Today's Business Headlines

$750 power bill rise
Electricity bills for the average WA household will rise by $750 over the next three years as the Barnett government struggles to meet its election commitments in the face of the economic downturn. The West

Payroll rebate in WA to 'save jobs'
A radical plan to exempt small business from payroll tax for a year, designed to protect jobs in Western Australia's slowing economy, is the central plank of the Barnett government's aggressive first budget. The Australian

Leighton earnings slide
Australia's biggest construction company, Leighton Holdings, has cut its profit forecast by 10 per cent after slashing the value of toll-road and infrastructure investments. The Age

Rio plunges on rights talk
Fresh speculation that Rio Tinto may shelve pr re-jig its $US19.5 billion ($26 billion) Chinalco tie-up in favour of a multi-billion-dollar discounted rights issue sparked a sharp sell-off yesterday that caused its shares to plunge 11.7 per cent, in its biggest one-day fall in five months. The West

Turnbull blows smoke at bluff
Malcolm Turnbull has called Kevin Rudd's bluff on the possibility of an early election, vowing last night to block budget means tests on private health insurance but offering to replace the $1.9 billion in lost revenue by lifting tobacco taxes. The Australian

THE WEST AUSTRALIAN:

Page 1: Electricity bills for the average WA household will rise by $750 over the next three years as the Barnett government struggles to meet its election commitments in the face of the economic downturn.

Page 5: Small business welcomed a one-off $100 million payroll tax rebate in the state budget but said the tax should be permanently abolished as industry faces years of economic difficulty.

Page 6: The state government yesterday committed $4.1 billion to education, and increase of 11.4 per cent on last year, but the teachers' union described the allocation as "skinny".

The government will spend a record $5.1 billion on health in the coming financial year, seeking to offset a $400 million cull of capital works projects with a $117 million sweetener to fast-track the rebuilding of the state's children's hospital.

Page 7: The state government will begin reaping profits from publicly owned generator Verve Energy as early as July as the move to slug average WA households $750 more for their power over the next three years alters the finances of the loss-making utility.

More than $1 billion in mining royalty income has been wiped from state coffers since December because of plunging prices for commodities.

Page 12: A move my independent MP John Bowler to end daylight saving at the end of February if tomorrow's referendum succeeds appears to have wide support.

Business: Fresh speculation that Rio Tinto may shelve pr re-jig its $US19.5 billion ($26 billion) Chinalco tie-up in favour of a multi-billion-dollar discounted rights issue sparked a sharp sell-off yesterday that caused its shares to plunge 11.7 per cent, in its biggest one-day fall in five months.

The verdict is in - for men looking to impress in the boardroom, grey is the new black.

Western Areas has called the bottom of the nickel market after tapping shareholders for $ 35 million to ramp-up its stalled exploration program.

AMP has been forced to defend its decision to stand by two beleaguered directors - former James Hardie chairman Meredith Hellicar and Allco Finance Group boss David Clarke - as the fallout grows over their controversial board roles outside the financial services company.

Macmahon Holdings is confident that its hard-hit contract mining business, the focus of the company's troubles since its first profit downgrade last year, has bottomed.

THE AUSTRALIAN FINANCIAL REVIEW:

Page 1: Leading chairmen and executives have lashed the Rudd government's assault on employee share schemes, as more companies moved yesterday to freeze or postpone their plans amid widespread outrage about the changes.

Opposition leader Malcolm Turnbull has vowed to reject the Rudd government's $1.9 billion cut to private health insurance but signalled he would take a "reasonable" approach to other budget measures because he did not want to add to the sharp rise in Commonwealth.

Hopes that a revival among big-spending US consumers will underpin America's economic recovery are fading fast amid signs that rising unemployment, the weak housing market and tight credit conditions appear to have reversed a recent upturn in spending.

Page 3: More than a quarter of the 800 listed mining and mineral exploration companies breached the minimum standard for public reporting of exploration results, the market regulator has found.

Qantas will be well represented when former chief Geoff Dixon and former airline executive Sandra McPhee join the Tourism Australia board in July.

Page 5: Business borrowing has rebounded in a sign that demand for commercial finance may be consolidating at relatively weak levels after the collapse in lending triggered by the financial crisis.

Page 7: Consulting engineers - 17,000 businesses employing over 130,000 people - are feeling the pain of the downturn in mining and construction

THE AUSTRALIAN:

Page 1: Malcolm Turnbull has called Kevin Rudd's bluff on the possibility of an early election, vowing last night to block budget means tests on private health insurance but offering to replace the $1.9 billion in lost revenue by lifting tobacco taxes.

A radical plan to exempt small business from payroll tax for a year, designed to protect jobs in Western Australia's slowing economy, is the central plank of the Barnett government's aggressive first budget.

The budget is being sold by Labor as old style nation-building - a case of the government spending big while capitalism takes an extended sickie.

Rugby league's biggest sponsors have bluntly told code administrators to act swiftly and decisively in dealing with the unfolding "group sex" scandal or risk losing financial backing.

Page 2: Two workers on maternity leave have been sacked from their jobs at a Defence Department-owned childcare centre, just as the Rudd government trumpets its plans to fund paid maternity leave.

Conservation groups have warned that an extraordinary decision to abolish Tasmania's Environment Department will damage the island's "clean, green" brand and threaten the management of its national parks and word heritage areas.

Page 3: Clothing manufacturer Bonds may have weathered a stormy six months, but the company's general manager says consumer loyalty to the brand remains strong.

Page 4: Foreign Minister Stephen Smith's office was in damage control yesterday after his accidental but highly embarrassing release of restricted treaty documents.

Page 5: Malcolm Turnbull has called on the government to increase the tax on cigarettes by 12.5 per cent - 3 cents a smoke - to raise revenue, instead of means-testing the private health insurance rebate.

Senior coalition party figures have attacked Kevin Rudd's threat of an early federal election as a stunt to draw attention away from serious flaws in his 2009-10 budget.

Page 6: Huge cuts to public service staff budgets and government contractors are expected, to help pay for the continuing blowout in family and welfare benefit payments.

New tax rules aimed at stopping beverage companies disguising alcopops as beer and wine products could cripple Australia's microbrewing industry.

The coalition has vowed to design a paid maternity leave scheme to take to the next election, providing new mothers with better financial rewards than those to be offered by Labor.

The practices of many rural and female obstetricians are likely to become unviable as a result of the federal government's cuts to the Medicare safety net, a leading obstetrician has warned.

Page 7: A recommendation to give greater rent assistance to pensioners who pay high market rents was one of a raft of issues raised by the final report of the Harmer pensions review but not taken up in the federal budget.

Treasury has clawed back more than half a billion dollars from a ballooning health budget through small, under-the-radar cuts - more than it will achieve from its big-ticket Medicare safety net savings.

Page 8: Treasurer Troy Buswell has stunned the West Australian business community by unveiling a unique plan to refund their payroll tax for a year, a move he says will stimulate growth and save jobs.

As 82,000 West Australians are expected to be unemployed by 2011, the Barnett government will spend $155 million over three years in an effort to maintain jobs and encourage employers to take on extra workers.

It was never going to be easy to sell a lean, mean budget to a public accustomed to multibillion-dollar surpluses and years of sweeteners.

Treasurer Troy Buswell has signalled an assault on Western Australia's 99,000-strong public service, in a bid to protect the state's finances from the economic downturn.

Michael Fagnani's garden nursery relies on bore water pumps running 12 hours a day to keep alive his four hectares of wholesale and retail plants in Perth's north.

Despite having most of its details comprehensively leaked days and even weeks in advance, there were still a surprising number of shocks in Troy Buswell's first budget.

Business: The collapse of Chinalco's $US19.5 billion ($26 billion) rescue plan for Rio Tinto loomed large yesterday as the mining giant's share price crashed in both Australia and Britain.

Shares suffered their biggest fall in almost four months yesterday when bleak US retail sales ignited a sell-off in global equities.

The global economic downturn has wiped $155 million from Leighton's net profit in the nine months to March 31, ensuring a sharply lower full-year result.

Rio Tinto cannot logically characterise the rapid retreat of its share price as reflecting anything but collapsing confidence in the global miner's capacity to deliver, as designed, the $US19.5 billion Chinalco rescue package.

Fairfax Media will be forced to fork out an additional $10 million a year in interest payments on its $1.8 billion in debt after Standard & Poor's downgraded its credit rating for Fairfax to sub-investment grade.

The market is clearly telling Rio Tinto and its new chairman Jan du Plessis that it expects the company to junk its increasingly less attractive proposed tie-up with the state-owned Chinalco and instead make a major rights issue to all shareholders.

AMP could become one of Australia's first companies to restructure its remuneration and share scheme policies after Labor's controversial move to close a potential tax loophole for executives.

The man who operates most of the major employee share schemes in Australia, Geoff Price, is still recovering from the news that the budget appears to have, at a stroke, accidentally made them all uneconomic.

The warring BrisConnections factions have resumed battle, with the toll road company warning that investors who failed to make a recent instalment payment would have no voting rights at a unitholder meeting next month.

Staff of the US Securities and Exchange Commission are preparing civil fraud charges against Countrywide Financial Corporation co-founder Angelo Mozilo, in what would be the highest profile government legal action against a chief executive connected to the financial crisis.

The list of frustrations about China's shortcomings as a base for foreign banks and investment firms is long, but many of these companies are increasingly enthusiastic about the profits they are making there.

The Australian share market plunged more than 3 per cent yesterday over concerns about the stability of the US economy, with falls across all sectors.

The Australian dollar closed 2 per cent lower yesterday as investors sold growth assets after weaker-than-expected US retail sales dented hopes the US economy was recovering.

Shares in Commonwealth Bank have come under pressure after Wednesday's third-quarter trading update, as analysts downgraded earnings forecasts because of slowing revenue growth and rising bad debts.