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Business Today -

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Good morning, welcome to

the program I'm Wittney

Fitzsimmons. In business

Today - fiscal focus t US

President unveils a budget

laced with tax increases.

Limited impact.

Limited impact. China's banks

in good shape despite

deteriorating global economic

conditions and exceeding

expectations the anger over

golden handshakes for

retiring CEOs. Those stories

shortly but first let's look

at the markets. Regional

markets may open on downward

slide off the back of a weak

lead from Wall Street but

yesterday they traded mixed.

Good

morning Julia. Wall Street is

falling into negative territory despite Barack

Obama's budget outline It was another volatile session

on Wall Street. We saw the morning session start well

with a rally in stocks but it

seemed to lose steam towards

midday and in the last hour

we reversed those gains and

fell into the red. Despite

Barack Obama's plans the

market is wore requested is

plans lack detail to turn the US economy around. Barack

Obama unveiling a recorded

3.3 trillion US budget. We

saw more bad economic data

flowing through. New home

lowest level sales in January down at the

lowest level in history. We

also saw weekly jobless

claims reach a fresh 26-year

low. In terms of earnings the

news was not good either. We

saw GM record a

fourth-quarter loss of $9.6

billion a massive loss so we

saw the Dow down by 1.2% and

not a good session for US markets. Europe, stock haves

climbed two are the first

news? We saw time this week, so better

news? We saw a good session

in Europe and it was on the

back ever banks. The British

Government has moved to help

the banks out with an insurance plan for some of

its assets so we saw a

massive jump in the banks.

The Royal Bank of Scotland

which unveiled the biggest

corporate loss in British

history actually rose 22.5%.

Lloyds was up by 25.3%. We

saw HSBC rise 5.9%, Barclays

saw HSBC rise 5.9%, Barclays

up 8.3% so really this rally

was because of financial

stocks and the banks. A lot

of traders uncertain if it

can continue because it is on

the basis of banks in a fire

sale of tear assets to the

Government stow the FTSE up

by 2.7% and a positive

session in Europe. How are we

expecting regional markets to

open today? I is a mixed

lead for regional markets

given we saw the positive

session in Europe and

session in Europe and the

negative session in the US.

We will see a nervous session on regional markets because

it is the last day of trading

while the US is open for

another day of trading this

week so it is expected to be

a negative session on the

back of the lead from the US.

The future is pointing to a

negative session with the

Australian t futures are down

struggling the city afloat in mess tick car-maker is billion. Perk's biggest do its 2008 losses to $31 a $9.6 billion loss pushing General Motors has announced The struggling US car-maker which is expected out in and. for mall 2010 fiscal budget preview of the president's document is only a broad financial system. The aside to stabilise the $250 billion is being set earners. It reveals an extra increasing tax on high-income reform to be paid for by includes major health care Congress today. His outline budget I'm Smithing to precisely the purpose of the shared prosperity and that is produce sustained get and over the long run we can restoring fiscal discipline moving it is only by families and get our economy provide immediate relief to deficits in the short-term to by 2013 We must add to our to reduce it to $533 billion President Obama proceedieses is estimated to be a record. two-pronged mission to ambitious fiscal plan has a budget. The president's his $3 trillion Federal unveiled the first details of US President Obama has currencies and commodities. from Bell Direct. Now to be a weak day. Julia Lee downpoint so it is expected and the fix Nick futures is

the worst car sales

environment for 36 years. I

has been kept going with the

aid of $13 billion worth of

Federal loans since the start

of the year. The firm's

executives are in Washington

to discuss GM's request for

another $30 billion the stop

it from going bankrupt but

the CEO says conditions had the CEO says conditions had

remain a challenge. China's banking regulator has

delivered a reassuring

assessment of the country's

banking system de pit the

global financial crisis. The

chairman of the regulatory

commission says the country's

banks are stable in contrast

to the massive write downs

and bad loan provisions at

major US and European banks.

The banking sector especially

the fourth large state-owned

in lenders have boosted lending

in line with Beijing's $600

billion stimulus package. The

finance ministry has unveiled

a plan for the banks to help

smaller companies by erasing

or rescheduling debts.

Relations between us's

largest phone company Telstra

and the Government are

expected to improve after the

departure of the CEO Sol

Trujillo. During his

combative lead at the combative lead at the top Sol Trujillo defended Telstra

after effort to deregulate

the local Telecom industry.

Telstra's globe-trotting CEO says he does not have another

job lined up when he steps

down in June I have family,

parent, I have elderly

parent, I have children, I

have all kiefd reconnecting I

need to do. He is

disconnecting if sell Austria

a year before his five-year term end with term end with glowing

reference from the Chairman

who appointed him. He has

delivered above and beyond

anything I think we could

have reasonably expected out

of somebody over this last

four years. Telstra's share

price is slightly below where

it was when Sol Trujillo took

over in July 2005 but that

will not stop him walking

away with a golden handshake

some estimate to be as some estimate to be as much

as (3) 000-0000 It has to

stop. Share holders should be

'em powered to vote down

excessive and geedy pay

packages and sevens payments

for CEOs. Sol Trujillo

delivered a slightly lower

half-yearly profit of $1.92

billion and revised down the

earnings outlook at the

economic slump affects tell communications use but he will be remembered for will be remembered for

building one of the world's cutting-edge wireless

networks and his running

battles with regulators and

both the Howard and Rudd

governments over the national

broadband network. He came

over very, very arrogant. He

did not want the listen to

other people, does not want the cooperate with other

people I think the market

has liked him because he has

had applausible plan and he

has not just rolled over has not just rolled over to

the Government. The sensitive

issue of executive payouts

has also flared up in the UK.

There is mounting anger over

the huge pension deal secured

by former Royal Bank of

Scotland boss Sir Fred

Goodwin. There was no sign of

Sir Fred Goodwin at his

Edinburgh home today nor was

there evidence of the former RBS about at RBS about at his Glasgow

property. Wherever he is the

man once known as Fred the

Sled for his cost-cutting

ruthlessness is in demand. A lot of people want to question him on the pension

deal he is now on. His an u

pay including bow news was ?4

million. He is now on a

?650,000 a year pension and

it is highly controversial

because he has left behind a

bank which has run up bank which has run up the

biggest loss in British

corporate history We are

determined to advance...

There are no high-level ha

demands for Sir Fred to give

up some of his pension I'm

determined we pursue if necessary by legal action cases where too much money

has been taken out and cases

where there is less

justification than has been

claimed. Sir fed has pension

rights from his employment contract contract but why was he

allowed to retire early and

still take a full pension? I

appears he has been allowed

to take the pension which

would normally be payable

from age 60 at age 50 win

which case someone has cut a

deal because normally if you

do that your pension will be

substantially reduced. Sir

fed's deal was typical of

many in the city. Big pension

pots were built up as part of

the lucrative pay packages

seen during the boom years. The Governor of the bank of

England believes that was a

serious problem. The real

question we should be

concerned with here is how

was it the case that everyone

thought it was a good idea

that executives be rewarded

in this way and this is not

just Fred Goodwin, it is not

just banks, it is

compensation in general.

Let's look at how the latest

economic and grim company

news is impacting the US

dollar and regional

currencies. I'm join by John

nunian. Good morning. Has the

US President's budget outline

impacted the greenback this

morning? Not very much. The

dollar remains relatively

well bid. I think there was a

little bit of dollar selling

when it first came out

because the budget deficit is

now 12.3% of

now 12.3% of GDP which is a currency negative but there

are other forces at play giving the dollar some

support and that is pretty

much the risk of of the

story. Looking at the other

forces, amid worry about the

Market Forces they favour the

US dollar. Why is that?

There are two reasons. One is

that the US Treasury bond is

considered to be the ultimate

safe haven for very nervous investors particularly US invest doors and the second

reason there is a sue out

this the major economies such

as the euro zone tUK and

Japan are as in just as bad a

shape as the US and the

negative US data and negative US data and despite negative fundamentals coming

out of the US. What does this

mean for higher-yielding

currency like the Australian

dollar and the New Zealand

dollar? The economic

fundamentals in Australia in

particular are relatively

strong the rest of world as

we saw in the data yesterday

so what that is allowing the

Australian dollar to do is

stabilising against the

strong US and the 65% level but the but the Aussie dollar against

the yen is strengthening

significantly and technically

speak sing it looks like it

is ready the track higher. It

has bounced off the 55-60 low

and heading towards 65 now.

The Australian dollar is

strong but against the US

dollar stable. Australian

capital spending climbed 6%

in the fourth quarter from

the previous three months so

what impact president has that had on

that had on the local currency? Very strong

number. I mean it has

surprised everybody.

Obviously the Australian

economy has some momentum

despite the global slow down.

However, unfortunately for

the Australian dollar what

the global growth story

impacts on it greatly and

investor risk attitudes which

are quite negative at the

moment. It has allowed the Australian dollar the Australian dollar the

stabilise against the US and

get relative strength against

some of the weaker currencies

but we will not see the

Australian dollar make any

serious headway until the

global story I'm proves and

investors start to buy some

of the high-yield currencies

like the Aussie. We saw this

week Japan's exports plunge a record 46% so what has that

meant for the yen? The yen along with

along with the US dollar for

the last 6 months has been

the safe haven currency for

investors. The yen has loss

that crown, in fact the yen

is very much on the defensive

now. I think investors

realise that the Japanese

economy is spiralling lower

very quickly. All the numbers

out of Japan recently not

only have been weak but

weaker than expectations so now you are seeing Japanese

invest doors as well as invest doors as well as

global investors not having

as much faith in the yen and

the fix Nick and Japanese

investments in general so

that has meant the yen has

weakened significantly across

the board in the last two

weeks. Thank you for your time today John.

Australian-based property

group Lend Lease plans to

slash 2000 positions

worldwide but the company

maintains it is a strong

position despite the current

volatility. As losses mount

in the local pot sector

Australia's largest developer

Lend Lease has been forced

into drastic action. It

becomes the latest firm the

announce widespread job cuts

shedding 1 in 6 shedding 1 in 6 positions

Our total work force of over

12,00 people is expected to

reduce to just under 10 ,000

as we right size for current market conditions. When less

has made a loss ever $600

million driven by

revaluations and write-downs.

The outgoing managing

director Greg Clark has reaffirmed Lend Lease's

full-year guidance but full-year guidance but warned

its annual deposits depend on

transactions that may not be

executed this year Our

strategy is to ensure our

cost basis proportionate the

market conditions and console

did it our pipeline of

projects to ensure we will be

in a leading position when

the markets recover. Lend

Lease's loss was dwarfed by

Centro Australians's second

largest manager of largest manager of retail

property which has posted a

$2.4 million loss in the

second half The need to

write down assets in Australia and the US is very

real and they have to operate

in that sort service

circumstance so that is -

means the company is worth

considerably less than a year

ago or so. CEO Glenn Refrano

says a restructure says a restructure of Centro

debts in January has restored

positive cash flee an gives

the group time and money to

navigate tough conditions.

It is a difficult economic

climb but we will focus on

simply case of the group,

services and proper maintenance of the balance

sheet. The question now for

Centro is whether its

underling earning ks hold up

in a declining retail market

and service the Gupta's and service the Gupta's $20

billion in loans. Today

Australia signs its biggest

ever trade deal with 10 ASEAN

nations. The agreement will

help drive regional

integration and highlights

the region's ability to

engage in open trade flows in

difficult economic times. In

most cases the agreement

locks in low or zero tariff rates introducing safeguards rates introducing safeguards

against protectionism. A

number of obstacles had to be

overcome in signing the

deal. I think DFAT have been

working on this for morning

two years now. It has been very extensive as you can

imagine. 10 countries all superintendent but combined,

about 2-plus years. Can you

tell us how significant this

ASEAN free trade deal is for

the region? I think two fold. I think fold. I think firstly the

fact that it is with

Australia is very

significant. Yes, we are a

close proximity neighbour but

more importantly we are an

honest broker in many of tear

trade deals which is a stand-out for me. The second

is the acknowledgement of

ASEAN being ASEAN. In the

last 6 months in addition to

the free trade agreement

being signed tomorrow we saw being signed tomorrow we saw

the signing of the foundation dharter and answer the late

that into English for

business people 2 30 15 we

have a look-alike EU

operating the our near north

that. Has to be good news

for Australia. How does this

provide a safeguard against

the fear of protectionism

resulting out of the global

downturn? I think probably

the most important first

issue is that it still went ahead. On Saturday ahead. On Saturday global

downturn is already with us,

thus signing the free trade

aGMTV which to me is a very

positive sign for the future.

I think it is fair the say that every single Trade

Minister that signed that

agreement is united in

wanting to see the world

trade organisation Doha round

conclude. They are talking

free trade, they are talking

open market. What we are

seeing is nervousness, truth but we are not seeing but we are not seeing closure

and I think that is a very

positive step. Will ASEAN

help protect the us? I think

the answer is yes because

what ASEAN does is open up

another formal dialogue so

that we can continually

review issues as they occur.

We do not need the wait for

long-term and bilateral

negotiations so from my point

of view this is a sign of the

future a positive sign of the

future and more importantly an

an ability for us the make

sure we speak on equalling

level to resolve any issues

that may occur. Do you think

that this will help push

along the process of the

world trade agreement? Again

I think it is more the

province of the Department of

foreign afirst and trade but

it is logical. If you start

to get a major sub regional

complex comprehensive trade

agreement through it is a

huge signal to the rest of the Doha members

the Doha members that we have

to move forward on Doha

round. You cannot expect the

Doha members to be comfortable with Australia

having this with ASEAN and

New Zealand and not having

witness the world so I think

the minister has a strong

message to take back to Doha

the say "Come on, it's time,

let's get moving" Obviously

this comes at a time when

exporters are suffering around

around the redone so could

this help spark an increase

in intra--ASEAN trade? It has

to be. It is not just the

tariff cuts t opening

dialogue, not just the

pretension mechanisms in the

trade bit is part of the

driver for doing free tried agreement and I agreement and I can imagine

in the next 12 months well I

know in the next 12 months

you are going to hear a lot

about the various opportunity

available in that market both

in terms of direct trade, in

terms of investment inward

and outward, in terms of

service exports which perhaps

you have not heard that much

about in the last 2, 3

years. So yes So yes, very

much a stimulus. Australian much a stimulus. Australian pharmaceutical companies and

livestock producers appear to

to be big winners here don't

they? Initially yes but

don't forget this is an extended period free trade

agreement. If you look and

extrapolate out to 2020 which

seems too far to be thinking

at the moment but in reality

won't be we are looking at

every single major ASEAN every single major ASEAN company's tariffs falling and

I think it business 98% will be duty free to Australia and

New Zealand. That is huge. I

think the other thing you

need to remember is if you

cannot get it through ASEAN

regional free trade aGMTV

then what you do is to start

the target those areas where

you still need to have

further benefit through the bilateral free trade

agreement and I was happy the

hear minister Crean and others others to announce in

Indonesia where we do have a

problem with automotive they

are prepared to put to buy

lateral free trade agreement

on the table. They finished

scopeing it, they intend to

negotiate that and without a

doubt Australia will be pushing automotive on the

table. However, on the flip

side of think it is not so

good for local car manufacturers particularly at

a time when the auto industry

is in decline, is it? I is in decline, is it? I think

to be frank with you the

recession is not a good time

for any car manufacturer anywhere in the world including Australia. It is the industry probably which

has been the first to fill

the major impact of

recession. Indonesia, yes,

they stuck, they held the

their guns, they decided that

they did not want to open up

the doors as early as we

wanted. They did not say they

would not open them but the

problem was more about problem was more about time.

Likewise Malaysia. You can

see why. They have a huge

vested interest in their

domestic automotive industry.

I do not agree with that

obviously. I'm a free trader,

I'm Australia, but I do think

what it does do is allow us

to you to take that further

through the bilateral trade agreement and I think that is

where you will start the see the biggest from degrees

made. We will have to leave

it there but thank you. I it there but thank you. I

has been an absolute

pleasure, thank you.

Most of the car industry

attempts to reduce costs by closing plant an shedding

jobs there are some market

niches coasting along. Rolls

Royce's sales have not been

dented too much by the

economic gloom. Its economic gloom. Its famous symbol is still sought-after

by those who have the means.

It may be doom and gloom in most auto plants the world

over but not here in southern England at Rolls Royce.

Orders for tease super luxury

models continue to roll in.

Sales rose 20% last year with

more than 1200 cars sold but

the brakes could still be

amid as January sales were

down 10%. We do have a

strong auto bank, a lot of strong auto bank, a lot of customers waiting for

delivery of their cars so we

see the delay slightly later

than some other band but

equally what we do see is the

new customer interest or

current customers looking to

change cars, there has been a

slight erosion in the

activity level we would

normally expect In fact the

entire UK auto industry had a

dismal January with

production down. Super luxury brand

brand have weathered previous

recessions not this time.

Bentley and Aston Martin

suffered a poor 2008. Rolls

will not give any predictions

for this year but says it has

no plans to lay off workers.

In fact it will move from one shift the two shifts later in

the year ahead of orders for

new hily anticipated smaller

Rolls Royce. The sticker

price of that new Rolls yet

unnamed is expected to start around

around $24 10,000. That is a

absolute steal compared to

this Phantom convertible

which will set you back at

least $43 10,000! A Japanese

unit of Swiss Bank UBS has

made what could have been a

very costly error mistakingly

placing an order for $31

billion of company bonds AU

BS employee in

BS employee in Japan had been

trying to buy 30 million yen

of bonds in computer games

firm Capcon instead 3

trillion was ordered but

thankfully for the bank the Tokyo Stock Exchange was able

to cancel the order. UBS insisted the mistake was not

human error but a computer

glitz. The firm has received

an apology from the Tokyo

stock exchange for the inconvenience. inconvenience. Now let's look

at what is making headlines

around the region. The US has

warned there are growing

number of of male prostitutes from around the region moving

to Hong Kong to work. Barack

Obama has unveiled the most expansive blue pint for government involve many in

the US economy for more than generation and the Wall

Street journal looks at why

the British Government the British Government has taken Royal Bank of Scotland

group the brink after the

biggest corporate loss in UK

history. That is all for the

program today. If you would

like to look back at our interviews visit our web

site. We look forward to your

feedback. I'm Wittney Fitzsimons. Thank you for

joining me. Enjoy your day. Closed captions by CSI