Summary: Garry and Leon look at the Federal Budget. In the lead up to the Budget, Treasury has warned the government of the danger of high inflation as the resources boom powers a return to high growth over the next two years. The federal budget is expected to help hundreds of thousands of families with teenagers by delivering Julia Gillard's election promise to increase the maximum family tax benefit for 16 to 19-year-olds by up to $4200 per child per year. The Baillieu government's first budget will double Victoria's public debt as the Coalition delivers the election promises that helped it win power. The Baillieu Government has abandoned its commitment to slash public debt, blaming weak revenue and a determination to deliver its election promises. The Reserve Bank of Australia has left interest rates on hold. Manufacturing activity has contracted in April for a seventh month in the past eight, as the stronger dollar dented local industry. Companies are taking longer to pay their bills. According to the latest Dun & Bradstreet Trade Payment analysis for the March quarter of 2011 reveals that average payment terms have risen to 55.6 days, which is the slowest rate of payment in three years and just slightly behind the 2008 figure of 55.9 days. Australian house prices decline in the first quarter by the most since 2008 as higher borrowing costs curbed demand and floods disrupted the property market in Queensland while the number of new home sales increases by 4.3% in March and building approvals rise 9.1 per cent in March ahead of market expectations. Sales of new vehicles in Australia fall 8.8 per cent in April and retail sales slip 0.5 per cent. Australian banks have posted a profit before tax of $15.7 billion for the 2010-2011 half year, up 8 percent from last year’s $14.5 billion. Westpac’s profit is up 38 per cent to $3.96 billion, ANZ’s rises 38 per cent to $2.64 billion and NAB’s rises 15.9 per cent to $2.428 billion. Westpac has technology problems with its ATMs. Ratings agency Moodys has issued a warning about Australian banks being more dependent on foreign funding than other banks in developed economies. News Corporation Ltd has reported a slump in third quarter net profit, saying film revenue was lower after a record contribution by Avatar in the third quarter last year. News Corporation reported a net profit of $US639 million for the three months to March 31, down from $US839 million. News Ltd has entered into a joint venture with several automotive dealer groups through its car sales website Carsguide.com.au. Fairfax Media has warned that its revenue has fallen and revised its profit outlook. The Maritime Workers Union has warned that there will be further strike action if Patrick Stevedores does not meet some of its demands. Coca-Cola Amatil says the high Australian dollar is wiping between 1-2 percentage points off its first-half profit growth, which is now forecast at 5 per cent and says it might have to move operations offshore. A Federal Court judge has thrown out Fortescue Metals' attempts to get access to Rio Tinto's rail lines in the Pilbara. Explosives and chemicals manufacturer Orica has reported an almost five-fold increase in first-half net profit and says it expects full-year profit above last fiscal year's performance. Macarthur Coal Ltd says record prices for metallurgical coal mean its annual net profit will be $185 million to $205 million, well up from its profit last year.
