Today's Business Headlines

14/11/2008 - 06:58

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ETS risks loss of Sunrise to Timor, warns Voelte; CBA faces $2bn debt threat; Jobs go in Westpac merger; States revolt over carbon plan; Shares dive as US shakes up financial bail-out

Today's Business Headlines

ETS risks loss of Sunrise to Timor, warns Voelte
Woodside Petroleum chief executive Don Voelte has issued a thinly veiled threat to the federal government to reconsider its proposed emissions trading scheme or risk losing the Perth company's Sunrise LNG project to East Timor. The West

CBA faces $2bn debt threat
Commonwealth Bank's bad debt expense could double this year, blowing out from $930 million to well over $2 billion, as the bank absorbs a series of shocks from the collapse of Lehman Brothers, Allco Finance Group and ABC Learning Centres. The Australian

Jobs go in Westpac merger
As shareholders approved its $17 billion merger with Westpac, St George Bank yesterday conceded that its reliance on closed securitisation markets meant a takeover was inevitable. The Australian

States revolt over carbon plan
Premiers are in revolt over Kevin Rudd's plans for an emissions trading scheme, urging changes to the proposed formulas for compensating export industries to ensure they are not pushed offshore. The Australian

Shares dive as US shakes up financial bail-out
The Bush administration's backflip on a plan to buy toxic mortgage debt from troubled US banks ignited a rout on global sharemarkets yesterday, as investors feared more financial turmoil amid further signs of a slowdown in the Chinese economy. The Fin Review

 

THE WEST AUSTRALIAN:

Page 1: The growing impact of the global financial crisis was highlighted yesterday when Wesfarmers and Fortescue Metals Group, two of WA's biggest companies, were forced to provide shareholders with heavy doses of reassurance that their futures were sound.

Mines and Petroleum Minister Norman Moore was left stranded by Cabinet colleagues yesterday as two senior ministers sold shares to avoid conflict of interest accusations while Mr Moore insisted his wife should be able to keep her shares in BHP Billiton and Woodside.

Page 5: Energy Minister Peter Collier has rejected an ABC television report that the state government is planning to buy back Alinta, labelling it a "fabrication".

Page 6: US President George Bush will today tell world leaders, including Kevin Rudd, not to abandon principles of free-market capitalism as they seek a way out of the global financial crisis.

Page 9: Property sales in WA have nosedived to their lowest level in almost 20 years and have halved since the peak of the boom, a prominent developer says.

Page 10: Controversial union boss Dean Mighell, who was expelled from the Labor Party during the federal election campaign, yesterday defended an $80,000 trip to Britain paid for by a workers' redundancy fund as legitimate and a call to a transsexual escort during the trip as a prank by colleagues.

Page 11: The battle between Fortescue Metals Group and Port Hedland Aboriginals who opposed the miner's bid to expand the harbour has intensified, with a claim by the mining giant that two representatives of a local clan were acting in their own interests, not that of "the Aboriginal people".

Page 12: Mining companies have raised the stakes in their pursuit of WA's huge untapped uranium reserves, warning that the next state Labor government could expose taxpayers to a multi-billion-dollar legal action if it attempted to block them.

New federal workplace laws will create some scope for the industrial umpire to arbitrate in difficult disputes where employers refuse to bargain in good faith, the Labor caucus has been told.

Page 18: A Perth nursing home has failed to meet 36 out of 44 national industry benchmarks, with a report revealing the facility was so poorly managed it lacked even basic procedures to ensure its elderly residents received enough food and water.

Business: Shareholders have delivered a stinging rebuke to Wesfarmers over a potentially lucrative bonus scheme for chief executive Richard Goyder by rejecting the group's remuneration report.

Another $54 billion was wiped from Australian shares yesterday as a fresh bout of fear invaded the bourse, pulling it down nearly 6 per cent to its lowest point since October 2004.

An unofficial announcement yesterday that Perth-based shipbuilder Austal has successfully won a major $US1.6 billion ($2.5 billion) US Navy contract led the company's shares rising 3.8 per cent on an otherwise bleak day for the markets.

Woodside Petroleum chief executive Don Voelte has issued a thinly veiled threat to the federal government to reconsider its proposed emissions trading scheme or risk losing the Perth company's Sunrise LNG project to East Timor.

The nation's biggest bank had "not a single day" to waste in making its move on BankWest, Commonwealth Bank chairman John Schubert told shareholders yesterday.

Builder and developer Lend Lease Corporation says it will need to sell assets to meet its forecast of a 10 to 15 per cent fall in operating profit for the current financial year.

THE AUSTRALIAN FINANCIAL REVIEW:

Page 1: The Bush administration's backflip on a plan to buy toxic mortgage debt from troubled US banks ignited a rout on global sharemarkets yesterday, as investors feared more financial turmoil amid further signs of a slowdown in the Chinese economy.

Ratings agencies and research houses will be subjected to wide-ranging regulation aimed at restoring investor confidence in complex financial products, under tough new proposals that Australia will urge other nations to adopt.

Commonwealth Bank of Australia has warned its profits will be hit by a potential doubling of provisions against bad debts to about $2 billion, with more large companies expected to collapse over the next 12 months.

Page 3: A derivatives trader who claims he was sacked by Westpac Banking Corp days after allegations emerged that he pretended to be a trainee bus driver to avoid paying maintenance to his ex-wife and children is suing the bank for the $1.3 million sign-on bonus he says he was promised.

The Australian Taxation Office is investigating multinational groups shifting losses into Australia to reduce their tax bill and has warned companies against manipulating transactions in response to the global financial crisis.

 

THE AUSTRALIAN:

Page: 1 Premiers are in revolt over Kevin Rudd's plans for an emissions trading scheme, urging changes to the proposed formulas for compensating export industries to ensure they are not pushed offshore.

Julia Gillard has tried to calm down Labor MPs agitated about the Rudd Government's planned workplace legislation by stressing unions will have a right to sit at the bargaining table with employers if they have just one member at a worksite.

Kevin Rudd's eagerness to please pensioners before all other voters can be explained by new research showing that Labor has more marginal seats in the grey belt than was previously thought.

The sharemarket plunged to its lowest level in more than four years yesterday as more than $60 billion was slashed from the value of leading mining and banking shares.

Page 2: There are few better examples of how quickly the global financial crisis has slashed on-paper wealth than that of Perth mining magnate Andrew Forrest. Since late June, Mr Forrest has lost $11 billion -- an amount that a month earlier no Australian had ever even amassed.

Journalists, an ex-federal minister and a colourful band of shareholders took the Fairfax Media board to task yesterday over the remuneration of senior management at the group.

Page 4: Kevin Rudd's guarantees for bank funding are in trouble following the revelation that they are unlikely to carry the federal Government's AAA credit rating.

The global financial crisis could force up the price of the developing-country carbon permits that the Rudd Government is hoping will provide a cheap source of greenhouse gas reductions for Australian companies under its new emissions trading scheme.

Temporary skilled workers earning less than $100,000 will be guaranteed market wages as part of a major overhaul of the troubled 457 visa program.

Work begins today on a world-first low-emission coal project in Queensland that could slash greenhouse gases from existing power stations.

Page 6: Holden has flagged more production cuts early next year, according to union leaders who warned the crisis in the automotive sector was causing an unprecedented level of down days across the industry.

Page 7: The fallout from the collapse of ABC Learning Centres is spreading to other parts of the economy, with 400 unsecured creditors lining up and the Commonwealth Bank revealing that it had written off $440 million owed to it by the failed childcare company.

Business: Commonwealth Bank's bad debt expense could double this year, blowing out from $930 million to well over $2 billion, as the bank absorbs a series of shocks from the collapse of Lehman Brothers, Allco Finance Group and ABC Learning Centres.

As shareholders approved its $17 billion merger with Westpac, St George Bank yesterday conceded that its reliance on closed securitisation markets meant a takeover was inevitable.

Macquarie has circumvented the Government's refusal to guarantee cash management trusts by creating an account that will be covered by the policy but operate in competition to its mega-trust.

Andre Forrest often describes his fledgling iron ore producer as ''the Fortescue Family''. Well, the investment market reckons his family could do with a new and very rich big brother and that the recruit should be signed up as soon as possible.

Australian and Asian equities markets took another hammering yesterday and the Reserve Bank was forced to support the dollar as fears of a worldwide recession unleashed a tidal wave of selling.

While Chinese importers' enthusiasm for Australia's iron ore has diminished, the fast developing nation's appetite for our gas exports and their willingness to pay for it is growing, according to Woodside's head of marketing.

After more than a decade, BHP Billiton is walking away from the controversial Gag Island nickel project off West Papua despite spending $US75 million.

The board of Fairfax Media yesterday faced an embarrassing ''show of hands'' shareholder vote against the adoption of its remuneration report, after it announced its September quarter operating profit had dropped by ''mid-teen percentages''.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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