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(generated from captions) Hello, I'm David Koch. a week like this. Most of us have never seen I haven't The headlines are really scary - financial firestorm. World stock crash, Black Friday, affects every Australian. This world crisis you need answered. Tonight, the questions How safe is your job? How safe are our banks? What's happening to your super? What's happening to property? Minding Your Money. Tonight is all about

The Friday free fall, the second

worst trading day every. To you

think this is a crash? I guess we

have to call it that. Australia's

central banks today stunned the

markets The Reserve Bank cutting

interest rates a full 1%. interest rates a full 1%

interest rates a full 1%.? We are in

an urgent situation It's going to be

come. pretty rough sailing for a while to

Three weeks ago I was on Wall Street of the financial meltdown. at the heart around the world Since then, governments have spent trillions of dollars and the financial system. to prop up banks But it hasn't worked. needs some leadership The world desperately because, to be brutal, US President George Bush. it's not getting any from lameduck What's happening now is serious. for the next ten years. It will change the way we live We begin with breaking news -

with an address to the nation. The Prime Minister, Kevin Rudd,

Good evening. The global financial

crisis is affecting financial

markets right around the world

including Australia. More than 25

banks around the world have failed

or have been bailed out. Share

markets around the world have

suffered large losses and the

reality is in recent days we have

entered a new and damaging stage in

the global financial crisis. With

real impacts on economic growth and

jobs around the world, and with real

impacts on economic

impacts on economic growth and jobs

here in Australia as well. Australia

is better placed than almost any

other country in the world to deal

with this crisis. We had the best

bank regulators in the world, our

bank's balance sheets are strong and

Australia unlike most other

countries has a strong budget

surplus. Part of the reason we are

in a better position than most, is

that all

that all year we have been

anticipating events and taking

practical steps to prepare for them.

That's why I have announced new

measures today to continue measures today to continue to maintain the stability of the

Australian financial system into the

future. This package includes a

guarantee for all bank xofts in

Australian banks, credit unions and

building societies. The government

has been working for the last

several months on the details of its

financial claims scheme for

depositors because they haven't had

in this one before. We have decided to bring

in this scheme inform cover all the

depositors and all deposits without

cap because I don't want to see

unnecessary anxiety out there in the

Australian community as ordinary

Australians watch the bad news

unfold on their television screens

from overseas each night. I also

want to our our banking arrangements

on the same footing as those which

now apply in many other countries.

Another measure I have announced

today is for the government to

guarantee the overseas borrowing

arrangements of our banks so that

they can secure long term credit to

continue to fund business and

mortgage lending in Australia into

the future. Other governments have

done this with their banks and with

banks, that in many cases have very

poor credit ratings indeed relative

to Australian banks. I don't want to

put our banks at a disadvantage for

the future. All this is necessary to

help unclog the arteries of the

global financial system. The

government is also concerned about

the I am

the impact of the financial crisis

on growth and jobs for Australia.

The government's determined to sort

the economy into the future by

bringing forward our 76 billion

dollar nation building agenda.

However the first time the

Commonwealth will fund large scale

investments in our ports, our roads

and our rail and in our high speed

broadband sfrur for the future. The

government always remains determined

to take other action as necessary to

support continued positive economic

growth into the future. And, to help

working families, pensioners and

carers deal with the impacts. This

is not just about the national

economy, it's just as much about the

household economy. The truth is, that what Australia is

that what Australia is experiencing is the economic equivalent of a

rolling national security crisis.

That means, there is going to be a

lot of rough weather ahead and I

just want to level with you. But the

government has set an economic

course for the

course for the country to see

Australia through. We remain

prepared to take whatever action,

whatever action may be necessary, to

secure this nation's long term

economic future. Good evening. economic future. Good evening..

Prime Minister there addressing the economic future. Good evening.. The nation. In a nutshell, in banks, building societies he's guaranteed all your deposits and credit unions. can borrow overseas He's going to make sure our banks so they can keep lending to us.

on infrastructure And he's going to spend up big to keep creating jobs.

They are good steps. leaders of the richest 20 countries This weekend, to come up with a plan have been in an emergency meeting system. to stabilise the global financial London. CNN's Richard Quest joins from everyone is very scared Around the world,

Have they come up with anything, Have they come up with anything,?

Everyone is so scared of their

savings in banks? I think in most

countries know, most governments

have pretty much told all individual

depositors don't worry, your money

is safe. But At this point, we are

not really worried about individual

safers, it's the health of the whole

whole system that people are really

concerned about. The head of concerned about. The head of the

said " IMF, said just short while ago, he

said "that the world has been

brought to the brink of sus tem ick collapse. brought to the brink of sus tem ick

collapse." Now, when you hear those

sorts of word, skgs systemic sorts of word, skgs system collapse"

that is why Kevin Rudd has just

announced these measures, vast

stimulus, because we have moved into

a new area and a new era in the

financial markets. It's one of

worry, it's one of despair worry, it's one of despair. What

about these other leaders? Have they come about these other leaders? Have they

come up with anything over the

weekend to try and stop the panic?

You have very cleverly spotted the

fact that I avoided the question

because the truth is, they have come

up with a 5 point plan and there is

no detail about it. For nearly 12

months, these men have been and

women have been talking but not

acting and now, all of a sudden,

they seem to have realised as

they seem to have realised as your Prime Minister said, this is a case

of a rolling national security

crisis. Now, only now, 12 months

after people like you and I have

been banging on about this, we have

been having G7s, been having G7s, G20s and to the nation Just quickly, this been having G7s, G20s and addresses

will settle markets down next week?

Volatility is going to be the

Volatility is going to be the word of the next few weeks. Nobody who

hasn't got the strongest stomach

should be anywhere near the equity

markets for the foreseeable future,

and I mean strong, churchy, strong.

We will check back to you a little later in the program. Our sharemarket's been smashed, down 16% last week, 8% on Friday alone. Remember, your superannuation nest egg is invested in shares so every working Australian was hit. Chris Reason has a look now at an extraordinary week and the damage it's done to your retirement dream.

There are now no two ways about it.

We are all not just witness to his

tri, many of us will be victim of it

too. Today was panic, this week was

panic Certainly bigger than 99 Here

at home, our worst week since the 87

crash. Stockmarket falls that

haven't been seen since the great

depression, down 25% in a month. The

free market became the free fall market. The free market became the freefall market, down 25% in a month. Across in Europe, the UK, Germany, and France tumbling 27%. Then to Asia, Hong Kong dropping 23%, Japan 32. And of course, Australia wasn't immune. Last year our stock market was up at dizzying heights, record levels, then it started falling... ..from its November peak to its Friday low, it lost 42%, three quarters of a trillion dollars wiped away. And the question no one can answer, how much further has it got to go? Eventually it does hit a bottom but no one can know when it does, until it stops. That share market of course is where much of our superannuation is invested. And for the average Australian in a balanced fund, this crash just cost you around 20% of your super. But unless you absolutely have to cash up,

experts say, don't tamper with it. It's too late. For people to be selling out of shares now and moving into cash, they're throwing their money away essentially. If you're retired, consider part-time work to top it up. If you're on the verge of retirement, delay. I think people will have to work longer - I'm talking three to five years longer. Think long-term, it will bounce back. Two other tips I'm sure you take an active involvement in your home or in your child's education. You need to take an active involvement in your super.

For people's whose balings have

dropped, it's worth contacting

Centrelink and working out if

whether they are entitled to a

pension. The time for buying could

be close. Some shares weather hard

times. I believe it will be the Aguilera, I

Aguilera, agriculture, I think

resources will do well Tobacco,

alcohol and gambling, though it

could be a while before we are back

at last year's levels. How long is

it going to take to move back up?

Yes, it could take another 20 years

t could take 30 years. Let's hope

not. Chris Reason reporting now.

Market analyst lift Craig James. We

just heard a prediction of 20 years

or more for the market to recover.

For every Australia ri whose super

is in shares, that's pretty

is in shares, that's pretty had

gloomy shares, what should we do

about it? It won't take 20 years to

recover. We saw a bigger crash back

in 1987. It was bigger in 1929 as

well. It didn't take 20 years to

recover after the 87 share market

crash. If you invested in late

October 87 and the share market

still had another 13% to fall, by

August of the following year, you

would zoo made 20% so we

would zoo made 20% so we believe that the share market will start

recovering, fairly soon. But it's

going to take a long time to get up

to those record highs that we saw of

November last year. It could take 3,

4, 5 years to get to those sorts of levels 4, 5 years to get to those sorts of

levels. So you believe that the

share market is close to the bottom?

It is pretty much close to the

bottom. Some of the companies on the

bottom. Some of the companies on the Australian share market are trading

at bargain basement levels. We have

a valuation level of our Shah

at the sheepest levels in

a valuation level of our Shah market at the sheepest levels in 24 years,

really some companies don't justify

their share prices at these sorts of

their share prices at these sorts of levels So stick with your super,

interest rates as well, we saw

interest rates as well, we saw the

Reserve Bank cut official interest

rates 1% last week, a real shock.

How many more

How many more cuts to come over what

period of time? Back in 2001 when

the US was in recession, Australian

interest rates got to 4. interest rates got to 4.25% interest rates got to 4.25%. But

currently sitting at 6%

currently sitting at 6%. This 6%

level of cash rate is actually still

tight monetary policy so the Reserve

Bank has a fair bit that it can go.

We believe that we can get down to

around 4 or 5%

around 4 or 5%. Big question, I keep

getting asked. If everything is

going well, why is the Australian

dollar dropped so much? What

investors are worried about overseas

is a global

is a global downturn, you buy less

coal, less of our resources so less

need for the Aussie dollar. But, we

have got to remember, that the

have got to remember, that the soggy

Aussie is a very good thing. It

helped us back in 2001, a low

Australian dollar helps our

exporters, helps our farm sector,

helps our economy Are we headed for

recession? No, simple answer no, if

there was chance, 10, 20% but

there was chance, 10, 20% but our

Australian economy is in great shape

Still ahead, how your property

values will be affected. But next,

will your job survive, the answer is

coming up on Minding Your Money. Hi, Dad. That's right. With the savings, you can buy yourself, or possibly a favourite son, something they really want. AAMI Flexi-Premiums save their new car insurance customers in NSW an average of $446. Oops. SONG: # Lucky you're with AAMI. #

We have decided to bring in this scheme to

scheme to cover all depositors and

all deposits without cap because I

don't want to see unnecessary

anxiety out there in the Australian

community as ordinary Australians

watch the bag news unfold on their

watch the bag news unfold on their television screens from overseas each night. The Prime Minister guaranteeing the bank deposits of Australians. We're now joined by the Opposition Leader, Malcolm Turnbull.

Mr Turnbull, has the government gone far enough to shore up Australia's financial system?

The government's steps are very

welcome. We will give them very strong support in the Parliament.

OK, so you can absolutely guarantee

you will back the government full

bipartisan support to this rescue

package, all of it? Yeah,

absolutely. The deposit guarantee

and the further investment in the

mortgage market were actually

recommended expansion of the

guarantee and further inpassenger

were recommended by us, so we are

delighted the government is doing

this and as I've said, we will

support the government in getting

any necessary legislation through

the Parliament. Any more they can

do? Anything else they should be

looking at? Well, they looking at? Well, they should be

looking at everything. That's why Kochie, we

Kochie, we are so keen to sit down

and talk about this with them in a

constructive bipartisan way. I wrote

my only disappointment today, is that I that I wrote to Mr Kevin that I wrote to Mr

that I wrote to Mr Rudd three weeks

ago and said this challenge is very

big, in the national interest we

should sit down and look at how we

should deal with it. He hasn't even responded to the letter. So, that

offer is still open. I think

Australians want to see her

Australians want to see her laiders

working together, pooling their

resources and their ideas to get the

best result for Australia. OK, Malcolm Turnbull thank you for your

time tonight Thank you very much. We

have had a dream run of low record

unemployment in this country. But is

that all about to change? As world

economy slow and the cech hits us. A

lot lot of people think a booming

China will protect us. Here is Mark

Riley John Roberts had been working

for Mitsubishi for 29 years when the

boss gave all talk that all workers

dread Sorry mate u haven't got a

job. It is a bit job shock. He is

retrained and now runs his own small

business. I can't see the car

industry really surviving the way

that it is now Unemployment was at a record low when Mitsubishi crashed.

The budget predicted it would stay

below 5%

below 5%, that's now out the window

Likely to be higher than has been

projected. We don't have numbers on

that. Respected economyist Bob

Gregory does I would be taking good

odds on 6, 7 at least by the end of

next year A jump to 7% unemployment

would put another 300,000 and

500,000 people out of work. The

industries where jobs are most at

risk, building, manufacturing,

mining, and retail. Businesses will not

not want to have to reduce their

employment levels but ultimately,

employment is a product of the level

of business activity. The boom in

mineral sales to China has acted

like a security blanket to

Australia. But now, even China is feeling

feeling the pinch. China is no where

near the short run security blanket

that we might have thought of 6

months ago. What we are seeing is

some push back from the Chinese on

some of the raw materials exports to

that country. Mr Law cock doesn't

believe the boom is over I

believe the boom is over I think this is a bump in the road I think

businesses are steeling them for

businesses are steeling them for a

tougher economic times. Tougher

times for some families There was some

some guy who worked for me, just got

married, found out his wife was

pregnant, and he finds out losing his job. That was big for pregnant, and he finds out he was

him. War

him. War whatever the circumstances, it him. War whatever the circumstances, him. War whatever the circumstances

are it will be important to people

to think about their skills.

Flexibility like from going to

making cars to making sandwiches.

Mark else us Prime Minister Rudd had

a 30 minute crisis call which

Chinese President last week. Now,

the Prime Minister wanted to know

whether China will keep buying

Australian resources. He got a mixed

Rye spons. China expect a slow down

but it will still be growing at 9% but it will still be growing at 9%.

Let's go back to Richard Quest in

London, will China save the day for

Australia? It is being seen as our

big security blanket? It may not be

a big comfortable feather blanket

that it was a few years ago, it may

be a bit thread bare but it's

certainly going to be a very

comfortable place for you to fall

upon. It's your get out of gaol free

card if you like in this crisis

because 9% economic growth by China

to support its own domestic demand,

China may not be exporting as much

to the United States and to

to the United States and to the European Union but it's domestic

demand is still strong, they

demand is still strong, they will still be growing, from that point of

view, yes, China is very comfortably

the bit that you are going to fall

back on I want to bring in Andrew

banks banks to talk about jobs. More

importantly, he has been through

lots of economic down turns, we have

just heard that maybe unemployment

going to 7 or 8%

going to 7 or 8%, what are the most

vulnerable jobs? Well, I guess jobs

that aren't skilled and/or semi

skilled but I think the good news

about Australia is generally when we

lose work, it's across a broad range

so we don't have sort of industries that are - that are - have a large percentage of our work

of our work force that it's

concentrated on. OK Only about 65%

of Australians have a permanent job

so we have a lot of permanent

part-time flexible work and I agree

with some of the earlier

commentators, think that I think

this will help us but the thing that

makes me more optimistic than

makes me more optimistic than some of the others, this is unlike the

90s when we had the dark days of

double digit unemployment, we have

all the world's engines of growth,

we didn't have the eastern European

an countries, that's pretty new. We

have got record lows of unemployment, interestingly,

unemployment, interestingly, because we have been short of people for the

past 4 or 5 years, capacity

constraints, we haven't had enough

people, companies have been quite

lean. So, it's not like we have got

fat dumb and happy companies that

have had too many people What if you

are in the local branch of a big

interest company company that is

doing it tough overseas, all your

work for a small to medium size

business where the boss is doing it

tough now, it will get tougher,

should you start re skilling, should

you start looking around? Well, I

think the important thing is don't

jump to con klunction, just

there is some bad news coming in on jump to con klunction, just because

a wire from overseas. We all talk

ourselves into things, if you were

concerned about your job or your

company, go and have a chat to

someone, your boss or people and say

how is it going? I think the message

to Ceo, communicate, communicate,

communicate, talk about with is

going on but generally speaking, I

don't think eem should over react

because otherwise they could create

a self fulfilling prophecy. Next

a self fulfilling prophecy. Next on Minding Your Money, the outlook for

your most important asset, your home. your most important asset, your


VOICEOVER: The Liberals - Brendan Smyth dumped as leader.

Bill Stefaniak, dumped as leader. Richard Mulcahy, defected, saying, it doesn't matter who leads the Liberals - they're unfit to govern. They don't trust each other. Why should you? Welcome back to this Seven News special, Minding Your Money. It was property that started all this, home loans handed out to Americans whether they could afford them or not. House prices in the US have collapsed.

Some homes are selling for as little as $1. Europe is now going through the same thing. So what's going to happen here? Howard Gretton investigates.

In the US, thriving communities are

now suburb and waste lands, the

banks have repossessed 3 million

homes. House prices have plummeted 20 to 30%

20 to 30%. What about here? The

so-called lucky country why buying a

house is the great Australian dream.

Are we immune? What is going to

happen to home ownership and

affordability in the future? Well,

it's going to return to the 60s, I

think. It will be a time for savings

and you will have to eyeball the

bank manager again Real estate agent

was a top seller, Western Australia.

How times have changed. We have had chock How times have changed. We have had

chocolates we forgot what boiled

lollies are. We haven't met

lollies are. We haven't met this

market before In in your suburbs,

families are doing everything they

can to hold on. At the moment, I am working 3

working 3 jobs to try and keep my

house basically. And my wife is

having to work nearly 7 days a week, so ta there is no-one to look after

the kids. Garrett is worried his

home is not wart what he paid for

home is not wart what he paid for it at the height of the boom Slow going

at a Sydney auction The market is

speaking and again today, we are a

little bit shy of where we wanted to

be or where

be or where we expected to be. However, our vendor had a decision

to sell and he did. Hello, how are

you, I am Julie. Agents say

you, I am Julie. Agents say for

those lucky enough to have the

money, it's a buyers' market It

seems to us to be in our favour

seems to us to be in our favour I

think cash will be king. If you've

got the money to invest, you will do

particularly well. Sold to the gentleman right there.

Congratulations sir.

Congratulations sir.. Let's bring in

Louy Christopher, you make your

living analysing the property

living analysing the property market. Are are we headed for a

property slump, the size of what is

happening in America and Europe?

Think it's actually possible. When

we actually look at our debt to

income ratios, they are actually

higher than what the states went

through. We have got a huge

household debt that we have to deal

with, if the world economy goes into

a delefr radging environment, assets

are sold down, then yes, we could be

are sold down, then yes, we could be in trouble. Which areas of Australia

are most dangerous? I believe the WA

housing market is

housing market is somewhat at risk

together with the south-east

Queensland market rkts Sydney's

richest suburbs, auction clearance

rates at the top end of coming off.

That together with Melbourne, we do

have Darwin in there Any areas that

will hold up better than

will hold up better than others do

you reckon? Well t all depends how

far the economy is damaged with the

events, look, if we see massive

damage then everyone will be

impacted rkts if it's a mild

downturn, then I believe the Sydney

market, many parts of the Sydney

market will hold, outside that,

maybe we could consider Melbourne

but outside that, no, there will be

some damage. What if if you need to

sell at the moment? Well, if you are

a outright home owner, let's

a outright home owner, let's say you don't have any mortgage, there is no

need to sell, hang on to the house,

just don't look at the value of it.

If you have debt, if you have to

sell, sell quickly Alright, thank you

you for that. I appreciate it. So

what is the future hold? When we

come back, come back, how to cope with the

crisis and protect what you've got. crisis and protect what you've got.. Industry SuperFunds have low fees, for people in health and community services. Call or visit the website. VOICEOVER: Don't wake up with regrets after the election to the divided and desperate Liberals, who don't even have a plan for the future. Canberra deserves better than four years of political infighting.

This election is vitally important for Canberra's future. Remember, if you vote for any other party or independent before you vote Labor, you risk getting a Liberal government. Don't risk it. Vote Labor first.

Now before we go tonight, things may

appear a bit scary at the moment but

Australia is the best country in the

world to fight this crisis. If

necessary, the Reserve Bank still

has a long way to go in cutting

interest rates, the Federal

government has plenty of cash to

stimulate the economy. That doesn't

mean it's going to be

mean it's going to be Rosy, it's not

a time to take big risks, look

carefully at your job situation and

pay off death debt. What is really

needed now is for the world's

leaders to show a bit of leadership

and stop the panic. Richard Quest in

London, what do they need to do, to

settle us down? We need serious

people to take serious decisions

over this serious crisis. It's been

running for the best part of 12

months Kochie and the atable truth

is that political leaders have not

wanted to face up to how horrendous

this systemic collapse is, it's on

top of u it's collapsing around you,

and you are the ones that have to

build it up. That is why we have

started to see late as the Americans

say, a day late and a dollar short,

but finally, finally, finally, we

are seeing coordinated action.

Whether it's too late, only you and

I will be able to talk about in

about 12 months Alright, Richard

Quest, we will keep checking back in

with you, thank you for watching

this Seven News special. Of course,

we will keep minding your news

through Seven News Today Tonight and

Sunrise, each and every day, good night.