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(generated from captions) we saw resources up, banks got

a bit of press which I'm sure

we'll talk about shortly.

Overall a positive day. On the

banks, National Australia Bank

has announced a major capital

raising, what was behind

this? NAB had previously

flagged that it was looking at

the underwriting of its DIPs

and I guess it started this

morning with a $2 billion

capital raising that was

replacing the DIP underwrite.

That due to strong demand was

expanded to $3 billion. What

does NAB's move mean for other

banks? They will review capital

positions. One of the things

banks focus on is tier one

capital ratios and the extra $1

billion for NAB improves the

ratio for that bank. I'm sure

we'll see Westpac and other

boards review their position

shortly. We have the AGM of

CBA at the end of the week on

Thursday. I'm sure we'll get

commentary from that board on

how they see their tier one

ratio. $3 billion is a lot of

stock - is that easy to get

away? The deal's been done, it

was easy to get away. You saw

the market sell down some other

banks to partly fund this in

terms of portfolios. Resources

performed strongly, is that

because of the stimulus package

out of China? That would have

been a key driver of very

strong moves in the materials,

the energy and the steel

stocks. So we saw OneSteel and

Bluescope which have been

particularly hit hard lately

move strongly, so up to close

to 10% on average for the two

and BHP and Rio up high single

digits. What does the market

make of Fosters? Last week the

market was focussed on the fact

that Molleson's showed its hand

within Fosters. The latest

move continues to see the market speculate that Fosters

is not interested in wine. We

get the capital review of the

market shortly. Most are

looking for a separation of the market. Craig Webb, thank you

for joining us. To the other major movers on our market

today:

The Government's $6.2 billion

injection into the car industry

has been given a firm tick from

both unions and manufacturers.

For more on what the car

industry might achieve with

this funding I spoke with Damon

Cantwell, a partner at Deloitte

who has been involved in the

auto industry and analysis of

it for the past 15 years.

Welcome to Lateline Business.

Thanks very much. $6.2 billion

that the Government says will

generate $16 billion worth of

investment. Can the car

industry reinvent itself? This

package provides the

opportunity for that to happen.

I think the package tries to position the Australian

industry to stand for something

in terms of its global

competitors and that is

obviously a more innovative,

green and technology-focussed

manufacturing space. There are

some good hallmarks to provide

good sustainability for the

local manufacturing

base. Speaking of

sustainability, a $1.3 billion

green innovation fund, the

minister Kim Carr says he hopes

to see fuel efficient cars on

Australian roads in the next 18

months. Is that achievable and

how will they go against

imports? It's certainly

achievable in that there's been

a lot of press around the

Toyota camera hybrid

announcement. They will come

online in that timeframe. The

fund provides the opportunity

and a catalyst for some of the

component manufacturers to

explore more fuel efficient

options that they can then put

on the market to local

manufacturers. So from that

perspective the Government has

covered a couple of different

bases in trying to achieve that

policy outcome. These billions

of dollars require

co-investment from the

industry, two of our three

carmakers - Ford and General

Motors - are in a bad way in

the US. People are talking

about possible bankruptcy,

where is the funding going to

come from? The investment

activity that is being

foreshadowed and the way the

industry programs are being

established suggests that

investment could either come

from the supply chain or the vehicle manufacturers

themselves. As you say,

certainly there are some dark

clouds around in terms of the

US market and what the vehicle

manufacturers are going through

there. I note that the US

Government as well has

foreshadowed a substantial

assistance package for it. The

hope would be some of these

incentive measures do support

longer term investment

decisions. There is a role

here for the component space as

well in regard to its capital

expenditure programs. Yes,

because local carmakers lost an

estimated $400 million last

year? Yes, and I think a

function of one of the outcomes

that this package - I guess

provides a foundation for,

we'll wait to see some more

detail around putting greater

choice in front of Australian

consumers so far as local

manufactured cars go.

Undoubtedly some of those

pointed to the fact that losses you allude to have

consumer preference is

changing, the environment in

regard to oil prices and a

range of other factors that

have been well documented are

changing. I think with

announcements like the Toyota

hybrid camera and the Ford

Focus they provide a greater

choice as far as locally-built

vehicles go. The Government

says tariff reduction targets

will stay but with... you

mentioned and US, Barack

Obama's $25 billion package,

Germany's $12 billion euro

package - are we in for a new

era of car industry

protectionism worldwide? I

think the reality of the

industry globally at the moment

is if you're in the business of

making vehicles then at the

moment you're in the business

of Government assistance

packages and I noted in the

Bracks Report and a number of

the submissions put to it the

new investment in vehicle and component manufacturer around

the world is basically aligned

with some substantial

contributions from government.

What this package potentially

does, I think, is create some

circumstances where over a

10-year timeframe there may be

some greater sustainability

driven through the Australian

economy and that is really tied

to a couple of key issues. One

of them is volume and getting

local volume of vehicle builds

up. The second is around

rationalisation of the

component space. One side not

addressed is retailing. 40% of

the 1500 dealerships across

Australia have their showroom

stock funded by GE and Gem ack

which says they're pulling out

at the end of the year. Is

this something that Government

will be addressing? I think the

decisions driven by the

financial crisis globally are

progressively getting onto

Government radars. I think

different State and Federal Governments may take different

positions in regard to that.

The Tasmanian Government has

announced an assistance package

to help companies through the

current turmoil there. I think

once, as the Prime Minister's

characterised some of those

changes globally feed their way

into the real economy it may be

an issue to go intont the radar

of State and Federal

Governments, yes. Damon

Cantwell, thanks for joining

us. Thanks for the opportunity. Australia's first Director-General of taxation

David Vos finished up his term

last week. One of his major

tasks has been to hold the Tax

Office to new levels of

accountability on behalf of taxpayers, both businesses and

individual. I spoke to David

Vos about what had been

achieved earlier this evening.

Welcome to Lateline

Business. Lovely to be

here. You've had just over five

years as the first inspector

general of tax, how has the

taxpayer benefited from

this? From the beginning, I

sought to make this a role to

represent taxpayers in dealing

with issues with the Tax Office

on tax administration. So what

I've done is not use this as my

own hobby horse, but to take

issues that have been raised by

the community, take to the Tax

Office, seek to then put recommendations to the

Government for change. And in

that time there's been over 100

recommendations accepted by the

Tax Office of 109 total

recommendations. 'Cause there

was a fair amount of scepticism

when you first started, wasn't

there? A number of the

accounting bodies a number of

the legal bodies, thought that

there was already enough

scrutiny of the Tax Office.

There was initial scepticism by

quite a few bodies and within a

very short space of time I was

able to win them over to see

that this was a role of some significance. And the Tax

Office has become more

accountable as a result? You

were actually able to go in and

look at the Tax Office's

records, weren't you? That's

correct. One of the greatest

benefits that was in the

architecture of the legislation

was to provide me with the

power to have full and free

access to the Tax Office's

records and there was a

provision in there that said

that if I asked the

commissioner or any other tax

official for information and

they hadn't provided that

information within a reasonable

time, they'd committed an

offence. That offence, six

months in jail. At times the

relationships might have seemed

a bit strained, but that was

expected, you know. I'm taking

head on to the commissioner,

issues of some significance and

it's going to cause a deal of

anguish by him and some of his

senior people. What has been

done, in particular, to improve

life for business and for

SMEs? I think the area of

auditing, the commissioner now

has to establish up-front what

his target is of particular

issues he's going after, set

out a work program with the

taxpayer, get in, get out. If

there's no issues there he's

got to pull the plug and move

on and, I think, the other

thing that's occurred is that

far more transparency about

what he's doing than what might

have been in the past. It's

been more in the area where one might argue that the

commissioner probably shouldn't

have been there in the first

place, but through a

misunderstanding of facts or

not understanding the business

well enough has sought to dig

his position in to that

particular taxpayer and then

after a while realised he shouldn't have been there and

then after hundreds of

thousands of dollars of

accounting and legal fees and

often a huge amount of

disruption to the business, he retreats. So originally this

office was not going to be

continued, was it, by the Labor

Government? No, from March '07

it was Labor policy to abolish

the role once they came into

government. The Government

decided to do a 180 degrees and

keep the role intact as is.

That's been my crowning glory.

That is justified what I was

about from the beginning. But

the role is intact, but they've

let you go, haven't they? Why

have they done that? You'd have

to ask the Government that. That's an issue between the

Government and Treasury. I've

not been reappointed. Is this

associations with the past,

perhaps? I don't know, you'd

have to ask them. Looking

forward, what about the Henry

review, is there any role for a

submission to that? Probably

not, but Treasury and

Government and parliamentary

committees have approached my

office, my office of the past,

the inspector general let's

call him that, and sought views

on changes or xroe.s to tax

administration. So --

improvements to tax

administrations. So I'm sure

the Henry committee will

probably be seeking the views

of the inspector general in an

informal sense. Should they

have included GST? I'm not

going to go there. That's an

issue of politics. The third

largest tax - let others make

that decision. Alright David

Vos, thank you very much for

coming in and talking to

us. It's a pleasure. This week

we're presenting a ground-up

look at the financial crisis.

Four businesses, four sectors,

four States, and we bring in

experts to assess the

challenges, responses and the

way forward. Reporter Scott

Alle has prepared this special

series for Lateline Business.

For companies like SPOS in

the front-line trenches of the

economy, the squeeze is on. A

supplier of point of sale

display units to 3,000

retailers ranging from

Woolworths to small suburban

stores it's already coping with

a sizable falloff in business

activity. We're preparing for

the worst, with a good focus or

a hope - and I know hope is not

a strategy - but we are hoping

that the downturn will not be

protracted. It's David Evans's

responsibility to steer the

business, with a turnover of

$22 million and 60 staff

through the highly challenging

operating environment in the

months ahead. I think the first

thing is not to panic. You

need to be confident around

what you're doing, stay close

to your clients and make sure

you deliver and provide them

and understand their current

conditions, to work with

them. Mr Evans is expecting

SPOS's 20% growth over recent

years to be pared back to 5%.

He and his management team are

working on reformatting aspects

of the business with an

emphasis on new

technologies. We're investing

in interactive platforms which

we think are the future for

retailing and we'll continue to

invest in those activities. The

company's located in Sydney's

northern suburbs. Already some

firms here have had to reduce

staff but coffee van owner

Wayne Churcher says his clients

aren't ready to forego their

morning caffeine hit. We

haven't had dropping off at

all. Back at SPOS, management

is looking to protect profit

margins as well as cash

flow. Ways to identify

expenses, parts of development

projects, maybe slowing them

down. That willingness to be

flexible and adapt to

challenging conditions experts

say will help a business

prosper in these tough times.

We asked business consultant

Sue Prestney for her tips to

aid SPOS to ride out the

downturn. It looks like SPOS

are doing a lot of the right

things in an uncertain economic

climate. If David is aware of

how his customers are going, he

will have a better idea of

future demand and a better idea

about how much stock to order.

Because in my opinion, the one

critical thing that can bring

down a business in this climate

is overstocking. David talked

about ways of identifying

expenses involved in projects

and this is one way of

analysing what costs are

discretionary in your business

and what costs you're stuck

with. Everyone should be

monitoring their cash flow very

regularly if not on a weekly

basis, even on a Dally basis

and projecting forward over the

next few months so they can see

where problems are going to

arise and where they might be

going to overstep their

facilities. That enables them

to go and talk to their bank in

advance if they look like

they're going to need more

support. Now a look at

tomorrow's business diary.

A look at what's making news

in the business sections of

tomorrow's newspapers:

The Dow Futures are up 184

points or 2% and in London the

FTSE is up 2.5%. I'm Ticky

Fullerton, goodnight.

Closed Captions by CSI

EXOTIC STRING MUSIC LIVELY MIDDLE EASTERN MUSIC For many years, I travelled between Australia and Palestine

but the Palestinian leader, Yasser Arafat, had never figured greatly in my life. Then, in September 2003, I woke up in the middle of the night convinced that he was about to die.

Just a week later, the Israeli government threatened to assassinate him. I had a feeling this was a story that needed to be told and I soon found myself travelling to Arafat's compound in Ramallah. (Men speak Arabic)

The last time I was here in the compound I was training Palestinian journalists. One of my former students, Muhammad, is now working for a major news agency and he's offered to help me get an interview with Arafat. Today he's going to introduce me to the president's right hand man, Nabil Abu Rudeineh.

I pressed hard on your issue considering the interview.

OK, we'll see you. Looking around the compound, it's hard to believe the Palestinian leader has been imprisoned here

for the past 18 months. The compound, or Mukata'a, as it's known, has come under attack by Israeli forces three times. They've blown up every building except for the one housing the president.

For Palestinians, the compound has become a symbol of resistance. Ever since the latest Israeli threats against Arafat, they've been coming to show their solidarity for the man they call Abu 'Ammar.

CHEERING AND CHANTING

APPLAUSE I've always had mixed feelings about Arafat but I can't help being swept up by the euphoria of the moment. I'm moved by his obvious love for his people and by their love for him. Arafat's devoted his entire life to putting Palestine on the map. For these people he's a father figure, the only leader they've ever known.

Arafat is a supreme survivor. For more than 40 years he's survived many battles and countless assassination attempts.

Arafat's instincts have ensured he has outlived most of his comrades. But now he's 74 years old and in frail health and life in the compound is taking its toll.

After waiting a week, I decide to track down Nabil Abu Rudeineh. I catch him during his morning walk but there are other journalists also wanting to ingratiate themselves with the president's right-hand man. Nabir asks to see my interview questions but tells me not to hold my breath. He says Arafat has given few interviews in recent months since being sidelined by the US and Israel. It seems his minders are reluctant to have him answer questions from the media or from little-known filmmakers. We will be in touch by phone, if there is anything we will be inside. But we have a flight tomorrow to Poland. I'm sorry to do that.

Sometimes people come from... WOMAN: China! ..Australia and until now we can't arrange... We'll wait today. We'll wait here. For nothing. If you are waiting here you waste your time. You can do something else until we find time for you. Only ten minutes. We can wait many hours. Special for you. Ten hours. And Mr President would say, "Yes, I have ten minutes." OK, they are ready. We'll be ready. Until now, we don't arrange it. If we succeed to arrange it with the President to have this meeting, we do. So, what's next step? Next step, if we have time, I call you back. (Woman laughs) It's very optimistic. Why are you laughing? This is a situation. This is what I can address... My friend Muhammad is helping me rewrite my questions

for the interview to meet with Nabil's approval. We've been told that the list I submitted earlier was silly. OK, we have to rush now. They're asking us to go. 'Bye. Muhammad advises me to steer clear of personal questions and, instead, focus on the derailed peace process. I'm sure there are other journalists like me who want to give him the opportunity to actually express his point of view. Yet, they're scrutinising questions which are really harmless and neutral.

It's like they're doing themselves a disservice. I don't understand it. It's basically, I see it as the one who would like to go to the next stage and he shot himself in the leg. How he will get to the next stage? That's bizarre. Do you think he should get new advisors? Well, um... ..this is Arafat, you know. He can't change one of his senior... ..from the close circle of Arafat was told to me, "I bought him two suits. Two new suits. Just to change." He refused to put them on. He does not love change.

Ali Sawafta is Arafat's press secretary.

The next day, I finally get a phone call from the compound telling me Arafat may be available for an interview. The soldiers look tense and they don't seem to be expecting me.

He has lots of, basically, arguments and disputes with Arafat.

Mmm-hmm. Yeah, that's right, yeah. I'm surprised to see an ambulance arrive at the compound and I wonder if it's for Arafat. MOBILE PHONE RINGS

Rumours begin to spread that Arafat might be sick and it doesn't take long for other journalists to appear on the scene. Hello. Yes. REFLECTIVE STRING MUSIC

The next day, I'm told that the normal schedule at the compound has been suspended. Two days later, Arafat's personal doctor and medical specialists from Jordan announce that he was sick but now he's better.

They say he had a stomach flu.

Despite what his doctors are saying, there is speculation that Arafat has been poisoned. For almost a week, he's not well enough to appear in public again and I return home to Australia without an interview.

It's ten months later and I've returned to Ramallah. This time I'm determined to get an interview. It seems it's not only Arafat who's under siege now. Ramallah itself is virtually cut off by a massive wall that the Israelis say they've built for their own protection.

MARCHING BAND PLAYS

I've arrived on Arafat's 75th birthday but it doesn't seem like there's much to celebrate. His own security forces have started to challenge his authority, accusing him of nepotism and corruption.

But Arafat looks determined to stay in control.