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Good morning. Welcome to Business Today for Australia network. I'm Whitney Fitzsimmons. Coming up on the

program - risk aversion - the

euro falls on fierces of the EU's debt crisis engulfing

Italy. Improving signs -

lift in factory Japan's recovery boosted by a

Australia's coal assets still lift in factory output. And

attractive despite the carbon

tax. Those stories coming up shortly but first let's take a

quick look at the markets. The

local session will start soon. For more on the market action

I am joined by Christine Ip from Bell Direct. Morning. Now the share market continued to slide locally. Is that due concerns over the carbon slide locally. Is that due to

tax? Good morning. Whitney. A

very dramatic reaction on the locals markets yesterday following the carbon tax uncertainty. Investors are

concerned of how much of an

impact the tax will

corporate profits. That is what

is causing that negative

sentment in the market. But we did see a big fall down 1.9%. The industries with did see a big fall yesterday,

the most to lose were the

biggest fallers - the airline,

the coal and steel companies

were amongst the worst performers. Today, though, the macro pressures coming market's decline. Looking at in the Australian share

the spy future, the spy is the spy future, the spy is flat

the US debt. So we will that is reflecting worry over

share market stabilise, hopefully see the Australian

commodities are firmer and it's

looking like a flat open for

market. Let's move on to the Australian share

elsewhere in the region. Shares gave up over 3% in Hong yesterday in trade. What will gave up over 3% in Hong Kong

happen today? We did see Europe's risk

Asian investors. It's the that systemic risk really spook

spread of European debt that is threatening Hong Kong exporting profit. With stocks with biggest exposure to Europe profit. With stocks with the

biggest exposure to Europe that

played on the market. One of

the companies that relies heavy

on revenue, that was down 7%

and HSBC was down 1.9%. In was

some disturbing news from

Moodys as well. It's identified potential governance, risk issues

issues in several private Chinese panes. That saw investors a little bit lacking

in the confidence in the private Chinese companies

sector. So it's been bad news

on top of bad news. So far in

the last week we haven't seen

sentiment to turn around. much reason for negative much reason

sentiment to turn around. So

the Hang Seng futures are down

and more weakness is expected in the Hong Kong markets

today. In the US, minutes from

the FOMC meeting were released. What do they show? We saw the

disagreement from the policy makers on whether more stimulus

was needed. The to doubts on how much more

their policy could take to jump

rally at the release start growth. We saw stocks

rally at the release of the

minutes. It doesn't look minutes. It doesn't look line

time soon and the market s will interest rates are going up any

be positive that further stimulus from the Federal

Reserve won't be ruled out. So US stocks did come back slightly but it still finished

in negative Territory. Macro

issues was the big focus. US and European debt more of a concern for the markets nand markets. We will leave it tend a shaky finish for US tend a

there. Thanks for the

update. Thank you. Now let's

take a closer look at what's take a closer look at

happening with happening with currencies and

commodities. Fresh fears that the Eurozone's debt crisis could

spread to Spain and Italy saw

the euro slide to a former low.

EU leaders may hold an emergency meeting on Friday

when some Ministers agree that some help may need to stop contagion spreading. Despite promises Monday by Finance Ministers of cheaper promises Monday by Eurozone

loans, longer maturities

more flexible rescue fund, the

euro fell for a third straight

day. Investors remain worried

the debt problems in Greece the debt problems in Greece and

Portugal will spread to Spain

and even Italy, the zone's

third biggest economy. The

financial crisis they are facing involving Italy Spain is a game changer if it

is not handled efficiently it

will mean a recession in Europe

in the world and it will mean a

financial crisis banking sector here financial crisis throughout the

banking sector here and abroad. I am anxiously waiting

on proposals of the euro group in a very short period, very short time and even adding in a very short period, in a

the word urgent to it. It is

very urgent that euro

very urgent that euro group

come with us, to us, with proposal s of stopping the

risks of contagion. The Italian

Parliament is working on a I approving a

approving a 57 billion dollar austerity plan by Sunday instead of month. Investors, though, have

dumped Italian bonds in part because they think Prime Minister Silvio Berlusconi may

not have the political support

needed to get the plan through

both houses. The reason why

Italy is risking more at this

time than the previous years is

because the economy is growing

less than expectation. So the

more slowly from the financial Italian economy is recovering

crisis and clearly even though crisis and clearly even though

the plan is to keep it under

control, the flow is problematic. Mr Berlusconi issued a written statement pledging to speed up the

efforts to cut debt. efforts to cut debt. But disagreements within the EU

over giving Greece more aid is just feeding into the continued

markets and continued pressure turbulence on European equity

on the Minister says his country needs

more rescue loans by mid-September. Adding that the markets were use ing Greece as

TRANSLATION: Everyone has an excuse to attack the euro.

realised that the problem not Greece. Greece not Greece. Greece is perhaps

being used as a motive or the pretext for an attack against heart of the euro, an attack concerning large countries,

countries with small fiscal

deficits with positive growth. Analysts say

slide in the euro is due to the

realisation in the market that

there's a much bigger there's a much bigger problem than Greece. There are large

doubts European central bank

let alone the IMF can bail out

a country the size of Italy. A

former debt governor of the people's bank of China has secured high level post at the International Monetary Fund. Dr Zhu Min has

Zhu Min has been a special advise tore the IMF for the

past year. Now the IMF chief Christine Lagarde

him to a newly created deputy

managing director post. Ms

Lagarde was widely expected to

appoint Dr Zhu Min in a senior

role after China supported her

candidacy for the IMF's top job. It's boosted recognition of China's of China's growing power in the

global economy and the appointment also emerging markets greater influence at the global

lender. There are increasing

signs that Japan's recovery

from the devastating earth quake is broadening with the Bank of Jap European Union giving a brighter assessment of

the economy. The bank's monetary policy has been kept

on hold with the bench mark

interest rate left between interest rate left between 0

and 0.1%. The positive outlook

has been encouraged by a rebound in factory there is a risk to the economies with the economic

slow down and the possibly slow down and the possibly of nuclear plant shut down. The

pressure is mounting on pressure is mounting on media baron Rupert Murdoch with

British Government backing

calls for him to drop his bid

for pay TV giant BSkyB. Shares

in embattled News Corporation

shed another 5% in Australia yesterday as the phone hack ing scandal threatens 'The Sun' and the broadsheet 'Sunday Times' have now been

named in the scandal turning

into an all-out corporate crisis. Rupert Murdoch is crisis. Rupert Murdoch is in

the battle of his corporate

life. A stream of allegations

of phone hacking and bribery

involving his old world involving his old world British newspapers is threatening his

attempts to move News

Corporation into the digital age. Investors gently are

skittish. If you see something

going wrong intra swrit's easy call to sell. And News

Corp has just given us two or three really good reasons to

sell the stock. A stock sell the stock. A stock which is now one Europe less is now one Europe less than

last week after the dramatic closing of closing of the 'News of the World'. Big corporate

advertiser s had deserted it, something Rupert Murdoch wanted

to stop spreading to his other

papers. Scott Mad ok beliefs

the biggest picture and the

bigger concern for News Corp is losing control of the ongoing

transition of content from newspapers to the Internet. When u're trying to

transform a business mod nell a

fragile environment, to have then a major foundation by large brand advertising in

your print product taken away, really undermines the whole

thing. The next strategy thing. The next strategy is

BSkyB it its aim is to acquire

the other 61% of BSkyB the other 61% of BSkyB it

doesn't already own and this is why. First half profit was E781 million and it's growing. News Corp's

global old world publish global old world publish ing empire, including all its

newspapers and bookserned just

$558 million in the same

period. It's the great ngin in

the UK, it's - engine in the UK, it's - engine in the

UK, it is UK's biggest media company

company now, and it certainly

will be after the merger. It

clear sli tinnoivator in that market. But Rupert Murdoch will

remain a minority shareholder for competition regulator competition regulator takes another look at the bid. His problems may not end there,

though - advertising industry veteran Rob believes

advertisers as far away as here

in Australia will keep a close

eye on event s in Britain. I think tirz s will be watching

what the perception of News

Corp is. But I would say they

would not be alarmed as yet. Here, it would very much be

seen as a 'News of the World' problem based in problem based in the UK. The crisis engulfing News International is Britain and its parent company norpg goes

to the heart of corps - News Corporation goes to the heart

of the governance. And the

importance of governance can be clean gleaned from its website where the topic gets a 1.5-line

motherhood statement. I says News Corporation's board of directors an management are

committed to strong corporate governance and sound business practices. News International

will now have that commitment to avoid Britain's new corporate bribery

laws, which came into effect on

1 July and carry heavy fines and jail sentences. Japanese

authorities have Orded stricter

inspection of cattle products

from the disaster hit Fukushima

prefecture. The order came prefecture. The order came as high levels of radioactive

caesium was found in beef

shipped out from the region. In the past few In the past few months,

prices of cattle from Fukushima

have plunged by around 1300 US dollars a head but for farmers

who rear atle near the embattled power plant things are about are about to get worse. Japanese authorities have Japanese authorities have just ordered stricter inspection of

cattle after beef products cattle after beef products from

the region were found to

contain radioactive caesium

between 3 to 6 times between 3 to 6 times above safety standards. TRANSLATION: There were less

ons for us to learn because of

this incident which occurs even

though we thought we had been

thorough in our management radioactive contamination. Reports of the contamination have spooked Japanese consumers. I am consumers. I am a bit worried a f hearing the news they may

have eaten some of that beef. It's a reaction beef. It's a reaction that understand write bli have

Fukushima's cattle form concerned: TRANSLATION: Even if we say

ours is safe to eat, I doubt

anyone will believe us now.

Even if for us it's obvious

it's safe because we

it. But expert have eased fears

for those who may have for those who may have already

consumed the beef. At those

levels of caesium there shouldn't be

concerns especially 23 you ate

this beef just once or twice. Radioactive contamination has already contamination has already hit

vegetable farmers in Fukushima

hard but pig and chicken farm

kers heave a sigh of kers heave a sigh of relief, with government officials

saying radiation yaetionz is

unlikely to accumulate in high. As because those animals As because those animals are mostly given imported feed. In

a fortuitous bit a fortuitous bit of timing for

Australian Government, Macarthur Coal shares jumped

37% yesterday on news of a $5 billion takeover American-based Peabody Energy

and steel joint ArcelorMittal

have announced a joint bid for

the company and the

announcement as made after the

Federal Government's unveiled

its carbon tax scheme this week. If completed the 4.7

billion dollar deal will be the largest coal acquisition in Australian Minister Julia Gillard was quick to take advantage, saying the offer is proof the carbon

tax won't till k till coal tax won't till k till coal industry. Peabody is the big American miner that operating

here now and wants to do here now and wants to do this

major takeover because they

clearly see a profitable future

for mining. The whole purpose

of a carbon tax is to close

down the coal industry. The

Labor Party is not being up-front with people about that. Analysts too over the impact of the carbon tax. It's quite clear evidence

that the increased certainty that the increased certainty of

a carbon price is impacting on

corporate decisions corporate decisions in a positive way. For positive way. For very top draw assets we're seeing the willingness of foreign acquirers to both those. Where

the impact will be felt is in

the more marginal mines where

this additional cost could be

the difference between early closure or not. The by Peabody and ArcelorMittal,

$15.50 a year share, is a $15.50 a year share, is a 40% premium to Monday's close. It

has a minimum acceptance

condition of only 50% so possible for this possible for this bid to

succeed and for ArcelorMittal and Peabody to get control of

the company without the support of the other of the other two major shareholders. MacArthur is the world's biggest producer of

pulverised coal and steel giant ArcelorMittal already has a

stake in the company. If you put yourself in ArcelorMittal's

shoes, as the world's large est

steel produce e, they may be happy simply to and secure access to Macarthur Coal's substantial metallurgical coal supplies. MacArthur was not available for interview available for interview but in

a statement says the board makes no recommendation in

relation to the indicative proposal but will seek to

engage with Peabody and

ArcelorMittal in relation to the price and terms. Macarthur

Coal has been a Takeover Target for some time with a three-way

bidding war erupting last year. Peabody emerged at the highest

bidder at $16 a share but the deal fell through when Peabody reduce ed its offer when the mining tax was proposed. However continued strong demand for coking coal Hello, you're

watching ABC News 24. I'm Jane

Hutcheon. We're just going to

break into our regular are

program Business Today are

You may not and wear, but we

put in place very tough

consumer laws from 1 January this year. The toughest consumer laws that Australia

has had in 100 years. has had in 100 years. These

consumer laws are now national.

The ACCC has the power to deal

with false and misleading claims about price business will believe the vast majority of business will do the right

thing, but for those businesses that don't do the right thing, they will feel the full force

of the law and heavy fines if

they don't do the right thing.

I'll ask David and Peter to say

a few things in a minute, but

it is absolutely critical

our consumer watchdog is active

and as active as possible from

1 July next year when these

changes are put in carbon price will have a very

modest impact on the cost of

living. It will impact on the

inflation rate by 0.7% when the

scheme is introduced. It is a

price which applies to the 500

largest polluters. It is not a

tax on households as is claimed

by many, but it will have a

small price impact in the

supply chain and that is why we

have put in place assistance for households, assistance households to ensure that they

can meet those price impacts and for six million households the assistance will be there to

meet the average price of the carbon price. Food

prices, for example, will be

hardly affected and I note that

Mr Abbott continues with his scare Pamplona campaign making all sorts of outrageous claims

about the impact on food prices.

prices. Nine oust 10

households will receive some

assistance. As I said before, 6 million households will get

assistance to cover the entire average price impact. The ACCC

will be the cop on the beat out there to end shoe that there to end shoe that those

that make these false claims

are dealt with and dealt with

the full force of the law.

What I'll now do is ask David

to say a few words and then

Peter to say a few words. David. Thanks very much

Treasurer. It is great to be

here and great to join you

party. As the Treasurer

indicated, from 1 January this

Australian consumer law Australian consumer law which

is not only the first is not only the first national

consumer law that our country

has seen but also a law that has some of the toughest penalties that we've seen.

Under the Australian consumer

law, the regulators have been given greater powers to given greater powers to act

faster and to get stronger and more effective outcomes with

their enforcement. We've already seen some very good

results in that regard. Under

the announcement being made

this morning, the Treasurer directed the ACCC to ensure

that they give priority to enforcement matters that relate

to the carbon price and its implementation. We know there

are a lot of claims that have

been made and there will be a

lot of claims that will be made

about the impact of pricing

pollution. But we have a very

simple message to both

businesses and consumers. To

businesses we say do not take advantage of this opportunity

to Jack up your prices unnecessarily. If you use this as an opportunity to

rip off your customers, then you

you will feel the full force of

the law. Indeed, the full

force of that law has become even stronger under even stronger under the

Australian consumer law with penalties of up to $1.1 million per contravention per contravention in relation to matters where to matters where consumers

might be misled or provided

with false information. with false information. In

relation to consumers, we have

a clear message as well and that is particularly at the

moment, where the

is not yet been implemented, if

you find anyone out there

seeking to tell you that they

are increasing prices as a

result of the result of the introduction of

the carbon price, then that is

not true. Certainly, at not true. Certainly, at the

moment, we would call on all

consumers to direct their concerns and their inquiries to

the ACCC. Even beyond the metropolitantation of the

carbon price, this should not

be used by businesses as an

excuse to increase their prices above and beyond the modest price the carbon price. We expect

that the majority of businesses

will do the right thing and to

those businesses that do the

right thing you'll have nothing to be to be concerned about. But

under this announcement we're

providing $12.8 million providing $12.8 million over

four years to the ACCC and

those funds will go towards the establishment of a dedicated

team which will involve more than 20 staff and their activitieses will be directed to wards enforcement towards education of businesses and consumers. We are providing

providing the ACCC with both

the direction, the powers and

indeed the resources that they need to ensure that they

crackdown on any false or

misleading claims in relation

to the carbon price. This is

the ACCC's bread and butter, this is what they do best and

we know we will be working very closely with them and with

other regulators to ensure that

households and families around

the country do not get ripped off by the carbon price as an excuse for jacking up for jacking up prices

unnecessarily. Peter. unnecessarily. Peter. thank you, Treasurer. Thank you parliamentary secretary. parliamentary secretary. The

message from the ACCC to

businesses is simple: don't

mislead your customers about

price increases or you will pay

the price. As the national consumer protection regulator,

the ACCC is well placed and will be well resourced to swift enforcement action

regarding false or misleading

claims about the impact of the

range of tools carbon price. The ACCC has a carbon price. The ACCC has

under the Australian consumer

law. Importantly, we can require businesses to

substantiate the claims they

make about the impact of the

carbon price on their goods and

services. Businesses should be

prepared to back up prepared to back up their

claims when the ACCC comes

knocking or otherwise they may

face hefty penalties. We also know that 22 million Australian

consumers will be on the look

out for businesses who use the

carbon price as an excuse carbon price as an excuse to

falsely justify price increases. The

that the vast majority businesses are that the vast majority of

businesses are compliant with

with industries right across the law and we will be working

the economy to provide the economy to provide guidance

pronged approach. We will on this issue. This is our two on this issue. This is our

assist businesses and consumers to understand their rights and

responsibilities and if the

need arises, the ACCC will deal

swiftly with any business that

tries to take advantage of

consumers. Thank you. Thanks

very much Peter. I'll take

question on the ACCC and we'll go to other questions after

that and Peter will leave.

Questions on the ACCC? What

kind of businesses have already made false claims and when if you particularly concerned

about? I'll throw to Peter in

a moment, but we had a claim

raised in the Parliament just

turned out it the other day that purpose

substantiated at all. There

turned out it wasn't will be all sorts

will be all sorts of false

claims being made and of course

Mr Abbott is running around the country making false claims

every day. Australians need to understand we understand we have a watchdog

with very sharp teeth and

the introduction of with very sharp teeth and from

pricing, they've got the the introduction of carbon

resources and they've got the

power to deal with false and

misleading claims. That's the

important thing. What kind of

businesses are we talking about

- anything from

full range that the ACCC will butter to... It will be the

with here. Peter might want to

give you some sense what

ACCC does at the moment. They

deal with a lot of consumer

complaints across a wide viert

of areas. He might give you a sense of... As the national

responsibility for businesses regulator we is have

right across the economy. I'm

not going to provide a list

today of claims that we today of claims that we might

already be looking at, but I

now to look at any business

that makes a claim about the

impact of carbon pricing,

whether they made that

yesterday, today or tomorrow,

and we'll be asking them to

substantiate those claims if we

have any questions about them.

You might want to give the number. Indeed. We would

encourage consumers who are

facing any claims of this sort

when they go to purchase a

product or service to call our

info centre on 1 300, 3 info centre on 1 300, 3 02502 or to visit our website Are the staff going to be new staff or are going to be new staff

you going to take them from other areas or a combination of

both? There will anditional

staff. They'll be in our

information centre to deal with

queries with the public.

They'll be liaising with business how to comply with the law. We'll have staff engaged

in investigations and enforcement to deal with any misleading claims. Hum new jobs

do you expect to create? Once

the program is ramped up, we're talking more than 20 new staff in the ACCC. Do you think penalties are tough enough to

actually stop gouging? We've

been very pleased about the been very pleased about the new penalties that we've recently

received as a result of the

consumer law reform. You may

be aware that last week we

obtained penalties of more than

$5 million against Optus misleading advertising. We've $5 million against Optus for

already seen a series million dollar penalties breaches of the law when it million dollar penalties for

comes to giving the consumers

false information. Those significant amounts. Those are false information. Those are

genuine deterrents to

misconduct in the market.

Could I just add to that,

that's why we say it is a

watchdog with sharp teeth.

These are very, very

substantial penalties. There

can be multiple penalties

because there may be multiple offences by organisation. Anyone else? On

the ACCC? No. Okay. Thanks, Peter. Thank you very

That will provide the tern certainty to deal with the issues of power generation in

the Latrobe Valley. You can

indicate in the short time what sort of job losses there may sort of job losses there may be

there. We can't indicate the

future outcome in terms of will future outcome in terms of what

plants because what we must go

through is the process that through is the process that we

outlined over the weekend. We

will go through a bidding

process in terms of removing 2000 megawatts of capacity. We

will do that in conjunction

with and talking with the power companies but of course that is

a commercial in confidence

process. We understand the

uncertainty and the desire of

people in the valley for

certainty and we will work our

way through these issues we've put in place a range of way through these issues as

measures for energy security to give people the certainty in

the immediate period ahead.

Most importantly, what will

deliver the certainty for the deliver the certainty

long-term is the finalisation

of these plans. Isn't Julia

Gillard's job safe given

today's polls? Julia Gillard

is a leader of conviction and

she is a leader of courage.

This country has been talking

about putting a price on carbon

for almost a decade. In the last

last Parliament it was voted down by the Liberals on three