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". 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.
Stocks drift on mixed economic data - Click2Houston.com
U.S. stocks were mixed Wednesday, reversing earlier losses, as investors react to mixed economic news and ongoing concerns about Europe's debt crisis.
The Dow Jones industrial average was down 6 points, or less than 0.1%, in morning trading. The S&P 500 was little changed, and the Nasdaq rose 4 points, or 0.1%.
Stocks opened lower after reports showed that retail sales remained weak in May and producer prices fell sharply. But the market turned around following a better-than-expected report on U.S. business inventories.
The early gains were kept in check by uncertainty in Europe. Investors continue to watch Spain's troubled banks, whose exposure to bad real estate loans has led Fitch to downgrade 20 of them in the last two days. Greece is also in focus ahead of a crucial election this weekend.
"The threat of recession, in conjunction with the ongoing European debt crises, will likely weigh down the risk-off end of the risk-on-risk-off scale," said Jim Baird, chief investment strategist for Plante Moran Financial Advisors. However, he added that stocks will be underpinned by expectations for additional stimulus efforts from the Federal Reserve.
A survey from CNNMoney of 20 investment strategists and money managers suggests that the S&P 500 could rise more than 8%, from its current level above 1,430 -- which means a 14% gain for the year.
U.S. stocks rose Tuesday, recovering the previous day's losses. All three indexes closed up more than 1% in what analysts said was a relief rally in response to Monday's sell-off. Bank stocks were among the biggest winners, with shares of Bank of America, Citigroup and JPMorgan Chase rising more than 2%, after sharp declines in the sector on Monday.
The banking sector was in the spotlight Wednesday, as JPMorgan CEO Jamie Dimon testified before Congress. Dimon blamed insufficient risk controls and a failure by traders to understand the bets they were placing for the loss.
Losses appear to be mounting, and sources tell CNNMoney that what originally reported as a $2 billion loss may have grown to as much as $8 billion. Details on the size of the loss and comments on the need for more regulation during the hearing could hurt shares in the banking sector.
World markets: European stocks were mixed near the end of the day. Britain's FTSE 100 and the DAX in Germany were both little changed, while France's CAC 40 fell 0.5%.
Asian markets ended higher. The Shanghai Composite gained 1.3%, while the Hang Seng in Hong Kong rose 0.8% and Japan's Nikkei ended 0.6% higher.
Economy: The Producer Price Index, which measures changes in wholesale prices, dropped 1% in May. Economists surveyed by Briefing.com had expected a decline of 0.7%.
The government's estimates on retail sales for May showed a decline of 0.2%. This was close to expectations from economists surveyed by Briefing.com.
Business inventories rose 0.4% in April, which was slightly better than expected.
Companies: Computer maker Dell said Tuesday that it will start paying dividends to shareholders later this year, boosting its stock by 4.5%.
Philip Morris International announced an $18 billion share repurchase plan Wednesday. Shares of the company, which was spun off from domestic tobacco company Altria Group in 2008, are up 8% year-to-date.
Shares of Dow component Johnson & Johnson were up 2.4%. The company disclosed after the close Tuesday that it will be able to complete its purchase of Swiss medical device maker Synthes on Thursday, much sooner than expected.
It also said the deal will add 3 to 5 cents a share to its earnings this year, rather than shave 22 cents a share off its profits as it previously forecast.
Currencies and commodities: The dollar fell against the euro, but gained strength against the British pound and Japanese yen.
Oil for July delivery fell 92 cents to $82.40 a barrel. Oil prices have swung wildly lately, due to political and economic uncertainty around the globe.
Gold futures for August delivery rose $7.70 to $1,621.50 an ounce.
Bonds: The price on the benchmark 10-year U.S. Treasury edged up, pushing the yield down to 1.66% from 1.67% late Tuesday.
Stocks Turn Higher as Banks Gain; JPM Rallies - CNBC
Stocks erased their early losses to bob in and out of positive territory Wednesday, but gains were limited following a batch of tepid economic reports and amid ongoing uncertainty in the euro zone.
“We’ve been gyrating around the 1,320 on the S&P 500,” noted Todd Salamone, director of research at Schaeffer’s Investment Research. “This could be some technical trading ahead of options expiration this week…and of course, we’re still trading on the headlines. It’s frustrating for both bulls and bears.”
JPMorgan [JPM Loading... () ] CEO Jamie Dimon apologized for the bank's $2 billion trading loss, and told the Senate Banking Committee that it was an "isolated incident." The CEO was earlier jeered by angry protestors ahead of his testimony. (CNBC.com is streaming and blogging this event live.) Meanwhile, Oppenheimer cut its price target on the bank to $56 from $58.
The Dow Jones Industrial Average hovered around the flatline, after jumping more than 1 percent in the previous session. JPMorgan led the blue-chip gainers, while H-P [HPQ Loading... () ] dragged.
The S&P 500 and the Nasdaq also cut their early losses. The CBOE Volatility Index, widely considered the best gauge of fear in the market, traded near 23.
Among the key S&P sectors, health care and financials led the gainers, while materials lagged.
Stocks have been volatile all week amid thin volume, with all three major indexes swinging more than 1 percent in either direction in the last two sessions.
“The headline risk in the market is at the highest I’ve ever seen and reactions are extremely temperamental,” said Keith Bliss, senior vice president at Cuttone & Co. “[The volatility] will certainly continue through at least the Presidential election…There’s going to be a lot of choppiness leading up to that and I definitely don’t think we’ll reach any type of viable resolution in Europe for a long time.”
European shares slipped as investors remained on the sidelines amid the ongoing tension and ahead of the Greek election over the weekend. Adding to woes, Greek bankers said up to 800 million euros ($1 billion) were leaving major banks daily and retailers said some of the money was being used to stock up on pasta and canned goods ahead of Sunday's elections.
On the economic front, producer prices tumbled 1 percent in May as energy costs fell the most since March 2009, according to the Labor Department. Economists surveyed by Reuters had expected a drop of 0.6 percent.
Retail sales fell for a second month, slipping 0.2 percent in May, according to the Commerce Department. Meanwhile, business inventories rose 0.4 percent to a record $1.58 trillion in April, pointing to continued careful management of stocks. Economists polled by Reuters had expected a 0.3 percent gain.
Dell [DELL Loading... () ] jumped to lead the S&P 500 gainers after the PC maker announced it will offer shareholders a dividend of 32 cent a share per year, or 8 cents a quarter.
Johnson & Johnson [JNJ Loading... () ] advanced after the drugmaker said it expects the $19.7 billion acquisition of Swiss medical device maker Synthes to slightly boost profit this year. In addition, at least three brokerages raised their rating on the company.
Scotts Miracle-Gro [SMG Loading... () ] plunged after the lawn care and service company said it would miss its full-year outlook on weak demand during the peak gardening season. In addition, RBC slashed its price target on the firm to $38 from $48.
Zynga [ZNGA Loading... () ] rose slightly after
Crude oil inventories for last week will be released by the Energy Department at 10:30 am ET. Inventories fell by 0.111 million in the prior week. This comes ahead of the OPEC meeting on Thursday. Earlier this week, the group said output averaged 31.6 million barrels a day in May, above its 30-million barrel per day target set in December.
The government is scheduled to auction $21 billion in 10-year notes at 1pm ET.
—By CNBC’s JeeYeon Park (Follow JeeYeon on Twitter: @JeeYeonParkCNBC)
Coming Up This Week:
WEDNESDAY: 10-yr note auction
THURSDAY: CPI, jobless claims, current account, 30-yr bond auction, AOL shareholders mtg; Earnings from Kroger, Smithfield Foods, Pier 1 Imports
FRIDAY: Empire state mfg survey, treasury int'l capital, industrial production, consumer sentiment, credit card default rates reported, quadruple witching
More From CNBC.com:
Financial crisis erases two decades of accumulated prosperity of US families - Economic Times
This vast loss of wealth was compounded by a loss of income, as the earnings of the median family fell by 7.7 percent over the same period.
The new data come from the Fed's release Monday of its triennial Survey of Consumer Finance, one of the broadest and deepest sources of information about the financial health of U.S. families. The latest survey is based on data collected in 2010. Figures are reported in 2010 dollars.
Unsurprisingly, the report is full of grim news, and although it is news from 18 months ago, fresher sources of economic data make clear that most households have since seen only modest increases, at best, in wealth and income.
Despite these setbacks, consumers have continued to spend surprising amounts of money in recent years, helping to keep the economy growing at a modest pace. The survey underscores where the money is coming from: Americans are saving less for future needs and making little progress in repaying debts.
The share of families saving anything over the previous year fell to 52 percent in 2010 from 56.4 percent in 2007. Other government statistics show that total savings have increased since 2007, suggesting that a smaller group of families are saving more money, while a growing number manage to save nothing.
The survey also found a shift in the reasons that families set aside money, illustrating the lack of confidence that is weighing on the pace of economic growth. More families said they were saving as a precautionary measure, to make sure they had sufficient liquidity to meet short-term needs. Fewer said they were saving for retirement, education or for a down payment on a home.
And the report highlighted the fact that households have made limited progress in reducing the amount that they owe to lenders. The share of households reporting any debt declined by 2.1 percentage points over the past three years, but 74.9 percent of households still owe something and the median amount of the debt did not change.
The drop in reported incomes could have increased the weight of those debts, requiring families to devote a larger share of income to debt payments. But one of the rare benefits of the crisis, lower interest rates, has helped to offset that effect. Families also have been able to reduce debt payments by refinancing into mortgages with longer terms and deferring repayment of student loans.
The survey also confirmed that Americans are shifting the kinds of debts that they carry. The share of families with credit card debt declined by 6.7 percentage points to 39.4 percent, and the median balance of that debt fell 16.1 percent to $2,600.
Apple Maps Could Launch With More Business Listings Than Google - Searchengineland.com
If the two companies’ self-reported numbers are accurate, and if nothing changes between now and then, Apple’s new Maps product will launch later this year with more local business listings than Google.
As Bloomberg points out, during Apple’s announcement on Monday, the company said it has “ingested” more than 100 million business listings around the world via its various data partnerships. As our Greg Sterling has pointed out on his own blog, Apple’s primary local business data providers appear to be Localeze, Acxiom and TomTom. (What appears to be a full list of Apple’s sources is listed here.)
Meanwhile, when Google announced its new Google+ Local Pages a couple weeks ago, Marissa Mayer said — and a Google spokesperson confirmed to Bloomberg — that Google has 80 million local business listings. That’s 20 percent less than the number that Apple claims it’ll have when iOS6 arrives later this year.
Of course, Google could do something to narrow or eliminate the difference between now and then.
Back in the first half of last decade, Google and Yahoo used to regularly try to one-up the other with grand proclamations about who had the bigger index of web pages/documents. Don’t be surprised if, much like those days, Google and Apple race to have the most local business listings and trade claims over whose local search index is biggest.
Related Topics: Apple: Maps | Google: Maps & Local
No comments:
Post a Comment