Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant the accuracy of closed captions. These are derived automatically from the broadcaster's signal.
Lateline -

View in ParlViewView other Segments

(generated from captions) hurting us. What do you think

of that for young people? It is

a very big issue. I think it's

getting the balance - so many

of these things in politics

it's a question of getting the

bleangs right. - the balance

right. The view was taken a

long time ago that university

education shouldn't be

completely free. As it had

been. Otherwise you've got -

you're eceptionly asking people

who go to - you're saying

people who go to university and

acquire skills which enable

them to earn more money and do

betner life should be in part

subsided by the taxes of people

who have not gone to

university. So there is a

question of balance. But the

burden of HECS debt is a

significant issue but it's

really something you've got to

weigh up. You've got to ask

your self should you - tell me,

do you think you should've had

a - what did Did you do at

university? Do I do? I'm

studying at the moment. I study

business. But - So you'll go

off into - you'll do business

degree, right. That will make

you more employable,ings you'll

go and get a very good job and

you'll earn a lot more than

friends of yours who did not go

to yumpt. The question is they

might be asking themselves if

they're in the work place now,

they mig be saying should I be

paying tax so that my friend

can get a free education at

university and then go and earn

a lot more money. Should she

not pay some part of it. And

that's getting the blains

right. It's like the - balance

right. It's like the Medicare

live yu surcharge issue which

has been... We have opposed a

change in the Medicare levy

surcharge thrrks threshold. The

Labor Party says if you - they

want to raise it from 50 to

$100,000 and this will mean

that a - percentage of people

obviously will pay less

tax. But it also means, inevitably, that there will be

more pressure on the public hospital system and a lot more

people will have to pay more

for their private health

insurance premiums. So again,

as with so many of these things

you have to balance up both

sides of the scale. I want to

stick to education. We have

another question from education

from a young residents in your

you feel confident your electorate. Bronte noks. Would

children would still have a

proper education by sending

them to a school in the public

I think the... seconder? - sector? Well, yes,

APPLAUSE Yes. I - look, I think

the - I... Our obligation, our

being all governments and all

parties' obligation is to

ensure that the public sector

provides out - an outstanding

level of education. Having said

that I believe that parents are

entitled to make a choice, we

believe in freedom. I think the

- about a third of Australian

children roughly are certainly

secondary students are edge

caughted in non-government

schools - educated in

non-government schools. It

isn't necessarily an income

thing, in fact the Catholic

school system have told me in

the past that the

socio-economic status of

children in their system at

least in Sydney is somewhat

less afluent than those in the

State school system. People are

entiled to choose, but that

doesn't mean that there should

be any neglect of public

education. Outstanding public

education is vital. The

question is the political

debate of, very often, is how

do you deliver that? How do you

ensure that you get those

better standards and better

education. That's one of the

reasons why when we were in

government John Howard, every

year, put more an more federal

money into public schools.

We're nearly out of time.

There is gentleman who has had

his hand up right in the front

row for quite a long time. We

may not have much time toison

your question. In 2 weeks' time

in Sydney there is the

intervarsity summit on

Australia's role in eradicating

extreme poverty. It's students

as well as linking it with the

previous gegs question In

Australia? Worldwide and in

Australia. That's thank leads

to my question - which is: What

do you believe Australia, the

Australian Parliament's role is

in eradicating poverty in

Aboriginal populations in

Australia? Well, I mean, the

Australian Parliament has a

responsibility for every

Australian. So we have a

responsibility to ensure that

all Australians can live if

dignity and that have access to

all of the opportunities this

great country afrords them. Yet

you must agree that the

situation for the Aboriginal

population is very different to

the non-indigenous population

in Australia? Well, yes and

no. I mean, you can't

generalise about, there are

different - indigenous

communities differ from place

to place. The indigenous

community, indigenous

Australians not far from here

in Redfern in Sydney are

differently situated to a

community, to a remote

community in the Northern

Territory. ... The life

expectancy differs extremely

between non-indigenous and

indigenous Australians I do

agree with you. Can I just say

this to you - I don't believe

there is any differential

across the Parliament in the

commitment to address

indigenous disadvantage. But

the policy solutions, many

policy solution that is have

been tried have failed. In the

past. And you will have seen

the trench ant criticism that

Aboriginal leaders like Noel

Pearson have made about some

very well meaning policies that

have been undertaken in the

past. But you saw with the

Northern Territory intervention

that the Howard Government

undertook last year how

seriously we took this issue in

government and I promise you we

take this issue just as

seriously in opposition. But it

isn't easy. It is a major

challenge but one which we must

rise to. I thank you for

raising it. I'm sorry to say

that that is all we have time

for tonight even with only one

guest the time flies Bay by.

Thanks to opposition leader

Malcolm Turnbull for facing the

'Q&A' audience tonight.


Thank you very much. Thank

you to the audience as well.

You don't need to applaud

yourselves. Next week we'll be

joined by another man who once

aspired to be the Prime

Minister, Peter Costello. With

him on the panel health

Minister nick lo Roxon, former

Democrat and former Labor star

Cheryl Kernot, author and

journalist David Marr and

former adviser to Brendan

Nelson Thomas Switzer. It will

be the final 'Q&A' of 2008. Go

to our web site to register to

be part of the student

audience. Or send us your

questions on online. One of our

favourite video mashups

courtesy of the grif ift

university - Griffith

University oorgd debating society.

I fight for my cause. There

is nothing easy about changing

your position. No way that GST

will ever be part of our

policy. Art or not, police say

charges will be laid. Let's

just allow kids to be kids. Our

ancestors started eating red

meat 10 years ago. Over time

the desire for lean red meat

became instinctive behaviour. I

don't think it's good for our

environment to go

nuclear. Personally I think we

should. There seems to be no

fld End to the drama when it

comes to the life of Britney.

We should seek out the

opinions of everyone.

Subtitles by ITFC Closed Captions by CSI

Tonight - President Bush

appeals to Americans to approve

his plan to bail out Wall

Street. The Government's top

economic experts warn without

immediate action by congress

America could slip into a

financial panic and a

distressing scenario would

unfold. Ultimately our country

would experience a long and

painful recession. Fellow

citizens, we must not let this

happen. CC

Good evening, welcome to

'Lateline'. I'm Leigh Sales.

It's critics are calling it

Kashima but supporters say --

'Cash for Trash', but

supporters say it's the only

way to avoid disaster, the plan

is in the hands of congress r

we'll have the details and go

to New York for the latest.

We'll be joined by Pakistan's

Defence Minister amidst

warnings his nation is on the

brink of civil war. Those

interviews coming up. Other

headlines - one crisis at a time. Kevin Rudd says climate

change policy has been

overshadowed at the United

Nations by turmoil in the

global economy. A warning by

the ANZ Bank in 'Lateline

Business', without the US

bailout a recession is inevitable. President George W.

Bush told Americans they face a

long and painful recession if

Congress doesn't pass the $700

billion Wall Street rescue

plan. Action could wipe out

banks, threaten retirement nest

eggs, sink house prices and

destroy jobs. The two men that

want the President's job

entered the fray. Mark Simpkin reports. George W. Bush

cancelled a fund-raiser,

returning to the White House,

takes his case for a Wall

Street bail out to the people

who House of Lords be paying

for it, the taxpayers. Our

economy is in danger. Rather

than talking the economy up he

talked it down. The Government's top economic

experts warn without action by Congress America could slip

into a financial panic and a distressing scenario would

unfold. The President warned

the scenario could include a

long and painful recession,

he'll host crisis talks. I have

invited Senators McCain and

Obama to join leaders of both

parties at the White House to

speed discussions towards a

bipartisan bill. There are

signs of compromise, the

policitians reluctant to spend

money to help financial Fat

cats. Angry voters swamp the

Senate's phone lines. Americans

are furious. I'm sure that

every single one of my

colleagues on both sides of the

aisle heard what I have heard

from my constituents,

amazement, astonishment and

intense anger. John McCain

doesn't think the rescue

package will pass, dropping a bombshell. Tomorrow morning

I'll suspend my campaign and

return to Washington after

speaking at the Clinton Global

Initiative, there'll be no TV

campaigns or events until a

bailout is reached. John McCain

wants to postpone his first

debate with Barak Obama. This

is the time the American people

need to hear from the person

who in 40 days will be responsible for dealing with

this mess. Some Democrats accuse John McCain of grandstanding and playing

politics, it is unprecedented

and probably calculated, making

them appear engaged, concerned

and bipartisan as opinion polls suggest that Barak Obama would

make a better economic manager.

And for the latest from Wall

Street I'm joined by ABC correspondent Michael Rowland

in New York. Michael, what are

you seeing in premarket

trade? We are seeing the Dow

Jones industrials up 74 points.

That's flat. Hey, it's a rise

in such a skittish uncertain

environment. It could be some

testament to the fact that

investors are optimistic about

what might unfold in Washington

at the crisis meeting at the

White House involving George W.

Bush, and the men that want to

succeed him in the Oval Office.

We see uncertainity in the

market about what the

Government will pay for the

toxic debt instruments, the

$700 billion it will spend on unclogging the clogged

financial system. There's a bit

of market uncertainy about

that, that is feeding into

financial stocks, and there's

also a very interesting

development which happened late

yesterday. There's been so much

uncertainy, anxiety, there's

been a rush to safe haven

investments like gold and 10

year Treasury bills, so much so

the bills were so popular

yesterday a that the yield fell

to zero, meaning investors are

so nervous about the financial

system that they are willing to

part the money and bills for no

return. We saw investment in

the less safe areas, when

Warren Buffett bought shares in

Goldman Sachs, how have the

markets responded to that, can

we expect other investors with

deep pockets might follow his lead. Investors are always

looking for an opportunity at

moment of market crisis, we saw

it that with the optimistic

move by Warne Buffett on

Goldman Sachs, and the move the

day before from Japan's largest

bank to buy a 20% stake in Morgan Stanley, there's signs

of interest in the two

remaining investment banks, and

they turned commercial given

the crisis on Wall Street, both

are looking desperately for

sources of capital. People like

Warren Buffett are happy to

oblige that. The shares in

Goldman Sachs rocketing in

trade and interestingly Mr

Buffett, the sage of Omaha

whose word and utterance is

watched closely expressed

confidence that there'd be a

solution to the crises, he

warned in the same apocalyptic

terms we heard from George W.

Bush, that if this doesn't work

and the rescue package falls

over, then in his words the

market would be kill. More on

the politics of it all, what

impact is President Bush's

speech likely to have had on

the Congress, does it look like

there are the numbers to get

the package through? As we go

to air, there are indications

from senior Democrats,

including Barney Frank,

Democratic congressman, chair

of the house banking committee,

who is deeply involved in the

negotiations that some package

will be finalised as early as

today, straight after the

meeting overnight at the White

House possibly. There's clear signs that the President's

speech, the strong words he

used have convinced some of the

waivering congressmen to come

on board, that Augusters well

for the package, it remains

what wealing and dealing is

involved on cap -- wheeling and

dealing and involved. And how

quickly the passage will pass

through Congress. We heard Mark

Simpkin say in his package that

John McCain's announcement that

he was spending the campaign to

help with the crisis made him

seem proactive and bipartisan,

it's also a risky move for

McCain, isn't it. It is, he's

showing all the atrib utes, it

smacks of desperation, there's

a poll out showing Barak Obama

opening a sizeable lead over

the veteran Senator. John

McCain knows if the election is

fought on the economy, he'll

lose, with his choice of Sarah

Palin as the Vice-Presidential

candidate, this is a bold move

to put a floor under his

ratings to induce voter

support. If this package falls

over and if he's seen as too

opportunistic playing too much

politics, and if he doesn't

appear and stand behind an

empty podium opposite Barak

Obama at the debate Friday

night, he'll pay a heavy

political price. Those are the

risks for him. What are the

risks for Obama, as he respond

to the crisis and John McCain's

announcement. Barak Obama can

be in a bit of danger. His

response to John McCain's

announcement yesterday was seen

as too cautious. As you know,

Barak Obama has been criticised

throughout the election

campaign for not being bold,

for not being aggressive, being

too cautious, not being willing

to go out on a political limb

to advance the Democratic

cause, taking the fight to John

McCain. Equally, if the debate

takes place tomorrow and say,

for argument's sake there's

doubt over the package, Barak

Obama could find himself in

trouble for being seen to be

playing politics at a time of

national crisis, it cuts both

ways, the politics are dynamic,

revoefing on the hour, it's

hard to see how the positions

of the Democratic and Republic

nominees will be at the end of

what's shaping up in New York

and Washington as a critical

day. As you say, a great deal

of the focus is on them, what

will happen, but there's a

figure, the actual President at

the moment. As we know, George

W. Bush is very un popular in

the opinion polls with the

American public. At times of

crisis, Americans rally around

the President. How are they

responding to him at this time

of crisis. Well, there are

signs that according to some of

the talk radio shows that I

have had a few minutes to

listen to this morning, that

voters are happy that George

Bush is showing that he has a

grip on the situation. You are

right. People don't really

care, to put it bluntly what

George W. Bush says, he's the

President, they have to

tolerate him to get the package

through. They are more

interested in what John McCain

and Barak Obama say about how

they'd deal with the crisis as

President, the focus is at the

White House meeting not on the

guy sitting in the big chair,

but the two guys opposite the

desk to him trying to take his

job in November. Michael

Rowland, in New York, thanks

for your insights. The Prime

Minister addresses the United

Nations tomorrow as he tries to

shift focus from the economic

meltdown to climate change.

Kevin Rudd conceded the

financial firestorm in the US

makes it tougher to sell his

message on tackling global

warning, despite the

uncertainity Mr Rudd is set to

win support from former

American President Bill

Clinton. Greg Jennett reports

from New York Before Wall

Street wrote its own thriller

he played Gordon Gekko, the markets dirtiest

scoundrel. Greed for lack of a

better word is good. Now... My

name is not Gordon, he was a

character I played 20 years

ago. Michael Douglas prefers to

play the Statesman. Backing

Australia's push to bring the

global ban on nuclear testing

into force, form are Defence

Secretary William Perry is also

on board as a high profile

signing to Gareth Evans's

commission on nuclear weapons

control. The objective of it is

timely, and important, and the

two leaders are distinguished,

capable leaders , it will be a productive exercise, the time

is right, this is the right

time for doing it. At a time

when North Korea turns rogue,

with plans to restart the

Yongbyong facility. They plan

to introduce nuclear material

to the reprocessing plant in

one week's time. We would like the Security Council to

consider further effective

measures that it might be able

to take. In half an hour with

Ban Ki-moon Kevin Rudd talked

nuclear security and East

Timor, he took his place among

Commonwealth leaders and sought

out a tried and trusted foreign

policy advisor. We talked

mostly about Asia, the future

of China, of an Asian community

and all of Australia, and the

friendship between our two

countries. On his second full

day in New York the Prime

Minister has had almost nothing

to say in public on the US

economy or on anything else. He

gives his address to the UN

tomorrow, its emphasis on

climate change. He admits the

economic uncertainy makes it

harder to inspire global

action. It's an even greater

difficulty at a time when the

global economy is under great

global financial stress. Even

sew he'll achieve a break

through form when Bill

Clinton's foundation links up

with Mr Rudd's global capture

and storage institute. It's

conventional politics turned on

its head. The Government's

managed to get contentious tax

increases through the Senate

but can't get through a bill

cutting tax. The Senate

rejecting a proposal to

increase the income threshold

for the Medicare surcharge. The single vote of Steve Fielding

was enough to bring it down,

Dana Robertson reports from

Canberra. The Senate gives. 34

ayes and 34 'No To Pope's. And

takes it away. They have the

hide to vote down a tax cut for

hundreds of thousands, hundreds

of thousands of working

families, you should be

embarrassed by your performance

in the Senate. Steve Fielding's

lone voice was enough to

scutedle the Government's plan

to axe the -- scuttle the

Government's plan to AFL the

surcharge. For ever -- plan to

axe the Sur charge. Family

First is families last. He

needs to look the 330,000

Australians in the eye and

explain why he refuses to

support a tax cut for

them. Today the Government's

luck changed. It will now reap

an extra $600 million into its

covers after the Senate passed

its new tax on the gas

derivative condensate ending a

three decade long exemption by

the companies. Nothing but

scorn for the opposition. There

was the Liberal Party punching

a 2.1 billion hole in the

Government's Budget. Less

economic responsibility. Than

Senator Feilding. Less economic

responsibility than Senator

Nick Xenophon. The importance

of the preserving the $22

billion surplus is the

Government's new mantra. We

have built a strong surplus, Mr

Speaker. A strong surplus to

act as a buffer against global

uncertainity, Mr

Speaker. Another report confirmed Australia is better

placed than most to ride out

the turbulence. The Reserve

Bank's twice yearly analysis


There are still plenty of

signs of good health in the

Australian economy. The report

points out that bad debt have

trebedly in a year, and the

global -- trebledly in a year

and global problems are more

pervasive and costly. The

report adds weight to the

Government's view that we are

not immune, we are well placed

to withstand the fallout The

opposition endorses the

comments about the Treasurer

about the financial stability

but not about the surplus. If

they needed a reason to support the Government's Budget reasons

in the senate, it's contained

in the Reserve Bank report. The

Opposition is not for

turning. We don't support bad

policy. We won't give up, we'll

push our proposal. They'll be

back in Canberra in a fortnight

to try again.

An inquest into the death of

a 14-year-old girl has begun in

Alice Springs. The girl was

bashed and sexual cli assaulted

after walking out of the Alice Springs Hospital in January

2006. Her death has exposed

faults in the hospital's

handling of patients that leave

without permission. Kirsty

Nancarrow reports. The

teenager was brought to the

Alice Springs Hospital with a

nosebleed that wouldn't stop.

Less than a week later she was

dead. She was diagnosed with a

blood disorder and admitted to

the medical ward because she

was deemed too old for the

children's unit. She left the

hospital without permission and

was found unconscious near a

school the next day. She'd been

attacked twice, and died from a

head injury. Police were told

the girl was missing 24 hours

after she was last seen in the

hospital. Nursing staff told the inquest its common for

patients to be away from their

beds and didn't initially

realise she was missing. The

council assisting the coroner

said staff should have contacted police immediately

because the girl was underage

and at risk because of her

medical condition:

The night shift nurse

coordinator at the time Alvin

Ching told the inquest he

didn't call police because he

thought someone on the previous

shift had done so, saying the

Alice Springs put up flow

charts of what to do when

patients abscond. Five people

were sentenced in the Supreme

Court earlier this year in

relation to two attacks on the

girl, two teenagers given

community work orders for

assault, three others are

serving jail terms for

attempted rape. The inquest

continues tomorrow. Australian

Federal Police have stepped up

their inquiries into claims an

Indonesian man living in Sydney

is a war criminal. They'll conduct a full investigation

into the allegations. Guy

Campos is accused by the family

of an 11-year-old East Timorese

boy of beating the boy to death

in August 1979. The boys family

lives in Australia. I want him

to rot in hell. The Immigration

Department says it conducted a

thorough background check on

Guy Campos before being granted

a Visa for World Youth Day,

Channel 7 revealed East

Timorese court documents show

he was tried for assault

leading to death. It took place

weeks after the 11-year-old boy

died. The region straddling the Pakistan Afghanistan boarder

comes under scrutiny, the US

launching raids against

militant strongholds well into

Pakistani Territory. After the

Marriot Hotel bombing, the rise

is putting pressure on the new

Government of Asif Ali Zardari,

to deal with home-grown terrorism. Hamish Fitzsimmons reports. The boarder area between Afghanistan and

Pakistan is known as a safe

haven for Al-Qaeda terrorists

and Taliban extremists. The

United States sees the area as

the greatest threat to its own

homeland safety. The bombing of

the Marriot Hotel in Islamabad

on the weekend which killed 53

people has been blamed on

Muslim extremists. Militants

moved out the Afghanistan into

the tribal areas, but the rest

of Pakistan. They are based in

major cities in Pakistan, in

all the four provinces. The

growth of militant Islamism has

destablised the country

according to former general

Talat Masood. It's affecting

the economy, stability, and its

social structure, so I don't

think the Government or the

country can take the pressure

for too long. It has to

neutralise the pressure of the

militants, and it has to bring

Pakistan to a certain sense of

normality. (Gunfire). The

assasination of former Prime

Minister Benazir Bhutto marked

the beginning of the end of the

nine year reign of the former

military strongman Pervez

Musharraf, and saw her widower

Asif Ali Zardari become

President. It gave the main

stream parties a voice. Our

dictates of the United States rulers are following the

of America. Militant Islamism

in Pakistan had strength in the

border regions with Afghanistan

known as Federally administered

tribal areas, much is under

control of Islamist

militants, We cannot separate

the tribal area people from

Afghanistan which are part of

Pakistan and the Pakistani

people, we are getting support

from tribal people in

Pakistan. Frustrated at what it

saw as a lack of action against

militants by Islamabad, Washington ordered attacks on

the strongholds. The raids have

been condemned by the Pakistani Government.


shameless incident vile I think

Pakistan sovereignty and

territory, Pakistan is

struggling against terrorism it

is fighting terrorism. It is a

key ally, and friend of the

world. After 15 civilians were

killed in a US-led raid the Pakistani Government asserted

its right to defend its

territory. US proceed tore

drones crossing the boarder

were fired on by Pakistani

forces, Tribesmen claiming to

have shot one down. Among the

Liberal moderate, those not

interested in politics,

American raids created a strong

sense of unease, a sense that

Americans are violating

Pakistan's sovereignty. Growing

tension between moderate and

extremist forces has the

makings of a civil World

Championship I think there's

going to be a civil war, it's

unaccept able that you have

large territories of yours

handed over to the Taliban who

run administrations. Whether the fledgeling Government of Asif Ali Zardari does anything

about it is the next chapter of Pakistan's turbulent

history. And I spoke earlier to Pakistan's Minister for Defence

Ahmad Mukhtar from Islamabad. Ahmad Mukhtar, some

believe that Pakistan is on the

nation's Defence Minister, are brink of civil war. As the

you preparing for that

possibilitiy. I don't think

that that reality is true that

we are at the brink of having a

civil war in Pakistan, there

are some elements trying to

create problems for Pakistan,

but I don't think it is that

extreme. Everyone should worry that there'll be a civil war

after this. How would you describe the security situation

in Pakistan: The situation is

fairly bad, but then a couple

of years ago it was like that

also over a period of time a

lot of damage has been done by

the terrorist. We lost our

leader Madam Benazir Bhutto to

these people. We are determined

to fight them to the end. You

were saying that you were going

all out to tackle the people. The United States doesn't feel

that you are doing enough. Do

you reject their criticism. I

don't think it is true that the

United States doesn't feel we

are doing enough. We are doing enough. We are suffering

because of that, we are in a

state, the world has to believe

in us, that Pakistan, the

people of Pakistan, Pakistan is

a country suffering because of

this, people are not happening

in Pakistan. If this continues

this will be bad. A few years

from today if there's no

investment coming into

Pakistan, the people are

jobless, then this kind of

terrorist will grow like

mushrooms in Pakistan, that is

the scary part. If we don't

contain them out here, it will

be very difficult for the world

to contain them anywhere else

in the country. As we know the

US is conducting stealth raids

into Pakistan, into the tribal

areas boardering Afghanistan,

Asif Ali Zardari said this week

that he will not tolerate the

violation of sovereignty or

integrity of any power in the

name of combating terrorism.

What does it mean in practice,

how does Pakistan intend to

respond to the actions by the

United States? There were Dig

regss on the boarders, -- dying

regss onned boarders, our

President talked to Mr Bush

saying it was not acceptable.

Pakistan is a sovereign state.

We know how to deal with the

people. We have a bottle,

there's about 940 checkposts

which Pakistanis are holding,

the arm force - we have more

than 80,000 people on the

borders. I think more than

that, the other side should do

it. The Government has to

consider the biometric proposal

we have given, that people

should not cross the border, we

should man the border, we

should have - the line should

be marked so people who cross

on the other side are coming

towards this side, they are

noted and action can be taken

against them. The Government of

Mr Gaza is working on that,

they don't want to accept the

border which we say is the

line. You have been telling the

United States for a while that

this action is unacceptable,

but it is continuing, so what's

your next step? No, the United

States is not continuing. Since

the President talked to Mr

Bush, which was only yesterday.

Prior to that when Mr Mullen

was here, we talked to Mr

Mullen, telling him it wasn't

acceptable which he conveyed to

his Government. We'd like to

get hold of the people

ourselves, they have done more

damage to us than any other

country. You spoke of Mike

Mullan, admiral Mike Mullan,

the Chairman of the Joint

Chiefs of Staff. He told the US Government that America and

their allies are running out of

time and is not convinced they

are winning the war there, is

that your assessment. I don't

think it is true. We are trying

to curb the areas, so in the

northern areas we have killed

more than 900 and some terrorists in the last month

and a half, a substantial

quantity, if you look at the

number that came down bows of

this. As far as Mr Mullen is

concerned he has his own

assessment to make. I think we

can handle this more seriously

and effectively than the

Americans can do. They can

throw a missile, that'll do

collateral damage, it's not the

way to handle the people. If

you kill one person, you kill

10 ladies and 15 or 20

children. Then there's more

collateral damage you do to

have benefit out of it. You say

that you can deal with the

situation more effectively, but

some people would say you

haven't so far? No, I think we

have done a lot in the last

nine-ten years, as I said, we

lost our leaders, and so many

lives because of this. We have

lost our economies on the

downslope, and all this is

because of this war which we

are fighting. We will - this is

not an easy war, the enemy shh

in front of you, it's a

faceless enhi, you don't know

from -- enemy, you don't know

where they will strike. We

don't know who the enemy is, he

could be standing next to you,

and blasting you or blasting

himself and killing other

people. If you are fighting a

guerilla war, it takes time.

It's not an Easy thing. We are

not used to guerilla war, we

are learning the techniques of

fighting the guerilla war and

shortly you'll see a more

effective role being played by

Pakistan. If we go back to this week's attack on the Marriot

Hotel in Islamabad, Pakistan's

Interior Ministry said the

Prime Minister and the

President had been due to dine

at the hotel that evening but

they had a last-minute change

of plans, that begs the

question whether the terrorists

responsible may have had a

tip-off that the leadership was

supposed to be at that hotel.

How confident are you that the

Government is not being

undermined from within? I think

the invitation was from the

speaker of the assembly on that

day, the invitation was for the

Prime Minister house. I don't

think that there was a change

of plans because when you

invite 300-400 for dinner, you

can't change them overnight.

Like you have an invitation, I

knew up to 4:30 we were going

to the Prime Minister's house.

That was it. For some reasons

terrorists were targeting the

hotel and I wonder where they

got the intelligence that

senior members of the

Pakistan's team were supposed

to be there. I don't think this

is true. The leadership was

going to have dinner where they

had dinner. Pakistan's

authorities are obviously still

investigating that incident.

Where are their inquiries

leading them, are they closing

to getting the people

responsible. Yes few days ago

it was in the papers all over

that they had about 50 people,

50 suspects, and they'll weed

out the people and ultimately

we will come to the group of

people who have done it. I

don't think we are too far away

from finding out and showing to

the world that these are the

people doing this kind of

matter. Today we got hold of

some people who wanted to

blow-up the Islam. They had

these designs so there was a

high security alert at the

airport, and one gentleman had

reported and the call centre

what he had overheard people

talk, and where he had gone

with them. So we are trying to

get hold of the ring leaders,

maybe they are the ones

connected with the Marriot

Hotel bomb. Ahmad Mukhtar,

Pakistan's Defence Minister,

thank you for joining

'Lateline'. Thank you. Now to

the weather - welcome rain

continuing in Perth, a possible

storm. Only light falls with

developing rain in Hobart.

Strong winth for Melbourne and

Adelaide ahead of a wind

change, dry and mild to warm in

the other cities. That's all

from us, 'Lateline Business'

coming up in a moment. If you'd

like to look back at tonight's

interview with Ahmad Mukhtar,

or review any of 'Lateline's

stories or transcripts you can

visit the web site at Now

'Lateline Business' with Greg

Hoy. Tonight - one last chance,

the head of the ANZ Bank

believes the US will have a

depression if the financial

bailout package is not

passed. It looked like a number

of banks, major financial

institutions in the US would

not survive. And had that been

the case, the knock-on effect would have would have been

extraordinary. Government -

money to burn, can Sovereign

Wealth Fund we trusted to help

solve the debt crises. I think

the key thing about the

concerns about them, is the

need to be very clear about

what their motives are. And bargain hunter, construction

giant Lend Lease says the time

is right to pick up some new

assets. We are waiting for the

market to cool down a bit,

which it has, we see great

opportunities around the world

to invest funds at cheaper

prices than a year ago. We are

talking at people queuing up to

sell assets at 25% of what we

would have paid a year ago.

First to the markets, and

banking stocks weakened with

doubts the US bailout plan

would get through would get through congress.

The big minors slid on

worries about slowing Chinese

growth. The absence of short

selling allowed Nickell minors

and investment firms to recover

a little. All Ords down 1%. The

ASX down 1.1%, in Japan the

Nikkei is down by nearly 1%.

Hong Kong's Hang Seng gave up

gains finishing flat. The

FT-100 up sloightly in London. -- -- lightly.

ANZ Bank boss Mike Smith blooes the United States will

be plunged into -- believes the

United States will be plunged

into recession if the rescue

plan is rejected. Mr Smith

believes the world hasn't

understood the seriousness of

last week's events. Even if the

rescue plan is approved, the

global financial crisis still

has at least 18 months to run,

he says. Andrew Robertson reports. While President Bush

was appealing to US policitians

and the public to support his

Treasury secretary's plans for

a massive injection of tax

player funds into Wall Street.

In Sydney ANZ Bank boss Mike Smith delivered his own dire

warning We were in a situation

where it looked like a number

of banks, major financial

institutions in the US would

not survive. Had that been the

karks the knock-on effect would

have been -- case, the knock-on effect would have been

extraordinary. That is why

Congress must pass the package put together by Henry Paulson. If it's not passed do

we have a recession on our

hands. Yes. No

doubt Absolutely. If congress

approves the package he sees a

slow down in the global economy

as banks adjust to the new

reality. Banks will scramble

for capital, most to repair

their balance sheets, and two

(2), there'll be a huge

de-Levering effect, that will

reduce the amount of credit in

the market, it will impact any

recovery. Mike Smith's sparns

at the Australia Israel Chamber

of Commerce coincided with the

Reserve Bank's review in which

it concluded:

Which Mike Smith says will

help Australia ride out the

financial crisis in better

shape than most. I think there

are 250,000 banks in the world,

only 18, 1-8 are 00 rated. Four

of those are Australia. That

says it all. While all the Australian banks have pledged

to pass on this month's cut in

the official cash rate the

turmoil of the last few weeks

means businesses and home

owners may not be fortunate

when the next reduction in

rates is announced. The stress

high rates gives is good for

nobody, however I have to fund

the book, I'm running a

business, it's not the welfare

state. On the issue of short

selling and its role in this

environment Mr Smith says when

markets operate it's a valid strategy. When they are

unstable, as now, he believes

it adds to the in stability and

he supports the ban imposed by

ASIC here in Australia and

other regulators around the

world. If a share price plunges

in a financial company, you are

not likely to deposit money

with it. Yeah. In a retailer,

if the share price pluges you'd

buy bread and milk. As for the

well documented write-downs of

ANZ courtesy of ill-fated

lending to companies such as

Tricom Opes Prime, and Chimera,

Mr Smith said it must be put

that perspective. We all have

our bad days. They are viewed

as a possible saviour in the

current financial price sis, at

what price. Sovereign Wealth

Fund owned by governments

around the world have been used

to soak up bad debt. Desdressed

businesses embrace the

injection of -- distressed

businesses embrace the

injection of cash, the problem

is the expectation of

governments advancing the

funds. Desley Coleman reports.

Sovereign Wealth Fund are

being eyed as a stablising

force to the wealth funds. Sovereign Wealth Fund

are becoming important. You

know, in 10 years they'll have

something like 15 trillion

dollars at their behest.

They'll own a few banks in the

world I suspect. ANZ's Chief

Executive's comments go a

little too far according to the

delegates at a two-day conference in Sydney discussing the role of Sovereign Wealth

Fund. That dimension of the

debate is more about foreign

investment than it is about Sovereign Wealth Fund

investment, which is to date

predominantly of a portfolio

nature. Sovereign Wealth Fund

are Government-owned pools of

assets, they are neither

pension funds or traditional

cash reserves. The United

Nations conference on trade and

development said in the latest

world investment report:

The growth in Sovereign

Wealth Fund has stemmed from an

increase in official foreign

cash reverse and rising revenue

from oil exports. Several

funds have been used to rescue

financial institutions hit by

the US subprime mortgage crisis, therefore suspicions

that stakes taken in strategic

sectors could pose threats to

national security, Abu Dhabi Investment Authority poored

$8.9 billion into Citigroup.

Swiss giant UBS, one of the

worst hit was rescued by a $12

billion worth of funds by the Government of Singapore

Investment Authority. The key

thing, about the concerns about

them is the need to be very

clear about what their motives are. Transparency is a

twin-edged sword. They can't

really be exposing too much

about what their intentions are

in terms of investment

activities, that could be

destablising to the

markets. Edwin Truman is a

senior fellow at the Paterson

institute and the assistant

secretary of the US Treasury for international affairs and

says permitting Sovereign

Wealth Fund is like any port in

a storm. It depends a bit on

who rur friends are. The

problem may be less of a

problem than for the United

States. We change our mind who

our friends are, you may be our friends today but not

tomorrow. While the rush of

Sovereign Wealth Fund investing

in financial institutions

paused, it's the nest move

investors should watch for.

That would give me a fairly

good indication of their

thinking that we are close to

the bottom of the market and

it's safe to come into the

water. I'd be looking as an

investor at their behaviour.

People should not think of them

as providing stability, they

are getting a great deal.

That's why they are buying. The

British market is cautiously

awaiting developments with the

US bailout package, for the

latest on the London stock

exchange I'm joined live by IG

Index's David Jones. David,

what is predominantly driving

the mood on the London stock

exchange today? At the moment there really is only one game

in town, and it's the fed

bailout that was announced last

week in markets over the last

couple of days, they've been

treading water waiting to see

what's going to happen. Last

week we had a fantastic rally

where financial markets thought

it was the answer to all their prayers, that the US

Government, cavalry came riding

in and would save everybody.

There's been a bit of

disessential in Congress as to

whether the US should do it,

should the taxpayer take on the

burden, and what size of deal.

We have been thin on details,

that fact, over the last few

days is making markets nervous,

and they are really marked time

until and if some plan gets

announced. That suggestions,

doesn't it, that the line

between optimism scpm pessimism

in London at least -- and

pessimism in London hinges on

the bailout package It's a fair comment, it's probably true for

markets around the world. We

have seen volatility die off

the last couple of days, and,

of course, it is because

everyone is hanging on to see

what happens regarding what is

going on in Congress, we know

there's a few meeting going on today, their hope is something

will be sorted in the next

couple of days. If we look at

the rallies we saw last week,

the big recoveries, it's

difficult to see when the plan

comes out, whether it will

spark similar rises, you'd have

to say the deal looks to be

slightly diluted from what

markets are expecting, so maybe

we are setting ourselves up for

disappointment either way, when

it does get announced. When it

happens, it will be interesting

to see what the market reaction

is, but I think there's a risk

they'll be disappointed. A

waiting game in London and

elsewhere. Meanwhile the

world's six-largest company

General Electric has revised

its profit forecast. What is

the news there and what's been

the impact. I think they have

revised their forecast earnings

down by around about 10-15% for

the current quarter, the

inticial impact was knee-jerk

sell off -- initial impact was

knee-jerk, the Wall Street

futures in the overnight market