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Tax cuts now and a treasure

chest for education. This

should be a fund which is here

for 10, 20, 30, 50, 100

years. Has the Treasurer stolen

Labour's clothes? Clever, some

would say cynic al certainly

cunning. And the bell tolls in

Beaconsfield, one year after

the great escape. Good

evening. Juanita Phillips with

ABC News. According to the

Treasurer, it's an education

Budget. The Opposition says

it's a cynical exercise in

winning votes. Both political

camps are now keeping an

anxious eye on the opinion

polls. Political correspondent

Jim Middleton leads our

coverage. The Government's

looking for election year

lift-off from Peter Costello's

12th Budget. And today's

headlines were all the

Treasurer and PM could have

hoped for as they rush from one

interview to another to sell

their wares. Their election

Budget delivers $5 billion in

tax cuts next financial year

worth $16 a week for the

average worker. $9 billion in

education spending, including a

new $5 billion Higher Education

Endowment Fund. And $4 billion

in one-off payments, including

a $500 bonus for seniors and a

$1,000 bonus for careers. Kevin

Rudd is calling it clever and

cunning, but the Government's

decision to lift the cap on

full fee-paying students at

universities has forced a

rethink from the Opposition

Leader. Good morning, Pete. How

are you? Top of the morning to

you. Morning. Peter Costello

and Kevin Rudd may have had few

words for each other this

morning, but there were words

aplenty from both sides of

politics as they set out to

spin last Budget before the

election to their own

advantage. Clever, some would

say cynical, certainly

cunning. This is a genuine

revolution in education. The

centrepiece of the Government's

Budget counterattack on Mr

Rudd's own education revolution

is a $5 billion university

endowment fund with proceeds of

arrange $300 million a year for

buildings and research. These

are the kinds of things you can

do when you clear your debt and

liabilities. A drop in the

bucket, according to Labour,

noting that ANU's medical

school, for example, cost $125

million alone. That would knock

off half of this in one hit.

There are 38 universities. On

average they would get less

hit. Government's announcement than $10 million a

of an end to the cap on full

fee-paying places at

universities has forced a Rudd

rethink of Labour's long-term

commitment to phase them

out. We'd like to look at it

closely. Beyond education, the

tax cuts were the other

big-ticket item, aimed scarely

at low and middle income

earners. From a

The Treasurer says the tax

cuts are not pre-election

bribes, but like the education

spending, about boosting productivity. This is

encouraging people to come into

the work force. Maybe work

another day, maybe increase

their skills and hours. It's

notable just how much of the

Budget tackles initiatives

Kevin Rudd and Labour have been

selling for months. Not just

education, but Australia's

faltering productivity and

smaller measures like energy saving for homeowners. Once

again, the Government's

reaching out to the so-called

Howard battlers, lower to

middle income families as Craig

McMurtrie reports. The paper's

delivered their verdict this

morning and the headlines were

full of praise from a Costello

masterclass to clever carrots.

Alex and Kylie Mynett watch

Friday their loungeroom in the

Liberal held marginal seat of

Bonner in Brisbane along with

their 9-month-old son. A single

income family earning $57,000 a

year, they've taken on a large

mortgage and will get a tax cut

of $14 a week, but are worried

about interest rates. From what

I heard tonight not too much

affect. Swinging voters, they

were leaning towards Labour. I

don't think the Budget has done

much to sway that. The Watson

household of five watch Friday

Adelaide's marginal seat of

Wakefield. It just appeared to

be clever the way it focussed a

lot on families, which is

fantastic. Victoria Watson is a

nurse and works part-time. The

family has a combined tax cut

of $35 a week. They are

undecided about the next

election. They are looking for

more action on global

warming. Not much focus on the

environment whatsoever. Not the

future of it. In Sydney, the

single income Stackpool liked

the education spending but were

hoping for more tax

relief. Grocery shopping, the

cost has notable increased

joofnltd petrol. They are

waiting for a daycare place for

their son, but are told it will

be next year at the

earliest. More childcare places. It's a responsible

Budget in terms of taking the

company forward, but in

cultivating votes, I don't

know. On the streets of the

PM's electorate ... I liked the

extra childcare rebate an the

tax cuts. Just a tone

gesture. They are convinced

there is more to come on

climate change. They're not

stupid F they put it in there,

it would have overshadowed

everything else. Afterall, she

says they had to leave

something for later. To counter

Labour's long-talked of

education revolution, the

Government's unveiled billions

of dollars in new spending,

including tuition vouchers for

improved literacy and numeracy

standards and bonus payments

for teachers to upgrade their

skills. But the centrepiece is

$5 billion in seed money to

boost university building and

research. Melbourne

University's sandstone grandeur

speaks of old money. Move

together modern era takes new

cash. To change a room like

this would cost many millions

of dollars. Hopefully we can do

that one day. For the moment,

we will start with the spaces

we can create. The

Government's $5 billion start

for a tertiary endowment fund

is to help universities build

the facilities they need.

University vies chancers have

welcomed it. Credit where it's

due. The fund ensures the

capital programmes of

universities are secure. But

some see a different agenda

behind the endowment plan. In

the long run its message is a

privatisation message and

increasingly I think Government

will expect us to use the funds

from the endowment portfolio to

sustain operations in the

future. Other Budget changes

mean an increase in HECS fees

for students. Overall,

taxpayer-funding for university

courses is up, but there will

be more money for areas like

maths, engineering, nursing and

medicine and less for degrees

in accounting and business.

So, extra fees for those

students and universities will

be able to offer as many

full-fee places as they

wish. The fact that

universities can now enroll as

many upfront fee students as

they want is a huge concern for

students. I think it will be

something that could affect

access to particularly the

prestigious sandstone elite

universities. Melbourne

University is one such place,

which it already announced big

changes to its structure. This

Budget will likely help its

transformation. The Budget is

very much election campaigning

on the stallment plan, designed

to neutralise the announcements

which have helped Kevin Rudd

hold the lead in the polls all

year. There may have been

little for the environment in

the Budget, but the PM will

receive the report of his

climate change task force

within weeks. An emissions

trading scheme to cut

greenhouse gases won't come

cheap, especially if people are

compensated for rising

electricity bills and the like,

as the Treasurer hinted today.

In 204, John Howard left many

of his big election sweeteners

to the last minute and has

plenty of money left over for a

repeat performance this year.

In other news, the former

senior prosecutor, Patrick

Power, is again on bail after

he appealed against his

sentence today for posing child

pornography. The 54-year-old

took his computer into work

last year to get it fixed. One

of his IT specialists found

video and still images of boys

younger than 10 involved in

sexual acts. He was sndges s

sentenced to 15 months jail

with a non-parole period of 8

months. The magistrate took

into account the difficulty for

correctional services in

keeping him in solitary for the

whole period. Activists were

disappointed with the

outcome. It should have been up

to 20 years. Lock them up. This

man was in a position of power

and authority. At the end of

the sentencing, the Bar Association asked the

magistrate to consider contempt

of court action against News

Ltd. It published the names

offer people who had written

references for power. The court

will consider that late they

are month. The sacked state

minister, Milton Orkopoulos, is

tonight free on bail after spending the last three weeks

in jail. Late today, Mr

Orkopoulos was driven out of

Sydney's long bay jail bound

for Newcastle. A court had

earlier granted him bail on

more than 50 child sex and drug

charges. He will have to report

to police three times a week,

not make any contact with

witnesses and be in the company

of two minders every time he's

out in public. A Sydney court

has been told that a romantic

triangle was behind the

attempted murder of a farm ner

the State's central west. Joe

Rix was shot last week at his

home. He survived and is in a

Sydney hospital. His wife has

been at his bedside, but police

allege she and her lover

planned the attack. Andrea Rix

has been sitting by her

husband's hospital bed for the

past eight days. Today she

faced court for his attempted

murder. Police allege that last

Tuesday night she tipped her

lover off about when and where

he could find her husband. It's

also alleged she supplied a

shotgun and ammunition. 44-year-old Terence Joseph Sealey allegedly shot Joe Rix

in the stomach and back as he

ran for cover. He finally

reached a neighbour's property

3km away and raised the

alarm. He's in a serious but

stable condition and will

undergo more surgery to remove

shrapnel from his head. He's

obviously devastated as to the

circumstances of what has

occurred. As is his

family. Police say in a taped

telephone call from the

hospital, Mrs Rix told Terence

Sealey she would leave her

husband when he recovered, but

wouldn't try to kill him

again. The police prosecutor

described it as a cold,

calculated, almost successful

attempt to murder her

husband. Both were refused bail

and will return to court in

Parkes tomorrow.

A man has been charged over

the beheading of an 82-year-old

war veteran in the State's

north. Mark Hutchinson's body

was found in his backyard in

Armidale in January. Police in

Tamworth today arrested a

41-year-old man from

Tenterfield and charged him

with murder. He was refused

bail and will appear in court

later this month. In Perth, two

teenage girls have been

sentenced to life in prison for

the murder of one of their

friends. The judge said their

actions were gruesome and the

teenagers showed no remorse.

They murdered 15-year-old Eliza

Davis in the south-west town of

Collie after a night partying

with her. One of them held a

chemical-soaked rag over the

victim's face and the other

strangled her with a piece of

wire. They then buried her body

in a shallow grave underneath a

house N sentencing, Judge

Reynolds said the community

needed to be protected and the

girls would have to serve a

minimum of 15 years before they

were eligible for parole. Australia's leading

intelligence official at the

time when five Australian

journalists were killed in East

Timor believed they were

deliberately killed by

Indonesian forces. Brian Peters

and his colleagues were shot at

Balibo in 1975 and previous

inquiries have concluded they

were killed in cross-fire.

Australia's former top spy,

Gordon Jockel, assumed from the

outset that the Balibo five had

been deliberately targeted. He

told the court:

Mr Jockel saw intelligence

intercepts which said five

Australians had been killed.

The evidence had been destroyed

and their bodies had been

burned. He said he showed the

message within 24 hours to the

Defence Minister who reacted

with shock and horror. He

assumed the PM would have been

told as a matter of course. It

didn't need any instruction

from me that a thing like this

would go to the PM's

department. Yesterday both Mr

Whitlam and his Defence Minister denied any knowledge

of a deliberate attack on the

journalists. Mr Jockel told the

court the deaths of the

journalists could have been

avoided if crucial information

had been shared. He said

Government departments worked

in isolation and intelligence

didn't always reach the right

people. Also giving evidence

today was Gerald Stone, the

director of Channel 9 news at

the time. He said he found out

his journalists were missing

when he heard a report on the

ABC the day after they were

killed. A man he believed to be

from the military approached

one of his colleagues and said:

Mr Stone said he knew the situation in East Timor would

be dangerous, but he didn't

believe he was sending his men

to a war zone.

The outgoing President,

Xanana Gusmao, has urged East

Timor's voters to accept the

result of today's presidential

poll whichever way it goes. The

run-off ballot has been

peaceful, but there are fears

of violence among supporters of

the losing side once the

results are known. As Anne

Barker reports from Dili, the

turnout may also be lower than

in the first round of

voting. East Timorese voters

headed for the polls for the

second month in a row. It was a

long walk for some, but all

were determined to have their

say on who should be President.

Jose Ramos Horta is the man

most likely. He sees himself as

East Timor's savour, the man

who can rescue a nation

devastated by years of crisis.

Does he even want the job? If I

had to choose, I would prefer

to be a free man, not be a

President. I accept that to be

a candidate with

reluctance. The ruling Fretilin

party is happy to grant its wish, confident Francisco

Guterres will be President. He

will win. No matter. I hope

Jose Ramos Horta will accept

defeat. Polling booths opened

soon after dawn, but they were

far quieter this time,

suggesting a lower turnout.

It's too early to know why the

queues have been shorter than

last month. Whether people have

been scared away by allegations

of voter intimidation or

whether they are simply

confused by the electoral

process. Some people don't

understand why have to vote

again. The election of a new

President means the departure

of another. Xanana Gusmao is

stepping down from the job

after five years. He's appealed

to all Timorese to accept the

election outcome. We all must

respect the result without any disturbance. Counting began

tonight as soon as the polls

closed, but it could be days

before there is a clear winner.

Northern Ireland has marked a

new beginning in its violent

and troubled history. After

decades of hatred, former

Protestant and Catholic rivals

are partners in power. They've

been sworn in ace the

province's new leaders. It was

one of the most significant

days in a century of northern

Irish history. I think what

people will witness today is

not hype, but history. We will

see one of the mightiest leap

forward. And so it was. Once

sworn enemies, now they were

sworn in together. The

Unionists old warhorse, Ian

Paisley, was installed as the

First Minister. Sinn Fein's

Martin McGuinness, a former IRA

director, is his deputy. If you

had of told me I would be

standing here to take this

office, I would have been totally unbelieving. While it

was a day of celebration, it

was also a day to remember the

victims of the so-called

troubles. More than 3,500

people were killed. Many were

innocent civilians. In the

end, it took nearly 10 years of

fraught and often frustrating

negotiations before the people

of Northern Ireland could live

in peace. I wonder why people

hate me, I'm such a nice man!

The key was the British PM. He

coaxed the two warring sides

into joint Government. Look

forward today and we see the

chance, at last, to escape

those heavy chains of history,

to make history anew. This

historic day is Tony Blair's

political swans song. Late they

are week he will unveil his

retirement plans. It's a year

to the day since the dramatic

rescue that captivated

Australia and the world. Brant

Webb and Todd Russell had spent

14 days trapped underground at

the Beaconsfield gold mine in

Tasmania. Today, the town

remembered. Beaconsfield's

Uniting Church bell rang for

the first time since heralding

the great escape exactly a year

ago. Flags were lowered in

memory of miner Larry Knight,

killed in the Anzac Day

rockfall. His funeral was hours

after Todd Russell and Brant

Webb surfaced from 14 days

trapped underground. APPLAUSE

Last night, mine workers,

management and supporters

remembered the tragedy. We do

pray for their family. And

celebrated the triumph. You can

hold your head up wherever you

go and say, "I'm from

Beaconsfield." That will be a

code for people who never give

up. Some can never forget or

return to mining. Too many

scars and what ifs. The mine's

new management is confident

safety is assured as it returns

to limited production. An

independent report into the

rockfall is due within three

weeks. I think it's very

unlikely anyone will ever go

back into that specific area

again. The unsung heroes, the

rescuers, are being thanked

with a belt buckle. I hope they

enjoy as much as we're enjoying

our life now. The small town

paid its own tribute in ahonour

roll call with a scarf

symbolising a close inform

Knight community ready to move

on. The State Government is

investigating whether NSW will

build another coal-fired power

station. The company which runs

the national electricity market

has told the Government it will

need to build new generators

within six years. The Premier

has appointed an industry

expert to consider the

greenhouse gas emmissions of

different technologies. The

most likely fuel source is

coal, but what we want to do is

keep an open mind and if it is

to be coal, then for it to be

the cleanest possible. Mr Iemma

says gas and solar will also be

considered, but he's ruled out

nuclear. On to finance and the

Budget took a back seat today

while rumours of a major

takeover pushed the market to

another record. Here's Alan

Kohler. Yes, forget the Budget,

all the attention today was

focussed on the global mining

giant, Rio Tinto. It was the

first stock to hit $100 on

rumours it will get a takeover

bid from BHP Billiton. Here's a

graph of their share price

through today. The excitement

seems to have been confined to

lunchtime. The price started running with the mineral water

at 12:25. Eased when the menus

were studied at 12:35. Surged

during entray and main course,

but when coffee arrived, it was

drifting and closed at $95.50.

Up a pretty useful 6.5% today.

After the close, Rio said

there had been no approach from

BHP Billiton. And BHP shares

hit a new record high of

$32.58. ERA and Fortescue rose

strongly. Incitec Pivot went up

4%. It's now up 40% since Anzac

Day. And some news on our other

big asset, property came out

today from the ABS. House

prices in March went up 1.1% or

8.6% for the year. A bit more

than the 10-year average. Here

are the annual increases in

property values for each

city. Perth keeps going strong.

Darwin prices are rising at

half the rate of Perth. And

then comes Hobart, Brisbane,

Canberra, Melbourne, Adelaide

and bringing up the rear,

Sydney. The Australian dollar

went up slightly today,

reflecting a view that the

chance of a rate hike has gone

up slightly. And for what it's

worth, here's a graph of

Federal spending on education

as a share of total expenses,

which indicate priorities, I

guess. The message - it's less

now than in the early '90s, but

more than the mid-

'80s. Journalists from the

'Sydney Morning Herald' and Sun

Herald have walked out on an

indefinite strike tonight. The

dispute is over plans to make

35 people redundant. New

research has shown that most

elderly people who arrive at

hospital are malnourished or

close to it. Doctors have been

able to cut the time patients

spend in hospital by focussing

on their diet as much as their

medical needs. What you usually

do eat? 100 patients in their

80s from Sydney's Prince of

Wales Hospital were asked about

their weight and eating habits.

They were given a test which

measures hydrogen in their

breath, an indication of how

well food was absorbed. What we

found was a high proportion of

patients were malnourished, 80%

were at risk or frankly

malnourish ed, which is higher

than we first expect. While in

hospital, half the parkts had a

normal diet. Rest had their

diet boosted. That group, we

halved their length of stay

from 19 days to 10 days. 86-year-old Jean has been

in hospital for six weeks. She

believes eating well has

assisted with her recovery. I

like deserts. Ice-cream,

yoghurt, chocolate, sandwiches,

anything. I'm not hard to

please. The next step is to

look at knewtrition in the community. Researchers will

recruit 600 people aged from 60

onwards to see at what age

malnutrition starts to show up.

Doctors say malnutrition can be

caused by difficulty

swallowing, loss of appetite or

poor absorption of nutrients.

The Italian cyclist who

confessed his involvement in a

blood doping scandal said he

never went through with the

illegal practice. Ivan Basso

was ban Friday last year's

Tourism Industry Council after

Spanish police discovered a

network of 200 cheating

athletes. The 29-year-old claims his career had been

clean up to that point. After

admitting to the Italian

Olympic committee his

involvement in the scandal,

Ivan Basso tried to moderate

his guilt by say Steven Gerrard

he'd never taken drugs and only

attempted blood doping. TRANSLATION: I have

never been accused of anything

other than attempting to dope.

Therefore, I can assure

everyone that in my career I

have never used doping

substances or

transfusions. Basso understood

that an attempt to dope

constituted an offence, but he

refused to indict others after

the widespread Spanish

operation last year, which

implicated up to 200 athletes,

including more than 50

cyclists. I wasn't asked, nor

am I aware of the names of

other people or cyclists

involved. It's a game of

transparancy. The NRL has

opened its books so the players

can see where the profits are

going. The forum was organised

after prominent players,

including the Bulldogs' Willie

Mason, called for the players

to have a greater share of the

NRL's revenue. We have to make

a mark now. If I can make a

difference in my career and 20

years later the rugby league

players association is strong,

I've done my part. The players

and the NRL were satisfied with

the meeting. They understand

the game's position. They know

there is no pot of gold under

my desk And Adam Gilchrist

batting aid, a squash ball in

the glove, has been cleared by

the games law-makers. Beaten

World Cup finalists Sri Lanka

had called Gilchrist's

innovation unethical, but found

no support from the MCC An

Israeli archaeologist says he's

found the tomb of King Herod,

one of the New Testament's best

known villains. The side is

outh Bethlehem. Researchers

have been working there for 35

years. They say it's a major

discovery. The giveaway was

the ornate decoration on

fragments of a smashed

limestone coffin. I can say

this is a monumental

sarcophagus. Known as Herod the

Great, the king is infamous as

the ruler who slaughtered every

child under 2 in Bethlehem when

he heard of the birth of Jesus.

The site is in the West Bank

and like other finds, it may

lead to increased political

tension. Time to check the

weather with Mike

Bailey. Thanks. Good evening.

Patchy rain across the state

today and more is expected over

the northern half tomorrow.

Around the nation's main

centres:

Thanks, Mike. Tonight's top

story again. The Treasurer and

the PM have spent the day

spruiking the tax cuts and

education spending in last

night's Federal Budget. In

response, Labour says the

Government has stolen its

ideas. That's ABC News for this

Wednesday. The '7:30 Report' is

up next. And I'll be back with

updates during the evening.

Goodnight.

Closed Captions by CSI

Tonight on the '7.30 Report'

- under fire. I heard the bang,

got covered in dust and

rocks. A close shave for Australian soldiers on patrol

in Iraq. It was a big shock. A

massive shock. And the young

artist re-tracing the steps of

Australia's first female explorer. She's a remarkable

woman. CC

Welcome to the program. "Clever" has become one of the

more abused words in politics

of late. Is John Howard a

clever politician? "Does Peter

Costello's budget make him a

clever boy?" As one newspaper

headline put it today. Or is

Kevin Rudd too clever by half,

as the Prime Minister suggested

today? The government says this

was the education budget with a