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Good morning, welcome to

Business Today for Australia Network, I'm Whitney Fitzsimmons. Coming up on the

program - bond fall out, fears about Germany's European and US markets. European and US markets. Core

strengths, Woolworths still strengths, Woolworths

manages to post a profit and

shifting priorities, China

backs efforts to negotiate a

new treaty on climate change. new treaty on climate change.

Those stories coming up shortly

but first let's take a quick

look at the markets and we'll look at the markets and we'll

have more on what will happen

in regional trade today in a

moment but yesterday around the

region the session was mixed:

For more on the market action

I'm joined by Cameron Peacock

from IG Markets. How will regional markets end the

regional markets will finish week? Good morning, I think

the week on a fairly subdued

note. Looking at the ASX 200

we've been down for 5 straight

days now and so far for the

week we're down about 3.2% and

with US seeing some modest losses across Europe last night we are currently calling our market to

wind down about 20 points or

do 0.5% around that 4,024 level. I

do say that though with very

little conviction. I think

volumes are going to be paper

thin today so it's not going to take much buying or selling take much buying or selling to

push the market dramatically in

either direction. Really today

I think with European markets

still having their issues and

the US having a shortened trading day tomorrow there's absolutely no reason to chase

this market heading into a

a flat to slightly weaker weekend hence I

session. Now Wall Street of

course is closed for the thanks

to Europe. You said that giving day holiday. Lets turn

European markets have issues

the can you just give us some of

absolutely. Obviously all absolutely. Obviously all eyes on Europe with the US on Europe with the US markets

away for their holiday and we

did see modest losses across Europe. We saw the major

indices all incurring modest

losses. The FTSE down about

0.2%, we had the DAX down about

CAC was essentially flat. I guess the major talking point of the session was German

chancellor Angela Merkel coming

out and reiterating her calls that she was against issuing

euro bonds and expanding the

ECB's role to help preserve the

crisis and that's certainly not

what the market wanted to hear

downside and hence we traded with a

night. Staying in Europe, downside bias last

business confidence has risen for the first time business confidence in Germany

since June? That's right.

Overnight we had the November

time in 15 months, a little

surprising given the worsening time in 15 months, a little bit

crisis we're seeing in Europe

at the moment. This is a at the moment. This is a survey

over 7,000 executives

reading came in at 106.6, up

from 106.4 and the market had

been expecting it to fall to been expecting it to fall

about 105.2. So a marginal

increase but better than a fall and certainly important given

out that germy is the powerhouse

out of Europe. We really to see confidence being out of Europe. We really want

preserved out of the region's commodities what's the latest biggest

with oil and gold? It was a

pretty benign session across

oil and gold last night. Obviously the US dollar traded

fairly flat and hence we saw

gold trading relatively flat

last night. At 4pm yesterday it was #2r5iding around $1,684. It rose last night to $1,686 and

crude prices edged up slightly

from around $96.60 to just over

$97 where it sits at the

Australian dollar, moment. Looking at the

trading against the other

majors? It was also another fairly quiet night for the Aussie dollar. It continues to trade in a fashion with US markets closed trade in a risk on, risk off

last night the Aussie dollar

essentially took a bit of a breather. At 4pm yesterday it

was trading around that 97.30

level, edged up to a high

overnight of 97.86 but back in

that 97.30 range and will be

continued to be dictated to by

the risk on, risk off trade,

what commodity prices do and

rate expectations heading into

the RBA's decision in thanks for joining us. Cameron fortnight's time. Cameron,

Peacock from IG Markets. Let's

take a closer look at what's

happening with currencies happening with currencies and commodities.

As we heard the fallout from

Germany's failed bond auction

has buffeted markets in Europe

and the United States for a

second day. With signs the European nervous investors are worried European crisis is deepening

about the size of debt held by

the Eurozone's biggest The small 10-point fall on the Eurozone's biggest economy.

big and growing problems domestic markets masked some

offshore. All of us must regard the current situation in

global markets with gravity. American and Asian global markets with utmost

Europe, even Germany, Europe, even Germany, Europe's

raise all the money it wanted safe haichb - haven could not


to refinance loans. Its

government bond issue was badly under subscribed. Simply

causing fear of Germany as the pay master of the euro area

having to bail out all the

other countries that so that other countries that so

might be the first sign of

people are also losing people are also

confidence into

Germany. Europe's divisions are

European Commission calling for European becoming more public with the

jointly issued euro

bonds. Implemented in the right

could bring tremendous way the that in the euro area

benefits. It could lead to

greater financial integration

and to the creation of a much

larger and more liquid bond market comparable to that which

exists for the United States

Treasuries. But German

chancellor Angela Merkel is

refusing to be pushed around by

the markets or the European

Commission. The German leader is

is resisting calls for what

for the borrowing of all euro

countries through ECB bonds. In

a forceful display she warned against fiddling bank's strict

inflation-fighting mandate

saying the idea just wouldn't work. It's the type of

behaviour that's worrying Treasury officials in

Canberra. What's going on in

the euro area is very troubling and it's getting and it's getting more disturbing. I'll leave it at investors are are sitting investors are are sitting on their hands. There's not the same breadth and depth of investor support as you would

have found several years ago

where you would expect kind of value levels. Christmas

can't come soon enough for

those looking to temporarily

escape the tension of global markets.

markets. Meanwhile markets. Meanwhile the Reserve Bank governor Glenn Stevens has also urged swift action from European leaders to sort out

the zone's debt problems as the zone's debt problems as the

threat of contagion grows. He

told the conference in Sydney that while he couldn't dollar value on the potential damage

damage to Australia caused by

Europe, he's concerned the time is running out for is running out for the problems to be fixed. On the to be fixed. On the probability what's the number of

probability of a severe storm

from Europe? Well unfortunately

it's not zero. I thinkton

events, as they say in Europe

are dire but not serious, as

the old joke goes. They are pretty serious are fast coming to the point

where all the parties who have

a role to play in a role to play in getting to

the solution there really have

to hurry up and do it otherwise

the probability of damage to

not just us but everyone will be unacceptably high. RBA Governor Glenn Steves sitting there. Former Olympus CEO woord ford have met police in Japan as they investigate the

skand ale which is threatening the camera

the camera and medical parts

company. Mr Woodford told

investigators he would not be

surprise fd there was some criminality involved in the accounting cover up at the

company. Olympus has admitted to using funds from

inappropriate deals to hard

losses dating back losses dating back 2

decades. Nothing would make me

happier that the company is not

linked to organised crime. In

all of these weird dealings we have been in murky pools and if criminality came out it

wouldn't be a surprise to

me. Mr Woodford is back in

Britain for if first time since

being sacked last month for

blowing the whistle on Olympus.

He said he had a dream team at

Olympus that he could Olympus that he could employ the run the company if he was returned as chief executive. While upmarket retailer David Jones is

struggling it's not just the discretionary spending side of the retail sector that's

finding conditions tough at the

moment. New Grant O'Brien says he's not

expecting an improvement in

trading conditions until at least well into next year. As with other retailers not been Woolworths' best not been Woolworths' best year. Profits rose 5%, low Profits rose 5%, low by Woolley's standards, Woolley's standards, and

offered its first profit

warning in 15 years. Chief executive Grant O'Brien doesn't

see much changing in the immediate future. There are new

environmental head winds as we begin the next

result in the short term the

real tis and the charges mean

we believe trade willing remain

subdued. Probably all the subdued. Probably all the way through to the next financial

year. In the longer term though Mr O'Brien says Woolworths' Mr O'Brien says Woolworths' aim is sales growth approaching 10%

but it wasn't sales that but it wasn't sales that many

people had come to the AGM people had come to the AGM to

talk about. There are people

today around the country who can't afford to buy groceries at a Woolworths at a Woolworths supermarket because they've lost because they've lost their money on a Woolworths poker machine. Woolworths is

Australia's biggest owner of poker machines through the 300

hotels it operates. Poker machines was the dominant topic

of the meeting with strong and

at times emotional commentary from the floor criticising

Woolworths' opposition to Woolworths' opposition to the Government's proposed mandatory

commitment rules. We do commitment rules. We do not

deny that there is a serious problem about people who have

gambling problems, addiction or

whatever phrase you would like

to use. But although sympathetic Mr Strong was sympathetic Mr Strong was also forceful in hitting back at woollies' detractors. When

you've done your picking on wool worths and not anybody

else who is involved in gambling

gambling is not fair and it gambling is not fair and it is

virtually in the category of bullying, in my opinion. And Mr Strong didn't

comments to those attacking him

at the meeting. Our main opposition, Coles, hides behind this issue as though they weren't involved or weren't

responsible for gaming machines

and that is a very unfair position to take . Woolworths'

perceived ill-treatment of its

farm gate suppliers was contentious topic as the retailer was called on to

defend claims that it's

its market power to force

prices down to what some

believe are un sustainable levels. Woolworths buys levels. Woolworths buys in fruit and vegetables about 12%

of what's produced in the

country. So we're not a big influence er of the prices of

what's produced the crops that

are produced within the country. As is the norm these

days at an AGM, the remuneration report prompted admission from James Strong that the report is too

complicated for the average

shareholder to understand. I

watch people when you talk to

them either at meetings or in public when public when you're talking to

just friends and so on and you start talking about STIPS and

LTIPS and reported values LTIPS and reported values of

shares and so on, people's eyes

absolutely glaze over. Investors controlling a

not insignificant 18% of shares

understood enough though to

vote against it. Next week

delegates from nearly 200

countries will converge

for another round of climate

change talks. China is pushing for an extension of the Kyoto

protocol which ends next year

even though it's not signatory and there's growing

pressure for a deal to include

all major economies to be

negotiated by 2015. The Kyoto protocol is the only legally binding international agreement to limit emissions and Beijing

says it is crucial that an extension be made. Shuanghuan

Auto will be part of the Greenpeace China delegation to

South Africa. He's optimistic a

delegation can be worked out. I

think countries in Durban

should stop blaming each and to really reach a new

commitment that fulfils their previous patch. China's

endorsement of an extension to the protocol comes despite

Beijing refusing to sign up.

The United States, the world's

other largest emitter is also

not a signatory. Because of

that a handful of nations they won't support the Kyoto

agreements. Reports indicate

several nations believe a new

protocol may not be agreed upon until

until as late as 2020. If does happen the delay would mean a significant depart

infrastructure - departure to

from the promise to sign a new

treaty at the end of the treaty at the end of the next

year. Yang Fuqiang is worried about negotiations. Unfortunately now

is very slow and face is very slow and face a challenge of the challenge of the failure. China

also wants progress on a multibillion dollar help developing countries mitigate mitigate or adapt to the effects of climate change. effects of climate change. This green climate fund was decided on at the previous round of negotiations in

negotiations in Kan kun last year but China is concerned the

economic woes in Europe and the

US will see that fund delayed.

about productivity in the

workplace but what actually is

it and how do you quantitify

it? Also, does Australia stack

up against its regional counterparts. To find out more about this I spoke earlier to

Peter Harte, vice-president Asia Pacific for Kronos. Welcome to the

program. Thank you for having

me. The term productivity has

been widely used and yet few can identify what constitutes

productive work force, why is interesting. You're right, productivity has been spoken

about a lot by all our business

leaders but not many people

have actually said how we

measure it. In its simplest form form productivity is the value

created per working hour. I think what's essential think what's essential right

now with the 2-speed economy

that we have in Australia it's

not so much whether not so much whether every

Australian will have a job to

enable us to be more productive and competitive, it's whether

we actually have the work force to fill those vacancies. So how

do we make sure we work force to fill those

vacancies? The incredible

explosion in the resources boom

that many other employees from

other industries

gravitating towards that sector

for higher pay and for higher pay and higher working conditions. Now what's happening as well is we're

going to have a massive increase in the amount increase in the amount of

mature aged workers retire and

we're not going to have enough

people coming into the work

force or enough migrant s

coming into the country. coming into the country. But however there's a whole hidden

pool of talent of pool of talent of workers out there and that is females

creating greater female

participation in the work force

but also encouraging those

mature age workers to stay in

the work force longer.

the work force longer. If we

look at that in a bit look at that in a bit more detail. Female participation, Goldman Sachs has released a report that said if 7% of the

females came back into the work

force it would increase our force it would increase our GDP by 13%. Now both males and

females coming into the work force at the same amounts

they enter it, however by the

age of 25 it and it never recovers. Nursing

is a good example that has high female participation and by the year 2012 Australia will year 2012 Australia will have

40,000 nurses, there will be a

shortfall. What can we do about

that? Well one of the most

commonly cited reasons is that nurses left because they had inflexible work conditions which therefore didn't allow

them to have a work and a home

life balance. Now, most

businesses do understand the importance of productivity,

however very few measure it, why is interesting thing is that interesting thing is that they

don't have the business metrics in place to productivity but that's really

dependent on the industry. In a manufacturing manufacturing industry which

employ s about 8.5% of the work

force, just under a million,

they have the rudimentary, if

you like, tools to measure

productivity because it's very

much about input versus output.

But Australia as a services

sector with 72% of our work

force in services quite force in services quite often

it's not so much they have the tools to pressure productivity, they're not aware

that the tools are available.

So most companies as well they

lack a cohesive, if you lack a cohesive, if you like, human capital management

strategy that really takes

their work force from being an

expense right through to being

a flexible resource and being a competitive advantage. competitive advantage. The news

is those tools are available at

an affordable cost no matter

what size of the

business. There's been a lot business. There's been a lot of talk about Australia being

competitive with Asia

that we do lack a certain

amount of competitiveness. How

do you think that we do you think that we should

improve that? What sort of strategies can be put in place

at a policy level, I guess, or

what things should businesses be specifically looking at be specifically looking at to improve on that? So, I mean

you're correct in saying that Australia's productivity has decreased in the last decade,

it's 1.4%. I think it was

interesting is that it's about again bringing those

age workers. I do like the

policies of some of neighbouring countries, neighbouring countries, if you look at what happened in Singapore Singapore the Singapore the Singapore Government wanted to be a lot more productivity and what they

did is it's incentive business, especially in the tourism industry, to capture industry, to capture travellers

rather than Singapore be a destination or a destination or a transit country into other places, they

wanted to make sure that people stayed and had a good f you like, customer experience. So

what the Singapore Government

is introducing incentives for businesses to embrace technology for the tourism

industry and that way grow the

tourism business. If you look at what's happening in

Australia, I think from a legislation perspective, legislation perspective, the

fact that the Government is now

looking at extending the

superannuation age from 65 to

67 is a great step. I think it

should be to age 70 and beyond

and again if you've got more

workers in the workplace and

they're greater participation

then we will be far more competitive against overseas competitors. Do you think the Government should also increase say workers from

overseas? I do think. I overseas? I do think. I think

you need migrants into the

economy. In fact statistics and research has shown they

actually do grow the economy. I

think they're going a long way

with what they're now doing

with the visas. More migrants

into the economy, like I say

we've got a massive amount of

people leaving our work force,

a huge resources boom and we

need more migrants bringing new

skills into our economy to help

Australia grow. It's an interesting

interesting thing too, the productivity conundrum, I guess, about for quite some time.

However, it seems like there hasn't been

hasn't been a lot done to hasn't been a lot done to kind

of combat it. Do you think that

there's just been this kind I guess, you know, feeling I guess, you know, feeling of

it's been, you know, very good

for a long time and it was not

necessarily going to drop off

and all of a sudden people have realised that realised that something needs to be done. Yes, like I say, we've been very fortunate, we've survived the global

financial crisis. We had a resources boom that's that. The economists have

predicted another decade of predicted another decade of growth. I think growth. I think most business

leaders have exactly thought

that, that I've got profits,

the shareholders are happy,

employee engagement seems to be relatively high, I don't need

to do anything about it and I

think what it comes down to is

you don't know what you don't

know and right now people are

struggling with I want to struggling with I want to be

productive but how do I do

that? And looking at work force management, it can beneficial for all management

tasked within an enterprise but

how do you use that to increase

productivity? So, I mean the

great thing about labour in general it can be up to 70% of

any controllable expense in a

company. So actually

understanding what your work

force is doing and in greater

visibility and then if you like schedule your work force to demands to

demands to your customers is

going to make any company more

productivity management tools have been

quite innovate ive of late. They've been around 35 years and will give people those competitive advantage. Those people who people who use them have greater employee engagement and

are returning better funds to shareholders. Peter Harte

thanks for joining the program. Thank you. Federal Treasurer Wayne Swan has

approved SAB Miller's hostile

tilt for Fosters. As the deal they've agreed to keep Fosters management operations based in Australia and vowed

not to relocate any of fosters' brewing facilities offshore. Fosters board approved the $9.9

million offer from SAB Miller

in September after a in September after a protract

ed bidding process in what's expecting to be a formality.

Shareholders will vote on the takeover

takeover next week. The Queensland Government has been

accused of risking the

environment by allowing the release of treated coal-seam

gas water into a southern Queensland Environment Minister says Environment Minister says she will investigate the claims in

an ABC online investigation

into the CSG industry. At the head quarters of Murray-Darling Basin the

Condomine River snakes through southern Queensland. But there are fears it's being are fears it's being polluted by water from coal-seam gas

operations. We don't want operations. We don't want any

community or any part of our environment suffering from any disposal of, from organisations or companies. The ABC has revealed that last revealed that last year the Queensland Government

gas project approval to dump 8

Olympic swimming pools' worth

of treated coal-seam gas water

per day into the river. That

allows for the allows for the release of a

string of chemicals and heavy metals at levels considered

toxic under toxic under Australian environmental guidelines. We

don't want to see this water

going down that riverine system

at all. One of the companies involved says the project's abiding by government-imposed standards. Queensland's Environment Department DERM

said it granted the approvals water guideLyons. However,

aquatic ecosystem standards

designed to protect river plants, animals and microorganism s are far stricter. Now that you've

brought this to my attention I will be sending DERM officers to look at these to look at these environmental

authorities and make sure we're protecting

protecting our environment. DERM is now amending the approval to ensure

levels of two possible

pollutants meet the tougher standards. Environmentalists say they're alarmed by what

they call it and see approach. OK, let's

put a whole lot of this partly treated water into our local

creeks and waterways and creeks and waterways and see

what happens. Monitor what happens, if we

you know, we might have to do something else. We should know

what the impacts are going to be before we go into be before we go into something that's going to change the bush

more radically than anything we

will ever know in our

lifetimes. The Queensland Government is releasing a

discussion paper on how to manage

manage CSG water and admits

releasing it into waterways is not ideal. It is definitely

option to have water discharged

into a natural waterway into a natural waterway and that's why we're releasing a

new policy which clearly sets

out that the first priority out that the first priority is actually to reinject treated CSG water back into the coal seam. The Condomine seam. The Condomine River

revelations are contained in an

ABC News online investigation.

Its modelling of industry data

estimates there will be at least 40,000 gas wells across

the nation by 2030, drawing 300


year and producing more than 30 million tonnes of waste salt

over the next 30 years. And now

let's take a look at what's making making headlines around the region. The 'Wall Street Journal' says big joint

ventures for India's retailers

could be on the cards as

officials there open the sector

to foreign investment. And the

'Standard' reports on growing

support for Henrik John to take

on the role of Hong Kong's next

chief executive. That's all for

this edition of Business Today. I'm

for joining me, enjoy for joining me, enjoy your day. Closed Captions by CSI This Program is Captioned Live. This morning - Live. This morning - fire crews

in WA hope light rain will help

them extinguish a bushfire

that's damaged or destroyed

that's damaged or destroyed up to The Opposition demands an explanation from the Government on the on the circumstances of yesterday's change yesterday's change of parliamentary speaker. Two of Egypt's most senior generals

apologise for the deaths of prodemocracy activists in Cairo. And an Australian teenager detained

teenager detained in Indonesia

on drug charges to on drug charges to be sentenced today.

Good morning, you're watching ABC News Geoghegan. Thanks for joining

us. A look at the weather first

around the capitals. There

should be some drizzle in