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(generated from captions) in the murder of about 2,000 people appreciate he's basically taken part

and that's a crime against humanity.

It's a terrible thing to do and if

he comes forward, I'm sure he's

worried that he'll be denied

in the country - refuge in the worried that he'll be denied refugee

country he's in at the moment and

his former wife is in the country

well. It's like a ghastly gothic his former wife is in the country as

horror tale and it goes on. She

that assassins employed by the horror tale and it goes on. She says

health authority, she believes, that assassins employed by the local

tried to kill her and her husband,

that she was stabbed in that

attempt. He escaped unscathed. Her

former husband, that is. He escaped

unscathed. It's at that point I

start to wonder about her story

because the Lodgic is that the

Health Authorities would have to

kill all of the doctors and nurses

and personal else involved in these

operations. His problems started

after he refused to do any more

operations and you will also recall

that the SARS epidemic hit China in

2 #0 #0

2003 and he was one of the several

doctors sent to China to deal with

the SARS epidemic there. You will

have notice ?he said he didn't

he would return from it but he did have notice ?he said he didn't think

survive the SARS epidemic. I wasn't

there and I'm not sure what

happened, but I did is it with her

for a long, long

for a long, long time and I was

persuaded she was doing her best to

describe it. Why else would she say

her husband had been stabbed and

will recall she said her mother her husband had been stabbed and you

worked in the health system. That's

how she found out about this.

Presumably, if there is a chance to

investigate to these matters, you

want an independent investigator to

look at these matters it would be

easy to corroborate the steps that

you 'gone through here with this

story because there must have been

lot of people involved. Have there story because there must have been a

been any attempts so far by the UN

or anybody or the human right group

use've taked about to look at the

dill of this or government

officials? I've met with the US

State Department and with Amnesty

International in London, their head

office, and with human rieth office, and with Human Rights Watch

in New York and I'm quit encouraged

that all three of those groups,

along with o theirs, are going to

try to get to the bottom of this,

report but there is no doubt that the UN

reporter on torture Manfred Novak,

in Vienna is the one that should be

doing with it. I'm working with him,

too, so I'm optimistic that the

inquiry also be done N the meantime,

this ghastly process has to stop

that's where Australians alling this ghastly process has to stop and

their MPs and you and I and others

can do our utmost to make sure the

Chinese government knows this is

totally unacceptable conduct.

Will you be seeking to speak to the

Australian Prime Minister about

this? It's so extraordinary these

allegations. They have to be

in some way, don't they? Yes,but allegations. They have to be tested

mow, too, that in fact he just died in some way, don't they? Yes,but you

in Canada a few months ago a man of

19 got out of awe wits and told the

world what is going on there in

and the world said this can't be world what is going on there in 1943

happening and he said it is

happening and nobody believed him.

We all know what was happening in

Auwitz and, yeah, I find them

extraordinary as well. But, as I

we've looked at it as carefully as extraordinary as well. But, as I say

we can and we've #k078 to the

regrettably conclusion it is

happening on a large scale and has

to stop now. David Kilgour, we'll

obviously follow your talks over

next few days with Australian obviously follow your talks over the

politicians and we thank you very

much for taking the time to test

these - have these questions put to

you and test the allegations on

Tony. Lateline. Thank you for having me,

a Northern Territory inquiry The co-chairs of in Indigenous communities into child sexual abuse say they've already received individuals. information from concerned

The inquiry opened in Darwin today and Pat Anderson. chaired by Rex Wild QC The claims of child sexual abuse, of Aboriginal children Allegations of sexual abuse like Mutitjulu in Northern Territory communities hit the national agenda in June 'Lateline' program. when they were aired on the ABC's Today,

the inquiry into the issue those enlisted to run outlined their massive task. to subpoena witnesses We have the power

to look at documents and we have the power

and go into premises, in fact. Mr Wild will work alongside Pat Anderson long-time Indigenous health worker as co-chairs of the inquiry. Mr Wild took on the role commissioner Mick Palmer after former federal police stood down, commitments. citing national transport security Co-chair Pat Anderson says in desperate need of help. communities are and a moral obligation We have an ethical as a responsible society to do as best we can

is having a go at that. and I think the inquiry eight months. The inquiry will run for It will take submissions, and: how to combat the problem. And it will recommend won't be singled out, Individual cases of sexual abuse for perpetrators. but that's no protection We'll refer them to the police. to talk about child sexual abuse Getting non-English-speaking people

is a significant challenge. where necessary Interpreters will be used are encouraged. and private meetings in Alice Springs next week. The inquiry board will be is due back in April next year. A report to Government Claire Mackay, Lateline. Now, to the weather. A morning shower or two in Perth, over south-eastern Australia and freshening winds and in the other capital cities. but remaining fine there, And that's all from us. in just a moment. 'Lateline Business' coming up If you'd like to look back Kilgour, at tonight's interview with David or transcripts, or review any of Lateline's stories you can visit our website at with Ali Moore. And now 'Lateline Business' Thanks, Tony. Tonight - and don't like what they see. Investors take a peek into 2007 the market The latest results reaching are threatening earnings. show cost pressures for his company, And despite a record profit the Wesfarmers CEO predicts tougher times ahead on discretionary expenditure.

...we'relooking out for that, if ...we'relooking out for that, if you like. But first, to the local market where negative reaction to those results from heavyweights Boral and Wesfarmers set the tone. The All Ords lost almost 0.75%. In Japan, the Nikkei slipped back as energy stocks retreated. Hong Kong's Hang Seng was flat. And the Dow will open in the next 20 minutes at 11,098. In the pre-market, stocks are trading higher. European markets are, of course, already trading and to find out what's moving I spoke to Anais Faraj of Nomura International in London a few minutes ago.

The London markets have come off a

little many morning trade? They

little many morning trade? They have, indeed. It's been quite a

have, indeed. It's been quite a weak start to the day and the tone has

been pretty soft. We've got

start to the day and the tone has been pretty soft. We've got The


overarching fears of terrorism that

are weighing down on some of the

airline and tourism waiting stocks,

but today specifically we've had

data from China showing that the

industrial production there is

slowing down. There's been a lot of

talk in London and Europe for the

last two months about whether the

Chinese economy is is slowing down

and this state has been taken quit

seriously and you are seeing the

miners, the resource tooks, the

industrials and anything else

industrials and anything else that's supposedly linked to the Chinese

growth story being sold off quite

aggressively right now. On the

economic front, you've had

infliction figures out today. UK

inflation slightly milder? Indeed.

inflation slightly milder? Indeed. I mean, consumer prices came in the

headline rate 2.5% year on year.

Slightly below what the mart was

expecting and certainly below the 2.

expecting and certainly below the 2.5% which used to be the

2.5% which used to be the historical bench mark. Not surprising that you

should see inflation beginning to

moderate but people aren't reading

too much into it right now because

the bank

the Bank of England is slightly

unpredictable at the moment,

following the last rate hike which

was a total surprise for the market,

the investment community is

uncertain about how much to read

into the softening of inflation.

No-one is talking about an eminent

switch back to a rate cut stance

from the Bank of England. In terms

of trade today, I imagine all eyes

are going to be on the US and their

inflation numbers? Absolutely. I

think the story remains that the

outlook in the US is still very

volatile, very data driven. US outlook in the US is still very very

futures are up. I think that's

partly because oil prices have

softened overnight but, as you said,

the Fed will be very unpredictable

in the next few weeks and that will

set the tone for theover all

markets. Key numbers out, the PPI

numbers? The PPI numbers, people

have been worrying about them for a

very long time. They are unlikely

weaken very much. Commodity prices very long time. They are unlikely to

continue to push up the producer

price index. The dollar has been

weak in the last two or three

and that's going to be reflected in weak in the last two or three months

today's PPI data. Overall there's

been no feed through into computer

price inflation, but what people

betting now going forward the CPI price inflation, but what people are

will not pick up as well. Thank you

for speaking with us. Pleasure.

the reporting season Back home and well into

as an earnings threat cost pressures are being highlighted to some key sectors. of building products, Boral, Today the country's biggest seller and predicted worse for this year. delivered a reduced annual profit market, higher interest rates The company blames a weak housing and climbing fuel prices. Richard Lindell reports.

The market is priced for perfection

and investors are in no mood to

forgive companies that fall short.

Companies that are m coming out

flat and even disappointing results Companies that are m coming out with

are often hit quite hard by the

market as some people will look for

better growth opportunities in

areas. And investors did flee Boral better growth opportunities in other

shares shed more than 4% taking

foelt falls to 28% over the last 3

months. Full-year earnings were

with refugee on $4.8 billion. months. Full-year earnings were down

demands and rising costs are with refugee on $4.8 billion. Weaker

squeezing margins, forcing them to

absorb the brunt of higher fuel

prices. Direct fuel is typically

only around 5 or 6% of our actual

cost base. It accounts for

cost base. It accounts for inflation of fuel accounts for 20-25% of our

overall cost escalation so that's

significant and quit hard to pass

through. Boral's fortunes are tied

to the residential housing cycle

demand in its biggest market, NSW to the residential housing cycle and

at a 30-year low. Latest interest demand in its biggest market, NSW is

rate rise of a quarter per cent and

the potential for a further quarter

per cent rate rise before the end

per cent rate rise before the end of calendar 2006 is likely to lead to

further softening of activity. calendar 2006 is likely to lead to a

It's a tale of two markets.

Commencements in western and South

Australia are running well above

long-term average. While approvals Australia are running well above the

in NSW and Queensland have slumped.

But four caster BIS Shrapnel points

to a loom

to a looming which will benefit

companies like Boral when the cycle

turns. When affidavitty returns

pent-up demand will be released and turns. When affidavitty returns that

we'll move into a pretty

upswing in terms of residential we'll move into a pretty substantial

construction at the end of the

decade. The building products group

is facing similar pressure in the

where it earns 30% of pre-tax is facing similar pressure in the US

profits. 17 interest rate rises in

the past 18 months are starting to

bite. The result would have been

worse, but for the bombing

nonresidential sector. With

to other things like infrastructure nonresidential sector. With exposure

and other nonresidential features,

the company is actually able to

offset some of those loss-making or

slow down areas that are slowing

down in order to at least keep the

earnings levels flat. Boral is now

facing its third straight year of

flat earnings, a prospect which is

underwhelmed investors in a market

priced and primed for growth.

Richard Lindell reporting. with a chilly earnings outlook Another to spook the market industrial company Wesfarmers. is the diversified of $1 billion looked good The profit it booked today

and returns from an asset sale. up 49% on strong coal prices starts to run out. But that's where the good news in the current year Wesfarmers foresees weaker earnings as coal gives ground dampen consumer spending and higher interest rates off the back of that. to a 21-month low today So the share price fell closing more than 2.5% down. Dianne Bain reports.

Since Richard Goyder took over from

long-time CEO Dick Cheney thes we

farmer's share price has slipped

even the profit result may not turn farmer's share price has slipped and

it around. Mr Goyder replains

convinced the company is headed in

the right direction. . I won't say

it hasn't been challenging. I think

any CEO's role is challenging, but

feel very confident. S

feel very confident.S we farmer 's any CEO's role is challenging, but I

profit is up 50% on last year,

although that includes $180 million

from the sale of its stake in the

Australian Rail Road Group. Mr

Goyder says it hasn't been smooth

sailing in all of the company's

businesses with Cyclone Larry

hitting its insurance arm and

affecting coal operations in

Queensland. In Western Australia

weather also hurt sales. The Queensland. In Western Australia the

destroyiest June on record in WA in

many areas really knocked us around

in that business in fertiliser

sales, which were less than half

expectations. The jewel in the sales, which were less than half our

company crown is the Bunnings

Hardware business. Its earnings

up just 1% to $420 million. But Mr Hardware business. Its earnings were

Goyder has concerns that a slump in

discretionary spending could put

squeeze on future profits. discretionary spending could put the

Shareholders won't be disappointed.

They'll earn an annual dividend of

$2.15 a share. Whilst the share

price has been on the decline, I

guess the analysts will be deciding

over the next period, the next 12

months, 2006-07 and going up to

2007-08 whethers we farmers can

that around. Despite this year's 2007-08 whethers we farmers can turn

good result,s we farmers is

weeker earnings next year because good result,s we farmers is flagging

a lower coal price and predictions weeker earnings next year because of

spending. another rate rise will soften retail another rate rise will soften

Dianne Bain reporting, and later in the program joins us. Wesfarmers CEO Richard Goyder Well, when credit is tightening,

the first to suffer. the retail sector is usually at David Jones. So far, little sign of that

$450 million in the July quarter. DJ's sales hit a record of over That was more than 5% above the same period last year

but the underlying message was familiar - with tougher conditions ahead the company says it must control costs if it's to lift margins. We achieved a strong performance across all of our key categories, including women's, children's and men's apparel, footwear and accessories, cosmetics, homewares and home entertainment. David Jones' shares fell from yesterday's record high. Though $0.08 weaker at $3.21,

they're still ahead 38% for the year. The health technology company Cochlear is spending millions of dollars to consolidate its world domination of the hearing implant market. The maker of the bionic ear has lifted spending on research and development, overseas. and has boosted its sales force for the year to June But a 34% jump in net profit failed to impress the market. Finance correspondent Phillip Lasker.

Cochlear's chief executive Chris

Roberts did not undersell the 3 #%

jump in after-tax profit to $80

million. Which erway you look at it

it's a great result. Not great

enough for a market expecting even

better from a company trading at 49

times earnings. The shares fell

times earnings. The shares fell more than 7%. We think the market

generally is seeing some PE

compression, particularly with high

PE stocks and cack clear has always

been high PE stocks and some of the

international PEs are having the

same market reaction. But we think

ultimately there's a solid business

here and there's a good growth

prospects, particularly into the

prospects, particularly into the new year. Revenue was up 50% in the

Americas, thanks to new technology

and a product recall by cochlear's

nearest competitor. Europe saw a

nearest competitor. Europe saw a 35% increase, while revenue in the

Asia-Pacific region rose a

disappointing 7%. 86% of our sales

are Europe and the meshes, but Asia

Pacific overall and China

specifically are fundamental to our

growth. Cochlear is sitting on a

6-year deal with China and 70% of

the global market. If you look at

what we are investing into the

industry, our research and

development, if you look at what

development, if you look at what the peep wrm putting on the ground in

terms of sales and marketing, we

really should be able to defend

really should be able to defend that position. The talk was less bold

when it came to delivering an

earnings forecast of $100 million.

We actually currently forecasting

numbers ahead of the guidance and

historically cochlear have guided

conservatively. There's probably a

bit of market psychology in that

one. People shouldn't get too

excited with respect seeing huge

amounts of growth coming through in

terms of implants in the next

terms of implants in the next couple of years, but the major show will

come in in maybe 3-5 years' time as

we see a pick up in sales,

particularly in China. But some are

expecting an uninterpreted command

performance from this double act. Even high achievers can disappoint. Phillip Lasker reporting.

The computer maker, Dell, has issued what it believes to be

the industry's largest product recall.

More than 4 million laptop computer batteries are being withdrawn after some overheated and exploded. It was prompted in part by photos like this one of a Dell laptop bursting into flames. Some industry observers link the recall to Dell's persistent cost cutting.

No doubt the cost-cutting of Dell has led to this, but that's the market pressure. They are a cost leader. They do have high quality. Sometimes you've got to take a risk on components and it doesn't work out. In Sydney yesterday, the company's founder gave no hint of a recall.

We are fully investigating that incident and a few other reported incidents to understand exactly what's going on and take the appropriate steps to provide the best outcome for our customers. We'll keep you posted. Dell has not put a cost on the recall

but analysts believe it could exceed US$200 million. And now back to Wesfarmers. It may have produced record profits for the past year

but forecasts for the future are not so upbeat

and investors today were unforgiving. To look more closely at the company's position, I spoke earlier with CEO Richard Goyder in Perth.

Guide guide guide, thank you very

much for talking to Lateline

Business. Evening, Ali. I guess

Business. Evening, Ali. I guess this the result is a case of "thank God

for coal" , if you take out the

one-off from the sale of the rail

business or ARG, energy was the key

driver. Waits a great result from

energy, up nearly 100% on last year,

on the back of coal prices, but

on the back of coal prices, but also an increase in production at our

an increase in production at our cur ra coal mine in Queensland.

Certainly coal drove a large part

Certainly coal drove a large part of the upside in the business, but I

don't think we should forget it was

an overall profit of over a billion

dollars, notwithstanding ARG, $86 9

million still a record and we are

pretty pleased with that result

overall. The outlock, though, for

this year, not quite so rosy? No,

coal prices coming off obviously

coal prices coming off obviously has an impact and we won't get the

an impact and we won't get the sales increase we might have hoped for a

while ago out of cur ra because we

continue to have bottlenecks at

continue to have bottlenecks at both the port at Gladstone in Queensland

and through the rail from our mine

to port in Queensland. So that is

going to contrain tonnes this year

unfortunately. If p you take the

other sectors, Bunnings, insurance,

a mixed outlook, but overall pretty

constrained? Well, we are roly

pleased with the way that Bunnings

is running at the moment. We had a

pretty soft first half to the year.

Expenditure was tight, but in the

second half we had same store

second half we had same store growth at a cash level of 7.5% and strong

sales have continued into July and

August. So Bunnings is actually

travelling pretty well at the

moment. We are a bit concerned

moment. We are a bit concerned about the impact that higher interest

rates and high fuel prices may have

on discretionary expenditure. So,

we're looking out for that, if you

like. On insurance, we came off a

record result last year. We're

record result last year. We're still making pretty good returns on

insurance, but growth prospects are

limit ?there at the moment without

growing the portfolio significantly.

We think a number of our other

divisions, not imagine, but a

divisions, not imagine, but a number of other divisions will have

increased earnings this year if

things go according to our plans at

the moment. Itythe market has taken

this very negatively in terms of

forecast. How much lower will this

year's result be? Well, obviously

too hard to tell at the moment. Ate

esvery early in the year and there

are a lot of factors that could

influence our result. We expect it

to be a satisfactory result and, as

I said earlier, we're hoping for

some earnings growth from a number

of our divisions. We don't think

that will offset the decline in

earnings from energy on the back of

the lower coal prices. But we still

expect a pretty satisfactory result

in the coming 12 months. But what

satisfactory? Down 10%, still in

your ballpark? I'm not going to

your ballpark? I'm not going to give a forecast at the moment because

it's just too hard. What will be

it's just too hard. What will be the biggest driver of future growth?

Well, I think we've got growth

opportunities across all our

activities at the moment and of

course we continue to look at

additions to the portfolio

generally. But, we've done a fair

bit of work over the last few

bit of work over the last few months on where we might grow each of our

businesses and I'd have to say

businesses and I'd have to say every one of them has real growth

prospects and we're working on each

of those now. Some are relatively

small, some are larger, some will

take some time to come to fruition

and require some capital, but we

like doing that sort of stuff. So,

as we look across the five

divisions, we don't think any of

them are growth contrain add the

moment. Are you happy with the mix

of businesses? Anything you want

of businesses? Anything you want out of, anything you want in on?

Yeah, no, we are happy with what

we've got at the moment, but we've

always got our eyes and ears open

for new opportunities and we'd be

delighted to find new opportunities,

but only if they are good

but only if they are good investment for our shareholders. As you said,

you're well placed for acquisitions,

your gearing is low, how much could

you spend? We've always taken the

view p we find the right

view p we find the right opportunity then we can spend what is required

to execute on it. In other words,

to execute on it. In other words, if we needed to raise debt, we think

for the right opportunity,

for the right opportunity, providers of debt would come to the party if

we needed to supplement that with

equity, we think again providers of

equity would come to the party if

it's the right opportunity. So, we

actually don't have size limits on

what we look at. It's the limiting

factor is the opportunities that

factor is the opportunities that are attractive for our shareholders.

But it would be billions that are

potentially in the kitty? Well, we

could, although we are looking at

opportunities that range from much

smaller to quit large at the moment

and we have over a period of time

looked at transactions across a

looked at transactions across a wide range of sizes. If we can return to

the home improvement business. You

said earlier you are keeping a

watchful eye on any further squeeze

on consumers. But what are your

crunch points. How much higher do

oil prices have to go. How much

higher do interest rates have to go

for it to hurt? That's a good

question, Ali, because 12 months

question, Ali, because 12 months ago we really hit a crunch time when

fuel prices went through $1.407 a

litre and we'd had - ($1.40) and

litre and we'd had - ($1.40) and two interest rate increases in

proceeding months. We've sort of

gone through a similar event over

the last few months, but we haven't

yet felt an impact and perhaps the

tax cuts have had some mitt git

tax cuts have had some mitt gitting

effect on it. We are watchful.

Another 25 basis points would hurt

in I'm not sure it would be helpful

for us anyway. Richard Goyder,

thanks for joining us. Thanks, Ali,

and all the best with your show. To find out how the markets absorbed all today's news I spoke to Justin Smirk at Westpac. Justin Smirk, thanks for talking to us. Today was a real case of profits and forecast bringing the market down. Ali, indeed it was. We saw both Boral and CSR - big building producers -

they've actually reported profits - while still strongly growing - well below market expectations. That was dragging the overall share prices down. They saw that building and construction sector, that sector was off 1.3% today and that showed the difference between what level people are expecting and what actually came through in terms of earnings. What about other sectors today? The other big sectors that are moving today were the resource sectors. In particular overnight we saw gold and oil prices come off a bit. That put pressure on Newcrest, the big goldmining company, and of course Woodside Petroleum - with all prices coming back, they eased back as well. Of course Woodside reports tomorrow.

Telstra, though, Telstra - another big loss today. It was really flowing out through the ACCC announcing

that they would actually force Telstra to lower prices they charge their competitors to use the network's access. On the back of that, you saw lots of earnings downgrades, people revising expectations for the share price going forward. And on the back of that, the share price did sell down to $3.62, which is actually a record low for the listing of Telstra. A record low for a closing price? It's a record low for the closing price today. Tomorrow, I guess all eyes on the data, the economic data. We've got wages, numbers and consumer sentiment.

They'll be giving us a big feel about what's going on in the Australian economy going forward. Consumer sentiment - it's the first really we get post the RBA rate hike,

so it'll be important judging on just what impact has the most recent rate hike have. Now wages - they're important to watch because wages so far have been contained and containing wages has helped contain inflation expectations and helped hold down interest rates. Now we have seen wages explode, particularly in WA and the tight resource sector, but elsewhere they've been really well controlled. So as long as those numbers come in tomorrow around about the 1% for the quarter mark, keeps the annual rate running at about 4%, that'll keep the - enough to keep the RBA off the back foot. Is 1% what most people are expecting? The market's looking for 1%. But we actually think there's a risk it'll come in a bit softer at 0.9.

But you really - in terms of getting the risks of wages really sort of becoming the focus again - you want to see a number somewhere 1.2%, 1.3% rise in the quarter. Justin Smirk, thank you very much for your time. Thanks, Ali. Well, today's top mover was auto parts retailer Repco, strongly ahead. The investment bank Babcock & Brown gained 2.5%. This week's profit result continued to propel Bendigo Bank, while Smorgon Steel went in the opposite direction from yesterday. Kimberley diamonds topped today's losers, down 8% as we've heard. Cochlear missed analysts' profit forecasts and fell nearly $4. CSR shed more than 4% after UBS lowered its price target for the stock. And we told you about Boral's bears earlier in the program. The Australian dollar is generally higher tonight, except against the New Zealand dollar. Gold prices fell slightly ahead of American inflation figures we talked about earlier. Oil also drifted downwards. It's been trading at around 73.14. Now to the diary. Another big day of results tomorrow

with full-year figures from AGL, Computershare and Lend Lease. There are half-yearlies from QBE Insurance and Woodside Petroleum and we'll be talking to the boss of Woodside in tomorrow's program. Away from the numbers, the ACCC is due to rule on Tabcorp's bid for UNiTAB. The Westpac Melbourne Institute survey of consumer sentiment will give some pointers on the impact of higher interest rates. Before we go, a look at what's making news in the newpaper business sections. The 'Age' reports Treasurer Peter Costello's plans to roll back what it calls the "excessive growth of regulation in business". In the past six years, says the paper, the Federal Government has created half as much legislation affecting business

as was passed in the previous 100 years. The 'Australian' leads with Wesfarmers but also reports plans by Colonial First State Funds Management to invest in Gasnet which runs nearly 200km of gas transmission networks in Victoria. The 'Sydney Morning Herald' continues the Telstra saga saying the company has vowed to fight the regulator over the prices it can charge competitors. And the headline from the 'Australian Financial Review' - a jittery market quick to punish weak profit forecasts. And that's all for tonight. As we leave you the FTSE is up 23 points at 5,894. And the Dow is ahead 97 points in early New York trading on good inflation figures. We'll be back tomorrow with all the day's business news and issues.

For any of tonight's stories or more information you can visit our website at or email us at I'm Ali Moore. Goodnight. Closed Captions produced by Captioning and Subtitling International Pty Ltd

This program is not subtitled


The past 200 years in the West have seen staggering increases in wealth and economic opportunity. And yet there have been no comparable increases in our level of happiness. Despite being so much richer than a few generations ago,

we're often more anxious about our own importance and achievements than our grandparents were.

I call this modern state of restlessness and dissatisfaction status anxiety. In this series, I want to explain where I think much of it has come from, how it affects our lives and what I believe we could do about it.

If we're surprised that being richer hasn't made us happy and secure,

it's because we don't understand the psychology of satisfaction. When do we feel we have enough? What enables us to feel prosperous and content? Chiefly, a comparison with other people. But it's not good enough to compare ourselves to people

who are very remote from us in time and place. It's not going to help anyone to feel very rich to be told that they have infinitely more money than one of their medieval ancestors who lived in a mud-walled cottage. We only feel content when we compare ourselves to people who are like us - our friends and colleagues, our neighbours. In short, the sense of being a success is all relative. No-one spends much time resenting the Queen or Bill Gates, but we're liable to get extremely resentful if someone we think is basically just like us moves into a bigger house

or gets a slightly better job. We most envy people who we take to be our equals. The modern world is based around the idea that we're all essentially equal. Not necessarily financially equal, but equal in terms of rights and opportunities. It's a lovely idea which brings with it one nasty side effect. In a world in which you could believe

that those at the top belonged to an inherently superior caste, you didn't need to feel humiliated by anything you didn't have. You might detest those who had more than you, but you didn't need to feel ashamed or anxious.

But in a world in which everyone is supposed to be equal but where there's still a lot of inequality around, it's hard not to take the achievements of others as an implicit reproach for everything you don't have

and haven't done. The best place to go to understand all this is the country where the idea of equality first took hold some 200 years ago - America. MAN: Young, ready and hungry! UPBEAT PERCUSSIVE MUSIC

In 1776, America had a revolution which changed the world. MAN: Help us to discover the secrets to our dream. The new democracy abolished the rigid class-based hierarchies of Europe. Just say to yourself every day, "It's possible." From the first, this basic sense of equality energised America, but it also, quite unintentionally, increased Americans' anxieties about what their true place was. You can't tell me nothing about this subject, but I was poor, but I - bless God - I ain't poor now. Their anxieties were destined to become our anxieties. TWANGY COUNTRY MUSIC The person who first and perhaps best understood the problem of modern equality was a young French aristocrat called Alexis de Tocqueville. In 1831, he came to America in order to study what he called "the future shape and temperament of the world". When de Tocqueville travelled to America, the Europe he was leaving behind was still essentially an aristocratic society run along feudal lines. This was a world in which you tended to accept the status you'd been born into. In America, everything was different. This was a democracy. And here you could change your status according to your luck or your talent. De Tocqueville, writing about his journey, later wrote that what he'd come to see in America was the future.

And what he saw when he got there left him both impressed and frightened for all of us. De Tocqueville distilled the experiences of his 9-month journey into a book called 'Democracy in America'. It's eerie, following in his footsteps 170 years later, to see just how prescient he was. He foresaw the problems that would arise when the old social hierarchies, based on class, were abolished.