Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant the accuracy of closed captions. These are derived automatically from the broadcaster's signal.
Inside Business -

View in ParlView

(generated from captions) ahead towards a Republic is

accurate, then we should expect something

something from gird in the next

week or two after she's met

with her trusted advisers and

Expect more to be made of what discussed it, and then let's

the Government was told about tensions arising at Christmas

Island before the riot. Okay.

Best wishes to Clive James, the Australian reporter treated for leukaemia. He's

perhaps Australia's most influence contemporary writer

and fine poet, but never invited to the taxpayer-funded

Sydney writers festival, which

is like many of these other taxpayer-funded literally

festivals seems now to have

become a centre for left-wing

opinion. That's the program.

We'll leave you now with a

final observation from

Edna. Thanks for watching.

Prince Charles is the prince

of Wales and our Prime Minister, Julia Gillard, comes

from Wales, though she's

managed to get rid of her Welsh

ak cents. Unfortunately she's

replaced it with another. Closed Captions by CSI Focus'. 'Inside Business'. Another blockbuster gas export

deal has been inked with the

Chinese signing a $20 pillion

contract. Go tote flies are

from origin's Queensland's LNG

joint vent grer. It is a game

changer for origin and further underlines the importance of

the coal seam gas producers and

China to the nation's future economic fortunes. We'll talk

to origin boss, Grant King

about being a big gas producers

as well as user and whether

that changes his views about a

carbon tax. We'll also discuss

the worrying increase in

inflation with former Reserve

Bank staffer and HSBC economist

Paul Bloxham. There's also

appears to be a big rise in the

number of companies underpaying

their staff. We look at a new

plan to head off the problems

before they're dragged into court. This Program is Captioned


In First Person Australia's

still spinning yarns, but only

just. The soaring dollar and

commodity prices are

players left in the textile threatening to unravel the few

industry. This industry since

the mid 80s has been struggling

to stay afloat. I would have

probably had 50 competitors.

Now I doubt if I've got

five. The big players in the

booming Queensland coal seam gas business have been busily

signing up customers for some

time now but potentially the

biggest of all, Origin Energy's

joint venture APLNG project

seemed to be lagging behind.

But the agreement by China he

Sinopec to buy a 15% stake in

the project plus $90 billion

worth of gas over 20 years

means the project is a goer

with at least one processing

plant or train as they're

known. Origin's project could

end up accounting for almost

half the $70 billion worth of projects to be built around the

port of Gladstone over the next

decade. I spoke to Origin

Energy chief Grant King about

his plans. Grant King, now

you've done binding deal with

Sinopec to sell 4.3 billion

tonnes a year, are you able to

move to final investment

decision based on that and one

train? Certainly it greatly

enhances the probability we'll

makes that final investment decision. That binding

agreement has two conditions

Australian Government precedent, Chinese and

approvals. We would expect

them to be forthcoming. The

other thing we need to do to

make that final investment

decision to finalise our

negotiation with our principal contractors that deliver the project. One never pre-sumentsdz all of those

things will occur in a

particular time frame. We're clearly expecting that to

happen and we've indicated some time around the middle of the

year that would be the case.

We're not totally in control of that timetable particularly

when it comes to government approvals. Are you saying you

expect at this point to make a final investment decision in

the mid year? That's quite

likely. We'll make it when we

make it. In respect of the

prior question you asked. It

is our intention to build a two

train project. We have the

resource base to do that.

We've clearly got a one train

sales agreement and are as we

said in respect to that first

train now, the second train

requirements can trigger that engaged with customers. These

second train. What's the total

capex spend between FID and

first gas? Again, that figure

will be released at fine

investment decision and that of

course will be large Lyn form

by the final negotiations with

our principal contractors.

We've made no specific announcement on that at this

stage. Is it likely to be 20

billion. It will be that order

of magnitude. These are very

large projects. The two other

Gladstone have taken FID that

order of magnitude. Would you

expect the number to be that

order of magnitude. Can you

fund your share of that? We

can fund our share of that. I

interests people is will we think the question that

need to do a substantial equity

raise ing inorder to fund our

share, the quick answer to that comment is from a liquidity

point of view we've got plenty

of funds available to origin,

particularly with recent

syndication of debt facilities.

Once we know how much buyer

equity is involved, we will

knee the residual funding task for origin and we'll clearly

then look at the various

sources of funds we've got debt

capital markets. We talked about hybrids and use of our

DRP to provide equity through

the construction period. At

the end of the day there may be

a requirement to raise equity

but it probably won't be

immediate. Must have a bit of

an idea how it's going to look.

You sit there presumably doing

the number on a blotter. You

must get a sense of what you're

going to have to do? We do

have a sense but going back to

an earlier question, these are

very large capital projects,

numbers have moving around a

billion dollars quite easily as

you finalise those estimates.

We'll seed a need for xment,

those numbers will move around

the next couple of months as we

go to FID. The best time to

ask those whence we make those announcement. When expect to

sign new customers. As we said quite continuously asked quite continuously asked that question we're engaged with

customers who can trigger that

first train. That was the case

as evidenced by Sinopec and

that's the case in respect to

the second train. It is

forecast a day or date you'll

execute those agreement. Is it

this year. We're very comfort

with the discussion weers's

having with potential buyers.

We're very comfortable with the

conditions in the LNG market

which clearly are Morrow bust they might have been thought to

be. The problem is finding

enough people to build it hand

the resources not only given

the fact there's few of these

projects being built in

Queensland but so much going on

in Australia. Are you

concerned about that? I think

there's probably two key

comments to make. Each of the

projects in Gladstone, for

example, will have put in place

those strategies they think

will allow them to deliver their projects on schedule, on

budget and they would hope as

we would have hoped to allowed

enough in our schedules and

budgets for that to occur inn

independent of each other but knowledgeable all of that activity is occuring at the

same time. We believe that's

to be the case in APLNG we can

deliver the project on the

budget and schedule that

ultimately deliver on FID and

we believe we've got strategies

in place to do that. The other

challenge there is a

substantial of workforce on the

east coast that goes to the

west case to pursue these

projects. They would be more

inclined to stay on the east

coast and some of the challenge

way pop up on West Coast slim

because do you toned have that

movement of people from east to

west to work on those current

projects. The climate change

debate in Australia has become

po are lar rised now the government

government has announced it's

going to bring in a carbon tax

on 1 July next year. You have

been a proponent of carbon tax

or carbon pricing for a long

time. You're potentially a big

winner from it through all the

gas generation that you have in

place. Now that you're a big

LNG exporter, is your attitude

towards that changing now that

you're moving into more of a

resource exporter? To the

extent that we seek as a country to reduce carbon

emissions that's a commitment

all sides of politics have

made, we've continuously

advocated a price be carbon and

the best way to do that is on

ETS not a tax. That's a detail

that's different from the CPRS,

we continue to advocate a price

but in the form of an ETS and

that's to which we will move

given thint convenienting fixed

price period. The second key

thing that we've everything aed

is when governments introduce

these major changes these need

to recognise transitional

arrangements are necessary and

quite clearly the two sectors

that are most challenged in this area are the generation

sector in the electricity

sector at large, coal-fired

generators and the so-called

trade exposed, energy intensive

exposed sector. The government

should make those proposal

transitional arrangement be be

at argument are just as strong

to apply in the steel industry

or other inn industries. Do you

think resource exporters should

be excluded? We can make two

comments. I think the first

and important one is the goal

that Australia has set itself

is to contribute to reduction

in carbon emissions. LNG is

one of the few industries

specifically for which if we do

more of we'll reduce glow equal carbon emissions. There's a

good argument for saying

Australia should turn up the

dial on LNG exports and

participate more in an industry which will result in a net

reduction in carbon glol bay L

whether that's done by imposing

a price and having transitional

arrangements or not imposing

the price you get to the same

outcome. You don't mind which.

Would you get to the same

outcome if you had appropriate transitional arrangements.

Other resource sectors will

have their own argument and

views. It's not true that all

resources would result in lower

carbon emissions but it is true

in expect to the LNG sector

that sector in Australia should

be exported and expanded

because it will be as intended

under a carbon scheme to reduce

flow Wal carbon emissions. What do you think of the fact that

the government in this case has

said the households will get

more than 50% of the

compensation and secondly, that

it will have to be revenue

neutral? This is why it is a

complex negotiation because

there's a fixed revenue and the

government is trying to

determine how broad that

revenue is that's in fact

determined by how broad the

scheme applies. Does it apply

to many sectors or just one

sector. How big will the

revenue pool be. How much of

that revenue pool is as you say

distributed to households to

generation sector. Dot two

commitments I mentioned mean

there's going to be less

available to commence say the

compensate as well as the electricity sector. The answer

to that lies in the ability of

sectors possible which a carbon

price to put to recover that in

pricing. The electricity

sector, for example, would

expect largely to recover that

from consumers. That revenue

neutrality and the way that

revenue raised is shared is

also partly informed by the and

the of each sector to recover

in its pricing that revenue as

well. Having said that, it is

right to say that most industries would understand

that the way the government is

proposing to distribute that

revenue will mean there's a

challenge in that sector in

particular to come up with a

appropriate compensation

arrangements and that's why it

is a challenging negotiation

for both industry and the

government to find a way

forward. We'll leave it there.

Thanks very much for joining us

Grant King. This week the

former operators after a chain

of 7 Eleven stores in Victoria

were hit with fines of $150,000 for systematically under paying

staff it is just one of around

25,000 claims the Fair Work

Ombudsman deals with each year

which leave Australian workers

millions of dollars out of

pocket. But not all the cases

are deliberate efforts to

defraud employees. Some of the biggest amounts owing and

biggest penalties handed out

are simple processing mistakes.

Businesses are being a urged to

run special audit to order

being dragged before the court, as Neal Woolrich reports. For

thousands of young Australians

working behind the counter at

Macdone #23458ds has been a

right of passage. And while

many are getting their first

taste of workplace responsibility, it's also their

first chance to put an employer

to the test, especially on the

delicate issue of pay. A lot

of crew at Maccas are

schoolkids, so they put a lot

of faith in the management team

to make sure they're looked

after. The management team a

lot of whom started as crew

themselves are usually trusted

to have the best interest interests of the workers at

heart. I've worked for

McDonald's the company side of

things for just on 12 months

now and as I said on a week to

week basis I believe I've

checked my pay slip once.

However that outlines my trust

and reliability as McDonald's

as an employer. But for others their workplace experience has

left a bitter taste. Mohamed

Ullat Thodi is an international

student who worked at a 7

Eleven in Geelong for four

years. He was underpaid

$25,000 after the store's

former owners doctored his time

sheets. I believe it's a

widespread, it's not just 7

Eleven in most of the servos,

some convenience stores, some

of the hospitals like the

restaurants I know some of them

still working underpaid. I

know they're a afraid of

standing up. The 7 Eleven

franchisees and their private

company were fined $1 50,000.

Some of which is to repay six

workers owed $2 0,000. But it

is now nearly three months

since the original order for

restitution. They still haven't

paid us any single cent, okay,

so I don't know how they're

going to pay and how the

Ombudsman is going to chase it.

I have no idea. If they had

any intention to pay us they

would have already done it and

got less fine from the judge. Sometimes not only do mistakes

occur, but also they occur on

quite a large-scale. When it's

very clearly the case that

people have gone out of their

way to avoid their obligations,

we'll take them to court and

sometimes we receive penalties

which are quite significant.

but policing hundreds of

thousands of workplaces is

beyond even the most heavily

resourced Federal agency, so

now the Fair Work Ombudsman is throwing part of the

responsibility back on to big

employers themselves.

McDonald's Australia is the

first foyer to sign up an a

proactive compliance deed with

the fair works Ombudsman. The

company has agreed to self

audit a sample of 10% of its

pay packets over one week in 29

and another week in 2010 to make sure staff have been

correctly paid. For a lot of

crew who are paid hourly, it is

more important to check it closely. But at the same time

I think that McDonald's

especially can be relied on to

pay. You can look each week

Anjo for the hours that you're

putting in you're being paid

fairly for those. That's

important for a worker. To go

through an audit two sets of

pay periods over two years

there's time involved to go

through and do that, but it's a

time that we think is worth

investing to make sure that we

can show our people and the

Fair Work Ombudsman that we are

compliant to the letter. That's

about to demonstrate to not

only themselves but to

ourselves as well that people

have been paid correctly and if

there are have been problems

and there might be a few

problems they're rectified with

no fuss and very quickly. Each

year the fair work opposition

chases 25,000 unpayment claims

re coughing close $25 million.

A 2009 audit by the Ombudsman

found that 0% of 7 Eleven

franchises are in breach of

workplace laws. And it is not the only large organisation to

have been caught up in an

underpayment case. In 2009,

toys are us was liable for

nearly a million dollars to

1000 staff inadvertently

underpaid. Hung jacks are paid

to have underpaid 700 Tasmanian

workers more than $650,000

between 2006 and 2008 because

their workplace agreement

hadn't been registered. And

last year the clothing retailer

Cotton-On handed over 250,000

to workers who hadn't been paid

for attending training

sessions. What we've found

the courts over the past three

to four years have started to

take quite a firm view about

non-compliance with Workplace

Relations Laws and so this does

really become quite a

reputational risk for any

business as well as a legal

risk and clearly, it is one

that should be

avoided. Nicholas Wilson Hayes

many underpayment claims are

made against small and medium

sized bisz you be he hopes

other large firms will follow

McDonald and sign up to

proactive compliance deeds.

The kind of active we have here

is not necessarily to be

looking at punitive action

against companies where they

haven't done the wrong thing.

Rather, these kind of deeds are

about trying to provide

assurance to the workers that

everything is going quite

okay. We also see it as part okay. We also see it as part of

continuous improvement. We do

have very robust processes in

place to audit our restaurants

and make sure we do have the

best practices in place at all

times. It's always good to

bring in an outside body to review those and see if there

are opportunities for us to

improve them. The challenge now

for the regulator is to get

more big firms to sign on and

help to weed out the rogue

operators within their own

ranks. Now with the latest news

on what's happening on the

markets, over to Jayne Edwards. Thanks, Alan. Wall

Street notched up another day

of gains on Friday, capping off

its best monthly performance so

far this year. Blue chip

stocks had healthy rises, but

the tech sector was muted. The

US sharemarket has been powered

this week by more good

corporate results. So far 73%

of companies have beaten

expectations which has maintained investors' appetite

for shares despite mixed news

on the economy, a sliding

economy and climbing oil price.

Weakness in the US currency

left the Australian dollar

hovering just under $1.10 at

the close. Gold hit another

record and oil finished at

nearly $114 a barrel. The

greenback looks set to remain

low with Ben Bernanke

confirming the wind up of

quantitative easing next month,

but saying interest rates will

remain low for an extended

period. In a shorterned

trading week most of the

markets rallied. Australia's

market was sharply lower as

Marcus Padley explains. That

was a short week but not a

great week our markets up 15%

since last July. If you add in

the currency which has been up

30%, international investors in

our market have made 45% in

less than a year. The story

that continues to dominate this

week has been the weakness in

the US dollar as Ben Bernanke

herald the end of quantitative

easing and send the Aussie

dollar heading towards $1.10. Stocks with big international businesses and a number of

those were under performing

this week. Also under

performing was the resources sector, uranium stocks in

particular, but outperforming

were the banks after Macquarie

Bank had their final results

better than expected and nobody

seems to want to sell the NAB,

west bag or ANZ ahead of their

results and dividends come ug

in the next couple of weeks. Resmed was down fon third

quarter results. Sims metal

was up. Goodman Fielder had a

profits warning blaming

currency and commodity input

source. Almost all of them

fell except for perhaps origin

which squeaked out a small gain

on the week. In other stories,

computer share made an

acquisition their largest to

date in the US which was very

well received by the market.

Fosters voted in favour of

submitting the company into

beer and wine. We also saw

Rams Home Loans known as RHG

Limited reject the chairman

John Kinghorn's company at 88

cents. Stung perhaps by the

fact he'd sold them the company

at $2.50 at the peak of the

market in 2007 only to see the

share price down to four cents

just a year later. Meanwhile,

ex heek knocks accepted a

higher offer from barrack cold

and China minmetal said he

won't be getting into a bidding

corporation one the star stocks Kuala. Timely minds that

of the year was down this week.

They're having a few problems

getting a licence for their

Malaysiian processing stock.

The stock is up 340% in the

last 12 months. Winner of the

week this week was Valad

Property Group up 51% after a

bid from private second tea and

loser of the week was Hastie

Group which recently collapsed

after their restructure and has

fallen 21% in the last week

only going to proof you

shouldn't buy a shock drop

stock. The big economic news of

the week was the large jump in

inflation and how it will be

viewed by the Reserve Bank

board meeting on Tuesday. The

other significant issue bobbing

up was Prime Minister Julia Gillard's push to strengthen

trading ties with China. To

see how all this played out I

spoke to HSBC's Paul Bloxham

who was a senior adviser within

the Reserve Bank economic analysis department and who was

in Beijing this week. Paul

does this week's CPI mean we have an inflation probe here or

not? I think the CPI numbers

we saw this week are the

beginning of the upswing in

inflation. I wouldn't call it

an inflation problem, but I

think it is the beginning of a

sequence of inflation numbers that will start to look

stronger than the previous set

and it will start to be a

concern for the RBA. They'll

having to lift rates, start to then be thinking about

underlying inflation that particularly given it was

picked up. The Reserve Bank has

been putting up rates already.

Do woe conclude that hasn't

worked? No. I think the RBA

has lifted interest rates in

line with the economy as it's

been expanding and that has held inflation down or the been

part of the story for holding

inflation down thus far. The

continue Reserve Bank will need to

continue to lift rates

gradually over time in order to continue to contain inflation

mpl the outlook for Australia

is still very strong.

Commodity prices are very high and the mining boom is

massive. What's your call on

when interest rates will go up

and by how much? We expect

that the next rate rise will be

in July or August and it will

get another 50 basis points

this year by the end of this

year, 100 basis points over the

coming year. This is on the

back of the fact that we

expected and we still have in

mind of course the inflation numbers established that

inflation is picking up. The

labour market is tightening up.

I think a key risk for the

Australian economy is that with

the labour market tightening

up, you start to see wages

rising in a solid way. What's your response to the evidence

that retail sales and,

therefore, the consumer side of

the economy are not doing very

well? It is necessary that the

consumer isn't the bigger part

of what's going on in the

Australian economy right now.

Because we've got a mining

boom, you can't have an

investment boom and consumption

boom at the same time and

indeed that's what the RBS is

doing. By lifting interest

rates they're containing

consumption growth. They're

containing the consumer. That's necessary in order to contain inflation in the

economy. We'll start to see

signs that the consumer revives

a bit. We're seeing income

growth has been relatively

strong as a consequence of the

labour market being tight and

that will mean the Reserve Bank

will need to lift interest rates to make sure that doesn't

pick up too much. The other

country that's got rising inflation is China which is

where you are at the moment.

How serious are the authorities

in China about dealing with

inflation? I think they are

very serious and they have been

very serious. We have already

seen them tightening the

monetary policy tools fairly

aggressively to try and slow

down inflation. We still think

that there's a little built

more of rise in inflation yet

to come. We have in mind inflation will slow over the

second half of this year. The

authority seem to be having

some success in their

endeavours to slow inflation

down. What does HSBC think

China's growth is going to be

over the next year or two? We

have in mind it slows a bit

this year. A little bit under

9% growth this year and a

similar sort of rate next year

and I think what's going to

happen or our view is that they

do contain inflation, get

inflation to slow somewhat, and

that allows them to continue to

grow at that sort of rate. I

think in the medium term we're

going to see Chinese rates of

growth have to slow a bit more

even and we know that the

premier has announced that

their objective is to get

growth down to 7% in the medium term. We also happen to be

there at the same time as the

Prime Minister Julia Gillard.

How she been received?

Certainly a coincidence that

is. She's been received very

well, I think. My sense is

that she's done a very good

sterling job as a

statesman. What's the view in

China about investing in

Australia moment. There's a lot

of interest from the Chinese

and Chinese authorities in investing overseas in general.

The reserves have gotten over

the three trillion mark and

they're looking for

opportunities to invest in.

There's adequate capital that's

looking to flow to the rest of

the world, in particular to

slow supply chains in term of

commodities and of course that

affects Australia a lot because we're a large commodity

producer and we're dog a lot of

investment and we require a lot

of funding from overseas in

order to do that. Thanks very

much, Paul. No problem. The

Australian textile industry has

been put through the winger in

the past 30 years with reduced

tar tives and the rise of China

squeezing many manufacturers

out. One of the few Australian

fabric makers left has defied

the odds to become a you can

section pull exporter and is

facing new hurdles of soaring

cotton prices and an unfavourable Australian dollar. This industry since the

mid 80s has been struggling to

stay afloat. I would have

probably had 50 competitors.

Now I doubt if I've got

five. Ian Joseph's father established this factory in

1929, making it a witness to

the rapid expansion and dram

mat decline of Australian

textile manufacturing. 20 years

ago I could buy wool yarns from

three or four or five different

yarn suppliers in Australia.

Now there are nil. But

Melbourne textile knitting survives the ruptures that trim

the industry. That's thanks in large part to Ian Joseph's technical training which meant

the company could create a

niche by manufacturing tailor-made knitted fabrics. Understanding the

theory of textiles is an enormous advantage. It's

allowed us to work in a whole

lot of different directions.

The other policy is to make

sure we've got a very diverse

plant, but there's quite a few

significant labels for whom we

supply. Those labels include

local names like Cue and

Alannah Hill, and significantly

some famous American ones too,

such as Ralph Lauren and J

Crew. We decided we would want

to tackle another part of the

world and the textile industry

is a truly lind national

industry. Therefore, there's

every reason to state what

other parts of the we're making here will work in

world. Exports are now about

35% of the business and are so

far withstanding the US

recession. I think that's got

legs. Because we're bespoke supplier, generally speaking

they still wanted to work with

us, but the volume of course

diminished significantly. Flooding in

Pakistan and China has pushed

the cotton price up 300% in

nine months, but the company's

clients are for now wearing the

cost. Between 15 and 20% of the

cotton got washed into sea.

They're aware prices are going

up for that reason, and they

hate it like poison but they

realise this is the world, this

is the situation of the world

as it is today. Ian Joseph

believes prices will remain

high for some time. The demand

is continually growing because

of the raising living standards in Asia. Therefore, the world

demand for textiles is

increasing, but the people are

wary of increasing the supply side, so the prices are going

up. The company's biggest

concern now is the relentlessly

climbing Australian dollar. It is making it very much more

difficult for us to sell into

the North American market

because they say to us our prices are too high and our

problem is we've got to put

into our costings the fact that the American dollar continues

to lose value or the Australian

dollar continues to gain

value. Ian Joseph is

increasingly hopeful about his industry's future, but will wait a little longer before

bringing today's generation

into the fold. I'd have to say

to them love to have you here,

we can teach you skills and

knowledge, but I can't guarantee that there'll still

be work for you in ten, 15, 20

years time. But he's taking the

long view of the

globalisation. It has actually

done something very wonderful.

It has made the rest of the

world a lot wealthier and taken

millions, in fact billions of

people out of poverty and although that's created

suffering in this country, I

think the balance on a

worldwide basis has been

desirable. Rebecca Nash

reporting. That's it for the

program. If you'd like to check out any of the offerings

again, we'll have transcripts

and a video and vodcast posted

up on our website a bit later.

Hlo again. Welcome to

'Offsiders'. The AFL this week stitched up the biggest television deal in Australian

sporting history, $1.25 billion

over five years. It will

change the way that Australians

watch the game, but will it

grow the code? Is Rugby League

missing out on the big bucks by

taking too long to get its new commission up We'll look at that this morning

on 'Offsiders'. With the State

of Origin just weeks away, the key Queenslanders

key Queenslanders are looking

ominous yet again. Slater. McDonald, Slater,

Slater! How does he do it?

Billie Slater yet again. This Program is Captioned