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An incredible shrinkling ing

economy. Australia cannot continue to

continue to swim against the

global economic side tide. The

nation on the brink of

recession. I think on any

definition other than the most

widely used one, Australia is

in recession now. Resolve in

the face of the Pakistan terror

attack. The world is a

dangerous place. But cricket

must go on. And welcome rain

relieves weary Victorians.

This Program Is Captioned

Live.

Good evening. Juanita

Phillips with ABC News.

Australia has finally got that

shrinking feeling. For the

first time in eight years, the

economy has gone backwards. GDP

was down by half a per cent in

the December quarter, despite

aggressive interest rate cuts

and billions in government

handouts . Now, even the

Reserve Bank is conceding

Reserve Bank is conceding that

Australia is flirting with

recession. Political editor

Chris Uhlmann. The nation's

pulse has missed a beat. Minus

point five. That's a big

shock. The national accounts

are a snap shot of how

Australia was fare ing from

October to December and in

those three months the

eight-year run of growth

ended. This is a sober ing but

ended. This is a sober ing but unsurprising outcome. The

economy shrank by half a per

cent in the Decemberquarter and

the full year tally of the ebb

and flow of all goods and

services in the nation only

added up to 0.3 %. Australia

cannot continue to swim against the global economic tide. That

tide is running out. Towards

years, no the first recession in 20

years, no matter how you define

it. We think growth will slow

to about zero over the period

to June 2000. But numbers don't

begin to tell the story. When

growth contracts, it has human

consequences. Australia went

backwards, despite a three%age

point cut in interest rates and

$10 billions worth of cash

handouts We had this huge cut

in interest rates and we

in interest rates and we had

this very sharp fiscal payout

in early detion and yet growth

didn't pick up. Things in this

country would have been far

worse had the Government not

acted when we did. Consumer

spending only rose 0.1% in the

quarter. But household savings

spiked to 8.5%, the highest

savings number in 20 years. The

amount of dollars saved was $15

amount of dollars saved was $15

billion. The Coalition says the

bulk of the Government billions

were banked. It produced very

little bang for the buck. The

Treasurer says any money saved

a step towards reviving shattered consumer

confidence. And, yes, it may be

that there is some part of the

economic security strategy that

has been saved. This lifts the

pressure on a Government which

enjoyed broad support for its

enjoyed broad support for its

first round of hash handouts.

Now more questions will be

asked about that and the second

round of #12d billion which

begins to flow in a week. The

cheques are in the mail. The

weaker than expected numbers in

the national accounts took many

economists by surprise. Even so analysts say the Reserve Bank

did the right thing keeping

interest rates on hold this month. That's because they

think there's worse to come.

More from finance correspondent

Phillip Lasker. The last time Australia's economy ventured

into negative territory was way

back in December 2000 after the

introduction of the GST. It is

now swinging like a wrecking ball through the Australian

economy. Those figures are

kiss appointing. This time, the

wreck ball is the global financial crisis. The

financial crisis. The national

accounts show it has shattered

consumer confidence and hit spending on items like

services, travel, entertainment

and cars. Part of Australia's

industry sectors are

contracting, with manufacturing

technically in a recession. While profits are

also falling. I think they

painted a picture of an economy

that is endering recession,

even though they haven't

provided the headline figure of

consecutive quarters of provided the headline figure of

negative GDP growth. The ACT

had that distinction, recording

its second straight negative

quarter of State demand, which

is only a partial measure of

State growth. Five States and

Territories went backwards

during thequarter with SA's

economy the weak est. Victoria

stood out as the only State to

record growth above 1%, with

the former boom regions in

tow. I think we will see at

least one morequarter of

negative growth during 2009 and

you couldn't rule out the

possibility of more than

one. That's why the Reserve

Bank is thought to be saving

its interest rate ammunition.

More cuts will be needed as the

financial crisis rolls on. The

latest attempt to boost

confidence came as leaders of

two of the weakest economies

met for the first time. The

what he has history book also record that

what he has done in his first

nearly 50 days of office has

been momentous in setting the

means by which we can see the

economic recovery

happening. And today the means

extended to Barack Obama

talking up American equestion

ti, saying they were cheap.-

equities, saying they were

cheap. Pakistan says it's been

plunged into a state of war by

Sri Lanka's the deadly terrorist attack on

Sri Lanka's cricket team. Team

u. It's promise ed to flush out those responsible but so far

the security force can't even

figure out who was behind the

attack. Pakistan now faces an

an uncertain and unstable

community questions its future as the international

handling of extremist elements.

Sally Sara reports. Sri Lanka's

battered cricket team arriving

the injuries from the home in Colombo, still carrying

the injuries from the terrorist

attack. Relieved family members

were on hand to greet the

cricketers after their sudden

evacuation from Pakistan. All

the member s would have said to

you that they never thought

they would come alive out of

that situation. Hours only

there was a dramatic exit from

the Gaddafi Stadium in Lahore.

The cricket pitch had become a

The cricket pitch had become a temporary helipad. Team members

boarded a Pakistani military

helicopter, brought in to air

lift them to safety. Outside

the ground their bullet riddled

bus that had been ambushed by

up to 14 gunmen. And not far

away more grim evidence of the

brutal surprise attack. Several

police officers and a civilian

died. At least six Sri Lankan

team members were among the

injured.

TRANSLATION: The first shot hit

about half a foot away from the

driver. Only then did I realise

they were firing at us. Then everybody shouted to hit the

floor. I heard some of the

flair s shouting that they had

been hit. He said the driver

was no shock but after about a

minute and a half he managed to

drive off. Australian umpire

Steve Davis was in the bus travelling

travelling behind. We just all

hit the floor of our van and we

had come to a halt behind the

Sri Lankan bus and it seemed

like ages but then we were

pelted with bullets and the

windows started smashing in.

Our driver was shot dead. I

think this was one of the worst

think this was one of the worst

security failures in Pakistan.

To see the type of security

provided to the Sri Lankan

cricket team was completely

shameful. The shooting is being

compared to last November's

terrorism attack in Mumbai,

which was blamed on Pakistani-based Islamic

militants. In both cases, the

gunmen were on foot, heavily

armed and launched a

armed and launched a sudden

assault after careful planning.

But no-one has claimed

responsibility. It was a very

planned attack and it was

systematic and obviously it was

aimed at de stabilising not

just Lahore, parts of Lahore

but also our ability to host

international cricket. The

cricketers may have left but

for Pakistan the problem is far

from over. With the gun plen still at large, the threat

still at large, the threat of

further attacks remains. So

where to now for top level

cricket in Pakistan? Certainly

in the short term international

teams will be kept well away

from there. And a one-day

series between Australia and

Pakistan in the United Arab

Emirates is already under review. Cricketing officials

feared it could happen. No-one

believed it would. The sport has

has been left stunned that Test

players have gone from star

attractions to terrorist

tarts. It is an extremely sad

day for cricket, for

cricketers, and for people in

general, a sad day for man

kind. We're just shocked at the

fact that a cricket team has

been targeted. It would appear

on this occasion that the Sri

Lankans have been specific

Lankans have been specific targets which makes it all the

more worrying for any sporting

team. And not only in

Pakistan. The foremost Sri

Lankan's coach, Tom Moody was

on the phone

immediately. Mahala rang

straight back an hour after the

event and he seemed remarkably calm. Another Australian who

has worked in Pakistan couldn't

believe it. I've driven through

this hundreds of times and it's

a place where people do their

business. Australia's Foreign

Minister says the attack has

shattered perceptions that

cricket stars are safe from

terrorism because of their

revered status on the sub

continent. Irrespective of what

position you occupy,

irrespective of what pursuit

you follow, you are not immune

from terrorist

activity. Cricket's ruling body

will meet next month to review

its decision to allow pack stab

to be a cohost

to be a cohost of the 2011

World Cup. Australia pulled out

of a tour of Pakistan last year

on security advie.s E With what

happened yesterday, the

cancellation last year

justifies that. The Australians

are cue to play Pakistan in the

United Arab Emirates next month

but even that is up for

discussion. If at any doubt we

have doubts or are

uncomfortable we will take the necessary action and

necessary action and postpone

the tour. Cricketing greats and

officials insist the game will

recover. The world is a

dangerous place but cricket

must go on, it will go on. Not

in Pakistan for foreseeable

future. NSW police are being

given sweeping new powers to

search people's homes and even

hack into their computers

without their knowledge. The

Premier, Nathan Rees, says the tough new

tough new laws are aimed at

fighting criminal gangs. But

critics say the target is

privacy. Charlotte Glennie

reports. Until now, the only

way police could lawful ly

enter a suspected drug lab is

by prentding someone inside

with a search wra>> If you are

is ears criminal you should be

very anxious. We will now have

the power to enter your home

without you knowing and collect evidence for subsequent

evidence for subsequent prosecutions. The new laws mean

police can apply for covert

search warrant in any case

where a person is us pected of

a crime punishable by at least

seven years jail. That includes

the supply, manufacture or

cultivation of drugs, the

possession, manufacture or sale

of firearms, money laundering,

organised theft, kid napping

and homicide. Warrants will be

valid for six months, but

valid for six months, but in

exceptional cases can be

extended to up to three years. These powers will be

used to invade the privacy and

the property of homes and

premises of people who

ultimately are found not guilty

of any crime. It's a serious

invasion of their rights. The

new laws also grant police the

right to tap into a suspect's

compute ir. The only

restriction is that all covert

search warrants must first be

search warrants must first be approved by the Supreme

Court. Unless you are involved

in criminal activity, then you

shouldn't be woer woryed about

this legislation. Police have

admitted they've carried out

covert raids in the past

despite them being illegal. But

these laws will make sure that any evidence gathered in this

way stands up in court. A

teenage vandal has avoid jail after appealing against her

after appealing against her

conviction. Last month, a

magistrate sentenced Cheyane

Back to three months jail for

drawing graffiti on a Sydney

cafe. But the higher court

dismissed the conviction. Ms

Back's lawyer told the court

that 18-year-old had been

hounded by the media and was

sorry for what she had done.

Her conviction was squashed and

she's been placed on a 12-month

good behaviour bond.

Queensland's Dengue fever

epidemic claimed its first

victim - an 82-year-old woman

died in the Cairns baste

Hospital after contracting the

disease. She's the first to die

since the illness broke out in

the State's far north late last

year. If more case of Dengue

we have, the more likely it is

that somebody who is frail or

occupied the disease and will

suffer badly from it. Residents

are being urged to do their bit

are being urged to do their bit

to contain the disease by

removing all potential breeding

site force mosquito which

spreads the disease. After more

than three weeks of hell, Victorians finally have

something to celebrate. The

fires that have raged since

Black Saturday are now under

control, with firefighters

confident they can put them

out. Paul Lockyer rrts from the

Yarra Valley, north of

Melbourne. At last, rain clouds replaced

replaced the plumes of smoke

that had covered the Yarra

Valley. The fires have been

contained, despite yesterday's

atrocious conditions. Mother

Nature threw just about everything at Victoria

yesterday. We had winds, we had

dust storm, we had rain, we had

fires. But the wild weather

also brought rain, the biggest

falls in three months. The

weather is now firmly on the

side of the firefighters. A

Tasmanian contingent is now

going home. Others from around

the nation and around the world

will soon follow. To think

they've all come to Victoria to

help us out, that was amazing

too. That's just been

unbelievable. The good news

from the fire front has sent a

wave of relief right across

Victoria. There's an

opportunity for the communities

of Victoria to start their process of

process of griefing, start

their process of re building

without the ever present threat

of fire that's been there in

the last month. People who fled

to the protection of relief

centres couldn't wait to go

home. Just a great feeling that

I think things are turning now

for Victoria and the

fires. Absolutely fantastic.

It's just been - everyone has

been waiting for the rain

waiting for rain wanting it to

be over. Life is

be over. Life is being breathed

back into scores of

communities, which came under

the fire threat. As people

reclaim their towns and

village, they do so with a new

wariness about their forest

surroundings. Just part of the

enormous fallout from Black

Saturday. , no it's never

over, is it. So if Queensland

can have floods and we have the

fire, what next There will be

weeks of mopping up left to

weeks of mopping up left to be

done in the fire areas, but one

of the most horrific chapters

in nation's history is coming

to a close. Tonight's top

story - the Australian economy has slipped into negative growth for the first time in

eight year s putting the

country on the brink of

recession. Still to come -

custom-made kids.

For every 10 students

starting primary school this

year, the Federal Government

wants four of them to go on to

university. By 2025, the aim is

to boost the number of people

with degrees from around 30 to

40%. It's part of a revamp of

higher education that will also

change the way that

universities get their money.

Kirrin McKechnie reports.

Kirrin McKechnie reports. Let

the revolution beg yivenlt By

2025, 40% of all 25 to

34-year-old also have a

qualification at bachelor level

or above. Currently, 32% of

young adults have degrees.

Julia Gillard warns that is

just not new. Our future

prosperity demands that we

don't fall behind in this international

international race. The target

is in line with the recent

Bradley review into higher

education, but the Government's

given itself an extra five year

s to achieve it, not that Professor Bradley is

complaining. Many of the

targets in the other countries

are an access or a

participation target that is

people coming in to the system.

So a completion target is quite

testing. The Government will

also adopt the Bradley

also adopt the Bradley review's recommendation to overhaul

tertiary funding. By 2012, it

will be determined by student

demand, but Julia Gillard

insists it's not a voucher.

Is If I could characterise is

in this way, politicians out,

students in. A new national

regulator will ensure taxpayers

an students get value for

money. The Government won't

money. The Government won't say

just yet how it much it will spend on the plan, but Julia

Gillard concedes the global

economic crisis has hampered

the Government's ability to pay

for sweeping reforms. We can't

implement it all today. Or

tomorrow. But what we can do is

get the settings right for the

longer term. The right

responses will allow our

country to thrive. The wrong

ones will lead to out comes

ones will lead to out comes too

bleak to contemplate. That is

the test Julia Gillard seeks in

May. - sits in May. The Federal

Water Minister says that buying

Toorale station is paying off

for farmers along the

Murray-Darling in western NSW.

Last year, the Commonwealth and

NSW governments paid $23

million to take control of the

property's water rights. Penny

Wong says that has allowed an

Wong says that has allowed an

extra 11 gig leet of water to

flow down the river system. It

demonstrates the value of

returning water to the river,

of purchasing entitlement for

the river so that when it rain

force first time they will get a greater a greater share. The Minister

now wants bams and embankments

on the property to be

dismantled. On to finance now -

and the local share market

slumped to a five-year low

after another poor performance

after another poor performance on Wall Street. Today's entire fall on the share market happened in the first nine

minutes of trading at 10am. At

11:30 when the national

accounts were published the All

Ordinaries was 3,120. Which is

where it was after the first

nine minutes and at the end of

the day. So today's fall was

entirely due to Wall Street

which fell a bit more than half

a per cent last night, the

fifth down session in a row.

fifth down session in a row.

The S&P 500 index fell below p

v 700 for first time since

1996. At that point the

Australian All Ords was 2300,

or 25% lower than it is

now. That's partly because the

US has had two bear markets,

not just one. The dotcom bust

of 2000, which we didn't have

and now the subprime bust of

2007. And it's also because its recession started a year before ours, in

ours, in December 2007 instead

of December 2008. Here is a

league table of Decemberquarter

growth and Australia is the

best of a bad lot. Half a per

cent contraction, versus next

best Canada, whose banks are

also not broke, just like ours.

A selection of the rest goes

Spain Spain, Ireland, UK, US,

Japan, 3.3% shrinkage in

thequarter, and Singapore

thequarter, and Singapore a

shocking 4 hadn't 4%. This

graph is the most important

thing from the national

accounts today - a massive

increase in savings at Tex

pence of consumption. In the

December quarter, Australians

saved a record $15 billion, 2.5

times mover than any other

quartiner history. Over 2008 at

as a whole, savings totalled

more than the previous 1 years

combined. So we're paying off

debt in a big

debt in a big way. And finally

the Australian dollar slipped

back below 63.4 US cents today

but just after the GDP number

came out it fell to below 63

and then it recovered a bit

this afternoon. That's finance.

Welcome to the club - the

harsh economic times have rugby

league bosses worried. As the new season is about to get

under way, some clubs are

facing uncertain furtds. But

measures NRL chief David Gallop says

measures are in place to keep

teams afloat. The NRL has gone

for a grass roots campaign to

promote its new season, as two

boys graduate from the park to

the premiership. He put his

foot on the gas and he became a

star. In tough economic times

people can enjoy the footy in

2009. And Gallop believes the

survive the economic salary cap will help clubs

downturn. Our system is set up

downturn. Our system is set up

to endeavour to keep our 16

clubs viable. But some clubs

refuse to rule out relocation. It comes a

situation where people aren't

getting behind their team that could be a reality and I

certainly hope it's never one

but there's always a chance in

life. The defending Premier

Manly will start the new season

on a high after becoming the

first Australian team in six

years to win the world club challenge. We're the bench

challenge. We're the bench mark

now and we're aware that teams

really want to take us

to. Despite last year's 40-0

Grand Final demolition, coach

Des Hasler is struggling to let

go of the club's underdog

status. We will still be under

the radar. Hasler nominated zts

and North Queensland as teams he expects to improve this

season. Both clubs missed the

top eight last year.

Selectors have been forced top eight last year.

to call in more reinforcements

for Australia's ailing Test

squad in South Africa. WA fast

bowler Steve Magoffin is on his

way to Durbin. He will be

covering for Peter Siddle and

Ben Hilfenhaus, who are suffering soreness after the

first Test win. Tasmania's

Brett Geeves arrived a couple

of days ago after Doug

Bollinger injured himself

during a net session. Sheer

Peter Wilkins. The y work load on Australia's

on Australia's bowlers reaped

dividends but has left a

question mark over the fitness

level of Peter Siddle an Ben

Hilfenhaus. There was a

question mark over Phillip

Hughes, who razz roughed up

physically and verbally by the

South Africaiance: He is -

South Africans. They can say

what they want. I am sure they

are frying to fidwell my

head. In the cauldron of Australia's second innings on

day three, Hughes

day three, Hughes was advised

that he was no Matthew

Hayden: Matthew Hayden has been

great for the game, great for

cricket Australia, for world

cricket really but Matthew is

not Phillip Hughes. We're

different guys. Aim sure

they're going to keep saying

words but I'm up for the

challenge. Hughes answered the

challenge with his bat and

accepted the attention along

with some luck and his first

innings duck. I was very thrilled to get

thrilled to get 75 in the

second innings. Get a duck on

debut doesn't really bother me.

That's cricket. We're going in

the second game with a lot of confidence. Western Australian

bowler Steve Magoffin will be

ready, if required: I am

confident with how I've been

playing. So hopefully I can

take that to the next level fi

get a chance. Australia shared

the point s with Kuwait in the

corresponding Cup fool

qualfiers in 2006. I don't know they played against

they played against each other

in 2006. I am looking at the players I have at the

moment. Now Australia has risen

to 27 in the world while Kuwait

has dropped to 125. That 50 z

no recipe for complacensy. Our

typical Middle East football

players are skilful. The

Socceroos all A-League team is

not necessarily an advantage

for Kuwait. Its players look

forward to challenging the big

forward to challenging the big

name Australians from European competitions like Tim

Cahill. Time to play against

the big star, especially this

very famous name in Europe. As

far as signature back and

playing for a draw, that is not

Kuwait's stated object yi. Try

to win, why not. It is

football. The match is in

Canberra tomorrow night. Now to

the brave or is it crazy new

worlds of designer babies? An American clinic says

American clinic says it can now

give potential parents the

option of choosing their

child's eye and hair colour.

Critics say that choosing

embryos for cosmetic reasons

has serious ethical

implication. When a baby is

born, it might have its

father's eyes or its mothers

hair. But rather than relying

on chance, with what if you

could decide your child's

appearance beforehand?

appearance beforehand? That's

what Los Angeles fertility

doctor Steinberg tine is

offering his

patients Technology and the

genes are there now. We're

having our eyes opened by

announcing that we're able to

do this. Dr Steinberg's clinic

has already allowed thousands

of couples to choose the sex of

their child. He utilises a

process called pre implantation

genetic diagnosis, which until

screen now has only been used to

screen out medical

conditions. But now it's being

offered to parent force

cosmetic reasons. According to

the clinic's website, doctors

are initially test embryos for medical conditions which affect

the eyes and skin such as

albino babies. But other

parents wanting to choose their

child's hair and eye colour are

encouraged to register their

intrae.s but would it work? A m

not sure that we know the exact

genes for example for hair

colour or eye colour. For

example, with againatic

diseases we often know there is

a specific gene problem. But

here they would potentially

have to look through thousands

of genes. Ethicists say using

re product ive technology for

cosmetic reason s opens the

doors to serious ethical

issues Designing your

descendents and seeking

slippery perfection is the biggest

slippery slope we could go

on. No would-be parents have

signed up yet for a designer

baby but reports say half a

dozen have expressed interest.

Checking the weather now

and it looks like we're in for

our first real taste of autumn,

Graeme . We are and we will

feel it most in the mornings.

The slopes an range also see

overnight temperature drop to

morning being single figure s with Friday

morning being the coldest start

since November. Temperatures

across Sydney ranged from 23 to

26 and dust was responsible for

the reddish tinge in the clouds

today.

After a period of drier

wet, northern Queensland is

looking at wets conditions

returning with a tropical low.

The cloud band and the front

will clear NSW overnight. And

the high in the bight will

dominate the weather across the

State until later Saturday.

Southerly winds will keep day

time temperatures mild and

combined with clear skies

overnight that will allow the minimum temperature s

minimum temperature s to

plunge. But onshore winds about

the north coast will maintain

showers there, making it the

only wet part about the state

until Sunday.

Thanks. And

Thanks. And that is ABC News

for this Wednesday. I will be

back with updates during the

evening. And for latest news

tomorrow morning, don't forget

News breakfast on ABC2.

Goodnight.

Closed Captions by CSI

This Program Is Captioned

Live. Tonight on the 7:30

Report - the deadly ambush

that's turned Pakistan into the

pariah of international

sport. I think this was one

of the worst security failures in

in Pakistan. A strife-torn

nation plunged into deeper

political turmoil. Pakistan has

many, many problems, and it

almost shifts from one crisis

to another.

He went into the missile

engagement zone around Baghdad.

He was shot at by surface-to-air missiles. And

the Australian top gun joining

the world's aviation elite. Flying is the

elite. Flying is the most

exciting flying I've ever done.

Welcome to the program.

Shortly of course we wills will

be looking at the latest

official figures putting

Australia into negative growth.