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(generated from captions) of installing a safety switch.

Transport Minister say it won't

remove the - electricians say

it won't remove the dangers,

the same experts say the cost

of making 50,000 homes safe

will come in at around $90 million. From Canberra Emma

Griffiths. These days

insulation is a suspect in a

roof fire, it's believed new

insulation had been installed

in this Western Sydney home,

and this afternoon its roof

went up in flames, and

collapsed, two firemen were

slightly injured. It's too

early for investigators to

determine the cause. On the

broader disaster engulfing the insulation scheme, the Treasurer determined the cost

of repair. It will be expensive, there's no doubt

about that. Wayne Swan admitted

other programs may

suffer. We'll have to make the

Budget fit these costings, it

may well be the case that we

will have to make adjustments

elsewhere in the Budget because

of these

adjustments. Electricians

estimate the cost will hit $90

million to pay for ripping out

the foil insulation or

installing a safety switch, and

one day after the fix was

announced industry experts say

the safety switch option isn't

all that safe. There are

supplementary means of

protection, they are not a

primary means of protection. I

have concerns that relying on

them will leave gaps, safety

gaps where people could be

hurt. The Leader of the

Opposition. The Opposition

picked a weakness How can the

public have any confidence that

the Government can fix the

of its Home Insulation massive public policy failure

Program. The questions elicited

a Prime Minister stumble. The

Department of environment water

heritage and arts spent five

minutes deciding - five months

doiting the final policy implementation. Kevin Rudd

revealed he received a letter

Environment Minister Peter last August from the

Garrett that tougher measures

were needed to control the

insulation scheme. Did he warn

in that letter of fire, fraud

or safety issues and isn't this

why the Prime Minister won't sack Minister Garrett because

the buck stops with the Prime

Minister? These obviously are

associated with the cabinet

process and we are

appropriately protected. The

Opposition is trying to pin

some of the responsibility for

the insulation scheme's

dangerous flaws on Kevin Rudd,

it's the apparent flaws in Tony

Abbott's paid parental leave

scheme that the Government Opposition Leader wants big wants to talk about the

business to fund it. The

Government says it will lead to

higher prices for consumers and

one Liberal backbencher

agrees. Any impost with a

company will flow through to

consumers, that is a fact. They

let the cat out of the bag,

what a dirty smelly animal it

is. The legislation to bring in

the Government's plan is yet to

be introduced to parliament.

Tony Abbott indicated the

Opposition may not try to block

it. I am not in the business

of the frustrating small steps

forward for Australian women

and families. He will frustrate

the Government. This is the

foil that works, unlike the

foil the Government used. By

trying to amend it. The UN

Secretary-General Ban Ki-moon

has announced an independent

review of work carried out by the Intergovernmental Panel On

Climate Change will take place.

The IPCC has been under

pressure over errors found in

its last comprehensive Climate

Report including unsub

substantiated claim that

Himalayan glaciers would be

corner by 2035678 There were a

number of areas. 2035. There

were a number of areas. This is

a 3,000 page synthesis of

complex scientific data. I have

seen no credible evidence that

challenges the main conclusions

of that report. The review will

be carried out by the Enter

Academy Council, a body made up

from representatives of science

academies from around the

world. Shadow Treasurer Joe

Hockey gave a speech in

Melbourne calling for

anti-terrorism legislation to

be reviewed even though he

voted for the existing laws in

2005. He used the address on

civil liberties at Melbourne

Institute's Grattan Institute

to stake a claim as a Libber

tare yam. Calling for more

personnel responsibility, and attacked Internet laws proposed

Hamish Fitzsimmons was there by the Federal Government.

for 'Lateline'. The Shadow

Treasurer spoke about the

traditions of liberalism, believing Government at all

levels have gone too far into

people's lives. I fear step by

step, and in a way that barely

registers in the consciousness

of most people we are losing

some protections against the

arbitrary and interfering

actions of the State. Joe

Hockey is positioning himself

as a Lib tarian rather than a

Conservative Liberal and is

questioning laws he voted

for. As a Liberal and lawyer

it's the anti-terrorism laws

enacted by a Government of

which I was a member that has

given me cause to reflect on

our rights. Joe Hockey is

worried freedoms are being

eroded and believes the Ain

terrorism laws are at the heart

of it. Laws including preventive detention and

control should be constantly

reviewed. It is my view these

laws cannot stand for all time.

What we must do is Objective

ly, dispassionately review advo

kasies, and preferably in a

bipartisan way. If we find the

laws are not used or not

needed, they should be

repealed. Australians, he says,

are becoming too accustomed to

regulation over individual

responsibility. If a company

goes bust, the Government

should save it, if we eat unhealthy, it's the Government's fault for not

regulating fast food outlets.

If some of our children are

delink wept, it's our schools

to blame, not the parents. If

people are drinking too much,

then it's up to the Government

to change drinking hours and

close liquor outlets, as we

suggested recently on Australia

Day. Joe Hockey wants violent

video games to come under a

classification system, he sees

moves to determine what we see

online as dangerous. What we

have in the Government's

Internet filtering proposals is

a scheme unworkable in practice. More perniciously

it's a scheme creating the

infrastructure for Government

censorship on a broader

scale. Joe Hockey is critical

of police stop and search

powers, saying States and

Territories are making demands

for increased police

powers. Surely the Australian

interpretation of liberty

extends to the right of an

individual to go about their

daily business without being

subject to a random body-search

by police. The police do not

have to declare a reason for

the random body-search. In my

view this goes too far. Whether

Joe Hockey makes any of this

speech part of the Coalition's

election strategy reto be

seep. There's been an emotional

protest over the death in

custody of an 18-year-old

Aboriginal man. The indigenous

community say Hao was denied treatment in prison. The

Minister met the man's family

to reasewer them the death

would be investigated -

reassure them the death would

be investigated. Sheldon Currie's mother took her

concerns to parliament. Sips

his death she has been

grieving. The 18-year-old was

on remand at the Arthur Gori

correctional centre when he became ill after stealing

cars. He was given Panadol, denied medical substance and told there was nothing wrong

with him. The death sparked

outrage in the indigenous

communities. What kind of

values do you put on the

Aboriginal life. Prison Chaplain Reverend Alex Gator

says she was called to the jail

to calm inmates after Sheldon

Currie was found unconscious on

the floor. The Murri Boys

nearly caused a riot, yelling

to the officers to get the boy

to the hospital, "He's in pain,

agony". He was taken to

hospital and his family says poor treatment continued

there. I was sleeping on the

floor and I was sent away from

his ped the night before I lost

him. The man died at the

Princess Alexandra Hospital, at

the time the Corrective

Services released a statement

saying there were no suspicious

causes and the death would be

referred to the coroner. This

afternoon family was given a

private meeting with the

Corrective Services Minister

who conveyed sympathies. In the

end, I made this clear to the

families, all the issues, claims, concerns will be on the

table for investigation. The

death will be investigated by

the coroner, and the Chief

inspector of prisons. The

policemen at the centre of the

2004 Palm Island death in

custody has begun testifying at

the reopened inquest into the matter. Senior Sergeant Chris

Hurley told the Coroner he

couldn't explain how Cameron

Doomadgee went from fighting

and resisting to being dead in

less than 50 minutes. The

officer watched a video

recording of Cameron Doomadgee

in the watchhouse in which six

cries could be heard and the

prison seen rolling from side

to side. Senior Sergeant Chris

Hurley said if he heard the

cries he would have gone into

the cell. The officer was acquitted of Cameron Doomadgee's manslaughter in 2007. Senior Sergeant Chris

Hurley will continue to give

testimony tomorrow. And now to

our guest, the 2010 'Australian of the Year', Professor Patrick McGorry. Professor Patrick

McGorry is an internationally

renowned expert in the mental

disorders of young people, best

known for his pioneering work

on early intervention and

treatment of psychosis done at Melbourne's Orygen Youth

Health, key parts of his team's

research and models were

adopted in the United Kingdom, Canada and Western

Canada and Western Europe, but

not nationally in Australia.

That may be about to change.

Professor Patrick McGorry is

calling for an overhaul of the mental health system and the Federal Government appears to

be listening. Professor Patrick

McGorry joins us in the stood why. Thanks. Since you were

named 'Australian of the Year',

as I understand it you have

been flooded with horror

stories about the mental health

system from all over the

country. Do you get the

impression that we are facing a

crisis beyond what you

imagined. I was aware of this

myself but it gives graphic relief to this problem all

around Australia. The figures

underpinning this are quite

stark. 65% of those in

Australia with mental health

problems have no treatment at

all, no treatment access

whatsoever. When we talk about

delays for elective surgery,

90% of people with health

problems get good access for

care, the lopsided nature of

the system is revealed by this.

One-third of Australians with

mental health problems have

access to treatment. Are you

getting personal accounts

coming to you, it would be

obvious you'd be a lightning

rod, I suppose, are these

flooding your office. These are

graphic in very large numbers,

emails, letters, quite

distressing stories, now, I'm

familiar with that myself

anyone on a day to day basis

from working in the mental

health system. The scale of it

is coming to the fore, I think

Australians are starting to

realise that their mental

health needs are as important

as physical health. Here is an

astonishing figure, 500,000

presenting with mental illness

have been turned away from

hospital emergency

wards. Unfortunately the the

acute end of the system,

hospital Emergency Departments

is the lightning rod, the place

where this desperation presents

and they can't cope. Many

people are discharged to other

forms of care or really to what

people aren't really sure. We

don't know what is happening to

these people. It's an incredible number of people to

have been turned away from

hospitals. It is, and it shows

that the system is lopsided and

the lack of upstream investment

in community based services,

beds, mobile outreach teams,

housing services, vocational

recovery programs, all the the

community elements of care are

disinvested in really. The States and Federal Governments

appropriately is looking at

supporting the health system

and the reform process. We want

to be a part of it. The mental

health system needs that

support to help the States deal

with the problem, particularly

on the community side. Is what

we see the inevitable side of

shutting down mental

institutions in the first place, people have to present

somewhere, but when they have

acute mental illness, there's

nowhere to take them. There are

a few acute facilities, those

are overstressed, understaffed

and in trouble themselves. We

need to take the pressure off

the cute end of the system by

investing upstream. It's 15

years or so ago when we started

to leave the asylum system of

the 19th century behind, our first attempt struggled because

of a failure to invest at the

appropriate level in the right

way. Did Governments think they

could save money, shutting the institutions, asylum. It's

meant to be a place where you

can find care. There's a

pejorative tone to that now. Is

there something else you could

put in their place for people

with acute problems I think we

do need a different range of

beds in mental health. We need

more therapeutic environments

than what we are left with with

the acute mainstream acute

hospital beds, they are far

from therapeutic because of

pressures placed on staff and

the system by the lopsided

model of care develop. You

model of care develop. You

talked about havens instead of

asylums. I think we need

smaller community based

environments which are

therapeutic and a range of bed

types which we haven't develop.

Where the governments trying to

save money, we haven't

developed a 21st century of

care with a balanced system, up

and down stream to provide the appropriate level of

resource. It could be

expensive. Is it clear what is necessary

necessary in your view in terms

of funding, and in the views of

others in the mental health

area. There's a strong

consensus in the field, it's

portrayed as being divided. My

experience is it's a unified

view of what is needed. It's a

combination of things, it's

upstream investment in a range

of community based services, it

may involve strengthening the

acute system it's not an either

or approach, there's a system

of care that is missing, that's

an early intervention model of

care that we have in cancer and

heart disease, if people have

early warning signs of illness

the doors open up, they are

welcomed into the health system

for appropriate care. That

doesn't happen in mental

health, that burden of that

falls squarely on young people,

children, adolescents emerging

adults where 75% of emerging

mental health problems appear

for the first time. Let's take

a step back for a minute to the

sort of funding necessary to do

the things you are talking about. Are State Governments

cape ail of doing it, is this something the Federal Government will have to provide

new funding for. With the best

will in the world, in some

states, particularly Victoria,

there's been a fairly committed

effort to try to do this, but

clearly the State Governments

need help. Some states more

than others, but just as the

Federal Government has

recognised the States need help

generally to cope with growth

and meeting the needs, nowhere

is that more apparent than the

mental health system. You are waiting for the Federal

Government to show its hand

because it's unclear as yet.

There's a fear obviously that

they could get bogged down in a

debate over what happens, just

with hospitals. There's a

concentration on waiting list

issues, the old chess nuts that

come out in terms of health

funding. It's a more serious

situation on the mental health

side, the mental health field

is anxious to be part of the

is anxious to be part of the

solution, and not be locked out

and excluded. Is it a public

image, mentally ill may have

worse problems than someone

waiting for a hip replacement.

Being on a long waiting list,

the ones waiting for the hip

replacements get the publicity,

front page stories on tabloid

newspapers and so on. We are

not trying to compare levels of

suffering, there's no doubt

people with mental illness and

disorders are the most disadvantaged in terms of

access to care and quality of

care, that's not to say there

are many dedicated people

working in the mental health

systems trying to make it work. They are not receiving the

right level of support, that's

where the system needs to be

scaled up more than anywhere

else, it's not expensive. When

we spend 100 billion on the

health system, we are talking

about an investment of several

hun dret million, it's the cost

of a major hospital, a level

making a significance

difference. You have made this

argument to the Prime Minister,

to the health Minister, are they listening. They are

definitely listening, I hope

and expect. Are they

receptive. They will make an

receptive. They will make an announcement on this in the

next few weeks, I'm hopeful and

expect on behalf of the

Australian community and the

mental health field to see

general reform in the mental

health field as we have been

promised in the general health

system. We want to be part of

this, mental health must be

part and central to this. Your

area, we will now,

area, we will now, is mental

illness in young people, your specialty, there's a hidden

element, the scale of tp it

give us an idea. There are 1 million Australians age the

12-25 with a mental illness,

it's the peak period when

mental disorders appear.

750,000 of them have no access

to mental health care

currently, if the access is 35% in general, it

in general, it drops to 25% in

young people and 13% in young

men, this is the least

accessible part of the health

system, because it's not

designed for them. The health

system is designed for younger

children and older adults with

chronic disease, basically, and

in the middle we have healthy

adults who their main health

problem is mental health and

substance abuse disorders.

substance abuse disorders. The

system is not strong, it's

weakest where it needs to be

strongest. There's something

ironic, it's more than a decade

ago that I met you, you worked

on Crown-breaking research,

modelling how - ground-breaking

research, modelling how you

could help early intervention

stopping psychosis in young

people becoming chronic, built into their

into their system so it becomes

something they suffer for a lifetime. The early

intervention model seems to

have worked well in Victoria,

it's been transported, as I

said at the beginning to many

parts of the world, but not

Nationally in Australia. What

happened. Well, in the late

'90s there was a lot of

support. It died off. Other

countries ran with it, there

are hundreds of centres delivering

delivering early intervention

for psychosis. This reform is

recommendation No.2 on the

health and hospitals reform

condition list of mental health

recommendation, it's overdue,

evidence is strong now, not

only does it improve outcomes,

the early detection and

comprehensive care in the first

few years after diagnosis, it

saves money, we published a paper showing the cost

paper showing the cost of cares

over the next eight years after

diagnosis dropped to a third

for patients receiving early

intervention compared to those

that received generic late

intervention, it's economically irresponsible not to role it

out in Australia. Let's talk

about how it would roll out if

it were to be done. The first

stage in the process is a

system called the head space

program, which I guess

program, which I guess is where

young people are picked up in

the early stage, and then if

they show signs of serious

disorders, they can be

transferred to the - to where

you deal with the serious

disorders with the early

intervention. How many of these

head space centres there could

be or should be and how much

that would cost. To give the

Government a pat on the back, they have set

they have set up 30 of these

one-stop shops around

Australia, every State and Territory has this resource

developing. It's a toe in the

water. It's treated 20,000

young people in a one stop shop

youth friendly environment. Low

stigma, young people are voting

with their feet. 93% are

engaged in the centres, and

benefit from them. It's been

benefit from them. It's been evalulated. The Government is seriously considering expanding

this. You want them to build 60

new centres similar to this to

reach regional Australia and

other parts of the country, how

much would that cost. Head

space is recommending and

requesting a level of support

from the Federal Government,

it's 60 centres, we want the

existing ones strengthened so

they can hit their straps and

treat more young people. 90

treat more young people. 90

centres would, over time,

provide services to 250,000

young people per year, which

would make a big dent in that

level that I referred to

earlier. They need to be backed

up, as you said, by specialist

youth mental health

centres. That's the second

part, the specialist centres,

the ones that take the young

people that look like they may

have psychosis, you want 20

more of those built 20 of those

nationally over time. It would

be feasible to establish 10 in

the first stage, costing $100

million recurrent. Expanding

head space and backing it up

with an effecting youth

friendly system of care for serious disorders, not just

psych owesies, borderline

parliamenty, serious mood

parliamenty, serious mood

disorders would be an effective

system, for a cost of $200

million recurrent, a fraction

of the cost of the a major

metropolitan teaching hospital

Australia's front line services

for young people would be

transformed. It's not the only

thing we need to do, but the

area I'm focussing on. The cost benefit. It would be

substantial, we commissioned

Access Economics to do a

Access Economics to do a broader spectrum report on

youth mental health care this,

is a 10-30 billion industry

depending on whether you koust indirect as well as direct

costs. The cost effectiveness

goes up the more you scale up

the system, showing you can

increase the cost effectiveness

by a factor of 10 scaling it

up. There are all sorts of

benefits, in terms of savings,

welfare benefits, more tax

returns, I mean, we are making

a key section of the population

more productive, and more

mainstream members of society

through the interventions. Potentially saving their

lives. Suicide, we haven't gone

on to the suicide issue, youth

suicide, homelessness, these

are collateral damage from

poorly treated or not treated

problems. Do you have a

champion inside cabinet to help

you push this through, you'll

need one. We definitely need

champions inside Federal

cabinet and the Opposition.

It's a bipartisan issue we are

looking for support for, and

mental health has never really

had that kind of support in the

past. We have had dissultry

support at different times, we

need solid support from the

Australian community too, all

the people that have been

writing to me, contacting me we

need them to indicate much more

strongly on the back of the

awareness that's improved in

Australia that new services are required. Professor Patrick McGorry, we'll have to leave

you there, I guess a lot of

people understand why you are

'Australian of the Year', but

we thank you very much for

joining us tonight. Thank you

Tony.

For 10 years imports of

American beef have been banned

from Australia as a result of

the bovine disease, more

commonly known as mad cow

disease this, week imports

begin again, but in a backflip

the Government extended the ban

for two years, Australia

exports 10 times the beef that

it used to import from the US,

now some industry leaders say

that Australia's trading

relationship with America is

under strain. In the last 24

hours there's been two new

developments, Canada revealed a

case of Mad Cow disease, in

Western Australia a suspect

case of scrapie is disease

similar to BSC has been found

in sheep. Ticky Fullerton

investigates. The hysteria this

generated I've never seen

anything like this in the beef

industry before. Last Sunday the Minister for Agriculture

was asked why he was ending a

10-year ban on American beef

imports to Australia. There was

no longer a scientific argument

for keeping it out. The ban was

lifted, but on Monday a policy

backflip. The Government would

conduct a new import risk

analysis that would take two

years to complete. Effectively

shutting out imports and

keeping the ban. There has been

no case where a Minister has

directly used their discretion

to initiate an import risk

analysis. About five minutes

ago I became the First Minister to do

to do so. Beef industry peak

bodies were stunned, saying

they had already negotiated

tough import protocols with

Government precisely to protect

the Australian market. And that

a new import risk analysis now

threatens to anger our

second-biggest trading partner,

the US If it can't be expedited

it will be used or will

actually automatically act as a

trade barrier. I have never

this will the last few days

heard anyone allege that this

was a protectionist

measure. But is this decision

driven by science or a very

effective campaign. Last month

an unholy a-Senators armed with

Aussie meat pies claimed the

protocols to protect the

Australian consumer and beef

industry will be useful. You

won't know whether that meat in

this pie came from the US or

Mexico. This is the biggest

ambush of agriculture and

betrayal of consumers by any

Government. Backing his claim

hef tabled evidence in a Senate

that a BFC positive cow was

identified in Canada two weeks

ago but only just made public,

warning thousands of Canadian

capital move into the US and

Australia is at risk. Why do

you need a risk analysis. Last

week Trade Minister Simon Crean

ruled out an import risk analysis. Bill, you can have

your chance after, if you can't

get an audience on your

own... Simon, you are not a

farmer, the farmers know the

story, you've not done an

import risk analysis. The trade

Minister was given a cattle

prodding by Alan Jones. Why

won't you ask for an import

risk analysis on this, which

will take a couple of years,

looking at the risks. IRA, risk

assessment, all that does is

term the risk to the animal,

not to human health. Today

Minister Burke defended the

backflip on an import risk analysis. The import risk

analysis, even though some

people who welcomed it will may

have welcomed it for the wrong

reason, the truth is it's a

science based process, nothing

more, nothing less. I think

other countries would be likely

to use this as a weapon of the

WTO. Yesterday the US

Ambassador met Tony Burke. US Embassy says it is surprised

and concerned by the import

risk analysis. It's serious

when the ambassador feels

inclined to come out and make

this an issue in the press.

The United States, I'll let the

US speak for themselves, but certainly the United States

would prefer the fastest

process possible. You can

understand that. We have

similar views when we try to

get exports into different

countries. Industry leaders say

it's Australia's annual 300,000

meat export business to the US

which is at stake. In a bizarre

coincidence yesterday in

Western Australia, the first

case of a possible scraipie in

sheep, a brain-degenerating

disease, I asked the Minister

if this was the sort of case

the US could use to

retaliate Until we get the

testing information coming

through, I think we are in the

realm of hypotheticals, as the information is available it

will become public. Today the

US Embassy restated a concern

to 'Lateline', but would not be

drawn on discussions with the

Government. We take the samples

first. Given the heightened

concern about VSE Australia his a

a robust policy towards blood

transfusions, the other

possible transmission of the

human version of the disease

variant CJG. Anyone who spent

six months in Britain between

1980 and 1996 cannot give blood

in Australia, anyone who spent

similar periods in France or

other parts of Europe can, yet

BSE was President in many

cattle in France as I

discovered back in 1999 to the frustration of the British

farmer. In France or Ireland,

your whole herd was

slaughtered, completely and utterly, which is the right way

to get rid of it. There was an

encouragement not to report BSE

but to bury them. French

research in the British Journal

Veterinary Science found as

many as 300,000 cows were affected in France. In New

Zealand the ban on blood

donation covers visitors to

Britain, France and Ireland.

Canada and the US include more

European countries, but the

Australian Government is

standing by its current

policy. There's been no

instances as far as I'm aware

of any transmission through

blood in those countries, the

incidents of VCJG was lower than the United Kingdom,

significantly lower, and the

travel patterns between

Australia and the United

Kingdom are higher than

continental Europe. We think we

have the balance right and the

decision taken some years ago

by the expert committee was the

right one. The Government sees

no contradiction in its

policies on beef, imports and

blood. Time for a look at the

weather - gusty showers in

Brisbane, late showers or

storms in Darwin, isolated

showers for Sydney, late change

for Perth, sunny in the other

capital cities, 'Lateline

Business' coming up. If you'd like to look back at the interview with Professor

Patrick McGorry, or review

stories or transcripts, visit

the website, and fol us us on

Twitter and Facebook. Now here

is 'Lateline Business' with

Whitney Fitzsimmons. Tonight - promising

promising a return to growth,

Myer tries to reassure

investors still hurting from

the retailer's float. We are

seeing a gradual return to

normal retail demand and a

heyday of what retail will be

once again. Too much of a good

thing - inflation fears prompt

calls to slow the Chinese

economy Further tightening will

come through in China. I think

at the end of the day all the

authorities are trying to do is

contain growth, stopping it

getting out of control. Telstra

fairs in favour as politicians

prepare to vote on the

country's future. If the

Government considers Telstra to

be a mere monopoly and wants to

break it up, where is the

commercial or constitutional or

the legal benefit with

replacing it with another

replacing it with another monopoly.

First to the markets, the All

Ords dipped after more than a

week of gains, the ASX 200 lost

ground in Japan the Nikkei rose

by nearly 1%, Hong Kong's Hang

Seng lost 74 points, and in

London the FTSE fell in early

trade. Shortly we'll cross to trade. Shortly we'll cross to London.

China stepped out of the

shadows of the global financial

crisis but faces a new

challenge, it released a robust

set of economic figures,

including a boost to retail

spending, the threat of rising

inflation has officials

concerned. Desley Coleman

reports. A great raft of

economic data has been released

by China. And the figures are

impressive for Australia's

biggest trading partner. The

strength of the Chinese economy

is great news for Australia, it

means ongoing demand for

Australian raw

materials. Factory output

expanded at its fastest pace in

5 gleers up 21%, it's a double

- it's a double edged sword,

inflation at the factory gate

climbing 5.4%, consumer

inflation surges to a high, CPI

2.7% higher than a year ago.

Retail sales growth of the

19.4% is seen in a positive light. Domestic demand is firm

in China, it's a little bit of

a myth that China is export

driven. It's the world's

strongest rate of growth in retail sales for a major

country, it seems as if the

consumer in China is alive and

well, picking up pace. The

pace and the quickening

inflation rate puts the

Government under pressure to

lift interest rates. For the

first time since December

2007. Probably in the next

little while or so we'll see a

move to raise interest rates in

China, the bottom line from the

numbers is that we'll see

further tightening coming

through in China, but I think

at the end of the day all the

authorities are trying to do is

contain growth, stop it getting

out of the control. Economic

news from China is going from

strength to strength, earlier

trade figures revealing exports

caught up with imports, both

growing by more than 40% in

February. The release of the

trade numbers followed premier

Wen Jiabao's speech at the

opening of a National Peoples

Congress, when he maintained

economic growth would hit

8%. Year after year the Chinese

Government comes out with an 8%

forecast. That's the forecast

released arpted around the National Peoples Congress for

the last five years, my feeling

is it's a minimum rate of

growth and for the last five

years it's come in above 8%,

including last year, when it

came in around 8.7%. My own

forecast is closer to 11%, I

think this point of the global

recovery cycle the starting

point for credible forecasts on

what will happen start at

10. The Chinese premier

promised to clampdown on

property speculation and

tighten up the superannuation

of bank lending as talk of

asset bubbles - tighten up the

supervise vision of bank

lending. I'm joined by David Tinsley of the National

Australia Bank. We heard

there'll be tightening of

monetary policy in China, what

is it doing to the markets. The

London market is down a little,

resource stocks are down more,

as your report coming into this

was suggest, we view this in a

bigger, which is an economy

growing at 10%, exports up 50%

on a year ago. 2.7% inflation

is modest. You'll see

tightening, monetary tightening

in China, it will be modest

over the course of this year.

We don't put too much store by

the scare stories, if you are a

big capitally intensive future

selling into the mark, you want

to see a long-term sustainable

expansion in China, not an over

the top boom, if you like.

Monetary policy, a tightening

of that is part of the solution

for China, not part of a

problem. There's no deal to

pull Greece out of its debt

crisis, is the uncertainty causing problems causing problems throughout

Europe. There's no explicit

deal on paper, noises from

European leaders, President

Sarkozy of France make it clear

that the Greeks aren't going to

be allowed to fail. They'll pay

their bills one way or another.

At the moment the market is

fairly content with that.

Really the Greek problem has

returned to really being a

domestic political problem,

big, general strike in Greece

today, about 2 million people

out on strike. It's become a

domestic political concern

again. The looming UK election

has the markets concerned. Why

is that. Well, really, because

the poll, the opinion polls

tightened considerably of late,

it points to a hung parliament

in the UK, which no party has

an outright majority to form a

Government of their own, the

United Kingdom has its own

fiscal woes, to cut spending,

raising taxes after the next

election, and worries about

hung parliament and narrow

opinion polls make the markets

concerned they won't be able to

do that. Recent employment data

out of the US showed it's

struggling, so what can we

expect to see from the January

trade balance figures due out

shortly. Not a great deal, to

be honest, as the US comes out

of recession we are likely to

see imports as firms restock, that means the trade deficit

may widen a bit in joint

enterprise, really in the North

Atlantic there's a lot of

January data confused any the

weather, various short cold

spells and snow on both sides

of the US and Europe. The data

is pretty confused at the

moment on that score, we'll

have to wait for a couple of

months to get a view of the

underlying picture. To the

other major movers on the

market. Atlas Iron surged 6%

after an announcement of a

merger with Aurox. Downer EDI

downgraded because of changes

faced by financial guarantors. Leighton

Leighton Holdings gained 1.5%

on news it had secured a $463

million contract, on the Hong

Kong Express Rail Link. And

iiNet was nearly half a per

cent higher after confirming

it's in discussions with

parties regarding a potential acquisition. On currency

markets - the Australian dollar

is stronger.

Gold slipped to its lowest

level in two weeks yesterday.

Telstra shares have rallied

again with the Senate paced to

block Government plans to

break-up the telco, Telstra

added 6% in two days, as debate

in the Senate continued shareholders are confident

their company will not have to

split operation and be able to

keep ownership of its network infrastructure, Andrew

Robertson reports. Telstra's

beleaguered shareholders have

this little to ring home about

in recent times, as politicians

began to debate the company's

fate Telstra shares added 5.5%

in two days. Liberal Senator Michael Ronaldson thinks he

knows why. The shares you are

up 7-8 cents today on big

turnover on the back of the potential for this legislation

to be defeated. That

legislation is the Government's

plan to block Telstra from

buying Next Generation mobile

phone spectrum if the company

doesn't separate its network

for retail operations. What we

have seen here is a slow motion

train reck from Senator Conroy

and his handling of the policy.

If the Government considers

Telstra to be a near monopoly

and wants to break it up. Where

is the commercial or

constitutional or the legal

benefit with replacing it with

another monopoly. While the

likelihood of Telstra remaining

intact buoyed sentiment.

Shareholder analyst Greg

Canavan believes there's more

to it than that. Fixed line

revenues are under pressure,

the Government will make money

and people will come to the realisation there's a strong

dividend yield, stock prices

are cheap and it's time to

buy. Dispoit the euphoria of

the last couple of days a look

at the last few months

highlights Telstra's struggled.

By contrast the ASX 200 is 49%

higher than last march. Greg

Canavan believes Telstra will

improve in the short to medium

term, only to about

$3.30. There's a lot of risk

around telestraw, regulatory

risk is the main, I don't think

they've gone away. We'll see

volatility in the weeks ahead.

There's fundamental value,

that's what investors are

starting to look at: The

change in sentiment towards

Telstra is closely watched by

its competitors, rival Internet

provider i-iiNet says a Senate

vote against plans to break-up

Telstra will be bad news for

the telco sector. We'll be

back into the same fight we've

had for 15 years about improved

competition in the telecommunications market in

the Australia. We have seen the

current regulatory regime fail

to deliver the public policy

that this Government and previous governments have been

pushing. If the Government's Telstra legislation has been

defeated companies like iiNet

will be able to move their business to the National Broadband Network, but Steve

Dalby said it won't be the best

solution. It will be important

to get the volume of traffic

that Telstra's business

generates on to the network as

well, to ensure that the

national infrastructure is competitive, cost effective and

not working at loggerheads

against a capper boiffed

network that Telstra owns and

operates. A Senate vote on

Telstra's future is expected

next week. Myer finally

delivered positive news for

disillusioned investors in the

retailers public float. First

half net profits up 38%, the

retailers expects to meet full

year earnings guidance, Myer

will pay a fully franked

interim dividend of 10.5 cents

per contrary, the shares are

below the listing price, I

speak with Bernie Brookes, a

short time ago. Welcome to

'Lateline Business'. Thank

you. Your sales for the period

were up 2%, but lower than

forecast in the prospectus,

what changed. We said at the

results announcement that sales

were below the prospectus

forecast of 3%, we had a

forecast of 3 and ended with a

2%, we circled a Government

stimulus, and customers that

performed an enormous amount at

Myer didn't have much money in

their pictures. It resulted in

a slight Dekker um. There's

been a profit performance

support to what was in the

prospectus. You revised

downwards sales for the full

years, is there a chance it

will drop further. We've been

prudent in providing a forecast

for the second half of the

year, there was a Government stimulus taking place in the

April, May, June period, we

traded up 4% in comp in the

last quarter, we are circling

big numbers in the last

quarter, we thought it was

prudent to provide an

assessment of where we think

sales will be. There's two

other factors contributing to

that. We don't have stores

until the first stores kick off

in the July at North Ryde and

November - October/November in

Robina, and we have the Myer

Melbourne store, six of the

stores are closed. Those are

big ticket items with an impact

on the sales. Bernie Brookes

the bright start was Myer

private labelled sales, they

were better than expected. Y We

worked hard with a lot of

exclusive tiners, Tony Matai

chess Ki, Wayne Cooper, Nicola

film ety and a number of designers developing Fusion

ranges and ranges of product

across women's and men's ware.

We have products such as

Basque, Blark, we spent time

making sure they are marketed

and they are as good if not

better than other brands, they

are sourced differently, we

have our own designer, we

invested in this area to make

sure the grand have a point of difference in the

marketplace. Is there a time

where we shift focus and

concentrate on the bask style

of labels and shift away from

designer types lake Wayne

coopers. It's a good question. One of the challenges

Department stores face, is

encouraging the sales of your

own exclusive product. Plus

making sure we do a good job on

brands such as astronautica and

Tommy Hill to make sure we look

after the brands whether it be

Apollo to premium brands. You

have to get a balance, that's

what the customers want. The

secret to our future ranging

and marketing of product is

making sure we are in line with

what the customers want, no

matter what category of the

store we are in. Given stimulus

spending is falling and

interest rates set to rise, how

confident are you that

strategies to increase sales

growth will work. We have to

get through the last five

months of strategy. We are

doing it with a large number of

initiatives, we have a program

running called blew sky where

we increased marketing to the

customer, we have more

aggressive product. At the end

of the 5-6 months, we get

Melbourne reopen, the new store

at Robina, and 10 stores after

that, that's when the sales

growth will kick in. Are you

concerned look the at the

retail sector, it's a

lacklustre forecast by a lot of

analysts. The real issue has

been the global financial

crisis and the last calendar

year. We are seeing a gradual

return to normal retail demand

and the heyday of what retail

will be once again. We have

gone through a period where

consumer confidence has been a

little wary, people have been concerned about the level of

debt, paying down the credit

cards, looking for a bargain,

we are seeing a degree of

change, the Consumer Confidence

Index rising, the interest rate

rises, most realise we are at

emergency levels of interest

rates, there's been a need to

move them up, it's well

broadcast and managed. For all

those reasons, we are rnal

confident that the consumer

confidence will graduate back.

This year will be good, future

years will be better as

consumer confidence returns to

pre-global financial crisis

levels. Will discounting play

a more integral part in the

business in the future. The

consumer now has been

reeducated, there's an astute

consumer, they delay purchases,

one of the reasons December was

stuff, we sold more gift cards

than before, and the customers

came out to purchase during

January. We have an astute

consumer, we need to respond to

that and have the right product

when te they need T we plan to

market and special through the

next year because that's what

our customers want. Customers

want a good service and range,

and make sure loyalty is based

on being able to come to Myer

during a stocktake sale and

sale and get a good price on

something, it's a combination

of all of those, we'll provide

it. How do you dread the fine

line between maintaining the

Myer brand integrity, and

finding benefits through

discounting. I think we have a

Myer 1 program. That gives us

the opportunity to target our discounting differently. It

doesn't mean we have to run 40%

off luggage for half price on a

dress. It means we can target

consumers with an offer

relevant to them. It's into

good us sending you a brochure

an children's ware if children

are grown up or offers on

women's ware if the house has

males. We have to make sure we

target the offers, although our

markdowns can be more in many cases they are targeted and

turn out to be less, it's about

being smart in retail as much

as giving things away with

discounting. You increased

margins by 90 basis points,

won't discounting squeeze those

margins. I think we have quite

a few plusses in record to the

reduction in shrinkage, we had

a reduction on improvement in margin coming out of the Myer

exclusive brands, better

overseas sourcing of product, a

number of plusses in margin and

we'll spend that to attract

customers, as proven with a 36

basis points in margin alone

we've been able to take in the

benefit. Spend some to attract

customers and continue to

manage it on a week by week

basis: the organisation has

been on a rapid refurbishment

plan which appears to pay off

in terms of growth, would it

not have been more prudent to

have waited for the IPO once

the facelift was finished. I

think it's a debate that you'll

get a lot of opinions on. The

reality is that we had no choice. The owners of the

business made the decision to

take toward the IPO through to past October last year. Going

forward, the original plan was

50 month turnaround, culminate

ing in November, which would

have seen the change in

ownership in the business, as

much as it's debatable as to

whether it's the right time to

go or wrong time. The reality

was there was no alternative,

owners of the company made the decision, we had to react accordingly. Brookes thank you

for joining 'Lateline

Business'. Thank you. The

competition watchdog criticised

Sydney Airport in its report on

airport performance, ACCC said Sydney Airport increased

profits at the expense of

customers by charging high

rates for an inferior service

and is concerned about the

monopoly of the airports it

monitors has con car parking,

shares in MAP Group fell more

than 1%. Australia's economic

recovery is on track despite

weaker than expected jobs data

last month, in February the

unemployment rate rose slightly

to 5.3% after jn's jobless

figures were revised down. Most

economists forecast the

creation of 15,000 jobs, with

the loss of 11,000 part-time

jobs, 400 new positions were

created. The number was less

than market expectations,

10-15,000, when you bear in mind where the numbers have

been, if this is a correction,

it's modest

correction. Economists say the

numbers indicate employers are

starting to move people back

from part-time to full-time

work. For some people the

Internet is about social

interaction, for others it's

been information, but for the

shrewed it's a place to make

money and lots of it. In the

last financial year, Australians spent around $100

billion buying goods and

services on the web,

increasingly that money is

ending back in the pockets of

well-focussed local business

people. Tracey Kirkland

reports. Pet lover Neil lock is

is young, entrepreneurial