Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant the accuracy of closed captions. These are derived automatically from the broadcaster's signal.
Lateline Business -

View in ParlView

(generated from captions) proper insurance regulate ors,

they have 50 insurance

regulators, one for each state

and nobody looked at the over

all prudential control of the

system. We recognised that was

on error in 1997. In 1997 I

established a body called the

Australian prudential

regulatory authority, APRA

APRA, we took prudential regulation away from regulation away from the

Reserve Bank. The Reserve Bank

strongly resisted that. Today they'd say it was the right

decision. We put it in APRA

saying withwe don't care what

you call your institution, you

can call it a bank, a building

society, a credit union, we are

going to have a regulator which

will have prudential will have prudential controls

across the board. On all of

those financial institutions".

When the US started going into

subprime mortgage in a big way,

it's on the record, I called in it's on the record, I called

the Australian banks, all the

chief executives and said, "We

don't want to go down this

rode, we don't want huge

exposure to subprime lending "a

Australia used to be called low

doc lending. We kept the

financial institutions out of

all of that kind of lending.

Now, the Australian banks which Now, the Australian banks

prior to that would have been

considered minnows in world

terms, are now, because of all terms, are now, because of

of the failures in the US are

amongst the 20 top banks in the

world, and they are all world, and they are all double

A rated, double A rated. In

fact, Julia Gillard boasting

about the situation. So, yes,

the United States by comparison

to Australia had a poor

regulatory system, that's been

proven. But in Australia, we

had a system that was totally

different. By the way, one we were continually

were continually recommending

to the Americans, I recommended

it to the Federal Reserve, the

US Treasury, you know, we were

holding it up at APEC meetings,

and I hope there are countries

around the world that adopt it.

Let's not say there's been a

failure in Australia. This

essay, by the way, I know it's

good for the monthly and boost

their sales, this has to be their sales, this has to be one

of the weakest essays you have

seen in a long time, it ought

to be condemned. Mr Rudd is essentially arguing with

neo-Liberalism getting extreme capitalism and

neo-Liberalism getting the

world into this, it falls to

social democracy to prevent neoliberalism, neocapitalism

for Cana billising itself. I

know some regarded the essay

was a call to return to big

Government. Is that how you see

it. That's the only way you can

see it. By the way, when Rudd

says, "This failed for 30

years", he's not only

condemning me and the Coalition

Government, he's condemning

Hawk/Keating, presumably,

because they were part of the

last 30 years, presumably he

was condemning Fraser, if you

want to go back 30 year, the

last 30 years being a failure,

who do you end up with, go back

30 years. Surprise. Surprise.

It's Golf Whitlam. Now, Mr Rudd

says social democracy has a -

has to rescue capitalism from

itself. And I suppose we are

lucky that the world has Kevin

Rudd to rescue the world

capitalist system. Maybe after

he's rescued the world

capitalist system he could move

on to solving the Middle East,

other things, which undoubtedly

he will. But let me ask a

serious question: if social

democracy is required to rescue

the world, which social

Democratic country does he hold

up as his model? Because

Britain's been under a Labor

Government for over a decade.

Britain has a huge Budget

deficit. The British would see

themselves ass a social Democratic Government. I don't

think the British record is

that good. By the way I don't

think the American record is

good. It appears he may pin

hopes on Barack Obama perhaps

advised by the Australian Government. I think the

Australian model has something

that could be held up and

recommended around the world,

the model that we have with

APRA. I agree with that. This

idea that social democracy is

the answer, let's forget about what might happen in the

future, we had a social

Democratic Government in

Britain through this period, is

Britain a great Britain a great success,

Northern Rock, Royal Bank of

Scotland. Budget deficit 8%, is

Britain the answer. We ought to

be assertive. We are

Australian, I think the

Australian model is what can be

held up around the world. Why

doesn't Rudd want to say that:

because there's a certain

ideological fervour to him, he

can't say the Australian model

was the answer, he wasn't part

of putting it in place, that

would give credit to the Coalition Government. Now, I

think at a time like this he

ought to drop his pride and ought to drop his pride and say

Julia Gillard, in all Julia Gillard, in all fairness,

Julia Gillard had the honesty

to say yes, the Australian

model was the best, he

shouldn't be ashamed of giving

credit to the Liberal Party

rather than writing appalling

essays for 'The Independent'

monthly. We are out of time, we

thank you once again for coming

in to talk to us on 'Lateline',

I'm sure the words will

resonate in your side of

politics, perhaps on the other side. Thanks very side. Thanks very much. Thanks

very much, Tony. Well, the

first Australian to be

convicted of leading a

terrorist group has been

sentenced to 15 years in sentenced to 15 years in jail.

Abdul Nacer Benbrika, led a

home-grown cell that planned a

seefrz of attacks on Melbourne.

--s series of attacks on

Melbourne the the Supreme Court

heard that the men posed a

threat to the community's

safety. Emma O'Sullivan reports

from Melbourne. Justice Bernard

Bongiorno took two hours to

sentence the terrorist leader

and his followers, security was

toughened up for the court

appearance, it passed without

incident. The men barely

reacting when they learned

their fate. Abdul Nacer

Benbrika will be 60 before he's

eligible for parole. Sentenced

to 15 years, with a minimum of

12. Six other men quibility of

being members of the group

received -- convicted of being

members received sentences of

between 10 and 4.5 years. His

lawyer told the court Islam

required a required a struggle. Abdul

Nacer Benbrika had a belief and

imparted it. They shared a imparted it. They shared

belief to varying belief to varying degrees.

The child heard the men didn't

have an advance plan for an

attack. Justice Bernard

Bongiorno said he disregarded

evidence from an unreliable

witness, Izzydeen Atik, a

member of the group member of the group claiming

Abdul Nacer Benbrika said the

MCG was a targets. He told the

men high school an attack

didn't happen, their crimes

were series. The existence of

Jemaah as a terrorist

organisation constituted a

significant threat that a

terrorist would be or would

have by now been committed here

in Melbourne. The judge said

four of the men, four of the men, including

Abdul Nacer Benbrika never

renounced or moderated their views and noted views and noted that Abdul

Nacer Benbrika said if the

brothers were arrested the

group was to continue in jail.

The men have already served 3

years in jail. The youngest

will be eligible for release in

18 months. Now a quick look at the weather, a the weather, a possible

thunderstorm in Canberra,

showers for Brisbane and

Darwin, morning showers in Sydney. Dry in the other

capital cities. That's all

from us, 'Lateline Business'

coming up. If you'd like to look at the interview look at the interview with

Peter Costello, or review the

stories or transcripts you stories or transcripts you can

visit the web site

abc.net.au/lateline. Now here

is 'Lateline Business' with Ali

Moore. Tonight - the Moore. Tonight - the recession

we are trying not to have, how

much difference will the

Government's big spending make.

I think it's been fairly well

thought through, and it's as

good a guess as to what one

ought to do as one could make.

No reason to panic, No reason to panic, the

Fortescue Metal Groups Fortescue Metal Groups chief Andrew Forrest is

optimistic. We need to get a

recession out of the road

always history being the best

pointer to the future repeating

itself they are the best times

to invest. Behind the numbers,

five experts tell us how they

see future economic growth. The

growth profile is likely to be

flat. In many sectors it will

feel like a recession. Significant

headwinds going forward. To

the markets - investors reacted

with indifference to the double

whammy of a Government stimulus

package and an ofible rate cut

of a full 1%. -- official rate

cut of a full 1%. The All Ords

up 50 points before the Reserve

Bank's decision. The Nikkei

slipped half a percent.

slipped half a percent. The

Bank of Japan agreed to by a

$17 billion stake in the

country's troubled country's troubled banks.

As you have heard it was a

big day on the economic front,

an interest rate cut and $42

billion stimulus package,

three-quarters of the $42

billion will be invested in

schools and house, $12.7

earmarked for one-off payments,

the big spending means a

deficit peaking at $35 billion

in 2009/2010. Treasury

forecasts unemployed up up to

7% and growth falling to

three-quarters of a percent

next year. The big question:

what what is announced today

will it stave off resession, we'll hear from the

manufacturers, rely tailers and

infrastructure, I spoke to the

CEO of Lateral Economics

CEO of Lateral Economics Nick

Gruen in the Melbourne

studio. $42 billion, more than

60% of money spent on

infrastructure, 12.7 billion on

one-off payments, in the one-off payments, in the words

of the Prime Minister, no

guarantee of a perfect landing,

will this work. Perhaps you

should have hired a Clair

voiant. I can't tell you if the

result is perfect. Like

result is perfect. Like the

Prime Minister. I'm impressed

with the package. I think it's

been fairly well thought

through, it's as good a guess

was to what one ought to do as

one could make. It's one could make. It's balanced

between the short-term spending

stimulus and longer term

infrastructure spend, how

quickly could the money make a

difference. The spending going

into people's pockets is

designed to make a difference

as quickly as possible. It

won't make a difference as

quickly as the money going into

our pockets in November, we

were all thinking of Santa at

the time. I don't think you can

spend that amount of money on

Easter eggs, that will trickle

into the economy over the next

six months or 60 or 70% of it

will. At least it will start as

soon as possible. Then we'll be

trying to ramp up the

relatively small scale

infrastructure projects. I

think it's a pretty sensible

way to go. One of my lingering

concerns is the current account

deficit and our rising foreign

debt starting to get scary, and

in two or three years all of

this burden on the this burden on the Budget, all

of the revenue measures,

spending measures will be lifting themselves off the

balance sheets. That makes a

lot of sense to me. When you

look at the way the package is

structured and you look at the

likely flow of money, will it

be fast enough to stave off a

recession? If you ask me to

guess, I'd say no. But it will

certainly make any recession

that occurs quite a bit

shallower, and so that's got to

be a good thing. If we look at

the Budget forecast we'll look

at a deficit peaking at $35

billion in 2009/2010. $34

billion in 2010/2011 - could

those numbers end up looking

Conservative. Absolutely, I

can't see the problem. We have

racked up something like $70

billion worth of surpluses over

the last decade. That's what -

that's what surpluses are for,

that's what deficits are that's what deficits are for, they are there because they are there because the

Government as I like to put it

is the risk ticking of last

resort. The Government is --

risk taker of last resort. The

Government is going it as the

private sector moves occupy.

Despite the size of the

package, we have a full package, we have a full 1%

interest rate cut today, do you

think that there is more to come. I would actually like to

see more coming from see more coming from the

Reserve Bank. Again, that gets

back to my concern about the

current account and foreign

debtment the more we do it on

the rate cut side, the

better. That said $42 billion,

will it mark the start of a

turnaround. You have to have a

clairvoyant to answer that,

clairvoyant to answer that, it depends on what the global

economy is going to do, I think

this could be extremely nasty,

it's not beyond the bounds of

possibility that it is a bit of

a - little bit that we are

overdoing it now, that's what

we tend to do, overdo optimism,

we did that as recently as a

year or so ago, we may be overdoing pessimism. That's how

I feel. Better to overdo

pessimism at the moment. Yes,

absolutely, it would be better

to find out we had done too

much than we did too little.

That's what we tended to

do. Let's hope we are too

pessimistic. Nick Gruen thanks

for joining us, more on the

stimulus package. The ever

optimistic Fortescue Metal

Group chief Andrew Forrest sees

this as an opportunity to

invest and predicts commodity

prices will recover with a

turnaround in China, as local

miners announce 2008 profits,

investors are hosing down expectations, woom

reports. Last year Fortescue

Metals defied critics making

its first iron ore shipment to

China on time. The world faces

the worst downturn since the worst downturn since the

Great Depression, Great Depression, Fortescue's

Chief Executive Andrew Forrest

challenges the doom sayers,

forecasting 2009 will see the

bottom of the market. I'm

looking to getting any

recession we need to have recession we need to have out

of the rode. Always and of the rode. Always and again

history being the best history being the best pointer

to the future repeating to the future repeating itself,

they are the best times to

invest. Andrew Forrest expects

Chinese steel consumption will

continue to grow this year.

He's tipping a rapid recovery

in China's economy because of

the Government's ability to

implement massive stimulus

package. If growth plateaus in

China, it will be for a short

period. The urbanisation and

the strelisation is a political imperative. While he imperative. While he won't

speculate on the possible

outcome of iron ore price

negotiation, he rejects

suggestions that the

commodity's price takes a

mauling. We'd need to come down

by 40-45% of the previous

benchmark to just get back to

last year's iron ore price. I

don't recall anyone whingeing

about last year's iron ore

price Maybe a 20-30% decline

is reasonable. It's an outcome

where iron ore producers and

steelmakers can live with in the current economic

climate. Falling prices climate. Falling prices have

already hit the bottom line of

Alumina. The miner reported a

62% drop in net profit to $168

million. We have had incredible

swing between the beginning of

the year where the market was

overhead, and not only was

aluminium -- overheed, not only

was aluminium prices rise ing

but in the second half it

reversed. Alumina revealed one

of its foreign banks withdrew

$75 million of its undrawn debt

facilities, to shore up its

cash facility it suspended

full-year dividends, cutting

production at offshore

facilities. We use the low cost

plants in Australia and Brazil

to run hard through this

period. They are in the lowest

part of the cost curve. John

Bevan says those operations

will help the company generate

cash through the recession,

allowing it to resume full

production when the economy

recovers. For a look at the

local market trade I spoke local market trade I spoke to

Marcus Padley, earlier. Pad

rsh, I was going to say rsh, I was going to say --

Marcus Padley, I was going to

say nothing like a big interest

rate cut and stimulus package

to excite the market. But

sentiment was up beat. It was

up 50 points before the rate

cut, it ended up 11 no-one

impressed by 100 basis points

or a stimulus package, we hoped

for 125 or 150 basis points. It

was not to be. Some of the

suggestion is that as the

interest rates get closer to

zero the RBA will slow down,

and the stimulus package put

them off doing 25 or 50 basis

points at this stage. We are

looking at 50 basis next month,

probably the month probably the month after as

well and make another 25 take

us us down to 2% by middle of

the year. I guess no surprise

the banks were among the best

performers, especially the Commonwealth. The banks not

driven by the rate cut or

stimulus package, driven by a

profit upgrade from CBA telling

us profits would be 20% ahead

of consensus expectations, and

that made a lot of people think

that the dividends are safe,

they seem to be important to

everybody. You have now got

banks trading on, including

franking, 12% and 14% yields

and as we run into the CBA results and the rest of the

banks later, the hope is that

dividends will be held. Of

course whilst you are

announcing a profit upgrade,

it's rather parlous not to pass

on the full rate cut, you begin

to wonder why the banks to wonder why the banks haven't

been doing that for the rest of

the year. There's been more

news on cappal raising, Qantas

in a -- capital raising, Qantas

in a trading halt. Westfield

going to the market. There'll

be opportunities to raise

capital. The property trust

sector got smashed today on the

back of Westfield's 2.9 billion

capital raising, people are

expecting an atrocious result

now, which will incloud

write-downs on assets, capital

raisings, disappointments on

distributions and profit

numbers, the whole sector is looking mishmash at the moment. Finally, what happened

to Newcrest Mining, its share

prices dipped, there's been support for share

placement. They did a share

placement at $27, trying to

raise $500 million, it was well

supported. They increased it to

$750 million, and the reports

are that some of the big

brokers asking for stock got

zero, the demand has been good

for their placement. It seems

that in a world that's falling

urt apart, that rather than

invest -- falling apart, rather

than invest in companies like

Macquarie, where 3,000 people

try to make money, people

prefer to invest in ininert

metal that does nothing, a metal that does nothing, a sign

of the times. It looks good

around your neckle Of course,

it would, that could pay all

sorts of dividends. Thanks for

your time. OK. To the other

major movers on the market:

Incitec Pivot felt the wrath of

investors, a profit warning saw

the explosive maker lose a

third of its value. Harvey

Norman announce ing the closure

of five office supply stores.

Free home insulation pushed CSR 9% higher. 9% higher.

Rio Tinto gined 2% on hopes

that it is -- gained 2% on

hopes of a funding deal with

Chinalco. The Australian dollar

boosted by the stimulus package.

The Prime Minister describes the Government's second

stimulus package announced

today as nation building, so what does big business make of

the four-year plan, Heather

Ridout, the Chief Executive sfofr of sfofr of the Australian

Industry Group sits on the

board of infrastructure

Australia, I spoke to her

earlier. Heather Ridout, in

terms of what you were calling

for to be included in the

package, on my count you have

2.5 out of six, no tax cuts or

refunds for business, but a tax

break on invest: yes on

infrastructure, and a one-off

payment for unemployed people

that retrain, nothing to lift

productivity, keeping people in apprenticeships, what's the

assessment I think we did well.

We wanted to boost to

consumers, a boost to business

spending in terms of capital

and support for infrastructure,

and a real major boost for

infrastructure for the broader

requirement. It's all there in

spades, probably more in terms

of consumers and infrastructure

that we advocated. It's a big

package. In terms of going

forward the gap, education and

training, and the Government

foreshadowed they'd do more

around that space, and put

allowance insist there for

unemployed people to access

string, it's small beans in

terms of big major efforts to

lift the skills base. You

talked a lot about that and

apprenticeships. The big issue

to remember is out of this, and

the further package that will

be there on infrastructure, is

that we are going to get a

generational lift in

Australia's infrastructure

outed of the package, it's well

targeted. You sit on the board of infrastructure Australia f

we get a final list of big

projects, reports, roads and

infrastructure later, do you

think we'll get another

stimulus package, norm 3 that

will focus on jobs, training

apprentice ships, what you

talked B I think the government

will have to do something about

the education and training

area. I spec they'll work on

it, it's an important part of

the equation to ensure when we

come out of the recovery that

we haven't gone backwards but

forwards, the future of forwards, the future of the

Australian economy. I think

that's there, on the other one

we'll have to see. The good

thing about today's package is

a lot of packages are as Obama

said "shovel ready", it's said "shovel ready", it's up to

the State's to cooperate. Does

that bother you. It bothers

everything, most of the states

will embrace this, and will

make it happen, some will be

less obliging. I think less obliging. I think the

Prime Minister and his team

will have to use the cattle

prods, we need the money spent

now. It has to be spent between

March and June, end of the

financial year, and the States take their time calling for

tenders, what can the

Government do. They have to say

the tap will be turned off if

the money is not allocated

during that time. It can be

done. Crises is a great time

for changes, the community

would be disappointed. They are

frustrated with the state of

the federation this would make

them more frustrated. With what

is announced is that enough as

Treasury thinks to stave off

recession. I think we are

hanging on by fingernails, it's

a close thing, like the lick of

paint on the the school wall

separating us from recession

and non-recession or a slow

down. When jobs, unemployment

goes 2.5%, it will be a

recession, it will feel like a recession, that's a Cem attic

argument. Heather Ridout, thank

you for talking to us. In the

short term the Government pins

its homes on $12.7 billion in

one-off payments adding to $8

billion handed out in dooesz,

for the money to work it has to

be spent. The country's

retailers are suffering and are

hoping money in the consumers

pocket will mean money in the

till. Margy Osmond heads

till. Margy Osmond heads the Australian Network Retailers Association. Margy Osmond Association. Margy Osmond ,

before today's package, your

surveys were telling you

consumers intended to cut

discretionary spending by 21%

in six month, now we have more

than $12 billion in one-off

payments s the outlook

different. I have to say the

combination of what has been

announced today with the

important additional cut in

interest rates may give people

a much more significant reason

to put their hand in their

pocket. What they were taling

us in January, after the first

blush of emotion applying to

Christmas and the post-Christmas sales is they

were putting hands back were putting hands back in

their pockets, not intending to

spend. I think timing on this

is good. That said though, the

first stimulus package may have

told you that it was only a

mild boost to spending, a lot

of people used it to pay off

debt, what's to say that won't happen this time happen this time around. I

don't think this is the

complete answer, the Prime

Minister said this is no silver

bullet. Certainly I think the

additional bit of money additional bit of money going

to be washing through the

system is welcome in a

traditionally tough time of the

year for retailers, the first

quarter. There's the tax break

for investment which a lot of

members, your members, those

involved in the retail sector

will benefit from, is that

significant enough, do your

members need more help to members need more help to keep

the staff levels they have, to

keep the profitability they

have. What is being proposed is

good for the smaller end of the retail spectrum, across the

board in terms of jobs, we have

to think about how we hold the

jobs in place, part of that

solution we think has to be a

greater conversation greater conversation between the State the State and Federal Government about what could

happen in the area of payroll

tax, if we look at a fempry tax

holiday bring it down to holiday bring it down to 4%,

temporary tax holiday. You

are saying the Fed should fund

the States to cut it. Partially, if we are

serious about holding on to

existing jobs, this is a

critical part of the puzzle. Is

that the one missed opportunity

you see in the package

announced today. I think it is

a missed opportunity in terms

of today's package, but not

period, there's a COAG meeting

in March, we'd lake to see this

being a subject of -- like to

see this being a subject of

that meet, introduced in 2009,

give businesses a chance to

plan around that relief. Given

the size of one-off payments,

is it fair to say the retail

sector is considering this as a

down payment, you think more

will be done and needs to be

done. I think this is the first

step, obviously the infrastructure spending is

great, it's a longer term

solution, looking at something

like this tax relief for the bigger employers particularly

is the medium term action we

need to see. Margy need to see. Margy Osmond

thanks for joining us. thanks for joining us. The

bulk of the money in the

package was for infrastructure,

$15 billion for schools,

billions for public and defence

housing, big projects like

roads and rail are still to

come. One man who has

advocated a bigger spend on

infrastructure, and sits on the

Board of Board of Infrastructure

Australia is Garry Weaven,

chairman of Industry Funds

Management, joining me from the

Canberra studio. Garry Weaven,

more than half of this stimulus

package will be spent on infrastructure, has the Government hit the right

targets. That half targets. That half in

particular is well designed to

be - have an immediate effect,

rapid effect on smallish

projects, but projects that projects, but projects that can

be brought forward quickly, and

likely to be projects ta will

stand the community in good

stead into the future. That's obviously an obviously an important

consideration not just to spend

for the sake of spending. I

guess given that speed is of

the essence, money for school

maintenance is that the shovel

ready project many have been

talking about. Ilth I think

that's right. I think it is

important that responses be

rapid. Bows, you know the rapid. Bows, you know the size

of the problem -- because, you

know the size of the problem is

large, anyone with a look at

the US economy knows that. So

this is a good way to get a

rapid response. Many of the

important nation-building

larger scale projects are going

to be very important. They do

take longer to get off the

drawing board and in to actual

construction jobs. I do

actually think that the

totality of the various measures that the Government

introduced recently is a bit of

an attempt a bold attempt to

try to flatten out the

construction cycle, and and

avoid some of the huge swings

occurringing. An attempt - do

you think it will work. Not

entirely, there'll still be

some swings. The Government's

own numbers suggest that. Although, the Government may

not be finished in terms of its

stimulus programs, who knows.

I would have thought better to

be ready to do more. If we want

to get that cycle to be not too

savage. So then is this what we

have at the moment, enough to

keep Australia from recession,

enough to as the Prime Minister

said, support and sustain

90,000 jobs. No-one knows if

it's enough to keep us out of

recession. I think on the

Government's own numbers, the

projected increase in

unemployment that will still

occur sounds very much to me

like a recession. So, I like a recession. So, I think

you have to say the Government

is taking measured responses

but keeping open the option of

further stimulus, If they don't

a recession is very much on the

accords. I think a recession --

cards. I think a recession is

certain if they don't. Garry

Weaven, thank you for talking

to 'Lateline Business'. On the

day interest rates were slashed

and the latest stimulus package

unveiled more worrying economic

news rolled number of

Australia's trade surplus

almost halved as china slashed

demand. Plunging to under $6

million, two months earlier it

was worth $2.5 billion,

economists say falling

commodity triss and stagnant

economy sees a return of trade deficits and drop in Federal

Government revenue. Good news, defying the gloom defying the gloom is West

Australian Newspapers Holdings,

the first media company to

report this earning season. The

publisher's half year profit

jumped to $5 the million,

annual profit could be as high

as $108 million, despite a

warning of softening in the

advertising market shares

closed 2.5% stronger at $4.05. Each night this week

five leading economists are

offering us their views on

where key indicators of economic health are heading

this year. Last night they

looked at interest rates, tonight they are gazing into

their crystal balls at another

key measure of economic

activity, gross domestic

product. Hopefully GDP will

grow and grow well by the grow and grow well by the end

of the year, my one number

forecast for the fourth quarter

is between half a percent and

1% by then. Between now and

then there's work to do. There

could be a negative growth rate

or two, the overall growth

rate for the year should be

positive, but less than the

pace at which we by the end of

the year. I think GDP will

declib, the focus, how much, is

not GDP what we produce but the

value of what we earn, income,

that is lifted when commodity

prices go up and detracts when

they decline, we'll have a

decline this year, so real

national income will shrink

6.5%. Now, GDP is less 6.5%. Now, GDP is less severe,

I think it will shrink through

the course of 2009 by the course of 2009 by 1.5%. In

relation to growth in the

Australian economy, over the

year as a whole it will eke out

a 1% growth, it will grow,

there'll be positive momentum,

for the fourth quarter GDP. It

will probably rise around a

level of 2.5%, there'll be

rebound there. For the rebound there. For the first

half of the year, 2009, the

growth profile is likely to be

flat. In many sectors it will

seem like an out and out

recession. Fourth quarter GDP

around 0.2%, quarter and

quarter. We have for some time

forecast a technical recession

in Australia, growth

contracting in the final

quarter of 2008, first quarter

of 2009. The economy faces head

winds going forward. Growth in

the major trading partners

deteriorated significantly, households facing increasing

head winds, particularly head winds, particularly that

rise in the unemployment rate

that we are forecasting. If we

are talking about the fourth

quarter in 2009 I think quarter in 2009 I think you'll

have a small growth around half

a percent in the quarter, a percent in the quarter, but

in the year, in other words

over the whole period, we'll

expect to have the economy

going backwards by about a

quarter of a per centment

really starting to see some

signs of growth towards the

very end of 2009. No surprises

that our experts predict

that our experts predict a

tough year for the Australian

economy. The cards may fall,

however that happens, the

Government is hoping a stimulus

package will revise some level

of activity, Treasury is

predicting GDP of 1% falling to 0.75% next year. Tomorrow

night we'll look at employment.

A look at tomorrow's A look at tomorrow's business diary.

I'll speak to CEO of BHP Biliton Marius Kloppers tomorrow night.

tomorrow night.

Before we go at look at what

is making news in the business

sections much tomorrow's

pagers, 'The Age' leading on

the Government's plan to

cushion the country from cushion the country from the global financial global financial crisis, the

Australian financial review

covering the same story, 'The

Australian' examines

Westfield's share placement and the 'Sydney Morning Herald'

looks at the knack of Incitec Pivot unexpected profit warning. That's all for

tonight. As I leave you Dow

Jones is up a modest 23 points

and the FTSE up 18 points in

London. I'm Ali Moore,

goodnight. Closed Captions by CSI