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Stateline (NSW) -

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(generated from captions) Tonight's top stories again:

The US home loan crisis has

spooked the Australian share

market again with more than $50

billion wiped off the value of

shares today. Security plans

for next month's a peck meeting

in Sydney are being re-jigged

because US President George W.

Bush is arriving two days

early. And an opinion poll out

tomorrow shows Labor ahead in

Western Australia where the

Coalition was hoping to pick up

seats in the election. That's

ABC News for this Friday.

Stateline with Quentin Dempster

is up next. We leave you,

though wrkts return of

Australia's RAAF oh wry beyonds

after a four-year stint in the

Middle East.

Orions. after a four-year

stint in the Middle East.

Goodnight. Closed Captions by CSI

This week, while the

dolphin s frolic offshore, on

shore they are fussing and

fighting over this - the

multi-multi-multimillion-dollar

adventure known as the

Glasshouse. $66 million cost to ratepayers is way out of

court. Also some rumours that

are upsetting the unions.

You're a union boss. I thought

you were running the Iemma

Government. No, we don't run any government.

Welcome to Stateline New

South Wales .s I'm Quentin

Dempster. First to a small sea

change town where it's people

behind the Glasshouse who are

having the metaphorical stones

hurled at them. It is a tale

of civic ambition, dissent,

huge amounts of public money

and the relationship between

central government and its

small regional counterparts.

On the mid north cove, a local

council is facing the

unpleasant prospect of becoming

the first in the State's

history to be sacked for

building a theatre. An inquiry

is now under way to determine

if all nine elected

representatives of the Port Macquarie Hastings Council

should be dismissed. They are

under attack over the building

of a theatre, art gallery and Convention Centre which critics

say will cost the community at

least $66 million. Undeterred

by the threat of the sack and

the blazing row the project has

provoked, the council is

building the centre as fast as

it can. David Spicer reports.

Port Macquarie was once a

convict settlement. Later it

became a sleepy fishing

village. Now it is a popular

tourist destination. There are

plenty of delights on offer to

entertain locals. Most,

though, agree that to thrive it

needs more than just natural

beauty. The culture is beach,

ocean, surf, you know what I

mean. It's that kind of thing,

but we don't have a whole lot

to do here, really. The Port Macquarie Hastings Council

wants all that changed and is

spending millions to make it

happen. $66 million cost to

ratepayers is way out of court

and they know it and they don't

want to pay it, but they're not

even being asked if they are

allowed to. I don't see it as

a bloody-minded approach. I

see it as a responsible

decision to take our community

into 30 years into the future.

In December last year, the

director general director

General. The Glasshouse is

proposed for the central

business district of Port

Macwar ri. But this is how the

council responded. Today the

Glasshouse is rapidly becoming

a reality. Work is well under

way and the building is on

track to be finished within 12

months. The orchestra pit

there, the stage behind it, so

the 620 seats behind that there

over two tiers. 400-odd down

on the bottom. The mayor, Rob

Drew. Signed the contract to

build the Glasshouse just weeks

after he received the letter.

We would have lost millions of

dollar fs we had pulled out of

that particular time. We had a

tender that was acceptable to

the council at the time, and we believe it was responsible for

us to move forward on the

project. And I might say I do

not believe that we are a

subcommittee of the State

Government either. We are

locally elected p

democratically elected to make

decisions. Inspectors from the Department of Local

Government were furious. In a

report released in May, they

endorsed the criticisms raised

by two out of the nine

councillors. Council failed

to properly assess the project,

economically or financially,

before proceeding. That we

failed to assess the effect on

our ability to provide other

basic services, and failed to

properly consult with the

community. What alarmed

inspectors most was the

escalating price. A building

which ratepayers were once told

would cost $7 million, had

become a $40 million complex.

The inspectors said that with

interest repayments, the bill

would reach $66 million. Costs

started rising when the council

bought and demolished a

neighbouring shopping arcade to

make the Glasshouse big enough

to include meeting rooms for

conventions. The inspectors

said the local community were

never asked if they wanted this

additional facility. Then came

a surprise. The Glasshouse is

being built on Port Macquarie's

first street. It was built by

convicts in the 1820s P

archaeologists discovered a

convict-built drain in

remarkably good condition. It

used to carry the slops of the

pioneers of Port Macquarie.

Ratepayers won't be able to use

it as a suer in future.

Instead, they're paying $3

million to preserve the drain

under a glass case. The

inspectors also criticised the

council for failing to consult

the community. They said the

sheer number of people signing

petitions and writing to the

media showed there was a

critical mass of opposition to

the project. Rallies have been

held by opponents and also

supporters of the Glasshouse.

Both acknowledge the need for a

cultural facility. Cate Marr

runs a local dance school. At

the moment we use high school

halls, auditoriums, gyms and we

are to bring our own lighting

and sound equipment.

Airconditions if it's summer

which is when we have most of

our end of year concert rs,

even seating. It's very sub

standard. Her students have

to driveway out of town for

their annual concert. For delights such as these, it must

be worth the effort. But

opponents of the Glasshouse say

it's not certain that locals

will flock to the new facility.

We want this nonsense

stopped over here. They fear

retirees won't be able to

afford to go there as hefty

venue hire fees push up ticket

prices. We are not against

having an arts and

entertainment cultural centre,

we think we need one, but we

want one that this area can

afford. Opponents are so

well-organised, they've even

come up with plans for a

theatre to be built in a

different part of town. A

group calling itself action for

Council Truth says another part

of Port Macquarie is much more

suitable. Total of 600 seats,

and all of the perform ers'

facilities on the same stage.

It says lobby to include

council facilities which should have been paid for by the

private sector, not ratepayers.

They've got this fixation

that it has to be up that end

of town. The reasons why it

has to be that end of town, the

big end of town, you might call

it, given the site, because it

is so constrained, is so much

more expensive to build on.

It's inefficient to build on.

The building on it doesn't work because of the constrained

site. This project back here,

if it happened, is vastly

better in terms of internal

design, vastly better in terms

of parking and the traffic

elements. What do you say to

the cynics who say there must

have been some undue influence?

Is there scuttlebutt in this?

No, definitely no scuttlebutt.

You listen to the people using

this facility. Where would

they like to see it placed?

What are the benefits to the

broader community? He are all

put in the melting pot for you

to make a decision from, not

some undue influence from one

particular person or hotel.

In the box seat is Port

Macquarie's newest hotel, just

across the road. The Rydges

Hotel is one third owned by

high-profile local property

developer David Moreton. He

used to be the deputy mayor.

Mr Moreton has told Stateline

that claims that he received

preferential treatment are

vexatious because the land here

was bought after a decision was

made to build the theatre on

its present site. Most agree

that it's probably too late to

stop the project. If work

stopped today, the bill would

be $10 million, a hefty price

for a hole in the ground.

Instead, ratepayers will have

to service a loan of $30

million to finish the centre

and keep paying afterwards to

subsidise the theatre once it

opens. I think we're in

serious trouble, financial

trouble. REPORTER: How

serious and who would be the

consequences? The consequences

will be either an increase in

rates for residents, or a

reduction in local services.

This council in is a very

strong financial position. We

can afford this project and

that also has been taken on

board as well. Can we afford

to do the project? The answer

is yes. An inquiry is now

under way to determine if all

nine elected councillors should

be sacked. The fate of the

council which is dominated by

members of the National Party

will ultimately be determined

by the Local Government

Minister Paul Lynch. Of the

last six public inquiries, five

councils have been dismissed.

I do hope that each inquiry is

undertaken on its own merits. Nevertheless, bearing in mind the local circumstances, I believe there is a strong possibility that the council

will be dismissed. Like the

Sydney Opera House was, the

Port Macquarie Glasshouse is a

big local drama. Maybe one day

it will be just as revered, or

maybe not.

There are rumours now

sweeping the State public

sector that the Iemma

Government is manoeuvring to privatise a number of agencies

and functions. Some informants

who contacted Stateline this

week were even concerned the

Government would do the deed

while everyone was diverted by

the APEC summit of world

leaders in Sydney early next

month. Or the private

privatisations could be timed

during the current federal

election campaign when local

unions would be too frightened

to kick up a stink. All this

in a week in which the Federal

Government intervened in State

politics with a plan to save a

troubled timber mill. The

Premier has counter punched by

threatening to withdraw from the Murray-Darling national

rescue plan. What's he on

about? We'll get to those

federal manoeuvrings shortly.

First, the State privatisation

hit list. One thing we should

have mentioned last week about

Owen inquay ri was its implied

end to state-owned power stations. The Iemma

Government's preference is for

future generation capacity to

be built, owned and operated by

the private sector. The

state-owned coal-fired power

stations could disappear at the

end of their operational lies.

But there is a fightback, it

seems. At least two

state-owned corps rietions,

Delta Electricity and Macquarie

Generation aren't going

quietly. State-owned Delta

electricity operates power

stations at Condong and

Broadwater and a gas generator

at Munmorah. Delta has told

Professor Owen it can finance

its generation expansion plans

without impacting on the

State's triple A credit rating.

And state-owned Macquarie

Generation, Australia's biggest

generation corporation, with

13% of the national market, 40%

in New South Wales, operate s

coal-fired stations at Liddell

and Bayswater in the Upper

Hunter. Macquarie Generation

has made it clear it wants a

slice of any future action by

using the latest technology in

low-emission coal burring.

Professor Owen's inquiry is

expected to signal the start of

a privatisation process, not of

the generators - that would be

a breach of current Labor Party

policy - but the retailers, Energy Australia, Country

Energy, Integral Energy. Some

union bosses are opposed.

There is a big push by the

private sector to start to own

generation in New South Wales.

Once it owns generation, there

will be an argument to start

privatise ing the rest of it.

There is already an argument to

privatise retail. The sole

reason for that is they won't

do it unless they own

customers. So that's leading

the push for privatisation.

What we're saying is if you

build and finish building Mount

Piper, you've got government

ownership of an essential

service, can be dot lot cheaper

and in half the time-frame and

government control of a very

important industry to maintain

environmental standards. But

it's dirty coal, still dirty

coal. It's not that dirty,

but the reality is that because

of the price of electricity,

gas cannot be afforded as a

base load station. What we say

is if you build Mount Piper, it

could be built within five

years T would supply our energy

needs for the next 10 years and

that will give us a 10-year

window to either find a cleaner

way of burning coal or

alternative technologies, or if

a carbon tax came on, there

would be room for a base load

gas-fired power station. This

is the reported shopping list

so far of government-owned

agencies or functions which may

soon be up for private aation.

Electricity retailers through

the Owen inquiry, rail

maintenance through the current

Transport Department internal inquiry, Sydney Ferries, currently under review through

the Walker inquiry. WSN waste

services a government-funded

waste separation, recycling and disposal corporation at Eastern

Creek. And although the

Government currently denies it, maybe New South Wales

lotteries, recently proposed

for private isation by the

State Opposition. Your ee a

union boss. I thought you were

running the Iemma Government and this wouldn't happen under

your watch. No, no, we don't

run any government. We are

very concerned obviously about

our members and the community.

Weave see privatisation as very

bad for community standards and

it's important to have

government ownership of these

essential services so the

community knows it's needs will

be continue to be met. The

privatisation manoeuvring

manoeuvrings of the Iemma

Government seems to have been

overwhelmed by the biggest

political game now rainls acog

Australia - Howard versus Rudd,

and this week Premier Morris

Iemma counter punched with a

threat to withdraw support for

the Murray-Darling Basin

national water rescue plan

claiming the Commonwealth was

reneging on its original

agreement. In 2014 when they start reviewing water allegations there will be

changes. Part of his $10

billion is to provide for

structural adjustment to ease

the pain of the changes that

are coming in seven, eight

years time on how much water

farmers get. What I asked in

February, when that happens,

Prime Minister, under our

current water - national water

initiative, the the states pay

liability. We share a

percentage with irrigators,er a

percentage with the

Commonwealth, and residual

liability rests with the

states. I asked a very simple

question. You put $10 billion

on the table of the that

portion, which is about $3

billion that pays structural

adjustment, if it's

insufficient to pay the

irrigators, will you accept the

ongoing liability? You're

determining the allocations,

you're giving yourself the

power. We're out of it. I

don't want New South Wales

taxpayers to still have an

ongoing liability if you reduce

water Al allocations. Now,

all of the discussions - there

was agreement in principle on

that, and all of the

discussions were around the

Commonwealth saying, "Yes." The

big change that's happened in

the last day has been that he

will only agree to that if

every State is in. There is a

pre-condition. There was no

pre-condition in February or

March. I'm saying to the

Commonwealth is: Go back to

what we agreed. Federal

Environment Minister Malcolm Turnbull and the Prime

Minister's office are now

considering New South Wales'

complaint. And still on federal-State manoeuvrings to

the story of a timber mill in

trouble. Earlier this week,

teg teg integrated.

The Federal Government leapt

to the rescue with a $4 million

bailout package but only if the New South Wales Government

backs the mill with a long-term

log supply. Over a hundred

jobs are at stake and most of

the workers come from

Queanbeyan in the marginal

federal electorate of Eden

Monaro. And there also jobs at

stack at Bombala in the south

of the State. Phillip Williams

reports on how one mill's

rescue could be another's

denies. We are not going to

abort a tender process that

starts next week because of John Howard's political

desperation. It is the State

Government that has the wood,

so it's up to them now to do

something rather than throw all

these people out of work. For

all the political verbiage,

these people live the fear.

Lost jobs, payments missed,

entitlements gone. The

uncertainty of it all. How

are you going to pay the rent?

Credit card. Credit card.

Rack it up. That in itself

adds extra stress. And the

car payment? Same - credit

cards. But there is another

half to this story that is

rarely told. Two hours south

of Canberra, the country quiet

of Bombala is punctuated by the

regular rumble of timber

trucks. In case you missed it,

this is timber territory.

Bombala has 46,000 hectares of

pine forests, much of it

controlled by the New South

Wales stoofrt. Up until

recently, these trees ended up

at the Canberra mill. (New

South Wales State Government)

But the New South Wales

Government cancelled the supply

contract after the company,

Timbermans, failed to build a

mill at Bombala has as agreed.

Bombala locals, like major Bob

Stewart fear the offer of $4

million to save the mill, could

cost jobs and the dream of a

new mill. How important is

that mill, the potential of a

new mill or expanded mill to

this town? Oh, it's just

crucial. It will be one of the

backbones to an economics

future to this area. Without

it, where are you? Well, we

just survive. When the New

South Wales Government shut

down the hardwood industry here

10 years ago, the promise was a

new softwood mill would be

built. The town and its

businesses are hoping next

week's tender for the softwood will finally see that promise

kept. There has been talk,

there has been red tape, there

has been, you know, promises.

Nothing has ever happened in,

what, the last 10 years or so,

so it affects everything - the

moral and that around in the

community and things like that.

It just has devastating effects

on things, yeah. Across the

road, talk of Bombala timber

going to Canberra is as hot as

as the coffee. Tell me, how

important is the prospect of a

new mill to this town? Great.

It would be excellent. It

would be good to arrive in the

street all morning and see the

town thrive all day. Everyone

has been struggling here for a

long, long, time. We've lost

the tore rally timber mill and

the hardwood mill. We've lost

so much T would be great if

something positive like that

was to happen. The mill

industry and the timber

industry is all Bombala has

got. That's it. If it goes,

that's T So it's vital? Yes,

it is. Do you think your

interests here have been sort

of forgotten a bit in all of

this? Absolutely. The smaller

towns always get lost. Never

on the TV, but the minute it's

closing in Canberra, it's on

TV, but this one closed and

that's it, nothing else has

been said job wrs lost. Major

Bob Stewart is taking me to the

site of the Timbermans mill,

the one the company never

built. Despited repeated

extensions by the New South

Wales Government. We've got

to get some sort of process in

operation going, or we are -

just of harvesting side of it,

it will keep some jobs, but for

the town to hold it, to be

economically viable, we really

need a base foundation in it

and that's a solid industry

process going. It's not the

icy winds that blew away this

dream, not even the bear bones

of a mill in sight. Well, it

should have been in process

now, well and truly, should

have been getting near

completion by now. As you can

see, no start on it. Zero? Nothing, no development on it

whatsoever. And locals are

determined this time the mill

and the timber won't get away.

And this has been great for

our town, this mill out here.

There is a mill in town

already. Will Mott forests

have announced they will be

tendering for the big timber

supply contract that. Would

mean a $40 million expansion

with jobs and investment

injected into Bombala, not

Canberra's economy. Is there

room for the mill in Canberra

and the mill here? Not unless

it's under the one contract.

We've only got 320,000 cubic

metre s from State forests and

it only meets one proponent.

So one or the other? Simple as

that. We want to go ahead.

All we need is a contract from

New South Wales for logs and we

are away. CHANTING. For all

the pressure to keep the

Canberra mill open, State Labor

MP Steve Whan has his

priorities. We have to make

sure that we meet firstly the commitments that have been made

to a mill in Bombala.

Secondly, that we do our best

to try and ensure that the

entitlements of the workers

here are met, and that we can

find some way of, if it is

possible, keeping this mill

open. Despite meetings today

between the lick quit daid tors, the New South Wales

Government and unions, there

are no guarantees these

Canberra workers' jobs will

ultimately survive. The 2003

bushfire destroyed their

original timber supply and,, an

in solvent company deprived

them of their second and now

it's up to politicians to sort

out a third. Their futures

depend on it. Thanks Phillip

Williams. Now to some shorter

stories from around the

regions. A survey at Lithgow

has found that most locals want

fluoridated water. 300

households were surveyed and

most of those on town water

supported fluoridation. The

city council will now do a

report on the report and a

possible council vote on the

matter. The Anglican Church

doesn't want five small

churches in the Young area.

The houses of worship are to be

auctiond in September. Several

of them are more than a hundred

years old. They are being promoted as possible house

blocks. The Hunter Valley

wants the Government to come up

with the money needed to repair

the local levee system after

the June floods. The catchment

authority reckons it will need

at least $10 million. It will

be lodging a claim under the

Government's natural disaster

relief program. The Cooma-mon

aero Shire Council may be

dragged onto the climate change

bandwagon. So far the council

has refused to join its

neighbours in a plan to half

the area's dependence on

non-renewable energy sources.

More than 200 met this week and

demanded the council take a

stand. The mayor says council

will reconsider its position.

The Federal Government is being

lobbied to fund Batemans Bay

Hospital. MP for Gilmore

Joanna Gash claims the State

Government has let the locals

down. Ms Gash says she

believes health should be a

federal responsibility. When

police stopped a van near Byron

Bay they found the learner

driver was allegedly over the

grog limit. They then breath

tested his supervisor and

claimed he also failed a breath

test. The learner had seven

passengers in the van. And

that's all for this week. This

program is repeated on TV1 at

12 noon Saturday and at various

times during the week on ABC

TV2. The '7:30 Report' is back on Monday. Bye-bye. Closed Captions by CSI

It's probably the worst flu

season we've had in five years.

It's the Crown case that

Dorothy Davis's remains here in

the Southern Highlands. The

Commonwealth has reneged on the

agreement they had with us.

There will always be debate,

always be controversy, but one thing that runs through the

whole game is the passion and

that's what today is the start

of celebrating.

Welcome to part two of Collectors On Tour. Hi, I'm Andy Muirhead, and tonight we're coming to you from the State Library of Victoria here in Melbourne, and it's going to be absolutely huge. HORNS BLARE, CROWD CHEERS DRAMATIC MUSIC

Tonight, it's on with our Melbourne mission - to find the best collectors this city has to offer. Tonight, a collection of beautiful blades, I'm kicking goals at the AFL collection, the original home entertainment system, and fantastic fashions. Hello, guys. (All exchange greetings) Welcome back to the State Library of Victoria. Highlights out of last week's program. Phones. You know, they were connecting the world in the Victorian age. You do love your phone, don't you? I do. For me, it was the kitsch and the colour of those wrestling masks.