Bernard Hickey details the key news over the weekend in 90 seconds at 9 am in association with the BNZ, including news emerging from G20 meeting in Toronto. The leaders of the 20 largest economies, including Australia, have agreed to halve their budget deficits by 2013 and stabilise their debt to GDP ratios by 2016, Bloomberg reported.
But this is a giant fudge between the conflicting aims of America, which wants to borrow and spend to restart its economy, and Europe and Japan, which want to cut their deficits to avoid financial market meltdowns. America appears able to continue to borrow and spend because it has the world's reserve currency and its interest rates remain low, in part because of a very accomodative monetary policy.
Meanwhile, the board dispute at Ron Brierley's Guinness Peat Group intensified over the weekend as New Zealand-based director Tony Gibbs called on the board to abandon the plan put forward by Australia-based Gary Weiss for a demerger. Gibbs wants a quick capital return to shareholders and a quicker shedding of GPG's underperforming Coats threads operation.
The GPG operation in London refused to publish Gibbs' statement and issued its own statement saying Gibbs' stance was not approved by the rest of the board, Stuff reported.
In Australia, new Prime Minister Julia Gillard has come out against previous PM Kevin Rudd's pro-immigration and growth stance. Gillard told Channel 9 over the weekend that she did not want to see Australia's population grow from its current 22 million to more than 36 million by 2050. Strong migration has helped Australia's economy grow quickly in recent years and boosted house prices to unaffordable levels in the major cities.
This raises questions for New Zealand, which is now dependent on Australia's growth for its own growth, and for many New Zealanders, who expect to be able to migrate to Australia without any restrictions.
"I don't believe in a big Australia," Welsh-born Gillard said. "Kevin Rudd indicated that he had a view about a big Australia, I'm indicating a different approach. I think we want an Australia that is sustainable," she told the Nine Network.
With 22 million residents, Rudd had expressed optimism about a "big Australia" with a population of more than 36 million people by 2050, achieved through rising birth rates and immigration.
But Gillard said such population growth could be problematic given Australia's water shortages, the difficulty in providing services across the vast landscape and transport infrastructure.
"I don't believe in simply hurtling down a track to a 36 million or 40 million population, and I think if you talk to the people of western Sydney or western Melbourne, or the Gold Coast growth corridor in Queensland, people would look at you and say, 'Where will all these people go?'," she said.
"I think we want an Australia that is sustainable. This place is our sanctuary, our home."
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