Gillard offers business tax lure - The Age Gillard offers business tax lure - The Age

Wednesday, June 13, 2012

Gillard offers business tax lure - The Age

Gillard offers business tax lure - The Age

THE Gillard government has reinstated its promise to cut company tax but says business must work out how to fund it so there is no effect on the budget bottom line.

And job agencies will be rewarded for finding jobs for people interstate to help combat labour shortages in areas of high demand, such as the mining sector.

Wrapping up the one-day economic forum in Brisbane yesterday, the Prime Minister, Julia Gillard, said the government's Business Tax Working Group, an expert body established last year, must come up with a funded company tax cut as an ''absolute top priority''.

Economic development... Prime Minister Julia Gillard promises to make cuts to company tax a "priority".

Economic development ... Prime Minister Julia Gillard promises to make cuts to company tax a "priority". Photo: AFP

It has until the end of the year to report, raising the prospect of a company tax cut in next year's pre-election budget.

In this year's May budget, the government abolished the promised 1 percentage point company tax cut that was worth $4.7 billion over four years and was to be funded by the mining tax.

The Greens and the Coalition would not pass the legislation so the government redirected the money towards cost-of-living help for low- and middle-income families.

The business community was angry and Ms Gillard sought to to bury the hatchet yesterday.

''We heard you loud and clear on the company tax rate and we see it as a priority in the next steps on tax reform,'' she said.

Ms Gillard did not specify the size of the cut but said it was up to the working group to nominate a cut that could be funded.

The Prime Minister said it must be funded by reforming other business taxes and not, as business groups have demanded, an increase to the GST or a broadening of its base.

Seeking to address the problem of labour mobility, Ms Gillard said her government would also offer incentives to job agencies which find positions interstate. Currently, the job network rewards agencies for finding people jobs in their local area. The commitment will appease unions angry at the resort to imported labour to help build large mining projects.

Business was surprised by the tax-cut commitment given tax reform was not even listed as an item for discussion.

The chief executive of the Business Council of Australia, Jennifer Westacott, told the forum the company tax commitment was welcome. ''But it will stand for little if it is not part of broader tax reform that delivers a net benefit to business right across the economy,'' she said.

The need to lift productivity created a frisson between unions and business groups before the latter agreed cutting wages and conditions was not a solution. The governor of the Reserve Bank, Glenn Stevens, told the forum that lifting productivity was the nation's ''biggest challenge'' and the recent slowdown could not be blamed on the mining sector's huge investments, as has been cited by the government.

Mr Stevens said there had been a material slowing in productivity over the past six to eight years and ''if you take mining out you still get this story''.

He said the Productivity Commission had a long list of ideas, many of which were controversial and politically fraught, but he said that list should be considered.

One idea floated by the commission was eradicating industry assistance but the Treasurer, Wayne Swan, would have none of it, saying investments in infrastructure, skills and education, and regulatory reform were preferred options.

Mr Stevens said lifting productivity would help combat the deleterious effects of the high dollar on business.

But he also spruiked the benefits of a high dollar and said people should be careful about wishing it to fall because every time someone put petrol in the car, bought an imported good, or travelled overseas, the high dollar was benefiting them.

The mining boom has contributed to the high dollar and Mr Stevens said this was a spinoff of the boom for consumers.

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Morning business round-up: World Bank warning - BBC News

What made the business news in Asia and Europe this morning? Here's our daily business round-up:

Economic concerns continued to dominate headlines, with problems in the eurozone threatening to have an impact on economies outside the bloc.

Developing nations should brace themselves for weak growth and "tougher times", the World Bank has warned.

It said that there may be "a long period of volatility in the global economy" as the eurozone debt crisis escalates.

The bank forecast that developing economies would grow by 5.3% this year, down from 6.1% in 2011.

There was, however, some good news for the eurozone, with new data showing that inflation for the larger economies has eased.

And although the Spanish economy continues to suffer, not all the country's companies are struggling. Retailer Inditex, whose brands include Zara, posted a surge in profits and sales, sending the company's share price up 8%.

In Japan, there was a boost for machinery orders in April, a key indicator of capital expenditure.

In what was a positive sign for the economy, orders rose 5.7% from a month earlier. Most analysts had projected 1.5% growth.

Failed carmaker Saab has found a buyer, with the identity of the new owner due to be announced later on Wednesday. However, media in Sweden reported that the buyer was a Swedish-Chinese investment group.

Also being announced later is the result of a shareholder vote on remuneration at advertising group WPP. Chief executive Martin Sorrell is facing a backlash over his £6.8m package.

In the UK, the chief executive of the financial regulator has been speaking about one of the defining moments of the financial crisis.

Hector Sants disclosed to the BBC that the crisis that forced the nationalisation of Northern Rock bank might have been avoided if his advice had been heeded.

Also in the UK, one of the leading supermarkets, Sainsbury's, has seen a rise in sales due to the opening of smaller stores.

The figures come two days after the UK's largest supermarket group Tesco reported a fall in UK sales.

In the latest Business Daily podcast, the team examines how Europe is starting to think the unthinkable - what happens if the eurozone splits. The BBC's Chris Bowlby runs through some of the possible scenarios.

Forget the financial crisis - BT joins the Premier League party and football lands an incredible £3BILLION - Daily Mail

By Charles Sale


The Premier League has secured its status as world football’s richest competition with an astonishing 3.018billion deal for domestic TV rights for three years.

The agreements, which start from the 2013-14 campaign, are a remarkable 70 per cent increase on the current contract.

Long-term partners Sky will show 116 games a season - the maximum allowed for one station - and newcomers BT have gained a 38-game foothold.

Winners: BT have managed to secure some massive matches

Winners: BT have managed to secure some massive matches

The mind-boggling numbers mean the goldrush Premier League is being paid 6.5million for every one of their 154 live TV games per season at a time of austerity when the value of most TV  sports contracts are falling or only holding up.

The big losers are the devastated Walt Disney-owned ESPN, who were desperate to expand their one-package Premier League portfolio but have ended up with nothing.

This is due to surprise entrants BT being prepared to pay 738m over three years for the games that cannot be sold to Sky, who have forked out 2.28bn.


BT will launch a new ‘football-based’ channel to carry its 38 Premier League games from the 2013-14 season and could distribute it to ‘other platforms’ like Sky or Virgin.

The company will release full details and pricing in ‘due course’, but non-BT customers could expect to pay around 10 per month.

Sky’s ‘Monday Night Football’, an 8pm match, and ‘Super Sunday’, featuring 1.30pm and 4pm kick-offs, are unaffected.

But ESPN’s absence means Sky also take over the Saturday 5.30pm kick-offs.

‘It’s down to the excitement of the  competition,’ said Premier League chief executive Richard Scudamore, who can expect a healthy annual bonus from a grateful Premier League remuneration committee as a reward for his jackpot negotiating skills.

There must now be considerable doubts as to whether ESPN, who regarded Premier League property as crucial to their business plan, will continue with their UK operation once their  current contracts expire.

These include Premiership rugby and the FA Cup, giving the FA more worries about their broadcast partners — ESPN having taken over from the doomed Setanta.

Scudamore was surprised by the size of the offers, boosted by the ultimate drama of Manchester City clinching the title in injury time of the last game of the  season.

‘We couldn’t have gone to market at a better time,’ he admitted.

Sky had been due to go to the market three months earlier but were delayed by the European red tape surrounding the Portsmouth landlady case, involving pub  football screening via a Greek TV decoder.

But it was widely expected that Sky, who have shown the Premier League for the 20 years since its inception, would retain the lionshare of the packages.

Yet Rupert Murdoch’s satellite company have had to pay the whopping 2.28bn — a premium of around 40 per cent — to keep their dominant position as the main broadcaster of Premier League football.

Excitement: The drama of last season influenced the huge price

Excitement: The drama of last season influenced the huge price

Sky were very concerned that money-no-object Middle East network Al Jazeera would be their major competition, so had to bid big accordingly.

It is still not clear — and the PL cleverly encouraged uncertainty — as to whether Al Jazeera, who have been preoccupied setting up their French football operation, even put in a bid. But Al Jazeera are sure to be at the PL rights table next time around, giving the clubs the expectation of another bonanza.


The cost of showing a Premier League game in the UK — 6.53m in 2013 — will be 10 times more than when it launched in 1992.

1992-1997: BSkyB, 60 games of the season, 190m — deal value is 633,000 per game

1997-2001: BSkyB, 60 games, 670m, 2.79m per game

2001-2004: BSkyB, 110 games, 1.2bn, 3.64m per game

2004-2007: BSkyB, 138 games, 1.024bn, 2.47m per game

2007-2010: BSkyB/Setanta, 138 games, 1.706bn, 4.12m per game

2010-2013: BSkyB/ESPN 138 games, 1.782bn, 4.3m per game

2013-2016: BSkyB/BT 154 games, 3.018bn, 6.53m per game

ESPN are understood to have competed strongly with BT through two rounds of bidding.

And Scudamore’s team were able to extricate every possible penny from what were previously the least attractive match choices by the ‘game changer’ of including a total of 18 first picks in BT’s set of 38 games to be shown on the Saturday 12.45pm slot and midweek and Bank Holidays.

This reformatting of the packages has resulted in the price for those 38 games rising from 2.3m-a-match to 6.5m - an increase of 260 per cent.

BT will be setting up a new football-based channel to drive business to their BT Vision station, which has 700,000 subscribers.

Scudamore said: ‘We welcome BT as a new broadcast partner.

‘They are a substantial British company that is at leading edge of technology. They will deliver new ways in which fans will be able to follow the competition.

‘ESPN are great partners and will continue to be great partners. They will come again in three years time I’m sure.’

However, the American owners might well have given up on the UK market long before then.

ESPN spokesman Paul Melvin said: ‘We made a strong bid that reflected the value of the rights to our business.’

Here's what other readers have said. Why not add your thoughts, or debate this issue live on our message boards.

The comments below have not been moderated.

There's no way i'm going to subscribe to yet ANOTHER channel. They really are taking the Michael Jackson now.

At least we have the Internet

When the money bubble bursts AND IT WILL then and only then can we get some sanity back into the English game. Here in the USA they had the wisdom to see the long term damage being done to the English game by not imposing a wage cap. So what did they do ? Impose a wage cap BUT unlike in the EPL where players sign over their IMAGE RIGHTS earnings, here they are allowed to keep them. Accordingly high profile players like Becks, Henry and others earn substantial 'off field' amounts while at the same time it acts as an incentive to the up an coming youngsters to continually seek to improve their own game. Here I pay $70 (45 pounds a month) for 120 + channels PLUS Fox Soccer, Fox Soccer Plus, Brazilian, Spanish, German, Italian soccer and three ESPN soccer channels. At weekends I can watch up to eight EPL games either live or simply by setting my DVR. In the interim period I expect Rooney will be in for a pay rise to pay for his latest hair cut !!!!!

My sky sports subscription for a year is @ £600. I probably spend close to £300 a year on newspapers. you make your own choices. I don't smoke for example.

Thank you Manchester City!

Football live TV market has hit saturation point and a lot will look to almost perfect streams and online alternatives to paying the ridiculous prices Sky, Virgin and BT intend to charge. I think this may be the last full premier league that goes to tender and the next set of packages will be P.P.V for each individual club which is much better value for money for most fans. I am not interested in watching Wigan V Swansea, Southampton V West Ham, Norwich V Aston Villa (Infact ANY Aston Villa games)

You can blame the introduction of FFP to a degree. If you can only spend what you earn, of course the owners of all the clubs will be wanting the highest bid possible, in order to raise their club's revenue. Every action has a reaction and all that.

I simply doubt SKY or BT will ever make a profit on their 2013-16 Premier League investment. More and more people are watching high quality pirate streams online. And the figures will continue to grow as subscription fees surely are set to rise yet again.

And whose money is it all those billions my frieds?... My money and your money and fans' money, becuase one thing is certain, they will make us true football lovers pay for it and it won't certainly come from their pockets.

The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.

'Diablo 3' real-money auction house European launch date confirmed - Digital Spy

Exclusive: Syria prints new money as deficit grows: bankers - Reuters

AMMAN | Wed Jun 13, 2012 11:16am EDT

AMMAN (Reuters) - Syria has released new cash into circulation to finance its fiscal deficit, flirting with inflation after violence and sanctions wiped out revenues and led to a severe economic contraction, bankers in Damascus say.

Four Damascus-based bankers told Reuters that new banknotes printed in Russia were circulating in trial amounts in the capital and Aleppo, the first such step since a popular revolt against President Bashar al-Assad began in 2011.

The four bankers said the new notes were being used not just to replace worn out currency but to ensure that salaries and other government expenses were paid, a step economists say could increase inflation and worsen the economic crisis.

The United Nations says Assad's forces have killed at least 10,000 people in a crackdown, and the government says more than 2,600 members of its security forces have died.

The four bankers, along with one business leader in touch with officials, said the new money had been printed in Russia, although they were not able to give the name of the firm that printed it. Two of the bankers said they had spoken to officials recently returned from Moscow where the issue was discussed.

"(The Russians) sent sample new banknotes that were approved and the first order has been delivered. I understand some new banknotes have been injected into the market," said one of the bankers. All requested anonymity.

Two other senior bankers in Damascus said they had heard from officials that a first order of an undisclosed amount of new currency had arrived in Syria from Russia, although they were unable to confirm whether it had entered circulation.

Outgoing Finance Minister Mohammad al-Jleilati said last week that Syria had discussed printing banknotes with Russian officials during economic talks at the end of May in Moscow. He said such a deal was "almost done", without going into details.

However, the central bank later denied through state media that any new currency had been circulated.

Goznak, the state firm that operates Russia's mint and has exclusive rights to secure printing technology, regularly prints money for other countries. It declined to comment.


Russia is one of Syria's major political backers and a close trading and economic partner. There are no sanctions in place that would bar a Russian firm from printing money for Syria.

Syrian money was previously printed in Austria by Oesterreichische Banknoten- und Sicherheitsdruck GmbH, a subsidiary of the Austrian central bank. That order was suspended last year because of European Union sanctions, an Austrian central bank spokesman said.

One of the four bankers described the decision to use newly printed money from Russia to pay the deficit as a "last resort" after several months of consideration.

Syria's deficit has swollen because of declining government revenues and loss of oil exports hit by sanctions. The government is loathe to impose unpopular measures to fight the deficit, like cutting subsidies or raising taxes.

"The deficit is there and it is already increasing and increasing quickly. And to finance it they have decided to print currency," said the senior businessman, who is familiar with the subject and in touch with monetary officials.

Bankers say a priority has been to continue salary payments for over 2 million state employees among a workforce of 4.5 million in a country of more than 21 million people.

"You cannot allow the public sector to collapse," said one of the bankers."

"People are getting their wages and there are no complaints if they are paid at the end of every month. If we reach a stage where they are not paid there will be a crisis."

Syria's $27 billion 2012 budget was the biggest in its history, taking many by surprise. Bankers say the spending surge was motivated by a desire to create more state jobs and maintain subsidies to help ward off wider discontent.

The private sector has suffered large scale layoffs, but workers in the public sector have kept their jobs and had steady wages despite a salary freeze.

Financing the spending has proven difficult. The central bank has exceeded borrowing limits from public banks, and private banks are reluctant to buy government bonds, one of the bankers said.

Inflation is already running at 30 percent, although the central bank considers it manageable.

Authorities have spent state funds on subsidies to keep the prices for household utilities and petrol unchanged, and have announced planned price controls on basic commodities. However, electricity prices for big industries have risen by 60 percent and the price of subsidised diesel fuel has also risen.

The authorities plan to inject only a small amount of new currency to prevent runaway inflation, said one of the bankers.

"But there is a limit to how much fresh money could be injected into the economy in such highly uncertain times. Reckless printing of money as a way of buying short term reprieve could be economic suicide," the banker added.

(Additional reporting by Fredrik Dahl in Vienna; Editing by Oliver Holmes and Peter Graff)

Financial stocks slide on Greece, Spain worries - Marketwatch

By Val Brickates Kennedy and Greg Morcroft, MarketWatch

NEW YORK (MarketWatch) — After spending most of the session in positive territory, U.S. financial stocks slid into the red Wednesday afternoon, pushed lower by concerns over the upcoming Greek elections and further downgrading of Spain’s credit rating.

Analysts at Egan-Jones Rating Co. announced late Wednesday afternoon that they had slashed Spain’s credit rating to a below-junk CCC+. That was followed by Moody’s downgrading the beleaguered Mediterranean nation’s sovereign rating to Baa3 from A3.

Adding to Wall Street jitters was continued speculation that this weekend’s Greek parliamentary elections could ultimately result in the departure of the financially crippled nation from the euro zone. Read more on broader market.

In the broader market, the Financial Select Sector SPDR ETF /quotes/zigman/246222/quotes/nls/xlf XLF -0.32% , which tracks financial stocks in the S&P 500 /quotes/zigman/3870025 SPX -0.70% , closed 0.3% lower, while the Dow Jones Industrial Average /quotes/zigman/627449 DJIA -0.62% dropped 77 points to close at 12,496. Market Pulse: Stocks finish lower on Europe uncertainty .

J.P. Morgan Chase /quotes/zigman/272085/quotes/nls/jpm JPM +1.57%   was the notable exception, with shares gaining ground after its chief executive officer, Jamie Dimon, testified before the U.S. Senate Banking Committee about how the banking titan recently lost billions in bad derivative trades. Read about Wednesday's banking hearing.

Shares of J.P. Morgan /quotes/zigman/272085/quotes/nls/jpm JPM +1.57%  added 1.6% to close at $34.20, making it the second-best-performing component of the Dow Jones Industrial Average /quotes/zigman/627449 DJIA -0.62% . The stock has taken a beating since the trading losses were revealed in early May but has managed to recover 3.5% in June.

During testimony on Capitol Hill, Dimon defended the U.S. banking sector and his bank’s risk-management team, responding to a much-anticipated and sometimes heated interrogation from lawmakers over the trading loss at the financial institution’s U.K. trading unit. See MarketWatch's blog coverage of banking hearing.

Dimon also was optimistic about the U.S. banking sector, responding to concerns raised by Democrats that less well-capitalized institutions might conduct the same risky trades and have a collateral impact on a more fragile economic system. Read MarketWatch's First Take on Dimon testimony.

“Banks are better capitalized, they have more liquidity, there is more transparency, their boards are more engaged, risk committees are more engaged,” Dimon said. Read more about Dimon’s congressional testimony.

Also fanning J.P. Morgan shares, Dimon said late Tuesday that he expected the company to produce a “solidly profitable” quarter as he apologized again for the trading blowup.

Economists don't believe headline

Wall Street is dissing disinflation. With all due respect, that may be a mistake.

Among the other three financial components in the blue-chip benchmark, Bank of America Corp. /quotes/zigman/190927/quotes/nls/bac BAC +0.13%  rose nominally, while American Express Co. /quotes/zigman/217470/quotes/nls/axp AXP -2.44%  fell 2.4% and Travelers Cos. /quotes/zigman/455344/quotes/nls/trv TRV -0.47% traded down 0.5%.

On Wednesday, an American Express executive told an audience at a Morgan Stanley investment conference that credit-card spending growth had dipped in April and May. See story on American Express.

Another exception to the downward trend was SunTrust Banks /quotes/zigman/242272/quotes/nls/sti STI +1.48% . Shares rose 1.5%, making it the best-performing bank stock listed on the S&P 500 /quotes/zigman/3870025 SPX -0.70% , after J.P. Morgan. 


Taking on the Goliaths of the business world - Financial Times

June 13, 2012 7:00 pm

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