Think small, for that is the way of the future

FROM the back of an old Arnott's van, he screened the first ever television broadcast in Australia during the Queen's royal tour in 1954. Fifteen years later, he ran tracking stations for NASA and provided the signal that relayed man's first landing on the moon.

But it is nanoscience that has John Hooke more excited than ever about communications in Australia.

The largely untapped science of manipulating matter on an incredibly microscopic level has the potential to change everything from the size of the internet to the resilience of sunscreen. Yesterday, Mr Hooke, a former chief executive of Amalgamated Wireless Australasia and a director of BHP and Channel Ten, donated $5 million to form the Australian Institute of Nanoscience within the University of Sydney's school of physics.

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''Why did the astronomers look out to space? I think this is a similar process; looking in, exploring new frontiers, ever smaller, the excitement of discovering,'' he said. ''This just seems a whole new world and the applications of nanotechnology seem to be limitless. I think it's the most exciting thing to happen in science, certainly in my lifetime.''

Mr Hooke's father would be especially proud. After joining Amalgamated Wireless Australasia in its first year, Sir Lionel Hooke brought the first radio to Australia, the first television, the first transistor and optic fibres.

AWA was a name as iconic as Vegemite to some Australians, said the head of the school of physics, Professor Clive Baldock. Their York Street office was once the tallest building in the country.

Sir Lionel transmitted Dame Nellie Melba from his home in Brighton to Parliament House to convince the federal government to license radio broadcasting. On Sir Ernest Shackletons's fateful crossing of the Antarctic in 1914, Sir Lionel was the wireless operator whose morse code messages saved the expedition, trapped in an ice field for eight months.

His son is now looking to the next communications revolution.

''When we started transistors in this country, a lot of us couldn't identify where it was all leading,'' he said. ''We didn't know whether you'd have a transistor in your washing machine or your iron or whatever but we just knew it had a huge future and I think this is the same thing but on a much bigger and more important scale.''

The institute will further world-leading research by the school of physics into quantum computing and photonics, such as reducing the energy to run the internet.

Source : http://www.smh.com.au/

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Invest in children of knowledge revolution

It's annoying the way business people keep slipping the words ''going forward'' into almost every sentence and it was even worse when Julia Gillard kept repeating the slogan ''moving forward'' in the last election campaign. But I have to admit they've got the right idea: we do need to keep our minds focused on the future and what we need to do to secure it.

The world keeps changing and we must respond appropriately to that change. Most of us feel threatened by change, and it's only human to want to resist it. The temptation is to try to preserve things as they are, rather than adjust to the way they will be.

As we wonder what to do about the threat to our manufacturing industry, it's tempting to see that threat as temporary. We're in the middle of a resources boom which has lifted the value of our dollar to a level which could wipe out some of our industry. But the boom won't last long and, if we're not careful, we could find ourselves high and dry: no boom and a big chunk cut out of manufacturing. What do we do then?

This is a serious misreading of our situation. What we're dealing with isn't just another of the transitory commodity booms we've experienced many times before. It's a historic shift in the structure of the global economy as the Industrial Revolution finally reaches the developing countries. The two biggest countries in the world, China and India, which were also the biggest economies before that revolution, are rapidly industrialising and within the next 20 or 30 years will return to their earlier position of dominance.

Does that sound temporary to you?

As part of their urbanisation and industrialisation, those countries - and the Vietnams and Indonesias following in their wake - will require huge quantities of iron ore, coal and other raw materials. Not for several months but for several decades. Much of what they need will be coming from us. That says it's likely to be many moons before our dollar falls back to the US70¢ levels our high-cost manufacturers are comfortable with.

The other side of the re-emergence of China and India is the global shift of all but the most sophisticated manufacturing from west to east. This is a disruptive trend affecting all the developed economies, not just us. All the rich countries are having to find other things to do as their manufacturing migrates to the poor countries.

This, too, is not a process that's likely to stop, much less reverse itself. So it's not a question of hanging in until the world comes back to its senses and things return to normal. The day will never come when we're able to reopen our steel mills and canning factories.

It's a question of whether we dig in and try to prevent our economy changing, or we adapt to our changed circumstances and move into areas more suited to a rich, well-educated, highly paid economy.

In truth, we're making so much money from our sales of raw materials to the developing countries that we could afford to use a fair bit of that income to prop up our manufacturers. That wouldn't make us poorer, just less prosperous than we could be (though keeping labour and capital tied up in manufacturing would mean a lot more immigration and foreign investment to meet the needs of our rapidly expanding mining sector).

And the fact is that, throughout most of the 20th century, we diverted a fair bit of our income from agriculture and mining to subsidising our then highly protected manufacturing sector. This may help explain why so many people - particularly older people - are so ready to do whatever it takes to stop factories being closed. It's the traditional Australian way of doing things: passing the hat.

But what's the positive, future-affirming alternative? What else can we do?

Embrace the newer revolution in the developed world, the Information Revolution. While the poor countries are becoming manufacturing economies, the rich countries are becoming knowledge economies.

The knowledge economy is about highly educated and skilled workers selling the fruits of their knowledge to other Australians and people overseas. It covers all the professions and para-professions: medicine, teaching, research, law, accounting, engineering, architecture, design, computing, consulting and management.

Jobs in the knowledge economy are clean, safe, value-adding, highly paid and intellectually satisfying.

The developed economies are fast becoming ''weightless'', as an ever smaller proportion of income and employment comes from making things and an ever increasing proportion comes from providing services. Some of those services are fairly menial, but the fastest growing categories involve the highest degrees of knowledge and skill.

Employment in Australian manufacturing has been falling since the 1980s. It's sure to continue falling whatever we do to try to prop it up. By contrast, since 1984 total employment has grown by almost three-quarters to 11.4 million. Get this: all of those 4.8 million additional jobs have been in the ''weightless'' services sector.

Notwithstanding our future increase in the production of rural and mineral commodities, our economy - like all the rich economies - will continue to lose weight. The real question is whether the services sector jobs our children and grandchildren get will be at the unskilled or the sophisticated end of the spectrum.

And that depends on how much money and effort we put into their education and training. We've gone for the past two decades underspending on education and training at all levels, falling behind the other rich countries.

If we've got any sense, we'll use part of the proceeds from the resources boom to secure our future in the global knowledge economy.

Source : http://www.smh.com.au/

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Skeletons may hold the key to male infertility

FOR years, scientists thought they understood the skeleton. It serves as structural support for the body. It stores calcium and phosphate. It contributes to blood-cell development. And it serves, indispensably, as the creepy mascot of horror movies.

But as it turns out, there might be still more to bone.

A few years ago, researchers at Columbia University Medical Centre discovered, to everyone's surprise, that the skeleton seems to help regulate blood sugar. Now the team, led by a geneticist and endocrinologist at the university, Dr Gerard Karsenty, has found that bone might also play an unexpected role in reproduction. If the work pans out, it might help to explain some cases of low fertility in men.

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''It's definitely an attention-grabber,'' says Dr William Crowley, of Harvard Medical School, who was not part of the research.

It is well known that the hormones oestrogen and testosterone, produced in the ovaries and testes, help to regulate bone growth. When women reach menopause, oestrogen levels decrease along with bone mass, putting them at increased risk of osteoporosis. As men age, their testosterone and oestrogen levels also decline. Men lose bone but much more slowly than women do. ''We thought that if the sex organs talk to the skeleton, then the skeleton should talk back to the sex organs,'' Karsenty says.

And, apparently, it does.

Early this year, Karsenty's team published a study demonstrating that in mice a protein called osteocalcin, which is produced by bone-forming cells called osteoblasts, binds to a specific receptor on cells of the testes. Male mice that were unable to make osteocalcin (due to genetic manipulation) produced less testosterone and were less fertile. When they mated, they had fewer and smaller offspring.

Fertility in female mice, on the other hand, was not affected by osteocalcin. Cells in their ovaries lacked the receptors to which the bone hormone binds. ''We were surprised by that,'' Karsenty says. ''We thought we'd find a hormone that regulated fertility in both sexes.'' Another compound, as yet unknown, might play the analogous role in females. Human testicular cells also have receptors for the hormone osteocalcin, Karsenty has found.

''I don't know of any hormone that functions in mice but not to some extent in humans,'' says a researcher at Maryland's Johns Hopkins University, Thomas Clemens. Still, the magnitude of the effect might not be the same as in mice.

The main hormone that stimulates testosterone production, in mice and men, is luteinizing, a protein made in the brain. Luteinizing hormone is ''the on-off switch'' for testosterone, Crowley says. Osteocalcin, on the other hand, looks more like a ''dimmer switch'' that modulates the process.

The question is, is it a critical mechanism or a back-up system? Does osteocalcin play a large role in problems such as low sperm count and low testosterone, or is it more peripheral?

Scientists now plan to study men with these problems and to measure their osteocalcin levels, Crowley says. Some of them might have a defect in osteocalcin that underlies their condition.

But, he says: ''I suspect this will turn out to be one chapter in an interesting and more complicated mystery.''

Karsenty has long argued that bone plays a central role in regulating body physiology. ''The body is not an assembly of silos that don't speak to each other but is full of surprising examples of crosstalk,'' he says.

In 2007, he showed that bone helps to regulate blood sugar, a result that startled hormone specialists. Working with mice, he reported that osteocalcin boosts insulin production in the pancreas and increases insulin sensitivity. Insulin, in turn, acts to lower blood sugar.

That work could prove relevant to diabetes, in which the body either does not produce enough insulin or stops heeding it.

Now, Karsenty hopes to unravel the complicated links binding the skeleton, sugar and gender. Bone mass tends to decline with age, he notes, as do blood-sugar control and fertility.

''One idea is that bone might not just be a victim of ageing. It might also be a contributor.''

Source : http://www.smh.com.au/

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Drogba injured as Chelsea late show sinks Norwich

Chelsea left it late to clinch a 3-1 victory over 10-man Norwich that was marred by a serious injury suffered by Didier Drogba at Stamford Bridge on Saturday.

Andre Villas-Boas's side were in danger of being held to a draw by newly-promoted Norwich when Grant Holt punished a mistake from Blues goalkeeper Hilario to cancel out Jose Bosingwa's opener.

Drogba was taken to hospital after suffering a horrific head injury.

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Drogba was knocked out in a collision with Norwich goalkeeper John Ruddy and was carried off on a stretcher wearing what appeared to be a breathing aid after receiving treatment for seven minutes at Stamford Bridge.

Blues boss Andre Villas-Boas revealed Drogba had remained unconscious ‘‘for quite some time’’ and he confirmed the 33-year-old had been taken to hospital for further examination.

‘‘We are just waiting for the full exams on his concussion and hopefully nothing is wrong,’’ Villas-Boas said.

‘‘He is showing some good signs of recovery for us to be a little bit more tranquil.’’

Villas-Boas cleared Ruddy of any blame for the challenge, but admitted he had been shocked by the incident.

‘‘It looked pretty nasty. He lost consciousness completely on the pitch,’’ Villas-Boas said.

‘‘I have to be very, very grateful, not only to my players but to the Norwich players and to my medical staff for reacting so quickly to a potentially dangerous situation.’’

Lampard ensured Chelsea won for the second time in three league games under Villas-Boas when he drove home a spot-kick with eight minutes remaining before Juan Mata marked his debut following his move from Valencia with a goal in the final moments.

Chelsea's sixth minute opener came from an unlikely source as Portugal right-back Bosingwa netted his first goal since November 2008 with a powerful long-range effort that flashed in off a post.

That should have been the springboard for a dominant Chelsea display, yet Holt equalised in the 63rd minute.

Holt was given a large helping hand by Hilario -- playing in place of the injured Petr Cech -- as the Portuguese stopper came way off his line in a failed attempt to catch a Wes Hoolahan cross and Holt was able to hook into the empty net.

It got worse for Chelsea moments later when Drogba landed in sickening fashion following his collision with Ruddy and the game was stopped for seven minutes while the Ivorian was carried off wearing a breathing aid.

However, Lampard got the second goal from the spot after Ruddy was sent off for bringing down Ramires and Spain winger Mata, on as a substitute, struck with a curler deep into stoppage time.

Liverpool swept to the top of the Premier League with an emphatic 3-1 win over Bolton at Anfield on Saturday.

Kenny Dalglish has spent over £100 million ($A156.83 million) transforming the club since returning to the Anfield manager’s office last January.

And that investment appears to be paying off after goals by new signings Jordan Henderson and Charlie Adam, either side of Martin Skrtel’s header, left the Merseyside club looking down on their rivals for the first time in over two years.

Liverpool now have seven points from three games. Henderson and Adam both scored their first competitive goals for the club as Uruguay defender Sebastian Coates watched from Anfield’s VIP seats ahead of an expected £7 million ($A10.98 million) move from Nacional before Wednesday’s transfer deadline.

And the 20-year-old must have been impressed with what he saw as Liverpool required just 15 minutes to unlock the Bolton defence, despite having club-record £35 million ($A54.89 million) striker Andy Carroll starting on the subtitutes bench.

The visitors thought they had escaped after Jussi Jaaskelainen’s brilliant finger-tip save kept out Stewart Downing’s volley following good work by Luis Suarez.

But the visitors failed to deal with the loose ball and Henderson took advantage of some sloppy defending to rifle home from 16 yards.

Owen Coyle’s side responded through Martin Petrov, the winger testing Pepe Reina with a sweetly-struck 18th minute volley in front of the Kop.

The hosts sealed the points with two goals in a minute in the early stages of the second half.

Substitute Skrtel, a first-half replacement for the injured Martin Kelly, outjumped Zat Knight to power Adam’s corner into the back of the net to double the lead in the 52nd minute.

And Liverpool fans were still celebrating when Adam found the back of the net from 20 yards with a low shot that beat the outstretched hands of Jaaskelainen.

Ivan Klasnic scored a consolation for Bolton deep in stoppage time after a mistake from Jamie Carragher but Liverpool thoroughly deserved their victory.

Blackburn missed two spot-kicks and then paid the penalty as Everton sneaked a 1-0 win at Ewood Park.

Rovers squandered a chance to take the lead early in the second half when Tim Howard saved Junior Hoilett's penalty after Mauro Formica made the most of minimal contact from Ross Barkley to win the spot-kick.

Formica missed from the spot himself -- shooting against a post -- after being fouled by Phil Jagielka in the final minutes.

Everton made the hosts pay for those misses when Spanish midfielder Mikel Arteta stroke home a 90th minute penalty controversially awarded by Lee Mason for a Chris Samba challenge on Marouane Fellaini.

Swansea were held to a 0-0 home draw for the second successive week as Sunderland held firm in a dour struggle at the Liberty Stadium.

Brendan Rodgers' newly-promoted team drew with Wigan seven days ago and found it equally hard to break down the Black Cats' defence, with Scott Sinclair going closest with a shot that hit the bar.

Wigan maintained their unbeaten start as a fine double by Argentinian striker Franco Di Santo secured a 2-0 win over QPR.

Di Santo - tripling his total of goals for the club to only three goals in 32 appearances since joining from Chelsea for 2 million last August - struck in each half to give Wigan their first win of the season after two draws.

Wolves remain undefeated after Mick McCarthy's team ground out a 0-0 draw at local rivals Aston Villa.

McCarthy's men won their opening two league matches against Blackburn and Fulham and showed plenty of grit to keep Villa at bay in a hard-fought but ultimately uninspiring midlands derby.

Source : http://www.smh.com.au/

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Cooper cleared of kneeing charge

Wallabies playmaker Quade Cooper is free to start the Rugby World Cup after escaping suspension for kneeing All Blacks skipper Richie McCaw.

Cooper had been cited for striking McCaw with his knee in the second half of Saturday night’s 25-20 Tri-Nations clinching victory at Suncorp Stadium but the charge was dismissed on Sunday morning.

SANZAR judicial officer Jannie Lubbe took little time to clear the influential five-eighth in a hearing which took 45 minutes in total.

A relieved Cooper can now start for Australia when they kick off their World Cup campaign against Italy at North Harbour Stadium in two weeks.

‘‘I’m just very grateful and happy for a fair hearing and I’m just looking forward to getting on with rugby and focussing on the World Cup,’’ he said.

‘‘Any time that you have to face the judiciary it’s going to be a sleepless night. I’m just happy to get a fair hearing and now I can get a good sleep.’’

While cameras caught clear view of Cooper kneeing McCaw in the head after the ball had left a ruck, the No.10 explained he was just looking to get to the next play of the game.

‘‘There were bodies everywhere and ... it’s a contact sport and blokes are going to come into contact with each other,’’ he said.

The incident was the latest in an ongoing 10-month battle between Cooper and McCaw. It dates back to Hong Kong last October when the Wallabies five-eighth delivered an in-goal head shove to the All Blacks flanker after James O’Connor scored a last-gasp try.

The niggle has continued through this season in Super Rugby clashes between Queensland and the Crusaders, as well as the opening Bledisloe Test in Auckland.

But Cooper denied there was anything personal and said the incidents were a result of both doing their jobs in tight matches for their teams.

‘‘It’s (now) a good time to think back and celebrate winning the Tri Nations after a 10-year drought,’’ he said.

‘‘Last night I was happy for the team but I had other things on my mind.’’

Source : http://www.smh.com.au/

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Bucharest or bust

Singer-songwriter Lucie Thorne courts an unlikely international fan base.

Lucie Thorne is big in Transylvania.

And I don't just mean the review on a Romanian website that declared of her 2009 album, Black Across the Field: ''You can't just listen to this album while you cook an omelet.'' Though, admittedly, the egg-dish rating system has something going for it.

As silly as it may sound for the singer-songwriter daughter of a Tasmanian poet, they love her in the Carpathians, down by the Black Sea, along the lower Danube and quite possibly a few more places where they pay with the Romanian leu.

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''It's a slightly unusual place to have established a fan base, but it's one of the beautiful surprises you get,'' Thorne says, amused as much as amazed.

Two tours there have given her not just ''a soft spot for that part of the world'', but a taste for its varied delights, from sausage and liver to more liquid refreshments. Speaking of which, what do they drink in Bucharest? ''Kind of anything actually, but there's a lot of beer drinking going on in Romania in general.''

And what does one eat as a visitor to Romania? ''Mostly beer.''

''Maybe I just made the wrong, or the right, friends, I don't know,'' she says. ''I fell in with a crew of young punk blokes who seemed to live on beer and cigarettes, but I went back there last year and did a bunch more shows in Bucharest and Transylvania and I did find myself supporting an array of amazing local talent, all somewhere in the punk and metal spectrum.''

How does a rootsy, hushed-voiced Australian woman who often performs in Australia with musicians as likely to play jazz as country, find herself among hard-edged blokes in a scene dominated almost entirely by young men?

''Part of it was just their incredible eagerness to be hospitable. [They'd say] 'You're our international guest star' so they wanted me to headline all these shows,'' she says with a laugh. ''I walked into the first gig to hear the other band soundchecking and I thought, it's crazy enough to be on the same bill as these guys but if they want me to go on stage after them, I think I might be killed or something.''

She managed to talk her way back down the bill to somewhere in the middle and then, though she readily admits ''shock and confusion was primary among the audience'' at the start, the response at the end was extraordinary.

''Pretty much the first question everyone asked me when I got off stage was, 'What the f--- are you doing here?' but people had never seen anything quite like me and they really dug it,'' she says.

Clearly intense songs about dramatic love and sex translate easily, irrespective of the language. Even more so when sung by someone like Thorne who specialises in need, desire and the bits that follow. It seems they get her in Transylvania in a way more emotionally repressed Australians can't without the help of a few beers and a quiet sob under the doona.

Romanians and Australians could be forgiven for thinking that, for Thorne, on the evidence of her albums so far, love is dramatic or it isn't there at all. Of course Thorne makes the reasonable point that not all the songs are autobiographical, although she lets slip that the past year or two has been more challenging than most: ''I'll spare you the details, but I have found myself laughing again recently.''

However, the emotional impetus behind the songs, whether they are character songs or autobiographical, are never unclear. The writer behind these songs does not squib when it comes to just how hot lust is, just how terrifyingly exciting love is and just how breathtakingly awful losing it can be.

''The passion drives me along,'' she says. ''It's definitely dangerous and gets me into all sorts of trouble. But that same kind of passion is at the centre of pretty much everything, my writing and making music. It's kind of a compulsion as much as anything else, it's in the middle of me. Maybe that's not a smart way to live. But what can you do? That's my lot.''

Would she have it any other way?

''No, no,'' she says, then pauses. ''Well, maybe I'd change a few things. But not much. There's a lot of joy kicking around.''

Lucie Thorne plays the Camelot Lounge, in Marrickville, on Friday.

Source : http://www.smh.com.au/

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Careful, now everyone's going Dutch

As finance minister in her native Indonesia for five years, Sri Mulyani Indrawati put the cleaners through her sprawling bureaucracy of 64,000 economists, bureaucrats, tax collectors and customs officials.

She fired hundreds of corrupt tax and customs officials, and gave pay rises to the clean ones. The number of income tax payers multiplied, revenues grew sharply, and foreign investment expanded, propelling Indonesia into its present high-growth trajectory just below China and India.

Then her campaign came up against one of Indonesia's most powerful figures, business tycoon Aburizal Bakrie, who also happened to head the Golkar party, a key player in Jakarta politics. After refusing to call off a tax demand on his business group, or socialise its problems by calling the disastrous mud-volcano from one of its gas wells a natural event, she found herself under relentless attack.

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With President Susilo Bambang Yudhoyono wavering in support, she was lifted out in May last year to become one of three managing directors at the World Bank in Washington.

In Australia this week, the 48-year-old Mulyani who has a PhD in economics noted the angst about the strong dollar, after the downsizing at BlueScope Steel and Qantas. It's the classic ''Dutch disease'' - named for the currency appreciation that hit the Netherlands after it tapped North Sea gas, the death knell for enterprises such as aircraft maker Fokker.

''It's happening here, in Latin America, in Indonesia, in Africa,'' Mulyani says. ''The challenge for the policymaker is how you are going to manage this booming sector and sterilise this impact that will disadvantage the other sectors, but at the same time without creating new distortions to the economy.

''The answer is more on the structural reforms that need to be adopted for the non-booming sectors, meaning that you have to invest in order to improve productivity and competitiveness of those sectors.''

She would no doubt regard a ''buy local'' rule to support the steel industry, as suggested by the Australian Workers Union chief, Paul Howes, as one such distortion, and probably frown at the growing attack on the Reserve Bank governor, Glenn Stevens, over the priority given to keeping inflation under control.

The fact is Australia ceased to be a significant manufacturing nation in the 1980s, when most civil and defence factories closed except for a few sectors sustained by lingering protection, notably car-making. It simply does not have the internal market or proximity to bigger ones to compete, except in specialised items, and there's no point preparing for World War II.

Compared with Brazil, which also sells iron ore to China, Australia is doing pretty well. It has inflation above 6 per cent, and its central bank has ramped up the key interest rate five times this year to 12.5 per cent, while taxes have been slapped on short-term investment flows. Its huge manufacturing sector, making everything from shoes to aircraft, is hit by Chinese competition.

According to The Economist's Big Mac Index (based on comparative prices of that identical hamburger around the world), the Brazilian real is 46 per cent overvalued, while the dollar is a modest 17 per cent too strong.

The Chinese yuan is 44 per cent undervalued by this index, while most of the other big non-Japan industrial countries in Asia have currencies undervalued too, ranging from 15 per cent for South Korea to 54 per cent for India.

But things are not quite that unfair. The Economist puts its fun index through a further filter, adjusting the ''raw'' Big Mac prices to gross domestic product per person to reflect local costs. The result is that China's yuan comes out 3 per cent above its ''correct'' value, and most other Asian countries move close to it or to over-strength. Brazil's real, however, becomes 149 per cent overvalued.

Our dollar's over-valuation drops to 12 per cent, with the proviso that the calculations were made on a dollar being worth less than US96¢ on July 25, when it was actually about $US1.01 - perhaps too much cholesterol from too many burgers clouding the calculations.

But would Australia rather not have this problem? As Mulyani pointed out, Asian markets are still quite vibrant thanks to strong domestic economies and intra-regional trade, though a prolonged crisis in Europe and the US will eventually impact growth. ''It's not totally decoupling, but they have the ability to withstand or at least to cushion themselves from the crisis,'' she said.

Governments are finding it hard to stand back and let market forces do their work, especially when it's not only manufacturing being hollowed out, but agricultural land is being devastated by mining and coal gas extraction. In mineral-rich eastern India, it is helping fuel the Maoist insurgency, in Australia's eastern states a more peaceful political backlash.

The rising power of big business vis-a-vis government is becoming a critical issue in diverse countries. In India, powerful companies have long made and broken ruling coalitions with suitcases of cash. Thailand has been racked for years by the power of the entrepreneur-politician Thaksin Shinawatra.

In Australia, the big mining houses easily stared down the Rudd government's clumsy effort at a super-profits tax, when the Henry report's original proposal for the proceeds to finance a five percentage point cut in company tax rates might have had small business, manufacturers and service companies cheering the government on.

In Indonesia at least, things are shaping up for a return bout. Earlier this month, a new political party registered itself in Jakarta. Its name, the Union of Independent People, in Indonesian yields the acronym SRI. Its founders hope to enlist Mulyani as presidential candidate in 2014 - in which case she might be running against Bakrie.

She feels honoured by the trust placed in her, but for the moment will concentrate on her role as an ''international public servant'', she says. ''Many Indonesians are proud about that, so I have to make sure they will not be disappointed.''

Source : http://www.smh.com.au/

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How to take control of your spending

 

Keeping a close watch on your outgoings can make a big difference to your budget.

Thanks to a 470 per cent rise in the cost of bananas since cyclone Yasi hit the Queensland coast earlier this year, fruit and vegetables have been an overall killer on the household budget.

Even if you dropped bananas from your shopping list months ago, they still managed to help push overall inflation up by almost 1 per cent in the June quarter.

According to the latest Australian Bureau of Statistics report, fruit rose 67 per cent in the year to June 30, while vegetables were up 9.7 per cent. The other big rises in necessities include 10 per cent for electricity, 12.8 per cent for water and 11.3 per cent for petrol.

To counter that, milk prices dropped 10.8 per cent thanks to a supermarket price war, appliances fell 3.5 per cent, TVs and computers dropped 19.5 per cent and sports equipment fell 6.7 per cent.

How different prices translate to the bottom line on the household budget depends, of course, on what gets bought.

No one is happy when the price of daily necessities, such as food and electricity, rise but for the past few years Australians have remained satisfied with their standard of living overall.

While the latest sharemarket rout could change people's satisfaction level considerably, the fact that wages have kept up with the rising cost of living has helped keep satisfaction levels stable to date.

The latest Australian Unity Wellbeing Index survey surmises that the high level of personal well-being reflects the sense of relief that Australia escaped the recession and that people's savings and superannuation funds remain secure, continued low unemployment, low inflation and the breaking of the drought.

There may also be an element of positive comparison with countries that have not been so lucky. "Australia is an expensive place to live by world standards but salaries have kept pace, interest rates are low and most people have jobs," says Bob Cummins, a professor of psychology at Deakin University and the author of the Australian Unity Wellbeing Index.

Although people can see everyday prices going up, the fact is they have the same amount of money proportionally to buy these goods as they did two to three years ago and that is a positive thing, Cummins says.

A NATSEM researcher, Ben Phillips, also says that statistically most Australians are at least as well off as they were a year ago.

The consumer price index, the most common measure of inflation, might be edging towards 4 per cent but it is in line with wages, he says.

Why then do so many people find life is becoming so much more expensive?

According to Phillips, it is because people have greater expectations about what they need to buy. "People are super-sizing their lives; they have bigger houses, bigger cars and bigger TVs," he says.

Phillips says the very visible prices of petrol, gas, electricity and some food items have increased strongly but other consumer products such as televisions, computers, new cars and other imported items have gone down in price. These items are not purchased frequently and therefore aren't noticed as much.

What does affect many people's cost of living is what they choose to buy, such as extra electronics, he says.

There will be some people who don't earn enough to pay for their household's basic living costs and will be finding things tough. But generally, the above statistics suggest some people could also be living beyond their means.

Live within your means

The advice that you should live off last year's income, not next year's, is another way of saying that spending less than you earn is the key to financial security, the founder of savingsguide.com.au, Alex Wilson, says.

"Living within your means makes no allowance for emergencies or long-term goals. Surviving month to month may seem fine when you're in your early 20s but what happens when you need to pull together some money for a hospitalisation or you unexpectedly get retrenched and finding work becomes difficult?" Wilson says.

His suggestions for living below your means starts with saving more money. He also recommends you track your spending by keeping a written log of your weekly spending and that you plan your finances.

"People who live below their means fund frivolities only once their savings accounts are funded. So, if there's a little less money this month, frivolities are the things to go, not savings," Wilson says.

It is only by tracking your spending that you can understand what you are losing money on - you could be surprised how quickly money spent on smoking, drinking, or buying lunch at work every day can bust your budget.

Wilson suggests a one-week trial. "Eliminate all unnecessary expenses and put the money into a savings account instead. Extend the challenge to a month. Once you see the money piling up, you'll be much less likely to return to your unnecessary expenditures," he says.

Having a plan for how you spend money can also help save money. Losing money on ATM fees or having to pay late fees on your credit cards are two classic examples of when planning could have saved money.

Saving money

Fortunately for those people looking to save money, frugality has undergone a drastic change of image in the past few years.

"It's often confused with being 'stingy'," the co-author of money saving ideas website Simple Savings, Jackie Gower, says. "Thanks to today's economic climate, however, it's not only smart being resourceful and careful with one's money - it's downright trendy."

She says the three big areas for saving money are food, in the garden and cleaning products.

Where vegetable gardening was once thought of as a rather quaint, old-fashioned hobby, people are now realising that the only way to guarantee their chances of being able to afford fresh produce is to grow their own fresh fruit and vegetables.

And when it comes to cleaning products, the secret lies in what people can produce for themselves using natural alternatives.

Vinegar and lemon are possibly the two big favourites in the bathroom as replacements for the more expensive and possibly toxic varieties bought in a bottle.

"Once people realise that they have a choice not to use harsh chemical products and learn how easy it is to keep their homes clean with cheaper, natural alternatives, they never go back," Gower says.

Not everyone is aware of what they spend their money on, which is where writing things down and crunching some numbers can really help to see where there could be savings to be made.

Bills for phone, water, electricity and gas are regular so why not budget and set aside some cash each pay day in a savings account to cover bills? That way you won't have to worry about how you will cope when they arrive.

Battling with a tight control

Denise Welsh shudders to think what her utility bills would be like had she not installed a rainwater tank and solar panels.

The single mother of two teenage boys says the water and energy bills are back to being what they were before she put the cost-saving measures in place.

"Every time a new household bill comes in, it goes up $30 or more. Food is a constant struggle but I manage by buying in bulk and from a wholesale butcher," the part-time financial counsellor says.

"When I go to the supermarket I'm so careful as I don't have money to spare. I would love to have $200 to go to do my grocery shopping but it's not going to happen."

Then there is the cost of petrol.

With no public transport where she lives, she can clock up an average 700 kilometres to 800 kilometres each week driving to work and taking her sons to TAFE or sports.

Unplanned trips are a rare event as there often isn't enough money to put extra petrol in the car to go anywhere. "My biggest fear is because I am so reliant on my 20-year-old car, I will be in big trouble if it breaks down and won't be able to get to work so may lose my job," Denise says.

The bright spot on the horizon is her mortgage. This time next year she expects to be mortgage-free for the first time in 20 years.

She started menu planning, internet banking and comprehensive budgeting to get by financially. If things are tough for Denise, it is equally bad for many of her clients who are also surviving on next to nothing as household bills eat up most of their money.

In the past six months she has seen more clients applying for financial hardship or trying to get off the pay-day loan roundabout than at any time in the past five years.

Source : http://www.smh.com.au/

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