TODAY'S NEWS

 

The Reserve Bank of Australia yesterday warned that house prices and rent would rise as the resources boom had placed greater strain on housing. RBA assistant governor Philip Lowe said that more action was needed to address planning shortcomings and the skills shortage, which both indirectly affect the supply of new homes. “We will need to keep a strong focus on improving the supply side of the economy so that demand can grow solidly without putting upward pressure on inflation,” Mr Lowe added. Page 1. Australian Financial Review

Indonesian President Susilo Bambang Yudhoyono yesterday warned the Federal Government against becoming complacent, saying that the two nations’ bilateral relationship had yet to reach fruition. “We need to do better to harness these economic benefits, we need to encourage our private sectors to do more business with one another,” Mr Yudhoyono said. Page 1. Australian Financial Review

The Federal Government is planning to restrict the sale of special products that allow do-it-yourself superannuation funds to take out loans for investments. The proposal came following a rise in borrowed funds to make investments. Federal Financial Services Minister Chris Bowen yesterday said that super borrowing arrangements, such as instalment warrants would operate within the consumer protection framework for other investments that require a financial services licence for the sale of financial products. Page 3. Australian Financial Review

The Victorian Government yesterday laid off the state’s mining warden, Andrew Swindells, replacing him with former Victorian crown counsel John Butler. Mr Swindells has threatened to litigate the Government over his termination, which took place after he was accused of overspending his budget. “I have not been afforded procedural fairness,” Mr Swindells said. Page 4. Australian Financial Review

The Federal Government is planning to use $50 million in taxpayer money to either remove foil insulation from up to 50,000 homes or install electrical safety switches to correct problems associated with the contentious $2.45 billion home insulation scheme. The Minister Assisting the Climate Change Minister, Greg Combet, yesterday said that a plan was required to examine all homes that had insulation installed under the scheme. Page 1. The Australian

The Federal Government was yesterday questioned over its allocation of crisis literacy and numeracy funding. Northern Territory schools, where 33 percent of students are reportedly failing literacy and numeracy tests, have not received any additional funding. However, affluent Canberra private schools including Canberra Grammar, Canberra Girls Grammar, and Radford College - which Prime Minister Kevin Rudd’s son attends - will receive money. Page 1. The Australian

Queensland Premier Anna Bligh yesterday announced that it would be compulsory for repeat drink drivers to pay for fitting breath-testing devices in their own cars. Ms Bligh said that new rules would be effective from Christmas, preventing offenders that have a certain blood alcohol level from starting their cars. “This is a clear message: if you drink and you drive, you’re not only a bloody idiot; the penalties just got a lot higher,” Ms Bligh added. Page 2. The Australian

The latest Australian National Audit Office report shows the Defence Department has more than $1.2 billion of munitions in an “other than serviceable state.” The report also found that the Defence Materiel Organisation has not completed restructuring its armament procurement process. Australian Defence Association executive director Neil James yesterday said that reducing costs might resolve many of these problems. Page 1. Sydney Morning Herald

Oil refining company Caltex Australia faces an uncertain future after 50 percent stakeholder Chevron yesterday announced that it would make large cuts to its international oil refining business. Chevron chief executive John Watson did not rule out selling its stake in Caltex. Analysts say Caltex chief executive Julian Segal would be given greater freedom to pursue plans to move away from the low-margin oil refining business, if Chevron sells its stake to institutional investors. Page 15. Australian Financial Review

Rio Tinto chief executive Tom Albanese will visit Beijing later this month, and is expected to hold talks with major shareholder Chinalco on possible joint venture opportunities. Chinalco, whose 9 percent stake in Rio makes it the company’s largest shareholder, has recently called for representation on the board of Rio, although sources within Rio described the proposal as “wishful thinking.” Page 15. Australian Financial Review

Perth-based mining company Atlas Iron announced yesterday a $143 million bid for Aurox Resources as part of a push to establish Atlas as a key supplier of iron ore to Asian markets. The bid, if successful, would increase the worth of Atlas to $1.13 billion. Atlas has offered Aurox shareholders one Atlas share for every three Aurox shares held, valuing Aurox shares at A74 cents - a 173 percent premium on its last closing price. Page 20. The Australian

Engine specialist Orbital Australia announced yesterday that it had won a $440,400 grant, to develop its direct injection fuel system for Chinese cars, from the Federal Government’s green car fund. The company has been working with China’s Changan Automobile to fit the system to its four-cylinder engines; if successful, the system could be in production within three years. “If we can get take-up in China, several other companies are interested,” said Terry Stinson, chief executive at Orbital. Page 20. The Australian

Explosives and fertiliser company Orica yesterday lost a court dispute with the Australian Taxation Office over a capital gains tax bill. Orica may need to pay a further $126 million to the tax office, although the company has not yet stated if it will appeal the decision. The court case was focused on Orica’s sale of its pharmaceuticals distribution business to Zeneca in 1998 for $328 million. Page 1. Sydney Morning Herald

Legendary keeper and batsman Adam Gilchrist said he feels safe and protected ahead of the tomorrow’s start to the third season of the Indian Premier League series of Twenty20 cricket matches. Terrorist style threats were made towards the IPL, the Hockey World Cup and the Commonwealth Games. Gilchrist said, "Fortunately the Hockey World Cup has gone by quite smoothly … that’s pleasing." Page 94. Daily Telegraph