No release date for Henry tax review, Swan promises cap on Federal Budget: Economy Roundup

Rudd told ABC Radio this morning he was currently concerned with the major healthcare reforms, and that he hadn’t yet considered the report fully.

“I believe what the Australian people wanted me to do was get on the business of delivering the health and hospitals reform, number one priority,” he told ABC Radio on Thursday. “Each thing in its season. We’ve got to do one thing at a time.”

“On the tax system, yep, we’ve got more work to do, but on the timetable for it, we’re still working our way through it.”

The comments come as treasurer Wayne Swan said the Government will impose a 2% cap on spending in the upcoming 2010-11 budget.
“What we are doing every year from 2011 is we’re meeting our 2% expenditure cap, and there’s a fiscal tightening of 1% of GDP each year as we go forward,” he said.

RBC senior economist Su-Lin Ong told Reuters the announcement was welcome. “It is encouraging. It tells you the Government forecasts will be upgraded in the budget, with growth back to trend in 2010-11 and beyond.”

Meanwhile, the balance on goods and services resulted in a seasonally adjusted deficit of $1.18 billion during January, representing a decrease of $998 million, according to the latest figures from the Australian Bureau of Statistics.

The figures show that in exports, goods and services credits rose by 1% to $20.1 billion, with non-monetary gold rising 15% to $167 million and non-rural goods rising 1% to $130 million. Rural goods fell 2% to $36 million while services credits rose by $13 million.

For imports, the seasonally adjusted series of goods and services debits fell by 3% to $21.3 billion, with intermediate and other merchandise goods fell by 7% to $517 million.

The fuels and lubricants component dropped 25% to $666 million, non-monetary gold dropped by 47% to $314 million and capital goods fell by 1% to $31 million. Consumption goods rose by 2% to $122 million while services debts grew by $20 million.

Shares flat after Wall Street declines

The Australian sharemarket has opened flat today after Wall Street stocks dropped due to worse-than-expected comments from the US Federal Reserve regarding the economic recovery.

The benchmark S&P/ASX200 index was down by 8 points or 0.18% to 4727.2 at 12.10 AEST, while the Australian dollar opened slightly lower to US90c following the Fed’s news.

ANZ shares dropped by 0.6% to $23.74, as Commonwealth Bank shares lost 0.6% to $54.79. Westpac dropped 0.3% to $26.91 as NAB gained 1.2% to $26.51.

According to a China Daily report, iron ore giants Vale, Rio Tinto and BHP Billiton are now seeking out a 50% jump in term prices.

“Baosteel, which is leading this year’s ore talks, would wait and see how Japanese and South Korean steel mills react to the proposal before taking a decision in this regard as they do not want to be blamed subsequently for the steep rates,” and industry source told the publication.

AMWU claims Boeing plant shut down

The Australian Manufacturing Workers Union has said aviation giant Boeing has shut its Milperra engineering plant in Sydney, resulting in the loss of 400 jobs.

“First and foremost this morning’s announcement is a terrible blow to the workers at Boeing and their families,” the AMWU said. “The loss of Boeing to NSW is not just the closure of one site. It is a massive loss to the entire aerospace industry in this state.”

Nufarm has said its disclosure policy is sound, following the ASX querying the company about whether it knew it would record a $40 million loss for the 2010 financial year.

The questions were asked after the company warned of the loss just moments before shareholders voted on a proposal to sell a 20% stake to Japanese group Sumitomo Chemical.

“The company was first aware of the magnitude of the expected loss at 4:35pm on March 1, 2010,” Nufarm said in its response to the ASX.

“The disclosure at the EGM represented the very first opportunity to communicate an indication of the Preliminary Estimated Half Year Result to the market, after the conclusion of the necessary processes of gathering the information from regional managers and distilling that information to arrive at the disclosed outcome.”