Talking Business

Leon and Garry discuss how the high Australian dollar and a slowdown have claimed their first mass casualties, with Qantas, GWA, Westpac, OneSteel and Thiess Egremont announcing job cuts. Wages rise less in the June quarter than the market expects and RBA minutes show the RBA will probably keep interest rates on hold. Women's pay rises by less than half as high as for male workers . Retiring Reserve Bank board member Warwick McKibbin says the RBA board should not have a majority of business leaders. World Bank president Robert Zoellick says Australia is better placed to withstand another global financial crisis. But world markets fall in response to worries about the stability of European lenders and concerns about a slowdown. Treasurer Wayne Swan warns parliament that a weaker global economy will have an impact on Australia but says Australia's fundamentals are strong. Economists predict the government will fail to return the federal budget to surplus next financial year. The CBA Business Sales Indicator falls 0.8 per cent, pointing to a slowdown. The Westpac/Melbourne Institute Leading Index falls again. Blood products maker CSL reports a 10.7 per cent drop in net profit to $940.6 million due to the high Australian dollar. Australian shopping centre giant Westfield Group defies retail gloom and posts a half-year net profit of $650.9 million. Variety retail chain The Reject Shop reports a 31 per cent fall in annual profit after the January floods almost destroyed its Queensland distribution centre. Brambles reports a six per cent rise in profit. Retail Food Group reports a 4.6 per cent net profit rise to $27.9 million. Newcrest Mining reports a 63 per cent rise in net profit to $908 million. Ansell reports a 2.8 per cent rise in net profit to $122.7 million. Gaming group Tabcorp Holdings Ltd reports a 14 per cent rise in full-year net profit. Casino group Echo Entertainment reports a full-year net profit of $226 million. Leighton’s reports a net loss of $408.8 million, down from last year’s $612.00 million profit. AMP posts a bigger-than-expected 18 per cent fall in first-half net profit to $349 million. James Hardie Industries reports a 99 per cent fall in first quarter net profit after an unfavourable asbestos adjustment. Property company Goodman Group reports net profit recovered to $392 million in 2010/11 from the previous year's loss. iiNet Ltd's full year profit declines three per cent to $33.37 million. OZ Minerals Ltd's first half profit falls 72 per cent after it settles a class action. Australian energy giant Woodside Petroleum reports an 8.1 percent fall in half-year net profit to US$828 million. Boral reports a full year net profit of $167.7 million. Real estate advertising company REA Group posts a 37 per cent rise in net profit to $67.5 million. ASX Ltd reports a 7 per cent rise in full-year net profit. UGL Ltd increases full year profit by 9.7 per cent. Village Roadshow reports a higher profit only because of asset sales. Half year profit for Adelaide Brighton Ltd falls by 10.6 per cent amid housing sector weakness. Insurance Australia Group takes its first step into China by acquiring a $100 million stake in Chinese general insurer Bohai Property Insurance. Westfield joins hands with Facebook to boost in-store retail sales in Australia.

RMIT economist Jonathan Boymal talks about motor vehicle sales, wages growth and the cost of living index.

Leon and Garry talk to David Blackmore who is the Managing Director and founder of Blackmore Wagyu Beef, a producer of 100 per cent premium Japanese Wagyu beef for international and domestic markets.

Leon and Garry talk about the share market’s volatility, both here and around the world. Future Fund chairman David Murray says it will be volatile for the next 20 years. Volatile times too for the Australian dollar. The Federal Government faces an uphill battle to bring the budget back into surplus. Superannuation managers still have more than half of their funds in shares. The NAB business survey shows trading conditions have deteriorated. Australia's unemployment rate surges to an eight-month high of 5.1 per cent and job advertisements decline 0.7 per cent in July. Consumer confidence falls for a fourth straight month in August to hit a 27-month low. Markets bet that interest rates could be cut. The International Monetary Fund says Australia is well positioned to handle a severe global financial market disruption and can cut interest rates. Treasurer Wayne Swan is briefed by US treasury secretary Tim Geithner on US economic problems. Margin calls sparked by Australia's five-day share rout surge to levels not seen since the global financial crisis. The number of home loans approved in June rises slightly. BIS Shrapnel expects national building starts will recover by 8 per cent in 2011-12. National Australia Bank records quarterly cash earnings of $1.4 billion and Commonwealth Bank posts a record cash net profit after tax of $6.835 billion. Commonwealth Bank and Westpac cut home loan interest rates. Telstra's annual profit falls by 17 per cent to $3.231 billion and Optus posts a 4.9 per cent fall in quarterly profit to $161 million. David Jones suffers a 10 per cent drop in sales, Harvey Norman posts a 1.7 per cent increase in global sales and Myer gives chief executive Bernie Brookes a pay rise and extends his contract for two years. Cochlear Ltd increases full year profit 16 per cent to a record $180.1 million. JB Hi Fi posts a fall in full-year profit to $109.7 million, a 7.55 per cent drop on the previous corresponding period. Coca Cola Amatil reports a 28 per cent fall in first-half profit as the closure of a fruit processing factory in regional Victoria wipes more than $80 million off the bottom line. About 150 job cuts expected under an overhaul of the Coca-cola owned SPC Ardmona food business. Bendigo and Adelaide Bank reports its full-year net profit is up 41 per cent to $342.1 million. Mining and rail equipment maker Bradken reports a fall in annual profit to 67.56 million. Developer Stockland says its net profit for 2010/11 is $754.6 million, up 57.7 per cent. Online travel agency Webjet has delivered a 5 per cent rise in full-year net profit after tax to $11 million. Rupert Murdoch’s News Corp reports a lower quarterly profit as weaker box office and DVD sales offset a strong performance by its cable and television business. Foxtel’s profit jumps 26 per cent to $200 million. Bain Capital and Kohlberg Kravis Roberts & Co are among potential bidders for MYOB Ltd, which could be sold for around $A1 billion. Adelaide based Argo Investments Ltd has increased full year profit by 11.8 per cent to $172.06 million. The coal market is heating up with Rio Tinto and Japan's Mitsubishi Corp offering to buy out minority investors in Coal & Allied Industries.

RMIT economist Sinclair Davidson talks about market volatility, unemployment, interest rates and running a business in uncertain times.

Garry talks to Naomi Simson, founder and CEO of the successful internet start up Red Balloon.

Leon and Garry talk about how it’s been a bad week for investors with the Australian sharemarket diving to its lowest point in almost a year and the Australian dollar taking a battering over concerns about a possible United States recession and figures showing retail spending in Australia at a standstill. The United States steps back from the brink of default. Fears of a recession in the US drives gold up to $1,666.30 an ounce. The Reserve Bank of Australia keeps interest rates on hold at 4.75% but the International Monetary Fund has warns that Australian interest rates will need to rise further to deal with the mining boom. Retail sales fall to a 50 year low, the Productivity Commission wants to end restrictive trading hours, residential building approvals fall 3.5% in June, house prices trend downward in the June quarter, new home sales fall in June, Australian manufacturing activity falls in July, activity in the service industries remains subdued in June, consumer prices rise at the fastest pace in three months, led by higher food and energy costs and media stocks crash. Another high profile retailer Brown Sugar goes under. But Australia's $2 billion-plus trade surplus for June brings the tally for the last financial year to $22.4 billion. The Clarius Skills Index says economic uncertainty at home and abroad prompts Australian companies to delay hiring plans. The boss of Woolworths food, liquor and petrol business, Greg Foran, resigns from the company after missing out on the top job. The Landfill Owners’ Association claims Australians will pay an extra $200 million to dump their waste under the Federal Government's carbon tax. National Australia Bank decides not to bid for 630 Lloyds branches on sale in Britain. Thousands of consumers have signed to explore switching mortgages, as part of a campaign to improve Australia's banking sector. Farmers fear a new rush of environmental plantings for biodiversity and carbon offsets will accelerate the loss of land for food production. Australia’s fast-growing internet industry now contributes almost as much to the nation's economy as the embattled retail sector. Telstra submits details of its structural separation. The NBN Co announces plans to begin work on the second release sites of the National Broadband Network (NBN) in NSW, Queensland and the ACT. The coalition insists it can deliver acceptable broadband using a mix of technologies at a fraction of the cost of Labor's NBN. Telstra plans to roll out a network of next-generation public internet kiosks dubbed "a 21st century upgrade for the payphone". Vodafone Hutchison Australia reports a loss of 375,000 customers this year, following customer service and network issues. The rivalry between Wesfarmers Ltd-owned Coles and Woolworths Ltd over milk pricing is about to spill over to alcohol sales. A move being prepared by the federal government preventing stockbroker firms from paying staff via brokerage they charge retail clients for buying will lead to an industry shake-up. Energy and ArcelorMittal go hostile with their $4.68 billion cash bid for Macarthur Coal after merger talks break down. Australia Post pushes deeper into the banking market through Bendigo Bank.

RMIT economist Sinclair Davidson talks about the US debt ceiling deal, the RBA’s decision on interest rates and which way it will go, trade figures and what retailers have to do to survive.

Garry and Leon talk to Matt Butterworth, founder of successful Australian website easyweddings.com

Leon and Garry talk about consumer prices rising more than expected in the three months to June, signaling an interest rate hike and sending the Australian dollar to a28 year high. A new study shows Australia’s house prices have become unaffordable. The Reserve Bank of Australia tells bank investors and the executives that the double-digit growth days are over. The Reserve Bank governor has again warned retailers and lenders the consumption boom of the mid-90s to mid-2000s was a one-off but adds consumers will return. The latest Nielsen survey shows that Aussie consumer confidence has plummeted seven points on the previous quarter, equating to three consecutive quarters of decline. Sales at Coles rise rise 6.7 per cent to $31.8 billion in financial 2011 amid declining prices and consumer confidence. Shoppers can expect to keep paying just $1 a litre for milk for the foreseeable future after Coles committed to the low price-tag. The Wesfarmers Ltd-owned supermarket Australian businesses are taking almost a full month longer than average to pay their bills. Ratings agency Fitch has downgraded its economic outlook for the Queensland Government from stable to negative. Meanwhile, financial markets are becoming increasingly jittery about the world's richest economy defaulting on its debt as the August 2 deadline draws ever closer. Relationships between the Government and business have deteriorated sharply. Commonwealth Bank chief Ralph Norris announces his retirement. The Bank of Melbourne (BoM) opens 40 branches in Victoria as part of the bank's relaunch and plans to add 85 more. Macquarie forecasts that full-year net profits would improve over the previous year’s $956 million. Royal Dutch Shell to halt refining operations at its Clyde plant in Sydney before mid-2013. Coles has been cleared of predatory pricing by selling its house brand milk at a discounted rate. The competition regulator has raised concerns that the planned $2 billion takeover of pay TV operator Austar by rival Foxtel, part owned by Rupert Murdoch's News Corp, could hurt competition on three fronts. Deloitte Access Economics says the RBA will increase interest rates three times in the coming year. A rise in producer prices confirms there is pressure on consumer prices. Premier, the owner of clothing brands including Just Jeans and Portmans to close up to 50 stores and downgrades its profit guidance. Poor retail conditions across the country are likely to persist into the first quarter of the 2011-12 financial year, according to a new retail-linked logistics report. With super funds, the median growth fund posted a 9.2 per cent return in the 12 months to June. Explosives maker Orica Ltd has reaffirmed that profit in fiscal 2011 will be higher than 2010. GrainCorp has entered into a binding agreement to buy European malt producer GermanMalt GmbH & Co for €58 million ($A77.95 million).

RMIT economist Sinclair Davidson talks about the latest inflation figures and the prospect of Australia being hit with stagflation.

Abigail Forsyth is the co-founder and CEO of KeepCup, a Melbourne startup that has so far sold 800,000 of its “you-keep-it” plastic coffee mugs, and is busily expanding into overseas markets. Ms Forsyth, most of three young children, and her brother, started in business with BlueBag, a highly successful chain of CBD sandwich shops. That was sold about a year ago and KeepCup founded. She talks about the challenges of the business and her decision to keep all design and manufacturing in Australia, giving her several advantages over exporting the manufacturing to China at no real cost penalty.

Garry and Leon talk about how Jetstar plans to bigger than its parent company Qantas. Qantas says its long-haul pilots will begin industrial action. Westpac predicts the Reserve Bank will move to cut interest rates by the end of the year. Minutes from the most recent RBA board meeting suggest the RBA is in no hurry to raise rates. A new survey suggests more people accept that interest rates will remain steady for the rest of 2011. Australia’s economic inertia is unlikely to disappear before next Easter, according to two reports on spending and investment trends that indicate growth has slumped to its lowest level in almost two years. Six in 10 Australian households are saving as much or more than they were a year ago, Sales at supermarket giant Woolworths rise 5.4 per cent in the fourth quarter to $12.28 billion, The confidence of Australia's chief financial officers takes a hit on the back of weak local data and the debt troubles of the US and Europe. Victoria comes in ahead of the other largely populated eastern states in overall economic performance in the June quarter, according to CommSec but WA is the strongest performer. Australian gaming group Tabcorp regains its licence to run retail betting operations in Victoria, The Gillard government tries to take a lead role in planning the agenda for the next United Nations climate change summit in South Africa in November. Meanwhile, Opposition Leader Tony Abbott executes his second policy U-turn on the carbon tax in 24 hours, BHP Billiton unveils a $15 billion takeover of the US gas producer, Petrohawk Energy. Santos reaches an agreement to take over Eastern Star Gas, which operates in New South Wales's Gunnedah Basin. Bega Cheese expects to raise $35 million from the company's float. Foster's to review its dividend options after winning a case against the tax office. Commuters are prepared to pay up to $4 extra to get a seat on a train and $5.80 to avoid a five-minute delay. The nation's four largest banks have been asked by Australia's banking regulator to produce plans detailing how they would respond to a future financial crisis. Two former directors of the failed broker and stock lender Opes Prime pleaded guilty to fraud charges and are expected to be jailed. A Chinese miner has launched a takeover bid for Perth-based iron ore company Sundance Resources. Gold has hit a record of over $1600 an ounce with investors worried about European defaults and US debt. The board of ANZ has been banned from bringing iPads into meetings due to security concerns. Sales of new motor vehicles in Australia rise 1.3 per cent in June. News Corp's shares have slumped to a two-year low in Australia as the phone hacking scandal fallout worsened with the arrest of the former head of Rupert Murdoch's UK newspaper arm and the resignation of Britain's police chief.

RMIT economist Jonathan Boymal talks about the latest car sales stats and building figures.

Garry and Leon talk with Evan Thornley, who began his business life with McKinsey and Company and who, with his wife Tracey Ellery, founded LookSmart, one of the world’s first online marketing businesses, later sold to Readers’ Digest. He was formerly and briefly a member of the Bracks Government in Victoria, resigned and became CEO of Better Place, a company founded in Israel that is in the process of launching in Australia the infrastructure (i.e. the charging point network across the country) to support the arrival of the world’s first mass market, zero-emission electric car, the Renault Fluence ZE.