Transcripts For BLOOMBERG Asia Edge 20141215

We can. My advice is that we have not had contact with the armed offender at this stage. There is at least one. Difficult to fully number of them because they are involved in everything from securing the streets through to responding to and checking out parcels, we have tired officers and negotiators. And lots of general duty police, graphicice raided police. There are hundreds of officers involved in the small location right now. If need be we will escalate the intake that are too many more. That to many more. [indiscernible] you might need to get back to the Queensland Police commissioner. I am not in a position to do with that, i am not sure that has come from. Can you verify . We are certainly looking at a range of calls that we have taken in a number of people that have advised us. Everything that we have done to date has proved to be negative. Suggestion of the offender theyre been of the offender . There is no direct contact with the offender. To get out as well . Is that itstanding is an undisclosed number and the question will be better put to the operational commanders that certainly we are working as hard as we can to determine exact numbers. Correct the flag being put on the window, can you tell us about the flag . Again, it is a flag that we have had people looking at. What itrawn to work out stands for but at this stage it is best to not take the any further. We are looking with our Partner Agencies to better determine what it is we are dealing with. The arrested amandas morning at the press conference. Is there any suggestion this is connected . Is similar question was from the side of the room. At this time there is no connection. [indiscernible] we have looked at this in the past and exercise around us and we continue to focus on this thread. Like we do every other scenario. There are so many scenarios we deal with but we deal with them because we have to be prepared. Certainly this is one that has been a part of a range of scenarios we have had to deal with in preparation. Today changing the approach to everyday life in sydney . It shouldnt. We are proud of the city. Continue every day to protect. Tested. Eing for confident in thankful the police and that thankful for the police and their activities. We are incredibly lucky to have them. [indiscernible] of course it is. This is an event that is testing all of us here. Public, it is something that we must deal with and will deal with and are dealing with. The important message, as the commissioner said, we have all of the activities in hand. It is best we get back to that. Could you tell us where the other evacuations are . At this stage it is not place specific and those that would be moving outside of that key location would be on the advice of police. I am told that it is a limited footprint. Last one. Have you called out the federal authorities . The army . I have been in discussions both with the premier and the Prime Minister and i have talked to my counterpart in the federal police and at this stage we have not had to draw on any resources simply because of the nature of the event. As i said, we have not yet confirmed this is a terrorist related event. Hostageealing with a situation with an armed offender and were dealing with it accordingly. But atready to escalate this stage we have a vast amounts of Resources Available to us. The most trained and prepared Police Agency in the nation. We looking to resolve this as quickly as we can. Thank you. That is the scene at the moment in sydney. And the New South Wales Police Commissioner talking about this event taking place in sydney. Treating it as consistent with a terrorist event. Not dealing with the government of which there is at least one. The treasurer has released the Midyear Economic outlook for the country and we can head over. This is him. We need a strong budget to all caps have a strong economy. , eventsast six months have hit the austrian economy. In particular we are witnessing the longest fall in terms of trade since records were first in 1959. 59 kept this has been faster and deeper than anyone expected. The export income has not been what we expected. For example, one for the more export dollars, has fallen from 120 a ton to 60 a ton for iron. The price of wheat, which is one of our largest agricultural exports, has fallen 20 since the budget. In agriculture and resources, australians produce more than we consume. So we use the export of produce and services to build our nations income. Income volatility from exports can have a negative impact on our economy and on the Budget Bottom line. When external events turn against us, our domestic budget strength needs to cushion the blow. As a result of reasonable events, tax receipts are expected to fall by 6. 2 billion and 32 billion over the next four years. Company tax receipts are expected to be 2. 3 billion less this year. Income tax is excited to be 2. 3 billion less this year. Expected to be 2. 3 billion less this year. To recover revenues through higher taxes would harm the australian economy. Following wage growth has also had an impact on both revenue falling wage growth has also had an impact on revenue. Families remain in lower income thresholds and therefore claymore benefits. Claim more benefits. Counterclaims of increased on the backs of more parents participating in the workforce. We will announce a cooperative families package in the new year including child care and parenting leave initiatives. This will deliver greater workforce participation opportunities for parents. Although be senate has passed the great majority of the governments budget, there are outstanding structural issues to be passed. These initiatives in health, education, and welfare re central to the medium and longterm benefits of the australian people. The mining taxr package have caused millions but the costs are more than recovered by the end of 2023. The failure of the senate to accept Government Policies has cost the budget 10. 6 billion. There is a further 34 billion still to be legislated, including a 5 billion in savings announced by the previous government. Or the government has made spending decisions, we have offset the cost was savings. In particular, defense and National Security commitments totaling 1. 3 billion are more than offset by the foreign aid budget 3. 7 billion. Where we have made savings we have worked hard when drilled there will be no negative impacts on the austrian economy. To make sure there will be no negative impacts on the australian economy. The budget is stronger than last year despite the fall in expected revenues of around 100 billion since only 13 since the 2013 budget. That is expected to be billions less than expected one year ago. Debt is expected to be billions less than expected one year ago. Rather than neverending deficits, the budget is on track for incredible surpluses. Deficits will decline each and every year at the same pace that we expected in the main budget. We continue to be disciplined on spending with real spending Growth Limited to just 1 per year over the next four years. Our response to the current economic challenges is not to spend more money but to spend what we have carefully. A betterm has been year for the austrian economy has been year 2014 a better year for the australian economy than the last year. To lift Economic Growth to 3 and beyond to create jobs and reduce unemployment. We need to pursue a structural reform, to lift growth rates to levels that australians expect. 2015 will be a better year for the australian economy. More energy prices, a lower Australian Dollar, and Interest Rates continue to facilitate Economic Growth. Ins of Investment Infrastructure will strengthen the productive capacity of the newralian Economy Investment in infrastructure will strengthen the productive capability of the austrian economy. New trade deals will develop deeper Market Access for australian owned businesses. We expect Housing Construction to strengthen, further boosting economic activity. So i say to the australian people that while we are faced many challenges, we have made a good start using the budget fixing the budget. There is work to be done but we are on the right track. Over the months and years ahead, we are determined to strengthen the budget and the economy so alll students benefit australians benefit through more jobs and greater prosperity. Withat is treasurer joe his Midyear Economic output. Than expected budget deficit from australia as a result of falling iron ore prices. Lets go to david. Over the past two weeks, the oil prices and the declining. Erms of trade in australia the sharpest drop since records have been kept, 1956. Less demand for the aussie dollar, down. 75 and the reason i bring this up is to show you the investors trading right now across the region. They want after the elections in japan, 1. 3 underwater. After the elections in japan, 1. 3 underwater area of the hang seng is down. Lets look at the aussie dollar, . 82 right now. Bigger budget deficit, higher unemployment, 6. 5 . Forecasthe growth 152016. It does not help that you have prices below 70. Will be at about 60 u. S. Dollars over the next two years. For the percent of your export income comes from iron ore 20 of your export income comes from iron ore. That makes it more expensive to the buyers, 8213. This chart shows you where we are. You understand why more economists are not expecting the the of least resistance, Australian Dollar is lower, 78 u. S. Cents. That is a two your chart, down 23 for the value of the aussie dollar. Crude prices. Trade, it does that help countries that rely on oil exports for the budget. Not help countries that rely on oil exports for the budget. Case in point, venezuela. But at this question, will opec have an emergency meeting . Venezuela is saying is that based on sources that they support an emergency meeting but they have no call for one. What opec is saying is that it take time before prices settle, perhaps into the second half of next year, that is when they can reasonably take a look at what measures they have to put in place. June next year is when opec is to meet again. Is scheduled to meet again. Crude, 42 . Limit draw something for you here. Let me draw something for you here. From ear to hear is 20 , from year to year is 20 , and from here, 15 . Back to you, angie. Still to come, the latest from sydney where the hostage standoff is heading into the fourth hour. Live pictures right now with the bloomberg cameras trained on the scene right there. Martin place, a popular Central Business district of sydney, it is being cordoned off and shut down. Nearby businesses and offices either evacuated or a knockdown. In lockdown. Up to 40 people held hostage in this situation. We will have more details when we return. Checking other stories, the police have started clearing hong kongs last protest site. The operation marks the end of more than two months of the street campaign. There has been little resistance as the police removed barricades. Ast week protesters say they will take the campaign to the Legislative Council and global government andnless substantial will block government bills unless substantial changes are made. In other news, the chinese are mere has hit the road, the silk road, to increase beijings influence on an area dominated by russia. Is expected to sign agreements worth a reported 10 billion during his visit to kazakhstan. Story, thethe top armed standoff in the streets of sydney. Dozens of people taken hostage in a popular that they area of cafe. The siege happening just a short walk down the street from the Bloomberg Bureau and that is the scene from our office window, paul allen covering the story for us all morning. What more do we know what the moment . We have been hearing from the New South Wales commissioner of police and also the New South Wales premier. That is right. Right. That is the give a press conference sometime ago. We have a few facts for you. The Police Commissioner repeatedly referred to an armed cafe. Er, only one in the he was later questioned and said there is at least one. As for the number of people inside, he says there are an undisclosed number of hostages. We have heard from the ceo of lindt this is taking place in he says there are 10 staff on duty and potentially 30 customers which is 40 hostages. Ut that is unconfirmed the Police Commissioner says that other incidents that people may have seen happening around the city are not elected connected. Paul allen in sydney. This ongoing situation, asc taking place at the ac taking place at the best a a at the taking place lindt cafe. We bring you back to australia. We have cameron priced running us on the li joining us on the line. We have just heard from the Police Commissioner of south wales. He is updated the situation. E is concerned at this stage, authorities are not in contact with the gunman inside the cafe. This remains an unfolding situation. They have been reluctant to call it a terrorist incident. They say it is a seed situation at this stage and bear attempting to resolve, and their words, quickly. They are attempting to resolve, in their words, quickly. Cafe is on, you can see a direct line of sight out the front doors of the cafe. Earlier today we saw the hostages inside pressed up against the glass, standing with their palms pressed against the glass. In the last little while, they have initially been allowed to sit down and then were taken back away from the windows. Also earlier, a number of heavily armed police were pressed up against one of the windows with what i can only describe as a technical field, tactical shield with one officer peering over it to look inside the cafe. Were out of sight but now they have retreated completely and we can no longer see those heavily armed Police Officers. It iseron, very quickly, not confirmed it is a terrorist event but it is consistent with a reaction to that event, is that right . Certainly, given what e an islamicb state flag will get back to you after this break. The latest from australia. Story to the top straight to the top story, and the Central Business district of sydney, we have in undisclosed number of people taken hostage in a popular cafe, the lindt cafe. The u. S. Consulate has been evacuated. Many offices under lockdown or being evacuated. Were talking about the reserve bank of australia as well as westpac. Llen atet to paul ai the Bloomberg Bureau around the corner. Past 30 minutes have been enlightening. We had a press conference with the New South Wales premier and the state Police Commissioner as well. Frequently returned referred to one armed defender suggest there is only one an armed offender, suggesting there is only one, but when pushed, said there is at least one. It may be 10 staff and potentially up to 30 customers in the store as well, 40 hostages maybe. He says that people have been with otherconcern arrests around the city and says that none of them are connected to the instance happening in martin place. He says the officers know what they are doing and are trained for this and he is confident the outcome will be peaceful and positive. The Police Commissioner was prescient if he knew the motivation for this attack and said that at this stage there has not been one established was questioned if he knew the motivation for this attack and said that at the stage there has not been one established. The boating is consistent with a terrorist attack. Consistent footing is consistent with a terrorist attack. He says the number of police is in the hundreds and would be increased if needed. He stressed that the city is open. And went on to say that they were not dealing directly although he does have a team of negotiators should he want to use them. At the moment, what is the general feeling like in the office and google people you are talking to on the telephone as well . It is not very cheerful, it is understandably tense, but people are doing the best they can as the premier suggested to just go about their daily business. Martin place is a significant thoroughfare in the city, a pedestrian only street. Numbereadquarters for a of important institutions such as the reserve bank of australia and many of the big four banks and a lot of them have been closed down. The u. S. Consulate has been evacuated. Bank of australia has shut their branches. Kbmj closed as well. And number of people affected and it is difficult without fear to not feel affected. The opera house, that has been evacuated. The u. S. Consulate also being evacuated as well. Other buildings are under what we would call lockdown. Is, do we have any idea what the next step is . Continues with the Police Wearing down the is itaker or takers a siege that continues with the Police Wearing down the hostage taker or takers . There are a number of ways this could go. The commissioner did stress the professionalism of the staff. They are fully trained and he is confident the outcome will be peaceful and positive which suggests they are going to negotiation route. The negotiation route. The premier says that thoughts and prayers go out to those caught out and that was a sentiment also expressed by the Prime Minister, tony abbott, when he gave a press conference this morning. Here is a little of what the Prime Minister had to say. Not yet know the motivation of the perpetrator. We do not yet know if this is politically motivated although obviously there are some indications that it could be. That even appreciate in a society such as ours, there are people would wish to do us harm. Who would wish to do us harm. He also called it a disturbing incident, terrifying for those involved, but insisted that ordinary business must go on. We saw an example of that this hour as well j asoe unveiled as joe unveiled the budget update. We have this comment coming through from the New South Wales Police Commissioner. You that wefirm for have an armed offender in the premises holding in undisclosed anber of hostages undisclosed number of hostages in the martins place area. The police have been in attendance and have controlled the situation from very early this morning, shortly after it was advised. We are at this stage continuing to secure and make sure were doing all we can to bring this to a peaceful outcome. We want this matter resolved peacefully and we would do what willto ensure that do what we need to to ensure that. Ministersnese prime election gamble paid off with a commanding victory. Party and partners 1326 26 seats. Won 3 the pressure is on the pm to lift japan out of recession and prove that abenomics will bring change. There will not be revolutionary change. Because they are going to have through parliament the budget for the next Financial Year and that is going to tie up parliamentary debate in january and february. Then it will start to get more interesting. March and april, new growth strategies, whether energy, health care, special economic zones, that is an april and may in april and may that that will be on the agenda. The people that ive met are not interested in the election at this moment but at the same time they supported the abe government. The coalition gained one seat. Obtained support for his policies. The results of the selection over the weekend demonstrated that, in fact, while many people are unsatisfied with the agenda, the reality is that there is not any alternative politically to choose from within the landscape in japan. So while not everybody completely embraces every policy, it is a vote for, lets support this agenda, there is more work to be done but we need to move forward rather than move back to an area of deflation and depression. A landslide, lets look to the markets now. 1. 2 . N but this is across the region, risk aversion. The nikkei two to five, 17,000. , 17,000. Not the best you see the day after the election. If you stocks in tokyo we were following all morning, a few stocks in tokyo we were following all morning. Makers, at the booze this is on a report this morning that the government will be beginning the discussion to tax, for all ¥55 types of regular beer. . 65. Rrent tax ¥77, what will happen, based on the report, is that we could be looking at a reduction in tax. Cheaper regular beer and a higher tax when it comes to the mold stuff. Malt stuff. As far as these three beverage makers are concerned, they are diversified. Changes, were waiting to hear from brokerages. We did neutral from goldman sachs. Rated neutral from goldman sachs. Tobacco, domestic sales, down by 9 . Mitsubishi motors, another under, 55,000, just 55,000. Foreseeable effects. For seat out defects. Blet defects. ¥2. 3 billion. Back to you. It has been described as hong kongs highest profile Corruption Case for it the trial of brothers case. The trial of the kwok brothers. The jury begins deliberation today. Rosalind outside of the high court with more on this. What can you tell us . The jury expected to go off in a little while to begin their deliberations. They will decide on a verdict for the case. What were looking at is this area of a man that wants to help hong kongs secondhighest position accused of taking bribes from to those of asias richest men. Hui was chief secretary of hong kong from 2005 2 2007. Thomas kwok,nd chairman of the longest chairman of the largest Property Developer by revenue. They are accused of having given bribes to this former official hui worth more than 10. 5 billion each. Hui. They are worth more than 10. 5 billion each. To 5 million in payments, unsecured loans, and housing given by the kwoks. Also claims to have received sweeteners. Men on trial, two are alleged to be middlemen between hui and the kwok brothers but all five men have pleaded not guilty. What about the money. What did the court here about that . R about that . It is alleged that hui received some of the money before he became chief secretary in 2005 and that the money came from the kwok brothers. The court heard that the money was part of an unwritten consulting agreement between the brothers and hui, but the money had to be paid in secret and kept a secret because of a third k, kidnappedter kwo in 1995. Witnesses say that after the kidnapping he became paranoid and ill and had to be kept a secret from him and the payment kept secret. Ui received money shortly after saystired in 2007 but hui it was not from the brothers. He says it was from an official. He has told the court that was in debt before he became chief secretary and his lifestyle meant that he spent more than he earned and that meant he spent it on mistresses one mistress at least horse racing, fine wine, and expensive meals. Hui says he has never done favors for the money. They said that was not the purpose of the money. The trail has been going on for one to five days now and the jury will decide shortly today 125 days now and the jury will decide shortly today. We are told that the jury has begun as we spoke. More to come on that and of course the latest on the cbc taking place sydney see taking place. And a look at abenomics. The image where leaving you with and theereagh street lindt cafe where the siege continues. Lets get back to the top story, the siege in the heart of sydney. Well joined from the university of melbourne. Thank you for joining us. We do not know the identity of the individuals but we do know that a jihadist like was seen that reportedly just jihad flag was seen that reportedly just says there i no god but allah. What is the significance of that . Is a commonly used islamic saying and flag. It has been coopted more recently by jihadists, especially as things have turned up for them with the ability to is flags,d export is it is difficult to get that. Things that look similar might be appealing to people who get flags to show they are associated with the islamic movement. Not know any motivation for this. Not know any more divisions of this and no one is talking to the hostage taker or takers. It is being treated consistent with a terrorist event. What is your view on that . What is beyond that with the burgeoning Islamic Community in australia . The first thing to say is that we need to be really cautious about what we label this at this point. There is very Little Information and a lot of misinformation in the media so far in terms of the number of hostages that were. Aken they ranged to 50 at one point this morning and now we know what is closer to 12. Even the number of gunmen is not verified. Urging caution. Whether it is an islamic it also, we need to make sure that we get the facts. , also, we need to make your that we get the facts. There are things we need to think about in relation to the event in the shortterm. I think we need to have an open mind to what might be happening in sydney right now and think about the implications of what is happening at a much broader level. Absolutely, and that a broader level, what is going on in sydney and beyond . , thate growing extremism is something you cannot deny, kenya, doctor . If you look at recent trends in australia itself, theres been an increase in the threat level by the Security Intelligence Organization Going back a couple of months now. Have thet to that we largest single counterterrorism raid conducted in australia. A stabbing attack on two police in the state of victoria by a muslim who was later shot as a result of that incident. If this incident is also related to extremism, then we have another event, potentially, if it is indeed related in any way. Certainly the general trend based on the governmentreleased reports would indicate threat, yes. The government is being very careful not to say anything or label in the community and that is the right thing to do. Definitely. We should work from facts and evidence and it is important to remember that this is a criminal matter first and foremost. This is not a terrorism matter. In the first instance. That is why the police are responding in due course. One thing to keep in mind here is that this is the first mass incident in australia that has been operationalized. If it is actually a terrorist related attack on extremist attack, then it will become a much bigger psychological or an extremist attack, then he will become a much bigger psychological impact in terms of where we look for from here. A negotiatedg for outcome, austria is a country that appears to the will of all. I think rule of law. In terms of the federal agencies that would be a good outcome rather than having a dramatic scene people are at risk. Where people are risk. Think you for joining us. Joining us now live from sydney is lucy carter at the top of martins place. Lucy, from your vantage point, what can you tell us . We are standing about a block away from the lindt cafe. I am on the corner of thunder and the street, hunter and philip street, central. All we have been able to see is Tactical Response police or the swat team as you would know them in america. There are a number of them around the corner from the cafe. Havederstand the police had no contact from the man we understand his inside holding the hostages so at the moment but weice are in place cannot not know what level of contact they have had in the last hour or so. There have been reports of up to 10 staff working, possibly, according to the ceo, there could be 30 customers in place, up to 40 hostages possibly. What do we know about how definitive those numbers of hostages are and have any of the families reached out to media . At this stage, no numbers have been confirmed about hostages. The Police Commissioner held a press conference at short time ago and was quite emphatic and not giving out a short time ago and was quite emphatic and not giving out numbers. Do not know how many were inside. When we had cameras we saw a number of people, more than two or three, but at this stage we do not know how many are in their. In there. We have seen a number of family members, and speak with police. They have been taken to another area. The families are being supported by police. But we do not know how many people are inside the cafe. Is this the first incident of that type in the Central Business district . Im sorry, you will have to repeat the question. Cannot hear you properly is this the first time this is happened in sydney . Has happened in sydney . This is the first incident in sydney, it has put the entire city into lockdown. There are frightened people on the street but the police are doing their best to keep them calm. At one point there were a number of parcels and the upper house was evacuated, a rare event. That was done as a precaution, there was nothing wrong it. But at the parliament, two locks up, that has been lockdown blocks up, that has been locked down. September we had involving 700ids Police Officers but this is the first event like this in sydney. All right, lucy carter, thank you for that. More on the hostage standoff. Will be back in a short moment. Just getting updated on what is going on in sydney. The images are coming through and we have been hearing from the commissioner of police saying that the city will operate normally. There is no idea as to the motivation of the gunman and it is looking likely that there is a single gunman. Itd said it was at least one gunman and they are treating this whole thing he did say that it was at least one gunman and theyre treating the whole situation like a terrorism thing. At least one gunman was holding an unknown number of hostages, undisclosed number of is holding an unknown number of hostages, undisclosed number of hostages. There has been no contact with the gun man is so far. Pictures. Res live stay with bloomberg for the very latest on the sydney siege. Will be there live when our special coverage continues area of this is asia edge. Stay right there. Kong,is midday in hong 3 00 p. M. In sydney, and you are watching asia edge. Australia is not ruling out terrorism at a hostage standoff at a popular cafe which enters a fifth hour. The case surrounding a powerful family and hong kong. Has scored more points than michael j ordan