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ABC News Breakfast -

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Live.

Relations withfiy hit a new

low. Top officials from

Australia and New Zealand

expelled from the islands. A huge fire is ex-I think

theished after authorities stop

oil leaking from a leak in the

Timor Sea. Grave fears for nine

people still missing after

their boat sank near the Cocos Islands. And Mark Kavanagh's

cup run eth over - celebration

after Shocking wins the

Melbourne Cup. Good morning.

It's Wednesday 4 November. I'm

Joe O'Brien. And I'm Virginia

Trioli. The top story on News

Breakfast - the Federal

Government is due to announce

its response this morning to

news that Fiji is expelling the top diplomats from Australia

and New Zealand. Fiji's military leader Commodore

Bainimarama has ordered High

Commissioners from both

countries to leave. Commodore Bainimarama has accused

Australia and New Zealand of

interfering in jcial

appointments which refusing to

grand travel visas toey issy is judges. Stephen Smith says

she's disappointed. We made it

clear to Fiji that has is the

case with our travel sanctions

and travel bans that we could

give consideration on a case by

case basis to travel. We've

waived or bans in the past for

humanitarian and other reasons

including medical treatment reasons but Commodore Bainimarama has chosen to go

down this path. It's most

regrettable and in a matter of

minutes and hours rather than

hours and days, I will announce

what Australia's response so

this action is but it's deeply

regrettable and we're gravely

concerned at Fiji's continual withdrawal from the

international community p. For

more Melissa Clarke joins us

now from Canberra. So as we

heard just then from Stephen

Smith, within minutes and hours

we will hear the official

response from Canberra. But

what as you understand it has

brought this on? It seems to be

a couple of things that have

really got the ire of Commodore

Bainimarama and also the Chief

Justice in Fiji who season Australian British citizen.

Empressly it has to do with the

appointment of Sri Lankan

judges to court positions in

Fiji. The Fijiians are saying

that Australia and New Zealand

as well are interfering in

their internal affairs by

essentially whereas the warning them off the job

Australian Government says all

they did was remind the Sri

Lankas, the judges, that there

are travel bans in place that

would affect them if they took

up posts in Fiji. Given those

bans were put in place when the

judges in the courts were

sacked in April this year.

Because of the abgation of the

constitution. So there seems to

be a different interpretation

there of how events occurred.

But there's also the matter of

a case of a child of one

Fijiian judge. Because there

are those snantion place it

seems she had some difficulty

getting a visa for medical

treatment for her 20-month-old

child in New Zealand. Now that

visa was granted and she's

currently in New Zealand

getting that treatment there's

some question over whether or

not the granting of that visa

was delayed or not and that

seems to have annoyed the

Fijiians as well. As we've just

said we're expecting that

official response from Stephen Smith and the Federal

Government within a couple of

hours. But what exactly if anything could Australia

do? Look, it could be that Australia chooses to

reciprocate by expelling Fiji's

representatives from Australia,

that's certainly a possibility

that Australia has, but look,

it may not achieve a great

deal. What we've seen over the

last two years or three years

since the coup in 2006 is that

Fiji Ha Commodore Bainimarama

has responded or dismissed

essentially moves to impose

sanctions against them. They've been suspended from the

Commonwealth of nations and

that doesn't seem to have had a

great deal of ill pact. That

means they can't be involved in

the Commonwealth Games and

other events like that. They've

suffered with their tourism.

They've been excluded from

regional trade talks in the pacer plus negotiations and

it's hard to know what the

Australian Government can do to

try and turn around this

situation. I know you'll let us

the Federal Government decides know as soon as possible once

to announce its formal

response. In the meantime,

there's an interesting argument

going on in the papers and the

commentariat and also at a Governmental level about

whether the Reserve Bank of

Australia and Treasury are in

any way at odds now about the

direction and the status of the

Australian economy? This is

very much being driven by the

debate over whether or not to wind back stimulus and the

suggestion is that with rates

going up that setting monetary

policy in a different direction

to fiscal policy. Even with a

rate rise this is still an expansionary interest rate

level, not until they get back

to levels of around 4 or 5% are

they going to be really neutral

levels so you couldn't say -

policy is monthing in different

directions but we do have the

Reserve Bank Governor and the

Federal Government with very

different percentages on just

where the economy is and where

it's going. The Reserve Bank

Governor Glenn Stevens said he

saw growth to return to trend

rates in in finance fall year

wrauz the budget update has the Government forecasting growth

to be just 1%. While that's

improved that's still quite a different between what Glenn Stevens and what think Wayne

Swan thinks and that's led to

the Opposition making

accusations that Wayne Swan is

just a bit of a mouthpiece for

the Treasury secretary Ken

Henry, which was quite a

serious allegation if they're

suggesting that Wayne Swan is

ignoring the advice of the RBA

to look at exclusively what the

Treasury is saying. And also a

strong suggestion that the tail

is wagging the dog. We'll talk

later this morning. Thank you

so much. In other news this

morning, a huge fire at the

West Atlas oil rig in the Timor

Sea has been extinguished. The

oil and gas leak fueling the

blaze has also been stopped. The West Atlas oil rig has been

gushing oil into the Timor Sea

for more than ten weeks. The

Federal Government is expected

to announce an inquiry into the

incident. Three people are

confirmed dead after a boat

sank in waters north-west of

Australia. 27 people were

rescued after the boat went

done hundreds of nutical miles

from the Cocos Islands. Nine

other people are still missing.

All of the passengers are

believed on the Sri Lankan

aslyum seekers, survivors are

being taken to Christmas

Island. The former Bosnian Serb

leader Radovan Karadzic has

appeared at his war crimes

trial in the Hague for the

first time. Karadovic boy coted

the first three days of the

trial and want morse time to

prepare has defence. He denies

charges of againside and crimes

against humanity relating to

the Bosnian war. Judge have

adjourned the trial to decide

how the case should proceed.

There are signs the Reserve

Bank of Australia will hold off

an another interest rate rise

until early #234e678 year TR BA

lifted the cash rate by 25

basis points yesterday. All

four of the big banks wasted no

time passing on the increase. And the Czech

Republic has become the final

country in Europe to ratify the

Lisbon Treaty. The treaty aims

to streamline decision making

in the EU and is the result of

almost ten years of

negotiations. It's set to

become law within weeks. The

search continues for nine

people missing in seas

north-west of Australia after

their boat sank Sunday night. The Federal Government has

confirmed three poem have been

found dead. While this latest tragedy unfolds the aslyum

seekers on board the 'Oceanic

Viking' are still refusing to

leave in Indonesia. No-one's

getting off the 'Oceanic

Viking', so essential supplies

for the 78 aslyum seekers have

to come on board. The Sri

Lankans are spent more than a

fortnight as a guest of

Australian custom it is West

Australian Premier says it's

time for the impasse to

end. Well I think what we're

seeing here is a fairly indecisive approach. No-one

likes this situation, but it's

there, it's reality, 7 # human

beings on an Australian

Government ship, they are our responsibility to let's deal

with it. There's no such advice

coming from the Federal Opposition leader. I'm not

going to try and be a backseat

driver for Kevin Rudd on

something as delicate as that.

He's got a a big problem there.

He's the PM. He should fix

it Australian and Indonesian

officials want the Sri Lankans

to rejoin the immigration queues in Indonesia but they

want the next stop to be the

Australian maybeland. The PM

isn't budging even as Labor

takes its biggest dive in the

upon polls since the election

in 2007. The decisions we take

on border protection policy are

taken in the national interest

and I know for a fact that they

won't be popular but my yob is

to take the hard decisions and

the tough decisions. The 7

point drop on a two-party

preferred basis occurred during

a renewed debate about aslyum

seekers, but before the latest

incident in which ten pen and

two boys may have died when

their vessel sank. Eight

aircraft are combing a vast

area off Cocos Islands

searching for 11 missing

people. One body was taken

aboard a Taiwanese fishing

vessel yesterday. Two bodies

have been sighted in the water

and the 7 pep were rescued,

month of them by 'Pacific

Dawn'. Liberal frontbencher

Tony Abbott has no problem

connecting the sinking with the

Government. Look at this

terrible tragedy it's unfollowing in the Indian ocean

at the moment and you've got to

sie that this is a

comprehensive failure and it's

all the PM's fault. Mr Abbott's

clarified his remarks saying

the sinking is the PM's fault

as the maker of what he calls

bad immigration policy. Do you

have aslyum seeker blood on

your hands? I think the remark

s reflect underneath them the

complete absence of border

protection policy. High level

talks are under way in Jakarta

between Australia and Indonesia

while the outcomes for the

latest arivals and survivors

appear all at sea. It's taken

more than ten

be the worst oil zaser in

Australia's history and it's

fuelled an environmental

backlash against industrial

development off the coast. It

was the news company executives

has been hoping for.. I can confirm that today we have

stopped the flow of oil and gas

from the leaking well. 3500

barrels of heavily mud and

brine were poured into a

relikely well stemming the flow

of oil and gas and stopping the

raging fire. For the operator,

PTTEP Australasia, the

successful operation was an

immense relief. The challengers

like ahead. We dot not

understood still the

significant increased lo

jirsical challenges and hazards

of the work now required in the

wake of the damage caused by

the fire to the wellhead

platform. The Tam of three

engineers will board the well

head platform and physically

put a plug in the leak in the

coming days. The Federal

Government has been under

increasing pressure over the

spill and was pleased by the

news. We will assess the cause

of the incident and then

lessens to be learned a with

will strengthen the law if need

be. The company wouldn't

speculate about the cost of the

incident or the Creanup of the

spill. But it says it will

continue to work from the mon

Tara oil field in if future. At

least 12 people have died after

a passenger train collided with

a freight train outside the

Pakistani city of Karachi. The

goods train was at a stand

still in a station on today

researchy's outscirs when the

Allama Iqbal Express slammed

into it. There was a big bang

at exactly 11 o'clock this

resident says Tim pact sent

passenger on the today

researchy bound express flying

and left wreckage strewn across

the tracks.

TRANSLATION: I was lying on a

berth on the train and I fell

down. After that I really don't

know how they rescued me. The

collision derailed one coach of

the passenger train and left

another badly damaged.

Emergency services were quickly

on the scene using blowtorches

to gain access to the trapped

passengers before pulling them

to safety.

TRANSLATION: One carriage of

the train crashed then it all

went dark. A boy was sitting in

front of me ch it was crushed

under the carriage. While

nothing could be done for some

of the passengers treatment was

at hands for the dozens of

injury. At this stageral

railway officials say it

appears the driver of the

express ignored a red traffic

signal and caused the accident.

An investigation is

expected. Let's take a look at

the front pages of the major

newspapers around the country.

And Melbourne Cup winner

Shocking is just on a few

othem. Winning jockey Corey

Brown is on the front page of

the 'Australian' which says it predicted the win earlier in

the week. The paper also reports on the Reserve Bank's

rate rise. The 'Sydney Morning

Herald' also carries the

stories of Shocking's cup win

and also the quarter percrept

rise in interest rates. Shock

and awe is the headline in the

West Australian, it reports how

Shocking powered home to win

the cup and the $5.5 million

prize. Jockey Corey Brown is a

shock star stays 'Herald

Sun'. It's going to continue

for weeks The also has the

story of Corey Brown victory

following his narrow defeat

last year. The 'Age' leads on Shocking epic Melbourne Cup

victory and it really was a

heck of a ride. The Victorian

Government's glen coal gamble

also features. Mark Kavanagh is

kissing the cup with his

partner and tells of his rags

to riechst riches story. Mark

Kavanagh is also on the cover

of the Adelaide 'Advertiser'

and the paper reports too on

South Australian Treasurer

Kevin Foley's bottle with depression. The 'Mercury' calls

Mark Kavanagh and Corey Brown's

win simply Shocking. The paper

also says Tasmanian Premier

David Bartlett acknowledges a

current land tax regime is

unfair. Shocking's cup win is

on the cover of the rate rise

along with the rate rice. The

'Financial Review' has a story

about the pressure the

Government has to bind back

stimulus spending. And finally,

guests were mugged at a cancer

fundraiser for a 10-year-old

girl reports the 'Northern

Territory News'. Now if you'd

like to send us your feedback

on any soft stories we're

covering today -

Take look now at the top

stories on News Breakfast - the High Commissioners from

Australia and New Zealand have

been expelled from Fiji. Fiji's military leader Frank

Bainimarama has accused both

countries of interfering in judiciary appointments by

refusing to grant travel easas to Fijiian judges. Stephen

Smith says he's disappointed by

the move. The Federal

Government is expected to

announce an inquiry into a huge

fire at the West Atlas oil rig

in the Timor Sea. The blaze was

been extinguished and the oil

and gas leak fuelling the blaze

has also been stopped. The West

Atlas oil rig has been gushing

oil into the Timor Sea for more

than ten week and three people

are confirmed dead, nine others

still missing after a boat sank

in waters north-west of

Australia. 27 men believed to

be Sri Lanka aslyum seekers

were rescued after the boat

went down off the Cocos Islands

and they're now being taken to

Christmas Island. A year ago

today President Obama was swept

to power in the United States

promising to change America. He

was making historic ITV in the

process wx his election came

high expectations and questions

are now being asked if Barack

Obama's achievement have

matched the rhetoric. An

election night last year,

Barack Obama made it clear. He didn't want to just make

history, he wanted to transform

America. It's been a long time

coming but tonight because of

what we did on this day in this

election at this defining

moment, change has come to

America. Barack Obama didn't

take office for another 2.5

months but the anniversary of

that election night exhiliration is giving

Americans a moment to

reflect. People are a lot more

hopeful. Certainly it's come

down since his election when

everyone was so high after the

election but he's still - I

think it's all pretty positive

in the country at least. This

woman and her children are

visiting Washington from Idaho,

the first time they've been to

the nation's expect A year ago

she joined the millions who put

their faith in the change

Barack Obama was promising. I

think he's doing well and I really do not appreciate all

the negative media coverage

that he's gotten. Eit's too bad

that the whole country can't be supportive But even households

are divided. We actually were

split. I voted for President

Obama and my husband voted John McCain. Tricia Wright is a

nurse, her husband is in sales.

She thinks the economy and two

wars is a lot for the to deal

with. We tend to see things a

little bit differently but I

think he's doing a nice job,

personally, financially, I

think we're taking a little bit

more of a hit than what we

would want. Oil not saying

anything bad about President

Obama but I believe that he has

taken this country in a

direction that now he needs to

step back and fix what he has done, because I don't

particularly like the way that

the country is go right now

with all the spending he has

done. This is a close race .

We're on the verge of making

history The anniversary has

triggered the release of prime

time documentaries and

commentary from both sides of

politics. This man left Fairfax

immediate qula in Australia to

become a senior adviser to the

chairman of the house energy

and committee. It's been

surprising to see the high

degree of bipartisanship and

the vociferous decibel level of

political debate in Washington.

It's just sort of staggering so

yeah, there is no quarter given

and no wiggle room for the.

There - it's just a head-long

attack day in day out by

Republicans and Democrats over

political turf and we're seeing

its as this by-elections

occur. Today I'm standing with

President Obama. Americans are

voting for Governors in two

states and if the Republicans

win both, it could be seen as a

referendum on the

presidency. In historical term

term the off year is not

important for the mid term bus

again given the noise level and

what people will make of it and

cable television and chatter

there will be a lot to be said

by people who believe that he

has peaked and is on his way

down. Jeremy mayer is an

associate profit in the school

of public policy at George

Mason University in

Washington. The bloom is off

the rose for Barack Obama but I

think mosts in the last 25

years would trade places with

Obama inters of his rankings of

public approveral right now I'm

pleased to be joined this

morning by... The President's

approval rate is just above

50%. He Fay big decisions on

Afghanistan, but Jeremy Mayer

thinks it will be domestic

issues that push those poll

numbers higher. I don't think

Afghanistan is the largest

challenge for this. I think if

Obama can do whats have been

doing since Harry Trueman and

get America a national hell

care. That will be the single

kooex of his presidency. I

would put Afghanistan second to

that domestic challenge. Health

care bills are now before

Congress and the wants to sign

off on reform before the end of

the year. The changes not a

given, it's got to be worked at

and it's going to be hard and

that's what the is working on

each and every day The may

still be looking for change,

but the last 12 months have

talking him it isn't easy to

come by. He has until this time

next year when the mid term

elections are head to convince

Americans he can still live up

to those lofty promises. David

Miliband will join us in the

next half hour to talk about

the anniversary of Barack Obama

but also there's very important

electoral races but conducted

today in America and they're

being seen as a referendum on

Barack Obama's first year in

office A bit of a test for him.

Now as we've been reporting

this morning, Australia has

experienced its second

consecutive interest rate

rise. Saum Eslake program director of Melbourne

university's graton institute

says the decision to raise

residents has helped the

economy remain strong when many

other trading partners have

faltered. The longer that rates

are left at exceptionally low

levels, the greater the risk of

an acceleration in inflation,

and of the formation of asset

price bubbles ch after all one

of the causes of the bubbles in

other countries that helped

precipitate the financial

crisis was that in the US and

Europe and perhaps even in

Japan, interests were left too

low for too long, after a

milder than expectedry kretion

at the beginning of the decade

following the tech wreck, one

of the reasons why Australia

didn't have the same extent of

imbalances and bubbles within

our economy and helps have done

rather better than most other social security because the

Reserve Bank was one of the

very few central banks in the

advanced world not to have made

that mistake at the beginning

of the decade. Saulest lake

speaking there a British

Chinese consortium has signed a

deal with Iraq to develop one

of the biggest oil fields in

the world. BP and Chinese group

CNPC have a contract to start

production at Iraq's Rumaila

oil field. The deal will 'the

field more than double its

output to 2850,000 barrels a

day. The 20 year deal is worth

$50 billion US and it's a big

step forward for Iraqi oil industry which has struggled to

main taken its output since the

2003 invasion. We'll take a

look at the markets now -

Vanessa O'Hanlon managed to survive cup yesterday and she'll be back with us in just

a moment for a look at national

weather and also we'll have a

ve view of some of the newspapers. This morning we'll

be joined by Michael Gawenda, Director of the Centre for Advanced Journalism at

Melbourne University. But now

with sport and some cup washup

here is Paul Kennedy. Thank

you. Good morning. The winning Melbourne Cup connectionses of

Shocking spent the night

celebrating their amazing

victory. Trainer Mark Kavanagh,

jockey Corey Brown and owner

Lawrie Eales all said it was

hard for them to fathom but

they'd won the big race. Eelz

bought Shocking as a 2-year-old

for $64,000, the 4-year-old

stallion has now delivered $3.3

million in prize money. And

we'll hear now from the owner

but firstly from Mark Kavanagh

and thin Brown. It hasn't sunk

in yet. Everybody wants to win

the Melbourne Cup. I was a

little kid at school and they

stopped school work and

everybody in Australia is, you

know, watches the Melbourne Cup

or has a bet and does something

for it. It's really the race

that stops the nation and gee,

it hasn't sunk in that I've won

it. At the enof last year when

I did run second I watched it a

fair few times. It was always

in your face because they're always showing the Melbourne

Cup on TV especially leading up

to the spring. I'm just glad

that I got me own. I thought he

might be a good miler or 2,000m

horse, anyway, so yeah ai

bought him and I never dreamed I'd within the Melbourne Cup

with him. I can remember as far

as back as Just a Dash thinking

and I think I had my first belt

and win on Black Knight and

ever since then I always had a

bit of luck on the betting othe

Melbourne Cup and I always

dreamed of having a Melbourne

Cup runner let alone winning

it. Beyond my wildest

dreams. Lawrie Eales there,

we'll speak more about the

Melbourne Cup team in just a

few moment bus we'll show you

some picks yesterday from the

baseball, the world series

continues, that's Chase Utly

hiing a home run for the Philadelphia Phillies. The

series was tied at 3-2 after

the fellies won and there he

is, a quite assuming man has

tied for the record for the

most home runs in a world

series with Reggie Jackson. The

series will now move back to

the Bron ch and New York is

still the favourite to take out

the world series and I thought

that was a nice picture there.

The young fella there in the

stands. Must have been a good

felling to hit those home runs

in front of the home crowd.

Joe, you wanted to look at Mark

Kavanagh's sell prations of the

race. Corey Brown celebrations

were great but mark also

jumping up and down at the

fence there at the end. See him

just going crazy here and I

don't think I think that's the

stroper. I thought she was

going to jump. She gave the

most gorgeous speech too. It

was all about four words..

Thank you to the trainer, thank

you to owner, fwoob. She was so

overcome with emotion and

nerves I think a horse trod on

her foot. She's nursing a sore

foot. Lawrie Eales - there he

is there celebrating his win.

He's an interesting story. He's

made all his money in earth

moving. He owns a hire and

heavy equipment company. Up in

Cairns? I think it is. And he's

lived in several states but he

is originally from Cairns and

was a labourer up there and a

rodeo rider I read this

morning, so he vent youred into

the horse game and bought a horse with another few people

and it didn't do any good and

so he's decided to take it on

himself, he chose Shocking at

the magic millions I think in

the Gold Coast and he chose who

begot you and the two horses

have made $6 million in

Brisbanor Brisbaneman and

they've been both invited to

race in Dubai. I guess hose a

name we'll more and more about.

The more money he gets the more

he can go out and select horses

and if he keeps selecting them

as he's done, then he's on a

sweet road paved with gold

maybe. He's got a goody. Thank

you. News Breakfast can be

watched live on the web from

anywhere. It was ridiculously

hot in Sydney yesterday. Here

to tell us all about it is Vanessa O'Hanlon? Good morning.

It sure was. It got up to 37

degrees yesterday before the

cool south-westerly change

moved through N Bourke it did

get down 40 degrees. If we take

a today's image the cloud

that's extending from NSW to

northern Western Australia is

carrying showers and storms, a

few showers for Victoria and

Tasmania from low cloud and

brisk south-westerly winds.

Cloud is patchy over the west

coast but there's little rain

in that cloud. The trough will

cause showers and isolated

storm over the eastern and no

forn parts of the state. Very

heavy rainfalls are for caste

for the north-east and they'll

increase also for the

south-east of Queensland. For

southern Victoria and Tasmania,

those cool south-westerly winds

will maintain showers and for

WA the trough is deepening,

that's triggering showers and

storms. Further to Queensland -

The top story on News

Breakfast - diplomatic

relations with Fiji have hit a

new low. Commodore Bainimarama

has expelled Australia and New Zealand's High Commissioners

from Fiji. Fiji's leader has

accused us and New Zealand of

interfering in judiciary appointments by refusing to

grant travel visas to Fijiian judge, Commodore Bainimarama

has given the Australian High

Commissioner James Batley and

his New Zealand counter-part 24

hours to get out of the

country. I wish to declare

that... I have told the

Minister of foreign affairs to

issue communication to the

Australian and New Zealand

Governments that their

respective heads of mission are

to be gone within 24

hours Commodore Bainimarama has

become increasingly frustrated

with Australia and New Zealand

when he addressed the United

Nations recently, he accused

both countries of sabotaging

Fiji's efforts to be part of

United Nations peace keeping

missions. The Chief Justice of

Fiji Anthony Gates accused

Australia and New Zealand of

trying to interfere with the

judiciary in Fiji because

consular officials from both

countries had contacted Sri

Lankan judges who are on their

which to Fiji to take positions

on the bench that they would be refused permiss to visit

Australia and New Zealand if

they took up those

positions. It's not the first

time that New Zealand's chief

diplomatic representative in

Fiji has felt the wrath of the

Commodore. New Zealand has had

High Commissioners expelled

were but James Batley the Australian High Commissioner,

will be the first Australian

High Commissioner thrown out by

Commodore Bainimarama. Sean

Dorney reports there. What do

you think? about the acts that

Commodore Bainimarama has taken

there? Let uknow. In other

news, a large fire at the West

Atlas oil rig in the Timor Sea

has now been extinguished. The

oil and Greenpeace leak fueling

the blaze has also been

stopped. The West Atlas oil rig

has been gushing oil into the

Timor Sea for more than ten

weeks and the pgt is expected

to announce an inquiry into the

incident. Three people are

confirmed dead after a boat

sank in waters north-west of

Australia. 27 people were

rescued after the boat went

down off the Cocos Islands, but

nine others are still missing.

All of the passengers are

believed to be Sri Lanka aslyum

seekers. The survivors are now

being taken to Christmas

Island. The former Bosnian Serb leader Radovan Karadzic has

appeared at his war crimes

trial in the Hague for the

first time. Karadovic boycotted the first three days of the

trial and he wants more time to

prepare his defence. He denies

charges of genocide and crimes

against humanity relling to the

Bosnian war in the 90s. Judges have adjourned the try to

decide how the case should proceed. This are signs the

Reserve Bank of Australia will

hold off on at interest rate

rise until early next year. The Reserve Bank lifted the cash

rate by 25 basis points

yesterday. All four of the big

banks passed on the increase

and economists will be watching

retail trade figures out later

today to assess when the next

rate rise could be. Young

indigenous Australians are 30

times more likely to be held in

detention than the their non-indigenous counter-parts according to new retch. A

report from the Australian Institute of Health and

Welfares are states that

Aboriginal and Torres Strait

islander youths are nearly 15

times for likely to be placed

under community supervision.

Most of those under supervision

or in detention are young men.

As we've been mentioning this

morning the Reserve Bank has

delivered Australia's second consecutive interest rate rise. The Government says the

increase is the price to pay

for economic recovery. Shocking

drawing away Kevin Rudd's cup

day flutter hit the

jackpot. It's mine. But for the

nation's home owners, the first

Tuesday in November brought no

such luck. Reserve Bank board

decided to lift rates by one

quarter of one%, to 3.5%. It's

the second month in a run are

row there's been a 25 basis

point lift and many race goers

are punting that it won't be

the last. I'm worried that

they're going to go up, yes. If

it keeps going up, it's

obviously going to be real pain. The experts don't

disagree. Rate also go up

further in 2010, and we would

expect that whilst the market

is expecting they'll go as high

as another 2%, we would expect

it will only be around 1% in

total. Today's decision is a

tough one for many Australian

families and businesses. But I

think it is also another

indication that rates could not

stay at 50 year emergency lows forever. The Reserve Bank

itself is saying as much. In

his statement, the Governor

points out that -

With the risk of serious - The political

translation... The fact is our

economy is recovering. Because

our economy is recovering,

interest rates cannot stay at

50 year emergency lows forever.

And anybody who claims they can is simply treating the Australian public like

mugs. They are going up faster

and higher than they would

otherwise need to be if the

Government was more responsible

in terms of its

spending. Managing the economic

crisis has been a challenge for

Australia, for the Government

and for the Reserve Bank.

Managing Australia's longer

term economic recovery is also

a challengement There's no

challenge for the banks though in responding to the Reserve

Bank decree. Within minutes of

the official announcement, Up

25. The ANZ had moved. Within

three horse, all of the big

four had passed it on. The

Government does understand how

important interest rates are to

households and also to

businesses, for someone with an

average home loan this will

moon an increased payment of

something like 46 dollars per

month. But even that family

would still be something like

$662 per month better off over

all. The next big bet is on

when the Reserve Bank will move

to lift rates again. Economists

are quited over the chance of a

rise in December but with no

meeting scheduled for January

the odds are shortening for

another rise the month after. I

think the rate hike will be

concentrated in the first half

of the year and by then it will

be pretty clear that the

Australian economy doesn't need

any higher interest rates The

punters won't be alone moping

so. Today marks one year since

US President Obama was elected

of the United States. Voters

are het Edding oto the polls in

the states of New Jersey and

Virginia to elect new

Governors. The ab's Lisa Miller

joins ust now from Washington.

Good morning. Good

morning. Now, Lisa what's the

sense from of wrom's effort

over the last year? Well it

depeps who you talk to. I have

had the experience of wandering

& Capitol Hill yesterday and

ran into various tourists

including a couple from

Wisconsin who you hard from

earlier who had split politics within their household, so if

you look at a country being

split you look at families

being split and households

being split, when it comes to

Barack Obama, I mean, he

started that year when we look

back on that election night, of

course he wasn't for another

2.5 months but certainly

everything he said was

Americans were hanging on every

word so it was as if he

virtually was a year ago. And

he had the economy and two big

wars, Afghanistan and Iraq, to

deal with. Now, most people are

giving him pretty good marks

these days on the economy, that

America is finally pulling out

of the recession. Of course,

Afghanistan and Iraq are two different stories, Afghanistan

possibly the biggest headache

he has. So when we look at the

last 12 months, he's made

progress in some areas and

still hoping to make more

progress in those other

areas. The economy was probably

the biggest challenge facing

him when he took the

presidency. Does that positive

economic news of the last few

weeks mean he's turned a corner

in relation to the economy in particular? Well, look, the

problem with the economy and

you and I have talked about

this before, is that the

unemployment rate lags so badly

behind the economic growth, so

while America is now tentively

moving out of the recession

it's been in, unemployment is

till 9.8% and the White House

keeping warning people that it

could rise over 10%. It could be another 12 months before

that's turned around so it's

certainly - I mean, the White

House is certainly happier to

have those kinds of numbers

with the GDP economic growth

than to see it going in the

other direction, but they're

well aware that Americans are

still hurting and when you talk

to people they will say, "Look

we're happy with a lot of

things that Barack Obama has

done over the 12 months, but as

far as the money that they have

in their wagget, it's not as

much as they would have hoped

perhaps that when Barack Obama

had talked about transforming

America bringing in enormous

amounts of change, that they were hoping that perhaps there would have been more progress

made on the economy." But

interestingly, a year on we've

got Americans voting again

today as you say in New Jersey

and Virginia, and, you know,

the alists are wondering

whether this is going to point

to Barack Obama's popularity.

The White House of course is

denying that these election

results will have any impact or

say anything about Barack

Obama, but of course when you

look at these two States that

both have had democratic and Governors and both could fall

to the Republican Party, well

it's very difficult if that

happens for the White House to

convince people that it's not a message to Barack Obama that

the exhilaration that people

felt a year ago perhaps is

fading and that they are giving

him a little mark out of ten

when they go to the polls today

here in America. And Virginia

will be particularly interesting because it's a

state which unexpectedly turned

blue at the last

election? Yes,. Well, I only

got its first democratic

Governor in 2005 and that was a

precursor to what we then saw

with the Presidential votes

last year. Barack Obama taking

Virginia for the first time in

40 years or so and of course

turning it into a swing state

on a national basis. What's

interesting is that we've got

the mid term elections this

time next year and that's when

the real test will be of the

first two years of Barack

Obama's White House, and when

you look at what happens with a

State like Virginia and just

whether the White House and the

Democrats can campaign well and

make the most of a state that

has become a swing state, and

hang on to it, could be very

very telling abhow they

organise their campaigns and

what will happen this time next

year when all of America makes

some decisionings on how they

think Barack Obama heeb

travelling. Disglsh has been

travelling. The Czech as signed

the Lisbon Treaty. Which will reform the European Union

P That removes the last

obstacle to the treaty coming

into force and follows a ruling

by the Czech Constitutional

Court that the treaty doesn't

conflict with the country's

laws. The BBC's James Robbins

reports. You might have thought

this controversy treaty was a

done deal almost two years ago.

When all 27 member countries

came to Lisbon to sign up to

what they'd agreed after years

of haggling and argument. But

there was one clue then to the

trouble ahead - Gordon Brown

missed the signing. Britain

always in a class of its own

within Europe, looked less than

enthusiastic. In fact, it's

been others who have held up

the implementation of the

treaty and kept its very

survival in doubt. Today the of

the Czech Republic finally

agreed to sign ratification by

his country, the last to do so. Last month the people of

Ireland reversed their

objection to the Lisbon Treaty

in a second referendum they

said yes. So seven years of

debate about reforming the

European Union are now ending.

The treaty will be in force

from 1 December. The Lisbon

Treaty is intended to

streamline decision making, it

creates a new post of of the

European council to increase

you're's influence in the

world, some national vetoes

will be lost p and critics fear

more power will move to

Brussels, however the treaty

also gives members of the

European parliament MEPs, more

power to scrutinise

legislation. Today as it became

clear the treaty was secure, Gordon Brown gave his

judgment. I hope that Europe

can set aside years of

constitutional and

institutional debate, years of

having to deal with

institutional issues and that

we can move forward and deal

with the main issues that the European Union must now face

and that is how to create jobs,

how to build growth, how to

tackle climate change, how to

build greater security for the

peoples of Europe. And in

evening the conservatives have

confirmed they'll will no

longer campaign for a

referendum on the Lisbon

Treaty. What has happen today

means that it is no longer

possible to have a referendum

on the Lisbon Treaty. We have

campaigned for that referendum

for many year, we believe passionately that there should

have been a referendum so that

the British people could be consulted. Britain's

relationship with the rest of

Europe certainly remains an

issue for many voters. As this

admittedly unscientific samp

ofrl opinions tonight

suggests. I'm very pro

Europe. From the little I know

about it, it's a nonsense, it

should be thrown out. I have

absolutely no idea what is in

it so I have no opinion at

all. It's 20 years this month

sense the Berlin Wall came

down, enning the division of

Europe east and west. That was

the seismic political event

which produced first and much

expand European Union and then

the years of argument about a

new treaty for that union. A

treaty which is now in

place. You are watching News

Breakfast. The top stories this

morning - Fiji has expelled

Australian and New Zealand High

Commissioners. Fiji's military leader Commodore Bainimarama

has accused both countries of

interfering in judiciary

appointments by refusing to

grant travel visas to Fijiian

judges. The Foreign Affairs

Minister Stephen Smith says

he's disappointed by the

move. The Federal Government is

expected to announce an inquiry

into a huge fire at the West

Atlas oil rig in the Timor Sea.

The blaze has been ex-I think

theished and the oil and gas

leak fueling the blaze has also

been stopped. The rig has been

gushing oil into the Timor Sea

for more than ten weeks. Three

people are now confirmed dead

and nine others are still

missing after a boat sank in

waters north-west of Australia.

27 men believed to be Sri Lanka

aslyum seekers were rescued

after the boat went down off the Cocos Islands. They're

being taken to Christmas

Island. The papers the day

after the running of the

Melbourne Cup and we're joined by Michael Gawenda, Director of the Centre for Advanced

Journalism at Melbourne

University. Michael good morning? Good morning Did you

back the whenner? No, I didn't.

I had about 15 bets on the cup

actually. Well close to 15.

Well, if you read the tipsters,

there's hardly a horse that

they say has been got a chance.

Every horse has got a chance. I

kept trying to eliminate horses

that had no chance and you

ended up with 15 that had a

chance. You always end up with must consider and many must

collide so you include

and... Did you even git a

place? Yeah I got a place. But

I didn't cover the outlay. I

remember - I recall yesterday

that a very good friend of mine

my punting mate always naks

point that when it comes to the

Melbourne Cup he says that

"Some dog of a horse wins it

you never hear from the horse

again." I remember back in 1949

when you were editor of the

'Age' and we were all watching

the race in on the 'Age' floor,

and Jeune won the cup and it's Jeune wins the Melbourne Cup

and you looked at the screen

and you said can e?S what?

Which worse won it. I think

it's become maybe I'm Manlying

this but it seems to have

become a bigger and bigger

event every year. The amount of

coverage in the lead-up to it

is enormous. And justified do

you think? No. A lot of it

suspect justified. I suppose

it's good fun. I don't want to

be too serious or silly about

it but a lot of it is kind of

over the top. I think what's

happened is that the media have

realised that the cup and the carnival, it's the dem graphy

they want to get. For some -

over time young people have got

interested in racing and it's the demographic they all want

to get. Have a look at the

papers today, they're full of

picture of young people Let's

go to a couple of the front

pages today. What have you

component for us? Obviously in

Melbourne, - well everywhere

the Cup maybe the main picture

story and lots of plays on

Shocking, Shocking this, We've

got the front page of aumg

there? Shock of new. I suppose

that's not too bad It's not one

of the better once?. It's not. The Australians was very

strange. I didn't get it when I

read it. If you have a look at

the 'Australian's one. It was

very strange. There's the

'Australian'. It's not - shock

therapy cure for winners flashbacks? Really, what is

that That's not bad because it

refers to Corey Brown's, you

know, many troubles on a long

road to trying to win a

Melbourne Cup so I don't think

that's too bad. I need to get

it straight away. Let's put up

the 'Herald Sun' and I reckon

of the frumg you get that

headline. There you go. Shock

star. That's a ripper. There's

there's the little photograph

of two young women there for no

reason. There's no caption,

there's no explanation of what

they're there That's goes to

what you were saying before? They're quite

attractive. Nothing wrong with

that. You sound like a real

fudy duddy.. If you look, it's

really interesting that that's

what happened with the Cup.

It's become a social event

bigger, bigger every yearers

and it's younger and younger

every year The money

Michael When I was interested

in racing when I was younger,

it was kind of an an old blokes

thing. The track wasfall of old

middle aged people, men

basically. When I first started

going to the races there were

barely any young women wearing

pretty hats. It was a whole lot

of bloke es. You had lots of

room and you could hang by the

mounting yard. Tomorrow, isn't

it oaks day tomorrow. Full of

young people. There was some

serious news though There was

some serious unews. We got the

rate rise of yesterday to talk

about? I think that the rate

rise comes after the poll, so

if you look at the national

papers, and look at the

'Australian', it plays the rate

rise as coming after the poll

and suddenly Rudd's under

pressure. The Government is

under pressure. The stimulus

which they've never supported

the omplt z, has to be wound

back. I think the at ferrics of Federal politics is about to

change. To what? , well, Rudd's

not going to get the run it's

had up to now. If those polls

are right, if that poll, that

Newspoll is right and there's a Nielsen poll out next week in

the 'Age' and the 'Sydney

Morning Herald', then the

coverage of the Government is

going to change. The fact is

that the media basically hangs

on the polls in term of how Governments and Oppositions are

doing. When you think about,

nothing has changed as far as

the Opposition is concerned.

They're the same mess that they

were before, but suddenly

they're neck and neck and so

things are going to change. It

is interesting that the Oz goes

with the stimulus or all the

other papers, the 'Age', the

tabloids certainly, go with the

fact that your mortgage is

going to go up. The paradox for

the Government is that the

economy is improving but it

will have to deal with these attacks from the Opposition

about it being the cause of the

interest rate rises? Absolutely

and the fact is it's hard to

sell an interest rate rise. You

can see yesterday, today, Rudd

and Swan are going with "We had

record low interest rates, absolutely, couldn't stay

there." That's not what people

hear. People hear interest

rates are going up. John Howard

has been given the shoe

treatment. The international

sim poll of scorn. Talk us

through this one? That was the

most interesting story in the

papers today This is in the

'Australian' In a speech at a

Cambridge university, for

heavens sake - in the middol of

a speech, some guy - it

described, a guy with a pony tail, Naturally... I don't know

whether that's meant to suggest

he was an Australian Rat bagary

I think. Was screaming out

racist, racist, at John Howard.

And then took off - he must

have been an Australian. Took

off his Doc martens which is

pretty heavy. And threw it at

John Howard Did it connect? No.

It missed but apparently he

didn't duck, it just missed. He

was so shocked I think by a Doc

Marten heading his way Maybe

it's a PR stunt by the company

mentionsomed? It could be but I

thought it was an interesting

story. Aye Hindmarsh maize mate

gosh have both had indefinite

setting. Except deposh does

have the most amazing reflexes

we have to give him that twice

in a row he ducked? There was

only one Doc Marten And he certainly managed to

duck. Here is Paul Kennedy

with a look at sport. Thank

you. We'll just go to the Melbourne Cup now where of

course looking back on the race

yesterday a couple of nice

pictures of the celebrations

and one hard working employee

at the track that daugt your

eye, Joe, we can have a look at

Mark Kavanagh now and the

strapper, celebrating in just a

few moments. That's the race

there and Virginia we'll talk about those international

horses a little ulater that you

wanted to break down but this

is the not I think that captured everyone's imagination

yesterday and you watch the

celebration there from the

trainer Mark Kavanagh and Joe

talk us through what happens

after this? It was just a

fantastic moment. You're seeing

the xaubance of the celebration

everyone going crazy and then

this woman pops out of nowhere.

To get the sponsor's cap on his

head and look at her efforts.

Whack. Whack, whack. She's got

a job to do. Just a little bit

unfortunate I think. It was a

great moment. Then she moves

him off. Right we've got to get

over here.. He doesn't look too

worried though. Thank you for

that Paul. Now here's Vanessa O'Hanlon with a look at the

weather. Thank you. Through NSW

a southerly change came through

last night, it's bringing

showers, very heavy rain is

forecast from tomorrow and into

the weekend for the north-east.

From today's satellite the

cloud extending from NSW into

northern Western Australia is

carrying showers and storms, a

few showers for Victoria and

Tasmania from low cloud and

brisk south-westerly winds and

cloud is patchy over the west

coast but there's little rain

in that cloud. The trough will

cause some showers and isolated

storms over the eastern and

northern parts of the state. By

Friday the heavy rain will

spread further north. For

southern Victoria and Tasmania,

those cool south-westerly winds

will mane taken showers and for

WA is prove is deepening dark

will trigger storms and

showers. For Queensland -

Still ahead on News Breakfast

- we'll camp one yesterday's

Melbourne Cup winning jockey.

Corey Brown. I doubt that his

feet have even touched the

ground yet. That's coming up

and that as well as lots more

on News Breakfast. We'll see

you after this short break.

This Program is Captioned This Program is Captioned Live.

Relations with Fiji hit a

new low. Top officials from

Australia and New Zealand have

been expelled from the

islands. The huge fire is

extinguished after authorities

stop fire leaking from a rig

from the Timor Sea. Xwraifr

fears for nine people still missing after their boat sank

near the Cocos Islands. And

Mark Kavanagh's cup run eth

over - celebrations continue of

Shocking wins the Melbourne

Cup. Good morning. It's

Wednesday 4 November. I'm Joe O'Brien. And I'm Virginia

Trioli.. This is our top story

on News Breakfast - the Federal

Government is due to announce

its response this morning to