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(generated from captions) that Labor has suffered quite a slide. Michael Stutchbury, do

you think this Budget will go

anyway to arresting that? I

think it will provide some

stability in the Government. I

will show a Government that is

focusing on the main game and

it can show some credibility on

economics. It did can parade

global financial crisis that it got Australia through

although in reality I think

that was largely the momentum

from the China boom and it

started to take some hits from

this home insulation program

and the primary school spending

program. They started to look

reckless. This is some of the world spend ing world spend ing programs any

Government hassem bargds upon

in living memory. Now they can

show in terms of the real

architecture of the Budget and

the economy that they've got it

in pretty good shape. Laura

Tingle, do you think it will

help with the poll s? I don't

think it will help the Prime

Minister at this stage It goes

to the heart of that economic

credibility issue. But the

Government now has this really

separate issue which is the

credibility and faith that

Kevin Rudd has with the

electorate and that is about

what he stands for. I don't

think this is necessarily going

to help him. Laura Tingle and

Michael Stutchbury, thanks very

mump. That's it for our Budget

coverage from Parliament House for now. Shortly Lateline

Business will look at how the

big end of town has re aect

acted to the Budget. But first

here is Deb Rice in Sydney with

tonight's other top

stories. Gordon Brown covered -

coveted the top job for years

but now he's made the ultimate

political sacrifice. He says he

will step down as Labour Party

leader before September, allow

k ways for talks with the

Liberal Democrats. They are

trying to woo back the LDP with

a promise on electoral reform.

Phillip Williams report from

London. Just as it looked like

the Liberal Democrats and the

Conservatives were edging towards a Coalition, Gordon

Brown decided it was time to

wedge his weight on events in

the most dramatic way -

resignation. I flfr intend to

dis for the Labour Party to set

in train the process -

processes needed for its own

leadership election. I would

hope it would be completed in

time for the new leader to be

imposed by the time of the

Labour Party conference. With

Gordon Brown going, the way was

now clear for Labour to begin

formal talks with the Liberal

Democrats, which forced an

immediate concession from the

Conservatives. Like Labour,

they too would offer voting

reform but it comes as a

referendum. So it is now I

believe decision time, decision

time for the Liberal Democrats

and I hope they make the right

decision that will give this

country the strong, stable

Government that it badly needs

quickly. And the man at the

centre of it all, the Liberal

Democrats Nick Clegg is not

giving anything away as to who

gets the last dance. But it has

to come soon. And I really hope

that we will be able to make an

announcement so we can clear up

everything and explain to

people exactly what our

thinking is as quickly as we

possibly can. But even as negotiations continue, some Conservatives are openly furious with the Liberal

Democrat s for what they say as double dealing by negotiating

with the Labour Party. Even if

the Liberal Democrat s doend up

in Coalition with the Labour Party, it would still need the

support of the smaller

Nationalist parties and perhaps

the one Green MP. Everyone says

we need resolution and fast,

and they've been saying that

since the election five days ago. ago. The Education Union may

have called off its boycott but

today's NAPLAN testing still

attracted controversy. The ABC

has confirmed that some schools

have told under performing

students to stay home so they

don't bring down the school's

ranking. The Deputy PM has

warned them they will get

caught but critics of the

national tests say the use of

underhand tactics was inevitable. Kirrin McKechnie

reports. More than a million

students Australia-wide are

sitting the NAPLAN test. Begin

the test now. But it seems not

all were invited. This

Melbourne man was stunned when

his son's teacher suggested the

boy should stay home. It seems

to me that they're doing it to

better their rate ing, taking

the for lack of a better word

dumber kids out of the

class. All around the country

there are reports that some

principals have been pressing

under performing student s to

keep away so they don't drag

down the school's ranking. When

you get high stakes testing,

teachers are very concerned

about it, their reputations are

on the line, and so it does

lead to a certain amount of

anxiety and game playing. Julia

Gillard is warning schools that

engage in under hand tactics

they will get caught. If

there's any unusual

circumstance appear ing about

large numbers of children being

away then obviously there there

can be a special inquiry as to

why that's happened. But one

educate or says departmental

bureaucrats have been applying

the pressure to improve State rankings. It becomes a State of

Origin game where they're

trying to do out-do each

other. The results of this

week's test s will be post

oddton Government's

controversial MySchool website.

Teachers had threatened to

boycott but a compromise was

met. The union is still

wary. What our concern has been

and remains is the potential

misuse of that student data and

the creation of damaging league tables. Testing times indeeds.

That's all from us in the

for more with Ali national new room tonight. Now

Moore. Tonight - high risk

strategy - business fears the

new resources tax could

backfire. The Government is

taking an additional $9 billion

per year out of the industry

that has saved Australia's

bacon. A cautious but credible

approach, though disappointment

remains about research and

development funding. With big

industries really struggling to

export under the weight of the

head wind of the higher dollar, the continued underfunding of

this area is really

regrettable. And findsing the

balance - concerned too little

spend willing mean too little

growth. What is the main game

here? Is it to break a land

speed record no returning to

surplus or do we need other

measures to go through to

encourage business?

It's usually pretty

predictable - a Budget leading

up to an election is likely to be big spending and popular but

this is not your normal

pre-election Budget and these

are not normal times. Coming

out of the global financial

crisis, the Rudd Government is

looking to rein in spending and

get the Budget back to surplus

much earlier than previously

forecast. For his views on

tonight's Budget 2010 I am

joined by the managing director

of Coca-Cola Amatil, Terry Davis. Welcome to the Prime

Minister. Hi. Coming into the

Budget the Treasurer talked it

down, it was going to be

boring, no frills, heavy on boring, no frills, heavy on politics. Certainly the

Government has to be applaud ed

for bringing the Budget into a

surplus at a much earlier rate.

I don't think anybody was

forecasting that it would come

so early. So that is a question. Is there any question

it's too fast? Not really. I

think the issue here is so much

depends on revenue growth.

Certainly the revenue growth

numbers look optimistic. It

relies very heavily on the

commodities boom continuing.

That is the big

question. Indeed, it's a big

bet on commodity prices and the

commodities boom. What happens

if that boom doesn't

continue? How much of the tax

cuts are conditional on the

corporate tax cuts are

conditional on the super tax

gets through the tax Senate,

how much is it conditional on

the amount of the super tax

being collected being the

amount the Government thinking

it is. I think there's still a

lot of water to go under the

bridge yet. Do you think it was

a risky strategy, putting so

much on a commodities boom? The

Government will be measured by

what happens in 12 months time

- I said that last year. And I

suspect the same will occur

this year. If the Treasury

estimates are correct and the

Government does go into the

surplus earlier than expected, it

it certainly gives Somare fire

power to be able to withstand

some shocks coming down the

system later on. As you say,

if. If, of course. You also

have to commend the Government

for the unemployment rates

peaking at - or employment rate

s peaking at 4.75%. That is a

great outcome. There's nothing

more important than keeping

Australians in a job and if we

can get to that level, that is full employment. And

full employment. And that's by

mid-2012. What about the other

forecasts? You have inflation

rung at 2.5%, GDP of 4% by

2011-12, do those forecast s

buoy you? Do you have

confidence in them? It's

difficult to see how an

inflation rate can be so low if

you're at full employment and

have a resources boom at the

same time. But again there are

plenty of leaver Fos tr

Government to pull there. We

haven't seen the last of what

will come out of the Henry tax

review, I am sure. So what is

in this Budget specifically for

business? Not much. If you

really look at the change in

the corporate tax rate, I don't

think that will make businesses

like ours change its policy

about how it invest. Think I the simplifying the tax

returning for low become

taxpayers, that is good but fst

not really going to do anything

for business. So many of these

things don't cut in for two or three years so for the

immediate term I don't think

there is a lot in there for

business at all. Is there

anything that you can put your

finger on that should be there

that is not there. The research

and development tax allowance

is an opportunity missed. One

would have hoped the Government

would have gone the other way

there and made more

encouragement for business to encouragement for business to

apply more funds into research

and development. That doesn't

seem to have occurred yet. Is

that a very short-term

focus? One hopes not. Again,

this is still being debated

about how these incentive s

will be played out. And we will

just have to wait and see. The

Budget was haild by many

commentator s as being the last

chance before the next election

for the Government to provide a

narrative, a theme to lay out and clarify what it stands for.

Do you think this Budget does

that? En, this whole thing is

predicated on the super

resources tax and there's such

lack of clarity there in terms

of what it's ul tullely going

to look like, what the change

at the Senate is going to

impose, what the changes the

mining industry will change, to

look for in consultation, so I

think it is just too early think it is just too early to

say. It is such a big component

of the overall Reserve you

take And we didn't know

anything about this tax until 9

days ago. Does that surprise

you, iffo're talking about

long-term planning? Thinkity

miner s knew that something was

coming. I don't think they knew

the extentor magnitude of it.

And certainly when you've

talked - I've talked to some of

the other see s in the the other see s in the mining companies big lack of concern

about the consultation. You are

not in mining but do you think

the Government risks killing

the golden goose? Again the

argument about the mining boom

putting such a restraint on the

economy in terms of full

employment and the other

pressures on interest rates,

there may well be room for a

resources tafrm, just what the extent of that should be. Thank

you for injoining us. Thank

you. Terry Davis. There. The

Budget has received a mixed

refraction business, with some

concern that the return to

surplus has come at the expense

of tax cuts. Wayne Swan says

it's a budget for the times and

one which reflects the strength

of Australia's economy while

the rest of the world struggles

with the legacy of the global

recession. Greece is a really

stunning reminder that there

are still risks in the global

economy. But there could be no

starker contrast between the

troubles of Europe and our own

economic story. The Treasurer

has heralded the return to

surplus three years early as a

key achievement of the Budget. What is the main game

here? Is it the main game here

to break a land speed record to

returning to surplus? The

Budget papers show tax revenues

are still bear ing the scars of

the global downturn, even

though the outlook is

improving. This time last year,

the Government was expecting a

$210 billion hit to tax revenue

over the next five year, that

is now down to $110

million. But it's the taxes

that are yet to come that most worry the Business Lobby, with

the resources super profits tax due to be introduced in due to be introduced in

2012. New taxes on the business

community, $9 billion projected

tax on the resource industry is

a hit on the industry. The Government is counting an

inflation staying at a

relatively low 2.5% over the

next two years, despite strong

growth in employment and

wages. Do you think it's

plausable for inflation to

remain at 2.5% for remain at 2.5% for year? I

think it will be hard. It's

hoped the repre-dictions will lead to an increased in spending. It's the Government's

prediction dl will be a 2.25%

growth in real jobs in the next

12 months we hope that comes to

pass. The Budget provide further confirmation for

business that the Emissions

Trading Scheme is well and

truly on the back-burner. There

will be no move to legislate

before the end of 2012, and

only then if there are

sufficient international

action. Instead the $650

million that had been allocated

for the introduction of the ETS

will be spentd a on a new

renewable energy Future Fund to

encourage private investment in

wind, solar and biomass projects. The safes from the

delay of the CPRS do appear to

be quarantined for renewable

energy and energy efficiency

but that still is going to be

short of what is needed. A no

frills Budget always risks

disappoint appointing some

stake hold birs while the

Treasurer described it as a

Budget for the time, a

recovering economy might mean

better times ahead. Better

times ahead is what the Budget

forecasts are based on, with un

aument down by mid- 2012. For their thoughts on the Budget, I

am joined by Shane Oliver and

by Warren Hogan. Gentleman,

thank you for - gentlemen,

thank you for joining us. Shane

Oliver, will the market like

this Budget? I don't think

there is anything in the Budget

that will move the market

particularly. So I don't see a

big impact. If anything a

slightly positive impact

because of the fact the surplus

is being brought under control

quicker than previously

forecast. But beyond that there

is not a lot in the Budget for the market to get excited

about. As we talked about in

the earlier interview, much of

the turnaround in growth is

reliant on the resource boom. A

very big bet on commodity

prices? There is inherently a

big bet in there. The Her

Majesty v teps of trade are

expected to go to a new high

over the next four years, based

on China going strongly. The

Budget is underpinned bay

strong world economy. Is that

a safe bet? I think it is. It's

our forecast. There is no doubt

that there is a great deal of

risk out there in the world

economy. What is going on in

Greece right now is a clear

indicator of that. But we think

that we are going to get

through this, that it's a

European issue, they're going

to manage it and then with

higher growth coming out of the

US I think Asia will recover. Shane Oliver, what do

you think about this bet on the

resources sector? Just today we

Somare numberings it of reason

Chan China that underline the

risk of China overheeth. What

could derail that resources

boom? The main risk is China.

China t Chinese economy is very

strong at the moment and the

risk is that that causes the commnese authorities to

overtighten, resulting in a

hard landing in the Chinese economy. I would have to say

the risk of that occurring is

relatively low when you look at

the latest figures on inflation

in China it's they still 2.8%,

that's not something that would

justify the Chinese authorities

crunching their economies. So

there is a risk there. But I

think it's probably in terms of

all the scenarios out there

it's probably appropriate for

the Government to rely on a

strong demand for our resources

going forward. I think that is

a reasonable assumption on the

Government's part. Warren

Hogan, I have to ask you the

slight sli political question,

is there any potential to, as I

put in terlier interview,

potential to kill the golden

goose with this super profits

tax? There's a lot of

uncertainty out there and that

is the key concern for

business. The taxes is going to

take $9 billion in its first

year and if you look at the net

income before tax of the mining

companies in Australia last

year it was about $50 billion:

We think that will get up to

$70 billion by the time the tax

is introduced. It's a big

number. There is a lot of

consultation, debate, but I

think most people think that

some sort of tax is appropriate

but whether this exact one or

the magnitude of it is

appropriate is a question. If

we can turn to the other

forecast in this Budget, Warren

Hogan, especially if inflation

if we're going to have a

continued resources boom and be

at full employment by mid-

2012, can we really have

inflation itting is as low as

Treasury is forecasting? The

condition k "get tough with answer to that is no. You

Wall Street" the economy

accelerating to 4% and

unemployment rates at around 5%

with a once in a 50-year

commodity boom and keep

inflation at 2.5%. Whether it's

for political reasons or their

own Budget numbering, I just

can't see those numbers coming

through. Inflation is going to

be a real issue for us if those

broader economic forecasts come

through. Shane Oliver, how big

an issue do you think inflation

will be? There is certainly a

risk on that front. We've seen

the Reserve Bank progressively

revise up its forecast in

recent times. My feeling would

be probably more towards the

Top End of the target range up

towards 3%. Perhaps the

Government is relying there on

a relatively strong Australian

dollar and I think if the terms

of trade is going to be as

strong as the Federal

Government is talking about,

it's quite like lay we will see

the Australian Government get

through parity in text 12

months which would help to keep downward pressures on

inflation. If anything the

Budget numbers I'd be worried

about is the inflation number

coming in on the upside. Does

that mean higher interest rates

if it does? I think so. The

reality is the Reserve Bank has

taken rates from unusually low

levels back to what they call

the average. My feeling with

the terms of trade boost to the

economy pushing growth up the

likelihood is we have more

upside for interest rates to

go, probably up to 5% by tind

of this year and maybe 7% by

the end of next year. Warren

Hogan would you go to 6% by the

end of next year? We would.

This economy is going to

require some restraint from

Monty policy. The Government

should be commended for getting

the surplus back into balance

but the strengthen willing have

to be done by monetary policy. In terms of the currency trying

to put a cap on inflation it

will have to go well through

parry time - parry tie - parity

to keep the inflation

down. Aside from inflation the

other forecasts you think are

realistic and achievement -

achievable? They're similar to

ours and the Reserve Bank's so

I think the broad tenor of them

is right. There are clearly

risks but if we get through

these events and they're

managed, then I think it is the

right view. Finally, briefly,

Shane Oliver, any particular

sectors that will be affected

by this Budget? I am thinking

perhaps renewable energy with

the Future Fund? Srn certainly

an impact on the renewable

energy sector, always hard to

work out what it is. Mining

sector is well known. The banks

sector will get some benefit

from 2 reduction in tax on

bank, obviously a boost for

superannuation which was flag

add week or so ago. Beyond that I don't see a big I don't see a big impact in

terms of Australian sectors.

One thing that was forgotten

about was the tax cuts. There

hasn't been much focus on them.

But I think most people have

got a remind tler are another

round of tax cuts coming and

some of the other good -

goodies in the Budget for ordinary Australians will add

up to a boost going forward. So

that should help retail

spending. Warren Hogan, would

you agree with that

identification of areas? Yeah,

I think that's right. Thinkity

financial services ser area

will benefit. I think the

strategic focus on increasing

national savings is to be

commended. I think it is a very

good policy initiative and the

Government is taking it

seriously. With an ageing

population these policies are

getting us well positioned for

that. So I do think the financial services industry

will benefit over the years

ahead from that. Warren Hogan

and Shane Oliver, many thanks

for joining us. Thank you.

Coming so soon after the

Government's response to the

Henry tax review, there's an

air of deja vu in the Budget to

help small business, they

include a big lift in the

threshold to instantly write

off small business assets. Nine

days after the Henry days after the Henry tax

review, the Treasurer was back

in the same room addressing the

same journalists and announcing

the same measures for small business. OK, well welcome to

the Budget lockup it seems like

it was just yesterday that we

were all here. The Henry tax

review items for small business

confirmed in the Budget are a

head start on the reduction in

the company tax rate, lifting

the threshold for the instant

write-off of assets to $5,000,

and a single 30% deprecious

rate for all other

assets. That's the good news.

The bad news is the benefits

don't kick in for another two

years. The reason we think the

small business benefits should

have been brought forward is

partly in Budget paper number 1

which says that the economic

recovery will largely hinge on

private sector activity. The

Budget benefit force small

business are dependent on the controversial resources super

profits tax being approved by Parliament. But the Government

has declined the business

community's call to remove that

link. By doing that it's meant

that the delivery of relief to

small businesses on tax, which

is narrated in its own right

will now become part of the

political football that st

debate about the resources tax. Small business should

benefit greatly from the

Budget's more than $7 billion

spending on infrastructure and

training, however the Council of Small Business Associations of Australia says it wants to

see the detail before it's

convinced. There's a lot of

money to be spent. We hope that

small business gets its fair

share of the spend. The Budget

lays the groundwork for

businesses to borrow directly

from small investors through an

expanded corporate bond market.

A key feature will be a short

form prospectus but it will

only be available to listed

companies issuing at least $50

million of so-called vanilla or straight forward bonds. That

means small business which has

struggled to get access to

finance in the post GFC world

will miss out. One of the real

problems with the Budget is there is very little in terms

of the encouragement of small

businesses to try to deal with

the problems of capital access that small businesses had

during the course of the global

financial crisis. The banking

industry will welcome the tax

discount on interest income of

up to $1,000 a year because it

will make bank dep yilts a more attractive investment and

potentially lower the bank's

cost of funds. However, for the

superannuation industry it's a competitive threat which it

will be lobbying Government not

to expand. We think this

Government is committed to

ensuring that saving for

retirement, being

self-sufficient in retirement

and being consumers in retirement is important

particular ly when we have an

ageing population. The Budget

also fore shadow s changes to

the legislation covering both

the GST and capital gains tax

aimed at lowering the

compliance burden for

business. To discuss the

implications for small to

immediate yf-sized enterprises

I am joined by Joseph Healy,

the NAB's group executive for

banking and from Canberra, Alex

Malley, the CEO of CPA

Australia. Thank you for coming

on the program. Joseph Healy,

weave just heard the financial

sector will benefit. Before we get specifically to small business, does this Budget tick

the box of fiscally responsible? I think it

certainly does. It is

conservative and I think quite

a respectful Budget. So I think

I certainly think so. I was

going to say particularly in an

election year there is always a

temptation or a concern that

governments might spend more

but I think this particular

Budget tib s that box of conservative responsibility. It

is not a typical election Budget. Alex Malley, does it

get the balance right between cutting spending and getting

back to surplus? It is

certainly fiscally responsible

and we applaud that. I think

the question about warranting

to repay the deficit three

years early has become almost

an objective that could counter

some stimulus in that ensuing

period. There's comfort around

saying you will return yourself

to surplus but to aim for a

3-year early payment I guess

does defer some of the issues

that business needs now. And I think that is worth debating

and discussing. Such as?

From From the point of view

that some of the deferrals from

business are on the basis they

want to repay the economy wants

to repay itself and get back to

surplus earlier and to a great

extent if you don't allow your

business to be competitive and

give it a certainty about what

it will receive, that does make

it for challenge . It's been

over two years that business

has been looking across all

sectors for some certainty nits

tax policy. And implementing

it. That said, of course, small

business in particular is going

to get an early - get that cut

to company tax rate early. Will

that not count for

something? It It will get that

earlier but it it it's still

not now and there are some businesses that are not

companies. So that won't

benefit those types of organisation. Yes, there are

some benefits and yes they are

in a year's time. But I think

that is a reality that small

business has to with. Joseph

Healy, do you think that tax

break for small business, which

they will get earlier, will

that make a difference to

business growth? Will it help

to push that growth in cred it

y y - credit which Banks like

the NAB are looking for? I

would step back a bit before

talking too much about the tax

breaks for small business and

look at the very healthy

economic outlook that we heard

today. Because businesses of

course need a health yirk

economic outlook to plan and to plan their investment

decisions. So I think for

mitt's very much a glass half

full from a business

perspective. And back on small

businesses I think the

introduction of the early

introduction of these reduced

tax rate and the introduction

of the $5,000 limit for

allowance are two significant

developments, set against a

more healthy economic outlook.

Think businesses will now start

to feel more confident about

making investment decision and

start ing to make sure the

economy keeps on moving. Right

across the economy not just in

certain segments of the

economy. If we look at the

healthy economic outlook, it's

depend on the resources

economy, does that concern

you? We need to diversify our

economy and the GDP forecasts,

the unemployment forecasts and

the inflation forecasts all

suggest an economy that is getting close to full capacity.

So if there is a concern in

tonight's outlook, it's the

risk to inflation and then what

that might mean to interest

rates and of course small

businesses will not want to see higher interest rates be forecasted but that certainly

one of the risks that to my

mind that comes out of State's

tonight's statement. One of the

benefits in the tax is the tax

break that will a I ply to

savings, if that was a gift to

the finance sector, was it a

whack of sorts to accountants

this move to the more simple

tax returns, a tick and flick

method for many Australians?

There that hurt

accountants? We We're very pos

changes that are going to

simplify things. What we need

to remember is over million

Australians have a range of

share portfolios, over $1.6 million Australian s have

investment properties and

increasingly all Australians

look for other sources of

income. So where it's possible

that that can simplify we're supportive of. That we would

like to see the par am terse a

- parameters around that. But

as a profession we've always

been in a position where if

someone can make a $500

deduction and they're better

off for it, that's fine. But if

they need to get some advice to

get a greater deduction, that

is the situation we would like

to support. And that tax break

on savings, do you think it

will make a difference? It will

create a problem for

superannuation accounts? It's a

step in the right direction. We

are aware of the need to boost

savings and . So I think that

is a step in the right

direction. For certain types of

members of the public, bank

deposits are an attractive

investment for them. Made more

so I think by the statement

tonight. Alex Malley, in terms

of the need for policy certainty for business, bearing

in mind that it is not the

usual pre-election Budget, how

do you rate this Budget? Can

you give it a number out of 10?

Does it give you a good out

look of where this Government

is going and what it stands

for? I would say it's a 7 out

of 10 from the point of view

that it's attempt tock fiscally

responsible and we applaud.

That I think the issue of the

repayment of the debt earlier I

think is an issue we need to

keep discuss ing because

ultimately we need to see some

action this year so people get

a sense of where the Government

is taking business. Joseph

Healy? I think it's strong

seven because it supports small

business. We have agreement to

finish on. Thank you very much

for joining us. Thank

you. Thank you. Before we go

a look at the big section of tomorrow's tomorrow's newspapers. The

Australian frurve says the

Government considering

redefining its super profits

tax in the face of the campaign

from the mining industry, but

can't be seen to be backing

down from its now. And the 'Sydney Morning Herald' says

one of Australia's richest men,

Andrew Forrest, stands to lose

a third of his fortune from the

new resources tax. And wrapping

up the markets - the All Ords

fell by more than 1% today

after a waving of selling late

morning. The ASX 200 was also

hit as profit taker s ed in

after yesterday's gains. In

Japan, the Nikkei slipped and

the hang saeng gave up more

than half of yesterday's big

gain and the Dow is trading

down and the FTSE is trade ing

down 1.8%. And that's all for

this special edition of

Lateline Business. I am Ali

Moore. Thanks for watching.


Closed Captions by CSI


21 years after the World Wide Web was born, the Internet has become a global tool of communication, taken for granted by the babies who grew up to be teenagers

and who have never known a world without it. How many hours a day do you spend online? Say about three to four hours. Two to three hours. Yeah, about 2.5 hours. I'd say 2.5 hours as well. Yeah, two I'd say. Probably go like three or four. Maybe just about three. Three.

But today's Internet isn't just innocent social networking. Some young people are bullied online,

while others are exposed to extreme pornography. Interaction between human species and animals.

While hundreds of millions of people use the Internet to educate, communicate and do business, there are those who exploit it to steal people's identities, plan terrorist outrages, and share images of child pornography. It can be a dangerous place. It's about some sick people, some very sick people, um, who are creating images and videos that are damaging to children and probably adults too. There's a fierce debate now over how to police the Internet and keep children safe online. The Federal Government says Australians need a mandatory Internet filter.

No responsible government can sit there and do nothing if there's 355 child abuse websites on the public Internet. Well, we think it goes too far. It's a heavy-handed measure. Ah, our primary concern is that the scope of content which the Government is seeking to block is too wide. Remember, this would apply to every Internet user in Australia, whether they like it or not. Tonight on Four Corners, is a mandatory Internet filter the best way to go? Will it work? And will it be used by governments to protect or censor?

Meet Australia's new generation of computer hackers - ageing pensioners discovering a fresh role in life as the unlikely enemies of Internet censorship. These senior citizens are battling a government proposal which will limit their freedom to choose how to end their lives. Why are you here today?

Well, I'm here because I support Exit and I support the right to choose when I die and how I die. Now websites don't have spaces in them... Oh, yeah. OK. it's just the one word -

In town hall meetings around the country, elderly Australians are attending classes in how to bypass the mandatory Internet filter, should it become law. Most of these folk are members of Exit International, the body set up by Dr Philip Nitschke to offer people information about euthanasia. It's a risky area, legally. There's no legal way you can get help to die. You can't. It's illegal to get help to die. The Peaceful Pill Handbook is Philip Nitschke's primer detailing the methods he recommends peacefully, on their own terms. for those who wish to end their life has been refused classification The book itself

and is banned from sale in Australia.

that the handbook's web address, Last year Exit learned, of prohibited Internet content. was on a secret blacklist is hosted overseas, Because the website can't block it now. Australian authorities