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Financial Review Sunday -

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(generated from captions) goodbye.It's been a great weekend. Anything on in sport today?A fair bit. Ryobi Cup on GEM. Tune in.We will do that. Hello, I'm Deborah Knight, this is Financial Review Sunday. Today, Joe Hockey joins us live after his biggest week since taking the job. Eye on the Tiger. Telstra's plans for Asian expansion and bigger investor returns. BlueScope's steely resolve not to be left behind in the Chinese consumer boom.This is already the best consumer story on the planet.And in Rear Window, the football feud making fans see red. But first, 50 days since winning power, the Abbott Government is beginning to lay out its economic agenda. And Treasurer Joe Hockey has been especially busy off the back of his recent visit to the US while in the grip of its debt crisis. Among his announcements this week, lifting the government debt ceiling to half a trillion dollars, bolstering the Reserve Bank's cash reserves by nearly $9 billion, blowing out the budget deficit to almost $40 billion, and a new Commission of Audit, laying the groundwork for major economic reform. Treasurer Joe Hockey joins us this morning. Welcome to the program.Great to be here.Also on our panel, Editor-in-Chief of the 'Financial Review', Michael Stutchbury. Good morning to you. Treasurer, you've leapt from the blocks this week with very defensive measures. You've said your loading both barrels to shore up the Australian economy. Very defensive moves this week. You're just back from Washington, what sort of crisis are we facing and exactly how will raising the debt ceiling and injecting billions into the RBA's emergency fund help?Were not facing a crisis, but it is important that our institutions are as strong and robust as they can be. Frankly I first flagged a concern that the Reserve Bank didn't have all the ammunition it needed in February of this year in reported comments, when Wayne Swan had previously taken out a dividend from the Reserve Bank, clearly against the wishes of the Governor of the Reserve Bank. And the Reserve Bank reserve fund has fallen to 3.8%. At no time under the Coalition did it go below 10%. Clearly the Reserve Bank board indicated it needed at least 10%, more recently they have indicated 15%. I wanted to make sure they were at their best to deal with any challenges that came before us over the days, months and years ahead. The surging Australian dollar is hurting a lot of industries, with fears it could soar up to $1.20 US if Washington has a repeat of its budget crisis. Do you share the Reserve Bank Governors frustration that he can't bring the Aussie down?-- Governor's. It is dangerous for the Treasurer to speculate about a currency. What you've got to do is you've got to make sure you can deal with whatever challenge is there, and the more domestic reform you undertake, the greater capacity your economy has to cope with volatility in the exchange rate. So, from my perspective we've got to continue to focus on the medium-term. Focus on economic reform, which ensures that whatever happens with the day-to-day movement of the currency, or happens in the United States, we're ready for it as best we can. Treasurer, 50 days ago you were elected and there was...It feels like 50 years...There was an immediate boost to business and consumer confidence, but the chiefs of Wesfarmers, Coles and Pacific Brands say this ended quickly, with conditions back to preelection conditions. How concerned are you that the economy is losing momentum again heading into the crucial Christmas sales period? I hope it doesn't lose momentum. You can see in property transactions and property prices that there's confidence coming back. There's data series, but also the anecdotes. When people say to me in the street that it has turned for the positive, I get great encouragement from that. But I'm realistic. Directed lies that you can have improvements in confidence but you've got to have improvements in outcomes to improve that wave of confidence -- I recognise. You need an improvement from a retail perspective and an employment perspective. We will lay down a growth agenda over the next few months that will sustain momentum in the Australian economy, despite what's happening overseas.A big part of that is getting the budget back under control. Can we clear up the approach you'll take off the back of the Commission of Audit. The AFR understands that the preliminary report will come at the end of January, and feed into plans for the May budget, but any contentious policies that may break election promises will effectively be delayed until after the next election. Will you put those plans to voters first? Is that the politics of the audit commission? That's basically the process. But the fact is we will keep to our promises. As for seeking a further mandate, Labor doesn't even respect the one we have. We have a clear mandate to repeal the carbon tax, and Labor is ignoring the views of the Australian people. We have a clear mandate to abolish the mining tax and associated expenditure, Labor is running away from that.But if the audit comes up with hard policies that mean you have to break some of the policies you made, will you put it to the people first?We are not going to break any promises. We went into the election with our eyes wide open about how bad the fiscal position was that we would inherit. We've been upfront about having a commission audit, we will do what is necessary to repair the budget, but we will honour our election commitments. They are not clashing with each other. We have been very up front, we have said we will fix the budget and we will do it.For all the talk of the budget emergency, if you compare what seems to be that you're looking at and compare it with the first Howard and Costello budget and budgets, they turned around labours 's distance it into a sizeable surplus within a few years -- Labor 's deficit. It's not until a decade's time that we end up with a sizeable surplus. Aren't you being a bit too timid on this?We are in a different economic environment. We are in a different economic environment to 1996, I was there, we were going into a period of pretty good growth. We have the Asian financial crisis but it was a period of pretty strong growth. I'm inheriting rising unemployment, not falling unemployment. I'm inheriting falling economic growth, not rising economic growth. I'm inheriting very low interest rates as well on an historical basis. It's a very different environment to that of 1996. But having said that, we will get the budget under control and we will prove that when the budget is delivered in May.You have launched a scoping study for the sell-off of Medibank Private. There are suggestions it could help admister the NDIS, how would that work? Is that part of winding back the costs of the NDIS?No, we are committed to the national disability insurance scheme. Medibank Private provides already a range of different services, and they will provide the services as the scheme unfolds like everyone else. We will see what happens. We have been absolutely committed to the privatisation of Medibank Private, we're not moving away from that, we are delivering on our promises. Our political opponents are trying to stop us from fixing the problems they inherited despite the fact we have a mandate.Quickly, on another issue, will the government order Kevin Rudd to appear before a judicial inquiry before the -- about the home insulation scheme? We promised an inquiry, we are not backing away from it. If there's evidence given it should be given under oath, not apologies.And Kevin Rudd will be ordered to do that?If that is the view of the judicial commission, but nobody should be excluded from providing full and frank and honest evidence before a judicial inquiry.Up next, Telstra's CEO predicts an explosion in mobile growth, plus his promise of a higher dividend.

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Welcome back. Telstra chief David Thodey unveiled a new strategy this week, with Asia at the heart of his growth plans. But the telco boss says there's more to come at home too. He's predicting mobile device numbers will triple in the next five years and is promising a rise in the dividend. And as he prepares to negotiate with the Coalition on the NBN, Thodey told Nabila Ahmed that Telstra would be prepared to build the entire network. Obviously my response was to shareholders, and it's got to be commercially sensible. But we're willing to consider what are the alternatives they would like to talk to us about. I've often said to the Minister and the executive that we can help let us know, and we will see if it makes commercial sense. The door is open.The structural separation of Telstra, will it look the same under the Coalition's NBN plan?Yes, when we went through it, part of the deal was that we would structurally separate overtime. That meant that we were willing to give up our copper access network in being the national carrier. The endgame is still structural separation.To your new strategy, what are the sorts of businesses you're looking for in Asia?Any Australian company, Telstra or any other company, has to find ways to participate. It's not easy, it's a very heterogeneous market, but you have to be there and you have got to think through how you can create value. You have got to build from what you've already got. Telstra has been in Asia than 60 years, remember the old overseas telecommunications company. We run these big cables that connect 18 countries around Asia. Overtime, as countries are going global, their dependence on interconnectivity gets higher, and may need additional services. It's not just that we are going to turn up and safe here we are, it is about a considered growth strategy -- said.You have cut jobs and taken a lot of costs out, how much further have you got to go?Some parts of our business are declining, fixed voice lost $400 million last year, even though we had overall revenue growth. We have got to move with the times, but we have got to do it compassionately in a way that respects the people involved. It doesn't mean we have got to be firm about this, we have got to restructure the business.Where do you see the market going? Somehow you're racking up a mobile growth in a maturing market.Today in Australia we have 32 million mobile devices. Over the next four to five years that will go to 100 million because there will be different types of devices connected, machines, and cars, so I see a bright future.A question for the mums and dads, the dividend, what will see that rise?At the end of the day dividends are all returns to shareholders, arise when you perform well, when you generate earnings.You're doing really well? We are. But the question is that it is a board decision, and what Catherine said, our chairman, is that every six months we will look at that and continue to do what we've always done, look after our shareholders. I should say that our intent overtime is to increase the return to shareholders.Joe Hockey, will you take Telstra up on its offer of doing more for the roll-out of the NBN. It's argued the NBN would have been up and running faster and more efficiently if Telstra had delivered the entire project from the start? Well, I think the NBN would have been delivered more efficiently and faster if Daffy duck had been delivering it from the beginning! It's been an extraordinary period and the waste and mismanagement has been extraordinary. My colleague, Malcolm Turnbull, is right on top of it. Using board changes, executive changes. But frankly the relationship with Telstra has been built on an agreement. We intend to honour the terms of the agreement, but we also recognise that we have got a major repair job, and if Telstra is prepared to participate in that, fantastic.Are the NBN targets going to change? The roll-out is running well behind schedule and the board has been slashed?I will leave that for Malcolm Turnbull. I do know that the total contribution of the taxpayer will be capped at $29.5 billion. We're now going through an extensive process to identify the liability could be. I believe it could be as high as $90 billion if the existing NBN continues, and that is just unacceptable from a taxpayer point of view.And shareholders will obviously be happy at the prospect of higher dividends from Telstra?Telstra has had this 28 cents a share dividend for the past six years, and it is bound up in the renegotiation of the NBN. Malcolm Turnbull and treasurer hockey need Telstra to get more involved in building it, and that is fuelling talk of an increased work for Telstra, increased money coming in and potentially an increased dividend from Telstra.Mums, dads and investors will be happy with that. Still to come, the Australian company's steely This program is not captioned. To Street Talk, and two of Australia's most powerful investors will do battle in court tomorrow. AustralianSuper is chasing confidential board and management documents over the future fund's purchase of a stake in Perth Airport. The country's biggest industry super fund argues it lost up to $33.5 million in the deal, claiming the future fund overvalued the asset, locking it out from increasing its 5% stake. The $89 billion future fund bought the airport stake as part of a $2 billion deal with Australian Infrastructure Fund last year. And for more breaking news on business deals, keep across the Street Talk website, and daily in the Financial Review. BlueScope Steel boss Paul O'Malley is planning to double revenues from China in the next four years to $3 billion dollars. -- $3 billion. The Aussie steelmaker is banking on the rising Chinese middle class, demanding more cars, clothes, and better quality food. BlueScope is planning to build the warehouses and factories that will support the boom, as the AFR's China Correspondent Angus Grigg reports. With 1.1 billion people, a new generation is arriving daily, there's little doubt China has been a beacon Australian business -- and. Confidence in China's future growth is on the up. BlueScope, Australia's listed steel maker, has just commissioned a $60 million manufacturing plant in central China.There's no doubt our international footprint is, in large part, the future growth of BlueScope. We have a great business in Australia and New Zealand, we have to make sure it continues to improve. But the outstanding growth will come from this region.Paul O'Malley says BlueScope's Asian business has subsidised the Australian arm in recent years, but some analysts now estimate 70% of the company 's future growth will come from Asia. Mr O'Malley sees business in China growing faster than GDP, which is expected to top 7.5% this year and remain at elevated levels through the decade. We see significant growth, doubling revenues over the next three to four years. That would take it to a $3 billion revenue business. So, yeah, with low capital, with really good human IP and technology, there's no say in where this business could go.Tucking into China's fast rising middle class is where the real opportunity lies for BlueScope. They are demanding more consumer goods, cars, high-quality food, with the biggest growth expected to come from China's expanding central cities. In an ideal world, BlueScope hopes to build the warehouses and factories to foster this megatrend. The ancient city of Schiavo, famous for the terracotta Warriors and Silk Road, is right in the heart of China's fast-growing Central and Western regions. That's why BlueScope has located its latest manufacturing facility here. Areas surrounding the city are growing at about 13% annually, propelled largely by consumer demand.Central and western China is really taking off, you want to look for companies moving out there and taking advantage of that, have the right marketing and distribution in those cities, cities that most have never heard of.It is evolving, it is a boom that will occur in China, that is why we have a footprint to cover a fair bit of the country because we want to be involved because it will be widespread.China's consumer power is a bright light in a fragile global economy.It's great. This is already the best consumer story on the planet, I think. It's probably not going to get much worse than that. Retail sales, new home sales, all growing at more than double-digit pace, probably as good as you can get anywhere.But such rapid growth comes at a cost, China's leaders are demanding greener buildings, just like this facility, the top green industrial building in China. It is about to grow exponentially. Looking at the environment we get from time to time in China, they will need to work out how they reduce their environmental footprint.With rising population and continued demands to reduce environmental impact, green buildings like those offered by BlueScope are a critical part of China's future. And our Governor-General Quentin Bryce was in China to open the BlueScope facility. Bluescope is about Australian companies going overseas, but what about foreign investment here? You've got some big Foreign Investment decisions to make, the Graincorp sale and Saputo's bid for Warnambool Cheese. -- foreign investment. Almost every chairman in the country is telling you to approve the ADM bid for Graincorp to prove your open for business? Are we?Of course.Will you improve it?Australia has been embracing foreign investment but the laws are very clear. I have a responsibility to act and ensure that any decision is not contrary to the national interest. I will look at the individual proposals on a case-by-case basis.Are leanings anyway?I'm not even going to indicate with a smile.-- are you leaning anyway. It's an important message.Everyone wants to see foreign investment, we need to see foreign investment in Australia. We needed to import money to Australia since 1788, so nothing has changed, therefore we need foreign investment to develop our massive resources. If a proposal is contrary to the national interest, and it comes under review, then we will make the right decision in the national interest.Treasurer, to get more BlueScope type activity in China, getting Australian companies in China, you need to work on this free trade agreement with China that has been stalled for a long time. The former government -- the government has been ambitious about getting it done in a year, showing how open we are, how confident are you you can get a deal with China within a year?It is a lot of hard work, but Andrew and the Prime Minister have done a great job of pushing this on the agenda. Getting on with the job of free trade agreements, not just with China, but Japan and Korea, which will be easier to land than China, but there's a range of multinational agreements, such as the TPP and others. These help to create demand, and that's what we have to do. And just as the Chinese want to come here, they have got to open the doors for us so we can be more active in China as well.After the break in Rear Window, This program is not captioned. With McDonald's
Drive Thru and Win, buy anything from the Drive Thru,
enter your unique code and you could win
a Hyundai i30 each week, with heaps of
Caltex StarCash cards to be won. So drive through today. BOTH: Yes!

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Time now for Rear Window and Joe Aston finds inspiration in all shapes and sizes at Sculptures by the Sea. Welcome to Rear Window. This week it is all about culture. Tony Abbott was in Adelaide last week addressing the Liberal Party's State Council. We couldn't help but notice he singled out the ministry's rising star Jamie Briggs. The PM described his infrastructure minister as one of the most dynamic, young politicians in our country. I know you will not let us down. Is Abbott moulding Briggs into a future leader? The last time an Adelaide boy led his party, he dressed more like an Adelaide girl. Alexander Downer, take a bow. Briggs be warned, steer clear of the stilettos.

Fans of A-League football team Adelaide United are none too happy about major changes at their home ground. The thriving local Greek community has shaped the club's identity. Now Reds supporters are up in arms after the contract to run the stadium recently shifted from the state government's Sport department to the operators of the Adelaide Entertainment Centre. New management has taken the fans beloved Gyros off the menu with more conventional football fare, pies and chips. And while the open bar used to run into overtime, the ground's new rulers are now calling time on drinks before the final whistle. Ironically, Hindmarsh Stadium has also been rebrandedCoopers Stadium. The Sydney Opera House is again playing host to drama as its foodie tenants Josh all for -- jostle for position. Less than a year after moving in, the rage and ship could be ancient history. Opera House management is already mired in a contract dispute with another tenant, Opera Kitchen. And the public waits with baited breath for the selection of a new more accessible food offering to replace French chef Guillaume Brahimi. Know, no, no. Scrambled eggs with truffles. -- no, no, no. See you next week.

That is Financial Review Sunday for this week. A big thank you to our panel, Treasurer Joe Hockey and Michael as well. We would love to hear from you.

We're also on Twitter and Facebook. You can see the show again on our website. On Deborah Knight, thanks for your company. Time now for wide world of sport. See you next week. Supertext captions by Red Bee Media -- This program is not captioned.

This program is captioned live. He's one of the greatest we've ever had - Ricky Ponting opens up about his career, family and all the dramas along the way. The Rugby League World Cup has kicked off. We'll have all the highlights. Mick Fanning is on the verge of a Third World title but as we find out that's not all he's been up to. If speed is your thing, stay tuned because we have it all here today on Wide World of Sports. Welcome to another edition of Wide World of Sports. Emma Freedman has been out and about doing the weather and she's here with the sport.Great to be with you on this Sunday morning. I'm particularly excited about the Cox Plate but I did catch up with Mick Fanning during the week and he has a great story to tell with his new movie coming out. Have your say on some of our hot topics.Do you always come out of the box so quickly? You're so good at it.I've learnt from the best.There's no slow start for you. Here we go. All the sport around the world and here it is. Far from home but plenty of green and gold support for the Aussies' World Cup opener. It was a slow start. England

Aussies' World Cup opener. It was a
slow start. England up 10-0 after the first 20 minutes. It wasn't long before the Kangaroos launched into action. COMMENTATOR: A high ball. Inglis has got it.Tempers plaered - Sam Burge -- flared - Sam Burgess was put on report for a high shot. The Aussies will face Kiwi. -- Fiji next. Alessandro Del Piero wasn't happy missing out on the match. Ono proved he was the man for the Wanderers, setting up the first goal and coming through with the goods for the second.

The 2-0 win was the Wanderers first victory of the season. The Mariners securing their first win with a 1-0 victory over Adelaide United. In the English Premier League, Manchester United came from behind to defeat Stoke City 32-2. United scored twice in just two minutes. Arsenal remain on top of the table with a 2-owin over Crystal Palace. It was the Gunners' seventh win. Southampton won 2-0. Real Madrid going down 2-1 to Barcelona. Not a single player ventured onto the pitch in India for the fifth one- day international. The Aussies still lead 2-1 with two matches remaining. In the V8s, the 'concrete jungle' found plenty of victims. Craig Lowndes won the race and currently holds a 9-point lead heading into today's event. Mark Webber will start from fourth on the grid for tonight's Indian Grand Prix. Sebastian Vettel is on pole and only needs to finish fifth or higher to secure his fourth straight world title. Shamus Award has won the $3 million Cox Plate at Moonee Valley. The Danny O'Brien- trained horse withstood a dash by Happy Trails to win.

trained horse withstood a dash by
Happy Trails to win. All things Cox Plate later on. Let's talk all things rugby league now. The World Cup kicked off last night. Joining us is Adam MacDougall. Australia got off to a reasonable start but they had to come back.Very rusty in the first 20 minute. That's the effect of several things - obviously not playing for a number of weeks together and their lack of combinations was apparent. They relied on some class from Thurston and Inglis and Slater.This always happens with an Australian team these days. It's unlike the State of Origin where you have a lot of players who gel straight away. You bring the cream of the cream together in one team and it takes them a while to get going. I don't know if they ever get going to the standard of Origin footy?Playing in the Australian side for a number of years, there's a lot of big personalities in these sides and all want to be the one that stands out. Coherency and team cohesion is hard to come by because of the pig personalities. It will take a long time -- big personalities. It will take a long time. Australia has got so much class all across the field. It only takes one or two players on the night to stand up and secure victory.The boys would have played against a couple of lads who they're familiar with in the NRL, being the Burgess brothers. Sam is looking for maybe a week out because of his high tackle.Sam plays with a lot of aggression and treads the fine line often. It nearly erupted into an all-in brawl. The Burgess brothers will be there to create some problems for the Aussies.There's still a way to go. Fiji is Australia's next obstacle. Italy and Wales. I don't think this was a huge upset. I know Wales was all born and bred and all there playing together on a regular basis. So many NRL players in the Australian side.The number of centre stars from all NRL clubs in all these different teams and minnow nations. Italy upset England leading into this tournament. They have class players right across the board with Anthony Minichiello leading them. I was struggling to stay up in the early hours of the morning and very exciting game this one, though. The Australians could upset a couple of other teams. Thank you very much for joining us. You'll be on call from time to time to do things. The football season never finishes.Waept it great to see the Aussies -- wasn't it great to see the Aussies beat the Poms. We have plenty more to come, including that we're having a chat with Ricky Ponting. That's coming up next.What is the legacy of Ricky Ponting - the cricketer and the qapten - that you'd -- captain - that you'd like to leave? Hopefully everyone that saw me play would like to see the way I played for the team. I put on a front for the way I believed the Australian