THE NEWS WRAP: Gillard warns “all reasonable options are on the table” in the federal budget

Prime Minister Julia Gillard has warned “every reasonable option is on the table” to deal with a $12 billion budget shortfall and fund the Gonski school funding reforms and NDIS, in a speech delivered to the Per Capita Institute yesterday.

 

“I have expressly determined we need to have every reasonable option on the table to meet the needs of the times – even options previously taken off the table… The nation and the government must have maximum flexibility to deal with these complex, and rapidly changing, events … that is my approach,” Gillard said.

 

“All options are on the table, so increased tax on superannuation, increased taxes on the family home, death duties, which Wayne Swan ruled out in Parliament – all options are on the table,” Shadow Treasurer Joe Hockey said in response.

 

Merrill Lynch downgrades Woolworths over $800 million Masters loss

 

Merrill Lynch has downgraded its earnings estimates for retail giant Woolworths over concerns its home improvement chain Masters is set to lose $800 million over the next four years.

 

Despite Masters generating gross margins of 42%, compared to 32% at rival Bunnings, the brokerage firm predicts losses for the chain of $135 million this financial year, rising to $265 million in 2015/16.

 

“The problem for Masters is, despite its very high gross margin… its costs per store are currently inhibitively high,” analyst David Errington said.

 

BHP sells US Pinto Valley mine for $629.5 million

 

Mining giant BHP Billiton has announced it has sold its Pinto Valley copper mine in Arizona to Canadian firm Capstone Mining for a better-than-expected price of $629.5 million.

 

Pinto Valley was one of 10 non-core assets or offshore assets flagged for sale by BHP in response to weaker cashflows as a result of lower commodity prices.

 

Overnight

 

The Dow Jones Industrial Average is up 0.72% to 14,818.75. The Aussie dollar is down to US103.51 cents.

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