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(generated from captions) outlined? That if they indeed

go into the negotiations

thinksing that 550 part s per

million of carbon dioxide in

the atmosphere is an

appropriate target for the

world to reach that we will

lose all those natural

assets? Given the extensive

discussion of my report on

those matters, I think a lot

would appreciate the risks, at

least very much better than

they did before the report. So

let me ask you this, then -

Treasury has just done a series

of models which suppose edly

look at the cost of the carbon economic trading scheme but

they don't look at the cost of

losing all those assets. Do you

understand or do you know what

the potential cost is of

leaving, say, one of them, like

the Great Barrier

Reef? Treasury did not seek to

model the cost of climate

change and therefore the

benefits of mitigation at all.

They just focus and quite

explicitly and trans parentally

on the cost of mitigation. My

report looked at the cost of

mitigation and the cost of

climate changend the way you

could reduce the cost of

climate change by various

degrees of mitigation. These

but these statistics must have

a financial cost the the

nation. The Great Barrier Reef

draws about $5 billion a year

in tourist income to the

tourist industry. So would you

the bottom line and isn't that inevitably be wiping that off

a cost that Treasury should

take into account when it looks

at modemling all of these

issues? They weren't - Treasury

I don't want to speak for them,

they weren't seeking to model the benefits of mitigation and

the cost of climate change. I

was. All of those issues are

dealt with thoroughly in my report, including those that

are not amenable, those reports

of mitigation around climate

change that are not amenable to quantitification through

standard economic models. A lot

of the benefits of avoiding the

worst outcomes from climate

change come in the form of not

an economic benefit but values

that are shared by many parts

of the Australian community

that don't come out in dollars

like the tourist industry comes

out in dollars. And I've sought

to take that into account

thoroughily in my report. I am

go ing to give final word to

David Karoly. If you have one

message that you want ed to get

across right now to anyone who

might be listening, particularly the Federal

Government, what would you say

as they are contemplating what

targets to set? I would fully

support Ross Garnaut that the

best outcome for Australia is

to reduce emissions

dramatically and quickly. So

25% e reductions by 2020 or

more by 2020 and 90% or more

reductions by 2050, are the

minimum that Australia needs to

do. Professor David Karoly and

Professor Ross Garnaut we thank

you very much for coming in in

and joining us tonight. Thank

you. Thank you.

It's been decades since quen

Kennedy was the king of

television but in the last few

years there's been a biography,

the telly movie and now the

people who helped write the

jokes that made his famous have

come forward. He launched his

new book on the King in the

Melbourne studio where Kennedy

became famous. Rafael Epstein

was there. Without you I'm

nothing, without you I'm

nowhere. Few spent as much

time with Graham Kennedy as

Bert Newton. Understand and

appreciate the man to whom

every host on television today

who might not have even known

the subject of this book how

much we all owe to Ken

condition Ken. - Graham

Kennedy. These shoes are really

nice, it's only me that hates

them. Relentlessly mocking the

responsors who signed his pay

cheque. Graham Kennedy appeared

on Melbourne television in

1967, after a year after

broadcasting began. He was

never afraid to send up the

sensorous. When they tried to

Dan some statue, he produced

many. They come in various

shapes and sizes, more old

David what a lot of fuss about

something that's been hanging

around for 500 years. He was

basically very truthful to his

viewers. If he had a sore tooth

or a headache or he was in the

poo with management or

whatever, he let viewers in on

the secret. He didn't hide

anything. I think that was one

of the charms about live

television. If something fell

over you can't hide it so you

capitalise on it. How tall

was Dick? About 6 foot

seven. Big Dick. Surrounded by

the props and the cameras in

the studio where he made his

naifrmt his former colleagues

came to reminisce as much as to

launch his book. Graham Kennedy

shaped TV in Australia. He

could travel and look at things

being done away but it was a

blank canvas. He literally was

bringing a whole lot of

vaudeville and radio ideas to a

new medium and making it

up. You can't have a

commemoration without

memorabilia. There's been Order

of auts awarded after his death

and a cigarette butt he spoked

in 1958. In the same year he

won his TV Week award, and it

was he who suggested to TV Week

that these awards should be

named after John Logie Baird,

one of the pioneer s of

broadcasting technology. In

later years he returned to

television after a long break.

But it was his passion for

acting that he often preferred

to remember. No-one is going to

sack me. I've just

resigned. But it was his

anarchic humour sometimes

meticulously rehearsed

surprises that became a trade

mark: By the time you get this

I will have shot myself. Is

that Is that on O?

And some say it's what he

wanted to see more of an

today's TV. The real razors

edge stuff. What he did then,

some of it look s tame but some

doesn't. But at the time it was

ground breaking. So he would be

saying we want more 'Rove',

more 'Good News Week', more

'Chasers'. Let's settle have

more of that. He was naturally

funny. He just had a gift of

being able to come through that

lens, gang busters into rooms

where people were sitting

singly and they imagined that

he was coming through chatting

to hem them and he had that

ability to chat through the

lens which is very rare. How

about that? It sounds like

dysentry, doesn't it? The kij

of comedy is now a publishing

niche all of his own. And a

quick look at the weather now.

Another hot day for Melbourne

with a late thunderstorm.

Thunderstorms are expected in

Brisbane, Adelaide and Darwin.

Sunny in Canberra and Perth and

increasing high cloud for

Sydney. That's all from us.

Lateline Business in a moment.

If you would like to look back

at tonight's discussion with

prorn or David Karoly, you can

visit our website. But now

here is Lateline Business with

Ticky Fullerton. Tonight,

wombats an tax reform - a look

behind the head of Treasury's

call for a simpler

system. They're willing to take

any ideas, they their same to

try end to up with a better tax

system or a tax system that is

built for the 21st century. Too

early to celebrate - consumer

sentiment up slightly. There is

still life out there and

retailers are willing to look

over the hill if you like

beyond the current state of

crisis. And in our special

series on the impact of the

financial crisis, a boutique food producer determined to

stay one step ahead. I think

the secret for us is to be able

to react very quickly. So we

have to be really conscious of

how fast we can move and I

think that's the secret for

little businesses not to let it

spiral and wait too long.

First to the markets and

following the US and Europe,

Australian shares ended a

volatile session in negative

territory for a second day. The

All Ords sank 1% with falls

across most sectors. Gains in

property stocks helped limit

loss on the ASX 200. In Japan

recession fear s pushed down

the Nikkei. Hong Kong's hang

essential gave up over 100

points but in London the FTSE

100 index has rallied 1.5%.

This despite new figures

showing British unemployment

has risen to an 11-year

high. There are signs tonight

that attempts to keep the

Australian economy afloat are

starting to work. Consumer

sentiment is rising and

business and personal lending

is continuing to grow. The news

comes despite the threat of a severe global recession caused

by the turmoil on financial markets. Andrew Robertson

reports. Interest rates slashed

by 2 percentage points and $10

billion of fiscal stimulus are

starting to counter the weight

of bad news. That's been

reflected in the latest survey

of consumer sentment which rose

4.3% in November, not great but

a start. Still the fourth week

is reading for this year and

those readings this year are

the weak est since the

recession in the early 1990s.

So still a very weak number but

at least it didn't fall further

in the face of all that

stimulus. Sentiment among shop

owners though continues to fall

to its lower in nine years

according to a survey by

property group Jones language

Lesalle. But more than half

those questions have plans to expand their business. The number of retailers who are

thinking about expanding is

certainly lower than it was in

the previous survey. But it

says that there's still life

out there and retailers are

willing to look over the hill

if you like beyond the current

state of crisis. And that

represents confidence in the

future, and according to

Treasury boss and Reserve Bank

board member Dr Ken Henry that

is the key to turning the

economy around. So anything

that can be done to help

restore confidence in real

growth in the strength of the

economy right at the moment is

valuable. With the economy as

weak as it is, wage inflation

has fallen in the September

quarter. Also out today were

lending finance figures which

showed a strong rise in

commercial lending and a small

but larger than expected

increase in personal loans. JP

Morgan chief economist Steven

Walters says that's a result

which can be interpreted two

ways. Perhaps consumers are

more up beat than we thought

and therefore are happy to take

on credit. Or it means they're

struggling to make ends meet

and using credit for household

bill payments. The upside of

the global economic slowdown

has been the dramatic fall in

the price of oil. Today, it

dropped below 60 US dollars a

barrel for the first Science

time since March last year with

petrol prices in Australia

heading back to forwards a

dollar as & leeter but that may

be as good as it gets. My

forecast is the Aussie dollar

will go down further. Even if

the oil price does fall further

I suspect we will not get too

much joy on the petrol

price. Westpac has changed his

fore cast for interest rates.

It now believes the Reserve

Bank will be fos forced to

lower the official cash rate to

3.5%. After seven months of

discussions the creditors of

failed Sydney broker Lift

Capital have agreed to

liquidate the company. Admoror

s McGrathNicol said today it

was the only option as former

clients fought to get their

money back. McGrathNicol

remains optimistic that

creditors could get as much as

50 cents in the dollar. At

this second meeting of

creditors of the failed stock

broker lift lift, former

clients had reason for some

optimism. I think in the

circumstances we are

comfortable but quite clearly

not happy with the whole

exercise and I think in one way

or another it's got a fair way

to run yet. Most cleents who

are creditors of Lift Capital

could WEF half their money

back. Our view is that the best

case is that there will be a

return of up to 50 cents in the

dollar. It could easily be less

than that. Now that Lift

Capital is in liquidation, the

company will be wound up. We

went to today's meeting with

just one recommendation and

that was that the company go

into liquidation. There are a

number of options available &

at this point in type, none of

which would have could have

been followed through. Like

Opes Prime and Tricom, Lift

Capital came to grief at the

start of the year when large

falls in the stock market

triggered a spate of calls on

margin loans. Clients of the

company say that shares they

thought were being held by Lift

Capital were actually passed on

to and then sold by Merrill

Lynch without their knowledge.

Dixon dim's firm had around 100 clients involved with Lift

Capital. He is funding a Test

case in the sprails Supreme

Court to prove the documents

his clients signed were very

margin loans My view is that

Lift Capital use Road the

document s that relate to a

margin loan. There's one clause

that the directors of Merrill

Lynch used to push people into

these amsls by stealth. We are

hoping to get success there in

rence relation to the documents

being void. A last minute

challenge to the McGrathNicol

position as liquidator was

voted down with creditors

deciding to stick with the

firm. Now we're going into

liquidation there's a real

opportunity with our expanded

powers to further investigation

the financing arrangements that

Lift Capital the company, its

directors and minch have put

together to see whether there

are any issues of concern. On

top of the liquidator's concept

for lick Woydation, asked for

their case to be under way

before the end of the year. We

think there's strong grounds

for recovery, for the full loss

not just the part of the loss

which might come out of the

liquidation. For creditors of

Lift Capital they now have the

long process of liquidation

before them which could take

between one and up to two years

to complete. And for the

latest local market news I

spoke to Droga drg from Macquarie Private wealth a

short time ago. There's been a

further slide on the local

market today. What's been

driving that ? General malaise

of the market continued today.

We had a down day in the US on

Tuesday night and that is over

tern concerns about American

industry and slonting slowing

economic growth. That has

flowed through into base metal

prices which were down last

night. So the resources were

was primarily responsible for a

lot of the downward movement on

the market today. The main

stocks that le the market down,

BHP was June 50% or 1.7% to

close at $28.30. Rio Tinto down

$1.30. Also down 1.7% to close

at 75.20. Fortescue Metals

wrotes continue. That - woes

continue. That stock was down

another 25 cent and boy has

that been a fall from grace as

that stock which was over $13

in June now over 85% down to $2.0. The banks are still under

pressure. What are investors

worried about? Concerns with

the banks are multiple. There

is the concern of an economic

slowdown, the concern that

corporate debt provisioning

related to impairment costs and

we've seen ABC Learning and

we've seen Allco all have their

problems and it looks like

there's a number of others just

loom on the horizon. So the

banks have to provision for

these out comes and in doing so

their capital positions look a

little bit more

tenuous. Property trusts have

defied the trend. Any

stand-outs there? The property

trust sector has been a very,

very interesting situation. And

that's real re revolve ing a

around a number of things. You

have a number of the property

Trust companies under heavy

debt burden and a lot of them

are facing refinancing issues

with Banks an we're all well

aware of what's going on with

century, which is obviously in

very close discussions with its

Banks. The other side of the

coin is as we get to this point

in the cycle, the jostling and

the fun starts. That is

basically where the weak look

weak and look ready for

kick-off and the strong take

the opportunity to perhaps

either take a steak or look to

merge with other property trust

groups with similar strategic asset honourable senator

business models. Today what

we've seen is tockland group,

an international property

developer and investment

manager take a position or a

strategic stake in GPT group.

GPT rose 14 cents or 13 toct to

cent placement level done at close at 1.19, way above the 60

the end of October. Sonic

health care is one of the local

companies going to the market

to make more capital. They're

seeking to raise $325mm from

basically institutional

investors. Now sonic has said

if they do this raising

successfully they will have

around $400 million as a war

chest to go out and make ak

which acquisitions. They're

only interested in making

acquisition. So here is another

example of a stronger company

looking to build a war cheat,

to take advantage of weakness

in their sector. Marcus Droga

thanks very much for your time

this evening. Pleasure. To the

other major movers - alumina

continues to fall after

yesterday deferring the

expansion of a Western

Australian refinery.

According to Treasury

secretary Ken Henry, Australia

has 125 taxes, that's more than

the number of endangered hairy

nosed wombats he's also worried

National Press Club address about. Dr Henry used hirds

today to explain the focus of

the tax review on complexity,

risk and governance. To find

out more on the implication of

the revie, I spoke to Michael

Dirkis, the senior tax Council

with the Taxation Institute of

Australia. Welcome to Lateline

Business. Thank you. Did Ken

Henry give anything away at all

today in his speech on the

tavenl review? I think he

really just more or less

reinforced what the review has

been saying to this point.

They're willing to take any

ideas. Their aim is to try to

end up with a better tax system

or one that is built for the

21st century. He did float the

idea of cash flow taxation.

Taxing the difference between

money in and money out may

sound simple but is there a

danger that a radical idea like

this would not be com patdible

overseas and add to the

compliance burden for overseas

investment? It's es one of the

risks. When the tax value

method which was floated which

was something reasonably

radical at the time of the

previous business tax reviews

around 2000, 2001, although it

seemed a simple idea as it was

translated into draft

legislation it became quite

apparent that it was not simple

and in fact there were more

complexities associated with

that simple idea that with what

we had with our current

system. So it can be a

danger. Today's board after

toxation study showses the

burden of compliance falls

mostly on small and medium

enterprises. Can we get a

dollar coast on overall compliance? It is very difficult and there's always

dis agreement on the levels of

cost. Certainly the

introduction of the GST has

added a compliance cost burden

because most businesses have to

do now quarterly business

activity statements and

obviously the income tax return

at the end and although it does

cut down some of the end work

they still are now seeing an

accountant five times a year

instead of once. And what are

the challenges with the

taxes? There are a number of

challenges. The fact that sort

of we do have a pay roll tax

administer by each State but in

fact they're all separate pay

roll taxes with different

thresholds and slightly

different rules. So trying to

get the States on board by some

form of compensation to either

get rid of some of the

inefficient taxes or

alternatively look at mean s

whereby there's centrally or

commonly administered. As the

belt tightens thing also get

more difficult? It's one of the

big dangers. Certainly in NSW

we've seen departure from the

agreement around the GST to get

rid of certain stamp duties.

The NSW Government has deferred

that now due to a fiscal

problem unless the States are

tied into an iron clad

agroement we will see -

agreement even depar durs after

the Henry of a similar

nature. Is it not a major flaw

that GST is not part of this

root and branch review? The

absence of GST particularly in

reference to rated and scope

and also the taxation of

superannuation are two key

areas. Given that there is

within the terms of reference a

limitation in terms of the

level of re form continue

result in a variation of the

amount of tax raised in

comparison to GDP. Given that

resfriks and given that a large

source of revenue is re moved,

it does limit the scope for

practical reform. On top of

this, Ken Henry is walk ing

quite a fine line. On the one

hand he's advising Government

and on the other hand he's

heading the inquiry into

tax. He certainly is wear ing

two hatsnd it 50 es a matter of

preercting which hatd he is

wearing at the particular point

of time. At the Press Club he

is talking about the chairman

of aut Australia's future tax

re view and therefore is

questioning some elements of

our tax system. When he's

wearing the secretary to the

Treasury role he is the advise

tore the Government. And I

suppose it's just people making

certain that when they're

jumping at things they're sump

jump ing at it from the. Right

place. This is one thing that

Ken Henry does want to change -

what are the complexities for

ordinary folk is that they pay

incomecism but they get the

benefits back, thing likes

family benefits. I think this's

one of the things that they

need to ex plain ploer is how

to get individuals who in real

terms end up on benefits from

first engaging with the tax

system and paying money over

and then having that engage ing

again with the social security

system and having the money

returned to them. If we can

focus on some strong rules that

exclude those people from day

one, then we're clearing a

number of people out of the tax

system. Thanks for joining u

us. Thank you. Incitec Pivot

has become the latest

Australian company to apreach

investors for more money. The

fertiliser and explosive maker

plans to sell over 2 million

shares, at a low er trade than

last. The company has said it

will be used to pay off debt.

Incitec announced tripling of

its annual profit and the

record result reflected

acquisition gains and higher

fertilise er prices. The ANZ

has announce had the former CEO

of British Airways and the

current directorship of Rio

Tinto and News Corporation. He

is seat set to replace Charles

Goode who has been ANZ's

chairman for 13 year. Four new

director also join the board as will Margaret Jackson after 15

years with the company. This

week we're prenling a groundup

look at the financial crisis -

four businesses, four sectors

four States and we bring in

experts to assess the

challenge, response and way

forward. Scott Alle has pre

prepared this special series

for Lateline Business.

Karm men's - Carmen's fine

foods in Melbourne has a proven

recipe for success. Marketed as

a healthy alternative, they

sell a range of breakfast

muesli, snack sized bars and

gourmet biscuits through 2,000

retailers including weerls and

Coles. And recent sales figures

reflect strong organic

growth. We've had our best

month ever in 16 years. Things

are really pos IVF for

us. Founder Creswell kes bought

the business for just

$1,000. And has nurtured it

into an operation that tucious

over close to $20 million

annually and ex ports to 16

countries. I think the secret

for us is to be able to react

very quickly. So we have to be

really conscious of how fast we

can mover. That is the cret

Secret for little businesses -

don't get it spir

AOL. Outsourcing is central to

their business model with

product s manufactured

offsphais. We pay for what we

use, so if there is a downturn

we will be paying for less

space so that is er a direct

cost. With the sharp slowdown

if business activity there's a

grow ing trend for firms to

delay payment s to suppliers

like karmience We have noticed

it a little bit and I hear

about it more and more with

other people that we deal with,

but I think we've really been

quite strict of being very

tight with that. The dramatic

slide in the Australian dollar

has accept helped with the

renewed push into European and

US markets. Can you show mu

how the packing of the biscuit

will go? And back home the

Carmens team of 12 staff still

intend to roll out a new range of biscuits in Australia

earlier next year. I believe

the people are spending a

little bit more at the

supermarket. They mightn't be

spending in other ways and I

think retail for fashion is

suffering more. Even with

annual growth raits of around

40% there are still challenges

ahead for karmience. Charter

accountant press Sue Prestney

has these suggestions to ensure

the company retain s the right

ingredient force future

expansion. I's a good idea for

fast growth businesses to now

review their business plans and

put in a few different growth

rates than those they've been

experiencing. Just so that

they're ready with cost cutting

contin Jensy plans in the event

that the growth doesn't

continue as it has. Businesses

like karmians that are well run

and with a strong cash flow can

continue their promotion al

expenditure and research and

development which may find them

better placed at the end of

this difficult economic cycle

and more competitive at the

start of the upturn. If they

can imagine imagine to keep

their cash flow coming in, then

they might be able to be in a

position to approach their own

suppliers and negotiate better

prices in exchange for prompt

payment. Now a look at tomorrow's business diary and

St George investors will vote

on whether to accept Westpac's

$14 billion takeover bid. S we

farmer's AGM is tomorrow.

Investor s in Fairfax media

meet tomorrow as well as

Bluescope steel. Before we go a

look at what is making news in

the papers - the the 'Age'

examins today's speech by

Treasurer secretariry Ken

Henry. The Taine says the

changes to the ANZ board

reinforce the banks ambition to

become a regional power house

and the 'Sydney Morning Herald'

leads on stockland's raid on

GPT's share register. The Dow

futures are up 65 points or

0.75% and the FTSE has risen

over 1%. If you want to review

any part of tonight's program,

you can visit our website. Or

you can watch the entire

program online or download it

as a vodcast. We would also

love to get your feedback. Our

e mail address is:

I am fulg Fullerton.

Goodnight. Ticky Fullerton.

Goodnight.

Closed Captions by CSI

Prostitute, early 20s. Joyce Watkins. Fractures to the skull. unprotected intercourse recently. Traces of semen, so she had it was inserted prior to death, The difference here is the chisel - hence bruising to the vagina. It's not for me to guess, by the same man who killed Jean. but I'd say she'd been killed That's impossible. ENGAGED TONE They're talking about inducing it. and there's no sign of that. Unless it happens soon DOORBELL RINGS I'll call you back. There's someone at the door.

Hello. Hello. Fitz! You're wanted. Hello?

picking out horses. He's sitting on the lavatory, picture the scene, can you? You can't help but No. Can we talk some time?

Face to face. Fitz has got my number - I'm not ready for that just yet. Yeah? (SIGHS) Beam me up, Scottie. It's a DNA report. found in the first victim. On the top, samples from semen On the bottom, the second.

The same man killed both women. They match. from behind bars? How do you murder a woman Voodoo? fell down the bloody lot. She dragged herself to the stairs, Found it on the stairs. The chisel?

Two caps...

Just one set. ..difference? The victim's. What do you want from me? what's left of my husband, Can I have now you've finished with him? Yes. with him? It's over? Have you finished I'm asking you. Why don't you ask Fitz? don't you? You think you hold all the cards, I'm the marriage wrecker. You're the loyal, pregnant wife -

Judith. Well, I know that's bullshit, You weren't around, you'd gone. We didn't know you were pregnant. Is it over? We did absolutely nothing wrong. Yes. in his body. I was only ever interested

I'd hear myself saying this, I never thought to it, isn't there? but there's a certain poetic justice To your rape, I mean. of that there's no doubt. David Harvey killed the first woman, to be someone David confided in. The man who killed the second has (MOUTHS SILENTLY) Really? Women used to fight over me once. Did my head in and everything. The loser got me! In a priest? Your father? Who would you confide in?

having comparable DNA? What are the odds against two men

to be brothers. And both short. Pretty low. Unless the two men happen His brother's a Catholic priest. with Father Michael? Yes. Do you get on well Yes, I do actually. Do you mind? What about your husband? They're brothers. Does he get on OK with him? I know, love. So were Cain and Able.

Yes. They trust each other?

from each other? No. Wouldn't hide anything Sometimes. You must resent that. Does he visit prostitutes? He's human. He's a priest.

I know you, and people like you. and you seize it - One or two priests make a mistake Well, they are not! "This is what they're all like." A mistake? You call murder a mistake? Murder? could kill someone? Yes. You think Michael No. Does he visit prostitutes?

Michael something? Cos I don't. Do you think you owe for years. He didn't. Your husband has gone to prostitutes spent all that money on them. He's had unprotected sex with them, said yourself they trust each other. You often hear of priests - you anything from each other. They wouldn't hide he's just not bothered to tell you. Father Michael has known for years, Excuse me. Does he visit prostitutes?