Today's Business Headlines

Two more years of economic pain
Australia faces a longer period of low growth, higher debt and higher unemployment than predicted just four weeks ago as the wave of job losses gathered strength, with clothing manufacturer Pacific Brands axing 1850 staff across the country. The Australian

Fortescue cancels raising
Fortescue Metals Group, fresh from striking a landmark investment deal with Chinese steel mill Hunan Valin, has been forced to scarp plans for a $500 million capital raising after Australian fund manager baulked at the Pilbara iron ore miner's asking price. The West

Seven minus debt equals zero
The nation's top-rating television network has become the second major free-to-air broadcaster to be declared worthless as it labours under a debt mountain. The Australian

Bonds put Woodside on strong cash track
Woodside Petroleum has secured has secured more than half of its cash requirements for this year after issuing $US1 billion ($1.5 billion) worth of bonds. The West

OZ shares fall on fear of banks
OZ Minerals shares tanked yesterday, falling to a 39 per cent discount to China Minmetals' $2.6 billion takeover bid, on fears the debt-laden miner's banks will crush the deal. The Australian

THE WEST AUSTRALIAN:

Page 4: The federal government has warned of more bad news after Pacific Brands, manufacturer of Hard Yakka and Bonds, revealed yesterday that it would sack more than 1,800 workers and move the work to southern China.

Treasurer Wayne Swan has signalled support for cutting the corporate tax rate while promising to push on with tax reform in the face of the global recession.

WA could follow Queensland and lose its AAA credit rating, which would burden the state with higher interest rates, economists warned yesterday.

Page 6: About half the disabled staff as a not-for-profit WA company face unemployment or drastically reduced hours if the Health Department awards a printing contract to another company.

Business: Debt-laden Pacific Brands will slash jobs, brands, property the carrying value of its assets and its dividend to turn around its performance and satisfy its bankers.

Wesfarmers last night confirmed small shareholders had flooded the retail component of its rights issue, increasing the total raising to a better-than-expected $4.6 billion.

Woodside Petroleum has secured has secured more than half of its cash requirements for this year after issuing $US1 billion ($1.5 billion) worth of bonds.

Fortescue Metals Group, fresh from striking a landmark investment deal with Chinese steel mill Hunan Valin, has been forced to scarp plans for a $500 million capital raising after Australian fund manager baulked at the Pilbara iron ore miner's asking price.

Kerry Stokes' Seven Network has booked $1.3 billion in write-downs after slashing the value of its main media asset to zero in light of a deteriorating outlook for television advertising revenues.

Telstra has thrown its weight behind rival internet service provider iiNet to fight a legal action over piracy claims.

The founders of the highly successful Little Creatures brewery have teamed up with their former Matilda Bay Brewing Company colleagues in a new venture on the New South Wales north coast.

Shares in Australia's biggest engineering company, WorleyParsons, jumped the most in two months yesterday as chief executive John Grill moved to allay investor concerns about the effect on its bottom line from the growing number of projects being shelved worldwide.

THE AUSTRALIAN FINANCIAL REVIEW:

Page 1: The federal government is under increasing pressure over the faltering economy after the nation's biggest clothing manufacturer, Pacific Brands, said it would axe 1,850 jobs and shut down production in Australia, including the Bonds factories that have been operating for 92 years.

Reducing the cap on termination payments to departing chief executives is being considered by the Rudd government as the centrepiece of a major Treasury review of executive pay and corporate law.

Page 3: One of the federal government's most influential financial advisers, Future Fund chairman David Murray, has signalled his support for giving the green light to Chinese investment in Australian resource companies, and also called for an extension on the short-selling ban of financial stocks.

Page 5: The federal government remained committed to long-term tax reform despite challenges created by the global financial crisis, Treasurer Wayne Swan said last night, but he warned the government must address tax biases that "encourage speculation".

Page 13: Pacific Brands chief executive Sue Morphet has rejected suggestions the bankers to the company are calling the shots as it cancels its interim dividend and suffers a $150 million loss stemming mainly from heavy write-downs.

Assurances from Asciano that it is weeks away from finding a buyer for its coal haulage business have failed to appease investors, who have dumped the stock on concern about its lack of progress to pay down debt.

THE AUSTRALIAN:

Page 1: Australia faces a longer period of low growth, higher debt and higher unemployment than predicted just four weeks ago as the wave of job losses gathered strength, with clothing manufacturer Pacific Brands axing 1850 staff across the country.

Indigenous leader Noel Pearson yesterday launched a scathing attack on the Rudd Government for refusing to take up the challenge of low school attendance and its ''miserable'' targets for reducing indigenous disadvantage.

The Rudd Government has called an emergency summit of bankers and small business next week to test small business's complaints of a credit crunch.

Barack Obama yesterday declared the economic crisis a ''day of reckoning'', but also the opportunity for a fresh start.

Page 2: Sweeping changes are needed to protect public servants, federal police and soldiers who blow the whistle on commonwealth corruption and mismanagement.

Page 3: Disgraced former Federal Court judge Marcus Einfeld would be a suicide risk if he were sent to jail for lying about a $77 traffic fine, his psychiatrist said yesterday.

Page 4: Wayne Swan has thrust negative gearing and capital gains tax on the reform table, vowing he wants to make tax changes that discourage financial speculation in favour of investment in the nation's productive capacity.

Australia is lobbying for changes to global greenhouse accounting rules to allow it to count more of its carbon storage in soils, trees and biochar.

Page 5: At least one foreign bank has decided to pull out of Australia and others have told Treasury they can give no guarantee of their continued support for Australian borrowers.

Nationals Senate leader Barnaby Joyce has vowed not to cross the floor on the controversial reintroduction of student union-style fees while the Queensland election is on, but says he is prepared to break the party line after Queenslanders go to the polls.

Page 7: The Liberal National Party claimed yesterday that an email from the head of a state government-owned corporation showed the loss of Queensland's credit AAA rating would hit ordinary Queenslanders as well as the Government.

Business: The nation's top-rating television network has become the second major free-to-air broadcaster to be declared worthless as it labours under a debt mountain.

OZ Minerals shares tanked yesterday, falling to a 39 per cent discount to China Minmetals' $2.6 billion takeover bid, on fears the debt-laden miner's banks will crush the deal.

Clothing, footwear and bedding company Pacific Brands is sacking 1850 staff, closing seven local factories and scrapping more than half of its 350 product labels in a push to cut costs by $150 million a year.

Any conditions imposed by the Rudd Government on the spate of Chinese investments in the resources sector will be designed to ensure control of Australia's mineral wealth conforms to the national interest.

The Japanese Government is preparing stock market support worth Y= 20 trillion ($315 billion) or more, to be launched before the end of next month.

Australia's string of natural disasters has doused early momentum at regional pay-TV group Austar despite a 20 per cent increase in operating earnings last year to $209 million.

The Australian Securities Exchange should take a look at the incestuous round-robin of transactions easing the departure of Futuris Corporation from the share register of Australian Agricultural Co.

Shares in port and retail operator Asciano slumped to a record low yesterday, after it failed to provide details of progress on asset sales required to repay a $2.25 billion loan due in May next year.

Fortescue Metals Group has cancelled a planned $500 million capital raising after being unable to get the same price from Australian investors that China's Hunan Valin Iron & Steel was willing to pay for new shares.

US Federal Reserve chairman Ben Bernanke has held out hope for an economic recovery by 2010 -- even as new signs emerged that the recession and financial crisis are feeding on each other in ways that worsen both.

Hearst Corp says it may close its San Francisco Chronicle newspaper unless it can slash costs at the money-losing daily.

Australian shares closed at a new five-year low yesterday for the second time this week, defying a strong rebound on Wall Street.

Mortgage Choice has suffered a 22 per cent slump in half-year profit and cut the size of its interim dividend after the slowing economy crippled demand for new home loans last year.