13/05/2014 Asia Business Report

believe that Gary Barlow should return his OBE, despite the ruling

that he avoided taxes. Now on BBC News all the latest business news

live from Singapore. Led by Prime Minister Tony Abbott, a

straighter's government gets set to hand down what could be one of the

nation's toughest Budget in years. Investors react as India wraps up

white Tomic five weeks of voting. Thank you for joining us on Asia

Business Report, on BBC World News. I Rico Hizon. How big Budget problem

does Australia have? Well, we will find out today the government

details its first Budget since coming to power late last year. With

warnings of the crisis, with the country's finances, Australians are

being told they will all have to do the heavy lifting to balance the

books. So while the local economy is picking up speed, locals are bracing

themselves for higher taxes for the rich, as well as cuts to welfare and

government jobs. From Sydney, our correspondent has this preview.

Australia managed to chart a safe path through the choppy waters of

the global recession, thanks to a mining boom. But the government

believes that this lifestyle superpower must endure Budget pain

to guarantee future prosperity. The Budget is something that does need

to come down, does need to have some tough measures in it. What I don't

think we are as poorly off as people might think we are. I think it will

be tough and hit a lot of people who don't want to be hit hard. I think

it will be brutal and will hit middle range. Tax hikes for the

rich, cuts to welfare, and the raising of the retirement age to 70

are expected to be included in its latest economic loop rent.

Economists believe that with a deficit of about 3% of GDP,

Australia's financial woes are modest. Compared with the US and

Europe. It is right to say Australia has a Budget problem. We have had

the biggest boom in our history. We should be running Budget surpluses

now, not deficits. There is a problem there, but we don't have the

sort of emergency that we have had over the last years. Australia does

the significant challenges. Although unemployment here is low by

international standards, at less than 6%, it is expected to rise. And

a decade`long mining boom is fading. At economic growth is steady, and

the weakening currency is helping exporters. So in many ways,

Australia remains the lucky country. But academics warned that

an overly tough Budget could harm the economy. In the medium to

long`term they could be some issues. The resources boom is over,

There are a fundamentally good There are a fundamentally good

aspect in the economy, and it is a question of sensible stewardship

rather than the sort of panic attack we are seeing at the moment. The

sand and the surf are part of Australia's famous, no worries,

lifestyle. But the government believes this fun loving nation is

living beyond its means and warns that all Australians will have to

share the pain to health balance the books. And the Budget will be

released this evening in Canberra. We will bring you updates and

reactions on tomorrow's Wollaton right here on Asia Business Report.

One of the key drivers of Australia's economy is China's

demand for its resources, with exports highly sensitive to

Beijing's slower growth. While the mainland's economic engine has lost

momentum, that is not necessarily bad news. I spoke to Mark Williams

from Capital Economics, who explained why China slowdown is not

stopping to worry about. It is slowing, but the sense of panic

which takes hold in some parts of the market, is massively overdone.

After all, we have to remember that China's growth rate has halved since

2007. It has come down from 14 to 7% in the past seven years. The fact it

is slowing at bit more should not because massive concern. Actually,

seeing is positive. We are seeing seeing is positive. We are seeing

slightly weaker investment spending. So some of those imbalances in

China's economy are eroding. We shouldn't be too worried about it.

We shouldn't be too worried about it, but where are we seeing the

risks in this slowdown in the China economy? Is because of debts,

laboured disputes... The focus of concern shift every few months, but

the area we should really focus is property. That is the area of the

economy which has massive oversupply of houses at the moment. It is also

big enough that something goes wrong we will have widespread recognition

is, not just in China but around the world. With the slowdown in the

Chinese economy, where is this most being felt in Asia? It is the

commodity producers who are most exposed to the sort of slowdown we

are seeing at the moment. And the sort of slowdown which is the big

risk. If the property sector goes down, that is going to hurt copper,

steel, iron ore producers. At the same time, if the government manages

to start keen to some consumer demand through spending, then

produces of consumer goods Tomic of which there are many in this part of

the world, should stand to do very well. Mark Williams from Capital

Economics. Later China will be revealing its sales numbers and

figures for industrial production. He will give us an insight into how

Chinese consumers are behaving and also provide an indication of how

the country's main factories are the country's main factories are

faring so far this year. In other business News making headlines,

Britain's biggest satellite television company has confirmed its

interest in buying its sister companies in Germany and Italy. The

UK broadcasting giant said the move would have the potential to create a

world`class multinational paid TV group. Rupert Murdoch owns almost

40% of Sky. Several former Barclays executives will be questioned over a

deal in 2008. They include former chief executive of diamonds, who is

among 12 senior managers due to be quizzed. Another ex` chief executive

was also named by the Financial Times and will also be interviewed.

The Royal Bank of Scotland has announced plans for a public share

sale later this year. Of part of its US affiliate, Citizens Bank. It is

expected to raise a lot of money. They turned it into one of the

biggest regional banks in America. It has since in bailed out by the UK

government in 2008. RBS has been under pressure to sell its foreign

holdings. Shares in Sharp rising by more than 4% in Tokyo trading, after

the firm reported its first annual profit in several years following a

huge restructuring move. Japan's electronics giant reported a net

gain of $140 million for the 12 months to March. More than double

its own forecast. Share sharp is the largest maker of LCD screens used in

televisions and smartphones. India's stock market owns in a few

hours' time, giving investors the chance to react to the first exit

polls released last night, after they racked `` wrapped up voting in

their five`week election process. The BJP, under the leadership of

Narendra Modi, will form the next government. Our correspondent has

more from Mumbai. This is the Mumbai stock exchange, located in the heart

of the financial capital of India. It is the best indicator of how

investors are feeling, and in the part few months, the only way has

been up. Time after time, the market have seen new record highs. Foreign

investors are low and have put $5 billion into Indian companies in the

last five months. It is a frenzy driven by the opinion that India is

set for a change of government. Polls have placed the coalition of

BJP headed by Narendra Modi as the front will run to form the next met.

The markets want a government led by Narendra Modi. And they also hope

that Narendra Modi can do it without the support of his coalition

partners, and can get some kind of a clean sweep, which would lead to a

lot of stability as far as policies are concerned. They won't have to

dance to the tunes of the coalition partners as they have seen the last

few years. Many expect sharp rises when trading begins on Tuesday. Some

are urging caution. Opinion polls turned out to be absolutely wrong

during the previous two elections. That left many investors worried, as

the fear is that stock markets could see a major fall if the prediction

turned out to be different from the outcome. But whatever happens today,

the long`term mood of investors, both from home and abroad, will be

determined not by what people are predicting will happen, but by who

takes power when the votes are in. In the markets, let's have a quick

look at Asian stocks. Broadly, in positive territory in mid`morning

trade, after an overnight boom led by the biotech sector. In Hong Kong,

South Korea, and Australia, all in the past column. The UK situation

remains uncertain after the weekend referendum. Those other markets.

Thank you for investing your time with us. I am macro one. `` I am

Rico Hizon. Goodbye for now. Relatives of the missing schoolgirls

in Nigeria have been speaking about their anguish after seeing a video