"Carbon Wars" - Talking Business 2011 Ep 5c

A review of the week in business, with expert analysis and commentary

Garry and Leon talk about how the carbon wars have begun with Tony Abbott turning the prospective carbon price into an election issue. Business is all for scrapping the price but wants certainty. BlueScope Steel managing director Paul O’Malley has written to Prime Minister Julia Gillard saying manufacturing should be exempted, the horse trading has begun. Computers seem to be melting down everywhere: at the ASX, Commonwealth Bank with its ATMs spitting out free money and Westpac. RBA leaves interest rates unchanged saying inflation will remain within its forecast but the price of fruit and vegetables is rising, City home prices have fallen as a result of higher interest rates and floods deterring buyers. Analysis shows that company gross operating profits fell by 2.8% in the December quarter. Meanwhile Austalia will rake in a record $251 billion from commodity exports next financial year. Its trade surplus has narrowed by less than expected with a sharp drop in oil imports helping to offset a billion dollar hit to coal exports from the floods. Retail sales grew 0.4% in January. Current account deficit comes in at $7.2999 billion in the September quarter while Australia’s economic growth rose 0.7% at the end of 2010. Manufacturing has also begun to expand for the first time since July last year. Government spending is up 0.8%. The Australian dollar holds strong despite jitters in the global economy and the impact of floods, trading at or near parity with the greenback since November. Home building approvals and exports crash as floods inundate north east Australia. New home sale rise 2.5%. The ASX will get a competitor with a new share market, the CHI-X set to open later his year. AMP’s proposed acquisition of AXA Asia Pacific gets the green light. Woolworths is meanwhile feeling the heat from Coles which is outperforming Woolies. Metcash the supplier of Independent Grocers of Australia (IGA) has slashed its earnings forecast, blaming it on weather, deflation and interest rates. Metcash also attacks Coles for cutting milk prices, QR National posts its first half result at $278 million. Goodman Fielder posts a 3,1% gain in profit to $93.1 million. QBE’s profit falls 17% to $1.28 billion, the result of flooding and earthquakes. Downer posts a net less of $103.8 million. Administrators of Borders and Angus & Robertson announce the closure of 38 stores with hundreds to lose their jobs. Myer sets up its China-based retail website, Lirim Emini, a former director of failed stock lender Opes Prime is committed to stand trial on criminal charges. Centro sells is strip malls to private equity firm Blackstone for $9.4 billion. The boards of Telstra and Consolidated Media Holdings have agreed in principle to let Foxtel make a $2 billion takeover bid for Austar United Communications. James Packer has quit the board of Ten after it appoints Seven executive James Warburton as the new CEO of Ten. Frank Lowy relinquishes his executive role at Westfield. The ATO will investigate 46,000 businesses under reporting their cash sales. Self managed super funds face a massive problem and could run short because of an aging population.

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Garry Barker and Leon Gettler
Business, Economics, RMIT