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(generated from captions) and public schools. like public hospitals to build national infrastructure uses private money and expertise how Tony Blair's new Labour He's specifically examining is on a pilgrimage to London. the Shadow Treasurer, Wayne Swan, to win - and stay - in power, a modern labour party needs to do and looking for hints as to what campaign is in full swing, In Britain, the election I'm Tony Jones. Welcome to Lateline. Good evening. This program is captioned live. to this treaty. by us taking a positive approach would be in any way jeopardised whereby Australian interests reason that we're aware of There is no solid national security what New Zealand does. why we should always do and there's no reason we thrashed them in the cricket New Zealand at rugby, We're able to beat and independent country. Australia is a proud pact with Asia. to sign a non-aggression to the Kiwi decision An aggressive response the amity treaty horror. Tonight -

at rugby, we thrash them at cricket, We're able to beat New Zealand and independent country. Australia is a proud I think not. to follow New Zealand's lead. wasn't feeling any pressure Alexander Downer diplomatic corps in Newcastle today, Playing tour guide for the Canberra and nor, frankly, do we. They've seen no obstacle to doing so close allies militarily of the US. Japan, Korea - they're both very that they're prepared to sign up. people have indicated Right across the region, to convince new Zealand. It seems that was enough to December's East Asia Summit. or risk not being invited and Cooperation sign the Treaty of Amity there was one clear message - met in the Phillipines this week, When ASEAN foreign ministers From Canberra, Narda Gilmore reports. with ASEAN countries continue. as discussions is "a work in progress" but says the matter For now, the government is resisting year's inaugural East Asia Summit. if it wants an invitation to this the Treaty of Amity and Cooperation that Australia sign ASEAN leaders are demanding pact with South-East Asia. in agreeing to sign a non-agression follow New Zealand's lead that it should has rejected suggestions The federal government accuse him of workplace harassment? after US officials to the UN Will John Bolton ever make it And, a gorilla in their midst? with Lateline. including his interview for talking to the media, Mordechai Vanunu back in court could hurt Schapelle Corby's case. against Indonesian diplomats fears that a threat Bullets in the mail - First - our other headlines. That's coming up. stirring up a hornet's nest. the shadow Treasurer could be inside Britain's Labour Party, is anywhere near as fiery as it was inside the Australian Labor Party Well, if the debate on this in this over time. unless there is a decent profit is not going to invest is that the private sector But the other side of the equation some risk to the private sector. that the public sector can transfer It is one way, if you like, that there is value for money. has to ensure is and what the public sector if they can make a quid The private sector will only do it

Schapelle Corby if the accused drug smuggler to kill diplomatic staff because of a threat at the Indonesian consulate in Perth Security has been tightened Narda Gilmore, Lateline. China is opposed to it. in the East Asia Summit, of Australia's inclusion but while Japan seems supportive the Treaty of Amity and Cooperation, Both countries have agreed to sign of China and Japan next week. when he meets with the leaders high on John Howard's agenda The issue is likely to be to this treaty. by us taking a positive approach would be in any way jeopardised whereby Australia's interests security reason that we're aware of There is no solid national will participate in the summit. and I think Australia we'll be able to work this through, But I think in the end the end of the year. The summit is not until We've got plenty of time. no hurry to reach any decision. Alexander Downer insists there's to help find a solution. establish a working party with ASEAN Another possible option is to to the United States. Australia's existing obligations that it doesn't jeopardise but with a condition of signing the treaty, The government is weighing the option a solution will be found. Mr Downer seems confident to the ASEAN countries about. it's something that we're talking I mean, in our case, countries have different views. This is a matter that different long-term national interests. of looking after Australia's and to get on with the business poltical pride on this to swallow his personal I think it's time for John Howard to sign the non-agression pact. John Howard again refused with the Malaysian leader, Only last week, during meetings in the region. It's an important country of the East Asian Summit. we'll be backing it to be part Whatever its decison on that, regardless of whether it signs up. in the East Asia summit, it's vital Australia is included New Zealand says Despite the sporting insults, and don't forget the Bledisloe Cup. don't forget the Sevens Don't forget the Oscars, his counterpart fired back. From across the Tasman, than that. We're a more confident country always do what New Zealand does. and there is no reason why we should

while security has been upgraded since the Monday incident, employees have been urged not to panic. It is very difficult, actually, to interpret this letter because it's very badly written. I don't think it's a serious threat to us, but we have to be cautious. Federal ministers today condemned whoever was behind the letter, claiming it may have even harmed the accused drug smuggler's case, which resumes in Bali tomorrow. I want to assure the Indonesian Government that we will do everything possible to bring those responsible to justice for this outrageous act. I completely condemn this threat to the Indonesian Consulate in Perth. Look, this does Schapelle Corby's case no good at all. State and federal police have begun a joint investigation into the origin of the letter, claiming they've already made some progress. Sue Short, ABC News. In Washington, it's been a tough few days for George W. Bush's nominee Consular officials say to the Indonesian Consul. and they've mailed a direct threat to the next level This person has taken it whether she is guilty or not guilty. Everyone has their own view on of Australians. has stirred the emotions Obviously, the Schapelle Corby case contained at least one live bullet. It's understood the envelope would be killed. or consulate staff in Perth Ms Corby be released from prison The handwritten letter demanded to the bottom of the death threat. as senior police vowed to get at Perth's Indonesian Consulate reviewing the security measures Specialist officers were today with the threatening letter. in the envelope Live bullets were also sent isn't released from a Bali jail. to be America's next ambassador to the UN. John Bolton has seen his record attacked by Democrats, and today a senior colleague joined the fray, accusing the nominee of bullying those beneath him at the State Department. In a confrontation with a junior analyst, Mr Bolton was accused of bahaving "like an 800-pound goriila devouring a banana". But despite the grilling, Republicans seem set to approve his nomination. Norman Hermant reports. The nominee to be America's next ambassador to the UN has been the focus of attention on Capitol Hill and the reception for John Bolton has been less than warm. He does not represent global security. Committee hearings have already been disrupted by protesters and they're not the only ones who say the Under-Secretary of State for arms control is a bully. I consider myself to be a loyal Republican. But the State Department's former head of intelligence is no fan of John Bolton or his management style. I've never seen anybody quite like Secretary Bolton. He doesn't even come close. He's quintessential kiss-up, kick down sort of guy. Just simply my advice, my opinion, is don't give him any responsibility for controlling people, 'cause he'll hurt him. John Bolton may have a diplomats smile, but he's regarded as a foreign policy hardliner. On disarmament issues, he abhors compromise and he's never been afraid to criticise the UN. I have spent the last month extensively reviewing your writings, your public statements about the UN and my overall assessment, Mr Bolton, is that you have nothing but disdain for the UN. To reinforce the point, Democrats played a speech from the mid '90s when Mr Bolton was a private citizen. The secretariat building in New York has 38 stories, if you lost 10 stories today it wouldn't make a bit of difference. The US makes the UN work when it wants it to work and that is exactly the way that it should be because the only question the ONLY question for the US - is what's in our national interests, and if you don't like that, I'm sorry. For his part, John Bolton says he does believe there is a way the UN can work. For the UN to be effective, it requires American leadership. I say it over and over again - I deeply believe it. But Democrats say following America's credibility collapse at the UN over claims about weapons of mass destruction in Iraq, the time is not right for John Bolton. This is the very man who may have to take the case to the world on Korea, and Iran, based upon intelligence. At the UN, though, some say they're ready for the next US ambassador. Mr Bolton, let him come here - he will discover in fact that the world is much larger than US interests. And despite his rough ride it's very likely Mr Bolton's nomination will succeed - Republicans control the Senate and this committee. I like the fact that you'll advocate our principles, you're not going to be seduced by empty, meaningless, courteous pontifications, by international bureaucracies. His critics may not like it but John Bolton seems set to be the face of America at the UN. Norman Hermant, Lateline. Scientists around the world are scrambling tonight to destroy samples of a deadly flu virus which were accidentally sent to them as part of a routine testing procedure. Hong Kong's Queen Mary Hospital is one of nearly 5,000 laboratories in 18 countries which were sent vials of the virus. The World Health Organisation says it poses a small, but real, risk of triggering a global flu epidemic. The virus is from a flu strain which killed around 4 million people in 1967. This virus is fully transmissible from humans to humans and everybody born after 1968 would have no immunity. Lateline understands that no Australian labs have received the virus, which was sent from a testing facility in the United States. Israel's nuclear whistleblower, Mordechai Vanunu, has faced court charged with 21 violations of the restrictions placed on him when he was released from prison last year. The former nuclear technician was jailed for 18 years after revealing details of Israel's nuclear weapons program in 1986. He has continued to criticise the Israeli Government despite concerns from his supporters in Australia for his safety. Hamish Fitzsimmons reports. Mordechai Vanunu could be jailed for up to two years for breaking a military-imposed gag aimed at preventing him from speaking to foreigners. Today he didn't enter a plea but spoke out against the government yet again. I hope the Israeli Government, the Israeli justice, will understand they are only causing damage to themselves by bringing me back to court after 18 years. Vanunu spent 18 years in prison after being found guilty of treason for revealing details to an English newspaper about his former workplace, Israel's Dimona nuclear facility. CHEERING He was released last year after serving his full term and promised to keep speaking about Israel's nuclear weapons. CHEERING Overnight, an Israeli magistrate's court was told that Vanunu had breached the restrictions placed on him 21 times since his release. These referred to interviews with foreign media, including this one with Lateline, where he pushed the limits of the gag. I think the Israeli Government realises that they have to respect the freedom of speech and all what I'm saying is only expressing my views. I don't have any secrets. All the secrets have been published 18 years ago. They cannot use the excuse of security to silence and take the freedom of speech from anyone. Today Mordechai Vanunu is sticking to that ideal, but after the restrictions on him were renewed ahead of the first anniversary of his release, he is keen to leave Israel. All what I did until now was meeting foreigners. I have no more secrets. When they charge me, it's about meeting foreigners. So what? The former nuclear technician spent several months in Australia and converted to Christianity in Sydney in 1986. Vanunu's supporters here remain close to him. Hello, Morde, David. How are you, my friend? Father Dave Smith is an Anglican priest in Sydney

who helped Vanunu convert. He says his friend still feels like he's in jail. I mean, he served his time completely. He wasn't given any early parole - he served his full 18 years. One would have thought in a democratic society, supposedly, he'd now be free, but he's not really free. Vanunu's defence wants the trail aborted and an Israeli court will decide whether or not to proceed with a trial on 19 May. Hamish Fitzsimmons, Lateline. Now to our interview with the globetrotting shadow Treasurer. With Britain's election campaign well under way, you might think that Prime Minister Blair is a little busy to entertain fraternal visitors from down-under. But last night, Wayne Swan met both Tony Blair and his deputy, Gordon Brown. Evidently they swapped notes on the Australian who's really making his mark on the campaign - the former Liberal Party apparatchik Lynton Crosby. Crosby is now the key political adviser to the Conservative Party Leader, Michael Howard. Wayne Swan's mission to London, on the other hand, is not to dispense political advice; he's there to learn what a Labour Party needs to do to win power - and keep it - in the 21st century. I spoke to him a short time ago. Wayne Swan, thanks for joining us. Good evening. Now, Tony Blair once took electoral advice from the Hawke Labor Government. Are you trying to get him now to return the favour? Well, I've certainly come here for some policy advice, some advice on how to have very tight economic management and some advice about how we can deal with our infrastructure problems so we can get some investment for the future. That's very important if we're going to continue prosperity, and the debate here in Britain is very similar in some ways to the debate in Australia. Have you been getting any advice? I know you've already managed to speak to Blair and Gordon Brown at the same time. Yes, I did. I met briefly last night with both the Prime Minister and the Chancellor. It was a very harmonious meeting. There was a fair bit of male bonding going on, actually. Were they able to give you any political advice or was it all bonding? Well, I think we're in the middle of an election campaign, so we had a pretty quick discussion about the tactics of certain Australians that are over here involved in the Conservative campaign and we had a very brief chat about economic policy but I think their minds were on the election. Alright. I'll come to that other Australian that you're talking about in a little while; we'll talk about the election campaign. But first - I understand that part of your mission is to examine one of Tony Blair and Gordon Brown's pet programs, that is, the private finance initiative. Can you start by explaining exactly what that is? Well, the private finance initiative puts private funding into public infrastructure, and it has various shapes and sizes. Essentially here, there's something like ?42 billion worth of projects on the drawing board or being worked on currently where private money is building public hospitals, public schools - that's called soft infrastructure - but private money in some of the hard infrastructure like roads and other transport devices. A lot of private money in public infrastructure is one way of dealing with the infrastructure backlog which in many countries around the world is such a drag on productivity and a drag on growth. Including Australia, obviously? Absolutely, and tonight we have a CEDA report out which talks about the disrepair of our infrastructure and they go as far as talking about a crisis in Australian infrastructure. We've already heard the Reserve Bank Governor and the OECD refer to the fact that infrastructure bottlenecks are a real brake on productivity and a brake on growth in Australia and one of those factors putting upward pressure on inflation and upward pressure on interest rates. So dealing with problems in infrastructure is one of the keys to ongoing strong growth, high productivity and high wealth creation. That's why coming here to Britain is so important. Well, can you explain how it is that the Blair Government manages to get private interest in putting private sector money into building schools and hospitals? How does that work? Well, the private sector will only do it if they can make a quid, and what the public sector has to ensure is that there is value for money. Some of these projects have been analysed and they haven't been Some have been analysed and they have been very good value for money. It is one way, if you like, that the public sector can transfer some risk to the private sector. But the other side of the equation is that the private sector is not going to invest unless there is a decent profit in this over time, and it's trying to strike the balance, if you like, between the public interest on the one hand and the profitability of these projects for the private sector on the other that's the key to the outcome, and that's what I'm looking at here. I haven't come here with any fixed views and I haven't reached any conclusions. It's a complex area, but it's an area that we must study if we're going to deal with our infrastructure problems through the 21st century. Where is the profit for private companies putting money into building public schools and public hospitals? Well, the project will strike a rate of repayment which will deliver the profitability, but of course, there is a risk element in here for the private sector as well, and if they get their sums right, they could end up losing a lot of money and we've seen a fair bit of debate about that with certain projects in this country where private sector interests have lost a lot of money and on the other hand there has been debate about projects where private sector interests have made a lot of money, and many people think that that has occurred at the expense of the taxpayer. So it's trying to strike the balance that's so important. But how does it work, though? I mean, does the private sector end up managing the schools, public schools? Is that how it works? Do you end up employing the teachers, do you end up, for example, running the management of the schools? Well, there are various models but the most common model would be that the private sector would build the school but the core services would continue to be provided by the public sector, because having universal services, particularly in health and education, is something that not only makes good economic sense but it's also important for long-term equity. So there are various models where there are mixtures of private provision and public provision. It just depends on the project and which one delivers the best value for money but also an equitable outcome in terms of the public purse. It also appears, from the Blair Government's point of view, to be working as well in public housing. They want to transfer, as I understand it, all council-operated public housing to private housing associations. Is that another one of the initiatives? Well, that is one of the initiatives that is being talked about at the moment, and I think there is a role in Australia for private investment in public housing and in affordable housing. It's one of the solutions that we've talked about before on this program, Tony, if we're going to do something about housing affordability in Australia, given the recent property boom and the fact that so many young Australians are locked out of the property market, because this is one of those factors which is driving growing inequality in our community and it's something that we must deal with in the years ahead if we're going to continue to be a society which is based on the principle of a fair go. Now, in Britain, Margaret Thatcher started first down this path. It's Tony Blair with his Labour Government that's actually taken it further. Could you imagine an Australian Labor Government ever going as far as either of those two governments? Well, Australian Labor Governments do have various forms of public-private partnerships on the go at the moment. The principles that they are organised on is what is important. I don't think anybody can say that the Blair Government has gone down the Thatcherite road with their plans for the private financing initiative. Equity is a very important driving principle here, and if equity isn't there, then the projects aren't worth doing. They have been accused of precisely that by the left wing of the party and by the public sector unions. I mean, would the ALP have the stomach to take on its own left wing if there was serious opposition to an idea like this and, indeed, the public sector unions? Well, I don't think it's a question of either/or. There are various models out there. What we've got to do is deal with the challenges of the future and the lack of investment that we have in key areas of infrastructure - hard infrastructure such as transport, soft infrastructure in terms of health and education. But we won't be walking away from our basic guiding principle of a fair go for those people who are out there working to make the economy strong and needing a fair go with opportunity in health and education. But you know that these ideas stirred up a hornet's nest inside the Labour Party in Britain. They'd be very likely to do the same inside the Labor Party in Australia, wouldn't they? I guess the question I'm asking you is: do you have the blessing of the party leadership to kick off this debate? Well, I'm kicking off the debate but I'm not coming down with a definitive conclusion. The party has a process in train at the moment to talk about infrastructure across-the-board, and that's one I support, and all of us on the front bench are thinking creatively about the ways ahead for the future. But I certainly haven't reached any final conclusions in this area, but what I decided to do - and I know Stephen Smith is working very hard on this as well - is to look at the area in total and work towards producing a package for the future so we can deal with the problems that we've got with infrastructure bottlenecks and the lack of investment for the future. That's absolutely essential if we're going to have a growing economy which is delivering higher wages and real prosperity for the future. So are you going to put something like Britain's private finance initiative on the table for discussion in the Australian Labor Party? Well, I'm not putting it on the table for discussion now. It is part of the discussion that the Australian Labor Party has been having for some time but it has been made more urgent, if you like, by the fact that infrastructure bottlenecks and they do need to be dealt with a real handbrake on growth are now seen to be

as it appears they will, Relations Commission, to scrap the Industrial I mean, if this government does move on inequality in Australian society. you're about to put out a book Now, I understand that fairly soon is now under way. under the old system national minimum wage case what may well be the last while you're over there in London, Wayne Swan, just moving on - into British politics. trying to introduce and that's what he's here is Hansonite politics You see, Lynton Crosby's speciality fear of immigrants. but most particularly, fear of the future, is running on fear - and the opposition and how it can be continued, on prosperity The government is running this classic dichotomy. So you've got to produce prosperity in the future. and on how it will continue of the economy on its stewardship is running very hard the government here but as you know, Lynton Crosby for some time, I think they've been studying against Lynton Crosby? what it's like to fight a campaign want to know from you Did Tony Blair and Gordon Brown are his speciality. on crime and immigration and running scare campaigns going back to 1992, I've fought him in campaigns before, Lynton Crosby's hand in that. and you can certainly see statements of Michael Howard, feature markedly in the fear of crime, fear of the future and fear of immigrants, a Crosby campaign are fear, The key features of is in town. you know that Lynton Crosby that John Howard has used, mouth slogans when you listen to Michael Howard Well, there's no doubt that looking at that campaign? Are you getting a sense of deja vu, on how to win an election. he's advising the Tories is actually doing the opposite - director, Lynton Crosby, John Howard's former campaign the Labour Government, getting tips from Alright. While you're over there are relevant to Australia. and see what lessons what's going on in Britain to have a look at the opportunity now and I thought I'd take that's been going for some time So this is a debate a strongly growing economy. and if we are going to have pressure on interest rates if we're going to keep downward

It's been welcomed by the RSL, that carry out humanitarian work. as well as civilians - that it's military people - and that is the modern reality, We must recognise Overseas Service medal. are to be awarded the Humanitarian The nine Australian defence personnel to formally honour their sacrifice. has now found a way the Australian government Indonesia's Medal of Honour, A week after they were awarded May you rest in peace. Scotty, God bless you. for Leading Seaman Scott Bennett. emotions were raw at a service In Nowra, too, farewell for Lieutenant Mathew Davey. Today in Canberra there was a final in the Sea King helicopter tragedy. for the Australians killed It's time for the funerals Peta Donald has more from Canberra. in non-warlike environments. service by military personnel It's being changed to include Humanitarian Overseas Service medal. They're to be awarded the are to receive an Australian medal. in Indonesia 10 days ago of the Sea King helicopter crash The nine victims on Lateline. to talk to us tonight taking the time in London We thank you very much for to leave it there. Wayne Swan, we'll have considering. but it might be well worth in my plans at the moment, I certainly don't have that where that came from. Well, I don't know on the minimum wage? actually living or trying to live some time yourself you're planning to spend that before your book comes out, to the rumour Finally, is there any truth at all our country go down. That's not a path that I want to see as working poor. who could be classified of people out there and about increasing the numbers about removing that This government's of a fair society. is an essential bedrock well-paid job for Australians that is, providing a secure, of what I call the Australian way, is an essential bedrock that the minimum wage but I will just say this: that's Stephen Smith's job - about industrial relations policy - future pronouncements Well, I'm not going to make bring it back again? would a future Labor Government

An Italian newspaper claims a major eruption may be imminent. intensifying fears that on the neighbouring island of Java, sprung to life A second volcano has also schools and mosques in nearby towns. Families have been evacuated to to issue their highest alert. and has prompted officials a series of tremors on the island The activity coincides with coming from the volcano's crater. seeing smoke and sparks Panicked residents reported early yesterday. began spewing volcanic ash on the island of Sumatra Mount Talang of a rumbling volcano. from the slopes more than 26,000 people have fled In Indonesia, Peta Donald, Lateline. from the helicopter. It includes a propellor blade a memorial for their colleagues. crew from HMAS 'Kanimbla' have built on Nias island, Back at the crash site governing the defence medal. is a change in relation to the rules active consideration at the moment What the government has under very helicopter crash near Townsville. who died in the Black Hawk for the 18 defence personnel of another peacetime accident - for the victims there could also be a medal After nine years, by what is a very appropriate medal. They are being recognised thing and we support them. The government's done the right for the future. which is most important the integrity of our system, We've actually kept upside down. that turns the whole arrangement So we haven't done something So we haven't done something for the crash victims. which was opposed to a military medal that Sydney's Cardinal George Pell is a serious contender for pope. The national paper, 'Il Giornale', has ranked Cardinal Pell in its top 18 favourites for next week's Papal election in the Roman Catholic Church. The cardinals who'll be voting in that election have been paying their last respects to Pope John Paul II. As the morning continues, the cardinals gathered to visit Pope John Paul II's final resting place. It's a tomb in a grotto underneath St Peter's Basilica. The cardinals also have the election of the new pope on their minds. If they're looking for guidance from the Italian press, they might be leaning towards George Pell, rated by national newspaper 'Il Giornale' in the top 18. It's news to Vatican commentators. I think at the level of his ideas about church, you know, there would be some people who would identify with him, But there would certainly be a lot of people who wouldn't. And even back home in his own cathedral today, the worshippers weren't at all optimistic their man would get the nod. Out here is just a bit too far distant for them. I just don't feel he's in the betting. That's what I feel. I probably think they'll go back to the tradition of the Italians. One Australian bookmaker has taken thousands of dollars in bets on the new pope over the last four months, but not a cent has been placed on "Big George", as the paper dubbed him, even with odds of 100-1. But you know, there are plenty of 100-1 chances that win at the races, so funnier things have happened. And the Catholic Church is saying anything is possible once the cardinals close the doors and seek guidance from the Holy Spirit. We sort of move to another level, if you like, in a conclave and we often find surprises simply because the Holy Spirit works in a mysterious way. The mystery will be solved later this month. Joe O'Brien, ABC News, Sydney. Now to finance. The US trade deficit has reached a new high, rising 4.3% to nearly A$79 billion. The deficit continues to be driven by America's hunger for imports, with the US commerce department now considering temporary curbs on textile imports from China, after American manufacturers complained about a flood of Chinese goods entering the country. On the local markets -

Now to the weather. And that's all for this evening. If you'd like to look back at tonight's interview or review any of Lateline's stories or transcripts, you can visit our website at abc.net.au/lateline I'll be back again tomorrow, so join me then. Goodnight. Captions by Captioning and Subtitling International.