THE NEWS WRAP: Coalition crows about government surplus backflip but economists welcome move

Shadow treasurer Joe Hockey has said that he cannot guarantee the Coalition will bring the budget back into the black, despite calling the government’s abandonment of the surplus as “humiliating.”

Hockey said he wasn’t going to make “enormous promises based on misinformation.”

Meanwhile, economists have broadly welcomed Treasurer Wayne Swan’s decision to ditch the surplus pledge, while a survey of top company CEOs found that 61% backed the move.

Rate cuts losing potency: RBA

Interest rate cuts are becoming a less effective way of stimulating the economy, according to a paper produced by the Reserve Bank of Australia.

Despite fevered media coverage of every monthly RBA decision on rates, the central bank said that the official cash rate was diminishing in importance as more Australians derive income from interest-bearing deposits.

Maker Studios raises $36 million

Maker Studios, a video start-up that is one of the most prolific YouTube publishers, has secured $36 million in finance from a group led by Time Warner Investments.

The business has raised a total of $44 million to date, with the funds used to partner with YouTube content creators.

Overnight

Then Dow Jones Industrial Average was up 0.45% to 13,311.72. The Australian dollar dropped to US104.88 cents.