:00:00. > 3:59:59in Iraq. A group of lawyers presented what they call evidence of
:00:00. > :00:15.serious crimes. Now it is time for Asia Business
:00:16. > :00:21.Report. As Australia Day jest a brand`new budget, where tough
:00:22. > :00:24.spending cuts and tax hikes are the order of the day, we get the
:00:25. > :00:26.reactions from the man on the street. And, Sony get set to
:00:27. > :00:40.announce its latest numbers, with warnings of a massive loss. Thank
:00:41. > :00:43.you for joining us on Asia Business Report. I'm Rico Hizon. Australians
:00:44. > :00:46.were warned it would be tough, and it was. The country's first Budget
:00:47. > :00:49.under the Abbott government includes plans to nearly cut the deficit by
:00:50. > :00:52.half, with reductions to welfare and higher taxes, and at the same time
:00:53. > :00:55.the government is increasing spending on infrastructure. The aim
:00:56. > :00:58.is to bring the deficit of nearly $50 billion down to about $30
:00:59. > :01:02.billion next year. To help with that goal, higher income earners will pay
:01:03. > :01:04.a special tax for the next three years. The new levy also applies to
:01:05. > :01:08.members of Parliament. Benefits for families have been reduced as well.
:01:09. > :01:11.On the investment side, the government promised to spend $11
:01:12. > :01:14.billion over five years on infrastructure spending. Phil Mercer
:01:15. > :01:17.in Sydney had a very early start this morning, he was out and about
:01:18. > :01:21.getting people's reaction to the budget.
:01:22. > :01:27.Pain with purpose, is how the government is describing its efforts
:01:28. > :01:30.to balance Australia's books. There will be sweeping cuts to welfare,
:01:31. > :01:35.tax cuts for higher income earners, and the retirement age will rise to
:01:36. > :01:38.70 further down the track. Government spending will be slashed,
:01:39. > :01:43.and thousands of public servants will lose their jobs. The aim is to
:01:44. > :01:48.save $34 billion in the next four years. The morning after,
:01:49. > :01:55.Australians are digesting their country's harshest Budget since the
:01:56. > :02:02.late 1990s. Tax hikes are probably a reasonable thing, cuts to welfare
:02:03. > :02:05.are bit questionable. If the previous government stuffed the
:02:06. > :02:10.country up, we have to try to fix it. Everyone has to help out, pay to
:02:11. > :02:17.go to the doctor, that is what we have to do. I think it is hard on
:02:18. > :02:21.health and education, but things have got to be sorted out, so as
:02:22. > :02:23.long as it is only short`term. The government says the budget will
:02:24. > :02:30.strengthen the Australian economy for decades to come. Billions will
:02:31. > :02:33.be spent on road, rail and port projects, to boost prosperity, as a
:02:34. > :02:40.decade`long resources boom comes to an end. Critics have labelled the
:02:41. > :02:50.Budget regressive and shortsighted. The opposition party has described
:02:51. > :02:53.it as a string of broken promises. Ministers will be expecting a
:02:54. > :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. > :03:20.describes as a long`term budget repair job. I spoke to a
:03:21. > :03:23.representative from a finance company in Sydney. I asked him if
:03:24. > :03:29.this was the budget we had to have? Absolutely. We have had years of
:03:30. > :03:32.mismanagement from previous governments, and I think this is a
:03:33. > :03:41.pill we have to swallow. Will these goals be achievable? I think this is
:03:42. > :03:44.an interesting question. I think if the Australian economy continues in
:03:45. > :03:47.this direction, it should do it. One of the fear is that we hold is what
:03:48. > :03:53.happens to its major trading partner, China. Our expectations of
:03:54. > :03:59.economic growth just happen to be linked to China, and if China
:04:00. > :04:03.continues to slow down, so will the Australian economy. I think given
:04:04. > :04:07.the budget, given where Australia stands at the moment, and the growth
:04:08. > :04:12.in the Asia region, I think the goals will be achieved. If China
:04:13. > :04:18.starts to slow down, more than what we expect, then it will be more of a
:04:19. > :04:23.concern. So, the economy is tied to progress in the Chinese economy as
:04:24. > :04:25.well. Taking a look on a local level, what will this budget level
:04:26. > :04:30.mean for you and your fellow Australians? I think it really means
:04:31. > :04:36.that we will be paying a little bit more. I know it is always hard to
:04:37. > :04:41.follow, but when you look at all the increases in the tax hikes, when you
:04:42. > :04:47.look at the increase in some of the subsidies, increase in some of the
:04:48. > :04:50.payments on the Medicare side, it is a bit tough, particularly for low
:04:51. > :04:56.income earners. At the end of the day, I think it is something that
:04:57. > :05:01.they will have to take. We are also getting tax hikes for the higher
:05:02. > :05:07.income as well, so it really is spread across the entire spectrum.
:05:08. > :05:12.When you look at it, it is a tough Budget, but everyone has to pay a
:05:13. > :05:16.little. In other business news, a top court in the European Union has
:05:17. > :05:22.ruled that Google must amend some search results if it is asked to do
:05:23. > :05:27.so by an individual. The landmark ruling found that a person has the
:05:28. > :05:29.right to ask the search engine giant to remove information under
:05:30. > :05:32.particular circumstances. That is, individuals have a right to be
:05:33. > :05:37.forgotten. Google said the ruling was disappointing. India's stock
:05:38. > :05:43.market, set to open in about an hour, headed to record highs on
:05:44. > :05:46.Tuesday after breaking new records at the start of the week. The rupee
:05:47. > :05:53.rallied to its strongest point in ten months. It follows the end of
:05:54. > :05:58.five weeks of voting across India. Analysts say it is a sign investors
:05:59. > :06:05.are confident that Narendra Modi's pro`business party, the BJP, will
:06:06. > :06:11.win the election. Votes will be counted on the 16th of May. It is no
:06:12. > :06:15.secret that the electronics business is a tough one, and no business has
:06:16. > :06:19.been feeling the pain more than the Japanese giant, Sony. Just how big
:06:20. > :06:22.the challenges the company is facing will become clearer today, when it
:06:23. > :06:28.announces its latest report, with warnings of a massive loss. We
:06:29. > :06:30.explain why Sony, once the undisputed market leader, has been
:06:31. > :06:33.struggling. Sony was once the king of consumer
:06:34. > :06:41.electronics, but it has fast been overtaken by competitors like Apple
:06:42. > :06:44.and Samsung. It is expected to book annual losses of $1.3 billion. That
:06:45. > :06:48.is despite undergoing restructuring of the firm, plans to cut 5000 jobs,
:06:49. > :06:55.and the $1 billion sell`off of its headquarters in Manhattan. The big
:06:56. > :06:59.drag on its bottom line has come from its TV and personal computer
:07:00. > :07:03.divisions. It prompted Moody's to cut its credit rating to junk status
:07:04. > :07:06.this year. Part of the losses have been put down to 1`off costs, linked
:07:07. > :07:12.to its decision to exit the PC business and sell off its brand of
:07:13. > :07:15.computers. There has been pressure to ditch its television division as
:07:16. > :07:19.well, a fiercely competitive sector with slim margins, but so far the
:07:20. > :07:26.firm is resisting the move, and is instead splitting the unit into a
:07:27. > :07:29.wholly owned subsidiary. It could prove to be a costly decision for
:07:30. > :07:37.the top executives, could be forced to forego their bonuses for yet
:07:38. > :07:39.another year. Some may now be asking why Sony is so different to other
:07:40. > :07:49.gadget makers like Panasonic and Sharp. Both of them have turned
:07:50. > :07:56.their fortunes around, and are back in the black, after huge losses last
:07:57. > :07:59.year. Earlier, I spoke to an expert, asking him what Sony should do with
:08:00. > :08:02.its business. It is one of the toughest business sectors, they are
:08:03. > :08:10.struggling to turn it around, moving it into a separate subsidiary. The
:08:11. > :08:21.pace of innovation in that segment is not enough for Sony to be able to
:08:22. > :08:25.differentiate and command a premium. It is a tough business, I don't see
:08:26. > :08:28.them providing any answers yet as to how they can bring back
:08:29. > :08:36.profitability. It is a tough business, as you say. Should they
:08:37. > :08:43.just shut it down? We all have associated televisions with the Sony
:08:44. > :08:48.brand. Diversification is what they need to do. As we see a variety of
:08:49. > :08:52.different consumer devices having the screen, that is an opportunity
:08:53. > :08:56.to bring growth. What Sony is doing, with its foray into healthcare, is
:08:57. > :08:59.an interesting proposition. They could integrate consumer devices
:09:00. > :09:06.into a new value proposition in hospitals, as well as consumers.
:09:07. > :09:11.That is an interesting idea. They will need more of these ideas to
:09:12. > :09:14.help drive growth and profitability. The PlayStation is doing very well,
:09:15. > :09:22.the movie business is profitable. When do you think this healthcare
:09:23. > :09:28.business will bring in revenues? To make the company again profitable? I
:09:29. > :09:31.think they are making tough decisions in terms of selling the PC
:09:32. > :09:37.business, and as a result they are left with only the television
:09:38. > :09:40.business. The remaining parts of the business are growing, there is
:09:41. > :09:43.profitability. The real value can come through Sony if it can
:09:44. > :09:49.integrate the various pieces of its business, from the television to the
:09:50. > :09:50.software to the music. And, have a greater impact on the consumer
:09:51. > :09:57.lifestyle. Asian stocks are inching upwards
:09:58. > :10:07.after another strong day. Asian stocks are inching upwards
:10:08. > :10:13.after another South Korea and Hong Kong in positive territory. Japan
:10:14. > :10:28.and Australia are territory. `` Australian and Japanese shares
:10:29. > :10:42.are moving sideways. Thank you for investing your time with us.
:10:43. > :10:49.Our top stories: An explosion at a coal mine in western Turkey has
:10:50. > :10:51.killed at least 160 people. `` it has