Tax Breaks or More Taxation? - Talking Business 2011 Ep 35c

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

Leon and Garry discuss how next week's tax forum will include a new tax break. But Finance Minister Penny Wong warns we’ll need more tax. Business groups will push for the GST to be increased, even though the government has ruled that out. Former treasury secretary Ken Henry will help prepare a white paper on Australia’s involvement with Asia at a time when fewer Australians are learning mandarin. Treasurer Wayne Swan says the government remains committed to returning the federal budget to surplus but outgoing Commonwealth Bank chief executive Ralph Norris has warned the federal government to abandon that commitment. Future Fund chairman David Murray blames Australia's politicians for the pessimistic mood of citizens. The number of job vacancies in Australia rose 3.2 per cent in the three months to August. A G20 sub-committee report shows that a lack of competition in Australia’s banking sector poses systemic and “moral hazard” risks. Figures shows smaller lenders are now more popular than the big banks. Westpac reduces the interest rate on its fixed home loans, followed by ING Direct, St George and CUA. Myer chief executive Bernie Brookes believes the struggling retail market will not recover for at least six months. The Australian dollar falls to a 10-month low. Woolworths expects to lift net profit in the current year but admits retailers face significant challenges. Childcare and nanny services should be tax deductible to help women return to the workforce, high ranking female executives say. WA's mineral and resources wealth reach record levels. European Central Bank board member Lorenzo Bini Smaghi says that Australia should use international forums to pressure European politicians to act with more speed in attempting to avoid a global downturn. Collateralised debt obligations (CDOs) exposed to United States mortgage insurer PMI Group are on the brink of imploding and put tens of millions of dollars of Australian investments at risk. Local law firm Blake Dawson, will merge its Asian practice, and possibly all operations, with UK law firm Ashurst. US energy giant Chevron signs off on its $US29 billion ($A29.63 billion) liquefied natural gas (LNG) project in a West Australia's Pilbara region. Wesfarmers pockets a handy $90 million profit on the sale of part of its coal interests to Chinese miner Yanzhou Coal Mining. Rio Tinto Ltd lifts its stake in Ivanhoe Mines to 49 per cent. The Mongolian government wants to take a larger stake in the Oyu Tolgoi copper and goal mine managed by Rio Tinto. BHP Billiton plans to roll out a remote operations centre for the Pilbara.

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Garry Barker and Leon Gettler