Today's Business Headlines

06/02/2009 - 06:54

Bookmark

Save articles for future reference.

Treasury head says spend now; Suncorp's issue shock as CEO goes; Macquarie profit set to slump; Cost cuts spook PwC partners; Lend Lease slumps on raising

Today's Business Headlines

Treasury head says spend now
Treasury secretary Ken Henry has warned that Kevin Rudd's $42 billion stimulus package is needed to stop the economy sliding into recession and unemployment soaring, as state and territory leaders promised it would unleash a wave of construction projects to protect jobs from the impact of the global financial crisis. The Australian

Suncorp's issue shock as CEO goes
Suncorp boss John Mulcahy yesterday paid the price for a strategy exposed as flawed by the global financial crisis, as the company rushed a capital raising to cover a near 25-fold increase in bad debts. The Australian

Macquarie profit set to slump
Local investors are bracing for a wave of writedowns in the commercial property market this reporting season after Macquarie Group revealed it would rip another $900 million from the carrying value of assets on its books. Herald Sun

Cost cuts spook PwC partners
Big Four accounting firm PricewaterhouseCoopers will slash partner privileges including company cars and profit shares as part of an aggressive cost-cutting program designed to claw back $20 million in savings. The Fin Review

Lend Lease slumps on raising
Shares in property developer and owner Lend Lease yesterday sank by a fifth to levels not seen since the late 1980s, after the group successfully completed a $302.5 million capital raising and reaffirmed earlier profit guidance. The West

 

THE WEST AUSTRALIAN:

Page 1: The state government will force widespread amalgamations of the state's 139 councils if smaller and inefficient local authorities do not agree to voluntary mergers within six months.

Page 4: Reserve Bank board member Warwick McKibbin has backed Malcolm Turnbull in his opposition to the government's $42 billion stimulus plan, warning cash handouts were a poor way to revive the economy.

Thousands of people earning up to $26,000 could miss out on the federal government's $950 cash bonus payments because they do not earn enough to pay tax.

Page 6: Colin Barnett has warned householders to brace for steep rises in electricity bills after WA's energy watchdog recommended last week that the state government raise tariffs to recover the true cost of generating power.

Page 10: The Australian Council of Trade Unions yesterday accused a retail industry group of plotting to deprive workers of more than $5,000 a year by locking them into long workplace agreements before the Rudd government's industrial changes take effect.

Page 14: The state government is considering slashing by half its royalty demands from WA's largest gas prospect in an effort to boost much needed domestic supplies and secure the state's energy needs.

Business: Shares in property developer and owner Lend Lease yesterday sank by a fifth to levels not seen since the late 1980s, after the group successfully completed a $302.5 million capital raising and reaffirmed earlier profit guidance.

Suncorp Metway chief executive John Mulcahy has been forced to fall on his sword, after the struggling banking and insurance group launched a heavily discounted $900 million capital raising and revealed a bigger than expected blowout in its bad debts.

Macquarie Group's 16-year bull run has come to a screeching halt, with the home-grown investment bank warning that its profits will halve after "exceptionally challenging markets" triggered a fresh round of write-downs and rising lending losses.

Freight rates for iron ore carriers have soared 20 per cent this week as evidence mounts that global demand for the steelmaking commodity - and one of WA's most important exports - is starting to rise again.

Australasian Resources was forced into a share trading halt yesterday while it clarified the status of its proposed merger partner, Resources Development International.

Cooper Energy is poised to end the five-month takeover battle for Incremental Petroleum by vending the 27 per cent stake it owns of the target into rival TransAtlantic Petroleum's improved cash offer.

A small 9.3 point fall in the S&P-ASX 200 to 3428.6 yesterday belied the underlying turmoil swirling through markets.

 

THE AUSTRALIAN FINANCIAL REVIEW:

Page 1: Suncorp has been forced into an embarrassing $900 million capital raising and its chief executive, John Mulcahy, will quit the financial services group after it slashed its dividend and warned that earnings would again miss forecasts.

Millions of self-funded retirees may soon win a reprieve from the federal government's superannuation rules, which are forcing them to realise losses on their retirement savings as a result of the global financial crisis.

Treasury secretary Ken Henry last night conceded that some of the Rudd government's $12.8 billion bonus payments would be saved rather than spent this year, but insisted the cash handouts were the best way to give the ailing economy an immediate boost.

Page 3: Prime Minister Kevin Rudd took time out last night from selling his $42 billion economic rescue plan to honour Westfield boss Frank Lowy at a black-tie dinner hosted by the American Australian Association.

Big Four accounting firm PricewaterhouseCoopers will slash partner privileges including company cars and profit shares as part of an aggressive cost-cutting program designed to claw back $20 million in savings.

Page 4: Mining companies have been warned by the Australian Taxation Office against exploiting a tax rort using offshore entities to slash their tax bill.

String warnings about the lack of maintenance spending on crucial rail infrastructure were ignored by the Victorian government in the lead-up to the release of its much-vaunted $38 billion transport plan late last year.

Page 5: Unions have attacked a push for smaller retailers to limit wage increases by striking a new five-year workplace deals before an overhauled system of industrial awards comes into force next year.

Page 6: Telstra will be hit by 24-hour strikes next week that will hinder fault repairs and key construction projects, as telco unions escalate their campaign for a new collective workplace agreement.

Page 9: The federal government's plan to pour $3.9 billion into making homes energy efficient could be largely lost to imports because businesses producing insulation in Australia are already stretched to capacity.

Almost 500 potential buyers have placed bids to buy some of the 241 ABC Learning childcare centres that were deemed unviable.

 

THE AUSTRALIAN:

Page 1: Treasury secretary Ken Henry has warned that Kevin Rudd's $42 billion stimulus package is needed to stop the economy sliding into recession and unemployment soaring, as state and territory leaders promised it would unleash a wave of construction projects to protect jobs from the impact of the global financial crisis.

Rupert Murdoch paid the ultimate tribute to the life of his friend Frank Lowy last night, saying it had the makings of a movie.

Tens of thousands of cattle stranded by floods in Queensland have been left to starve because owners cannot drop feed to them and state authorities claim they are powerless to act.

Almost a third of politicians have failed to submit their tax returns on time, thumbing their noses at authorities who have asked them to set a better example.

Page 2: The NSW Ombudsman has called for a rewrite of the state's 20-year-old Freedom of Information Act, describing its application by a secretive government as appalling.

ABC broadcaster Stephen Crittenden has returned to work three months after he was suspended for blasting management on air following the axing of his radio show, The Religion Report.

Page 4: The Rudd Government's chief economic adviser, Productivity Commission chief Gary Banks, says Labor's determination to base policy on evidence is being undermined by a lack of resources.

If you want to know what the end of a commodities boom looks like, you need only stand on the foreshore at Newcastle.

Kevin Rudd has signalled that Australia will not follow the lead of US President Barack Obama in capping executive salaries for companies bailed out by the federal government.

Page 5: Retailers have been urged to rush thousands of employees on to new five-year workplace agreements to avoid increased pay and compliance costs associated with federal Labor's new workplace laws.

Collapsed childcare corporation ABC Learning expanded its empire by bullying smaller day-care operators into selling up, a Senate inquiry has been told.

Page 6: One in three politicians have breached tax laws by not submitting their returns on time, thumbing their noses at authorities who have asked them to set a better example.

World: Tokyo police arrested a businessman and 21 of his executives for defrauding investors of at least $US1.4 billion ($2.17 billion) in what Japanese media described as the country's biggest scam.

Business: Suncorp boss John Mulcahy yesterday paid the price for a strategy exposed as flawed by the global financial crisis, as the company rushed a capital raising to cover a near 25-fold increase in bad debts.

Macquarie Group is losing hundreds of millions of dollars on investments in its own funds.

Chinese mining group Chinalco is again using Labor Party connected lobbying firm Hawker Britton as it prepares to test the Rudd Government's attitude towards investment levels by Chinese companies of more than 15 per cent in local entities as a domestic recession looms large.

The latest business survey shows that manufacturing activity in China contracted again in January, but at a slower pace than the month before, providing some early signs of recovery for the Chinese economy.

Centrebet has taken a calculated gamble in applying to the Takeovers Panel for an order that would enable it to proceed with a bid for its rival online corporate bookmaker, International All Sports.

Lend Lease shares crashed more than 16 per cent to their lowest level in two decades yesterday after hedge funds took a wrong bet on a successful $302.5 million capital raising.

National Australia Bank is poised to sever ties with Satyam Computer Services after bank executives cancelled the second phase of a massive outsourcing project contracted to the troubled IT services provider.

Sales in China's intensely competitive car industry exceeded the US for the first time last month.

The names of thousands of clients who invested money with Bernard Madoff were made public yesterday.

Stocks finished lower yesterday after a wobbly session, as weakness in banks, Qantas and Lend Lease offset gains in miners.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options