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(generated from captions) point that something like

400,000 young people got onto

the electoral rolls....

Final observation? Nick

Xenophon will change the

tenor of the debate, he has a

chance of picking up the

quota Natasha Stott Despoja

had. If we can't see better

than what we have seen we

rain for a terribly boring

six weeks. Matt Price

despite his illness says he

will keep filing during the

campaign. I am sure he is

crazy enough to do that. To

the battalion of viewers who

have been inquire bing the

health of Matt Price, he has had preliminary surgery for

pain tumours which went but

he has a tough time ahead of

him. His Canberra colleagues

put together this CD with

personal song choices and if

you read his piece on Bob

Dylan you would appreciate

the cover. He asked me to

thank the well-wishers and

said he will be back. And

that is definitely not his

final observation. We will

keep you abreast of the

developments in Canberra.

Well Dom the program. It is

not all quiet tonne Western

Front as the fight for iron

ore turns hostile and pits

Japanese interests against

the Chinese. We will talk to

Murchison Mines about the

billion dollar bid for West

Australia. We will look at a

new drive to scuttle the

video pirates. To parity and

beyond we will check out

where the Australiay dollar

may be heading.

CC In First Person the former

chippy who built a family

business and about 1,200 houses

a year. If you understand cash

flow you are halfway there.

Cash flow is more important

because you can still go broke

making a profit. This week the

extraordinary goings on in

Western Australia's iron ore

boom got more extraordinary

with a bid for Midwest

Corporation by Murchison

Metals. The parallels are quite

remarkable - they are the

second and third best

performers on the all ords this

year, Both their fortunes lie

in targeted rather than proven

reserves in the same rocks near

Gerald tonne. Both have

significant Asian investors and

they fell out over the

construction of a road and rail

port project which they had

tried to build together. To

what extejts does your bid come

about because Murchison and

midwest couldn't work together

to jointly develop the port

infrastructure at Gerald

tonne? The port infrastructure

projects are an ancillary issue

in this bid process. The main

reason for the bid is the

consolidation benefits we see

from merging midwest and

Murchison at the iron ore

project level, there's

significant synergies, cost

savings and efficiencies that

can be achieved. Ultimately

those benefits can glow through

to the bank ability of both the

mining projects but also the

infrastructure. You are saying

you would be bidding for

midwest whether or not you were

working together on the Port infrastructure? Yes, I believe

that we would still make the

bid because of the benefit that

is we see at the mining project

level. The WA government just

cancel ed the Act that gave

midwest the exclusive right to

develop the port at Geraldton.

That seems pretty rough,

doesn't it? That Act's very

dated T was an inappropriate

piece of - an inappropriate

agreement with which to proceed

infrastructure, the to develop port and rail

Government's recognised that.

We agree with them.

Consequently the playing field

is level in terms of proceeding

forward with selection for infrastructure providers.

Doesn't it mean you could end

up in the High Court offer over

this which adds another layer

of uncertainty to a bid that's

already quite conditional? Our

offer isn't conditional, it's

an unconditional offer. The tax

ruling only really affects what

the final offer premium will

be. In relation to what happens

subsequent to our offer if

we're successful in acquiring

midwest then there won't be any real contestable process and obviously there won't be any

legal action following from

that. To what extent is this

bid a manifestation of the geo

political rivalries between

China and Japan given that

China backs midwest and your

partner is Mitsubishi of

Japan? I think the geo

political statements are not

really that relevant to the

issues between ourselves and

midwest. In fact in a lot of

areas we cooperatively work

together. As far as the geo

political aspects, it's not - Mitsubishi is a global organisation, multi-national,

that really it's not a case of

Japan versus China. Really

these are just commercial

arrangements between

Mitsubishi, Murchison, midwest

and their joint venture partner

in sign a-Steele. Are you

satisfied you fully understand

midwest's agreement with Sino Steele? We've only had access

to the public domain

information. We've had to rely

on the digs closure midwest has

made through its obligations

under continuous disclosure. We

are reasonably confident about

what that agreement provides

for, but we would like to have

clarification in relation to

any potential tax liability

that might accrue from Sino

Steele eventually - any payment

that is are eventually made by

Sino Steele to acquire their

50% interest in a couple of

midwest projects. What about

pre-emptive rights? There has

been no disclosure of

pre-emptive rights, so we're

assuming that those don't exist

under the agreement. If they

do, bearing in mind the

consideration hasn't been

settled yet, so Sino Steele will effectively haven't

acquired their 50% interest,

but if there were pre-emptive

rights in that there that would

then trigger some value assess

ment and a payment in any

event, from the other party in

acquiring those assets. Is this

your final bid? We think we've

made a fair offer. I think the

market's assessment of this

transaction is very positive

when you look at the share

price movement of both midwest

and ourselves and the

differential between the prices

is basically our base offer. So

once the bidders' statement is

out there and shareholders can

make their decision and we also

get to see the midwest board's

recommendation in relation to

this bid, then I think we're reasonably confident of having

a successful outcome. To what

extent is what's going on here

a manifestation of the desire

by both the Chinese and

Japanese steel mills to

diversify their iron ore supply

away from the Pilbara and BHP

and Rio Tinto into the smaller

players like Murchison and midwest in the mid west of

WA? I think, maybe a period of

time ago there was this aspect

of diversifying supply options

away from BHP and Rio and CVRD

and maybe creating some further

pricing competition, but I

think the reality of the market

now is that they're just after

raw material supplies so wherever they can obtain it

from, obviously the steel mills would like to see those

developments progress. A key

part of accessing much larger

volumes of iron ore from the

mid west region is the

development of new rail and a a

new deep water port ot ok agee.

The only way forward in the

Midwest region for expansion of

the existing iron ore projects

and development of others is

the development of oak ageoand

the associated rail infrastructure. Can you see further consolidation in the

iron ore industry in

Australia? Yeah, I would say

that that's bound to happen. I

think there are a number of

players now, some companies

will probably struggle to get

their projects to development

and I think also with rising

cost pressures across the industry consolidation makes

sense in terms of being able to

generate economies of scale and

potentially also share capital

costs over much larger resource

bases. Will you loobicing to

drive that consolidation? I

think this is a first step in

the process of consolidation

and our plans in the future

would be to look at what other

opportunities there are in the

iron ore industry to further

expand our production. Do you

think the iron ore price will go up again next

year? Absolutely. How much? Oh,

I think most of the forecast is

in the range of 20 up to 50%. I

think 30% or thereabouts is

probably a pretty good outcome. Thanks very much for

joining us, Trevor

Matthews. Thank you. It's been

my pleasure. Now with a wrap-up of the week's market and

business news here's Rebecca

Nash. US markets bounced back

from Thursday's dip after some

good economic news. The Nasdaq

moved forward more than 1% on

news of a price multibillion-dollar takeover

offer in the software industry.

US investors renewed optimism

was in large part due to strong

September retail figures which

were double expectations. The consumers' resilience in the face of the housing downturn

and credit crunch bolstered the

US dollar and decreased the

chances of another rate cut any

time soon. In corporate news - British billionaire Richard

Branson and a New York based

investment firm will bid for

Northern Rock. The plan is to

combine the mortgage lender

with Virgin's finance arm. The

value has plummeted more than

60% since it was forced to seek

help from Britain's central

bank last month.

More from Marcus Padley. A

good week this week. The market

hit three consecutive record highs in the middle of the

week. We are now up 23% from

the low hit in the recent

correction, just 7 or 8 weeks

ago. In that time BHP is up

48%, Rio 40%, and fort up a

mere 105%. Few things going on

- Tattersalls was up despite

losing a 54-year monopoly on

scratchies. We saw Foster's

downgraded by five brokers,

after the recent share price rise. Alumina was down after a

few brokers downgraded on the

back of the Alcoa results in

the US. Alcoa is the joint

venture partner. We saw

MacMahon well up after latons

told us they had FIRB approval

to buy more than 19.5% of the

company. We saw another bid in

the iron ore sector, $982

million bid. The iron ore

sector is hot, hot, hot. We

also saw Bank of Queensland

with results kicking off the

banks' result season. There

were a few hold, neutral and sell recommendations around

after the results. The stock

has jump add couple of dollars

in the last moment. We saw a 23-year high on the Australian

dollar, that saw a few brokers

downgrading some of the

currency affected stocks -

Bluescope Steel, CSL and billabong. Finally, tensions

are spilling over in the Health

care sector. Two approaches for

Simbion Health from Healthscope

and Primary Healthcare. Neither

of those parties seem to agree

with each other. Finally, I

don't want to depress you after

the rugby result last weekend,

but next Friday is the 20th

anniversary of the 1987 crash.

Winner -

Up on a broker's

recommendation. They say the

company's worth 20-$40, not bad

for a stock worth less than $4.

Loser - RAMS Home Loans, down

34% on no particular news. In

am coing weeks the Australian

film and video industry will

embark on a concerted campaign

to point out that copy right

piracy is not a victimless

crime. It is getting fleeced to

tune of about a quarter of a

billion dollars a year. While

the rapid spread of new and

cheap technology is making

theft easier, the industry

points out the biggest problem

is a tight fisted public.

My father was not a pyrate.

Whatever the plot of new

release movies, major studio

action block busters, small

independent features, and

everything in between, are all

battling the cheap romance of

pyrate copies. Never do what

they did. New technologies from

the Internet to cam corders to

DVD burners are making it

easier to get films, television

programs, music and games into

homes across the globe both

legally and not, at stunning

speed. One day a chap walked in

the gate and said to my workers

"I have some DVDs for sale,

would you like to buy some".

They said, have you got Kenny,

mate? He said, "No, I've just

sold the last copy up the

road." Then he said but I'll go

back and get another copy and

bring it down to you. Glenn,

sole investor in Kenny the

movie and CEO of the real life

port aloo supplier Splash down,

says the pyrate DVD was offered

not long after the movies'

release. Look at that, hey! At

that stage, I was really angry

when he came in because I've

put a whole lot of money and

time as well as Clayton and

Shane Jacob sen, putting their

careers on the line with this

movie, here's this person

robbing us. Most Australians

still don't understand that

it's not a victimless crime.

Adrian from the Australian

Federation Against copyright

theft says piracy is estimated

to have tripped from 2000 to 2005. Film piracy affects

everybody from a small

Australian creative film maker,

their local video store, their

local cinema, the people who

might or might not get a job in

those businesses. They're the

people first hit by piracy long

before the big studios and the

big stars get affected. Adrian

says piracy cost the Australian

film industry more than $230

million. So AFAC's about to

launch a new campaign to try to

change people's views. ... What

you're really burning is the

future of Australian films. I

put my money on the line, I put

my business, three years

would've been pretty tough. The

story behind the Kenny the

movie would make a film in its

own right, its creators, their

use of family members in

starring roles, and

Splashdown's real workers

lending their expertise to the

film's fictional company. In a

surprise happy ending the Jacob sens' unique approach wins

industry awards, makes more

than $8 million in the cinemas

and claims the title of best

seller in the legitimate DVD

industry. There's even a

subplot, in how that pyrated

version made its way to Splashdown. Fantastic copy. It

was excellent copy. So much so

- it wasn't taken bay handi

cam, it was a much better

quality than that. The cover on

the DVD too was similar to

ours, they did a probably

better job than we did with the

cover which is a real

concern. Police raids have

shown that all sorts of people

are involve end that sort of

crime from small backyard operations through to organised

crime. It's impossible to

really quantify the extent of

piracy. We know it is having

and it has had a substantial

impact on volumes and sales.

But Mark from industry market

research analysts Ieb ice World

says while piracy is a major

risk it's among a number of

hazards besetting the

manufacturing and retail side

of the DVD and CD industry.

Where increased sales no

longer mean better profits.

Should be noted, that CD album

sales in 2006 were at the highest level since 2003,

whilst DVD sales were the

second highest on record. Total

value of DVD and CD sales was

down 7% year on year. We

produce about 40-plus million

DVDs a year, over 6-7 million

CDs a year, we have a turnover

of about 40-plus million

dollars a year. FINA horman is

managing director of Regency

media, one of the top 3 CD and

DVD manufacturers in Australia,

with about 100 full-time staff

and an evolving line of product

in a bid to outwit the pyrates.

Several years ago when we were

getting new release tight frl a

stud yes to manufacture it

could be up to 1 million units

we'd be asked to manufacture. A

similar style of movie and

quality now we'd be asked to

manufacture about 400,000

units. People unfortunately

believe that things that are

available on the Internet are

free of charge, they don't

understand it is someone's

intellectual property and that

they should respect that. Once

films reach the Internet in an

illegal capacity it's almost

impossible to put the genie

back in the bottle. In a case featuring 20th century Fox's

recently released 'The

Simpsons'" movie a Sydney man

is heading into court over the

film's debut on the Internet

shortly after its release at

the cinemas.

Kill! Kill! In the instance

of the Simpsons' movie forensic

testing found a particular copy

of a film, we then tracked that

film and found it had been

downloaded 70 - in the first 72

hours that film had been

downloaded 110,000 times.

Action block busters, Diehard

4 from twent yet century Fox

and paramount pictures

Australia's the Bourne

Ultimatum eature soon in

upcoming court cases after

illegal copies were seized. Now

the curtain's about to go up on

an appeal to the hearts, minds

and wallets of consumers.

You're really robbing from

your mother. You're robbing

from... When you're in this

industry you're robbing from

the people that you - give you

some entertainment and some

joy. So at that stage I think

we've got to think harder the

next time we go out and put our

hard earned on the pyrated

copy. Currency strategists

are looking at a movement to


Clifford Bennett made his

call about 18 months ago. I

spoke to Clifford Bennett to

see whether he's now revised

his forecasts. How high do you think the Australian dollar can

go? I think we'll see parody

next year. Obviously along the

way there is going to be

setbacks, maybe from 93 c,

around 98.5 c, I really feel

perhaps the two-four year

timeframe which is worth

considering for a lot of our

commodity exporters, we could

see the Aussie as high as 10 #,

112. The underlying factors

have been a US dollar that's in

decline is in the background

for a lot of currencies rising

over it's last year or so.

Australia has two very powerful

arguments - one is obviously

our high interest rate settings

relative to the US, particularly Japan and other

parts of the world, which makes

the great yield search that's

been on over recent years for

major fund managers, makes the

you Australian dollar very

attract ive. Perhaps the most

powerful factor has been our

door step of Asia Gee graphical

location, if you like, in terms

of commodity exports. Beyond

the door step of Asia has been

a major plus for this

country. Are you seeing a big

shift in the holdsings of US

dollars by global funds? Yes, I

think you're quite right there,

Alan. The US is perhaps going

through its most historical

realignment of its currency

the most dominant global since Bretten Woods. It's still

economy, but if you like, the

margin over the rest of the

world is civicly narrowed.

People are very concerned about

having a more balanced portfolio in terms of

currencies, perhaps for the

first time. How are the

portfolio weightings of US

dollars and euros changing? I

think what happens every month

these large funds and even

central banks have more money

on their desk, they arev to put

it somewhere. They look around

the world and go, we don't want

to increase our US holdings

relative to our euro holdings,

we want to build our euro, the

euro is the big winner in this

story. People think that's the

next reserve currency if it

isn't already. They really are

wanting to move away from the

US to the euro, or to at least

balance the two currencies in

their books. They may still buy

US dollars each month but they

might buy 10% US and 80% euros.

It's not like we're going to

see a withdrawal from the US

dollar market but we are going

to see a slackening of

investment there whilst places

like the euro, Stirling and

perhaps even the Australian

dollar to a slight degree will

see funds being permanently

move end our direction. Is the

Australian dollar gaining a

position of its own in international portfolios? I

think it might be for the very

first time. I think, it might

only be half a per cent or 1%

of a portfolio weighting, but

it's a constant steady locked

in half a 1% weighting. Some of

these funds are massive. If you

have a half a per cent or 1%

weighting that is a lot of

money. So I think every month

you are going to see portfolio

flows to Australia that will

not be reversed for efrl years

if at all. I think Australia's

finally on the map in that regard. I suppose it's a bit

the Australian dollar being on ironic that the good news about

the map is bad news for our

industries and our

exporters. Yeah. It is in a

way. But I do believe there is

a silver lining, thaw can

always argue. A lot of our competitors, particularly

commodity export competitors

are suffering the same dilemma.

People have to recognise this

is the territory and this is

the game we now have to play.

It would be great if all the Australian exporters

outperformed the exporters of

other nations in terms of

dealing with this constantly declining US dollar which is in

the background. Thanks very

much for joining us,

Clifford. Thank you very much,

Alan. On tus die the agreed

statement of fact about visy's

price fixing cartel with am

core will be present to the

Federal Court. The court will

decide whether to accept the

ACCC's penalty. They're

expected to total about $40

million. If that's what

happens, they will have got off

very lightly indeed. In Europe

the fine would be 10% of

turnover, for visy that would

be nearly $300 million. There's

a bill before Parliament that

would introduce jail terms for

price fixing although that's

not certain to be passed. It's

a bit of a joke that the

players in Australia's biggest,

most egregious price fix get

off with a confession,

apologies to customers and a

small fine, yes, Dick Pratt's

reputation has been damaged and

that, by all accounts is causing him some sleepless

nights. It doesn't even look

like the customers will sue,

they're just looking forward to

having the upper hand at the

next price negotiation. The

first thing am core directors

did when they found about the

cartel before teleing the ACC

was to fire the chief

executive. Visy's CEO is still

there. He offered his

resignation, Pratt didn't

accept T he should do so this

week. No-one can sack Dick

Pratt, he owns the company, but

should he go to jail? Or would

he under the proposed law? I

mandatory sentencing and anyone doubt it. We don't have

who gets a character reference

from the Prime Minister, the

Premier and the entierp Carlton Football Club would need to

back a truck through a

jeweller's window and clean the

plagues out to get locked up. -

place out. Some would they teas

that's exactly what he did. The

fine should definitely be

bigger. Volume building can be

a pretty tough game with everyone fighting for market share as interest rates rise.

One of the survivors is the

Simonds Group, headed by a septuagenarian former carpenter who's turned it into a family

concern. We are building

approximately 1,200 house as

year. It dut take a bick

turnover. We turn over about

$250 million a year. To open

our doors costs us $42 million.

# We've come a long, long way

together... # Gary Simonds

began as a carpenter in 1949

and built his first house soon

after. His business grew

organically for a few decades

until it was notching up around

100 homes a year in the

1980s. I remember saying to my

son one day, "I believe that in

the fore seeable future

there'll be five major builders

here in Victoria and indeed

possibly every other State so

we need to go volume." I said,

we'll go round and take people

from volume builders and bring

that expertise into our company

and that's what we have done.

We were lucky at the time

because Jennings was laying off

a lot of people, we gobbled

them all up. Today, the

business run by Gary Simonds

and son Mark is in the top 20

builders in

Australia. Employing over 7,000

people and focusing on the Victorian and Queensland markets. Volume was always

tough. It's competitive in more

ways than one because not only

is the price, but it's also in

design, ah, we fight for better

positions in land subdivisions, we argue about anything that

gives us an advantage. If you

understand cash flow you are

halfway throo. Profit is

important, but to be quite

honest cash flow is more

important because you can still

go broke making a profit. The

business also has to navigate

through rising interest rates,

though it's only a short-term

problem. After a month people

forget about it. We are very

conscious of it, but it

certainly hasn't stopped a

sale. Trades people are

forever a problem especially

good trades people. A lot of

our people have been here 10

years or more. We had about a

10,000 dollar a year and after

three years they get a cheque

for $30,000. Tradesmens' pay

isn't the only thing that's

changed over the years. Today

we see al frescos coming into

houses, the theatrettes coming

into houses, but we see houses

changing on a regular basis.

Goodness me, when we first

started bitding if you had a

built-in wardrobe you had a

pretty posh house. The era of

the display home might be near

its end as technology takes

over. We've got something like

90 display homes out there,

we'll see news future cutting

that down to maybe 25, but

we'll have a big warehouse and

they will sit down there and

design the house of their

wants. Every time they bring up

an al fresco, another bedroom,

every time they change it, the

price alters. Simonds remains

a family-owned business,

providing work for half a dozen

members of the clan. I got the

best son in the world, that has

worked so hard to make this

business prosper. I got a

grandson who's 23 years of age.

He's just born into it, because

when we sit down as a family

all we talk about is building.

Always want my family in it. I

used to take my son to work

when he's in nappies and I used

to change his nappies on the

job. A lot of people say to

me, why aren't you out there

playing golf? Why aren't you

out doing whatever you like to

do? This is what I like to do.

I like to be at work, I like to

be amongst the kids that work

for for me. None of us can beat

him. He's too good. That's it

for the program. Transcripts of

all today's stories and

interviews will be available on

our web site. Thanks for your

company. See you next week. Now

it's back to Barrie and the

team. Thank you. Welcome to

'Offsiders'. Horse racing has a

new champion - the Caulfield Guineas winner Weekend Hussler

is surely headed for greatness

after after emphatic vict I

have with some of the best

judges already comparing the

gelding with man acarto and tul