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Stephen Long Discusses The World Economy -

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Welcome to the program. Tonight on 7.30 - London's sinners but outside the capital, violence boils
over. What are the lessons to be learned?

Who's going to compensate me? Insurance? I don't know what's going to happen next.

Disability scheme to bring long-awaited reform at a cost

Disability scheme to bring long-awaited reform at a cost

Broadcast: 10/08/2011

Reporter: Chris Uhlmann

The government has backed a Productivity Commission report recommending a disability insurance
scheme that will cost billions and bring much needed reform to the current system. But how will the
costs of the scheme be paid?


LEIGH SALES, PRESENTER: The disability support system is broken, but fixing it won't come cheap.
The Productivity Commission says the existing regime is unfair and underfunded, so it's proposing a
national disability insurance scheme at a cost $13.5 billion a year. It would probably be funded by
a Medicare-style levy, and the commission says its economic benefits outweigh the cost. But, as
political editor Chris Uhlmann explains, the Government stopped short of committing to the scheme,
saying instead that it shares the vision of disability insurance.

LAURELEI MOORE, MOTHER: He had the world at his feet. He was an Australian Open junior tennis
player. And then he got discovered in that tournament and offered a scholarship to college in
Florida. And he went there and just had completed his degree there and was playing tournaments in
Europe. And he just got back to Australia and was about to start a job. And actually the day before
he was about to start, he had a skateboarding accident. It was on the Sunday afternoon, I remember.

GRAYDEN MOORE: My world changed. It took a very long time for me to realise I had had the accident.
Because I was in a coma for over a year and a half.

RACHEL MERTON, NSW BRAIN INJURY ASSOCIATION: There's the initial trauma and then there's the
ongoing needs for the rest of that person's life.

CHRIS UHLMANN, REPORTER: Grayden Moore was 23 when his life was shattered by chance. Jackson West's
life was pre-ordained.

SALLY RICHARDS, MOTHER: And because the paediatrician just said, "I have no idea how your son will
develop, you have to wait and see," it just meant that I actually felt that the normal baby I'd
been expecting died a little bit every day, until Jackson got to about age three, when I realised
that he was gonna be profoundly affected by his chromosome abnormality.

CHRIS UHLMANN: What happened to Grayden and Jackson can't be changed, but the disability system
that supports them can and everyone agrees it's broken.

RACHEL MERTON: The Productivity Commission has actually used the words, "unfair", "underfunded",
"under-resourced", "inequitable".

CHRIS UHLMANN: The commission's report on disability care finds a system fractured between levels
of government. It doesn't have enough money and there are too many gaps. It's confusing, it changes
from state to state, and for those thrust into its arms, its capricious.

LAURELEI MOORE: I know in Victoria, in a car, you're looked after if it's a car accident, but
skateboarding or any of those other accidents, you're not, if it's catastrophic.

CHRIS UHLMANN: Even injuries from car accidents aren't covered in some states, unless you sue, so
the costs of care can be crippling.

SALLY RICHARDS: When you're trying to come to terms with the baby that you've got, not the baby
that you wanted, every day is a day of grief and of struggle and of confusion and you dunno where
to go for help, you don't know who can help you, you don't know what help there is.

LAURELEI MOORE: Because there was no funding for somebody with such a bad accident, they weren't
getting the care they shoulda been getting. And from then on, it was just such a battle to try and
get him, to get the basic and vital life-saving care he needed.

CHRIS UHLMANN: The pressure on carers can be intolerable.

SALLY RICHARDS: I'll give you one example. About 20 years ago, when my husband Mike had attempted
suicide the first time, and he was in the psychiatric ward with a fractured skull and I had four
children under the age of eight, and I went to the department looking for some help for Jackson, I
was told it wasn't policy and there wasn't any assistance that I could get.

RACHEL MERTON: And then, years later, we have - we hear from people in their 80s and 90s who are
terrified about what's gonna happen to their son or daughter after they die.

CHRIS UHLMANN: So the Productivity Commission has called for change. It recommends the Commonwealth
run a national insurance scheme to cover everyone with an existing disability, and it wants the
states to settle on a national injury insurance scheme.

RACHEL MERTON: The advantage of a national scheme is that regardless of where you live now and
regardless of where you might want to live in the future or actually do move to the future, you can
direct your own life, you can control your own life.

CHRIS UHLMANN: Fixing the system won't be cheap. Disability insurance would cost nearly $13.5
billion a year, and probably be funded by a levy on all taxpayers. Injury insurance adds another
$800 million to the bill, funded through modest rate rises, hikes in car insurance premiums and
public transport ticket prices. But the commission argues the economic benefits outweigh the costs.

GRAYDEN MOORE: If a national disability insurance scheme was in place while I had the accident,
then I wouldn't have been living in a nursing home and may have survived a lot quicker than I have.

CHRIS UHLMANN: Today the Government took a step towards the commission's plan, but did not commit
to it.

JULIA GILLARD, PRIME MINISTER: Today, I'm in a position to say the Government shares the vision of
the Productivity Commission. We share the vision that our nation needs a national disability
insurance scheme.

CHRIS UHLMANN: The commission cautioned against haste and the Government's happy to comply. It will
start negotiating with the states and territories through a select council and give an advisory
committee $10 million to start working through the technical details.

Assistant Treasurer Bill Shorten pushed disability insurance onto the Government's agenda. He
believes it's now unstoppable.

BILL SHORTEN, ASSISTANT TREASURER: It's been the Labor Government, the Gillard Government that's
recognised that the status quo is irretrievably broken and that the future has to be very different
to the past.

CHRIS UHLMANN: Yet there's no commitment even to trialling disability insurance on a small scale by
2014, something the commission recommended, and Sally Richards believes all the research and
talking has been done.

SALLY RICHARDS: Well, I would've liked a commitment. I would've - I think it's about time that -
you know, in Australia we have - we really do have a second-class disability system. And in a
country as rich as ours, there's no excuse for that at all. None, whatsoever.

London Riots

Britain woke up this morning to night of unrest with violence and looting, this time spreading to
the north of England. There's no agreement and probably never will be on the underlying cause of
the riots. But there's no doubt about the about the impact of the violence and the anger of the
innocent people caught up by it. Take a look.

They have been telling us that what is happening in this that what is happening in this country is
going country is going to happen.

It's absolutely disgusting. They are feral rats. What are those parents doing? Those children
should be at home. They shouldn't be out here causing mayhem.

What's the reasons? You see a lot of kids are not being pear-shaped. It's going to get worse and
worse so they better sort something else out.

Just hooligans. They should bring back rubber bullets and tear gas.

They're just trapped. You can't get in, you can't get out. It's just everything's exploding around
us, there's sirens and helicopters. Just smoke everywhere. It's a war zone. Never seen anything
like it.

I live here. I live here. I'm astounded at what you're doing.

We're getting our taxes back.

What do you mean by that?

We pay tax.

Are you proud of this? Are you proud of what you're doing?

SONG: # Misguide ed youths taking pleasure robbing Boots ... #

Who's going to compensate me? Insurance? I don't know what's going to

Every single thing broken.

You don't have any cover for that?


. What to do?

I don't know, I don't know next what will happen to me.

One of the areas affected by violence has Clapham Junction in the south of London's inner city. As
the riot wrers have dispersed other Londoners have stepped in clean-up. Sam Way is joins me now.
I'm told you live just outside London. What's made you decide to come in and volunteer for the

It was my brother's idea actually. He looked up on-line, found out, just what had happened, really,
saw the scale of the violence and and we thought we want to do our bit to help in whatever way we

From the scenes behind you it looks like there's going to be quite a clean-up job there. What is
the scale of it like and did it surprise you to it first hand for yourself?

To be honest, most of the things have been have been cleared up at the moment. Obviously behind me
there that's a building which was on fire, so that's structurally unsound and we're not really the
most suitable people to help. But apart in that, the shops have been boarded up, and the clean-up
effort has been amazing. We turned up this morning really with nothing left to do.

What do you think about what's actually happened We just heard a clip here of people that people
that have been affected and ordinary Londoners saying what they think about it. What do you think?

Um ... well ... obviously it's just abhorrent. I can't see any reason behind it. I just - it just
saddens me that people of my generation are able to think like this and think that doing things
like this is in

One of the things that some people are saying is people are saying is that there's an underclass in
Britain that's been disadvantaged and that's young people have acted like this. What do you make of
that argument?

Well, whatever possible factors are being put forward to mitigate the things, I think at the end of
the day what's happened it's destroyed people's livelihoods so there are other methods by which are
other methods by which we could possibly deal with whatever problems there are in terms of social
inequality. But to do things like this is in no way helpful. Thoits not helping their cause, and
it's not helping anyone who wants to help them.

With people starting the starting the clean-up there, do they feel safe doing it? How do you know
that the violence isn't going to flare up again?

Sorry, that.

How do you know the violence isn't going to flare up again? The clean-up's started but I'm
wondering if you're going to go to this trouble and then the violence could flare back up?

Sorry I can't quite hear you.

We might be having some trouble with our audio. audio. We'll leave it there.

Italy's economy on the brink

Italy's economy on the brink

Broadcast: 10/08/2011

Reporter: Emma Alberici

The global financial situation has markets alarmed that many big countries cannot repay the
enormous debts they owe. One country causing concern is Italy, with 50 percent of the nation's debt
held by overseas investors.


LEIGH SALES, PRESENTER: Over the past weeks stockmarkets across the world have been convulsed by a
fear that some of the biggest countries in the world won't be able to pay back their enormous
public debts. The latest teetering domino is Italy. 50 per cent of Italy's debt is held by overseas
investors, and that means if Italy defaults, the virus will spread. Emma Alberici reports from

EMMA ALBERICI, REPORTER: It's the epicentre of the economic earthquake shaking Europe, with Italy's
public debt at 120 per cent of its GDP and an economy that's at a stand-still, the country can't
even afford to pay back the interest on its loans. Once upon a time it could devalue its currency
and raise money by selling more of its world-known brands overseas, but it can't do that anymore.
Its fortunes or otherwise are tied to the other 16 countries who also use the euro.

JAMES WALSTON, AMERICAN UNIVERSITY OF ROME: The Italian Government and the European governments
have got to find a way of dealing with the Italian problem, otherwise the euro is in serious

EMMA ALBERICI: Does the Italian Government have a credible plan to increase economic growth?


EMMA ALBERICI: First came Greece, then Ireland and Portugal, but now the prospect of a financial
tremor wiping out Italy's financial future is something the markets just can't bear.

This economy is the third-largest in the Eurozone. To give you some idea of its relative size, take
Greece, Ireland and Portugal, put them together and double it and you get somewhere close. But even
more significant than that is the Italian bond market. After the US and Japan, the Government here
issues more bonds than anyone else in the world. It currently owes international investors around
$3 trillion. The fear on global markets is that in the event of a default, none of the European
institutions have the financial muscle to bail Italy out.

Cini Cino fears for his son's future. Even after graduating from university, he can't find a job.
He's one of the 30 per cent or so of young Italians out of work.

CINI CINO (voiceover translation): Of my son's class, 20 of them went to university, but only three
found work, one because he went to China and the other two got jobs in international banks in
Brussels. Those who found jobs in Italy could only get temporary work for three or six months.
There is no job security in Italy.

EMMA ALBERICI: The Prime Minister Silvio Berlusconi has vowed to raise $67 billion over the next
two years by privatising public services and cutting government spending. In true Berlusconi style,
he told the Italian people that the markets have overreacted and not to worry because the crisis
will be over soon.

SILVIO BERLUSCONI, ITALIAN PRIME MINISTER (voiceover translation): The markets are like a broken
watch. Twice a day they'll tell you the right time. The rest of the time, it's wrong. Everybody
should know that by now. If I had substantial savings put aside, I would be investing that money in
my businesses, which have always and still provide a very good return on investment.

EMMA ALBERICI: James Walston is Professor of International Relations at the American University of
Rome. For more than 30 years, he's been studying an economy so mired in tax abuse, corruption and
red tape that businesses other than those within the Berlusconi family itself no longer want to
invest here.

JAMES WALSTON: Berlusconi in his recent speech in which he addressed the Italian economy and said
practically everything was fine, when he was heckled about not knowing anything about the stock
exchange, he said, "I'll have you know that I am a businessman fighting in the trenches, defending
my three companies quoted in the stock exchange." I thought he was Prime Minister of Italy first.

EMMA ALBERICI: The financial markets aren't the only ones putting pressure on Rome. EU headquarters
in Brussels has warned the Government to better manage its economy or go it alone.

Outside the Italian Parliament, this man is on a hunger strike. He hasn't eaten anything for 67
days. Gaetano Ferrieri and his supporters want to raise awareness about a government that's about
to impose austerity on the public while itself pocketing the highest levels of wages and perks in

GAETANO FERRIERI, HUNGER STRIKER (voiceover translation): Even on a humanitarian level, no-one has
come out to ask how I'm going. The politicians have ignored us completely. As far as the political
class is concerned, the people should just pay their taxes and stay silent.

EMMA ALBERICI: Since the collapse of Lehman Brothers, the Government here has been telling the
people that everything's fine, that Italy is in a better position than most to weather the
financial storm, and in some respects that's true. Aside from interest payments on the country's
spiralling debt, income in Italy is actually higher than spending. So the problem's not so much a
fiscal one. Commentators complain more of a lack of leadership, that Silvio Berlusconi himself is
distracted from the task. Since taking office, he's faced no fewer than 23 lawsuits against him.

JAMES WALSTON: Berlusconi over the last few years has been dealing much more with his own problems,
both his sexual problems and his economics problems, his business problems, changing the laws in
order to deal with that and not moving into reforms for the economy.

EMMA ALBERICI: 10 years ago David Lane wrote a piece for The Economist magazine claiming that
Silvio Berlusconi was unfit to govern Italy. He hasn't changed his mind. Given now that Rome has
taken the EU to the brink of economic collapse, it's time, he says, for Brussels to seize control
of Italy's budget as well as the budgets of all the other countries that use the euro.

DAVID LANE: It's not political unity that's needed. What is needed is fiscal unification.

EMMA ALBERICI: For now at least, the ECB, the European Central Bank, is buying Italian bonds to buy
time and calm the markets. The bank of Italy is one of the ECB's biggest shareholders, so this
tactic is hardly sustainable in the long or the short term.

LEIGH SALES: Emma Alberici reporting from Rome.

Stephen Long Discusses The World Economy

With me in the studio is Stephen Long who has been covering the financial crisis for for us.
Stephen, why should we in Australia care about what's happening in Europe, our major trading
partners in Asia, what does it matter to us?

It will hit some of those major trading partners, some of the markets for China are in Europe, and
if Chinese exports dwindle, then inevitably that will hit Australian commodity experts. That's the
first order hit. The second is that this may cause another global credit squeeze, and that would
crimp Australian growth also.

How does Europe get out of this mess that it's

easy answer. One of the potential remedies that is being discussed is to replace these troubled
individual nation state bonds with one Eurozone bond which markets could have confidence in,
because it would be backed by the the entire Eurozone. The question is, is there the political will
to do that? Certainly as Emma suggested in herpes, the option that's being pursued now of the
European Central Bank buying bonds is no bought enough bonds to make a difference, you'd be placing
the Central Bank at risk itself.

What do you make just across the of this pledge by the Federal Reserve to keep interest rates on
hold at zero until at least 2013 in

Clearly it's caused big rallies on the markets but if you step back and think about it, it's really
no cause for optimism. This is optimism. This is quite extraordinary. A Central Bank committing to
keep interest rates at zero for telling you that the Federal Reserve, the worlds most powerful
Central Bank, thinks that the world's major economy the United States is going be stagnant for at
least the next two years with high unemployment, low wages, low wages growth no, threat of
inflation, that is actually a worrying sign despite the fact that it has caused the markets to
rally. Those interest rates have been at zero for something like 30 months now. And it recovery in
the United States. Once the markets step back and think about this you might see that people see
that this is not really a cause for not really a cause for great hope.

Wayne Swan the Australian Treasurer has been saying this week that the Gillard Government will
still deliver a return to surplus in Australia in to 12-13 despite the changing global
circumstances. circumstances. Is that sound economic management?

It's not sound economic management. It's also not an Wayne Swan can categorically give, because it
will be out of Wayne Swan's hands and the government's hands. Australia is captive to these
international events. We will be in deficit no matter what the government wants to do if things get
bad enough overseas. If they don't we may achieve a surplus but it'd make no sense to try to keep
the budget in surplus merely to meet a political goal or a political promise if things get bad
overseas. The unemployment rate would go up, that and there may be a case for more fiscal stimulus
in any case, so I just don't think that the government's in any position to give any categorical
assurances and we are just at the whim of these international forces . It's likely to be a wild

Which means I will be having your company probably a little bit more Stephen Long thank you very

Campaign against chaplaincy program reaches the High Court

Campaign against chaplaincy program reaches the High Court

Broadcast: 10/08/2011

Reporter: Tracy Bowden

Jazz singer Ron Williams is fighting the National School Chaplaincy Program in the High Court,
claiming it is unconstitutional.


LEIGH SALES, PRESENTER: Ron Williams says he's not a religious man, but he's certainly on a
crusade. The jazz singer and father of six has launched a self-funded legal challenge to the
controversial National School Chaplaincy Program. The case has now gone all the way to the High
Court, as Tracey Bowden reports.

TRACY BOWDEN, REPORTER: Singer/songwriter Ron Williams likes nothing better than taking to the
stage with his big band.

But this week he's playing to a very different crowd, in the highest court in the land.

RON WILLIAMS: It just kept rolling on. It just kept going down the freeway like a big sacred cow
that nobody's really game to touch. So it really did have to be taken to the High Court.

TRACY BOWDEN: The sacred cow to Ron Williams is the National School Chaplaincy Program, the
federally-funded scheme which has placed 2,700 chaplains in schools across the nation.

RON WILLIAMS: What prompted me to take it on was that there were a lot of other parents feeling
that they were in the same boat, so I guess somebody had to do it for them and it just turned out
to be me.

TRACY BOWDEN: The full bench of the High Court is being asked to rule on whether employment
criteria and funding for the chaplains' program breach the Constitution.

GEORGE WILLIAMS, CONSTITUTIONAL LAW, UNSW: This is an important test case in the High Court of two
major questions. The first relates to the ability of the Commonwealth to set up an office where
there's a religious test for that office, and the second is a big battle about our federal system
and the ability of the Commonwealth to directly fund certain activities without channelling that
money via the states.

TRACY BOWDEN: This is the case of father of six Ron Williams, the plaintiff against the
Commonwealth of Australia and Scripture Union Queensland.

Former rugby league referee Tim Mander is the chief executive of Scripture Union Queensland, the
nation's largest provider of school chaplains. He's become the public advocate and defender of the
work of the chaplains.

TIM MANDER, SCRIPTURE UNION QLD: We're very concerned that the future of school chaplains could be
determined on a legal technicality.

TRACY BOWDEN: Ron Williams' family is at heart of his challenge. When he enrolled his oldest child
at the local public school in Toowoomba, he was troubled by the messages his son brought home.

RON WILLIAMS: The case of our son, we'd asked that he be excluded from religious instruction, and
so other children, or a couple of other children, probably zealous kids, had told him that he'd go
to hell because he wasn't doing RI.

TRACY BOWDEN: After the introduction of government-funded chaplains into his children's school, Ron
Williams launched his push against the program, putting his message into song.

So what was your concern about the impact of these chaplains on your children?

RON WILLIAMS: That it would be just the encroachment of a religious missionary being put into the

GEORGE WILLIAMS: This is a case of the little guy taking on the Commonwealth, and it is a case that
shows that the little guy can have his day in court. There are shadows of The Castle involved in
this case.

TRACY BOWDEN: In fact the movie The Castle and its story of an Aussie battler taking the fight for
his home all the way to the High Court has been a source of inspiration for Ron Williams.

TRACY BOWDEN: So it was a welcome surprise when old friend, actor Michael Caton, showed up to
support the cause. The event was the launch of a book about a similar legal battle 30 years ago.

MICHAEL CATON, ACTOR: This is a man who's gone to the High Court to get the justice that he
believes is due to him - that is the separation of church and state.

TRACY BOWDEN: But Queensland school chaplains believe justice is also on their side. Tim Mander
points to the 70,000 statements of support he's received.

TIM MANDER: The hundreds of chaplains, and therefore the welfare of children, are at risk and we
want the community to know that school chaplaincy's very well-received, very well-supported and
that we think it'd be a great shame if the federal funding was stopped because of this challenge.

TRACY BOWDEN: Are you driven by the fact that you're anti-religion?

RON WILLIAMS: Oh, no, I'm not anti-religion, no. I'm not anti-religion at all. I am a fervent
believer in the constitutional separation of church and state. I do believe that our state schools
should be secular spaces for our children.

TRACY BOWDEN: The High Court is expected to announce its decision at the end of the year.

LEIGH SALES: Tracy Bowden reporting.

And that's the program for tonight. We will be back at the same time tomorrow, but for now,