THE NEWS WRAP: BCA says low growth “the new normal”
Business Council of Australia president Tony Shepherd has warned a low growth environment is “the new normal”, with businesses and the economy needing to make structural adjustments in the years to come.
“We are now seeing that the economy is not as great as it looked. Is it the end of the world? No, it is not, but we will have significant structural adjustment issues in the coming years," Shepherd told The Australian.
"This is the new normal. We need to get used to it. Double-digit growth year on year has come to an end. This will require companies to be more efficient, more productive and more innovative."
Coles denies Bangladesh factory claims
Coles has defended its supply chain, denying claims aired on the ABC’s Four Corners program that it pays suppliers in Bangladesh too little to safely operate factories.
“Coles is currently contracted with just one supplier in Bangladesh for a small Mix clothing order, which will be completed in the next few weeks. Like all of our international suppliers, the factory working on this order has been audited to international standards and complies with our ethical sourcing policy,” a Coles spokesperson said.
“Our sourcing from Bangladesh has always been small – less than 5% of the total Mix clothing range – and we have no plans to source any further product from the country. Should this change in the future, we would audit any factory supplying to us and be prepared to sign the Bangladesh Safety Accord.”
The news comes as the Wesfarmers-owned supermarket giant signed a new supply deal for its $1 own brand bread with Goodman Fielder, which will see the food manufacturer secure a 10 cent per loaf price rise.
US senators looking to scrap Fannie Mae and Freddie Mac
A bipartisan group of US senators, led by Tennessee Republican Bob Corker and Virginia Democrat Mark Warner, have put forward a proposal to liquidate Fannie Mae and Freddie Mac within the next five years.
The proposal would see the mortgage finance firms, which were bailed out with $US187.5 billion from the US federal government as a result of the GFC, replaced with a new government reinsurer of mortgage securities.
“It lessens the footprint of the federal government in housing and winds down Fannie and Freddie. But at the same time it keeps the housing finance industry in a liquid state,” Corker said.
The Dow Jones Industrial Average is up 0.69% to 14760.31. The Aussie dollar is down to US92.57 cents.