10/05/2017 Asia Business Report


10/05/2017

Live from Singapore, the essential business news as it breaks and a look ahead to the news that will shape the business day.


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

:00:00.:00:17.

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

:00:18.:00:28.

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

:00:29.:00:33.

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

:00:44.:00:47.

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

:00:48.:00:53.

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

:00:54.:00:57.

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

:00:58.:01:02.

early trade. Late on Tuesday the government announced a huge

:01:03.:01:04.

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

:01:05.:01:10.

stimulus is expected to create thousands of jobs across the country

:01:11.:01:14.

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

:01:15.:01:18.

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

:01:29.:01:32.

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

:01:33.:01:36.

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

:01:41.:01:46.

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

:01:54.:01:57.

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

:01:58.:02:01.

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

:02:02.:02:06.

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

:02:07.:02:11.

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

:02:20.:02:23.

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

:02:24.:02:26.

government removed the so-called zombie measures, measures from

:02:27.:02:29.

previous budgets which were never realistically going to get through

:02:30.:02:32.

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

:02:33.:02:36.

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

:02:44.:02:49.

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

:02:59.:03:06.

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

:03:10.:03:12.

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

:03:17.:03:21.

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

:03:22.:03:26.

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

:03:45.:03:51.

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

:04:02.:04:05.

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

:04:06.:04:10.

Walt Disney falling nearly 2% after its revenues missed market

:04:11.:04:13.

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

:04:14.:04:19.

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

:04:20.:04:23.

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

:04:24.:04:32.

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

:04:33.:04:38.

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

:04:43.:04:46.

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

:04:47.:04:49.

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

:04:50.:04:53.

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

:05:00.:05:07.

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

:05:08.:05:11.

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

:05:12.:05:16.

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,

:05:31.:05:35.

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

:05:36.:05:39.

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

:05:51.:05:55.

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

:06:04.:06:07.

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

:06:08.:06:15.

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

:06:21.:06:24.

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.

:06:31.:06:37.

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

:06:38.:06:45.

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

:06:58.:07:02.

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

:07:03.:07:06.

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

:07:07.:07:11.

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

:07:12.:07:15.

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

:07:16.:07:31.

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

:07:32.:07:35.

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

:07:36.:07:39.

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

:07:50.:07:54.

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

:08:03.:08:07.

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

:08:58.:09:01.

place to allow legitimate employers the legal means to hire people

:09:02.:09:07.

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

:09:11.:09:16.

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

:09:17.:09:23.

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

:09:24.:09:27.

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

:09:28.:09:31.

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

:09:32.:09:35.

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

:09:40.:09:43.

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

:09:44.:09:48.

that a huge number of American businesses in different industries

:09:49.:09:51.

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

:09:52.:09:56.

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

:09:57.:10:05.

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

:10:06.:10:09.

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

:10:10.:10:15.

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

:10:16.:10:19.

opening higher as the yen remains weak on expectations for global

:10:20.:10:25.

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

:10:26.:10:30.

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

:10:31.:10:34.

everyone. I am Rico Hizon. Goodbye for now.

:10:35.:10:36.

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

:10:37.:10:41.

The top stories this hour: US President Donald Trump has

:10:42.:10:44.

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