Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant the accuracy of closed captions. These are derived automatically from the broadcaster's signal.
Lateline -

View in ParlViewView other Segments

(generated from captions) METAL CREAKS RUBBLE FALLS on that stage When you finally step out

everything together, and you try and bring it's almost a release. and, um, it's just, It's a point where you just go, we've made it again." "Yeah, we've done it,

Arggh! HEART BEATS together and ready It's a long road to get the shows and to really be on top of it, and to get your body in the condition come together, but they eventually somehow always performance time, and when it comes to "OK, let's show what we've learnt, it's like, let's show what we can do." With this piece, foundation and background there's so much of an emotional to lots of the movement, to feed this thing so you're constantly trying so that it's a natural progression. have to think about it so much then. When you hit the stage you don't it's in your muscle memory. It's already in your body, If you're really in the piece, in a way. you don't even know you're in it, you're conscious of anything, You're there, and then by the time the show's finished. I enjoy the process.

and about having that audience. But it's about that stage time

but it's the applause. It's gonna sound a little bit naff, that we can communicate that way You know, that's amazing to me and through dance, you know? through our bodies just beautiful. I think that's what makes it

with this idea Dance used to be aligned in some kind of rhythmic way. that it's movement that's ordered

But that's finished.

SOUNDS OF DESTRUCTION of thinking, Dance now is just an expression are thinking, there will be dance and so as long as people in all its forms. ideas through the human body... There will be artists expressing Arggh!

and understand bodies. ..of how we can utilise a mysterious place with bodies. How we can enter into seen before. And find something that we haven't Closed Captions by CSI APPLAUSE


Tonight - Australia loses two young soldiers in

Afghanistan. Today, the nation

mourns the loss of two brave soldiers of Australia. All

Australians will be reaching

out to the families of those

killed soldiers in their hour

of terrible need and grief. This Program is Captioned


Good evening, welcome to Lateline. I'm Leigh Sales. One of Australia's most respected journalists, Chris Masters, currently on assignment in journalists, Chris Masters, is

Afghanistan for the ABC. He's

embedded with the Army unit involved in this latest

tragedy. In fact, he shared a

tent with the two soldiers who

were killed. Chris Masters is

though, coming up shortly. But first,

though, let's look at other our

headlines. Changing tack - the

Prime Minister's behind the

scenes talk s with BHP boss Marius Kloppers. Doing Marius Kloppers. Doing the continental - governments across Europe continue their

Lateline belt tightening. And on

Lateline Business - a German

construction company pushes

ahead with the first big float

since Myer. The Defence Force has named the two soldiers

killed bay roadside bomb in Afghanistan. They were Sappers Darren Smith and Jacob

Moerland, both from the Brisbane-based 2nd Combat

Engineers Regiment. Their remain s will be flown back to

other Australia by the weekend. Eight

other international soldiers

died yesterday, n the deadliest

day for NATO and American-led

forces in Afghanistan so far

this year. The Prime Minister

has expressed his sympathy for

the families of the soldiers

commitment to the fight against but reaffirmed Australia's

the Taliban. Peter Lloyd reports. It was Jacob

Moerland's first overseas

engaged to deployment. He was 21 and

engaged to be married. Darren

Smith leaves behind a wife and

young son in Brisbane, this young son in Brisbane, this was his first deployment two. The

6-year-old was a handler forrem

ploesive detection dog Herbie, who also died. Smith featured

in this ABC story. They get

house dogs. The soldiers were looked after better than the


on a routine foot patrol in the

remote Mirabad valvy. It was

before lunch time when an improvised explosive device or

I yesterday - - I yesterday -

IED explode ed. One of the soldiers was killed instantly

and the other was #34edically

evacuated to a nearly ISAF

hospital. Sadly he died from

his wounds. The death s take to

13 the number of Australian

soldiers killed in

Afghanistan. This is an

enormous loss for their family

and their loved ones. On behalf

of the Government and the

people of Australia, I extend

to them our deepest

condolences, our deepest

sympathies. With more soldiers dying, the Prime Minister was

facing question s - was this

war onable? Conspicuously Kevin

Rudd spoke today only of

progress. This is a very tough,

difficult, continuing military

campaign. And we are up against

a determined and dangerous

enemy. It's very hard for the

Prime Minister under these

circumstances to say that it's

not winnable. But I don't think

there's any evidence that we're

making serious progress. Hugh

White was a senior figure in

the defence establishment, a

Government adviser, now

Professor of strategic studies

at the ANU. He is openly

pessimistic about the pros

Prime Minister-elects -

prospect force any sort of

victory in Afghanistan. I think

the scale of un surgency remain

s large and the scale of the

Western effort, the coalition

effort, to combat the

insurgency and to build the

kind of effective government in

Afghanistan that can resist the

Taliban's pressure once the

coalition forces leave, that

progress is way too slow for us

to have any confidence. So why

are we there? Kevin Rudd, like

John Howard before him, says

quounterring terrorism. Our in

addition - countering

terrorism. Our mission is

important - to ensure that

Afghanistan does not become an operating base for terrorists

around the world, terrorists

who in the last decade have

killed more than 100

Australians. But the reality

on the ground undermines the

logic of the Government's

strategy. The Taliban's top

leaders an al-Qaida 46 linked

terrorists have long ago

established operating bases

across the border in

Pakistan. Hugh White argues the

Australian presence is about

something else. Ever since the

end of the cold War in Asia,

way back to the end of the Vietnam War, Australia has

demonstrated its support for

the United States as an ally by

make ing small, quick cheap

contributions to the various

wars that America has fought in

and around the Persian Gulf. I

think our cribs to Afghanistan

and in er Iraq before that were

very much part of that pattern.

The problem for Australia is

these wars turned out not to be

a small, quick and cheap, but slow,

slow, hard and ultimately I

think unsuccessful. When it began, the mission in

Afghanistan was justified by John Howard

John Howard as a nation-building project,

provincial reconstruction. Now

under Rudd Labor, under Rudd Labor, the emphasis

on building up the capability

of Afghan soldier and police.

Either way, the US want morse Australian boots on the ground

and some senior military

thinkers here agree. If we

aligned our strategy with our

campaign, with our tactic, I

think Australia, or someone,

has tot got to put in has tot got to put in about 3,500 troops. But Kevin Rudd

says he're doing enough Ep We

have never extended a bank

cheque when it comes to our troop commitment. Time is

running out, with the US planning

planning to begin a phased

withdrawal next year,

Australian soldiers won't be

far behind, and then

Afghanistan will be on its own Investigative journalist

Chris Masters is on assignment

in Afghanistan for the in Afghanistan for the ABC's 'Four Corners' program. He'sem

bedsed with the Australian fo forces in Tarin Kowt. In fact,

with Smith and Moerland mere's

unit. He joined me a short time ago by phone. Cri, it's

terrible day for the Australian Army. I understand that you had some dealings with the two soldiers who were killed. What

did you know of them? Well, as

it happened, when we were

embedded in this patrol base, I

was put in a tent that happened

to be occupied by about 12

guys, England years and two of

them were these guys. My film crew were right there as

well. So one of them in

particular Snowy, as he's

known, Sapper Moerland, was

quite a character, a vivid character and he was one of

those people who was impossible

not to know. A fair bit of

yarning with them when I first

moved in, in fact the first

bloke I met was his mate,

Sapper Darren Smith because

Smithy was the dog handler and you know you're inevitably

attracted to the dog handler

and Herbie, and he was fairly

new to this unit too. He was only there for three weeks. So we had quite a few conversations with them all.

And Sapper Smith and Snowy had actually formed a pretty good

team of course with Herbie. So

it was a hell of a loss. I can't pretend that it's

anything like the loss to us as

it is to their mates. I mean,

this was a very, this was a very, very close

knit unit and you just saw it

on the faces of everybody

yesterday. And the little

memorial service that was held

this morning out at the base,

200 Australians were there and

I've never seen anything as

moving like this. The sense of loss is tremendous. And, Chris,

who spoke at the memorial and what happened there? The

officer commanding alpha

company is Major Jason growth

and he spoke briefly. But thee

gave it over to some of the

mates - three of the mates got

up. Not the sort of people who

are used to public speaking but

they certain ly know how to be

sincere. Very tough guys. And

I'd have to say there were a

few tears shed. How are the

mates coping today? Have they

had to go straight back out on

patrol and straight back to

work? Yes, that's exactly what

happened. I watched one of the patrols go out this morning. This was done deliberately, the

major said the night before as

he assembled everybody that

they were only halfway through

their deployment and there was

a lot of work to do. And they

had to get out there again the

CSM gook them out this morning

and we watched them going out

the gate. Fortunately we

watched them all come in some

time later. Have you been on

the type of patrol that Sapper

Smith and Sapper Moerland were

on when this incident occurred? Well, yes, obviously

not exposed to nearly the same

danger. Although we have seen

IEDs explode. It's quite a

battle front. I thought I knew

quite a lot about it until I

came here. But the temp o of

this particular conflict seems

to have picked up. As these

soldiers seem to make ground

with the hearts and mind

campaign, it's a hell of a

struggle out there, sort of a

war of inches out there in the

fields where the locals pretty

much sit on the fence, are pers

kulted by the Taliban. -

persecuted by the Taliban. And

they're very frightened to show

support for the soldiers. But I

got a strong sense - it's

difficult, I know, but I did

get a strong sense that they

would like to support the

soldier s. It's equally

frustrating for the soldiers to

recognise that they're there to

help people who on certain

occasions will turn against

them in a vicious way. Chris

you,, you've been to

Afghanistan before. How does

that situation you've just

described on the ground compare

to what you've seen previously

in Afghanistan? Well, it's

interesting to note if progress

that has been - the progress that has been made in the three

or four years since I was last

here. I wouldn't have thought

of going out into that distant

valley. It is only, say, 20 K

out but that is almost 30 300

year s away and there was no

chance of anyone going out

there other than special forces

back in '07. The township of

Tarin Kowt was undersiege, it

was a dangerous place to g, there were a lot of suicide

bombings. Now - Westerns do go

there. Health care has ex-tened considerably. There was a road

we came back in on today that wasn't there before. There are

schools. It's not as if you're saying that everything has

turned and. There's been

progress but from a very low

base with a long way to go. If

we can return to yesterday's tragedy, do we know exactly

what happened? My understanding

is that - I saw the patrol go

out and it was a disruption

patrol. They were looking for

weapon s caches, I IEDs and

the like. Because we were on a

neighbouring patrol, we heard theyed that had some success,

both Sappers Smith and Moerland

and the dog had actually found some weapons and munitions, et

cetera. At about 11 o'clock,

they turned to go back to the

base. On the way back, they

continued their search, they

were searching along some culverts because often the

insurgents will secrete weapons along side the waterways, dash

in dash out, hide the weapons

and go. So they were looking

for these types of weapons. My

understanding is that Snowy did

find something. He called for

Smithy and the dog. The dog

arrived and, bang, there was an

almighty bang, which we heard

about 2.5km away. And even

though it was one of many bangs

that we had heard, everybody

knew that this one was

especially ugly. Chris, are

details known yet such as whether it was a mobile detonation or whether one of

the soldier s or indeed may

have stood on it and activated

it. Do we know that level of

detail yet? No. The weapons inspection team people have gone out there. They're quite

puntion ill louse. I could make a

a guess at that and it would be

wrong to do so. I've asked them

the question and they say they

simply do not know. Kevin simply do not know. Kevin Rudd

has said the Australian troop numbers in Afghanistan are

about right for the mission.

There are some people who disagree with that, including

Jim Molan, among others. How do

you think the soldiers feel

about that? Do they think they

have the necessary resource an people power to do the

job? They're not inclined to

make comments on the politics.

They're doing it tough but I am not hearing them complain about

it. Watching them go out and

carrying the loads they carry.

Obviously everybody would like

for it to be a bit easier but

nobody is complaining. What is

critical to this mission is the

mentoring element. I think most

Australians engaged don't want

to be there for any longer than

they need to be there. And they're doing their best to

transfer the skills to the

Afghan national Army, so we saw

quite a lot of this mentoring.

The general reports seem to be mixed about how well it's

going, but what we saw was very

positive. Indeed, one of the

IED finds that occurred the day

before had been found by an ANA

engineer. So I think if there

was a wishlist, it would be for

the Afghan National Army to gain capacity so that the Australians would not need to

be so much in harm's way. Chris

Masters, I wish we weren't

speaking in these circumstances. This is

obviously a terrible I vent.

Thank you very much for making time to speak to us tonight. Thank

tonight. Thank you, Leigh.

The Prime Minister has finally started meeting mining

bosses one on one, in an

attempt to convince them to support his proposed super

profits tax. Kevin Rudd held a

supposedly cret meeting in

Sydney today with BHP boss

Marius Kloppers and tomorrow pe

He will meet one of the loudest critics of the tax, Andrew

Forrest. The PR offensive

coincides with Kevin Rudd's

visit to Perth tomorrow. Julia

Gillard was sent on an advance

mission today, and she had her

work cut out for her today.

Lunch in the Lion's den. How

are you? Nice to see you. Julia

Gillard was dispatched to the

West to mingle with the miners.

An attempt to rehabilitate the

Government's tarnished

image. From a distance, mining

bosses have been in open revolt

against the resources super

profits tax. At close range, it

was no different. I eel bet

direct the directors f s we

farmers to spend the 50% of the

profits we make, to spend that

more wisely than in the

past. Sure ly your Prime

Minister and your Cabinet also

said something, what you going

to do about it? I wanted to ask

you about the process, which

today has been dysfunctional

and hopeless. Julia Gillard

tackled their complaints head

on. I don't think that a

passionate debate is something

we should fear. But I am

concerned, as the debate rages,

there is fear being generated

in some parts of the Western

Australian community. Today, I

was to reassure that there is

no need for fear. Some of the

nation's most prominent businessmen are still furious they can't get the Prime

Minister's ear. Despite all the

talk of consultation. No-one I

know has been able to book an appointment with the Prime

Minister because he's too busy

consulting. When I was last in

WA, a month ago, I sadth sat

down with a bunch of leaders

from mining companies. I saw

another group recently in Canberra. We will continue to

talk, as is necessary. I am

sure I will run into a few over

there as well. In fact, the Prime Minister is already

trying to appease his fiercest

critics by hold ing private

meetings with mining bosses.

Today he met BHP's Marius

Kloppers in Sydney. And after

weeks of complaining and his

own lack of access, Fortescue's

Andrew Forrest will have his

turn with the Prime Minister

tomorrow. Kevin Rudd won't be

under any illusion s about the

difficulty of the sales job

ahead. I think Australia's had

an experiment with Kevin

Rudd. Let's just see how that

experiment goes. I am not happy

with the results from my

view. The stand-off with the

miners has only been made worse

by Wayne Swan's admission on

'Four Corners' that some mining

company also pay almost 60% tax

once the new regime kicks.

In There are be some projects

paying 50%? There will be some

companies that could reach that

level. The Minerals Council

wasted no time in make ing sure

everyone hears the same

thing. The Treasurer's office

says the 58% rate would only

apply in the rare event that a

company had no write-offs on

its company tax. And it paid

off all its establishment costs

for a mine. But it's an opening

the Government didn't

need. These people are not

ignorant liars. They are

standing up not just for their own shareholders but ultimately

they're standing up for the

half a million Australians

whose jobs depend on mining. Mr

Abbott says the Prime Minister

should be doing less lecturing

and more listening. There will

be plenty of both tomorrow when

Mr Rudd facings a community

Cabinet in Perth.

Cabinet in Perth. European

Finance Ministers are currently

meeting in Brussels to discuss

measures to tackle excessive

government debt. A rescue

package for debt ridden Eurozone States has already

been agree and will come into

effect from the end of the

movement but already many

countries have introduced

massive spending cuts and many

workers are un happy with the

austerity drive s which

threaten their jobs and wages.

Phillip Williams reports. The

pain in Spain falls mainly on

workers like this - 2.5 million

public sector employees who

from this week will find 5%

less in their pay packets.

Automatic pension adjustments

for inflation are ending, as is

the Spanish version of the baby

bonus. Despite the noise and

the passion, the nation-wide

strike sun likely to dent the

Government's decision to shave

money from the Budget this year. The Prime Minister has

slashed his own salary as he to

cut a deficit now running at

11% of GDP down to 3% by 2013.

To the north in Germany, the Coalition Government has

approved the biggest package of

cuts an tax rises for decades. Thousands of Federal Government

jobs are to go, welfare payment

s will be cut. The Defence

Ministry is considering

slashing the armed forces by up

to 40,000. The German

chancellor, Angela Merkel, says

the aim is to get the deficit

down to 3% by 2014.

TRANSLATION: We're in difficult

times. We can't afford

everything we wish for the we

want to shape the future. That

is what the whole Budget is

Batesed on for the coming

years. More broadly, European

nations have been meeting with

the IMF to agree on the details

of a massive $7 - 750 billion

euro bail-out fund to prevent

another Greek-style collapse in

the zone's weaker economies. It

is not just the money but the regulation at issue, a

determination the country also

stick to strict deficit limits

of no more than 3% of GDP. To

use the traffic light image,

until now you only got fined

when driving through the red

light of the 3%. From now on

you could also get in trouble

when cross ing the orange

light. Britain is not a member

of the Eurozone but the cuts

here are likely to be among the

biggest. Some estimates 60

billion pounds over the next

year alone. David Cameron says

they are unavoidable as they

are painful. The decisions we make will affect every single

person in this country and the

effect s of those decisions

will stay with us for year,

perhaps even decades to come. David Cameron says if

nothing is done about it in

five years time the country's

undebtedness will be the if

quebt lf of $40,000 for every

man, woman and child in

Brisbane. As the great cuts

caravan moves from one European

economy to another It ushers in

the year of austerity. What is

not clear yet what is what

effect it will all have on

growth. And our Europe

correspondent joins me now from

London. Germany, Spain,

Ireland, Italy, Greece - are

these just the first cabs off

the ranks? What is next? It's

hard to predict exactly which

country will move next but

certainly I think by the end of

this year you will see

virtually every country in

Europe having established some

sort of austerity program. They

vary enormously from the

extremes of Britain, from the

extremes of political and

street trouble in Greece, but

they do have one aim and that

is to get their debt levels

down. That debt era is over, at

least that's what people want

to happen. And there's some

pretty severe cuts along the

way for almost all countries.

We haven't seen the end of it

yet and Committee with look - we can look to Britain for

example. They're Slarke and

burn ing has yet to peggin.

We've hood ?6 billion cut out

of the Budget. That is a drop.

There could be 10 times that

comes in the next year

alone. David Cameron has been

trying to prepare the ground

for those absolutely enormous cuts you mentioned there. What

has been the public reaction? What is the public mood so far,

particularly given he is very

new in office? There's a lot of goodwill as the political

honeymoon is still there so

people are willing to listen to

them and they do understand

there is a serious problem here in Britain. The reality of the

cuts actually biting them and

having their services cut back

or losing their job will be

another thing. So politically

it's quite a rusky move but of

course they are in the very

early phase of the political cycle here. Fit goes to five

years they have plenty of time

for the economy to have picked

up again so they may not yet feel that politically themselves. Say they this is

the pain they have to go through because as, David Cameron says, if Britain

continues the way it is at the moment, then in five years moment, then in five years time

it will owe 2.5 trillion

dollars and the interest alone

on that would be over 1 billion

pounds every week. So it is

just not sustainable. The

country's ministries like education don't even spend that

money in a - much in a year.

And they say something just

that has give. All in the count

country will have to share that

pain. The austerity measure s are partly about reassuring the markets. What has been their response to this? The markets

have been gradually shifting

downwards, as service demvs the whole euro area evaporates worldswide. And and of course

the sense that is this Europe

going to lead the rest of the world into a double-debt

recession. That is the fear

really and that is the big

question too. Can you have these

these austerity measure, can

you slash and burn to the

extent that's being done, without dropping these count

Raines the Eurozone and Europe

as a whole back into ktion? Some economists think they can

get away with it, some think

they can't. Phillip Williams, thanks for that. Back home

now to the nation's largest economy and in NSW the State's

beleaguered Government has

promised to eliminate stamp duty for people buying new homes after the plan. The aim

is to help builders secure finance in tough economic finance in tough economic times

but the scheme comes with a

catch dr the homes have to be

valued under $600,000. The

initiative was the centre piece

of the NSW State Budget which is

is also remarkable for its return to surplus. Matt

Wordsworth reports. Buying a

home is everyone's dream, for

many it's not a

reality Sydney I think is one of

of the most expensive cities to

buy a new home in. It's

expensive to live here as

well. From July, buying a home

off the plan for less than

$600,000 in incurs $600,000 in incurs no stamp

duty. A saving of $22,500. And

people over 65 will have their

stamp duty wiped if they sell

their home, build a new one for

under $600,000 and live nit for

12 months. Older people don't want to live in bigger

homes. And there will be a cut

for those whose homes that have

already been built. I am

pleased to say we have real

edthat the State Government has

been listening. Developers say it will help them get

finance. We see it as finance. We see it as positive stimulus. We see it certainly

positive in terms of helping positive in terms of helping us release more product to market. The two-year scheme

will cost $140 million and

create 8,000 homes. All of the different trades go into building a home, there's the

need to furnish it. So the multiplier effect true the economy is strong for housing. The flipside is now

adva lorium fee on homes

losting more than $600,000. A million dollar home would be

slugged $1,000. The property

market is providing a massive

boost to State finances and

allows the Treasurer to hand

down ad 773 million surplus this year, with surpluses into the future. Economic growth

nowism pevenlged to be 3%, and

- now expected to be 3% and

unemployment is down 5.5%. The

beacon of hope I talked about

last year has lit the path to

prosperity for NSW. There is

bad news main ly for moativist.

They're already facing the $500

million car weight tax now the

Government expect s to pocket

an extra $137 million from

increased fines thanks to

mobile speed vans: The revenue

goes up and the road toll

doesn't go down we need to look

at the snl. But there is no

funding for major projects like

the M 4 east. We need to change our thinking the tha the only

way to move around Sydney is

roads. If the Treasurer has

said that, he is a bigger dope

than I thought he was because

Sydney's road congestion is

also a huge constraint on doing

business in this city. In 2

economy has tlurnd will be

plenty of cash in the kitty for

an election less than 10 months

away. An Iraq-based US military

analyst has been arrested on

suspicion of leaking classified

combat video and documents to the whistle blower website, Wikileaks. 22-year-old Bradley

Manning was turned in after

boasting to a former computer

hacker he had leaked sliddo of

a controversial US military

helicopter strike. It shows the

US military shooting civilians

and journalists in Baghdad in

2007. The former hacker, Adrian

Lamo, said he felt obliged to

contact Army investigators and

FBI arths after being told of

the leaks. It's alleged Bradley Manning also supplied 260,000 secret cable leaks to Wikileaks. Helen Thomas has resigned following comments she

made that Jews should "Get the hell out of Palestine." The

89-year-old solemn - columnist

has covers the administrations

of 10 different Presidents. She made

made the comments to a Rabbi on

Jewish her daij Day.

Mr President, - A veteran of

the old media has been caught

out by the new media. Any

comments on Israel? Tell them

to get the hell out of Palestine Any better comments

than that? Remember these people are occupied. And it's

their land. The comments were

made to Rabbi David Nesenoff

and posted on his website chtd So where should they

go? Go home. Where is their home? Poland. Germany. And

America and everywhere else.

Why push people out of there who lived there for centuries? Those remarks were

offensive and reprehencible. I think she

think she should and has

apologise. But an apology yaz

not enough. Shortly after this rebuke from the White House,

Helen Thomas resigned her

position as a columnist for

'Hearst' newspapers. Two months

short of her 90th birth da. It

was a humiliating end to a career that had many

highlights. The daughter of illiterate Lebanese immigrant,

Helen Thomas became the first woman office ore TV National

Press Club and the first female President of the White House

Correspondents Association. She

was known as the dean of the

press corps. And was the only

report rofrtd to have her own

assigned seat in the White

House briefing room. Lyndon

Johnson described her as a mix

of ak #3uk9ure and journalism.

And her questions could get

under the skin of the President

of the day. My question is why

did you really want to go to

war? To assume I wanted war is

just flat wrong, Helen. With

all due respect. Hold on for a second, please. Excuse me. But

Helen Thomas was also critical of her fellow reporters after

9-11. I think it's a

degradation. I think it's a on

the part of the reporters to

not call the hands of these

people and say, look, you said this yesterday and you're

saying this now. How can you approach the American people

with this? Why did he say

publicly that we do not torture

when he really did know that we

do? Helen Thomas was regularly

criticised by politicians an other reporters for being a journalist with opinions. I

think most of my colleagues do

not agree with me at all. Think

they I'm intrusive and

shouldn't have my opinions.

That's their problem. But it

was her opinions that ended her

career after 67 years in

journalism. Her old seat at the

front of the press corps is now

vacant. Now to the weather -

cold, wet and windy in Melbourne, Canberra and Hobart. Possible showers in Adelaide

and Brisbane. Dry with a gusty

change in Sydney. Sunny in Darwin and Perth. That's Darwin and Perth. That's all from us. Lateline Business

coming up in just a moment. If

you would like to look back at

tonight's interview with Chris

Masters or review any of

Lateline's stories or

transcripts, you can visit us

on our website. Now to Lateline Business. Tonight, getting the

timing right - German

construction giant Bilfinger

pushes ahead with the first big

float this year. I think at

the end of the dayet gets down

to Germany's strategic decision

s that they've made about where

they want to take their

business. On the road to recovery - Queensland and NSW both deliver better than

expected Budgets. The business community will welcome this

Budget because it moves on

taxes, it moves on housing

affordability which will become increasingly a big business issue in the years ahead. And

the stock market compared to a classic spaghetti western. The

worlds is being cat grized into

- cat grieszed into the good,

if bad and the the ugly.

Australia is certainly in the

good. First to the markets and

news of big price rises for

iron ore and coal boosted the

resource sector which leds the

All Ords 1% higher. A and and

the ASX 200 regained some

ground too. The Nicky was up a

little and the hang sedge as

well the footy is down in

morning tried. - the FTSE is

down in morning

tried. Bilfinger Berger hopes

to raise as much as 1.4 billion

dollars from a sale of the

listed company which will be

rebranded Valemus. It will be

Australia's big est initial

public offer ing since the

disappointing mire float last year. The Australian executive

team are ready to get the sale

going, despite recent shaky

markets. What's happening the

last couple of weeks is

probably made people have

another look at it again but I

think at the end of the day it

gets down to Germany's

strategic decisions they've

made about where they want to

take their business, the issue

of the exchange rate and I

think with the situation in

Germany at the moment there's

probably some good

opportunities for

them. Bilfinger, which was

recently rebranded Valemus,

operates construction and

engineering companies

Baulderstone, abbey Group and

Conneq. The float was

originally shelved during the

glfbl after a failed attempt at

a trade sale. Now, the German

parent company will take the

majority of the 1.4 billion

dollars expect ed to be raised

while 200 million will go to

Valemus to boost its already

positive balance sheet. We will

look at aqua sitions going

forward. Now, I think in the

first in stance that those aqua

sitions are not going to be of

any significant size. Valemus

has nearly $6 billion worth of

engineering and construction

projects under way, with more

in the pipeline and it's

planning a further push into mining infrastructure. There's

certainly some concerns around

the resource tax. Our view on

that is we've really got to

wait and see what happens there

over the next couple of months

before we can really have a

better feel for what the

impacts of that might be. Going

forward in 2011, some commentators are suggesting

that infrastructure spend might

actually go down slightly in

2011. That may be a concern.

The resources tax, and its

influence on activity over the

next few year, that might be a concern.

concern. And the companies not got a lot of annuity. Valemus

shares are expected to list

between $2.20 and $2.50 each.

That prices the offer at 10.5

to 12 times the company's predicted 2010 earnings. Its bigger rive Leighton Holdings

is trading about 14.5 times its annual forecast earnings. You

would expect them to trade with

the multiple, the margins are low, it has less annuity

income, it has less services

exposure, Leighton has built up services over the years,

Valemus's services component is still small and Leightons has the overseas

opportunity. Valemus is hoping

to attract a mix of offshore

and local investors. The retail

offer, which consist s of a

broker firm offer and an

employee offer opens on 16 June. Institutional investor

also have to wait a little

longer. That offer opens on 6

July. Sair shairs in Valemus

are pex effected d - - are

expected to hit the boards on 9

July. To finds out more about

the Valemus float, I caught up

with Nick Greiner, the chair of

Valemus. The Latin translation

of Valemus is - we are strong

and healthy. Welcome to


Business. Thank. Valemus, will

it live up to its name in the

float? I certainly expect that

it will. I think it is a strong

and healthy company. It's a

strong and healthy balance

sheet. It's clearly in a very

strong sector to the future of

Australia, infrastructure has

clearly had a significant

backlog and I think everyone

agrees that over the next four

or five year also will be a

large investment in it by

governments and also by proift infrastructure investors. So,

yeah, we certainly expect it to

be strong and healthy. It is not a strong and healthy

market, though. Was there some

urgency behind 2 sale given the

German economy? No, not really.

I think the bition disition

that Bilfinger Berger made in

Germany is they had a clear

strategic intent. They

announced this two years ago.

They were forced to put it off

because of the GFC and I think

they took the view that things

are not as strong as they were

a few months agoks, but from

their point of view the currency has moved in their

favour. Clearly the Australian

stock exchange has moved

against them. But they have

some certainty now and they

also have low prices for

companies they want to buy in

Europe in the services

sector. So why was there no

intraets interest in a trade

sale? Lend Lease was reported

to be interested, was it

price? I can't tell you that,

not because I want don't want

to but it's not to known to me.

It is true that Lend Lease

looked at the business, this is

publicly known. It's also true

that there was quite a bit of

overseas interest but it was

always the primary intent of

the sharehold tore go to an

IPO. It was frankly always the

preferred option of local

management, not surprise ingly

perhaps. Valemus is also a

business with pretty tight

margins given the risk of the

contracting business. I thisity

net profit margin is 22.5% of

sales. Where is the growth

going to come from? The The big

contracting businesses and the

service businesses do tend to

have telltively small margins

but they also tend to have very

large volumes. Frankly the

criticism we get more often is

people worried we're not

competitive enough and we're

making too much money. I think

the reality is that the market

is reasonably competitive

between the three Leighton

Group companies, the two

Valemus Group companies an the

other companies that play

either in the building space

like lend less least or in is

the civil space. There are suggestions today that you want

to expand into WA and perhaps

into mining infrastructure.

That is a very big area for

Labor Governmentons. Are you

expecting them to react? We are

certainly underweight in WA.

And we've never chosen to be a

major competitor in contract

mining. I think perhaps at the

moment might be an interest ing

time to seek to be a major

competitive in contract mining.

But we do see a scope for

geographic growth in WA. We're

winning some work in

infrastructure only in the

north-west of WA, in the

resources areas. So we are

starting from a very low

business. I don't think

Leighton s or anyone else will

be the quake ing in their boots

at the thought of being there.

But it gives us room for

considerable growth. Price

expectations have been adjusted

to reflect current share market

conditions. What sort of

institutional support have you

got for the IPO? We've had very

strong response so far.

Obviously nobody would have

pressed the button if they hntd

had a strong response to the

premarketing. But the next

month will tell. In many ways

that's the real work. Today was

just a lodgement of the

prospectus and we acknowledge

we have a job to persuade both

institutionle al and retail

investors that this is a strong

investment and a strong as &

sector as we think it is. What

do you make of the resource

super profits tax? It doesn't

make a great deal of impact on

Valemus. Valemus gets four or

5% of its revern glus the

resources sector. It mostly has

to do with existing mines. I

suspect in terms of new mine

projects it may cause some

delays. But if you want my

personal view, I suspect in the

long run there will be some

profit-related taxation of the

resources sect or. I also

suspect and hope that it won't

be spret ive because that is

just plainly stupid and I hope

it wouldn't be anywhere near

40% because that is out of the competitive range with the rest

of the world. I frankly just

think that is stupid. I think I

should say salve Valemus.

Thanks for talking us to Thanks very mump, Ticky.

Despite today's rebounds on

the local market, a Reserve Bank board member has warned

that the volatility on world

financial markets will continue

for some time yet. At stock brokers conference in

Melbourne, Jillian Broadbent

compared the situation to a

Western movie, in which

Australia was one of the good

guys. The jittery recover y

from the global downturn has

created plenty of drama for

stock blokers. But Jillian