16/09/2009 - 06:57

Today's Business Headlines

16/09/2009 - 06:57

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Telstra gets offer it can't refuse; Hard man has telco on the ropes; Small harvest in bumper crop; Banks may lift rates before Reserve; Too soon to claim compo: oil body

Today's Business Headlines

Telstra gets offer it can't refuse
Investors dumped Telstra shares yesterday as the federal government placed its regulatory sword of separation against the telco's throat and made real its threats to dismember the telecommunications industry giant. The Australian

Hard man has telco on the ropes
Stephen Conroy knows Telstra too well to allow it to blackmail him by stringing out talks over regulation into next year, when the pressure of an election would force him to accept a bad deal. The Fin

Small harvest in bumper crop
Rains in Western Australia have lifted the official forecast for the nation's winter crop to its highest level in four years, but the value of the harvest is dropping as world wheat stocks rise and prices plunge. The Fin

Banks may lift rates before Reserve
The Reserve Bank believes private banks are coming under funding pressure that may force them to raise mortgage rates, and is holding off lifting the official rate until it is certain the world economic recovery is more firmly based. The Australian

Too soon to claim compo: oil body
Threats of legal action by commercial fisherman for compensation over the West Atlas oil spill were premature until claims of harm to wildlife could be confirmed, according to the offshore oil industry's peak body. The Australian

 

THE WEST AUSTRALIAN:

Page 1: Telstra's stranglehold on Australia's phone and broadband network is coming to an end after the Rudd Government said yesterday it would break up the company to deliver consumers greater choice and modern services.

Page 4: Telstra will face fines of $10 million if it fails to comply with tougher consumer protection standards under the Federal Government's plan to restructure the telco.

Page 6: The battle to take credit for the Gorgon gas bonanza moved to Parliament House yesterday with little ground given on either side.

The Gorgon partners' decision to go ahead began creating jobs immediately yesterday when WA company Mermaid Marine started interviewing wharfies.

Page 7: While mining booms send some people laughing all the way to the bank, small businesses like North West Mechanical and Fleet Service in Karratha claim it is nothing but trouble.

The State Government has not done enough to prepare for the next mining boom in the Pilbara, which is facing a population explosion twice as big as the last one, according to the Chamber of Minerals and Energy.

A natural gas project with a more immediate effect on WA households and businesses but overshadowed by the Gorgon project broke ground yesterday.

Page 10: The Reserve Bank wants to raise interest rates but it is not convinced the economy can withstand it, the minutes of its latest meeting reveal.

Business: Telstra could be deprived of a massive revenue stream from mobile phones and broadband if it refuses to bow to the strongest form of separation proposed by the Federal Government.

The head of the national broadband network has rejected claims that businesses and households will be hit with a steep increase in prices, saying the new network will need to be priced to match the market.

Telstra's partners in Foxtel will be in the box seat to snap up the telco's stake if it decides to shed its share of the pay-TV network.

News of the $34 billion Gorgon LNG project's go-ahead has made headlines around the world as global attention focussed on Australia's emergence as "energy superpower".

WA engineering contractor Clough has underscored Monday's official go-ahead for the Gorgon liquiefied natural gas project by winning $540 million worth of work on the project.

BHP Billiton chief executive Marius Kloppers' pay packet soared 51 per cent to $US10.39 million ($12.08 million) in the June year despite boradbased government and and community pressure for executive pay restraint in the wake of the global financial crisis.

Brokers would need to record market rumours, ban their staff from creating rumours, try to verify rumours and consider whether a rumour was "widely circulated" before passing it on, under a new plan put forward by the corporate regulator.

Grain growers wishing to bypass CBH's storage and handling networks in the country and at port will find renewed incentive after the bulk handler's announcement of restructured port and storage handling fees.

 

THE AUSTRALIAN FINANCIAL REVIEW:

Page 1: Telstra will be compelled to splits its operations or face drastic curbs on its future growth, under federal legislation introduced yesterday to get the company to support the Rudd government's $43 billion national broadband network.

Stephen Conroy knows Telstra too well to allow it to blackmail him by stringing out talks over regulation into next year, when the pressure of an election would force him to accept a bad deal.

Page 3: Stockbrokers and investment advisers will be forced to verify and record stockmarket rumours, under guidelines proposed by the corporate regulator yesterday.

East coast hoteliers have slashed room rates in the past six months in a bid to lure guests as the economic downturn lingers in Australia's travel sector.

Malcolm Turnbull's plans to negotiate with the government over emissions trading have hit a significant hurdle in the opposition party room, meeting with trenchant criticism by a large number of Liberal and National backbenchers.

Page 4: Agriculture Minister Tony Burke has failed in his first attempt to reform biosecurity, after opposition senators rejected his last minute offer of a $20 million sweetner to appease exporter's concerns about increased quarantine certification fees.

Page 7: Prime Minister Kevin Rudd has ordered the Department of Defence to report to cabinet's powerful National Security Committee twice a year on efforts to curb cost blow-outs and delays on big ticket military projects and to realise a separate $20 billion cost cutting program.

University campuses are set to be disrupted today as the National Tertiary Education Union stages a 24-hour strike to force a sign off on higher wages and lighter workloads.

Page 8: The Reserve Bank of Australia is increasingly confident the recovery is on track and has firmed in its view that interest rates will have to rise.

Page 9: Rains in Western Australia have lifted the official forecast for the nation's winter crop to its highest level in four years, but the value of the harvest is dropping as world wheat stocks rise and prices plunge.

Page 10: You need to kill a monopoly to make a monopoly. That's the thinking behind Stephen Conroy's reform of the telecommunications sector.

Page 12: There was scant mention of the national broadband network (NBN) in the regulatory reforms yesterday. But make no mistake, the new laws are designed to ensure Telstra cannot compete against the $43 billion project and damage its financial and political viability.

Competition regulator Graeme Samuel last night declared that the Rudd government's communications reforms would allow him to take faster action to stop companies gaming the system, while bringing industry rules closer to those already applied to gas and electricity utilities.

 

THE AUSTRALIAN:

Page 1: The Rudd government has given Telstra an ultimatum to split its wholesale and retail businesses or it will be forced to sell key assets and locked out of new broadband and mobile phone opportunities, in the biggest shake-up of the communications sector in a generation.

Stephen Conroy's radical reshaping of the telecommunications industry will not change the way Australians use their mobiles, surf the internet or watch pay-TV.

Page 2: Building industry watchdog John Lloyd has criticised the Rudd government over its handling of his future, with taxpayers facing a $115,000 compensation payout if he departs before his contract expires next year.

Page 3: The James Hardie company is to sue a Queensland council to recoup compensation paid to an ailing worker, potentially sharing liability for the misery caused by its asbestos products.

Page 4: Malcolm Turnbull's shaky leadership took another heavy blow yesterday when he was confronted with a partyroom rebellion over his position on climate change.

The Reserve Bank believes private banks are coming under funding pressure that may force them to raise mortgage rates, and is holding off lifting the official rate until it is certain the world economic recovery is more firmly based.

Page 6: The telecommunications sector yesterday welcomed reforms that will force a break-up of Telstra, saying the changes would put rocket fuel into competition and greatly benefit consumers.

The Rudd government's new telecommunications legislation will put Telstra on the operating table for a bout of radical surgery.

No Australian government has ordered the break-up of a company the size of Telstra like Stephen Conroy has now done.

Page 7: Future Fund chairman David Murray has denied the fund had any advance knowledge of the government's plans to force a structural separation on Telstra when it sold a major parcel of shares in the company three weeks ago, netting $2.4 billion.

Government ministers are gloating over the decision by one of the country's leading economists, Henry Ergas, to put his consulting business into voluntary administration.

Page 8: Kevin Rudd's uncle -- Kevin de Vere -- reckons his nephew has saved the economy and now it is time to rescue the family heartland.

Threats of legal action by commercial fisherman for compensation over the West Atlas oil spill were premature until claims of harm to wildlife could be confirmed, according to the offshore oil industry's peak body.

Page 9: Asia-Pacific airlines are tipped to account for a third of a worse-than-expected global industry loss of $US11 billion ($12.8bn) this year and will be hit harder than carriers in every region except Europe.

Business: Investors dumped Telstra shares yesterday as the federal government placed its regulatory sword of separation against the telco's throat and made real its threats to dismember the telecommunications industry giant.

The government ultimatum to Telstra - separate or be forced to sell assets, such as its $1.5 billion stake in Foxtel - has come at an opportune time for Kerry Stokes.

BHP Billiton may remain cautious about a global economic recovery, but the mining giant has substantially boosted its Australian thermal coal and iron ore reserves that will help it ride a return to growth many are expecting.

The Reserve Bank has added weight to financial market expectations that official interest rates would not be increased next month, saying it was yet to be convinced the economy was on a sustainable growth course.

A day after approving the $43 billion Gorgon liquefied natural gas project, Chevron and its partners have awarded a $2.7bn contract for procurement and construction management of the huge LNG plant to be built on Western Australia's pristine Barrow Island.

BHP Billiton chief executive Marius Kloppers' total remuneration jumped 51 per cent to $US10.4 million last year as the value of his long-term incentive award share grew.

If the talk is right, the sales process for the failed Great Southern Plantations has unearthed an offer for the group's managed forestry projects that is expected to be recommended by the receiver McGrathNicol.

Rio Tinto has made a small step towards the sale of Alcan's engineered products division, taking on its first private equity partner by selling a controlling stake in the cable unit to Platinum Equity.

The boss of Woolworths' new hardware joint venture with US retail giant Lowe's is banking on houseproud Aussies to make the company's big-box outlets a viable competitor to market leader Bunnings.

The financial crisis has eaten into the earnings of credit unions and building societies, with the industry's net profit falling 24 per cent from $454 million to $344.5m for the June financial year.

The corporate watchdog has released a consultation paper on the responsible handling of market rumours in response to suggestions of widespread manipulation of markets during the financial crisis.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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