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(generated from captions) on the bird flu virus but it's also focused attention Most have now been destroyed, around the world in the mail. that caused the 1957 flu pandemic thousands of vials of a killer virus it had accidentally sent laboratory yesterday admitted There was outrage when an American I'm Tony Jones. Welcome to Lateline. Good evening. This program is captioned live. go to jail for substantial periods. that breach the Corporations Law it shows that executives to come of this, If you wanted a message and I will be going to my room. a custodial sentence I will be receiving is punishing me today. The government of Australia in jail. Rodney Adler spends his first night for at least 2.5 years. Sent to his room Tonight -

find myself in that position. and I did not believe I would a good feeling but it's certainly not rather than scared, The word is anxious during his last moments of freedom. as he documented his feelings stopping traffic for Rodney Adler's final media fling, was out in force and the fourth estate more column inches than most, He's the businessman who'se inspired will go to jail. that white-collar criminals to corporate Australia it was a strong message and the regulators said Both the government biggest corporate collapse. for his part in Australia's 4.5-year jail term was handed a stiff The 45-year-old former HIH director in prison. is spending his first night of the power elite, Rodney Adler, The man who was once part rises may not be necessary. saying that further interest rate in Australia's economy, And the IMF warns of a slowdown of her Bali drugs trial. forcing another adjournment Schapelle Corby collapses in court, before the Medicare rebate kicks in. the amount people must pay the government raises safety net - The incredible shrinking First, our other headlines. is coming up. global influenza program, the coordinator of the WHO's Our interview with Dr Klaus Stohr, take, currently, several years. and globally it would certainly would not suffice to do that faster and the vaccine production capacity have not started, just because the clinical trials would be available before enough vaccine about a year that in Europe it would take in North America, might be available in June or July to 2 million vaccine doses that round about 600,000 if a pandemic were to occur today, The current situation is that and crosses over to humans. if the bird flu mutates for the inevitable pandemic we're unprepared is warning Now, the World Health Organisation through South-East Asia. that is sweeping unchecked

and the courts that ASIC, the community to corporate Australia sends a clear message handed to Mr Adler The custodial sentence for someone who pleaded guilty. This is 4.5 years This is a very heavy penalty. the HIH collapse. invested in addressing and $80 million for the more than two years regulators as a handsome dividend It was seen by government and of 2.5 years. with a non-parole period 4.5 years jail sentenced Rodney Adler to Justice John Dunford Supreme Court judge and I will see you." "but I will miss you I will be away, "I don't know how long "and I will be going to my room. a custodial sentence "I will be receiving is punishing me today. "The government of Australia punishment, but then you come out. "you may agree or disagree with that for a couple of hours, "and I punish you to your room "When I punixsh one of you I said to them that, this way. I've explained it to my kids How have you explained it to them? to your children? REPORTER: What have you said and I did apologise. I did say falsehoods to what I am saying, but if there is any ambiguity is so misleading, that I was not sorry The insinuation and the coverage remorse in his recent testimony. who reported that he did not express And there was criticism of those to do anything with him. and I did not agree in return for favourable coverage. to pose for photographs that Rodney Adler recently offered in Sydney's 'Daily Telegraph' front-page report by journalist Peter Gosnell's A position made more awkward

who will now have to spend more on doctors' bills before the Medicare rebate kicks in. From Canberra, Narda Gilmore reports. In the lead-up to last year's election, the Medicare Safety Net was at the centre to average Australians, Critics say it's a cruel blow must be reined in. but says rising health costs a pre-election promise, The PM acknowledges that it breaks the government's Medicare Safety Net. by announcing cuts to a week of speculation John Howard has ended Phillip Lasker, Lateline. where his new life has begun. at Silverwater Prison, from his new home to witness the coverage Rodney Adler will have plenty of time will make an interesting comparison, And the two judgments will learn of his fate tomorrow. Ray Williams The 68-year-old former HIH director anywhere in Australia. for that sort of crime one of the highest sentences imposed of the range - if not THE highest - appear to be right at the top 'Financial Review' journalist, through the of disseminating false information for the first two offences of 2.5 years imprisonment It seems that the sentences imposed and their dealings with the media. for businessmen which raises the stakes He sees this judgement as a watershed criminal law committee. of the Law Council of Australia's QC David Grace is co-chair in evidence He said Mr Adler's remarks the offences are serious Justice Dunford said a struggling company he controlled. to get $2 million out of HIH for related to lies he told Another two charges months before its collapse. to buy HIH shares which was likely to induce investors to the journalist to disseminating false information Rodney Adler pleaded guilty Review' articles in June 2000. Two charges related to 'Financial of shareholders. against the interests will not tolerate criminal behaviour

of the government's health policy. We have this you-beaut safety net. Australians on low incomes who spent more than $300 a year on medical bills would get 80 per cent of those out-of-pocket expenses back. The same for high-income earners who spent more than $700. The policy came with a guarantee for the future. That is an absolutely rock solid, ironclad commitment. But six months on, things have changed. The truth is that in order to maintain its sustainability, we do need to have a higher threshold. The thresholds will rise to $500 for low-income earners and $1,000 for those on high incomes. This is a cruel blow, and it amounts to a tax rise of $200 a year for average and low-income families. This is so typical of John Howard. Say anything, do anything, promise anything to get yourself elected then, after the election, present the Australian public with a bill. The PM isn't denying it's a broken election promise. Well, certainly we didn't say we were going to increase the thresholds, no, but at the time of the last election, we did not believe that it was going to blow out quite to the extent that we believe it is now. It had been estimated the safety net would cost under $450 million in its first year. The figure is now at a $1 billion. Labor says the government got its calculations wrong. We could not believe the figures they put in place, and when we said this was going to cost billions, John Howard accused us of scaremongering and lying. They've underestimated the pressure, the financial pressure that a lot of people have been under in trying to meet medical costs in this country. The PM says Australian families will still benefit. It will still be a very generous safety net. But critics argue the new thresholds are unrealistically high. For average and low-income Australians, they will need to go, on average, 33 times to a GP to make the threshold. That means a visit to the doctor once every 10 days. This government has the most unreal understanding of what goes on in low- and middle-income families. The AMA denies surging medical fees are to blame for the government's backflip. I think this is very premature. I think it's a knee-jerk reaction. I think it's a reversal away from good health policy. John Howard admits the decision to raise thresholds wasn't easy, but he says unless health costs are put on a sustainable basis now, they will become unaffordable in the future. The cuts to the safety net will be factored into the May budget, but won't come into effect until new legislation is passed. Narda Gilmore, Lateline. In Iraq, there are fears insurgents may have regrouped after a lull in violence that followed elections 10 weeks ago. More than 20 people have been killed in three car bombings and an ambush on a police station. In the deadliest attack, two suicide car bombs rocked a highway police convoy in Baghdad. At least 15 people died. Another 30 were wounded. An Islamic website has posted a claim of responsibilty from the Iraq wing of al-Qa'ida which said the strikes were a warning to the US that the insurgency could not be quashed. Another bombing near a US military base in Tikrit killed four Iraqis. And in Kirkuk, gunmen opened fire on a police station, killing at least five officers. It's the bloodiest day of attacks in Iraq since February. In Bali, there's been another day of hysterics in the drugs trial of Schapelle Corby. The Gold Coast woman collapsed in the witness chair today before proceedings could even begin. Indonesian prosecutors had been set to reveal their sentencing demands for Ms Corby, who is accused of trying to smuggle more than 4kg of marijuana into Indonesia. Prosecutors could demand the death penalty, but their request will now remain a mystery for at least another week. From Denpasar, Indonesia correspondent Tim Palmer reports. The pressure on Schapelle Corby resumed the moment she stepped from the prison bus. (Sister screams hysterically) Swamped by cameras, and as her sister struggled to clear a path, another female prisoner cuffed to Schapelle Corby collapsed. In the end, guards picked up both women and carried them to the cells. But minutes later, Schapelle Corby called in the Australian Consul, Brent Hall, and asked him to bring a doctor. Before she arrived, though, Corby was led to court where it was expected she was to learn whether prosecutors wanted a death penalty imposed if she was guilty or more likely, would call for a prison term, possibly a life sentence. But for the second week in a row it didn't reach that stage. Schapelle Corby slumped onto the shoulder of her translator then collapsed completely. As relatives and lawyers rushed to help her her parents launched into the camera crews pressing around. Get out of here! Let some air get in the bloody place, will you? Have some common sense! For some minutes, Dr Conny Pangkahila examined Schapelle Corby as she lay stricken on a wooden bench. The doctor told judges there was no prospect the case could go on. Basically, her condition is too much stress, I think, and also because of the surroundings when she was admitted to the court so many people surround - there is not enough oxygen, yeah, so she becomes so stressed and then she become like, hysteric, you know. The chief judge expressed his agitation from the bench that Corby had come to court two weeks in a row to claim she was too sick to face trial. But on the doctor's advice there was no choice but for Schapelle Corby to be led from the court and back to prison, where late today it was expected she'd be seen by doctors again. So, apparently losing patience over the delays, the chief judge has asked for a full medical report to be presented to the court to establish whether Schapelle Corby will be able to finally face a sentencing submission next Thursday. It's likely that relations between prosecutors and defence lawyers in the case could become severely strained in the interim after Schapelle Corby's outspoken Australian backer Ron Bakir alleged that the prosecution had made improper approaches to the defence team. Mr Bakir told a Sydney radio station that the approaches by someone he said was acting for the senior prosecutor in the Corby trial were absolutely disgraceful and sought something from defence lawyers. In Bali Mr Bakir denied he was referring to bribes but wouldn't elaborate on what he was alleging prosecutors had asked for. Tim Palmer, Lateline. Health officials in the United States are trying to discover how thousands of vials containing a deadly flu virus were sent in the mail to laboratories around the world. The World Health Organisation warned the accident creates the risk of a global pandemic if the virus escapes. It's now hoped all the samples will be destroyed by tomorrow. But a very similar virus continues to spread relentlessly through South-East Asia. So far the "bird flu" has not mutated enough to enable easy human-to-human infection, but medical experts fear it is just a matter of time before it does. It's already mutated enough to infect other species, including tigers, leopards, domestic cats, pigs and mice. And in February, 500 open-billed storks were found dead in Thailand's largest freshwater wetland. Hamish Fitzsimmons reports. Avian flu continues to spread throughout South-East Asia and remains deadly. An 8-year-old Cambodian girl has become its most recent victim. An investigation into her death last week found poultry in her village had been dying two weeks before she became ill. Of the 80 human cases since January last year, 50 have been fatal, and millions of birds have been destroyed. It's hit animals previously unaffected by the virus, which has led experts to fear the virus is evolving at a rapid pace. In October last year, more than 100 tigers in a tiger zoo were put down after they became infected with the virus from eating diseased poultry. The World Health Organisation says there's no direct evidence of human-to-human transmission of avian flu. But Thai authorities suspected one such case last September. It hasn't been conclusively proven that there was human transmission. In Vietnam, officials say a recent survey of birds in the country's south found a 70% infection rate of Avian flu in ducks and geese and 24% in chickens. Other influenza strains remain a concern. Health authorities are battling to make sure a potentially deadly strain of flu virus is destroyed after it was revealed an American laboratory sent thousands of samples around the world in test kits. We also wanted to make sure that the work on destruction has started, because this H2N2 Asian flu strain virus could possibly also be used for other purposes. There is a bio-security risk. Say "Ahh". Ahh. The H2N2 strain of the influenza virus killed between 1 million and 4 million people around the world between 1957 and 1958 in what was known as 'the Asian flu pandemic'. This particular case is one in question where they've used it as a reference virus and I think ill-advisedly, simply because as time has gone by the human population will have less and less immunity to this type of virus. Dangerous viruses are routinely stored in many laboratories but authorities acknowledge there should be limits on their distribution. It's important we do keep reference viruses that we can use for research, and as potential vaccine strains, if we do see a similar virus emerging in the human population. But it's equally important that we don't spread these viruses around without due concern, and in large quantities. The WHO says it hopes to know whether most of the samples of H2N2 have been destroyed by Friday. Hamish Fitzsimmons, Lateline. The World Health Organisation has the task of preventing pandemics. The coordinator of its 'Global Influenza Program' is Dr Klaus Stohr, and I spoke to him in Geneva just a short time ago. Dr Klaus Stohr, thanks for joining us. Now, wouldn't you expect that a virus responsible for a pandemic in 1957 would have been treated as if it were plutonium? How could it possibly have been sent around the world without the knowledge of the laboratories that were creating it? Yes, this event is another indication of complacency, lack of institutional memory. Infectious diseases, when they are gone, also fade very quickly from our memory. Many people may not even remember that in 1968 there was another pandemic in addition to the one in '57 which virus has just been distributed to several thousands of laboratories worldwide. It is at least short-sighted to do that, and unwise. The risk that this virus will go out of any of these laboratories diminishes by the day because more and more laboratories are destroying, and the international laboratories will presumably be finished already by Friday this week. But as long as this virus is in the hands of the laboratories Now, that 1957 pandemic and I believe all the over known pandemics from this century came from viruses which crossed over from animals to humans. We now have a new crisis with the bird flu virus - humans already dying from it. How dangerous is the potential for that to become a pandemic? Yes, the risk assessment is done based on what we know this influenza pandemic virus can cause to mankind. There were three big pandemics in the last century: a very, very bad one, perhaps the most disastrous recorded, in 1918 with between 40 to 50 million people dying in less than two years, when the world population was much, much smaller, about a third of what it is now. There were mild pandemics in 1957 and '68 with between 1 to 4 million people dying. That's enough, but that's what we call mild pandemics, and that's what this H5N1 virus which is currently circulating in Asia can also cause - a very bad pandemic, a mild one. It has all the potential to ignite such a global health emergency. If we don't move fast, it can do that. All the past pandemic viruses had these avian influenza genes in it and the situation is quite concerning and has been for the last 18 months. How worrying is it that this particular avian virus is already killing other animals, other species, which previously appeared to be immune to bird flus? Yeah, the situation has really evolved perhaps not in the right direction, as far as we are concerned. We have not seen an outbreak of avian influenza of such magnitude. 10 countries are affected. So far, 140 million birds were either culled or died. Whilst the number of reported human cases is small now, we believe that there have been thousands and tens of thousands of exposures and possibly silent cases. And as long as people are in contact with this avian influenza virus, there will be infection and there is a chance that this virus changes, it mutates, it re-assorts and becomes what it's missing now, namely the human-to-human transmissibility. There have been no large outbreaks. This virus also in humans has remained an avian influenza virus, but there is a concern that it might change and then acquire human-to-human transmissibility and spread globally. I will come that to that in more detail in a moment. Firstly, though, it is reported that no virus, or no known virus, has ever spread so fast across such a vast geographical area. Now, is that true or is that an exaggeration? This avian influenza virus can cause very severe disease in poultry. There have been, since 1957, around about 20 outbreaks of avian influenza. They did not infect humans, these avian influenza outbreaks. Five of them were large - so-called large. They infected more than one farm. But in comparison now, we have at least four countries where the disease is still rampant. There are 10 countries which reported the disease in the last 18 months. The situation is of completely different magnitude. As the emergence of a pandemic virus is a probabilistic event, what is the chance for the avian virus to infect humans and then mutate? The more avian viruses are spreading to humans, the more likely is it that this virus can mutate and change into a fully transmittable form for humans. There is another very worrying phenomenon and that is that ducks appear to be and yet not exhibiting signs of carrying the virus, in fact not getting ill from it. Does that mean it could be transmitted invisibly from country to country? Yes, that's another feature this virus has acquired. The virus in the last 18 months has already changed, not for the better, as far as we are concerned. The virus has increased its pathogenicity for chicken. It has increased its disease-causing effect in mammals. It has already infected cats. Mice are very, very susceptible. There is no transmission in the wild by these animals, but increasing this pathogenicity means also that it is much more likely to infect humans. And what is most concerning is this virus is now in ducks, as you mentioned. These ducks do not exhibit clinical signs and people can protect themselves - it's much more difficult to protect themselves from a duck which is healthy and doesn't exhibit any clinical signs, but excretes the same amount of virus in chickens. The control of the disease in the infected Asian countries is mainly Thailand, Indonesia, Vietnam, most likely also Cambodia and Laos, but disease surveillance is not extremely strong in these countries. The control of the disease in these countries will not take days or months. It will take, at best, several years. With the virus fully entrenched in ducks, with the disease having spread so widely with countries in that region not even having an animal disease control strategy, we must consider that the control will take several years and as long as this virus is around, there is a chance for it occurring with occurrence of a pandemic and therefore investment into pandemic preparedness makes sense whether or not the H5N1 virus is causing a pandemic or not. Now, you said that right now there is no evidence of it spreading from human to human. And, of course, that is the most worrying possibility, because once it starts doing that, it could spread quickly, but some epidemiologists late last year in Thailand did seem to make a link between a mother who died after her young child had died, and they seemed to believe the transfer there had actually come from the daughter to the mother, from human to human, and that that may have been the first case. Has that not been proven? We need to differentiate here between what we call sustained, continuous human-to-human transmission. That's a feature of the normal influenza virus. If you or I get influenza and we don't take care of ourselves, we might infect our family members relatively easily. We can go to a bus, cough, sneeze, and then a large part of those people on the bus might be infected. This is not at all what this avian virus can do in humans. It can infect an individual person and then, under very exceptional circumstances, it may also infect somebody else. Particularly if there is very close contact, a large amount of virus can be transmitted to the next person. But that's absolutely the exception. The virus is bound in its animal reservoir. If there is no transmission in animals, there will be no cases. The very rare and exceptional transmission of the virus to the other person does not lead to any sustained infectious change. They are very short. The virus has not principally changed too much in the past with the exception of what I mentioned before, that it has gone into ducks and increased its pathogenicity for humans. I need to emphasise that human-to-human transmissibility is not there yet. But is that the greatest fear, as I understand it, that the virus will mutate at some point in the future. You've suggested, only a couple of months ago, that countries in the region and countries in the world and pharmaceutical companies were not taking this seriously enough, the possibility of a pandemic. Has that changed? Are they now taking it more seriously? The answer to this question is not a straightforward yes or no. There have been some changes. For instance, in November last year there were two companies there were two companies which invested into H5N1 pandemic vaccine development. There are now 12 companies in 8 countries which do invest. That, in our view, comes one year too late. We still believe that the commitment by these companies, as well as by governments, is perhaps not adequate to the seriousness of the situation. We are also seeing that more countries are investing into pandemic preparedness. They develop plans. They try to make informed decisions on how they're going to spend their money. For pandemic preparedness, they are thinking about how they are going to use the vaccine, in which age groups, in which professional groups. They are thinking about stockpiling of antivirals. But there is a huge discrepancy or a hugh difference between countries. For instance, Australia has been purchasing antivirals and stockpiled it. The UK has been doing it for 22% of its population. There are other countries in the world which have not thought about this, or worse, will not have even the money to purchase enough antivirals or even think about vaccines. Pandemic preparedness is certainly something which is not high enough in the public attention in many countries.

We know that 50 countries have pandemic preparedness plans and we have 220 countries and territories in the world. It will be very important that informed decisions on pandemic preparedness interventions are being taken now, in the face of a global health emergency, in the face of a situation like many of you remember, like during SARS. It will be much more difficult to have a balanced, transparent, incorporative discussion on interventions which will impinge on the society and on the individual in every country. One final question: is there any idea at all - is there any projection as to how long it might take to create a vaccine for this virus? For the H5N1 virus, vaccine development in quite a number of companies is quite well advanced. Clinical trials or the testing in humans has already started - in April, for a vaccine from one company - but there are 11 more companies which have not gone beyond the animal trials, and without testing this vaccine in humans, it cannot be produced at such a large scale. The current situation, if a pandemic were to occur today, that around about 600,000 to 2 million vaccine doses might be available in June or July in North America. In Europe, it would take about a year before enough vaccine would be available, just because the clinical trials have not started and the vaccine production capacity would not suffice to do that faster, and globally it would certainly take, currently, several years to provide enough vaccine for the majority of the world population. And that's certainly not considered to be a very far advanced pandemic preparedness as far as vaccines are concerned.

Dr Klaus Stohr, we will have to leave it there. We thank you very much for that warning tonight and thanks for taking the time to come and talk to us on Lateline. I thank you. The Federal Treasurer, Peter Costello, has confirmed the economy will slow this year with high petrol prices one of the key factors. Mr Costtello was speaking after the International Monetary Fund warned a slowdown in Australia was imminent and suggested further interest rate rises may not be necessary. More from our finance correspondent Michael Rowland. In its latest assessment of national economies, the International Monetary Fund has identified Australia as one the laggards. While it praises the government for its budget surplus and low debt, the IMF forecasts the economy will continue to slow. I have observed that there is - there has been some slowing in the Australian economy and I think that was shown by the most recent national accounts and in fact, our forecast is for slower growth than the previous year. The IMF expects Australia's economic growth rate to drop to 2.6% this year - well below Treasury's official forecast. Look, I think it's pretty much in the bag now that growth in 2005 is going to be signicantly slower than 2004. The momentum going into 2005, of course, with that 0.1% in the final quarter of 2004 will mean that this year is going to be a fairly soft year and I think consumer spending will be modest compared to previous years. The IMF points out slower growth may negate the need for further interest rate increases. It's a view gaining greater currency on local financial markets. I don't think we are going to see further rate rises this year. Interestingly, the markets which wax and wane at the moment are pricing in a very low probability of a rate hike in May, although most economists are still expecting that to happen. Well, I don't want to comment about future movement of interest rates. Higher rates aside, one of the strongest economic headwinds continues to be hefty world oil prices. Even through the price of crude has dropped sharply in recent days - down to just above US$50 a barrel - motorists continue to feel the pinch at the bowser. Rising petrol prices are in nobody's interest, poor consumers are paying the pain at the pump, the cost for business has increased, it will slow the economy and it is not good for the Australian economy. Even the IMF can't predict where oil prices are heading. We cannot foretell whether in fact today's price - which is around 51 a barrel - is going to go up to $100 a barrel or is going to go down to 25. Both are possibilities. In our view, however, we should be prepared for some volatility. This volatility is wreaking havoc on consumer confidence in Australia. The latest consumer snapshot by the Melbourne Institute shows that high petrol prices are fuelling inflationary expectations at a time when the Reserve Bank is already fretting about inflation taking off. The high cost of crude is buffeting the global economy as well. The IMF is cautiously optmistic, though, that the worst is over but warns economic growth will continue to be uneven. We see an increasing divergence across regions. The expansion continues to be overly dependent on growth of the United States and emerging Asia, while we still await a sustained recovery in the Euro area and Japan. The IMF believes the global economic picture will be much brighter this time next year. Michael Rowland, Lateline. To the markets now. The All Ordinaries slumped today, affected by falls on Wall Street and weakening commodity prices. Banks lost ground - the Commonwealth and Westpac both easing. Resource stocks also took a battering - Now to the weather. 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.