AUSTRALIAN NEWSPAPER HIGHLIGHTS - AUGUST 1, 2007.

SYDNEY, August 1 Asia Pulse - Highlights of today's newspapers:

THE AUSTRALIAN FINANCIAL REVIEW:

- Prime Minister John Howard has slammed the Australian Labor Party's plan to give more power to the states, accusing Opposition Leader Kevin Rudd of walking away from his responsibilities on key election issues such as health and education.

- A leap in building approvals, strong business borrowing and the largest jump in personal lending on record sees the market shorten odds of an interest rate rise next week.

- Opposition treasury spokesman Wayne Swan steps up his attack on the coalition over housing affordability, accusing Treasurer Peter Costello of deceit in his criticism of Labor's A$500 million (US$426 million) housing plan.

THE AUSTRALIAN:

- Immigration Minister Kevin Andrews releases details of an internet-based conversation involving freed terror suspect Mohamed Haneef; Prime Minister John Howard attacks Labor's plan to give the states more freedom over how they spend federal funding; Macquarie Bank (ASX:MBL) says two of its funds could lose up to A$300 million because of the collapse of the United States' sub-prime mortgage market.