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Labour market surges, pushes unemployment down

EMMA ALBERICI: To some good and bad news on the economy.

The Reserve Bank has been given more food for thought today with an unexpected surge in the labour
market.

Twenty-nine thousand new jobs were created in the month - almost three times what economists had
been forecasting.

That helped push the unemployment rate down from 4.3 per cent to 4.2 per cent.

Joining me to discuss the figures is Neal Woolrich.

So Neal, on the face of it these figures are good. More jobs is always welcome news for any
economy, but given how the Reserve Bank is likely to judge these numbers perhaps not so uplifting
for home owners?

NEAL WOOLRICH: That's right Emma. These figures were unexpectedly strong and on the face of it
likely to put more pressure on interest rates to go up again. But most economists are still tipping
the Reserve Bank will keep rates on hold, probably for the rest of this year at least.

The June quarter inflation figures are coming out at the end of this month and while the consumer
price index is expected to remain well above the Reserve Bank's target range, economists are
arguing that the Reserve Bank is likely to look through those inflation figures.

A lot of the pressure on prices here is caused by global factors like high oil prices, food
inflation, and the rising cost of finance. So as long as the Reserve Bank sees that domestic demand
is slowing, it seems to be prepared to tolerate high inflation for some time.

And as we saw yesterday, consumer sentiment has hit its lowest level in 16 years, so perhaps the
Reserve Bank is starting to see some of the slowdown that it's been seeking.

EMMA ALBERICI: But there does seem to be some sort of disconnect between all these figures that are
emerging given we see, you know, anyone who wants one can virtually get a job these days and yet
they're not feeling so confident about the future.

NEAL WOOLRICH: Well that's right. The consumer confidence figures yesterday were a surprise given
the strong labour market that's been proven today and the fact that the economy is growing at
around two and three-quarters, close to three per cent. So there's a real disconnect and some
economists are saying that consumers might even be talking themselves into a recession.

At the moment the fundamentals of the economy are pretty strong but consumers seem to be focusing
on the bad news items like rising petrol prices and rising food prices.

EMMA ALBERICI: Now what impact have these job figures had on the markets today given this might
well put a renewed focus on the possibility of an interest rate hike?

NEAL WOOLRICH: Well there was a very swift reaction on currency markets, Emma. The Australian
dollar was up by half a cent against the US dollar in the first few minutes after the figures came
out. That suggests that currency traders are more confident that these job figures will put upward
pressure on interest rates.

As you said there were 29,000 new jobs created in the month and the consensus forecast was for just
10,000 new jobs. Most of these jobs that were created in June were full-time work - 24,000 new,
full-time positions as opposed to 5,000 part-time positions. So it really shows that employers were
taking on more workers in June and the job market remains extremely tight.

EMMA ALBERICI: And that's quite a turn around isn't it, because in the past months we've seen quite
the opposite where we've seen big surges in part-time work?

NEAL WOOLRICH: That's right and even in May we saw a drop in the total number of people employed.
That was the first time in 19 months that there had been a drop in employment numbers. So really
the labour market did come back in June quite unexpectedly.

EMMA ALBERICI: Now the jobs data can't be entirely responsible for movements on the stock market
today, given the performance of US shares overnight?

NEAL WOOLRICH: That's right. Well the Australian share market started down about 1.5 per cent and
remained in that sort of area straight after the jobs figures came out.

The US market was down about two per cent and that's mainly due to more concerns in the banking
sector in the US. The credits ratings agency Fitch overnight predicted that Merrill Lynch will post
a fourth consecutive quarterly loss when it reports next week.

That sent local banks tumbling here. The finance index is down about 2.5 per cent today.

But Emma, it's a fairly dark day across the market with all of the major industry groups falling by
more than one per cent.

EMMA ALBERICI: And just quickly Neal, if we look just a bit closer at that jobs data, are we still
seeing that skills shortage high in Western Australia and what can you tell us about the other
states?

NEAL WOOLRICH: Well there was a real surge in employment in Western Australia. As we're all aware,
it's benefiting from the mining boom. The unemployment rate there dropped from 3.7 per cent in May
to 3.2 per cent in June, so an extremely tight labour market in Western Australia.

Of the other states, only Victoria posted a rise in its unemployment rate. It's gone up slightly to
4.6 per cent - that puts it equal to New South Wales. So even the states like Victoria and New
South Wales where the Reserve Bank's tight monetary policy was really expected to hurt, even those
states are still faring fairly well in the jobs market.

EMMA ALBERICI: Neal Woolrich, thank you very much.

NEAL WOOLRICH: Thanks.

Govt emissions trading timetable ambitious: Swan

EMMA ALBERICI: The Federal Treasurer is being questioned on just how committed the Government is to
its emissions trading timetable while the Opposition struggles to come up with a united position on
the timing for any such scheme.

The shadow treasurer Malcolm Turnbull and his leader Brendan Nelson seem to be at odds over the
issue.

Doctor Nelson says big polluters should be on board before Australia begins its carbon trading
scheme while Mr Turnbull believes it should start in 2012, regardless of what other countries are
doing.

Wayne Swan uses the word ambition to describe the Government's stance on a 2010 start.

Mr Swan spoke to our reporter Samantha Hawley about that and the International Monetary Fund's
latest assessment of the Australian economy.

WAYNE SWAN: Well I think the IMF's statement is a strong endorsement of the Rudd Government's first
budget and I think in particular our long-term reform agenda to build productive capacity in the
economy. But most particularly our plans to tackle inflation, to get that downward pressure on
interest rates in the long term.

SAMANTHA HAWLEY: It has found that the cuts in personal income taxes, which of course came into
force about 10 days ago, will support economic activity. Are you concerned at all that those tax
cuts will be inflationary?

WAYNE SWAN: I'm not concerned. Those tax cuts have been earnt by the Australian workforce and many
on low and middle incomes have waited a long time to get some incentive in the tax system.

SAMANTHA HAWLEY: You certainly don't think those tax cuts will lead to an increase in spending?

WAYNE SWAN: Well I don't know what they will do in terms of the individual. The individual make the
choice themselves, but most importantly in terms of our budget, which the IMF has given a very
strong tick to, is they note that we have defined room in the budget to deliver those tax cuts.

SAMANTHA HAWLEY: There has been some suggestion this week that the next move on interest rates by
the Reserve Bank could actually be down. How likely do you think that is?

WAYNE SWAN: Well that's entirely a matter for the Reserve Bank, but what we can see from this IMF
report is that with our budgetary stance it is their view that we are assisting the Reserve Bank in
that fight against inflation.

SAMANTHA HAWLEY: Okay, well can I ask you about the emissions trading scheme? When that's
introduced, will it be inflationary?

WAYNE SWAN: Well the emissions trading scheme will certainly have an impact on prices. There's no
doubt about that. But what we have to do is to put forward a set of responsible approaches to an
emissions trading scheme which deliver for the country...

SAMANTHA HAWLEY: But an emissions trading scheme could be inflationary and could lead to higher
interest rates?

WAYNE SWAN: You know about the whole issue of climate change, is that the cost of inaction is far
greater than the cost of action. That's what we will have as a set of approaches to emissions
trading which will work in a responsible way and minimise those impacts.

SAMANTHA HAWLEY: But should households be prepared for a further rise in interest rates once an
emissions trading scheme is introduced in this country?

WAYNE SWAN: Potential price impacts of an emissions trading scheme flow from the design of the
scheme itself. We can have that debate in full when the green paper is published and we are talking
about the proposals.

SAMANTHA HAWLEY: Brendan Nelson says that the 2010 start date is too rushed. Do you really think
the Government can meet that target?

WAYNE SWAN: Well Brendan Nelson isn't clear about what he's saying. On the one hand he's said that
it might, could start in 2011 or 2012. Mr Turnbull suggests the Liberal Party's position is that it
will start in 2011. There is no coherent position from the Liberal Party when it comes to an
emissions trading scheme.

SAMANTHA HAWLEY: There is some confusion though when it comes to the Government as well, isn't
there, in terms of the start up date? Can you promise that the Government will start this scheme in
2010 as outlined before the next election?

WAYNE SWAN: Sam, the Prime Minister has made it very clear, the Climate Change Minister has made it
very clear, and I'm making it very clear, is that our ambition is to start that scheme in 2010.

SAMANTHA HAWLEY: But using the word ambition seems to give the Government a bit of wriggle room. Is
that what it aims to do?

WAYNE SWAN: No, it's not what it aims to do. It's a practical recognition that we are going to
design a scheme, that we are going to have green paper which is published next week, that we will
consult on that through to the end of the year. We will then produce a white paper and all the
detailed proposals and we have an ambition to start that scheme in 2010. It's as clear as that.

EMMA ALBERICI: And there you go, the Federal Treasurer Wayne Swan speaking to our reporter Samantha
Hawley.

Murray-Darling situation, 'a shocker'

EMMA ALBERICI: The drought across the Murray-Darling Basin is getting worse.

The Murray-Darling Basin Commission has just held an update revealing that last month's inflows
were the lowest on record and the total inflows for autumn were only just above the record lows
recorded last year.

The outlook for the rest of the year is grim, with the National Climate Centre describing it as a
shocker.

The basin's chief executive warns that people who rely on water from the channel and smaller
tributaries off the Murray system might have to have their water trucked into them.

From Canberra, Sabra Lane reports.

SABRA LANE: Every couple of months, the National Climate Centre and Murray-Darling Basin Commission
hold a briefing on the outlook for the entire basin.

Neil Plummer is the acting head of the National Climate Centre. He says in word, it's a shocker.

NEIL PLUMMER: Our second driest February to June period on record for Victoria and those records
extend back to 1900. So certainly the autumn period through to early winter, certainly an absolute
shocker in terms of climate conditions for the basin.

SABRA LANE: Wendy Craik is the Murray-Darling Basin Commission's chief executive.

WENDY CRAIK: Well the current status of the basin, particularly the southern part of the basin that
we have operational involvement with, is not at all good. Inflows in June were back to record lows
after nearly record low inflows in autumn. Our storages are very low although we do have some
carryover for irrigators in them this year.

The catchments are very dry. And the outlook unfortunately for rain is drier than average. So, put
all that together and you don't have a very encouraging outlook.

SABRA LANE: I think the weather bureau said it was a shocker.

WENDY CRAIK: I think that's pretty right actually. There's not a lot of hope in that outlook in
terms of increased inflows and water availability for the environment, for irrigators and for
communities.

SABRA LANE: If it was a patient, if the river system was a patient, how would you describe its
condition?

WENDY CRAIK: I would describe its condition as critical - not beyond hope but still in pretty bad
shape.

SABRA LANE: And the Lower Lakes - you were saying there's a 50 per cent chance by April next year
that we reach a point where the soils become acid-like and it's really beyond repair, isn't it?

WENDY CRAIK: No what we're saying is that with the inflows, taking the inflows that we've had for
the last six years, on the probability of those inflows for the last six years and with no remedial
action, yes, there is a 50 per cent chance of the Lower Lakes being at a critical level by April
next year.

Now clearly we have a short-term contingency measure in place right now, pumping from Lake
Alexandrina to Lake Albert, and we are in the processing of developing medium and longer term
options for governments to look at.

SABRA LANE: Are we moving fast enough to save it or is it too late?

WENDY CRAIK: We're moving just as fast as we can because trying to develop some of these options is
not, it's not as easy as it might seem, and it's not a simple proposition. And trying to work out
where, what options you have, what you can do with infrastructure, what you can do with water
availability, what the likely climate change scenarios are both in terms of water availability and
sea water changes - all those things are not straightforward and simple. And so we are moving as
fast as we can but clearly it would be nice if we'd been prescient enough to do this a decade ago.

SABRA LANE: The bureau was also saying, even if we did get average rainfall, that wouldn't mean
average inflows. Could you explain why?

WENDY CRAIK: That's right because certainly recent work on the South Eastern Australian Climate
Initiative has shown that we've had increasing temperatures and increasing temperatures mean
increasing evaporation and reduced inflows.

Work from the bureau has shown that for every one degree Centigrade rise in temperature, we get a
15 per cent reduction in the inflows.

SABRA LANE: Now water for human consumption is being guaranteed for those who draw their water from
the Murray system, but what about for those who have channels and take their water from the Ana
Branches from the Murray?

WENDY CRAIK: The water, if there is no water in those channels and Ana Branches then the states are
taking responsibility for making sure that there's water availability for towns and for critical
human consumption. And we're reasonably sure we can deliver water for critical human consumption
throughout the year.

SABRA LANE: But that means they'll probably have to truck it in, rather than take it out of the
river.

WENDY CRAIK: Well of some of them have been using ground water sources and/or trucking it in but
the states have for the last two years in some cases, you know, this has been underway. And so the
states have pretty good systems in place to ensure that that can be done.

SABRA LANE: And Wendy Craik, also you showed a snapshot when you talked about the Murray today. You
showed a picture of some gums near loch six I think it was, and they looked distressed and dead.
What is the environmental outlook for all the River Red Gums particularly along the Murray?

WENDY CRAIK: The outlook for the River Red Gums along the Murray and of course other ecosystems
along the Murray is not good. But in a general sense, if we don't get a lot of water, given some of
those flood plains haven't been flooded since 1993, then we're going to lose some of those Red Gum
and Black Box ecosystems, without a doubt.

EMMA ALBERICI: The Murray-Darling Basin Commission's Wendy Craik speaking there with Sabra Lane.

Rawlinson withdraws from Olympic Games

EMMA ALBERICI: Jana Rawlinson's Olympic dream has been shattered yet again, but according to her
it's not all over.

A knee injury crippled Rawlinson's gold medal chances in Athens and now Australia's world champion
hurdler has ruled herself out of next month's Beijing Olympics because her toe has not recovered
from surgery.

The withdrawal has hit Australia's athletics team hard as the 25-year-old has long been seen as the
nation's best gold medal chance on the track.

Olympics reporter Karen Barlow.

KAREN BARLOW: A month out from the Beijing Games, Jana Rawlinson and her coach and husband Chris
Rawlinson have come to terms with the fact that the hurdler's body has let her down again.

Toe surgery in January with ongoing complications has led to pulling out of the Olympics.

JANA RAWLINSON: Chris and I we are very devastated. The Olympics are what you dream of since you
are very small and I certainly have got unfinished business when it comes to the Olympics Games.
But I've had to make this decision and it's what is the best thing for my career and for our
future, and we've really just got to look forward to where it's going.

KAREN BARLOW: The 400 metres hurdles world champion speaking there in an interview with her
management team.

It is a common practice for elite athletes to be shielded from the media at difficult times. Her
manager James Ward revealed to AM this morning that she has been hiding other complaints.

JAMES WARD: She's had a lot of injuries that no-one's known about, she's kept quiet. She's had a
physio living with her in London that the AIS sent across, living with her for a month, working
extensively every day for three to four hours a day, working on her varied injuries, unfortunately
to no avail.

KAREN BARLOW: Rawlinson raced in Poland last week. She came second, but it was her second slowest
time in eight years and other problems were being masked.

JANA RAWLINSON: I'd suffered a small calf tear leading into that race and it's basically been a
year where we've tried to band-aid me back together and at this stage I am struggling to put my
spikes on.

And we've gone down the last four days to the track to see if we could sort of run in a straight
line and it's really no happening and I have just been advised the best thing to do for my career
would be to try and re-consolidate, take three months off and unfortunately it just seems to happen
that it's an Olympic year.

KAREN BARLOW: Jana Rawlinson is hoping to cheer on the Australian team in Beijing, which is now
doing some re-consolidating itself due to her absence.

Danny Corcoran is the head of Athletics Australia.

DANNY CORCORAN: She will be a great loss to our Olympic team. The two world champions that we have
in Nathan Deakes and Jana Rawlinson, and that's 50 per cent of that team gone. So it is a big loss,
it's a big blow.

KAREN BARLOW: The toe injury has brought back memories of the athlete's knee problems in 2004 which
ultimately led to her coming in fifth in the 400 metres event at Athens.

But Danny Corcoran says Rawlinson is not being a drama queen about her 2008 injuries.

DANNY CORCORAN: I think there is obviously some carry over from the huge speculation and drama and
goings on from Athens. It certainly re-surfaces some of those issues but certainly from our
dealings this is a totally different situation, almost a totally different young woman.

KAREN BARLOW: Jana Rawlinson is already casting her mind to the next opportunities for athletics
gold - the world championships in Berlin and the London Olympics in 2012.

JANA RAWLINSON: This decision about my athletics career was the hardest decision I have ever made
to pull out of the Olympics, especially when I certainly have unfinished business with Athens and
now Beijing.

But I really know that I will be strong and I will be ready mentally and physically when it comes
to London.

We have done everything possible this year and I am very proud of all the people on my team. My
doctors and physios and tried their best but we've just got to step forward and this is definitely
not the end of us. We will come back so much stronger.

KAREN BARLOW: The hurdler will be 29 in 2012 and Athletics Australia says a fourth crack at Olympic
Gold will not be out of the question for a determined person like Jana Rawlinson.

EMMA ALBERICI: Karen Barlow.

Call for mandatory Holocaust studies

EMMA ALBERICI: Around six-million Jews were murdered during the Holocaust but in New South Wales at
least you might never learn about that part of history in school.

The head of the New South Wales Education Department Michael Coutts-Trotter says he discovered only
recently that you could get through the entire compulsory school curriculum in the state and never
know there was a mass killing of Jews during World War Two.

His call for the Holocaust to be a mandatory component of history teaching has the backing of
Jewish groups and secondary principals.

Barbara Miller reports.

BARBARA MILLER: It's school holidays in New South Wales and if these students relaxing outside Town
Hall in Sydney ever learned anything much in the class room about the Holocaust, it's long
forgotten.

LOGAN: I'm Logan and I'm in year 12.

BARBARA MILLER: What do you know about the Holocaust?

LOGAN: The Holocaust? Like the nuclear holocaust, like the bombing of the Japanese people?

BARBARA MILLER: The, well, tell me what else you understand under Holocaust?

LOGAN: Nothing.

KAYLA: I'm Kayla, year nine.

BARBARA MILLER: Kayla, what do you know about the Holocaust?

KAYLA: Nothing.

BARBARA MILLER: Do you imagine anything when I use that word?

KAYLA: No.

BARBARA MILLER: Do you know about millions of Jewish people being murdered in Europe?

KAYLA: Yes.

BARBARA MILLER: That is referred to as the Holocaust. You didn't know that?

KAYLA: No.

BARBARA MILLER: What do you know about the murder of Jews during WWII?

KAYLA: It's sad.

JESSICA: I'm Jessica, year 10.

BARBARA MILLER: Jessica, what do you know about the Holocaust?

JESSICA: Um, Germans and Jews, and they got the Jews to like, they tried to kill all the Jews and
they did stuff, yeah.

BARBARA MILLER: When was that?

JESSICA: Was it WWII? Yeah, was it?

BARBARA MILLER: Is this something you've learned about at school?

JESSICA: Yeah, wait, probably not. Probably not, probably TV, not from school.

BARBARA MILLER: The New South Wales Board of Studies says even though it's not specifically
mentioned many students do learn about the Holocaust. The board issued this statement:

EXCERPT OF STATEMENT: The Holocaust can be and is taught in New South Wales schools. While it is
not a mandatory topic, it can be covered in several ways as part of either the mandatory or
elective years seven to 10 history courses.

There is already a lot to cover in year seven to 10 history and the board is mindful not to over
crowd the curriculum.

BARBARA MILLER: Andrew Blair, the president of the Australian Secondary Principals Association,
also says it's unlikely that large number of students leave school without ever learning of the
Holocaust.

ANDREW BLAIR: You're not going to get in some states and territories a statement which says
students must study the Holocaust. What you will get is a statement like students being exposed to
issues of treatment of humans throughout the Second World War. And so therefore clearly there will
be schools that will talk about the Holocaust.

BARBARA MILLER: Andrew Blair agrees that Holocaust studies should be a key component of history
lessons.

ANDREW BLAIR: I think that it's really important that students are exposed to the major events of
civilisation and arguably the Holocaust is right up there as one of the darkest moments in human
civilisation, along with the First World War, the Second World War, the Iraq War. Whatever wars
have taken place should be, young people should be exposed to, no question.

WOMAN (recording): So they gathered 10 people, 10 Jewish people and they hung them in every city.
And all of us...

BARBARA MILLER: In the Sydney Jewish Museum visitors can look at photographs of the Holocaust, they
can read about the Holocaust and they can watch and hear accounts from survivors of the Holocaust.
Thousands of school students pass through this museum every year.

With me here is Vic Alhadeff, the CEO of the New South Wales Jewish Board of Deputies. Isn't that
enough that you're getting a lot of students visiting a facility like this?

VIC ALHADEFF: It's fantastic that 13,000 school students are coming through the Sydney Jewish
Museum every year. Our concern is, is that students can complete 13 years of high school education
in New South Wales without every studying the Holocaust. The reason that that is a concern is that
the Holocaust is a seminal example of where racial hatred can lead.

BARBARA MILLER: But the New South Wales Board of Studies says there are opportunities, there are
possibilities for students to study the Holocaust and teachers can exploit those.

VIC ALHADEFF: There certainly are opportunities but they are few and far between.

BARBARA MILLER: Any students now curious to find out about the Holocaust will have to be quick if
they want to do so at the Sydney Jewish Museum. It's closing for five weeks from Monday for
refurbishment.

EMMA ALBERICI: Barbara Miller.

Iran's nuclear test firing provokes global anger

EMMA ALBERICI: It's being described as a shot across the bows of US foreign policy in the Middle
East and the latest example of sabre-rattling in the region.

Iran's test-firing of nine missiles yesterday has provoked global condemnation.

The test by Iran's Revolutionary Guards comes after last month's military exercise by Israel, that
analysts said appeared to have been a rehearsal for an air attack on Iran's nuclear facilities.

It also comes straight after Washington announced the latest part of its plan to develop a missile
defence shield in Eastern Europe, aimed primarily, the US says, against so-called rogue states such
as Iran.

Dr Robert Ayson is a nuclear strategist and the director of graduate studies at the Australian
National University's Strategic and Defence Studies Centre.

I spoke to him a short time ago:

Dr Robert Ayson, just how powerful are these nine missiles Iran has tested? Which countries are
they actually capable of hitting?

ROBERT AYSON: They're not super long range. They are capable of, one of the missiles is potentially
capable for example of reaching Israel, countries like Turkey.

And they're not the sort of missiles that can strike at inter-continental range. Most reports
suggest that they are fairly older missiles, so Iran is kind of clearing its older inventory. So
these are not the missiles that the international community is most worried about.

EMMA ALBERICI: The United Nations as well as the US has for some time now been demanding that Iran
roll back its nuclear program, indeed as far back 2003. Eventually they're going to have to make
good on their threats or risk losing face, losing credibility on the international stage, aren't
they?

ROBERT AYSON: There aren't very many good choices here or particularly good outcomes because it
does seem that Iran is determined to continue with some sort of at least low level enrichment of
uranium and that is a matter of national pride and prestige. And it's unlikely that there is an
easy diplomatic negotiation that can be done to get Iran to desist from doing that.

And on the other hand if we're thinking about some sort of more provocative action - military
action to respond to Iran, it's unlikely that that military action would actually get rid of all of
Iran's complex.

And so what we have is basically no easy answers, because of course military action, Iran is
threatening to set the countries that do that on fire, and the missile tests are just a sense of a
sign of Iran's determination to suggest that it is able to do that.

So really we don't have a situation where there is a very nice outcome that we can say well that's
the way we should be preceding here.

EMMA ALBERICI: But Iran could be pretty confident I imagine that the last thing the US is likely to
do is to launch another war.

ROBERT AYSON: Well, the US is not going to get itself into a major war, a kind of a repeat of the
Iraq situation. But I don't think that we should completely discount the possibility that
Washington would consider some sort of very limited action against Iran.

Not to remove Iran's facilities because that's very difficult as I've already said, but to send a
pretty clear signal to Iran and to suggest that Iran's nuclear posturing is not going to be taken
lightly.

There's also the question of course of what Israel might do. And the more that Israel feels that
the US is unlikely to act, the more Israel will feel it may be necessary for it to act. And we've
got a track record there of course. In the early 1980s Israel struck Iraq's nuclear complex and
then most recently of course Israel struck a facility in Syria.

EMMA ALBERICI: Now the timing here of course is quite curious, coming as it does a day after the US
announced the deal with the Czech Republic for a missile defence system in Eastern Europe.

ROBERT AYSON: Yes, it does curious. I think in a sense those two are not too closely related. I
think the missile launches by Iran are a response to concerns that the US and particularly Israel
are indicating that some sort of military action is not off the table, to use diplomatic language.

So I think Iran is really saying to Israel and to the US: don't try, don't try, don't even think
about military action because we can strike back.

The missile defence situation in Europe; there is a connection there but I don't think that Iran is
responding to that.

EMMA ALBERICI: And just quickly, are the foreign policy objectives of the presidential candidates
clear on this? We heard Barack Obama talk about his preference for what he calls aggressive
diplomacy. What does that mean?

ROBERT AYSON: That's a good question, and I think obviously as a candidate and then as a president,
there are going to be differences.

Mr Obama had talked earlier about the possibility of direct negotiations with Iran and came under
quite a bit of pressure in the US for that statement because the US on the whole has a tradition
since 1979 of not really dealing with Iran directly.

But I think Mr Obama has kind of moved back a little bit from that and in an attempt to show that
he is the sort of person that you'd want as the commander in chief, his approach on Iran has
toughened slightly.

Mr McCain is famous for repeating the Beach Boys tune, the bomb-bomb-bomb Iran sort of version of
the song. So I think actually the differences between the two are not absolutely vast.

And I think that basically if Iran feels that it just has to wait for the Bush administration to
leave and then it won't come under pressure in the future, I wouldn't advise that as what they
should be thinking.

EMMA ALBERICI: Dr Robert Ayson, thank you so much for your time.

ROBERT AYSON: No worries.

EMMA ALBERICI: And that's Dr Robert Ayson from the ANU's Strategic and Defence Studies Centre.

Questions surround finances of Great Mates charity

EMMA ALBERICI: Questions are being asked about why a Newcastle charity received millions of dollars
in funding from several state governments when there were indications it was hopelessly insolvent.

The Great Mates charity collapsed in August last year, with more than $3-miillion worth of debts.

Liquidator Ferrier Hodgson blames the charity's demise partly on a $1.5-million loan made to a
company controlled by the charity founder and former owner of the Hunter Pirates NBL team, Jeff
Blandon.

Ferrier Hodgson wants the corporate regulator to investigate the circumstances surrounding the
loan.

Giselle Wakatama reports .

GISELLE WAKATAMA: When it was set up in Newcastle in 1998, Great Mates' goal was simple: providing
accommodation for at-risk children and offering mentoring programs.

Its mission statement struck a chord with Newcastle man Phil Amos who signed on as the charity's
human resources and industrial consultant in 2002, but he says it wasn't long before the wheels
fell off and he was owed $50,000.

PHIL AMOS: I had concerns about the accounts not being paid and I asked, was there money being
moved from Great Mates into the Pirates.

GISELLE WAKATAMA: Liquidator James Shaw says the charity's decision to gave Jeff Blandon's company
- Administration Support Services - a $1.5-million loan in March 2005 severely compromised its
financial position.

JAMES SHAW: It's our understanding that a lot of the money was used to fund the Hunter Pirates and
we'll be arguing that there have been some breaches of duty.

GISELLE WAKATAMA: Great Mates made no secret about its mentoring program being built around
basketball.

Ex-NBL players were recruited by American born Jeff Blandon who was a star player for Transylvania
University, but never played in the Australian NBL. He instead made his mark as the owner of the
Hunter Pirates until 2005.

None of the Great Mates loan money was ever repaid directly by Mr Blandon or his company, but he's
repeatedly told the ABC the loan was drafted so he could offset loan repayments against money owed
to his company for services provided to Great Mates.

The mere existence of the loan has angered Justine Moran from the Australian Services Union who
represented Great Mates employees in Queensland in their fight for wages.

JUSTINE MORAN: It was getting to the point for some of them where they simply didn't have money to
put fuel in the car to even be able to go to work. So employees, once they became aware of that
through the process of the organisation being wound up, were quite disgruntled.

GISELLE WAKATAMA: Jeff Blandon has told the ABC it was the state governments that ultimately sunk
Great Mates as funding was always late - a claim rejected by the Australian Industrial Relations
Commission.

Great Mates was also in trouble in Western Australia despite receiving more than $13-million in
government funding there.

That amount didn't go unnoticed by Anglicare WA which had complained to the Government it was
missing out on contracts to Great Mates, which had no track record and relied heavily on glossy
ex-sports stars.

Anglicare WA CEO, Ian Carter, hopes the collapse is a catalyst for change.

IAN CARTER: Look I think a lot of people had been looking carefully at Great Mates and other
players who are around and I think some uniform standards around that would give the sense of
confidence that there aren't mavericks out there.

GISELLE WAKATAMA: The director-general of the West Australian Department of Child Protection, Terry
Murphy agrees more change is needed to improve accountability, but he's defended his Government's
actions in relation to Great Mates.

TERRY MURPHY: We undertook due diligence when we first established a contractual relationship with
them and the unfortunate fact is this agency, as it was going under, didn't provide honest
financial reports.

GISELLE WAKATAMA: Jeff Blandon is currently living in Kentucky where he's opened a new jazz club
aimed at helping minority artists including Aboriginal Australians.

He's told the ABC he would welcome an investigation into his financial affairs as he's done nothing
wrong and has the paperwork to prove it.

Ferrier Hodgson's supplementary investigation report into the Great Mates collapse is now in the
hands of the corporate regulator ASIC.

EMMA ALBERICI: Giselle Wakatama.

Aid workers in Burma lament late start

EMMA ALBERICI: The military junta in Burma this week has been trumpeting the fact that more than
1500 international aid workers have been granted visas to the country to assist in the rebuilding
after Cyclone Nargis.

The Government has been condemned for not allowing workers in 10 weeks ago when the cyclone first
struck. They say it might have made a difference to the death toll.

South East Asia correspondent Karen Percy reports.

KAREN PERCY: In the cyclone-affected areas of Burma, school is back in. Thousands of schools have
reopened in the past week and it's in part due to the work of agencies like Save the Children.

Andrew Kirkwood is the organisation's Burma director.

ANDREW KIRKWOOD: Kids obviously need to continue their eduction but also, because we know that
that's the best way to help children deal with the trauma that they experienced, getting kids into
a routine, into some sense of normalcy, we know is extremely good for their mental as well as
physical security. So we've been focusing on that.

KAREN PERCY: Children have been among the most vulnerable victims of Cyclone Nargis. Some are
orphaned. Some are still hoping to be reunited with their families.

Experts say the cyclone will have a long-term effect on many of Burma's youngest citizens, but for
babies, even now, it could be fatal.

Andrew Kirkwood again.

ANDREW KIRKWOOD: In every community we go to there are children, young infants who have separated
from their mothers and who are not being breastfed at the moment. And we know that if we don't find
other women to breastfeed these kids soon, that they are likely not to survive the next few months.

KAREN PERCY: Under the guidance of the Association of South East Asian Nations and the United
Nations there's been an influx of foreign expertise in recent weeks.

Those aid workers will be able to provide valuable assistance on the ground for the rebuilding
efforts. But they're also providing much needed relief for the Burmese aid workers who were forced
to carry the load for so long - people like Save the Children's Andrew Kirkwood.

ANDREW KIRKWOOD: Yes, our house was very badly damaged in the cyclone but of course I mean I have
the resources to find alternate accommodation.

I think the story really is about all of those Burmese people who have been very badly affected by
the storm and have put that aside and decided to really dedicate themselves to helping other
people. And I'm incredibly proud of our staff who have done that.

KAREN PERCY: Has there been a shift do you think in the mindset of the junta realising what the
development programs over the past decade or more have done, in building up this Burmese local
population who is at least capable of dealing with it in some way?

Do you think the junta might see this now as a positive and make it easier for the likes of Save
the Children?

ANDREW KIRKWOOD: We certainly hope so. I think that one of the reasons Save the Children was able
to respond so quickly was that we did have 500 national staff in the country. And I think that
certainly in some parts of the Government we're getting recognition for what we've been doing.

KAREN PERCY: As yet there is no clear idea of how long it will take to rebuild after the cyclone
and at what cost. Aid agencies know they're dealing with long-term projects after disasters like
this. With Burma's stubborn military junta, it will be even more so.

This is Karen Percy in Bangkok reporting for The World Today.

NZ sports presenter sacked after admitting to domestic abuse

EMMA ALBERICI: In New Zealand a popular sports presenter has been taken off the air after admitting
he assaulted his ex-girlfriend two years ago.

Tony Veitch is a big media personality across the ditch. He presents the sports news on the
national broadcaster - Television New Zealand.

The 34-year-old fronted the cameras to say sorry, but in a country where many believe the level of
domestic violence has hit crisis point, that apology isn't proving to be good enough for the
public.

New Zealand correspondent Kerri Ritchie reports.

KERRI RITCHIE: Tony Veitch is a household name in New Zealand. Known for his cheeky smile and
snappy suits, Tony Veitch presents sport on TVNZ's 6pm news bulletin. He also hosts a radio sports
program and is a regular in the social pages.

But today his photo was in the newspaper for all the wrong reasons. The Dominion Post ran a front
page story this week that Tony Veitch had broken his ex-girlfriend's back in 2006. It said Kristin
Dunne-Powell's injuries were so severe she spent time in a wheelchair.

Tony Veitch fronted the cameras at a media conference, looking tired and distressed, to explain
what happened.

TONY VEITCH: On the night in question I agreed to let Kristin come over to my house. Following
dinner we had a major disagreement and we argued for a long time. In the end my frustration took
over - I broke and lashed and out in anger.

KERRI RITCHIE: With his new wife standing beside him, Tony Veitch admitted he'd struck a
confidentiality agreement with his former partner. The newspapers are calling it 'hush money' and
have suggested he gave her $100,000 to keep things quiet.

TONY VEITCH: The reason I have not spoken until now is that Kristin and I made an agreement about
confidentiality because we did not want this to play out in the public. That agreement included
payment to Kristin for loss of income and distress I caused her.

KERRI RITCHIE: Domestic violence is hurting New Zealand. The Government is spending millions trying
to control it. At the moment TVNZ is running a series of TV advertisements with the message:
Domestic violence won't be tolerated.

Many New Zealanders want TVNZ to take the advice of those ads and terminate Tony Veitch's contract.

TVNZ says it's reviewing the situation and the broadcaster believes domestic violence is a major
issue in New Zealand. John Drinnan is the media writer for the country's largest paper, the New
Zealand Herald.

JOHN DRINNAN: You have to question the ongoing employment of the guy. He's not just some back room
person, sort of, a sub-editor or someone like that. He's a major personality for TVNZ and so he's
representing the company.

I think there's a tendency even with the public opinion at the moment to think that a lot of people
are getting away with stuff now, provided that you do say you're sorry and maybe there is some
compensation as well, that it's all okay, but (inaudible) the right people.

KERRI RITCHIE: Tony Veitch says he doesn't want to make excuses for what he did, but he did provide
a few.

TONY VEITCH: I was working seven days a week in two stressful jobs and was emotionally and
physically exhausted.

KERRI RITCHIE: Catherine Delore is the spokeswoman for the Women's Refuge Organisation.

CATHERINE DELORE: We are pleased to hear him use the word sorry, that he regrets it, that he said
he was making no excuses for it. But on the other hand he then goes into talking about the fact
that he was in stressful jobs, that he was exhausted and he was taking medications.

KERRI RITCHIE: She says the silence surrounding domestic violence is adding to the problem.

CATHERINE DELORE: She obviously felt she was due some money in terms of the shattering effect this
has had on her life, but I do question his motives in making the payout, whose privacy he was
really concerned about.

(Voice of Tony Veitch presenting)

KERRI RITCHIE: But for Tony Veitch, getting back in the stadium and back on the television may not
be his biggest concern. Police have just announced they are launching a formal investigation into
the matter.

This is Kerri Ritchie in Auckland, reporting for The World Today.

FuelWatch to probe bowser 'rip-off' claims

EMMA ALBERICI: Motoring organisations are calling it a rip-off. As prices at the bowser approach
$1.75 a litre there are claims that retailers are making it difficult to buy fuel on Tuesdays when
prices are usually at their lowest.

The Federal Government's watchdog says it will investigate the claims but the Service Station
Association says the suggestions are ridiculous and that previous investigations into similar
allegations have come up empty.

Timothy McDonald reports.

TIMOTHY MCDONALD: The Australian Competition and Consumer Commission is investigating a western
Sydney petrol station where pumps were repeatedly labelled out of order on Tuesdays. At least one
driver claims he was able to fill up despite the signs.

Suspicious motoring groups and politicians fear it's an attempt to force motorists to buy on
Wednesday, when prices are usually higher.

A Liberal representative in Canberra's Legislative Assembly, Steve Pratt, told ABC local radio he's
heard similar reports from his constituents.

STEVE PRATT: I had a woman phone me on a Tuesday night in May who had been to a petrol station in
Hughes in fact and she, frustrated, had used a not-for-use bowser and to her surprise found that
she could fill her car. And then three other customers followed suit on that particular night.

She was so incensed she rang my office that evening. I've now written to the Minister and provided
all of those details.

TIMOTHY MCDONALD: The petrol commissioner Pat Walker says it's too early to say if there's been any
breach of the Trade Practices Act, but he says there's serious penalties for retailers who do the
wrong thing.

PAT WALKER: You know, misleading conduct, misrepresentation are potential breaches of the TPA, are
very serious and breaches of the Trade Practices Act provisions carry penalties of $220,000 for an
individual and $1.1-million for a company.

So that type of activity, if proven and if correct, is very serious.

TIMOTHY MCDONALD: The NRMA's Alan Evans says he hopes it's not a widespread problem, but he says
petrol retailers aren't above playing games with drivers.

ALAN EVANS: We're getting quite a number of motorists complaining about the fact that they're
finding queues at their service stations on a Tuesdays, which means they're stuck in a queue
burning fuel and they're not making any real savings. So they're avoiding Tuesdays.

So you know, it really is one of those things that just are sent(phonetic) to annoy motorists, but
more importantly I think it shows that fuel is an essential commodity and people will play games at
the motorists' expense with it.

TIMOTHY MCDONALD: Coles, who runs the station, has rejected the claim, saying the manager was
trying to address the problem of drivers leaving without paying. Coles says he wasn't authorised to
do so, but he wasn't trying to rip anyone off.

Ron Bowden from the Service Station Association says out of order signs aren't unusual, and they
don't necessarily mean there's no fuel. He says the claims are a beat-up and retailers have been
unfairly targeted before.

RON BOWDEN: There have been no incidents of any service station deliberately shutting down a pump
on cheap Tuesday. This story ran last Easter. The Office of Fair Trading, the Minister herself
organised a squad of inspectors to check it out in Sydney and they found that in all cases where
there was an out of order sign on a pump, it was for a legitimate purpose.

TIMOTHY MCDONALD: Ron Bowden says refusing to sell fuel would be a downright foolish way to operate
a business. After all, motorists could easily go to one of the several other service stations on
the same road as Coles. He says it makes no sense for any station to hold onto fuel.

RON BOWDEN: Petrol costs so much money to buy and when you buy it and put it on the ground, you've
got to sell it as quickly as you can otherwise your overdraft bill will go through the roof. So
it's completely against the interest of the service station not to sell fuel if he's got it.

EMMA ALBERICI: Ron Bowden from the Service Station Association.

Earthquake prediction a step closer: scientists

EMMA ALBERICI: Scientists in the US have been able to measure minute geological changes in the
earth that could one day help to predict earthquakes.

The team of seismologists dropped sensor equipment into holes drilled one kilometre deep into
California's San Andreas fault.

They then recorded changes in the speed of seismic waves - some up to 10 hours before a small
earthquake struck.

The scientists hope this leads to a prediction system that could one day give people hours to
evacuate buildings ahead of earthquakes.

Jennifer Macey reports.

JENNIFER MACEY: There's a small town in California called Parkfield that's perfect for American
seismologists to observe changes in the earth's crust just before an earthquake hits.

Dr Paul Silver of the Carnegie Institution for Science in Washington explains.

PAUL SILVER: This is a town of 19 people that happens to sit on the San Andreas fault - right
between LA and San Francisco. And it's a place where every 20, 25 years or so there's a magnitude
six earthquake, it doesn't hurt very many people or anything but it's fairly regular.

So we've put a lot of instrumentation there to try to catch a possible precursor, to try to just
study in general the earthquake problem and the earthquake cycle through this 20, 25 or so years.

JENNIFER MACEY: He says a team of researchers lowered sensitive instruments into a well dug one
kilometre below the surface and monitored any geological changes over two months.

They were able to record slight changes in the speed of seismic waves and at one stage they
recorded a signal ten hours before a magnitude three earthquake struck on Christmas Eve in 2005.

The results have been published in the latest Nature journal. The lead author of the report is
Associate Professor Fenglin Niu of Rice University in Texas.

FENGLIN NIU: The speed, how fast the wave travels, it depends on the stress applied to the loch. So
if you have the same material under high pressure, then the wave will travel faster. And if looking
at the time between the earthquake and our signals actually interestingly the velocity changes
start ten hours before the magnitude three earthquake, and two hours before the magnitude one
earthquake.

JENNIFER MACEY: The scientists are now planning more experiments to test these pre-seismic signals.

Dr Paul Silver says scientists have tried to record these waves since the 1970s, but advances in
technology have allowed them to make more precise and reliable measurements. He says it's a key
step towards predicting major tremors.

PAUL SILVER: There's more instrumentation available, there are new phenomena being discovered sort
of as a result of this. This I think is an indicator of a whole spectrum of behaviours that if we
understand them, of this slow earthquake variety, I think we may be able to ultimately predict
earthquakes.

KEVIN MCCUE: Well that's true, if you have the money.

JENNIFER MACEY: Kevin McCue is the director of the Australian Seismological Centre and an adjunct
professor at the University of Central Queensland.

He says while this prediction system could be applied along well-known faults it may be less
effective where an earthquake strikes seemingly randomly such as Newcastle.

KEVIN MCCUE: And there are some great areas of the world where we know reasonably well what the
tectonics are - where the major earthquakes occur on the faults. But in an area like Canberra or
Sydney, Newcastle for example, we have no idea which, if any faults are active or not, where the
earthquake might be.

JENNIFER MACEY: And he says a dense network of bore holes and instruments are needed for this
system to be effective.

KEVIN MCCUE: So it's probably feasible to do on parts of the San Andreas fault in California where
this is a) a lot of money and b) a lot of already existing instrumentation. And also the bore holes
which are so critical to put the instruments not on the surface but down a bore hole to be
measuring the waves that travel through, directly through the volume of rock that may rupture in a
future earthquake.

So you've got to be constantly measuring the velocity of these waves as they travel through the
area. And it may be weeks to even months before a very large earthquake.

EMMA ALBERICI: Kevin McCue the director of the Australian Seismological Centre ending that report
by Jennifer Macey.