The value of the Australian dollar will continue to remain high due to local terms of trade remaining high, treasurer Wayne Swan has told American television network CNBC.
Addressing the New York stock exchange, Swan praised the Australian economy and said the Government is taking measures to ensure economic growth continues.
“So what we want to do over time is to put plans in place to cut rates of taxation, to benefit all of our industries,” he said. “That’s why the government has put in place a plan to broaden and strengthen our economy.”
He also pointed out Australia’s low unemployment rate of 5.1%. He also defended the IMF’s position on exchange rates and said it would take more time for any imbalances to be corrected.
“We have to deal with these exchange rates but we can’t deal with them in isolation,” he said. He also defended the government’s MRRT, saying that resources belong to the country.
“Australian people own the resources 100%– they are rented from the Australian people,” he said. “What we are proposing is a profit-based tax, which is a better outcome.”
Swan also said in a speech to the New York Stock Exchange that currency reform is only part of the issues that must be addressed by the G20.
“Currency reform is an important element of this reform agenda but it is not the only issue,” he said. “It has to be accompanied by structural reforms necessary to promote sustainable growth in all economies.”
In London, the British Chambers of Commerce has said economic activity slowed during the third call, sparking calls for the Bank of England to introduce more stimulus. The Quarterly Economic Survey found domestic demand fell for both services and manufacturing.
BCC chief economist David Kern said the BoE should expand its easing programme by 50 billion pounds.
“We’re not saying 50 billion is a guarantee of success, but it’s nevertheless something which we feel should be done before the end of the year because what we do know is that the impact of the increase in VAT and the subsequent (budget) cuts is to dampen the economy,” he told Reuters.
Telstra chief executive David Thodey has told the Herald Sun that the company is “looking at different management structures” for its Sensis subsidiary.
“We will always look at financial engineering to see what makes the best sense for shareholders,” he said. He also added that some acquisitions may not be out of the question.
“We continue to look at all options about how we can profitably compete in that market,” he said.
“There are a lot of ISPs out there – the real issue is to ensure that if you’ve got what might be aggressive competition at the moment, you won’t want to see that damaged on a longer term basis by over-aggressive acquisition.”
The Australian sharemarket has opened lower this morning following a weak lead from Europe and Wall Street.
The benchmark S&P/ASX200 index was down 58 points or 1.25% to 4638.5 at 12.25 AEST, while the Australian dollar has remained largely unchanged at US98.4c.
NAB shares lost 0.4% to $25.69 as Commonwealth Bank shares lost 0.5% to $50.87. ANZ fell 0.1% to $24.13 as Westpac lost 0.5% to $23.05.
In Melbourne, casino workers may go on strike this week with the Liquor Hospitality and Miscellaneous union saying workers are deserving of better pay.
“Crown Melbourne dwarfs other Australian casinos by every measure. It needs to attract and retain the best staff, and now it has an opportunity to do just that – by creating the best conditions at work,” LHMU’s state secretary Jess Walsh said in a statement.
“Most Crown staff are irreplaceable, both in terms of licensing and training, and also experience and knowledge of the particular requirements of this casino. It will be impossible to bring in outside replacements, who would not be qualified to work at this casino.”
Metcash has appointed former Telstra executive Fiona Balfour as a new director, with chairman Peter Barnes saying in a statement she will be appointed at the next board meeting on 25 November.
“We are fortunate in being able to secure Fiona’s services as a director. She brings to the board the skills acquired from over thirty years’ executive experience in the services sector, across the aviation, telecommunications, health administration, financial services and education industries,” he said.
The Securities Industry and Financial Markets Association has said that a moratorium on housing foreclosures could spark losses on investors. The move comes after Bank of America said it would cease all foreclosures until it sees fit.
“It is imperative…that care be taken in addressing these issues to ensure that no unnecessary damage is done to an already weak housing market and, in turn, that there is no further negative impact on the economy,” SIFMA chief executive Tim Ryan said in a statement.
The Dow Jones industrial average gained 3.86 points, or 0.04%, to end at 11,010.34.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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