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(generated from captions) takes her own journey and

goes completely off formula.

In ways that just excited me

so, so much and I'm deeply

into the documentary world

now. I love making

documentaries and at the

moment I'm actually involved

with three different ones at

the same time. Um, this

struck me as a piece that we

could actually pretend we

were making a documentary. It

is so unpredictable. Jenny

wrote with such truth it is

sort of a public story in a

way that I thought let's

pretend we are making a home

movie here and see if that

approach does not in some way

help draw the audience that

much closer to the emotions

we are hoping will be

generated Why is Emma the

maid of honour, why not me?

mean? Because. What does that

Because I was not entirely

sure if you were coming or

you would even make it. Blue

it is a sorry, you take a bit

of cloth, wrap it around

yourself a few times. Kym

does not go home ashamed she

comes home to fight for her

place in the family because

she believes she does deserve

to be loved that everyone

deserves to be loved and that

she is willing the fight for

that and I just loved that so

I was amazed by her bravery

with that. It occurred to me

that this is a girl who has

been battling with addiction

for 10 years why tell her

story at this point and I

think it is because she

accepted a certain ownership

of responsibility for her

actions. She is working on

will on for giving herself

for some not all of them but

she needs her family to

acknowledge her part and only

by that can they be a family

again so the fight she is

having to stay with her

family I thought here is a

hero, she is not necessarily

who you would think of as a

hero but she is one of the

most heroic girls on the

planet. Why did you shoot it

in that style? I have been

making films since the '70s

and trying to develop that

best-possible fiction film

style t kind of style that I

feel is the most expressive

and at a certain point in a

way I felt I was winding up

making the same film in the

same style and I found that

boring. At the same time I'm

loving these Dogma films and

realised I have always loved

these films, that certain

kind of power that comes from

the illusion of actual reality in what we are

seeing. I found it very

intoxicating and we went for

it. Darling, hi. Come here,

honey. Did you get my note?

Blue yep. Let me look at

you. You are beautiful. To

be perfectly honest it is an

actor's best friend to not know where the camera is

going to be, to have no

rehearsal, do all your

homework, show up and have

everyone el have done theirs

and jump straight sin.

Everything is spontaneous,

you arely anything all the

time because you have no idea

if it is on you or when it

could pan to you so you have

to be ready and it is a great

equaliser, no-one gets more

takes than anyone else, it

makes the hole experience

very communal and it really

stuck us together and made us

like a family. What about the

scene with Deb December, is

one of the most shocking

moments in cinema? I think it is overwhelming to watch

that scene because I think

one of the great - this film

is a great screenplay. Jenny

did an amazing job with it.

Great screen place are

defined by their conflict and

the conflict in this is so

intense and presence you are

on the side of whoever spoke

last and in that scene with

Debra Winger and I you are

not given a chance to be on

anyone's side. Your brain is

going a million miles per

hour trying to understand it

from each perspective and you

wait for a hug but get a

punch. Even though I was

not keen on the film it was

an interesting discussion

Margaret had with Anne

Hathaway and Jonathan Demme.

It has been innings watching

the results come in for the At The Movies viewers

poll. It was. At The Movies

viewers usually have such good taste don't they? Usually, but there is

this guy called Ben is better

than David Stratton who gave

'Big Stan' five stars on our

web site! It does take all

kind doesn't it? Much but

your top 10 films in reverse

order were...

Well, really interesting.

That is all from us this

week. Thank you to everyone

who voted. Your picks ever

2008 are on our web site

tomorrow Thank you very much for contributing and

goodnight from me too.

Goodnight.

Closed captions by CSI

Tonight - the scorching

aftermath of the

apocalypse. There will be lots

of powerful emotion s around -

shock and disbelieve giving way

to guilt and perhaps anger. Naturally we will start

to feel anger that we can't

move on and grieve. This Program Is Captioned

Live.

Good evening. Welcome to

Lateline. I'm Leigh

Sales. Tonight - more

Victorians are bracing

themselves for the worst as

bushfires threaten their

communities. Others who have

already faced and survived the

Passion week's infoernos are

making do in hastily erect ed

camps. Some people have been

allow ed to return to their

homes where they've had to

confront the massive job a head

to rebuild their lives. I've

met many of the people who had

got back into their house, some

were just devastated. They just

did not understand or expect

what it would be like. So the

community services are working

with those people to help them

through. But there are still

some towns that we're trying to

finish our investigation -

Marysville for instance is one

of them. And we believer lit be

three or four days yet before

we can allow people back into

that community. Joining

Lateline is the Victoria Police Commissioner Christine Nixon.

But first our other

headlines. Israeli voters have

swung to the right but with no

party scoring decisively the

country seems set for another

fragile

coalition. Overstimulated -

Family First senator Steve

Fielding says he's losing sleep

over the changes he wants to

the Government's economic

stimulus plan. And on Lateline

Business sh - the Commonwealth

Bank delivers a healthy profit

but warns future rate cuts

won't be passed on in

full. More than 1,000 homes

have been destroyed and police

now say as many as 300 people

may have been killed. The

fallout from the Victorian

bushfire disaster will last for

years. Police have begun their delicate work, trying to

identify the bodies scattered

through the wrecks and battered

streets of the State's small

townsand communities. It could

be months bvr many funerals are

held. Rafael Epstein spent the

day in Kinglake, where people

are trying to deal with grief

while they rebuild their

lives. And the loungeroom. And

this was my bedroom. Marcia

Nelson is struggling. Just

minutes before the flames

ripped through her street, she

drove our with her 83-year-old

mother and her aunt. As they

left, more than a dozen homes

were destroyed. I think just

siege how lucky my mum and my

aunty and I were to be able to

leave and be safe, but I'm

really still need to know about

some of my friends who they

haven't confirmed yet. And the

other people in the street? Um,

so far there's been 10

confirmed that they're not

here. She spent the last few

days trying to find out who

lived and who died. She's not

sure this is somewhere she can

stay. Not sure she can harndle

driving home here every dai. I

would drive up and still think

how lucky I was to - I was

really content here and I loved

Kinglake, and I was just starting to get to know some

people and I had - because I

live on my own my neighbours

were really beautiful. They

looked out for me. Many of the

cars that were abandoned on the

road or that people died in

have now been pulled off the

road. People have much better

movement in and out of Kinglake

so they can come and check on their homes but there's only

something that is beginning to

stake a long time - the

gruesome task for police of

trying to determine how and

when people died in their

homes, their cars and trying to

flee the fire. The whole of

this one is going to end up in

small bags. It's badly

burnt. Police have to move

carefully. With more than 1,000

sheds and homes that need to be

checked, each location needs a

dedicated team. And they know

it's delicate work. There's a

whole host of information that

we like to collect from every

scene. Virtually anything that

will help us identify the

person. They treat every thing

with dignity and respect. The

deceased are always treated

that way. You treat it like

it's something that you might

know because you might have

known that person. This process

will take a long time. People

know the lack of funeral also

create a space and that space

could fill with

frustration. Naturally we will

start to feel anger, that we

can't move on and grieve. We

want to reach out to the people

that have lost their loved ones

and funerals are the way to do

that. If they're delay and

Adelaide we're going to feel

it, absolutely. Kaye Simpson

and Greg Rogers just got out.

They sped out of their gate in

a car and turned left. If

they'd turned right, they're

sure they would be dead. Just

pure arse, mate. Pure arse.

The police have often relied

on the people who live here to tell them where the bodies

are. McDonald says he had to

check to see if he could find

where his neighbours were. The

one good thing about the way

that they went and it's an

awful way to go - it must have

been so desperately frightening

for them - but they were lying

next to one another with their

dog. And that made me feel

heartened that they went

together . Hirz neighbours were

people he had bar bee cues

where - with and he'd seen

every day. They also had a

passion - they had been raising

money to build a local park.

Now Anthony wants that park to

be a memorial to the people who

died, simply because they lived

in Kinglake. I would like it

to be a place of, you know,

happiness and reflection and to

see little kids running around

in the play equipment and just

somewhere where people can

reflect. People talk about the

ferocity and intensity of the

fire. The wind made the fire

roar up here and it forced this

entire bush over and for some

reason it's frozen it in time

and those leaves pushed

horizontal haven't burnt but

they give you some idea of what

people were facing. People

here are still hungry for the

food they can't make

themselves. They can eat at one

of the many free bar bee yous

and the local supermarket is

giving it away. We were all

just trapped in a fire ball and

we just didn't know what was

going on. David Nicesky doesn't

live in Kinglake buzz he has

worked here forsix years. Like

everyone else, he knows some of

the dead,- one of his staff was

kilgd. He says he worked as

quickly as he could to start

helping in any way he

could. They were just so

grateful and it was just

fantastic that they would come

and I could help them out. They

needed help there and then and

a lot of them lost everything.

Even one of my staffer members. The rebuilding is

slowly beginning. As the people

of Kinglake try to start again,

authorities are warning that

the danger from a number of

blazes in Victoria is far from

over. North-east of Melbourne,

hundreds of firefighter s are

still battling a huge blaze

known as the Murrundini-Yea

fire and late today two new

fire s flared up, giving the

thousand of firefighters still

on duty another headache. Conor

Duffy reports. Just a few

hours ago, alpine residents got

a scare when a grass fire swept

into a pine plantation near

Mansfield. It ises no under

control but underscores the on

going danger. Earlier today,

the aerial assault continue on

a massive fire that has been

burning near the town of Yea

for five days. It's still

dangerous and the chop -

choppers won't be returning to

the hangar any time soon o.ton

ground, the Army has moved in

and is helping to build

containment lines.

Police also blocked off roads

and residents made last

desperate efforts to fire proof

their homes. There are hundreds

of refugee s at an Army camp

nearby and the lingering threat

has them on edge. We still have

burnable areas, so don't feel

quite safe enough to go back

yet. 100km south in Melbourne, authorities are concerned that

the Kinglake and Bunyip fires

may form a megafront that could

threaten Melbourne's outer

eastern suburbs. Potentially

that will join up with these

fires and could potentially

join up with the Bunyip fire,

that is effectively burning

towards it anyway. Joost It is

not over yet. It won't be over

for some time and we need erve

to show that respect to people

and show their support to the

Fire Services. There are also

fears those fires could contestimoninate Melbourne's

water supply. We have fire in

two of the catchments -

O'Shannesy and Maroondah and

they're our critical issue for

the coming period. As

firefighters deal with that

problem, police have formed

Taskforce Phoenix to hunt for

arsonist. Think've divided the devastating fires into six

zones. They believe two of them

are suspicious. We are

identifying individuals that

may have the opportunity or

otherwise,tor motivation, to

start such a fire. We are

examining the history of that

area rather significantly of

course for similar fact and

similar offences. As a

community, we really need to be

vigilant. Just last night, fire

bugs are alleged to have

started a new fire near the

huge blaze known as the

Beechworth fire, burning near

the NSW-Victorian border. We

trying to contain it and you

get dickheads - sorry, but you

get dickheads doing this sort

of stuff what do you do? But

the fire is also brig out the

best in people. Warehouses are

stilling - filling up faster

than the goods can be given out

to those who have lost their

homes. People are helping out

friends that are suffering too.

Lisa Vennell made individual

Gift bags. They got children,

what their sizes are, their

ages that sort of thing so I

could get spesks for those

specific families. This

afternoon she delivered some of

the items to family staying

near Whittlesea. Where should

we put them? Inside, Lisa. We

took it for granted that we

didn't - we had toothbrushes

and toothpaste, when you lose

those kinds of it m ys it's

then that you - items it's then

that you respect what you

had. Bhor than $30 million has

been donated. And to discuss

the situation in Victoria, I

was joined a short time ago by

the State's Police Commissioner

Christine Nixon. Commissioner

Nixon, thanks very much for

coming in at such a busy and

difficult time. You're

welcome. Can I start first with

a questions about practical

matters? How soon can we expect

to see authorities release

bodies back to families for

funerals? I think that we still

have a distance to go on that.

We're at the phase of starting

to collect information from

families and particularly

samples of forensic samples

that can then be matched to the

bodies that we have. And the

coroner is responsible for that

process, so we're starting that

in the next few days. And then

it's a matter of working with

the families through the

coroner's office and getting to

a stage where once we can

identify people then hoping

that we will be able to start

to release the bodies. But I

think Judge Jenny Coate said

she thought that would be a

week or two yet and then it's a

long and slow process as we

work our way through the so

many people who have died. The death toll is constantly

rising. How many bodies is the

Victorian coroner preparing

for? The coroner has the

facilities put in place for 300

bodies. That's part of their

planning. But the toll at the

moment is 181 people, but we do

expect, as I've said all along,

that would rise as we are

working our way through a

number of communities that we

are going house by house and

street by street to search for

bodies and we have some cause

to believe there are clearly more people who have demied

this fire. In terms of the

continue ing emergency at the

moment do you have enough

resources? Is there anything that other State taskforce Federal Government can do for

Victoria? Look, I've travelled

certainly to Traralgon, which

is one of our main sites and up

to the Marysville and also to

Kinglake in the last few days

and I've seen many, many people

who are there and part of the

resource. In terms of Victoria

Police we've certainly pulled

many of our officers - there

were 150 police officers at

Kinglake today that I met many

of them so we do have enough

capacity. It is a long

investigation and a long

incident. But I think the CFA

and others are bringing

resources from all over the

country as are we. We couldn't

have been better assisted by

our colleagues in other States

in all of the disciplines - the

emergency

services. Commissioner, ars nis

still seem to be creating havoc

for emergency workers. Is there

anything that police can do to

prevent arson, given the

difficulty of anticipate ing

who might strike or where. It's

a very difficult offence. It is

one that is often in isolation,

obviously in forests or away

from the main road and that's

part of the problem of even

preventing it initially. But

then it is obviously the

subject of investigation. But

many of our local criminal

investigation areas are aware

of perhaps local arsonists in

their area, and obviously are very keen and investigateding

them. In this case, what we

believe is the fire that was -

the Churchill fire we believe

it was deliberately lit and we

have a very strong

investigation now in place for

some time on that and our

Taskforce Phoenix is now picked

that up as part of the

investigation. But there are a

number of the other fires that

fire investigators and the CFA

and other s believe have been

suspicious because of the way

the fire behave. Even as late

as today a suggestion that

perhaps the Marysville fire was

deliberately lit. So it's a

matter for us so investigate.

On the day as anybody knows who

was in Victoria at 46 degree

temperatures there are a range

of causes for fires but we have

to look at those and that's

part of the investigation. What

is it that leads you to believe

the the Marysville fire was

deliberately lit? Part of that

is, as we've gone to Marysville

to investigate, we've - along

with fire experts become

suspicious about how the fire

actually came into Marysville.

The direction it came from, the

pace it came, with all of those

things are a part of the way we investigate a fire and working

with fire authorities like the

CFA. Part of what we watched on

that day was just some fires

that some of the fire

authorities said can't have

oure oh cured in the way they

did. Along with obviously what

was the main fire front we

found fire in other location.

Part of the concern of

Marysville is that it was

unexplain and how that fire got

started so that is part of the

of the process for us. Can you

tell me if we're anybody close to seeing anybody charged in

relation to these fires? We

believe the team is working

very hard. They do have a photo

fit that has been released on a

person we would like to talk

to, a person of interest. But

the team is confident that they

will have a successful out come

in the not too distant future.

But it is a matter of time and

information. I've continually

asked the community if they're

aware or concerned about

anybody or suspicious or saw

anything that they report that

to Victoria Police and through

Crime stoppers on 1800 333000

and any information they might

have will add to our investigation. The South

Australian Premier, Rann ravern

ran, has said on high fire risk

days putting convicted of

suspected arsonist under

surveillance has helped reduce

the number of fires being lit

in the Adelaide Hills. Is that

something that you think could

work in Victoria? Look, it's a

reasonable strategy. I hadn't

actually heard of that before.

But we have obviously arrested

arsonists before. And they're

certainly suggest to investigation nxth some cases

they might have been suggest to

surveillance in local

investigation units. We've

certainly had a set of fires

over time on the Hume Highway

and we've certainly put people

under surveillance who we believed may have been setting

those. So some of those we've

been able to bring to justice.

But it's a difficult offence to

pursue and a difficult one to

prevent. Commissioner, you will

be heading the reconstruction body charged with re building those devastated communities. Yes. People often

ask metaphorically when we see

traj disof - traj disof this

scale where do you start, but

can I ask you where, how and

when will you be starting that

process? Today I have been out

talking to the heads of government departments in

Victoria about their processes.

The night before, I was talking

to the Victorian Emergency

Management council about the

current stage that the response

and recovery is at. So it is in

aeffectd started. We started to

bring on board staff today to

be able to be part of this

whole process. So it is under

way I think Commissioner who

people would want me to ask me,

is when they l they be able to

go back to their homes and

salvage what they can and start

cleaning up? That certainly has

start particularly at Kinglake

where we had a number of

families were very concerned

that they wanted to get back.

Today I was there, we developed

a process of tagging people.

Those people who were in

Kinglake have been given

particular colours. Those who

were down in Whittlesea have

been other Col Sors there was a

lot of traffic up and down

today. We're also very keen to

protect that environment. We're

still investigate and we still

haven't been through all of the

houses. So we were letting

people in, and letting people

come back to see their property

bus advising them they were

still - the house and the site was still under investigation

in some says cases. That's been

important. I met many of the

people who had got back into

their houses. Some were just

devastated. They just did not

understand or expect what it

would be like. So the community

services are working with those

people to help them through.

But there are still some towns

that we're trying to finish our

investigation - Marysville for

instance is one of them. It

will be about fleor four days

yetd before we can allow people

into back into that community.

That is a sad thing, I

understand it. But the devastation is such that we

need to continue to work there

uninterrupt and until we can

get to a point where we can allow the community

back. Commissioner Nixon, I am sure everyone wishes you well

for the work that lies ahead.

Thank you for joining us

tonight. Thank you very much.

As the nation mourns, the

country's leaders put politics

to one side again today to reflect on the bushfire

horror. But behind the scene,

the intensity of negotiations

over the Government's economic

stimulus package hasn't'sed

off. The Government's locked in

crucial talks with crossbench

senators to try to ensure its $42 billion plan gets through

the upper House. From Canberra,

Kirrin McKechnie reports.

Politics on hold. The only

other time that the Parliament

has sat for a week and not had

question time is perhaps during

World War II. In a rare step,

question time has been

cancelled for the entire week,

as politicians from fire

devastated Victoria record

their community's losses. As we

all come to terms with the

grief, the absolute anger, the

disbelief - And those from the

north count their relative

blessings. Our trouble s pail

into insignificance with what

has happened in Victoria. It's

a remarkable thing about our land that in our Parliament

today we've had moving accounts

of both fire and flood. As our nation battles with all the

elements. But while

parliamentarians present a rare

display of bipartisanship on

the floor of the House, behind

the scenes intense negotiations

are continuing over the

Government's $42 billion stimulus package, and

frustrations are beginning to show. These negotiations have

been a lip service. Lip

service. You tap dancing around

here this afternoon, you put it

off until some convenient time

when there's no news or news

stories. Stop playing politics.

These are Australian people and

their families and lives. I'm

dead set serious about this.

This is just a joke. The Family

First senator is fuming about

the Government's attempts to

rush the package through

Parliament. I may not be the

best negotiator but I am sure

as all heck when I grew up in

Reservoir, I know when someone

is stuffing around. Get serious. To get the legislation

through the up err house the

Government needs the support of

all the crossbench senators.

They've ooh headed into

negotiations with a long list

of demands meaning the package

faces significant changes

before tomorrow night's vote.

But the key players are un

repetent. It's that $12.7

billion in so-called splash

spending that we want to see

perhaps better targeted. I I am

discussions with the Government willing to enter into

in good faith and I think that these requests have been

reasonable. No,, no no. - But

with tensions running high - I

am torn between two two places

and a hard rock. I don't know

how I am going to vote. I can't

sleep terribly well last

night. There will be more

sleepless nights before the

week is out. Both key

contenders in Israel's

parliamentary elections are

claiming victory after today's

counting of votes. The Kadima

Party of Foreign Ministers

Tzippi Livni and the Likud,

headed by former Prime Minister Benjamin Netanyahu have each

begun the scramble to form a

coalition with minor parties

after what was almost a dead

locked vote. The result signals

a major shift to the right.

Tzippi Livni's party remains

the country's biggest but

advantage over Benjamin barely, holding on a one-seat

Netanyahu's Likud. The big development is that Israel's

third biggest party is now the

far right nationalist group,

Yisrael Beiteinu, like - highly

likely to be included in a

coalition - coalition. 34 seats

are split between the religious

Shas Party and evener minor

group, almost ensuring

political instability. Matt

Brown reportings. Israelis are used to choosing their

governments amidst conflict and uncertainty. And this time they've produced a real cliff

hanger. Just a couple of

weeks ago, spores of the

Xstrataist Kadima party feared

a right wing walkover but on

polling day they came out on

top. Their leader Tzippi Livni

leaned heavily on her

untarnished reputation but she

might not get a chance to

negotiate because Israeli

governments always made up of a

coalition of parties. And in

this poll, the brotherer right

wing made the great est gains.

The lead over the Likud party,

Benjamin Netanyahu, was hope

ing to he would be number

one. A big day. A good

victory. Despite coming second,

he may yet get the chance to

implement his promise to put

the brakes on negotiations with

the Palestinians. His party

effectively doubled its vote

and he could form a wing block

with other right wingers.

Avigdor Lieberman from the

ultra-nationalist Israel party

also made significant gains.

His campaign focussed on confrontation with Israel and

their political lead rsz but in

some ways the clearest sign of

the public mood is in the fate

of the Labour Party which once

had a near monopoly on party.

While Ehud Barak could end up

in a coalition Government that

won't disguise the heavily -

heavy losses his party has

suffered. Whoever Israel's

President believies can forge a

coalition and keep it together

will now be asked to form a

Government. In that sense, the

struggle to control Israel's

Parliament, the Knesset has

only just begn. -

begun. Joining me live from

Jerusalem is Tom Segev, a

newspaper Col yimist at rats

rats. At this stage it's -

'Ha'aretz' rets. What do you

think is the most likely

outcome? There are various

possibilities but I think the

most logical thing four - would

be for Netanyahu to form a

coalition Government and the

backbone in that Government

would be for the first time

really in Israel a far right

party, headed by Avigdor

Lieberman, as you said. We

don't have experience with

bigotry and hatred. We used to

say to ourselves that we don't

hate, it's the enemies who hate

us. And with the election of

Lieberman leash, hatred has

been made legitimate in Israeli

plitds so that is a very

alarming development. How do

you explain the rise of that

party at the expense of Ehud

Barak's Labour Party, which as

we heard in that package used

to be in an almost un

assailable position? I think

the explanation is that

Israelis are very pessimistic

right now. They don't believe

in peace anymore or politics

anymore. And so they are

looking for a strong man, they

are afraid of Iran, they are

afraid of Palestinian

terrorism, they are economic

worries for the first time. You

also have to remember that many

of the supporters of that

particular man, Lieberman, are

immigrants from the former soef

yet Union and they don't bring

with them democratic

traditions. So if you take all

this together, as you said,

Israel has really shifted to

the right. The Labour Party is

almost nonexistent. The small

peace party is practically

non-existent. So that is a very

new situation in Israel. You

talk about the pessimism there.

When you look at the factors

you outlined such as the fear

of neighbours and the

disillusionment with the peace

process, it seems almost

logical that Israelis would be pessimistic. Yes, it is

logical. But apparently it took

the election to show how

pessimistic they actually are.

They are so pessimistic that

they are actually voting for a

really far right party that

appeals to bigotry and hatred.

When a party like that did very

well in Austria, Israeli

actually re called its

ambassador from Austria,

stateding that it cannot stand

idle by when far right parties

rise. So that was about eight

years ago and obviously -

unfortunately we've come a long

way since then. Australians may

not know very much about

Avigdor Lieberman's party,

Yisrael Beiteinu, you say they

appeal to bigotry and hatred.

Can you give me some examples

of that? Yes. The major idea is

to fence out of Israel about

1.5 million Israeli Arabs. They

are Israeli citizens and

according to Mr Lieberman they

should really belong to the

Palestinian population outside

of Israel. So they would lose

their Israeli citizenship and

he's talking about draw ing new

boarders. He is not talk about

expelling them physically but

he is talking about fencing

them out of Israel and that is

of course a terrible idea and

unfortunately many Israelis go

for that. What does the

election result there in Israel

mean for the peace process? In

particular the long talked

about possibility of a

two-state solution? I think

that the peace process did not

have very good chances, even

with the previous Government. I

think that at the moment the

conflict cannot be solved. I

think it can only be managed

and - but I would not be

surprised if under Netanyahu we

do get some agreement with

Syria. Because Syria is much

easier to serve, it is not

about emissions, history or religion , it is about

strategy. It is possible that

in the framework of some new

strategy led by America,

designed to draw Syria away

from Iran, we might reach some

agreementd with Syria. This is

speculating but perhaps. We

know that the Israeli

Government is in chaos. This

mirrors a split on the other

side within the Palestinian

Government between the Fatah

party that controls the West

Bank and Hamas controlling the

grip Gaza Strip. So presumably

their side is not particularly

united either in terms of its

approach to a potential peace

deal? No, it is not. Which

makes it much more difficult to

reach an agreement with them.

You are right. The new

President - the new President

Barack Obama has made Middle

East peace a key priority. I

think he appointeded George

Mitchell as his enjoy on his

second day in au.s given this complicated situation in

Israel, what can the US

practically do? Israel is very

heavily dependent on the United

States and there are some

things which Obama can do,

particularly to make life more

liveable. He cannot solve the

conflict. I think he can manage

the conflict or lead us to

manage the conflicted in a way

that would make life more

liveable. Of course the

political development in Israel

comes at a particular delicate

time when America, under Obama,

has totally new values which

are very, very different now

from our values, and you always

talk about the basis for the

relationship between Israel and the United States is common

values, so I think that with

the latest political

developments in Israel that is

also very prop attic now. You

were 23 at the end of the six

day war in 1967 and you wrote

recently that at that time you

wr certain that 40 years on the Arab-Israeli conflicted would

be over. Why do you think we've

not seen it in the past 40

years? Yes, I grew up - I

belong to a generation that

grew up to believe in peace f.s

you had asked me then I would

tell you that 2000 #9d we will

have peace. If you ask my son

today, who is 28, he would tell

you he doesn't believe in peace

anymore. So that is a very

marked change and relatively

new in the Israeli society,

that so many Israeli s - they

want peace, they're willing to

do something for peace, they're

willing to pay forpeace but

they don't believe it's

possible and that's the big

difference between us and them

and, to me, the major reason

why we didn't make more

progress is that we kept

developing Israeli settlement s

in the occupied

territories. That is to say

the West Bank which we occupied

in 1967. That I think is the

major obstacle for peace. Tom

Segev, many thanks for your

time tonight. The United

States Senate has passed Barack

Obama's tril dollar economic

stimulus package. The vote was taken as President Obama address add immediating in

Florida, one of the areas worst

hit by the financial crisis.

Only three Republican senators

supported the plan after some

of its spending provisions were

refuse deuced: By the way, I

just want to announce the

Senate just passed our recovery

and reinvestment plan. The plan

includes massive tax cuts and

infrastructure spending aimed

at stemming the job losses baus

caused by the financial losses.

The Obama admrtion has also announced a revamped rescue

plan for troubled banking

sector. Former hctd judge

Michael Kirby has condemned

what he called hypocritical

religions for obstructing safe

sex education and attempt ing

to stop the spread of AIDS.

Speak at the 25th anniversary

of the Bobby Goldsmith

Foundation, Michael Kirby said

education was the key to

protecting people. It has to be

said religion gets in the way

in many countries to get the

message over that the best way

to bring down tep demic

proportions is to protect

people who are at risk. And sex

worker s - nobody will talk

about it. Such hypocrisy, such

wicked and wrong headed

hypocrisy. Michael Kirby is a

patron of the foundation which

raises money for people

suffering from HIV. Now to the

weather - showers in Sydney,

Melbourne, Canberra and Hobart.

Mostly fine in Adelaide and Brisbane. Showers and storms in

Darwin. That's all from us. Lateline Business coming up in

a moment. If you would like to

look back at tonight's interviews with Christine Nixon

or Tom Segev or review any of Lateline's stories or

transcript , , you can visit

our website. Now Lateline Business with Ali

Moore. Thanks. Tonight - don't

bank on it. The CBA says it may

not pass on future interest

rate cut s in full. Just

flagging the fact that going

forward we not be able to pass

on all of the next reduction,

and certainly that's because of

increased cost of wholesale

funding. Science of life in the

houszing sector - lower

interest rates bring first home

buy ertion back into the

market. And all risk to the

downside - Stockland tables a

big loss and warns it may miss

its full-year tarpthd. The

builders can't afford the land

banks that we've held land for.

They're finding it incred ibly

hard to get land and that will weigh heavily on our results.

To the markets and Australian

shares held up pretty well,

given the large falls on Wall

Street overnight. The All Ords

closed 11 points weaker. Falls

in bank ing stocks helped push

the ASX 200 14 points down. In

Japan, the Nikkei was closed

for a holiday. The hang

essential ended its five hv

dayral yi, losing 2.5%. In

London, the FTSE is steady, a

short time too ago the Bank of

England warned the zuk in a

deep recession. The

Commonwealth Bank may be forced

to cut future dividends if bad

debts blow out and economic

conditions continue to

deteriorate. But for the moment

Australia's third biggest lend

ser doing relatively well and

today revealed cash

earnings. While many overseas

banks have either clapsds or

are teetderring on the edge,

Australia's big four are not

among them. This is the result

whichry flects the group's

cautious and conservative approach in the current

environment as well as the

underlying strength of our core

franchise. Net profit after tax

was up 9% to $2.6 billion,

however when one-offs were re

moved, the quement's cash

earnings were down 16%.

Contributing to that slide was

a 400% increase in the

provision for bad loans with

ABC Learning the worst

ofebdser. We've come out of a

very benign credit cycle and

moving into a downturn where

companies are getting stressed,

et cetera, $1.6 would not be

out of the question for six

months and it's expected for

CBA and other banks that this

number will increase as a

pactage of their loan base. The

dividend was the same as last

year and the first time in 16

years it haentd been raised.

Ralph Norris says the full year

dividend may in fact be cut but

Constellation Capital Peter

Vann says it is not a decision

the bank could take slight

light limit I would say they

would only agree to that at

board level fit helps shore up

the bank's balance sheet and

provides a safer institute. So

I would not be against

it. Having already gabble gobld

up BankWest and having taken a

stake in Aussie Home

Loans Ralph Norris is saying the current environment

provides unique opportunities.

The biggest jump in housing

finance apli kaetionzs in close

to a decade is providing some

much needed hope to builder s.

Many of the apli kantds are

first home buyers burd back

into the market by an

increasing government grant and historically low interest rates

but for major compliention

Boral and Stockland, the good

news is tempered by their

massive exposures to the US and

Europe. Desley Coleman reports.

It's not an enviable record.

Construction group Boral is on

track to deliver its fifth year

of declining profits. Boral

chief executive Rod Pearse says

high interest rates last year

and the economic downturn

around the world is take its

toll on the company. We said we

would get $80 million for the

first time and we've got $75

million for the first half and

that is not bad compared and we

have weaker second half and that's where we're

disapointsdsed. Boral flagged

in late January that it would

not immediate its octd

guideness. Today the company

turned in a 44% drop to just

under $75 million. The first

half - The first half has been

a very tough environment from a

residential perspective. You

started to see housing

approvals fall quite

considerably but more

importantly in the US business,

housing starts have reached an

average of - reached about 750,000 in the December

half. At its peak two years

ago, housing starts in the US

were over 2 million. Rod Pearse

expects houszing starts in

Australia to soften 150% this

year but he is - 15% this year

but he is optimistic that 2000

#9d will prove to be the

bottom. 400 basis pointses of

interest rate reductions in

four or five months compared to

300 basis points of increases

between 2002 and 2008. So that

is a lot of stimulation in a

short time from the RBA. And

it's a lot of stimulation come

ing through from the #23g9.

Those tlintion have an - things

settle have an impact. With the stimulus packages that have

been rolled out they're

targeted at the infrastructure

sector so in many ways Boral

will be a net been fishery of

the Government's spending on

infrastructure. While Boral's

first half was hurt by its presentation from the United

States, property developer

stocklands's first half numbers

were crunched by its

presentation in Europe.

Australia's top residential

property developer posted a

half year loss of $727 million.

Largely due to write downs on

asets in the UK and Australia.

Stockland has warned that it

may not meet its full year

guidance. The builders were

they can't afford the land

bank, we've effectively held

land for them, we will

subdivide for them to use,

they're finding it incredible

hard to get finance and that

will weigh on our results

because those sale also be hard

for us. As a result we've

downgrade for put some downward

risk into our forecast for

today. But December's home loan

approval figure, outtoday, will

be welcome news to builders and

developers. They show a #6.4

bctd in - 6.4% increase to just

under 53,000 approvaltsh

biggest increase in almost nine

years. Almost a quarter of the

the a pli - applicants were

first home buyers: They're faced with wild swings in

supply, demand and price and as

a consequence what we're seeing

here is a trough that is

longer, deeper, more protracted

than we wha we've seen in the

past. The good news is the

December housing finance

approval Fos the construction

of new dwellings were flat

compared to the year before and

that's after de-Kleins of 15%

or more over the ous couple of

months. So that is a real

posztive sign that the bottom

of the market has been

reached. And the bottom for

finance approval also lead to

more building on the ground by

the middle of the year. Ansell

was another company that failed

to impress the market with its

profit result today. First half

earnings rose 27% to $72

million, thanks to trang sales

of its medical f glo tbusz rub

esh products make er also slow

dr - - lowered its full year

profit result. For a look at

the day on the markets and the

lead in in Wall Street as it

heard noufrs the Obama

administration's new rescue

plans for the bank, I spoke to Wayne Flekser from ABN Amro

Morgans. The market closed well

off its lows but it could have

been a lot worse, given the

lead from the US? Yeah, that's

right, interesting night in the

US, everything focussed on Mr Geithner and what he had to

say. I wanted to show you what

happened on the trading. Floor.

It would have gone something

like this. - so o'clock US

market opens, no-one is really watching the screen, everyone

is quietly chatting, 11 o'clock

all eyes were on the TV scene,

Geithner gethd up there,

traders would have been going

is that a smile, is that a

grimace - ed is good news or

bad news? Then Timothy Geithner

started talking, what would the

traders do? Trying to pick up

on the point tanced word ing

and how it's said and when it's

said. I'm sure it would have

sounded like real political

jargon and rhetoric and then

Tim Geithner said they were

going to be stretion testing

the banks, what do you mean?

How are they going to do it?

What happens if the banking

fail the stress test? Does that

mean they won't get any anymore

and they - money and they will

go insolent. So the US market

was sold off and yet our market

didn't follow suit? No, it

didn't. That is right. And our

own market has the same

problem. We need some kind of

clarity. Have a look at today

what happened with Stockland

for example, same thing. What

is happening with the asset valuations, written down again

I think it was about 286

billion dollars. It's uncertain

. Questions are being asked.

The biggest problem with

Stockland and I don't mean to

pick on them, was on 5 February

they came out with an announcement confirming the

earnings guidance. Today, they

came out saying probably not

going to meet earnings

gietdance. Given that

uncertainty, why is it that you

think we performed relatively

well today? Probably the

Commonwealth Bank, everyone was

really watching that really,

really closely this morning.

Compare to that ANZ? Why is ANZ

underperform ing so much? Again

it: Again it's a lack of

clarity issue. It's the only

bank of the four banks that

hasn't done capital raising?

Why? We don't know. They should

simply come out with it and

tell us what ease going on. At

the moment everyone is going to

push the price down until