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(generated from captions) has reassured America Pakistan's President on terrorism, he's committed to the war members in his country. despite the presence of al-Qa'ida met US President George W. Bush Pervez Musharraf of South Asia, during the American leader's tour

to improve intelligence sharing. both men acknowledging the need It was a relaxed Mr Bush in Pakistan, to dodge this bouncer. so relaxed he was unable Later at a dinner in his honour, from both sides - there was admiration the Pakistani President a sign of friendship and a sign to justice. is committed to bringing terrorists that we have affirmed today The strategic partnership will contribute towards our success for peace and development in realising our common aspirations of the world. in this critically important region and when the peace is won, When the terrorists are defeated the peace together. our two nations will share But just 300km away, both leaders are trying to stop. an example of the violence GUNFIRE and three soldiers At least 46 militants were killed in this battle and security forces between pro-Taliban tribesmen attacked a suspected al-Qa'ida camp after Pakistan's army reportedly earlier this week. Wendy Kingston, National Nine News. and music Well it was night full of colour Mardi Gras parade, at Sydney's annual gay and lesbian sexual diversity. celebrating Australia's lined the streets An estimated 300,000 people to watch more than 6,000 participant to watch more than 6,000 participants

cheeky, costumes and dance moves. show off a range of bold, often (All) Happy Mardi Gras! by this years Oscar nominated movie 120 floats took part, many inspired 'Brokeback Mountain'. during the parade, Police made seven arrests four for assaulting police. were arrested for being drunk. The other three people I think it's been well-behaved. Given the size of the crowd, officials and the crowd I'd like to thank Mardi Gras for their behaviour. Ricky Ponting Australian cricket captain and all-rounder Andrew Symonds to overcome injuries have trained strongly in their bids for tonight's crucial third game against South Africa. in the one-day series Ponting has a stomach muscle strain muscle strain. and Symonds a hip flexor the five-match series 2-0. The Proteas lead in Port Elizabeth, South Africa. Today's game will be played has crushed Carlton by 99 points To AFL - and Port Adelaide in their NAB Cup match. from the opening bounce The Power jumped the Blues throughout the first term, and kept them goal-less romping away to a convincing win. by 26 points. Geelong defeated the Kangaroos 71-58 against Hawthorn. And the Crows won to claim victory - Adelaide slotted two super goals including this 9-pointer. to Henshell... COMMENTATOR: Short pass ...and he's put it through! Sydney FC and Central Coast Australian club soccer this afternoon will play for the biggest prize in kicks off at Aussie Stadium. when the A-League grand final A capacity crowd of 42,000 between the two NSW rivals. is expected for the season decider Taking a look at the weather now. across much of the country: And a fine day

but now its back to Ali. I'll be back at 8.30 with an update $5 billion corporate high flyer, Back in a moment with New Zealand's Theresa Gattung. And I thought, to run a public company. "Gosh, it would be really cool to university, And so I started wearing suits I was going to do I started imagining that's what about seriously weird, right That's what I mean at about 18 So I sort of formed the goal when I was doing a business degree we're in our new home! Oh, I can't believe save a deposit, we can afford... And because we didn't need to To have kids now. BY SHERYL CROW PLAYS 'IF IT MAKES YOU HAPPY' the business this much We couldn't have grown SONG: # If it makes you happy... # Let's talk:

in New Zealand, As a teenager growing up to university. Theresa Gattung wore suits determination It was part of her single-minded to become a corporate high flyer. Today, at 43, her goal. few could say she hasn't achieved

of Telecom New Zealand, She's in charge four million customers. a $5 billion empire with more than $2.5 million a year She pockets more than powerful women in our region. and she's one of the most you'd hardly know it, But talking to her, as Katrina Nicholas reports. Hi, guys. most powerful women in the region. Theresa Gattung is one of the She's got an easy and unusual style. of the integration. Give me your perspective that she got to the top. But it's not by accident Ambition is what it was all about. of leadership, Once I understood the concept to be a leader then I understood that I wante then I understood that I wanted

as CEO of a public company And I framed that I wanted to do that to achieve that goal It took me 20 years I've been doing it for six years for quids I wouldn't have done anything else the head of Telecom NZ, That determination has made her a telecommunications empire customers, with more than four million

and annual revenue of $5 billion. listings on three stock exchanges So how did she do it? for a column. I bet you've got lots of material Well, I'm bossy Yeah, I think I am When I read the literature about women in business there's quite a lot of literature number of women got to the to and there's a disproportionate number of women got to the top

or eldest children with only children an all-girl family and and they often came fro and they often came from

and no brothers And my father had five sisters around women so he was very comfortable that women could do anything And I did grow up thinking and life was always going to be equal opportunity But Gattung has chosen not to do the one thing many women want most.

For me, I've never wanted children I've just always thought I could not do justice to both Some people can And I know that the world is full of stories of superwomen who survive on five hours sleep a night, but I can't I need 8.5, 9 hours sleep a night to function well And I never thought that I could do justice to being a mother and to being a CEO, basically It would be fair to say, of course, that we're disappointed with the performance to date She's been CEO for six years and now pockets more than $2.5 million every 12 months. But many were surprised when she got the job. I can remember the year I became CEO I went to Bill Gates's CEO summit in Seattle Jamie Diamond, who was then the CEO Jamie Diamond, who was then the CE of Bank One, he looked at me and he said, looked around the world for a CEO "So the board of Telecom NZ looked around the world for a CE

"and they decided that the meanest, you know, crustiest, "darnedest person they could find was a young woman? And basically he was being honest I think she's a very energetic person but also surprisingly strong but also surprisingly stron behind what is a veneer of being very friendly and warm

And if you look at the business in NZ, I think it reflects very strong leadership I think it reflects very stron leadershi and that hard-driven attitude Paul O'Sullivan runs Optus, Australia's second biggest telco and fears fierce Telecom NZ competitor. Well, there is a great US Marines saying, which is it's easy to be tough but it's tough to be smart By any measure, Telecom NZ has been quite strong in its performance in the last few years

Gattung's background is hardly blue chip. Her parents were 10 pound Poms and she wasn't your average student.

Seriously weird At school, I actually liked lots of different subjects I did everything, I think, except physics, so it made it quite hard to decide what I would do at university But I chose to do a management degree because it was a course that you could do other things in as well And I thought - I suppose I was 18 at the time "Gosh, it would be really cool to run a public company. And so I started wearing suits to university, I started imagining that's what I was going to do That's what I mean about seriously weird, right So I sort of formed the goal at about 18 when I was doing a business degree She split with her partner of 20 years and lives alone, but she's a bit of a baker and sometimes her junior staff come around to sample the Gattung high life. Tamarillos aren't in season so I had to improvise.

So I can't be absolutely sure that it's worked. But I went off to get apricots instead. My father was the first Gattung for several generations My father was the first Gattun for several generation that was not a baker His father was a baker, his grandfather was a baker And I've started doing it again About a year ago, actually, I started baking again I hadn't baked for a long time Her wide passion is for horseracing. Her particular passion is for her own horse, Pride. So, Theresa, what first got you interested in horses Well, it's funny, really, because I actually didn't grow up with horses. I think that it's totally different from the rest of my week and that it's great physical exercise but at the same time you have to really concentrate mentally too, particularly if you're riding outside going fast or jumping. And do you like having a flutter occasionally Oh, yeah, I do. I really do. A big punter, would you say Oh, no, no. I spend enough on my own horses. An amazing combination of strategic thinking and the ability to galvanise an organisation and build a culture to achieve So she's performance driven but she's also a people person as well Phillip King is Telecom NZ's corporate affairs manager and has worked closely with Gattung for almost 10 years. and uncertainty There was a lot of surprise and uncertaint around whether she was up to do it She had a marketing background Would she would understand the dynamics of the financial markets et cetera And what she has really proved in the last 6.5 years as CEO is she understands all the disciplines So is this in commercial deployment in Europe, yet Technology is also big on her agenda At Telecom, she is overseeing a $200 million network upgrade that will see NZ's old copper network switched off in just six years replaced by a brand new Internet based one. She is very keen on seeing technology being innovated

and she's very keen on seeing people taking personal responsibility for doing stuff in a better way. This is the first of our video phones that we've started to see hit the overseas market Uh-huh. And it's the first one

that actually looks a little bit customer friendly Yeah, yeah. The other ones are very square, very clunky This looks like a design element. Switching to new technology

is something Telstra in Australia is grappling with as well. But Gattung is not giving away any trade secrets. Hello. Well, I still haven't met Sol Really? Despite requests? No. No. To be fair, no recent requests Look, his model for Australia is pretty obvious

There's no focus on wholesale And so in that situation, presumably he defaults to, "I run the competitor. I think it sucks That market is really not sure about telcos full stop Theresa's Gattung single-mindedness got her to where she is today. She is a determined woman but it is not just about hard work. Look, it would be very strange for me where we didn't laugh in a meeting to have a meeting in my office where we didn't laugh in a meetin to go through a day and it would be unheard of and not have a good giggle at some point Theresa Gattung.

Back on this side of the Tasman, Terry McCrann's got his money on tax cuts. It's much easier to explain why Peter Costello is having that hyper-speed tax inquiry than what might be delivered. He wants to seize back control of the tax debate

after spending all of last year giving a very bad imitation of a very grumpy scrooge - "It's my big surplus and no-one else is going to play with it." He also wants to keep control of the normal rundown that takes place each year to the Budget, when, yes, it is a racing certainty he will unveil the third successive round of tax cuts. My best guess is that they will be focussed just below the top end and right at the bottom, pushing out the tax-free threshold to give the same dollar amount cut to everyone and so the biggest relative cut to low income earners. He might cut the basic $0.30 rate, but you don't get much bang for your buck there. I doubt he'll do anything at the very top end,

where taxpayers are still to get last year's big cut.

It wouldn't cost much in dollars to cut the top rate to, say, 45% so it is possible. More likely is cutting the second top rate to, say, $0.40, as it is now effectively the top rate with only 3% of taxpayers in that very top tier. And you can get a lot of bang for your bucks there. John Howard is going to be right - we'll get tax cuts, not tax reform. But on this, John and Peter are as one. After the break, our studio guest is AMP Capital's Shane Oliver on this week's worse than expected trade deficit. The worst monthly trade deficit in history. That's what Australia recorded in January. At $2.7 billion, it was double the previous month and double what most analysts had forecast. And it came on top of slower than expected GDP numbers. All this despite a once-in-a-century minerals boom. To try to make sense of where the economy's headed,

I'm joined now by AMP Capital's Shane Oliver.

Good morning. Good morning. As we

said, the wors monthly deficit ever

What happened? Was it as sim plel

as cyclones on the West coast? I

think it was a big driver. When you

look behind the numbers you see a

huge fall, a 7% fall in exports

that seem to be driven by $900 million fall mainly in mining

exports. A lot of it was in copper

and iron ore. There were two

cyclone that is went through the

Western Australian coast. It is

likely that a that disrupted

production and exports through the

month. We also saw a relatively

early Chinese new year. It kicked

in the later part of January. It

might have also con trained exports

Hopefully we might see a bounceback

and hopefully more of the mining

investment we have seen in the last

couple of years will show up in a

pick-up in export volumes. People

have been forecasting a bounce in have been forecasting a bounce in

exports for ages. Why is it taking

so long and given we've been in a

commodities boom for some time? It

is disappointing. This has been

going on for 18 months now. We've been seeing record prices for

exports, particularly the ratio of

export prices to import prices is

at at 32-year high. We should be

taking greater advantage of this.

I think what's happened is that the

mining sector was srt of caught

short, I guess. We have had' had 30

years or so of a bare market in

commodity prices. Consequently

investment has been low so it has

taken a while to catch up. Likewise

the investment in our

infrastructure has been let run

down a little. Over the last couple

of years there has been a scramble

to gt those areas back on track

again. That should start to show up

through this year. It is not just commodities though, is it?

Manufacturing exports were also

down in January. It is true. I

think what has happened here is

that as we have seen the mining

boom come through, it has pushed up

the value of the Australian dollar.

That husband made life a lot

tougher for other exports - rural

export, but particularly services exporters and our manufacturers.

They are having to contend with a pretty high Australian dollar. But

unlike the mining companies, they

don't have the offset of high

commodity prices. What happens if

in the commodities area our volume

doesn't pick up and prices start to

wane? Hopefully, export volumes

will pick up. I think we would be

in trouble if export prices started

to fall. If negotiating, we want

into a global recession and they

woo start to see export prices come

off the top. That would sort of

pull the rug out from under

Australia's export indtrisz to some

degree. We would see a further degree. We would see a further deterioration in our trade balance.

Hopefully that won't happen. But

running big deficits makes us more

vulnerable? It is risky. Our

current account balance is 6pp of

GDP where it was when Paul Keating

referred to the ban a a republic

risk. Any weaker GDP numbers. Any

flow through of the trade deficit

figures into economic grotd. How figures into economic grotd. How

strong is the economy? The economy

is doing pretty well in terms of

national income. Because of the

mining - surge in mining prices,

it is boosting national income.

There is lots of money around, so

to speak, but we aren't producing

as much as we could, partly because

of the weakness in export volumes.

We have seen a slowdown in

consumer spending and housing

activity. We are certainly seeing a

boom in investment and in certain

part of the economy are doing well

but other parts are constrained. Of

course that softness in export

volumes is part of that What sur

reading? Do you think the boom in

investment will keep the economy

ticking along until the investment

really kicks? You my feeling that

pick-up in mining investment - for

example, if you look at mining

investment in the last 12 months, investment in the last 12 months,

it is up almost 70%. That certainly

will lead to a pick-up in mining

export production and then should

kick on to GDP growth. If it

doesn't, obviously all the the shareholders in the mining

companies will be startding to

wonder what is it happening to

their money. I am confident we will

see the pick-up in export vom uems

in time. Corporate profitability -

that is my last question. As we

have seen in Australia, corporate

profitability is doing well,

particularly in the mining sector.

That is on the back of the high

level of prices. What the miners

need to do is get their production

up as well. Then we would see a

further boost to mining sector

profit blts. Hopefully that will

happen. If it doesn't, the hieners

would be vulnerable if the prices

eventually come back down. On the

rest of the economy, we are seeing

some constraints there obviously

manufacturers are doing it a bit

tougher. Between the manufacturers

and the miners, there is a mixed

bag for Australian companies. But

generally profitability in

Australia is quite pro bust. It is

holding up. Thank you very much for

joining us again. My pleasure. Shane Oliver from AMP Capital. Coming up - with new foreign players undercutting local insurance companies, could we be in for another HIH-style collapse? What you see is a Jeep Cherokee Extreme Sport with V6 power. hard top, soft top, no top! They're proving a mite slippery. That's where you deputies come in. Go hunt them down! (Barks) Still to come - the price of pollution. In Orica's case, $200 million.

And the future for Australia's insurance industry. First, though, with a news update, here's Kellie Connolly. Melbourne police are searching for a man who attacked three men with with a knife at a park in Spotswood. One of the men was killed while the other two are in serious conditions in hospital. US President George Bush says the war on terror is progressing but there is more work to do in defeating al-Qa'ida. He made the comments after meeting with President Musharaff who renewed Pakistan's support for the war. And hundreds of thousands of people hit Oxford Street last night to celebrate Sydney's gay and lesbian Mardi Gras. More news in the 'Sunday' program at 9:00. Ali. In the wake of the HIH collapse, insurance premiums in Australia have been rising and insurance company profits have sky-rocketed.

But is it all about to end? Despite those healthy results from our major insurers in the past two weeks, competition is intensifying. There are calls for mergers and takeovers to gain size and reduce risk in a market where premiums are being cut by new overseas players. Ross Greenwood caught up with Insurance Australia Group boss Michael Hawker. We've got margins contracting quite quickly in a number of the insurance markets, which is tremendous for customers right across the board. Some of them aren't sustainable, in my view. There's some in the commercial sector where margins are getting to levels which are unsustainable low profit or no profit. So what are the key areas So what are the key area where the industry right now those premiums is losing money on writin those premium where the risk simply is too high We would say in commercial property insurance premiums are now very, very low - some of what we could short tail products, where the risk ends at the end of the year. We would also say in things like workers compensation in Western Australia, we think premiums should bottom out and start going up again. Forward looking, the prices aren't nearly as profitable or as efficient as looking in the past. This industry prided itself on getting on top of its premium and really writing at the right level So what is the motivation for the industry now in these areas to write unprofitable business Well, I think that the local market is very disciplined so I think that in personal lines people are being very disciplined. I think the competition is making it very competitive but it is still disciplined. It's really when you have new players coming into the Australian market who don't have a history of the ris exposure of the various sectors

that they are writing business in and they just have a view that it may be profitable and price at risks with very little risk history. So do you think writing premiums at that unprofitable level means that there is any accidents waiting to happen Not in the short term, but long term that is the risk. So you really cannot afford to write business below a certain return for long periods of time because then you might not be able to pay the claim. So does it also take discipline on behalf of the regulator APRA to be prepared to pull the pin to be prepared to pull the pi if risks are too great, in fact, greater than what the community would expect Well, the regulator doesn't look at individual pricing Well, the They look at the strength of the company behind that is writing the risk. Many of these offshore players are regulated in other jurisdictions, they are very large, and they are writing business here for a period of time at levels which are unsustainable. So do you think that the next HIH potentially might be one that APRA is not watching here in Australia that,

like bird flu, it simply comes i across our borders Yes. It is an analogy. That is probably one way of looking at it. I think APRA has a very good handle on the prudential requirements now in Australia. I think that we are one of the safest insurance markets in the world now because the whole review of prudential standards in this country is now regarded as very much leading edge globally. It is just that there is some portion of risk written in this country

which is not being regulated by APRA. But you have also talked about consolidation in the industry Is it these competitive pressures that will force the various players to come together Absolutely. I mean, the economics of insurance are driven by scale because scale allows you to diversify your risk. So there is only one a certain level of pricing you can get to on a certain level of risk. If you can diversify that risk further, you can drop your price and be more competitive. So what is the right combination We've seen all sorts of them here life insurance with general We've seen banking with life insurance What do you think is the right combination I don't think there's a right model There are successful models in both banking insurance and in companies which are focused purely in a certain industry sector So we've chosen as a company to be a general insurer because we think by focusing on that we can do a better job than a composite. However, there are models. Suncorp is a composite. It is a bank and an insurer and a life company. Promina is a life company and a general insurer. So there are other models which are very successful as well. But, of course, as you take that very pure attitude towards general insurance, it might make IAG more attractive to others, who might be prepared to try the hybrid Potentially. You know, we are trying to manage our business the best we can for shareholders and for our customers. If someone thinks we're a takeover target, well that's their issue. It's not our issue. I can't let you go without askin at least there's been speculation in the papers this week about your old shop Westpac and about the future of its chief executive Have the head-hunters given you a call and sussed you out for that job down there No, no, no. And I'm not interested in going back into banking. I really enjoy the insurance industry. The insurance industry, in my view, in complexity is far more challenging than the banking industry. It is an engaging business to be in And it is keeping me very busy and very interested. I see myself as really only halfway through really where I'd be like to be able to take the company. With the board's permission, I would With the board's permission, I woul like to be here for a lot longer. That bank insurance model, though, surely that would be almost a most delicious combination of your old shop and this shop It would be fascinating, in some ways, theoretically thinking about puttin that together Well, it is in their ballpark, not ours. They are bigger than us, so they would be buying us rather than the other way around. If happened, who knows. But I don't think that's on the cards. IAG's Michael Hawker. When we come back - Orica still cleaning up its environmental mess 20 years on. The worst possible scenario occurred A tank with more than 1,000 litres of ethylene dichloride fractured and leaked, creating a plume of dangerous pollution. It was a disaster both corporately and environmentally. In the late '80s, thousands of tonnes of carcinogenic liquid escaped from a tank at the Sydney plant of chemical and explosives giant Orica, leaving the company with a classic dilemma. On the one hand, there are shareholders demanding their returns. On the other is the duty of a corporate citizen to right a wrong. Finance Editor Ross Greenwood looks at how Orica is handling the problem and how it's throwing $200 million down a hole with little hope of return. Ross Greenwood reports. On the face of it, this plant looks like another piece of heavy technology churning out the dollars. But this is no money-maker. Instead, it's a chemical plant like few others. Its purpose - to clean up an embarrassing mess and potentially to save a long-term corporate liability. For more than 60 years, Orica and its predecessor ICI have run chemical plants on this 100-hectare block just 10km from central Sydney. In its day, it was elite, churning out vinyl, PVC and chlorine Orica still runs the chlorine plant. The other operations have been sold to Quenos and Huntsman. The problem was, still is, where it's located - right on top of a sand based water course and right beside Botany Bay.

In the early 1980s, the worst possible scenario occurred A tank with more than 1,000 litres of ethylene dichloride fractured and leaked. The material, used to make plastics, went into the ground

and then into the ground water, creating a plume of dangerous pollution. Orica chief executive Graham Liebelt I kind of guess it's not the moment that I guess you're company, ICI or Orica, would be most proud of it. No. That's right

Of course, our operating procedures didn't allow for this to happen So it's a mistake on behalf of our company We acknowledge that, and it's costing a lot of money The plant cost $167 million to construct, with at least another $30 million in running costs over the next 30 years Well, it is a significant investment for us too And the direct return from this investment in terms of income earned today is not high There may be some income flowing from the treated water eventually But it won't meet our usual return criteria But how do you explain that to shareholders - that you've spent $200 million, $160 million literally on a hole in the ground

when really they are looking for a rate of return? First of all, our reputation is extraordinarily important we build heavy plants We operate in industries in which we build heavy plant and we need community support for those plants and those operations And the second thing is that our employees want to work for the sort of company that walks up to its responsibilities in these areas But are there other motives to cleaning up? They did do work on voluntary clean-up and remediation trialing and remediation trialin that they were doing, and they had indicated a commitment to it We ended up issuing a legal direction on them on 2003, though, because we were concerned about the plume moving too quickly towards Botany Bay So, Graham, is it right to say that this is pretty much the front line in the containment of the contamination on the site? Yes, it is This is one of three containment lines There are about 60 wells like this one extracting water right here The plume has moved this direction The plume has moved this directio at about 100m to 150m each year When the plant is fully operational, it should recycle the equivalent of one per cent of Sydney's annual water supply,

which will be used in industrial facilities around Botany. Even the company and its board, were they cognisant of the James Hardie situation, where of course the long-term legacy of asbestosis really did mount into a significant financial damage for the company? I don't know enough about the James Hardie situation to comment specifically about that However, I think that the community's concern in this area types of issues is raising the profile of these types of issue with chief executives And I think increasingly boards are acknowledging that they do need to deal with these issues going forward But unlike the James Hardie situation, proving that any future ill health is directly attributable to Orica or these plants is difficult. Even John Walker, whose company IMF

funds some of Australia's largest group and class legal actions, is wary of such cases. If you look at the risk If you look at the ris to the entity as being economic, then it's a far lesser risk for them to be having to pay out for injury to the person Which continues to concern local residents, including long-term campaigner, Nancy Hillier. In Botany, there has never been a hazard risk analysis,

including health. We have continually pressed for that over the years. All our testing and risk assessment around the site shows that there's no risk to human health in living in the area I don't think about it constantly myself and I have stayed here for 80 years - just on 80 years. And the only place I'm going to will be a much better place. I don't know whether there's any pollution up there or not, but I'll deal with that when I get there. Where the community is fortunate is is that Orica is large enough to afford the cost of cleaning up. This is one of the issues This is one of the issue that we need to deal wit with these legacies where companies with these legacies where companie don't have the money We do now have very strong legislation with the Contaminated Land Management Act that does put the legal onus quite clearly on the original polluter That's been very helpful now There are some instances, however, where companies simply don't exist any more and the taxpayers have to pick up and the taxpayers have to pick u the tab The most famous example of this is Union Carbide

on the site of the Olympic Stadium at Homebush in Sydney.

Union Carbide used to produce agent orange back in the '80s They've left and there is not a company now that legally can take responsibility are so high So, fortunately, the land value are so hig that developers are actually picking up some of the tab for cleaning up land there, which is costing tens and tens which is costing tens and ten of millions of dollars Making the lessons of Orica's Botany plant all the more easy to understand.

In the environmental world, it's called cradle to grave responsibility

And that doesn't necessarily just mean the good or the service It means the effect of the good or the service So these effects can be decades further down the track, not only in the environmental area not only in the environmental are but also in human bodies They have to understand there is legislation in place that will hurt them considerably. You know, the main lesson for us as an organisation of this whole operatio

is don't create the problem in the first place After the break - he's taken Woolies to outright leadership in the competitive world of supermarkets and he's about to leave the top job. Roger Corbett is next. Will you crack the billion-dollar profit mark this year You're mighty close We'll have to wait and see.

It would be a nice objective, of course, but we'll have to wait and see. Woolworths' Roger Corbett is retail's man of the moment, with a 22% hike in half-year profit and a record share price. But he's soon to leave it all behind He's got seven months to go before he steps down from the top job after 46 years in the industry. This week's figures coincide

with the final stages of a massive overhaul of the company's supply chain, known as Project Refresh, which has cut billions from the retailer's cost base. I spoke to Roger Corbett just before he headed overseas to talk to major investors. If we look at the results first, analysts are now saying that you aim to underpromise and overdeliver You're already forecasting a profit increase of up to 23%

Are you being conservative No, Ali. Our guidance is our guidance, and if people choose to go beyond that, well that's their judgment. But our guidance is our guidance. Will you crack the billion-dollar profit mark this year You're mighty close We'll have to wait and see. It would be a nice objective, of course, but we'll have to wait and see. So it's potential Just potential. You would be the first Australia retailer to do it Well, let's see what happens. It would also be, I imagine, a very nice note to go out on It would be. Your results obviously hinge on the performance of the economy And the Treasurer has now sai that it won't reach official forecasts of 3% growth this year, although we did see some surprisingly strong retail figures this week What is your reading

Well, month to month retail figures can be misleading. I said prior to the beginning of the last half year that I thought that discretionary spending - general merchandise spending

but particularly discretionary spending - would be constrained. It has been constrained. It is constrained. And I think that it will remain constrained for the rest of this half year. As constrained as it is now, or are things going to start to loosen Well, I don't know. Maybe if there were some tax cuts later in the year that would be really good for retail spending. You would see plenty of roo for tax cuts

I would indeed.

How patchy is it We've seen GDP numbers that make Victoria and NSW very much the drag Is that your experience

Yes, it is. Particularly NSW, which is of concern because of course it is the biggest state in Australia. electronics business overseas You're taking your consumer electronics business oversea to India Where else can you go and what else can you take overseas Well, Ali, India is a pretty good step for a start - 250 million middle income type people in India. I think we'll try our toe in India. It is, if you like, a low level trial in a Third World country. You wouldn't have just looke at India, though Putting NZ to one side, when you considered offshore expansion, you would have looked at other countries Did you consider China, Singapore, Malaysia or Indonesia Why India Yes, we did. But a lot of this also has to do with opportunity. And the opportunity presented itself in India, so we took advantage of that. Do you see yourself eventually spreading to some of those other countries Well, they are big, big steps, Ali. And I think we've got enormous expansion in our core businesses in Australia to do yet. The systems and logistics investment we've made is going to play a big yield for Woolworths in coming years

and we will be pretty focused on making sure we get those benefit from the very large investment we've developed in intellectual property and now invested in structural property. That will be a big upside for Woolworths moving forward. Who do you admire in Australia retail I think there are some tremendous personalities. Hans Mueller has of course been a proprietor of Lowes, which is a private company but an outstanding retailer. Naomi Milgrom, who of course runs Sussan and Suzanne Grae and Sportsgirl. And Mark McInnes Oh, yes. I think he's an outstanding young man and I think David Jones has a wonderful position in the marketplace. that's come up to replace you McInnes is one of the name that's come up to replace yo when you leave in September What does Woolworths need from the next CEO What skill set Well, you probably best talk to the chairman about that, Ali.

But that process is moving on. There are some wonderful candidates and I'm sure, come September - well, in fact, the chairman said that the company intends to make an announcement in May. That will provide a nice time for whoever it is to become involved in the activities to become involved in the activitie of chief executive and for the market to become confident in the continuity. You talk about the strength of the Woolworths management team Would it bother you if there was an external appointment Would it disrupt the culture Well, I'm sure if the board was to make an external appointment, they would be very sensitive to the issues you just referred to.

You have been busy, though, in recent years mentoring people I mean, Michael Luscombe, your head of supermarkets, is one of them Would you not like to see someone from your own management tea take over Well, yes, of course, I would. I have had the joy of working with many colleagues, of which Michael is a very capable one. Yes, I would like to see that, but the board has to look at a wider spectrum of issues, which I'm sure they're doing. This is a very personal question, but it's probably going to be the last chance we get to speak with you on Business Sunday You're now the biggest pokies operators, the biggest pub owner, the biggest liquor retailer in Australia How does that sit with your very well-known personal Christian beliefs Well, Ali, right across the community lots of people like a drink. I like a nice glass of wine myself. Lots of people go to their local hotel and it's their club. It's their social life. Lots of people like to use a gaming machine. I think from our point of view, we are anxious that the retailing of liquor and the providing of hotel services to our customers is at the highest level so we create environments where it is conducive to people enjoying it in the way that I think it's best used. You've got to remember people - a person asked me the other day, "Why do you sell cigarettes?" Well, people have a right if they are adults. We cannot be the type of standards setters for society.

That is not our role. As you look back at your career, though, at Woolies, if it could have been as profitable, as successful, without going into liquor and into gaming, would you have been more comfortable Well, that's not a judgment for me to make. The board of directors is elected and empowered

to make those judgments on behalf of the shareholders. And it is their decision. From my point of view, my personal point of view, that decision having been taken, I want Woolworths to be the most caring organisation it can be in how it delivers those services. And I'm sure in doing that I am - I have a great partner in Bruce Mathieson in doing that. Did you ever consider walking away In the broader - it's a very difficult question. But my greatest obligation is to do what I'm employed to do by the shareholders, and that is to do my very best in their interests at all times. And that was the overriding principle here. So you never considered walking away I wouldn't say that. And, of course, this week saw the close of bids for rival retailer Coles Myer's chain of department stores. With an expected price of around $800 million, the successful buyer of the Myer shops will be announced by the end of March. That's Business Sunday for today. You'll find transcripts of today's interviews at: 'Sunday' is next. I'm Ali Moore. See you next week.

Supertext Captions by the Australian Caption Centre.

DOOR SQUEAKS A more efficient way to achieve cross-ventilation can be seen at the eco-living exhibition, Majura Rise Estate, Roma Mitchell Crescent, North Watson.