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Inflation accelerates out of RBA's target band

Inflation accelerates out of RBA's target band

The World Today - Wednesday, 23 April , 2008 12:11:00

Reporter: Stephen Long

LISA MILLAR: And starting with the economy, new figures show a sharp acceleration in the pace of
inflation. Consumer prices rose by 1.3 per cent in the first quarter of this year.

That puts the annual inflation rate at 4.2 per cent, well above the Reserve Bank's two to three per
cent target range. And that appears to put the possibility of a further rise in rates back on the
agenda.

Joining us to analyse the news is economics correspondent, Stephen Long.

Stephen, that kind of rise in the inflation rate is a concern?

STEPHEN LONG: A big concern, I think. You have to go back to the period when the GST was introduced
to see a headline rate of inflation that was higher than this, Lisa. And if you leave aside that
one-off spike with the introduction of the GST in 2000/2001 you've got to go back 13 years to find
a time when we had a rate of inflation higher and debt levels were a lot lower back then.

But even more concerning than the headline numbers are the underlying numbers of consumer price
inflation that the Reserve Bank looks to. They're known as the trimmed mean and the weighted
median, and they're respectively 1.2 and 1.3 per cent in the quarter. The forecast was for 0.9, and
so you're seeing a very, very high underlying inflation rate. I think that that will give the
Reserve Bank pause for thought and possibly mean that they're a lot less relaxed and comfortable
than they were when the board last met.

LISA MILLAR: So what's been driving this rise?

STEPHEN LONG: Fuel predominantly, as well as food and housing. So if you look at it, one of the
worries for ordinary people, for people who have to go out and shop, is that it's the basics of
life that are going up. Automotive fuel up 5.4 per cent in the quarter and nearly 20 per cent over
the year.

Pharmaceuticals up 13 per cent, electricity up six per cent in the quarter, rent is up two per
cent. And so if you look at it, basically the things that we all need to buy, food, electricity,
transport, housing, healthcare, education, are all going up.

LISA MILLAR: But haven't we seen evidence that the economy is slowing, that the previous interest
rate rises have had an impact?

STEPHEN LONG: Indeed, the economy is slowing, the Reserve Bank is convinced that demand is slowing
and you have to bear in mind that this is the first three months of this year. It takes a while for
rates rises to actually impact, and so you wouldn't really have been seeing much impact from the
February rise and probably no impact from the March rise in official interest rates, plus the whack
that the banks added on top in these numbers.

So there is evidence that the economy is slowing. That said, I think that this is a real surprise,
that inflation was this high to a lot of observers, and clearly I think it's more than the Reserve
Bank was expecting. The best indication that we had from the Reserve Bank reading the tea-leaves
was that they weren't looking at an underlying inflation rate nearly this high.

It might mean that their view, that they could be in a position to write... to revise down their
outlook for inflation a lot quicker than they previously thought, that the numbers would come back
down to within their target band sooner than they expected, that might have to be recalculated
after this.

LISA MILLAR: Stephen, you say that the analysts were surprised by this figure. How have they
responded to it?

STEPHEN LONG: Well, the kinds of language that's being used is that these are a "pretty nasty set
of numbers" - that's Rob Henderson, the chief market economist at National Australia Bank;
"shocking", another economist said.

And one of the big concerns with the economists is really this underlying rate of inflation and the
suggestion from just about every market analyst is that while the Reserve may hold off on a rates
rise in May, it suggests that the Reserve Bank is still in play, that if the economy shows any
signs of strength, there's a chance that they could hike rates again.

LISA MILLAR: So with a rate rise back on the table, I mean it does beg the question, how many more
can the mortgage belts take?

STEPHEN LONG: Where's the tipping point, that's the question. And that's the way that rates rises
tend to hit. They can go on going up and going up and going up and you don't see that much impact,
and then they reach a point where you see a big impact. And we don't know where that tipping point
is. Now, the Reserve Bank has been saying repeatedly that mortgage defaults are still relatively
low by historical standards, but bear in mind that the most recent figures they put out were
figures up to the end of last year.

They really wouldn't have even been showing the impact of the rates rises we had in November last
year, and certainly not the ones we've seen subsequently. And so we ... when you look at it, rates
have gone up 1.3 per cent for mortgage holders in a very, very short space of time since late last
year.

If there's another rates rise on top well, a lot of people are going to feel pain. You've already
got unprecedented rates of home repossession in western Sydney. It is localised.

The question is, how much do we have to see before it spreads much further, much wider and that's
what we don't know. Combine that too with the fact that you're seeing the basics of life going up
and you've got real pain for a lot of people, I would suggest.

LISA MILLAR: Economics correspondent, Stephen Long, thank you.

ANZ's profits fall for first time in a decade

ANZ's profits fall for first time in a decade

The World Today - Wednesday, 23 April , 2008 12:14:00

Reporter: Peter Ryan

LISA MILLAR: Australia's third biggest bank, the ANZ, has posted its first profit fall in a decade
as the credit crunch and bad debts continue to bite.

The ANZ's half year profit fell seven per cent to just under $2-billion because of the credit
meltdown, despite some strong growth in the bank's Asia Pacific division.

ANZ's shares have fallen more than 20 per cent so far this year, and its reputation has been
damaged by its association with the failed Melbourne stockbroker Opes Prime.

Here's our business editor, Peter Ryan.

PETER RYAN: ANZ's chief executive Mike Smith had been preparing investors for today's results,
warning several weeks ago of a financial services bloodbath in the US and Europe, and flagging
higher provisions for bad debts. Today, he had the confirmation with the ANZ's first fall in profit
since 1998.

MIKE SMITH: For some time now we've been saying that credit costs would rise. This half we have
seen that happen. This has obviously impacted on our results.

PETER RYAN: The ANZ's half year profit is down seven per cent to $1.96-billion because of higher
funding costs brought on by the credit crisis, and a provision of $980-million for bad debts,
doubtful loans and an exposure to the troubled Centro property group.

Mike Smith tried to talk up a 12 per cent growth in revenue, and a 47 per cent profit increase for
the bank's Asia Pacific division. But he knew what analysts would be focusing on.

MIKE SMITH: Unfortunately, this has been overshadowed by higher credit costs and some legacy issues
which are well known. But we shouldn't lose sight of the fact that we're turning this business
around, and it does have very good momentum.

PETER RYAN: Despite the impact of higher interest rates, a slowing economy, and the likelihood of a
recession in the United States, Mike Smith signalled that Australian banks, including the ANZ, were
insulated from the fallout he has been witnessing overseas.

MIKE SMITH: Australia's banks are fundamentally well-placed. Compared to what is happening in other
banks around the world, the additional credit costs for ANZ this half barely register. More
importantly, quite a few of those other banks are facing fundamental changes in their business
models, which will really hit their future earnings. We do not have that problem.

PETER RYAN: Mike Smith's challenge in keeping the ANZ strong has been hampered by the bank's
association with stockbroker Opes Prime which collapsed more than three weeks ago.

He is heading up an independent review of what went wrong, and admits he is surprised at what's
emerged.

MIKE SMITH: When you shake a tree, stuff falls out. I mean frankly, a bit more fell out than I
thought but... and I'm not terribly pleased about that. But, you know, we're fixing this up and we're
going to sort it out.

PETER RYAN: With 1,200 investors unsure of their investments, and the ANZ clawing back a
$650-million in debt as the first in line creditor, the case is now the subject of a major legal
battle over the agreements clients signed up to.

One banking analyst at this morning's briefing highlighted the reputational damage the ANZ has
suffered.

ANALYST: A lot of innocent people have been injured by this, rightly or wrongly, depending on the
fine print of what they've signed. But I just wonder about the reputational damage that ANZ cops on
the back of this?

MIKE SMITH: The position is very unpleasant and I have to say, I'm somewhat pissed off about the
whole thing. However, you have seen that we are conducting a review that I am actually running
that, and I will make it public. The question to ask is should ANZ have been in this type of
business? Quite clearly not.

PETER RYAN: The ANZ's involvement with Opes Prime could haunt Mike Smith for months, even years,
with a Federal Court ruling on the fine print of the agreements expected within the fortnight.

LISA MILLAR: Business editor, Peter Ryan.

Angry investors steal Chartwell company records

Angry investors steal Chartwell company records

The World Today - Wednesday, 23 April , 2008 12:17:00

Reporter: Rachael Brown

LISA MILLAR: Another share trading company has collapsed in Victoria, and administrators are
appealing to looters to return the company's records.

The Geelong-based Chartwell Enterprises has been placed in administration, and many local families
fear their life savings will be wiped out.

The collapse has stirred up bad memories in Geelong of the Pyramid Building Society failure in
1990, which crippled the city's economy.

Chartwell's administrators say they can't determine the company's position, unless stolen financial
records are returned.

Rachael Brown reports.

RACHAEL BROWN: Administrator Bruno Secatore admits he's not used to appealing to looters to get his
job done.

Distressed investors are reported to have gone on a rampage through the Chartwell Enterprises
office, and the word "liar" was scratched into the driver's door of the black Jaguar convertible
belonging to Chartwell's director, Graeme Hoy.

Mr Secatore says unless the looters return the crucial company records, they'll be their own worst
enemy.

BRUNO SECATORE: The task is going to be extremely difficult if we can't get those core records
back. Part of the records that were taken were also company chequebooks and bank statements, so ...
which is essential for us to get back.

RACHAEL BROWN: A creditors meeting is being planned for early May, but it's too early to know the
prospects for Chartwell's 80 investors.

Mr Secatore understands many investors were offered a 70 per cent return from Mr Hoy, but he can't
confirm reports the company is worth $70-million.

BRUNO SECATORE: We don't know what assets there are in there, what ... where these monies have been
invested, if they're still there. So it's certainly not trading on. It's surely going to be an
exercise of investigating to see where the monies have gone.

RACHAEL BROWN: He is one of the few who has spoken to Mr Hoy, and says the director is very
concerned.

BRUNO SECATORE: He met in our offices last night to formally appoint us, so he is quite shaken up
by the whole matter. In fact, I'll be in touch with him again this morning, so he's being
cooperative, but obviously he is trying to lie a bit low.

RACHAEL BROWN: Lying low he is, avoiding calls from many distressed investors, like Ann Abrahmsen,
whose superannuation and only source of income has been wiped out in the collapse.

ANN ABRAHMSEN: I put it with the person and it wasn't a company when I gave Graeme Hoy my funds,
and we entered into an agreement for him to trade my income.

RACHAEL BROWN: What would you like to say to Mr Hoy?

ANN ABRAHMSEN: I'd just like to know what happened. Yeah, I'd like to know what happened.

RACHAEL BROWN: It's deja vu for many Geelong residents who, two decades ago, were dealt a similar
blow by the collapse of the Pyramid Building Society.

Chartwell's collapse, following the similar demise of Opes Prime and Lift, have investors wondering
if their watchdogs, the corporate regulators, are doing their job.

ASIC (Australian Securities and Investments Commission) has confirmed it is investigating Chartwell
Enterprises, but has refused to comment further.

And the Federal Corporate Governance Minister, Nick Sherry, is similarly tight-lipped.

Associate Professor of Financial Markets at RMIT, Dr Terry Hallahan, says the 70 per cent return
Chartwell was offering should have run alarm bells a lot earlier

TERRY HALLAHAN: Long-term investments tend to average I think, you know, around eight per cent, if
you look at it over 30 or 40 years, and the sharemarket is six to eight per cent. So if you see
someone coming out and saying, "Ok, I'm going to give you 70 per cent or 100 per cent or something
like that", well you think, "That's fine, but why isn't everyone doing this?"

RACHAEL BROWN: The corporate regulators and indeed the Corporate Affairs Minister have been quiet
on the issue today. Do you think the watchdogs are going their job?

TERRY HALLAHAN: Well, I think there's quite a lot of regulation in the financial services area, and
it's all about giving people information to make informed decisions. So whether people actually
read that information, whether they understand what they're reading, is a different issue.

I think the Government has some programs now looking at financial literacy just to see how much
people do understand. At this stage we don't actually know what they were doing. These schemes,
these sort of schemes tend to be very complicated, and it often takes quite a while for the
information to come out to say exactly what they were doing.

It could be that they were meeting the regulatory requirements for these sorts of investments, but
they could be doing other things behind the scenes that you don't know about. These sort of schemes
tend to be localised, and I think in this case, looking at the newspapers, they were saying that
it's a lot of the business was done through family referrals in the local area and that. If people
go to reputable financial planners and that you wouldn't get these sort of schemes recommended to
them.

LISA MILLAR: The Associate Professor of Financial Markets at RMIT, Dr Terry Hallahan*, ending
Rachael Brown's report.

*Editor's note: This transcript has been amended as Terry Hallahan was incorrectly identified as
Bruno Secatore in this story.

Health authorities recall contaminated Heparin batches

Health authorities recall contaminated Heparin batches

The World Today - Wednesday, 23 April , 2008 12:20:00

Reporter: Barbara Miller

LISA MILLAR: Australian health authorities are recalling five batches of a common blood-thinning
drug containing Heparin after they tested positive for a potentially dangerous contaminant.

The contaminant has been associated with a series of severe allergic reactions and deaths in the
US, prompting allegations that the regulatory authority there isn't doing its job properly.

The Therapeutic Goods Administration insists that the recall of the Heparin product in Australia is
purely precautionary, but it has led to fears of a possible shortage of the life-saving drug.

Barbara Miller reports.

BARBARA MILLER: The product affected by the recall is Clexane. The Heparin contained in it has
tested positively for a dangerous contaminant.

And in the US a possible link is being investigated between intravenous forms of the drug and up to
80 deaths.

Rosanna Capolingua is the president of the Australian Medical Association:

ROSANNA CAPOLINGUA: This is a very serious situation. There have been a number of recorded deaths
due to anaphylaxis, which is a severe allergic reaction to Heparin products, to Clexane for
instance, in the United States.

BARBARA MILLER: The Therapeutic Goods Administration, which has issued the Australian recall,
insists the measure is purely precautionary.

Rohan Hammett is the TGA's director:

ROHAN HAMMETT: It's important to note that to date there have been no reports of adverse events or
untoward reactions to Clexane in Australia.

BARBARA MILLER: But there have been some reports of very serious reactions to it overseas, haven't
there?

ROHAN HAMMETT: There haven't been to this form of Heparin. Clexane is a form of Heparin that's
given as an injection under the skin. There have been reports of serious allergic reactions with
the intravenous form of Heparin in international settings. It's important to note that all forms of
intravenous Heparin in Australia have been tested for the contaminant and are free of the
contaminant.

BARBARA MILLER: The US Food and Drug Administration says the contamination of international Heparin
supplies can be traced back to a Chinese factory where the product was made.

The allegations have been strongly denied by China, which is shifting the blame back to the US
manufacturer Baxter.

Jin Shaohong, the deputy director-general of the China National Institute for the Control of
Pharmaceutical and Biological Products says if the fault lay with China, more countries would have
reported adverse reactions from the drug.

JIN SHAOHONG: In addition to the USA and Germany, more than 10 other countries also use the Heparin
ingredient that's contained over (inaudible) to produce final Heparin injection. But a new
(inaudible) report from these countries.

BARBARA MILLER: The Australian manufacturer of Clexane is Sanofi-Aventis.

The company's director of communications, Alan Brindell, says he's confident all contaminated
products have now been recalled.

ALAN BRINDELL: Sanofi-Aventis has put in a very sophisticated screening measure since the first of
April globally on all Heparin and end products, like Clexane batches, that's been able to identify
where that impurity exists and we're confident that the five batches that we've identified in
Australia are the batches that do contain the low level of impurity.

BARBARA MILLER: The Heparin scare has led to fears of a shortage in the lifesaving product, which
is commonly used to stop blood-clotting during and post-surgery and for patients who are bedridden.

But the TGA's director, Rohan Hammett, says measures are being taken to ensure demand is met.

ROHAN HAMMETT: Certainly we think there may be a shortage of Clexane in the near future. There are,
however, several other alternatives that patients and doctors can use. And we're working carefully
to try and ensure that Australia's supply chain for Heparin products is maintained for as long as
possible.

LISA MILLAR: The director of the TGA, Rohan Hammett, ending Barbara Miller's report.

Bush concerned over soaring petrol prices

Bush concerned over soaring petrol prices

The World Today - Wednesday, 23 April , 2008 12:23:00

Reporter: Kim Landers

LISA MILLAR: Crude oil has hit a new high, rising to almost $US 120 a barrel as the greenback
dipped to an all-time low against the Euro. The soaring price of oil has prompted countries
attending the International Energy Forum in Rome to express concern.

And the US President George W. Bush has conceded he's worried as well about the high cost of
petrol.

Washington correspondent, Kim Landers, reports.

KIM LANDERS: Crude oil has hit an all-time peak of $US 119.90. Analysts say a complex mix of
factors from low interest rates to the sagging US dollar to the faltering American economy is
behind the hike.

Abdulla Salem el-Badri is the Secretary General of OPEC, which produces about 40 per cent of the
world's oil.

ABDULLA SALEM EL-BADRI: To decide on a price ... I think nobody can decide on the price. The market
will decide on the price.

KIM LANDERS: Iraq's Oil Minister Hussain al-Shahristani says the current price is not being
influenced by supply and demand.

HUSSAIN AL-SHAHRISTANI: But it is the speculators who are buying future oil, this is paper oil,
this is not real oil.

KIM LANDERS: Ministers from 74 countries attending the International Energy Forum in Rome have
ended their three day meeting with a statement expressing concern at the high price.

But producers and consumers at the meeting have struggled to agree on much more.

The International Energy Agency, which represents consumers, is warning that high oil prices could
tip the world economy into recession.

Britain's energy minister has told the forum it'd be a good thing for the world economy if prices
were significantly lower, while Saudi Arabia's petroleum minister is calling for calm, saying "this
is not the time to panic".

Anthony Grisanti is a trader for GRZ Energy.

ANTHONY GRISANTI: I think it's the dollar definitely. You know, $1.60 setting a new low against the
Euro, definitely that's added to the strength of crude. But I also think, you know, it's the whole
trend, and the trend has been up for the last six or seven months.

KIM LANDERS: Petrol prices in the US have reached a national average of $3.50 per gallon, fuelling
the tempers of motorists.

VOX POP: Gas prices are outrageous right now. I mean, $3.96?

VOX POP 2: $4.09 is the ... oh my goodness, I don't even know. Oh my God!

VOX POP 3: It just cost me over $50 to fill up this car.

VOX POP 4: It's horrible.

KIM LANDERS: President George W. Bush has acknowledged the pain of the soaring prices.

GEORGE W. BUSH: No question, rising gasoline prices are like a tax on our working people. You know,
what's happening is that we've had an energy policy that neglected hydrocarbons in the United
States for a long period of time and now we're paying the price.

KIM LANDERS: Jack Gillis from the Consumer Federation of America thinks the high prices will curb
the amount that Americans drive.

JACK GILLIS: Culture shock or the economic shock as a result of $4, even if it's just
psychological, will change behaviours dramatically.

KIM LANDERS: But the US President isn't urging Americans to drive less.

Instead George W. Bush wants Congress to approve oil drilling in an Alaskan wildlife refuge to
boost supply.

LISA MILLAR: That's Kim Landers in Washington.

Clinton wins crucial Pennsylvania primary

Clinton wins crucial Pennsylvania primary

The World Today - Wednesday, 23 April , 2008 12:26:00

Reporter: Michael Rowland

LISA MILLAR: In the US, Hillary Clinton has defied her critics once again, claiming victory in the
latest primary in Pennsylvania. This was a crucial win for the Senator, who is still trailing her
opponent Barack Obama in the overall delegate count.

It's been six weeks since the last primary, so Pennsylvania is considered a key indicator of where
the candidates are placed.

The ABC's Michael Rowland is in Philadelphia and can tell us exactly where the votes are going.

Michael, counting has been under way for a while now. What's the absolutely latest?

MICHAEL ROWLAND: Well, it's certainly shaping up as a solid victory for Hillary Clinton, and it's a
victory that will stave off any move by Democrats to force her out of the Democratic primary ... the
seemingly never-ending Democratic primary.

She has done well in Pennsylvania on the back of solid support amongst blue collar voters, amongst
elderly voters, and amongst female voters. It was an extremely buoyant former first lady who,
accompanied by her husband and daughter Chelsea, who fronted a raucous crowd of Democratic
supporters here in Philadelphia, and here's what Senator Clinton told the crowd:

HILLARY CLINTON: You know, for six weeks, Senator Obama and I have criss-crossed this state,
meeting people up close, being judged side by side, making our best case. You listened, and today
you chose.

(Cheering)

LISA MILLAR: Hillary Clinton in Philadelphia just a short time ago. Well, Michael, what, or should
I say, who got her across the line?

MICHAEL ROWLAND: Well, it's the base that she has relied upon in past contests: those voters with
lower incomes, those voters who work in factories or have other blue collar jobs. She has always
been very popular amongst female voters, in fact, there was a majority of female voters going out
to the polling booths across Pennsylvania, and she has also done very well with older Americans.

Barack Obama has younger Americans essentially locked up, but there are a lot of older Americans
living in Pennsylvania, and they once again rallied to Hillary Clinton's cause. So she does
certainly have a lot to celebrate tonight, but still faces a very hard, in fact, many would say
impossible road to securing the Democratic nomination.

LISA MILLAR: What does the result mean for Barack Obama?

MICHAEL ROWLAND: Well, it essentially means that he is still ahead. In the overall contest he is
ahead, in the pledged delegate race he's ahead, in the popular vote contest. So despite the
comfortable nature of Hillary Clinton's win here in Pennsylvania, it doesn't really change the
dynamics of the Democratic race at all.

In fact, Barack Obama certainly saw what was coming - he left Pennsylvania even before the polling
booths closed today, off to Indiana, the site of the next Democratic nomination battle in a couple
of weeks time.

He addressed a group of Obama supporters there this evening, and he made a great play about the
fact that he managed to pull back what was a 20 per cent lead by Hillary Clinton in Pennsylvania
only a few weeks ago.

Here's what Senator Obama had to say:

BARACK OBAMA: There were a lot of folks who didn't think we could make this a race when it started.
They thought we were going to be blown out, but we worked hard and we travelled across the state to
big cities and small towns, to factories and BFW halls.

And now, six weeks later, we closed the gap. We rallied people of every age and race and background
to the cause.

LISA MILLAR: That was Barack Obama who had, as you mentioned, already left Philadelphia, I guess
knowing that it wasn't going to go his way. There had been suggestions that Hillary Clinton would
have been under pressure to pull out if she hadn't had a decisive win. But is the margin that she
has got, or that it appears she has got, is it decisive enough?

MICHAEL ROWLAND: No is the short answer. And she really need to ratchet up margins of 25 per cent
or more in the nine remaining Democratic contests if she wants any chance of getting anywhere close
to Barack Obama's lead in the delegate race.

Now, even though Senator Clinton's campaign supporters concede this would be mission impossible,
and as a result she is still going to come under pressure from some quarters of the Democratic
Party to step aside, to pull out of the race sooner rather than later to ensure that Barack Obama's
chances aren't harmed in the general election race in November against the presumptive Republican
nominee, John McCain.

LISA MILLAR: It's been reported that she is running short of money. What can you tell me about
that?

MICHAEL ROWLAND: Well, that's right. It's on the eve of the primary here in Pennsylvania, the
Clinton campaign put out its latest financial report. It revealed that the former First Lady was
raising only half the amount of money as the Obama juggernaut, and also, more worryingly for her
supporters, that the Clinton campaign was $11-million in debt.

Now she is obviously going to be making lots of phone calls to donors over the next couple of days
trying to wrangle more money out of them based on her performance in Pennsylvania.

But really, it's still Barack Obama's race to lose, this one, and that's why there's going to be
pressure, pressure around the edges, but certainly pressure growing, if Senator Clinton doesn't do
well in the subsequent contests for her to think seriously about pulling out of the race in the
interests of the broader party.

LISA MILLAR: Michael Rowland in Philadelphia, thank you.

Zimbabwean churches call for election results

Zimbabwean churches call for election results

The World Today - Wednesday, 23 April , 2008 12:29:00

Reporter: Lindy Kerin

LISA MILLAR: Church leaders in Zimbabwe have warned that post-election violence in the county could
lead to genocide of the same magnitude seen in Rwanda if the international community fails to
intervene.

In a joint statement, the leaders of the country's main churches have called for the Zimbabwe
Electoral Commission to immediately release the results for the March presidential election.

Meanwhile, the Opposition leader Morgan Tsvangirai is still insisting he won the March poll and has
promised an honourable exit for President Robert Mugabe.

Lindy Kerin reports.

LINDY KERIN: Representing various denominations, the church leaders from Zimbabwe are calling for
the country's post-election deadlock to be resolved immediately.

The joint statement warns that "if nothing is done to help the people of Zimbabwe we shall soon be
witnessing genocide similar to that experienced in Kenya, Rwanda and other hotspots in Africa and
elsewhere".

A senior Roman Catholic priest, Father Frederick Chiromba, spoke to the BBC.

FREDERICK CHIROMBA: At the moment what we are witnessing from the towns is organised violence
perpetrated against individuals, families and communities who are accused of campaigning or voting
for the wrong political party. People are being abducted, tortured, humiliated in different ways.
It has been alleged also that people have been murdered.

LINDY KERIN: The Opposition Movement for Democratic Change claims at least 10 people have been
killed and hundreds injured in post-election violence.

The group Human Rights Watch has alleged that torture camps have been set up to punish those who
voted against Robert Mugabe.

Spokeswoman, Carolyn Norris:

CAROLYN NORRIS: People are taken there at night, held for several hours, beaten with wooden planks
and other wooden batons and then just left on the side of the road.

LINDY KERIN: As the row over the election result continues, there's growing pressure on the
international community to intervene.

The Church leaders are calling on African countries and the UN to step in and help deal with the
"deteriorating" situation. There's also pressure on African leaders from Zimbabwe's Opposition
leader, Morgan Tsvangirai.

He is still insisting he won the March 29 poll and has promised what he has called an "honourable
exit" for President Mugabe.

MORGAN TSVANGIRAI: Robert Mugabe is a liberation hero on our continent and he must be convinced to
make a graceful exit. In fact, we have no intention of violating his rights. We believe that the
time has come for him to have an honourable exit.

LINDY KERIN: The Opposition leader has met the United Nations Secretary-General and appealed to him
and African leaders to help resolve the crisis.

An election recount for 23 out of 210 constituencies has been delayed for an unknown period.

The leader of South Africa's ruling party, Jacob Zuma, says the delay is "unacceptable".

JACOB ZUMA: It's not helping, firstly, the Zimbabwean people, who have gone out genuinely to elect
the kind of party and presidential candidate that they want, exercising their constitutional right.
This is interference with the constitutional right of the Zimbabwean people. So, it's not
acceptable.

LINDY KERIN: Jacob Zuma is calling on African leaders to help solve the post-election deadlock.

JACOB ZUMA: African countries should, I think, identify some people to go in there, probably talk
to both parties, call them and ask what is the problem, as well as the electoral commission, so
that they can understand the problem on the spot and try to help the Zimbabweans to solve the
problem.

LINDY KERIN: The former UN secretary-general Kofi Annan has also stepped in. He is calling for
greater regional coordination to deal with the Zimbabwe crisis.

KOFI ANNAN: The countries of the region have to come together and find a way of doing it, and not
treat it as an internal problem of Zimbabwe alone - an internal problem that creates three million
refugees in South Africa alone, an internal problem that creates almost an economic collapse and
forces people to leave the country, can no longer be defined as internal.

There is a regional dimension, there is a human rights aspect and the governments in the region
have to take it seriously and the African Union as well.

LISA MILLAR: The former UN secretary-general Kofi Annan ending Lindy Kerin's report.

Concern over increasing tension in Somalia

Concern over increasing tension in Somalia

The World Today - Wednesday, 23 April , 2008 12:32:00

Reporter: Barney Porter

LISA MILLAR: When the war on terror is discussed, the focus is usually on Iraq or Afghanistan.

But another conflict zone is attracting concern.

Last weekend, it was reported at least 85 people were killed in Somalia in the Horn of Africa,
where a transitional government, backed by troops from neighbouring Ethiopia, and with moral
support from the US, is trying to hold off a resurgent Islamic militia.

As well, increasing incidents of piracy off the Somali coast have prompted calls for a strong
international effort to end the region's reputation as one of the most dangerous waterways in the
world.

Barney Porter reports.

BARNEY PORTER: There's been no effective long-term government in Somalia since warlords overthrew
the former dictator Mohamed Siad Barre in 1991 and then turned on each other, plunging the country
into chaos for the next 17 years.

Last weekend, at least 85 people were killed when mortars and machine-gun fire rocked the capital
Mogadishu, in battles between Islamic-led insurgents, and government troops backed by forces from
Ethiopia.

Hundreds of residents are fleeing Mogadishu on foot, by car, and on donkey carts, while thousands
more are fleeing other areas, creating the potential for a massive humanitarian problem.

Hassan Noor is from Oxfam Somalia.

HASSAN NOOR: I think this is close to getting to worst times ever. Nothing is actually improving at
all. Help to these people is not possible somewhat because of the street problems, because of the
problems of access.

BARNEY PORTER: But it's simply more of the same.

The fighting after the overthrow of President Barre destroyed the country's agriculture, which led
to widespread starvation, and an estimated 500,000 deaths.

In June 2006, an Islamic movement called the Islamic Courts Union seized the capital after
defeating US backed warlords who'd formed a transitional government.

The Union then succeeded in taming the city for the first time since 1991.

But the imposition of Islamic law, and accusations by the US that the Union had links to al-Qaeda
ended any good will towards the new rulers.

With tacit US approval, Somalia's powerful neighbour, Ethiopia, sent in troops to prop up the
transitional government, and Mogadishu was recaptured six months later.

Professor Clive Williams is from the Centre for Policing Intelligence and Counter-Terrorism at
Macquarie University.

He believes Somalia is more of a failed state, than a key theatre in the war-on-terror.

CLIVE WILLIAMS: The US has claimed that people who were involved in the 2002 attack in Mombasa
against the hotel and the Israeli aircraft, basically Israeli targets, that those people took
sanctuary in Somalia. So... and they have also claimed that the upper level of the Islamic Courts
Union is also made up of extremists who are anti-US, but I think that's maybe is a bit of a
stretch.

BARNEY PORTER: The Islamic Courts did actually succeed in bringing peace to the capital Mogadishu
during their six month rule in 2006. Is the Council the only force capable of achieving this
long-term for the country, and should the west have offered more support to the Council at the
time?

CLIVE WILLIAMS: I think that probably is the case, yes. Because the people of Somalia are Muslim,
and, you know, it's a... almost entirely a Muslim country, and the Islamic courts union is probably
the only body that could really draw them together.

The transitional government, which is led by President Yusuf, is perhaps... although its supported by
the African union and the UN and the US, it's not really representative of the whole of Somalia nad
never can be, because it simply... Somalia will tend to break down along clan lines if it's not a
religiously-based government.

BARNEY PORTER: There's another problem.

The coastal waters off Somalia are considered to be among the most dangerous in the world for
shipping, with more than 25 ships seized by pirates last year.

The EU has called for "a strong international effort" to tackle piracy, and France, Britain and the
United States are now drafting a UN Security Council resolution.

But Clive Williams believes the problem won't be solved by force alone.

CLIVE WILLIAMS: The people are engaging in piracy because they really have no other economic
options So, you know, the way to deal with piracy is not to kill all the pirates, it's probably to
get in there and help the area and develop it economically so they have alternatives.

BARNEY PORTER: What does the future hold for Somalia?

CLIVE WILLIAMS: Well, really more of the same, unless the Ethiopians withdraw and there's some sort
of accommodation. But I think really the Islamic Courts Union is probably the best answer. And it
it's a more moderate approach, then even better. I think that the smart move for the west and for
countries like Australia would be to back moderate elements within the Islamic Courts movement.

So that would be, I think, a more positive development and help them to isolate the extremists,
because as I say, the transitional government really doesn't have much hope, I think, of pulling
the country together.

LISA MILLAR: That's professor Clive Williams, from the Centre for Policing Intelligence and
Counter-Terrorism at Macquarie University. And the reporter was Barney Porter.

Lib MP criticises Govt over absence at troop ceremonies

Lib MP criticises Govt over absence at troop ceremonies

The World Today - Wednesday, 23 April , 2008 12:35:00

Reporter: Alexandra Kirk

LISA MILLAR: The Federal Government has come in for some criticism over the way it's handling
welcome home ceremonies for Australian troops. Last weekend soldiers returned to Townsville after a
six month deployment to Afghanistan.

Federal Liberal MP, Peter Lindsay, says there weren't any members of parliament there to welcome
them home.

And he says since Labor came to power he hasn't been invited once to welcome troops home in his
electorate, which includes the garrison city of Townsville.

From Canberra, Alexandra Kirk reports.

ALEXANDRA KIRK: The federal member for the seat of Herbert, which takes in Townsville, Liberal
backbencher Peter Lindsay, says he has always attended military farewell and welcome home
ceremonies in his electorate, but that since Labor won the election he hasn't been invited to any.

Last weekend, while Kevin Rudd hosted his 2020 ideas summit in Canberra, a contingent of soldiers
from Townsville returned from Afghanistan, but no federal MPs, Government or Opposition, were there
for the arrival.

Peter Lindsay says he only found out about it because he happened to be flying back home and the
chief of the army was on the same plane flying north for the ceremony.

PETER LINDSAY: Well this is RTF-3, the Regional ... the Reconstruction Taskforce returning from
Afghanistan, virtually all Townsville troops. A very significant and dangerous deployment, and a
long deployment, and certainly the soldiers were happy to be home.

ALEXANDRA KIRK: Peter Lindsay says the soldiers haven't complained. But their parents have.

PETER LINDSAY: They've been very disappointed that their sons and daughters, their loved ones,
haven't been welcomed back. It's important that the men and women of the Australian Defence Force
who are returning from overseas deployment having given dangerous service to our nation, should be
welcomed home.

And it's disappointing that in Townsville, our garrison city of Australia, no representative of the
parliament was there to welcome them. That's wrong, and I believe that should be addressed.

ALEXANDRA KIRK: Was this a one-off problem in your view?

PETER LINDSAY: I always used to welcome home troops, whether there'd be two or whether there'd be
200. But since the change of government that hasn't happened. I do believe it is the intention of
the Defence Minister that the local member of Parliament should be invited, but that hasn't
happened since the change of election and that's disappointing.

ALEXANDRA KIRK: You've had a discussion or some correspondence with the minister?

PETER LINDSAY: I've certainly had a formal agreement from the minister, because he understands and
I understand that this is a bipartisan issue. There are no politics in this.

ALEXANDRA KIRK: And what undertaking has the Defence Minister Joel Fitzgibbon given you?

PETER LINDSAY: Well, he's indicated that I, as the local member, should be invited to all of these
welcome homes. But that's not just for me, that's for all around the country, that local members...
that there should be a representative of the parliament present, and I think he's genuine in giving
that undertaking.

ALEXANDRA KIRK: So what's happened?

PETER LINDSAY: I'm not sure where it's gone off the rails. It's wrong and it should be addressed.

ALEXANDRA KIRK: The defence minister Joel Fitzgibbon is on his way to Gallipoli for Anzac Day.
Warren Snowdon, the Minister for Defence, Science and Personnel, says while the previous government
didn't invite local Labor MPs to military farewells or arrivals as a matter of course, the Rudd
Government is committed to a bipartisan approach.

Mr Snowdon says Mr Lindsay is right to say the Government should try to have people there, it's
just that last weekend it wasn't possible.

WARREN SNOWDON: We recognise absolutely every single soldier who has been overseas should get an
official welcome home, and we're 100 per cent committed to this, that's why a welcome home ceremony
will be held in May and there'll be extensive government representation at this event.

It's absolutely imperative that we do, that we make sure that these Australian troops, or members
of the Australian Defence Force who have been deployed, when they get home understand we want to
see them home, we want to see them safely home, and we want to give them credit for the work
they've done on our behalf.

ALEXANDRA KIRK: And Peter Lindsay says as the local member for the city of Townsville, the garrison
city, he wants to be at those ceremonies and he was given an undertaking from the Defence Minister
that that would occur. But what's gone wrong?

WARREN SNOWDON: Look, I'm not certain about that. I'm seeking advice as to why Mr Lindsay wasn't
there, but he's right. He should be there, and he should be invited to be there. There's no
question about that in my mind, and we'll be making sure that doesn't ... there's no slip-ups like
this in the future.

LISA MILLAR: Federal Minister for Defence, Science and Personnel, Warren Snowdon.

Smooth arrival for Olympic torch in Canberra

Smooth arrival for Olympic torch in Canberra

The World Today - Wednesday, 23 April , 2008 12:38:00

Reporter: Karen Barlow

LISA MILLAR: After all the talk and protests, the Olympic Flame has arrived in Canberra for its
only Australian appearance.

Amid tight security and with no public audience, a Chinese jet carrying the Olympic symbol landed
this morning at a RAAF base where it was welcomed by officials and Aboriginal elders.

More than 20 of those controversial tracksuit wearing Chinese torch attendants were part of the
official party. Two happily posed for media photographs with the lantern on the tarmac.

While the ceremony went off without a hitch, China's human rights record was never far from
people's minds.

Karen Barlow was at the Flame's arrival for The World Today.

KAREN BARLOW: The specially painted Beijing Olympic Games jet touched down at Canberra's RAAF base
this morning.

Potential protesters and the general public were kept well away as Federal Police officers roamed
the area.

It was another 20 minutes before the flame was walked down the stairs and officially welcomed by
local Ngunnawal elder Aunty Agnes Shea.

AUNTY AGNES SHEA: In the words of the Ngunnawal people (speech in Ngunnawal language).

Which means you may leave your footprints on our land now. Or, in other words, welcome to Ngunnawal
country. Thank you.

KAREN BARLOW: The official guests included the Chinese Ambassador Zhang Junsai, the federal Sports
Minister, Kate Ellis and the President of the Australian Olympic Committee, John Coates.

JOHN COATES: The Flame and torch, like the Olympics, themselves evoke symbolism and proud memories.
We remember the deeds of Australia's first Olympic hero, Edwin Flack, and those since. We remember
also with great pride that twice the games have come to Australia.

KAREN BARLOW: The ACT chief minister Jon Stanhope raised the vexed issue of human rights.

JON STANHOPE: Participation in this relay is important and it is important for those who care about
human rights, as well as those who care about the ideals of sport. Participation is a way of
allowing our differences a clear and clarient voice, even as we celebrate our similarities and our
share humanity, in a robust and mature democracy such as ours, there is no particular danger in
mixed messages.

KAREN BARLOW: China's human rights record is what led to social campaigner Lin Hatfield Dodds
pulling out of her duties as torch bearer, but The World Today understands that no further torch
bearers have pulled out of running in the event.

Of course, the flame has its attendants: there are more than 20 of the blue tracksuit wearing
paramilitary trained Chinese guards.

Two were with the flame at all times. Others carried mysterious black boxes.

There is still some residual concern over their role. As of this morning, the Prime Minister, the
Chinese Ambassador and the IOC say there have no security role whatsoever.

This is despite the Ambassador Zhang Junsai saying on Channel Nine last night that if the flame was
attacked, the attendants would use their bodies to stop it from going out.

Today IOC member Kevan Gosper says the Chinese have no security role.

KEVAN GOSPER: Let me emphasis that any security matter rests with this country. And that's been
made very clear.

KAREN BARLOW: So they will be getting in and out of the bus?

KEVAN GOSPER: I don't know, I don't know. I thought I gave you a very clear answer on that.

KAREN BARLOW: Australian IOC member, Phil Coles, is hoping all goes well with the torch relay in
Canberra, but says the pro-Tibetan protests mean that the event will never be the same again.

PHIL COLES: I just don't see where they could be to demonise the Olympic torch for what it stands
for too, you know.

KAREN BARLOW: Do you think this has damaged the Olympic movement?

PHIL COLES: I don't think it's damaged the Olympic movement. I think it's damaged the flame.

KAREN BARLOW: Damaged the flame?

PHIL COLES: What it means, what we, what we hope it means. To some people it doesn't mean that, I
suppose.

KAREN BARLOW: Local Aboriginal elder, Bunja Smith, supports the torch relay and the Olympics, but
says there is wider Aboriginal sympathy for the pro-Tibetan movement.

BUNJA SMITH: We can't give someone human rights by taking away someone else's human rights, we have
a right to choice. And I support the Tibetan people with their protest. I ask that they keep it
protesting and not violent and at the same time we welcome the torch to Canberra.

KAREN BARLOW: The Chair of the Canberra torch relay task force, Ted Quinlan, says he is happy with
the smooth start to the Australian leg of the relay and foresees no late changes to the relay
route.

LISA MILLAR: Karen Barlow in Canberra.