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(generated from captions) infamy with Borat . Borat's a

naive reporter from Khazakhstan

who manages to insult nearly

everyone. He's sexist, racist

and home phobic. She's my

sister. She is number four

prostitute in all of

Khazakhstan. This is not a

problem that the women have the

smaller brain than the man. But while audiences can't get

enough of him, American victims

of his humour in his new film

are not amused, some taking out

law suits. They said what

they've said under false

pretences. They were coached.

They were instructed to be a

certain way. What he does is

he really makes people look

like jerks. Good morning

gentlemen and

prostitutes. Between insults he

told Australian journalists of

his adventures in a gay Sydney

nightclub. There were 200 men

dancing there with no shirt,

very strong and muscular and

only one woman and who did she

choose? The woman choose me.

Ladies like Borat very much. I

have had syphilis 15 times. But

it's his anti-Semetic humour

that's the rawest. I hope to

receive Oscar for best

anti-Jewish film, although

there is, of course, very stiff

competition from your Mel

Gibson. I would like to say

that we in Khazakhstan fully

support the statement of Mr

Gibson when he say that the

Jews started all the

wars. Baron Cohen is Jewish himself and it seems this

majority will see the human protects him. I think the vast

rouse side of it. Humour has

sustained Jews for thousands of

years in our darkest days. The

comedian intends to marry Isla

Fisher but Borat is looking for

the perfect woman. My

preference is for a woman

unlike more Khazakhstan woman

who have more hair on hair than

back and whose teeth only grow

on inside of mouth. We support

your war of terror. His film

described as hilarious and

offensive opens nationally this

week. Apologies to

again on this program. Khazakhstan, it won't happen

That's all from Lateline for

this evening. Tonight's

interviews with John Burns and

Stephen Smith will be on our

website shortly. You can

download stories or stream the

whole program from the website,

too. But for now it's over to

Ali Moore at Lateline Business.

Thank you, Paul. Tonight - a

profit explosion for the

world's biggest explosives

manufacturer Orica. Business

complains the economy is being

ignored in the Victorian

election and Finance Minister

Nick Minchin talks about

T3. What I am pleased about is

that demand already on the

retail side is 2.5 billion shares compared with our

original estimate or our

original offer size of 2.15

billion shares. To the markets

and resource stocks took a

beating today driving the All

Ordinaries and the ASX200 down

despite some upward pressure

from the banks. In Tokyo the

Nikkei slipped to its lowest

close for six weeks ahead of

GDP numbers tomorrow. Hong Kong's haeng slipped back after

blue chips and property stocks

fell and Wall Street opens in a

couple of hours with the focus

on a week which will bring

retail earnings and a number of inflation pointers including

the producer pointers index.

The Dow closed on Friday up

five points. For the latest

from London we're joined now by

Justin Urquhart Stewart from

Seven Investment Management.

Justin, thanks for joining us.

How's London started the week?

The FTSE is currently up around

3 points. Yeah we had a

dramatic start, actually. All

the merger mayhem going on.

Yet more ideas coming out about

who might get taken over coming

out of the weekend press. That

was enough to put the market

actually doing nicely. FTSE 100

up strongly until about 10:30

our time. Then we promptly

started moving south. Why?

Taking a lead very much from

yourself in terms of what's

been happening with the miners

and minerals and we saw Rio's

off 4% and along with them a

load of the usual one s all

listed now on London. FTSE 250 doing better which is more

domestic stocks. FTSE 100

dominated by oils and mining. In terms of takeover

activity there's been some in

your infrastructure sector,

it's Scottish Power under

threat? The Scotts get

nationalistic over this one,

don't take our last power

company away. The question

with this as with a lot of

British infrastructure

companies people trying to buy

them because they see them as

good regulated, good solid

income streams coming through.

At the moment a Spanish company

bidding, we're waiting for

confirmation as to what will

exactly happen. Will it drive

anybody else out as well? The

State parliament is likely to

have something -- Scottish Parliament is likely to have

something to say about it. It's

going to be a key week for the

US in terms of data out.

What's the futures saying about

today's start? It looks as though we were going to be up

positively to start with. In

the past few minutes that's

turned around again. It might

get weaker. Maybe nerves

coming out about inflation data

later in the week. It's difficult to tell at this

stage. No great excitement for

the moment. A little bit off,

but that figure could change in

the next hour or so. Justin

Urquhart Stewart thank you very

much for your time. My

pleasure. Back home and Orica,

the world's biggest explosives

maker says its net profit for

2006 has more than doubled.

Strong demand for resources and

the sale of its Incitec-Pivot

fertiliser business has seen

earnings rise to more than $500

million. Sue Lannin with the

story. It's been a blast of a

year for Orica. A record

result in its mining division and chemicals business has

pushed up profits. Sales

dropped slightly in its paint

supply division but not enough

to effect earnings. A lot of

reshaping of the business has

taken place during this year

and then to come up with an

underlying profit xro. Of 12%

is pleasing. After-tax profit

rose 159% to $539 million,

boosted by $400 million from

the sale of fertiliser business

Incitec-Pivot. Investors will

get a final dividend of 48

cents a share, a rise of 4%.

shares closed at $23.23, up by

a third. The result was a solid

result and certainly came in

well within consensus, possibly

slightly better than. The big

surprise for the result was a

48 cent dividend, which was a

couple of cents better than we

had anticipated. Last year

Orica bought say assets from

rival Dyno Nobel. Orica's

chief executive denies they

paid too much, saying he

expects savings of up to $50

million from the purchase . The

reason we paid that price was

we had a lot of synergies

available to us. What we now

know is that we're more

confident than ever of getting

those synergy benefits coming

through. It was a large

acquisition. It probably needs consolidation. At this point in time it's well on track. Orica's chemical distributor Chem-Net struggled

in 2006 but the company is

hoping for a turnaround next

year. Chem-Net lost some market

share in the process of

integrating a couple of

businesses and some of the

sectors it sells to are

themselves struggling with

Asian imports particularly, and

so the market conditions have

been tough for Chem-Net.

They've probably pulled about

$9 million out of an estimated

$20 million of restructuring

benefits from Chem-Net. But it's early days yet and there's

a lot of work ahead for them to

achieve that $20 million

turnaround in

restructuring. Despite that

Graeme Liebelt is confident

overall earnings for 2007 will

exceed this year. I think you can see some quite strong

earnings coming out of our

business during 2007. The

company is planning more

acquisitions, including

consumer product businesses in

Asia. Sue Lannin there.

Shares in brewer Lion Nathan

were down 3% today after the

company forecast flat earnings

in the coming 12 months. Net

profit for last year was up 12%

to $227 million. But Lion

Nathan says the year ahead will

see the company focus on

investing for the long-term.

Andrew Robertson reports. Leave

it to me, it will be as good as

gold. And gold according to

Lion Nathan will be for its

troop of former Test stars to

upstage the Ashes and the snare

it a larger share of the

Australian beer market - all part of Lion Nathan's strategy

to invest in its existing

brands. Lots of us consumers

are choosing to drink higher

quality and more differentiated

offerings. We're really able

to feed that with new

innovation. Lion Nathan's net

profit of $227 million was

understood pinned by a 5% rise

in beer volumes and it's

planning to spend up to 10% of

revenue to boost brands even further. However that combined

with higher spending on the ready to drink market and the

launch of a new whiskey have

put a dampner on the profit

outlook for this year. It was a

solid result in a difficult environment and it's a result

where they're trying to lay the

foundations for the future. New

Zealand was a tough market for Lion Nathan this year with

earnings there down 4% and

although it's only a small

player in the wine business

compared to companies like for

the benefiters, Lion Nathan

can't see an end to the grape glut for at least another

couple of years. With

conditions in the beverage market extremely tough, Lion

Nathan is under pressure to

make an acquisition to boost

earnings. While not ruling out

a mur chase Rob Murray says for

the time being at least organic growth is the best way

forward. We don't build our

world around acquisitions.

It's a competitive marketplace

with a large number of players.

There aren't obvious

opportunities around. Which

means Lion Nathan's performance

this year will be determined by

how well it can market existing brands. Andrew Robertson.

From brewing to building

materials and James Hardie

Industries expects to begin

paying into a compensation fund

for asbestos victims from next

February. Announcing a better

than expected 43% rise in

quarterly profits today, the

company said shareholders would

vote in February whether to approve the compensation

deal. Obviously we communicate

with our shareholders on a

regular basis and I think all

stakeholders have indicated

that they think this is a good

resolution. The company says it

could begin paying into the $3

billion compensation fund five

days after shareholder

approval. The chief executive

of MacArthur Coal Ken Talbot

has stepped down from his

position until further notice

while his company is at the

centre of an inquiry. Queensland's Crime and Misconduct Commission is

investigating the Beattie

Government's decision to

bankroll road and rail infrastructure at MacArthur

Coal's mine in 2003. The

investment came is two years

after Ken Talbot lent minister

Gordon Nuttall $300,000. MacArthur Coal and the minister

were unavailable for comment

today. Tomorrow marks another

milestone for Telstra. Its last annual meeting with the Federal Government as major

shareholder. While T3 is going

better than expected, with estimates of the final public

selloff now ranging as high as

$15 billion there's still

plenty of contentious issues

for the AGM. Top of the list

are the Government's nomination

of Geoffrey Cousins to the

Telstra board, and the pay

packets of top executives,

including Sol Trujillo. On the

eve of tomorrow's meeting I

spoke to Finance Minister Nick

Minchin from Melbourne.

Welcome to Lateline

Business. Hi, Ali, nice to meet

you. You're obviously pleased

with the way the sale process

is going. You were targeting

$8 billion, you've already got

retail demand of $9.8 billion.

If you add in a conservative

estimate of what the

institutions might bid for

that's another, say, $4

billion, is this a minimum $14

billion offer? Well, I don't

want to put any numbers of that

kind on this. Remember we

haven't set the price yet. The

figure you use of $9.8 is

simply to quote the closing

price last Friday and we

haven't priced the offer yet.

What I am pleased about is that

demand already on the retail

side is 2.5 billion shares

compared with our original

estimate or our original offer

size of 2.15 billion shares.

Already we're ahead of that

without the institutions coming

in. Can you give us your

parameters, though? You talked

about potentially being able to

increase this offer to just $10 billion which would now seem to

be too small. Is $14 or $15

billion too big? Can you at

least give us an idea of the outside number that you're

prepared to entertain? No, I

won't be drawn even on any sort

of parameters on numbers. All

I'll say is that clearly we

have got applications in excess

of the number of shares we

originally wanted to offer.

We've not set a final price.

We will stick strictly to the

rules in the prospectus that

allow an increase in the size

of the offer. I really don't

want to say anything that would

allow anybody to hazard a guess

from what I say as to what the

pricing might be. Before the

institutional book build, of

course, there's tomorrow's AGM

and I guess top of the list of

contentious issues there is the

Government's appointment or

nomination of Geoffrey Cousins

to join the board. Given the

reaction of the board, given

the reaction of many big institutional shareholders to Geoffrey Cousins's appointment,

any regrets? No, Ali. What I

regret is the presumption on

the part of far too many that

Mr Cousins will be some sort of

Patsy for the Government which

I think is very unfair on Geoffrey Cousins and frankly

unfair on the Government. We

don't want a patsy on the

board. We want a strong board,

a strong director. Our

interest is in, as we exit the

share holding of the company to

leave the board in good shape

and to leave it with the best

quality board we can and we

think Mr Cousins will actually

be an asset to the

company. Quite apart from

whether he's considered a patsy

he does have a previous

relationship with the

Government and if that

relationship means that he is

deemed to have a conflict of

interest and because of that

conflict of interest he's asked

to remove himself from various

board discussions, how

effective a director can he

be? Well, there's a lot of hypotheticals and presumptions

there Ali which I'm not

prepared to entertain. Their

hypotheticals and presumptions

that have been raised by the

board itself? The board has

said it's not in a position to

determine whether Mr Cousins

meets their tests of

independence for the purposes

of their board rules. They are

putting him through their

normal due diligence which

every director goes through to

make that determination.

They've not yet made that

determination. Obviously the

fact that Mr Cousins had a consultancy with the Government

is one of the factors they've

got to take into account. It's

our strong view that Mr Cousins

should be found to be

independent and will be

independent in his position on

the board and that he will be

an asset to the

company. Another area of

contention for tomorrow is the

remuneration report and

certainly both Peter Costello

and the Prime Minister have urged shareholders to question

the board about their largesse,

especially to the CEO. It's a

non-binding vote on that report but which way will the

Government vote? Well, the

Government will be supporting

the remuneration report. You

have no concerns about it,

despite what both the Prime Minister and the Treasurer have

said in the past? You're quite right the Prime Minister and

the Treasurer had things to say

about this matter when it arose

earlier and they made the

obvious point that any shareholder that does have

concerns can raise them at the

AGM and there is the

opportunity for the non-binding

vote. But so far as the

Government is concerned, we

will be supporting the

remuneration report. If we can

look at other Telstra issues I

understand both Macquarie Bank

and Babcock & Brown approached

the Government preT3 to take a

stake in Telstra. Why did you

reject that option? I don't

want to get into the business

of confirming or denying what

discussions may or may not have

taken place prior to the

Government's decision to

proceed with T3. So there were some? Well, I'm not going to

confirm or deny that. I don't

want to get into the question

of what might or might not have happened prior to the Government committing to

T3. Six months after T3 the

Future Fund can sell some of

its stake to an investor as

long as that stake is more than

3%, and that investor pays more

than institutions pay in the

float. How much more than 3%

can be sold? Well, there is no

upper limit. There's a minimum

of 3% for obvious reasons I

guess. But beyond that it'll

be a matter for the Future Fund

to negotiate in consultation

with the company. Obviously

we've got two issues here, we

don't want the Future Fund to

be overweighed in Telstra for

any longer than necessary. At

the same time we don't want a

whole lot of shares coming onto

the market immediately after

T3. There is those two control

measures. The 6-month gap

after T3 but then anybody who

does buy a cornerstone

investment is bound by the two

years escrow applying to the

Future Fund itself. So the

same restraint would apply. Senator Minchin thank you very much for joining Lateline Business. A pleasure,

Ali.as we heard earlier the

Reserve Bank says inflation

will remain around 3% for the

next year, the top of the

bank's target range . To look at the Reserve Bank statement

today and how local markets

moved, I spoke earlier to Rob

Henderson at NabCapital. Rob

Henderson, thanks for joining

us. The Reserve Bank's left

the door open for another rate

hike but really it all depends

what happens in the next few

months? I think that's right.

To us there were three main

messages out of the Reserve

Bank statement today. The

first was that they've cut

their growth forecast. That

was mainly to take into account

the effects of the drought.

But they've also said that the increases in interest rates so

far are having an effect in slowing the economy. Secondly

they've left the inflation rate forecast where they were in the

last statement in August and

they've also said that the

medium term outlook for

inflation has improved. That's

good news in terms of the

outlook for interest rates. Thirdly they have said they

have a tightening bias which

really means if thras move in

the next six months it's more

likely to be up rather than

down. However they have said

that they will now wait for two

to three months for a few

months to see whether the

tightening so far is sufficient

to get inflation back where

they want it. Our view would

be that there's already signs

of a slowdown. If that

continues it's probably good

news for mortgage holders in

that rates have probably peaked

already. As they say they're

going to be watching over the

next couple of weeks.

Ironically this week is quite a

big week for economic

data? That's very true.

Tomorrow we have our NAB

business survey and one of the

key measures out of that survey the Reserve Bank has been

watching is capacity use in the

economy because they continue to be concerned that the

economy's running near full

capacity. Last month we saw is

a drop in capacity use. If

that was sustained obviously

that would be another bit of

good news for interest rates

staying on hold. Then on

Wednesday we've got the Westpac

Melbourne Institute Consumer

Sentiment Survey. We expect

that to show a sharp drop. That was taken after the

Reserve Bank's increase in

interest rates last week.

We've also got wages and we've

got house prices coming up

ahead. Quite a lot of data as

you said. Finally our market

today, commodity prices? Whole

market was down? That's right.

Very nasty night in New York on

Friday with the overall metals

prices dropping by about 4%

with the fall in copper prices

even larger down about 5.5%.

That's led to substantial falls

today in the likes of BHP, Rio,

Zinifex - those sorts of

companies exposed to metals in

the resources sector coming

off. That pulled the index

down about 18 points. Still,

it's up near record high types

of levels. Rob Henderson thank

you for your time. To the

major movers:

The Victorian election is

less than a fortnight away, but

business is worried that

neither major party has

outlined plans on how they'd

kickstart the State's faltering

economy. Unions agree

something needs to be done to

stem the flow of job losses in

struggling industries, in

particular, manufacturing. Now

there are also fears a new

voting system could leave the

State with a gridlocked Upper

House. Neal Woolrich reports.

It has all the hallmarks of a traditional election battle.

Policies have been debated,

babies kissed and there's been

a big talking point - water, or

the lack of it. But a

fortnight into the campaign and

the top end of town fears that

Victoria's economy is being

ignored. Victoria is at the

economic crossroads. Our

economic growth over the last

12 months is just over 1%. When you compare that with Western Australia which is

riding the resources boom at

14%, there are particular

challenges for Victoria and

that's why we'd like to see the

party start to enunciate

policies about how they're

going to continue to grow the economy in Victoria and create

continued prosperity. The

manufacturing industry is often

seen as being at the top of Victoria's economic sick

list. In the last ten years

alone now we've seen 63,000

jobs disappear out of Victoria

alone. That equate s to 119

jobs every week disappearing

out of the manufacturing sector

and our union has been calling

for some time that the

government particularly at the

Federal level can't sit by and watch these jobs disappear. Dave Oliver says

whichever party is elected

later this month it needs to

promote development. The

industries of the future are

nanotechnology, biotechnology,

the medical science area and

we've got some of the best medical science people in the

world here in this country. It

was in Australia we developed

the bionic ear and we need

assistance in trying to get all

the players together to try and

attract that assessment and to

develop those skills. Most

polls are tipping the Labor Party will be returned

comfortably. But a change to

the Upper House voting system

is expected to give minor parties like the Greens a

greater say. Labor won a clear

majority in the Legislative

Council at the last election.

But if the 2002 vote was

applied to the new proportional representation system, Labor

would only just retain control.

The Victorian employers Chamber of Commerce and Industry is

worried a dead locked Upper

House could delay major projects. The clear message

that always comes through is

those investors look for

certainty and decisiveness from

government. Our concern is

that the prospect of a hung

Parliament means that that sort of decisiveness and certainty

can be called into question. Labor and Liberal voted

together on two-thirds of the

bills last year. So it'll be a

rare occasion when the Greens

actually hold the balance of

power. Only in those few

matters where the Lib-Lab

duopoly have a split over

something. When that happens

we'll look at the bill on the merits. The number one

infrastructure priority is to

widen the Port Phillip Bay

shipping channel but the Greens

argue that environmental impact

studies haven't been completed

and no-one has made a

compelling business case. I've

gone onto the Port of Melbourne

website and I've seen a graph

with p container movement going

up. No corporate board is

going to hand over money on

that basis. Why should the public? What we have seen from

the Greens, are clear policies

enunciated which reflect a

strong position in opposition

to channel deepening favouring

the closure of brown coal power

stations and no more freeways

and roads. That to us

indicates a fairly unambulanced

policy competition. VECCI wants

firm commitments from all sides

on how they will stimulate the

State economy, but so far

neither major party has even

hinted at what their plans will

be. With less than two weeks

to go in the campaign that

leaves voters little time to

make an informed choice on

economic policy. Neal Woolrich

prepared that report. On the foreign exchange market:

a brief look at tomorrow's

business diary.

A look at what's making news

in the business sections of

tomorrow's papers. The 'Age'

confirms the Telstra board

stance on the election of

Geoffrey Cousins. Shareholders

attending tomorrow's AGM will

be advised to vote against his

nomination. And the 'Australian Financial Review' reports on the Prime Minister's

plans to seize the initiative

on climate change by setting up

a working group on emissions

trading. That's all for

tonight. As I leave you the

FTSE is up 1.7 and the Dow

futures are up just 3 points.

If you'd like to review

tonight's program or earlier

programs, simply log onto our

website. If you'd like to

write to us our address is on your screen. I'm Ali Moore,

goodnight. Captions by Captioning and Subtitling International.