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US Credit Rating on a Negative Watch with Deficits and Debt - Talking Business 2011 Ep 12c

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

Garry and Leon talk about how Standard & Poor's has put the US credit rating on a negative watch, meaning there is a substantial possibility the country could lose its AAA credit rating over the next couple of years if it does not rein in its mountainous deficits and debt. The news has hit the Australian share market and sent the Australian dollar soaring. Australia's export prices rebounded last quarter, courtesy of voracious Asian demand for the country's commodity riches, lifting the terms of trade to near historic heights and fuelling a boom in mining investment. And a leading index of the Australian economy has pointed to robust growth ahead, while sharp upward revisions suggested the economy fared better in the face of damaging flooding than some had feared. Despite these good economic signs, Treasurer Wayne Swan has flagged a tough Federal budget and the big question for the ALP is whether it will cost it further support at a time when it’s getting a hammering in opinion polls. Treasurer Wayne Swan says revenues will fall $4.5 billion following the Queensland floods and Japanese earthquake. And Victorians can expect some savage budget cuts too. will deliver the state government's election commitments but little else, with a national spending slump expected to slice an extra $1.5 billion from Victoria's GST collections. The May 3 state budget is expected to also contain a blunt warning that Victoria's property boom is set to end. And the bad weather continue to affect companies. Pay television company Austar says the devastation from this year's natural disasters has cost the company 8,500 subscribers in the first quarter. Woodside Petroleum has blamed higher than normal cyclone activity in the north of Western Australia for a fall in first quarter sales and production. Newcrest Mining Ltd has downgraded its full-year guidance for gold production on the back of flooding and the suspension of operations at its Bonikro mine, after posting a 16 per cent fall in March quarter output. Newcrest Mining Ltd has downgraded its full-year guidance for gold production on the back of flooding and the suspension of operations at its Bonikro mine, after posting a 16 per cent fall in March quarter output.

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iTunes Category: 
*Business*
Author: 
Garry Barker and Leon Gettler
Keywords: 
Business, RMIT, Economics