KiwiRail to build $40m carriages in Dunedin, buy locos in China; first government-insured finance company fails; common border for New Zealand and Australia?; Bluff oyster season begins; and more

Good news and bad news for local workers lead the South Island papers this morning. The Otago Daily Times celebrates the government's decision to spend $40 million set aside by the previous government on 17 passenger carriages for TranzScenic rail routes. The contract has been awarded to Dunedin company Hillside Engineering, which has 195 staff and 50 suppliers. KiwiRail will also borrow $75m to buy 20 new locomotives from China. The Press however reports "a horror day" with Sealord announcing a staff cut of 180 from its Nelson factory, Christchurch's water-jet propulsion company CWF Hamilton saying it will lay off at least 29 people, and GE Money announcing a net reduction of 40 jobs.

Good and bad news as well for investors in property lender Mascot Finance. Mascot, which owes 2558 investors $70m, yesterday became the first company covered by the government's Retail Deposit Guarantee to fail. Receivers were called in yesterday, but Treasury secretary John Whitehead says investors will get all their money back. Meanwhile Treasury's February economic summary has confirmed its December forecasts were too optimistic, with unemployment rising and export demand falling.

Australian Prime Minister Kevin Rudd said his country's relationship with New Zealand was "core" to its foreign policy after his first bilateral talks with John Key in Sydney. The pair agreed to speed up work on a possible common border so that flights across the Tasman could be treated as domestic flights and to look at harmonising climate change policies.

The New Zealand Herald leads with a report that the National government wants New Zealand's aid budget to better reflect the government's policy goals and to be part of a "New Zealand Inc arrangement". Labour and aid agencies are horrified, with local Oxfam chief Barry Coates worried that aid could be spent "for political purposes rather than the benefit of the country concerned".

EPMU boss Andrew Little was yesterday elected unopposed as president of the Labour party. While planning to stand as an MP in 2011, he said his goal was to rebuild the party's grassroots and reconnect it with voters.

This season's first Bluff oysters went on sale yesterday after a successful opening day on Sunday. In Christchurch prices reached $30 a dozen, while in Dunedin they were around $26 and "delicious".