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National accounts paint puzzling picture

ELEANOR HALL: There's evidence today that the Australian economy is weakening at a faster pace than
the Reserve Bank has forecast.

This raises the prospect of deeper interest rate cuts over coming months. But it's bad news for job
security and those Australians who are unemployed.

Gross domestic product or national income grew by just 0.3 of one per cent in the June quarter,
which adds up to an annual rate of 2.7 per cent.

While this is far from recession levels, the pace of the slowdown outside of the mining states will
be of concern to policy makers.

With the detail, I'm joined now by Richard Lindell.

ELEANOR HALL: So Richard what do the numbers tell us?

RICHARD LINDELL: Well expectations for growth Eleanor, were 0.4 per cent, so coming in at 0.3 per
cent is slightly down on forecasts. The annual rate of 2.7 per cent is well down on last year's 4.5
per cent.

And what's more the trend is very weak; so if we took 0.3 per cent out for the next year, were at
1.2 per cent which is very weak and well below what the RBA and the Government for that matter,
would be hoping for.

And it could actually lead to more aggressive rate cuts from the RBA in months ahead.

ELEANOR HALL: And these figures are for the second quarter of the year, could things be even worse
now in reality?

RICHARD LINDELL: Well some economists I've been speaking to over the last week or so actually
expect the third quarter to be weaker than the one we've just had.

And that means we could be facing flat or even negative growth in the third quarter this year.

They're pointing to the sharp decline in household spending which is showing up in retail sales and
in borrowing in consumer confidence, and in fact business confidence for that matter as well.

So changes in sentiment are in fact very hard to turn around, and certainly a quarter of a per cent
cut from the RBA yesterday wouldn't do it.

Also confidence tells us about the future, so there may be worse numbers to come over the coming
months.

ELEANOR HALL: This sounds like an economy in the midst of a pretty severe downturn, were there any
positive signs in the figures?

RICHARD LINDELL: Well actually things aren't as bad, as all that, because if you break down the
components of the figures, and actually things look pretty good still.

We've got business investment growing at six per cent in the June quarter. Investment intentions
over the next year are up 14 per cent, and that's very strong, it is very concentrated on the
mining and mining services area.

But outside of that we've got state governments, they've got $50-billion plus in infrastructure
projects in the pipeline at the moment.

So if you put all that together, what we're about to get is a huge boost to the productive capacity
of the economy, which will also have a dampening effect on inflation, and in fact that's what
economists like to see, they like to see investment and they like to see infrastructure spending.
So all that's pretty good for the economy.

ELEANOR HALL: So what is all this likely to mean then for another rate cut, will we see one next
month?

RICHARD LINDELL: Well today's figures are important for the Reserve Bank certainly. It doesn't want
to send the economy into recession and that's why it cut yesterday.

Even with inflation at 4.5 per cent and still expected no to peak until the end of the year at
about 5 per cent; it can look past inflation though because inflation is in fact telling us about
the past not the future and certainly not the present.

So while the RBA will want to cut and try and engineer a soft landing, it must still maintain
credibility as an inflation fighter. So it would really like to see the October, or sorry the
September quarter inflation figures first. But today's soft GDP numbers certainly increases the
chance of another rate cut in early October.

ELEANOR HALL: Richard Lindell thank you.

Swan upbeat despite economic slowdown

ELEANOR HALL: Before the national accounts came out, the views of the Government and Opposition
were a study in contrasts.

The Treasurer Wayne Swan has acknowledged that the Australian economy is slowing, but this morning
he was speaking optimistically.

Yesterday the Opposition was saying that all politicians should welcome the interest rate cut; but
today says the economic signs are disturbing.

Our chief political correspondent, Lyndal Curtis joins us now in Canberra.

So Lyndal, are these figures likely to support the arguments of the Government or the Opposition.

LYNDAL CURTIS: Well, as all things economic, a bit of both really, for the average person certainly
there are signs in these figures that they are feeling the pain with household spending and retail
trade down.

But overall, the economy's not stopped or stalled, the growth is slower than was expected but is
still there.

It probably as Richard said, leaves room for the Reserve Bank to cut interest rates again, and
maybe even confirms their move to interest rates yesterday.

While the Government was warning of bumpy roads ahead yesterday, and was more pessimistic
yesterday, Mr Swan, the Treasurer was reasonably optimistic about the health of the economy when he
spoke to AM this morning.

WAYNE SWAN: Well, certainly there's internationally, conditions are most uncertain, the most
uncertain in 25 years, as I've said before most developed economies are slowing dramatically.

And we are not immune from the impact of that, nor are we immune from the impact of the global
credit crunch, which in itself is pushing up borrowing costs for businesses and for households.

But we are better placed to withstand these conditions than perhaps any other country in the world,
we've got, as I said, a significant surplus, if it's not significantly eroded by the Senate; we've
got the very high terms of trade; we've got very strong business investment. These are things that
many other countries in the world would wish to have, but they don't.

LYNDAL CURTIS: So is some of the doom and gloom around at the moment misplaced?

WAYNE SWAN: Well I think it's important to get this into perspective. There is a lot of pessimism
around on the back of the global credit crunch and the impact it has had, particularly on global
stock markets and that's impacted here as well.

But here in Australia, we have many advantages over the rest of the developed world, as I've said.

ELEANOR HALL: That's the Treasurer Wayne Swan.

Lyndal, the Opposition had been accusing the Treasurer of talking the economy down, but now the
Coalition's own message is more pessimistic. What's happening there?

LYNDAL CURTIS: Well certainly the shadow treasurer Malcolm Turnbull has been accusing Wayne Swan,
over a number of weeks, of talking the economy down and essentially fuelling inflation.

If anything the Opposition had until really the last week been more upbeat about the state of the
economy, Malcolm Turnbull said last week he was optimistic about the economy, but that language
seems to have changed in the last couple of days.

The Opposition leader Brendan Nelson has certainly been more pessimistic yesterday, and we saw in
Parliament, the Opposition raising again and again the question of jobs and asking whether the
interest rate cut will come at a cost of jobs, and Malcolm Turnbull asked if this was the economic
slowdown we had to have.

As I said, there are some points to mind politically for the Opposition in these figures, with some
household pain on the way, although the news is probably not as bad as could have been. But
certainly the Opposition has been using the interest rates cut to say the economy is slowing.

While Dr Nelson welcomed the cut, he is concerned about the reasons which led to the Reserve Bank
taking the move.

BRENDAN NELSON: The problem we've got however is that the reason we're getting this is because our
economy is slowing very sharply, business confidence and consumer confidence which is everything,
is shattered. It's back to the level of, sort of 1991.

Our economy is forecast to grow slow, to two per cent by the Reserve Bank by the end of the year,
inflation to increase to five per cent and unemployment is increasing. So it's good news that we're
getting a cut, but the reasons we're getting it are in fact quite disturbing.

ELEANOR HALL: That's Opposition Leader Brendan Nelson and Lyndal Curtis in Canberra there.

Wizard slammed over credit rate hike

ELEANOR HALL: Just days after providing some mortgage relief, one of Australia's big home lenders
is being savaged by consumer groups for raising its credit card rates.

Wizard Home Loans was one of the first lenders to drop its home lending rate, ahead of the Reserve
Bank's cut of 25 basis points yesterday.

But now it's become one of the first lenders to lift its credit card charges.

It's boosted the interest rate on one of its popular cards by nearly three per cent; to just under
18.5 per cent.

As Tanya Nolan reports.

TANYA NOLAN: Here was the sweetener issued by Wizard Home Loans chairman Mark Bouris on Sunday.

MARK BOURIS: Our signal today is reduce the same as Reserve Bank, and with Reserve Bank, re-couple.

TANYA NOLAN: Wizard's move to reduce its variable home loan rate by a quarter of a per cent, ahead
of the Reserve Bank's cut, was the first by a lender to reduce mortgage rates in nearly seven
years. And it was described by Mr Bouris as a signal of the return of competition to the banking
sector.

But today Mark Bouris isn't talking about his company's latest announcement, the move to slug new
customers nearly three per cent extra in interest on its Clear Advantage Mastercard.

Choice spokesman Christopher Zinn says Wizard's customers would be confused at best.

CHRISTOPHER ZINN: Customers of that financial institution would have to be confused. It certainly
seems like a slight of hand coming from a company that prides itself on its magical name.

TANYA NOLAN: In a statement, the company explains the move this way:

EXCERPT OF STATEMENT: The increase is necessary to ensure the Clear Advantage Mastercard can
continue to offer a nil annual fee as well as no fees for cash advances or overseas purchases and
remain 55 days interest free.

TANYA NOLAN: At just under 18.5 per cent, this credit card is competitive, sitting just below the
Reserve Bank's standard credit card indicator rate of 19.65 per cent.

It's also lower than the more popular cards offered by many of the big banks which have average
interest rates at just over 20 per cent.

But you can find cheaper, and Stephen Anderson says you should. He heads research at the online
financial research comparison website InfoChoice. He says with over 200 credit cards on the market,
there are many that offer interest rates as low as 11 or 12 per cent.

Mr Anderson says his modelling shows credit card interest has nearly doubled over the past year,
compared to increases in the official cash rate.

STEPHEN ANDERSON: Wizard's move to increase their credit card interest rate is not completely
uncommon in the market, and looking at some data that InfoChoice has pulled out of its own database
is the average increase on a selection of credit cards has been just on 2.1 per cent since August
of last year to today.

Compare that with the Reserve Bank increases of just on one per cent and the additional 50 to 60
basis points or 0.5 to 0.6 of a per cent added on by the banks and their mortgages.

TANYA NOLAN: It's likely that those people who found some relief in yesterday's cut in the official
cash rate will be hit by any increases in credit card interest.

In its July report on mortgage trends, Genworth Financial says nearly 60 per cent of adult
Australians have credit card debt compared to the nearly 40 per cent who have mortgages.

The company says 18 per cent of people have a personal loan, 16 per cent a car loan and 11 per cent
have a HECS debt.

Choice's Christopher Zinn says consumers would benefit more if the same scrutiny given to mortgage
rates was given to credit cards and other loans.

CHRISTOPHER ZINN: They really go up as opposed to down, with really no reference to the RBA or
anything else.

There's something like $46-billion on the countries credit cards at the moment, that's a record,
something like over $3,000 per man, woman and child, a lot of that interest is being paid on.

So look, it's a substantial matter of public interest what interest rates are for cards, and
basically the banks and other financial institutions are really charging top dollar for many of
them.

TANYA NOLAN: It could be argued though that consumers have more of a choice on credit cards, and
which ones they choose to use and whether they choose to use them at all, and with discretion. So
in a way isn't it better to put the heavier impost on credit card rather than the home loan?

CHRISTOPHER ZINN: Look there's no doubt with credit cards, you do have, or hopefully most people
have the choice to avoid it if possible, but really products should be priced in a way that
reflects the costs of those institutions, and there shouldn't be excessive cross-subsidisation of
one product to another.

And really, I mean the other banks so far as we know, haven't put up their credit card rates to
allegedly subsidise any reduction in home loans. So Wizard's going to have pull a pretty good
explanation out of a hat on this one.

ELEANOR HALL: That's Choice spokesman Christopher Zinn, ending that report from Tanya Nolan.

Luxury car tax deal, not finalised: Swan

ELEANOR HALL: The Federal Treasurer, Wayne Swan, has contradicted Greens senators saying that no
deal has been struck with them to get the Government's luxury car tax through the Senate.

This morning three Greens announced that the party had negotiated a deal with the Government,
giving it five of the seven votes it needs to pass the bill through the Senate.

But Wayne Swan says discussions are still going on and that nothing is yet finalised or guaranteed.

And a short time ago, a Greens spokesman said the party would now wait to see all amendments to the
Government's proposed bill, before agreeing to pass it.

But car manufacturers are already accusing the Greens of selling out, saying their negotiated
changes achieve very little.

In Canberra, Sabra Lane Reports.

SABRA LANE: The Coalition's opposed to the luxury car tax changes, forcing the Government to
negotiate with the Greens, and senators Steve Fielding and Nick Xenophon, to steer its $500-million
plus savings through Parliament.

This morning on AM, the Greens said they'd struck a deal with the Government on the car tax
package.

Greens Senator Christine Milne.

CHRISTINE MILNE: This outcome has demonstrated to the Government that the Greens have a very
serious objective here in terms of climate change, a more equitable Australia, and they know that
when we negotiate we're going to come from a very reasoned, consistent position.

So I think it augurs well for the future of this balance of power period.

SABRA LANE: The Government wants to jack up the tax on luxury cars from 25 per cent to 33 per cent,
on cars with a price tag of more than $57,000.

The Greens want that tax phased out, and a new one instead based on greenhouse emissions, an idea
the Greens say will be referred off to the Government's Henry tax review.

But the Greens say the Treasurer has agreed to exempt some fuel efficient luxury cars, with a
price-tag of up to $75,000, that consume less than seven litres of fuel per 100 kilometres.

But Wayne Swan insists he's agreed to nothing.

WAYNE SWAN: We're in discussion with both the Greens and all of the minor party senators, none of
those are concluded yet, nothing is certain.

It's very important that we get through the Senate, these important budget measures which are very
important in terms of protecting the surplus, and having the capacity in the longer term to fund
our investment funds, the education fund, the Building Australia Fund, the Health and Hospitals
Fund.

So I'm talking to each and every one of these Senators, but I can't say at this stage that any
arrangements are finalised or guaranteed.

SABRA LANE: And perhaps because of that kind of pressure, the Greens have now softened their
stance, appearing to back-track.

A Greens spokesman now says all five senators will wait to see all amendments to the Government's
bill, before they decide on whether to pass it.

The Federal Chamber of Automotive Industries chief executive, Andrew McKellar.

ANDREW MCKELLAR: Our analysis of the vehicles that this amendment might apply to, indicates that it
might pick up somewhere in the order of about 1,000 vehicles a year.

The total cost to revenue could be in the order of perhaps between one to $2-million a year.

SABRA LANE: Mr McKellar says the legislation should be opposed, he says the Greens have sold out.

ANDREW MCKELLAR: If the Government is successful in securing support for this amendment, then they
will have, I think, succeeded in conning somebody and if the Greens end up supporting this
amendment then I'm afraid they will have sold out at a very low price.

So that would be very disappointing. Our view is that the bill should be opposed, we have produced
clear evidence today with new sales figures that the impact on the market in August has been
devastating.

Sales of cars in the so-called luxury segments are down 19 per cent on a year ago.

SABRA LANE: Liberal Senator Bill Heffernan says the luxury tax is penalising Australians who aren't
wealthy.

BILL HEFFERNAN: A four wheel drive for a farmer, is a bloody, it's an essential item, it's not a
luxury.

There are lots of people, the Labor Party probably doesn't realise, that there are lots of people
who the last 30 miles into their farm is not an all-weather road, it's a dirt, clay road.

They've got to get their kids to school, you get 30 points of rain, you can't do it in a car,
you've got to do it in a four wheel drive.

It's an essential part of the farm just like the bloody tractor.

SABRA LANE: And that's something that Family First Senator Steve Fielding wants addressed, he's one
of two votes the Government now needs to ensure the bill passes Parliament.

He wants exemptions for farmers and small tourism operators; his office says he's been talking to
the Government today about his concerns.

Independent Nick Xenophon is the other senator the Government needs to woo. He agrees with the
Greens amendments, but says he's not sure about Senator Fielding's proposed changes.

NICK XENOPHON: It's a question of how much would it cost, whether it's practical or not, when the
fact is this tax applies, the increase applies for anything over the threshold.

It's not as though you're paying it over the entire price of the vehicle, that's not, some people
don't understand that.

I think it's important that we just sort out what the costs will be and what's feasible, but I
think we've come a long way. We were miles apart on this, now we're just kilometres apart.

ELEANOR HALL: Independent Senator Nick Xenophon, ending that report by Sabra Lane.

Conservationists urge scrutiny of Murray-Darling options

ELEANOR HALL: The Federal Opposition says none of the options open to the Government to fix the
Murray-Darling Basin water system are palatable.

At least 1,000 gigalitres of water are needed to replenish the lower lakes and Coorong Wetlands in
South Australia and this water could be diverted from irrigators or drawn from seawater.

Conservationists are urging caution saying careful consideration is needed before any decision is
made.

And the Federal Government has called on the Opposition to stop playing politics on the issue.

Michael Edwards has our report.

MICHAEL EDWARDS: The Government faces a series of tough choices in its efforts to save the
environmentally fragile Lower Lakes and Coorong wetlands region in South Australia.

The Water Minister Penny Wong says up to 1,000 gigalitres of water will be needed to replenish
supplies to the region.

Senator Wong told Radio National's breakfast program the region must remain viable, so as to ensure
drinking water supplies to nearby towns and Adelaide.

PENNY WONG: The fact is that as we face a future of climate change, lower rainfall, lower inflows,
there are some very hard choices staring at us down the track.

The priority has to be the critical human needs of Adelaide and other towns.

MICHAEL EDWARDS: The Government has presented eight options to fix the region they include flooding
the Coorong with salt water, releasing water from the Meningie lakes and purchasing water from
irrigators.

The Federal Government has been told that purchasing water allocations could result in the loss of
more than $1-billion worth of crops.

Senator Wong says long-term economic implications will be taken into account.

PENNY WONG: My view in terms of tempering carry over water is that we really do have to ensure we
retain permanent plantings, you know, areas such as the Riverland for example.

But what we will do is continue to purchase permanent allocation from willing sellers, that gives
these communities, these irrigators time to adjust.

What we're looking at in the Murray-Darling Basin is a long-term economic transition as we reduce
allocation levels which have been over allocated by previous governments.

MICHAEL EDWARDS: And Senator Wong has called for the Opposition to stop playing politics on the
issue.

PENNY WONG: There's been a lot of politics played on this issue, and a lot of things being said by
the Liberal Opposition to the communities downstream which are completely at conflict to what their
members tell the Victorian and New South Wales constituencies.

What we need to do is get an informed debate, and get the community understanding some of the very
hard decisions and hard choices that face us, in a context where we see climate change diminishing
the amount of water that is available.

MICHAEL EDWARDS: But the Opposition leader Brendan Nelson went on ABC Local Radio in Adelaide this
morning to say that none of the options were attractive.

BRENDAN NELSON: When you actually have a look at what they're proposing, it's, none of them are
palatable, that doesn't mean that any or all of them should be ruled out. But none of them are
particularly attractive, I would think, to people in various parts of the system.

MICHAEL EDWARDS: Environmentalists say it's time the political debate ceased, and serious
examination of options to fix the region took its place.

Arlene Buchen from the Australia Conservation Foundation says time is running out.

ARLENE BUCHEN: The problems of the Murray-Darling Basin have been caused by in-fighting and one
state pointing the finger at the other; New South Wales blaming Victoria, Victoria blaming South
Australia.

It's time that we just draw a line in the sand and move on together, and find solutions to these
problems together instead of just always passing the buck and blaming someone else.

MICHAEL EDWARDS: Arlene Buchan says the options on the table to fix the Murray-Darling Basin need
to be subject to full scientific security.

ARLENE BUCHAN: About six months ago the scientists told us that there was a very short window of
opportunity within which we had to return fresh water to the Lower Lakes and the Coorong if they
were going to survive.

Now mother nature has actually been rather kind to us over the last couple of months, there's been
lots and lots of local rainfall. Which means that the threats aren't quite as urgent as we thought
they were a couple of months ago.

Nevertheless, we need to be looking at all the options on the table, getting all the proper
information, the scientific data and things together and properly scrutinising the pros and cons of
all the different options before we make decisions which are irreversible in terms of the ecology
of the lakes and the Coorong, and their ability to support local industries.

ELEANOR HALL: That's Arlene Buchan from the Australian Conservation Foundation speaking to Michael
Edwards.

Republicans say they're back on track

ELEANOR HALL: The Republican National Convention is back on track after Hurricane Gustav delayed
proceedings for a day, and controversy about Senator McCain's choice of running mate knocked the
McCain campaign off message.

Revelations over the past couple of days about the pregnancy of Governor Palin's 17-year-old
daughter, an ethics investigation into whether she tried to have a former brother-in-law sacked,
and whether she once belonged to the Alaskan Independence Party, have dominated discussion at the
convention.

But the planned theme today is "Who is John McCain?" and this included an appearance via satellite
from President George W. Bush.

As John Shovelan reports:

JOHN SHOVELAN: For Republicans the convention was finally underway.

(sound of convention announcement)

JOHN SHOVELAN: And it was time to get back on track selling John McCain with speakers painting
portraits of him as a war hero, public servant, and maverick.

Relegated to only a bit part President Bush appeared from the White House via satellite and spoke
only briefly, for about eight minutes.

GEORGE W. BUSH: When the debates have ended and all the ads have run and it is time to vote,
Americans will look closely at the judgement, the experience, and the policies of the candidates,
and they will cast their ballots for the McCain-Palin ticket.

JOHN SHOVELAN: The President didn't make it to Minneapolis-Saint Paul because tomorrow he plans to
visit southern Mississippi. The McCain campaign didn't press the President to appear personally.

They are fighting the Democrat branding that a McCain presidency would be what they call 'McSame',
another four years of the Bush administration policies.

Another dominant administration figure who hasn't appeared at the convention is the Vice President
Dick Cheney.

In effectively passing the baton to Senator McCain, President George W. Bush invoked the attacks of
9/11.

GEORGE W. BUSH: We live in a dangerous world. And we need a president who understands the lessons
of September 11th, 2001.

That to protect America, we must stay on the offence, stop attacks before they happen, and not wait
to be hit again. The man we need is John McCain.

JOHN SHOVELAN: As President Bush addressed the convention from the White House, Republicans were
defending Senator McCain's vice presidential running mate, Governor Sarah Palin.

First Lady Laura Bush applauded the choice.

LAURA BUSH: The Republican Party has a very exciting ticket, a real American hero John McCain, and
a strong executive and proven reformer, Governor Sarah Palin.

JOHN SHOVELAN: The McCain campaign has lost ground over its choice of running mate. Until last week
the campaign was clearly a referendum on Barack Obama and his fitness for office.

It's now shifted focus to McCain-Palin. Several times today Senator McCain had to defend his
selection.

JOHN MCCAIN: I just want to repeat again how excited I am to have Sarah Palin, the great Governor
of Alaska as my running mate.

America is excited and they're going to be even more excited once they see her tomorrow night, and
I'm very, very proud of the impression that she's made on all of America and I'm looking forward to
serving with her.

JOHN SHOVELAN: Governor Palin will address the convention tomorrow night.

John Shovelan, Washington.

Britain launches campaign blitz to end knife crime

ELEANOR HALL: In the UK, Scotland Yard is stepping up its campaign against knife crime with a
graphic advertising blitz.

There have been 20 fatal stabbings in London this year and the Government has responded by giving
police new powers to tackle the problem.

But opponents of the measures say it's a waste of government money that would be better spent on
helping abused children before they turn to crime.

Europe correspondent Emma Alberici filed this report.

EMMA ALBERICI: A teenage boy is getting ready to leave the house, he picks up his wallet, his keys
and his knife which he shoves down the back of his pants making sure it's well hidden by the cuff
of his bomber jacket.

EXCERPT FROM TV ADVERTISEMENT: See you later man.

EMMA ALBERICI: It's the multi-million dollar advertising campaign launched this week in the UK.

Part of a Scotland Yard attempt to crack down on knife crime.

(sound of TV advertisement - girl screaming)

EMMA ALBERICI: Operation Blunt 2 began in May after the death of Jimmy Mizen in south-east London.
The 16-year-old altar boy was stabbed to death with a shard of glass.

He was the 19th person to be killed this year in a wave of knife attacks that's shocked London.
Last weekend came number 20.

REPORTER: The latest victim Shaquille Maitland-Smith, just 14 years old and back from holiday. He
was killed by one stab wound.

EMMA ALBERICI: Commander Mark Simmons is the head of the police operation, he says he's confident
this campaign plus extended police powers to stop and search youth will reduce crime.

MARK SIMMONS: Absolutely, I think it will help to stimulate the discussion that we need to have
with young people, it will help to inform the kind of discussions they have in their youth clubs
and their schools, with their friends, with their families, hopefully.

And it helps us to stimulate the discussion we want to have with them. If it helps any small number
of young people think twice about the consequences of taking a knife with them when they go out the
front door then it will be absolutely worth the effort in putting it on.

CAMILLA BATMANGHELIDJH: They don't ask the question: why you, a nine or ten-year-old in the fourth
richest country of the world have got to the point where you feel you need to carry a knife. And if
the Government listened, the child would say, I don't feel safe.

EMMA ALBERICI: Camila Batmanghelidjh is the founder of Kids Company, a leading youth charity in
Britain. It has a staff of 300 who support more than 12,000 young people.

She's just released the findings of a mental health study that shows how abuse and neglect can
damage the brains of children and potentially lead them to crime.

She says the Government initiatives will do little if anything to curb crime and instead they
should focus on bolstering community services to help care for vulnerable youth.

CAMILA BATMANGHELIDJH: Now you can have a campaign against knives, but I can tell you now that the
emerging new weapon at street level is actually dogs. Dogs that are being treated badly, so that
they can become agents of attack in a dispute.

And the point is that we can have initiatives that tackle the symptom, either a firearm, a knife or
a dog, but if we don't get to the root causes and address the problem at that level then all were
doing is banning one weapon and immediately another one emerges.

EMMA ALBERICI: The new campaign to fight knife crime came on the same day the contents of a home
office document were released.

It states that violent crime will rise in Britain as the effects of the economic downturn take
their toll.

And with the OECD (Organisation for Economic Co-operation and Development) overnight stating that
the UK will be in recession before the end of the year, the challenge for Scotland Yard looks like
getting even bigger.

This is Emma Alberici in London for The World Today.

Freeze to dealings with suspect Indian adoption agencies

ELEANOR HALL: The Federal Government has today responded to accusations that Australians have
adopted stolen children by announcing a freeze on dealings with suspect Indian adoption agencies.

Several Australian families are believed to have been caught up in the scandal.

But the Government says that while it will offer them support and advice, it will be up to the
courts to handle any custody claims.

Child welfare advocate and former New South Wales Community Services commissioner Roger West is
speaking at a conference looking at the importance of adopted children understanding their past.

He's also the father of two children adopted from Colombia, and he's told reporter Annie Guest that
the Government must do more to ensure that Indian adoptions continue.

ROGER WEST: I absolutely support the idea that they should look closely when, and have a freeze in
the meantime, but I think they should move very, very quickly to do the review that needs to be
done, and the checks that need to be done.

Because I can't see any reason why a freeze serves any other purpose. I mean, there are children
who are needing adoptive families, there are families who want to adopt children and you wouldn't
want to put any unnecessary process in between that happening. But you do need very good process.

ANNIE GUEST: While the Australia Government deals at the inter-governmental level with India, do
you think it should also be doing its own checks about the orphanages recommended by the Indian
Government?

ROGER WEST: No I think that should be making sure that the Indian Government is doing their job
properly, I mean, double checking to me seems to be a bit silly.

ANNIE GUEST: How then, what would it be looking for then, to ensure that the Indian Government is
doing its job properly, how could that be ascertained?

ROGER WEST: I guess, this is not unfamiliar to governments dealing with each other, you know, in
the national security area, in air safety, in a whole lot of things, and making sure that people
are adhering to processes that are good is a matter of investigation and checking.

ANNIE GUEST: Do you think that the Australian authorities should shoulder some of the blame for the
fact that this happened in the first place?

ROGER WEST: Look, I could not say that, I just don't know what has happened and what hasn't
happened.

ANNIE GUEST: You're speaking at the Australia Adoption Conference in Sydney tomorrow, where the
theme is connecting pasts, securing futures. How important is it for adoptive children, in your
view, to know about their pasts?

ROGER WEST: Look, I think it's absolutely crucial, I think that the theme of the conference is
fabulous and I totally whole heatedly believe that adoptive children should know as much as they
can about their past, or at least have choice to pursue that if they want to. And connecting past
and future in that sense is a great thing to do, and I think a very important thing to do.

ANNIE GUEST: We're hearing today that the mother of the Indian born girl who was allegedly stolen,
and then later adopted by Queensland parents, is interested in now contacting her daughter.

How important is that for that girl, and do you consider that beneficial?

ROGER WEST: It's not easy to answer in the sense that I think the opportunities ought to be there,
but I don't, it may or may not be beneficial for that girl.

But she should have a choice in the process, and so should the other parties. And so one person's
rights in this system shouldn't necessarily override those of others.

ELEANOR HALL: Child welfare advocate, Roger West, speaking to Annie Guest.

Plantation forests could 'drive up emissions'

ELEANOR HALL: There's a warning today from two Canberra academics that including plantation forests
in an emissions trading scheme could drive emissions up not down, by encouraging the logging of
native forests.

The researchers say that under the Government's proposed scheme plantation owners are likely to
make more money using plantations for carbon storage rather than for processing wood.

They say that will encourage the forestry industry to turn to native forests, which are able to
store more carbon than plantations.

Sara Everingham has our report.

SARA EVERINGHAM: There are warnings coming from many quarters about the Government's proposed
emissions trading scheme.

The latest is from Dr Judith Ajani a forest economist at the Australian National University.

Her concern is the Government's decision to including plantations in the scheme, she says it will
be counterproductive.

JUDITH AJANI: The effect of the emissions trading scheme with respect to the forestry sector, both
native forests and plantations is potentially to be quite negative from a climate change mitigation
perspective.

SARA EVERINGHAM: Dr Ajani argues that under the proposed emissions trading scheme, plantation
owners are likely to make more money from using plantations for carbon storage rather than for
logging.

She and a colleague at ANU have used a mathematical model to prove their point.

Their research is included in a submission to the Government on its green paper for the Emissions
Trading Scheme.

JUDITH AJANI: We found that plantation growers would need only quite low CO2 prices before they
would receive the equal revenue that, as the alternative of logging a plantation.

So we'd be looking at prices for a hard wood plantation of around $10 to $15 a tonne of CO2 for
plantation growers to be attracted by the carbon market rather than the wood market.

SARA EVERINGHAM: Dr Ajani says that's bad news for native forests. She argues plantations should be
excluded from the ETS (Emissions Trading Scheme).

JUDITH AJANI: If we see a curtailment of plantation processing in Australia, what will happen is we
will revert back into more native forest logging.

SARA EVERINGHAM: In the Government's green paper on the carbon pollution reduction scheme
plantations established since 1990 are able to opt into the scheme.

Dr Ajani says that policy will do little for reducing carbon emissions.

JUDITH AJANI: More native forest logging rather than plantation logging means that we'll have more
emissions, CO2 emissions going up because plantations are less dense in carbon than native forests.

SARA EVERINGHAM: The Australian Conservation Foundation is also concerned.

The group's Tony Mohr says the Government's green paper is too heavily weighted in favour of
industry.

TONY MOHR: The Government's proposed to exclude the clearing of native forests from the emissions
trading scheme but include plantation forestry inside the scheme on an opt in basis. And that means
the industry can make money out of credits, but doesn't have to pay for their pollution from
clearing native forests.

SARA EVERINGHAM: But the National Association of Forest Industries has rejected the research.

CEO Allan Hansard says the proposed scheme won't see more plantations being used for carbon storage
rather than wood processing.

ALLAN HANSARD: I can't see how that would happen because the products we produce from our forests
are carbon stores as well, and if the Government recognises that in the emissions trading scheme it
wouldn't make sense to actually do that at all.

There may be some cases in marginal land areas where, a long way away from wood markets, where
trees could be grown just for carbon, but that would be in those sorts of special case areas only.

SARA EVERINGHAM: On Friday the economist Ross Garnaut will release a report on emissions tradings
targets for Australia.

That's likely to turn attention to the price at which carbon will be set.

ELEANOR HALL: Sara Everingham reporting.

And The World Today's calls to the Climate Change Minister Penny Wong weren't returned on this
issue.

Agencies prepare for possible plague of locusts

ELEANOR HALL: The head of the Australian Plague Locust Commission is meeting with agriculture
authorities from New South Wales and Victoria to try to avoid a plague of locusts this spring.

High numbers of locust eggs were laid in southern New South Wales and northern Victoria over autumn
and the nymphs will soon start emerging from the ground.

The head of the Plague Locust Commission, Chris Adriaansen, is in Jerilderie today to work out the
best strategies to avoid a widespread outbreak.

He told Simon Lauder the last outbreak was several years ago.

CHRIS ADRIAANSEN: A marching band of nymphs when they gather in very high densities, you know 7,000
nymphs per square metre, they can certainly mow down an area reasonably quickly.

Those sort of bands can stretch for some fairly extensive lengths, you know hundreds of metres
long, and so they can certainly make a mess of a crop within a reasonably short time frame.

SIMON LAUDER: I understand that the laying of eggs is an indicator of what kind of season is ahead?

CHRIS ADRIAANSEN: Yeah we had some populations particularly down in southern New South Wales, and
also into northern Victoria in late autumn; and those adults are likely to have laid eggs in those
areas, those eggs over winter. And then we can expect hatchings ranging through from the middle of
September in some parts of New South Wales and through October in southern New South Wales and
northern Victoria.

SIMON LAUDER: And what are the indications for locust numbers this season?

CHRIS ADRIAANSEN: The seasonal outlook is, has been reasonable and given the amount of crop that is
in the ground and we've seen ourselves in the last few days, in the southern New South Wales area,
certainly there's the opportunity for a reasonable number of locusts to come out.

Given the concentrations of populations of adults we saw in late autumn, we would expect that there
would be a reasonable egg load there and so that we could expect some reasonable hatchings to
occur.

Our strategy is obviously to find these hatchings as early as possible after they've come out of
the ground and to undertake control measures where appropriate on those early populations, rather
than allowing them to go through the nymphal development stage, grow wings and start to become more
mobile.

SIMON LAUDER: Do you fear it will become a plague?

CHRIS ADRIAANSEN: Well, it's one of the things that we obviously try to avoid, is any opportunities
for plagues. Quite obviously with our early intervention strategy, we try to get on top of major
population problems early rather than awaiting those nymphs becoming adults and therefore moving
into anything that people might refer to as a plague.

SIMON LAUDER: And your meeting with Department of Primary Industry people in Jerilderie today, what
are you planning there?

CHRIS ADRIAANSEN: We're working through the plans; we've already had a number of discussions with
the state departments from both New South Wales and Victoria over the last couple of months.
Putting together overall plans and strategies for the three agencies, New South Wales, Victoria and
the Australian Plague Locust Commission, to deal with this potential problem.

I mean, obviously, the problem may not be as extensive as our forecasts are predicting, we'll know
a bit more as we get more information from surveillance later this month.

But it's better to be prepared and not have to implement the strategy than to not be prepared.

SIMON LAUDER: Under your forecasts, what is the most feared scenario?

CHRIS ADRIAANSEN: Possibly the worst scenario that we can get is that we have a lower level
widespread population across a wide area.

If we've got concentrated areas or bands of the young locusts then, that's a lot easier to get in
and do the spot control, as we need to on those concentrated bands.

If we have a more general widespread population, it becomes quite difficult and the economics are
obviously a little bit questionable, about getting in and doing widespread control over a much
larger area.

The problem with that is that, if you don't do the early intervention strategy then you can end up
with a more substantial adult population later on in the season.

ELEANOR HALL: That's the director of the Australian Plague Locust Commission, Chris Adriaansen,
speaking to Simon Lauder.

Swan delivers response to national accounts figures

ELEANOR HALL: Returning now to our lead story on the national accounts, the Federal Treasurer Wayne
Swan held a media conference a short time ago in Canberra to respond to the lower than expected
figures.

Here's some of what he had to say.

WAYNE SWAN: These are solid numbers, these are solid numbers, especially considering the global
challenges that we are facing and what is happening elsewhere in the developed world.

The global credit crunch and the global oil shock have buffeted confidence in share markets around
the world, and of course, they are slowing global growth.

While growth has stalled or gone backwards in the world's largest developed economies, it's still
growing solidly in this economy.

Now, while these numbers are solid, the data also confirms that Australian families are still doing
it tough.

It doesn't come as a surprise that, in particular, households in New South Wales and Victoria,
where housing stress has been most evident, have been hit harder by rising interest rates.

Overall, household consumption fell by 0.1 per cent, as the country experienced sky high global oil
prices, and of course, continuing high interest rates. That has had an impact upon consumption; it
has had an impact on family budgets.

ELEANOR HALL: That's the Treasurer Wayne Swan, responding to the story on the national accounts
today.

Calls for greater transparency in politicians' allowances

ELEANOR HALL: The public tends to have little sympathy for politicians trying to explain their pay
increases.

But it seems we're not even getting the full picture on just how much they're being paid.

A discussion paper by the New South Wales Ombudsman is calling for more transparency on the tens of
thousands of dollars worth of allowances that politicians receive on top of their salaries.

The Ombudsman says one option would be to adopt reforms brought in in the United Kingdom which
require MPs to provide receipts showing exactly how the taxpayers' money has been spent.

Simon Santow has been speaking to a supporter of the changes, the New South Wales Greens MP Lee
Rhiannon.

LEE RHIANNON: The public has no way of finding out how much MPs receive in allowances or how that
money is spent.

Each year members of Parliament receive more than $50,000 in allowances; now this is public money
and clearly the public have a right to know how it is spent.

But it isn't impossible for them to find that out at the moment, in the case of the Greens, I
actually put my information on my website. But we certainly need much more openness about this
matter.

We do have a number of allowances and clearly money is needed, we do a range of work, we travel
widely, we have to do mail outs; and so I think clearly allowances are needed. But we need to be
clear on how much money is required and what is important is that it's publicly known where that
money is spent.

We receive an electoral allowance. That electoral allowance is well over $30,000 and it's more for
ministers, it comes direct to MPs once a month as part of their pay.

Some people have actually called it a back door pay rise because there's no requirement for
information on how that money is spent to be publicly released.

And in fact if it's not used by an MP for their electoral work, it actually becomes part of their
salary.

SIMON SANTOW: As far as the New South Wales Parliament is concerned, what degree of accountancy or
receipt keeping is necessary?

LEE RHIANNON: Say the electoral allowance, there is no requirement to submit receipts to the New
South Wales Parliament. If you do want to claim for any expenses drawn from the electoral
allowance, you need to put them into the Australian Taxation Office. But again, that's hidden from
the public.

In this day and age with websites, it would be easy for this material to be publicly disclosed, on
the parliamentary website.

SIMON SANTOW: Why is public disclosure a good thing in your view, what would it do?

LEE RHIANNON: Public disclosure of MPs' allowances should happen and I do believe that such a move
would help restore confidence of people in their elected representative.

I do find that many people are cynical about members of Parliament, and what we do with our
allowances. Now I think that's understandable, I find that most MPs work hard and I imagine they
probably are doing the right thing.

But nobody knows and that's where the cynicism comes in, we then see a lack of credibility around
how MPs operate and that's what needs to be cleaned up.

SIMON SANTOW: In the UK recently when these sorts of details were made publicly available, a lot of
people got a shock, they found that their MPs were paying for life insurance policies in their
wives' names or their children's names. That there was rorting going on.

LEE RHIANNON: That's disturbing, and I think it underlines why this information needs to be
publicly disclosed.

The benefits of public disclosure is not only that the public then know how this money is spent,
but it does put pressure on politicians to do the right thing.

Because while it's behind closed doors, we can't be sure if it's being spent as it is required to
be.

ELEANOR HALL: And that's the Greens MP in New South Wales, Lee Rhiannon, speaking to The World
Today's Simon Santow.