Abbott to take on tax-evading multinationals at G20 summit; Flight Centre cuts profit forecasts: Midday Roundup

Prime Minister Tony Abbott is set to flag global tax issues as a major issue at the G20 summit, which will be held in Australia later this year, reports Business Spectator.

Abbott, who is currently touring the United States, says global regulations need to change so large multinationals are compelled to pay their fair share in tax.

“We need global tax rules to ensure businesses pay tax in the countries where they earn revenue,” he said.

Multinational giants Google and Apple have previously come under fire in Australia for shifting their profits across national borders.

Flight Centre cuts profit forecasts

Travel agency Flight Centre has reduced its profit forecast for the year as a nosedive in consumer confidence takes its toll.

According to Business Spectator, Flight Centre is now expecting an underlying profit before tax of between $370 million and $385 million for the financial year, sitting at the low to midpoint of their market guidance.

While managing director Graham Turner said business has been good for much of the year, low consumer confidence is causing problems.

“While Australian leisure continues to grow and increase market-share, it is not achieving the high levels of growth during the fourth quarter as it recorded earlier in the year… This slowdown in growth was most evident in May,” he said.

Shares down on open

Aussie shares have opened lower this morning, with CNC chief market analyst Ric Spooner saying weaker iron ore prices could dampen sentiment, alongside a stubbornly high Aussie Dollar that’s beginning to re-emerge as a real concern in many market sectors

“The impact of budget concerns on consumer spending will be a key issue for the economy,” says Spooner. “It’s also a clear and present issue for the retail sector with profit downgrades starting to trickle in. With confidence low and the savings rate stuck at elevated levels, investors may have to wait some time for a significant pickup in consumer spending to boost the economy and corporate profits.”

The S&P/ASX200 benchmark was down 13.3 points to 5456.4 points at 12:27pm AEST. On Tuesday, the Dow Jones closed up 2.82 points to 16945.9 points.