THE NEWS WRAP: ATO launches crackdown on ‘loss making’ small businesses

The Australian Tax Office is taking a harder line with small businesses that claimed losses during the financial downturn.

The Australian Financial Review reports that the ATO will place greater scrutiny on small firms following “significant revenue losses”, which can be used to reduce tax bills, in the sector in 2008 and 2009. 

China becomes world’s second largest economy

China has overtaken Japan to become the world’s second largest economy. In the final quarter of 2010 Japan’s economy was worth $US5.474 trillion, compared to China’s $US5.8 trillion.

A drop in Japanese consumer demand and exports and China’s manufacturing boom has been credited for the switch. The US remains the world’s largest economy, at nearly three times the size of China in dollar terms, although analysts predict that China will claim top spot within the next decade. 

Twitter CEO denies Google talks

Twitter’s chief executive has hosed down speculation that Google is set to acquire the micro-blogging site for $US10 billion.

Dick Costolo said that the Google reports were “just rumours”, although he declined to comment on similar speculation that Facebook was set to swoop on Twitter.

Overnight

The Dow Jones industrial average dipped slightly, down 9.04 points to 12,264.22, while the Australian dollar remained steady at 100.26 US cents.