Telstra to take $430 million revenue hit over ACCC decision; Turnbull attacks Labor over penalty rates: Midday Roundup

Telstra believes it will take a $430 million revenue hit following a decision by the Australian Competition and Consumer Commission to force the telecommunications giant to cut the wholesale prices on its copper network and mobile terminating access services.

Telstra chief executive Andrew Penn flagged the hit to revenue in a statement to shareholders earlier today as part of the telco’s annual general meeting.

Penn said he is disappointed the decision will result in the estimated reduction in revenue but indicated Telstra may appeal the decision.

“We are particularly disappointed to see the ACCC depart from its draft decision in March. That decision correctly recognised the importance of providing price stability to the industry at this time of transition to the NBN,” he said.

Turnbull attacks Labor over penalty rates stance

Prime Minister Malcolm Turnbull has attacked Labor’s stance on penalty rates, saying it is hypocritical for the Opposition to run a scare campaign when deals overseen by former union leaders such as Bill Shorten saw workers’ penalty rates reduced.

During question time yesterday, Turnbull went on the offensive, according to Fairfax.

“Businesses like McDonald’s and Coles have reduced or removed penalty rates in exchange for other conditions like higher base rates of pay,” Turnbull said.

“Now we will all enjoy and benefit from solutions that create a more flexible and dynamic 21st century economy. So really, it is time for the Leader of the Opposition to stop trying to frighten Australians into poverty.”

The Coalition was cautious about discussing penalty rates under former prime minister Tony Abbott.

However, under the new PM there have been growing calls for reform from both the front and backbenches.

Shares down on open

Aussie shares have fallen this morning off the back of “choppy” trading overseas. 

Michael McCarthy, chief market strategist at CMC Markets, said the general support for commodities could see a bottom-up rally emerge over the course of the day.

“Holidays in Japan, Spain, Canada and the US meant overnight trading was thin and choppy, and largely restricted to small ranges,” McCarthy said.

“The exception is oil, which plummeted from resistance after a 14% gain over just six sessions. However, support for other commodity prices points to a further fracturing of sentiment, as investors divide more sharply into two camps.”

The S&P/ASX 200 benchmark was down 30.6 points, falling 0.59% to 5202.3 points at 11:48am AEST. On Monday, the Dow Jones closed 47.37 points higher, up 0.28% to 17,131.86 points.