Opposition treasury spokesman Joe Hockey has called on the Government to stop banks from lifting interest rates above and beyond any movements by the Reserve Bank of Australia. He called on the use of legislation to do so, if necessary.
“I would say that none of the levers should be ruled out because ultimately, the Australia people should know where the banking industry is going,” Hockey told reporters today.
Hockey told ABC that the banks have “conned the government into believing that the costs of raising money are continuing to grow”.
However, treasury Wayne Swan has told AAP that the challenge is another example of the Opposition producing no new answers or solutions.
“Hockey was asked time and again (during the interview) what he would do differently, and had no answers, just incomprehensible bluster,” he told AAP.
“Just last week we had the shadow finance minister advocating the government intervene with the floating dollar. Now we have the shadow treasurer saying we should jump in the time machine and remove the RBA’s independence by re-regulating interest rates.”
Brewery giant Foster’s has said it expects beer sales to decline by between 4-5% in the first half, before improving in the second half.
As part of its investor briefing today, the company said the short-term outlook for the Carlton and United Brewery beer business remains subdued. As part of the investor presentation, it also said the market remains relatively volatile.
The company noted “recent volatility largely driven by RTD excise change and economic stimulus, with decline as we cycle these impacts”.
However, Foster’s also said that its “beer category fundamentals are strong”.
Meanwhile, Wesfarmers has said it still remains cautious regarding consumer spending despite its relatively strong results.
“We remain cautious of any negative impact to household budgets or consumer confidence, particularly leading into the Christmas trading period,” managing director Richard Goyder said.
The company announced that in the three months to 26 September, Coles recorded sales of $7.49 billion, representing a 4.9% increase on the previous corresponding period.
Food and liquor comparable store sales growth as 6.2%, while total home improvement and office supplies sales, which includes the Bunnings chain, grew by 4.8% to $1.95 billion.
The company also said Kmart sales recorded a 3.7% increase to $926 million, while Target sales fell by 1.4% to $847 million from $859 million in the previous correspond quarter.
“Target experienced a challenging period, with continuing price deflation and an extended period of cooler weather in many of its key trading markets impacting new season apparel sales,” Goyder said.
The Australian share market has opened higher after a solid night on Wall Street, where good financial gains sent stocks upwards over 1%.
The benchmark S&P/ASX200 index was up 13 points or 0.29% to 4638.2 at 12.20 AEST, while the Australian dollar increased to about US98.6c as well.
ANZ shares lost 0.5% to $23.46, while Commonwealth Bank shares lost 0.4% to $50.19. Westpac lost 0.2% to $22.54 as NAB dropped 0.8% to $24.83.
Newcrest Mining has said it expects to produce up to three million ounces of gold in the 2011 financial year.
The company announced it lifted gold output to 674,219 ounces from 526,131 ounces in the previous quarter, representing a 78.8% increase from the previous corresponding period.
Net cash costs came in at $488 per ounce, up from $436 in the September 2009 quarter. It attributed 50% of the cost increase to Lihir operations, 45% to lower-grade deposits and 5% to the impact of movements in the exchange rate.
Excluding the Lihir operations, production fell by 11.47% to 465,774. The company’s quarterly report also said there would be no change in annual copper production during the current financial year.
AGL Energy has said it expects underlying profit for the 2011 financial year to be between $450-480 million. Chairman Mark Johnson said the company was in a “sound position” and is beginning to work with some strategic opportunities.
Santos has said its September quarter revenue fell by 8%, coming to $535 million from $580 million in the previous quarter. The company has also given a production guidance of 49-52 million barrels of oil equivalent.
“The GLNG project continued to make solid progress in the third quarter. We brought Total on board and secured five million tonnes per annum of binding offtake agreements that will underpin the development of two trains,” Santos chief executive David Knox said.
“We’re very pleased to welcome Total and their substantial technical and management expertise on major LNG projects.”
In the United States, the Federal Reserve has said the American economy is recovering, but at too slow a pace needed to continue sustained jobs growth.
“National economic activity continued to rise, albeit at a modest pace,” the Fed said in the report. The announcement has given investors more reason to believe the Fed will embark on another path towards more stimulus.
The Dow Jones Industrial Average gained 129.35 points, or 1.18%, to 11,107.97.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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