NSW Government backs down on solar tariffs: Midday Roundup

The New South Wales government has backed down on its plan to retrospectively reduce the solar feed-in tariff from 60 cents to 40 cents, according to reports. 

According to the Sydney Morning Herald, New South Wales premier Barry O’Farrell has said he will abandon plans to retrospectively apply the new rate.

Several solar firms said they opposed the change, believing consumers who bought solar panels were led to assume they would receive feed-in rates at 60c per kilowatt hour.

“I am a realist and there is no point putting up legislation which does not have widepsread support and which is going to be rejected,” a spokesman for O’Farrell told the Sydney Morning Herald.

“No one likes retrospective legislation, I don’t like it myself but we had to try to find a way of curtailing the blowout in the cost of the scheme.

Construction industry contracts for 12th straight month 

The Australian construction industry has recorded its twelfth straight contraction, according to the latest Australian Industry Group findings.

The Housing Industry Association Performance of Construction Index for May lifted 1.7 points to 39.6, still well below the 50 point level that separates contraction from expansion.

All four sub-sectors contracted, with apartment building down 5.8 points to 25.3 and commercial construction decreasing by 3.2 points to 35.2.

Housing went up 1.4 points to 39.8, and engineering increased by 2.7 points to 42.3.

Australian Industry Group Director of Public Policy, Peter Burn, attributed the latest figures to a range of factors including a lack of private sector investment and a shortage of new work to replace existing projects.

“There has been clear withdrawal of the stimulus measures associated with the response to the Global Financial Crisis,” he said in a statement.

“At the same time, private sector demand, held back by higher interest rates and a cautionary sentiment, has not grown with sufficient strength to counter the dampening impacts of lower incentives for first home buyers and direct public investment in schools and community housing.”

Metcash records 6.1% profit increase

Grocery and liquor wholesaler Metcash has posted a 6.1% rise in annual profit to $241.4 million, outperforming expectations, but has warned of challenging conditions.

Metcash reported that revenue had increased 7.4% to $12.4 billion, underpinned by its IGA supermarkets.

“The industry continues to experience product deflation, underlying cost inflation and a value driven consumer,” Metcash said.

The company also said it could not provide any further forecasts for the 2012 fiscal year until a court case over its proposed takeover of Franklins supermarkets is resolved.

Palmer gets funding for China First project as Hong Kong float canned

Queensland billionaire Clive Palmer has announced funding worth $1.2 billion dollars for the Galilee Basin China First coal project, just after announcing the Hong Kong float of his Resourcehouse business has been pulled.

The funding, from China Exim Bank with cooperation from the Chinese Government, takes total funding to $6.8 billion for Resourcehouse’s aggressive expansion plans.

Palmer said in a statement that despite media commentary suggesting the project was in doubt due to the company’s decision to suspend its listing plans, the China First Coal project has strong financial and government support.

“We have struck back quickly with a deal which ensures the project’s viability and puts to rest the unfounded criticism of some media and analysts.”

Shares lower on Wall Street decline

The Australian sharemarket has opened lower this morning following a weak night on Wall Street, where investors are continuing to fret over Europe’s sovereign debt crisis.

The benchmark S&P/ASX200 index was down 23 points or 0.52% to 4545.5 at 11.50 AEST, while the Australian dollar fell to $US1.07c.

AMP shares lost 0.4% to $4.96, while Commonwealth Bank shares lost 0.7% to $49.33. NAB gained 0.2% to $24.48 as Westpac rose 0.05% to $21.36.

Singapore, Virgin airlines sign partnership

Singapore and Virgin have signed a new partnership which will see the two airlines share codes on international and domestic flights.

The companies say the agreement will also allow Singapore Airlines customers to use Virgin Australia’s domestic network with one ticket, and airport lounges for both airlines will be available to customers of either loyalty program.

“Asia is clearly a critical market for us as we build our international alliance network,” Virgin chief executive John Borghetti said in a statement.

“Singapore Airlines’ extensive network throughout Asia will be particularly attractive to our international business and leisure travellers and this partnership, along with our other alliances, will mean Virgin can now offer truly global flight coverage.”