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(generated from captions) This Program is Captioned Live. Business Good morning, welcome to the program Business Today. Coming up on

the program - savings regime, Wayne Swan looks to balance

saving and spending priorities in tonight's Federal Budget.

Debt concerns, rating agencies

cast fresh doubt over Greece's ability to restructure its

loans. And 2-way pressure,

China and the US sit down to

work on ways to resolve the

trade deficit. Those stories

coming up shortly but first

let's take a quick look at the markets.

For more on the market action I'm joined by Michael McCarthy

from CMC Markets. Good morning, Michael. The local session will

to start soon, what can we expect

interesting session today. to see? Well it will be an

We've seen some very positive

leads in overnight markets, in particular oil and metals

prices are all higher and that

component of the Australian should support a mainlior

share market. We've also seen a good rally in US good rally in US stocks overnight however European

stocks were weaker so a little

bit of a mixed lead there and

in fact the SPY futures is

indicating a slightly softer

start, down 3 points at the close of New York trading. close of New York trading. It

looks as if we'll have a

cautious day ahead of Budget tonight. If we just cast

our focus elsewhere around the

region what will investors be concentrating data coming out of China today. The market is looking for a surplus of about US surplus of about US $3.2

billion and any big change in

that will have implications

across the region. We're also

tomorrow we'll get a reading on

CPI and PPI in China and that

will be very important because

the whole world wants to know how have engaged in measures that the central bank

through and whether or not have engaged in are coming

they're being they're being effective. Let's

move over to the US, now you

market mentioned that rally on the mentioned that rally on

was driving that? The earnings

reporting season is drawing to

a close. We've seen a 26 of 30

only 4 to go and Dow companies report already,

only 4 to go and the

conclusions are from the bottom

up the American market looks very good. We've seen a number of companies beat expectations.

In fact 7 out of 10 have better than anl is were

expecting and one of the key

themes there has been the

weaker US dollar feeding demand

into the US economy and while

that US dollar has rallied somewhat, it's still in a much

weakened position compared to 6

months ago and so that effect

appears to be ongoing and

that's giving US investors confidence. Let's move over to

Europe now. It was a different story there. What impact will Greece's downgrade have on

trade? Well, debt markets have been very aware of been very aware of this potential for a downgrade in Greece for been watching the 2-year bonds

in Greece trading around 22%

which is a very high level and for most market watchers that was suggesting there was a restructure coming and possibly

even a hair cut for investors.

However it does appear as if

the markets hadn't factored in

in terms of the global growth

scenario and effects that that scenario and effects that

could have because of the sell

off that we saw in the share

markets in Europe overnight. Michael, I can't overnight. Michael, I can't let

you go without looking at the

Australian dollar, how is it slightly stronger US dollar, performing? Well,

we've also seen strength in the

Aussie dollar. Overnight it bounced back over We've seen it pull around 107.75 but around 107.75 but it appears to

be building up another go at be building up steam to have

level. We'll another go at the 108 thanks for the update. That's Michael McCarthy from CMC

Markets. Let's take a closer look at what's happening currencies look at what's happening with Federal Treasurer Wayne Swan has has promised substantial

savings in tonight's Federal

Budget but financial markets

doubt this will the reserve Bank to stop raising interest rates in

Budget process next couple of weeks. The

situation to difficult by the recent task has been made more

and less profitable business sector. I call the Treasurer. will learn Come Budget night Australians

will learn that relative

guarantee immunity from tough Budgets. They will really seen significant made in Budgets since really seen significant cuts

perspective it will be a tough Budget. So from that

Budget but it won't be as tough

only a as I suspected it may have been

because policy Reserve Bank have raised their some pressure few months ago by around $10

billion to over $50 its mid year economic and fiscal outlook in November. Revenues are expected billion less while Revenues are expected to be $9

could be down by $3 billion after the effort. Outside after the flood rebuilding economy's struggling a bit and effort. Outside of mining the

when you put that together with carry forward losses that will be continuing through the are investing and the fact that the miners and the fact that the

means they will get alet of start poipt for the deficit is worse than people think somewhere around $55

billion. Softening the blow of

a predicted boom expected to

stretch stretch the economy is a

program of attracting permanent

to see the companies, corporations spend much more to see the companies, the

There are people who are looking jobs. It would be good if they

apprentices to work could train them up as

areas. However, it is always

difficult for people to move to

Northern Territory or very small places out in

one way of tying people down to go and work Swan will be financial crisis will do most

of the heavy lifting. And of the heavy lifting. And Wayne Swan addressed Swan addressed the media a short

details of the measures details of the measures in tonight's Budget tonight's Budget. Tonight's

Budget will get us back in the black. It will will spread the opportunities of

of the boom. Tonight's is based on economic responsibility, jobs and it's focused on spreading We have to make the savings to come back to surplus to make sure we don't compound any of

the price pressures and capacity pressures which flow

from the boom. But we from the boom. But we will come back to surplus before any other major advanced economy. And that's Federal Treasurer Wayne

short time ago there in Canberra. BHP chairman Jacques Nasser has warned

still in a fragile state. In a wide ranging speech covering shortages and nuclear Nasser said Australia could be prosperous for shortages and nuclear power, Mr Nasser said Australia could be prosperous for another century if it manages this difficult period. The chairman of the

world's biggest miner warns over. For the medium over. For the medium term we should be prepared for further downside as fiscal tightening and economic

restructuring takes hold. But

he says in the long term many he says in the long term many countries will countries will experience growth on a scale

before. And Australia is in a

unique position to capitalise

on this, particularly with the

current geopolitical shift

towards Asia. Without question

if we get the management of

this period right we can

position Australia for another century of sustainable prosperity. And with the

economy so reliant on the

resources sector, the carbon

tax has come under fire tax has come under fire with many critics claiming it will

hurt the country's economy. Mr

Nasser admits energy policy is

difficult given the need to

reduce carbon emissions and

there's no silver bullet. We

favour a go slow approach. In

other words, take a sector,

work on that, take another

sector, work on that, and the

solutions to each sector may solutions to each sector may be completely nuclear power could still be part of the world's energy solutions and doesn't think there should be an over reaction to the nuclear crisis

in Japan. I still think that there is inside of the whole

energy mix solution for the

world a place for safe nuclear generation of power. With the resources sector facing a skills shortage, BHP Billiton wants Australia to become a global centre of excellence. Mr

Nasser says Australia needs to attract more skilled labour

from oversea s. The sector needs flexibility to bring in highly skilled and trained

people to augment peak demand

for specialised skills. In the short term flexibility is

required on labour practices including immigration policies. In the policies. In the long term though

though the skills shortage might best be addressed increasing university training

in Australia. Credit ratings

agencies have hammered Greece

after senior euro zone policy makers acknowledged makers acknowledged that Athens will soon need a second bail out package to avoid a messy

overhaul of its debt obligations. Standard & Poors

downgraded Greece's credit

rating further into junk

territory to be just one notch above Pakistan's. The move hit Greek bank stocks as investors sought safety in German bonds

and the

level in 3 weeks against the

dollar. Moody's investor services threatened to

downgrade Greece by several notches play placing Athens's notches play placing Athens's B

1 rating on review. The worries about Greece's debt rebound about Greece's debt stalled rebound in commodities as the

fall in the euro and the rise in the US dollar made dollar denominated metals more

expensive for holder and for other currencies. And other currencies. And to find

out more about what's out more about what's happening

on the commodities front I spoke earlier to Jonathan Barratt managing director with Commodity Broking Services. Welcome.: Good morning. How

concerning is the downgrade for

Greece and what impact is it having on commodities? I think

it is a bit of a because they've put so many prosperity measures in place it

seems to me some of those

aren't taking hold. So if anything I think it is a

concern and I do think it will

have more of an effect on the whole region because you get - This is a psychological

thing, isn't it? It's a

psychological thing, it's that

confidence thing which we confidence thing which we

really need when you get

concerns like we do have in Greece. Will that start to spread to Portugal and Spain?

Once again it's that confidence

that starts to erode and

that starts to erode and erodes the ability for our

to recover. There's a lot of volatility out there. volatility out there. Crude

lost 15% last week, it's now $100, what's your take on

that? It's going to be quite

interesting particularly for

oil because we worked into the Middle Eastern premium, oil

prices went up, we start to think the volatility's going to remain as

remain as people try and work out whether we'll resuming trend whether there's a changing of the guard. Whether or not oil prices will in fact start trend lower. Can I

in there, it seems the market has sort of way laid its concerns over a concerns over a retaliation against so Sam a's death? I think it has. I think what's is the markets said look, if there are terrorists they're thing. At the moment it's in the forefront of most people's minds. So if minds. So if anything, I think the market has

hey look, nothing's going to happen for a whilst this news is fresh. prepared that down prepared that down the track something might happen, away and I think that's the way they're going to play it out and that's certainly the way the the markets are treating it. What about the pressure driven by countries, the demand from countries like India and the fact that big saying they can't keep up with demand? This is they're not keeping up with demand because that

helps their story, OK, which is - So you think it's PR then? There's involved. I think at the end of the day you've got to look at they're trying to slow down, they've got to put the they've got to put the brakes on. They still need inputs to keep the

their economies going but they

are slowing down. Interest rates are moving up, they continue to move to have the brakes otherwise their inflationary pressures will take hold and they will

have to do a lot more to rein in their in their inflation. They've got

more of a demand

whilst the economy appears to

be going well they will be going well they will keep buying it. But they're buying

it in terms of falseness because interest because interest rates will be pushed higher and they will correct will be a lot volatility that we've seen

through the first half of the

year, do you think year, do you think that that creates more potential upside going into noticed, particularly in the last money moving system. There's a lot more hot money moving to

prices and that in itself has sort of seen an exaggeration in

the price. The real supply

demand story should give you a

good level but we're seeing the

between 10% and between 10% and 15%. The fundamental pictures for

not at 115. And the quirky things. So leading

into the second half you will probably find that the volatility will remain with us but hopefully people will be able to happening is we're happening is we're also seeing this

commodities like wheat. Now

it's jumped off the back of adverse weather conditions in Europe and the US and What do you - what are thoughts on that? It's a whole

grain complex. It's pretty much weather concerns, not just in because we've got massive America but we've Europe, we've got them China, we've got drought conditions. Wheat So if anything, inflationary pressures as a result result of what could potentially happen potentially happen we'll know

pretty soon but we'll probably see the grain complex

go very well bid, just purely because we don't have the

subsoil moisture required to

sustain the stocks and the market. That pushes prices

higher and I think that's what

we're going to see in the next

6 months. We'll see prices back

at 1,000 a bushel when they're down at 700 now. That brings me

to my next point, I was going

to say this would push food

prices higher and then that

would also fuel inflation, particularly in Asia, wouldn't

it? Absolutely. And that's a

massive concern.. We've already

seen it - actually the UN have

come out and actually mentioned as well that it is a concern, concern. We certainly believe

there's a concern at the moment

because it's just another

- There will be some sort of protectionist measure put in place then by governments? There can be.

We've already seen it. Russia

did it. You will find China, which used to be self-sufficient now self-sufficient now has to

import. That's a recent turn around and that's around and that's quite interesting because China interesting because China now

becomes an importer of grains where before they used to

produce all their own. I think

that will become more prevalent

in the market for wheat, in the market for wheat, for soy beans, particularly as the drought remains unresolved in

China and that should keep

prices high which is a concern. Inflation goes rates go up and leave it there.

Beijing has urged Washington to to lift export and investment controls directed saying that it could know a

long way to conquer ing country's massive imbalance. But in their annual bilateral dialogue continue to press Beijing on

its undervalued yuan as to address China's surplus with its undervalued yuan as its undervalued yuan as a way to address the United States. Seen your figures from 16 US figures from 16 government departments government departments have come together to discuss the most contentious of issues at the annual US/China strategic and economic dialogue summit in Washington. While it started that the most sensitive issues of currency human rights topped The two countries have

The two countries have met to

build a more cooperative and comprehensive relationship and

to lay down the foundations for

a new economic growth model. It is our shared responsibility

during this dialogue to during this dialogue to work toward creating

that our respective governments on solutions that give relationship that our two

presidents have directed pursued. And to that end, US Treasury Secretary Treasury Secretary Tim Geithner called on China to rely more on growth driven by local growth driven by local demand rather than exports. He said

market based economy and a more US officials unfairly relying on an artificially exports gone down too well with China as fears and worries about about China's yuan rate is unfounded because because China's surplus has continually dropped over the issues in the world today issues in the world today needs our our cooperation and coordination more than ever. The building of our cooperative partnership reflects the reality and trend reality and trend of our comprehensive as one of the growing strategic relationships at relationships at the bilateral, regional and global

levels. Despite the US economic relationship with China, the

bilateral talks began largely maintaineded the two conflict. HSBC's strong Asia

focus has seen it deliver a surge in first quarter net profits to $4.15 billion. The

result was driven in revenues from Hong Kong and elsewhere in the region. Analysts highlighted $47 billion in new deposits along with strong capital and revenues in emerging

positives. The bank also

signalled concerns that the US

recovery may take longer than

anticipated. It tabled a $400 million charge in result of a stop in result of a stop in home foreclosures. New chief

executive Stuart Gulliver will announce a

tomorrow and could use the

occasion to announce major cost cutting measures. Up to 4 payment protection the UK could be in line compensation. The country's biggest banks their fight over the misselling

of the insurance and the

billions compensation can run into the billions of dollars. watchdog rules for banks. Written's biggest banks sincerely they followed them when selling PPI loan but the financial services authority and the courts

decided that the banks a much more basic principle of looking after customers treating them fairly and the banks gave up their the banks gave up their fight against this damning banks of paying banks of paying compensation to millions of customers are huge, similar amount for Royal Bank of Scotland, ?3.2 billion for damage to their reputations in being perceived to have their will be worse. Like millions others Jason billing ham bought

loan insurance to help him keep

up the payments if he became sick and kound to find he had been sold policy that was useless to them. I had a short

end of the phone to find couldn't claim because I self-employed. So I was flabbergasted know what to million PPI policies million PPI policies have been

sold which have so far prompted

around 2 compensation may eventually be due to customers. So some would argue the

the banks forgot the rule of business - customers come basic principle about whether the banks have treated their customers customers fairly in selling these policies in the first

place and also they deal with complaints arising from those sales and

the basic principle is you must treat your treat your customers fairly. One of the Australia's

world is finally taking women seriously but Business Council of Australia chief executive chief executive Katie hay - Lahey is filled with Lahey is filled with optimism the chief of catching up in gender

The push is on to get into the boardroom let by ASX's corps gnat governance into the boardroom let by ASX's corps gnat governance on diversity. It's unone diversity.

why recently departed business koun ill of Australia chief

executive Katie Lahey is convinced attitudes to women are about it to other men. It's not

just us whinging just us whinging about it. Katie Lahey was speeblinging to speeblinging to the converted

at a women in banking and finance forum in Sydney finance forum in Sydney but while she's confident about the future for women in business she

she had a warning for male

business leaders who refuse to move

move with the times. I'm still

for having those quotas in my back pocket if all else fails

but I think for the moment

we're on the cusp of a change

that's not going to that's not going to require quotas. Among quotas. Among those sharing the platform was Janie Wanless

who 's the Australian manager

for Bank of America. She

recalled her early days in the corporate corporate world when life were women was very different. When

I first started out my career

in global markets most of the

women in the dealing rooms were

we too scared to take annual

leave and we didn't take annual

leave for the first 2 years of our careers just because you didn't know you were going to

have a desk if you came

back. But while career paths

for women are improving in the corporate sector of science and engineering it's a different story, even though

the head of the CSIRO is a woman. Whilst we have very even

numbers in the early stages of

people's career, we literally

have a bifur occasion which

gets progressively worse in the different promotional levels. According to Megan

Clarke the CSIRO is not keeping

its women because old fashioned

ideas of what a career in ideas of what a career in science and engineering should look like still

sector there can be very, very

subtle messages, you know, if

you want a career in science

there is only one way you need

to keep on this very linear

path which can be very quietly

but very powerfully exclusionary and that has the

effect of people opting out and

not coming back. The panel was

agreed that women can be their

own worst enemy in their climb up the corporate ladder. Katie Lahey is now the Australian

hunting firm Corn ferry and say women often sell themselves

short when applying for big

jobs. They will come to the

fore without us having to spook ourselves and we have to learn ourselves, we have ourselves and we have how to do it. Part of that

spruiking for women is to points os. You have points os. You have frunk discussion, take constructive criticism, look for room for women applying for senior roles is that women applying for

against very aggressive high l focused men focused men are are not backward in themselves. Now let's take a

look at what's making headlines around the region. The 'Financial Times' has more around the US pushes bay zwringe US pushes bay zwringe for financial reforms and financial reforms and the 'Wall

Street Journal' says the world's largest sovereign wealth funds will

Beijing this week amid politics politics is shaping their

investment decisions. That's

all for this edition Business Today. I'm Whitney

Fitzsimmons, thanks

me. Enjoy your Fitzsimmons, thanks for joining

me. Enjoy your day. Closed Captions by CSI Live. This morning - tighten your belts, the your belts, the Treasurer says tonight's Budget will deliver Budget is Budget is based on economic

responsibility, it's focused on jobs and it's focused afraid that tonight's Budget is more a political document it is

to deliver some respite for every day Australians.

The Ibrahim's western Sydney family

family home sprayed with bullets, the target the family in 24

hours. Pakistan's PM PM takes hours. Pakistan's PM PM takes a swipe at the US as