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This Program is Captioned Live.The top stories from ABC News. The Coalition has unveiled its long-awaited industrial relations policy declaring workers have nothing
to fear. Instead of WorkChoices, Tony Abbott is proposing relatively minor changes to the current system. Julia Gillard says the Opposition Leader can't be trusted and regardless of what he says, it will be a return to Howard era policies. A student nurse is being hailed a hero after coming to the aid of a man who fell off a Brisbane train platform. The woman jumped on to the tracks and helped him back up. Queensland Rail says that while it was a brave act, commuters shouldn't put themselves at risk. The Defence Force is calling the battle of Shah Wali Kot in Afghanistan the most significant in decades. Corporal Ben Roberts-Smith got his Victoria Cross from it and tomorrow the crack SAS regiment which fought with him will receive a battle honour that hasn't been awarded since Vietnam. Essendon coach James Hird has promised a tell all about the club's controversial supplement program. Heading into the top of the table clash with the Cats, Hird says he and his players will open up about the drug controversy once the sport's Anti-Doping Agency's
investigation is concluded. And those are the latest headlines from ABC News.
This Program Is Captioned Live. Tonight, the surprise jump in jobs. A rise in employment confounds the pundits but is the mining miracle waning? Reflects commodity prices have come down a lot and the big mining companies are cutting back on their costs, including staff. I'm Ticky Fullerton. You're watching The Business.
WA leads the country for growth but not in job creation. A work in progress. Employment up but it's mining jobs hitting a wall. Rio versus people power. Sam Walsh lashes out on planning decisions. Small beer making a big splash. Tipplers toast the rise of boutique breweries. And looking for yield? National Australia Bank boss Cameron Clyne tells The Business he's comfortable NAB can driver. First a quick look at the markets:
The switch is on . Today's unemployment number chose mining jobs are disappearing and opportunities are opening up elsewhere. The unemployment rate fell slightly as more than 50,000 jobs were created but not everyone is willing to take the data at face value. Here's finance correspondent Phillip Lasker. The surge in jobs was greet would a fair amount of caution. The economy in the first few months of this year first few had stabilised a first few months of had stabilised a bit and was had stabilised actually OK. They don't tell us anything about the future anything about the direction.They don't reflect Charlie's reality either. He's part of the 15% of young people who can't get a job. I've been looking for apprentices and looking for a job. I always get rejected. Unemployment edged lower to 5.5% in April after more than 50,000 jobs were created. A majority of them were fulltime. Unemployment fell in Queensland, NSW and SA. It was steady in the ACT. The jobless rate went up everywhere else and, in a sign mining jobs are drying up, the unemployment rate in the Northern Territory stands at its highest level in more than five years while WA's jobless rate rose sharply to a level not seen since February 2010. The trajectory there is clearly upwards, reflects commodity prices have come down a lot and the big mining companies are cutting back on their costs including staff.It could be that the non-mining some
states are beginning to take up some of the slack left by some of the slack left by a cooling mining boom but not everyone accepts that view just yet. I think I'd be cautious in interpreting these numbers. The reality is that other indicators out there tell us things are a lot weaker. It's interesting, it was 20,000 jobs created in NSW and we're told the NSW economy is still struggling rgets if you go out there talk to business people, times are still tough. The Reserve Bank prized most of the pundits by cutting interest rates. A surge in jobs is not the sort of outcome that supports the argument for lower interest rates but this week's RBA rate cut was more about kens for the future. The trouble is we've got a mining investment boom the is coming to an end all of a time when inflation is benign and the Aussie dollar still remains incredibly strong. That all to me suggests the Reserve Bank did exactly the right thing by cutting interest rates.Charlie will be hoping that today' better-than-expected numbers tell the real story and opportunities are opening up. The new boss of Rio Tinto has hit out at a recent court decision which has blocked expansion of coal operations in the NSW Hunter Valley. Sam Walsh made the comments a that company's annual general meeting in Sydney today. Here's resources reporter Sue Lannin. Sam Walsh was all smiles at his Australia
first shareholder meeting in Australia but he came out with fighting words over the future of Rio's coal mines in the Hunter Valley. The recent decision by the NSW land and environment court to over turn our approval to extend our Mt Thorley Warkworth Mine is an
example where the future of an ourn business has potentially been compromised. The mine employs 1300 people but the court ruled in favour of locals who opposed the expansion which would extend the life of the operation. Rio Tinto has
appealed against the decision. If the appeal is not successful then the extension of the mine can't go ahead and obviously it will have an impact on the jobs of the people in the community.The meeting in Sydney was a far more sedate affair than the recent AGM in London where shareholders slammed Rio for its $14 billion in write-downs and its $3 billion annual loss. Rio Tinto defended its corporate governance policy, including questions about why the board didn't resign over the big write-downs on coal and aluminium. Jan Du Plessis said he wanted to hold on to experienced directors. We've seen quite a lot of change in the organisation and I think at the end of the day stability and continuity is very important. There's a lot more that should be done in terms of the board composition and also
in their the board composition in their attitude to in shareholders.The Australian shareholders' association shareholders.The wants to see shareholders' association also wants to pay-outs. The issue wants to see bigger dividend pay-outs. The issue for Rio
right now pay-outs. The right now is that they do have a lot of debt. They right now is that they do a lot of debt. They are on negative credit watch so they need to address those issues need to address those first, perhaps before they can even contemplate returning excess cash or more cash to shareholders. Rio Tinto is selling off businesses and cutting $5 billion worth of costs over the next two years but Sam Walsh wouldn't be drawn on whether Australia would be targeted for more job cuts. We are very focused on cost reduction, productivity improvement and improving efficiency and after the discussion about location of head office I'm a little bit nervous about raising this but even in a head office in London we're looking there to significantly reduce our cost base and significantly reduce numbers.Mr Walsh did say that Rio paid a small amount of mining tax over the March quarter but he wouldn't say how much. Let's go to Europe now. G7 Finance Ministers are gathering in London and top of the agenda is that vex ing issue, how to get growth back to Europe. All the talk going out talk of austerity going out of fashion is news talk of fashion is news to the Germans. I'm joined from London by David Buick from Panmure Gordon & Co. David, welcome. Ticky, David, greetings. It's Europe Day in Europe, celebration of peace and unity. Where will you be celebrating? Actually, I'm going - which is ironic and not choice at all - I'm taking a plane this afternoon to Krakow to visit Auschwitz which I think is very poignant. That was a disunity from a was ago. That's right. Back to nowadays, of course the disunity is all about growth in Europe and how to fix the problem. Is there any momentum now to end austerity, the sort of momentum that Germany fears? Not really. There was some data last week from Germany that suggested they weren't doing as well as could be expected and that even they may have negative growth for 2013 but there was better manufacturing data this week and one ventures to suggest that germally will just about avoid it but anywhere south of France really looks pretty horrible. We had some awful, awful employment numbers from Greece, up to 27%, and youth unemployment 64% and I and the rest of Europe is supposed to believe the European Union and the Greek Finance Minister that the show is back on the road. I don't know what book he's reading and what yardstick he's got. It's extraordinary. I gath here was on national teefrb there last night claiming the country's battered economy would begin to recover by the ends of the year and the Budget would be in primary surplus, by which we mean surplus before paying off debts. Is that likely? I don't see how you can actually achieve that and create growth and this is where the real problem is. What they're saying is that the show is on the road, persuading those people who've been avoiding paying taxation in Greece to step up to the plate. It's a wonderful platitude but to deliver it is going to prove a huge problem in my opinion. The fact is that what Europe is doing at the moment is trying to show unity and Angela Merkel has this German election in our sights in September and October and everything is focused on that.I gather the IMF gave the Greeks a pat on the back for making progress but Morgan Stanley in the last couple of days has been recommending that investors buy Greek bonds? If you cast your mind back 18 months when Greece was, as they say, absolutely in the last chance saloon, 10-year bonds were yielding 18%. The yield this morning is 9.34% so if you'd had the muscle, the brain, the brawn and if I maisay so the stupidity to buy them at that level, you would have made a king's ransom. If you look over your shoulder northeast to Brussels to see Mario Draghi, who's done a fantastic job, saying, "I am the garbage pail you look for," there is safety at buying at these levels. I wouldn't have the constitution or digestion to take them and also I don't believe the rhetoric being delivered to us all.It sounds a fairly risky proposition to me since nothing seems to be clear in Europe at the moment. We've got Christine Lagarde and the German Finance Minister, they're just two of the speakers at the G7 speakers at the G7 warm-up event on global investment. Presumably the audience event Presumably the audience is
going to event on global investment. Presumably going to be looking for any differences in their views there? Well, they will do. I think the German Finance Minister is probably more - how can I put it - antagonistic towards the whole recovery processyism think he's the biggest cynic of the lot. Madam Lagarde, what a fine-looking filly who walks well in the paddock. I think she's a wonderful politician. I think the IMF is a toothless tiger. I'd like to return to French politics and become the French Presidentyism think she'd do a fabulous job. I hope George Osborne doesn't listen to any twaddle about austerity. Ticky, we haven't even started and if we change game at this moment, God help your generation and your children's generation. The Reserve Bank meets today. Any change on rates, do you your think? No change. They can't change it. Stimulus to remain 375 billion but the door is open to oncomers if we think it's necessary.David Buick, thank you. Now to key stocks on the local share market:
The big bank profits continue to roll in with yield s that endear them to investors. Naerb posted a half-year after tax profit 22% up on the same period last year, a solid result according to CEO Cameron Clyne. ANZ announced a dividend up 3 cents to 93 cents a share. I spoke to Mr Clyne earlier. Cameron Clyne, welcome to the program. Since we last spoke there's been a massive shift towards yield stocks. Banks are a sweet spot in a rather patchy economy and we've even had one broker talking about the possibly the great bank asset bubble of 2013. Should shareholders be careful about investing in bank s? I think there's been a lot of focus on that because all the banks have enjoyed strong share price perform this year but I think investors are looking for yield and as long as the banks are generating earnings and people have a view the economy is going to remain relatively strong, not withstanding some difficult patches, we think at the moment that yield can be supported. You have passed on that rate drop in full, citing better funding conditions, but the profits you've seen and enjoyed in the last 6 months would actually indicate that you and indeed all the major banks probably could have passed the last rate fall on in full for customers? I think you've got to look at it from a broader perspective. It's what we're able to get from the funding markets, yes, they've eased, but we're also dealing deposits
with the need to gather deposits and we're paying more for those and that's very important from a regulatory point of view. We have more stable balance sheets. With hindsight, do you think you could have passed the whole lot on last time round? Not necessarily because the average cost has been rising. We're still replacing some more - cheaper funding with more expensive funding. It's not until we start to see perhaps the average cost stabilise and even fall that we're going to be in a comfortable position to guarantee a better rate outlook. There are calls in the market suggesting these results are probably the weakest of the big banks. Is that because of your reliance on business in your business retail mix? No y think we're obviously a smaller retail bank and obviously the conditions for retail banking are slightly better than the conditions for business banking because business credit demand's low. We've got some challenges in the UK but I the majority of the UK but I think if I asked the majority of our shareholders four or the majority of months ago if shareholders months ago if they'd take
improved earnings months ago improved earnings and improved improved dividend, better improved earnings and dividend, better asset quality and a more dividend, and a more stable UK they would have taken it. I don't look beyond today's reactionyism think most of our investors would say this was a better result than they were expecting. You're talking about better asset qualitich we've recently done a story on insolvency on the program and according to ASIC there were 15,000 insolvencies last year, about the level of the GFC in 2009. Does that surprise you? No, I think we've always had a view that the economy's really going through a transition but no different to any economy in history. I mean in the serbs that we don't subscribe to a 2-speed economy. We thing it's a 10-speed economy. You see the jobs figures again today beating expectations suggesting a lot of commentary around the economy and there are patches of stress, there are some seg.s that are going well. You can't manufacture 5.5% employment for 3 or 4 years based just an perception. There's real economic strength there but, yes t is offset by some weakness.Are you still looking to cut $800 million in costs by 20 18 because if anything your operating costs in this half were up slightly? They were but they were up slightly for a range of reasons, one is of course we have the full pykt effect of the enterprise bargaining agreement we've negotiated. We've obviously got a number of other factors, increased depreciation coming through as we implement our new technology platform. These are good costs associated with running a Coalition is flagging its industrial relations policy today as a very minimalist reform really over the next three years and then using the productivity commission to perhaps make bigger changes after 2016. Is that a satisfactory approach from your point of view? I haven't had a chance yet to absorb the full detail of it but what I'll be doing, as I do all the time s spend time with small business customers. A fair amount of detail is out on the Opposition's policy of paid parental leave. You're likely to be one of the organisations whose taxes will be increased. What do you make of that policy? Again, I think we haven't got enough detail on two fronts for us to really make a full assessment. The first is that obviously I know there is a 1.5% levy on I think the top 3,000 companies. I think we'll probably be safely in that category but I don't know to the degree to which that will be offset. There's been some suggestion that may be offset by a corresponding reduction in corporate tax either fully or partially.Are you confident though that that's going to be able to be delivered, given the state of the Budget? I don't know. I'll leave that obviously for others to determine and announce what the corporate cut will be. We're probably going to reserve judgment until we see the degree to which the levy is fully or partially offset and also the degree to which or how the scheme - proposed scheme works with our existing scheme. Growth for the bank and credit growth in particular you say is very much driven by confidence. You almost seem to be playing down today the importance of our growing fiscal drama here in Australia and saying that businesses and you've spoken to are really more concerned about things like the Australian Dollar or Europe. What I'm saying is that really confidence is multifactorial in the sense that as you talk to businesses around the country they point to lots of factors and they absolutely point to concerns they have about the Australian economy and concerns around policies here and budgets and fiscal conditions but equally point to the high
dollar. They fiscal conditions but they
equally point dollar. They point to concerns
in equally point to the high dollar. in Europe, the prospect of China continuing in Europe, the prospect China continuing to grow. What they're really looking for, I guess, is across the board buoyancy and conditions. Your UK business obviously was much better on the results front but continuing to drag down your overall return on equity and you suggested that actually the worst might not be over yet for the UK and it would depend on the British economy? Absolutely. I think obviously when we embarked on the lestructuring of our UK business a year erso ago, that was off the back of a dibble-dip recession and that was something that people weren't pricking. People were suggesting the worst was over in 2011 and that wasn't the case and we had to restructure the business. Cameron Clyne, thank you very much for talking with me. They often have weird names and odd ingredients. Craft sbeer the product of pint-sized breweries seeking to reclaim taste and market share from the global beverage giants and there's a for boutique beverages. Rebecca
Nash tried one or two for the team. This is Melbourne's World Heritage royal exhibition building last May. The patiently queuing crowds all-R here to happily seep teeny, delicate pots of beer. It's Australia's first boutique beer festival. It was a success.The genesis of the festival began in this St Kilda bar. The idea is to invite independent brewers from here and overseas to concoct something new. The knock-backs have been few and far between. The rule book is thrown out the window for this event and brew rrz encouraged to get creative and do something different. One of the microbreweries taking part this year is Melbourne's Moon Dog. Started by three 20-somethings two years ago, you could say they're living many a young man's dream. Is-T is really fun, interesting beers with big, bold flavours, high alcohol. The kind of beers we wanted to drink back when we were home brewing. This the man behind Moon Dog's unexpected flavours and ingredients. It's got cherry plums in it so it's a very fruity beer. Keeping up with demand is his biggest issue with three new tanks arriving shortly to help triple output. People are looking for something different, something that's not what their dad or grand dad drank. It's the estimated craft beer now accounts for over 2% of beer sales. Small beer perhaps but it is a $5 billion industry. In places like the states where the craft movement is lot more mature it's somewhere around the 8, 9 or 10% mark so I think just as a proportion of our beer market there's a lot of growth left. The movement towards independent small breweries is following in the recent footsteps of other foods. Whether it's wine or food, whether it's coffee, you name it, people now care what the source of the thing they're getting into is. I think the culture has shifted enough for it to stay. I think that back when all those other breweries had the big consolidation and became a few breweries, it suffered, and I don't think that the customers are willing to accept that again. Some of the independent labels found their success attracted the attention of the industry's giants. I wouldn't be surprised to see other craft brewers purchased by some of the big boys but I don't think that there's going to be this mass consolidation in the marketplace.At hiss pint-sized brewery in Richmond's back streets, Karl van Burren has discovered some unexpected down sides. More breweries are releasing more beers so there's much more beers to sample and do some market research had to manage research.Do you ever see a day when research.Do you ever day when you'll be sick of day when you'll be beer? Short answer - no.Fans of boutique beer will be toasting that. And a brief look at organise business stories making news- Rupert Murdoch's News Corp has trebled its third quarter profit despite hacking costs. The global media giant posted a net profit of $2.85 billion, succeeding analysts' predictions. The 'News of the World' phone hacking scandal cost the company $fromillion during the quarter. News Corp says Fox sports Australia a solid contribution to its bottom line. Greats of the beautiful game have paid tribute to Sir Alex Ferguson following his shock retirement announcement. Sir Alex is stepping down with his 13th Premier League title secure. Listed on the New York stock exchange, the club, Manchester United, hasn't announced a successor. Shares in Manchester United fell more than 4% on the news. Investors fearing his successor won't continue the winning streak. And while Billabong's been making waves with its financial woes, it's been handing out big money for big waves. Hawaiian surfer Shane Dorian walked away with the ride of the year award in this year's Billabong XXL Global Big Wave Awards. Dorian earned $50,000 for less than 30 seconds' work at Jaws in Hawaii. Wipe-out of the year went to Australian Chris Shanahan who survived this epic plunge at The Right in WA. Before we go, a look at what's making business news in overseas newspapers. London's 'Financial Times' says coca cola has announced a clearer calorie counting and a pledge not to market to children under 12 as the world's largest beverage company and its rivals draw fire over the obesity epidemic. That's The Business. Alan Kohler's here with 'Inside Business' on Sunday. I'm Ticky Fullerton. Thank you for watching. Goodnight.
Closed Captions by CSI.
This Program is Captioned Live.Tonight on The World, everybody needs good neighbours as the Prime Minister arrives in PNG for her first visit since taking office.
Julia Gillard says she is writing the next chapter in bilateral ties but gets a frosty reception.PNG is modernising, it is changing and we want to work together as partners.
partners. Also ahead, it is 7a.m. in the US State of Ohio where two of the women held captive for a decade have been re-united with their families. It is 5p.m. in Dhaka where, in the aftermath of the building collapse that killed 900 people, there has been another clothing industry mishap with a factory fire. It is 4p.m. in Islamabad where the Taliban has promised more pre-election violence. Our South Asia correspondent reports from one of the most dangerous parts of Pakistan.
is 9p.m. in Port Moresby where the Prime Minister has been attending an official dinner. Julia Gillard arrived Julia Gillard arrived in Papua New Guinea this afternoon for the first visit by an Australian Prime Minister to PNG for five years. Both governments see it as a chance to broaden the relationship beyond the traditional focus on aid. But, first, this report from Joh McDiarmid. It is Julia Gillard's first visit to Papua New Guinea as Prime Minister. It was a warm, if not noisy, welcome. A 19 gun salute marked her arrival in Port Moresby, along with a traditional greeting from elaborately dressed women from the highlands. Her first official engagement was a meeting with the Governor-General and tonight she is the guest of honour at a State dinner hosted by her PNG counterpart Peter O'Neill. Julia Gillard says she wants to modernise Australia's relationship with Papua New Guinea. For years it's focused largely on Australia's aid program but both Governments want to re-cast the tie to reflect growing economic links.I will be signing a declaration about the relationship between Australia and PNG, a relationship about a new chapter, a new phase.Unemployment in Papua New Guinea is stubbornly high, so law and order remains a serious issue. But there is also the issue of immigration. Australia sends asylum seekers to Papua New Guinea's Manus Island but there are concerns over the adequacy of the facilities. Australia needs the country's support to make the