:00:00. > :00:00.Investigation into allegations of abuse will begin regarding reports
:00:00. > :00:18.of abuse by British soldiers. As Australia digests a brand`new
:00:19. > :00:24.budget with tough spending cuts and tax hikes, we get the reaction from
:00:25. > :00:33.the man on the street. And, Sony get set to announce its latest numbers,
:00:34. > :00:38.with warnings of a massive loss. Thank you for joining us on Asia
:00:39. > :00:43.Business Report. I'm Rico Hizon. Australians were warned it would be
:00:44. > :00:47.tough, and it was. The country's first Budget under the Abbott
:00:48. > :00:50.government includes plans to nearly cut the deficit by half, with
:00:51. > :00:54.reductions to welfare and higher taxes, and at the same time the
:00:55. > :00:59.government is increasing spending on infrastructure. The aim is to bring
:01:00. > :01:02.the deficit of nearly $50 billion, down to about 30 billion next year.
:01:03. > :01:07.To help with that goal, higher income earners will pay a special
:01:08. > :01:10.tax than three years. The new levy also applies to murmurs of
:01:11. > :01:15.Parliament. Benefits for families have been reduced as well. On the
:01:16. > :01:17.investment side, the government promised to spend $11 billion over
:01:18. > :01:21.five years on infrastructure spending. Phil Mercer in Sydney had
:01:22. > :01:27.a very early start this morning, he was out and about getting people's
:01:28. > :01:30.reaction to the budget. Pain with purpose, is how the
:01:31. > :01:34.government is describing its efforts to balance straight's books. There
:01:35. > :01:38.will be sweeping cuts to welfare, tax cuts for higher income earners,
:01:39. > :01:41.and the retirement age will rise to 70 further down the track.
:01:42. > :01:45.Government spending will be slashed, and thousands of public servants
:01:46. > :01:52.will lose their jobs. The aim is to save $34 billion in the next four
:01:53. > :01:55.years. The morning after, Australians are digesting their
:01:56. > :02:02.country's harshest Budget since the late 1990s. Tax hike are probably a
:02:03. > :02:08.reasonable thing, cuts to welfare are bit questionable. Is the part
:02:09. > :02:12.government stuff the country up, we have to try to everyone has to help
:02:13. > :02:16.out, pay to go to the doctor, that is what we have to do. Root think it
:02:17. > :02:24.is hard on health and education, but things have got to be sorted out, so
:02:25. > :02:28.as long as it is only short`term. The government says the budget will
:02:29. > :02:33.strengthen the Australian economy for decades to come. Billions will
:02:34. > :02:37.be spent on road, rail and port projects, to boost prosperity, as a
:02:38. > :02:43.decade`long resources boom comes to an end. Critics have labelled the
:02:44. > :02:48.Budget regressive and shortsighted. The opposition party has described
:02:49. > :02:54.it as a string of broken promises. Investors will be expecting a
:02:55. > :02:56.backlash from voters, but the next federal election is two years away,
:02:57. > :02:59.so the government will have time to sell the benefits of what it
:03:00. > :03:07.describes as a long`term budget repair job.
:03:08. > :03:11.Earlier, I spoke to the chief executive of the Australian innocent
:03:12. > :03:16.group, which represents the interests of more than 60,000
:03:17. > :03:21.businesses across a range of sectors, including manufacture, and
:03:22. > :03:25.labour hire. I asked him if this budget was what he had been
:03:26. > :03:30.expecting. This is a tough budget, it could have been tougher in some
:03:31. > :03:33.respects. But it is one for the longer term. The short`term pain
:03:34. > :03:38.will be quite significant for many within the community, as your street
:03:39. > :03:42.poll said, a lot of the focus is around health and welfare issues.
:03:43. > :03:50.For business, there are very significant cuts to government
:03:51. > :03:56.programmes, and that will be recalibrated, but it will be quite
:03:57. > :03:58.harsh on businesses. A lot of government programmes have been cut
:03:59. > :04:03.out, there has been cuts to research and development, we have had very
:04:04. > :04:08.welcome cuts to corporate taxes. Those will come down by one and a
:04:09. > :04:17.half points, to 28.5%. That is welcome. So, this Budget will indeed
:04:18. > :04:21.impact many businesses, but are their sectors that will benefit from
:04:22. > :04:26.it? Look, definitely. The biggest winner at this is infrastructure. We
:04:27. > :04:30.have a very dry infrastructure pipeline, and we need to get that
:04:31. > :04:33.going. Part of the problem that this Budget has identified is that the
:04:34. > :04:37.Australian economy is sluggish at the moment, we are growing below
:04:38. > :04:40.trend, unemployment is forecast to go up over the next year, do we need
:04:41. > :04:49.to get those infrastructure projects going. That was the CEO of the
:04:50. > :04:57.Australian industry group. Other news making headlines, a top caught
:04:58. > :05:03.in the EU has ruled that Google must altar search results if asked to buy
:05:04. > :05:06.an individual. An individual has rights to ask Google to remove
:05:07. > :05:13.information under particular circumstances. That is, individuals
:05:14. > :05:16.have a right to be forgotten. In the stock market, fresh highs on Tuesday
:05:17. > :05:21.after records were broken at the beginning of the week. The rupee
:05:22. > :05:26.rallied to its strongest point in ten months. It follows the end of
:05:27. > :05:32.five weeks of voting across India. It is a sign that investors are
:05:33. > :05:43.confident, particularly that Narendra Modi's BGP will win the
:05:44. > :05:49.election. `` BJP. Retail sales have grown, showing that consumers cut
:05:50. > :05:54.back on purchases of electronics and furniture. The slowdown surprised
:05:55. > :06:00.many analysts, who were looking for continued growth after a harsh
:06:01. > :06:05.winter impacted spending. A BBC Watchdog investigation into the
:06:06. > :06:08.German carmaker, Audi, has discovered widespread lying about
:06:09. > :06:10.the safety testing of their vehicles. Undercover research has
:06:11. > :06:20.witnessed nine out of ten dealers from around the UK falsely claiming
:06:21. > :06:28.the Audi A5 was safety tested. Audi UK said it had not been an
:06:29. > :06:32.deliberate intent to mislead. The electronics business is a tough one,
:06:33. > :06:37.and no country has been feeling the pain more than Japanese giant Sony.
:06:38. > :06:41.Just how big the challenges the company is facing will become
:06:42. > :06:47.clearer today, when it announces its latest report, with warnings of a
:06:48. > :06:52.massive loss. We explain why Sony, once the undisputed will market
:06:53. > :06:55.leader, has been struggling. Sony was once the king of consumer
:06:56. > :07:01.electronics, but it has fast been overtaken by competitors like Apple
:07:02. > :07:05.and Samsung. It is expected to book annual losses of $1.3 billion. That
:07:06. > :07:12.is despite undergoing restructuring of the firm, plans to cut 5000 jobs,
:07:13. > :07:17.and the $1 billion sell`off of its headquarters in Manhattan. The big
:07:18. > :07:22.drag on its bottom line has come from its TV and personal computer
:07:23. > :07:26.divisions. It prompted Moody's to cut its credit rating to junk status
:07:27. > :07:31.this year. Part of the losses have been put down to 1`off costs, linked
:07:32. > :07:35.to its decision to exit the PC business and sell off its brand of
:07:36. > :07:39.computers. There has been pressure to ditch its television division as
:07:40. > :07:43.well, a fiercely competitive sector with slim margins, but so far the
:07:44. > :07:48.firm is resisting the move, and is instead splitting the unit into a
:07:49. > :07:52.wholly owned subsidiary. It could prove to be a costly decision for
:07:53. > :07:58.the top executives, could be forced to forego their bonuses for yet
:07:59. > :08:02.another year. Some may now be asking why Sony is so different to other
:08:03. > :08:07.gadget makers like Panasonic and sharp. Both of them have turned
:08:08. > :08:12.their fortunes around, and are back in the black, after huge losses last
:08:13. > :08:21.year. Earlier, I spoke to an expert,
:08:22. > :08:26.asking him what Sony should do with its business. It is one of the
:08:27. > :08:31.toughest business sectors, they are struggling to turn it around, moving
:08:32. > :08:36.it into a separate subsidiary. The pace of innovation in that segment
:08:37. > :08:42.is not enough for Sony to be able to differentiate and command a premium.
:08:43. > :08:50.It is a tough business, I don't see them providing any ads is as yet ``
:08:51. > :08:54.answers, as to how they can bring back profitability. It is a tough
:08:55. > :09:06.business, as you say. Should they just shut it down? We all have
:09:07. > :09:12.associated televisions with the Sony brand. Diversification is what they
:09:13. > :09:15.need to do. As we see a variety of different consumer devices having
:09:16. > :09:20.the screen, that is an opportunity to bring growth. What Sony is doing,
:09:21. > :09:24.with its foray into healthcare, is an interesting proposition. They
:09:25. > :09:28.could integrate consumer devices into a new value proposition in
:09:29. > :09:35.hospitals, as well as consumers. That is an interesting idea. They
:09:36. > :09:39.will need more of these ideas to help drive growth and
:09:40. > :09:44.profitability. The PlayStation is doing very well, the movie business
:09:45. > :09:47.is profitable. When do you think this healthcare business will bring
:09:48. > :09:53.in revenues? To make the company again profitable? I think they are
:09:54. > :09:57.making tough decisions in terms of selling the PC business, and as a
:09:58. > :10:02.result they are left with only the television business. The remaining
:10:03. > :10:07.parts of the business are growing, there is profitability. The real
:10:08. > :10:10.value can come through Sony if it can integrate the various pieces of
:10:11. > :10:14.its business, from the television to the software to the music. And, have
:10:15. > :10:21.a greater impact on the consumer lifestyle.
:10:22. > :10:29.Asian stocks are inching upwards after another strong day. South
:10:30. > :10:33.Korea and Hong Kong in positive territory. Japan and Australia are
:10:34. > :10:42.moving sideways. Thank you for investing your time with us.
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