THE NEWS WRAP: BCA says surplus should not stunt productivity

Business Council of Australia president Tony Shepherd has warned the Federal Government against pursuing a surplus at the cost of lower productivity.

Shepherd says the BCA supports the government’s strategy of a budget surplus, but not at the expense of possible productivity gains.

“A surplus shouldn’t be at any cost. We have to be careful that in achieving the surplus that we don’t kill the goose that laid the golden egg,” he says.

“Our advice would be: be very careful in cutting back on anything that encourages the private sector to invest in projects, developments, and research and development.”

Vodafone Hutchison Australia posts $445 million loss

Vodafone Hutchison Australia lost $445 million in 2011, a bigger operational loss than previously thought, but was able to continue thanks to a capital injection from its parent company.

The loss was due to a $228 million decline in revenue to $4.6 billion, a $123 million increase in the cost of handsets, and substantial increases in connection and employee costs.

In February, part-owner Hutchison Telecommunications Australia Ltd reported its 50% share of Vodafone Hutchison Australia’s loss for 2011 was $175 million, leading analysts to conclude the joint entity lost $350 million.

But a special purpose financial report reveals that VHA lost $445 million in 2011. It also reveals that one or both parents gave the company $300 million.

Yahoo! to cut 2,000 jobs

US internet firm Yahoo! says it is cutting roughly 2000 jobs as it seeks to build a “smaller, nimbler, more profitable” company and reduce costs.

“We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities,” Yahoo! chief executive Scott Thompson said in a statement.

The company said it would notify about 2000 people that their jobs have been eliminated or would be in the future. It gave no details on the timing of the layoffs.

It expects the workforce reduction will produce about $US375 million ($A364 million) in annualised savings.

Overnight

The Australian dollar has fallen after US stocks lost ground following a weak Spanish bond auction.

At 7am today, the local unit was trading at 102.70 US cents, down from 102.82 cents yesterday.