It’s good new for investors, with the Financial Review reporting today that major Australian companies
with operations in the US
are working on repatriating up to $1 billion in profits from their US
operations after the federal government’s renegotiation of Australia’s
tax treaty with Washington. It’s
important, says Allesandra Fabro, because it enables Australian-based companies
to relocate those funds or distribute them to shareholders, who in turn
“reallocate them through the economy.” (not online)

The Fin also looks
at the 17.1% rise in the full-year net profit at Foster’s Group to $936.1
million – a result underpinned by the group’s strong CUB
beer business. Now chief executive Trevor O’Hoy can focus on the brewer’s
Southcorp wine division it bought for $3.7 billion. But analysts are
looking in the wrong direction when they
try to pin down O’Hoy on returns from Southcorp, says Chanticleer’s John Durie.
The focus should be on the entire wine division which, if a bullish O’Hoy is to
be believed, will actually earn its way in a relatively short time.

Meanwhile, for O’Hoy, who put his company and his own reputation on the
line by launching the Southcorp bid before the global settings were clear,
there must be some sense of relief, says Stephen Bartholomeusz in the Smage. In fact, his $3.7
billion bet on the future of the wine sector now looks to have been almost
perfectly timed, with the industry performing better generally, and the US
industry recovering rapidly.

But O’Hoy and his executive team still have a huge job on their
hands, says Michael West in The Australian, bedding down the
Southcorp purchase. They have gambled on premium wine brands at the expense of
cash flow.

Back at the Smage, Alan Kohler looks at another reason why tax cuts are back on the political agenda – because
the alternative, the Future Fund, “is beginning to look threadbare, not to say
a bit daft.”

On Wall street, markets slid on worries about record-high prices for
oil in the wake of Hurricane Katrina and disconcerting comments on
America’s inflation outlook from the Federal Reserve. The Dow ended
down 50.23 points at 10,412 – MarketWatch has the full details here.