Government's Spending Cuts and Surplus - Talking Business 2011 Ep 44c

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

Leon and Garry discuss the Government’s spending cuts to deliver a $1.5 billion surplus. The federal government has retrospectively reversed laws passed in July 2010 which entitled companies to massive tax refunds in mergers. Expectations of interest rate cuts are running high, capital investment in mining soars, business investment surges by the most in 16 years and ratings agency Fitch upgrades Australia's key credit rating to AAA from AA+. The OECD says Australia’s economic growth will accelerate to the fastest rate in the developed world. The Australian Taxation Office is caught up in more than $8 billion worth of tax disputes, a $2bn increase on last financial year. Wayne Swan plans to meet with bankers, regulators and other market participants to discuss strengthening Australia's corporate bond market. Pressure is mounting on the Federal Government to axe the Gold Pass for former MPs. The heads of BHP Billiton Ltd and Rio Tinto Ltd say they may be forced to review their expansion plans as Europe's debt crisis threatens to smash global growth and freeze credit markets. BHP Billiton's senior management is to undergo its first significant change in 4½ years of leadership by chief executive Marius Kloppers. BHP Billiton is reviewing its diamonds business in Canada's far north. Rio Tinto has revealed plans to expand its flagship iron ore operations in Western Australia. Qantas expects its first-half underlying pre-tax profit to drop by up to 66 per cent as a result of increased fuel costs and the impact of industrial action. Virgin Australia says the move to a new reservations and booking system make it easier to look after frequent flyers and reduce duplication. Food manufacturers are negotiating with the Federal Government to make it illegal for Coles and Woolworths to mimic the packaging of branded products for their private label lines. The peak retail industry body warns of a Christmas devoid of cheer, with end of season sales forecasted to grow below inflation. Harvey Norman isn't expecting a wonderful Christmas season after consumer electronics sales copped a hiding in 2011 and Gerry Harvey warns he might stop advertising in newspapers with his online venture. Foreign Minister Kevin Rudd says uranium sales to India are no sure thing even if Labor does overturn its ban at this week's national conference. ASIC is investigating 35 alleged insider trading cases after receiving almost 30,000 tip-offs. Telstra research shows that around 12 percent of employers have rejected job applicants based on what they have found on the applicant's Facebook or Twitter postings. Court approval has been granted for Count Financial's $373 million takeover by Commonwealth Bank of Australia. BIS Shrapnel says spending on infrastructure is falling victim to the two-speed economy. Retail workers are being left behind as cashed-up mining companies hand out huge wage rises to employees, according to new research. The Murray Darling Basin Authority has released its long awaited plan. Laboratory group Campbell Brothers has increased first half profit by 55 per cent. The Fairfax dynasty severs links with Fairfax. Premier Investments, the owner of retail brands such as Just Jeans and Portmans, says trade improved in October and is in line with expectations in November. A Deloitte report says that a growing mountain of inefficiently handled data in corporate information systems is a silent productivity killer. Legislation has passed in South Australia paving the way for mining giant BHP Billiton's proposed expansion of its Olympic Dam project. Australian house prices are more vulnerable to a major correction than the US housing market was before its collapse following the GFC, according to The Economist magazine. Australia's house prices are falling at an accelerating rate according to RP-Data Rismark. The federal government guarantees Optus protections should its $800 million deal with the NBN Co hit any political hurdles.

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Garry Barker and Leon Gettler
Business, Economics, RMIT