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April 7th 2007
$20 increase for low paid workers 'fair'
FIVE Labor-run states and two territories have called for a "fair" $20 rise to the weekly minimum wage but business warned no increase should be delivered until at least December.
The Australian Fair Pay Commission published 50 submissions tonight to its forthcoming decision on the 2007 minimum wage. Last year the commission delivered Australia's lowest paid workers a hefty $27.36 per week increase, this surprised critics who had claimed it was little more than a tool of the Federal Government. In a joint submission, the governments of Victoria, South Australia, Western Australia, Tasmania, the ACT and the Northern Territory said a $20 rise in the weekly minimum wage would "represent a fair and reasonable increase to the minimum wage and improve wages for lower paid workers''.
NSW is still considering its submission while Queensland made a separate submission in which it supported a $20 pay rise. The unions want more, with ACTU calling for a $28 rise.
Commission chairman Professor Ian Harper tonight said the next minimum wage decision was expected mid-year.
February 10, 2007
Melbourne may avoid major events
Melbourne could avoid hosting major events such as last year's G20 conference to avoid "disrupting the entire city", Victoria Police's Chief Commissioner Christine Nixon has said.
Her suggestion that major conferences may need to be relocated to islands or resorts was condemned by the Treasurer, Peter Costello, Fairfax newspapers said.
Such a move, Mr Costello said, would consign Melbourne to "second-rate status".
Mr Costello has defended last November's G20 international economic forum, describing it as "the most important financial event ever held in Melbourne".
But the conference was marked by violence, and demonstrators attacked police lines outside the Grand Hyatt Hotel.
Ms Nixon said police across the world increasingly believed international conferences with potential fo violence should be avoided in big cities.
"To have stood in the middle of Collins Street at 5 o'clock on a Saturday (during G20) and see the street absolutely empty because we had to provide that level of protection, I think you have to very seriously consider whether or not cities are the appropriate locations to hold these sort of events," Ms Nixon told The Age.
But Mr Costello did not agree with the chief of police.
"To suggest that Melbourne cannot hold international conferences that other global cities do is to consign Melbourne to second-rate status," he said.
"Washington, Ottawa and Berlin (previous G20 venues) do not surrender to demonstrators and cancel or move events as a consequence, and nor should Melbourne.
"Sydney will host the APEC leaders' meeting later this year and it is expected NSW Police can handle demonstrators."
Search resumes for missing fisherman
A search will resume at first light today for a 51-year-old fisherman who went missing yesterday in southeast Tasmania.
The man, from Premaydena, was reported missing in Norfolk Bay yesterday after his empty dinghy was found.
Police launched a land, air and sea search of the bay and the Tasman Peninsula between Taranna and Koonya.
A police spokesman said "The boat has been recovered but there has been no sign of the missing man,".
The Price of Oil rises and then falls
The price of oil travelled in opposite directions overnight after breaching $US60 in Asian trade, icy winter weather continued to hit the northeast US and boosted demand for heating fuel.
In London, the price of Brent North Sea crude for March delivery lost 31 cents to 58. 72 per barrel in electronic deals. New York's main oil futures contract, light sweet crude for delivery in March, rose to $US59, $US74 per barrel in floor trading.
Calyon oil analyst Mike Wittner was quoted as saying "The market is catching its breath after the big increase yesterday," . He added: "$US60 (per barrel) appears to be a technical resistance level. " Speculative buying and the shutdown of a California oil field following an explosion combined to drive prices past 60 late Thursday, ending the session with a hefty gain of $US2.
New York crude peaked at $US60, $US42 in Asian trade - this had not been seen since the end of 2006. Kevin Norrish, Barclays Capital analyst said "The rally was due to what had been a growing tinderbox of factors during the day that was finally ignited. "The decisive spark was provided by news of force majeure being declared at the 120,000 barrels per day Elk Hills field in California following a fire." News that Occidental Petroleum had shut down its Elk Hills operation in central California had increased traders' nerves. A blaze gripped the field after a pipeline leak on Tuesday caused a powerful explosion.
Elk Hills produces 60 per cent crude and 40 per cent natural gas, and is one of the largest fields in California.
The crude market had also moved higher as traders fretted over renewed US-Iran tensions, frostier US temperatures and declining OPEC output.
The United States is the world's biggest energy consumer and rising demand in the country for heating fuel during an unusually cold late winter weather has been a key factor driving oil prices up. American weather forecasters say that colder weather is on the way for the next fortnight.
Traders have meanwhile been nervous about the impact of recent production cuts from the Organisation of the Petroleum Exporting Countries.
27th November 2006
New Home Sales on the up
Sales of new homes rose last month thanks to strong improvements in housing markets in Victoria, New South Wales, and Queensland markets.
The latest Housing Industry Association's (HIA) new home sales survey shows sales of new homes and units by Australia's largest builders and developers rose by 1.3 per cent in October to 7434 dwellings.
That followed a fall of 3% in September to a 21 month low of 7342 dwellings . The survey also found that new house sales increased by 4.6% in October while sales of multi-unit fell by 16%.
Simon Tennent HIA executive director of economics and housing said that the results reflected the dual nature of the nation's economic growth and housing affordability across the states. "New home sales were resilient in the eastern states as house prices continue to grow in line with consumer prices," he said. New South Wales, Victoria and Queensland detached housing sales were up strongly, while the accelerating house prices and land constraints in Western Australia meant the new home sales market continued to struggle, he said.
In October, detached house sales fell by 21.9 per cent in WA and 0.9 per cent in South Australia but rose by 16.7 per cent in NSW, 15 per cent in Victoria and 8.5 per cent in Queensland.
"The real test will be in the first quarter of 2007 when the combined affect of three interest rate rises start to squeeze household budgets, particularly in the resource-poor states," Mr Tennent said.
The Reserve Bank of Australia lifted interest rates this month by 25 basis points to 6.25%. That followed hikes by the same amount in May and August. Economists say it is not likely that the RBA will lift rates again at the first board meeting of the year in February as the RBA will want to see how the three hikes have trickled through the economy. 1
23rd November 2006
Aviation laws tested by proposed takeover of quantas
The proposed foreign takeover of Qantas has the potential to set test Australia's strict aviation laws, an expert is reported as saying.
Only one day after Qantas confirmed it was a takeover target, Peter Harbison, of the Centre for Asia Pacific Aviation, says any movement of Qantas shares offshore would test the airline's legislated foreign ownership cap.
“The pursuit of Qantas by a consortium involving Macquarie Bank and US private equity firm Texas Pacific Group has the potential to test the Australian government's aviation regulatory strategy,” Mr Harbison said.
The initial outrage at the news of the takeover cooled slightly when Macquarie, who are leading the takeover consortium, confirmed it had no plans to take ownership of the flying kangaroo offshore.
However, that pledge only came after Transport Minister Mark Vaile was forced to promise the Government would never lift the foreign ownership cap. The takeover, Mr Harbison said, was unsurprising given the lean and profitable position of Qantas.
“Qantas is a plum target - a financially robust carrier with a strong track record and access to the world's fastest growing markets, in the Asia Pacific,” he said.
Shares in the airline closed 15 per cent higher yesterday at $5, up 65 cents.
20th November 2006
Tough day at work? - Don't worry, go and have a sleep.
Are you struggling to get through some of those long afternoons at work?
If you can drag yourself away from your desk, and if the boss allows it, a snooze-pod siesta could be the answer to the mid afternoon fatigue.
MetroNaps, a Sydney based business has designed what it hopes will be a popular answer to the mid-afternoon energy dip that is a part of working life for many workers.
The two-metre-long, 122-centimetre-wide sleeping pod that could make power naps the next big thing in the Sydney office scene. 65 per cent of light and sound is blocked out by gel-coated fibreglass visors. Workers are gently awakened by a gentle mix of vibration and increased light after a period of 20 minutes.
Director of MetroNaps Alex Silva says that if the trials and sales are successful, the next two years could see the snooze pod become "as common as photocopiers". Alex also believes that the pods could lead to the establishment of specialist sleep shops, where people would drop in to use the pods as they do a health spa or solarium.
"Our initial focus is on places that have employees who work long, erratic hours," Mr Silva said. Businesses are currently able to lease the pods for $900 a month, and will soon be able to sign off on 12 or 24 month plans.
International companies such as Procter and Gamble, Estee Lauder and Saatchi and Saatchi have already shown an interest and Clear Blue Day the Australian IT marketing and research firm have trialled the pods for a two week period.
"The feedback we got from the staff was very positive," said Clear BLue Day office manager Tara Lloyd.
"In the environment we work in it was quite good because people are staring at screens for nine hours straight.
"It provided downtime because you didn't have to do anything with your eyes except close them.
"Everyone felt that productivity had increased and they did feel refreshed."
Mr Silva said the sleep pod was not about increasing or decreasing the amount of time people work, but "improving their quality of work and then their quality of life".
"Because there's nowhere to catch a nap it's almost frowned upon," he said.
"Work is becoming more intense and our bodies are just not coping with it. They're not designed to work for that amount of time without a short break."
"Executive payout not excessive" Claims Coles Myer
COLES Myer claims today that the payout made to former Myer boss Dawn Robertson was not excessive.
Rick Allert the Coles Myer chairman told shareholders that the department store business had been in deep trouble and Ms Robertson had played a large part in reviving Myer.
When asked if he thought that the company felt that Ms Robertson's payout was excessive Mr Alert said: "No, we do not."
After finishing up her final year with the company Ms Robertson took about $8.2 million back to the United States,(Ms Robertson was with the company for a total of four years).
After Myer was sold to Newbridge Capital earlier this year Ms Robertson opted not to stay with the company and as a result picked up $1.9 million in lieu of notice and that her employment was not being extended to June 1, 2007.
15th November 2006
Jobs go at Coles to boost profits.
Coles Myer said today it was on target to meeting its annual profit projections and that it would be cutting 525 jobs before December to help get it there.
The company said it planned to shed jobs and convert stores to help improve profits. The company said it had cut 26 per cent of its senior management positions already and would shed 525 jobs by December.
In September the company said it would slash 2500 management jobs, simplifying its business and opening supercentres. By reducing the numbers in Coles's Melbourne headquarters buildings by a third they said it would save the company $90 million.
The strategy is part of a defence to a $14.50 a share takeover proposal from a private equity consortium led by United States raiders Kohlberg Kravis Roberts. The group sales during the first quarter were $8.5 billion, an increase of 3.2 per cent on the previous corresponding period, Coles (cml.ASX:Quote,News) said.
Food and liquor sales rose by 6.3 per cent, with comparative store sales increasing by 3.3 per cent.Sales of non-food items rose by 2.2 per cent.
The company has forecast net profit will jump 35 per cent to $1.06 billion in 2008. The company is folding its Bi-Lo and Kmart brands under its Coles brand as part of a wider initiative to help cut costs. So far 45 Bi-Lo stores have been converted with a total of 75 to be rebadged by the first week of December. The rebranding of stores has helped increase sales by between 7 to 8 per cent.
Mr Fletcher said comparative store sales in food and liquor increased in line with expectations. "This trend is expected to continue as strategic initiatives gain traction, including increased investment in supermarket service levels from this month and the continuing Bi-Lo conversion program," he said. Coles Express dragged down group sales as it remodelled some of its stores and sold less fuel.
Coles Express sales fell by 4.8 per cent during the quarter. Excluding the convenience chain results, overall group sales would have risen by 5.1 per cent. Kmart sales increased by 1.2 per cent but fell by 2.2 per cent on a comparative store basis.
The company expanded six of its Target stores, while the first Kmart store to be converted into a Target outlet will open on November 16th. sales at Target rose by 4.3 per cent helped by demand for footwear and menswear.
Officeworks sales rose 0.3 per cent as rising as tougher competition reduced revenue at Officeworks Business Direct.
Sigma pharmaceuticals Ltd still seeling API takeover
Australian Pharmaceutical Industries (API) the drug and pharmaceutical retailer announced today that it was still in talks with Sigma pharmaceuticals LTD about a proposed takeover.
“The discussions are based on the proposal put to API by Sigma (sig.ASX:Quote,News), and will focus on a number of the conditions including those around scrip, ACCC (Australian Competition and Consumer Commission) matters and due diligence requirements,” API said today.
“The board of API believes it is in the interests of all shareholders to continue talking with Sigma but have confirmed that it will only proceed to recommend an offer if they believe it to be in the best interests of all shareholders and in the absence of a superior offer.”
Earlier this month Sigma said that it would only make a formal $643.4 million takeover offer for API, worth $2.50 per share, if it secured option agreements with major shareholders to acquire a 19.9 per cent stake, among other conditions.
The offer is was also conditional upon completion of satisfactory due diligence and approval by regulatory authorities.
October 17th 2006
Thames Water sells business to Macquarie
Thames Water,the biggest water supplier in Great Britain, has been sold to a consortium led by Macquarie, according to the website of RWE, the utility's parent company.
Thames Water was sold for £8 billion ($19.82 billion) to Macquarie (mbl.ASX:Quote,News), after rival bids from British investment group Terra Firma, Qatar Investment Authority, and also the Australian energy group Alinta.
RWE said it expected the transaction to be finalised by early December.However the sale remains subject to RWE's supervisory board, which is next due to meet this coming weekend, along with anti-trust authorities.
Thames Water supplies eight million customers in Britain with drinking water and thirteen million with sewage services, the majority of customers are in London and the southeast. RWE put it up for sale at the same time as its US subsidiary, American Water.
The British water services firm announced in August that it planned to slash one quarter of its workforce as part of a huge cost-cutting program - amounting to about 300 jobs per year until 2010. Thames Water employs around 6000 workers.
Thames Water has been heavily criticised in Britain for failing to repair its ageing underground pipes which are notorious for leaking, particularly as the region around London is experiencing its worst drought for a century.
At the same time, group profits have soared. The company posted a 31.4 per cent jump in pre-tax profits to £346.5 million ($858.52 million) in its financial year ending March 31, 2006.
October 10th 2006
Google buys Youtube
Search engine giant Google said overnight that it had agreed to acquire YouTube the top video entertainment site for $US1.65 billion ($2.22 billion) in stock, putting an even higher valuation on consumer-generated media sites.
The deal combines two of the most popular Internet brands: Google, well known for web search and rapid innovation, and YouTube, a Silicon Valley upstart that has lead the way in the video-sharing craze.
iinet sells ihug to Vodafone
iiNet Ltd the Australian internet company has sold ihug, its New Zealand operations, to mobile phone giant Vodafone for $NZ41 million ($36.42 million). ihug, which has become the third largest internet provider in New Zealand was offered for sale last July by iinet following several approaches. iinet bought ihug in 2003 for $NZ81 million ($71.94 million) and expects to show an above book gain of $6 million from the sale.
Chief executive Michael Malone was quoated as saying "We're pleased that a fair price has been made by Vodafone, delivering a good clean result for iiNet shareholders,"
iiNet Shares closed yesterday at 83 Australian cents.
Vodafone is the biggest mobile phone company in New Zealand and has around 53% market share, interestingly it has limited presence in other areas of the telecommunications market. It said the ihug acquisition would allow it to offer expanded services and increase its estimated 20 per cent share of the national telecommunications market, although it would remain first and foremost a mobile phone company.
October 05, 2006
Patties Foods Launches Initial Share offer.
Patties foods the famous and iconic piemakers have launched an initial public share offer at $1.75 each. The company which includes Four'N Twenty, Patties Pies, Herbert Adams and Nanna's hopes to raise $102.7 million when it lists on the Australian Stock Exchange. Funds raised from the float will be used to expand the business.
October 3rd 2006
HDF takes over South East Water (UK)
HASTINGS Funds Management Ltd (HDF) has bought South East Water (SEW) the UK water utility for an implied enterprise value of £665.4 million - about $1.66 billion.
By using equity,preferred equity, and shareholder loans HDF intend to invest £92 million ($230 million) in South East Water. In February HDF took over Mid Kent Water (MKW) this was done through its Hastings Diversified Utilities Fund and Utilities Trust of Australia.
HDF believe that the purchase of South East Water is very important for the future growht of the company.Tim Poole, HDF managing director was quoted as commenting: "The investment builds on HDF's successful investment in Mid Kent Water, providing additional exposure to an attractive asset class, and will deliver stable regulated cash flows that should be accretive to HDFs current level of distributions.
South East Water provides water to 1.4 million people in two regions in the southeast of England, covering an area of more than 3600 sq km.
If the UK Competition Commission grant permission HDF plan to merge SEW and MKW To help pay for the acquisition the company would offer a hybrid issue to help raise $60 million as well as ordinary stapled securities to institutional investors to raise $40 million.
Hastings would also offer a security purchase plan under which all HDF security-holders may buy up to $5000 worth of new HDF ordinary securities. If the merger was cleared, HDF may sell down some of its equity in the merged group.
September 26th 2006
The property market in Australia could suffer a severe blow if interest rates rise any higher.
The Australian Property Institute's (API) biannual property directions survey found that 97 per cent of respondents believed the rate rises in May and August, which pushed official rates up to 6 per cent, had a moderately negative impact on the residential housing market. In some cases, those rate rises had helped push the value of people's home loans above their property's value.
Tom Webster, API New South Wales president said the survey found that the residential sector was expected to remain in a slump over the next couple of years, with interest rates widely expected to rise even further. "The majority of respondents see interest rates increasing short term and have identified rising interest rates as a significant factor that could adversely impact on the recovery of the residential property market," he said.
Phil Bennett, API research committee chairman made the point that recent interest rate increases following a period of relatively low rates were depressing housing affordability. Mr Webster said that the increased costs of borrowing as a result of higher interest rates had started squeezing people out of the property market, many people are now finding that their property is now valued less than when they bought it.
A survey of fund managers, property valuers,financiers and analysts found that the residential property market downturn in Sydney, Melbourne and Brisbane was expected to continue throughout 2007, it was expected that ther may be signs improvement seen through in 2008.
The Perth market continued to ride on the back of the recent resources boom, with the upward trend is expected to continue for some time. About 78 per cent of people polled predicted interest rates to either remain steady or fall during the next three years.
But while higher interest rates were expected to take their toll on the residential property sector, the commercial property sector would be more likely to grow over the next two years.
The survey showed that Sydney and Melbourne have the greatest commercial sector growth potential in the next two years, with the upward peak expected in 2008.
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