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Tonight - cheap labour -

Kevin Rudd admits his wife's

company underpaid workers.

Look, I would be dishonest with

you if I said it's not

embarrassing. 10 years on,

what has changed for the stolen

generation? The Prime Minister

either doesn't get it or he

doesn't care. The former PM

pushing for Sydney as the new

national cap tam. If I'd have

done it, they would have boiled

me in oil. And the one that

got away - New South Wales

Origin blues. Good evening.

Joe O'Brien with ABC News.

Kevin Rudd admits he is

embarrassed. . The Opposition

Leader conceded today that his

wife's company had underpaid

almost 60 of her workers for

nearly a year. He says it was

on honest mistake which was

fixed as soon as possible, but

he also acknowledged it should

give the Opposition pause for

thought in its attack on the

Government's workplace laws.

Kevin Rudd may have taken his

time, but when he finally

emerged in the late afternoon,

he did not gild the lily.

Look, I will would be dishonest

with you if I said it's not

embarrassing that these sort of

things happen. Of course it's

embarrassing. At the

Opposition celebrated

Queensland's victory in the

State of Origin last night, one

of his wife's company Work

Directions Australia had

underpaid 58 employees for

nearly a year. They had been

hired for a firm Therese Rein

had taken over last July, but

continued to be paid just 45

cents an hour above award for

giving up penalties, overtime

and other benefits. The

Opposition Leader says the

problem was only identified

following a Fair Pay Commission

decision in December. This

was honest ly an honest mistake. The company has

since given the workers $70,000

in backpay, but Mr Rudd won't

say just how much they are now

getting for giving up penalty s

and other allowances. The

important thing is for all

employers to act fairly under the laws that exist at the

time. The episode certainly

blunts Labor's attacks on the Government's workplace laws and

now he has found trouble close

to home, the Opposition says

Labor needs to exercise caution

about vilifying employ years.

It gives you fresh pause for

thought. Kevin Rudd denied any prior knowledge of the

problem, saying he and his wife had more important matters to

discuss, like family. However,

for the first time, he

acknowledged they were

considering sell ing her $170

million business if he became Prime Minister. A tough call

on a marriage, he says. Do

you turn around and say, "Well,

that's the end of that,

sweetheart."? His ambition -

her business. 10 years after

the landmark report into the stolen generation, the Federal

Government is facing a fresh

attack over its record on

Indigenous affairs. A

prominent Aboriginal leader

says the bulk of the

recommendations in the report

have been ignored. Lowitja

O'Donoghue has also accused the

Federal Government of drastically underfunding

services for Indigenous

communities. It put the

stolen generation in the

spotlight, and fuelled the

national debate on

reconciliation, but a decade

after the landmark Bringing

Them Home Report, the pain is

still very real for many, line

Valerie Linow taken from her

family when she was 2 years

old. Sometimes you wish you

had your mum and dad like the

white kids had. So years has

done little to dampen the

reconciliation debate. At an

event marking the anniversary

of the report, the Government

was in the firing line. The

Prime Minister either doesn't

get it or he doesn't care.

With ministers watching on,

Lowitja O'Donoghue gave a

scathing assessment of the Government's record on

Aboriginal housing, health,

education and employment,

describing funding as

drastically in adequate. Just

compare had 135 million over

four years on Aboriginal health

with 1 23 million for the very

silly and totally un necessary

new citizenship test. What is

more important, I ask you?

APPLAUSE. Lowitja Lowitja, it

is not a tokenistic approach I

take to this work. The Health

Minister was heckled during his

speech. (Heckling) John

Howard wasn't there, but told

Parliament a bigger effort is

needed by both government and

Indigenous communities. There

needs to be an assumption of greater personal

responsibility. Two-thirds of

the recommendation in the

Bringing Them Home Report have

not been taken up, among them,

the call for an official

apology. While the states have

said sorry, the Federal

Government has stopped short.

Labor has promised an apology

if it wins government, but John

Howard says his view hasn't

changed. Now to a police

shooting in Sydney late this

afternoon. Officers have

opened fire on a man who allegedly stabbed his wife to

death at Punchbowl in the

city's south-west. At last

report, he was in a critical

condition. ABC reporter

Philippa McDonald is at the

scene. Pill Philippa, what

ameres 30 have happen.

Eyewitnesses are telling us

that a 6-year-old girl came

home from school today about 4

o'clock and found her mother

stabbed to death in their home.

She raised alarm and around

4.15 police arrived. We

understand 6 policemen

surrounded a man weeding a

large carving knife and police

told him to drop his weapon.

When he didn't, after several

warnings, they opened fire on

him. We understand he has been

shot three times in the throat

and the chest. And what are

police telling you now? Police

are saying very little. We're

waiting for the Deputy

Commissioner to arrive. They

have, however, confirmed the

shooting, saying that the man

allegedly threatened police and

a shot was fired. The man is

now undergoing surgery in

Liverpool hospital where he is

in a critical condition.

Thanks, Philippa. Qantas

shares hit a record high today,

as it outlined plans for the

future, including a sell-off of

assets and returning money to

shareholders. In his first

investor briefing since the

private equity bid collapsed,

Qantas chief Geoff Dixon ruled

out selling Jetstar and

signaled major changes to the

frequentfullier program.

Qantas chief Geoff Dixon

emerged from what he called the

protracted and difficult

private equity process with a

clear message to investors. I

think the company has come out

of the process in very, very

good shape. The national

carrier is an airline with

plenty of options and now

without the massive debt the private ek qity group would

have imposed. In a closed

session, he told in vestors

that the next 12 to 18 months

looked good, notwithstanding

higher oil prices and looming

challenges from new competitors

like Tiger airlines. He

outlined the company's plans to

take on more debt, but not

nearly as much as the private

equity bidders. Qantas is also

considering returning billions

of dollars to shareholders

through a share buyback or

dividends. We think it is a

very good statement which does

set out the directions the

company will take, and the

focus of management and the

board on those issueses.

Action air yeahs, could include

the sale of some businesses

like catering and freight. The

airline's massive Frequent

Flyer program will also come

under the microscope. We are

going to review ownership. We

would never sell it off, but we

are going to review it. That

means a share of the Frequent

Flyer business could still be

sold as part of the airline's

plans to develop it further.

And Jetstar remains an

important part of Qantas and

its regional expansion plans.

Qantas shares hit a record high

of $5.54 today, despite a

weaker market. You're now

think ing in terms of share

price head ing upwards, because

there are buyers out there, not

necessarily because the

aviation industry is going

well, but because there are

peopling who are circling who

want to buy this airline. The

market has just raised the

asking price. Virgin Blue has

faced action in the Federal

Court over its policy on disabled passengers. Jackie

May is one of two wheelchair

users who were told they would

have to pay for carers to

travel with them, even though

she lives independently. They

claim the airline is creating

unlawful and discriminatory

hurdles with people with

disabilities. Jackie May said

Virgin Blue staff told her she

would receive no help in an

emergency. They suggested

that if I was out of my

wheelchair and my house was on

fire, if I could crawl out the

front door, then I would be

able to evacuate off the plane

independently. The Public

Interest Advocacy Centre says

Virgin Blue is the only airline

in the world with such a

policy. The airline says it

won't comment until the case is

heard later in the year.

Sydney' cab drivers are also

being accused of

discrimination. They've been

taken to task over their

treatment of blind people with

the Australian commissioner for

disability discrimination

angered that some cabbies

refused to carry his guide-dog.

As a Human Rights

Commissioner, Graeme Innes is

used to fighting

discrimination, and being

vision Wally impaired, that has

also extended to his private

life. Once every six weeks or

so, I'm threatened refused

carriage in a cab as a result

of being a person using a

guide-dog. Barbara Bonfield

has been blind since childhood

and helps to educate cab

drivers, but says the message

isn't always getting through.

Last Friday I tried to get a

cab at the mill sons point

Railway Station and the driver

refused me because of the dog.

The Taxi Council of New South

Wales is working to fix it.

It's the same people who try to

say we've got a health issue.

Taxi drivers can be fined up to

$is 100 for refusing entry to

passengers with guide-dogs.

There are calls, though for

that penalty to be increased.

I would love to see bigger

fines, bigger sort of loss of

licence or some sort of penalty

to say, "Hey, this is just not

good enough." It is

intolerable to think that a

visually impaired person with a

guide-dog has been refused

access to a taxi. It's

illegal. It should not be

happening. But for people like Barbara Bonfield, it is a

reality. She wants taxi

companies to play a greater

role in punishing drivers who

break the rules. President

George W. Bush has revealed

intelligence claims that

al-Qaeda's leader wanted Iraq

to become a base for

international terrorism. Mr

Bush made the announcement in a

speech to US coastguard

graduates. He warned that the

danger of terrorism in his

country had not passed.

According to our intelligence

community, in January 2005,

Osama bin Laden tasked the

terrorist Zarqawi who was then

al-Qaeda's top leader in Iraq,

with forming a cell to conduct

terrorist attacks outside of

Iraq. Bin Laden emphasised

that Zarqawi should that

America should be Zarqawi's No.

1 target. The United States it

also increasing pressure on

Iran, threatening new UN

sanctions if it doesn't suspend

its proffer shal nuclear

program. Nine US warships have

begun exercises in the Persian

Gulf amid reports that Mr Bush

has given the go-ahead for a

regime. Two Australian men are

being held in jail in the

United Arab Emirates facing

drug, drunkenness and sexual

harassment charges. A third

man charged with indecent

exposure has been released on

bail. The three first-class

passengers were taken off a

Etihad flight from Sydney to

dab dab dab last nont. Two of

the men, David Evans and Jeremy

Snaith are directors of Jupiter

Mines. Etihad Airways says it

has a zero tolerance policy towards disruptive passengers.

The men deny the allegations

are their lawyers are confident

of a speedy resolution. A

woman accused of killing her

6-year-old child with a lethal

dose of methadone will stand

trial for murder in the Supreme

Court. The woman can't be

identified for legal reasons.

She was charged with murder in

September 2005. Her daughter

died of a methadone overdose at

their cat die home. The woman

told police she accidentally

gave her daughter the heroin

substitute because she thought

it was cough medicine. The

magistrate found there was a

reasonable prospect a jury would convict the woman of

murder. When he was Prime

Minister, he famously said if

you weren't living in Sydney,

you were just carping out. Now

Paul Keating is calling for the

Federal Government Parliament

to be shifted from the bush

capital to the Emerald City. A decade after leaving the seat

of power, Paul Keating says he

would like to see it shifted.

According to the former Prime

Minister, Sydney is already the

political capital in all but

name. John Howard has effect

Tivoli moved the Government to

Sydney. Strange but true, the

Government operates now out of

a little office building in Phillip Street building.

That's where the Cabinet meets

except when Parliament is

sitting. He argues the

Federal Parliament should be in Australia's biggest city

because there is an air of

unreality about the bush

capital. I think a part of it

should be at the heart of a

city at the heart of the

nation. Brisbane is the place

to be. Sydney knows that. We won the State of Origin. I

think Brisbane is the capital.

Sydney is the capital of

Australia in the sense it's

Australia's only global city

and the best city in the

county. But would Sydney

welcome the politicians.

Parliament produces a lot of

greenhouse gas emissions, a lot

of hot air. I think Sydney

would be penalised. Many

already regard Sydney as the

financial capital. We are the first significant Stock Exchange in the world that

opens on any day, that we have

60 of our top 100 companies located here . The Reserve

Bank is here, the Furtures

Exchange. But Washington has

the White House while nearby

New York is the financial hub.

Qana's -- Canada's Parliament

sits in Ottawa though Toronto

is better known. It's neither

Melbourne nor Sydney, so all

people in Australia consider

Canberra as their political capital and that's the way it

should be. Constitution

aside, there is little chance

of change. Mr Keating is un

deterred. He is even

suggesting that once the Navy

moves out, Garden Island could

be used as the new spot for

Federal Parliament. If I'd

have done it, they would have

boiled me in oil. Throw if

the fleet does leave town,

developers are sure to have

their own ideas for the site.

Tonight's top story - Kevin

Rudd says it is embarrassing

that a company owned by his

wife has been found to have

underpaid staff. Till to come

- how to reverse the ageing

process. The environment

lobby wants tighter regulation

of Australia's carbon offset

industry. The total

environment centre says carbon

trading in Australia is a mess,

with few controls over

operators. It feels the whole

practice could be dis credited

if the focus on the industry

turns from green to greed.

Reducing carbon emissions w is

big business for many

companies, but assessing what's

on offer and its value to the

environmental foot print ka be

as hazy as city smog. We

think the carbon reduction

market is in ACOSS -- chaos

and creating a crisis of credibility which should concern companies and

individuals who want to become

neutral. There are at least 17

companies who advise on

reducing emissions. Even has

different methodologies. Among

them is the carbon reduction

Institute. Under the

different abatement projects,

there are different rules.

Different players are playing with those different rules in

order to get the best returns

for themself. In a report out

today, the Total Environment

Centre says the industry

desperately lacks cohesion

cohesive regulation. It is a

mess. We have another four

standards comeing from the

international sector. Not

surprisingly, people are

confused. There certainly are

questions over the credibility

of the industry. I think the

growth and need to take action

towards global warming is

stopping that from being a

major problem. But the Total

Environment Centre says it is

already a major problem N the

come ing months, it plans to

name and shame the companies

which need to lift their game

and it's calling on the Federal

Government to introduce one

uniformed accreditation scheme.

I will have a look at their

report. The Australian

Greenhouse Office has the best

carbon accounting in the world,

and our certificatation is

similarly excellent. If a

simpler system is not

introduced, the green

campaigners say it could do

long-term damage to the environment. Last night's Aboriginal art auction in

Sydney more than matched

expectations with a new record

set for an Indigenous painting.

Earth Creation by the late

Central Australian artist,

Emily Kngwarray fetched $1,056,000, smashing the

previous record of $755,000.

The 6 by 3m work will now be

exhibited at an Alice Springs

gallery. To finance now and the local share market fell

back today as sellers moved in

on the resources sector and the banks. Here is Alan Kohler

with the details. The All

Ords index today just dipped

below its 11-week old trading

range. It is not a dramatic

fall, in fact more a sag than a

slump. The market has now not

moved since 4 May. As you can

see, the graph has been jerking

up and down for 3 weeks without

any definite trepd emerging.

I'm not suggesting it's

definitely going into free fall

or something, but it's worth

noting, as it what's going on

in Shanghai. The B index has fallen heavily three days in a

row. Today was the biggest

drop, 9.4%, bringing to 20% the

fall this week. Now, I would

call that a slump, not a sag.

Here are the details of today's

trading in Australia:

This year' hot stock,

Fortescue, fell 5 %. The banks

all fell, typified by ANZ, down

1.5%. But once again, Qantas

bucked the trend, rising 4

cents to $5.46. At one stage,

the stock was cell selling for

$5.54. High ironic that for

nearly six months Qantas sells

for less than the takeover

offer of $5.45 amid warnings

from the board of directors

that if the bid failed, it

would slump, and then when the

bid does fail, it goes above

the bid price. The currency

market remained becalmed. The

Australian dollar is steady for

a week. The last time that

happened was January last year.

That's finance. Queensland

looks even more likely to

retain its rugby league Origin

crown after last night's

fightback win over New South

Wales. The Blues blew a

12-point lead, conceding three

tries in the second half to

hand one game one of the

series 25-18. It could be a

long series. The maroon Army

was in good voice. Throw him

in the bin! The margin on the

scoreboard was narrow, just 7

points, but the gap in the

performance of the combatants

was considerably wider. Just

let them get away . You've

just got to wear the momentum

if you can and then dig in and

get out of it. It just seemed

a bit of a relentless

onslaught. Let Cameron Smith

do pretty much what he wanted

to do. Antonio Kafusi

suffered a season-ending knee

injure and Nate Myles will miss

two club games. Maroons have

little soulen searching to do.

There are a lot of things we

can improve on. Johnathon

Thurston caught out the Blues

backs for 6-0. Rookie half

Jarrod Mullen's game rarely got

beyond its nervy beginnings.

I was pretty disappointwide my

game. I should be leading them

around. I didn't do that to

the best of my ability

tonight. Against the feel of

the game, the next 18 points

when the Blue's way. Mullen's

best touch came to send Cooper

in. But for a drop and a

forward pass call, twice

Queensland looked certain to

score. Instead, another rookie

Jarryd was p opportunistic on

half-time, to give New South

Wales an un likely 12-point

lead. Once the momentum swung

the Maroons' way, there was no

turning back the tide.

Especially half Hayne's back

pass as he tried to avoid being

man-handled into touch.

Thurston made it a 7-point

buffer. The kick probably

stopped the score blowing out.

Most of the Blues will get

another chance, though not Kurt

Gidley. He will miss 10 weeks after damaging his left

shoulder. AC Milan has

restored some pride to Italian

football with a 2-1 win over

Liverpool to clinch the

European club championship.

Last year the team was smeared

incy tally's match-fixing

scandal. Here is Peter

Wilkins. AC Milan is the

toast of European football

after winning the Champions

League for the 7th time. Its

opponent, Liverpool, had a host

of opportunities in the

surprising role of first half

aggressionor against the

star-studded Italian side.

Against the run of play, Kaka

was fouled nearing half-time

and a deflection of Filippo

Inzaghi wrong-footed goal

keeper Pepe Reina. Steven

Gerrard's miss from close range

would prove costly. Australian

Harry Kewell came on for the

last 30 minutes and produced

some nice touches. But

Inzaghi's cool finish for his

second gave Milan a 2-0 lead.

Liverpool narrowed the deficit,

but it was all too late. AC

Milan had gained some revenge

for its dramatic loss to the

English club in the 2005 final

and restored some pride in

Italian football after last

year's match-fixing scandal.

TRANSLATION: I would say this

is good for Italian football in

general. It will help us

regain some credibility. The

result sent central Milan into

a frenzy, while some Liverpool

fans in Athens cast an ugly

shadow over past-game

celebrations. Sydney FC faced

the daunting prospect of

beating Urawa Reds on their

home turf to progress to the

quarterfinals of the Asian

Champions League. The visitors

weren't intimidated and put

themselves in goal-scoring

positions, none better than

this 10 minutes before the

break. Urawa's rare forays

were easily handled, but

frustration mounted at the

other end as the vital goal

proved elusive. Sydney's

domination of procession came

to nought. The scoreless draw

propelled ur tour the knockout

phase and ending Sydney's first

excursion to the peaks of Asian

club football. We all know

that exercise is good for you,

but new research suggests it could actually reverse the

ageing process. A study has

found that regular weight

training can re-ak ty vait

muscle cells in people in their

60s, giving them back the

muscle tone they enjoyed in

their tos. It is a tantalising

prospect that simple sessions

of weightlifting could be the

key to restoring youth, but

that's what the science is

suggesting. This study shows

quite convincingly that

strength trainer or resistance

train something a very effect

tiff way of counter acting the

age-related changes in our

muscles. The muscle tish ious

-- tissues were compared to

though in their 60 and 70ings

with those in their 20s. And

30s. It should be an

incentive for everyone to try

and take up some form of

physical activity and to keep

active for as long as possible.

76-year-old Solomon Ende does

regular strength training.

I'm sure that tt must be good

for you, rather than sitting on

the crouch and -- couch and watching whatever is on the

couch. We're advocating

strength training as a form of

medicine to treat a range of

conditions associated with

ageing. 70-year-old Alison

Cobbett began exercising to

beat arthritis. It makes me

stronger, yes. It lets me do

everything I want to do. I

look forward to it now every

week. Once a week I come over

and I look forward to it. As

the research shows, it's never

too late to start. Now let's

take a look at the weather.

First of all, dam levels have

remained virtually steady this

week thanks to the rain we had.

The overall storage level is:

There were some cloud y

areas on the Snowy Mountains

and in the south-west. Apart

from that, it was generally

fine.

It was mostly fine over the

in land today. There's

scattered cloud crossing

Tasmania in strong

north-westerly winds and there

is more cloud over the northern

tropics. On the synoptic

chart, there is a high still

dominating the map, which will

bring another cold morning, and

there is a trough over WA with

an approaching cold front.

Rain tomorrow - that front will

produce showers over southern

WA. Strorng northerlies over

Tasmania will maintain showers

over the south-east and there will be more rain in the trop

yigs.

Before we go, another look

at tonight's top stories.

Labor leader Kevin Rudd has

admitted he is embarrass ed

over a revelation that his

wife's company has been

underpaying workers. A decade

on from the landmark stolen generation report, the

Government is under attack over

its record on Indigenous

affairs. Qantas shares have

soared on the news that the

national carrier may sell

assets and make big payouts to

shareholder thes. That's ABC

News for now. I will be back

with updates during the

evening. We leave you with

some celebrations at Melbourne

Zoo to mark the 2 is is it

birthday of one of its Sumatran

orang-utans. Goodnight. Closed Captions by CSI

welcome to the program on

another unpredictable day in

what has been an unpredictable year in Australian

politics. With Kevin Rudd the

centre of attention and he's

here to discuss his quandary in

a moment. If this week was a

tennis match the first two sets

went to Labor, but John Howard

has just picked up the third

and for the moment at least the

pendulum has swung back to the Government. In the spotlight

today the business affairs of

Kevin Rudd's wife, Therese

Rein. And whether she pays her

staff Farlie. Regardless of

her statement and his public

explanation late this

afternoon, a damaging story was

allowed to run for most of the

day, suggesting a double

standard in the Rudd household

on the very issue that has been

Labor's ace policy area -

fairness in the workplace. The

claim in two newspapers this

morning was that Ms Rein's multimillion dollar employment