THE NEWS WRAP: Wesfarmers boss warns about talking down the economy

Wesfarmers chief executive Richard Goyder has warned that negative chatter risked harming consumer confidence, in stark contrast to the good news coming from the World Economic Forum in Davos.

“In January I left Davos feeling really good about the world, having been there for a week and people were talking up the US economy, being pretty satisfied where Europe was and satisfied where the rest of the world was, and I’ve come back to Australia to incredibly pessimistic sentiment and I can’t reconcile the two, to be frank,” Goyder says.

“I think consumer sentiment is still somewhat fragile and I think we all need to be careful that we don’t inadvertently, or otherwise, talk it down when the bottom line is, I think, Australia is still very well placed economically.

“You have got superannuation funds that will be performing well, people’s wealth increasing as housing prices move up, employment is still generally strong, interest rates are low and we all have to be careful we don’t get ourselves into a downward spiral … it’s not helpful.”

Abbott pushed for wage cuts at SPC Ardmona

The federal government pushed SPC Ardmona to slash employee wages by up to 40% in order to receive a bailout package, with some staff at the Shepparton plant seeing wages slashed by $20,000 to $30,000 a year, according to a Fairfax report.

While Industry Minister Ian Macfarlane did not directly address the claims, he did stress the importance of boosting productivity in reducing labour costs.

“I do want to reduce labour costs but it’s not necessarily reducing wages,” Macfarlane says.

“If we boost our productivity, if we increase the number of units that a person produces, then wages can remain stable but we do have to have competitive working conditions and we do have to make sure that some of the things that have happened in industry in Australia in the past are addressed.”

Sensis slashing 800 jobs

Sensis has announced it is cutting 800 jobs, with 330 jobs to go in Victoria and 400 in NSW, as part of a restructuring plan, with half of the positions being sent to the Philippines.

“These changes are designed to support our growing digital business, respond to competition and deliver improvements in the service we provide to our customers,” Sensis managing director John Allan says.

“As a leader in digital marketing services and print directories serving Australian businesses, Sensis needs to remain responsive to the changing media landscape. While these decisions are difficult, they are necessary to ensure Sensis maintains its competitive position.”

Overnight

The Dow Jones Industrial Average is down to 16,066.3 points. The Aussie dollar is down to US90.02 cents.