Business News Online

By cutting interest rates on Tuesday, some economists believe the Reserve Bank would be taking insurance now rather than leaving it until later.

A move now could pre-empt further bad news globally, Richard Webb reports.

THANK weak retail spending in the run-up to Christmas. Thank subdued underlying price inflation in Australia. But most of all thank the spreading sovereign debt crisis in Europe.

That’s the principal reason why most economists expect the Reserve Bank will cut interest rates again at its December meeting on Tuesday, despite news on Friday night of a German-led drive for fiscal union among the 17 euro-zone members.

Remember too that while another rate cut is potentially good news for those with home mortgages, it is not so good for those with an increasing pile of savings on deposit.

But economists say it is clear the non-mining sector of the Australian economy has been struggling for some time, and with the European crisis already lifting bank funding costs, they argue that Australian interest rates need to be lower, and soon.

Interest rates should be acting in a neutral fashion on the economy, they say, and there are arguments that Australia should even move to a protective stimulus.

While there is much debate as to what the Reserve Bank deems as a neutral setting for rates, the consensus is it is somewhere between 4.0 per cent and 4.5 per cent for the cash rate.

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All homeowners should consider if they want to use the service of a letting agency before they begin to rent their property. Also this consideration is very important for tenants. For example, if a person wants to move out but he or she can not break the leasing agreement. This case, a professional agent can help find a tenant. Surely we can do everything ourselves, but is it that easy? Let’s look at the whole picture.

Being a landlord can be done part time or full time, but no matter how long you are able to devote to it, it is certainly a business you as an owner must take seriously. To begin with, every day that the property is left blank, means you lose money. I Read more…

According to information from the Office of Advocacy, just two years ago, there were approximately 27.5 million businesses nationwide. Whether you are a new small business about to unveil itself, or a business that has been around for some time, you will often be asked about your business plan. Simply put, the business plan involves the business owner laying out in detail how they will go about placing their company in a strong position in the marketplace, how they will finance their operation, and how they plan to earn a good return on investment .

While answering those three questions can be difficult, keep in mind that just about every business owner has some business plan in place for when they open up, with that plan being reviewed and retooled over time to make sure the company is meeting its goals.

In the event that you have a business plan in place, but do not feel that your company is benefitting from or adhering to it like it should, keep several factors in mind:

• Review your original goals – Why did you get in business in the first place? Wha

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Changes to VAT and business investment tax relief could do much to stimulate the rural economy, says Mike Harrison of accountant Saffery Champness. On VAT, the Chancellor could use his autumn statement on 29 November to introduce a reduced rate for property works to boost maintenance and extension work in the building trade, he says. 

Tourism could also be encouraged through a reduced rate of VAT, encouraging more holidays at home and in the countryside to aid the rural economy.

Although larger companies will benefit from lower corporation tax rates from April 2012, there was nothing to help partnerships or sole traders cope with the reduction in capital allowances next spring, so the Chancellor could offer these businesses enhanced allowances to stimulate investment, suggests Mr Harrison.

Diversified businesses could also be helped if the tax rules were changed to allow losses in one business to be offset against the profits of another.

Is the European Union in Danger of Collapse?

Bank of America Merrill Lynch became the latest investment bank to open the door to the once unthinkable collapse of the euro, underscoring the deepening investor fear about Europe’s debt debacle.

The brokerage said it now sees just three outcomes for the euro zone: fiscal integration, a limited liability partnership and a breakup, which is not its baseline scenario.

“Any break-up or withdrawal from the [euro zone] would unlikely be orderly. There would be large shocks to all currencies involved,” BofA Merrill Lynch foreign exchange strategists Richard Cochinos and David Gray wrote in the note.

If the euro broke apart, it would likely entail a full dissolution with all countries returning to their original currency or a partial union with only some nations exiting — the more likely outcome, BofA said.

Under the partial breakup outcome, the analysts projected an “initial shock” that would cause a “violent swing in the euro,” followed by the currency settling about 2% lower on Germany’s departure and 2% to 3% higher in the case of Spain, France and Italy leaving.

In the less likely scenario of a total breakup, BofA said the currencies of Germany, Ireland and the Netherlands are undervalued against the U.S. dollar, while t

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McDonald’s dropped an egg supplier Friday, following reports of cruelty.

Mercy for Animals, a non-profit organization devoted to animal welfare, produced a video alleging abuses at farms run by McDonald’s egg supplier Sparboe in Iowa, Minnesota and Colorado depicting hens packed into industrial cages too small for them to spread their wings.

The video also suggest additional cruelty, including dead fowl left to rot in cages with egg-laying hens, blood on eggs, chicks’ beaks being burned off, chicks being crushed in worker hands and other birds being simply thrown away.

Sparboe Farms could not immediately be reached for comment. According to the company website, Sparboe is “the first egg producer in the nation to be certified by the U.S. Read more…