A surge in commodity exports has revived economic prospects for 2006 and cut Australia’s trade deficit in half. Exports made a record high of $16.3 billion in December, caused mainly by increased mineral and metal exports and helped by a recovery in rural exports.
Australia’s trade deficit shrank to $1.2 billion reverting from high levels of $2.5 billion in November. The annual deficit reduced to $20 billion last year, from $25 billion in 2004. Japan remains Australian largesty export destination, with China our largest source of imports.

Justice Goldberg of the Federal Court, Melbourne has imposed a fine of $8.9M on Safeway, a division of Woolworths for fixing the price of bread and misusing its market power. The allegations of misuse of market power concerned the supply of bread by Tip Top, Buttercup and Sunicrust Bakeries to other retailers who discounted the price of bread. The Australian Competition and Consumer Commission alleged that Safeway took action against each of the bread manufacturers to induce them, or attempt to induce them, to take action to have the discounting cease.
It was alleged that Safeway refused to accept further supplies of bread from a baker where the baker was supplying retailers who were discounting the price of bread. The space normally occupied by the affected baker being filled with another baker’s product. The ACCC alleged that Safeway recommenced purchasing bread from the manufacturer concerned once the discounter ceased discounting. Five other similar allegations under trade practices legislation were dismissed.

Trademark regulator IP Australia has removed the Ugg boot from the Australian register of trademarks, allowinh Australian Manufacturers to use that generic name and rejecting an application by giant US shoe corporation Deckers to prevent local companies using it or any variation of the name.
This decision ends a three-year battle over the Ugg name, which began as an icon of the Australian surfing culture in 1960s but later developed into a fashion item. Australian Ugg boot manufacturers were outraged at the hijacking of a shoe synonymous with their country, heralded the win as a moral victory for Australians. In 1978 Australian surfer Brian Smith set up Ugg Holdings Inc. in the US and registered the Ugg trademark in 25 countries. He later sold out to Deckers in 1995.

Overall Australian retail sales rebounded in December as retailers reduced prices to attract Christmas shoppers and hot weather induced spending on air conditioning Units.
The Australia Bureau of Statistics said Retail sales rose 0.4% from November, when they fell 0.1%. Retail sales in the three months ended Dec. 31 adjusted to remove inflation, gained 0.3% from the previous three months. In a mixed bag, Australian retail spending on household goods gained 1.8% in December from November as sales at supermarkets rose 0.3%. Sales at clothing stores dropped 1.3% and sales at department stores fell 0.8%. The economy, in its 15th year of expansion, grew just 0.2 percent in the third quarter of 2005. The states with the largest increase were the Northern Territory (up 2.2%), South Australia and Tasmania (both up 0.7%) and Queensland (up 0.6%).
Electronics retailers Retravision and Harvey Norman confirmed demand for air conditioners increased because of record temperatures in December and had boosted their sales. Harvey Norman, increased second-quarter sales 10.7% to A$1.24B