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Lateline Business -

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(generated from captions) companies should not have

existed. The Government

should not have passed a law

forcing good banks to make

bad loans. We need to undo

the bad roons, break Fannie

and Freddie up and turn them

into 10 smaller private

companies not two big

Government out of that area, monopolies and get the

not subsidise There are many more things I

would like to ask but we are

out of time. Thank you Grover

Norquist for coming in Good to be with you. Britain's former Foreign Secretary David Miliband

David Miliband is deciding

whether to serve under his younger brother

younger brother inlay but's shadow Cabinet. Ed Miliband

defeat his elder brother by

less than 1% in the race for

leadership. The new leader

relied on the votes of trade

members to get over the line

but that does not

will take the party to left

he says. All these characterisations about 'Red

Ed' are tiresome and rubbish

frankly. Ed Miliband his elder brother still has a

big role the play in rebuilding British Labour.

David Miliband has not

committed to joining the

shadow Cabinet but has called

on the party the abandon

factionalism and unite behind

his brother. Saturday saw one

of the most thrilling AFL

grand finals ever played when

before more than 10 St Kilda and Collingwood due

people at the MCG. There have

only been three drawn finals

in 112 years of competition and Geoffrey Blayney and Geoffrey Blayney says it

reflects brilliance of our

Indigenous game. Now the

grand final will be played next Saturday which means a

financial windfall for the

AFL and many others. The week

after the AFL is triumphant

for some, bitter for others,

but today they are all in

football limbo. Australian

Rules is a

it is one of the great game

of the world and we should be

proud as Australians we have

invented it. It is

through a golden phase and

one does not know if it will

last but a lot of people are

overjoyed there is one more

match of the season. That is

part of football. I was at

the 77 draw, I had to go back

to see them get beaten so

let's hope it is a difficult

fanatic, this is my 54th in a result this time. I'm a

row. People began the queue

for tickets as soon as the

game was offer but there was

they would go on sale. That confusion about when and how

was the impression, but there

is a lot of confusion. The

AFL stand the make millions

if replay and it says it is

doing its best to make

tickets available to everyone

including more tickets for St

Kilda and Collingwood members

as well as tickets for people

who may not report are

ordinarily be able the afford

grand final. People who the inflated prices of a

might be doing it hard and

there are some tickets hopefully we can make sure

available for those people.

In Melbourne many lives resume first weekend in October but resume normal activity on the

not this year. An A-League soccer Derby has been rescheduled as is horsesing

and house auctions are being

rearranged. 50 off the list,

10% have shifted Australia's

and I expect we will see more and vendors take that tonight an term as agencies

decision. Other businesses

are in for a grand final

windfall. Amazing. I

noticed on Saturday I was the

only person in the venue jumping and cheering when this was a draw because we

realised if we had a rematch

we would have another big day. There have been two

drawn grand finals since

1998. In 19 48 Melbourne and Essendon draw and Melbourne

won Taree match. In 1977 North Melbourne and

final siren. North then beat Collingwood were level at the

Collingwood a week later.

Australia's pre-eminent his

store krn and football fan Geoffrey Blayney knows

something about drawn

By chance I have been the all

three drawn grand finals. In

1948 I I was a student at the university and saw Melbourne

places done. He has written

extensively about the gym and

says due to its high-scoring

tide match are rare. There

Australian is great excitement in

is a drawn game, people

amazed it should take place

and that was true of last

Saturday afternoon. People

were numb. St Kilda has only

one premiership to its name

and Collingwood has 14 but

few of those have been in the

last0 years despite being in the finals which has given rise to the term 'The rise to the term 'The Col'y wobbles. Since '60s onwards

final after grand final but Collingwood got into

did nothing with it except in

1990. Once a team builds up reputation for failing 1990. Once a team builds up a

reputation for failing at the

last minute it is very hard

to get over it. For now the

rewind button has been hit on another week

another week of anticipation.

Showers across the region.

That is all from us. If you

would like the look backt our interviews

Norquist and Christine Milne

visit our web site and follow

us on Twitter and Facebook.

Goodnight. See you again tomorrow.

Closed captions by

This Program Is Captioned

Live.

Good evening. Welcome to

Lateline Business. I'm Ticky Fullerton. Tonight, two weeks into the job and

already the government is on

the defensive as Treasury says

a new approach is needed to

trade deals. We are looking at again a number of other

test will bilateral agreements but the

test will be do they contribute

to overall trade

liberalisation? Having missed the worst of the financial

crisis, should Australia be

thinking more clearly about the

future? You're in a very

privileged position at the

moment and now is the time to

make these long-term decisions

for the benefit of future for the benefit

generations. It's hammers at

dawn in home hardware. Wesfarmers

Wesfarmers spends big as

Woolies prepares to enter the market. Bunnings has market. Bunnings has been ready

for an all-out war in the home

improvement industry and it

will be a tough couple of

years. To the market now.

Treasury warns that they are

not meeting Australia's needs,

but the new Trade Minister defending the use of bilateral

trade deals. The red book

handed to the incoming

government says the foreign

investment rules need an overhaul and that trade needs a

different approach. Craig

Emerson says that some have had clear benefits for Australia,

and the small print on any new

ones will be read closely. The

Federal Government has been

trying tome brace bilateral

trade deals. It now has six of

them but the new Trade Minister

is contemplating advice from

the Treasury department that existing

existing agreements are not meeting Australia's needs. A number of the bilateral agreements were put in place by the previous Howard Government.

We are looking at again a

number of other bilateral agreements, but the test will

be do they contribute to

overall trade liberalisation.

Made public after freedom of

information requests the

Treasury advice also says the

free trade agreements under negotiation have negotiation have been overseld and the negatives largely

ignored. And that the

government should explore more

flexible approaches to FTAs as

well as well as alternative mechanisms to improve market access for Australian exporters and investors. My een disposition

is to try to work mainly

through the multilateral

forums. So that we get

liberalisation right around the world because that's where the

gains from trade are the greatest. Treasury also says

Australian foreign investment

regime is too complex, and not

based on firm legislative

footing. It's urging the

government to move toward

multilateral trade agreements

and away from bilateral deals. The Productivity Commission's

final report into trade policy is due

is due for release in November.

Some trade economists are bilateral trade deals like the ones Australia has signd with

the US and Thailand for

instance. They say individual

agreements can distort trade

flows, while multilateral trade deals involving all deals involving all countries

create widespread economic

benefits. On terms of updating

rules of the road, streamlining

procedures and the like and

trying to get trade agreements

that go beyond bilateral to

multilateral, regional and the

others, I say all for it.

Visiting from the US the editor of 'Forbes' magazine also says

Australia has weathered the global financial crisis better country in the world. And his

prognosis on the US economy is

upbeat. Even though the US

economy's in low gear, make no

mistake, there will be no

double-dip recession. The US economy will continue to grow.

The US like other western

economies is pursuing

international trade as a way to

export their way to growth. It

sets a competitive scene as all

countries jockey for position

with another round of

international trade talks in

the offing. Right now those

trade deals for Australia

appear to be doing very nicely.

Thanks to demand for Australian

raw materials from China and India. And while the signs are there that this boom part of

the cycle will be with us for

the next decade or more times

and challenges change. Some

argue we smud be thinking more about the future,

the economy in 20 or 30 years'

time and start a sovereign

wealth fund to meet future

challenges. Dr Michael Power is

a strategist with the special

bank and asset manager Investec

based in Cape Town of the he

joined me in the studio

earlier. Welcome to Lateline Business. Nice to be here. You

are calling for a sovereign

wealth fund in Australia. That's quite separate from the Future Fund we already have? Absolutely. It's very

much the model that the likes

of Abu Dhabi and Norway, Chile,

Nauru was the first place in the world to have

wealth fund and the idea is

essentially to ring fence some

of your foreign exchange

reserves and to invest them

wisely through the - for the

children of Australia. To this

is actually using the boom

we've got at the moment to actually then ... Absolutely.

It's the good times when you

should be thinking about these things.

things. You're quite literally

a lucky country at

It's right to think about the longer-term implications of

this? How would this

work? Very much in the same way

is does in other places in the world that have one.

Essentially the Central Bank is

involved in the process of actually overseeing the flows

of capital into the economy, even in the current market.

Some of those flows are

essentially ring fenced and put

into a sovereign wealth fund.

It takes time to build it up.

Those are then invested very

much on a private sector basis.

The whole approach of the likes of Adia, the Abu Dhabi

investment authority, is very

private sector. They invest

very wisely for the benefit of

tomorrow's children. You say

ring fenced. We already

mining tax that will probably

be creaming off quite a lot of funds from our resource

profits. That's already of course peged to other

spending. That's inside the

country. This is essential ly

the flows coming in from

abroad. The difference between

the likes of a Future Fund is the Future Fund is denominated

in Aussie dollars. A sovereign

wealth fund is essentially a

don't do this, do you worry about Australia Post a

resources boom. I still go back

to this wonderful quote that

the economy said you were the best country for dealing with

adversity and the worst for dealing with booms. That's still

still one of the problems with

Australia. You have a great sen fral

fral bank. It's one of the best

in the world. And I think that

now is the time to really think

about setting yourselves up for

tomorrow. Occasionally we hear about the Dutch disease. Yes,

and that's the the ways that a sovereign

wealth fund does, it's sort of

inoculates you against the worst effects of the Dutch

disease. Essentially it

involves a certain amount of

intervention in the foreign exchange the sovereign wealth fund is.

But it does mean that the

Aussie dollar probably wouldn't

appreciate quite as appreciate quite as fast as it

is at the moment. It would

offer some respite to the industrial sectors of Australia

that are trying to compete with cheap imports or indeed trying

to export their products. And

the Dutch disease is something

which resource rich countries all over the world are having

to contend with at the moment.

all the time. If you go to

Brazil now it's pretty much the

major topic of conversation.

All year I've been hearing

comments from certain corporate

leaders about the lack of

foreign investment in Australia, we've got Treasury

advice over the weekend calling

for an overhaul of the foreign

investment regime, and also

noting that the OECD wants to extend the investment threshold

in terms of investments into

Australia to the lel of US

investments twloo. That make a

dhirchs? I don't think it can

be the case. You're running a current account deficit yet the Aussie dollar By definition that must mean

you have a capital account

surplus. That capital account

surplus can only come from net foreign inflows

You are receiving a lot of

investment at the moment.

Exactly where it's going to is

different. Your resource sector

has been overwhelmed by

interest from outside of

Australia. And I think that's

likely to continue. Again, it's

a question of dealing with a

problem of success, not of failure. I should talk about the Forbes conference a rather controversial article in 'Forbes' magazine from a

week or so ago, claiming that President Obama is the most

anti-business President in a

generation. And I quote "The US has been has been ruled according to the

dreams of a Luo tribesman,

anti-colonial ." Do you see

any truth in this? I think it's

a bit of Forbes puff at the

moment. One has to remember of course

course that George Bush junior

oversaw the nationalisation

many sectors, hardly the

actions of an out and out who's ka tal and who's

communist and who's whatever in today's world has changed very dramatically. And even dare I

say it the Republicans in the United States have become very interventionist in their economy, much more

interventionist than historically they've been.

There is something in what that

article says. I do think that

Obama's heard that and I

suspect that, for instance, in terms

terms of the replacement of the Council of Economic Advisers head

head to replace Larry Summers

you will probably see a very

pro-business candidate put forward. Thank you very much Thank you.

Wesfarmers has announced big

plans to expand the Bunnings hardware chain with $600

million earmarked for 18 new

stores over the next three

years. It lays t ground for a

major battle with arch rivals

Woolworths for the lucrative home improvement market.

Woolies has done a deal with US

hardware giant Lows to set up 30 new stores, the first of which they aim to have open by

the end of next year. This

former glass factory, once

owned by

the shape of Australia's biggest home improvement store.

It's part of Wesfarmers' plans

to spend $600 million on 18 new Bunnings stores in New South

Wales over the next three years, and upgrade various

others. It's a move that will

boost its 16% share of the home improvement sector

nationally We're a bit underweight in the New South

Wales market compared Wales market compared to other

markets that we're in, and we

see a great opportunity to

increase our network presence. Bunnings benefited from cheaper

property prices during the global financial it acquired many of the new

sites. Analysts say this will

help put it on the front foot

as it prepares to go

head-to-head with Woolworths

and US giant Lows who will soon

enter the market. Bunnings has

clearly been ready for an

all-out war in the home improvement industry. It will

be a tough couple of years.

Clearly they're trying to make

sure their existing stores are

up to speed, as well as opening

new stores to try to prevent

intense competition. Bunnings

CEO John Gilham says it's not a defensive

defensive move. That's quite

until informed. If you what we've been talking about,

we've been talking about expanding our Network TEN to 14

Bunnings Warehouses opening every year for the foreseeable

future for quite some time.

That hasn't changed. The competitive landscape continues

to evolve. That's not new. That

evolution will be advanced by

the opening of the first of Woolworths' warehouse-style

stores late next year in the Bunnings stronghold of

Victoria. As for its part,

Woolworths wasn't prepared to

comment on its competitors'

moves but it did say its plans

to acquire 150 sites over the

next five years are on track or ahead of rush to keep up, retail

analysts say Woolworths needs

to choose its locations

carefully. To get that number

of sites in that time scale, think they will have to accept

some B grade sites. Bunnings

has been quite strong in only

accepting top-notch sites. I

mean they've made the odd

mistake but they're very few

and far between. Bunnings' strong reputation for good

service and low prices is

something else Woolworths will

have to contend with. It's an interesting proposition that

Woolworths has. Bunnings has Australian hardware market. And a very strong reputation in

other categories which they

have expanded in recent years.

It's up to Woolworths to

impress the customer at the end of the day. Other competitors

like Mitre 10 are seen as

trailing Bunnings. Mitre 10 has

lost its way a litled and

doesn't seem to know how to

compete with Bunnings. They

need to redefine their strategy

to occupy those fill-in spaces

that Bunnings are trying to do

themselves. The strategies of

the home improvement giants

the battle heats up next year.

A strong start to the week

on the markets. I spoke Charlie Aitken from Southern Cross Equities. Given wall

strees's performance over the weekend there watts only one way the Australian market could

go I guess. That's right. We

were always going to have a positive start to positive start to trading but it's turned out to be very

positive. I don't think anyone

thought the market would be thought the market would be up

73 points today, let alone the

futures at a 30 point premium

above 4700. Probably better

than optimist s like me

expected. Take me through the banks? The banks, I think

you're starting to see end of quarter short covering in the

Australian banks from the hedge

funds. Also the dividend and

reporting season is not that

far away for the major banks.

Plus, the economy's travelling

well and banks are just a

derivative of GDP. A variety of

reasons and they really led the

market today. No apparent fallout for Virgin Blue after

its computer debacle S that a

surprise? That was a surprise.

In the one second markets

Blue shares would be down today

but they seemed to cope with

the disorganisation at the

weekend closing flat. All of us

were surprised by were surprised by that. The

farm fep kal company Newfarm

says it's managed to get wagers

to its banking covenants. How

reassuring has that been?

Never like the words debt

covenant or waivers. The covenant or waivers. The market

edged Newfarm shares higher. I

think in a weird way this was actually banks nan it was for Newfarm.

In the Newfarm statement they were talking about extra collateral that banks were demanding. It shows you that

banks have pricing power when

it comes to business lending.

I see one company has been punished today and that's

Murchison metals. And that's

despite denying a report that

it could lose its joint venture partner in a West Australian

project? This was a very

strange day in Murchison

metals. Stock opened down about 15%, was put into a trading

halt, said they knew anything about Mitsubishi their trading partner pulling

deal. In the afternoon it fell

10%. The market wanted to

believe there was a problem

closing the shares down 10% but

the company said there wasn't. I'm sure we'll find out in the future. And only other stock that didn't go

up today? The long suffering Telstra shareholders including

the Future Fund just can't take

a trick at the moment. The market very bright across-the-board today and

Telstra down. Investors are

worried about a trading update

Telstra are giving about their

retail strategy. Any time

the shares have fallen. It's

right to be cautious ahead of

that later this week. Thank you

very much for joining us. Thank

you. To the other major movers

on the local share market now.

The official opening of the

Commonwealth Games is only days

away, but the

multimillion-dollar event that

was supposed to lift India's

standing on the world stage has

turned into a billion dollar

nightmare. Allegations of incompetency, corruption and

nepotism are now encircling Delhi with foreign investment now at risk.

ABC2 4's business reporter

Shraysi Tandon has been looking

into this for Lateline Business

and I spoke to her a short time

ago. Shraysi Tandon, you

actually come from Delhi, your

family come from Dell here,

presumably you're very well

networked out there. How

serious a problem is this in

'terms nor India? It's a very

serious issue. The Commonwealth

Games was actually meant to be

a moment of national pride. It

was meant to elevate India,

India was using it as a growth and the superpower that

it has become. And funnily

enough it seems to have

backfired, because the original

estimated budget was $500 million for the Commonwealth Games. It's now increased by nine-folds

nine-folds and is now estimated

to be close to $5 billion. I

interviewed a gentleman today

who is one of the best selling authors

authors in India. He was also

voted Time's 100 most

influential people in the

world. He comes from a business

background. He used to be an

investment banker for Goldman Sachs and Deutsche Bank and has

since quit that to go back

since quit that to go back to

India. And he was an vaf lid supporter supporter of the games but has

since been urging the public to

.cot it. I don't know if you

can call it corruption and

nepotism, one of knows two is

definitely required if vut

relationship, if you have the connections, you go further in

India, not only in business,

but at an individual level in

life, but the thing s it's nice

that this issue has come out.

There is a this. It's always been like

this. No-one is surprised by

what's happening, but it's just

that it's out there now and

it's global and I think that

will lead for a way to change,

and I want the foreign media to

support us in a way, because

ultimately it's not about India, Australia or India, Australia or anything, it's about one sixth of

humanity which is suffering

under corrupt leadership. We

must do our bit to make sure this society this society doesn't hold

back. These sort of corruption

allegations, what evidence do we have for this? How widespread is this sort of

cronyism? There've been a

of - there has been a lost

evidence to prove this.

There've been reports that show

that the Indian organisers have

spent $80 on one roll of toilet

paper, and something ridiculous

like $60 on one soap dispenser,

whereas the retailers ... This

is what it's logged at? This is

what it's logged as. These

accounts have been revealed. So

$60 for a soap dispenser, $60 for a soap dispenser, which

only retails for $2. And

statistics prove that 25% of

all costs actually end up going

in the pockets, lining the pockets of these bureaucrats and government

officials, and business

leaders. Is this across many

companies? This is across all

sectors. This is not only one

specific sector. There this

corruption is riddled across

India. It just so happens that

the few sectors focusing on the

Commonwealth Games, these

allegations have emerged. But corruption aside, nepotism is

something that's very much the Indian culture, and fortune

favours family. This is actually

actually seen, if you just look at so biggest companies in India, such as Reliance

Industries, the board members

are predominantly family members. Relatives. Sisters.

Sons. Children. And they're not

necessarily qualified to be

leading those companies. Yet

they do end up managing the

firm. This author echoes my views when it comes to

nepotism. There is obviously

something. The big newspaper

here has done exposes. The they have not come clear on

them and then the hiding them and then the hiding those

topics to be discussed, the

fact that if they were a bright

people they could've offered up

to be suspended or to be on the sidelines still the investigations are on. The investigations are on. The fact

that there is so much covering

up going on, it's quite obvious

that things are very murky over

there. Things don't seem to getting any better in Delhi.

We've had a large cobra on one

of the tennis courts and now we

just need a good dose of Delhi

Belly. What will this do for

foreign investment? It's a bit

of a catch-22. While this does

instill wheer factor into

people who are not familiar

with the way business is done

in India, it will deter them

them for a while. It's not all

bad news. At the day, India is a growing

economy. There is a huge demand and a huge infrastructure

deficit. I think business,

international business people

see this as a great investment opportunity, but it's funny,

because of all the

infrastructure setbacks such as the lack of proper roads the lack of proper roads and bridges and power and

bridges and power and clean

running water, costs the Indian

economy $6 billion a year in

losses, and so what is really

India's loss can be picked up as an

gain. People who know India,

they will not be surprised. I

know the visual that extremely dirty toilets and snakes like

that, but those who know India

know that it's the kind of

getting the wrong PR right now too. But

too. But I think long term it's

OK. People still know that this

is a country which has very low

per capita income. Therefore the growth possibly here will

be far more than anywhere else.

If you do it right, then you

will make money in India as a foreign investor. Shraysi

Tandon, thank you very much for

filling us in tonight. Thank you, Ticky. A look at tomorrow's

business diary.

A look at newspapers. The 'Wall Street

Journal' says Citigroup's

newest banker stands to earn up

to $30 million over the next

three years. 'Financial Times' says private

equity has rushed to put its

money to work has seen buy-out

activity double in the past nine months. That's all for

tonight. You can watch Lateline

Business Monday to Thursday at

8.30 each night on ABC News 24,

as well as after 'Lateline' on ABC1.

ABC1. I'm Ticky Fullerton.

Thanks for watching. Goodnight. Closed Captions by CSI

NARRATOR: When the people of Luverne, Minnesota and Sacramento, California, Waterbury, Connecticut, and Mobile, Alabama, went to the movies in March of 1945,

they saw and heard a sick and weary President Franklin Roosevelt. So sick and so weary that for the first time in his career,

he referred directly to the paralysis that kept him from standing without braces. I hope that you will pardon me for an unusual posture of sitting down during the presentation of what I want to say.

But I know that you'll realise it makes it a lot easier for me in not having to carry about 10 pounds of steel around on the bottom of my legs. And also because of the fact that I've just completed a 14,000-mile trip. APPLAUSE Roosevelt's strength was waning. But his message was undimmed.

The war was still to be won. It's a long, tough road to Tokyo. It's longer to go to Tokyo than it is to Berlin. In every sense of the word. The defeat of Germany will not mean the end of the war against Japan. On the contrary, we must be prepared for a long and costly struggle in the Pacific.

THEME MUSIC Americans had been fighting for more than three years now. And the number of dead and wounded and missing had more than doubled just since D-day.

The Nazis seemed at last to be on the verge of collapse but American men were still dying in the struggle to eradicate them. And allied planners feared the final battle with Japan would stretch on for years.

WOMAN: I remember going to New York on the train in the station at St Louis, Missouri. The platform was lined with caskets with American flags. I could cry now. They were as far as you could see them on the platform at the train station. And I went down reading the name in the brass plaque that was on the names. And I cried and cried. How could you not cry?

CHEERFUL PIANO MUSIC MAN: The Pacific is one experience that began at San Diego. And you got a sense of what a huge base you were going into. That this was not gonna be like Europe

where there was land all around and they had names. This was gonna be nameless, empty space

almost all of it, with little dots of land in between. In March of 1945, marine pilot Sam Hynes was 20 years old.

A former university of Minnesota student,

who, like thousands of other young men, had been made to grow up fast during the war passing test after test on the way to manhood. He had learned to live on his own, had married, mastered the dangerous art of flying torpedo bombers and had now received his orders

to proceed 6,000 miles across the Pacific to face his final trial - combat. Hynes landed at Ulithi, a sprawling coral atoll the US Navy had turned into the advanced staging area for the assault that was about to begin on the Japanese island of Okinawa. It was awesome. It was huge. The anchorage was miles across. And it was covered with ships of all sizes. Carriers, battleships, destroyers, cruisers. I'd never seen so many ships. It was like seeing all the power in your corner. And there wasn't any power in the other corner. Okinawa - 60 miles long and home to almost half a million civilians was the gateway to Japan. The Allies knew they had to take it before they could move onto the home islands and were gathering the largest invasion force since D-day -

almost 1,500 ships and more than half a million men. EXPLOSION

Day after day in March of 1945, American and British warships fired shells and rockets at Okinawa. There was little evidence of the island's defenders. Allied planners were not sure just where they were dug in. But they knew they were somewhere on the island.