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Lateline Business -

View in ParlView

(generated from captions) different angle. Anna Bligh is

looking for someone to

blame. Whether a prosecution

can be secured we'll pursue

compensation for the cost of

this clean-up. A spokesman for

the owner said the boat was on

the way to Brisbane and couldn't turn back in couldn't turn back in spite of

weather: the weather. Now to the

That's all from us, Lateline

Business coming up. If you'd

like to look back at tonight's

interview with John Buchanan,

or review stories or

transcripts visit the website at at abc.net.au/lateline. Now

Lateline Business with Ticky Fullerton. Tonight Fullerton. Tonight - National

Australia Bank's new boss cuts

the dividend, sharpening his

focus on matters closer to

home. The realities is the

markets we operate in outside

of Australia are less

attractive than Australia, the

right thing is to focus on

Australia. The head of bind

slams the managed funds model -

manager of Babcack & Brown Wind Partners, slams the

choices. The position was that

models came under a lot of

stress, associated with the

level of fees and development

profits that were charged by managers, whether it

Babcock & Brown or anyone managers, whether it was

else. The human face of rising

unemployment. You are given 10

minutes notice of, "Can I have

your corporate card, can I have your corporate card, can I

your mobile phone", on the

spot, on the table now, "Don't

bother going back to the office".

First to the markets and

today's weaker than expected

employment numbers pushed

Australia's shares into the

red. All order dropping 9

points, ASX dropped ending

three days of gains. Nikkei

falling 2.5%, Hang Seng booking

a small rise. The FTSE lost

ground we'll cross to London shortly. National Australia

Bank becomes the second of the

big four banks to slash its

dividend. Shares actually rose

close to 3% with investors expecting the move. They are

now betting the bank will now betting the bank will not

need to raise new capital to

offset bad debt, sure to

increase in a recession. Andrew

Robertson reports. Australia's

big four banks are giving the

rest of the world a lesson in

how to ride out a crisis, the

new National Australia Bank

boss Cameron Clyne isn't

complacent. It will be a

challenging period.Ly the same

token we do see some - by the

same token we see opportunities same token we see

to grow the market

share. Cameron Clyne share. Cameron Clyne unveiled

strategy for the year National Australia Bank's

strategy for the year ahead

including a new management

team, a new member of the board

and in a concession to

challenges ahead a flagging of

a big reduction in dividend. We

felt it was appropriate having

done the strategy update to

signal our intention is a 25%

cut to maintain conservative cut to maintain

balance sheet balance sheet settings. Making

NAB the second of the mainliors

to cut its payout to

shareholders after ANZ. I

thought they might cut it as

much as 30%, maybe they will

ultimately, it's important to

conserve capital in times such

as these. You don't want to go

to shareholders asking for capital. NAB's United Kingdom

banks, Clydesdale and Yorkshire

may need more capital. Cameron

Clyne says he's committed to

them. According to Brett Le

Mesurier, there's no choice,

no-one will want to buy them in

the current climate. If he puts

the business into run off

they'll wither, die and destroy

more value than if they are

supported. Hopefully the

support will one day bear

fruit. It will take a lot of

time. A view Cameron Clyne

agreed with as he said the

banks' primary focus is

Australia. The realities is the

markets we operate outside

Australia all are less

attractive than Australia. The

right thing is to maintain

Australia, let's maintain

optionality offshore. One of

the biggest changes is The

restructuring of the

institutional banking and

capital markets division known

as nabCapital and the closing

of some parts of that business,

work Brett Le Mesurier says

should have been done by John

Stewart. He should have done it

faster. It looks like what they

were talking about was

something more than what they

actually executed. Costs will

continue to come under scrutiny

this year, and Cameron Klein

refused to rule out Job losses. The Bank of losses. The Bank of England

yesterday became a

controversial scheme of buying

up to $160 billion of dollar

bonds, knop as quantitative

easing hopes to kick-start the

Government by kick-starting the

economy. We are joined by Tom

Vosa, from . Can you explain

how the system works, it's a

reverse auction. It is, buyers

compete against each other to

buy an item in a normal

auction, the person with the

highest cost wins. In the

reverse, sellers compete. The

lowest price wins. The bang

said to the market, we are

willing to buy ?2 billion willing to buy ?2 billion of

United Kingdom Government gilts

maturing in 2014 and 2018. The

lowest won. The banks, how did

they react? It was well obvious

subscribed. We have five times

as many bids given to as many bids given to the Bank of England than they were

prepared to buy. Non-banks did

not apply, pension pension

funds and institutional

investors decided to remain on

the sidelines, we suspect

because they have no idea what

to do with cash from the Bank to do with cash from

of England England. How long

do you think it will take to

have an effect. I have an effect. I gather Bank

of England's Mervyn King has

not put a time line on

it. Monetary models - the lags

are long and variable.

Realistically six months, when

we look at Sweden and Mexico,

where there's been banking

crisis we get get policy

response around six months

time, perhaps the second half time, perhaps the second

of the year, dependent on the

banks going out and lending it.

If they keep it in the Reserve

Bank account narrow money will

stay in the system and we won't

see an acceleration in broad

money. This is printing money,

effectively, won't that have an

inflationary impact or is it so

far off the agenda it doesn't

matter? It is, indeed printing

money by electronic means

rather than running the

printing press impressions printing press impressions as

they did in Zimbabwe, it should

have an effect. The

inflationary concerns are if

the demand and supply curves

are normal big increases in

money supply should increase

inflation, the point about

recession, if not a

recession, if not a depression,

we are looking at at a week

economic growth. Linkages break

down, you increase supply

because demand is not there.

Quant tattive easing is trying

to push cash down the throat of

the banking system that it will

lend to the rest of the

mark. The FTSE is off, what has

dragged it down. Across the

board selling, banks,

financial, materials and,

indeed, discretionary consumer

stocks are down, we'll see a

little rally in health care and telecommunications, overall

more profit taking, we are

gloomy in Europe about the

economic prognosis. Thanks for talking to Lateline talking to Lateline Business,

Tom Vosa. To the other major

movers on the market - rising

bullion prices pushing Lihir

gold 4.5% shire. Stockland

jumping 11%, the property

sector in fiver. Woodside a Vic

time of weaker oil prices. CSL

dropping 4%.

Administrators of Allco

Finance are investigating

Finance are investigating more

than $1 billion worth of

transactions which it describes

as potentially uncommercial.

Two former Allco directors,

David co-and Gordon fell could

face legal action over related

party deals down in the final

months of the investment firms

life. Administrators said there

may be grounds to recover $63

million the pair earned when

Allco bought Rubicon, the real

estate firm owned mainly by Mr

Coe and Mr Fell. Public private

partnerships were seen as the future of infrastructure

development, now it's

struggling for relevance. The

credit crunch has taken its

toll, business says the

Government needs to reform PPPs

to make them more attractive to

the finance sector. Neal

Woolrich reports. Spending on

infrastructure is touted as a

cure for local and global

economic impactses. But the

enthusiasm for nation building

is coming up against a stark

reality, the absence of

funding There is constraints,

we should accept what we have,

not what we don't have, and

recognise the reality and work

out ways to move forward. In

recent years Australia has been

among the world leaders in

using public private

partnerships to build major

project, it's been coming under

pressure, not just because of

the credit squeeze. The

policitians and transport put

up projects as PPPs, those that

are not financial ly and the

states built PPP themselves.

It's the opposite of what

should oyour cur. A deterrent

is the tender process, costly

and risky We'd have two

partners, engineers, our

investment for our company was

somewhere between 10-15

million, and you are thinking,

there's three or four

competitors, is that a good use

of our money. Some suggest that

governments need to loosen the

funding requirements that

bidders must meet. The dynamics

change such that I think a

competition, a funding

competition post preferred

bidder is probably the only

realistic way to go. Because I

think at the moment what is

happening, I gave ab example of

that is that actually nobody is

putting committed finance on

the table. Giles Tucker says

the number of public private

partnerships in the United

Kingdom has halved in the last

12 months and is back to 1996

levels. There's also a growing

list of deals becoming stranded

mid project as funding dries

up. There are calls for

superannuation funds to invest

in major projects like

Victoria's $3 billion

desalination plant. We

understand and acknowledge the

social and community benefits of investigatedive

infrastructure, at the end of

the day we are not a honey pot

for pursuing those benefits for

the community. Private

operators say authorities need

to slash red tape. So if we are

going to get on with the

infrastructure projects to

provide employment, be need to

move forward positively and

quickly. Traditional ways of

implementing infrastructure,

the projects won't be

implemented for four or five

years, that's not what we want in this current

environment. What history will

judge governments by ultimately

is what taxpayers get in

return, obviously there's a lot

of fiscal stimulus, job

creation, if we talk about infrastructure, I think the

infrastructure spending will be

about implementation. While the

appetite for public/private

partnerships has not dried up.

PPPs will play a smaller role

in developing Australia's

infrastructure infrastructure needs at least

in the near term. Another

infrastructure model in trouble

is one employed by investment

banks, a satellite fund

removing itself from the model

and hefty management fees and hefty management fees is

Babcack & Brown Wind Partners,

I spoke with the Chief Chief

Executive Miles George. Welcome

to Lateline Business, you've

been busy, what is it like from

being unleashed from the mother

ship Babcock & Brown. It's a

great feeling. We moved away

from being a managed fund,

which is common to being on

independent business with our own internal growth function

and a great future. What are

institutional investors saying

about you cutting ties with

Babcocks. They think it's a

good thing. We have had a

number discussions with

investors there was concern

about the generic managed model

that applies in the

infrastructure sector, as I

mentioned, with Babcock &

Brown, as the manager, that Brown, as the manager, that was

sort of an additional problem

increasingly so in recent years

or months, You were running BBW

from early 2007. Yes. Were

there times when you had to

take assets from Babcocks that

you weren't happy W No, one of

the things making our

shareholders happy with the way

that the management team and

the board operated BBW was that

we didn't take assets that

weren't accretive. We rejected

the most recent acquisition opportunity offered for us,

were B & B. The US '08

portfolio, that is something

that set us up well for the

future. Looking at the Babcock

model or the Macquarie

infrastructure model, where do

you see it failing. Well, there

are some inherent conflicts of

interest in that model that

need to be carefully managed. I

think the position was that

that model came under a lot of

stress associated with the

level of fees and development

profits charged by managers,

whether it was Babcock & Brown

or anybody else, the more

serious issue for B & B is the

condition of the manager B & B

itself. What was at the itself. What was at the heart

of the deterioration of the deterioration of Babcock

& Brown, I think it was the

case that Babcock & Brown is,

as you know, had a number of

managed funds, for a number of them, they had them, they had issues

associated with refinancing

debt, for example, including at

the parent company level. We'd

been in a position different to

that, we had debt fully Amor

tiesing, we make debt

repayments each year, we

weren't exposed to the issue of

banks cutting off credits. We

took stems to build up the cash

reserves over the last 15

months or so with serious asset

sales. When you cut ties in

December, your chairman said, "The independent directors are

confident the internalisation of British Broadcasting Corporation's management will improve the corporate governance governance of British Broadcasting Corporation, Broadcasting Corporation, and

strengthen the line of - strengthen the line of - govern

innocence of BBW, and

strengthen the lines of

management. Is it fair to say

one of the problems is one of the problems is you,

Chief Executive, was paid

Chief Executive, was paid by

Babcock & Brown, it's a

conflict of the managed fund

model is that the manager whom

I was approval employed by,

compensates the executive, such

as myself in our case as myself in our case with Babcock & Brown shares, this

was clearly a conflict. Have

you taken a cut in your package

under the new structure. New

arrangements will be revealed

at the extraordinary general

meeting in April, late April.

The arrangements we have put in

place are better satisfy the shareholders requirements to

have something more aligned, my compensation, in particular as

the CEO, more aligned to the

performance of the BBW and

shareholder interest. The The

fee leakage culture is

gone. There are no fees if you

are an independent business. We

were able to sever our

relationship with Babcock &

Brown by paying a sum to them

in December. That means no more

management fees, reduction in ongoing costs each

year. Babcock & Brown is in a

trading halt at the moment.

Would you have saved yourselves

money if you could have severed

those management ties now

rather than paying $40 million

three or four months ago. No,

we believe it was the right

timing to make that timing to make that decision.

We paid a multiple of two times

the previous years fees. There

is substantial ongoing savings

from the sprigs, to do it now

would have been more difficult

a process as the banks moved to

a more position of control

within B & B. We thought the

timing was right, it was important from the important from the shareholders

point of view. They were keen

for us to undertake the

transaction. When it was

initiated by the management and

board it had strong shareholder

support. How important is the success of success of the Emissions

Trading Scheme to the success

of BBW. The more important

legislation to us is 20% by 2020 renewable energy target

legislation, leading in to legislation, leading in to the Emissions Trading Scheme

legislation later on, so the

carbon pollution reduction

scheme legislation is important

to us in the 5-10 year horizon,

in the shorter term it's the

other one. One big concern is

the sovereign risk, you have

businesses in different

countries, and it would be nice

to live in a sustainable world.

We live in a world of global

financial economic crisis. Yes,

that's true. In the markets

where we are focussed,

particularly Australia the

Australia, the legislation and

the prospects for encouragement

for renewable energy are

strong, the US in financial

crisis - yes, absolutely, the

Obama stimulus package over

there has provisions to encourage renewable energy

invest., it's the same here,

the Rudd Government's

commitment to 2020 renewable

commitment means there'll be a

10-fold increase in the next

10-15 years. An option is to

team up with emitters under the

ETS. Are you filling up your

dance card there. The model is

that we as a provider of

renewable energy, long in

carbon credits, ultimately will

transact with those that need

carbon credits, emitters,

that's a process we envisage

will be attractive for us

having the largest market share

of wind energy in Australia. Your six Australia. Your six month

result last month was a loss of

88 million, compared to 4.4

million in losses a year

ago. Accounting for the

separation costs from Babcock &

Brown, that's 40 million more

in losses Yes, it is, the

business we have is seasonal.

The seasonality changes with

the structure of our portfolio,

we have a higher proportion of

US assets in our portfolio

having sold the Spanish and

Portugese assets and the US

portfolio is more seasonal, in

the second half, from now until

June it produces more, we'll

make a profit. You are comfortable with how you are travelling. Yes, we are

comfortable. You have a new

name coming up as rebranding,

any hints there. Can't, it won't have the word Babcock &

Brown in the name. It's

important to have a name distinguishing us in a distinguishing us in a sector

we are in, a competitive

provider of renewable energy

generation. Miles George, thank

you for joining us. Thank you for joining us. Thank you

very much. As we heard on

Lateline, the unemployment rate

jumped to a 4-year high of

5.2%, not surprisingly job

agencies report a surge in

demand for their services, what

is surprising is the range of

people now looking for help. As

labour markets weakens

opportunities are drying up.

Those that have work are

feeling less secure, finance

correspondent Philip Lasker

reports. 22 years with the same

bank didn't matter, Doug

Russell was laid off a week

before Christmas. You are given

10 minutes notice of, "Can I

have your corporate card, can I

have your mobile phone on the

spot, on the table now, and

don't bother going back to the

office" A 2-month intensive

search yielded nothing, luckily

Doug's wife found work, so he

and his three children can hold

out for three months before

serious belt-tightening

begins. Josephine landed a

teaching job, but feels far

from secure. Unistudents coming

out want a job. It's becoming

hard. We've been based on

contracts or casual work. Youth

unemployment taking a jump, and

today's numbers suggesting

employers are shifting down,

replacing full-time work with

part-time. There's an

increasing number of

part-timers turning up at

places like this, the Salvation

Army's employment plus

offices. In recent weeks we

have seen an alarming number of

new people coming through our

doors for assistance. Demand is

up 15%, the biggest jump in

five years as the client base

broadens from the long-term

employed with few skills to the

main stream. As misery estimates go some say unemployment underestimates the

problem, at times problem, at times like this

there are many in work, going backwards. Recently the working

poor has been a stagnant

category, I expect that

category of employment to

increase over time. It's not a

category Doug Russell expect to

be in I'm always optimistic, I

will leave it at that. In the

meantime there's plenty of time

to reflect. It's not just

ordinary working folk feeling

the pinch during the the pinch during the downturn.

Forbes magazine latest list of

the world's billionaires shrunk

from more than 11 00 to under

800. Stocks are down, rel

estate fortunes are down, it's

interesting to see even though

they've had huge successes,

they haven't been better at

hold on to their money than a

lot of us. Warren Buffett had

his worst year allowing

Microsoft founder Bill Gates to

regain the title as world's

richest person with more than

$61 billion. Tomorrow's business diary:

Before we go, a look at what

is making news in the business

sections of tomorrow's

newspapers, The Sun says

Allco's administrator questions the legality of a number of

deals, Sydney Morning Herald

leading on the same story, The Australian Australian examining National

Australia Bank's trading update and The Financial Review and The Financial Review looks

at the unemployment figures,

that is all for tonight. As I

Lee you the Dow Jones futures

is down 24 points, and the FTSE

down 47 points or 1.25%. If

you want to review part of

tonight's program visit the web site at

abc.net.au/latelinebusiness.

You can watch the entire

program online or download as a

vodcast. We'd love your

feedback. I'm Ticky Fullerton, goodnight.

Closed Captions by CSI

PUMPING ROCK MUSIC CROWD ROARS Hey, guys. MAN: The legendary Status Quo! Let's hear it once again for them. Let's hear it once again. Are we running? # Writing songs that I think sound so strange # Writing words that I feel I should change # It's all right if they sound just like other songs # My guitar strums along just the same # If this song's underlined with my name # Nanana na nana na na na na na na # Nanana na nana na na na na na... #

I didn't really want to be a musician as such.

I just wanted to strum a guitar and be like the Everly Brothers and just sit and strum and sing. Well, make those noises. It was really Cliff Richard and the Shadows, I have to say -

Hank Marvin - made me want to pick up a guitar,

which I duly did when I was ten. Within sort of a year I'd learned three chords, and they're the three I know. (LAUGHS) There it is. What's with this bass drum in front of me? It's the old one we used to use. It's lovely.

Do you remember, it changes colours and everything? Having not seen it for a while, very Butlins. It's showbiz, isn't it? Very Butlins.

After I'd kind of left school, sort of ran out the gates, you know, teachers, cough... (LAUGHS) ..was I ever pleased to get out of there. I'd got a summer season down at a little holiday camp called Sunshine Holiday Camp down in Hayling Island. And Butlins have their red coats. We were canaries, dressed in yellow, right? Beaks, everything, looked really stupid. I met a couple of girls down there, teamed up, and we became a trio. Went mainly to the clubs working and we got a summer season at Butlins. And consequently, the band, who were then called The Spectres, had a summer season at Butlins at the same time. We were a kind of a rock band and rock'n'roll band. We nearly got thrown out after the first few weeks cos we were too loud. RICK: And I had this racket coming from the rock'n'roll ballroom so I dashed over there, you know, to see, and there they were. Walked in. "Hello. You're great, you lot." He said that moment, as soon as he saw it, he thought, "That's what I want to do."

I got quite friendly with Rick and I've kind of known Rick ever since. (LAUGHS) Tricky, ain't it? Tricky Dicky. (LAUGHS) Trick.

I then left Butlins with my little trio, which consequently split up, and I got a phone call from Pat Barlow, the manager - who sadly passed away not so long ago, rest his soul - and he said, "Do you wanna join the group?" So I sort of said, "Well, yeah, all right, then." (LAUGHS) And here we are... (LAUGHS) ..40 years on. Who would have ever thought it?

OK. B's the key. Let's rock. How was that? Did you get no click, Matt? No-one got a click! OK, only Matt's getting the click. Why is Matt getting a click and we're not? Cos he's, you know... he listens to it. (LAUGHS) Good. He listens to it. Fuck off. Bosh! I'll get my coat. I'd heard Hey Joe by Jimi Hendrix

and I thought I'd try and copy that, and I think it's a similar chord sequence, if not the same chord sequence. The engineer was turning this wheel and it kind of... ..kind of phased it, you know. And we were going, "Wow!" cos I'd never heard phasing before. I couldn't even spell it. It was so fantastic and these weird sounds on this record and Francis's wa-wa pedal. PSYCHEDELIC MUSIC PLAYS And it was gonna be the B side. This other weird thing was gonna go on the A side, and, of course, once Matchstick Men kind of became colourful in the studio everybody knew straightaway that this is a hit. # Pictures of matchstick men and you... # At that particular time, the band was naturally a rock band. # ..to keep away from you # He better chase the cat # Like he's supposed to do # Cos I # No, I don't mess around. # (SCREAMS) Because of getting work at the time, we were playing a soul set. Then we come out with a psychedelic record, so people were saying to us, "Well, what are you? Are you..." And we're saying, "Well, we don't really know." MAN: They were all very young. I mean, I was a couple of years older than them, but they just struck me as young kids having a good time, but really wanted to make it in the pop business. You can do this today, if you like, because I'll be 57 in another year or so. We're gonna go from the tune into the middle section. The tune into the middle? Yeah, it's a tune... You're gonna hear from the tune but you're gonna sing from the bridge to the end, OK?

ROCK MUSIC PLAYS # When the morning comes # So when the morning comes # I'll do more than just survive # I'll walk into the sun # And live until I die # So let the walls come tumbling down # Bring on the last sunset # I ain't moving to heartbreak town

# The party ain't over yet. # We've gotta get a singer, you know. (LAUGHS) RICK: In those days, I mean, you were so, like, managed by people and told what to do, and people would say to us, "Get yourself dressed, get your make-up on, get your hair right," you know. "If you need lacquer I'll lend you some of my lacquer." "Thanks, dear." ROCK MUSIC PLAYS We couldn't be ourselves and we didn't like being told what to do, so in late 1969 we kind of rebelled against it and we said, "Fuck this." # Heading down the back turnpike # Signposts are pointing west... # We went back to wearing jeans and T-shirts, but not normal jeans and T-shirts. The jeans had to have the knees ripped out

and the pumps that we wore had to be kicked around cos they couldn't be new pumps. (PLAYS HARMONICA) And to actually go on stage in that stuff, we were like, "Heh heh." (LAUGHS) "We don't have to wear that anymore." We didn't realise nobody else was wearing that shit anyway.

It was only us. We took a huge chance cos, I mean, who should turn that down? But we didn't see it as having much longevity. We weren't gonna be around long, we didn't feel, as pop stars because a bit like nowadays, really, in those days - they came and went. Bloody snare drums. We've worked with Fleetwood Mac and Chicken Shack a lot, and Rory Gallagher, and we do our thing, and then we come off and sit on the side...

(INHALES) ..joint - there we go, let's just watch this - and they would start, "Dum-dum-dum-dum-dum."

And about an hour and a half later they were still, "Dum-dum-dum-dum." "This is good shit, isn't it? We like this stuff. Yeah." It fascinated me that they had such good guitar players and they seemed to know so much about blues. I don't know where they learnt it or where they heard these records. (PLAYS BLUESY MUSIC) We would do these sound checks and we'd be doing stuff similar to what we do, you know. More rockyish kind of stuff. And we'd almost had this... wouldn't it be great if the sound check could be the gig, you know. Francis and I were out at a club in Germany many years ago and we heard this track come on,

and it just had that... # Dun-dun dun-dun dun... # And straightaway, "Yeah, we'll have some of that." And there was this couple dancing on the floor, and they were just moving so kind of slinkily, you know, and it just turned us on. We did roadhouse blues and various other things of that nature.

We started thinking "Yeah, this is all right, isn't it?" MAN: Ma Kelly's Greasy Spoon

actually defined the change that was going on within the band musically. And it was fighting against the system album. In fact, that album reminds me of Kings of Leon, a lot of that stuff. # Had a car in my pocket # And we started moving # A man in a helmet said "What's that you're using?" # There was a lot of people within the business, like the record company, that didn't want Quo to go into this rockier, bluesier type of thing because it wasn't what was selling records. We were getting off on what we were doing. We'd actually found something... we really liked this. "Fuck 'em if they don't like it." So we decided to go the slower route and go into the underground clubs with a much heavier set. # I'm gonna come and make a fool out of you # You spend my money # But, honey, you sure didn't waste my time... # We got out there, and the stage is, I don't know, sort of six inches high. And I remember that's how the... this dance came about, because they're all sitting down there and we're up on this six-inch high stage and you want to get to them.