Victoria Invests $363 Million To Keep Australian Open In Melbourne

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Melbourne Park will remain the home of the Australian Open for generations to come thanks to a multi-million dollar transformation of the world-class sporting precinct.

Premier John Brumby said a major facelift to Margaret Court Arena – including the installation of a new retractable roof and an additional 1500 seats – and a new Eastern Plaza that will house 21 new courts, were the major highlights of the $363 million first stage of the redevelopment.

“Victorians are passionate about their sport and the Australian Open is one of the major highlights on Melbourne’s world-class international sporting calendar,” Mr Brumby said.

“The Open is the biggest sporting event anywhere in the world for the month of January and is the largest annual event in the southern hemisphere – that’s why the Victorian Government is making this significant investment to keep this prestigious tournament in Victoria.

“More than 600,000 people attended the 2009 Australian Open, with a third of those coming from interstate and overseas, generating more than $160 million for the Victorian economy.

“This major redevelopment is the single biggest investment in the precinct since the Australian Open moved to Melbourne Park from Kooyong more than two decades ago and it will ensure Melbourne continues to lead the way as the world’s best sports city.

“The world’s best players love coming to Melbourne and our significant investment in Melbourne Park will guarantee the Australian Open remains in Victoria until at least 2036.”

Mr Brumby said Stage One of the redevelopment included:

• A major upgrade to fully enclose Margaret Court Arena, including the installation of a retractable roof and additional seating to increase crowd capacity to 7,500;

• A new Eastern Plaza, incorporating eight new indoor courts and 13 outdoor courts for elite training and general public use as well as change room facilities and a gymnasium;

• Refurbishments to Rod Laver Arena and Hisense Arena; and

• Additional parking and a footbridge linking Melbourne Park to the Rectangular Stadium.

Sports Minister James Merlino said the project was a major boost for both players and fans.

“The Australian Open is one of our great events and its popularity will continue to grow, with annual crowds of more than one million people forecast in the next 20 years,” Mr Merlino said.

“That’s why the Brumby Labor Government is investing heavily in our sporting infrastructure, like the Melbourne Park precinct, so we can continue to attract the big sporting events to our state.

“As well as extending the life of Rod Laver Arena, Margaret Court and Hisense Arena, our $363 million investment will also help open up opportunities for other sports, such as netball and basketball, as well as concerts and other events.”

Tennis Australia President Geoff Pollard said the redevelopment provided a major boost for the tournament and the future of the game in Australia.
“This is an historic day for tennis and the culmination of a lot of work by a lot of people,” Mr Pollard said.

“Full credit goes to the Victorian Government for its ongoing support, and its foresight in recognising the future growth of tennis and the Australian Open.”

Melbourne and Olympic Parks Trust Chairman Russell Caplan said the announcement would help Melbourne Park continue to attract big events.

“This redevelopment reinforces our position as the world’s premier sporting and entertainment precinct,” Mr Caplan said.

Mr Brumby said immediate works would begin shortly after the Australian Open and include improved connections between Rod Laver and Hisense Arena, the installation of new underground water recycling facilities and re-landscaping of the oval.

“Melbourne Park is part of the Melbourne and Olympic Parks Precinct, which each year hosts around 600 events and attracts more than two million people,” Mr Brumby said.

More than 50,000 small businesses will benefit from $14 million in Rudd Government funding to help them go online or upgrade their internet presentation.

The funding is being provided from the Rudd Government’s $10 million Small Business Online program which has been boosted by another $4 million to extend it to more tourism small business operators.

Across the nation, 95 per cent of small businesses are connected to the internet, yet only 57 per cent have a website.

The funding will help small businesses – especially tourism operators – take full advantage of the National Broadband Network (NBN) by helping them install and upgrade websites.

Small Business Minister Craig Emerson and Tourism Minister Martin Ferguson announced that grants ranging from $50,000 to $700,000 had been offered to 47 small business support groups including industry associations.

The groups will use the grants to help small businesses develop the skills to go online or upgrade their existing internet operations so they can better engage in e-business to reduce costs and improve market opportunities.

Among the groups to be funded are the Darwin Region Business Enterprise Centre ($320,000); the Margaret River Wine Industry Association ($140,000); the NSW Business Chamber ($495,000); and the Gulf Savannah Development group – which supports businesses from Cairns to Broome – ($200,000).

Dr Emerson said the NBN would provide fresh opportunities for small businesses to lower their costs and extend their market reach.

“The NBN will be a powerful tool for small business and helping 50,000 small businesses go online or improve their online presence will ensure they are ready for these exciting opportunities,” he said.

Mr Ferguson said he was pleased many small tourism operators would receive support.

“In the 21st century, tourists want to know a lot about the quality of the accommodation on offer before committing to travelling to a particular location and giving them a virtual tour online will help improve the attractiveness of tourist destinations,” Mr Ferguson said.

“The business support groups being funded will be specifically targeting the tourism industry, in line with the Government’s announcement of the National Long-Term Tourism Strategy.”

A list of successful applicants and more information on the Small Business Online program can be found at www.ausindustry.gov.au

The RBA Tells You What You Already Know

The Reserve Bank released its Statement on Monetary Policy for August yesterday, reader. It took 25,254 words, 76 graphs and 17 tables for our monetary authority to tell you everything you already know about Australia’s economy and financial markets.

Only 28 of those words meant anything to anyone.

“On the assumption that the subdued demand conditions are likely to continue, scope to move to a less restrictive monetary policy stance in the period ahead is increasing.”

It all boils down to that. The RBA only really needed three words: “interest rate cut”. That would’ve done it.

The rest of the publication is a recap.

Fuel costs are high. Asset prices are falling. Economic growth is slowing everywhere. Inflation is high. The credit crunch isn’t over. Business conditions are deteriorating. Retail spending is falling.

So it looks as though we’ll be getting an interest rate cut. Money markets and analysts are taking it as a given now.

Then again, central bankers have resorted to threats and games before. We guess we’ll find out in a month.

But there was one optimistic point from the RBA’s letter. Australia’s terms of trade are increasing, thanks to coal and iron prices. Buy the ‘Out Economy’, we say.

Another Chance to Buy the ‘Out Economy’…at a 34% Discount

How can you do that? Well, here’s a thought. Iron companies have lost chunks of market value in the last two months.

Fortescue’s (ASX:FMG) down 34% from its high.

Murchison’s (ASX:MMX) off 43%.

Mount Gibson’s (ASX:MGX) 41% lower.

They could go lower.

But the iron business is still a gold rush in its own right, whatever the share prices are doing. Fortescue announced yesterday that plans to double its iron production are ahead of schedule. We asked Gabriel what he thought of the stock. He was pretty keen. Scroll down for the full story.

Meanwhile, fellow iron ore producer Mount Gibson announced a record net profit of AU$113 million. The market didn’t even glance up. The stock traded flat.

You buy when there’s blood in the streets. What about when there’s utter indifference in the streets? What about when the streets are flush with beige?

It’s uninspiring to see investors shun good results. It’s not like insiders anticipated this either. Mount Gibson has been trading lower for the last month. But markets change. It’s handy to get in before that happens.

A Correction in Bank Pain

The market isn’t entirely indifferent these days, though. It shrieks and leaps up on a chair every time another company confesses sub-prime blues.

But as we’ve said before, sub-prime losses aren’t the best measure of how Australian banks are travelling. It’s how much their funding costs rise.

And, as you can see from our Bank Pain Index to the right, funding costs are back to where they were this time last year.

Maybe it’s tempting to think that the credit whipping is over. Especially when Bendigo and Adelaide Bank (ASX:BEN) posts solid, 40% growth in annual profit.

Don’t be fooled though. This isn’t permanent. As we said above, money markets have factored in a rate cut. Probably a double-slash of about 50 basis points. That’s how the RBA usually kicks off the cutting party. It likes to loosen things up with a double-shot of financial liquidity.

But if the RBA makes its move and cuts…don’t expect money markets to follow the cash rate down any further. And that’ll leave banks with a big spread between the cash rate and their own funding costs. A big, nasty, expensive spread.

Or, the alternative…the RBA doesn’t cut rates and money markets skip back up to nosebleed highs. Someone hand ANZ a tissue.

Babcock, the Life of the Party

After looking at that Mount Gibson result, it seems like investors are bored with the share market, reader. And every time things get boring, Babcock and Brown (ASX:BNB) likes to step in and liven the place up a little. Like the attention-seeking guy at a party who loves to make a spectacle. Usually at his own expense.

Right on cue…Babcock’s tipping next half’s profit will be down 40%.

Investors’ lives suddenly became instantly interesting. They had purpose. They had a mission. Their mission was to sell the stock down 12% for the day.

Credit crunch? Not over.

Money Weekend editor Kris Sayce has been all over this story. Babcock’s paying for establishing a high-debt business model that doesn’t work when the cost of debt goes up. And the money markets continue to flog companies like Babcock into submission. It’s not over.

Gold Cheapens to US$828

Meanwhile, gold took a big fall last night reader. It’s gone all the way down below US$830. Gabriel’s trying to figure out whether traders will support it from here, reader. He’ll let you know tomorrow.

Remember…gold’s one of the best ways to sell the financial crisis. This is just a correction. And in a financial crisis this huge, there’s more to come. Watch for gold to move up again later this year.