Government expects opposition to back budget update: Midday roundup

Prime Minister Julia Gillard expects the opposition to back the government’s Mid Year Economic and Fiscal Outlook.

The government has been forced to find $16.4 billion in its budget update and Gillard has dismissed opposition criticism of the revenue raising measures outlined by the government.

“The opposition is full of its usual negative huff and puff,” Gillard says.

“Our experience in the past has been even though they are negative until they are blue in the face … they have come into the parliament and backed the government’s legislation.”

Australia third most expensive place in the world to do business

Only Norway and Switzerland are more expensive to do business, or spend money in than Australia according to estimates from the International Monetary Fund.

The IMF revealed Australia has the third most expensive currency in the world, and the most expensive of the world’s 20 largest economies.

Since 2002, the dollar has turned Australia from a relatively low-wage, low-cost country to a high-income, high-cost one outpacing even Japan.

The IMF’s database shows goods and services costing $US100 ($A97) to produce in the US now cost $US41 to produce in India, $US67 in China, $US105 in Germany or Britain – but $US161 in Australia.

Pacific Brands sales are down

Pacific Brands says sales have been down so far this financial year, with the clothing and homewares retailer not expecting any significant improvement.

The group, which owns brands including Bonds, Rio and Sheridan, posted a $451 million loss in the 2011/12 financial year and chief executive John Pollaers told Pacific Brand’s annual general meeting today that underlying sales in the 2012/13 financial year so far had been down on the previous corresponding period.

“There has been no noticeable improvement in the operating environment so far this year,” Pollaers says.

“Time will tell whether the latest interest rate cut has much impact, but, prudently, our plans assume more of the same.”

Stock market little changed

The Australian stock market opened little changed this morning despite Wall Street and Europe’s positive leads.

At the official market open, the benchmark S&P/ASX 200 index inched up 0.10% to 4545.4 points, while the broader All Ordinaries index was up  0.12% to 4570.2 points.

Ric Spooner, chief market analyst at CMC Markets, says positive momentum at the end of the US market and a better than expected result from Yahoo should lead to a mildly positive sentiment in the local market.

“Today looks like being a news free day for the market with little on the calendar to change investor opinion. Market action in China could be an exception,” Spooner says.