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Good morning, welcome to

Business Today for Australia Network, I'm Whitney

Fitzsimmons. Coming up on the

program - stability threat

concerns grow that Italy will

be the next victim of the debt

crisis. Losing faith, Europe's

markets fall on political

uncertainty. And fresh breaks,

surfing carves a new market in

China. First let's take a quick

look at the markets and we'll

have more on what we can expect

to see on the markets today in

a motel. Yesterday around the region the session was

downbeat:

For more on the market action

I'm joined by Tim Piper from

Bell Direct. Good morning, Tim.

the week, what will happen It was a lacklustre start to

today? It was a lacklustre

start, we saw Asian markets

fall pretty much across the

board with the Australian

market included. This was on

the back of news that the back of news that Italy's

resurfacing as a threat to the

Eurozone stability. The Chinese

market fell as a speculation

that central bank won't ease

monetary policy and we saw the

Japanese exporter s fall also

as the continued kernsz about falling European demand. After

slight falls on European a flat start to the US and

markets our market's actually

pointing to a flat to

higher start today despite pointing to a flat to slightly

pointing up 13 points this

morning. The gold sect lr be

one to watch today. We saw gold

price rise to 3-week highs

overnight and oil stocks also

to watch as we saw oil price rise to 6-week highs. Commonwealth Bank and Atlas

Iron to hold their annual

general meetings today so they

will be ones to watch. However we will expect that the market

will remain a little subdued as

clarity around leadership in we wait for a little bit of

Greece and Italy. Let's move Greece and Italy. Let's move to

Europe. Now there was some

negative retail sales figures

there, what are the details? There was some

negative retail sales figures.

It looks like the Eurozone crisis is hitting consumer

spending and confidence. We saw in September retail sales in

the Eurozone fall 0.7%. was below gains of 0.1% the Eurozone fall 0.7%. That

was below gains of 0.1% last month and came in below

expectations of falls of just

0.1%. So consumer confidence continues to fall as

governments set tougher budget

cuts and countries such as

Greece are staring down barrel of bankruptcy. So Greece are staring down the

retailers face tough times

ahead in Europe as this

Eurozone crisis is expected to

continue well into 2012. And

across Europe major across Europe major indices also ended the day lower? Euro

markets ended lower and it was that political uncertainty that drove the markets lower

overnight. In Greece we're seeing reports of a new coalition government to form. That's expected possibly in

February next year. In Italy

government borrowing costs set

new record hietion at 6.6% for

the 10-year bond price. This is as Prime Minister Silvio the 10-year bond price. This is

Berlusconi's future is in jeopardy as many are calling

for his resignation. This is a

hurdle ahead of a key hurdle ahead of a

parliamentary vote tonight on

the 2010 budget and it remains

a hurdle ahead of implements

austerity and budget cuts to

the Italian economy. This is

significant as Italy is the

Eurozone's third largest

economy and currently their debt level is un sustainable.

Retail stocks fell hard after

those disappointing retail

sales. We saw Morgan Stanley

advise investors to sell out of

European stocks. To to US, Cha sectors had the most

activity? It was a choppy

session. Markets opened lower,

around 1% but did make gains in

was the Greek and Italian the final hours of trade. So it the final hours of trade. So

uncertainty that drove markets lower. The European Central Bank made comments that the

debt crisis will be under control within 2 years. Now 2

years is a long time in the markets however what we are

seeing is the markets responding positive to really

any positive comments coming any positive comments

movers out of the Eurozone. So the big

movers on the Dow included

Hewlett and pack ard and Home

Depot and General Motors rose

1.7% as they're expecting Chinese sales to double 1.7% as they're expecting their

Chinese sales to double by 2015. However, US markets do continue to be very to these Eurozone continue to be very sensitive

headlines. Tim, thanks for

joining us. Tim Piper from Bell

Direct there. Now let's take a

with currencies and closer look at what's happening

commodities. The Italian Government's

borrowing costs have hit a

record high as concerns grow

over political uncertainty in

Rome. There are fears Eurozone's third biggest Rome. There are fears that the

economy could become the next

victim of the debt crisis.

Prime Minister Silvio

Berlusconi faces a crucial vote

on public finance later today

and is resisting calls for him

to step down. European finance

ministers meeting in Brussels

have a new and dangerous

challenge ahead, containing the

debt crisis that's threatening

to infect Italy. The third

biggest economy in the

Eurozone. We have to increase

the capacity of the emergency

fund. That's very important but it's not the only thing. Economic reforms and budget

cuts in countries currently on

markets are at least as the attack of the financial

important as more money in the

emergency fund. With the public

debt worth $2.5 trillion

there's not nearly enough money

in the emergency fund to rescue in the emergency fund to

Italy should it need help. Protestors have taken to

the streets of Rome carrying

fruit bowls, a symbol of the

PM's long party that the party

say they're now having to pay

for in higher taxes and cuts to

services.

TRANSLATION: The vote on the

State's budget is on in

parliament tomorrow. Let's hope

that with this vote and the latest defections within

Berlusconi's party this

government will finally fall so

that we can go to the polls as

soon as possible Stocks on the

Milan exchange jumped 2.5% as

investors bet that investors bet that Silvio

Berlusconi's days as Prime

Minister were numbered. But the

PM used his Facebook page to

deny rumours published in his own own newspapers.

TRANSLATION: Italy has a strong

economy. The Eurozone's third

biggest economy and the world's

7th. Italy's living standards

are this of a well

country. Back in Brussels the

Greek Finance Minister was

talking up the new national unity government. After unity government. After a

difficult week we have now a

new political situation, a new political frame in Greece. We

have a new government of

national unity and national

responsibility. This is the

proof of our commitment and of

our national capacity to

implement the program and to

reconstruct our country. Lucas

Papadimos is tipped to take

over as the new Prime Minister

of Greece. He helped of Greece. He helped the

country adopt the euro.

country adopt the euro. He will have to work hard to avoid

taking them back to drachma. The Australian Government is sticking to its pledge to have the budget back

in surplus next year despite

claims that the deficit is much

bigger than forecast. Deloitte Access

Access Economics says the

Government's financial position

has deteriorated significantly

in the 6 months since it handed

down its budget in May and it

should a - abandon the surplus pledge. Falling economic growth equals falling economic revenue

as compeans and individuals pay

less tax while spending goes up

as more people as more people claim unemployment benefits. On

Friday the Reserve Bank lowered

its economic growth forecast

today Deloitte Access today Deloitte Access Economics

supported that view. Things are

just a little more careful just a little more careful on the outlook out there. You can

see that in jobs, you can see it in profits, you can it in profits, you can see it

in share markets. Which is why Deloitte Access Economics

believes the Government is

making no headway on its stated

aim to bring the budget back to

surplus in 2012-13. Back in May

the Government was forecasting

a deficit this financial year

of $22.6 billion with a

surplus 12 months later of $3.5 billion. Deloitte Access Economics believes the real sef

- sef sit this willia will be

$9 billion worth than forecast

dragging 201213 into dragging 201213 into deficit.

It's for that reason Chris

Richardson believes the

Government should abandon its surplus pledge. We're surplus pledge. We're fighting

for this in part because the

public somehow believes if the

Government gets the budget a

dollar in surplus then they're

economic geniuses and a dollar in deficit then they're dunces

and it just doesn't work that way. The Treasurer way. The Treasurer isn't

listening though. He says the

2012-13 surplus is set in stone despite economic despite economic conditions

getting tougher. At a time of

global economic turbulence

where there are developed

countries all around the world

that have implemented over a long period of time lax fiscal

policy and are now paying policy and are now paying the price for that in their real

economy, it is really important

that a country like Australia

with such a strong economy

demonstrates its capacity to

put in place fiscal discipline. Which sounds good

in theory but former NSW

Treasury economist Dr Betty con

rr Walker says it's non-innocence. Whether the

Federal Government has a 3.5

billion surplus or $2 billion

deficit is of no consequence in

a $400 billion budget. We're

talking about less than 1% of the $400 billion budget. To

achieve its goal of a budget

surplus next financial year the

Government is planning more

spending cuts, a move which

could further reduce economic

growth. It's a position at odds with the Reserve Bank's decision to cut interest rates

last week to support growth and

there are some who believe it

may prompt the bank to cut

again. As you know we've got

this 2-speed, some say 3-speed,

economy, so we have some economy, so we have some soft spots in the economy and if we

try and pull the whole of the

government sector back again

then we may find that we will

have a very slow ing economy. You can't trust this Government with the nation's

finances. And just as they want

the Government to change its

position on the surplus both

Betty Conn and Chris Richardson

would also like the oop -

Opposition change its position and make a meaningful

contribution to the budget

debate. The carbon tax is expected

expected to pass the Senate

today ending a long battle for

Australia to price carbon.

After two failed attempts,

months of negotiations and many

hours of parliamentary debate,

the Gillard Government is set

to legislate a carbon price

scheme. The 18 bills are

expected to pass with the tax

to start in July next year. And there are reports Australian

businesses could pay double the

global carbon price when it's introduced. The 'Financial

Review' says the starting price

for carbon price willing be at

$23 a tonne from mid 2012 to

2015 when hit its $29 a tonne. The head of the International Monetary Fund has

urged world leersd to increase

their efforts to overcome the

Eurozone debt crisis while the

Russian Prime Minister has

called on emerging economies to

help. Russian Prime Minister Vladimir Putin was addressing

members of the Shanghai cooperation corporation with

Premier Wen Jiabao leading the delegation. He said major

economies should help in boosting the euro channels

their efforts through the

IMF. Prime Minister Putin told

reporters that he hoped any assistance given to Europe would bolster the status of the

countries like Russia and China within the IMF. Concerns about

Italy not being able to service

its debt have helped push gold

prices to a 6-week high. Gold

put on around 2% overnight as investors again turned to the precious metal. Spot precious metal. Spot gold rose

to a high of $1,794 an ounce,

its highest level since September 21. The price

recovery tracked those of recovery tracked those of other

assets like the US dollar and

US Treasureries. Gold has

struggled to remain investor

confidence after an 11% slump

last month. Fears of a last month. Fears of a credit

crunch prompted some investors

to sell their holdings in

favour of cash. I'm joined by

Jonathan Barratt, welcome Jonathan Barratt, welcome to the program. Good

morning. Let's start with gold.

It's back at a 6-week high,

nearly $1,800 an ounce. nearly $1,800 an ounce. It's regained some of that safety

status? It certainly has,

there's no doubt about it. I

think given what's out there

and given there's still

concerns in Greece or in concerns in Greece or in Europe

that I think people will

continue to trade towards it. So the Europe situation is

likely to get much worse or

become more of a focus,

particularly with Italy, what

impact will that have on

commodities in general. Look, I

generally I think it will act

as a break, a big handbrake and

that's one of the big concerns

we do have because whilst you don't get any key stones in

terms of policy together,

people will just shy away

through further development. So

what Jen reallily you will find is just a slow down, economic performances, you know, the

economy sort of perhaps dipping

into a recession but most

important thing I think is

important thing I think is to get on track, get the talks

back on track, get everything

back so we see something

concrete actually occurring. So

in terms of commodities what

would be the best performing

sectors other than gold in a

situation like this? It's very

hard to tell because hard to tell because there's a lot actually happening lot actually happening out

there in the commodity space. A

lot of commodities obviously tiered to economic performances. Gold is one of

those ones where it acts as a

bit of a hedge all the time and

when you see with gold - Except

when people want to cash in

their position? That's only a

temporary thing. The supply and

demand for gold is only about a

6% variation, so if you get

more demand for it then naturally that could sway into

a deficit and that's one of the

concerns because if it does sway

sway into a deficit then you

will see gold prices continuing

to remain firm and so far the

outlook remains in tact for 2000 hopefully quarter 1. Where

do you see gold prices heading

for the next six months? At the

moment I see there is a big

turn towards gold and I think

gold prices will remain firm.

There's still a lot out there

economically and geopolitically

that will influence the price but at the end of the day I

think gold remains strong. 2000

is something we've always hung

a hat on and expect that to

come sooner wrathth rather than

later. Zbli was read I was

reading this morning someone was saying 5,000 at some was saying 5,000 at some stage,

a little bit craidsy? A bit

crazy but there's enough out there to suggest gold there to suggest gold should

remain well bid. The international atomic energy

agency will report on the Iran program, some time this week,

Israel is gaining support Israel is gaining support from

military attack. What sort of

impact is this going to have

then on oil? It's pretty major.

I think wits one of the underlying factors for underlying factors for gold as

well if the story well if the story develops and I think we're right at the

beginning of something. We've

pondered on oil for the last

month as to why it would month as to why it would trade

higher. All the fundamental news has been relatively

negative for oil to go negative for oil to go lower.

What it means is if in fact the

report is negative then you

could see Israel looking to

stop Iran in its proliferation

of nuclear arms. That to me is

more of a concern because then

they will have that potential

to restrict the supply of oil.

Now Iran is the second largest

OPEC producer, it also controls

the straits of hor muz. You can start to see a bit of a ground

swell developing if this report

is negative and there is, or we're hearing stories that

there is potential for Israel

to put military strikes against Iran. If this story does

develop more and more then develop more and more then you

will see oil, it won't stop at 100, it will just keep on going. It's being supported

also at the moment by the situation in Greece and Italy.

It's at $95 a barrel. So where

do you see it heading, do you see it heading, over $100 but back up to $100 but back up to 144? I

think this is the key. At the

moment the fundamental stories

are saying we've got enough of

oil to meet demand and with the

economic slowdowns we're all expects then oil should trade

lower. The big issue for us at

the moment, this is why oil has

broken through $95 a barrel is what's happening in the Middle

East. That to me is one of the

key factors at the moment that

will drive the price higher.

And purely on the back of more

focus, more focus on the Middle

East, more focus on Iran, that should restrict or could

restrict some supply. Now this

is early times yet. We don't

know what the real extent as to

what's happening but if it does

develop the story develop then

you could see oil prices back

through US $100 a barrel, even

higher if the story continues to

to show concern to the supply

or concern to Iran. Remember

Iran doesn't want to be caught

by the US or Israel so they are

going to put up a fight. Let's

see what happens. It's interesting because we've interesting because we've just got Libya back on line. Iranian

supplies are they as coveted as Lybian light sweet Lybian light sweet crude? Not as much as Libya but the sheer

production of their production

is the key. 15.5 million

barrels. Yes, that's so that's going

going to put a dent anywhere.

The fact that you've got this

ability for it to expand into the region

the region I think is one of the the big concerns that we all

hold. Is there the potential

though, if this does erupt and the situation exacerbates and

gets worse, that we would see

it go to zero production like

we did in Libya? I don't think

lit get to zero production but

the sheer weight. Libya

produced about 1.5 million

barrels of good oil, the light

sweet, as we mentioned, Iran

produced about 15, 15.5 million

barrels. So when you look at it

it's a totally different

scenario. If it does develop

then that supply, if it is

restricted in any way, shape or

form will have an impact on global economies. Given that

this has been signposted and,

you know, the potential for you know, the potential for a

negative sort of turn of events is is there, would OPEC then

release some of its inventries

to offset some of the cuts in

supplies? Not at the moment supplies? Not at the moment but that would be one of the strategies they'd have to strategies they'd have to look

to if in fact it does to if in fact it does escalate.

We've already seen it, we've

already seen it before when

Libya came off. OPEC said Libya came off. OPEC said that

increased more the SPDR said

they would increase the

strategic reserves. So there is

enough there to placate any

concerns. The key is how long

it will last and that to me is

one of the issues. But it's

early days yet. We'll just have

to see what happens. With will

indeed. Thanks for joining us.

Qantas planes may be in the

air again but they're facing a new threat from unions, new threat from unions, they're

questioning the legality of the

ruling by Fair Work Australia which ended the grounding of

the airline's entire fleet and

are contemplating legal are contemplating legal action to get the decision overturned. Just when you thought it was safe to go back

to the skies, one of the three

unions battling Qantas says

it's considering a challenge. The Transport Workers' Union

says if it's not happy with says if it's not happy with the compulsory negotiations now under way at Fair Work

Australia, it will challenge the entire order which has

banned both sides from taking industrial action. Among other

things it says Qantas acted illegally

illegally by not giving 3 days

notice for the proposed notice for the proposed lock

out. They would have to seek an order before

to quash the decision. I think that would be a difficult ask

but our advice is that the

decision is robust. It's now

ammunition for the pilots and aircraft engineers as aircraft engineers as well. They're also before Fair Work Australia

Australia in Australia in closed

negotiations. Nobody from

Qantas was available to be

interviewed but a spokesman

said the company had acted

lawfully and wasn't required to

give its employees any notice

of a lockout. He also said it

was important on safety grounds

for the chief executive to have

sole responsibility for any decision to ground decision to ground planes. The Qantas sale act needs to be

amended to ensure that never

again can a fleet, the nation's

flag carrier, be grounded on

the say so of just one person. A spokeswoman for the

Federal Government says it will

consider the act and respond to Senator Senator Xenephon's request

after the inquiry is finished. The first Cruze hatchbacks produced at hatchbacks produced at Holden's

Elizabeth plant are ready to

roll into showrooms but the

good news was tempered by

continued speculation about the

future of the Commodore and hundreds of design hundreds of design jobs. After concerns about its long-term

operations in Australia, Holden

was keen to show off its new

model. We do as many car

launches as we can here in

Adelaide. It is Holden's

heartland, it is honestly the

spiritual home of Holden. The new Cruze hatchback, along with

the Cruze sedan has bought 300

jobs back to the Elizabeth

plant after some lean times.

But Holden is still fending off

speculation of job cuts. We've

got a model year 14 Commodore

that has been design engineered will be manufactured will be manufactured here,

that's happening, that's just

fact. Beyond that we actually

don't know. The company was

responding to claims by the engineers' union that it plans

to move the Commodore design department offshore. This department offshore. This would

lead to more than 300 job

losses at its port Melbourne site. The Federal Government

has defended hold Holden saying it's confident the

company will keep design jobs

here. I think you've got every cause of frustration of cause of frustration of people

shooting off their mouth too early. Mr Carr said early. Mr Carr said the Government is committed to

having cars designed, engineers

and manufactured onshore. There

are 13 countries in the world

that can do that. There were a few more before the economic

crisis. We have survived that.

And I've got no doubt that we

will continue to be in that

league. Holden has also faced

problems this weekend with the recall of almost 40,000

Pontiacs manufactured at Pontiacs manufactured at its Elizabeth plant and exported

for sale in the United States.

Holden says those cars will be

recalled and repaired in the

US. The company says the issue

won't affect future exports.

Holden says the Pontiacs need a simple

simple re calibration of the passenger airbag. Consumer habits

habits in China are continuing to

to change as the population

becomes increasingly wealthy.

The latest sensation is surfing

and even though only 100

Chinese citizens are beach

lovers, it's confident the

industry will swell. Darci Liu

represents the changing face of

China's evolving surf culture. Originally Originally from the land locked

Hunan province she moved to the

beach 4 years ago with her husband. Before lots of people surf here but it's all

foreigner people but they're

living in China so they're

coming down to surf. Right now

there's more Chinese people getting interested in the sport. With almost 15,000

kilometres of shore line China's surfing culture is

confined to a relatively tiny

stretch of beach near the South

China Sea. Culturally China

isn't a nation of swimmers. A

bronzed beach body is also

frowned bon because tans are

often associated with the rural

poor. Leading the change is 32-year-old Brendan Sheridan

who made the bold move to open

China's first surf shop in

2006. It's easy because I was

one of the first so you don't

have to worry about competition

too much but difficult too much but difficult because

I've been having to build market I've been having to build the market almost single handedly.

The local economy's likely to

benefit from the emerging

market with a steady flow of international tourists. There

was a couple of surfer, they

somehow found this place and

they realised that there is no

nobody around yet so - and that

this place is just very unique

and very good and very good for surfing. But

attracting locals will continue

to prove difficult with a to prove difficult with a surf board costing on average 2

months salary. And now let's take a look take a look at what's

headaching headlines around the region. The 'Standard' says

Italy's European neighbours are

putting screws on Rome to meet

its fiscal promises and the 'Wall Street Journal' warns

that China's success in taming

housing prices may lead to them

falling too far and too

fast. That's all for this

edition of Business Today. If

you'd look like to look back at

any of our interviews please

visit our website. We look

forward to your feedback. I'm

Whitney Fitzsimmons. Thanks for

joining me, enjoy joining me, enjoy your day. Closed Captions by CSI

This Program is Captioned Live. This morning the carbon

tax set to pass its tax set to pass its final hurdle in the Senate but the

debate wages on. This is not

going to change the temperature

of the globe. It's not going to

affect the climate. There's no credibility to their position whatsoever and Tony Abbott's word, you know, is Also today - the Opposition seizes

seizes on the scrapping of the

Australia Network

process. Politics has

destroyed this tender. It just

shows the

shows the Government's

dysfunctional because it is so divided. Michael Jackson's

former doctor Conrad Murray

guilty of involuntary manslaughter. We, the jury in