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Nelson takes an interest in rates

ELEANOR HALL: But we go first to Canberra where The Federal Opposition leader, Brendan Nelson, has
gone out on a political limb today by putting a number on how far he thinks the Reserve Bank should
cut interest rates.

It's widely anticipated that the Reserve Bank board will cut the official rates when it meets
tomorrow.

But in a move that even he admits is unusual, Dr Nelson is calling for the bank to cut rates by
half of one per cent.

As well as providing some free advice to the Reserve board, he's also indicated that the Opposition
will negotiate with the Government over its emissions trading scheme.

In Canberra chief political correspondent, Lyndal Curtis reports.

LYNDAL CURTIS: Ahead of the Reserve Bank meeting, it's standard operating procedure for the
Treasurer Wayne Swan.

WAYNE SWAN: Well, I don't interfere with Reserve Bank decisions nor do I speculate about them.

LYNDAL CURTIS: But Dr Nelson is willing to do more than speculate.

BRENDAN NELSON: All of the indicators from our perspective as such that there is every
justification for the bank, if it chooses to, to cut those rates by half a percentage point.

LYNDAL CURTIS: He says it's not a call he'd make as prime minister and acknowledges it's an unusual
move for someone in his position.

BRENDAN NELSON: Somebody has to say it and I think we are in an environment where the Reserve could
easily justify a 50 basis point cut.

LYNDAL CURTIS: Both Dr Nelson and Mr Swan are calling for the banks to pass on any rate cut in
full. And on Sydney radio 2UE the Treasurer has continuing to warn the banks they'll have no excuse
for not passing on a cut in rates and he'll act if they don't.

WAYNE SWAN: Economic policy has twin pillars: a fiscal policy and monetary policy. And if the banks
are challenging the authority of the Reserve Bank and the authority of the Government, that is a
challenge to the authority of monetary policy; and I also think what it does is undermine public
confidence in the banks themselves.

We'll wait and see what they do. I've got all options on the table. I've asked the Treasury to have
a good look at all competitive aspects of the market and we'll just see how it goes in the next
month or so.

LYNDAL CURTIS: The Nationals leader Warren Truss says if rates do fall, the Government can take no
comfort.

WARREN TRUSS: Tomorrow's interest rate reduction is not a sign of a healthy Australian economy. It
is a sign of Labor's mismanagement.

LYNDAL CURTIS: But the Treasurer says the Government gave the Reserve Bank room to move through its
budget and he's continuing to pressure the Opposition over its planned vote against some budget
measures.

WAYNE SWAN: And it is just the height of hypocrisy for someone like Brendan Nelson to be blowing a
hole in the surplus and at the same time be calling on the Reserve Bank to cut interest rates. He
will cripple the capacity of this Government over time to take pressure off inflation and create
room to move for the Reserve Bank if he continues to try and blow holes in the surplus.

LYNDAL CURTIS: One of those measures is the increased tax on luxury cars. It will begin to be
debated in the Senate today with a vote expected later in the week.

The Opposition is voting no and the minor parties and Independent Senator Nick Xenophon have called
for changes to exclude fuel efficient cars from the tax rise.

Senator Xenophon says he's talking to the Government about a range of issues although not yet to
the Prime Minister.

NICK XENOPHON: Oh, look I am in constant contact with the Government. I think we are all sorting
our way through this and the new arithmetic in the Senate. So I am sure that we will get there
sooner rather than later.

LYNDAL CURTIS: Have you sat down with Kevin Rudd yet and had a chat?

NICK XENOPHON: Oh, look I haven't met with the Prime Minister. I am sure that will happen in due
season.

LYNDAL CURTIS: Have you met the Prime Minister?

NICK XENOPHON: No.

LYNDAL CURTIS: While the Opposition is happy to send the Government into the arms of the cross
benches on budget matters, Dr Nelson has indicated that won't be the case with emissions trading
when the Government's carbon pollution reduction scheme comes before the Parliament.

BRENDAN NELSON: But I want you to know that we are not and I will not allow this country to be held
hostage to extreme elements in the Parliament nor indeed to, on occasion, extreme elements within
the Government itself.

LYNDAL CURTIS: He says the Coalition will negotiate with the Government.

BRENDAN NELSON: I want to say to you that I have said to my colleagues and I say this to you, it is
about putting Australia first. It is about Australia's national economic and environmental
interests. It is not about political opportunism and the things of which I and others are
frequently accused. It is making sure we get this right for our country and that is the overall
objective and the prism through which decisions will be made.

Next year when this comes into the Parliament and it comes into the Senate, I want you to know that
we will be negotiating with the Government to see that we get the best outcome for Australia.

LYNDAL CURTIS: The Government wants the scheme to start in 2010. The Coalition's position is that
it shouldn't start before 2011 and probably not until 2012 but Dr Nelson is expecting the
difference between the two to be split and the scheme to probably start in 2011

BRENDAN NELSON: In the context of looking at the Government as distinct from ourselves, I think it
is more likely to be 2011 but it could be as late, as I said today, as 2012.

And I think as Australians become increasingly introduced to the economics of this emissions
trading scheme and the complexity of it actually starts to dawn on the Government then I think it
is likely that we will get to 2011 but I would think the Government would be most reluctant to go
any later than that.

LYNDAL CURTIS: The Government's climate change advisor Professor Ross Garnaut will hand down his
next instalment on the details of the scheme on Friday.

The legislation is due before Parliament in March next year and then the negotiations will begin in
earnest.

ELEANOR HALL: That is chief political correspondent Lyndal Curtis with that report.

Central bank begins another balancing act

ELEANOR HALL: While some politicians are calling on the Reserve Bank to make deep cuts to interest
rates tomorrow, the Reserve Bank may end up being constrained by the need to keep inflation in
check.

A survey released late this morning shows that inflation is coming off its peak.

But a closer look at the numbers suggests that the RBA may not be able to cut rates as much as many
in Canberra and the market now expect.

With more, I'm joined in the studio by Richard Lindell.

So Richard, what does the TD Securities inflation gauge tell us about where prices are going?

RICHARD LINDELL: Eleanor, according to this survey, prices rose 0.1 per cent in August and 4.2 per
cent over the year. On the face of it - that's pretty good. Inflation appears to be coming off its
peak of 4.8 per cent hit in June.

But much of the fall is due to lower petrol prices. In fact, if you strip out petrol - inflation
would have risen by 0.6 per cent. Fruit and vegetables, insurance and gas prices all rose
significantly last month. So this means there are still plenty of inflationary pressures in the
economy.

The author of the inflation report is Josh Williamson at TD Securities and he says the RBA will cut
by a quarter of a per cent tomorrow, but is unlikely to cut as deeply and quickly as it has in
previous cycles.

JOSH WILLIAMSON: I think that we are going to see a slow and a steady pace of interest rate cuts
over this cycle. Probably massing over probably 125 basis points. That is different to the 200, 250
basis points we have seen in the last couple of cycles but primarily due to the fact that, again we
have a Reserve Bank that is concerned about inflation.

Inflation pressures are likely to remain above the target band for a good 18 months to come yet. So
the Reserve Bank will want to manage the downturn in the economy but not restimulate the upswing
and risk restimulating inflationary pressure.

ELEANOR HALL: That is Josh Williamson from TD Securities.

Richard, this isn't what the Reserve Bank has been saying in its reports lately but the other part
of the equation here is the strength or otherwise of the economy. And it seems each new piece of
data contradicts the previous one. Where is the economy heading today?

RICHARD LINDELL: Well, I think you are right Eleanor and no one really knows the answer to that
one. This morning we saw the release of the balance of payments figures also - the deficit came in
at just under $13-billion which is down from 20-billion in the first quarter. It's still a terrible
number though given the mining boom.

But it is moving in the right direction and it does show the huge improvement in the prices we're
receiving for coal, for iron-ore and for other commodities overseas.

So these numbers do highlight the boost we're getting from the mining boom and also show why
business investment is still holding up.

But on the downside, last week we saw a big fall in construction activity which makes up about 15
per cent of the economy. Retail sales remain weak. Business and consumer confidence are both at
recession levels still. But for Josh Williamson at TD Securities on balance he says the talk of
economic gloom has been overdone.

JOSH WILLIAMSON: This just shows you the stimulatory effect of the terms of trade and the fact that
we are starting to get some traction in our exports now after all that business investment has gone
through.

This is important because what it is going to mean is that we could actually have exports actually
adding to economic growth for the first time in a couple of years and this is also going to help
buoy overall economic conditions and factor into the RBA decision making. So we are certainly not
in the recessionary-like conditions of the New Zealand or the US.

The economy is slowing but we are seeing a re-balancing of the economy towards business investment,
towards exports and away from the household sector. So we are actually in a pretty good position
and probably the envy of many other countries in the industrialised world.

ELEANOR HALL: That is Josh Williamson from TB Securities again.

So Richard on Wednesday there is the release of the June quarter economic growth numbers. That will
tell us more about how the economy is travelling. What can we expect from them?

RICHARD LINDELL: Well it certainly will although they are historical numbers, it has got to be
remembered.

The market forecast seems to be that the economy will have grown by 0.4 per cent in the three
months to June. So, it's still a pretty healthy number although not quite as high as we've become
used to in recent years.

It also shows that the economy has managed to stand up to very high official interest rates as well
as those few more thrown in for good measure from the banks.

So, the RBA may have hoped for a slightly lower number on GDP, but overall if the number come in as
expected, it may actually provide the RBA with some more flexibility in that it won't need to move
too quickly to cut rates and it can maintain the focus on inflation which has got to be remembered
is still not expected to peak until the end of this year at a very uncomfortable 5 per cent.

ELEANOR HALL: Richard Lindell, thank you.

Keelty under renewed pressure over Haneef

ELEANOR HALL: The former Attorney General, Philip Ruddock, has been giving evidence at the inquiry
into the bungled handling of the Mohamed Haneef case.

The Australian Federal Police declared on Friday that the Indian doctor who was arrested on
terrorism related charges on the Gold Coast last year was no longer what they termed a "person of
interest".

But Dr Haneef's legal team is questioning the role of the AFP commissioner, Mick Keelty in the case
and the Australian Lawyers Alliance wants him to stand down immediately.

Donna Field has our report.

DONNA FIELD: Mohamed Haneef has spent the weekend taking in the news that he's no longer the
subject of an Australian Federal Police investigation.

The doctor who was based at the Gold Coast was charged over a terrorism plot in the UK in 2007 but
the case against him later collapsed.

The AFP released a statement on Friday saying it's concluded its active inquiries, but that some
overseas inquiries are yet to be resolved.

ROD HODGSON: He was delighted to receive the news on Friday afternoon but he remains very concerned
that for the last 14 months, he has been referred to as a suspect and effectively accused of some
wrongdoing by that description. When each and every other agency who had looked at the matter,
didn't have such a description for him.

DONNA FIELD: Dr Haneef's solicitor Rod Hodgson. He says the focus has now shifted to those who
pursued his client.

ROD HODGSON: Effectively Mr Keelty has said 'trust us, we're the AFP, we know best and butt out'.
He has effectively told our Attorney-General to take a flying leap when Mr McClelland suggested
that the AFP ought to be producing a public submission to the Clark Inquiry.

And he has presided over an organisation that ignored Dr Haneef's legal rights by not providing
with a lawyer when he requested and misled our client about his right to talk to a magistrate when
Dr Haneef was in detention.

All of that things point to serious problems with the AFP at its senior management level and
clearly this government must be thinking about Mr Keelty's tenure and how solid that tenure ought
to be.

DONNA FIELD: So should he stand aside until the Clark Inquiry's findings are handed down or are you
comfortable with him staying in the position?

ROD HODGSON: Look, we are not comfortable with Mr Keelty for all of those reasons but I emphasise
that we have not seen all of the material that Mr Clark has seen and accordingly it is a matter for
the Government based on the findings of the Clark Inquiry when its findings are made public, to
consider Mr Keelty's position.

DONNA FIELD: While Dr Haneef's legal team isn't calling for AFP commissioner Keelty's scalp just
yet, the Australian Lawyers Alliance wants him to stand aside until the Clark Inquiry into the
handling of the Haneef case is finalised.

President Clara Davies says while much information being put before the inquiry is secret,
information that is on the public record seriously questions the actions of the AFP.

CLARA DAVIES: If there was nothing that was done by the AFP of concern, then there should be no
problems after the findings are handed down. If there is a situation where there is some doubt or
shadow thrown upon the actions of the AFP then the appropriate action at the time should be taken.
Everyone should be held accountable for their actions.

DONNA FIELD: Today Philip Ruddock will give evidence to the Clark Inquiry but his testimony will be
heard in private. Mr Ruddock was attorney-general at the time of Dr Haneef's arrest.

He says the AFP is an independent statutory body under its own leadership and it wasn't subject to
political interference while the former Howard government was in office.

PHILIP RUDDOCK: This was a proper matter for inquiry and the fact that it didn't lead to a
prosecution doesn't mean that the inquiry shouldn't have taken place. And I think the Australian
community, if there were allegations involving an individual here, where there had been a terrorist
act and it was suggested there were linkages and they didn't inquire, they would be very severely
criticised.

DONNA FIELD: Dr Haneef's legal team says once the Clark Inquiry delivers its report at the end of
the month, it will start pursuing compensation and defamation cases.

Rod Hodgson says it seems the AFP has used the time since Dr Haneef's arrest to dig itself out of a
hole.

ROD HODGSON: For the past 14 months he has continued to trash Dr Haneef's reputation by
continuously referring to him as a suspect against a background that every other agency that
investigated this matter, cleared my client very early in the piece.

DONNA FIELD: The Clark Inquiry will report at the end of the month. Until then AFP commissioner
Mick Keelty isn't commenting. Neither is the Federal Government.

ELEANOR HALL: Donna Field reporting.

Paralympics struggling to attract sponsorship

ELEANOR HALL: Australia's Paralympics team is jetting off to Beijing today and is hopeful of an
even bigger haul of medals than last time.

But it is worried about a decline in corporate interest.

Organisers of the Paralympics say the event is growing in popularity and is now one of the biggest
sporting events outside of the Olympics.

But in Australia, the growth of Paralympic sports isn't translating into increased corporate
sponsorships, as Michael Edwards reports.

MICHAEL EDWARDS: The members of Australia's Paralympics team don't consider themselves disabled
athletes - they just say they've had a few more obstacles to overcome to get to the top of their
chosen sports.

Jayme Paris was not expected to live when she was born with the neurological disorder - Cerebellar
Ataxia.

Now she's off to Beijing to represent Australia in cycling.

JAYME PARIS: I was thinking about it on the way over and thought I was there four years ago
welcoming back like my, my teammates who are in this team and I thought, wow, I'm leaving today and
going to do what they're doing and it just feels great.

MICHAEL EDWARDS: Kurt Fearnley is representing Australia in the marathon at the Paralympics. He
says it's a great feeling to have the whole country behind him.

KURT FEARNLEY: I think that it is always great to get the feedback from home and it is always fun,
you know, to get there and to know that Australia is behind us.

MICHAEL EDWARDS: At the last Paralympics, Australia won 101 medals. The team is confident it can
win more at this Games.

Greg Hartung is the President of the Australia Paralympic Committee.

GREG HARTUNG: We have a gifted group of athletes. This is the best away team we have assembled.
They are big on talent and big on toughness, so we will expect our athletes to perform at peak.

MICHAEL EDWARDS: And Greg Hartung says it's expected that this year's Paralympics will be watched
by an unprecedented number of people across the world.

GREG HARTUNG: There will be unquestionably the biggest viewing audience worldwide and indeed in
Australia for these Games. We expect 1.8-billion viewing audience for a Paralympic event. We expect
1.6-million people to go through the turnstiles in Beijing.

MICHAEL EDWARDS: However, there are concerns the increase in popularity of the Paralympics isn't
translating into support for the athletes by the corporate sector.

Australia's Paralympic team is funded by the Federal Government but also relies heavily on
donations and corporate sponsorship.

But this year, Paralympic organisers say they've been underwhelmed by the amount of companies
sponsoring the team and disability sports in general.

Jim O'Brien is the chief executive of Wheelchair Sports, New South Wales.

JIM O'BRIEN: Well, I think there has been a general downturn right across the board in sponsorship
for both able bodied sport and sport for those with a disability. I think we have seen that in a
number of areas and people struggling to get adequate levels of sponsorship.

MICHAEL EDWARDS: Jim O'Brien puts it down to tougher economic conditions and companies needing
higher profile sports to get a return on their money.

JIM O'BRIEN: I think they want to see a return for their investment. A lot of organisations want to
see that the money they are getting in, the money they are putting in for sponsorship, will see a
return for them. And I think a lot of the time we just can't provide that; we just can't, with our
media exposure for disability sporting events, can't provide that.

ELEANOR HALL: That is Jim O'Brien from Wheelchair Sports New South Wales ending that report by
Michael Edwards.

Fairfax CEO defends company standards

ELEANOR HALL: There's been a breakthrough in the dispute between Fairfax Media and its journalists
over job cuts.

Journalists from The Sydney Morning Herald, the Melbourne Age and the Australian Financial Review
have returned to work in response to the company's managers making some concessions on journalists'
pay.

The journalists' union is now negotiating with Fairfax on when and where the planned redundancies
will take place.

But in an interview with The World Today, Fairfax Media chief executive, David Kirk, maintains that
the quality and diversity of the company's journalism won't be compromised by the cuts.

David Kirk spoke to our business editor Peter Ryan.

PETER RYAN: David Kirk, you are in the middle of what has been a very bitter stand-off with your
staff. Could this have been handled better by Fairfax Media?

DAVID KIRK: I mean you always ask yourself that Peter and we will certainly think about whether
there was any way to handle it better. But it was rather unexpected from our perspective. Staff
attended a, a stop-work meeting on Thursday and we'd agreed to that and then there was an
unplanned, from our perspective, wildcat and illegal strike thereafter.

So we have been handling it and subsequent to that with that context.

PETER RYAN: Before this breakthrough was reached late yesterday, it is claimed that Fairfax
threatened to lock out staff. Can you confirm that?

DAVID KIRK: We certainly did reserve the option but it was something that we would have very much
tried to avoid.

PETER RYAN: Do you think that was an over-reaction in the heat of the moment?

DAVID KIRK: No, no, no. I don't think so at all. I do think that everyone in these sorts of
circumstances reserves their options and I am sure the staff and the union were reserving all their
options as well and; but it is not something that we would have wanted to apply at all.

PETER RYAN: Do you think this breakthrough could have been reached earlier if there had been better
communication with your staff and the journalists' union?

DAVID KIRK: In the end there just had to be an agreement and very often we see these agreements get
crunched through and sometimes in tough circumstances. So that is not unusual for all sorts of
these sorts of agreements.

PETER RYAN: But your announcement last week of a business improvement program did catch your staff
by surprise and they learnt about the proposed cuts by email. Is that good management?

DAVID KIRK: Well the problem there, Peter is we have got a lot of people in the organisation. We
have got 11,000 people and we announced redundancy of 550 across the whole business.

Now the editorial businesses were also in the middle of the EBA so it is quite understandable that
the heat and the emotion would be turned up in that part of the business.

That said, we can always learn and we can always do more and if there is opportunity for us and
there is feedback that people wanted more and more comprehensive discussion and they wanted smaller
groups or whatever it might have been, then we can learn from that.

PETER RYAN: Some of your big name columnists have been dragged into this such as Mike Carlton who
was sacked on Friday for refusing to file his Sydney Morning Herald column. Was that an
over-reaction?

DAVID KIRK: I think it is very unfortunate. It is a completely separate issue though. Nothing to do
with the EBA and we have a whole range of contributors. Very many, 50, 60. I am not sure what the
number is. Maybe more, maybe 100. They all filed except for one.

PETER RYAN: Have you had a chance to have a word with Mike Carlton? Will you be offering his job
back?

DAVID KIRK: No, Mike doesn't work for me. He works for the Sydney Morning Herald and he works for
2UE radio station so the appropriate people to speak to him are his managers.

PETER RYAN: How damaging has this dispute been to the Fairfax brand and what responsibility do you,
as chief executive of Fairfax Media, take for any of the damage that has occurred over the last few
days?

DAVID KIRK: Well, I think clearly the company and the markets have received a lot of bad PR. I mean
I would be quite open about that. It has been very unwelcome criticism from a range of quarters.

All we can do now is get good papers out, pull the organisation together and continue to do what we
do well.

ELEANOR HALL: That is Fairfax Media chief executive David Kirk speaking to our business editor
Peter Ryan.

And you can listen to an extended version of that interview on our website later this afternoon at
www.abc/net.au/theeworldtoday

Authorities rush to protect New Orleans against Gustav

ELEANOR HALL: Darkness has fallen in the US city of New Orleans where authorities say they have
completed one of the most successful evacuations in US history.

National Guard troops are now patrolling what has become a ghost town enforcing a curfew and
bracing for inundation by Hurricane Gustav.

The hurricane, which is fiercer even than Hurricane Katrina, is expected to make landfall west of
New Orleans early tomorrow morning Australian time. And the tidal surge accompanying it is expected
to breach the city's levees as John Shovelan reports.

JOHN SHOVELAN: With the Gulf Coast only just feeling the effects of the outer edge of the massive
storm system - it's hardly the time for state, local and even federal officials to be patting each
other on the back - after all the hurricane is still hours away from making landfall.

But authorities are already feeling the satisfaction of a job well done. The reason - the
evacuation of the city of New Orleans ahead of Hurricane Gustav appears to have gone without a
hitch.

The Governor of Louisiana Bobby Jindal says 90 to 95 per cent of people in coastal areas and the
city of New Orleans have left.

BOBBY JINDAL: But as many as 95 per cent have evacuated. That will put the total at a little over
1.9-million people.

JOHN SHOVELAN: Governor Jindal says he's heard an estimate that only 10,000 people are left in the
city of New Orleans.

The city's Mayor Ray Nagin says this time is a far cry from the lawlessness and chaos that was the
hall mark of Hurricane Katrina.

RAY NAGIN: We know what we need to do. We've practiced it. We've got the resources and we're
implement it and everybody is appreciate.

It is just nice to see a plan come together.

JOHN SHOVELAN: Nothing has been left to chance compared with three years ago when the White House
released a picture of the President flying over the area in Air Force One while his vice-president
was fly fishing.

The Federal Emergency Management Agency director was blissfully unaware 80 per cent of New Orleans
was under water.

Images were flashed around the world of hundreds of people on roof tops - stranded pleading for
help - people living on bridges with deaths in hospitals and nursing homes because authorities
failed to act.

This time the President is in neighbouring Texas monitoring the response - his Secretary of
Homeland Security is in Louisiana and his director of FEMA has been in the area for days.

Every effort has been made to ensure there is no repeat.

FEMA director David Paulison says they can only wait now to see what track the hurricane takes.

DAVID PAULISON: I've told you before that we were going to be ready for this storm. I think we're
showing that we are ready for this storm. Again, we cannot, I can't stop the damage from happening.
We can't stop the storm from coming in. What we can do is be as ready as possible, making sure we
are ready, the States are ready and the local community is ready.

JOHN SHOVELAN: Among the unknowns are just how effective are the levees which protect the city of
New Orleans.

Local government officials are expecting some of the city to once again be under water because
Louisiana Senator David Vitters says the reconstruction is still incomplete.

DAVID VITTERS: That work is not scheduled to be complete until the 2011 hurricane season. It'll
only be 2011 when we have full, what we call, 100-year storm protection and so there are
vulnerabilities in the system.

JOHN SHOVELAN: The storm surge generated by Hurricane Gustav appears likely to overwhelm the levees
west of the city.

Forecasters predict the hurricane will cross the coast as a category three storm with sustained
winds of nearly 200 per hour.

John Shovelan, Washington.

US Republicans aim for quick Gustav response

ELEANOR HALL: The approaching storm has already thrown this week's Republican National Convention
into disarray.

President Bush has pulled out and many of the opening day's activities have been scrubbed.

Republicans don't want to be seen partying when the massive storm comes ashore.

They are also desperate to avoid a repeat of their poor response to Hurricane Katrina.

North America correspondent Michael Rowland reports from the convention floor in St Paul,
Minnesota.

MICHAEL ROWLAND: Hurricane Gustav has dramatically altered the political dynamics of the Republican
convention.

What was to have been a week-long assault on Barack Obama and the Democrats, and a
made-for-television promotion of Republican Party values, has now been turned into a public service
event.

The party's presumptive presidential nominee John McCain issued his riding orders to delegates
during an appearance via satellite from the Gulf Coast.

JOHN MCCAIN: We have to join with 300-million other Americans on behalf of our fellow citizens. We
are going to care for these people in their time of need and we are going to display it in every
possible way as Americans always have and Americans always will.

MICHAEL ROWLAND: Most of the opening day's events have been cancelled.

The convention will be formally opened but there'll be the bare minimum of business.

And, as per John McCain's instructions, there'll be absolutely no politics.

Rick Davis is the McCain campaign manager.

RICK DAVIS: Owing to the fact that the Senator has asked us to take our Republican hats off and put
our American hats on, tomorrow's program will be business only and we will refrain from any
political rhetoric that would be traditional in an opening session of a convention.

MICHAEL ROWLAND: The schedule for the rest of the week is up in the air. Republican officials will
review the situation on a day by day basis.

But if the hurricane is as devastating as expected there's every chance John McCain won't make it
to Minnesota. Mr Davis hasn't out the possibility of the Senator accepting his nomination via
satellite.

RICK DAVIS: Obviously, he would like to be here. This is culmination of a political career that has
been launched a long time ago. Hard fought primary campaign so obviously he is going to do
everything he can but obviously, too, we are not going to do anything that would be deemed
inappropriate during the course of this kind of situation.

MICHAEL ROWLAND: Already a no-show is President George Bush.

He was to have given the opening night speech here but wants to focus instead on hurricane relief
efforts.

GEORGE W. BUSH: In light of these events, I will not be going to Minnesota for the Republican
National Convention.

I am going to travel down to Texas tomorrow to visit with the Emergency Operations Center in Austin
where co-ordination among federal, state and local government officials is occurring.

I intend to go down to San Antonio where state and local officials are pre-positioning relief
materials for Texas and Louisiana. And I'll have a chance to visit with residents of both states
who have been evacuated.

MICHAEL ROWLAND: Mr Bush and the Republican Party generally want to avoid the condemnation heaped
upon them after the poor federal response to Hurricane Katrina three years ago.

Mr Bush doesn't want to end his time in the White House with a repeat of the main domestic policy
failure of his presidency.

John McCain also wants to be seen as a leader who can respond effectively and quickly to a national
crisis. That's why he's changed his campaign schedule and travelled to the Gulf to talk to
emergency response teams.

While the Republicans, at this stage at least, are being denied a prime time forum for going after
Barack Obama, there are some potential upsides from the revamped convention schedule.

There are plans for a mass fundraising drive here - a move that could generate plenty of positive
images for a party still very much on the nose across America.

And while nobody here will say so publicly, the absence of a deeply unpopular president is a
godsend for John McCain, who's spent the campaign so far trying to avoid him.

But of course another botched response to a natural disaster could be electoral poison for the
Republicans.

In St Paul Minnesota this is Michael Rowland reporting for The World Today.

Half a million stranded after Indian floods

ELEANOR HALL: While the residents of Louisiana wait for a possible catastrophe, in northern India
millions of people have already been dealing with their own flooding disaster.

The worst floods in the region in half a century were triggered two weeks ago when a river in
neighbouring Nepal burst its banks.

Half a million people in the northern state of Bihar are estimated still to be stranded and many
more have been left homeless, and are seeking shelter in already overcrowded relief centres.

As Barbara Miller reports:

BARBARA MILLER: India is used to dealing with heavy floods in the monsoon season.

But the extent of the disaster now affecting the northern state of Bihar has taken even seasoned
observers by surprise.

MADELINE WILSON: The scale is quite hard to fathom actually.

BARBARA MILLER: Madeline Wilson is a spokesperson for Emergency Affairs at World Vision Australia.

MADELINE WILSON: The reports that are coming vary but there is between two and three million people
displaced which is, if you can imagine that is almost the population of Melbourne. So that many
people have been displaced by the flooding.

There is about 500,000 people or half a million that have been marooned and they are basically
waiting for assistance. Waiting for the authorities to come and assist them.

There has been extremely heavy rain all across the weekend so that is really hampering relief
effort.

BARBARA MILLER: Melville Fernandez the emergency co-ordinator for Caritas Australia is on his way
now to the affected region.

MELVILLE FERNANDEZ: Compared to the past, so many years, I think it has become quite serious and
really of high magnitude which the people themselves are amazed.

Caritas India which is very familiar at handling (phonetic) differnet disaster situations. We are
also amazed about the extent of damage and seriousness caused to the millions of people over there.

BARBARA MILLER: Many of the temporary shelters are being run by volunteers.

Ashook Sharaf is a local aid worker at one of the camps.

ASHOOK SHARAF: We are not getting from government; we are managing ourself. So we will like to get
some aid from government.

BARBARA MILLER: The head of a shelter set up at a Madrasa said all the needy were being given help:

AID WORKER (translated): Both Hindu and Muslims around 1500 of them have been here for the past
week. We have been running this service and we provide food and shelter to all those who come here.

We do not discriminate. Everybody eats together.

BARBARA MILLER: These men, who are Hindus, were among those being looked after at the Madrasa:

INDIAN MAN (translated): My house was flooded. It was difficult to even get out alive from such
flooding. Release (phonetic) this madrasa and the Muslims out there are helping us. Giving us food
to eat.

INDIAN MAN 2 (translated): There was flooding everywhere. Our house was surrounded by deep water.
My sister-in-law was expecting a baby and we had to leave. We thought we would drown on the way but
we reached a madrasa and the boy was born here.

BARBARA MILLER: Providing aid to all those affected is proving a huge challenge for the
authorities. They've now taken control of all private boats in the region and are using them to try
to help those stranded in remote villages.

But hundreds of thousands remain cut off. And with the river Kosi widening* by up to 200 metres a
day, this disaster might not yet have reached its peak.

ELEANOR HALL: Barbara Miller reporting.

*Editor's Note: This transcript was amended on 1st September, 2008 to insert a reference to the
river widening not swelling.

Tourists take off, as stalemate simmers

ELEANOR HALL: To Thailand now where the airports have reopened, but the political crisis is far
from over.

Thousands of holiday-makers on the island of Phuket were scrambling to get home over the weekend,
as anti-government protesters shut down the airport there and in other centres in the country's
south.

The country's prime minister is refusing to give in to their demands that he step down.

But the protesters are just as determined as South East Asia correspondent Karen Percy reports.

KAREN PERCY: Every person who wants to join in the protest by the People's Alliance for Democracy
has to pass through several security checks.

Portable toilets are lined up outside the gate. Food stations have been set up. There are resting
spots. And people are camping out nearby the grand staircases and enjoying the ornate water
fountains that are usually the reserve of Thailand's political leaders.

Thousands of people are gathered about a large professional sound stage where all night and all day
rousing anti-government speeches and patriotic music keep the people focused.

They are doctors. They are teachers. They are students. They are managers. And they all believe
this government voted in by the rural masses who are firmly in favour of disgraced former prime
minister, Thaksin Shinawatra, has to go.

VOX POP: Give the poor people everything they want. Something like that but they use our money.

KAREN PERCY: General Chamlong Srimuang is one of the leaders of the People's Alliance for
Democracy. Arrest warrants are out for him and eight of his senior colleagues.

CHAMLONG SRIMUANG: I didn't break the law. We abide by the Constitution otherwise we can not do
something like this.

KAREN PERCY: The protesters here are unconcerned about the chaos that's being caused elsewhere.
Three regional airports were shutdown over the weekend because of blockades.

The airports in Krabi and Phuket are the lifeline for the tourism industry in the southern part of
the country and thousands of visitors were forced to change their plans or were simply left to wait
it out at the airport.

Security has been stepped up at Bangkok airport and in Chiang Mai which are both major regional
travel hubs. The PAD is said to have threatened those as well.

But General Chamlong says the direction didn't come from him.

CHAMLONG SRIMUANG: We worry about tourism.

KAREN PERCY: But you've been the ones who have shut down the airports.

CHAMLONG SRIMUANG: No. It is not my intention. They did by themselves because of the Government, so
the easy way to solve this problem is that the Government is supposed to resign. Very, very, very
easy.

KAREN PERCY: But of course they are not going to resign which leaves you at a stalemate. How far
will you go?

CHAMLONG SRIMUANG: I cannot predict.

KAREN PERCY: But already the union movement is threatening to escalate the action and the
Government seems powerless to stop it. Mr Samak says he was elected to the job and won't step down.

An emergency parliamentary debate yesterday exposed further the deep divisions within Thai society
and law-makers offered little in the way of a solution - preferring to point fingers instead.

With pro-government forces starting to mobilise there is a real fear that while the politicians
squabble, the army will have no choice but to intervene yet again.

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

Social researcher discusses Australia's new mood of hope

ELEANOR HALL: He has been closely observing Australians for more than 3 decades.

Now social researcher, Hugh Mackay, has given up his day job writing the Mackay Report but he
hasn't given up observing how changes in technology, in the economy, in gender roles and in the
world have affected the attitudes of Australians.

And he has just released an updated version of his latest book: "Advance Australia Where?"

In it he shows how Australians are now emerging from a sort of torpor of introspection into a new
mood of hope.

But he warns that this carries with it an element of danger for the Australian governments.

Hugh Mackay joined me in The World Today studio this morning. Hugh Mackay you say that in the last
three decades, Australia has been going through a major social renovation, if not a revolution.
What are the most significant shifts that you have seen over this period?

HUGH MACKAY: I think by far the greatest of all the shifts has been the revolution in the place of
women in our society.

Sure there has been an economic upheaval; there has been a technology revolution. Australia is a
different kind of society from the way it was 30 years ago. But of all the changes, I think the one
that sent most ripples through our society is this revolution; this sense that women are not to be
treated as second class citizens.

That they have their own identity and their own person-hood and that has affected marriage,
parenthood, family dynamics, the life of the neighbourhood, the workplace of course, transformed.
Tertiary institutions, education institutions transformed. The retail environment, the political
landscape. Nothing is unaffected when half the population finally says what about me.

Thirty years ago, 25 per cent of Australian women were married by the age of 20. I mean you can
hardly comprehend. That is only 30 years ago. Today the corresponding figure is three per cent.
This is a revolution.

ELEANOR HALL: Over these decades, you say that you've observed shifts in Australian society and
that we are just emerging from a long period of a sort of disenchantment and disengagement with the
big picture. What was it that turned people inward into what you call the dreamy period? Was it the
terrorist attacks in 2001?

HUGH MACKAY: No it had happened before then, Eleanor. I think, I think it was the accumulative
effect of all of these social, cultural, economic, technological changes. It seemed to, I mean
added of course on top of that, the threat of international terrorism. The threat of environmental
degradation, world wide economic uncertainty.

But really around the turn of the century it looked to me as though it was a case of overload. As
though about three quarters of the population had just found it all too much.

Our consumption of anti-depressants had tripled through the 90s. People were reporting high levels
of anxiety and stress. This thing called reform fatigue is a real thing and so people just look it
is all too much.

ELEANOR HALL: And it wasn't just economic reform fatigue?

HUGH MACKAY: Oh, no. no. All these other things: what has happened to the family? What has happened
to the neighbourhood? Why are my kids acting as if they are off a different planet from me? All
that sort of stuff.

So we entered into a period where the focus came off all the big social issues. We disengaged from
politics. I mean the sure sign that we disengaged from politics was that for almost ten years, we
just kept re-electing every federal, with the exception of South Australia, every federal, state
and territory government with increased majorities. Not because we loved them but because we didn't
want to rock any more boats. Let's just maintain the status quo.

It was a period when the focus turned inward. We became more than usually materialistic. Racked up
record levels of personal and household debt to finance our self-indulgence. We became very
self-absorbed; we became obsessed about our homes and our backyards, our renovations, the kids
schools.

We became obsessed about our bodies. Body shape, tattoos, body piercing, cosmetic surgery. All
these things thrived during this dreamy period and they were all symptoms of a society taking a
break. A kind of societal retreat. It was a fascinating. We became more prejudiced. Less
compassionate, less tolerant.

All the things that go along with the inward focus and of course, what is most fascinating to me
about that period is why it ended. Because it seems to have ended and it is not clear what brought
us out. Although I think climate change; I think the drought, the water crisis was the big trigger.

ELEANOR HALL: So what brought us back from this holiday was fear of an even bigger change heading
for us.

HUGH MACKAY: Yes, the sense that this is a real problem. But then once you get focussed on one
issue after having not been engaged then of course you are awake and you start not just focusing on
other issues; like WorkChoices became a big issue about a year after the legislation.

You also start listening to your memory. Issues like AWB kickbacks, even the invasion of Iraq.
Treatment of asylum seekers in our detention centres. All of these things that during the dreamy
period we sort of didn't like it much but we just kind of shrugged and focused on what was for
dinner or what tiles we would choose to top off the bathroom renovations.

But once you are awake, you hear your memory as well as attending to what is happening here and now
and the accumulation of lots of things seem to bring us out of this torpor.

ELEANOR HALL: So is the Rudd Government one of the causes of this re-engagement or a beneficiary?

HUGH MACKAY: A beneficiary. There is no doubt in my mind that, well I think the arrival of Kevin
Rudd on the scene as ALP leader was one of the contributing factors to a general reawakening. But
mainly they were beneficiaries.

When John Howard said before the '07 election, if you change the government you will change the
country, he had missed the point. The point was the country had changed so a change of government
was inevitable and becomes of course, more likely in every state and territory as well.

ELEANOR HALL: And do you think that the Government, the Federal Government and indeed the state
governments are picking up on this mood sufficiently?

HUGH MACKAY: I suppose they are. I mean the Northern Territory, the Labor Government there, I
suppose thought they were home and hosed and very nearly lost office. West Australia might find the
same thing.

I think they are all very alert to the fact that a newly engaged, newly energised, newly hopeful
electorate is much more in the mood for change.

For the Federal Government of course, the real challenge is that the change of government became a
symbol of our awakening and so there was this, this quite hyperbolic sense of a new order. It
wasn't just a new government, but people were talking about their great relief, their new sense of
hope. Now that produced a kind of euphoria in the community which is actually very dangerous for a
government.

ELEANOR HALL: It is a double edged sword, isn't it?

HUGH MACKAY: Yeah, absolutely. It means that the community is very amenable to calls to action, for
example on climate change, people are expecting to be asked to join the fight and already rather
disappointed that the fight doesn't seem to have begun.

But euphoria is a bubble which has to burst and there is an inevitability about the shock or
disappointment that must set in for this government.

ELEANOR HALL: Hugh Mackay thanks very much for joining us.

HUGH MACKAY: My pleasure, thanks Eleanor.

ELEANOR HALL: That is social researcher, Hugh Mackay, speaking about the updated version of his
book "Advance Australia Where?".

World's fastest particle accelerator seeks answers to universe

ELEANOR HALL: Scientists are getting ready to activate the world's most powerful particle
accelerator, in an attempt to find out more about how the universe began.

The machine, near the border between Switzerland and France is 27 kilometres in circumference, and
seven times more powerful than any such machine built before it and the project has its opponents.
Indeed they have been so concerned that the accelerator could create a black hole that will swallow
the earth, that they launched a court case to stop the experiment going ahead.

But a court has now dismissed that case as Simon Lauder reports.

SIMON LAUDER: Next week the European Organisation for Nuclear Research or CERN will make its first
attempt to recreate conditions which existed a split second after the Big Bang.

Particle physicist, Dr Ulrich Felzmann, is from the physics school at Melbourne University which
has a stake in the project.

ULRICH FELZMANN: This machine accelerates proton beams to the speed of light and then smash them
into each other. The idea is to produce very high temperatures and pressures to simulate conditions
which happened during the Big Bang.

SIMON LAUDER: The hope is that the particle accelerator will produce the Higgs Boson, which is the
missing link and theory to describe how all matter is held together.

ULRICH FELZMANN: This discovery will prove that the whole theory which is the most important theory
ever, will be correct.

SIMON LAUDER: But there's a great deal of fear about the Large Hadron Collider. A website has been
devoted to a campaign to stop it.

(Excerpt from website advertisement)

WEBSITE: Several experts are concerned that these high energy collisions could create dangers
currently unknown in our universe like ever increasing microscopic black holes, anti-matter and all
consuming strangeness.

(End of extract)

SIMON LAUDER: Physicist Walter L. Wagner is a part of the campaign, and he explained why on US
radio earlier this year.

WALTER L. WAGNER: It is possible that it would allow for the creation of a miniature black hole or
a micro black hole. If that were the case, it could potentially grow larger and eventually over the
course of decades to millennia devour the earth.

RADIO INTERVIEWER: Literally suck the planet right in?

WALTER L. WAGNER: Well, yes.

SIMON LAUDER: A European court has just rejected an attempt to stop the project going ahead and Dr
Ulrich Felzmann from Melbourne University says there's nothing to worry about.

ULRICH FELZMANN: There is a very small chance that such a mini black hole as it is called can be
produced. But there have been many studies at CERN performed.

SIMON LAUDER: So these, the particle accelerator could create a black hole. Is that right?

ULRICH FELZMANN: Yes, It is possible that a mini black hole could be created at the LHD, but as I
said it won't mean any danger. It is just an interaction which can happen all the time. In fact, we
have for example, much higher radiation with much higher energy which hit the earth all the time
from out of space.

And there has never been a mini black hole seen so far in our atmosphere and never has the Earth
has been disappeared by the creation of mini block hole just in our atmosphere. So the fact that we
are still here means that the mini black holes are not any danger for us.

Nobody has to be terrified.

ELEANOR HALL: Let's hope he's right. Dr Ulrich Felzmann from the Melbourne University speaking to
Simon Lauder.