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Row continues over Opposition's Pensions Bill

Row continues over Opposition's Pensions Bill

The World Today - Tuesday, 23 September , 2008 12:10:00

Reporter: Alexandra Kirk

ELEANOR HALL: The Clerk of the Senate has made it clear that he disagrees with the Federal
Government over the Coalition's Pensioners Bill and is advising the Opposition's bill to increase
pensions is constitutional.

Harry Evans has told The World Today that the Government should explain why it's refusing to debate
the bill rather than seek some pseudo legal argument for that decision.

The Opposition has already secured the support of a majority of senators for the Bill and is
accusing the Government of trying to avoid a politically damaging debate on the floor of the House
of Representatives.

But the Government is sticking to its guns, insisting that its tax inquiry is the forum for fixing
the plight of pensioners.

In Canberra, Alexandra Kirk reports.

ALEXANDRA KIRK: The Opposition's Pensioners Bill has cleared the Senate hurdle, putting the
Government under renewed pressure over a sensitive issue.

While many Labor backbenchers want a better deal for thousands of struggling pensioners in their
electorates and have urged their leaders to act, the Government isn't keen to debate the Bill on
the floor of the House of Representatives.

JENNY MACKLIN: Well Section 53 of the Constitution is very clear, it says that a proposed law that
appropriates money shall not originate in the Senate, so it's very plain that the Liberals are just
playing politics with pensioners.

ALEXANDRA KIRK: Jenny Macklin, the Minister for Families and Community Services, says the
Opposition should stop playing politics and make sure all pensioners get a better deal by waiting
for the Government's Henry Tax Review to examine the matter.

But Coalition MPs say if Labor isn't willing to debate the Bill in the Lower House, it will be for
purely political reasons.

ERIC ABETZ: One, they don't trust their own backbenchers to hold in relation to that, because we
know that there's been a lot of pressure by backbenchers over this issue and secondly, it clearly
isn't a priority for the Rudd Labor Government.

BARNABY JOYCE: There's nothing to be lost by showing a little bit of compassion now, and you know,
adjusting it later on.

JOHN WACKA WILLIAMS: We owe them a lot, and Mr Swan should open the cheque book.

ALEXANDRA KIRK: Labor MPs have got the message from above loud and clear.

JIM TURNOUR: This $30 a week proposed increased is not thought through, it's simply politics, and
it's politics of the worst type. Playing politics with older people out there that are doing it
tough, and there's almost 11,000 pensioners in my electorate who would miss out under this
proposal.

YVETTE D'AUTH: It's unconstitutional, the Opposition knows it's unconstitutional, that's why they
put it in the Senate first.

But the Clerk of the Senate, Harry Evans, says the Pensioners Bill is constitutional.

HARRY EVANS: Well, what the Constitution says is that a bill appropriating money can't be initiated
in the Senate. This Bill doesn't appropriate any money, the Social Security Administration Act
appropriates an unlimited amount of money of indefinite duration for all future pension increases,
so the money is already appropriated by that provision in the Act.

ALEXANDRA KIRK: So if the Government maintains its unconstitutional and the Bill won't make it to
be debated in the House of Representatives, you don't think that is right?

HARRY EVANS: Well, I mean obviously the claim that it's unconstitutional is not the real reason why
it won't be debated in the House of Representatives. The real reason is that the Government has the
control of the House of Representatives and will stop it from being debated there because it
doesn't approve of the Bill.

But unfortunately in these sort of situations, bizarre new constitutional doctrines are always
being invented to cover what is really a political decision and, you know, they should be openly
represented as political decisions rather than seeking some pseudo legal argument for them.

ALEXANDRA KIRK: Harry Evans says there are precedents that back his advice. But the other clerk,
the Clerk of the House of Representatives, Ian Harris, has a very different view about the Senate
Bill for the payment of extra one-off benefits.

IAN HARRIS: There are very severe doubts as to the constitutionality of the Bill. My belief is that
a bill of this kind should not have originated in the Senate.

ALEXANDRA KIRK: The World Today understands the Speaker, Labor's Harry Jenkins, is expected to make
a statement to that effect, leaving the Government to move to have the Pensioners Bill dismissed.

Constitutional law expert Professor George Williams says there are good arguments both ways.

GEORGE WILLIAMS: There is no clear answer to this question. What the Constitution says is that when
you have a law that is seeking to appropriate monies from the Commonwealth, then it needs to
originate not in the Senate but in the House of Representatives. The question here is whether this
is such a law, whether it is appropriating monies or merely making an alteration to the amount
that's being appropriated, and that's something that would bog down undoubtedly in legal
technicalities without there being a clear answer.

ALEXANDRA KIRK: And it can't be solved in the High Court?

GEORGE WILLIAMS: It's clear also that the High Court isn't the body that can resolve this, the High
Court has indicated that this is the type of provision that it is up to Parliament itself to
enforce and to determine what it means.

ALEXANDRA KIRK: And is the resolution then what the House of Representatives decides?

GEORGE WILLIAMS: Well the way it will be resolved ultimately is according to the numbers in the
House of Representatives, the Government has the numbers, this is about the rights of both houses
to be involved in budget bills and to start those bills through the Parliament, and it's not
surprising that we'll see different answers on the one hand from the House of Representatives and
the Senate, because each would like to assert their own role, and each would like to assert a large
role.

ELEANOR HALL: And that's Law Professor George Williams, from the University of New South Wales
ending Alexandra Kirk's report.

Regulators screen small retail outlets for imported toxic products

Regulators screen small retail outlets for imported toxic products

The World Today - Tuesday, 23 September , 2008 12:14:00

Reporter: Karen Barlow

ELEANOR HALL: Australia's food regulator is screening imported Chinese products to see if they
contain the substance that has been blamed for killing four babies in China and making more than
50,000 people sick.

Food Standards Australia and New Zealand says it has found no contaminated Chinese milk powder or
products in major supermarkets but is now checking smaller retail outlets.

One of the concerns is imported Chinese lollies, and there have already been recalls in Singapore.

The escalating scandal has now forced the resignation of China's chief product quality supervisor
and police have arrested 18 Chinese officials.

Karen Barlow has our report.

(Sound of shop assistants speaking Chinese)

KAREN BARLOW: Chinese sweets, containing milk powder and sugar, are on sale today in Chinatown
stores.

(to shop assistant) Hi there, are you selling White Rabbit lollies?

But candies like the White Rabbit treats are under suspicion of being tainted with the same
chemical which has made tens of thousands of children sick in China and has killed four.

(to shop assistant) How much are they? Two?

Tests in Singapore have lead to a recall from sale there.

Lydia Buchtmann from Food Standards Australia and New Zealand says they are undergoing testing in
Australia.

LYDIA BUCHTMANN: The states and territories are looking going into these shops, taking things off
the shelves that may have milk as s small ingredient, a minor ingredient, perhaps lollies, for
example, and sending them off for testing.

KAREN BARLOW: No infant formula or major mainstream milk products from China have been found in
Australia, and no illnesses associated with melamine have been reported.

But parents who have travelled recently to China are being warned to check any products they may
have brought back. Taiwan has joined countries like Japan, Malaysia and Tanzania in banning Chinese
milk products.

Lin Fang-Yu is Taiwan's Health Minister:

LIN FANG-YU (TRANSLATED): We will certainly recall those tainted products and we have suspended
imports of all Chinese milk products and vegetable-based proteins.

KAREN BARLOW: The Chinese scandal came to light two weeks ago as stories started to emerge in the
state controlled media, and its size has been growing exponentially ever since.

It is a public relations disaster for the Chinese Government, which has been trying to assure the
Chinese population that it has the contamination under control.

But public health expert, Professor Stephen Leeder from the University of Sydney says China's rapid
expansion in recent years has made it very difficult to maintain quality.

STEPHEN LEEDER: It is not surprising that in a country that's undergoing huge growth that food
security may not be as tight as it would be in a country where agricultural patterns are well
established, where food manufacturers have been more or less the same for decades.

KAREN BARLOW: Total food security is difficult for any country to attain.

Professor Leeder says the ultimate aim is to be assured about the safety of the steps from paddock
to plate..

STEPHEN LEEDER: Even that is a huge job because 25, 35 steps, but if you the add to that, the
business of checking all imported products, you get an idea of the size of the task. You're not
saying it shouldn't be done, there are clever ways of doing it, you can sample, you can focus on
various products that we anticipate an elevated risk and things of that sort, but it's heavy stuff.
Heavy lifting, and every now and again I think we have to accept some kind of breech.

This is not like flying a Boeing 747 even, where, you know, there are a finite number of viable
things that can wrong. It's almost infinite when it comes to food supply.

KAREN BARLOW: How is it that Australian inspectors have to go into supermarkets to find these
products and then test? Shouldn't it be the other way around and we should be more aware and have a
register perhaps of products coming in?

STEPHEN LEEDER: A register would be very good and I imagine that there are such registers, the
difficulty of course is then in managing what would be a huge data base and then acting on it
appropriately. It's a bit like international intelligence with regard to potential terrorist
attacks in the sense that you know, you could get so much data that you wouldn't know where to
start looking at it, so I guess that the products purchasable are at least the tail end of the
line, and immediately before they're purchased and consumed, so the sort of last port of call and a
very important one.

But as you say, whether this could be more effectively done further up the line, again is a matter
of professional judgement but also how much we're prepared to invest in this. There's always a
trade-off between cost and food security.

KAREN BARLOW: With a global food crisis underway and millions of people around the world not
getting enough food of any sort of quality, Professor Stephen Leeder says a global perspective is
needed.

However he says Australia should be forever vigilant about the food it imports.

ELEANOR HALL: Karen Barlow reporting.

US Congress questions bailout plan

US Congress questions bailout plan

The World Today - Tuesday, 23 September , 2008 12:18:00

Reporter: Peter Ryan

ELEANOR HALL: To the global financial markets now, where there's been a sudden return to reality.

After the euphoria of the last two trading days, share markets in Europe, the US and now Australia
have fallen on fears that the US government's $700 billion bailout plan might not work.

Members of the US Congress are edgy about signing off on an effective blank cheque to bail out the
banks but not the victims of the worst housing slump since the Great Depression.

And now another of America's most prestigious investment banks, Morgan Stanley, looks like it may
be bought up - in this case by a Japanese investor.

Business editor Peter Ryan has our report.

PETER RYAN: It's now three days since the $700 billion bailout plan was hastily released, and in
that time, it's been criticised for being big on goals, but short on details.

Fearing a global financial catastrophe if Wall Street melts down, the US Treasury Secretary Henry
Paulson wants the bailout rushed through Congress.

But Democrats and Republicans alike want a bigger say on where and how the billions will be spent -
not just the wealthy on Wall Street, but Americans people who need to refinance their housing debt.

Democrat Barney Frank also says the fund shouldn't be used to reward failed banking executives with
severance packages and bonuses.

BARNEY FRANK: If you are the CEOs and the top people who made these decisions that are requiring
the tax payers to put money at risk, and we don't think we're going to spend, we're certainly not
going to spend $700 million ultimately, but we're putting it at risk before we know how much we'll
recover, and you're telling us that having made those decisions that require this taxpayer money,
we can't limit the outsize compensation you're getting?

PETER RYAN: Florida republican Cliff Stearns worries the plan will blowout America's national debt,
and that ultimately the taxpayer will foot the bill.

CLIFF STEARNS: This plan increases our excessively high national debt to $11.3 trillion while also
allowing foreign banks, foreign banks which hold US mortgage debt, to benefit from the billions
provided by this bailout.

This plan constitutes the largest government bailout in history, yet it does nothing to protect the
taxpayers.

PETER RYAN: Henry Paulson and the and chairman of the US Federal Reserve face an increasingly
suspicious Congress tomorrow. Both will be under pressure to deliver some quick answers.

The uncertainty caused a heavy fall on Wall Street this morning, with the Dow Jones Industrial
Average down 3.2 per cent and the Australian market opened 1.7 per cent lower.

DOUG DACHILLE: Right now, the details are very unclear and that's a big issue, and you saw the
impact of uncertainty and lack of clarity today in the markets, so my advice now is prior to
passing the legislation, let's make it clear what the rules of the game are.

Investment strategist Doug Dachille has a list of questions for Hank Paulson and Ben Bernanke.

DOUG DACHILLE: What assets are going to be eligible? Everybody's lobbying for mortgage related
assets, but it's going beyond mortgage related assets. People want to put in auto loans, student
loans, home loans, corporate debt, everything is going to go into this.

PETER RYAN: And despite the initial optimism that the bailout would put the economy back on track,
doubters are starting to emerge.

JEFFREY FRANKEL: There has been a tremendous, just in the last 24 hours I would say, counter
reaction.

PETER RYAN: Professor Jeffrey Frankel was an economics advisor to Bill Clinton.

He says the US budget is already overloaded without the $700 billion bailout.

JEFFREY FRANKEL: We're in a position where the budget deficit is rising very rapidly, the national
debt was rising very rapidly because of the completely unrelated measures, the program of tax cuts
that mostly went to the rich and that was enacted by President Bush in 2001 and 2003, plus the
rapid increase in spending, especially defence spending, such as in Iraq and Afghanistan. But not
just defence spending, so we already were facing a situation of looming larger and larger budget
deficits and then coming along, the entitlements problem that the baby boomers are going to start
retiring this year.

PETER RYAN: Meanwhile, the process of picking over Wall Street remains continues.

Japan's Mitsuibishi UFJ Financial group is taking a 20 per cent stake in Morgan Stanley, and Nomura
Holdings is buying Lehman Brother's Asia Pacific operations, in what could be seen as an ironic
twist.

GILLIAN TETT: Two decades ago the Americans were worrying because Japanese banks were coming in on
the back of their domestic bubble and buying up a bunch of Wall Street names.

PETER RYAN: Gillian Tett, the global markets editor at The Financial Times, can see certain kind of
karma in the crisis.

GILLIAN TETT: The Japanese banking system plunged into crisis when their own property bubble
collapsed, and in the late 1990s, the Japanese banks were in such crisis that the Americans went in
and bought up some of the Japanese names.

Now of course we've had the American system collapse into crisis as the result of another property
bubble and so the Japanese are back again. So I guess the one thing you can say from all this is
that nobody ever seems to learn from anybody else's mistakes.

ELEANOR HALL: Gillian Tett, the global financial markets editor at The Financial Times, ending that
report from Business editor Peter Ryan.

Economist tips recession

Economist tips recession

The World Today - Tuesday, 23 September , 2008 12:22:00

Reporter: Stephen Long

ELEANOR HALL: An economist who predicted the current crisis four years ago says that the US
government's planned bailout of the financial system is flawed and will not prevent a major
recession.

Nouriel Roubini is a professor of economics at New York University.

He says the intervention will fail unless it assists the homeowners who are struggling with debt,
and stops the wave of foreclosures crippling the US economy.

Professor Roubini spoke to economics correspondent Stephen Long

NOURIEL ROUBINI: If it's implemented in right way it could be a step in the right direction, I feel
however it is not going to do the appropriate job.

STEPHEN LONG: Why not?

NOURIEL ROUBINI: Because in addition to buying the bad assets from financial institutions, you have
to make sure that the houses that are burdened with excessive mortgage and other debt have a
reduction of that burden, otherwise they are not going to continue to spending and the recession is
going to continue, so it's not enough to buy the assets and pack them into a bad bank, you have to
work them out, you have to reduce their face value, so as to ensure that many houses are not going
to end up in foreclosure, losing their homes.

STEPHEN LONG: Well this seems to be a criticism that's being raised both in political terms and
economic terms of the package, that it's socialising the losses and debts for Wall Street but doing
nothing for the home owners who are struggling to meet their commitments?

NOURIEL ROUBINI: Yes, that's certainly the case. We're essentially privatising the gain and now
we're socialising the loses, and we're doing it for the rich, the well-connected and Wall Street.
It's necessary of course to buy the stuff and work it out, the important thing is the borrower
should have that reduction because of that overhang and that's an important part of what needs to
be done, and so far that doesn't seem to be the centre of his program.

STEPHEN LONG: Do you think that they critics in Congress and the US Senate are right to be holding
up the package whilst they push for those measures?

NOURIEL ROUBINI: Yeah, first of all you need oversight of these, you cannot just give unlimited
power for the sake of the (inaudible), then you have to make sure that there are conditions for
having the work out and that reduction, and third, most likely banks, after they have written down
disasters, they need more capital.

STEPHEN LONG: That also seems to be a problem with the package, these are essentially worthless
assets, the debt, the assets on the balance sheets of the banks are essentially worthless, so if
they are bought at value, then there will be little injection of capital, and conversely, if
they're not bought at value, then you've got a massive taxpayer transfer to the banks?

NOURIEL ROUBINI: Yes, that's absolutely the case. If you essentially offer a subsidy to the
lenders, then you're subsidising them, and the fiscal cost is going to increase. If you don't do
that, you're writing down the assets and then the banks are severly undercapitalised and then
unless the government or somebody else injects capital in it, these banks are not going to be able
to lend again and provide credit, and the credit crunch is going to continue as it is now.

So you need also something of recapitalisation with public money of the banking system.

STEPHEN LONG: Well how will the United States afford that?

NOURIEL ROUBINI: That's going to be very expensive. You are right, the fiscal deficit that is
already very large, $400 billion by next year, could be a trillion dollars. You're putting $700
billion in this package, you put $200 billion in Fannie and Freddie, you put $85 billion in AIG,
you're going to have to recapitalise the insurance service because they are running out of money,
they put $30 million into Bear Sterns, and many, many their financial institutions and
non-financial that may be bailed out. So the US are left to probably borrow from abroad all this
money.

STEPHEN LONG: People are saying that that will push down the value of the American dollar. Do you
think that realistically there is a prospect that China and the oil rich nations will no longer be
willing to fund the massive and growing current account deficit by buying Treasury bonds and the
like?

NOURIEL ROUBINI: There is certainly a risk that that's going to happen, if China and other
creditors of the US were to pull the plug, then the dollar would collapse, interest rates would sky
rocket.

It might not be in the short term interest in China of doing that, because the financing of their
currency may become excessive and they will destroy their own economic export-led growth, but over
time, there are links to how much even China, let alone other central banks, and some wealth funds
want to pile more public debt on the US on their own balance sheet.

STEPHEN LONG: In your view, what is the consequence if it doesn't include all those steps including
assistance to home owners?

NOURIEL ROUBINI: Right now we are already in a recession in a severe financial and banking crisis
in the United States, so the only debate is how long it's going to be. If you do it right, then
maybe this recession is going to last only 18 months, if you don't do it right, you might end up
like Japan in the 90s when after the bursting of its real estate and equity bubble, it was almost a
decade long of lost growth, of economic stagnation.

ELEANOR HALL: Professor Nouriel Roubini of New York University, speaking to Stephen Long.

Glee among the gloom

Glee among the gloom

The World Today - Tuesday, 23 September , 2008 12:26:00

Reporter: Philip Williams

ELEANOR HALL: With the financial shocks around the world it is rare to see the CEO of a major
construction company with just a hint of a smile on his face.

But outgoing Chief Executive of the global building company, Lend Lease, sees opportunity in the
gloom.

Greg Clarke told Europe Correspondent Philip Williams that he was criticised for not driving higher
returns during the boom but he says that has put Lend Lease in a position to take advantage of the
downturn.

GREG CLARKE: Well we have about 80 per cent of our balance sheet outside of Australia, and about 80
per cent of our profits come from outside of Australia, so we are seeing all of the global
economies suffering at the moment, some more than others. Australia is doing relatively well, the
UK is slowing down rapidly, continental Europe is following, the US is doing the same, given that's
the engine room of the world, I expect a protracted period of gloom.

PHILIP WILLIAMS: How do you then turn a quid in these bad times, or do you just have to accept that
you're not going to make money over the next couple of years?

GREG CLARKE: Well we kept our powder dry and we've got about nearly $1 billion in the bank, we
didn't buy a lot of assets at the inflated assets at the top of the boom, so we're now roaming the
world looking for opportunities to invest, we've got a great pipeline of work in the UK. Most of
it's long-dated from 2012 through to 2020, so we think we're well positioned in the UK and we're
now looking for other opportunities.

I've just been in the Gulf in the Middle East, I'm in the USA next week and we're looking for
opportunities to grow our business because we have money to do it.

PHILIP WILLIAMS: In a sense, are you in a position, one of those rare people in a position to
actually take advantage of the downturn?

GREG CLARKE: This is a time of great opportunity for Lend Lease. We took some abuse from the market
for not gearing up to the same level as many of our competitors, so we have very low levels of
borrowing, so now we can invest at prices that are 25 per cent of what they were maybe a year ago.

PHILIP WILLAMS: Did you get, were you criticised at the time for putting money aside and for not
gearing as highly as you possibly could?

GREG CLARKE: Yeah we received quite a lot of abuse from some of the analysts in the marketplace on
the basis that we weren't driving our return on equity as high as some of our competitors because
our levels of borrowings were too low. Now our job is to make decisions for the long-term, but
there was some short-term pain associated with that and our profits could have been higher,
historically, but we decided that property was a cyclical business, we should return good returns
over the long-term rather than short-term, and to do what required us to sit on the money at the
top of the market and invest it at the bottom of the market, and that's what we're doing now.

PHILIP WILLIAMS: I mean, that's simple economics, that's, you know, business 101. Why is it that so
many companies seem to have forgotten that?

GREG CLARKE: I think they are continually driven by the marketplace for short-term returns. We
tried to build - I talked about the UK pipeline of opportunity which goes from 2012 to 2020 - the
market doesn't value that at all, because basically it doesn't help this year's or next year's
profits. The market is largely obsessed with this year's or next year's profits, and unless you can
show a big increase in your profits this year or next year, they're not interested.

PHILIP WILLIAMS: Who do you blame for this whole mess?

GREG CLARKE: I blame greed and short-term thinking. I think if you give people the opportunity to
earn outrageous sums of money, they will find a way to earn that money which may not necessarily be
in the long-term interests of nations or corporations or employees, and I think we've got to start
paying people for long-term performance, rather than just to turn in a good result one year or
another by whatever means possible.

So the pendulum has swung back to people who are interested in long-term value management.

PHILIP WILLIAMS: So out of all this crisis, I mean, have you got a smile on your face?

GREG CLARKE: I've got a slight smile on my face because we created a position of great potential,
we now have to be smart enough to change potential into reality and invest wisely.

ELEANOR HALL: And that's Greg Clarke, the outgoing chief executive of the global building company
Lend Lease, speaking in London to our correspondent, Philip Williams.

Home on hit list after man drives car into crowd

Home on hit list after man drives car into crowd

The World Today - Tuesday, 23 September , 2008 12:30:00

Reporter: Ben Knight

ELEANOR HALL: Police are describing it as a terrorist attack and now some Israelis are now calling
for authorities to retaliate by destroying the family homes of those responsible.

But the man who drove his car into a crowd of Israeli soldiers in Jerusalem and injured 19 of them
was an Arab resident of the city.

The incident happened near the Old City near the boundary between the Jewish and Arab areas.

Israeli soldiers immediately shot and killed the driver.

This report from Middle East correspondent Ben Knight in Jerusalem

BEN KNIGHT: It's hard at the best of times to escape symbolism in Jerusalem but even if this was a
random attack, its location was significant.

This corner sit just opposite the walls of Jerusalem's Old City, and it's on the street that in
1967 was no-man's land, the dividing line between Arab East Jerusalem and Jewish West Jerusalem.

Those divisions don't exist officially anymore, but the divisions between the two halves of this
city are growing ever deeper after incidents like this.

MICK ROSENFELD: This evening at approximately 11 o'clock Israel time, one vehicle struck a number
of bystanders, a group of approximately 15 people.

BEN KNIGHT: Micky Rosenfeld is a spokesman for Jerusalem Police.

MICKY ROSENFELD: Immediately after the people were hit, an officer, a soldier that was the scene
opened fire and shot and killed the terrorist. A police officer that had arrived also opened fire
and both of them managed to prevent the terrorist was continuing any other further damage or
killings.

BEN KNIGHT: They are saying this was a terrorist, is there any indication that the brakes may have
failed or anything like that?

MICKY ROSENFELD: Absolutely not, it was also the direction the direction was travelling as well as
the speed and you can see from the impact and the damage on the scene, you can see the type of
speed that he actually struck, we can confirm 100 per cent that this was a terrorist attack.

BEN KNIGHT: Police are withholding details about who was driving the car but have confirmed that
the man was a resident of East Jerusalem, and the significance of that won't be lost on anyone in
this city.

In July, there were two separate incidents where Arabs from East Jerusalem driving bulldozers
attacked cars on Jerusalem streets.

Having built a security wall to stop the suicide bombers coming from the west bank, Israelis in
Jerusalem are now facing what seems to be a growing threat from inside its own city and using motor
vehicles.

MICKY ROSENFELD: This is one of the ways if not spontaneous or planned that it's very easy or
relatively easy for a terrorist to carry out an attack, he wasn't armed, he wasn't carrying
explosives but we can see the damage and we're lucky that no one was killed here this evening in
Jerusalem.

BEN KNIGHT: There was political significance also in the timing, this incident came on the same day
Israel's President, Shimon Peres asked the country's Foreign Minister Tzipi Livni to try and form a
new coalition government.

Tzipi Livni has been holding weekly talks with the Palestinian Authority trying to reach a peace
deal.

Now, one of her potential coalition partners, Labor's Ehud Barak, is calling for the family homes
of such attackers to be demolished. Another potential partner, the Ultra Orthodox Shas Party, has
outright rejected any notion of talking about sharing Jerusalem with the Palestinians.

But aside from the politics, Israeli residents of Jerusalem like Gabriel Friedsen are clearly
worried at what they see as a new trend of terror.

GABRIEL FRIEDSEN: Last time it was two yellow tractors, now it's regular private citizens' cars,
what's next, a donkey? I don't know. This is right here in the middle of Jerusalem, it's very
scary.

BEN KNIGHT: This is Ben Knight in Jerusalem reporting for The World Today.

Palin power pulls them in

Palin power pulls them in

The World Today - Tuesday, 23 September , 2008 12:34:00

Reporter: Kim Landers

ELEANOR HALL: The economic crisis in the United States is already dominating the election campaign.
But some Republicans in the critical swing state of Ohio appear not to be too concerned that their
party will be blamed for the problems.

The town of Chillicothe is a popular spot on the presidential campaign trail and has an uncanny
knack of picking the White House winner.

John McCain has already visited the town this year and Republican Party members now want him to
return with his vice presidential running mate, Sarah Palin.

North America correspondent Kim Landers filed this report.

(Sound of a coffee machine)

KIM LANDERS: At the Grinders coffee shop in the centre of Chillicothe, a group of Republicans is
sitting around a table.

Although their votes for John McCain may never have been in doubt, party members like Carol Myers
are thrilled with his decision to pick Alaska Governor Sarah Palin as his running mate.

CAROL MYERS: Just because she's attractive, and that's actually a plus, she can talk, she's easy to
listen to, she articulates, she's eloquent. But the main thing is that she does have substance.

KIM LANDERS: Diane Carnes is the chairwoman of the Ross County Republican Party.

She's been deluged with phone calls and people wanting signs since Sarah Palin joined the
Republican ticket.

DIANE CARNES: Now of course women are crazy about her, but men are also seeing, this is a strong
woman, this is somebody who can do something and isn't afraid to stand up for what she believes in.

And I can tell you as the first female chairman of the Ross County Republican Party that there are
still good old boys out there who find it very difficult to work with a woman, and one who will
stand up for what she believes in. I've had so many people say, "Sarah Palin's like, she's done all
the stuff I've done", and her willingness to stand up for her belief to be against abortion, to me
is absolutely amazing.

KIM LANDERS: Do you see any evidence that women who once supported Hilary Clinton are now
supporting the McCain-Palin ticket?

DIANE CARNES: Yes I am seeing that, but then there are women who supported Hilary just because she
was a woman, not because they believed in what she believed in, but because she was a woman and
this is somebody who can be for us.

KIM LANDERS: Chillicothe's voting record makes it a bellwether for the state of Ohio, which in turn
is a key presidential election battleground.

This town has a knack for predicting the outcome of the White House contests.

David May is a retired engineer. He admits he's troubled by the upheaval on Wall Street and the
possible damage it's doing to the American economy, but he doesn't blame George W Bush or the
Republican administration.

DAVID MAY: The economy has its own momentum, there's absolutely nothing that George Bush has done
that caused the situation that we're in right now, it's Congress, Congress has allowed this to
happen. We've heard it quite candidly; a majority of our congressman on both sides of the aisle
have been rotten eggs for the last 15 to 20 years.

KIM LANDERS: Apart from being the chairwoman of the local Republican Party, Diane Carnes is also a
real estate agent.

She's lived and worked in Chillicothe for 28 years.

DIANE CARNES: So I have seen the economy in the real estate area go up and down, I've never seen it
dip as low as it did in the last year, year and half. I blame it mostly on greed, on the companies
who gave loans to people who should have never, ever, ever, ever had a mortgage loan.

So I see it as not a George Bush issue, not a Republican issue, not even a Democrat issue, but
Congress allowing this kind of thing to happen.

KIM LANDERS: For now, Diane Carnes is dividing her attention between her real estate business and
the Republican campaign.

She's spoken to John McCain twice, he's been to Chillicothe once and she's hoping he'll come back
soon and bring Sarah Palin with him.

This is Kim Landers in Chillicothe, Ohio for The World Today.

Russia and Venezuela prepare for war games

Russia and Venezuela prepare for war games

The World Today - Tuesday, 23 September , 2008 12:38:00

Reporter: Simon Santow

ELEANOR HALL: When the Russian Army rolled into Georgia last month, the United States and its NATO
allies were unimpressed.

Now Russia is engaging in some sabre-rattling much closer to the US border.

A squadron from the Russian navy is steaming towards the top of South America to take part in some
joint exercises with its Venezuelan allies.

As Simon Santow reports, it's a show of force likely to infuriate the White House and give
Venezuela's socialist President, Hugo Chavez, a propaganda boost as he engages in his long-running
war of words with Washington.

SIMON SANTOW: There's nothing Venezuela's outspoken socialist President Hugo Chavez likes more than
baiting near neighbours the United States.

On the weekend, he seized on an opportunity to tell his people about tough action he'd taken
against two representatives from the US based Human Rights Watch.

HUGO CHAVEZ (TRANSLATED): Yesterday, one of those characters who goes around the world doing the
dirty work that the North American empire has ordered arrived in Venezuela. A character from an
institution created by the empire to try to manipulate the world regarding the sacred topic of
human rights.

And then he started to make some statements. It's not the first time he does it. So yesterday, in
the afternoon, as evening came, I called the Foreign Minister and I told him and the Interior
Minister, I told them, "Kick him out of here because we are not going to allow foreigners to come
here to disrespect the Venezuelan people."

SIMON SANTOW: But for President Chavez, some foreigners are especially welcome.

There's the Russian navy squadron heading his way for some joint exercises in the Carribean, and
uncomfortably close to Russia's Cold War enemy, the United States.

In the squadron are the nuclear powered guided missile destroyer, Peter the Great, and an anti
submarine ship Admiral Chabaneko.

While no one expects any weapons to be fired in anger, there's no doubt that Venezuela and Russia
see the visit as a timely show of force and independence in a region traditionally dominated by the
world's remaining superpower, the US.

Last week, it was the turn of the Russian air force to help train the Venezuelans.

Beyond the military ties, the two nations share oil and energy wealth and increasing cooperation
when it comes to economic development.

Some analysts are calling this the biggest display of Russian military power in the Western
Hemisphere since the Cold War.

Dr Michael McKinley is a Senior Lecturer in International Relations at the Australian National
University in Canberra.

MICHAEL MCKINLEY: They are going down there basically to demonstrate to the United States that
Russia is not to be taken for granted, it's really a way of irritating the United States and to
show just how much things have changed, go back to the Cuban Missile almost for an act like this,
except it's nowhere near as dangerous now. Russia does not need to exercise with the Venezuelan
navy which is an insignificant maritime force, but in the context of global politics, where Russia
thinks it has been taken for granted and probably has been, this is a reminder.

SIMON SANTOW: And if it is about irritating the US, is it going to be successful in doing that?

MICHAEL MCKINLEY: Yes it will. Currently the United States is very capable of being irritated by
Russia because Russia has been increasingly assertive, and I think we saw the spill over here with
the Russian reaction to the Georgian bid in South Ossetia. The way that was handled by the United
States and then by the allies is suggestive that the United States in particular has decided that
Russia is far too uppity for its own good.

ELEANOR HALL: That's Dr Michael McKinley from the Australian National University, speaking to Simon
Santow.

Catholics rail against abortion bill

Catholics rail against abortion bill

The World Today - Tuesday, 23 September , 2008 12:42:00

Reporter: Alison Caldwell

ELEANOR HALL: The Catholic Archbishop in Victoria is warning today that Catholic hospitals could
close their maternity departments, if the State Government's proposed abortion law is passed.

The law would require a doctor who doesn't want to perform an abortion to refer the patient to an
alternative doctor or hospital.

But the Catholic Archbishop says that amounts to a 'cooperation in evil' that would threaten the
existence of Catholic hospitals.

In Melbourne, Alison Caldwell reports.

ALISON CALDWELL: The Catholic Church in Victoria owns and runs 15 hospitals, including St Vincent,
Cabrini and Mersey Private. They account for about a third of all Victorian births.

The Catholic Archbishop Denis Hart has written to all state mps asking them to reject the new
abortion bill which was recently passed by the lower house.

His letter comes with a warning too, if the laws are passed, he says the Catholic church may have
to get out of hospitals altogether.

Martin Laverty is the CEO of Catholic Health Australia.

MARTIN LAVERTY: We want to make it very clear that before this Bill is passed, the Upper House and
the broader government need to give consideration to the fact that this will have ramifications on
Catholic hospitals, and we're hoping to resolve those issues so that we don't need to revisit the
services that we offer the Victorian community.

ALISON CALDWELL: The new law requires a doctor to provide an effective referral to a woman who
wants a abortion, if the doctor has a conscientious objection to the procedure.

The Catholic Archdiocese says a doctor would be breaking the law if they didn't provide a referral.

Martin Laverty again.

MARTIN LAVERTY: What this law is now seeking to do is impose a mandatory mechanism whereby doctors
of all religious or otherwise persuasion would need to act in a certain way or face breaking the
law, and we don't think that that type of control on medical professionals is appropriate.

Before the Bill is determined in the Upper House, Upper House members should think through all of
the consequences and particularly this issue of conscience, that if a doctor, if a nurse, if a
health professional is forced to act against their conscience, surely that's in conflict with the
charter of human rights, which after all is a piece of legislation or a law made by the Victorian
Government itself.

So we don't think all of this has been thought through.

ALISON CALDWELL: The Catholic Archbishop wasn't available for an interview, but The Age newspaper
quotes him as saying that "providing a referral is a cooperation in evil".

He says that by including a mandatory provision, the new laws make a mockery of Victoria's Charter
of Human Rights.

Victoria's Attorney General Rob Hulls disagrees, he says abortion was removed from the charter,
after discussions with the Catholic Church.

ROB HULLS: It has to be remembered that abortion was specifically precluded from the charter, that
was actually at a request after discussions with the Catholic Church, so the charter of human
rights and responsibilities specifically precludes any laws in relation to abortion, so I don't
think there will be any problem with the charter of human rights, in fact, I'm quite sure about
that.

ALISON CALDWELL: Rob Hulls voted against the new laws in the Lower House.

While he sympathises with the Catholic Archbishop's concerns, he says he doubts Catholic hospitals
will have to close any services.

ROB HULLS: I'm not too sure how many Catholic hospitals actually perform abortions. My
understanding is they're not performed in Catholic hospitals.

ALISON CALDWELL: Callers to ABC Local Radio this morning said the church was being hypocritical in
threatening to withdraw services.

CALLER: Fair enough, if they want to say, "We're not performing terminations," but I would like to
be able to exercise a choice to have a referral to another hospital where I could make that choice.

CALLER 2: The Catholic hospitals are excepting a very large amount of money from a promptly elected
Government in Victoria, and they therefore I believe have an obligation to except majority rule as
far as these issues are concerned, otherwise they should be refusing to accept the money.

ALISON CALDWELL: The Abortion Bill is due to go to the Upper House in the first week of October.

ELEANOR HALL: Alison Caldwell in Melbourne.

Food versus fuel

Food versus fuel

The World Today - Tuesday, 23 September , 2008 12:46:00

Reporter: Donna Field

ELEANOR HALL: In Queensland, farmers and miners are at odds over the cost of the state's resources
boom.

Farmers on free-hold properties are obliged to give mining companies access to explore for
minerals, but they say the explosion in exploration permits is damaging prime agricultural land.

And the peak rural lobby group Agforce is now calling on the State Government to introduce better
regulation.

In Brisbane, Donna Field reports.

DONNA FIELD: The Smith family property, Mount Panorama, in central Queensland is in demand. Mining
and energy companies want access to explore for resources.

The family's first experience with a mining company was a letter advising that 50 holes would be
drilled in prime agricultural land to explore for coal. Gail Godwin-Smith says they had a matter of
days to respond.

GAIL GODWIN-SMITH: And we were able to, through the mining registrar, get that notice of entry
thrown out on the basis of a number of deficiencies associated with that notice, and that bought us
a little bit of time. So 18 months later they've reissued us with another notice of entry, and it's
a revise to a pattern and we have been able to negotiate that the drilling occur off cultivated
areas for the time being, and drilling should occur in the next two weeks.

DONNA FIELD: The companies have to pay bonds to the Environmental Protection Agency before
exploration work begins, but Gail Godwin-Smith says more protection is needed for farmers.

GAIL GODWIN-SMITH: The bonds that the environmental regulators like the EPA ask of mining companies
is just not enough, there's just too many examples of where exploration activity has gone
pear-shaped, and land holders are left with an absolute mess in their own backyard.

DONNA FIELD: Queensland's economy is underpinned by the resources sector. Coal export royalties
kept the state's books in the black last financial year.

Rural lobby group Agforce says the current exploration system favours mining companies. CEO Brett
de Hayr says government regulation hasn't kept up with the growth in the resources sector and
farmers are suffering.

BRETT DE HAYR: There are very few places in Queensland that aren't subject to exploration permits
now, and that moves from the south-east corner to the tip of Cape York to the far south-west of the
state.

DONNA FIELD: And what are the problems with seeing that level of exploration?

BRETT DE HAYR: Well there are two issues there. One, from a lot of the land holders' perspectives,
the uncertainly that goes with it whether there will actually a coal mine, a gas operation or
another type of mining operation on their property, what their future will then be, and then we
move to the series of problems that are worsening when those exploration problems are activated and
the conflict that we're getting between the mining operation and the farmers that want to be there.

DONNA FIELD: Is there an easy solution to this?

BRETT DE HAYR: It could be easier than it is, I think is our problem.

DONNA FIELD: Agforce is lobbying the Queensland Government to ensure farmers get a better deal. A
series of stakeholder summits will be held next month, bringing together mining companies, farmers
and the Government in the state's mining heartlands.

Mines Minister Geoff Wilson says mining shouldn't come at a cost to rural land holders.

GEOFF WILSON: I stress that whilst we want a strong and growing economy and mining is important to
that, we don't want it at the cost of rural land holders. We want to make sure that the economic
potential that is in the Sarat Basin and Bowen Basin and Mount Isa as well, is unleashed for the
benefit of all Queenslanders, but especially those in those regions.

DONNA FIELD: But with more and more of the state's food bowl under exploration Gail Godwin-Smith
says it's inevitable that farmers will be disadvantaged.

GAIL GODWIN-SMITH: There's a very real possibility that some of those prime agricultural areas will
be mined, they will be feasible to proceed into a full-blown mind and those areas will be lost
permanently, we won't be able to use those in the same way that we have been able to use them,
particularly for our cropping areas and that they won't be lost forever.

DONNA FIELD: A spokeswoman for the Queensland Resources Council says the council and its members
are working with the Government on the issue and are looking forward to the summits to work through
the issues with the land holders.

ELEANOR HALL: Donna Field in Brisbane with that report.

Osama bin Laden set to become published poet

Osama bin Laden set to become published poet

The World Today - Tuesday, 23 September , 2008 12:50:00

Reporter: Lisa Millar

ELEANOR HALL: He's one of the world's most wanted men but Osama bin Laden is now also about to be a
published poet.

His poems were discovered on audiocassettes in his Afghanistan compound after the 2001 attacks, and
an American academic, who's studied the work, says the al-Qaeda leader is a skilled wordsmith.

Lisa Millar reports.

LISA MILLAR: You've heard his voice before, but perhaps not quite like this:

(Sound of Osama bin Laden reading poetry)

LISA MILLAR: It's Osama bin Laden delivering poetry, and some of his work is due to be published
next week in the Language and Communications Journal.

It's the work of Professor Flagg Miller of the University of California.

FLAGG MILLER: Well, there was a variety of occasions he delivered this poetry, he's got a vast kind
of repertoire of poems that he uses, so they were sometimes given to large audiences when he was
recruiting for Jihad in Afghanistan and afterwards, and other times they are delivered at weddings,
and far more personal contexts.

LISA MILLAR: Professor Miller says the September 11 mastermind was regarded as a skilled poet, his
work was taped and passed around like pop songs.

(Sound of Osama bin Laden reading poetry)

FLAGG MILLER: This is a speech given in 1996 on the heights of Tora Bora, Afghanistan, as he was
taking on the United States in first declaration of war against the US, and he starts the poem, "a
youth who plunges into the smoke of war, smiling. He hunches forth, staining the blades of lances
red. May God not let my eye stray from the most eminent humans, should they fall".

LISA MILLAR: More than 1,500 audiocassette tapes were reportedly taken in 2001 from Osama bin
Laden's compound in Afghanistan. They feature scholars and al-Qaeda chiefs as well as bin Laden
himself.

And he thinks he's probably still writing poetry wherever he may be.

FLAGG MILLER: Oh absolutely, it's just part of tribal culture, wherever he is he's very likely in
touch with tribesmen who respect kind of these oral traditions, and respect a sense of someone who
can use his knowledge of history, of language to connect with the common man.

Now, if he's in Afghanistan or Pakistan, the languages are not going to be Arabic, at least not
among the wider populace, so one could speculate how widely his message is getting out.

LISA MILLAR: Dr Nijmeh Hajjar from the University of Sydney isn't surprised that Osama bin Laden
might have been writing poetry.

NIJMEH HAJJAR: Poetry is the first artistic expression in Arabic culture, and in Arabic language.
So we can say that actually Arabic poetry is the first Arabic art, so the word is very important in
Arabic culture, and it is expected actually that it is natural that any Arab who knows the language
well and who knows how to use the language to be a poet.

LISA MILLAR: The tapes are now at Yale University, where they are being cleaned and digitized, but
some unnamed academics are reported to be unimpressed that the tapes are being published at all,
comparing them to violent videos regarded too obscene to broadcast.

ELEANOR HALL: Lisa Millar with that report.