Commercial News from Australia March 2006

SUCCESS STORIES ECONOMY IT & Telecom IT INVESTMENT HEALTH IT RESEARCH & DEVELOPMENT SECURITY Israel Trade Commission 6/37 York Street Sydney, NSW 2000 Tel: +61-2-92623943 Fax: +61-2-92625242 Mobile: +61-413055501 E: nili@israeltrade.org.au

Dear friends and colleagues, The Governor of the Bank of Israel, Prof Stanley Fischer, and the Director General of the Ministry of finance, Dr. Yossi Bachar, visited Australia 2 weeks ago. Their visit was part of a Road Show of the Israeli economy in Australia, following the major reforms that have taken place in Israel's capital Markets and tax systems. The visit included meetings with financial institutions, investment banks and funds as well as with the Government, at both Federal and State levels. We are currently exploring the possibilities of planning a road show of the Australian economy and opportunities in Israel and we look forward to an increase in the level of activity between the two countries. Please feel free to contact us for any assistance required. Nili Shalev Israel Trade Commissioner

STANLEY FISCHER, Governor of the Bank of Israel & YOSSI BACHAR, Director General of the Israeli Ministry of Finance
visit to AUSTRALIA in March 2006.

Mr. Stephen Loosley & Prof. Stanley Fischer	Mrs. Nili Shalev, Mrs. Jillian Segel, Mr. Robert Magid & Dr. Yossi Bachar
Photos taken at an Australia-Israel Chamber of Commerce event.

SUCCESS STORIES

Research agreement between Mekorot and Sydney Water Sydney water has signed a historic Memorandum of Understanding (MOU) with Israel’s national water carrier, Mekorot. Research and development cooperation in areas such as drought prevention and management, and desalination, formed the basis of the agreement. The MOU was signed in Sydney by Mekorot CEO Ronen Wolfman, and Sydney Water Managing Director David Evans. The Australian representative of Mekorot, Eliyahu Kaufman of Koor Intertrade, has said that like Israel, Sydney was trying to find solutions to recycling and desalinating water in drought-affected areas, and Mekorot had the expertise to assist greatly in this regard. PHOTO: l to r Ronen Wolfman & David Evans

ECONOMY

Overview In seasonally adjusted terms, GDP increased in Australia by 0.5% in the December quarter. The increase in expenditure was a result of positive contributions from private business investment, government and household consumption. The strongest contributions were from Agriculture, forestry and fishing, property and business services, and health and community services. Following the fall in GDP in December quarter 2000, there have been 20 consecutive quarters of growth in Australia.

Trade Deficit The trade deficit widened to $2.7 billion in January as exports slumped. The main source of deterioration was a 16% ($0.8 billion) decrease in mining exports. Imports increased by 2% in January following a 1% decline in December. Capital imports remain strong, indicating that business investment got off to a strong start in QI. Overall, the strong level of imports indicates that domestic spending is firm. Economic growth is expected to rebalance towards investment and exports and away from consumer spending. Low inflation and uncertainty about how consumer caution will ultimately play out mean that the Reserve Bank of Australia will not be in a hurry to convert its tightening bias into action.

ISRAEL SUCCESS STORY

Israeli company Arrow Ecology ‘cleans up’.

Four local Councils in New South Wales – Campbelltown, Camden, Wollondilly and Wingecarribee – have recently jointly awarded a $150 million, waste and recycling contract to WSN Environmental Solutions who will use world leading ‘Arrowbio’ technology from the Arrow Ecology Group in Israel. Arrowbio provides a fully integrated solution to the problem of recovering recyclable material and green energy resources from municipal solid waste. Its unique process generates significant volumes of green energy while simultaneously facilitating high rates of waste diversion from landfill.

The contract delivers to the region’s residents a state-of-the-art waste processing system that offers important community benefits, including the return of valuable resources and the generation of ‘green electricity’. In addition, most of the operation will be managed in an enclosed environment, reducing the potential for odours and the litter generally associated with traditional waste technologies.

Arrow Ecology Group CEO, Yair Zadik, considers the Macarthur Resource Recovery Park as one of the most exciting concepts seen in municipal waste management internationally. ”The contract represents the culmination of two years intensive co-operation and technical exchange between the two companies supported by leading international consultants and engineers," Mr Zadik said.

IT & TELECOMMUNICATIONS

Digital content lagging The Federal Government wants to grow Australia's digital content sector to a $42 billion industry by 2015. The target was announced as part of the government's Digital Content Industry Action Agenda, released this month by Department of Communication Information Technology and the Arts. Chairman of the strategic leaders group behind the report, Tom Kennedy, has stated that Australia's digital content industry was being outpaced by other countries The report found that Australia's digital content industry currently employed around 300,000 people and contributed $21 billion to the economy each year, or around 3.5 per cent of gross domestic product.	$1bn bush net to rival Telstra The federal Government has flagged plans to spend hundreds of millions of taxpayer dollars on a new regional telecommunications network in an effort to break its impasse with Telstra. Federal Communications Minister Helen Coonan yesterday outlined a bold plan to use a $1.1 billion regional broadband fund to help build a wholesale network in regional areas which would compete with Telstra. The Government and Telstra have been in conflict over a range of issues including the price of access to the telco's copper wires, the building of a new fibre-optic broadband network, and guaranteed levels of service to the bush.
Crazy John's million-dollar audit The quality of Telstra's data systems will be tested in the Federal Court in October when its long-running battle with Crazy John's, its second biggest mobile phone retailer, comes to a head. The case has implications for Telstra's dealer channel, both fixed and mobile, which Telstra is believed to pay close to $1 billion a year. A new report by Telstra's chief data officer has uncovered widespread data quality issues and hints that there will be more to come when Telstra's network and mobile databases are checked. The long running $30 million legal dispute with Melbourne-based Crazy John's will lift the lid on a new set of problems with Telstra's mobile billing systems and dealer remuneration, which centres on the poor quality of the company's data. Crazy John's, which manages 450,000 high-value customers for Telstra, has accused Telstra of underpaying commissions for half a decade because its systems were inadequate.	Tough times continue, says Telstra TELSTRA says it expects the tough trading conditions it experienced in the first half of 2005-06 to continue. Australia's largest telco reported a first half net profit of $2.14 billion, down from $2.39 billion in the previous corresponding period. The company has maintained its interim dividend at 14c per share, but will also reward shareholders with a 6c special dividend. "The recent deterioration in operating trends and our investment in transforming the business will see earnings fall in the near term," chief executive Sol Trujillo said recently. The 1.9 per cent growth in total income was due to increases in broadband, mobiles, IP solutions, advertising and directories and pay TV bundling, offset by a decline in revenues from PSTN calling products, specialised data and ISDN products, Telstra said.
BigPond cranks cable TELSTRA will soon bump its cable internet service to a theoretical maximum of 17Mbps, opening a pipe for its forthcoming movie download service. Telstra will charge an extra $10 per month for the speed boost, which more than doubles the current 8Mbps limit. Telstra said trial users of the new services, branded "Cable Extreme", had experienced speeds of up to 17Mbps, but cautioned that real-world performance was affected by location, system configuration and network traffic. "We have been upgrading the cable network's infrastructure and we have been trialling software changes to evaluate the network's ability to provide even higher speeds," BigPond group managing director Justin Milne said last month.	Unwired starts Melbourne build UNWIRED is expanding its wireless broadband network to Melbourne as the first step beyond its Sydney base, but will not say when its service will be available in the Victorian capital. The move was made possible by the formalisation of the WiMax wireless broadband standard late last year, Unwired chairman David Spence said. Unwired has begun installing equipment in Melbourne, but refused to say when the service would be commercially available. Mr Spence said Austar, which last year entered a spectrum-swap arrangement with Unwired that will see it offer similar services in regional areas, would announce its roll out plans later in the year. Nevertheless, Unwired still planned to offer services in some major centres and other regional areas, he said.
HUAWEI IN NEW FIELD AGREEMENT WITH NCR Huawei Technologies has expanded its national installation and service support capabilities in a twelve month strategic Field Service Agreements with NCR’s Worldwide Customer Service division and Silcar. NCR and Silcar were chosen following a competitive tender. The agreements will cover basic on-site customer maintenance and fault rectification, through to major equipment installation, deployment and upgrades. The deal gives Huawei hands-on service coverage in every major capitol city and regional centre in Australia. “The key drivers in Huawei’s tendering process were that the chosen companies would have the necessary experience and size to enable us to provide comprehensive coverage of our network on a national basis. Both NCR and Silcar fulfill these requirements,” Huawei Australian technical services director, Arthur Zhang said. Silcar said that deal would take on long term significance. “Although a relatively new entrant into Australia, Huawei is a major global player and this agreement allows Silcar the opportunity to support and grow with Huawei’s Australian operations,” said Silcar national operations and maintenance manager Murray McKenzie.

IT

Aconex builds $275m Vietnam deal Construction industry software specialists Aconex has signed a $275 million deal to provide its online management service for Vietnam's largest property development. The Australian software house was selected for the project by Australian development management company The Clifton Coney Group and Vietnam Land SSG Company, a joint venture between companies from Vietnam and Hong Kong. The company's web-based document management system will be used to keep track of progress on the Saigon Pearl development in Ho Chi Minh City. When completed in 2010, the Saigon Pearl will include eight 37-storey apartment buildings, four office towers, restaurants, a shopping mall and parking for thousands of cars and motorcycles. The Aconex system will replace the use of paper documents on the development by storing all information online in a central location.	CSIRO spins off search group Australia’s peak science body CSIRO has spun off its state-of-the-art web search technology to form a new company. The Canberra-based company Funnelback Pty Ltd will be led by former CSIRO senior manager Stuart Beil, while the system's developer, Dr David Hawking, will be the firm's chief scientist. Funnelback is already used to power searches on websites of major Australian organisations such as the Australian Government Information Management Office, Westpac, the Australian Stock Exchange, the ABC, ninemsn and the University of Sydney. It is also used overseas by universities and research bodies, including the National Research Council of Canada, to search for information contained in their websites, intranets and databases.
Demand for security experts The Australian technology sector is experiencing unprecedented demand for security professionals prompting new specialisations, according to recruiters. Michael Page Technology NSW associate director Stuart Packham said demand was strong for senior security professionals, in areas such as security architecture, policy and consulting. Mr Packham said recently that senior security people were highly sought across banking and finance, the public sector and utilities, as well as technology.	US forces won over Australian enterprise software specialist Tower Software has won a contract with US Department of Defence worth $45 million over five years. The contract requires Tower to supply the US Air Force with licences, training and maintenance for its TRIM enterprise content management software. Tower described the deal as its "biggest ever" and said that it would push its presence in the US military to over a million seats. The US Navy has already purchased 360,000 licences for Tower's enterprises content management software and its software is also used by the US Army.
Reforms to spark media frenzy The biggest shake-up to Australia's $12 billion media industry in 20 years is set to unleash a flurry of takeover activity as moguls look to bulk up their businesses with television, radio and newspaper acquisitions. Communications Minister Helen Coonan outlined the industry overhaul recently, proposing the lifting of cross- and foreign-ownership restrictions from as early as next year. The new laws would allow publishing companies, such as Rupert Murdoch's News Limited, to diversify into television, while James Packer's Publishing & Broadcasting Ltd, which owns the Nine Network, would be able to buy newspaper assets. Foreign media giants, such as the US's Time Warner and Viacom, will also be able to seize control of Australian operators, such as newspaper group John Fairfax Holdings.

INVESTMENT

Australian Stock Exchange to become one of the world's biggest The Australian Stock Exchange is poised to become one of the world's top 10 share markets after striking a merger deal with the Sydney Futures Exchange to form a $5 billion regional capital markets powerhouse. It will give the ASX a virtual monopoly on shares and derivatives trading in Australia by allowing it to offer investors a range of fixed interest, currency and commodities futures products.

Brisbane garbo aims to be No.1 TRANSPACIFIC Industries has lived up to its promise of pursuing big acquisitions with a friendly takeover bid worth $NZ870 million ($748 million) for a New Zealand waste business. The latest deal, if successful, will make Transpacific the largest waste disposal business on both sides of the Tasman. The move comes as the company seeks to snap up Brambles' Australian waste management and industrial services divisions.

HEALTH IT

Kaz wins $3m hospital deal Australia’s third largest private hospital operator has signed a $3 million deal to outsource its server infrastructure and disaster recovery needs. Under the terms of the three-year managed IT services contract, Telstra subsidiary Kaz will provide server hosting and business service continuity for the Victorian and Western Australian operations of St John of God Health Care. The organisation is Australia's third largest private hospital operator with 11 hospitals in Western Australia and Victoria. The Catholic health care provider also operates pathology services in WA and Victoria and a Social Outreach and Advocacy program. It employees over 6600 staff and operates 1665 hospital beds.

Medicare pilot in slow lane MEDICARE Australia has issued only 2450 Medicare smartcards out of an anticipated 40,000 since the national rollout began in Tasmania early last year. More than $4.37 million has been spent to date on the Tasmanian card - which features a microchip on the front - Human Services departmental secretary Patricia Scott told a Senate estimates hearing last month. A further $4 million was being sought for further development, she said. The computing capacity of the chips could support a wide range of health-related applications. Medicare Australia e-business manager David Trabinger has reported that 3619 Tasmanians had expressed interest in taking up a smartcard.

e-Payment system close Health industry transactions specialist ICSGlobal could be providing Medicare payments electronically this year. Federal Human Services Minister Joe Hockey has sought private-sector interest in running the huge-volume Medicare payments business, which handles about 235 million claims, worth about $9 billion, each year. ICSGlobal managing director Tim Murray says the company's Transactional Health Exchange Linking Multiple Applications technology (THELMA) is "a perfect fit". "There is nothing else already in existence that's competitive," he says. "There's only one THELMA and since Medicare Australia wants something now, that's good for us.

Victoria’s HealthSmart plan on track The Victorian government has inched closer to completing contracts for its AUD$324 million HealthSmart project after it awarded Australian developer ‘TrakHealth’ a AUD$10 million deal to install its patient management software in community clinics. The agreement is the second HealthSmart hospital software contract to be awarded this year, and follows a AUD$27 million deal with UK vendor ‘iSoft’ that was announced in January this year.

RESEARCH & DEVELOPMENT

Showcasing Innovation at Australasian Aquaculture 2006

http://www.australian-aquacultureportal.com/austaqua/aa06.html

Australasian Aquaculture will be one of the world’s largest aquaculture events in 2006 and will take place in South Australia, at the Adelaide Convention Centre from 27 to 30 August 2006. The Australasian Aquaculture ‘Innovation in Aquaculture’ Conference and Trade Show will bring together over 1,000 delegates from across the planet to share knowledge and showcase aquaculture’s best innovations. Some exciting developments in the Asian-pacific region will be presented. Attendees will have the chance to meet with Australia’s inventing celebrities Gavin Partridge and Ian McRobert – the masterminds behind a unique system developed with assistance of major conference supporter, the Fisheries Research and Development Corporation (FRDC). Originally designed to revolutionise production of fish in salt-water affected areas, the idea behind the project was to turn salinity, one of the

biggest environmental problems in Australia, into a profitable solution.

SECURITY & DEFENCE

The Australian Government has announced what's been described as the biggest overhaul of the army since World War II. A restructure it says will better meet national security needs. It includes provisions for a more mobile force that can be deployed offshore for longer. Another 1,500 recruits will also be needed for what the Government has described as a hardened and networked army. In essence, this is an update the Government says will produce a Defence Force capable of meeting future military challenges at home and overseas.The proposals in the review are estimated to cost about $1.8 billion over the next 10 years.