Today's Business Headlines

Alcoa freezes pay, cuts contractors
Aluminium giant Alcoa is set to freeze salaries across its 5,000-strong workforce, cut spending on contractors and recruit fewer staff in the latest bid by one of the state's resources companies to slash costs in response to plunging commodity prices. The West

WA gas prices to surge on Citic deal
West Australian domestic gas prices are continuing to rise, with Santos and Apache securing potentially the highest prices ever in a $1.8 billion deal with China's Citic Pacific that has resurrected the stalled Reindeer gas project. The Australian

Babcock down for the final count
Babcock & Brown has warned that it will book more than $2.6 billion of write-offs, making its assets worth less than its debts and jeopardising negotiations with its bankers over whether they keep the embattled company alive. The Fin Review

Fletcher loses Midas touch as car venture fails
Former Coles Myer chief John Fletcher and clients of investment bank Lazard Carnegie Wylie look to have lost more than $10 million in a failed attempt to turn around the car care group Midas Australia. Sydney Morning Herald

Gillard tells unions - jobs not pay rises
Julia Gillard has urged unions to temper pay-rise demands to prevent job losses in a weakening economy as the CFMEU revealed it had launched a campaign demanding pay rises of up to 33 per cent for power plant workers at the West Australian operations of struggling aluminium giant Alcoa. The Australian

THE WEST AUSTRALIAN:

Page 1: Aluminium giant Alcoa is set to freeze salaries across its 5,000-strong workforce, cut spending on contractors and recruit fewer staff in the latest bid by one of the state's resources companies to slash costs in response to plunging commodity prices.

Page 3: Stephen Lee, who quit as Cockburn City Council mayor yesterday as the result of a report by the Corruption and Crime Commission, may return to the post within two months after the state government admitted it could not stop him standing for re-election.

Business: Australian banks have rushed to take advantage of the federal government's funding guarantee, tapping markets ahead of European and US rivals to raise more than $37 billion over the past month.

Infrastructure house Babcock & Brown has warned it will become technically insolvent as it prepares to make a series of massive asset write-downs as part of efforts to push through the sales of its aircraft leasing and property business to pay debt.

WA retailers need to get smarter or risk going out of business amid declining sales and gloomy economic forecasts, experts say.

Former Coles Myer chief John Fletcher and clients of investment bank Lazard Carnegie Wylie look to have lost more than $10 million in a failed attempt to turn around the car-care group Midas Australia.

Two weeks after Perth stockbroking firm Hogan & Partners shut its doors for the last time, the corporate watchdog is investigating allegations of millions in missing client money.

Iron ore hopeful Brockman Resources yesterday hosed down takeover talk after appointing UBS as a corporate adviser and confirming it had signed confidential agreements with several potential Chinese, Japanese and Korean investors.

THE AUSTRALIAN FINANCIAL REVIEW:

Page 1: Babcock & Brown has warned that it will book more than $2.6 billion of write-offs, making its assets worth less than its debts and jeopardising negotiations with its bankers over whether they keep the embattled company alive.

A record low number of pending home sales in the US has stoked concerns the country's housing slump will undermine efforts to revive the world's largest economy as the Federal Reserve said it expected the first decline in growth since 1991 and warned there was the risk of a "prolonged contraction".

The federal government will consider a proposal from the competition regulator for tougher laws to make it easier for the courts to convict companies and their executives of anti-competitive and collusive behaviour.

Page 3: The nation's air traffic control agency has taken on debt to help pay the federal government a $66.6 million dividend as it comes under fire from airlines and unions for neglecting crucial services.

Page 5: AWB has launched a court appeal to prevent the Australian Federal Police using what it says is confidential material obtained by the Australian Securities and Investments Commission during its closed-door examinations of former executives involved in the $300 million Iraq kickbacks scandal.

Page 7: The local car industry received a further blow yesterday when US motoring giant General Motors axed orders for the Australian-made Holden ute, which it had planned to rebrand as a Pontiac G8 ST sports truck and sell to American drivers.

Page 8: Aluminium maker Alcoa plans to cut 15,000 jobs, or almost 15 per cent of its global workforce, and take a fourth-quarter charge of up to $US950 million ($1.32 billion) in response to a global downturn in metal demand and weak commodity prices.

Page 12: Santos and partner Apache Corp are set to re-start the stalled Reindeer gas development off Western Australia after confirming China's Citic Pacific as a foundation customer.

BHP Billiton shipped 5 per cent more iron ore from Australia last month than in November, when exports hit a nine-month low on plunging demand from China.

THE AUSTRALIAN:

Page 1: Julia Gillard has urged unions to temper pay-rise demands to prevent job losses in a weakening economy as the CFMEU revealed it had launched a campaign demanding pay rises of up to 33 per cent for power plant workers at the West Australian operations of struggling aluminium giant Alcoa.

Twenty years after the world's first sperm donor register was set up, the first children conceived under the program are finally getting to meet their donor parent.

Page 2: Receivers for ABC Learning centres have apologised over new employment contracts sent to workers providing for reduced job security and benefits.

Page 3: Fears the entertainment industry will suffer in the wake of the economic downturn have not been realised at theatres across the country.

The visual effects team behind Baz Luhrmann's Australia film have been short-listed for an Academy Award nomination.

Business: A group of three international investment bodies has fired a broadside at proposed short-selling rules in Australia, saying they do not provide enough privacy for institutions selling short.

West Australian domestic gas prices are continuing to rise, with Santos and Apache securing potentially the highest prices ever in a $1.8 billion deal with China's Citic Pacific that has resurrected the stalled Reindeer gas project.

In a further sign the global economy is slowing sharply, aluminium giant Alcoa said it would slash 15,000 jobs and cut production for the third time in as many months.

Investors are ringing in the new year by taking more risk, even though the economic outlook remains grim.

Australian shares and the dollar advanced yesterday as government efforts to stem the global financial crisis continue to encourage a greater appetite for risk among investors.