Businesses are bracing themselves for the worst start to a financial year in more than a decade, with Australian sales and profit expectations at their lowest point since the 1991 recession and employment growth expectations at their worst level in two years, reports the Smage. The latest D&B Business Expectations Survey shows that one in three businesses now report signs of a drop-off in spending, up from 22% in April.

BHP Billiton chairman Don Argus and chief executive Chip Goodyear can’t believe their good timing in the WMC takeover – on paper they have already doubled their money, says Robert Gottliebsen in The Australian. The huge BHP paper profit reflects the fact that the US and Chinese economies have not slowed down as expected, so the prices of copper and nickel are substantially above the independent expert’s valuation level and uranium looks set to take off.

BHP’s use of an equity swap arrangement with Deutsche Bank at the onset of its WMC bid has added to the focus on derivatives and concerns that, because they don’t create a relevant interest in underlying shares held by the counter-party, they could be used to circumvent disclosure rules and the Takeovers Code, says Stephen Bartholomeusz in the Smage.

Mirvac will be hoping that its earnings guidance for 2006 will stop the rot in the group’s share price following the forecast of a lower profit for 2005. And it might work, says Bryan Frith in The Oz, because the latest forecast is in line with the industry consensus and better than many had anticipated.

The Fin Review reports that taxation commissioner Michael Carmody has vowed to get tough on small business owners who consistently default on tax debts, requiring them to report monthly and warning that the ATO will take overdue payments from their bank accounts. Also in the AFR, the $15 billion drug industry will be hit by new multimillion dollar fines and executives could face long jail sentences under a sweeping government plan to tighten the regulations on drug manufacturing.

On Wall Street, US stocks crept higher in reserved trading overnight as investors awaited comments from Federal Reserve chief Alan Greenspan. The Dow Jones closed up 6 points, or 0.1%, at 10,467. MarketWatch has a full report here.