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CC Europe's largest economy

falls into recession, its

neighbours look set to follow,

as President Bush prepares to

welcome G-20 leaders on a

meeting of the financial crisis

A nervous wait on the market

are a 4-year low, the Prime

Minister ruling out running a

Budget deficit. United Nations

food rations

food rations run out in Gaza,

blockade not to end until the

Palestine attacks cease. Andrew

Symonds back from the wilder

innocence to be named in the

squad, but it could be at the

expense of Shane Watson.

Good morning, it's Friday,

14 November, I'm Joe

O'Brien. And I'm Virginia

Trioli. We go straight to the

United States now where

President George W. Bush is

speaking in New York about the

US economy ahead of a gathering

of G-20 nations in

Washington. The President's

drags comes after the announcement from --

announcement from -- address

comes after the announcement of

a shift in process with the

rescue plan, it will

concentrate or credit cars, car

loans and other businesses.

Let's listen in to President

Bush. ... account for 90% of

the world economy. Leaders of

the World Bank, the

international monetary funds,

the United Nations and the financial stability forum will

be there as well. We'll have

dinner at the White House

tomorrow night. We'll meet most

of the day on Saturday. The

leaders attending this

weekend's meeting agree on a

clear purpose - to address the

current crisis, and to lay the

foundation for reforms that

will help prevent a similar

crisis in the future. We agree

that this undertaking

that this undertaking is too

large to be accomplished in a

single session. The issues are

too complex, the problem is too

significant to try to solve or to come up with reasonable

recommendations in one meeting.

This will be the first of a

series much meetings. We'll

focus on five key

focus on five key objectives.

Understanding the causes of the

global crisis, reviewing the

effectiveness of our responses

thus far, developing principles

for reforming our financial and

regulatory systems, launching a

specific action plan to

implement the principles, and

reaffirming our conviction that

the free market principles offer

the surest pass to lasting prosperity.

APPLAUSE

We are working towards a

common understanding as to the

causes behind the global

crisis. Different countries

will naturally bring different

perspectives, but there are

some points on which we can

some points on which we can all

agree. For the past decade the

world experienced a period of

strong economic growth. Nations accumulated huge amounts of

savings, and looked for safe

places to invest them. Because

of our attractive political,

legal and entrepreneurial

climates the United States and

received a large other developed nations

received a large share of that

money, the massive inflow of

foreign capital, low interest

rates, producing a period of

easy credit. That easy credit,

especially affected the housing

market. Flush with cash. Many

lenders issuesed mortgages and

borrowers could not afford them. Financial institutions then purchased the

then purchased the loans,

packaged them together,

converting them to complex

securities designed to yield

large returns. The securities

were purchased by investors and financial institutions in the

United States, in Europe and

elsewhere, often with little

analysis of their true

underlying value. The financial

crisis was ignited when

crisis was ignited when the

booming housing markets began

to decline. As home values

dropped borrowers defaulted on

their mort ins, and institutions holding securities

-- mart im, and institutions

holding securities backed by

those mortgages suffered losses

because of outdated relyingu

lottery retrickeds. Many

financial institutions in lottery retrickeds. Many

America and Europe were highly

leveraged. Capital ran force,

many faced financial jeopardy,

leading to failures of financial institutions in

America and Europe, leading to

contractions in and widespread

anxiety, all of which

contributed to sharp declines

in the equity markets. These

developments placed a heavy

burden on

burden on hard-working people

around the world. Stock market

drops eroded the value of

retirement accounts and pension

funds. The tightening of credit

made it harder for families to

borrow money for cars, home

improvements or Eddu caution

for children. Businesses fund

it harder toll get loans to

it harder toll get loans to

expand federations and get

jobs. Many nations suffered job

losses and have concerns about

the worsening economy.

Developing nations have been

hit hard, nervous investors

withdrawing their capital. We

are faced with the prospect of

a global meltdown. So we

responded with bold measures.

I'm a market-oriented guy,

I'm a market-oriented guy, but

not when I'm faced with the

prospect of a global meltdown.

At the Saturday summit we'll

review the effectiveness of our

actions. Here in the United

States we have taken

unprecedented steps to boost

financial institution, liquidity, re capitalise

guarantee new debt issued by

insured banks, and prevent the disorderly collapse

disorderly collapse of large

interconnected enterprises.

These were historic actions

taken necessary to make

necessary so that the economy

would not meltdown and affect

millions of our fellow

citizens. In Europe governments

are purchasing equity in banks and providing Government

guarantees for loans, in Asia,

nations like

nations like China, Japan, and

South Korea lowered interest

rates, launching stimulus

plans. In the Middle East

nations like Kuwait and the UAE guaranteed deposits opening up

Government lending to banks. In

addition nations around the

world took unprecedented joint

measures. Last month a number

of Central Banks carried out a

coordinated interest rate cut.

The Federal Government reserve

is extending liquidity to banks

around the world. The IMF and

World Bank are working to

ensure developing nations can

weather the crisis. The crisis

did not develop overnight, it

won't be solved overnight. Our

actions are having an impact.

actions are having an impact.

Credit markets are thawing.

Businesses are gaininging

access to essential short-term

financing. A measure of stability is returning to

financial systems here at home

and around the world. This will

require time for these improvements to fully take

hold. There's going to be

difficult days ahead. The

United States and our partners

are taking the right steps to

are taking the right steps to get through the crisis. In addition to addressing the

current crisis, we'll need to

make broader reforms to

strengthen the global economy

over the long term. This

weekend leaders will establish

principles for adapting our

financial systems to the

realities of the 21st century marketplace. We will discuss

specific actions we can take to implement

implement the principles, we'll direct Finance Ministers to

work with other experts and

report back to us with detailed

recommendations on further

reasonable actions. One vital

principle of reform is that our

nations must make our financial

markets more transparent. For

example, we should consider

improving accounting rules for

securities so investors around

the world can understand the

the world can understand the

true value of the assets they

purchase. Secondly, we must

ensure that markets, firms and

financial products are properly

regulated. For example, credit defaults swaps, financial

products that ensure against

potential losses should be

processed through centralised

clearing houses instead of unregulated over the

unregulated over the counter

markets. I bring a greater

stability to the large and

important financial sector,

reducing the risk to the

financial systems. Third, we

must ep hance the integrity of

our financial markets, for example local authorities in

every nation should take a

fresh look at the rules

governing market manipulation

and faud, ensuring that investors are

investors are properly

protected. Fourth we must

strengthen cooperation among

the world's financial

authorities, leading nations

should better coordinate

national laws and regulations.

We should reform international

financial institutions such as

the IMF and the World Bank

which are based largely on the

economic order of

economic order of 1944. To

better reflect the economies

today, the governing structure

should be modernised, extend

greater voting power to dynamic developing nations as they

increase their contributions to

those institutions. They should

consider ways to stream lib the

executive boards, making them

-- streamline the executive boards boards making them more representative. In addition to

the manage changes we should

move forward with other reforms

to make the IMF and world bang

more accountable and effective.

They should agree to work with

member country rois to ensure

that the... We'll leave it

there. That was George W. Bush

speaking in New York. Mark Simkin joins us Simkin joins us from

Washington. George W. Bush was

saying there, making a point

ahead of the G-20 sum iment

that underpinning the meeting

must -- summit, that

underpinning the meeting must

be the belief that free market

principles offer the surest

past to marketing prosperity.

I'm sure that's what the market

wanted to hear. This was a

ringing endorsement of

capitalism and the free-market system. The White system. The White House released the substance of the

President's speech ahead of

time in the speech he goes on

to say explicitly, "This crisis

was not a failure of the free

market. If you seek economic

growth , opportunity, if you

seek social justice and human

dignity the free market system

is the way", of course, the

problem for the President is he

has given many speeches defending the defending the system, talking

of progress, predicting that

the economy will recover. Of

the markets heard it before.

They are looking at the

economic data, which continues

to be grim indeed. These words

alone will not do anything to

reassure investors and the

market. He was critical of the

IMF and the World Bank. Basically what he's

arguing is that there needs to

be reform, even though he

argues that the system is a

good one, and it is helped

lifting people out of poverty

into prosperity, he says

there's a need for reform,

change, and laid out some key

cheque left, if you like, for

the G-20 meeting, you heard the

President say there needs to be better global coordination between

between IMF and the World Bank,

and better regulation, better

regulation in terms of specific

changes to laws in specific

countries as well. I don't

think anyone is underany

illusions. There's a lot of

different force, factors,

factions all coming together in

the G-20. It will be hard for

them to agree on a single prescription certainly at this single

single meeting. President Bush

also seemed there to be

pointing the finger at other

countries, saying the US alone

is not to blame for this mess.. Yes, basically the

President is making it clear as

far as he's concerned it's an international crisis requiring

an international response.

Having said that the heart of

the problem is here in the United

United States, starting with

the subprime mortgage debacle,

spreading throughout the US

economy and then with the - as

the President said the world

being more interconnected than

before it will be solved

internationally. He made it

clear that at the end of the

speech he goes on to say that

the United States is the engine

of world growth, it's the countryy

country that created the iPod

and the other types of product, and the other types of product,

and that he thinks it will be

solved by the United States

taking a strong lead. This

speech comes after the Henry

Paulson announcement yesterday,

why did the Henry Paulson

announcement go down so badly

when they are still spending

money on the problem? Well,

no-one likes to hear

policymakers, after they have

invested money and political

capital in a solution to capital in a solution to a

crisis, then saying, "Well,

maybe we were not quite right,

maybe we should have gone

another way", it doesn't

inspire confidence. Having said

that, I don't think you can

blame Henry Paulson entirely

for what happened in the market

yesterday, there is so much bad

news around at the moment.

People are extremely nervous,

there are signs today of the

fact that the United States is, if

if not technically, certainly

heading for a very nasty

recession, jobless claims up to

the highest level since just

after the 2001 terrorist

attacks, more signs of absolute

carnage in the autosector in

the car markets here, General

Motors hanging on, just trying

to stay out of bankruptcy,

there are a lot of serious

problems here in the United

States. Simply the words, States. Simply the words,

whether they be of George W.

Bush, or hadn't yesterday

aren't the thing -- or Henry

Paulson yesterday aren't the

thing driving the markets. The

Republicans are regrouping

after the election losses and

Sarah Palin hasn't been

backward in coming forward. No,

not at all. Sarah Palin is a

person that gave few interviews

during the campaign, not holding holding a single press

conference. She's done so many

interviews in the last few

days, I'm surprised she's not

here sitting alongside me,

she's been in many other

studios in the States. It's

unbelievable. A lot of it is

justifying her position, she

was in Florida with the

governors, Republican governors

charting a future course for

the party. There's no doubt

given the amount of media

coverage she's getting coverage she's getting and

seeking that she sees a role

for herself in the future of

the party. She has, in all of

these interviews refused to

rule out running for the

presidency in 2012. Mark Simkin

in Washington, thank you. To

Europe now, and grim economic

data confirmed that the

continent's largest economy

Germany is officially in recession, the economy contracted by 0.5% in contracted by 0.5% in the third

quarter of this year, following

a slump of 0.4% in the second

quarter. The news following an

announcement from the Organisation for Economic

Cooperateon and Development

that the US Japan, and eurozone

countries are shrinking, the Paris-based grouping of the top

30 industrialised countries

said the US would shrink by 2.8% in the fourth quarter 2.8% in the fourth quarter of

this year. This is obviously

not a positive outlook that we

are presenting. Basically we

are saying that the OSD is in

recession. And the OSD will

stay in recession for some time

to come. The subsequent

recovery will be a relatively

slow one. We recognised that there are large uncertainies

around the outcome. The basic

message is that we are in for a

troubled period. One has to

recognise that countries have

done a lot already to stabilise

financial markets, but more

could be necessary in that

field, at least one cannot

completely exclude that. But in

terms of boosting demand in the terms of boosting demand in the

economy, further cuts in

Central Bank interest rates,

and measures to reduce taxes or

boost Government expenditure

may help. We are joined by

Philip Williams, Europe correspondent. Good morning,

what's the response locally to

the news that this battle ship

economy, Germany has gone into

recession. Yes, very bad news indeed,

indeed, because this is the

largest economy in Europe. In

fact, it's the largest

exporting nation in the world,

biggest than China, bigger than

the United States. Exports

alone from August to September

dropped by 8%. They are very

export oriented country. Their

economy drives to a great

degree the rest of the Europe.

When this goes down there's

flow-on effects throughout the flow-on effects throughout the

rest of Europe. Britain is

looking probably the worst of

all the economies at the

moment, even Mervyn King from

the Bank of England predicted

the economy would go backwards

by 2% before it improved. BT,

British Telecom announced it

will lay off 10,000 workers,

unemployment is creeping up

towards 2 million, they expect towards 2 million, they expect

2 million by Christmas, that's

the highest for 11 years. All the indicators throughout

Europe are bad. Here is a

really odd one. It's very

indicative of how people are

feeling. The Minister in charge

of the Olympics, the 2012

Olympics for Londonan, Tessa

Jowell came out and said, "If

we had known how bad the recession was going to be recession was going to be we'd

never have bid for the Olympics

in the first place", the cost

of the Olympics have blown out

400% already. There'll be cost

cutting no doubt attacheded to

that. They wouldn't have

attempted to get the Olympics

if they'd known this was coming.

That's an astonishing

admission, as you say, an indication of how serious it

is. One economist I know is

warning that in Germany in warning that in Germany in

particular this recession will

be the worst he says since

'92/'93. Probably, yes. The

problem being that the last six

weeks or so we've been getting

the trickle of the bad news -,

"It'll be OK", to, "It's not

looking good, it's looking

bad", " It's looking really

bad", there's a sense that we

bad", there's a sense that we

haven't heard the worse news,

the accumulative affect of the

fear factor sweeping through

Europe at the moment will mean

that it will be a

self-fulfilling prophecy that

the results will be worse than

predicted so far. Now, at the

moment there is a predicted

upswing of very modest amount,

but an upswing all the same in

but an upswing all the same in 2010. Although some analysts

are saying, "Hang on, if this

depth of recession continues

the way it does, into 2009,

where is the motivation for the

upswing? Where is the demand

going to come from?", some

analysts are saying, "This will

be more than a one year

wonder". Finally, it signifies

not just the Germans with their

not just the Germans with their

problems, but the whole 15

nation Eurozone moves into

recession. Absolutely, and, of

course, OECD predicting that

the output of the Eurozone

going down by 0.5%. Nowhere

near as bad as the prediction

for the US, 2.8% over the final

quarter of this year, they are

saying. What it says is that

all over globally, we all over globally, we are in

trouble, and really we don't

know where the bottom is, and

certainly here in the European

zone, there's certainly a lot

more fear out there than has

been registering in the last

figures, don't forget these

figures have a lag effect. We

are not actually recording what

is going on now. Yes,

indeed. From the sniff of the economic air economic air here in Britain

and elsewhere, you can tell

that there's a palpable fear

there and quite likely the

figures will be worse than predicted at this

stage. Philip, thanks so

much. And if you'd like to send

us your feedback, I'm afraid on

these gloomy stories we are

covering sent an email:

And there's a nervous wait on the Australian stock market

following yesterday's 4-year

low. The Prime Minister is on

his way to Washington for the

G-20 summit on the global financial crisis. Before

leaving Kevin Rudd did little

to rule out whether the Government would fall into

deficit during the market

slump. There are reports that

the ANZ Bank is considering

cutting up to cutting up to 3,500 jobs by the

end of the year. According to

Fairfax Media, the bank plans

to axe up to 10 of its staff

and contractors in response to

the economic slowdown. An ANZ

spokesman was quoted as saying

most of the cuts will affect

middle management but would not

comment on how many would go. A

review of the temporary skilled

migration scheme called for a

fairer deal for foreign

fairer deal for foreign workers, the Industrial

Relations Commission, Barbara

Deegan recommended that the

minimum salary system be

scrapped and replaced with

market rates. Trade unions have

been lobbying the Government

for three years for the same

deal. Israel denied a convoy of humanitarian supplies entry

into Gaza Strip after rocket

fire by Palestinian militants.

Israeli officials said theld

allow 30 truckloads of food and

drugs in to Gaza, the border

closure means 750,000 Gaza

residents will go without

food. An Austrian man who

imprisoned his daughter in a

cellar for 24 years has been

charged with the murder of one

of their children. Josef Fritzl

refused to call for medical

help, incinerating the child's

body in a furnace. His trial

for this and other offences

will begin early next

year. Health officials from the

Solomon Islands defended their

use of aid from Iran to fly

medical students to Cuba for

training, there's concerns they

are aligning with regimes with

countries that differ from the

maid aid donors, Australia, New

Zealand and the United

States. These young Solomon

Islands men and women are in

Brisbane after the first leg of

a journey taking them to the

other side of the world.

They'll spend the next six

years studying to become

doctors in Cuba It's very

expensive to training a doctor

in New Zealand and Australia.

Since Cuba is offering us this

free scholarship, we are taking

it. Dr Cedric Alependava is

making his third drip to Cuba,

leading this group of 25. --

trip to Cube, leading this

group of 25, the cream of last

year's high school students.

They'll join 25 that have been

in Cuba this year. Jolaenda

Seke is one of five women in

the group Women into my country

prefer female doctors, that's

why I was selected. Checking in

at the Brisbane international

airport proved a trial. The

next destination is Singapore,

then a series of connecting

flights via London and the

Bahamas. The Government of

Iran is helping to pay the

airfares. I think the fund

allocated from Iran may help

our students with tickets. The

students are enthusiastic,

although for many it's their

first trip out of the

Solomons It's a great thing for

the Solomons. Six years away

from home is a long time Yeah,

it will be long, but hopefully

the years will fly. The Solomon

Islands students will spend the

first six months studying

Spanish, if they gradulate

they'll almost double the

number of doctors in their

country. Now let's take a look

at the front pages of major

newspapers around the country,

'The Australian' features a picture of the Prime Minister

signing a copy of a book by the

late political journalist Matt

Price, he's signing it for the

author's doctor, Matilda. The 'Financial Review' reporting on

bad news from the financial

crisis, the Australian stock

market falling to a 4-year low,

the US Treasury announcing

changes to the bailout plan.

'The Age' says President George

W. Bush will tell a meeting of

world leaders not abandon

principles of free market

capital ex. The words aimed at

Kevin Rudd and other leaders,

using the global financial

crisis to demand greater

Government control of markets. The financial news

continues at 'The West Australian', saying the Chief

Executive officers of

Wesfarmers and Fortescue Metals

Group have been forced to

reassure shareholders their

futures are sound. In other

news 'The Sun' has an exclusive

interview with the wife of Victorian Labor MP Theo

Theophanous, who is facing rape allegations, Rita Theophanous

branded the woman making the

claim a liar. The 'Sydney

Morning Herald' says an ABC

Learning Centre in Red hild

warned parents to look

elsewhere for child care. The

embattled NSW Premier Nathan

Rees is facing an internal

party revolt over the

mini-Budget, according to the

'Daily Telegraph'. He copped a

lashing over that. A collection

of art works by Archibald

winning artist Del Kathryn

Barton have been sealed off in

an adults only part of the

Queensland art calorie. The Old

Advertiser leads with an image

of a knife used to kill a

Sudanese teenager in Adelaide.

Daniel Awak, picture, was

stabbed to death in a brawl

outside a city newsagency. A

man sentenced for three years

gale for inassessment will be

eligible for parole by the end

of the month. The 'The Canberra

Times' sayses the Queanbeyan

Council approved a land release

and plan at Tralee south of the

Canberra. The mercury

celebrates a contestant hoping

to fine started dom in a series

searching for a bogan. I

thought you'd have a

chance. That looks good. I'd

beup there. To finance, local

markets expected to rebound

after the Australian share

market plunging to its lowest

point since October 2004.

market plunging to its lowest after the Australian share markets expected to rebound beup there. To finance, local chance. That looks good. I'd a bogan. I thought you'd have a dom in a series searching for

point since October 2004.

British Telecom announced

plans to cut 10,000 jobs by

March as the recession looms in

Britain, the BT redundancies

represent 6% of the global work

force, it cut 4,000 jobs and

6,000 will be slashed before

March. In a few minutes Vanessa

O'Hanlon here with the weather,

and ahead we'll have a review

of some of the newspapers this

morning we'll be joined by

author Gideon Haigh, now with

the sport, here is Paul

Kennedy. Good morning, Andrew

Symonds is back, but is he

back. The all-rounder has been

recalled to Australia's 13-man

Test squad after seeing a psychologist about his

behaviour. He's delighted. It's

not certain he'll play against

New Zealand at the 'Gabba I'm

happy. It's a great feeling to

be re select back in the

side. Are you ready, do you

think you'll perform with

distinction considering your

wickets we've played on have form. I don't know. Some of the

been difficult. I don't know if

you have seen them. I haven't

flooded the selectors with runs

and that sort of thing, but

bearing in mind I wasn't

dropped from the side for my

form, but, you know, I'll be

doing my best to get back into

what you blokes call batting

form. I have had unbelievable

support from far and wide. I am

not going to get a chance to

send a message to everyone that

sent me one, I'd like to notwithstanding everyone from

all corners of the globe for

their support and messages,

it's great to have that,

thanks. I've enjoyed the

experience of going through

this now I've been through it.

I needed it. And hopefully it

helps me with a continuation of

my life. The Rugby League World

Cup semifinals will be played

this wns, New Zealand taking on

England. The Kiwis starting favourites. Australia face

Fiji, Darren Lockyer saying his

side won't be complacent. It's

difficult to see the Fijian

side getting close. The Bate

side getting close. The Bate

are plotting an upset. Nikolay

Davydenko qualified for the semifinals of the Masters Cup

in China, the 27-year-old

Russian beating Juan Martin Del

Potro, overnight to remain

alive in the 4.5 million

tournament. He'll play Roger

Federer, or Andy Murray. In the other game Joe Wilfried Tsonga

beat Novak Djokovic 1-6, 7-5,

6-1, it was a consolation victory, Joe Wilfried Tsonga is

out and Novak Djokovic

qualified for the semis. That's

all for sport for now. Vanessa

O'Hanlon joins us for the

weather now. Vanessa I tried to

go for a run in Melbourne

yesterday afternoon and nearly

collapsed it was so hot. I bet

you did, we reached 33 after

4:00. Victoria's temperatures

were 16 degrees above the

November average. The cool

change swept through around

6:30, much needed rain, 4.2mm fell. 6:30, much needed rain, 4.2mm

Let's look at the satellite -

a cloud band moving from eastern WA through the Tasman

Sea in a trough. Causing storms

in Victoria and northern South

north-east NSW and south-east Australia. Cloud over

Queensland resulting this

showers. Around the states -

Queensland -st late showers

about the East Coast, the Gulf

and the south-west. NSW - a

stormy day on the way, showers

expected in most areas, apart

from the north-east. Victoria -

scattered showers with isolated

storms. Storms in Wangaratta.

Cooler conditions. Tasmania -

patchy morning rain in the north-east, showers in the north-west heading to the east

of the state. Hot temperatures there yesterday. South

Australia - isolated showers

over the pastoral, Flinders and

Riverland districts. WA - in

the south, scattered showers

and thunderstorms in the inland

Central West and northern

central wheatbelt. Up to the

north - afternoon storms and

showers for this time of the

year that's usual.

See you in half an hour. See you in half an hour.

. The top story today on 'ABC

News Breakfast', US President

George W. Bush warns of the

prospect of a global economic

meltdown ahead of a meeting of

G-20 countries this weekend. In

a press conference on Wall Street President Bush said the

financial issues facing the

G-20 are too complex to be

solved in one meeting, calling

for a series of gatherings to

address the crisis. We are

faced with the prospect of a

global meltdown. So we have

responded with bold measures.

I'm a market-oriented guy. But

not when I'm faced with the

prospect of a global meltdown.

At the Saturday summit we'll

review the effectiveness of our

actions, we should reform international financial

institution, such as the

institution, such as the IMF

and the World Bank, based

largely on the economic order

of 1944. To better reflect the

realities of today's economy,

both the IMF and World Bank

should modernise Government

structures, consider extending

greater voting power to dynamic

developing nation, especially

as they increase the

contributions to these

institutions. They should

consider ways to streamline the

executive boards making them

more representative. In

addition to these changes we

should move forward with other

reforms making the IMF and West

Bank accountable, transparent

and effective. Prime Minister

Kevin Rudd is attending. He was

steadfast that Australia would

remain in positive growth. Mr

Rudd was speaking to Jim are on

Australia Network's 'Newshour'

program. Our view that, first

of all, we can keep this

economy growing in positive

terms. That is going to be

difficult because the rest of

the world is now sliding into a global recession. But we believe that through the

actions we have taken in fiscal

policy supported by the actions

by the Reserve Bank on monetary

policy can continue to support

positive growth. It will be

tougher and tougher and tougher

as global conditions get worse

and worse and worse. You

wouldn't rule out deficit if

necessary. That's on the

question of positive growth.

Let me go on to the question of

Budget. Our policy has been to

support a Budget surplus over

the economic cycle. That's been

the position essential the days

of Opposition, it's the

position taken into the election campaign and our

position today. From the

mid-year financial and economic

outlook we product modest

surpluses across the years

ahead. For more, Ben Worsley

joins us from Canberra. Good

morning. Do we have then a

difference in opinion, a

difference in view between

Wayne Swan, and Kevin Rudd.

They seem to be walking

gingerly around the idea, the

concept of some sort of deficit

Budget, not yefg the

possibility Is Kevin Rudd being

more optimistic or less candid

than Wayne Swan. Yes Neither

are using the D word, but Wayne

Swan yesterday was saying at

least conceding that area of

economic direction might be a

possibility. Many commentators

believe the Government is

making a mistake by not preparing Australians for what

many see as the inevitability

of a deficit that they say the

Government should be using the

arguments of many economists

which believe that a deficit

isn't the evil thing that many

people paint it as, when it's

used to buffer the economy

against a recession. Wayne Swan

in New York overnight was again

saying that Australia is better

placed than other countries,

it's one of two developed

countries that has projections

of modest growth and surpluses.

That's all very well. As we

know projections ain't what

they used to be and not the

most accurate of economic

forecasts. I'm thinking they

never were. Well, yes. The

discussion continues, and I was

mentioning yesterday in some of

our interviews on the program

that economists like Sol

Eastlake is wringing his hands

saying, "Go for it, spend the

money, go into deficit, dear

Government, that's what you are

there to do, what the times are

about", do you sense the mood

is shifting around the Holy

Grail of running a Budget

surplus. You do sense that,

but it's been driven, of

course, by the circumstances.

You get the feeling that Labor

is still spooked by 10-12

across of the "ings under

Howard and Costello bagging

Labor our for running def

stits, there's criticisms that

Kevin Rudd is in campaign mode

and isn't acting like he's in

the lodge, he's trying to get

there. This is a way of

inseveritying -- asserting your

confident saying, "We might be

heading to a deficit, it's not

necessarily a bad thing in the

current circumstances", other

subjects to get to later, we'll

leave it there for now. There's

a great deal going on at the

moment. If you'd like to

contribute comments and

observations to what you've

seen us cover this morning, do

send an email to:

In WA, there are calls for the Federal Government to overhaul legislation which is

proving a major obstacle to

skilled migrants staying in

Australia. Under current laws

migrants who have children with

disabilities have been battling

to secure permanent residency.

Andrew O'Connor joins us from

our Perth newsroom. Andrew,

what prompted this call for

change? Joe, the call came from

the Down syndrome association

of WA, and it follows a

decision yesterday by Senator

Chris Evans to intervene in the

case of a WA midwife granting

her permanent residency, she

came to WA in 2001, applied for

came to WA in 2001, applied for

permanent residency in 2002,

had been fighting

unsuccessfully to secure that

for six years before the Minister's intervention. It was

a major victory for her. I

guess it brought attention to

the issue of migrants with

disabled family members, finding it difficult to get

permanent residency. The whole

case surfaced through a case

highlighted in Victoria in

Horsham where a Dr Bernard

Moeller was rejected for

residency after working for a

couple of years, because he had

a 13-year-old son with downs

syndrome. That struck a cord

across the country, for anyone

that works in rural, remote or

rural Australia, they know how

hard it is to cee and find

professionals. What the downs

syndrome association in WA is

saying while the case of WA

midwife has been solved, a

legislative change is require. Governments can come

across as heartless in these

situations, their argument is

that the migrant children pose

a great financial degree of

stress on Australia. Senator Evans acknowledged that the

Government has to consider

long-term medical costs that

come to our shores with medical

problems, if someone arrives

with a medical condition

requiring them to access the

public health system, it will

be a cost impost on the

Australian taxpayer. What the

downs syndrome association of

WA is arguing is not every

condition necessarily translates into major health

problems and cost. A condition

like Down syndrome is a

developmental and genetic disorder. It doesn't necessarily automatically

translate into long-term health

problems. The association says

that the Government should have

a framework allowing the

department to assess individual

cases making a decision on the

merits of those cases rather

than a blank discrimination

against people with

disabilities, that's the

argument they are putting to

the Americans, the minister

saying he bloos the framework

is inflexible. -- believes the

framework is inflexible. Maybe

they'll get a fair hearing. Those campaigning for

action on climate change had

help from a high profile and

unexpected source this week.

American evangelical leader

Reverend Richard Cizik has been

touring Australia to highlight

the need for urgent action on

climate change. Earlier this

week he met with Prime Minister

Kevin Rudd to discuss the

issue, and Reverend Richard

Cizik has been dubbed the

earthy evangelist and lifted as

'Time' magazine magazine top

100 influential people. Good

morning. Good to have you on

board. You have had special

criticism over the years you've levelled at Australia and the

US when it comes to dealing

with climate change? My

position has been neither

Government in the past, the

Howard Government nor the Bush

Government has been doing right

by evangelical Christians, we

call it creation care. We are

pleased as evangelicals that

Barack Obama will address this

issue, as you said, I melt earlier this week with Kevin

Rudd. I'm pleased by the

changes in Government in both countries. What representation

did you receive from Kevin

Rudd. Warm one. We chatted

about a lot of different

things. Personally we vice-president in common that

we studied in China in our

youth. We are older, we agree

that this is imperative to act

on climate change, I told him

Australia is important, meeting

with Angela Merkel, who I have

to tell you, she was the

daughter of a loouth ran pastor

from East Germany, we have

Gordon Brown, he said, "I'm the

son of a Scottish pastor Presbyterian", and Barack Obama

- he is one of those community

organiser types. I think we

have a leadership in each

country that is prepared

intellectually, personally,

from a borrowed world view

perspective to begin to tackle

the problem. It's exciting. You

believe that major and minor

world religions, religious

leaders and those that follow,

have a role to play in dealing

with climate

change. Absolutely, from our

vantage paint in America, we

are saying it's a moral and

spiritual issue, and that we

have to collaborate with scientists, I've been meeting

and travelling around the world

with the world's greatest

scientists, Eric Tribio in and

Dr Ed Wilson, we believe this

combination of fate and

religion and science is the key

to changing populations and

ultimately in finding

solutions. You can't do it

really - you can't begin to do

it without the faith

communities. Reverend Richard

Cizik, can I assume you are a

creationist, is that correct. I

wouldn't call myself that. I

believe in creation care. I am

not a literal when it comes to

the first book of Genesis, no.

I represent millions of people

in America, 30 million at least

evangelicals, not all of them

would call themselves

creationists, a healthy number

would. It's an interesting

knengs of science and religion

deal with climate you see painting the role to

thang. Absolutely. Climate

change has been the victim of

the origins debate. Evangelical

Christans said scientists are

evolutionists, we opposed that,

we won't believe the scientists, now they are

believing the scientists, they

are the key to helping unlock

the misties. Pleased to meet

you. Thank you. Thank you, my

pleasure. You are watching ABC

News breakfast . Top stories,

US President George W. Bush

issues a warning over the

prospect of a global market

melt down ahead of the G-20.

Meeting, amid grim news that

Germany is in resomething's,

and the warning signs are that

its neighbours will follow. The

Prime Minister is confident

Australia will remain in

positive growth but refuses to

rule out running a Budget

deficit. Kevin Rudd is joining

the Treasurer Wayne Swan in

Washington for the G-20 summit. The ANZ Bank is

considering cutting up to #,000

jobs by the end of the year, a

-- 1,000 jobs by the end of the

year, Fairfax Media reports are

rejected that it could be as

high as 3,000, most are middle

management.

For a look at the National

papers, we are joined by the

author Gideon Haigh, good

morning. Good morning. Good

morning. Look, I thought I

would start today with - these

are interesting days, because there's no immediately obvious

front page story for everyone

to run with, so you see the

prejudices of the newspapers

mashled in over generation,

Murdoch is in town, that makes

it interesting. The Fairfax

papers start with the old

Kevin, he's off, has the old

Kevin Rudd wave there. You see

the teddy bear's paw. He's off

to listen to George W. Bush

make a plea for free market

capitalism. When you have a 20%

approval rating, it's

interesting what you can get

away with saying. There should

be more of this defence of the indefensible. His parting gift,

it was interesting to note in

the little built that we heard

from George W. Bush, his doty

defence of capitalism. And

Kevin Rudd fly insist with a

phrase that he's been using

describing it as extreme

capitalism bringing us to this

position. Fear and greed

prevents you smaing the

dynamics of a rising market for

complexities of financial derivatives. The 'Sydney

Morning Herald', the heading

was that Bush was looking to

G-20 to resolve it. Only a few

weeks ago he didn't know what

it was. He's come a long

way. We don't know that. I'll

be interested to see if Kevin

Rudd greets George W. Bush with

a salute and cheesy grin. Ann

Davies, the Washington correspondent of 'The Age'

says, "In a sign that the White

House does not accept full

blame for the world's woes,

Hank Paulson says others may be

to blame", there's something

scalding about Ann Davis

comments. There's a fair number

of people to scald. There's,

it's amazing that Hank Paulson

saying that is regarded as

anything other than obvious. In

'The Australian', on the front

page an interesting story, our

unis getting a high score in

wage test down the right-hand

column. It's to do with a

survey by the International

institute for god knows what - saying that Australian

academics are the fourth best

paid in the world and you learn

a little bit further down extraordinary that Australian

academics are involved in wage

negotiations at the moment. I

wonder where that information comes from. This is a

Pernicious story, anything

involving averages is

fundamentally suspect. The average individual as one tit

and one ball. If you did an

average salary of an international cooperation from

CEO to cleaner, what average

figure would you get, it's

meaningless. Average figures

for academics are in the same

area. What's the political

interpretation you have of this

story and the placement of this

story. Someone in the course of

wage negotiations has leaked

that Australian academics are well off and shouldn't

complain. Back off. My own

experience of academics,

particularly at the low end of

the academic scale, the amount

of work they do for free, exam

marking, essay correcting, the

lousy infrastructure. Sounds

like you have an interest to

declare. Not completely

unencouplered by tertiary

education. The lower classes I

hang around with respect may

give me a different conception

by the academia to the one pur

vad by 'The Australian'. I

think that's unfair. 'The

Australian' is the only

newspaper that runs a higher

education section and that has

spas and room for debates that

take place nowhere else. It has

an excellent higher education

section and one of the few

newspapers in the world that

amazingly has a direct

correlation with the opinions

of its editor-in-chief. That's

why papers have editors in

chief. Some no longer have

editors in chief That's

true. Or they have new one.

'The Sun' is following up the

front page story yesterday

about Dean Mighell, and his

high-flying life some time.,

"The Dean Mighell high club".

It was a 'Daily Express' kind

of story revealing that trade

unionists went to London

staying in a pash hotel. They

followed it up. There's no

obvious way to follow it up.

But with results from an online

poll. 80%% of readers said the

trip was unjustified., "It drew

a storm of outrage", it says

scores of readers inundated the

Herald website." A

poll. Scores. Of course, it not

a random poll, a cross-section,

it's the people who have

bothered top click on an icon

on the screen. It's easier to complain about something leek

this than it is to say it's

justified. I'm amazed 14% of respondents said that Dean

Mighell - it was justified.

Maybe it was Dean. The mood of

the day, thanks so much. A

reminder about the web site.

Abc.net.au/breakfast where you

can watch the entire program

streamed live every morning.

Whether at home or in the

office you can stay across the

main news story by logging on.

Paul Kennedy with the

sport. Andrew Symonds and Shane

Watson appear to be fighting

for the same spot in the first

11 to take on NZ at the 'Gabba,

Andrew Symonds was recalled to

the 13-man squad. He's been

seeing a psychologist after

being banished from the team

for a lack of commitment. Drug

testers to re-examine samples

from the Beijing Olympics after

the emergence of a drug

booster, called CERA, an EPO,

emerged after this year's Tour

de France, it was believed to

be undetectable. It is an

endurance drug, likely to be

used in the Olympics, casting a

shadow over a sport struggling

with its credibility. Nikolay

Davydenko qualifies for the

semifinals of the Masters Cup,

beating Juan Martin Del Potro,

6-3, 6-2, to remain alive in

the $4.5 million tournament,

playing Roger Federer or Andy

Murray. Joe Wilfried Tsonga

beat Novak Djokovic in the

other game. It was a

consolation victory, Joe

Wilfried Tsonga is out and

Novak Djokovic has qualified

for the semis. Palm, is there a

chance that there could be positives from the Olympics

Games with this new form of

EPO. Sure, and a lot of

authorities are saying that

they'd be surprised if it

doesn't pick up positives.

They'll go over some of the

blood samples, and find out

whether that new drug has been

used. There's also been talk

that cyclists are coming

forward saying that it's all

very upfront, the drug use in

their sport now. It was on the

'7.30 Report' last night, there

was a story on Brad McGee, an

Australian cyclist said, going

back to his 1988/1999 start in

the Tour that it was up front.

People were putting it in front

of him, waiting for him to take

drugs and be caught in the

system. It was a revelation, I guess. We assumed that was

taking place, for someone to

say it. Depending on how you

were brought up as to whether

you'd go for it or not Yes. Thanks, Pall. Let's

lock at the weather. Here is

consistency in the weather at Vanessa O'Hanlon. There's no

the moment.31 recorded at

Hobart. Over the next few days

temperatures in Hobart will

plummet. The satellite shows a

cloud band manoeuvring from

eastern WA to the Tasman Sea,

Victoria and South in a trough causing storms in

Australia. Cloud over NSW and

south-east Queensland resulting

in showers. In Queensland -

isolated showers about the East

Coast and the gux. In NSW - a

stormy day on the way, showers

speibility in most arse, apart

from the north-east, storms

expected in Sydney, 33 in

Tamworth. In Victoria scattered

showers, isolated thunderstorms

in Wangaratta. Tasmania

expecting patchy morning rain

in the north-east, showers in

the west heading to the east of

the state. In Australia -

isolated showers over the

pastoral Flinders and Riverland

District. In WA - in the south

showers expected along with

thunderstorms in the inland

Central West and northern

Central Wheatbelt. Storms for

Kalgoorlie, to the north storms

and showers this afternoon, and

showers for the Alice, a top of

40 drtion. -- degrees. egrees. -- degrees.

Unusual weather patterns at

the moment.

We take you to the US where

police in Denver are trying to

determine the motive behind an

extraordinary incident of road

rage. This security camera

footage has been released. The

driver of the car, you can see

through the restaurant window

was seen driving eratically in

a customer car park, he was

confronted by a bystander again

and again. Suddenly he rammed

his car through the restaurant

window destroying tables and

chairs, pinning a patron to the

wall. No-one was injured, the

man was chased, being subdued

with a

We are facing the prospect of

a global economic meltdown.

President Bush issues a warning

ahead of this weekend's G-20

summit in Washington. A nervous

wait on Australian markets

after the 4-year low as the

Prime Minister refuses to rule

out running a Budget deficit

sno. More concerns over how

Australia is -- weathering the

storm as ANZ prepares to slash

up to 1,000 jobs. Andrew

Symonds back from the

wilderness to be named indeed

Australian Test squad. It could

be at the expense of Shane

Watson.

Good morning, it's Friday, 14

November, I'm Joe O'Brien. And

I'm Virginia Trioli, the top

stories today on 'ABC News

Breakfast', US President George

W. Bush warns of the pros

pected of a global economic

meltdown ahead of a meeting of the G-20 countries this

weekend. On a speech on Wall Street, President Bush said the

financial issues facing the

G-20 are too complex to be

solved In meeting, calling for

a series of gatherings to

address the crisis, he was

critical of the international

institutions like the World

Bank and International Monetary

Fund. We are faced with the

prospect of a global meltdown.

So we have responded with bold

measures. I'm a market-oriented

guy. But not when I'm faced

with the prospect of a global

meltdown. At Saturday's summit

we'll review the effectiveness

of our action, we reform

international financial

institutions, such as the IMF

and the World Bank, which are

based largely on the economic

order of 1944. To better

reflect the realities of

today's global economy the IMF

and World Bank should modernise

their Government structure,

extending greater voting power

to dynamic developing nation,

as they increase their

contributions to these

institutions. They should

consider ways to streamline the

executive boar boards and make

them more represent TV. In

addition, these important - to these management changes we

should move forward with other

reforms making the IMF and

World Bank... George W. Bush

speaking there in New York just

a short time ago. Mark Simkin

joins us now from Washington.

Now, Mark, George W. Bush there

was pointing the finger

elsewhere, making it clear that

this mess wasn't all the fault

of the US. Yes, the President

is saying that this is a global

problem, and it needs a global

solution, and as you say, he

was mentioning by name the IMF

and the World Bank, some of the

big international organisations