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) the stimulus, in terms of the

long-term infrastructure

projects are needed to improve

productivity in this country.

So look, irrespective of

whether we were in a recession

or not they're important

infrastructure initiates and

need to be carried through by

the Government. The G20

ministers resolve to maintain

stimulus packages until the

recovery are entrenched. The

Prime Minister and Treasurer have reaffirmed their

commitment in full, however

there are growing questions

about whether assistance is

still needed for the banking

industry. In particular, the

Government's offer to guarantee

the wholesale funding of

Australian institutions for a fee. I think at the end of the

day, the market really

determines whether there's a

need for a bank guarantee, and

at the moment we're seeing

3-year bonds around the same

rate whether they're guaranteed

or not and that's a pretty good

indication that the time is

coming where there is

confidence in the banking

system. Deborah Ralston is a)

director of the Melbourne

centre for financial studies

and also on the board of

Mortgage Choice, a mortgage and

home loan broker. She argues

the financial crisis has provided significant advantage

to the major banks in accessing

funds and attracting deposits, which has driven smaller

lenders out of the market, and

Professor Ralston doesn't agree

with Wayne Swan's argument that

Australia can't remove its bank guarantee before other

countries. I think the market

is starting to indicate that

our banks are doing OK and, in

fact, they could get by without

that guarantee. So whether

we're ahead of the rest world,

our banking system, and as the

Government has repeatedly said,

has stood up much better than

most banking systems around the

world. At the moment, Australia's four largest banks

are charged at half the rate of other institutions to get the

Federal Government's wholesale

funding guarantee. Professor

Ralston suggests the Government

should gradually raise the cost

for the big four banks as a

first step in phasing out the

guarantee. The G20 Finance

Ministers are adamant that

economic stimulus condition

need to stay in place, but in

Australia at least, the case

for propping up the economy is

continuing to weaken. The

latest evidence comes from job

advertising figures, which in

August showed their first

increase since April last year.

According to the ANZ Bank, the

total number of jobs advertised which includes newspapers and

the Internet rose 4.1%. ANZ

says it's a sign unemployment

is not going to peak at levels

currently forecast, and if that

proves correct, it will have an

impact on when the Reserve Bank

raises interest rates. If

labour market conditions do

hold up quite well, as

suggested by today's figure,

and particularly if the trend

continues in the ANZ job

advertisements data, then that

does suggest that household

incomes will grow more strongly

than previously expected and it

suggest s that consumer

spending could perhaps perform

more strongly in the second

half of the year. So that does

add to the case for an earlier

rather than a later rate rise. Official employment

figures are due out on Thursday

with economists tipping the

jobless rate will touch 6%. The National Australia Bank has

taken a 7% stake in Suncorp-Metway. The Brisbane-based company is

Australia's second biggest car

and home insurer and the fifth

largest bank. This year it

reported a 40% drop in profits

and a 10-fold blow-out in bad

debt provisions. NAB says the

holding was principally on

behalf of investors and not a

corporate or strategic stake.

Let's take a look at what

happened today on our local

market. Earlier I spoke with

Juliette Sarly of CommSec.

Juliette Sarly, the market has

pushed ahead today, but there

didn't seem to be much

conviction? That's right. We

did start the week in the

black, but not a lot of direction given that US markets

are closed tonight for the

Labour Day holiday. We saw

generally good movement coming

through from the financials.

All the majors except for

Westpac up by around 1% today

and good gains coming through

from Suncorp-Metway, up about

4% on news the NAB has acquired

a 7% stake in the insurer. The

big miners also managed to keep

their head above water. We saw

weakness from defensive stocks

today. Telstra and Woolworths

both down by about 1.5%. The

rural services company Elders

trading again today after

announcing an annual loss. A

37% drop in the share price, would you have expected

that? It's not surprising given

the hefty discount we are

seeing. Elders tried to tap

the market through a capital

raising. The issuing of the

shares will be at a big

discount of 15 cents each.

Given that profit loss on

Friday and the tap for cash, it's not surprising we saw a

big fall from Elders today. At

one point they were down as low

as 21 cents closing as you

mentioned down 37% to 24.5

cents. Elders looks like it's

doing everything to get back on

track. There's no suggestion

this capital raising won't be

subscribed and Elders expects a

strong recovery in 2010.

Hopefully a pick-up in the

short-term. Another capital

raising $300 million for the

drugmaker Sigma Pharmaceuticals, that seems to

have been well supported by shareholders? It certainly

does. Sigma seems to be

catching up to its peers here.

We've seen Primary Health and

Ramsay Health tapping the

market, and, of course, acquire

new assets. It looks good when

a company tries to balance its

books through the issuing of new shares but at the same time

go aggressively after assets.

Sigma certainly looking at

brands from Bristol, Myers,

Squib and this dig count isn't

too hefty, the issuing of

shares at $1.02. It looks like

it will do well for Sigma. The holiday in the United States

marks the end of the summer for Wall Street summer, what are

the implications there? It's

really back into the swing of

things now. It hasn't been a

challenge for the markets over

August. We saw a lot of Wall

Street take a holiday, but it's

all over now. It's back to

work and we will start to see

more scrutiny on the markets

and what companies are coming

out with. It's been a year

since we saw the collapse of

Lehman Brothers and, of course,

the government take control of

Fannie Mae and Freddie Mac. So

there's going to be a lot of

scrutiny as to how Wall Street

will perform over September.

We have markets down 13.5% from

where they were before the start of the economic downturn.

So September really is going to

get into the full swing of

things when we see markets open

again tomorrow night. The

week, though, fairly light on

economic data. All eyes on the

Beige Book which comes out

later in the week. Juliette

Sarly, thanks for talking to

us. To the other major movers

on our market:

Despite a change in government and the worst

recession since World War II,

Japan has emerged as a

lucrative source of business

revenue for Australian

companies. Trade with Japan

increased by 39% last year and

Australian companies have been

urged to take advantage of

cashed up businesses looking to

spend money here. Nicole

Chettle reports. Flying high

over Brisbane, workers show off

the skills that make this

company a leader in building

maintenance using rope access.

The owner saw a gap in the

market in Japan and formed a

joint venture there to train workers and save

lives. Obviously we're all

trying to recession-proof our

own business. People need to

look outside the box in these

tough times and distinguish

themselves by showing the world

what they have to offer. The

deal's worth around $500,000

over two years - a big boost

for a small business, and

despite the downturn, two-way

trade is booming, creating fresh opportunities for

growth. We had an increase of

39% in our trade to Japan last

year, it's been growing on

average 20% a year for the last

five years. A top-level

delegation of government and

business leaders have visited

Australia looking for ways to

boost partnerships with

Japan. Japan has something like

20 trillion dollars in savings.

It has a huge savings base and

we would hope that some of that

money would be looking at

investing in Australia, in

infrastructure particularly. Big ticket

spending is already under way.

Japan's among the major financial backers of

Melbourne's $3.5 billion

desalination project. The

Japanese trading companies in particular at the moment are

very cashed up in most cases

and they're looking for

opportunities in Australia .

Competition for this kind of

finance is massive. They are

looking for projects where not

only they have good return and

good partners, but they also

have to offer this kind of

environmental sustainability. For those

willing to take the plunge,

finding common ground is the first step for even small

operators to break into a

growing market. And in these

difficult times, Australian

companies are also having to

work harder on winning and keeping customer loyalty. In

fact, loyalty programs have

never been more popular. Don

Peppers is an industry leader

in direct marketing. He

invented what is known as

one-to-one business strategy

over 15 years ago. Mr Peppers is founding business partner of the Peppers & Rogers Group

based in Georgia and is visiting clients here this

week. I spoke to him a short

time ago. Don Peppers, welcome

to Lateline Business. Glad to

be here. How has direct

marketing responded to the

economic downturn? Direct

marketing is about information

and even in the worst downturn

imaginable, there are some

customers still buying, some

customers who are still loyal

and a direct marketer knows who

those customers are. Is the

focus on preserving your

existing customer base rather

than trying to grow your

customer base in these

times? In a downturn most

businesses do need to focus on

keeping their most valuable

customers, because that's where

the money is. It's really just

smart marketing. It's better

allocation of your

resources. Is that why loyalty

programs have become quite

popular recently? No. Loyalty

programs have become quite

popular, but I think loyalty

programs are indins pencible

even in an upturn. If you're a

re-Tayler for instance a

customer comes into your store,

they give you money, they walk

out, you don't know who they

are. You can't do customer-specific marketing.

You don't have the information,

unless you give that customer

some reason to hold their hand

up and say "Hey, that's me

again, I'm the same guy that

bought this other basket of

groceries back here". You've

been consulting to Woolworths, recently, should Coles be

afraid of its every day reward

program? Coles program is not

every day rewards. Should Coles

be afraid of it? Yes, they should be very, very afraid. Why? Because what

Woolworths will be doing is

they'll be offering... while

their competitor might be

offering every day low prices,

Woolworths will be saying, do

you know what, we have your low

price for the items that you

buy. We have your low prices

for the items you buy. They'll

say to different customers

different things. It's very

individualised marketing. It's

very tailored and the rewards

you can get are what? Well, the

rewards... you know what, the

rewards don't matter. What the

rewards are is an incentive for

the customer to hold their hand

up and identify themselves.

What really matters is that the

loyalty program allows the

store to collect enough

information to be able to

tailor the service for the

individual customers. So we're

not... you know, we never

recommend to a company you put

a loyalty program in place to

earn loyalty. You put the

loyalty program in place to collect information and gather

insight about your customers

and use that insight to create

loyalty. One of the rewards in

this program, though, is Qantas

frequent flyer points. Yes,

yes. Qantas seems to get something completely different

out of this. They get a direct

payment, don't they, from

Woolworths? You have to buy the

miles. But think of it as

currency. Really, a loyalty

program is like a mini economy,

you're printing money and

you're redeeming money. You

have both sides of the economic

system, but what you really get

out of it is a great deal of insight about the habits,

needs, preferences, wants of

your customers and that allows

you to better satisfy those

customers and that's the

pay-off of the loyalty

program. I was quite staggered

looking at the numbers of the

Qantas frequent flyer program,

they've got, from the year to

June their EBIT on the frequent

flyer program rose 142% to $310

million, that's compared to the

JetStar EBIT that year of only

$137 million. Well, that's not

usual. The advantage program

is worth more than American

Airlines operation. It's not

surprising they want to hang

onto it rather than sell

it? That's a business decision,

you know, and I don't comment

on that. That has to do with who the shareholders are going

to be. Does a loyalty program

suit a certain type of business

or a certain size of

business? It suits a certain

type of business. It's best

for those businesses that don't

have a natural connection with

their customers. For instance,

if you're an online marketer you don't need a loyalty

program. If you're a Telecoms

company, probably you don't

need a loyalty program because

you already have a direct

connection with your customer.

Even banking, even retail

banking they usually don't need

loyalty programs. They use

loyalty programs for something

else but they already get the

information they need. If they

do a good job they can already

track the transactions. But if

you're a grocer or a drug store

or a hardware chain or a petrol

chain, you can't participate in

the digital revolution without

a loyalty program. You don't

have a direct connection with

your customers, you can't get

it. Do you have, because we've

had some quite interesting

situations here about how far

loyalty programs can go and

still be on the right side of

the trade practices laws,

competitions laws, is that

going to be an increasing

problem? I can't speak for

Australian law, so I don't

know. In the United States,

our argument is that you need

to make your loyalty program as

open as possible, because the

whole goal of the program is

not to sell loyalty or buy

loyalty from your customers, it's to get information from

them, and the more they can

redeem their points outside

your system, the more you learn

about them. I've consulted

with airlines and said, you

ought to let your flyers redeem

the miles on any airline. That would be terrific airline,

you've already earned the

miles. How important today is

going digital, the whole online

space to direct marketing? It's

indice penceable. There's

going to be no non-electronic

direct marketing within 10

years, none. What's your

message to people in that

industry? Go digital, or get a

different job. Don Peppers,

thank you very much for taking

to Lateline Business. Great,

thanks. The winter sporting

codes are entering the business end of the season with the

finals this weekend. The

business of sport has been

tested this year with the

global financial crisis

restricting corporate spends,

but even with a pullback in

sponsorship dollars, fans have

rushed to matches and taken out

membership in droves. Desley

Coleman reports. It's tough

out on the field. Off the

field, the battle to keep the

dollars rolling in is just as

brutal. But like the

Australian economy, the

business of sport is proving

more resilient than expected. A

lot of our revenue is locked in

from TV rights and ratings on

TV which has gone very well.

Relatively low ticket prices in

this country have kept crowd

numbers up, and most of our

sponsors, we're doing a service

for them. We're delivering in

a cost effective way a way to

emotionally reach customers. At

a conference in Sydney, the

heads of Australia's sporting clubs and organisations

gathered to talk about how

their clubs are tackling the

financial crisis. The timing

of major sponsorship deals and

lengthy contracts have assisted

clubs. Netball Australia had

recently signed up with

ANZ. We've introduced over the

last two years the ANZ

championship and what that's

provided us with is a product.

It's very appealing, very

certainly appealing to

broadcasters and corporate

partners and we, I think, sit

under the big boys of sport and

so for us it's been actually

quite exciting because we've

been able to attract interest

from corporate partners. ANZ's

sponsorship budget has been cut

by around 10%. David Lynneberg

says while spending decisions

are tougher, aligning with events rather than individual

teams is paying

dividends. Netball is, in fact,

the number one participation

sport for women in Australia,

and so we really get a good

combination of branding effect

through the assortment of

eyeballs that we reach, but

also we have a great partner

that we work with and frankly

think we will continue to grow

together with. Luxury car maker

Audi Australia hasn't cut its

sponsorship budget, but like

the ANZ, it prefers to align

its brand with events rather

than individual sporting teams,

and while the bottom line

benefits of sporting

sponsorship is negligible, it's

the media coverage that drives

Audi managing director's sports choices. It's maybe the most

important part of our

sponsorship activities.

Sporting values and the Audi

values is a key value of our

sporting dynamic. Sport fits extremely

extremely well. For individual

clubs attracting sponsorship

dollars has required creativity

and that creativity is needed

even more so in the current

economic climate, and it looks

like getting even tougher. The

Federal Government is threatening to ban alcoholic

sponsorship of sporting events

and teams which would strip the

industry of $300 million in

sponsorship. I think clubs are

adaptable. While they don't

like to have too many restrictions can see the

writing on the wall, and the

ones that have been disciplined

and focussed have actually made

moves to take account of those

changes already. Fans are also

driving change and providing

new avenues to grow income

streams. Social networking

sites like Facebook and Twitter

are opening up more than just

the game day experience. This

professor says supporters want personal relationships with

their clubs. If you don't

really understand and do not

allow yourself as a strategic

manager to accept that you may

not understand, but it is a

different marketplace and

segment of the market that is

growing and increasingly

important, they are the

organisations that should

rethink their strategic

direction and their strategic

executive leadership. And the

head of A-League franchise

Perth Glory says the ability to

capture new fans is driving the club's expansion into the

social networking space. Technology and the

electronic media is a huge

opportunity for any sporting

code, especially with the round

ball game that we're involved

in. There's a fantastic

opportunity in the people that

we touch, especially the

8-14-year-old category and it's

arguably the biggest supported

support in Australia in that

category. The CEO of Rugby

League club Newcastle Knights

says the financial crisis has

forced the business of sport to

evolve. He joined the Knights

when it was in crisis, and says

after changing the club's

culture, his next biggest

challenge was winning back the

fans. I think we've got to

understand that we're more than

a Football Club, that we're

actually a business and we're

in the entertainment business

so it's about providing that

whole package. I think where a

club has gone wrong, or any

number of clubs is where they

lose touch with that support

base and lose touch with what

is their main purpose. Once

that's determined, I think that

there has been generally a

rallying around of the flag for

any club in trouble. That sentiment has been reflected

across the AFL and NRL, with

membership numbers up and

crowds at near record level,

and if last week's 3-year

sponsorship deal between the

Fremantle Dockers and mining

giant Woodside is any

indication, the business of

support is winning. A look at

tomorrow's business diary and

the NAB's business survey for

August is released.

A look at what is making news

in the business sections of

tomorrow's newspapers. The

'Herald Sun' looks at the

upturn in job ads, saying it

adds to the chance of a

pre-Christmas rate hike. The

'Australian' has a different

angle, saying the surging Australian dollar means

interest rates could go up as

early as next month. The

financial 'Financial Review' says seats have benefited

disproportionately from the

infrastructure program and

'Sydney Morning Herald' says

toll could face inflated

traffic forecasts. The FTSE is

up 1.61%, and the Dow has

closed, Wall Street closed for

the Labour Day holiday. If you

want to review any part of

tonight's program, you can

visit our website, where you

can watch the entire program

online or download it as a

vodcast. I'm Ticky Fullerton,

goodnight.

Closed Captions by CSI

wondered what makes Bruce. (Muffled voice) I've always that I know. He behaves like nobody else world that get to live a whole life There aren't many people in this to do, when they want to do it. doing pretty much what they want a very well-educated person That's why we've got and a very intelligent person a very cultured person. and in some ways, I'm not saying he's a psychopath, (Muffled woman's voice) or at least antisocial, in him. but there are elements of that person. You can't categorise him. He's a real bizarre eccentric Where Bruce is there's trouble. like these about my father I've been surrounded by comments my whole life. When I was growing up, and embarrassed by him. I was ashamed by my father And whenever anybody would ask me, do for a living?" "Oren, what does your father I would just make up lies. really distance myself from him. Then as I grew older, I started to to revisit our relationship. But now that I'm an adult, I'm ready who my father is. I want to see for myself my place here in Australia So I started packing up and spend some time with my father. and heading back to the States

This is my father's hideaway. when he needed to disappear It's been his sanctuary when he was in trouble. many times. And Bruce has been in trouble I've always tried to hide You see, the thing that is that my father is a criminal. He's an outlaw, to support a frugal lifestyle. and he steals just enough my whole life I've avoided coming here see this place my father calls home. but now I want to finally society at a young age. Bruce dropped out of mainstream for the American government He's always had a vehement disdain and most of its policies. that he would never pay taxes again. During the Vietnam War, Bruce decided normal job in over 30 years. And he hasn't had a so-called

and corporations. Instead, he steals from banks What's the topic of the day? Mm... Topic of the day... our relationship. ..is...let's talk about were just a wee tot? Starting from when you things that I don't know Yeah. You can start off by telling me because I was too young to remember. Hoo! You're assuming I remember those things... that Naomi tells me from time to time Yeah. I'm interested in this thing she was miserable, that she didn't want a baby, she was so angry and unhappy. she was smoking pot a lot because didn't know what to do And then I was born and she just and you basically took care of me and just freaked out about it

and the fathering. and did all the mothering Well, yeah. She did some things. I took up the slack. But whatever she didn't do, since there's only one of you. I didn't mind that It wasn't like twins or triplets so it wasn't that hard. and we didn't have any before you I was born in New York City in 1968. conservative middle-class backgrounds My parents both rejected their alternative movement of the '60s. and got swept up in the

We left Manhattan when I was three back-to-nature lifestyle. and moved to Vermont for a kind of Bruce's criminal ways My mother, Naomi, couldn't handle and after a couple of years, named Argenta. she left him for a bohemian artist Argenta was a Buddhist and he took my mother and me to live with the Dalai Lama in India. I was taken out of school for a year while we travelled around the world and eventually we settled in Australia on a spectacular 350-acre rainforest property. My mother and Argenta set up a Buddhist retreat centre and invited lamas and monks from all over the world. My two half-sisters were born on the property and this was an idyllic period in my childhood.

But that all changed when I was uprooted and sent back to live with my father in the United States. I was nine years old and I did that cross-Pacific journey alone each year for the next 10 years. My upbringing was full of contrasts as I was shuttled back and forth between the Buddhist retreat centre in Australia and road-tripping and scamming in America with my father. My mother taught me the lessons of the Buddha. My father taught me how to open fake bank accounts. I turned into a really sensible and diligent teenager. Going straight was my way of rebelling. (Giggles) You must've kept some of these photos here because I don't think I've ever seen this one. The ones that I've got - it's smoking a joint, but it's very posed but it doesn't look like it's being smoked.

This one looks like I'm actually taking a toke. Doesn't it really look like I'm taking a big drag?

Mm-hm. You might have been. Road trips were not the only kind of trips I took with my father. Bruce gave me a psychedelic mushroom trip on a beach in Mexico when I was 12 years old. He watched over me, and I felt perfectly safe and relaxed. Curious and fearless, I was experiencing my mind in a whole new way. I realised that there was more to my mind and to the physical world than simply what I saw in front of me. And this experience has stayed with me ever since. This is a photo of Fatima in Cuba when she was tripping on MDMA and you see that she looks very euphoric. Well, I've seen lots of pictures of Fatima because you continue to send me nude photos of her. A few is OK, but then I... I send them back and I say, "Bruce, don't send me, your daughter, pictures of your naked 23-year-old girlfriend. "I've seen enough." 27. 27...Yeah. But you were sending them to me when she was really young. And then, I know when you get my letter that said that, you just chuckle and go... (Chuckles) This is tobacco country here. Lots of tobacco. That's my mailbox, that big black one.

I don't like to put my name on it, just to keep things as private as possible. You know, it's pretty well stuffed. These are hungry letters. OREN: What's that mean? That means that people want money mostly. See, here's a bill for $2,000 from a bank. That goes in the circular file. These people want $943. Oh, this is alright. This is one of my bank statements telling me how much money I have. That's OK. Now, these people aren't so hungry. They just want $538. That's better. Better. Are you gonna pay it? (Sighs) I don't think so. Bruce was an expert at obtaining fake identification which he used to open bank accounts. He carried up to 15 separate aliases which I had to memorise during our road trips, so that if police stopped us I knew which name to use. And because our names didn't match,

or family friend. I had to pretend to be his niece This is my safe deposit box. What's in there? to make it seem... I cover it with straw ..a nondescript thing. Then I just dig it up. this is the security you have. So this is...instead of using a bank, You have to go there... Oh, yeah. A bank is no good. It's a lot of hassle. I have to go there too often. There it is, wrapped in plastic. Look how dry it is.

today? What are you getting it out for Just getting some ID. Pair of Diner's. There's a VISA. Check cards. that wasn't in there. I'm looking for another one It must be in this pile. On the road alone with my dad. This feels like old times. to see my grandmother, Ruth. We're on our way to New York of his mother a lot Bruce has been taking care these last few years. I haven't seen her in a long time. some new ID. I'm getting out...getting out and I've got a slight problem here. We're in Kentucky now baby warrant out for me. There might be a little I'm not sure.

we're gonna get some new ID out. But just to play it safe, It's in my sleeping bag.