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(generated from captions) Aboriginal communities about

what exactly it would involve

and mean, what's the mood like

now? I think I share those same

sentiments in the initial phase

of the intervention. What it

does is it changes the focus to

me in looking at an area of

expertise I'm comfortable with and that is around the ear

disease program. The

intervention has good and bad

aspects. With any kind of

intervention you're going to

note those differences. What

we want to harness is pick up

on an area we're very familiar

with, in this case being ear

disease and hone in on how we

can make this the best possible

model so we can translate to

that other service provision.

In ear disease, we're talking

about ear surgery per se, but

we really mean is talking about

a child being able to ear and

learn at school. That might

involve hearing intervention,

as simple as the acoustics of a

classroom being maintained so

the kids can hear. Involving

the teachers being aware of the hearing deficit and education

tailored to that need. It may

involve surgery, but collateral

support is important. Part of

the process which I'm proud of,

is that the employment of the

Indigenous people in this

process is in giving the

capacity and the empowerment of

the people to actually lead the

way in which they want to

determine what they're doing.

I'm not from the Alice or these

communities, I don't know which

way it's going to lead, we need the community to lead these

discussions and lead the way.

We support as much as we can

filling around the gaps. You

mentioned you initially had

mixed feelings about the intervention and you referred

to some of the bad aspects of

it, what do you think the bad

aspects are? I think the bad

aspects of the intervention are

discussion for me at the probably beyond the scope of

moment. If you look at the

excellent report by our Social Justice Commissioner in and

around the 10-point plan to

change the intervention to make

it more appealing to the

Indigenous people A lot of it

is based appeared human rights

and we're talking about

Indigenous people as humans and

having an amount of dignity and

respect about that. I think

that's where a lot of the

process can be failing us. Major General Dave

Chalmers, in Suzanne Smith's

story it was clear some people

are happy with the intervention

and want it to go on

indefinitely and some are not

challenges that you're supporting it. Is one of your

basically dealing with a policy

that's one size fits all and

you're treating all of these

people the same way whether

they want to see the

intervention or not? I think

it's certainly challenging to make sure we explain the

intervention to people in a way

that they can understand and

maybe this challenge isn't a

mountain, perhaps it's a hill.

Nonetheless it is a significant

issue for us. I wouldn't

underestimate cross-cultural

communication. I think

empathising with people, being

able to talk in a way that

enables them to understand why

we're doing things is very

important. But I would say

about the one size fits all

issue that where we have

people have got through the introduced policies, where

teething problems of introduction and understood the

benefits that these policies

are delivering, then we've got

this groundswell, this momentum

now of support for the

forward. Major-General, do you intervention moving

think there's more scope at

this point to include

responsible individual

Aborigines in the communities

in the implementation of the

intervention? Well, I think

there's always scope for

discussion, for consultation,

for working with people. The

solutions are in the end going

to be solution s that we develop with Indigenous people,

not for Indigenous people. I

think this Government

thoroughly understands that

and, of course, now as we move

to the 12-month mark of the

intervention the Government had

committed and is committed to

conducting a review where we'll

examine all aspects of the

intervention and this will be

independently done, and where

many views will be canvassed and people will be consulted as

we shape the way forward. Dr

Kong, if your opinion's asked

for that review, what will you

say? I think I need to look at

some of the data that's around

that, certainly from an ear,

nose and throat prospective.

It's a little early to talk

exactly how we're going to

guide this and certainly how

we're going to measure the

outcomes of this. Again, with

the point you were mentioning

before about being tailored to

each community, very much so in

this aspect. You look at

certainly the people involved

on the ground at the community

level is phenomenal and they're

that community health worker. driven at the local level by

I think that's very important

to make sure we make this

sustainable and actually build

the capacity into the

community. One of the very

controversial areas when this

intervention first started was

the issue of the health care

checks for children and the

extent of sexual abuse it might

uncover. Major General Dave Chalmers, what have those

health checks actually ended up

involving? Well, I think it's important to understand that

the child health checks are a

check of general health of

children and Dr Kong's probably

far more qualified than I to

speak to this, but generally

these are checks of skin, of

height, of weight, of

condition, a check of social

history of the child that a GP

can do in the space of 30

minutes or so, and these checks have resulted in us having a much better understanding of the types of health problems

that confront Indigenous children. So Dr Kong, if a

child comes to you for a ear,

nose and throat check, are you

able to check for signs of

sexual abuse? No, that's beyond

the scope of what I'm doing,

nor would I actually do that.

That would contravene or really

support an avenue of rape on my

behalf and I would go nowhere

near that. What we really want

to be careful of is talking

about this kind of sexual abuse

in the climate of the ear

intervention, because we're

from that. We're looking about

ear disease here. Given when

the intervention first started

there was so much concern about

child sexual abuse, how are we

getting to the bottom of how

problem is then Major General severe or otherwise this

Dave Chalmers? Well, it's not

that there aren't people

working on this. In fact the

Australian Crime Commission and the Northern Territory police

are working very hard on the

issue of child sex abuse, on

detecting perpetrators and

bringing them to justice. But

the intervention as a whole is

much more about changing the

social dysfunction in

communities, the poverty that

leads to child neglect and

child sex abuse. So it's about

changing the whole paradigm so

that the next generation of

Indigenous children grow up

happy, safe and healthy. But it

was initially discussed as a

crisis in that there were children needing immediate help

to get them out of abusive

situations. Has that happened? Well, it is a crisis,

it is a crisis for these

children and there are children

who need help and there are

children being offered help.

What I'm saying, though, is

that from my point of view as

the operational commander of

the intervention the canvass

that I'm painting on is much

broader and it's looking at

generational change. But are

you seeing still sexual abuse

of children? Are there children

being sexually abused that are

still being sexually abused six

months after the intervention

started? Well, yes of course

there are and that's happening in mainstream Australia as well

as in Indigenous communities.

The measure of what we're

doing, though, is addressing

those conditions which allow

child sex abuse, for example,

to occur at much greater rates

in Indigenous communities than

it does elsewhere. And that

process has started. I think

the indicators are very

positive but it is going to be

a long-term commitment. So far

about 8,500 children have been

checked and there's about it's

believed 7,000 or so who

haven't been checked. How are

you going to get those children

checked, Major General Dave

Chalmers? Well, child health

checks have been offered to

nearly 17,000 children now and

of those children, 8,557 have

been checked by the teams of

doctors and remote area nurses

that the intervention has

brought into the Northern

Territory. A further 1,900

children have been checked

through Aboriginal Medical Services, clinics in

communities and that's an

ongoing process and I estimate

that by June this year, 12

months into the intervention,

we will probably have conducted

about 12,000 child health

checks all up. I think that's

a great result. It compares

very favourably with other

screening processes. But, of

course, I think our aim should

be that every Indigenous child

is offered a child health check

every year, that we track the

health of children and we make

efforts to improve both primary

health care and also the rate

of visiting specialist care. Dr

Kong, as I mentioned before

initially this was discussed as

a crisis and the first phase

was responding to the crisis

and then there would be some

sort of ongoing next phase and

an ongoing response. Do you

believe that we're through the

crisis yet? I think the use of

the word emergency and crisis

is quite alarming to me. We

have known about this kind of

health disparity that has

existed for quite a long time.

The dichotomy that we live in

where Indigenous people in

Australia endure third world

status whereas our general

population endure quite good

status. When you compare us to

the competing OECD nations the

health status is fantastic.

What you're doing in looking at

that is working out why we're getting these health

disparities going on. To add to Major General Dave

Chalmers's comments there,

irrespective of this

intervention, every child in

Australia deserves primary

health care. Every child in

Australia deserves ear care, or

ear health care, every child in

Australia deserves the right to

education, employment and

self-determination. This is

what we need to provide for

these kids. It's ser

diplomatous the intervention

has kicked in. We need to

provide wholistic care to these children. Gentlemen, we appreciate your insights and

your efforts in this field, we

thank you very much for joining

Lateline. Thanks, Leigh. Sydney

Swans' player Barry Hall has

ignited a debate about discipline in Australian Rules

football after he knocked out

an opponent with a punch against Saturday's game against the West Coast Eagles.

Commentators say it's been a

long time since such an ugly

incident has been seen in

Aussie Rules. There are calls

for the code to introduce red

card or sin bin-style penalties

where players are removed from

the ground immediately after

such offences. Rachel

Carbonell reports. Barry Hall

has worked hard to lose his bad

boy image since he joined the

Sydney Swans in 2002, but after

Saturday night, all that may

have been in vain. It was a

shocker, he's let himself down

completely there, Barry Hall.

That is the sort of thing we

thought was out of this

game. Despite those initially

half-hearted pleas to the

umpire, Barry Hall was quick to

call it as it was. It was just

a mind explosion and... looking

at the replay, I certainly

regret what I did. Today, the

Swans continued that line. I

think we all are generally

disappointed with what

happened. He certainly let all

the players down 'cause he is

one of our most influential

players. But Barry Hall has

admitted it could happen again.

The AFL's Match Preview Panel

has deemed the issue so serious

it sent Hall straight to the

tribunal which is tipped to

suspend him for at least six

weeks. Hall broke his wrist

when he slammed into the

sidelines later in the game and

that injury could well keep him

out of the game for as long or

longer anyway. What kind of

punishment Barry Hall should

suffer as a result of his

action s isn't the only issue.

What role he plays in

advertising campaigns is also

likely to be an issue for the

team and for the AFL more generally, there have been

calls for some kind of send-off

rule or red card system to be

introduced for when issues like

this arise. Soccer, rugby and Rugby League all have

provisions to send players off

immediately after major

indiscretions. But AFL

commentators say such a system

wouldn't work for Aussie

Rules. I think by its nature,

Rugby League is a game of

heavier tackling, greater

tackling priority. It's a game

given to probably more violent contact historically. Brent

Staker, the victim of Barry

Hall's left hook, had his jaw checked today. He wasn't

saying much, but his parents hope the tribunal comes down

hard. Maybe if there's a fight

and you come out second best,

fair enough. But not to be

king hit when you're not near

the play. Pretty weak I reckon. While Barry Hall hasn't been suspended since 2002,

prior to that he had a string

of 16 suspensions dating back

to 1998 when he was with St

Kilda. And in news just in,

Zimbabwe's High Court has

rejected the Opposition's

petition for the immediate

release of the results of last

month's election.

That's all from us.

'Lateline Business' coming up.

If you'd like to look back at

tonight's discuss with Kelvin Kong and Major General Dave

Chalmers or review any of

Lateline's stories or

transcripts, you can visit our

website. Now 'Lateline Business' with Ali Moore.

Thanks, Leigh. Tonight -

recession fears, more bad news

from the US to hit our

markets. It's going to be very

tough, be it for interest

expense, margin expansion for

companies. Cheap flights -

shares in Virgin Blue fall to a

record low on a poor

outlook. Might get down to 80

cents and that's probably about

as low as they'll go. The

cycle is certainly alive and

well. Virgin in the second

half is going to earn

nothing. And pokies row, the

Victorian Government slugs it

out with Tatts and Tabcorp over

compensation. What isn't so

clear is whether or not the

change at the end of the

licence period meant that the

Government wasn't required to

pay the licence penalty

payments. Renewed fears of a

US recession sent Australian

shares down sharply. The All

Ords followed Wall Street's

slump on Friday. Falls in

banking and resource stocks saw

it shed 94 points. The ASX200

lost 97 points to close at a

2-week low. The selloff

continued across the region.

In Japan the Nikkei closed 3%

weaker. Hong Kong's Hang Seng

plunged 3.5% and the FTSE

weaker for a fifth consecutive

session. World stock markets

are bracing for a weak result.

There may be further evidence

of a US recession. Already

markets have taken a hit on the

back of General Electric's

surprise profit fall over the

weekend, with sellers out in

force in Australia. Andrew

Robertson reports. General

Electric is to the United

States what BHP Billiton is to

Australia, so when an

unexpectedly announced a 6%

fall in first quarter earnings,

markets all over the world

became nervous. It's obviously

covers a lot of the industry

groups, it covers a very broad

geography, so when you get a

big company like that

downgrading, it does tell you

something about the broad scope

of the downturn in the

US. General Electric's woes

coupled with the earnings

downgrade at Virgin Blue saw the Australian stock market

lose nearly 2% in today's

trade. UBS stock market

analyst Rob Taubman believes as

the US economy slows and takes

other economies with it,

there'll be more earnings

surprises. If we look at GE in particular, only a few weeks ago the company still felt

things were tracking to

expectation, so there's been a

significant short-term

deterioration, really over the

last couple of weeks. And in

Australia I think it's a very

similar situation, on a week by

week basis. Which doesn't auger

well for the outlook for the

stock market which has suffered

greatly over the last eight

months and according to Tanya

Branwhite it won't be that long

until earnings forecasts for

2009 start being revised

down. The environment we see is

actually going to be tough, be

it for interest expense, margin

expansion for companies and

there may, in fact, be the need

for companies to come to the

market to raise additional

capital given the fact that the

credit markets are more

difficult and the cost of debt

is certainly rising. According

to Standard & Poors:

Other developed nations have

seen all gains of the last 12

months wiped out, but those in

emerging countries such as

China, India and Brazil are in

the black. With Australia

being a large supplier of raw

materials to countries like

China, commodity broking services analyst Jonathan

Barratt believes resources

stocks will put a floor under

the Australian stock market, as

other sectors struggle. Your

BHPs and your Rios I think are

certainly remain very good in

terms of their buying potential

and their valaution. They'll

naturally gyrate with the

market, but I think for a

long-term holders, you'll be

able to draw a line in the sand

and they still look very good. UBS's Rob Taubman goes further. Although this is a

big week for economic data and

earnings in the United States, he believes the figure which

will have the most impact on

Australia will be China's March

quarter gross domestic

product. The argument's been

there for some time, really for

the last sort of two years that

a decoupling has occurred and

that Asia and India and various

economies would have an element

of self-sustainability about

them. If the numbers are to

weaken off in GDP terms I think

it'll bring us back fairly

quickly to looking at the US

consumer and just how much of a

global demand they do make

up. Rob Taubman believes an

annual growth figure of at

least 9% in China will be

needed to insulate Australia

from a recession in the United

States. ANZ chief executive

Mike Smith will lead the bank's

review into its share lending

practices which have damaged

the ANZ brand. The high-level

inquiry will look at how ANZ

monitors and controls stock

lending, as well as how it

managed clients including Opes

Prime and Tricom. It will

investigate whether any ANZ

staff member broke the law or

breached bank policy dealing

with Opes Prime. This is a

particular issue which is an

isolated unit within a small

unit of the institutional bank

and I don't believe it's

systematic. ANZ was Opes

Prime's major banker and it's

come under fire for selling

shares held by Opes to recoup

loans the bank made to the

stockbroker. The move has

sparked legal action by Opes

clients who say they own the

shares, not ANZ. Virgin Blue

shares slumped to a record low

today as investors dumped the

stock following a profit

downgrade. The situation

wasn't helped by Toll Holdings

decision to hold onto its major

stake in the airline because it

can't get the right price and

Qantas didn't escape the

selloff in what's become a

tough time for the global

aviation industry. Desley

Coleman reports. Just six

months ago, Qantas and Virgin

Blue were in a sweet spot,

enjoying record profits and a

cozy duopoly. Now the sector

is facing strong headwinds,

including a slowing economy,

rising fuel costs, a new

entrant in the form of Tiger

Air and too much capacity. This

calendar year is probably going

to grow by 20% which is way

ahead of the anticipated market

growth, passenger growth and,

therefore, the obvious thing

happens. You've got too many

seats so carriers will have to

discount to fill them. Virgin

Blue expects earnings of no

more than $100 million compared

to the $216 million result

posted last year. Analysts

Philip Wensley from Morgan

Stanley is more pessimistic,

tipping earnings of just $89

million. We're actually trading

now right down towards the

trough levels of the cycle. We

think Virgin Blue is now

trading at 90 cents where it is

today this morning at about 1.1

times price to book and we

think that's sort of getting

close to a level where they

start to get trough cycle

support from our book value.

Might get down to 80 cents and

that's probably as low as

they'll go. But the cycle is

certainly alive and well.

Virgin in the second half is

going to earn nothing. The

market reaction was predictably

severe with Virgin Blue down

22% by the close. They're

worts a third of what they were

at the peak a year ago. Qantas

stock was also sold, down 5%,

while Toll, which owns 63% of

Virgin Blue, fell 15%. Toll

had been shopping its Virgin

Blue stake since acquiring it

in the Patrick takeover two

years ago. But with the sector

coming off its highs, buyers

weren't willing to pay the

price Toll wanted. I guess it's

fair to say we got the timing a

bit wrong. If we'd be able to

sell this six months earlier it

may have been a different

story. However it wasn't. The

business is still a very good

business and we will hold it

until we can realise the value

from it. Virgin Blue also

flagged that the rocket jet

fuel price of $130 a barrel

could gouge more than $120

million from its bottom line

this year. If that level is

sustained it may be forced to

raise its fuel surcharge by up

to $12 which could put Virgin

Blue's market share at risk. If

you push the price up too high

in a soft market, the number of

people who are going to buy

that price are going to reduce,

so your end product is less income and I think that's the

way they see it. They see the

market is really soft, it's really price sensitive at the

moment and by pushing fares up

higher you're going to

basically hurt yourself. Australia's airlines

are feeling the pressure of a downturn in the global aviation

industry and that downturn has

already forced four American

carriers to declare bankruptcy

over the past month and while those airlines were relatively

new entrants, it's confirmation

that conditions have become much tougher. The Victorian

Government has been accused of misleading investors in the State's two big gaming

companies. Last week it

announced it will not renew the

gaming giant's pokey licences

when they expire in 2012 and it

won't pay compensation. It's

been revealed the Government

apparently has the power to

change the conditions of the

original deal with Tatts. The

Government's decision on future

licences has wiped millions off

the value of the businesses.

Tabcorp shares dropped 7% while

Tatts fell just over 2%.

Michael Troy reports. The

Victorian gaming giants are on

a losing streak with share

prices on the nose again today.

Last week they threatened to

sue the Victorian Government

for more than $1 billion in

compensation for a decision not

to renew their pokies licences

beyond 2012. However, the

Australian newspaper today

revealed a 13-year-old letter

stating the Government had the

right to change terms and

conditions at any time. It's

been very clear that the

Government could change those

arrangements, but what isn't so

clear is whether or not the

change at the end of the

licence period meant that the

Government wasn't required to

pay the licence penalty payments. Gaming analysts are

not sure why the Government

decided to change what was a

lucrative deal and risk wider

investor confidence. To add

something like this where I

think the legislation was

reasonably well understood, or

at least by the companies, then

it does add additional risk to

investing in the bank and

investing where Government

regulation is a key part of the

business risks. The issue looks

certain to go to the Victorian

courts, as on Thursday the

Victorian Premier made it clear

there would be no compensation,

claiming the move to

venue-based spoky licences

would benefit the

community. When you change aye

structure, of course there are

winners and there are losers.

The Government seems to have

been quite cynical because, of

course, the Government takes huge amounts of revenue from

gambling, as well. So it seems

unfair that shareholders should

be the victims in all of this.

The Government is obviously

going to issue licences again

for gaming machines, but

they'll just be issuing them to

different participants. The

Shareholders' Association

believes the companies have not

misled investors, but the

Victorian Government which

helped promote the original

issue, is not living up to the

refund deal, as outlined in the

Tabcorp prospectus. It has potentially misled the

shareholders who purchased

shares in that initial offering

as to what it was going to do.

Because it's quite clear in

there, there's never any

mention of there not being a

time where these licences will

exist. Regardless as to who is

right, other players in gaming

deals are watching closely. If

there's a broader move within

Australia towards more control

and different regulations with

regard to gaming sector as a

whole, then perhaps the NSW

Government will be looking at

those issues more closely. The

risk is if you are in a highly regulated industry, the

Government can come out of

nowhere to reduce your

assets. The new Victorian

gaming machine entitlements

will be auctioned in a

competitive process in 2010

with the cashed up players most

likely to bid, such as the

large hotels and the Woolworths

Group. European markets are

now about halfway through their

trading day. For the latest

we're joined in London by David

Jones, chief market strategist

at IG Index. David Jones,

Europe's playing follow the

leader so far, down for a fifth

session in a row? Yes. There's

an element of cashing up from

the falls we saw in US markets

after the European markets

closed on Friday. European

markets had held up quite well

until Friday when that GE news

broke and they plummeted like a

stone all day. Those are

quarterly earnings, the

reporting season is continuing

in the US as we speak and the

latest result comes from

America's fourth biggest bank and it's not particularly

good? No, it's not. They

pulled their results forward by

four days so I think the

feeling was always going to be it was bad news and it is.

They've reported a loss of 20

cents a share, US $$39.3

million against an expectation

of a profit of 40 cents a

share. It's that phrase again

- subprime, that's meant

they've made a loss, surprising

this time round. It's maybe a

wake-up call this problem

hasn't gone away and there's

worse to come. Slightly more

optimistic news, in the last

hour we've had the retail sales

figures from the US and they were stronger than

expected? They were, not a

drastic jump, it has to be

said. The market was expecting

a growth of 0.1%, they came in

100%, but only 0.2%. It's a

little glimmer of sunshine

compared to maybe the consumer sentiment figures we had last

Friday that showed that US

consumer sentiment was at

26-year lows I think the number

was. A slight bright one today

but nothing to suggest the doom

and gloom has gone away

yet. Lots more economic data and profit results due this

week. What are you keeping a

closer eye on this

week? There's a load of stuff

this week. Earnings from the

likes of Johnson and Johnson.

Insight into how retailers are

feeling and how the consumer

feels. JP Morgan, Capital One.

Again people will be scrut

niezing that to see what the

state is of subprime and

lending. We've also got

inflation data out of the US

and housing starts due out of

the US which should give us a

sign as to how bad the property

market is, or is it getting

better. We could have a quiet

day today, but plenty to focus

on as the week goes on. What

are the futures looking like

for Wall Street's opening in a

matter of minutes? When I last

checked they were softer,

nothing drastic. The Wall

Street, the Dow Futures were

off around about 10 points.

The market's having a breather

after the big plunges we saw on Friday. David Jones, many

thanks for talking to us. Thank

you. To the other major movers

on our market today:

There's more evidence high

interest rates are having an

impact with demand for home

loans dropping significantly.

The number of loans fell nearly

6% in February, while the total

value of those mortgages was

down by more than 7%. Analysts

say Jose Ramos Horta are more

cautious because of --

homebuyers are more cautious.

Lending is still at health levels, though, and brothers

are going back to big banks for

mortgages. While the Prime

Minister is back from China and now it's the Trade Minister 's

turn. Simon Crean heads to

Beijing tomorrow morning to try

to make progress in negotiations for a free trade

agreement with the Chinese.

Negotiations which started in

2005, but have made little

progress. Despite differences

over Tibet, Simon Crean is confident the Prime Minister's

visit provided the impetus needed to kickstart proceedings. The minister

joined me from our Melbourne

studio earlier this evening.

Simon Crean, welcome to

Lateline Business. My

pleasure. Kevin Rudd says China

has now agreed to unfreeze

trade talks. Indeed these free

trade negotiations with China

actually started a good three

years ago. Is the end now in

sight? Well, I hope so. I

think that the discussions that

Kevin had with the Chinese

leadership were terribly

important in unfreezing what

have been essentially stalled

talks over the past three

years. Our intention was to

test the will of the Chinese

leadership early to proceed

with a new vigour and new

determination to conclude this

free trade agreement. It was

an important breakthrough last

week. Just as important I

think is going to be to see how

far we can get in really

getting substance and timetable

to the talks. You talk about

substance, exactly what was the

breakthrough? Was it just the

commitment to reinvigorate

talks, or was there a specific

commitment? Think it was two

things. It was the

reinvigoration of the talks and

a determination to bring them

to a conclusion. But secondly,

the recognition that it had to

be a quality free trade

agreement. It had to be

comprehensive. In other words,

it had to conclude all sectors,

not just agriculture and

manufacturing but services and investment. The Prime Minister

says financial services will be

the engine driver of our relationship and there are, in

fact, significant barriers to

foreign investment in China's

financial services. Is the

removal of those barriers a

precondition for any trade

deal? Oh yes, I think this

question of services and

investment do go together very

much. There are limitations,

restrictions on sorts of

investments that can be made.

We would want to address it.

But let me just say, it's not

just financial services, as

important as they are. There

are education services, there

are the services sectors

associated with our two big

resource based operations, the

mining sector... I understand

that, but I guess in fine

services it's an easy area to

quantify the barriers. There

are three specific barriers to

foreign investment. One, that

foreign companies can only buy

under 20% of a local bank.

Two, that they can't invest in more than two banks and, in

fact, in some areas they can't

invest in a bank at all. Have

the Chinese agreed to put those

conditions on the table and do

you want those three conditions

removed before you sign any

deal? Well, they will be on the table, they are on the table because it's a comprehensive

FTA. Our task is to try and

get some conclusion and some satisfactory conclusion to

them. I won't be able to answer that question better

than what I've just done until

I've sat down and had the

discussions. We need to

establish where the barriers

are. Do they exist? How

significant are they, and are

we in a position to overcome

them? Now I think that the

breakthrough last week

demonstrates a determination to

a address them and secondly, to

recognise that we do have to

address these sorts of

issues. As many analysts would

say, those three barriers are

clearly defined and if China

gives ground to Australia, it

would have to also give ground

to many of its trading

partners. At what point do we

say, "Yes, we will accept that"

and, of course, that goes to

the heart of the quality of any

trade agreement? The point that

we determine how well the

negotiations are going. Let me

just make the point it's not

just the financial services.

You've talked about three

issues there. There are a whole range of issues when it

comes to services and

investment. I wouldn't like it

to be confined to just those

areas. They are important

issues. They've been

identified. You're aware of

them, but there are others that

we have to address as well. Do

you go in with benchmarks,

though? The benchmark is

quality, WTO consistent,

comprehensive. The next stage

we have to get is some sort of

work program, some

determination that actually

says well, let's try and set

some objectives and work

towards achieving them and then

make a judgment as to whether

or not we're going to be making

progress. I mean, we're not

going to negotiate it to final

ity next week. I think what

we're going to do is put

substance to the significant

agreement, breakthrough that

was achieved last week and I

hope that substance contains

the basis for a meaningful work

program looking ahead and against which we can judge success. Politically down the

track if you don't get what you

want, can you walk away, or is

a low quality agreement better

than no agreement? No, we're

not talking about low quality

agreements. I think we should

be aiming high. There are

clear synergies between our two

economies. There are specifics

in the bilateral relationship

between ourselves and China that open up huge

opportunities. There's the

services sector, there's the

resources sector, there's the

investment flows, there's the

agricultural market access and

there's the implications, the

sensitive issues for Australia

as to what it means for our

manufacturing industry. So all

of these have to be not just on

the table, they have to be

approached in a conglomerate

sense and judgments made in the

end as to what is going to

advance the interests of both

countries. If I can rephrase

the question, is an agreement

inevitable? Will Australia walk

away if you can't judge one to

be successful? Our objective is

to achieve a successful

outcome. Our objective is to

aim high and we know that there

are aspects of our relationship

with China that hopefully will

give us some of that leverage.

But let's wait and see. I

don't want to talk about what

happens if I want to talk about

how we can progress this now

that we've got a breakthrough

after three years of dor

mansy. You point to aspects in

the relationship and, of

course, when the Prime Minister

was in Beijing he criticised

China over Tibet. Does that

change things as you sit down

for trade talks this week? No,

I don't think so. I think this

demonstrates not just the

mature of the relationship but

the up-front way in which the

Prime Minister raised these

issues. I mean, we've had

difficulties with another

trading partner Japan, over

whaling. That hasn't prevented

agreement to progress a free

trade agreement with them.

Likewise with China. We have

differences over the question

of Tibet. We have a format, a

dialogue mechanism for dealing

with Hewlett Packard rights-related issues. We

don't link them to trade. They

don't link them to trade. I

think that's important in

itself. But more importantly,

we're able to address these

issues without jeopardising the

ability to proceed on the trade

negotiations. Simon Crean, many

thanks for talking to Lateline Business. My pleasure.

A look at what's making news

in the business sections of

tomorrow's papers. The 'Age'

leads on the ANZ's review of

its share lending practices.

The 'Australian' examines ANZ's

Asian expansion plans and

predicts it'll face tough

competition in the battle for a

Hong Kong bank. The 'Australian Financial Review' says the Government is

considering an overhaul of the

Auslink transport plan. And

the 'Sydney Morning Herald'

says Macquarie Group's plans to

move into China's financial services market has received the backing of the Prime

Minister. That's all for

tonight. The FTSE is down 56

points or almost 1% and the Dow

has opened, it's down 4 now, it

did open 12, taking a breather,

as we said earlier. I'm Ali

Moore, goodnight. CC