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(generated from captions) the Cabinet and in the country,

we should use the money from

the Timor Sea to combat

poverty. How you do it? Two

ways. Line up everybody from

one end of the country to the

other and hand out cash. I'm

not going to do that. We have

to invest more in education, in

health. That is part of

development. We have to invest

more in infrastructure such as

roads, bridges and a new port

that we badly need, housing for

the poor. For centuries our

people don't have housing.

Well, the other day I was

telling my Cabinet we must

quickly develop a master plan

to build housing for the poor

of the country. For the

widows, for the veterans for civil servants and most people

agree with that. So in the

next few weeks we will do that

and also I have asked the World

Bank and IMF to advise my

government to review the entire

fiscal policy and tax system to

make it more attractive for

investors, both foreigners and

local. We have a cumbersome

tax system. We have a very

complicated bureaucracy and regulation s that really hamper

efforts to inject money into

the economy. So in the next

few weeks we might see some

significant changes in the way

we govern the country. One of

the problems obviously for

small countries handling large

sums of money in the past, and

plenty of examples of this, is

the corruption andm al

administration means these

large sums of money can be

frittered away. How are you

going to prevent that from

happening? Well, one thing I

call a party Congress in Dili

the other day talking to the

nation. I said, I Jose Ramos

Horta, I can accept any charges

against me aez an incompetent

Prime Minister, but no-one

would ever be able to accuse me

of stealing the money from the

people. So fighting corruption

is one of our priorities and

fair to say from my predecessor

Dr Alkatiri, he was also very

very serious on these issue.

At the top leadership level of

my country we are committed to

that. The important thing is

that we give incentives to the

civil servants so they don't

feel the need to steal $50,

$100 here and there to feed

their children. I took office I called in the inspector

general. He is the one who

conducts inspection into the

practice, the behaviour of

state institutions and the

government leaders and I told

him, "Don't waste time with

petty corruption of individuals

in the bureaucracy who have,

who might get $10 here and

there to feed children. Pay

attention to us, the big fish.

If there is corruption, serious

corruption it always starts

from those in power. We are

the ones who enable corruption

by closing our eyes or by

unfortunately being directly

involved. " If we in the

leadership level are tight in

this, we are able to prevent

Timor from falling into the

corruption trap of many other

developing countries. OK Jose

Ramos Horta you've just laid

out a plan for a number of years hence and yet you are

actually saying and said so

today on the 'PM' program that

you're not going to run for

Prime Minister in the election

next year. Are you serious

about that? Yes, I'm dead

serious about that. I'm an

individual, primarily with

sentiments, with feelings and I

sincerely believe that the new

generation of our country

should take the reins of the

government of the country. But

what if that new generation and

indeed the new party which you

are now endorsing and spoke to

very passionately not so long

ago, ask you to reconsider that

position and run as Prime

Minister, because they need an

experienced hand, not an

inexperienced young

person? Well, first I have to

say I am not involved with any party whatsoever - yet, at

least. I work with all of

them. I seek to support them in creating level playing field

for all the parties to have the

same chances in the coming

election, 2007. If - and that

is a big 'if' - in an extreme

scenario where out of a million

or so people in my country they

can't find someone else for a

president or for Prime

Minister, then I might - and I

emphasise " I might consider"

- I gave more than 30 years of

my life for the country to be

free. There are many, good

young leaders in the country.

I'm impressed with many of

them. People in their late

20s, their pos and after all,

what we, all the generation

have shown to them. Well, many

admire us for what they

achieve, but the recent crisis,

you know, is our responsibility

and should they continue to

trust us? They should be

courageous, have a chance, take

the leadership and we and President Xanana stand behind

them and give them a chance. Support them. That is my

preference. Finally I have to

ask you, are you preparing for

possible bad news from the UN inquiry? Are you worried that

political allies of yours? Are you worried that senior

military people that you've

associated yourself with could be implicated in the violence

by the UN report? Well, there

are some aspects of the report

I presume that will not

constitute news. The killing

of the police civilians,

civilian police elements in

Dili. That was in broad

daylight, everybody knows who

did it. That was done by the

military. The distribution of

weapons - everybody knows. On

the part of the government at

least one person acknowledged

that the former minister of

interior. But what is not

known is whether it is true or

not the allegations that Dr

Alkatiri actually directly or

indirectly was involved. I

doubt - I've said back then and

today I emphasise it again.

But the problem is that there

is a certain perception

readiness in the country to

judge a particular individual

in a certain fashion and if the

report turn out to be different

from their perception, that

expectation, that's when they

might be angry. But I hope

that all of us accept the

report with honesty, with

humility, because I believe the

report will be very enlight

enning to us about our

mistakes, the weakness of the

institutions including of the

United Nations and then let the

judiciary take its course. If

there are criminal evidence

against particular individuals

then let the prosecutor general

of the court do their job. We

are out of time, we could

probably speak longer on these

subjects. I'm sure others will

be talking to you about them

very soon. We thank you very

much for taking the time to

quick look at the weather. talk to us tonight. Thank you.a

tonight's interview with Jose

Ramos Horta will be on our

website shortly at our

website. You can also download

individual stories, view the

entire program and visit our

archives. For now it's over to

Lateline Business with moorl.

Tonight - why Internet giant

Google has spent over $2

billion on the video sharing

website YouTube and banking on

Asia - the world's leading

financial players woo emerging

markets in the Asian region. It

is the single largest profit

pool for personal financial

services over the next ten

years are going to be in Asia.

Straight to the markets now where Australian stocks rose to

a 5-month closing high with

both the All Ordinaries and the

ASX200 rising almost 1%.

Japanese stocks were also at a

5-month high shrugging off

fears caused by North Korea's

nuclear test. Hong Kong's

haeng recovered some of

yesterday's losses as investors

picked up shares in global

giants like HSBC. The Dow

opened shortly at last night's

close of 11,858. For the

latest from London we cross to Tony Tassell from the

'Financial Times' a short time

ago. Tony Tassell thanks for

joining us. London's up in the

morning session, North Korean

jitters not there today? We're

seeing markets have really

taken this fairly calmly.

We're seeing most of the North

Korea situation is fairly contained although we're seeing

a bit of geopolitical

uncertainty being priced into

markets. London's up about fairly firmly this morning

mainly on a bit of continuing

M&A bid activity and rumours

really. You talked about

takeover talk and, of course, Brambles the Australian company

is in the headlines again,

shares up once more? We're seeing Brambles here rise about

1.5%. It's been really a follow-through from what's

happened in Australia today.

We've had bid talk continuing

to surround this company for

quite a while. Almost any large industrial company at the

moment is being eyed up by the private equity houses and

General Electric has been

mooted as a potential buyer of

Brambles. That's had a strong

run today. On the commodity

front we've seen wheat prices up fairly dramatically,

certainly there's been a lot of

talk in this country about the

drought. You're watching that

as well? That's really making,

causing a lot of attention here

in financial markets. Wheat

prices have jumped by nearly

13% in the last two days.

They're up nearly 40% in the

last month and that's really

starting to must be having an

impact on companies and food

prices. It's really I think

been driven by the Aussie

drought that some of the forecasters are saying that the

wheat crop this year will be

less than half of last year.

We've got that at a time of a

very tight market for

commodities and wheat in

particular, with rising Chinese

demand and Australia's one of

the biggest exporters while it

may not be the biggest wheat

exporter in the world it

affects the pricing of wheat

around the world. If we look

across Europe now, we've had

the FTSE up this morning, has

that been reflected across the

continent? A strong morning in

Europe as well. Vodaphone has

been an interesting stock, up

nearly 2% today. There's been

rumours it might be closer to

selling its stake in a Swiss

mobile company. Outlook for

Wall Street, do you think we'll

continue to get more excitement

over the Google YouTube deal? I

think we'll definitely see the

Nasdaq open much stronger.

This is quite a good story for

M&A and the tech sector. It's

vote of confidence in what is

Internet business models.

YouTube has yet to make money

and they're paying more than $1

billion for it. I think we'll

see Nasdaq open higher and I

think the US is cautious after

much stronger than expected

jobs data last week which has

raised expectations that the

Fed may continue to pause. We

also have today Alcoa reporting

third-quarter earnings numbers,

the first and major S&P 500

company to report earnings.

That will be seen as a

bellweather for how the third

quarter seasons earnings will progress. Tony Tassell, thank

you very much.well, as we just

referred to, two young men in

their 20s are seriously rich

tonight after the Internet

search engine leader Google

bought their company for more

than $2 billion Australian.

And the acquisition of online

video company YouTube hands

Google the lion's share of an

area of the Internet which is transforming the future of

Telstra, as Scott Alle reports.

It is the Internet success

story of the past two years.

YouTube show cases everything

from the seemingly mundane. To

the serious, and the downright

bizarre. All posted by anyone

who can pick up a video camera

or has mastered a few simple

download functions on their

computer. They've got the

people, they've got people

looking at videos, spending

millions of minutes every day

looking at videos and they've

got the numbers up first. And

the numbers are the kind that

had media heavyweights like

Viacom and News Corp cozying up

to two Californian dotcom

survivors who started and

venture in a garage. Now 100

million daily click on to surf

a diet of material from network broadcasts to today's number

one, a kind of ek Lechtic

invitation to self-expression

on video. You can mime

something, you probably won't

win, but you can still send it

in. Is it worth $2.2 billion.

Many analysts aren't sure. Most

ov that is copy righted content

and the other is typically

overgrown adolescents doing

lip-syncing to 'I'm aye Barbie

girl'. We're sceptical that

Google needs to buy into this

market. YouTube has half of the

mushrooming video market and

with its existing search engine business Google will have close

to 60% of all Internet

traffic. Google had been trying videos and new applications

since January of this year and

they haven't been successful at

getting traction. Google is

interested in expanding their

business model. They need to

do more work in the media

section. Mindful of the demise

of NAB star which sank under

copy right issues Chad Hurley has announced distribution

deals. Soon the marketers

could be queuing up for the

Tube's delivery to fickle

Generation Ys and early

siblings. People will start to

incorporate product placements.

The book is yet to be

written. Fittingly Chad and

Steve posed to post their take

on it all. Two kings who've

gotten together. We're going

to be able to provide you an

even better service and build

even more incentive features

for you. Not bad for a couple

of guys who just wanted to work

out a better way to send a few

dinner party videos. Scott

Alle with that story. To

another possible acquisition

closer to home and takeover

target Queensland Gas has

rejected a bid from Santos

describing the offer as

inadequate and opportunistic.

In a statement advising

shareholders not to accept the

Santos bid of $1.26 a share the

founder said his shares had

traded above the offer price.

Separately Santos was put on

review for possible downgrades

by Moody's. The ratings agency

was concerned about the way

Santos proposed to use a debt

bridging facility. From gas to

banking and the high growth

rates and rising populations in

the Asia-Pacific region are

creating new markets for

financial services. Consumer

finance, mortgages and asset

management all provide

opportunities for the world's

banks and in Sydney today,

leading global financial

institutions were meeting to

discuss the advantages and the

risks in emerging markets. Sue

Frankelstreit reports. It's a

leading forum for the world's

banks and financial services

firms. Companies are spending

hundred of thousands of dollars

to promote their wares. More

than 6,000 people have attended

Sibos so far and emerging

economies are a major focus,

especially the Asia-Pacific. It

is the single largest profit pool for personal financial services are going to be in

Asia. The head of the Hong Kong

and Shanghai banking

corporation says the region is diverse and shouldn't be

considered a single entity. We

talk about Asia as if it is a

one piece of land mass but

actually there is huge

diversity as we all know and

really the only common theme in

Asia is that all the countries

in Asia-Pacific are growing

very strongly. And he says,

economies like Indonesia and

Vietnam as having great

potential. I was just recently

in Vietnam and I've been told

that out of a population of 82

million, there are only 6

million bank accounts and

indeed two years ago there were

only 2 million bank accounts.

So you can see how underbanked

that country is. I think the

question is, where do you begin

and how much capital do you

have to put into it and also

how many people do you have to

get into this game? That's sort

of the biggest challenge which

limits how much you can do at

one time. With economic growth

averaging 10% a year, China is

a favourite for investors. Corporation, constant changes

in government policy and limits

on foreign investment are

barriers. There's regulatory

challenges. How much are you

actually allowed to buy and

then what are you allowed to

buy? There's restrictions all

over the map. India is another

economy that is booming and being targeted by foreign

financial institutions. The

head of the Bombai Stock

Exchange says there are both

opportunities and challenges,

including the need for better

infrastructure. The government

has - I would say much more

needs to be achieved in a much

shorter span if India really

wants to become the financial

hub or the centre which it

inspires to be. Despite bomb

attacks on trains in Mumbai

which killed nearly 200 people

in July Rajnikant Patel

dismisses political

uncertainities as a curb on

investment. It has not reached

a proportion where it might

have a negative impact on the investment climate because

after all, the potential to

grow is much, much larger than

the potential to damage. While

it may be a volatile region,

investors think the risks are

worth the returns. Sue

Frankelstreit there. Well, one

Australian company with a

presence in many Asian

countries is the ANZ. CEO John

MacFarlane was at today's

conference and he was forced to

deny he's shipped and bank's

call centres to India. The denial followed newspaper

reports about the issue and

comment busy the Federal Treasurer and the

Attorney-General warning Australian companies about the

risks of sending customers'

personal information offshore.

The Treasurer saying banking

records can't be passed on

without consumer permission. I

spoke to the ANZ's John

MacFarlane earlier today.

Welcome to Lateline Business.

You've been speaking at the

regional financial services

forum. All of Australia's big

banks are interested in Asia to

varying degrees, but

realistically, how big an

opportunity is there? I might

make two points. The first is

that this conference here is

absolutely enormous and, of

course, it's actually show

casing Australia as a financial

centre and given this audience

here, this is precisely the

right thing to do. So that's

very important. But that then

leads me to the second point

which is Australia's done very

well if you go back over the

last 15 years of uninterrupted

growth and it's had great

performance right through from

the 50s but when you actually

look at what's been happening

to the OECD the growth rate in

the OECD peaked in the '60s at

4% and it's been declining

about 0.5% per decade ever

since. Whereas if you look at

the last few years in Asia the developing countries have been

growing very fast and at more

than twice the rate of the

OECD. So how big an opportunity

is there? There may be higher

growth but there's also higher

risk? At the conference I

showed a very interesting study

that said look, the growth rate

of China and the major Asian

economies relative to the OECD

was about three times the

growth rate of the OECD.

Whereas the risk was only twice

the risk, the volatility of

that growth rate. So in

essence that's still a very

good outcome. That's the risk

return ratio for China, but

there are so many different

countries and economies in

Asia, where's the biggest

opportunity? I think the

smallest opportunity to start

with that are in the more developed economies,

particularly for financial

institutions that are heavily

banked and, of course, Japan,

Singapore and Hong Kong would

be a good examples of that.

It's very difficult to break in sensibly and, therefore, the opportunity really lies in all

the other countries there and

starting for the ones that are

easiest first, but also putting

some investments down that are

further out. For example,

Vietnam or Cambodia, and I

think the secret is to have a

diversified portfolio of these

investments. Some will be good

at some times and some good at

others. That's way to control risk. Back home there were

claims in a Sydney newspaper

today that you've shifted your

call centres to India, not

so? It was a front-page story

showing our building in bang

Alor and headlining it as our

call centre in India. We have

no call centres in India. I

understand, though, the

sentiment that Australians have

about their data perhaps being

at risk offshore. That's not

the case with ANZ. These are

all ANZ people in Bangalore.

They're not a call centre.

development for our They're mostly doing technology

systems. That technology works

involves no access to customer details? It's mostly development systems not

production systems and they

don't have access to the production systems. Secondly,

the data centres are actually

in Australia. Now it's fair to

say that there is some access

to domestic accounts in some of

our offshore centres. For

example, one of our biggest

Australian companies in the top

five has the Treasury centre in

the Hague. Now you're not telling me we should return

Australia simply because them access to their data in

they've decided to locate their

Treasury centre offshore? So I

think there's a danger of

things going very awry here

just because of the

scaremongering around this.

Surely we're not saying that

other financial centres can't

process Australian transaction.

If so, it's incredibly

hippocratic situation. Are protectionist and incredibly

Peter Costello and indeed the

Attorney-General, are they scaremongering? I can't hear

what they said. I haven't read

or seen what anybody said in

Canberra and, therefore, I'd better not comment, because I

didn't hear it. What I am saying, though, is that there's more being made of the issue

than exists. Finally if we can

turn to the economy, we've got the Reserve Bank

Governor-General's address

tomorrow night. Do you think

interest rates on hold for the

destined for another interest rest of the year, or are we

rate hike? It's difficult to

judge whether it's nothing

coming or another quarter.

It's sort of a balance William

Deane those two. Most people

feel it's going to be stable

for a while and then maybe

0.25% increase. -- between

those two. If there's any

growth rate, notwithstanding inflation, that's probably

going to keep rates on hold. If inflation on the other hand,

particularly with petrol prices

remaining quite high, if that

was to take hold then there may

be a case for just a little bit

of tightening. It will be

0.25%, not 0.5%. Will 0.25%

have much of an impact? It had

a disproportionate impact on

the psychologically of people

in Australia. Therefore

probably a third of it is

probably enough to have people

be more cautious. What are you

seeing at the moment in terms

of your loan book? Are people

finding it more difficult to

pay off their mortgages? No.

One of the things about our

loan losses at the moment is

that not only are they at an

all-time low in terms of the

actual loss rates in our

portfolio, but we've got a

large number of our businesses have got net recoveries rather

than losses at all. The issue

with that, of course, is that

that's not sustainable through

time. What will be the trigger

for a turnaround? It's usually

a downturn in the economy because unless there's

something external as a shock

on the system it's not likely

to have a major impact. House

prices are still very strong.

Employment rates are still very

strong. Interest rates are not

all that high. There's not a

lot of stress in the economy

and, therefore, there's not

really a reason for any change

there and that's really the

bottom line. Now looking into

'07 every year now I think

we've said we expect the

following year to see an

upswing in loan losses. Well,

actually we've not really see

that and, in fact, we may not

see it given the strength of

the economy in 2007. Even if we

get another rate hike? Even if

we get another rate hike. Thank you very much for joining

us. Thank you.

For a check on the a day's

news on local markets I spoke

earlier to Warren Hogan at the

ANZ. Warren Hogan thanks for

talking to us. A turnaround on

the market today. Investors

much more chirpy? Yeah, the

Australian equity market was up

exceptionally strong 1% on the day, which is an

performance. The main driver

was commodity prices which

across the board were strong in

the last 24 hours. Zinc and

Nickell the standouts but also

gold and oil up. We've seen

BHP, Rio Brambles all leading the way.? I think another

factor that's been important

that be the fact that Asian

markets have actually been up

on the day. There's potential

for the developments in North

Korea over the last few days to

act as a destabilising

influence on markets and so far

that hasn't happened so the

Australian market was able to

perform really well. Are you

surprised at how quickly

markets have turned? They got

nervous yesterday with news of

the nuclear test and then all

seems to be forgotten

today? Well the Korean market

was up 0.7% today. So it is

quite surprising given that the geopolitical situation seems to

be quite tense at the moment.

But markets in the last five

years are becoming increasingly

complacent about geopolitical

and terrorist events. There's

been a lot of one-offs that

have caused markets to move

only to really be overwhelmed by strong economic

fundamentals. So markets are

sort of not being fooled into

it anymore. So it is a little

bit surprising and the markets

are a little bit complacent.

We'll have to keep a close eye

on things how they develop over

the next few days. How

well-placed is that complacency. Tension could

give markets another jolt? The

geopolitical situation could

play out in a lot of different

ways. The US is indicating a

diplomatic route is the way to

go.? this could represent a

significant change in the north

Asian balance. If that does

happen, of course, the world's

biggest economies are there. Japan and China are major

players. I think the markets

are actually surprisingly

complacent but it's really just

watching on the US moves over

the next few days. More

domestically all eyes are on

that first speech from the new Reserve Bank governor, what are

you expecting to hear? We're

expecting to see the new governor Glenn Stephens

reaffirm the view they've had

for some time, that this is a

very healthy economy and the inflation pressures remain

elevated and he's going to

signal that any upside surprise

on inflation will result in

further rate hikes. The markets, in fact, in the last

few trading sessions have

changed their view on the

chance of a rate hike by

Christmas. A week ago it was

priced as a 30% chance and

after stronger data in the US

on Friday night and I think a

few nervous nellies ahead of

the governor's speech tomorrow

night the market is pricing the

chance of a rate hike at

60%. What do you give it? 75%

for November. Tin flation

story hasn't gone away. This

economy continues to be

resilient and I think the

Reserve Bank is going to move

one more time and that could be

it for this cycle. Wait and see, Warren Hogan thank you

very much for your

time. Thanks, Ali . To the

major market movers and as we

heard earlier in the program

Brambles was among the top

movers.

A brief look at tomorrow's

business diary:

A look at what's making news

in the business sections of

tomorrow's newspapers. The

'Age' takes a look at the media

industry and investors betting

on a big shake-up coming as a

result of changes to the

ownership laws. The 'Australian' highlights the

launch of the nation's first

listed legal practice, a move

aimed at shaking up the legal

services market and the

'Australian Financial Review'

reports the Board of Taxation

is reviewing tax breaks

associated with offmarket share

buybacks amid concerns they

discriminate against small

retail investors. That's all

for tonight. As I leave you

the FTSE is up 31 points and

the Dow has opened down 2. If

you'd like to review any part

of tonight's program, just log

onto our website. You can

check the archives or download

the entire program, or bits of

it. We'd love to get your

feedback. Our email address is

on the screen.I'm moorl.

Goodnight.-- I'm Ali Moore.

Goodnight. Captions by Captioning and

Subtitling International.

More than anything, I want to know that part of me, of what I will be as a parent, what I can give to a child and what they can give to me. Without it, I feel VERY empty. Without it I feel very incomplete. SWING MUSIC DRUM SOLO CHEERFUL SWING MUSIC

For 15, 18 years, I thought about this in silence. I would never dare - never DARE - talk about it, because it was the most impractical thing to do. And I couldn't either afford it or have the patience for it or have the time for it. And with my lifestyle, being busy at work, and having a big career, it just became impractical. I want a good, young, hip announcer. Someone really... Should we try Cam on that? Yeah, definitely Cam. He's great. Bring in, uh...just figure it out. About 10 or 12 guys. This is for the new show... It's young, hip, edgy... kind of thing, but not a...you know, Joseph Brown and Company. 'Forgive or Forget' is the new show. Robin Givens is the new host. Robin Givens. Glad she got a job. (Laughs) OK. I could easily say, "My life is really good the way it is. "I'm free, and I...I have mobility and I have independence