THE NEWS WRAP: Recovery two years away, Aussie dollar set to remain strong

Australia’s GDP growth rate is set to remain at 2.5% to 3% for the next two years, while the Aussie dollar to remain above 90 US cents for a further four, according to a new report from BIS Shrapnel.

“This suggests that the fall in the dollar will be painfully slow,” senior BIS Shrapnel economist Richard Robinson says.

“From the point of view of the next structural shift in the economy, it will seem like an eternity.”

Indonesia spy row puts trade at risk

Elders chief executive Malcolm Jackman has warned Australia’s spy row with Indonesia risks putting trade at risk, with the nation’s largest live cattle exporter urging a swift resolution to tensions.

“My observation is on both sides, Australian and Indonesian, there has been a bit of rhetoric, but on the other hand… everybody wants to keep this as a diplomatic issue. As a businessman leading a company that has a large presence in Indonesia I endorse those sentiments,” Jackman says.

“There’d be no winners from a trade point of view in terms of any of this rhetoric turning into action.”

Murray Goulburn boss calls for a merger with Bega

Murray Goulburn has warned farmers they risked getting “absolutely whacked” if Australian dairy companies can’t achieve enough scale to make them internationally competitive against multinational food manufacturers.

During the speech, Murray Goulburn managing director Gary Helou also called for the creation of a super-co-operative through a merger with Bega as the battle for Warrnambool Cheese and Butter intensifies.

“If we remain a $500 to $600 million dollar turnover business, well guess what? The big guys are going to come in and whack you.

“Absolutely whack you like they’ve done with Warrnambool. It’s not of a scale that can defend itself. Warrnambool and us [would] achieve a defendable base.

“The brutal reality is we are not going to sell into Bega. Bega has got to sell into us, or merge with us.

“We are a co-operative. We don’t want to mess with that structure. It’s absolutely non-negotiable.”

Overnight

The Dow Jones Industrial Average is up 0.3% to 16064.8. The Aussie dollar is up to US91.82 cents.