Australia must diversify economy: report

FIVE "super growth" industries could boost the national economy by $250 billion over the next 20 years.

Mining is expected to remain a major driver of prosperity, according to a new Deloitte Access Economics report released on Tuesday, with agribusiness, gas, tourism, international education and wealth management well-placed to join it.

In the third of Deloitte's Building the Lucky Country reports, co-author Chris Richardson says Australia's economy cannot be built solely on natural resources.

"The boom is slowing and our competitive advantage is being challenged," he says.

"It's all about catching the next wave. We need another wave - or several - to create a more diversified growth."

Australia already has a comparative advantage.

The report cites world-class resources in land, minerals and energy; proximity to the world's fastest growing markets in Asia; use of English as the world's business language; a temperate climate; and well-understood tax and regulatory regimes.

Agribusiness, gas, tourism, international education and wealth management offer high growth and could give Australia a further advantage as the global population grows, Asia's middle-class expands and cleaner energy is sought.

Global markets for gas, tourism and agribusiness alone are each expected to grow over the next 10 to 20 years at least 10 per cent faster than global gross domestic product at 3.4 per cent a year.

"Exceptional growth in these five sectors could add an additional $25 billion to Australia's GDP in 2033 or a boost of about one per cent to an economy turning over $2.6 trillion in today's dollars," Mr Richardson said.

He also expects a retreat in the Australian dollar to 80 US cents in the longer term will further help these sectors.

Deloitte chief strategy officer and co-author Gerhard Vorster said business has to take the lead in positioning Australia as a competitive global force in these sectors.

He said governments play a supportive role in managing the challenges of labour markets, providing more efficient regulation and tax regimes and a stable and clear set of policy rules for business.

"But ultimately, it is up to business leaders to put in the hard work."

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Greece expects economy to grow, finally

GREECE expects its economy to grow next year - at last.

In its draft budget presented on Monday, the government forecast the economy would grow 0.6 per cent, the first annual improvement after a brutal six years of contraction.

This year it is predicted to shrink four per cent, leaving the economy 25 per cent smaller than when it was first hit by the financial crisis in 2008.

The government even expects some jobs growth and a continued improvement in public finances through further spending cuts, but without new taxes. Deputy Finance Minister Christos Staikouras cited a rise in investment and exports.

Greece's economy was hit like many others by the global market turmoil in 2008.

But its problems multiplied in late 2009, when it revealed that its public debt was far higher than expected as a result of dodgy book-keeping.

That scared international investors away from buying its government bonds, bringing the country to the brink of bankruptcy in early 2010.

It was saved when other European countries and the International Monetary Fund stepped in with two massive bailouts.

In exchange, however, Athens had to make harsh spending cuts and tax increases to rein in the runaway deficits.

The reforms devastated the economy and eroded standards of life.

The country is now seeing signs of hope, though the recovery is expected to be slow.

The draft budget Staikouras presented foresees a slight drop in unemployment - from 27 per cent in 2013 to 26 per cent next year.

That is still not far from the 28 per cent hit in June, which is the highest rate among the 17 countries that use the euro currency.

Staikouras warned the government cannot afford to relax its five-year austerity drive, with further reforms and privatisations needed.

Athens continues to face a crushing debt load, expected to reach 174.5 per cent of annual output next year.

The minister said the conservative-led government had been able to reduce government overspending to 2.4 per cent of output this year, from 6 per cent in 2012 and more than 15 per cent three years ago.

According to the draft budget, the deficit will remain at the same percentage in 2014.

The final version of the budget will be tabled in Parliament following extensive negotiations with Greece's bailout creditors, and is expected to be voted in December.

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Greece expects economy to grow, finally

GREECE expects its economy to grow next year - at last.

In its draft budget presented on Monday, the government forecast the economy would grow 0.6 per cent, the first annual improvement after a brutal six years of contraction.

This year it is predicted to shrink four per cent, leaving the economy 25 per cent smaller than when it was first hit by the financial crisis in 2008.

The government even expects some jobs growth and a continued improvement in public finances through further spending cuts, but without new taxes. Deputy Finance Minister Christos Staikouras cited a rise in investment and exports.

Greece's economy was hit like many others by the global market turmoil in 2008.

But its problems multiplied in late 2009, when it revealed that its public debt was far higher than expected as a result of dodgy book-keeping.

That scared international investors away from buying its government bonds, bringing the country to the brink of bankruptcy in early 2010.

It was saved when other European countries and the International Monetary Fund stepped in with two massive bailouts.

In exchange, however, Athens had to make harsh spending cuts and tax increases to rein in the runaway deficits.

The reforms devastated the economy and eroded standards of life.

The country is now seeing signs of hope, though the recovery is expected to be slow.

The draft budget Staikouras presented foresees a slight drop in unemployment - from 27 per cent in 2013 to 26 per cent next year.

That is still not far from the 28 per cent hit in June, which is the highest rate among the 17 countries that use the euro currency.

Staikouras warned the government cannot afford to relax its five-year austerity drive, with further reforms and privatisations needed.

Athens continues to face a crushing debt load, expected to reach 174.5 per cent of annual output next year.

The minister said the conservative-led government had been able to reduce government overspending to 2.4 per cent of output this year, from 6 per cent in 2012 and more than 15 per cent three years ago.

According to the draft budget, the deficit will remain at the same percentage in 2014.

The final version of the budget will be tabled in Parliament following extensive negotiations with Greece's bailout creditors, and is expected to be voted in December.

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Jetstar to fly Dreamliners

BUDGET carrier Jetstar will fly its new high-tech Dreamliner aircraft from Melbourne to the Gold Coast, starting in November.

Qantas and Jetstar chief executives Alan Joyce and Jayne Hrdlicka have toured Boeing's factory in Seattle, as the group prepares to take delivery of its first Dreamliner in Melbourne on Wednesday.

Ahead of the maiden flight to Australia, Jetstar has announced that tickets for the first Boeing 787 Dreamliner flight would soon go on sale for travel between Melbourne and the Gold Coast on November 13.

But this is subject to approval from the Civil Aviation Safety Authority, which is required for all new aircraft types.

Dreamliner services will also operate between Melbourne and Cairns before international services are launched towards the end of 2013.

Qantas has ordered 14 Dreamliners, which will gradually replace Jetstar's Airbus A330 aircraft which fly to long-haul destinations like Honolulu, Phuket, Bali and Tokyo.

The A330s then will be moved into the Qantas mainline fleet, as part of a plan to retire ageing and less fuel efficient Boeing 767s by mid-2015.

Qantas also has options for 50 Boeing 787s from calendar 2016.

During the factory floor tour, Mr Joyce addressed reliability concerns about the Dreamliner.

"The 787, like any new aircraft, has had a number of teething problems with its introduction but it's actually had a smoother introduction than the 777 which is the last large aircraft that Boeing introduced," he said.

Last month, budget airline Norwegian Air Shuttle demanded Boeing take back a Dreamliner and fix a faulty hydraulic pump after only 30 days in service.

"It's important to distinguish reliability from safety. Sometimes in people's minds they can be really concerned," Mr Joyce said.

"Reliability in new aircraft takes a while to get up there. It's not a safety issue.

"We're very comfortable this is an extremely safe aircraft."

Boeing 787 vice president and general manager Larry Loftis said the ambition to build the most technologically advanced aircraft in five decades had been a logistical challenge since production began in 2007.

"From a reliability standpoint ... we're working to make sure the airplane continually improves and becomes more and more reliable," he told reporters.

"We put a lot of new technology in this aircraft and over-estimated the ability to bring this new technology to market in the time frame which we committed."

The Dreamliner is 20 per cent more fuel efficient than comparable wide-bodied aircraft with about 300 seats.

It uses carbon fibre composite graphite instead of traditional aluminium.

But 50 Dreamliner jets were grounded globally in January when lithium-ion batteries caught fire on two Japanese airlines.

They returned to the skies in April but an emergency transmitter on a Boeing 787 caught fire at London's Heathrow airport in July on an Ethiopian Airlines plane.

Mr Joyce said the lighter Dreamliners would reduce fuel costs in the Qantas group, and help enable the airline to have an even younger fleet than Singapore Airlines "in the next couple of years which we haven't seen in a long time".

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ASX BookBuild to launch on Tuesday

THE Australian Securities Exchange (ASX) has launched a new bookbuilding facility which it says will broaden the number and range of investors who can participate in this process to set the price of new shares.

In a bookbuild, the bookrunner, usually an investment bank, determines the price of shares to be offered based on the number of shares demanded by institutional investors and the price they are willing to pay for those shares.

Currently, participation in bookbuilds is via invitation and is limited to selected investors, usually major shareholders.

Under the ASX BookBuild facility, a wider market of potential buyers is available.

All investors could gain access if the offer of shares is a documented offer as determined by the Corporations Act.

But if the offer is undocumented, such as a placement of shares, only sophisticated investors can participate.

On-Market Bookbuilds (OMB) developed the ASX Bookbuild software.

"From today, ASX BookBuild is available to raise capital in a transparent, fair, efficient, and cost-effective way, drawing on the maximum number of potential investors in the marketplace," OMB chief executive Ben Bucknell said in a statement.

"Institutional investors benefit by having access to all capital raisings, and by seeing a live price.

"All investors, from retail to the largest institutional buyers, benefit by increased access and a level playing field."

Companies would benefit by accessing demand from all potential investors, lowering the cost of raising equity and have various means to control the price and allocation of shares.

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Target of US raid in Somalia named

THE target of raid by Navy SEALs in Somalia over the weekend was a Kenyan man named Abdulkadir Mohamed Abdulkadir, a US official says.

A Kenyan government intelligence document names him as the co-ordinator of other planned attacks.

The man, also known as Ikrima, was a known operator for the Somali militant group al-Shabab.

The document says that foiled plots by Abdulkadir included plans to target Kenya's parliament building and the United Nations office in Nairobi, as well as an Ethiopian restaurant used by Somali government officials.

It does not appear that Saturday's raid resulted in the killing or capture of Abdulkadir. The US official who confirmed the target of the SEAL raid insisted on anonymity because he wasn't authorised to discuss the matter.

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WWF seeks to protect Congo park

THE World Wildlife Fund is trying to block proposed oil exploration in Africa's oldest national park where 200 gorillas live.

The Swiss-based conservation group filed its complaint on Monday with Britain's Department for Business Innovation and Skills in a bid to stop SOCO International's exploration in Congo's Virunga National Park, a World Heritage site listed by UNESCO as being "in danger".

The WWF says SOCO's plan violates Organisation for Economic Co-operation and Development guidelines on sustainable development, public disclosure and other points.

The Department for Business Innovation and Skills is the arm of the British government responsible for overseeing compliance with OECD guidelines.

Last year the Congo government authorised SOCO, which is based in London, to explore the region, saying that economic interests take precedence over environmental considerations.

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American Airlines to hire 1500 pilots

AMERICAN Airlines says it will hire 1500 pilots over the next five years.

That's in addition to recalling all of the airline's pilots who have been furloughed.

American plans to start recruiting new pilots soon. It's already hiring 1500 new flight attendants.

Airlines have resumed hiring pilots in part because a large number are hitting a new mandatory retirement age of 65. The age was raised from age 60 a little over five years ago.

American earned $US71 million ($A76.70 million) in August, after losing $US82 million a year earlier. Revenue rose 7 per cent to $US2.34 billion.

American wants to exit bankruptcy protection in a merger with US Airways Group. First it needs to get past an antitrust lawsuit filed by the Justice Department. A trial is planned for November.

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Labor refuses to rule Rudd off front bench

LABOR leadership aspirants Anthony Albanese and Bill Shorten have refused to guarantee Kevin Rudd won't get a spot in shadow cabinet - although both insist the former prime minister doesn't want one.

The two went toe-to-toe for their third and final leadership debate on ABC TV's Q&A program on Monday night, with obvious differences in their policies once again proving few and far between.

When asked about Mr Rudd's future in the Labor party, both leaders quickly denied it would become an issue.

"Kevin Rudd doesn't want a position in the shadow cabinet. He's made that very clear that he is going to stay as the Member for Griffith," Mr Albanese said.

Mr Shorten said the party would be making a mistake if it publicly ruled out the former prime minister from the front bench.

"It's not up to the leader to say A and B are in and X and Y are out," he said.

"You get the best out of a team by involving the team.

"So while I certainly don't think he wants to nominate I certainly wouldn't be in the business of ruling him out."

Twitter lit up after the answer, with many users pointing out that Mr Rudd also once pledged never to seek a return to the Labor leadership.

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Abbott gives fresh assurances on boat plan

PRIME Minister Tony Abbott has given President Susilo Bambang Yudhoyono fresh assurances that Australia will not violate Indonesia's sovereignty amid ongoing tension over the coalition's plans to turn asylum seeker boats around.

While both leaders on Monday spoke of a united and cooperative approach to combating people smuggling, it was clear from comments following their talks in Jakarta that Mr Abbott's controversial boat tow-back plan remains a sore point in the relationship.

Speaking after what was his first bilateral meeting with Dr Yudhoyono since being elected prime minister, Mr Abbott on Monday evening said his discussions with the Indonesian president on people smuggling had been "very cordial, constructive and collegial".

"We are resolved together united to tackle this problem and to beat it - on land and at sea, and at the borders of our countries," Mr Abbott said.

"We are determined to end this scourge which is not just an affront to our two countries, but which has so often become a humanitarian disaster in our seas between our two countries."

However, Dr Yudhoyono stressed that it was Indonesia's view that the issue of asylum seekers would be best dealt with under the regional dialogue known as the Bali Process.

"They burden Indonesia," he said of asylum seekers.

"They give us social burden, they give us economic burden. And when some of them decide to continue their journey to Australia, they then bring more burden to Indonesia.

"It would be much better if cooperation at the bilateral level will flow even further based on the Bali Process so that we may both together overcome this challenge".

The meeting between the two leaders comes just days after the tragic sinking of an asylum seeker boat off the coast of Indonesia, and weeks of criticism out of Jakarta over Mr Abbott's plan to turn boats back.

Neither Mr Abbott or Dr Yudhoyono spoke in any detail about what was discussed in their meeting in terms of asylum seeker policy.

But Indonesia's Foreign Minister Marty Natalegawa later confirmed that Mr Abbott had given a fresh guarantee that Indonesia's sovereignty would be respected, in what was clearly a reference to the coalition's controversial tow-back policy.

"The Australian side constantly repeated their assurances that they would not take any action that contravenes Indonesian sovereignty," Dr Natalegawa told reporters.

"We are assured by that expression of commitment on the part of Australia."

The comments come after Dr Natalegawa last week warned the tow-back plan could violate his country's sovereignty and damage relations.

"We have had just now a very clear recognition on the part of the Australian government, the prime minister, that the issue of people smuggling is an issue that is a shared responsibility, a shared challenge for the two of us," he said.

"Therefore the ways to overcome it must be coordinated and cooperative ... (and) the ways and means will be respectful of Indonesian sovereignty."

Mr Abbott, who was accompanied by Foreign Minister Julie Bishop and Finance Minister Andrew Robb, met with Dr Yudhoyono for more than 30 minutes, also discussing trade and investment.

A group of Australian business leaders has also travelled to Jakarta as part of Mr Abbott's delegation.

Mr Abbott began his trip by laying a wreath at Kalibata Heroes Cemetery in south Jakarta, where many who died fighting in the Indonesian war of independence against colonialists are buried.

He will address a business breakfast on Tuesday morning before returning to Australia.

Later, during a speech at the Presidential Palace, Mr Abbott announced an Australian Centre for Indonesian Studies would be established to "strengthen and deepen" business, cultural, educational, research and community links.

The new centre is to be based at Monash University, with the Australian National University and the University of Melbourne also involved.

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