10/05/2017 Asia Business Report


10/05/2017

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Now on BBC News, all the latest business news live from Singapore.

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Australia logs a decade of Budget deficits, putting its AAA credit

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rating at risk. Soars to an all-time high, adding $1 million to its

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market value -- Bitcoin soars to an all-time high. It is Wednesday. Glad

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you could join us for this midweek edition of Asia Business Report. I

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am Rico Hizon. Australia's Budget is expected to be in the red until at

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least 2021, and markets are down. As you can take a look at the market

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boards, the ASX 200 has fallen nearly one third of a percent in

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early trade. Late on Tuesday the government announced a huge

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infrastructure spending plan worth $55 million -- $55 billion and the

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stimulus is expected to create thousands of jobs across the country

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but will also lead to a wider than expected deficit of $22 billion for

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the current fiscal year. Earlier I spoke to the realm -- earlier I

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spoke to Cherelle Murphy from ANZ bank. We are likely to get a few

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more deficits from here on in. We were heavily impacted by the global

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financial crisis, and we are really just still recovering from that.

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There has been certainly a lot of changes in taxes, particular at the

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household level, and new spending measures which were put in when

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times were good and of course now that times are a little bit tougher,

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and particularly with commodity prices having come off their highs

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from 2011, it has been harder and harder for the government to get

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revenue back up to where it used to be ten years ago. And with more

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deficits to come, Cherelle, is Australia's AAA rating at risk?

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Look, I think the credit rating agencies will not he urgently moving

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to move our credit rating. I wouldn't say that the issue has been

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put to bed though, either. There are certainly some things in the Budget

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that would comfort the credit rating agencies, the fact that the

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government removed the so-called zombie measures, measures from

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previous budgets which were never realistically going to get through

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the Parliament. The government removed all of them, it was a cost

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of $13 billion to do so. Credit rating agencies didn't like that.

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Also the new policy is that the government has brought in are

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arguably more likely to pass the Parliament so the Budget looks more

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credible. Also, of course, there is a return to surplus projected by the

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end of the forward estimates, so by 2019/2020, sorry, I 2020 one. And

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what that means is of course that there is a recovery plant through

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both revenues and expenditure. Now, a lot of analysts, including

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yourself, have criticised the government in the past for being a

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little bit too optimistic about that. But you would have to say that

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now, compared to more recent years, we do have a more likely outcome of

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surpluses, given the economy is starting to pick up. And Miss Murphy

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referred to comment on the Australian government's new bank

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tax. Treasurer Scott Morrison hopes to raise $4.6 billion from the levy

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from the balance sheets of the country's five largest banks. It is

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estimated it will add 10% to their liabilities. The Australian bankers

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Association slammed the move move, saying it is a direct attack on jobs

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and growth. In business news making headlines, shares in Rupert

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Murdoch's news Corp rising 2% after its earnings beat forecast, much of

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the growth coming from the expansion of its real estate website which had

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a big increase in traffic. As well as profits and revenue. Shares in

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Walt Disney falling nearly 2% after its revenues missed market

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expectations, coming in slightly under forecast at $13.3 billion.

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Disney's boss says there has been significant growth in subscribers to

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digital services, but not enough to make up for losses. Bitcoin surged

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above $1700 for the first time ever. In the last 24 hours alone its

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market cap has risen by more than $1 billion, according to an industry

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website. But in India, where there have been complaints that virtual

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currencies are being used for money-laundering, the government has

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been pressured into figuring out how to manage them. Will regulation

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help? Our correspondent spoke to Michelle Gupta, part of a foundation

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to monitor transparency in India's market. The Bitcoin market has been

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growing at 100% per annum. It is a million-dollar company within the

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foundation. In India, the growth has been phenomenal. And I think there

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is a lot of attention within the media in the country and it has led

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to the government paying attention to it. But if you look at the

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comments from the Indian government, they are really concerned about

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Bitcoin. The Finance Minister has said that people should be cautious,

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they shouldn't deal in Bitcoin. You have a Member of Parliament who has

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called it a 'Ponzi' scheme, a pyramid 'Ponzi' scheme. The central

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bank has warned investors, so clearly there are consequences. The

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volatility involved, they will make an informed choice in terms of

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making investment in Bitcoin or other crypto currencies. And as far

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as people calling it a 'Ponzi' scheme, there have been some

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instances in India where certain pyramid scheme companies have turned

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up across India, and that is probably creating emotion, and the

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popularity of Bitcoin means they have nothing to do with Bitcoin, and

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they offer unrealistic returns to investors. I think it is fair for

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the government to warn the general public that they need to be aware.

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And people need to be more aware and understanding of how Bitcoin works.

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So what are the benefits of Bitcoins? What are the advantages if

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they legalise? I think Bitcoin has advantages in India. Creating a bank

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account is still not easy, and we are seeing this penetration of

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mobile technology and systems like Bitcoin make it cost-effective for

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people who come into the financial inclusion system, and there are real

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implications for that. The second part of it is value transfer. There

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are billions of dollars which come in, and the costs are really high.

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If the governments and banks would Hamas the power of technology and

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instruments like Bitcoin, that could really bring down the costs -- would

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harness the power. The problem the US economy has with migrant workers

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is that it needs more of them. Agriculture and tourism is feel it

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particularly badly. Our correspondent reports from a farm in

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New Jersey. Farmer Kurt Dawson get to spend as much time in the field

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as he used to, or as he would like. He is a first-generation farmer. For

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him, agriculture was a calling, to do God's work. As we to his 600 acre

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property, he admits his business would not be thriving without

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outside help. Agriculture as we know it would not be able to survive if

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the people who were working today as undocumented workers were not in the

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workforce. During peak season, Farmer Kurt has more than 200 people

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working for him. 50 are here on temporary visas, like Ivan. He

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leaves his wife and two daughter 's Arica eight months of the year and

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has been doing so for the last six six years. -- in Costa Rica. You

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can't find sufficient Labour, and you don't know from year-to-year if

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you are going to be able to find the workers legally. So you wonder why

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people turn to doing things under the table, and why they turned to an

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undocumented worker. Because we don't even have the resources in

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place to allow legitimate employers the legal means to hire people

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properly. This farm depends on guest workers, but the application process

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for temporary visas is expensive and cumbersome. Farmer Kurt needs more

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workers, and needs them faster, and it would seem, so does the US

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economy. We have very close to full employment. That is great, and it is

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good for... We want wages to grow up, and we wanted to a tight Labour

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market we want the economy to expand beyond the current Labour force, so

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I think you do need immigrants to come in and help that to expand. I

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think that is a good thing. The rhetoric surrounding immigration has

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become harsher and focused on more and more constraint. But the fact is

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that a huge number of American businesses in different industries

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are dependent on the Labour of overseas workers. And what these

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businesses want is for the President and for Congress to focus on the

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reality. Let's have a look at the markets, and Asia is currently mixed

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in early morning trade, due to revive the worries about North Korea

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and the lacklustre mood on Wall Street overnight. Tokyo's stocks

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opening higher as the yen remains weak on expectations for global

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recovery growing. Expectations are down due to lower oil prices. Thank

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you for investing your time with us. Have a wonderful Wednesday,

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everyone. I am Rico Hizon. Goodbye for now.

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You are watching BBC News, I'm Greg Dawson.

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The top stories this hour: US President Donald Trump has

:10:42.:10:44.

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