Carbon Tax and Revenue - Talking Business 2011 Ep 11c

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

Leon and Garry talk about how Australian Climate Change Minister Greg Combet has announced that more than 50 percent of the revenue raised by placing a price on carbon will be used to assist households. The Gillard government is on a collision course with the Greens over carbon tax assistance for big polluters, with the minor party angered at Labor's enthusiastic embrace of the abandoned 2009 compensation package and its focus on trying to please big business. The government also appears on a collision course with unions, after two senior cabinet ministers warned that wages settlements in the offshore resources sector were too high. Treasurer Wayne Swan signals a tough budget. Australia's central bank governor, Glenn Stevens, says the world economy's center of gravity is shifting rapidly to Asia. Australia’s biggest construction company Leighton Holdings now expects to report a full year loss of $427 million and plans to raise $757 million in a new share sale to offset the losses. Shareholders of West Australian Newspapers have voted to approve the purchase of the Seven Network's media assets but there's been a big protest vote t o the $4 billion deal. Resources giant BHP Billiton Ltd has denied market chatter. It says it is not about to launch a takeover bid for Woodside Energy Ltd, Australia's top oil producer and one of the world's biggest producers of liquefied natural gas. Global miner Rio Tinto has acquired majority control of Riversdale Mining after more than 50 per cent of the target's shareholders accepted its $US4 billion takeover offer. The banks are getting nervous about the new pokie rules coming in. Banks are believed to be reviewing their lending practices with pokie venues, although none have publicly disclosed it. Toyota will halve production at Altona affecting 3300 workers and Ford will cut 240 jobs from its Victorian plant. Meanwhile, Holden is back in the black after five years of losses on its car making operations in Australia. The red lion brand banked a $112 million profit on its operations through 2010, finally reversing the trend that had built cumulative losses of more than $550 million since 2005. IAG CEO Mike Wilkins has cited poor planning and lack of flood mapping for insurers' refusal to cover homes in disaster-prone zones. Iron ore shipped by Fortescue Metals Group during the three months to the end of March dropped nearly 16 per cent from the previous quarter to 8.4 million tonnes, as heavy rain in the Pilbara iron-ore producing region interrupted operations. One of the world's largest uranium producers, Energy Resources of Australia, is suspending processing operations in the Northern Territory until late July because of continuing heavy rain. Rio Tinto's production of almost all its major commodities has fallen in the first three months of the year, largely due to heavy rainfall and flooding. The company's iron ore production totalled 42 million tonnes, which was down 3 per cent on on the first quarter last year, and 16 per cent on the December quarter. Bank of Queensland's first half profit slumps 45 per cent as it was hit by a significant increase in bad debts. And in the wake of the bad profit figures, it has lost its chief executive David Liddy who told the market he will not be renewing his contract after 10 years with the bank. Qantas engineers have voted overwhelming to take industrial action next month in their fight for better pay and conditions, threatening the travel plans of thousands of people.

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Garry Barker and Leon Gettler