Interest Rates Still On Hold - Talking Business 2011 Ep 23c

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

Leon and Garry discuss how interest rates have been left on hold at 4.75% for the eighth straight month. Australians will learn how the proposed carbon tax will hit their back pockets when the federal government unveils its policy on pricing pollution on Sunday. Prime Minister Julia Gillard will promise that seven out of 10 families will face no added financial burden from the carbon tax, the tax will not apply to petrol for individual drivers, it’s likely to be $23 a tonne and Gillard has halved the number of companies needing to pay the tax from 1,000 to about 500. The Australian Competition and Consumer Commission (ACCC) will be given power to respond to complaints about carbon tax-related price increases. The government removes a month-long ban on live cattle exports to Indonesia. Australian residential building approvals data fall 7.9 per cent in May. New housing starts are expected to fall by 13% between 2010 and 2012 according to the Housing Industry Association. The Australian construction industry is expected to remain weak this financial year, after it shrank for the 13th straight month as residential building slumped, according to an industry survey. Retail sales drop 0.6% in May with weak consumer confidence. Retailers should brace for tough trading conditions until Christmas, with no prospect of recovery until 2012, the Australian National Retailers' Association (ANRA) says and a Boston Consulting Group study shows Australians plan to tighten their purse strings over the next 12 months. A private sector survey shows activity in the services sector fell in June and has been contracting 10 of the past 12 months. Australia’s unemployment rate stays at 4.9 per cent for the second month in a row. The Reserve Bank could downgrade its forecasts for the Australian economy by up to 1.5 per cent. Research shows it’s been a weak financial year for public floats. Australia’s trade surplus in May is the widest in seven months. Total beverage retail sales decline for the first time in four years. A survey shows more graduates are leaving full-time education without finding a job. An ad for the pressure group Get Up Australia, which pastiches the advertising of furniture retailer Harvey Norman to attack its environmental credentials, is censored by Commercials Advice. Publisher Pearson Australia enters the online book retailing business after buying the websites of failed booksellers Borders and Angus & Robertson. Network Ten tells its staff it is looking for 60 voluntary redundancies over the next few weeks. Consumer prices are flat in June, and inflation remains within the Reserve Bank's target range. Profit and employment expectations fall into negative territory for the first time in two years. The MasterCard Worldwide Index of Consumer Confidence which depicts consumer confidence in Australia reveals overall optimism has fallen since March 2010. Insurance companies could raise the cost of home and content insurance policies by as much as 50 per cent over the next two to three years.

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Garry Barker and Leon Gettler