Today's Headlines
PM’s $3.5bn for states to fire economy
The Federal Government plans to give the states $3.5 billion in extra payments for education and health over the next seven months, leaving the federal budget near a deficit. Treasurer Wayne Swan said yesterday the proposal, part of a $15.2 billion deal with the states, would help create 133,000 new jobs. But states have warned that the package may not come through speedily enough to ward off the looming threat of recession. Observers expect the latest national accounts figures, due out this week, to show almost zero economic growth. Page 1, Australian Financial Review.
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Australia squibs on climate promise
Climate Change Minister Penny Wong has left for Poland to attend the United Nations climate talks that start today, but will not present a 2020 target to cut greenhouse emissions at the summit. The decision has led critics to accuse the Rudd Government of back-pedalling on its previous commitment, but Senator Wong said a formal announcement had to be delayed until the release of the final version of the Government’s carbon pollution reduction scheme on December 15. Page 1, Sydney Morning Herald.
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Australians flee Thai crisis
Qantas Airways was set to fly a 297-seat aircraft from Bangkok to Singapore last night to ferry Australians out of Thailand’s capital after an attack on anti-government protestors. A grenade explosion yesterday injured 50 protestors at the office of Prime Minister Somchai Wongsawat, as a siege of Bangkok airport by thousands of people opposed to the Thai government continued. Foreign Affairs Minister Stephen Smith said the Australian Government was trying to get Thai authorities to approve extra flights out of the country. Page 1, The Age.
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Angry shareholders turn up heat on directors
Directors seeking re-election to the boards of some of Australia’s most prominent sharemarket-listed companies are increasingly facing shareholder protests, according to an analysis of annual general meetings this year. Companies that recorded investor votes of more than 10 percent against the election or re-election of board members include Qantas Airways, Insurance Australia Group, Transurban, Lend Lease and Crown. Telstra and Wesfarmers director Charles Macek yesterday called the trend a ‘significant challenge.’ Page 1, Australian Financial Review.
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Creditors line up for proceeds of FreightLink sale
Adelaide-to-Darwin railway FreightLink is facing almost $900 million in debt claims from creditors, and is likely to be sold by receivers before the end of January. The company’s administrator, Steve Parbery of PPB, said yesterday that receivers KordaMentha would launch a campaign to sell FreightLink’s assets. FreightLink’s creditors, led by the Royal Bank of Scotland, include Australia and New Zealand Banking Group, Societe Generale Australia, Bos International, and Banca Intesa. Page 16, Australian Financial Review.
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Business Today
Dragon bosses put to the knife
Westpac Banking Corp has begun to dismiss the tier of managers below divisional leaders that formerly ran St George Bank. Three of St George Bank’s senior executives have already departed — chief executive Paul Fegan, chief finance officer Michael Cameron, and retail bank head Les Matheson. Only six out of St George’s 70 general managers are expected to be appointed to commensurate positions in the Westpac group, although some will probably take lower-ranked jobs in the new organisation. Page 17, Sydney Morning Herald.
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Hardie dashes dividend
Building materials company James Hardie has suspended its interim dividend and reported a 36 percent drop in net profit compared with the previous year. The company yesterday reported a net profit of US$76.2 million for the six months to September, excluding costs associated with its ongoing market watchdog civil action. Company earnings have been adversely affected by a slowdown in the United States housing market and the global financial turmoil, according to chief executive Louis Gries. Page 17, Australian Financial Review.
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Fegan rejects ‘subsidiary’ role
St George Bank chief executive Paul Fegan has turned down an offer of a secondary role following the lender’s merger with Westpac Banking Corp, opting instead to take a $4 million payout. Westpac chief executive Gail Kelly is likely to cut the number of group executives at the merged bank to 12 from 23 after she finalises her executive committee before the end of the week. Following the Federal Court approval of the merger yesterday, Westpac is expected to take control of St George Bank from December 1. Page 19, The Australian.
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Fortescue takeover rumours resurface
Andrew Forrest’s Fortescue Metals Group has denied speculation that the West Australian iron ore miner was in takeover talks with China Investment Corp. The denial came after the South China Morning Post reported that the $200 billion Chinese sovereign wealth fund was moving on Fortescue jointly with Baosteel Group and China Shenhua Energy. ‘We’re not talking to anyone, there are no discussions,’ a Fortescue spokesman said yesterday. Page 20, The Australian.
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Unviable ABC centres in spotlight
Receivers of failed childcare learning centre operator ABC Learning will on Wednesday shortlist the unviable childcare centres from the 386 that were under review. Chris Honey of McGrathNicol last week named the centres that would stay open next year and those still ‘under review.’ Barbara Romeril of Community Child Care Victoria believes that unprofitable ABC Learning centres could be made profitable as community-based centres if they receive funding from the Federal Government or other agencies. Page 19, Sydney Morning Herald.
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