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Cabinet leak reveals split over FuelWatch

ELEANOR HALL: The Federal Government is in damage control mode today over a Cabinet leak and a rift
within its ranks over its promised FuelWatch scheme.

In his Cabinet submission on the fuel price monitoring system, the Minister for Resources and
Energy, Martin Ferguson, warned that the program would fail working families, hurt small businesses
and seriously undermine Labor's economic credentials.

The leaking of the Cabinet document not only erodes the perception of government unity - it also
scuttles the Government's attempts to get back on the front foot on the petrol issue.

But the Coalition has leapt on the revelation as Alexandra Kirk reports from Canberra.

ALEXANDRA KIRK: The Federal Government hailed FuelWatch as a way to keep petrol prices down. From
December the price monitoring system based on a Western Australian scheme will allow motorists to
shop around with certainty because fuel outlets will have to post the price at which they will sell
petrol for the next 24 hours.

The Minister for Resources and Energy, Martin Ferguson argued against it in Cabinet last month.

MARTIN FERGUSON: I made that contribution to the Cabinet processes. Cabinet decided that my views
were not appropriate and Cabinet correctly decided to introduce a FuelWatch scheme.

ALEXANDRA KIRK: Martin Ferguson warned his Cabinet colleagues, FuelWatch was an anti-competitive
waste of money. That it would hurt working families in places like western Sydney and seriously
damage the government's economic credentials but he lost the argument.

MARTIN FERGUSON: Once Cabinet makes the decision, that is the start and the end of the process and
I am one who has always supported the Westminster system and Cabinet processes.

I am disappointed that my Cabinet submission has been made public because I am one who absolutely
believes in the Cabinet process and I accept my responsibility to argue out what is appropriate but
also actually accept the outcome of Cabinet.

So far as I am concerned FuelWatch is the right decision because it reflects the view of the
government at large. I am only one member of that Cabinet.

ALEXANDRA KIRK: Do you think that after FuelWatch has been in for some time that your concerns will
be borne out and you will have proved to be right?

MARTIN FERGUSON: The debate has moved on. The Government has made its decision. We are now not just
looking at issues such as FuelWatch and a taxation review. We are looking at medium to long-term
solutions about alternative fuels, gas to liquids, cold liquids. This government is going to do
everything possible to not only look after its consumers in the short-term but to guarantee
transport fuel security for Australians over the medium to long-term.

ALEXANDRA KIRK: Under sustained pressure over fuel, particularly the Prime Minister's declaration
the government had done all it could to help struggling families, Kevin Rudd has since argued more
can be done citing FuelWatch as an example.

But Mr Ferguson's dire warning has scuttled that argument.

The Opposition which has panned FuelWatch says the Minister's submission tells it all.

Treasury spokesman Malcolm Turnbull says it is clear FuelWatch will put petrol prices up, not down.

MALCOLM TURNBULL: Kevin Rudd said he was going to govern on the basis of evidence and on the basis
of getting the best advice and what we now know is confirmed by Martin Ferguson is that the
evidence is that FuelWatch will reduce competition. It will cause prices to be higher rather than
lower and it will hurt families on lower incomes and Mr Ferguson nominated families in western
Sydney the most.

This is a thoroughly anti-motorist polity. It is a bad policy. It is bad on the evidence. It is bad
on the advice.

ALEXANDRA KIRK: The Coalition has been having a field day with the government split on fuel.
National's backbencher Bruce Scott maintain FuelWatch will be a disaster for rural and regional
areas.

BRUCE SCOTT: With Captain Rudd on the Titanic, he has hit the iceberg and they are still playing
Mozart on the deck.

ALEXANDRA KIRK: Liberal senator Eric Abetz says Labor is divided, with good reason.

ERIC ABETZ: Because the experiment in Western Australia clearly hasn't worked. If you have a look
at petrol prices in Western Australia, they are only marginally lower than in the east coast states
and the reason for that of course is the transport cost.

Coming from Singapore, the price of petrol is a lot cheaper in Western Australia by about one cent
a litre and that is the price differential. It has not worked.

ALEXANDRA KIRK: From the Opposition benches Martin Ferguson is being praised for speaking his mind.

OPPOSITION SPOKESMAN: I thank Martin Ferguson for calling FuelWatch for what it is and that is a
political stunt.

MALCOLM TURNBULL: And Martin Ferguson is an honest man. He is disgusted by it. That is a powerful
letter and it speaks to the truth that this government is all about spin.

ALEXANDRA KIRK: The Government's in damage control on two fronts - petrol policy and the leaking of
confidential Cabinet material.

It says Martin Ferguson's department would be responsible for investigating the leak, in
consultation with the Prime Minister's department.

In a Senate Estimates Hearing this morning, Liberal Senator Michael Ronaldson prodded Mike Mrdak,
the deputy secretary of the Department of Prime Minister and Cabinet for some details.

MIKE MRDAK: Officials in our department will co-ordinate and check with the Resources, Energy and
Tourism Department as to whether they require any assistance in any investigations they may do,
Senator but no discussions have been held to this point.

MICHAEL RONALDSON: Are you aware whether they have commenced an enquiry?

MIKE MRDAK: I am not aware, Senator.

MICHAEL RONALDSON: If an enquiry was extended to external agencies including the AFP or someone
like that, would you be co-ordinating those enquiries?

MIKE MRDAK: Not co-ordinating. Generally those are matters between the line agency and the AFP but
they may wish us to stay across where the investigation is up to.

ALEXANDRA KIRK: The World Today asked Mr Rudd's office if the leak's been referred to the federal
police and if they can rule out that the leak came from the Prime Minister's office or the
Department of Prime Minister and Cabinet.

The Prime Minister's office, so far, won't say.

ELEANOR HALL: Alexandra Kirk in Canberra.

Crean warns leak could hurt Govt

ELEANOR HALL: Trade Minster Simon Crean has a long history in Federal Labor Cabinets and he is
warning today that the leak could be damaging to the operation of the Rudd ministry.

The Minister spoke about the leak during a press conference this morning.

The ABC's Chief Political correspondent Lyndal Curtis asked him whether he was worried about a
cabinet leak so early in the government's term.

SIMON CREAN: I'm not too sure that the Cabinet is leaking but these are issues that obviously you
would prefer they didn't happen. I don't think it is any surprise that Cabinets and particularly
ours, Labor Cabinets and I have been in a number of them over a number of years, that there are
differences of opinion.

It is the robustness of the Cabinet process that resolves those differences. Importantly, it is not
just the principle of Cabinet solidarity but the ensuring the documents don't leak is a very
important part of that.

LYNDAL CURTIS: Should there be an enquiry with this one?

SIMON CREAN: Well, that is a matter for the Prime Minister in his consideration but it is not in a
government's interest and I don't believe it is in the national interest for documents of Cabinet
to be leaked.

Cabinets are very, are the most important decision making processes in a country. They have to
involve commitment. They have to involve an honesty and they have to involve a rigor and people
can't... people need to be confident that in expressing their views, and then ultimately accepting
the discipline, that their views and the circumstances in which they are argued, are not
misrepresented and they can be through selective leaking.

LYNDAL CURTIS: FuelWatch is the one scheme the government has in short-term to try to help bring
down fuel prices. Doesn't the leaking of this document blunt your political attack? Does it make
FuelWatch...

SIMON CREAN: No, I don't think it blunts the political attack at all. I think that FuelWatch after
robust debate is still and accepted by a significant number of not just the Cabinet and the
Parliamentary party but on the advice we had and Martin I see today has indicated he now accepts
this position, this is a mechanism that brings importantly scrutiny to petrol prices.

Better information and based on the WA experience, has brought petrol prices down and I would have
thought that is in the interests of advancing, of trying to give people information, make that
information available and put pressure on the market to adjust accordingly.

I think it is a good thing.

ELEANOR HALL: That is the Trade Minister, Simon Crean, speaking to our Chief Political
correspondent Lyndal Curtis.

New Tas Premier dubbed 'Lennon Lite'

ELEANOR HALL: Tasmanians may have a new Premier but David Bartlett today dashed hopes that he will
lead a new style of government in the Island State.

This morning Premier Bartlett looked like he may be taking Labor in a new direction with his
announcement that he would set up an ethics body.

But under questioning in the Parliament today, the Premier made it clear he wouldn't crackdown on
corruption any time soon.

In Hobart Felicity Ogilvie reports.

FELICITY OGILVIE: The new Premier's first words to Parliament were about ethics.

David Bartlett promised to set up a parliamentary committee to investigate if an anti-corruption
style watchdog is needed.

DAVID BARTLETT: To enquire into and report upon the issue of ethical conduct, standards and
integrity of elected Parliamentary representatives and servants of the state in performing their
duties with particular reference to; one, a review of existing mechanisms currently available to
support ethical and open government in Tasmania.

Two, an assessment of whether those mechanisms need to be augmented by the establishment of an
ethics commission and if so, by what means.

FELICITY OGILVIE: In the last days of Paul Lennon's time as Premier hundreds of Tasmanian's held
public rallies around the state calling for an anti-corruption style watchdog.

The rallies were sparked by a scandal known as 'Shreddergate'.

It's called that because a shredded document revealed the former Deputy Premier, Steve Kons had
lied to Parliament about the appointment of a magistrate.

That was six weeks ago - Mr Kons was forced to resign and David Bartlett became Deputy Premier.

When the Premier, Paul Lennon, resigned yesterday, Mr Bartlett became Premier.

This morning was the first Question Time since the Shreddergate scandal.

In his first question the Opposition leader, Will Hodgman, called on the new Premier to investigate
the affair.

WILL HODGMAN: In the interests of transparency and accountability and ensuring that your government
and indeed Tasmania can move on from the stench that has surrounded Labor's appalling handling of
governance in this state, will you agree to establish an independent enquiry into all the questions
outstanding relating to this magistrate's appointment scandal and if not, why not?

FELICITY OGILVIE: The new Premier said he was doing enough by investigating the idea of an ethics
commission.

DAVID BARTLETT: Mr Speaker, Mr Speaker this morning I have stood up and as my first act as Premier
of Tasmania, have moved a motion to establish a joint select committee of both Houses of this
Parliament to look into establishing an ethics commission.

FELICITY OGILVIE: The Premiers reply was at times drowned out by the Opposition

DAVID BARTLETT: The last 10 years...

OPPOSITION: You lot are rotten to the core.

FELICITY OGILVIE: Will Hodgman came up with a nickname for the new premier.

WILL HODGMAN: Absolutely nothing has changed in this place and what have we seen today? In the
first eight minutes we have seen "Lennon Lite". The same thing. Refusing to answer the question.

FELICITY OGILVIE: The Opposition say the Government's ethics committee is a way of avoiding
actually investigating allegations of corruption.

The former Premier Paul Lennon consistently supported Gunns' pulp mill.

In her first question to the new Premier, the Greens Leader, Peg Putt, wanted to know if David
Bartlett would build roads for Gunns.

PEG PUTT: Premier, it is our understanding that funding is provided in this upcoming budget and its
forward estimates for, at the very least, the construction of the interchange. Can you please
explain whether that will continue to be supported by you?

FELICITY OGILVIE: David Bartlett has been trying to distance his party from Gunns in the media.

But in Parliament he revealed the government won't rule out spending millions of dollars building
ports, roads and pipelines for Gunns.

DAVID BARTLETT: A government's responsibility is to build infra-structure that creates opportunity
for economic and social wealth so I will not rule out in the future, building infrastructure that
creates opportunities in Tasmania for growth, for jobs, for economic wealth.

I will not rule out building public infrastructure.

FELICITY OGILVIE: Paul Lennon seemed to lose the support of the Tasmanian people because he
promoted the pulp mill and he refused to set up an anti-corruption commission.

This morning David Bartlett has spoken about winning back the support of the Tasmanian people - but
at the moment his leadership style still looks a lot like Paul Lennon's.

ELEANOR HALL: In Hobart, Felicity Ogilvie reporting.

Executed man pardoned over murder 86 years ago

ELEANOR HALL: It is too late to save his life but today a man, who was executed for murder 86 years
ago, has been pardoned.

Colin Campbell Ross was hanged in 1922 for raping and strangling a Victorian schoolgirl but the
28-year-old publican always said he was innocent.

Now he has been pardoned thanks to modern technology.

But while legal experts say justice has finally been done - one relative of the dead girl says the
pardon doesn't go far enough.

In Melbourne, Jane Cowan reports.

JANE COWAN: The family of 12-year-old Alma Tirtschke always thought the wrong man had been executed
for her murder.

JOAN: My grandmother always said the wrong man was hung.

JANE COWAN: This woman, identifying herself only as Joan, is the murdered girl's second cousin.

She told Fairfax Radio how the case has preoccupied people like her grandmother over the years.

JOAN: She didn't say who was the right man but she said the wrong man was hung.

JANE COWAN: It was 1921 when Alma Tirtschke's naked body was found dumped in Melbourne's Gun Alley.

The schoolgirl had been raped and strangled while doing errands for her aunt.

The crime was pinned on Colin Campbell Ross, a 28-year-old man who ran a nearby wine saloon.

He professed his innocence but was hanged.

Kevin Morgan researched the case for 15 years and wrote the book "Gun Alley: Murder, Lies and the
Failure of Justice".

KEVIN MORGAN: The prosecution held Alma Tirtschke went into the wine saloon of Colin Ross and as
the saloon continued its normal trading, remained there consensually from 3pm until 6pm drinking
wine at which time Ross had sexual intercourse with her and murdered her and to us it just didn't
make sense.

JANE COWAN: Colin Ross was convicted on the basis of a jailhouse confession - and several strings
of hair found on a blanket.

But a little research revealed the confession had been reported by a fellow inmate who himself had
prior convictions for perjury.

And author Kevin Morgan was also able to discount the evidence relating to the hair.

KEVIN MORGAN: You see the prosecution had to argue that Alma was in that wine saloon or else how
could she have been murdered by Colin Ross and just before she was buried, the two policemen went
out to her home and as she lay in her coffin, they cut from her head a lock of her hair.

Two weeks later they arrested Colin Campbell Ross and they took from him some blankets and on those
blankets they found same hairs and they had the government chemist of the day have a look at those
hairs and he was willing to testify in court at Colin Ross' trial, that these hairs and I quote
"come from the scalp of one and the same person".

JANE COWAN: But when the samples were retested using modern techniques, the hair on the blanket was
found not to be the girl's and the whole decades-old case unravelled.

ROB HULLS: Well this really is a tragic case where a miscarriage of justice has resulted in a man
being hanged. It is almost incomprehensible.

JANE COWAN: Victoria's Attorney-General Rob Hulls has today granted Colin Ross a posthumous pardon.

ROB HULLS: It is the first time and this pardon, I think, is a recognition that there are serious
doubts about Mr Ross' conviction for murder.

JANE COWAN: But the pardon is not good enough for the murder girl's second cousin Joan.

JOAN: A pardon means I am forgiving you for something you have done. Shouldn't it rather be an
exoneration which means I accept you didn't do this in the first place?

JANE COWAN: But the Victorian Premier John Brumby says the pardon does come close to exonerating
Colin Ross.

JOHN BRUMBY: Science in particular I think has proven beyond reasonable doubt that he could not
have committed that crime.

JANE COWAN: The Premier says the case shows how far forensic technology has come - and it
reinforces the decision to formally abolish the death penalty in Victoria in 1975.

Speaking on Fairfax Radio, John Brumby says it's not inconceivable there could be other instances
of people being executed for crimes they didn't commit.

JOHN BRUMBY: If you went back through every single case and you had the evidence still around to
scientifically test, forensically test, there may well be some other cases.

JANE COWAN: The President of the Law Institute of Victoria Tony Burke says the pardon serves a
purpose, even if it comes too late to save Colin Ross' life.

TONY BURKE: Justice reverberates beyond the particular victim to the extended families and it is a
good news story for those family members that this verdict will now be set aside.

JANE COWAN: But the official recognition that Colin Ross may not have killed Alma Tirtschke raises
fresh questions for her descendants, like who is the real murderer?

Tony Burke, again.

TONY BURKE: They will never have the opportunity to see the perpetrator brought to justice.
Presumably he or she is now long dead.

ELEANOR HALL: That is the President of Victoria's Law Institute ending that report from Jane Cowan
in Melbourne.

Army chief aware of soldiers frustration

ELEANOR HALL: The head of the Australian army, Lieutenant General Peter Leahy has defended his
organisation against criticism that troops are no longer allowed to engage in real battle.

The criticism has come from within the army itself with a senior army officer saying Australian
soldiers deployed overseas are so restricted in their operations that they are often relegated to
being mere spectators on the battlefield and some have become ashamed to wear the Australian
uniform.

But the army chief says that while he's aware that many infantrymen are frustrated by a lack of
combat action, they simply have to accept that the nature of warfare has changed.

Barbara Miller prepared this report:

(Excerpt from television advertisement)

ANNOUNCER: Throughout history we have risen to the challenges that have confronted us under a
rising sun.

BARBARA MILLER: To be in the Australian Army, so say the recruitment advertisements, is to be a
part of protecting our country, our national interests, as well as helping other nations to rebuild
after conflict or natural disaster. An army officer named as Jason is quoted as saying "there are
not many jobs that allow you the freedom and the flexibility that I have".

(Excerpt from television advertisement)

ANNOUNCER: If you want to make a difference, challenge yourself and rise.

BARBARA MILLER: It seems though that for many soldiers it is not the promise of freedom and
flexibility that makes them join up.

(Extract from Australian Army Journal)

JIM HAMMETT (voiceover): Why do people join the infantry corps? The answer is simple, to fulfil the
role of the infantry or to use simpler terms, to fight.

BARBARA MILLER: The words of Major Jim Hammett in an article entitled "We were soldiers once"
published in the latest edition of the Australian Army Journal.

Major Hammett, who's served in Somalia, East Timor and Iraq, continues.

(Extract from Australian Army Journal)

JIM HAMMETT (voiceover): The infantry are not fighting. They are trained to fight. Equipped to
fight and being indoctrinated to expect to fight. They are doing many other things but not
fighting. That function is being fulfilled by Special Forces.

BARBARA MILLER: Major Hammett says the situation is so bad that Australian soldiers have at times
been ashamed of wearing their Australian uniform and have become mere spectators on the
battlefield:

(Extract from Australian Army Journal)

JIM HAMMETT (voiceover): Australia has expressed itself a staunch ally of the Americans in both
Iraq and Afghanistan and indeed has received significant political kudos for what has been termed
as unwavering support.

At the coalface however, such sentiments are dismissed as political rhetoric as serving members
from the United States, Britain and Canada lay their lives on the line in support of their
government's objectives whilst the Australian infantry appear to do little more than act as
interested spectators from the sidelines.

BARBARA MILLER: Another article in the same journal by Captain Greg Colton talks of a growing sense
of frustration that regular infantry units are only receiving perceived second rate operations
taskings.

The head of the Australian Army Lieutenant General Peter Leahy says he's aware of these sentiments.

PETER LEAHY: These are some views that I have got and I must say that they are not ones that I
share entirely because what we have seen is the facing nature of war. This is no longer infantry
wearing red jackets and white cross straps and taking on the army of another king.

What we are seeing now is that we are required to work in different populations. To work to
protect, support and persuade and the nature of war has changed and we have to adapt to that.

BARBARA MILLER: In an interview with ABC Newsradio Peter Leahy said he knew the infantry was
capable of carrying out frontline combat operations but the army chief was unapologetic about
current deployment policies.

PETER LEAHY: As we assign tasks and missions we very carefully assess the threat. We assess the
environment and then we look at the capabilities of our troops and we assign those tasks and
missions to the best people.

I think we have got the balance about right at the moment.

BARBARA MILLER: Neil James, the Executive Director of the Australia Defence Association, suspects
however that it's not operational needs but a fear of casualties that's resulting in the increased
use of Special Forces for combat duties.

NEIL JAMES: The operational limitations that are preventing them from carrying out every infantry
role and being limited to only part of the infantry role appear to come from governments of all
persuasions fearing a higher casualty count or more accurately, fearing what public opinion might
be if there was a higher casualty count.

BARBARA MILLER: What do you make of the argument of the head of the army, General Peter Leahy who
says well the nature of warfare has simply changed and the infantry men are not needed right now
for those tasks.

NEIL JAMES: Well, the simple answer there is you have to take a long-term view. We don't send the
military to a war just to keep professional standards up in your military but if you do commit to
the war for a range of strategic and moral reasons, there are sound advantages in rotating the
maximum amount of your force structure through combat so that you can keep professional standards
up by in effect blooding a new generation.

ELEANOR HALL: That is Neil James from the Australia Defence Association ending that report by
Barbara Miller.

French dig for 'lost army'

ELEANOR HALL: They were labelled the 'lost army'.

During the First World War, 2,000 Australians were killed by Germans at the village of Fromelle and
while the bodies of most were recovered almost a century on, no one had any idea what had happened
to the bodies of 170 of those ANZAC soldiers.

Now the mystery has been solved as Stephanie Kennedy reports from Fromelles.

STEPHANIE KENNEDY: On the night of the 19th of July, 1916, on these muddy foreign fields of
Flanders, Australian soldiers fought their first battle on the Western Front.

Their mission was to attack the German lines just outside the village of Fromelles.

At 6pm as rain fell on the low lying field, the whistle blew and the infantry leaped out of their
trenches and charged across no man's land.

7,000 men went over the top that night but their efforts were futile - wave after wave was mowed
down by the enemy's machine guns.

The ANZAC's were annihilated - by dawn 2,000 Australians had fallen - another 3,500 were wounded,
taken prisoner or missing.

170 were buried in a mass grave along with 250 British soldiers behind enemy lines but in the
aftermath of the war, the location of that grave was lost.

Roger Lee is the official historian for the Australian Army.

ROGER LEE: By the dawn the attack is over and we failed and our guys try and find their way back to
the lines.

Because we don't win the battle ie: we don't retain possession of the ground, we are in no position
to come out and collect our wounded. In fact, the Australians were retreating, I can't recall
exactly when they go over the line but they, neither they nor the unit that replaced them, attempt
to challenge the German dominance of no man's land.

So the Germans are collecting Australian dead almost up to the Australian wire in the days after.
In fact the Germans recover remains well into August from this area.

STEPHANIE KENNEDY: And so what happened to those remains?

ROGER LEE: The problem that we had is when you do all the sums, we come up with about 160, 170, the
numbers are a little uncertain, dead Australians that we can't account for.

STEPHANIE KENNEDY: And you think they are here in this site?

ROGER LEE: The evidence now suggests that they are. I will be honest and say that I didn't they
were. I could not understand how a post-war graves recovery operation like, was mounted on the
Western Front could have missed a mass grave that everybody knew about.

I mean the evidence is that all knew about it but the evidence from investigation last year and the
fact that we can't find the numbers suggest that yes, they are probably still here.

STEPHANIE KENNEDY: It was only after some dogged forensic investigative work that the location of
the digger's unmarked resting place was found after 92 years - here in this field next the village
of Fromelles.

Major General Mike O'Brien is heading the operation.

MIKE O'BRIEN: I think it is got a significance to the Australian nation because in the First World
War, 50,000 Australians died in France and there are still many of those whose bodies haven't been
found so I think this is something that is significant for the nation as a whole.

Paying due honour and regard to the people who fought at that time.

STEPHANIE KENNEDY: How do you feel today having this dig start?

MIKE O'BRIEN: I am very pleased that it is starting. It is another milestone. It is just one along
a long, long road.

STEPHANIE KENNEDY: How did it go today?

MIKE O'BRIEN: Oh, it went pretty well thanks. We have confirmed the location of the pits. We found
them where we expected to find them and we've made good progress towards what we expect to find in
the next couple of days.

STEPHANIE KENNEDY: Descendants hope that a DNA database could be built up to match remains with
living Australians.

In Fromelles France this is Stephanie Kennedy reporting for The World Today.

Fukuyama backs Obama for US presidency

ELEANOR HALL: He is one of America's most famous neo-conservatives and his ideas on the spread of
democracy have informed the Bush administration's foreign policy.

But Francis Fukuyama, the author of "The End of History" and Professor of International Political
Economy at Johns Hopkins University, is now a sharp critic of George W. Bush and has even come out
as a supporter of Democrat frontrunner, Barack Obama, for President.

Professor Fukuyama is particularly scathing about the Bush policy in Iraq but he says that
regardless of who is elected to lead it next, the United States is about to undergo a significant
transformation.

Professor Fukuyama is in Sydney this week as a guest of Sydney University United States Studies
Centre and he joined me this morning in The World Today studio.

Francis Fukuyama thanks for joining us.

FRANCIS FUKUYAMA: Thank you.

ELEANOR HALL: Now you are famous for your end of history thesis on the historical inevitability of
democracy and yet your latest work is a critique of the foreign policy of a President who professes
to be all about spreading democracy. When did you first realise that you needed to split from the
Bush neo-conservatives?

FRANCIS FUKUYAMA: I think that it really happened in the year preceding the war. I had spent a lot
of time in Europe and as we got closer to the war, the arguments that the administration was making
in favour of it, just seemed to make... didn't make sense to me.

ELEANOR HALL: And yet after 9-11 did you support a policy which would have seen the overthrow of
Saddam Hussein?

FRANCIS FUKUYAMA: No, as far as getting rid of Saddam Hussein I have no problem with that at all. I
think that we have seen in a lot of other cases where you have these really terrible tyrants. I
don't have a moral problem in the use of power to do that sort of thing. The issue is really in a
way more pragmatic question of whether we actually know what we are doing when we use power.

I just didn't think the administration was prepared for a long and difficult post-invasion
scenario.

ELEANOR HALL: That is about the execution of the war though but did that mean you had to split with
the neo-conservatives who were behind the Bush foreign policy ideology?

FRANCIS FUKUYAMA: I think so because as I started to think about the uses of American power, I
thought that a lot of my friends were way too dependent in their own thinking on the use of hard
power as a means of bringing about political change.

These conflicts are very complicated. They ultimately involve bringing over a population to your
side and you are not going to do that simply by using conventional military power.

ELEANOR HALL: So do you feel that your ideas have been distorted, even discredited by association
with the Bush foreign policy?

FRANCIS FUKUYAMA: Well, I hope not because I do think that you can't just snap your finger and will
a democratic society into being.

ELEANOR HALL: So what advice do you have for the next President of the United States on foreign
policy?

FRANCIS FUKUYAMA: Well, I think that the US as a result of Iraq has really alienated itself from a
good deal of the global public. Not just people in the Middle East where anti-Americanism is at a
all-time high but from its European allies, from a lot of publics in places where there ought to be
a lot of sympathy.

So I think the United States needs to reconnect with the world. It needs to do some symbolic things
like we shouldn't torture people so as a first symbolic gesture I think the new President ought to
close Guantanamo and I think in general what you need is a shift.

There needs to be great down-playing of the whole war on terrorism. To call it a war I think has
over-militarised our objectives and the means that we have used to prosecute it and I think there
has to be a greater shift to the use of soft power in projecting American influence and then
there're large areas of the world where we have kind of neglected thinking about things like east
Asia where you have obviously got some very big changes going off.

ELEANOR HALL: So which President do you think would be the best placed to handle these challenges?
Would it be President McCain, President Obama or a President Clinton?

FRANCIS FUKUYAMA: Well, it is a little bit difficult. In my own thinking since I have to vote in
this next election, I personally actually don't want to see a Republican re-elected because I have
a general view of the way democratic processes should work and if your party is responsible for a
big policy failure, you shouldn't be rewarded by being re-elected.

I think of all the Republicans, McCain in many ways is the most attractive but he is still is too,
you know comes from the school that places too much reliance on hard military power as a means of
spreading American influence.

I think in many ways, Hillary Clinton represents both the good and the bad things of the 1990s and
there is something in the style of the Clinton's that never really appealed to me and so I think of
all the three, Obama probably has the greatest promise of delivering a different kind of politics.

ELEANOR HALL: That is a big shift for you, isn't it? To go from a registered Republican voter to an
Obama supporter.

FRANCIS FUKUYAMA: Yeah, but I think a number of people are doing that this year because I think the
world is different at this juncture and we need a different foreign policy and there is this larger
question about in American politics, I do think that we are at the end of a long generational cycle
that began with Reagan's election back in 1980 and I think unless you have a degree of competition
and alternation in power, certain ideas and habits are going to get too entrenched.

ELEANOR HALL: Barack Obama talks a lot about sort of big change and what sort of revolution do you
expect him to deliver in the United States if he does become President?

FRANCIS FUKUYAMA: Well, that is an interesting question because I think that one of our problems in
the United States is that the existing polarisation has gotten very debilitating where you can not
talk about certain issues like raising taxes or starting program in investing in infrastructure
without this being cast in this old ideological debate and so I think that he probably got a better
chance at trying to forge a different kind of rhetoric. Different ways of thinking about that.

ELEANOR HALL: Do you expect to see a real shift in America? In 10 years time will it be a very
different place if Barack Obama is elected?

FRANCIS FUKUYAMA: Well, I think the shift will happen regardless of who is elected. I think that
the politics of the country is going to be different. I think in tone and certainly in terms of the
international perception of the United States, if you elected someone like Obama, it is really
going to be really quite something I think to witness and I think that is why a lot of people would
like to see him as president because it symbolises the ability of the United States really in some
way to renew itself in a very unexpected way.

ELEANOR HALL: Are you one of those historians who sees an inevitable decline in US power though
over the next couple of decades?

FRANCIS FUKUYAMA: Well, I don't think American power is going to decline in absolute terms but what
is happening manifestly in the world is that there are other power centres that are growing.

So you have got China and India and the rest of east-Asia and that is going to happen regardless of
what the United States does so one way or the other so relative power is certainly going to
decline.

ELEANOR HALL: Now while you are in Australia you are meeting the Prime Minister at the end of this
week. What advice do you have for Kevin Rudd?

FRANCIS FUKUYAMA: Oh, I am not going to give him any advice. I have known Mr Rudd for some time and
it is just a matter of catching up.

ELEANOR HALL: What are the topics of conversation you would like to engage him on?

FRANCIS FUKUYAMA: I think the obvious ones. You know, the US-Australian relationship has been
central.

ELEANOR HALL: Do you think there is work to be done on the Australian/US relationship?

FRANCIS FUKUYAMA: I think that it is something that can not be taken for granted because Australia
is balanced between a need to have really good relations you know, as long as China is digging up
half of Western Australia and shipping it off to China, that is going to be an extremely important
relationship but there is obviously in terms of culture and politics, a very close tie with the
United States so where Australia positions itself is not something that can be taken for granted in
this constellation of forces in this region.

ELEANOR HALL: Francis Fukuyama, thanks very much for joining us.

FRANCIS FUKUYAMA: Thank you very much.

ELEANOR HALL: That is Professor Francis Fukuyama from Johns Hopkins University. He is in Australia
as a guest of Sydney University's United States Studies Centre and is giving a public presentation
there tomorrow evening.

Director of insurance firm IAG steps down

ELEANOR HALL: The board of IAG could be about to undergo a further shake-up with institutional
investors now calling for other directors to follow Michael Hawker out the door.

Less than four weeks after he told investors he would be staying on as chief executive, Mr Hawker
has stepped down.

He had lost the support of the company's major shareholders and that meant his position was
untenable.

But his departure has raised questions about just who should take responsibility for the bungled
handling of the attempted takeover of IAG by rival insurer, QBE.

Emma Alberici reports

EMMA ALBERICI: Michael Hawker first made a name for himself as a rugby union great.

(Extract from rugby union game)

ANNOUNCER: Hawker. Hawker straight through!

EMMA ALBERICI: He was celebrated as a member of the Grand Slam Wallabies who toured Europe in the
80s. He was one of the best inside centres the game had ever seen but his undoing would come more
than 20 years later when, as chief executive of IAG, he was blind-sided by QBE proposing a takeover
that had the potential to create the country's biggest general insurer.

Michael Hawker thought the $8.7-billion bid undervalued the company. Investors took no particular
issue with that. What upset them was the lack of discussion about the deal which the IAG boss
rejected point blank.

Institutional investor Peter Morgan of 452 Capital owns four per cent of IAG.

PETER MORGAN: You know we said we don't want the company having it both ways. If they go to say no,
they have to be transparent, accountable to share holders. Particularly with regard to a hard
valuation for a company.

Far too often there is plenty in history where companies have walked away from deals only to see
their share price never reach those heights again.

EMMA ALBERICI: At the time, Michael Hawker assured the market he was there to stay. His boss, IAG
chairman James Strong was equally enthusiastic about Michael Hawker's longevity at the helm of the
insurer. Here he is last month speaking on Lateline Business

ALI MOORE: Michael Hawker has your full support?

JAMES STRONG: Yes and he has right through. I think you know that Ali and I think for people to say
well, why don't you change that now, well that would actually be detrimental.

EMMA ALBERICI: Six weeks later, Michael Hawker is gone - replaced by his chief operating officer
and former head of rival Promina - Michael Wilkins

Michael Hawker released a statement saying that after seven years at the helm of IAG he had decided
to resign. He said he believed he had lost the confidence of a number of shareholders which was not
tenable for the company

Anton Tagliaferro is investment director at Investors Mutual - another big shareholder in IAG.

ANTON TAGLIAFERRO: The reality is that the company in the last few years hasn't performed very well
and obviously the managing director has to take the responsibility.

EMMA ALBERICI: IAG's most recognised brands are the RACV and NRMA.

(Excerpt from television advertisement)

ANNOUNCER: At the NRMA we are famous for helping people.

EMMA ALBERICI: Many observers now feel that it's the former chief executive himself that's been
left stranded. Taking all the blame for the company's woes. The share price at $3.98 - a long way
from the $6.95 it was trading at in early 2004.

Shareholder Peter Morgan again.

PETER MORGAN: You've had a board there say no to a negotiation yet they are carrying out a review
of the company.

Heaven help shareholders you know, if the dividend is cut. The capital position is cut. There are
right-offs. You know, why is it all happening after a negotiation? Why aren't shareholders informed
of that before the negotiation ends?

EMMA ALBERICI: Do you think in some respects Michael Hawker has been made a scapegoat?

PETER MORGAN: I think he has been made 100 per cent the scapegoat and I think it reflects very
badly on that incumbent board. They should be hanging their head in same today. It is un-Australian
just to let one bloke take the blame for everything.

EMMA ALBERICI: Would you like to see other members of the board?

PETER MORGAN: We have voted against members of that board previously. We will continue to do that
going forward. If that board thinks it is getting itself off as lightly as it thinks it is today
with regards to what is going on, it has got another thing coming as far as I am concerned.

I will be pushing that at an AGM. I would encourage every IAG shareholder if they feel the same to
write to the Chairman today to stop him from being yellow and show a bit of backbone.

EMMA ALBERICI: You have been largely held responsible for squeezing Michael Hawker out of the
company. Indeed, he said his position was untenable because he didn't have the support of major
shareholders like yourselves. How does that sit with you?

PETER MORGAN: I am not happy with it. I respect Michael for taking some accountability but their
attack is not totally on Michael. It is on the board itself on not being transparent and
accountable.

ELEANOR HALL: That is Peter Morgan of fund manager 452 Capital ending that report by Emma Alberici.

National Basketball League in doubt

ELEANOR HALL: One of the founding teams of the National Basketball League is set to fold.

The Brisbane Bullets problems began earlier this year, when owner Eddie Groves from ABC Learning
came under financial pressure.

He tried to sell the team but the new owners say they're pulling out of the contract because they
can't find a major sponsor.

With both the Bullets and the Sydney Kings facing uncertain futures, questions are now being asked
about the entire league's viability.

Donna Field spoke to five-time Olympic basketballer Andrew Gaze about the game's future.

ANDREW GAZE: Whether it is one owner or whether it is a multiple of owner or whatever membership
based club, whatever the formula is, it really is irrelevant if the economics don't stack up.

Unless you can have the club on a profitable foothold, then it is going to be very, very difficult
regardless of the ownership situation. I think Eddie Groves was an outstanding owner that had a
great passion for the game and brought a lot of organisations to the sport and I think that is
outstanding so I think it would be wrong to say that the Eddie Groves model is not correct but
ultimately, the sport and the clubs have to be to stand up on their own two feet and be financially
viable.

DONNA FIELD: And what is the problem at the moment? What do you see as the big problem as to why
clubs like the Brisbane Bullets aren't financially viable?

ANDREW GAZE: Well, in a very simplistic sense, they are spending more than they have and what I
think the situation is, a lot of it is created because of lack of control over your venues. Some of
these clubs pay exorbitant leases to use their venues and despite getting in basketball terms, very
reasonable attendances and good support, corporately these types of things.

If you don't have a situation where you can generate significant profits from your home games, it
makes it very, very difficult.

DONNA FIELD: And what does it mean for the future of the game if you do have teams within the NBL
experiencing this financial difficulty and the possibility of folding?

ANDREW GAZE: Well right now I think the future is outstanding. Yes there are some problems with a
couple of our clubs in the NBL but across the board over the last two or three years, there have
been some tremendous improvement in the viability of most of the teams so you know, obviously when
teams go under it gets a lot of exposure and it is clearly very disappointing but it is not
something that is exclusive to basketball so I think that it would be wrong to assume that the
sport is at its knees or that there is radical problems with the sport as a whole.

As a whole it's in a very healthy situation but clearly there are some issues with a couple of the
elite level teams that is unpleasant and needs to be addressed.

DONNA FIELD: Are you hopeful for the future of the Sydney Kings and the Brisbane Bullets?

ANDREW GAZE: Absolutely. I think that the sport is going through a reform over the next six to 12,
well it is in the process right now but very soon there is going to be some announcements about
what direction the NBL and Basketball Australia and the various programs are going to take and I
think it is an exciting time and there will be some significant changes to the structure of the NBL
and the number of teams and all those types of things I think are being discussed and I don't think
it will happen for the upcoming season, well it won't happen for the upcoming season but when you
look ahead, I think that the foundations are there for continued growth.

Obviously the Sydney Kings and the Brisbane Bullets are significant issues but they are not ones
that I think you look at to say well, that means that the whole sport is done and dusted and it is
all over.

ELEANOR HALL: That is Olympic Basketballer, Andrew Gaze speaking to Donna Field.

Rabbitohs woes jitter rugby league heartland

ELEANOR HALL: Now to a troubles in another sporting league.

The changing of the guard at the top of the South Sydney Rugby League Club is raising questions
about the future of the game in its Sydney heartland.

Sydney's nine rugby league clubs are all struggling financially and the director of one is
predicting that they can't all survive.

Yesterday the celebrity owner of South Sydney, Peter Holmes a Court, stood aside as Executive
Chairman, just two years after taking over the club with Hollywood actor, Russell Crowe.

And while the club's new CEO says Souths will survive, others aren't so sure.

David Mark has our report.

DAVID MARK: It all started so well. The Hollywood actor Russell Crowe and businessman Peter Holmes
a Court tipped millions into South Sydney and for a while it seemed to be working.

The team made the finals last year while a documentary and a plan to re-open the leagues club
without poker machines meant that the publicity machine was in over-drive.

But South Sydney's fortunes have dived this year and co-owner Peter Holmes a Court appears to be
sharing the same fortune.

Souths have won just one game out of 10 and his anti-pokie plan has been quietly shelved.

The ad-man John Singleton has tried his hand at running a rugby league club, North Sydney and he
knows the pitfalls.

JOHN SINGLETON: New ownership mate, an old club. There was always going to be problems and success
papers over many cracks which it did last year and obviously it is not as easy as people think.

DAVID MARK: The Chief Executive of the National Rugby League, David Gallop is offering qualified
support for the changes at Souths.

DAVID GALLOP: You want to see your clubs get their front office in order and be operating
efficiently and clearly there are a few dramas there at the moment so the sooner it settles down,
the sooner it will be better for them.

DAVID MARK: Souths lost more than $4-million last year but the club's new Chief Executive Officer,
Shane Richardson says things will improve.

SHANE RICHARDSON: What we have got to do now is make sure that we focus on the areas such as
stadium, such as membership, such as our corporate areas and television rights to make sure that we
actually last long-term.

The game will last a long-term it is whether some individual clubs will last the same long-term.

DAVID MARK: Indeed Souths may be in the spot right now but there is agreement throughout rugby
league that times are tough and the nine Sydney clubs are facing a crisis.

GREG ALEXANDER: The leagues club has always propped up the football club and you know that is why
leagues clubs, how they came about.

DAVID MARK: Greg Alexander is a former champion half-back with the Penrith Panthers. He is now a
director of the football club and the Panthers Leagues Club, one of the biggest in New South Wales.

He says the tax on poker machines, new anti-smoking laws and a sluggish economy are responsible for
a downturn in revenue from the leviathan leagues clubs.

GREG ALEXANDER: It has been a massive kick in the guts for leagues clubs and those leagues clubs in
particular that are trying to support rugby league clubs.

DAVID MARK: Is the football club running at a loss?

GREG ALEXANDER: Yes, football clubs always run at losses. I think there was only one NRL team and
that was Brisbane that made a profit last year.

There is always a shortfall and that is what leagues clubs were there for. To fill in that
shortfall and that can range anywhere between a million and five million dollars.

DAVID MARK: You seem to be arguing that the football clubs have been too reliant on the leagues
clubs for too long. Is that the case?

GREG ALEXANDER: Absolutely. I think we are a product of how we were born and the leagues clubs
poker machine money providing money to football clubs. There was always going to be a time where
that was going to run dry or something. I think league people became complacent about where their
money was coming from and it has come back to bite them.

DAVID MARK: How serious is the situation then? Can all the Sydney clubs survive?

GREG ALEXANDER: No, I don't think so. I don't think they can. No, there is too many clubs in
Sydney.

DAVID MARK: How many do you think will go?

GREG ALEXANDER: It is too hard, it's too hard for me to give you a number. I would be guessing.
Let's just put it this week that nine is too many.

DAVID GALLOP: It is a distinct possibility.

DAVID MARK: The NRL's Chief Executive Officer, David Gallop.

DAVID GALLOP: Some clubs won't survive unless there is a change. That is about as definitive as you
can be.

DAVID MARK: Is South Sydney one of the clubs that is most likely to go.

DAVID GALLOP: Not necessarily although they are certainly at the moment experiencing what happens
when your footy team is not travelling that well. You tend to have less people going to your games
and your gate receipts are down but the pressure is on quite a few Sydney clubs as well as South
Sydney.

ELEANOR HALL: The NRL's David Gallop ending that report from David Mark.