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Good morning. Welcome to the

program. I'm Whitney

Fitzsimmons. In 'Business

recession. Today' - emerging from

recession. The Federal Reserve

leaves interest rates on hold.

Digging deep. BHP Billiton says

strong commodity demand is a

way off. And - pirates lose

out. The WTO rules in favour of

US over media row with China.

Those stories shortly, but first, let's take a quick look

at the markets.

I'm joined by Chris Weston I'm joined by Chris Weston

from IG Markets. The US has

posted a Budget deficit. What

impact did that have on the

market? It was largely

positive. If you look at how

the market opened we put on

about 9 points and rallied very

strongly from the outset.

Obviously we got those Budget

deficit numbers pre-market. So

the market would always open

quite well. We saw the Budget

deficit widen as expected from deficit widen as expected from

26 billion to 27 billion but

the good thing was it was less

than expected. We were

expecting it to be 28 billion

deficit. And we did see an

increase in exports which

really helped that. We saw

exports increase 2%. So people

look to that better than

expected economic data. The

market rallied about 9 points

on open, which was good to

see. The Federal Reserve has

also kept interest rates unchanged? Yeah, there was unchanged? Yeah, there was no

doubt that was going to happen.

The consumer is still very weak

in the US. We heard the

chairman say they were keeping

rates at exceptionally low

levels for an extended period

of time. They'll probably keep

rates on hold for a while.

We've also seen they will keep We've also seen they will keep their quantitative easing

program until October. They

were expected to finish it in

September. It's been extended

until October. But the market

liked the bullish comments about the economic situation

picking up. Hence why we saw a nice rally into the close. Let's turn to the UK

where the Bank of England has

made some interesting comments

about the inflation there. What

are the details? This really

other backs up with what we saw the

other day. We saw their chief -

banking chief say that

inflation is likely to miss

their targets over the next

three years. They expect

inflation to be through 1% going through this year and

then below their goal of 2%

going into 2012. Inflation's

obviously not a big problem in

the UK. That's why we saw quantitative easing program extended, probably a bit too most people's surprise the

other day where they extended

the gilt purchasing people the gilt purchasing people by

?50 billion. So obviously

inflation isn't a big issue in

the UK at the moment, hence why

we saw that program coming

out. Can you tell us how regional markets will perform

today then? In Australia, it's very, very strong at the

moment. We saw a weak lead

yesterday and the market put on quite a few points into the

close. Today we're seeing the

market open at 4384 given that

the SPY futures last night were

very strange very strong and we're seeing a

very strange situation at the

moment which is very much like

stay long until proven wrong.

We expect the market to be very strong today. Probably strength

across all sectors given the

leads we you a in Wall Street.

If we look at the Nikkei we're

expecting strength there, to

open at around 10,505 points,

an extension of some of the

losses we saw yesterday. So

some good gains especially

across some of the financial

from Wall Street last space given the lead we got

from Wall Street last night.

Looking at currencies, how is

the greenback faring at the

moment? A bit weaker actually.

It was very, very - put very

much in play last night after

the FOMG meeting. The

Australian dollar traded from

81.81 up to a high of 83.73.

Cable after the comments was

risk pretty strong. I think most

risk currencies putting on some

good ground. The euro put on

about 40 points although the

FOMC meeting we saw a lot of

weakness and then it rebounded

again. A lot of risk currencies

were much stronger. That's weakened a fuft commodities in

London on the LME last night.

Chris, thanks for the update.

Chriss we fon from IG Markets

now. Now a look at what's

happening with currencies and


The world's biggest miner

BHP Billiton says the company

remains cautious about signs of

a recovery in the global

economy. The collapse economy. The collapse in

commodity prices and several

writedowns sliced 62% off net

profit and CEO Marius Kloppers

warns there won't be a strong

increase in demand until well

into 2010. With net earnings

down by more than half, it's no

surprise BHP Billiton Chief

Executive Marius Kloppers says

2009 was the most challenging

year he can recall. Within a year he can recall. Within a

12-month period we went from a

situation where rampant demand

couldn't be satisfied to one

where demand simply evaporated

and lately stabilisation. And

a breakdown of the numbers

tells the story. Stainless

steel recorded a loss of $854

million. Aluminium, base metals

and petroleum were among the

other divisions to suffer big

hits to earnings, however, the two largest divisions two largest divisions by

revenue, coal for steel-making

and iron ore, both saw profits

increase. The bottom line was

affected by asset writedowns

centred mainly around the

closure of the Ravensthorpe

nickel operations in Western

Australia, and a $2.5 billion

increase in costs but despite

all that BHP Billiton still

generated record net cash flow

of $19 billion. At a time of $19 billion. At a time when

others were forced to cut

capital spending and dividends,

this ability to generate cash,

even when markets are weak, has

allowed BHP Billiton to

continue to continue to invest

strongly in growth projects.

Such as the joint venture with

Rio Tinto in Western

Australia's Pilbara region.

However, not everybody is

impressed. Financial analyst

and BHP Billiton shareholder Dr

and BHP Billiton shareholder Dr

Carolyn Currie says the board

has been opportunistic. They

have a new Chairman coming in.

This is a big bath. In other

words let's write off

everything possible so that my

performance can then be

assessed from a far lower

baseline. As a big trader with

China, BHP Billiton is keeping

a close watch on Rio Tinto's

current troubles with the ghin niece government. Marius Kloppers says at the moment, it's having no it's having no impact on the

Pilbara joint venture with

Rio. From our perspective, it's

basically progress as

anticipated at this stage. As

for future, he doesn't see

demand for commodities rising

substantially until well into

next year. Hutchison

Telecommunications has fallen

into the red after posting a

first-half net loss due to a sharp drop in turnover from sharp drop in turnover from its

Israel operations and currency

depreciation. The emerging

markets telecoms arm of

Hutchison Whampoa posted a net

loss of $37 million for the

January to June period. The

conglomerate owned by Hong Kong

tycoon Likar shing also

announced it will sell a 51% in

its under performing unit in

Israel for $1.4 billion. The Israel for $1.4 billion. The

company says it expects a - to record again before tax of

about $1 billion but is still

to decide how to spend it.

Investors will have their first

chance to react to the news today. Writedowns have weighed

heavily on Australia's second largest property group

Stockland as it posted dismal

earnings results. CEO Matthew

Quinn is the latest in Quinn is the latest in a string

of business leaders to express

cautious optimism about the

year ahead and warns the

recovery may be slow. It's the

first major property group to

report annual profits, and as

expected, the result wasn't

pretty. Last year was a tough

year for everyone. We've all

been looking forward to the reporting season really to get

the results out, put a line in

the sand and move on with the

next year. Tumbling next year. Tumbling property

prices have forced Stockland to

downgrade the value of its

investment properties. The

company reported a hefty annual

net loss of $1.8 billion. That

compares to a profit of more

than $700 million last year.

Stockland's retirement living

and commercial property

businesses managed to make an

operating profit, but its

apartments arm suffered a $19 million

million loss. They haven't been

able to move stock and they've

also cut back on their

developments. A lot of it is

down to us and the way we've

executed thing. But the

Stockland chief also blames

governments and local councils

and their processes which

discourage development. Governments want

supply, they want pay Fordable

housing, they want built form, urban consolidation,

urban consolidation, they want

regentrification of the others

around old railway stations. It

makes sense for everybody but

the planning system is just a

real quagmire, it's just too

hard to work through. Despite

Stockland's falling profits its

balance sheet remains strong,

with access to more than $2

billion in cash and other

funding. Matthew Quinn says

Stockland plans to dispose of

its offshore assets an focus on

its local business over the next two to three years.

Melco Crown Entertainment,

the casino venture between Australia's James Packer and

the son of Macau gambling

billionaire Stanley Ho, is

looking to raise $200 million

on the Nasdaq. The Hong

Kong-based company is offering

37.5 million US depository

shares or around a 7% stake in

the company. If needed the

company says the sale may be expanded

expanded by 10% to cover excess demand. Melco Crown

Entertainment is raising the

capital to fast track a

repayment of a $1.75 billion

loan that financed the building

of its City of Dreams. It's the

second largest casino in Macau,

and opened on 1 June. The

authorities in China have

finally charged the four Rio

Tinto staff who've been held

in detention for the last five

weeks. They're accused of

violate ing commercial secret

and bribery, however, they

haven't been charged with the

more serious offence of

stealing state secrets. After

five weeks in this Shanghai

detention centre without

charge, the four Rio Tinto

employees have now been

officially arrested. Stern Hu

and the three other Chinese

staff are accused of staff are accused of using

improper means to obtain

commercial secrets about

Chinese steel companies. This

has prompted Rio Tinto to speak

out about the case for the

first time. The charges have

been down graded and I think

that reflects what we've been

saying all along, that we don't

in fact believe that there's

any evidence of wrongdoing. A

former colleague says he's relieved that Stern Hu

relieved that Stern Hu has not

for the moment been charged

with more serious crimes of

stealing state secrets. His

wife's also very, very

relieved. I understand now that

they can correspond by letter.

And that she's able to prove

him with some reading the

material, books, etc. In Beijing, deputy commerce

minister Fu Ziyang says the formal arrest of the formal arrest of the Rio staff

shows China is moving towards

the rule of law. He hinted that

this matter will go to trial

and says his country's handling

of the case will actually attract foreign investment, including that from Australia.

We do not think this case

should or will have an impact

on the healthy and steady

growth of our bilateral

Australians with Australia. If Australians with Australia. If

the charges against the Rio

staff remain in the commercial

rather than state secrets

realm, this could be an

indication that Beijing is

trying to take some of the heat

out of the situation. Either

way, Australian diplomats here

have asked that Stern Hu now be

given access to a lawyer. For

the United States has won a significant victory in its

battle to open up the Chinese market to American films, market to American films, books

and DVDs. Chinese restrictions

on imports and the distribution

of copyrighted products mean

the market has been wide open

for pirated copies. The World

Trade Organisation has ruled in favour of the US and called on

China to lift the restrictions.

US trade representative Ron

Kirk says the decision means

there will now be a level

playing field for American entertainment companies. China entertainment companies. China can appeal the decision but

even if it doesn't it's not

clear when it will be forced to

comply. As we've heard, Wall

Street has rallied overnight

after comments from the Federal

Reserve that the economy is

stabilising. The position is

backed up by economist Laura

Tyson, one of President Obama's

senior economic adviser. They

rejects the notion that the government's massive stimulus

packages appear to have achieved

achieved little. You look at

the numbers, it looks just like or worse than the Great Depression. Exactly. The world

economy is tumbling. The US

economy is tumbling. Policy

makers literally pull out all

the stops and then they go for

a major stimulus, a larger

stimulus as a percentage of GDP

ever, a major monetary infusion

through the whole sale of federal facilities federal facilities and

quantitative easing of Federal

Reserve and six months later it

looks like the economy has

begun to stabilise. That's actually quite remarkable. Australia's Parliament is

set to vote on the government's

emissions trading scheme today,

and the carbon pollution

reduction scheme would put a price

price on carbon pollution from

2011 and as a major part of the

government's plan for tackling

climate change but the scheme

has faced strong opposition

from the Liberal coalition

party, and heavy industry, and

many analysts believe it may be

voted down. Here to talk about

Australia's proposals to tackle

climate change ahead of global

talks in Copenhagen, I'm joined

by Adrian Kemp, associate

director at economic consulting firm firm Nera. Good morning, welcome to 'Business

Today'. Good morning, how are

you going? How important for a proposed global carbon market is the Australian move to

implement a carbon emissions

trading plan? An Australian emissions trading scheme is a

very, very important step

forwards building some momentum

toward as global carbon market.

It's really all about trying to

gain consensus globally about the importance of actually the importance of actually

doing something. Emissions

trading schemes are really part

of that. It also demonstrates Australia's willingness to be

part of the solution and it

will also create opportunities

for Australian businesses

globally to innovate and

develop opportunities and

options for addressing carbon

emissions globally. There are

some who are saying that those

opportunities are being overstretched or

overpublicised. What sort of opportunities opportunities would present

themselves? Well, I think

there's really opportunities in

terms of building technologies

particularly in the electricity

generation sector. There is a

lot of work going on in areas

such as solar thermal and there are good Australian companies

that are actually developing

technologies there that could

potentially be sold globally to

help cut emissions particularly

associated electricity generation. Do you generation. Do you think - in

terms of the actual scheme, it's very important for

Australia to get it right. Many

countries are looking to

Australia as an example. Do you think that Australia will actually get it right? Getting

it trite is very important.

Part of the difficulty in

trying to design these sorts of

things is what does getting it

right actually mean? Part of

that is because there are really going to really going to be different

winners and losers under all

the various design options. In one particular design scheme,

one particular industry sector

might be better off, whereas

alternatively other sort of

design options that particular

sector might be worse off. One

support for a particular design

really depends on the

circumstances of an industry. Regardless of whatever Regardless of whatever happens

then there will always be

losers and winners? I think

that's without doubt. Really

the difficulty is trying to

make sure that those industries

that are going to be worse off

can be best helped transition

to a situation where they're

emitting less carbon. There is

an argument that the current

approach of targets and

timetables in cap in trade

permit systems are lun lick permit systems are lun lick to

work overtime? That's simply

wrong, I think. Once you have a

design in place you end up

having a situation where those

targets will be achieved. The

problems arise when one fiddle

ws the design of the scheme

over time to try to address

particular concerns that might

be happening in particular sectors. What's really

important is to lock a scheme

in place, put those targets in

place and aim towards achieving those targets over those targets over time. Do

you think that the European

experience has any relevance

for Australia? There's a lot of

rem vans out of the European

experience. It's really a

microcosm of how a global

carbon market could operate.

Just recently they've been

doing quite a bit of review of

the initial operation of the

scheme since its inception.

There have been three areas

they've focused on. The first is harmonising the ability to is harmonising the ability to

trade between countries. That's

pretty important in terms of

getting these schemes to work

effectively. That's all about

trying to minimise the cost of

abatement over time. The second

is about trying to expand the

coverage. They're working to

include other sectors, for example, they're including

aviation in the scheme. And

they're also including the

geographic spread by allowing

other countries to join the

scheme. Apparently, they're creating the opportunity for

countries like Australia to potentially some time potentially some time in the

future negotiate with the

European Commission to actually

join the EU scheme if that's

how the global market develops.

Finally they're trying to fix

up their system of allocating

permits. They're moving towards

a system where, as much as

possible, the permits are

auctioned and really that's all

about trying to make sure that

there aren't any competitive

implications between countries

that are involved with the

scheme. And that will be a scheme. And that will be a very

important part of any scheme

design here in Australia as

well. We're nearly out of time

but I just want to ask you,

there has been a lot of

pushback from China and India

on such a scheme. Do you think

that the long-term consumer pressure will force it to

follow the global trend? China

countries are certainly a and India and other develop ing

challenge. But ultimately it countries are certainly a

will be about these countries

realiseing if they want to be a

global economic power it comes

with responsibilities. One of those responsibilities is

helping to solve our carbon

emission or climate change

problem. So I think it mightn't happen immediately but

eventually these parties will

come to the table and a global

market will occur.

Unfortunately, we've run out of

time. Thank you. Thank you, Whitney.

General Motors' Chevy Volt unveiled this week is the

latest in a series of electric

cars coming onto the market

over the next year. They're

being touted as the saviour s

efficient and convenient are of the environment but just how

they? In the beginning,

others. electric cars outsold all

others. Henry Ford's cheaper

Model T changed that but a

century later the electric

renaissance is on. From Akron

home of this three wheeled car

to Spokan where they make the

Tang yo, perfect for splitting

grid line. No oil changes or

preventive maintenance.

Britain has a line of electric

trucks called Smith. Warren

Buffet invested a quarter

billion in China's billion in China's BYD and

coming soon, Norway's Think

City. The exterior is made of

plastic. How safe is that? The

safety structure is in the

frame. This has a high-strength

steel frame. Next year will

bring the Nissan Leaf at around

30 grand and the Chevy Volt for

about $40,000 and whether it's

the Tessler roadster or BMW

space Mini E the first thing you notice is the

you notice is the quiet. The

second is the instant power. I

do love that torque! Now that

several hundred of these are on

the road the so-called pioneers

who pay $850 a month to lease

them are discovering the hassle

of the charge. Full of hurdles.

Unless you're on top of it.

The best batteries are still

expensive and limited to around

100 miles, and they take 23

hours to charge on a standard hours to charge on a standard

wall socket. A higher voltage

garage box will fill her up in

three hours. But so far the cars seem easier to get than

the cords and poxes. The

utility is completely prepared

for what's required to install

an electric drier but an

electric car is different. A

company called Better Place has

plans to build a chain of ought

most titted battery swapping

seg stations. Everybody is seg stations. Everybody is

jumping in the game to show the

public that these cars aren't

science fiction, they can

really be part of their

future. It's a future when

extension cords will replace

gas cans, a change enthusiasts

say that is well worth the

growing pains. Britain's financial regulator is being

accused of watering down

controls on banks originally

intended to get rid of the bonus culture which helped

create the financial The financial services create the financial crisis.

authority has published a new

code of conduct which it says

is more workable, but others

say it will encourage a return

to bankers' champagne

lifestyles. Huge bonuses fueled

champagne lifestyles in the

city. But they also contributed

to the financial crisis. We

were told it would all have to

change. The old short-term

bonus culture is gone. No

rewards for rewards for failure. Sweeping

aside the old short-term bonus

culture of the past. Do the

new rules on bankers' bonuses

go far enough? Well, at their heart is the principle that

there should be no reward for

excessive risk. More specifically, there is guidance

that staff should not be

offered guaranteed multiyear

bonuses and linking pay-outs to

long-term performance, that

two-thirds of bonuses should two-thirds of bonuses should be

deferred over three years.

These new rules on remuneration

practices are intended to have

a big impact upon big earners

here in the City of London. But they contain significant

changes to earlier draft

versions circulated some months

ago. Now, has that simply made

the rules more workable or as

critics argue after months of debate have these important

principles are rules be watered down? The

principles are still there. The

FSA says they will apply them

and I'm sure they will. It

would've been no use in having

rules that simply didn't work, because they were too

rigid. New rules or not, evidence suggests bonuses are

back and on the way up.

Tonight, the gulf between those

who receive them and those who

don't is wider than ever. There

has been a lot of victimisation

of bankers. Some bonuses of bankers. Some bonuses are

justified. I think the bone

newses should be paid to

employees of banks in London. -- bonuses. Otherwise those

employees or the banks will

move that to places like

Frankfurt or Paris. Ee, which

think the bonuses fuel reckless

speculation, but they also fuel

a culture of superiority in

which bankers believe the work

they do is infinitely more

important than the work of a

nurse or a bus driver or

teacher. We think that's bad

think it's wrong. for society and frankly we

The bonus culture may have

survived the financial crisis,

but it's resulted in the UK

becoming one of the first

city pay. places in the world to regulate

Let's look at what's making

headlines around the region.

The 'Standard' reports on

Construction mainland giant China

Construction Bank's plans to

buy out the consumer finance

International Group in Hong business of American

Kong. The financial times

reports on BHP Billiton chief

Marius Kloppers calling for the

emotion and anxiety to be taken

out of the iron ore business in

the wake of the charging of

four Rio Tinto employees in

China. And the 'Wall Street

Journal' says a deal has been

reached between Swiss bank UBS and the Swiss and US Governments ending a long-running

long-running tax evasion

investigation. That's all for

this edition of 'Business

Today'. I'm Whitney

Fitzsimmons. Thanks for joining

me. Enjoy your day.

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