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This Program is Captioned Live.The top stories from ABC News. The Federal Government is considering a levy to pay for the National Disability News. Insurance Scheme. Government sources say a full costed scheme will be made public before the budget. The Prime Minister had previously ruled out a Medicare-style pay for the scheme but appears to have changed her mind. Unions are hoping for formal talks with the Victorian workplace investigator after a demonstration demanding higher safety standards on construction of workers rallied at a site in Carlton where a wall collapsed recently killing three people. Celebrations are under way in the Netherlands as the country welcomes its first King in more than a century. The abdication of Queen Beatrix means her oldest son will take the throne the. The well-loved Queen signed her power away in a simple ceremony. And NBA player Jason Collins has become the first professional American athlete still active in his sport to come out as a gay man. Collins made the landmark statement in an interview with statement 'Sports Illustrated', saying simply "I'm a 34-year-old NBA centre, I'm black and I'm gay". He has been widely praised receiving support from other luminaries like Kobe Bryant. Those are the headlines.
This Program is Captioned Live.Tonight - the ANZ strategy paying dividends. The Kashima - cash machine's in full swing but no promises on matching RBA rate cuts.We are one of the cheaper offers out there in the market so perhaps it's not for us to do anything yet. You may ask some of our competitors.I'm Ticky Fullerton, you're watching The Business.
Investors chasing high yields weren't dis appoint ed as ANZ ramped up its dividend. Pocketing $500 million a month, ANZ Pocketing $500 million a ANZ shares surge on ANZ shares surge result.How to plug billion budget hole, we've been billion budget hole, we've crunching the numbers.And tackling trillion dollar cyber hackers waging computer war fare in the 21st century.Well first a quick look at the markets and a bumper day on the local bourse with ANZ and the big banks leading the charge.
Solid but not spectacular, that's the judge's verdict on ANZ's first half profit while profits grew 7%, the result was largely driven by cost control and productivity gains.However, the sweetener for shareholders was a big increase in ANZ's dividend and that sparked a surge in the bank's share price. But no more largess. Boss Mike Smith lukewarm on passing on full RBA rate cuts.In this low credit growth environment it's all about cost control for Australian banks. ANZ has booked a 7% increase in first half profit and a 10% rise in cash earnings to $3.2 billion. Profits were up across each of the bank's divisions and shareholders were rewarded with an 11% increase in the interim dividend.This is a very good result. It positions ANZ strongly going into the second half with good momentum on growth opportunities, on costs and on capital management.Productivity pretty much drove this result. It was a key driver, they dropped the cost-to-income ratio and they also dropped the impairment charge and impairment for bad loans.ANZ shares jumped 6% on its first half results announcement. However, Patterson's Mark Goulopoulos said that was largely a product of the increased dividend as the profit itself was solid but not spectacular.ANZ has been trading at a discount to its peers for function
and that's mainly been a function of its Asian expansion strategy as well and its function of its Asian strategy as well and its lower
payout ratio and the lift in pay out ratio today was welcomed by pay out ratio today investors.Investors have also been concerned about ANZ's Asian strategy and the results reveal that cash earnings from Asia, Europe and America fell 11% in the March half compared to September. Lonsec's bill Keenan thinks there's been a subtle change of emphasis away from Asia and back towards Australian growth.They haven't said that upfront but I do notice the strategy is now - the mantra is now growth, productivity and shareholder returns whereas previously it was super regional strategy. So that's changed in the last 6 months.But Mike Smith is still backing the Asian strategy and says the reason for ANZ's share price discount in recent times compared to its peers is the bank's lower exposure to the Australian mortgage market and its smaller dividend payout ratio.I'm still bullish about Asia and about Australia's future. The business mix we have actually gives us upside and indeed a hedge against poor performing portfolios. II think there's a fair degree of scepticism regarding the Asian strategy particularly around potential for further acquisitions down the track.And speculation continues to bubble around what the major banks will do next on interest rates. While wholesale funding costs have eased recently, Mike Smith was noncommittal on whether ANZ would match any Reserve Bank rate cuts.I feel that where we are placed right now is appropriate. We are one of the cheaper offers out there in the market. So perhaps it's not for us to do anything yet. You may ask some of our competitors.It will be a delicate balancing act for all bank CEOs in this election year especially as the big four's profits continue their upward March.Rio Tinto has cut the ribbon on the $2 billion expansion of its Argyle diamond mind in the Kimberley. Behind the fan fare Rio Tinto is in talks for potential buyers for the famed mine. Sue Lannin brings us the latest from the Kimberley.Rio Tinto has spent $2.2 billion mine here the underground mine here in the the underground Argyle mine here in the Kimberley the underground Argyle diamond mine northern Western Australia. The expansion of the mine actually increases its life to at least 2020. increases its life 2020. It means that diamonds can be mined here can be mined here for at least another 10 years. Argyle, of course, is home to the very famous and very rare pink diamond. Now these diamonds are so rare they just account for a fraction of Rio's annual diamond production. Only a handful, in fact, are found each year and the best diamonds, that's 50 to 60, are put in a tender that travels the world and is sold collectors to investors, and also to luxury jewellers. Now these diamonds are worth millions of dollars. In fact a 1 carat pink diamond 1 to $2 million.This mine is hugely significant to this State. It accounts for the bulk of diamond production in WA and by volume is one of the world's largest diamond mines.Rio Tinto's trying to sell its diamonds business so it includes Argyle, it also includes a mine in Canada and also in Zimbabwe. That's part of Rio's attempts to shave $5 billion worth of costs from its businesses around the world as commodity prices fluctuate and costs like the cost of labour rise. It hasn't had any takers yet though it says it is talking to potential buyers. It's also looking at a potential float of the Argyle diamond mine. worth about $2 diamond mine. Now that could be billion.Speculation about the sale of Rio's diamond assets comes on the back of yesterday's off-loading by BHP Billiton of its Pinto Valley open cut copper mine in the US. It's all part of this focus on capital management as growth from the boom times wanes and an eagerness to address growing investor appetite for yield which means dividends. I'm joined in the studio now by Steve Johnson from Intelligent Investor. Welcome.. Hi, Ticky.This chase for yield is one thing. We're seeing it in the banks, we're seeing it with Telstra but also now this rush over miners selling assets, is that the right thing to do for them at this time, do you think?It is the right thing to do. It was the right thing to do 2 or 3 years ago was to give some of the spoils from the mining boom back to shareholders. It's been an extraordinary 5 of 6 year period. There's within twice as much money put into mining companies as has come out despite the boom prices that we've seen over the past 5 years. The fact that shareholders are putting pressure on companies to stop wasting this money on expansion and new mines and give some of it back I think is a very encouraging thing.You say 2 or 3 years late on this, were there calls coming from analysts 2 or 3 years ago that this should be happening or was everybody caught up in the boom that they would get more down the track?Of course not. The boom was at its peak everyone was throwing money at the mining companies and saying please expand and grow the share price and we want the share price to go um. It's only in hindsight that everybody wants to look back and say you should have given us more money. But it's something that we've been calling for all along, that you should be paying out dividends to your shareholders in boom times and when the times are bad is a good time for companies like Rio to be going around and consolidating some of the less well capitalised miners out there.Speaking of capital management. I'm lookinged a Goodman Group today with a massive finishing its massive $1 billion equity raising. What was driving the success of that, because it was successful?This one really is about yield and we're seeing it in bank shares, we're seeing it in property stocks, we're seeing it in the rates, there is an incredible rush for yield out there among investors. A lot of the people coming off the sidelines after a tumultuous time in stock markets are looking for the closest thing that they can find to bank deposits and at the moment that is high yielding shares because they pay them dividends every year or distributions every year in the case of Wriedt. So Does this reflect in your Viewed - view a sound investment in what's going on for view a what's going on for example in
the industrial property view a sound investment in
what's going or what's going on in the industrial property market
banking?Look, I have real banking?Look, I have concerns across the Australian economy and I think there's a disconnect here between the concerns that everyone has about China which we've seen flow through to mining share prices. They're off a lot over the past 6 months and yet we're seeing bank shares hit all-time highs and we're seeing things like industrial property stocks bid up. I think that the flow-on effects from a slowdown in China are going to be a much slower Australian economy and I think that's going to make life difficult for some of these businesses that have been bid up. So it's really, really important for investors out there to remember that these and
are shares, not bank deposits, and they come with very considerable risks.Let's talk about a sector which is really struggling at the moment. In the Fin earlier in the week there's some awful numbers that were published at least 80 farming operations worth over $80 million in receivership or some form of distress and this is quite close to your heart, gather.I grew up on a farm in Wellington, NSW, and my parents are still out there. I've seen first hand exactly what's going on in farming land. I sat in a meeting up in woman from Rabobank and she had
a book there that woman from a book there that she ran through and said you're running a beef farm, you should expect to generate a beef to generate a 3% return on your capital if you run that farm well. And my parents have got debt that's costing them 7.5% a year and I sat there and thought debt that's costing them 7.5% thought you don't need to be a fund manager to work out that's not thought you don't need to be not a particularly attractive trade off and we're seeing that the whole sector. The banks have lent a lot of money to rural Australia. It's bid land prices up.What's the solution? Because if those numbers are looking like that, clearly, at you say, it doesn't add up. The Cattle Council I know is calling for better strategies to help farmers with their lending, the Government's put in a loan financing assistance package now. But really if we're looking down the track, aren't we valuing our farm assets wrongly given what we're being told about how in the future they're going to be probably the most valuable assets that we will have in Australia?Actually I think that argument is what's bid land prices up to a point that's completely un sustainable in terms of the cash flow that they're currently generating and it's a very, very speculative argument to be saying in 10 years time the world is going to be eating a lot more food and therefore prices are going to be up. What farmers need is to be able to cover their interest bills now and I think that's a real problem. More debt is not going to fix the problem. I think Government's well intentioned
in terms of trying to help farmers through a short period with a higher Australian dollar and the impact that that has on farm prices. But ultimately what needs to happen if farm prices need to come down and we need to get the level of debt down.It's not very happy news for farming at the moment, is it? Steve Johnson, thanks for joining us.Thanks, Ticky.Australia may be a AAA rated country but it doesn't feel that way at the moment given the debate surrounding the Federal Budget. The country is locked in discussions about how to prevent the country's debt profile from deteriorating, despite our privileged status as a leading resources exporter. Finance correspondent Phillip Laskar looks at some of the option. Prime Minister Julia Gillard triggered the debate announcing that even previously off the table solutions would be considered to help fill a $12 billion revenue hole.In a way, the situation that we have at the present moment, the - if kit be portrayed a as crisis is a good opportunity to reread the Henry reforms.It's been a good opportunity to raise profound tax changes like negative gearing. The Henry tax review didn't look at the GST but broadening the tax to include food, health, education and financial transactions would raise almost $20 billion. Reducing capital gains tax concessions from 50 to 40% was recommended by the Henry tax review. The Government could also raise the tax rate on superannuation earnings to 20%, company tax changes could include a crackdown on foreign companies, not paying enough tax in Australia. Revising the mining tax or hitting banks with a transaction tax. Also possible is a family trust possible is a family trust tax crackdown. Taxing alcohol volume and crackdown. Taxing volume crackdown. Taxing alcohol by
volume and levy to help fund volume and the widely expected levy to help fund the National Disability Insurance Scheme. But Disability Insurance But the economists prefer
raising Disability Insurance Scheme.
But raising marginal tax rates rather than raising marginal tax rather than levies.Politicians can over exploit them because they have great public consumption. People like consumption. People like to think that I've paid something
and I get something. So they tend to get overused and overworked. And so if we did have this kind of levy there's a chance that it will get overworked.Business groups are opposed to raising taxes and prefer cost cutting.I guess the key thing to understand is that when you talk about the Commonwealth budget there are essentially 3 big target areas for spending reductions.Superannuation is one, as is the $20 billion-odd outlaid on family benefits and the support for the car industry.The pain of adjustment should be shared and it should also be spread over time so you might want to do that over 2 or 3 budgets rather than just a single budget.Public service jobs are also a target for the Opposition should it win Government but it's important to cut without crippling.Don't just blindly reduce staff numbers because as you what happens in that sort of process is the people that are most able put their hands up for redundancies and then they leave the public service.Stephen Anthony's warning against cutting the public sector without conducting a productivity review.There was more bad news for would be mining magnate Nathan Tinkler today. The Supreme Court in Sydney has ruled liquidators for Mr Tinkler's failed company Mulsanne Resource s can take legal action against there tlinker. Mulsanne re sours was wound up last year after it failed on an agreement to pay $20 million. It has no assets so the legal action will be Pfundted by Blackwood.The All Ords broke through to a 4.5-year high, closing fueled by a surging financial sackt 4.5-year high, closing high
fueled sackt - sector. I spoke to Marcus Padley a little Marcus earlier.A noteworthy rally today with some real grunt from the financial sector, is this high as she will go for the banks?I don't think so, Ticky. Just to put the numbers together, we were up 65 and 43 or two thirds of that came from the four big banks. So it really was a banks rally today. Helped by a few other things. Things like Telstra approaching $5, they're up again today. What's going on is this realisation that rather than the sector's peaking out what we're seeing is a real desire from big licks of money in self-managed super funds and super funds generally looking for returns in the equity market which are safe. It's that old safety bubble thing and basically what's happening is any stock that's got a bond-like quality is going up and probably going to stay up as long as that super money keeps driving and when you consider baby boomers are coming along and superannuation funds are expected to quadruple in the next 15 years or so you can see that this driver might stay for a while in which case we might still be in the early stages, he said optimistically.Quite a trend. Now there are more signals from Woodside Petroleum, I see, that there are floating platform option for their Browse development is quite real, any market reaction to that?No. Well, they did OK today. They had - they went exdividend 63 cents and they only fell sort of 37 cents. So they went exdividend quite well but they weren't up much more with the rest of the market. I think people understood that this Browse Basin development which sort of got canned was on the basis that they'd have to develop floating LNG technology. That is going to take years and it's probably why they hedged their bets on their recent dividend announcement that at some point in the future they may have to lower their payout ratio again. That's because FLNG might come into fruition and therefore they'd have to start spending again. The stock's up 350 cents in the last week on a dividend of 63 cents and they now yield on forecasts of a 5% on forecasts of a 5% yield over 7% including franking. So you can almost put them in 7% including franking. So can almost put income fund.Robust quarterly figures from Whitehaven Coal, how are coal stocks faring generally?Not terribly well. The price they've achieved over this quarter was less than expected. They've continued to struggle with high costs and although these numbers don't have it in, profits aren't fantastic on the back of all that.A broker downgrade for Woolworths?We had one of the
major broker, Merrill Lynch downgraded earnings forecast, they've got a target price of 33% below what the current share price is which matches most of the other brokers have target prices below the current share price. It's typical of a stock that's performed well, most brokers seem to play catch up rather than lead at the moment. They're behind the 8 ball with the share price behind most compmingss behind most compmingss -
expectations.Thanks for joining us.My pleasure.Another big Australian making news today, Westfield Group has pulled out of its $350 million joint venture in Brazil after less than 2 years. Joint CEO Stephen Lowy saying the partnership was not conducive to the achievement of Westfield's long-term objectives. Some other key movers on the local bourse now:
One of the world's most wanted cyber hackers has been arrested by Spanish police. The Dutch man is accused of master minding the largest cyber attack ever recorded against anti-spamer Spamhaus. Cyber attacks are costing global business trillions of dollars every year and Australian companies are not immune as Emily Stewart reports.Spanish police swooped on the 35-year-old man known only by
his initials SK. He's alleged to have master minded the cyber assault on the Swiss anti-spam watchdog Spamhaus from a secret bunker. Last week Australian Federal Police arrested the so-called kingpin of international computer hacking group LulzSec. The group claimed responsibility for high profile cyber attacks including shutting down the CIA's website.It's the war fare of the 21st century essentially.Hackers have attacked a roll call of the world's biggest companies. Apple, Facebook, Twitter, eBay and PayPal.We know foreign countries and companies swipe our corporate secrets. Now our enemies are also seeking the ability to sabotage our power grid. Our financial institutions.Our air traffic control systems.Internet security company FireEye says most attacks emanate from Asia or eastern Europe, either State sponsored crime or maverick individuals.We're seeing cyber attacks or Malware activity every 3 minutes.Beijing denies it but fingers are pointing at the red army.All countries have some sort cyber capability but usually they have some sort of offensive they will go after information that's of strategic military or intelligence value whereas intelligence value China tends to go after intellectual company.No Australian company has admitted it's been a victim of hacking.There's a huge amount of underreporting in Australia.Nigel Phair is a former head of the Federal Police High Tech Crime Centre. In the last several years organisations are now starting to realise how much data they have and how much of that is online and the advent of social networking has played a big role in that.The banking sector is at the forefront of cyber security.Being a large financial institution there are always people who are interested in our systems and obviously the money that we control. That's why we have that defence in devept - depth approach. We never have a situation where any sort of failure at one level would be enough for them to be able to compromise say a customer's account.NAB's head of cyber security, Nick Scott, says the most common form of attack is phishing where a bogus email requests a pass word or user name.Most organisations have something of interest and that's why customers need to remain vigilant and it's not hard to actually protect yourself in this day and age simply making sure those earnt vie - anti-viruses are installed and patches are being applied.As installed and applied.As many companies move data on the cloud security risks are chaidge - changing .The cloud will be a challenging environment going forward but there has been a lot of investment in understanding what parts of data should be in the cloud.And cyber assaults are becoming more sophisticated.Attackers are targeting these organisations for modification of source code. In effect, trying to create a future opening for criminal activity.The US is leading the ledge slaited - legislative charge. It's passed cyber security laws to increase information sharing between government and business.Here the Federal Government is also ramping up protection with a new cyber security centre expected to be tackling computer crime by the end of the year.And a brief look at other business stories making news. Virgin's passenger space ship has made a spectacular maiden flight. The blast over California's Mojave desert lasted 16 seconds and broke the sound barrier. Richard Branson and his children plan to be the first passengers next year. Virgin Galactic is selling seats aboard space ship 2 for $190,000 a seat and so far more than 5 people have put down deposits. It's the last word in uncomfort able bling. As the gold bears were selling an Indian gold bug splashed out $250,000 on this gold shirt. Nicknamed the God Man, he has had the garment Taylored from 3 kg of gold. He boasts ace only worn on special occasion and always with a security guard.That's The Business. I'm Ticky Fullerton, thank you for watching, goodnight.Closed Captions by CSI.
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Tonight - on the World - Middle East word border tensions as Syria's civil war again threatens to spill further into neighbour ing Lebanon. TRANSLATION: We have decided we must defend our land and our people.There are fears the low legal attacks into Syria by Lebanese rebels backed by mez mez could spiral out of control.It is worrying because both are determined to fight to the last man there.
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Also ahead - it's 1 pm in Amsterdam and a million people have poured into the capital to celebrate the Netherlands's first more than 100 years after Queen Netherlands's first king in more than Beatrix handed royal power to Beatrix handed royal power her son.It's 5pm in Dhaka and horrifying building collapse there that killed nearly 400 there that killed nearly people, sparked some serious questions about the exploit ation of text tile industry workers in the Bangladeshi capital.And it's early afternoon in Cyprus where the summer is coming but even 2 sin flux of tourists may not be enough to stave economy, as the Government moves meets to approve a potentially painful bail-out Mackage.Welcome. I'm Kurt Fearnley. It's 2pm in Beirut and the bloody civil war in Syria is threatening the stability of neighbouring country, particularly Lebanon. Shi'ite villages in the border region have formed a new militia backed by the powerful Lebanese Shi'ite movement Hezbollah. As Middle East correspondent Matt Brown reports the growing involvement in Syria's conflict is exacerbating dangerous sectarian tensions.Fanning out, Lebanese Shi'ites are on patrol on the border with Syria in an increasingly sectarian conflict. They're backed by Lebanon's powerful Shi'ite militia, Hezbollah, which is a I lied to the Syrian Government. Just a few clom tersz away in the Syrian town of Qusayr Hezbollah has been battling mostly Sunni rebels. These men are securing rear. TRANSLATION: We have decided we must defend our land and our people.The conflict is making an already porous border irrelevant and sectarian divisions even deeper.It is worrying because both are determined to fight to worrying because both determined to fight to the last man determined to man there.And this means of destruction, a lot of bloodshed and a lot of displaced people as well.The Lebanese are acutely aware of the dangers of being dragged into Syria's civil war. But this is technically across the border in Syria. And each day Lebanon does get a step closer to being engulfed.The rebels have issued a call to Lebanon's