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(generated from captions) save somebody, a day or a week

or a month or a week or a year

I'm doing something for my own

experience. He received an

honorary doctorate from Sydney

University for his

activism. (Applause) He was

named a living national

treasure and received an Order

of Australia. And there were a

swag of music awards. Thank

you, music lovers, you've given

me a long and illustrious

career. Three years ago, Jimmy

Little's career came full

circle, with a new recording of

that old hit.

SONG: # Telephone ... # I look

at the past sometimes and say

gee, I value living in that era and there are some things in

the past I would've changed had

I been able to. But not the joy

of things of the past.

SONG: # My father

# Taught me all the things

# I needed #

# Like identity ...

# And dignity ... # And we had

expected to be talking to the Israeli Deputy Foreign Minister

Danny Ayalon tonight. But

unfortunately, he was delayed

in traffic in Jerusalem and

couldn't make it to the studio

in time for the program. So a

look at the weather:

That's all from us. If you

want no look back at any of

'Lateline's stories or

transcript you can visit the

web site and also follow us on

Twitter and on Facebook. The

business news is coming up now

with Ticky Fullerton. I will

see you again tomorrow night.


Closed Captions by CSI

Tonight -'s China's

changing of the guard. It's

doing good business but there's

a power struggle going on in

Beijing. China has only once in

the last 25 years successfully

and smoothly handled the

transition of leadership. I'm

Ticky Fullerton. You're watching 'The Business'. This Program Is Captioned


China's promising greater

openness, but behind closed

doors there's political intrigue so a murky business,

the struggle for the top jobs

in a once in a tech Kade

leadership transition.

Retailers say they're paying

the price as on-line consumers

buy now but do the figures add

up? And put your money where

your mouth is, face News Corp

to Fairfax over its accusation

of pay TV piracy. First a quick

look at the markets.

Beijing is cracking down on

Internet users for reportedly

circulating rumours of a coup.

It's just a glimpse of the sensitivities of party bosses

as a once in a decade power

struggle plays out. China

watchers say the Conservative

wing of the party is still very

much in control, but whoever

wins, the promise is a more

open China focusing on economic

stability. Here's Phillip

Lasker. Global markets are

celebrating the latest better

than expected manufacturing

numbers from China as a sign

engineered a soft landing for the powers that be have

the economy. But the statistics

can't predict the outcome of a

more significant event. China

has only once in the last 25

years successfully and smoothly

handled a transition of leadership. China's new leaders

will be appointed in October

but some see a power struggle

already under way. With the

removal of an anti-reformist

party boss. Which direction

will China take? Will it move

in what we'd call a western

direction, moving towards something more like

representative government, or

will it use nationalism and

expansionism to try to distract

people from domestic political change? Associate Professor

Fong Song Yia specialist in political developments in China

warns against hoping the

reformers will prevail. So far,

the conservative wing. Party.

They're all I think wedded to

turning their back on the

cultural revolution. Turning

their back on the Mao era of

Chinese politics and developing

a more internationalised more

open China which runs on fairly

well understood economic

lines. Still, a ban on

Internet users commenting on

posts to China's two biggest

blogging siteses and the arrest

of six people did not inspire

confidence. It suggests to me

that the Chinese party state in

its usual overreaction is not

is dealing something which

would be better left to

repressive fol rans. They're

doing it in a more drai Koban

way. Does it also suggest that

the ruling party's survival is

paramount, even if it means

stopping or reversing the

economic reforms welcomed by

the west? They don't intend to ...

That could happen but it's

unlikely and it's unlikely

because of the high degree of economic interdependence

between the Chinese America and

the American economy But some

say a power struggle doesn't

need to be prove found to do

damage, it just needses to be

prolonged. If it does then it

runs the risk of distracting

policy makers from the recovery

Chinese economy through or the stabilisation of the

2012. But so far, it's business

as usual for both China and

global markets. Interesting

times. And to talk a little

more on China and the rest I'm

joined from Singapore by Grant

Williams the strategy adviser

at Vulpes Investment Hedge Fund

and auth authorities of the

investment newsletter 'Things

That Make You Go Hmmm'. Welcome

to the program. Hi Ticky. How

much store should we put in the latest Chinese manufacturing

figures, do you think? As with

most Chinese figures depends

which one you're talking about.

There are a couple of PMI

numbers that come out of China

there is the official one today

which came in at 53.1, a 12

month high and a lot of good

numbers in it but we had the

HSBC PMI number which came in

at a disappointing 48 which was

down to a four-month low. There

are some differences between

the two. The HSBC one concentrating very much from

the bottom up. It looks a lot

more at some of the smaller

businesses and some of the

businesses that don't get

direct state funding whereas

the official one concentrates a

lot more on so bigger

enterprises. If you look at the

sample size in the official two there is a slightly larger

number. That's the one a lot of

people from overseas look at

but we have to pay attention to

the HSBC number which was

slightly more disappointing.

It's worth pointing out that if

the official number has a

slightly more sketchy record at factoring in seasonal adjustments. Historically the

March number is 3% than the

January and February numbers

which is when Chinese New Year

comes in. There is no cut and

dried number. We've also got

this growing political tension

in China. We have a closing

down of web sites and blogs and

talk even of coups. How serious

is all this It's very difficult

to look at China through a

western eye. The microbloging

sites have become phenomenally

popular in China. They've been

allowed to proliferate to the

point where last week they

became a slight problem. They

closed them down for three days

to delete and clear up any

messages that the government

aren't too happy with. They

reckon 200,000 messages have

been deleted. 16 sites have

been closed down. Six people

have been arrested for posting

what have been deemed to be inflammatory remarks on the Internet. They're an important

tool but they will be allowed

to be as important as the

government is happy with them.

Any time there's a problem they

will be stepped down fairly

quickly. Do you think it will

have any sort of impact on the

economy more broadly? I don't think that will particularly

have a major effect. Obviously

we're in an election year in

China which don't come along as

often as other countries. It's

a very important thing for

them. They'll do everything to

ensure as much stability as

possible between now and

October when we hand over.

These goings-on with this

leader being ousted a very

senior member of the party, his

pedigree was impeccable, that's

the kind of instability that

the Chinese do not like there

is a lot of people focusing on

that, but realistically we

never really know what's going

on. We do know some very

important people have been

pushed out. That's a very big

sign of weak France China and something they will be looking

to smooth over as quickly as

they can. Let me throw over to

Europe. Another half a billion

euros now available to fight

fires through 2013. The markets

are reeling from Eurozone

unemployment data, a 25-year

low to 10.8% in February. 17.8 million people out of work

now? Yes an that's clearly a

big problem. Everyone knows the

numbers in Greece are very

high. Everyone knows the

numbers in Spain, Portugal

verio are very high. Today we

had Italy at a 17 year high.

The unemployment is clearly a

problem. We had Eurozone PMI

numbers out. That's below 50

which signals a contraction. So

with every good number, it's

great. There's a lot of people

cheering those good nmts when

they come out but we haven't

seen a broad enough selection

of decent numbers to suggest

that this recovery is

self-sustaining. So numbers

like unemployment are very important and # 5 year highs do

not play well. Also, I've had

we've got big banks like BNP

par bar, even banks in Italy

and Spain saying they're going to repay most of the money

they've borrowed, these cheap

three year money under the LTRO

in less than 12 months S that

like lie? If things pick up,

and if business is booming,

absolutely, I'm sure they will.

But the problem is we've seen

already when they took these

loans down loft that money went

straight back on deposit with

the ECB. When you lend people

money and they have control of

it, they will pay it back when

they're good and ready. It's

fine to say we'll pay it back

in a year but if in 11 months

the overall financial situation

of the market has changed they'll hang on to the money

once they've gotity promise

you. With this new combining of

funds, combining the EFSF with

the European stability

mechanism, the ESM, it's been

said that this should have a

greater level of control over decisions to fund anything

because it needs a unanimous

vote from members as opposed to

the ECB which just needed a

majority vote. Do you think

there's going to be more

control over the kitty now? Any control over decision out of Europe as we've

seen in the past 12 months it's

a very, very difficult thing to

pull off. A majority decision

is one thing. If you need any

kind of unanimous decision from 17 countries haul with

different metric, all with a

different angle on the outcome

it will be a very, very tricky

thing for them to pull off I

have to say. Grant Williams,

thank you very much for joining

us. Thanks Ticky. Australian

retailers are crying foul with

overseas on-line competitors

dodging the GST on goods of

less than $1,000. The latest

missive in this campaign is a

specially commissioned report

which claims tens of thousands

of local jobs are at stake but

will moving that tax-free

threshold really be the

leveller retailers are crying

out for? Price and convenience

are luring shoppers to the

Internet and for Australians

sometimes those prices can be

jaw dropping. People can source

their products from 40 to 60%

lower prices via the Internet

from offshore providers. Some

of the discount is view to the

low value threshold or LVT

where overseas purchases under

$1,000 don't attract the

GST. Unless the government acts

quickly to close this tax

loophole we'll see very

substantial job losses across

the Australian retail sector.

That's been measured at around

33,000 jobs. That's the

conclusion of an Ernst & Young

study of the LVT's impact commissioned by the national

retail association. We cannot

expect to see the shifts of

domestic trade offshore and not

expect substantial job losses. But some are

questioning the report's

findings. Is the LVT having the

size of effect that the Ernst &

Young report suggests? Almost

certainly not. Is that the big

story in Australian retailing?

No. Former ACCC commissioner

Stephen King says only about 2%

of Australia's retail spend is

at overseas web sites. He

argues enforcing a zero dollar

threshold would cost far more

than it would recoup. Even

reducing the threshold to say

$100 wouldn't be worth while

because 90% of offshore

purchases are less than

that. Now, the idea that

capturing one quarter of 1% of

retail sales in a low value

threshold will save 33,000

bricks and mortar retail jobs,

I just think that is

incredible. There's no denying

that retail is having a tough

time in Australia at the

moment. The sales line is being

impacted badly by poor consumer confidence. They're paying

above CPI increases in

represent and labour costs are

rising. It means US and even UK

bricks and mortar shops are

undercutting Australian prices

by half. They've got an

enormous population and much

more store numbers so they can

offer product at a lower price,

take a lower gross margin. So

it's not the Internet per se or

on-line transactions per se

that's causing the problem.

There's something wrong with

our bricks and mortar model

here in Australia. A lot of that has to do with the

economies of scale and if we

can close this tax loophole, we

think our pricing will be

competitive within two or three

years. But some say in that

time, a substantial amount of

what we buy overseas on the

Internet will be very difficult

to track. By 2015, most of

those books brought in from

overseas, pretty much all of

the music and pretty much all

of the film will be coming

across as data. So all of those

electronic transactions for all practical purposes, they will

not be taxed. The national retail association says calling

for the scrapping of the LVT is

as much about protecting

Australian on-line stores. We

don't believe that we can have

a competitive on-line sector

wile this price disadvantage

prevails. I can't see them actually matching the price is

of the orshore alternatives via

the Internet. As a share of employment, retail has been

going on for 10 years. They

predict it's going to continue

on. Most of those 118,000 jobs

that they look at, most of them

will be lost regardless of the

low value threshold. And

coupled with advances in

technology at the check-out and

in distribution, the outlook

isn't particularly rosy. From

retail to whole sale now and

Metcash remained in a trading

halt today with the company

expected to announce a multimillion-dollar writedown.

The board of the country's

biggest grocery whole saler met

today to consider management

recommendations. The owner of

IGA, Mitre 10 and Franklins has

been trying to sell its 80

Franklins stores which is

bought for $215 million last

year. Analyst s say the company

has been having trouble finding

buyers for some of the chains.

The Chief Executive has warned

the price war between

Woolworths and Coles is hurting

the sector. Metcash is

expecting growth in the low

single digits. Andrew Reitzer

says the company is it

struggling with unof its worst

years on record. The local

market started with high hopes

after positive news from China,

but ended the day flat. Stephen

Pill from RBS Morgans watched

all the action A reversal of

fortunes on the broader market.

What appears to have spooked

the market late in the

session? Market had a very

strong opening. We were up 40

points at one stage before

falling in the afternoon

closing down 6. It seemed to be

a bit of investors concern on

some of the local data. We'd

had a pretty strong lead out of

China over the weekend, some

strong PMI data. Looks to be

some profit taking. Some of the

weakness was also driven around

the fact that it was the

opening day of the quarter and

might've just been a bit of

movement on the books for some

of the larger hedge funds who'd

driven the close up over the

last couple of days in the

quarter last week. You

mentioned the China niece PMI

figures. Was that why resource

seemed to be the only bright

spot really? Looking at the

market today, it was definitely

the large resource cap sthoks

that outperformed. BHP although weaker in the en was something

like 1.5%. It was a stronger

day for Rio, the likes of

Fortescue Metals and Woodside. They were the bright spots as

you noted. The banks were all a

bit weaker today. They've had

very strong runs in the last

couple of weeks. Some of the

consumer stocks like Woolworths

and Wesfarmers were weaker and

it was pretty much across-the-board. A steep

slide in February's building approval figures according to

the statistician. How have building material companies

fared as a result? They had a

bit of a mixed day. They were

basically you look at something

like James Hardie that was

pretty much flat. I don't think

the market was expecting those

figures. So it will be

interesting to see how they

respond over the next day or

so. On top of that we've got

the Reserve Bank due to meet on

a rate decision and I wonder

exactly what is in their

thoughts and what this will'

end up doing tomorrow. I'm sure

you're not the only one. In

company news, Pan Aust has

started processing gold at its

second mine in Laos. Investors seemed to like that

announcement? They were up

almost 5%. The stock has been

beaten up pretty much in the

last couple of weeks. As all

commodity particularly copper

based stocks have. That've got

ad 200 million project at their

mine, looking to start

production in about two weeks.

So that looks very positive for

them. We particularly like that

stock in here. I think both

from a copper perspective and

also from a technical

perspective t looks like it's

probably due for a bounce and

has some good upside from these

prices. Good to talk to you up

there in Brisbane. Thanks

Ticky. To the other major

movers on the local share

market now.

Put up or shut up. That's

the message from News Corporation to the Fairfax

Group over its allegations of

pay television piracy by a News

Corp subsidiary NDS. While the

Australian 'Financial Review'

is sticking by its story, News

Limited's local boss Kim

Williams says it's nothing more

than a conspiracy theory and he

says if Fairfax has any evidence the company should take it to the

take it to the police. Its it's

editors at 10 paces as

Australia's two National

Daylies trade blows. I've been

appalled at the aggression shown by News Limited.

Trying to prosecute these

things through the pages of the

media is fraught with risk. And

is frankly inconclusive. Since

last Wednesday, the 'Financial

Review' has devoted 20 pages to

News Corporation's partly owned

subsidiary NDS which is alleges

engaged in piracy that cost the

Australian pay television

industry more than $50 million

a year and hobbled News Corp's

rivals. It follows similar

claims last week on the BBC's

Panorama program. The

combination of what Panorama on

the BBC revealed with hackers

an pirates giving oncamera

confessions combined with the

14,400 emails from NDS that the

Formula One review has in my opinion makes for a compelling

says. I think what's been established so far is that

there was a great deal of

activity relating to the

relative merits of NDS's

technology compared with its

competitors. Much of that could

pass as business as usual

product testing. BBY's media

analyst says the 'Financial

Review' has not made a

convincing case and many of its allegations don't stack up in a

business sense. Frankly from

News Corp's wider standpoint it

has far more invested in the

pay TV industry at large than

in NDS in particular. So

anything that would undermine

the viability of the pay

television industry would most

expressly be against News

Corp's own commercial

interests. On Saturday, NDS

took out a full-page ad in the

'Financial Review' rejecting

the paper's allegations. That

was followed by a letter to the

editor by News Limited's boss

Kim Williams who says the AFR's

coverage is merely a conspiracy

theory looking for a story.

Austar which is about to be

taken by Foxtel rejects claims

that it too was a piracy

victim. The problem with the

very aggressive defence by News

Corp is they did precisely the

same with phone hacking in the

UK for about five years. Before

they finally admitted they'd been involved in

industrial-scale criminality.

So far, these allegations are

yet to have any noticeable

impact on News Corp's share

price. Shareholder activist

Stephen Mayne says that's

because News Corp pulled off a

remarkable coup in agreeing to

sell NDS to Cisco for $5

billion just days before the

claims surfaced. So clearly,

the market is comfortable that the company will pocket

billions of dollars of windfall

gains from its controversial

NDS subsidiary, and they don't

believe that regulators are going to take action that will seriously damage the company's

earnings going forward. It

took five years for the UK

phone hacking scandal to wound

News Corporation. And it may

take just as long to see

whether these new claims have

the same impact or merely end

up as fish'n'chip wrapping. The

bad news just keeps coming for

the troubled manufacturing

sector. A peak industrial index

ratesed activity at 49.5 in

March, a sharp contraction from

the previous month. The

Australian Industry Group says relentless pressure from the

high dollar and weak domestic

market continue to stifle

manufacturing performance. This

month's poor figures come after

three month of tentative

growth. And Sydney has led a

rise in national home prices

for the second month. Capital

city prices rose 0.2% in March

with Sydney prices rising more

than 1% in the first three

months of the year according to

RP Data Rismark. It comes as

building approvals slumped more

than 7% in February, the lowest

level since 2009, defying

expectations of a modest rise

but don't expect any rate

relief. 24/24 economists

surveyed by Bloomberg say the

Reserve Bank will leave the

cash rate unchanged tomorrow.

And - in Queensland - BHP

Billiton is declaring a force

Madge jur at its Bowen Basin

mine citing rolling strikes and

bad weather. Thousands of

unionised workers have staged

stoppages since mid 2011. The

world's biggest miner owns

seven mines in the region.

Analysts say the move has the

potential of driving prices up.

A look at what's making

business news in overseas

newspapers. The 'Wall Street

Journal' says congressional

Republicans and Mitt Romney's presidential campaign are

working to fashion proposals

that could make up ground with

Hispanic voters concerned

rhetoric on immigration from

many in the party is turning

away the increasingly powerful

constituency. And London's

'Financial Times' says the

outgoing President of the world

bank Robert Zoellick has kd

backed the creation of a BRICS

bank. Mr Zoellick says the need

for such an institution

highlights the failure to mobilise sufficient resources to support large developing

cunning trees. And that's 'The

Business'. You can watch the

show Monday to Thursday at 8.30

each night on ABC News 24 as

well as after 'Lateline' on

ABC1. I'm Ticky Fullerton.

Thank you for watching. Goodnight.

Closed Captions by CSI Sugar Horse? What is it? No idea.

(SCREAMS) I promise I've never seen that before in my life. It's all right. I know you had to do it. I'm afraid that when I told you I'd never heard of Sugar Horse, I was lying. I need you to remember everything that happened at the time it was mentioned. Who was present? I was tortured for 17 days. Continuously. Was Sugar Horse the reason? I'm certain it was. When I was meant to be out cold, I kept hearing a word repeated - Pilgrim. I checked it out. The only link seems to be to an MI5 officer. You all right? You and me. The old team. Richard Dolby, Hugo Prince and I conceived the most complex viral network of spies ever to have infiltrated the Russian political system. We recruited young pro-Western minds in all areas, with one aim. To ensure that in 20 years, we would have moles at the very highest levels of Russian life... ..moles who could limit or destroy the Russian nuclear threat. We have that capability. remained entirely uncompromised. Operation Sugar Horse, which has had interrogated me about it. Yes. Until I told you that the Russians knew about Sugar Horse until now. And I didn't know how the Russians from a Sugar Horse asset in Moscow I am waiting for some intel of a mole within MI5, a traitor, and then I will expose the identity British Intelligence operation. who has tried to sabotage a 20-year both here and in Russia. all hell will break loose, When I expose the mole, I'll need both your support. Anything at all. Whatever you need, Harry. Thank you. Thank you both. MAN SPEAKS IN LOCAL LANGUAGE SCREAMS of 325 Palestinian civilians NEWSREADER: Last week's killing sent shockwaves through the region. by an Israeli missile in Gaza has in London in two days' time emergency summit to be held The announcement of an the cycle of attack and reprisal. last chance for both sides to stop represents what surely must be the and UN negotiator Claude Denizet Rachel Beauchamp British Foreign Secretary amount on the success of the summit. have both personally staked a huge great historical complexity here, TV: Well, we are dealing with that go back thousands of years... with ownership rights They're staying at the Stanmore. the Palestinian Fatah delegation. I've got the security details of in Knightsbridge. The Israelis are at the Haymarket and the UN negotiating team? And Claude Denizet They're staying at the Asquith. Not inside the hotel. Can we get surveillance? be thrown from diplomatic prams. of spying on them and toys will Each side will accuse the other Ros, can I show you something? or military equipment sold online. to explosive substances I have a filter that alerts me 7.2 VHI immobiliser. What is it? A limited issue It just flashed this up. An assassin's best friend. In English. all the electrics freeze up. Point that at a moving vehicle, classified stock. They are. I thought these were a highly explosive political summit? the public domain two days before So what's it doing in and Palestinians touch down. before the Israelis I want that in safe hands the liberty of buying it. Good. I'm glad you said that. I just took PHONE RINGS 'Where are you?' Is he always that arrogant? Negotiator into his hotel. I've just seen the UN Special on your way in.' Croissants? 'I need you to pick something up Not exactly. to bring both sides together. RADIO: 'We must achieve it towards a lasting peace.' cannot put us off the path 'This latest incident is notoriously pro-Israel. 'But Claude Denizet DOORBELL RINGS needs to be completely impartial.' 'Surely a special negotiator