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(generated from captions) already on death row. The ABC's Geoff Thompson reports

from Denpasar.

There are precious few choices

left available to the six

Australians now on death row

inside Bali's jail. Scott Rush's lawyer has been

discussing the options with his

client. I feel that he's very

shocked. That's why as his

lawyer I already and always

hope that he will be

stronger. Scott Rush's case

particularly has caught the

attention of Indonesia's legal

minds, who have labelled and

decision an absurd and

inconsistent mistake. He should

get the kind of penalty that

the others are getting. All of

the Bali nine, with the

exception of Renae Lawrence,

now have the right to pursue

judicial review. Not all will

have their applications

accepted, but none have

anything to lose except the

expenses involved. They have a

better chance with different

judges than they do of being

granted a presidential

pardon. We have no experience

of President Yudhoyono's

approach to these issues. We

do know that he is very tough

on drugs. Martin Stephens's

lawyer says the Bali nine don't

stand a chance. This particular

President has never given any

pardons, especially in his

campaigns against drugs. No

pardons to date either for

convicted terrorists. But

arguably, light sentences.

Bomb-making apprentice Khalid

Sheik Mohammed was caught with

a bomb in his bag but received

18 years jail. He was

terrorist conspiracies which convicted of being part of the

led to the deaths of 20 people

in triple suicide bombings in

Bali last October.

And now to the weather. Rain

yooirfg And that's all from us

for this evening. Tonight's

interview with Senator Bob

Brown can be replayed on our

website. You can also download

individual stories or play back

the entire program from the

site, which also contains our

archives and transcripts of our

major stories. Maxine McKew will be with you tomorrow

night. Please join her there.

For now it's over to Lateline

Business with Ali Moore.

Tonight - Coles Myer under

pressure to justify its

rejection of a takeover bid.

The Bank of England holds

interest rates. For those that

try, say well of course growth

is slowing, we're bumping up

against the ceiling. We've

hired almost everyone who's

willing to work. We're using

all of our capital. In other words growth is slowing not

because people don't want to

spend, but because we can't

produce anymore output. Today's unemployment numbers

had little impact. Both the

All Ordinaries and the ASX200 closing marginally lower. In

Japan the Nikkei was well down,

the big loser Sony after

production problems with its

latest PlayStation and laptop

batteries. Hong Kong's Hang

Seng fell almost 1%, lower

crude oil prices dragging down

the oil sector. And New York,

of course, opened shortly with

the Dow at last night's close

of 11,406. To London now,

where markets are well into the

day's trade. I spoke to Tom Hougaard, chief market

strategyist at City Index a

short time ago. Tom Hougaard

thanks for talking to us. The

FTSE is down a fair bit this

morning? It certainly is. That's probably the result of

the selloff we saw in the

Nasdaq and in particular, the

S&P 500 last night. It's

simply a follow-through from

uncertainty in particular last night. Also we had some

areas. For example, the online

betting saga in the US seems to

have taken its toll on certain

battling around at the moment. stocks. There's a few things

That's causing the investors to

sit on the sidelines rather

than stepping up to the

plate. That online betting saga

you refer to, there's been

another detention of an online betting detention in the

US? That's the party gaming

manager was detained in the US

and as far as I'm concerned

from the news wire there hasn't

been any charges pressed

against him, but of course,

this follows after the previous

saga we saw a couple of months

ago with betting on sports who

was suspended. He's out there.

This is a FTSE 100 company. At some point it was down more

than 20% during the day. It's

just down 6%. But, of course,

this is such an industry which

is attracting a huge amount of

speculation, because we all

know that sooner rather than

later the US is probably going

to succumb to modifying their

law that has been in place

since 1961 and I personally

think that this is just a

question of time and I think

investors are liking being in

it, but they have to succumb to volatility. The Bank of England

have decided to keep interest

rates on hold? The Bank of

England decision to keep rates

on hold was largely expected at

4.75 percentage points. There

hasn't been an accompanying

statement, but in the light of

inflation that we're seeing not

only in the UK but also in the

US and elsewhere with rising

commodity prices, we think it's

just a question of sooner

rather than later before we're

going to see another 25 basis

points to the upside taking us

up to 5%. That's probably

going to happen at the next

meeting. At least that's the

speculation. Once interest

rates are rising that tends to

put a dampner on the demand for

shares. And finally very

briefly, what's the outlook for

New York to want? Of course

yesterday it was all the focus

on labour costs? When I got in

this morning we were calling

the Dow down 6 points. We're

calling it down 20 points. It

could be a largely flat day

until we get going. But we've

improved a lot over the last

few hours. Tom Hougaard thank

you very much for your

time. Thank you. Back home,

and Coles Myer is under

pressure tonight to justify its

decision to reject the $17

billion takeover offer led by

private equity group Kohlberg

Kravis Roberts. At $14.50 a

share it's nearly 40% above

where Coles Myer stock had been

trading before the bid, and

many are wondering how the

company will be able to

generate that type of value

without a takeover. Andrew Robertson reports.

For Coles Myer, its shares tell

the story. Trading below $11

when the takeover bid was

revealed and then soaring

nearly 40% to $14, still well

short of the $14.50 that's been

offered and according to retail

analyst Peter Ryan, that's the

dilemma. A win that's actually

had an effect of lifting the

share price up to its most

recent high and you're knocking

that back, you've got to have a

good story coming behind it

about what your growth

opportunities are to take it

beyond that value. And it's the

lack of a good story that's been keeping Coles Myer shares

depressed with the market

unimpressed by John Fletcher's

strategy announcement a few

weeks ago. However, Tony

Pearce who works for one of the

world's biggest asset managers

is backing the Coles Myer board

saying he's happy to be overweight in Coles

shares. We've spent a lot of

time looking at the company, talking to the management and

John Fletcher and we think all

of his plans he's delivered on.

We're confident. We know that

you can't achieve the

rationalisation of the

warehouses, the IT supply chain

implementation - it can't

happen overnight. Tony Pearce

believes that's part of Coles

Myer's vulnerability - it's a

stock that needs a long-term

view. You've got private equity

obviously being able to offer a

decent price now, which is

30-40% above recent prices and

Coles promising, or about to

promise to deliver profits that

will probably be considerably

higher but two or three years

away. The pressure is well and truly on the Coles Myer board

to justify why it rejected the

Kohlberg Kravis Roberts

takeover offer and to

demonstrate how it will lift Coles share price without the

takeover. At the same time,

the board has to develop a

strategy to rep el the bid.

James Jacobs is head of mergers

and acquisitions at leading law

firm Minter Ellison and thinks

KKR's need for a friendly transaction might save Coles

Myer. They need to do transactions which will take

them from nothing or almost

nothing to 100%, and the reason

for that is that private equity

bidders usually have a lot of

debt in their bid vehicle.

They'll put some of their own

money in but borrow a lot from

the bank. They need access to

the target's cash flow to pay

the interest on all that

debt. And if Coles Myer does

successfully rep el its

predators the big danger is its

share price will crash and that

in itself has dangers in the

form of angry shareholders

looking for revenge. If it's

subsequently found that the

reasons why it was rejected and

recommended against did not

have a proper basis, then that

could provide an instance for

shareholders to take action. A

bit like the GIO case in which

a bid was recommended against

and statements were made by the company and the directors and

the auditors. That case

settled but in effect,

shareholders did recover

against all of those

parties. For Coles Myer, the

next crucial date appears to be

Thursday 21 September - the day

it releases its annual results.

What adheres that day may

influence Kohlberg Kravis

Roberts to either up its bid or walk away.

On the topic of takeovers the Federal Treasurer Peter

Costello today released a draft

bill to restore the power of

the takeovers panel to block

takeovers with clearly

unacceptable outcomes. Mr

Costello says the bill once

enacted, would ensure the panel

could continue to act as a

primary forum for resolving

disputes during takeover bids.

Well the big economic news of the day was the employment

figures. As you heard earlier,

employment rose by almost #

23,500 in August, most of that

full-time jobs. Though with

more people looking for work,

the unemployment rate also

edged higher. The jobs figures

add to the picture drawn by other data this week and to see

how it fits together I was

joined in the studio earlier

this evening by Chris Caton

from BT Financial Group. Chris Caton thanks for coming into

the studio. A record number of

Australians either in work or

looking for it - what does that

say about the strength of the economy? It says certainly that

the labour market is strong. People are confident that

they'll find a job. So they've

either already got one or it's

true, they're out there

looking. The labour market is

clearly quite strong. But if

you put these labour force figures together with yesterday's weaker than usual

GDP. We've had strong housing

approvals and credit expansion,

it seems like a complicated

picture? It's a mixed picture

and we saw the growth figures

you mentioned. Yesterday we

found out in the last year the

Australian economy's grown Bibi

a little lower than 2%. That's

lowest growth rate with the

recession in the 1990s, with

the exception of when we

introduced and GST. Growth

measured that way has clearly

slowed and yet we've got a lot

of jobs groe. How do you

reconcile these? You probably

can't completely but those that

try say of course growth is slowing, we're bumping up

against the ceiling. We've

hired almost everybody who's

willing to work. We're using

all of our capital. In other

words growth is slowing not

because people don't want to

spend but because we can't

produce anymore output. That's

bad for inflation. You get

wages pressure, if you can't

find enough people? The Australian economy is operating

at such a level that yes,

inflation pressures do seem to

be increasing and, of course,

we've had on impetus provided

to inflation from oil et cetera

and the news we got in the national accounts yesterday on

the inflation side was a little

heavy. Yes, the Reserve Bank is clearly worried that

inflation se at or close to the

top of their target range and climbing and they should be

worried. If the economy's

slowing more because it's

running out of capacity, it's

running out of people than

anything else, what does that

mean for interest rates? Well -

that of course is not the only

thing the Reserve Bank will

consider. If we do get another

rate rise in Australia it'll

almost certainly be in November

after the next consumer price

index. Are you tipping one? I'm

sitting on the fence at the

moment but I will get off it

before November. It really

depends on what we find out

between now and then. About

things like retail sales

building approvals, importantly

about credit growth which is

still very strong. About

inflation and we'll get to know

the CPI before then. And also

about the rest of the world,

particularly the United States.

We're very much hostage to what

happens overseas and there's a

chance that we'll see a

significant slowing in growth

in the US, even in the next two

months and if that comes

through then that rate rise may

disappear or rather, be

postponed and then we may get

it later or we may never get

it. I think perhaps the best

thing to assume is there's one

more rate rise out there. That

should be enough. With that economic background what does

it all mean for profit growth

and indeed equities? Well it's

complicated. Profits growth in

Australia has been at a record

high, a record share of total

income, but it's no longer

increasing that share. Growth

in profits has clearly slowed

already and is likely to slow

further. Profits growth in the

past year or so has been almost

solely in the financial and

resource sectors. Costs are

going up and they've been

unable to pass these price

increases along. Their profits

are in a sense being squeezed.

We will get profit growth over

the course of the next year,

but say 6 to 10% rather than

the 25% we've been used to in

the past couple of years. What

does that mean for the market

then? If you look at the All

Ordinaries over the past couple

of months it's gone nowhere, up

one day, down the next. What's

the outlook? The All Ordinaries

has been going well over the

past month. Two reasons.

First of all, international equity markets have been

recovering and secondly we've

had a bit of a push-along if

you like ever since this new ne no more no-one private equity

money started sniffing around

for companies like Coles Myer,

for some companies like Suncorp and for the benefiter's et

cetera. That's given us

impetus. How long will that

factor last and what hand will

the world deal us? I suspect

that the Australian market

continues to rise from here,

but at a far slower pace than

we've been used to the past

three years. Stay in there but

don't expect the massive returns can experienced over

recent years? I think that's reasonable. Chris Caton thank

you very much for your time. My

pleasure. To Victoria now and

a Melbourne judge has been

asked to stay permanently

Westpac's case against Steve

Vizard's former bookkeeper. Mr

Vizard was in the witness box

again today, where he

repeatedly failed to recall the

purchase of expensive artworks.

After a fourth day in the

witness box, Steve Vizard made

another hasty retreat from the

media spotlight.

REPORTER: A relief for all that

to be over? Yeah, I can spend that time with my

daughter. What are you doing

for a living these days?

Is Spending my time in

court. At the businessman and

television comedian has

finished giving evidence

against Roy Hilliard. Westpac refunded the money to Vizard

and now the bank wants Hilliard

to pay it back. But Vizard's

testimony has cast a cloud over

Westpac's case. In calling for

a permanent stay of

proceedings, counsel for Roy

Hilliard, Peter Hayes QC says

Steve Vizard has repeatedly

refused to answer questions.

Peter Hayes argues that makes a

fair trial impossible because

his client won't be able to

claim privilege against self-incrim nation. Peter

Hayes told the court the case

will Boyne down to Vizard's

word against Hilliard's but the

defence has never been allowed

to question about tax evasion

or perjury. They claim their

client was acting under advisory from Vizard. Steve

Vizard accepted his signaturure

appeared to be on a letter to

Westpac in August 1991 allowing

Roy Hilliard to buy shares

through two stockbroking firms.

But Mr Vizard couldn't find any

limits in that letter on the

dollar amount s that Roy

Hilliard could approve. When

asked if he knew that Roy

Hilliard signed countless

cheques for more than $10,000

in the 1990s, Steve Vizard

replied, "I can't turn my mind

to it. " And he repeatedly

failed to recall the purchases

of expensive artworks. The

case resumes tomorrow when Roy

the stand. Hilliard is expected to take

And now to a very different

story - the world's developing

nations have a new weapon in

the fight against tariffs and

subsidies distorting world

markets. The answer is

competition, and it's coming

from the poorer nations which

are now producing food at a

faster rate than ever. Brigid

Glanville reports. For decades Ethiopia has been better known

for its lack of food rather

than its ability to produce it.

But that's now changing and the

poor African nation is the

world's largest exporter of

green beans. The beans are

sold in supermarkets around the

world and they're cheap. But while globalisation means

cheaper food for everybody, it

doesn't necessarily benefit

Australian farmers. Some people

are going to lose. They're going to be facing increased

competition for the products

they produce and so they'll be

concerned about that increased

competition. But on the

consumer side rather than the

producer side there's concerns

people may have about whether,

for example, the food that

might be imported is safe or

made in ways that they would

like it to be made. Economists

from around the world who

gathered at a conference in

Australia recently welcomed

globalisation because it's

allowing some poorer nations to

become economically viable. 10

years ago, India was a poor

communications and could soon nation. It's now a hub for

become the world's largest

processor of dairy products. In

the case of Peru, for example, it's from virtually nowhere in

1990 it now supplies more than

one-third of the world's asparagus. But there are

concerns about how quickly

globalisation is happening. As

you'll see an increased

movement of supermarkets into

the domestic supply system.

Small families -- farmers less

able to negotiate contracts

with the supermarket chain for

supplying them with fruits and

vegetables et cetera. Both

sides of the debate agree all

small farmers around the world

and their economies would

benefit if governments - rich

and poor - improved

infrastructure to help

transport goods around the

world. Some economists say the

globalisation of food will put

pressure on countries such as

the United States to reduce

subsidies and tariffs, because

if they don't, they won't be

able to compete with the

cheaper produce that's now

being grown in developing

nations such as Peru and

Ethiopia. The last chance for

countries to agree on free

trade failed at the latest

round of free trade talks. Kym

Anderson from the World Bank

says this will change. They'll

give it up mostly because it's

going to benefit their own

their own economies some economies. Of course within

farmers would lose out, others

would gain and it's a question

of getting that balance right

politically. But any hope of a

revived Doha round of trade

talks seems a long way off.

Trade ministers will meet in

Cairns later this month to try

to restart that failed Doha

round of trade talks, while

relations between WTO members

may be strained, the

relationship between Australia

and India is thriving. Two-way

trade is worth more than $8.5

billion a year. Sue Lannin

reports. Like a Bollywood movie, trade relations between

Australia and India are looking

rosy. India is Australia's

sixth largest export market and

Australian exports are growing by about 30% every

year. Exports around $7 billion

and there's 1500 Australian

businesses exporting to India

now. It's a real up and comer

and a chartbuster. In fact,

total exports to India came in

at $7.3 billion last financial

year, with two-way trade

measuring $8.5 billion.

India's growing middle class is

fuelling the demand for

Australian exports. In 2005

Australia sold nearly $3

billion worth of gold to India

- the largest single export.

While India has joined China in

hungry eating up Australia's

resources, the selling of uranium has been mooted,

there's been an increase in the

export of services such as education, as well as more

foreign investment. For a long time because of economic nationalism India was close to

foreign investment. A) lot of

the sectors, particularly mining, Australian mining companies couldn't get in.

It's important that we have the

capacity to deliver for the

future. But doing business in

India can be difficult. It has

some of the highest tariffs in

the world on imports. Earlier

this year, Australia and India

signed an economic and trade

agreement but there's no sign

yet of a free trade pact. Tim

Harcourt's job is to encourage

Australian businesses to look

overseas, so it's not

surprising that he's optimistic

about its prospects. More and

more I think under the present government you're going to see

more and more liberalisation

and deregulation of the Indian

economy and that's good news

for Australia. Australian firms

are also moving into retail.

With coffee house Gloria Jeans

opening outlets in India and

basketball star Andrew Gaze

opening a clothing

franchise. India is getting

good press globally but we've

still got a big job to sell it

to potential exporters in

Australia. Like a Bollywood movie, despite some rough

patches, he hopes everyone will

live happily ever after.

Sue Lannin reporting. From

trade to sugar and bad weather

in Queensland looks set to

reduce CSR's profit this is

year. The company has revealed

it's unlikely to meet its

previous forecast of 10%

growth. The unseasonably wet

weather has suppressed the

sugar content. Prices have

fallen by around 25% since

July. CSR, Australia's biggest

sugar producer, did not give a

new forecast. Its shares lost

30 cents or 9% on the news.

-here's a story you might be

interested in. Australians are

apparently missing out on more

than $8 billion in unclaimed

superannuation. The

administrators of Ausfund, a

special fund which looks after

unclaimed cash, is trying to

reunite the money with its 4.8

million owners . It's

targetting 14 to 25-year-olds

in a special campaign starting

this weekend. Ausfund says

workers in this age bracket

tend to be more mobile,

changing jobs and addresses and

strange as it may seem, can

forget about their super

contributions.

Well tonight's profit news now.

Babcock & Brown partners has

reported a loss of more than

$16 million after lower than

expected revenue. The company

invests in wind farms around the world including in

Australia, the United States

and Europe. Chief executive

Peter O'Connell says delays in

the purchase of wind farms in

Spain affected earnings.

Babcock & Brown wind partners

floated on the Stock Exchange

as an arm of investment firm

Babcock & Brown. Despite the

loss, the company's shares rose

5% today after it upgraded its

contribution guidance for 2007.

To more detail on the markets

now and fundamental manager

IOOF Holdings charged ahead

again today adding another 4%.

Also bucking the market trend

was publisher John Fairfax.

Its shares rose 2% and Symbion

Health went higher after it was

named by the Federal Government

as one of five companies that

could tap into a $150 million

fund to distribute affordable

drugs to people in remote

areas. With crude oil prices

bouncing off a 5-month low,

Australian energy stocks

suffered. Santos fell 1% after Australia Pipeline Trust

launched legal action over the

unwelcome appearance of Alinta

on its register, investors

pushed Alinta down 1.5%. And

after the rough night on Wall

Street for both BHP Billiton

and Rio Tinto, their falls were

not so great here, but enough

to depress the market. The Australian dollar has been

struggling to improve all day,

tonight trading around US

$76.18.

Now a brief look at

tomorrow's business diary. The

Bureau of Statistics releases

international trade data for

July. The ABS also has figures

for housing finance figures in

July. Southern Cross

Broadcasting delivers its

annual results and the new US

ambassador to Australia Robert

McCallum Junior will address

the American chamber of

commerce in Perth. A look at what's making news in the

business sections of tomorrow

's papers. The 'Age' focuses

on the changes to the takeover panels legislation. The

'Australian' looks at CSR's

shock profit downgrade and the 'Australian Financial Review'

says the skill shortage puts

resources projects at risk.

And that's all for tonight. As

I leave you the FTSE is down 53

points. I'll be back on Monday

with all the day's business

news and issues, but join

Maxine McKew tomorrow night for

a full business wrap on

Lateline. If you want to

review any part of tonight's

program you can visit our

website. we'd love to get your

feedback. Our email address is

on the screen.I'm Ali Moore.

Goodnight.