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ABC News (Sydney) -

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This program is not subtitled This program is captioned live. Tonight - from the State's top beaches. police say "stay away"

of public ownership. The Snowy Hydro scheme to flow out a new government. A big turn-out as Iraqi's choose Australia-South Africa series. And a willing opening to the

Juanita Phillips with ABC News. Good evening.

this weekend. Popular beaches, no-go zones of Sydney's recent racial conflict It's feared people from both sides to beachside suburbs are planning to bring weapons to continue the violence. As a result, an extra 1,000 police the commissioner has called up Wollongong and Newcastle. to lock down whole areas of Sydney,

perfect weather for the beach. Summer in Sydney - But not this weekend. contradicting what he said yesterday The Police Commissioner directly and leaving no-one in any doubt. you stay away. My preference is that This is what he wants to avoid. He says there's intelligence that last week's ugly scenes in Cronulla the coast, are set to be repeated up and down from Wollongong in the south,

Terrigal and Newcastle. north to Cronulla, Maroubra, Bondi

the police operation yet again, And he's expanded rostered police from 1,000 to 1,500 increasing tomorrow's and Sunday's from 1,500 to 2,000. operation outside the Olympics. It's the State's biggest police of intelligence reports We have, literally, thousands of sources. coming into us from a variety Some of those do involve firearms. can expect road blocks As with last night, the community and police searches, the Government's new expanded powers the commissioner promising to use to lock down whole areas. measures for extraordinary times. But clearly these are extraordinary to anyone planning lawlessness And this warning from the Premier this weekend. available There are hundreds of cells available There are hundreds of cells for you this weekend in our correctional facilities if you intend to create trouble. Our determination is absolute. And on one of Sydney's beaches some of Australia's biggest stars gathered to deliver a message of peace. Violence and racism are bad. they are to be condemned. Whenever they occur, to them. We should not turn a blind eye It is about respect. to stop violence All leaders should actively work acting that way. and to stop their fellow Australians Violence is not to be tolerated. no matter who does it - It is never excusable, a relative - your best mate, your neighbour, it cannot be condoned. the message was heeded In 48 hours we'll know whether

or fell on deaf ears. Michael Gleeson, ABC News, Sydney.

with making explosives Two men charged in a Sydney court. have been refused bail and 33-year-old Mark Miller 24-year-old Matthew Lalor were charged with making explosives seven petrol bombs after police allegedly found

in a Cronulla apartment. They'll be back in court next week. of the Snowy Hydro-electric scheme. NSW is selling off its share to raise $1 billion A share market float is expected and give investors of Australian history. the chance to own a piece owns more than half The NSW Government Hydro Electric Scheme. of the Snowy Mountains The rest is split and Victorian governments. between the Commonwealth interests of taxpayers It is no longer in the best interests of taxpayers It is no longer in the best in Snowy Hydro. to retain our 58% shareholding

Morris Iemma estimates $1 billion could be raised to investors from next year. when shares are offered But he warns it's no sure bet. a business that is growing. A risky business, but nevertheless, The cash-strapped State Government to spend the money. is already planning This is about freeing up dollars in New South Wales. to invest in infrastructure The Commonwealth will now consider what to do with its stake. Victoria has no plans to sell reservations and is already expressing Snowy could have on the environment. about the impact a privatised We're particularly not satisfied for irrigators in relation to guaranteed water to water for environmental flows. and we're not satisfied in relation the key environmental targets It will be easier to achieve under this set of arrangements to be growing. because the Snowy will be able in regulating water licences. NSW will not relinquish its role jobs will be safe. Unions have been assured wants to know The State Opposition didn't come clean about its plans why the Government when it raised the issue in Parliament two weeks ago. motivated by a budget crisis. This is a privatisation that is or good return for taxpayers. This is not about good public policy working on the privatisation option The Government says it's only been an earlier proposal to raise equity since Victoria blocked of the three governments. and dilute the shareholding Simon Santow, ABC News, Sydney.

The Federal Government is trying to keep a lid on expectations

of sweeping tax reform in the forecast Budget surplus. after yesterday's increase Treasurer Peter Costello says of his priorities, reducing tax is one of spending. after one or two other areas of being the 'can't do' man But the Opposition has accused him of hoarding the surplus. and accused the Government a Sydney charity As the Prime Minister stopped by which delivers Christmas cheer... It's the best job in the world. That's fantastic. Very rewarding. increasing pressure ..the Government was coming under to deliver a present to taxpayers. to reach into its whopping surplus The Treasurer says reducing tax is his priority. after defence and health spending, on reducing the tax burden So, I put a priority rather than increasing expenses - that's my priority. a structural overhaul Yesterday, business called for of the tax system, the top tax rates. including cutting

But despite yesterday's mid-year outlook adding an extra $2.5 billion to a forecast surplus that's now grown to $11.5 billion, the Government isn't saying how far it'll go. As to what form that should be is something I'm not going to give a statement on in an ad hoc news conference. The Opposition Leader agrees about the need for substantive change but wants tax relief pitched at middle Australia.

Kim Beazley's warned the Government not to try and sit on the surplus until the next election. They build up this poultice of dough and they cackle away about it

and then they flood it out - often on useless things - to buy themselves back in at the subsequent election. Not so long ago, of running up the white flag Labor was accusing Peter Costello over his leadership ambitions. Now, it says he isn't up to overhauling the tax system. He's the 'can't-do man' and he's gotta become the 'can-do man'. In Melbourne, unveiling a bust of the only man to serve longer as PM than John Howard... The Menzies Bust. APPLAUSE ..the Treasurer argued that keeping interest rates low

was also a priority for next year's Budget. Putting all of those things together is a very difficult task. A task he says he'll be dedicated to over Christmas. Craig McMurtrie, ABC News, Canberra. Criminal charges may be laid over a yachting accident in which four people were killed. The yacht 'Excalibur' capsized off the coast of Seal Rocks in NSW in 2002 when its keel snapped. A coronial inquest has found the keel was deliberately cut. And a warning - some viewers may find language in this story offensive. It was a terrifying ordeal for the six Melbourne sailors. In a 3m swell, the yacht's keel snapped off

and within seconds the 'excalibur' had capsized. Tracy luke, anne-marie pope, christopher heyes and peter mcleod died at sea. At the coroner's court today, the two survivors described the event. Well, you're scared shitless. You, know, there's no other way of putting it. You're just out there for a pretty wild ride and you've got to try and mentally stay as fit as you possibly can. The deputy coroner found: The inquest found it had been severed and then welded together during its manufacture. But no-one has ever admitted to it. These people involved have run away from the issue and virtually ignored it, hoping it will go away. Um, they'll be brought to some sort of justice. The manufacturer denied all knowledge of the cuts and signed it off as seaworthy. But the coroner said: The bravery shown by john rogers was recognised both inside and outside the court. John basically saved my life and I think I'll never forget that.

You do as much as you possibly can and then when you're in a situation where there's no air, there's no light, you're completely immersed,

it then becomes a matter of matter of self-survival. The Deputy Coroner says she believes a criminal offence has been committed and has made a number of recommendations to improve yachting safety.

Jayne Margetts, ABC News. An investigation into Australia's worst air disaster in 40 years has found the company which operated the aircraft breached some of its own safety recommendations. But an interim report examining how the small carrier crashed in Far North Queensland killing 15 people. is yet to discover why the flight ended in disaster. In May this year, 2 pilots and 13 passengers - most of them locals - boarded Bamaga Transair flight 675. Three minutes from landing, the Fairchild Metroliner slammed into a steep hill near Lockhart River

the Fairchild Metroliner slammed into a steep hill near Lockhart River killing all on board. Constable Sally Urquhart was one passenger. She had been planning her wedding. We'd like to know exactly what caused the accident. We're not being kept informed and we feel really, really badly done by. Seven months on, an interim report has been released with few answers about what went wrong.

We have ruled out a mechanical failure of the engines. But investigations found both pilots had not completed some training recommended by employer Transair.

The flight operator says, by law, they didn't have to, as long as they met Civil Aviation Safety Authority regulations. We meet all the requirements and we carry out checks above and beyond in the company what are required from us by CASA. So far, the Australian Transport Safety Bureau has failed to discover why the plane was flying so fast and low when warning systems should have alerted the crew. Unfortunately, the cockpit voice recorder malfunctioned and we were not able to get any sounds from that

that had meaningful or useful information. Now, victims' families are questioning a safety check which gave the aircraft the all-clear two months before the crash. Was that audit carried out properly? The answer would be, "No, it wasn't". Inspectors will continue to sift through the wreckage and make a final report next year.

Kirstin Murray, ABC News. A court has heard an alleged Melbourne terrorist cell discussed

the religious merits of killing Prime Minister John Howard and his family in retaliation for Muslim deaths. A magistrate today denied bail to 20-year-old Abdullah Merhi and 31-year-old Hany Taha, describing elements of their case as disturbing. 18-year-old Violet Merhi was amongst those in court to hear transcripts of conversations her 20-year-old husband is accused of having with his alleged terrorist cell leader. Police say they recorded the apprentice electrician expressing impatience to commit jihad overseas or in Australia. Prosecutor Nicholas Robinson says Merhi and vehicle painter Hany Taha are amongst nine Melbourne men led by cleric Abdul Nacer Benbrika in a commitment to violent jihad in Australia. Federal Police allege Benbrika and Merhi were recorded saying an unnamed Muslim leader who denounced Osama bin Laden was a dog, and they suspected he may have told police about their group's plan. The court heard Benbrika and Merhi laughed as they discussed sending some men to the un-named Muslim cleric with large batons. Police did not name the Muslim leader, due to fears for his safety. It's alleged Hany Taha was present when the group discussed "grabbing members of the police and quietly slaughtering them." Lawyers for the men say the conversations are open to interpretation. This afternoon, Magistrate Reg Marron denied bail to both men. He said the police case wasn't overwhelming,

but the parties had taken disturbingly strong positions at times.

Their families left court alone. The men will face a committal hearing next year. Josie Taylor, ABC News, Melbourne. There's been a massive turnout in Iraq as millions ignored threats by al-Qaeda and voted for a new Iraqi parliament. Voters heeded the advice of Sunni, Shi'ite and other leaders to have a say in the country's future. Organisers of the election are hailing it a triumph. Middle East correspondent Mark Willacy reports. With cars banned from the streets, many Iraqis walked for kilometres to cast a ballot and to receive the mark of democracy. And after boycotting January's election, Iraq's once-dominant Sunni population has re-joined the political process - an important step if this new parliament

is to have any political authority. In fact, Sunni turnout was so high in some insurgent strongholds that polling stations ran out of ballot papers. I feel very confident, very optimistic about those elections. The participation of the Iraqi people will be massive. GUNFIRE Most of all, Iraqis want their new government to deliver security, which means stopping the insurgency led by the country's most wanted man, Abu Musab al-Zarqawi. In an exclusive interview with the ABC, a cousin of the leader of al-Qaeda in Iraq has revealed that after last month's triple suicide bombings in Amman, his family and his tribe have decided to sever all ties with its infamous son. (Speaks Arabic) TRANSLATION: Zarqawi is now part of the al-Qaeda tribe, not ours. He doesn't care about being Jordanian. Many Iraqis hope the election of a new parliament - which includes prominent Sunnis - will give the incoming government a greater legitimacy, not only to fight the Zarqawi-led insurgency, but also to assume full responsibility when US forces begin their pullout. This election marks the end of the political process put in place by the US occupation force.

Iraq's future is now squarely in the hands of those who have been entrusted with a seat in the new parliament. Mark Willacy, ABC News, Amman. A 1-month-old baby in New York has had a remarkable escape after his mother threw him from the third floor of a burning building into the arms of rescuers. A security camera recorded the moment the baby was caught by a man on the ground below. That wasn't the end of the drama though - the boy had stopped breathing and had to be resuscitated. She threw the baby across, and that's when I ran in and just caught him just in time and gave him a quick mouth. Firefighters later rescued the mother and both are now recovering in hospital. You're watching ABC News.

A reminder of tonight's top story - Police are urging people to avoid some beaches in Sydney, Newcastle and the Illawarra this weekend. The police say they've received credible threats of gang violence and riots.

And still to come - three heads are better than one. The Sydney Swans captaincy merry-go-round to continue. At least three people, and possibly four, have been incinerated when a car crashed and burst into flames in the State's central west. The car was heading from Gooloogong to Forbes on the Lachlan Valley Way early this morning, when it veered off the road and hit a tree. Police are still trying to determine how many people were in the car. Sydney's latest motorway is up and running. The M7 slices through the city's west, linking other motorways to the north, west and south. The Prime Minister cut the ribbon and predicted a lot more toll roads will be built with the help of the private sector. It was a moment of harmony between the State and Federal governments. I have great pleasure in declaring this magnificent engineering feat open and long may it provide wonderful service to the people of Australia. The M7 is Australia's largest urban road development. It runs from Baulkham Hills in the north to Prestons in the south. It'll link the M2 motorway to Lane Cove, the M4 to the Blue Mountains and the M5 Hume Highway to Canberra. It cuts 48 sets of traffic lights and is being seen as the key to an expanding part of the city. It will bring enormous economic and job benefits for western Sydney. We've already seen the setting aside of an area of State significance

near the M4-M7 interchange, where we plan to locate 36,000 jobs. It's the first section of the national highway to be a toll road and in his speech, the Prime Minister implied there could be more on the way. The reality is that if we are to achieve all the goals we have in public works we need to have public-private partnerships. The M7 is free for the next month. After that, motorists will pay between 40 cents and $6 depending on the length of the trip. E-tags are compulsory. Sarah Schofield, ABC News.

The former deputy mayor of Rockdale Council has been jailed for five years, on bribery and corruption charges. Adam McCormick was convicted of planning to receive $70,OOO, in return for delivering Labor Party support for a development application. He was also found guilty of giving false evidence to the ICAC's investigation into Rockdale Council. McCormick will be eligible for parole in three years. The wait is over for nearly 66,000 HSC students - they received their results today, completing 13 years of education. 17-year-old Chris Lonergan was among many

to access his results on-line. He was happy with what he saw and is hoping it'll be enough to win a place at university. This is one day.

It's an important day. But you've got the rest of your life ahead of you And there are many, many options that having a Higher School Certificate opens up. For those people not heading to university, some HSC subjects can be used as credit for a TAFE course.

The fight for asbestos compensation has hit another snag with the Tax Office ruling that compensation payments will not be tax deductible. James Hardie says it can only go ahead with its $4.2 billion compensation deal if it can claim the payouts. Treasurer Peter Costello says there are other ways the company can get a tax deduction. That is, you are able to deduct expenditures which were not otherwise deductible. Sometimes called black-hole expenditures, over a period of five years. So even if James Hardie can't so structure its affairs to get immediate deductibility, it should be able to take advantage

of deductibility of black-hole expenditures. In a statement James Hardie says it's pursuing other options with Treasury and the Tax Office. To finance now - and local share prices moved higher today, even though gold slumped below US$500 an ounce. Here's Alan Kohler. The reason gold has done such a dramatic U-turn from the 24-year high of US$540 an ounce on Monday night to US$494.60 today is an equally dramatic reversal, the other direction, by the Japanese yen. Now a few days ago one US$1 was worth 121 yen. Now it has fallen to 115 yen, including the biggest one-day move between the American and Japanese currencies in four years. Speculators had been borrowing yen at virtually zero interest rates -

because that's what rates are in Japan - and buying gold but they suddenly got caught by the rising yen and had to dump gold. The tumbling gold price had little impact on the local share market today -

it closed a 0.33% higher, with rises by Telstra, Qantas and all of the banks, led by ANZ. And by the way, Qantas shares have gone up 6.3% this week after putting in an order

to buy up to $24 billion worth of Boeing aircraft. At the same time, Boeing shares have gone up 2% and then went back down 1%. The US market closed steady this morning despite a big drop in inflation in November caused by falling energy prices.

There were also a couple of very strong manufacturing surveys which got investors worrying about inflation and interest rates again. But interestingly, the US share market has been steady for five years, or at least, it has just got back to where it was in late 2000. But if you take a 10-year view, the Australian and US markets have performed exactly the same. The gain in each from December 16, 1995, to today is 200%. They just very different paths to get there. The price is up 80 cents a barrel in Singapore and the Australian dollar has lost ground against everything, but especially against the resurgent Japanese yen. And that's finance. The competitive nature of South Africa's cricketers has come to the fore after star all-rounder Jacques Kallis was ruled out of the first Test against Australia. Captain Ricky Ponting led the batting after winning the toss, but his team-mates found the going harder against their aggressive opponents. Here's Peter Wilkins. The battlelines were drawn early, but the body language proved to be deceptive. Ricky Ponting copped a nasty blow... COMMENTATOR: Crash! ..after Matthew Hayden departed for nought. Is it safe? It shouldn't be. They're all running for it, will they get there? They do. Justin Langer was edgy and the South Africans were smirking.

But the visitors couldn't capitalise on the uncertainty. Oh...collision between Ponting... Ricky Ponting translated apparent concern into high-powered shot making to steal the initiative. That is straight out of the middle of the bat - magnificent. Ponting ran solo until Langer joined in... Works it through a gap. ..but he played second fiddle to his captain whose 50 was followed by a princely drive. That is something quite beautiful from Ponting. Then, initiative lost came bouncing back as miserly bowling produced two wickets, including the prize scalp of the man in form. It's going to very close indeed, in fact Steve Buckner said yes, it's better than close. There might well have been another. The South Africans had pin-pointed the Australian middle order as a weakness. They answered the challenge. Great shot. Until this. And here we go the pool shot up in the air again and what a brilliant catch. And this... Edged and straight through. Firmly in the fold, former Socceroo coach Frank Farina

and one of his former team-mates Robbie Slater are certain of their spots in the crowd at Australia's three World Cup matches in Germany. But they'll be amongst the few. Australia's been allocated just 8,500 tickets for the games against Japan, Brazil and Croatia, available next week through the FFA website. We are disappointed we don't have more tickets, but we'll do our best to get a few more and put them straight into the hands of Australian football fans. The Socceroos are locked into warm-up friendlies against Greece and the Netherlands. But a proposed clash with England is off the agenda. It wouldn't be a friendly. It'd be a serious game, so England have steered away from that. The Guus Hiddink hit list of potential opponents - Denmark, Poland and South Korea. Queensland Reds players have welcomed the news that former Wallaby coach Eddie Jones is keen to coach them in 2007. Jones says he'll talk to Queensland rugby officials who are conducting a worldwide search for a replacement for Jeff Miller who was dumped as Reds coach after two seasons in charge. He says the Reds have a wealth of young talent and are potential Super 14 champions.

Like any team, they go through their highs and lows and you go through periods of development. There's some good, young players there coming through and I'm sure they're going to have the nucleus of a very good side. Queensland will decide on a new coach early next year. Initially it was a stop-gap measure, but having more than one captain brought premiership success so the Sydney Swans are sticking with it.

But there are changes - the number of captains has been cut from six to three and all three will lead the team in every game. Brett Kirk, Barry Hall, and Leo Barry are the players chosen to captain the Swans in 2006. Retired former captain Stuart Maxfield could be the last solo Swans skipper, with coach Paul Roos now embracing the concept of multiple leaders. Really I think it was felt that maybe going back to one

would be a backward step after having such success with the six. But six was seen as three too many, so, the Swans will have a captain at full-back, full-forward and in the midfield. It's definitely not stepping on anyone's toes, you know. We don't feel that way at all. And whoever gets out to the centre first to shake the other bloke's hand, will toss the coin. So it'll be interesting to see the sprint that takes place.

Having lifted the Premiership Cup with Roos, Hall will share the moment if Sydney successfully defends its title. Hopefully it's got four handles this time. Yeah. Sporting the evidence of corrective eye surgery, the Swans' spearhead is inspiring more confidence in those who kick the ball to him. When you're coming in,

you'd definitely like your full-forward to be able to see straight. The Swans will be back in training again on January 2 before heading to Los Angeles for a pre-season game against the Kangaroos. Duncan Huntsdale, ABC News. Let's check the weekend weather now. And it looks like there's something for everyone, Mike? Call it a mixed bag, Juanita. Good evening. A very unsettled end to the week in some areas. A severe thunderstorm moved just to the north of Sydney late today. Our radar shows the cell crossing the Hawkesbury and moving over the Central Coast. The State Emergency Service received many calls as wild winds damaged house and brought down trees and powerlines. Very warm to hot ahead of all that, with temperatures from 21-33 degrees, a top that's 7 above average. Very warm to hot in most part of the State. Big storms up to the north todyay. A little rain in Brisbane today. A little snow possible tomorrow in the Snowy Mountains. Unsettled around the nation except for Perth. Total fire ban tonight for the Upper Western. Thanks, Mike. Now before we go -

another quick look at tonight's top stories - police are warning people to stay away from a number of popular beaches after receiving information that there could be more mob violence this weekend. The State Government is selling its stake in the Snowy Mountains Hydro Electric Scheme, saying it'll use the money to pay off debt. And early estimates say up to 11 million Iraqis have voted

in the country's first full-term election.

And that's ABC News for this Friday I'm Juanita Phillips. The '7:30 Report' is up next, and there'll be a full wrap-up of the day's news in the late bulletin at 10:55.

Enjoy the rest of your evening and have a great weekend. Closed Captions produced by Captioning and Subtitling International Pty Ltd

This program is captioned live. Welcome to the program.

I'm Tracy Bowden. After a seven month investigation, further light has been shed on Australia's worse aviation disaster for 40 years. The Air Transport Safety Bureau today released an interim report which ruled out the possibility

that a mechanical fault was to blame for the crash of a Metroliner in remote North Queensland in May. But the bureau was unable to obtain some critical evidence, because of a fault in the cockpit voice recorder. Meanwhile, some families have been left feeling angry and frustrated.