South Korea has begun collecting a levy on domestic banks and local branches of foreign banks it introduced in August, hoping to help the economy guard against shocks stemming from rapid capital flows in and out of the country, the Finance Ministry said Sunday. The Australia & New Zealand Banking Group Ltd. paid $759,000, making it the first foreign or domestic bank to pay what is called the "macroprudential stability levy" to the Bank of Korea.

Australia’s Prime Minister Julia Gillard may be forced to follow U.S. Federal Reserve Chairman Ben S. Bernanke by increasing mortgage purchases as house prices slump and the nation’s biggest banks extend their grip on the home-loan market, Bloomberg reported. Non-bank lenders including Greater Building Society and CUA say more government purchases of residential mortgage-backed securities will be needed as Europe’s debt crisis saps investors’ appetite for risky assets.

Thousands of travelers were stranded Friday after budget airline Air Australia went into voluntary administration, immediately grounding its entire fleet, The Washington Post reported. The Brisbane-based international and domestic airline, formerly known as Strategic Airlines, said all flights had been canceled and the airline would not be accepting new bookings because it could no longer pay its bills. Voluntary administration in Australia is similar to bankruptcy protection in the U.S., and can buy a company time to trade out of its financial problems.

Fledgling carrier Air Australia yesterday hit out at rumours that ANZ Bank is considering winding up the company amid worries from some creditors about outstanding payments. A spokeswoman rejected suggestions parent company Strategic Group was being put into receivership or administration. She did not respond to suggestions the company was as much as $30 million in debt or that several creditors were chasing payments.

Joe Hockey has called on Australians to embrace a new spirit of austerity, saying families and businesses should pay off debt to prepare for up to two decades of economic turmoil, The Australian reported. The opposition treasury spokesman said it critical for the government to pay off debt, but similar policies should be pursued in households and boardrooms. "The bottom line is that we are going to have a very volatile period, economic period, for the next 10-20 years, " he told ABC radio.

Cracks are starting to appear in Australia's housing market, The Wall Street Journal reported. The value of homes in Australia's capital cities has fallen 4% in the first 10 months of this year. By June, Merrill Lynch predicts, house prices will be 10% below the June 2010 peak. Those numbers might not look too alarming given the depth of recent housing crises in other parts of the world. But weakness in Australia's property sector could be especially acute because of a boom in investment-property ownership.

Rogue liquidators have been put on notice after the government announced new laws to protect creditors from misconduct by corporate undertakers, The Sydney Morning Herald reported. Under the changes revealed yesterday, creditors such as banks and small businesses will have the power to pass resolutions dismissing liquidators without court permission and to cap fees charged by insolvency firms.

The federal government is providing the corporate watchdog with $11.4 million in additional funding to help strengthen scrutiny of the insolvency industry, The Sydney Morning Herald reported. Outgoing Attorney-General Robert McClelland released a suite of new proposals for the industry on Wednesday. They include new money for the Australian Securities and Investments Commission (ASIC) to reform the way insolvency professionals are registered, disciplined and regulated.

Residential property builder National Builders Group is the latest company to be issued with an ultimatum from its bank: either refinance its loan with another bank or sell the business, The Sydney Morning Herald reported. The group, which generates revenue of between $25 million and $30 million selling home building services ranging from drafting, engineering, selecting fixtures then outsourcing construction to a builder, is in talks with Malaysian company MAE Synergy to buy the business by December 30. But National Builders Group is still very much a going concern.

Data released by the Australian Securities and Investments Commission showed that Queensland's small business owners continue to bear the brunt of uneven economic conditions, making up more than 80 percent of the state's initial insolvency reports, the Courier-Mail reported today. Queensland's small business insolvency is higher than the national average of 78 percent. Of the 1468 initial external administration reports filed for Queensland businesses, 1192 involved companies that employed fewer than 20 people.