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Republicans bail-out of bail-out talks

Republicans bail-out of bail-out talks

The World Today - Friday, 26 September , 2008 12:10:00

Reporter: John Shovelan

LISA MILLAR: Negotiations over a Wall Street bail-out package have stalled in the US Congress.

After appearing to be close to a deal early today one now seems distant.

Republican members of the house are resisting and without one hundred of their votes there won't be
any deal.

From Washington John Shovelan reports.

JOHN SHOVELAN: Just yesterday the Republican presidential nominee Senator John McCain called on
President Bush to convene a meeting at the White House to hammer out an agreement to deal with the
credit crisis on Wall Street.

President Bush obliged and rang Senator Obama inviting him to attend along with Congressional

The meeting was meant to restore confidence and calm and end with a show of unity.

At the outset President Bush was optimistic it would follow the script.

GEORGE W. BUSH: My hope is that we can reach an agreement very shortly.

JOHN SHOVELAN: But instead of a deal - the meeting ended in acrimony and concluded with Senators
McCain and Obama leaving separately without saying anything. The Treasury Secretary Henry Paulson
having to placate angry Democrats and house Republicans upending a week of negotiations by
introducing an entirely new proposal calling for a privately financed bail-out.

The negotiations have now stalled and prospects for a deal seem remote at best.

Democrats were blaming it all on Senator McCain.

Senator McCain had hoped voters would see his decision to suspend his campaign and return to
Washington as rising above politics and showing his deal-making leadership skills.

But Barack Obama said the presence of two presidential candidates had gummed up the negotiations.

BARACK OBAMA: Sometimes if you inject presidential politics into some delicate negotiations, it is
not necessarily constructive and it is amazing how much people can get done when folks aren't
worried about taking the credit or passing the blame.

JOHN SHOVELAN: This morning Democrats along with Senate Republicans appeared to have reached an
agreement on the principles of a deal.

They were willing to use Treasury Secretary's Henry Paulson's $840-billion taxpayer funded plan as
the basis.

But by the end of the day negotiations were confused.

There is wide agreement the US economy is in peril, with more financial institutions going under
and a possible severe recession.

But the economic scare stories haven't budged most House Republicans, many of whom are fiscal
conservatives and are refusing to sign onto the deal.

The presence of the presidential campaigns didn't help negotiations but it wasn't the reason they

Those House Republicans have been critical for a long time of the Bush administration's deficit
spending and see this plan as a debt that not even their grandchildren can pay off.

And they are ideologically opposed to bailing out companies.

Senator McCain who had little to say in today's White House summit is still not letting on where he
stands on the Paulson plan and its numerous amendments.

But he says he understands the problems House Members are having.

JOHN MCCAIN: I think significant progress has been made. I believe it will be made and I believe
that we will reach a successful conclusion. Our members are aware of the crisis situation that we
are in. They do have concerns which I think when you are talking about 700-billion or a trillion
dollars, that need to be addressed so this is a genuine bipartisan, bicameral agreement.

JOHN SHOVELAN: Tonight the Treasury Secretary and the Federal Reserve governor are back up on
Capitol Hill talking with the House Republicans.

But the numbers just do not exist to pass the plan any time soon.

House Members and Senators are getting ready to sit through the weekend.

The failure of a deal means tomorrow night's presidential debate is in doubt.

In suspending his campaign Senator McCain said he wouldn't participate until a deal is reached.

If he holds to his word Senator Obama will be sitting opposite an empty chair.

John Shovelan, Washington.

Crisis deepens as talks falter

Crisis deepens as talks falter

The World Today - Friday, 26 September , 2008 12:14:00

Reporter: Lisa Millar

LISA MILLAR: While the bail-out negotiations continue in Washington, the financial crisis is
deepening with the last minute rescue of America's third biggest bank.

Washington Mutual has just been bought by its rival JP Morgan Chase, as another American banking
brand bites the dust.

I'm joined now by our Business editor Peter Ryan.

Peter, interesting timing. How significant is the demise of Washington Mutual, given the apparent
stalemate in Congress?

PETER RYAN: Lisa, this is very significant and it is perhaps a sign that the longer the Capitol
Hill negotiations continue, the deeper the hole for the US financial system.

Now Washington Mutual which is based in Seattle has seen its market value halved in the past week.
It has $US19-billion in mortgage related losses.

The demise though really hit last week after its credit rating was cut to "junk bond" status in the
wake of the bankruptcy of Lehman Brothers, the near collapse of the insurance giant American
International Group and Merrill Lynch having to sell itself to the Bank of America

And Washington Mutual is now America's biggest banking collapse since 1984 when the Continental
Illinois Bank had to be taken over.

This is the second major rescue carried out by JP Morgan Chase. You will recall it took over the
failed Wall Street investment bank Bear Stearns back in March.

So regulators in the United States are obviously closely monitoring the stability of banks, both
large and small, to avert the possibility of any customer panic.

LISA MILLAR: But Peter, the fallout isn't just in America, is it?

PETER RYAN: Oh no. Yesterday in Hong Kong, there was a run on the Bank of East Asia and that is
Hong Kong's third largest lender.

This was based on unsubstantiated rumours, prompting some customers to pull their deposits from the
bank but today we're seeing things return to normal in Hong Kong, after regulators came out quite
forcefully and said there was no need to panic.

Also, on mainland China, there's been an interesting development. We know that regulators in the
United States, Europe and here in Australia have banned most forms of short selling, and put
restrictions on risky margin loans. Well today, the Chinese Government has signed off on changes to
allow margin lending and short selling, to boost trading in what has become Asia's second biggest
share market.

LISA MILLAR: And just recently there's been a major economic development closer to home, across the

PETER RYAN: That's right. New Zealand is now officially in recession - the first one in ten years.

The second consecutive quarter of negative growth that defines a recession hit today - down 0.2 of
one percent in the quarter.

New Zealand's Reserve Bank is now expected to cut interest rates to a three year low next month -
possibly down half a per cent to seven percent.

There are a few similarities with Australia. We've both had a long period of rising interest rates
because of high inflation - and New Zealand has now recorded its worst consumer confidence result
in 17 years.

LISA MILLER: Well, we won't mention the "R" word here but how is Australia's share market reacting
to the events in the United States?

PETER RYAN: Lisa, started off well this morning, but now running very flat. A short time ago the
key market indicator, the All Ordinaries Index, was a third of one per cent stronger at 4,973. But
all eyes remain on the United States and any delay in brokering the bail-out deal could hit Wall
Street very hard when it reopens again late tonight our time

LISA MILLAR: Business editor Peter Ryan. Thanks for joining us.

Rudd offers solution

Rudd offers solution

The World Today - Friday, 26 September , 2008 12:18:00

Reporter: Michael Rowland

TONY EASTLEY: Well, the financial crisis has been the key topic of Prime Minister Kevin Rudd's
address to the United Nations General Assembly.

Mr Rudd has told world leaders the problem was a global one and it required a global solution.

He's urging all countries to move quickly towards standardising regulatory structures and market
oversight to make sure the events of the past fortnight aren't repeated.

North America correspondent Michael Rowland reports from the United Nations in New York.

MICHAEL ROWLAND: The initial plan was for Kevin Rudd to use his first speech to the United Nations
to highlight issues like climate change and the campaign to reduce global poverty.

But like most other world leaders stepping up to the General Assembly podium, Mr Rudd had to make
some last minute changes to his formal address.

Climate change and poverty reduction did get a mention but it was the financial crisis and ways of
dealing with it that dominated Mr Rudd's remarks.

KEVIN RUDD: The global financial crisis of today presents us afresh with a critical opportunity to
act comprehensively and collectively for the long term rather than selectively and separately for
the short.

MICHAEL ROWLAND: The Prime Minister told the assembly the world hadn't learned the lessons from the
Asian financial crisis of a decade ago.

KEVIN RUDD: And as a global community we resolved that we would act to reduce the risk of such
systemic crisis in the future. The problem is, a decade on, systemic lessons were not learnt.

MICHAEL ROWLAND: Mr Rudd said political will was needed to strengthen the global financial system.

He said bodies like the International Monetary Fund and the G20 had to move quickly to ensure
regulatory structures around the world were standardised to minimise the prospects of further
market failure.

KEVIN RUDD: Systemically, important financial institutions should be licensed to operate in major
economies only under the condition that they make full disclosure and analysis of balance sheet and
off-balance sheet exposures.

The central bank in each country should have responsibility for financial systems stability. This
should be embedded in globally agreed best practice standards of financial regulation and assessed
by the International Monetary Fund.

Second we need to ensure that banks and other financial institutions build up capital in good times
as a buffer for bad times using predictable rules.

MICHAEL ROWLAND: The speech capped off a three day visit to New York by the Prime Minister that was
overshadowed by the mayhem on Wall Street.

His schedule was changed as much as his UN speech.

Hastily organised meetings with financial figures were inserted into his program to allow Mr Rudd
to show he was actively concerned about what was happening on the markets and its potential impact
on Australia.

Just before his speech the Prime Minister scored a meeting with senior Federal Reserve official
Timothy Geithner, who'd been heavily involved in drafting the financial rescue package now before
the US Congress.

Mr Rudd did set aside time for other issues.

He lobbied heavily for Australia to get a temporary seat on the United Nations Security Council.

KEVIN RUDD: On the question of our Security Council candidature, it is a competitive race. The vote
is not until 2012 and so frankly every vote counts. It is like one huge global caucus ballot.

MICHAEL ROWLAND: And the Prime Minister did devote some of his precious minutes before the UN
General Assembly to underscore Australia's efforts to cut greenhouse gas emissions.

KEVIN RUDD: We are determined to be part of the solution to climate change - not just a part of the
problem. We have acted to begin the process of developing a comprehensive emissions trading or
carbon pollution reduction scheme to bring down CO2 emissions over time.

We will also implement a national energy efficiency strategy as well as a renewable energy

MICHAEL ROWLAND: But like every world leader Mr Rudd is, for the moment, more concerned about
re-energising the battered US financial system.

At United Nations headquarters in New York, this is Michael Rowland reporting for The World Today.

Financial crisis could herald the death of low doc loans

Financial crisis could herald the death of low doc loans

The World Today - Friday, 26 September , 2008 12:22:00

Reporter: Michael Edwards

LISA MILLAR: Well, they were blamed for creating much of this financial crisis now the question is
- are they dead and buried?

Low doc and no doc loans - which offered money with little need for proof of income fuelled the
borrowing boom amid a climate of loose lending practices.

And they created misery for thousands of Australians.

Well, now there's some speculation with lending practices tightening up and international credit
shrinking that these products have had their day.

Michael Edwards has this report.

MICHAEL EDWARDS: 2003 and 2004 were good times for mortgage brokers across Australia.

According to the Reserve Bank, a combination of 'loose lending standards' and a desire to
capitalise on what were then increasing property values led to a borrowing boom, especially in
western Sydney.

Less than one per cent of those mortgages took the form of 'low doc' and 'no doc' loans often to
people who should never have been allowed to get them in the first place.

But now the impact of those loans is being felt heavily.

Thousands of borrowers are behind in their mortgage repayments by 90 days or more.

Western Sydney is the worst affected as are parts of outer metropolitan Melbourne.

Garry Rothman is a financial counsellor at Broadmeadows Uniting Care in Melbourne.

He says 'low doc' loans are responsible for a lot of the mortgage stress being felt by homeowners.

GARRY ROTHMAN: 'Low doc' and 'no doc' loans have enabled mortgage brokers, banks and other lending
institutions to manipulate the assessment of credit to enable people who wouldn't otherwise be able
to get a mortgage, to find themselves in the mortgage market with loans that are totally
unaffordable and unethical in nature.

MICHAEL EDWARDS: Garry Rothman says he's never seen so many people seeking financial counselling.

GARRY ROTHMAN: We are seeing an increasing number of clients presenting who have got loans through
brokers and their financial circumstances just leave you scratching your head where you see both
members of the household are on a Centrelink benefit and have been given a mortgage for over

MICHAEL EDWARDS: And Garry Rothman says the government should be taking action to stop the
proliferation of these loans

GARRY ROTHMAN: Despite government enquiry after government enquiry, highlighting it as a problem,
we are seeing a complete lack of action in actually doing something about it and that is just
extraordinary in this climate where we are just seeing so much mortgage stress and mortgage
problems on an international basis, not just in Australia and the complete lack of action by
regulators and government to actually do something with legislation.

MICHAEL EDWARDS: But there are those in the financial services industry who say that might not be

Aussie Home Loans founder, John Symond, says the United States financial crisis has put an end to
'low doc' and 'no doc' loans.

JOHN SYMOND: On account of the global credit crunch, you can't now source global funding for AAA
rated prime residential mortgages. People with decent deposits, decent jobs, all mortgage insured -
you can't get funding for those loans so as far as anything below that, it is mission impossible.
So there is a bleak future for 'low doc' loans, 'no doc' loans and my prognosis is that they are
next to non-existent.

MICHAEL EDWARDS: But there are those who defend these loans as viable financial products.

Phil Naylor from the Mortgage and Finance Association of Australia says while they have been
misused by a small section of the industry, there is a legitimate role for them.

PHIL NAYLOR: The original intention of 'low doc' and 'no doc' loans was that they basically go to
self-employed people, contractors and so forth who don't have a smooth income flow and for those
people it is a valid and it is a good product or they are good products.

In the predatory area and in some cases, people who have not been self-employed or don't really
qualify for the original intention of those loans, have been sold those loans, that is wrong and
that certainly will be wiped out but I think there will always be a place for 'low doc' loans as
they were originally intended.

LISA MILLAR: That is Phil Naylor from the Mortgage and Finance Association of Australia ending
Michael Edwards' report.

Greed isn't so good, say church leaders

Greed isn't so good, say church leaders

The World Today - Friday, 26 September , 2008 12:26:00

Reporter: Emma Alberici

LISA MILLAR: The Church of England has weighed into the financial crisis.

Its two most powerful figures, the Archbishops of Canterbury and York have attacked city traders
for greed and questioned the value they bring to society.

The Archbishop of York, Dr John Sentamu, condemned the short sellers who made millions by driving
down the share prices of banks.

Europe correspondent Emma Alberici.

EMMA ALBERICI: The Archbishop of Canterbury, Rowan Williams, has referred to the modern devotion to
the free market as a form of idolatry and said Karl Marx was right in his analysis of the power of
unbridled capitalism.

He has written an article for the Spectator magazine that will be published today in which he
claims that it's no use pretending that the financial world can maintain indefinitely the degree of
exemption from scrutiny and regulation that it has got used to. The bishop of Croydon, Nick Baines

NICK BAINES: I mean there is something basically immoral surely about the system where people can
make vast profits when it is going good and that isn't necessarily shared with the wider community
who money it is that they are gambling with anyway and then as soon as it goes wrong, they are
bailed out by the states that they pleaded for years should not be involved.

EMMA ALBERICI: The Archbishop of Canterbury has been joined in his criticism of the markets by the
other most senior member of the Church of England. The Archbishop of York Dr John Sentamu referred
to the short sellers who've cashed in on falling bank shares as bank robbers and asset strippers.

Giles Fraser is the Vicar of Putney

GILES FRASER: The idea that the Americans are going to give $700-billion and nationalising their
banks as it were when there are people who can not afford to eat all the way around the world. That
clearly has to be morally wrong.

EMMA ALBERICI: There is also a rising level of unease about Washington's bail-out coming from the
world's leading economists like Jon Danielsson of the London School of Economics.

JON DANIELSSON: It does send this signal that financial institutions that assume too much risk,
they can always go to the Government and demand to be rescued. It will create that impression in
the future. It will take a long time to eradicate that and it is a very dangerous impression to
have. This has happened in the middle of the US election. Now there's are a large number of
companies not connected to Wall Street which are in trouble.

I mean Ford and General Motors come to mind. In a key electoral state like Michigan, it will be
difficult for the Government to say we are going to bail-out the fat cats on Wall Street but not
the average working man in Michigan.

Indeed the US Congress is debating whether to give $25-billion to these companies. One of the worst
things that could happen is if this turns into a general give-away to every single ailing company
in the US.

EMMA ALBERICI: This $700-billion, where does it come from?

JON DANIELSSON: Somebody pulled it out of a hat. They have no idea. They probably looked at this
and said well the amount of sub-prime is somewhere 500 and a trillion, let's pick a number in

EMMA ALBERICI: What sort of companion legislation should come with this bail-out?

JON DANIELSSON: As little as possible. We have seen in previous crisis when the Government reacts
quickly in a panic, we end up with legislation that often ends up causing more damage than good.

We saw it in the Great Depression. We've seen it elsewhere and really the reason for this crisis is
the fact that the industry was creating products that are so complicated that not the regulators,
not the clients and not the banks themselves understood what was going on.

In the future, I doubt very much that we will see anything of this scale happening in the future.
However the problem with financial crisis and try to prevent them is like closing the barn after
the horse has escaped.

We are very good at reacting to the previous crisis but the new one always catches us unawares and
the next crisis will be completed different in some area we had no idea existed.

LISA MILLAR: That is Jon Danielsson of the London School Of Economics.

Human-generated carbon emissions booming: report

LISA MILLAR: New figures have found human-generated carbon emissions are booming despite action to
curb them.

The Global Carbon Project has revealed an alarming four-fold increase in emissions over the past
eight years leading to the highest level of CO2 concentration in the atmosphere for the past
650,000 years.

Australian environmental groups say they want to get on with the fight against climate change, but
they're divided over the Prime Minister's plans for carbon capture and storage technology.

Karen Barlow reports.

KAREN BARLOW: The Global Carbon Project is a group of climate scientists who argue current climate
change policy is relying on data a decade old.

The group's latest carbon assessment released today in Paris and Washington pin points the location
of CO2 pollution and calculates how much is being pumped into the atmosphere.

The CSIRO's Dr Pep Canadell is the Project's executive director.

PEP CANADELL: In 2007 we completely flip over who are the major carbon emitters in the world when
the Kyoto Protocol, was developed or thought of, the developed world was responsible for 62 per
cent of all emissions and consequently we developed a protocol that was trying to push those
countries to do something about climate change. Well, now days we have completely flipped the whole
thing over. It is the less developing counties who are now responsible for more than 50 per cent of
all emissions.

KAREN BARLOW: So we've been aware that countries like India and China have been increasing their
CO2 emissions and other greenhouse gas emissions but this is a clearer picture now of what the
problem actually is?

PEP CANADELL: It is so clear that we can confirm that China has become the top emitter in the
world. That the US is now second and that India, this year in 2008, will take over Russia to become
the third top emitter in the world.

KAREN BARLOW: The study uses national energy consumption figures from around the world to craft its
picture of human-induced carbon emissions.

PEP CANADELL: The emissions into the atmosphere have grown by four times the emission growth we had
in the 1990's.

KAREN BARLOW: This is despite current efforts to tackle CO2 emissions?

PEP CANADELL: This is depite, you know, suddenly all the talk we have been doing about, you know,
addressing climate change and if anything we are seeing the massive response from a booming economy

KAREN BARLOW: That's mostly been due to developing countries, such as China, which are heavily
dependent on coal generated power.

Australia's CO2 emissions have risen by two per cent since 2000 but Dr Pep Canadell says the
Garnaut Report on climate change released earlier this year anticaped this increase and took it
into account.

The Climate Institute says Australia's energy and transport sectors are the main polluters.
Executive Director, John Connor, says strong policies are needed to turn the situation around.

JOHN CONNOR: Again, we have got to move beyond research and development funding. We've got to move
beyond institutes. We've got to get to implementation so that is where we need the ambitious
target. Australia needs to be a leader. It is in our interest to do so so strong targets for

Let's be a positive player in those global talks. Let's not quit on the great natural assets we
have like the Great Barrier Reef, our Murray-Darling with weak targets or soft starts.

KAREN BARLOW: There's a split in the environmental movement and the Climate Institute is on the
side of carbon capture and storage technology.

Together with the World Wildlife Fund it was derided by other green groups in April for joining
forces with the coal lobby group the Australian Coal Association.

Now after the Prime Minister Kevin Rudd's support for the technology, the Climate Institute's John
Connor says there is an agreement to disagree.

JOHN CONNOR: Yes that is right. I mean we have had our respective positions for some time now. Some
are obviously concerned about this technology overshadowing other clean technologies. We think it
is part of the package that needs to happen but we also, it is a promising technology but we can't
allow it to hang around like a bad smell.

KAREN BARLOW: Other green groups insist deep cuts in greenhouse emissions can been done without
clean coal technology.

Tony Moore from the Australian Conservation Foundation.

TONY MOORE: Environment groups are very focused on the task at hand which is reducing our emission.
There will always be different ideas about the best way to do that but in the end, we just have to
do as much as we can across the spectrum to reduce our emissions and green groups and environment
groups, they are united on that front completely.

KAREN BARLOW: Independent scientists, like the CSIRO's Pep Canadell says the carbon emission
figures are so serious all options needs to be looked at.

PEP CANADELL: We are going to need all the technologies to curb carbon dioxide and more than we
don't have yet so I am neither a proponent nor a detractor. We can certainly not put all the eggs
in one basket, that's for sure.

LISA MILLAR: That is Dr Pep Canadell from the Global Carbon Project ending that report from Karen

Former minister puts UN policy under the microscope

LISA MILLAR: The grim death toll from catastrophes like Rwanda and Darfur offers plenty of evidence
that the international community has struggled when faced with humanitarian crises.

The United Nations has adopted a policy called the Responsibility to Protect which puts the weight
back on nations to protect their own civilians and if they don't, it offers a path for the rest of
the world to force them to do so using everything from persuasion through to military force.

But the policy - adopted by the UN in 2005 - has been misunderstood and proven to be controversial.

Australia's former foreign minister Gareth Evans has written a book - called the Responsibility to
Protect - Ending Mass Atrocity Crimes Once and For All and I spoke to him from New York earlier.

He says the Responsibility to Protect is more than an empty slogan - it's already been put to work.

GARETH EVANS: Well, as recently as the beginning of this year when a catastrophe erupted in Kenya
in the immediate aftermath of that contested election. You remember churches being burned with
50-odd people being incinerated alive. 150,000 being displaced in a matter of days from where they
lived in what looked like a real ethnic cleansing exercise.

The international community from the Secretary-General of the UN down branded this Responsibility
to Protect case and swung into full reactive mode. Compare and contrast that with 1994 in Rwanda
where nobody gave a damn as the evidence emerged of really horrible blood letting occurring and
people just dismissed that and said oh that is just tribal violence. That is the sort of thing
Africans do. Nothing to do with us.

So I think things have moved along. That is not to say that we don't have problems in getting
universal acceptance for this. There has been a bit of what has been described as 'buyer's remorse'
from some of those countries that signed up to this in 2005 saying well what the hell did we do.
Isn't this just a bit of an excuse for the big guys to throw their weight around again. Just using
new language to justify it.

But that said, I do think there is a genuine willingness to move forward and to try and find
consensus here but because there is a lot of unfinished business in refining and defining the
concept and working out the necessary institutional capability and mobilising the necessary
political will, because there is all those challenges still ahead of us, I thought it was timely to
try and write a book bringing all this stuff together and to set the debate.

LISA MILLAR: The book is almost an admission, I guess, that this concept has struggled to win
acceptance internationally.

GARETH EVANS: What 'Responsibility to Protect' is really all about, is not an all-purpose doctrine
for solving all the world's problems, all the world's conflicts, all the world's human rights
violations and HIV-Aids and climate change thrown in as well.

It is not about that. It is about just a very narrow class of things that we have got horribly
wrong in the past. The Holocaust, Cambodia, Rwanda, Srebenicia in the Balkans, Kosovo and to ensure
that whatever else we continue to make a mess of internationally, at least we get this stuff right
and that never again in the future, when these situations erupt, do we have people sort of saying
well that is none of our business.

Let's try and get to the stage where the only argument is what is the right response, not whether
there should be a response.

And I think, you know, to be fair that is really the point which we are getting to at the moment
but we do need to consolidate it and take it further.

LISA MILLAR: How does it get triggered at the moment?

GARETH EVANS: Well, it depends on whether you are talking about early prevention, immediate
prevention or actual reaction to a situation that has already exploded.

What we need to do is to be very clear headed about what sort of situations are 'Responsibility to
Protect' situations in the making in the sense that if effective preventive action is not taken,
then the situation could well disintegrate into full scale mass atrocity crimes in a country like
Zimbabwe might well be a candidate for that kind of preventive attention.

And then we have to be clear about those cases like Kenya that I spoke of which were unequivocally
and clearly cases where mass atrocity crimes were occurring and were about to occur on a much
larger scale if some very rapid reactive action did not take place.

It didn't necessarily have to be military. There are other options available and they proved
successful in this case. So it is a matter of being clear about defining what the problems actually
are, understanding what the tool box of preventive measures is, having the capability to apply that
tool box and then having the political will to mobilise that capability and all of those things are
challenges for this doctrine but I think we are doing better than we were a decade ago where we
were just making a horrible mess of all these situations as they arose.

LISA MILLAR: But it is quite radical in the way that it is putting human lives above state

GARETH EVANS: We can't get too worried if it is not universally embraced and loved immediately.
What does matter is the shift is visibly occurring and that there has been a new way of thinking
about these things.

LISA MILLAR: Gareth Evans, as of this week you are now taking on a new role as co-chair of the
International Commission on Nuclear Non-Proliferation and Disarmament. This is an extraordinary
time to taking on such a role. We have got North Korea again on the verge of restarting its nuclear
weapons program.

GARETH EVANS: One thing after another has really lead us to worry I think, quite properly all over
again, what on earth are we getting into here and the challenges are obvious, the solutions are
less-obviously readily obtainable but I think we can actually make a difference in changing the
terms of the debate and articulating a way forward that will really get us out of this hole that we
are plunging back into as an international community.

LISA MILLAR: That is Gareth Evans on the 'Responsibility to Protect'.

Grand final parade a hit for local fans

LISA MILLAR: Well, it's a glorious day for a parade in Melbourne, sunny and warm although a touch
windy and thousands of people have lined the streets of the CBD to watch the Grand Final parade of
this year's two AFL finalists, Hawthorn and Geelong.

The reigning premiers, the Cats, lost only one game this year and are hoping to win back to back
flags while the Hawks have timed their finals campaign beautifully.

Our reporter Alison Caldwell is at the parade, she joins me now.

Alison the city usually slows down each year for the parade, but with two Victorian teams vying for
the cup, are you noticing more have shown up for the parade than usual?

ALISON CALDWELL: Oh yes Lisa. I would say that there are a few more who have showed up. I reckon I
would say there are between 70 and 80 thousand people here today.

Because of the glorious weather, a lot more people have come out and also of course because two
Victorian sides will be playing in this final but I can see people hanging out of balcony windows.
There were people standing ten lines deep at some points in the city but as you know, no trams
could move, no cars could move.

It has been an absolutely day for a parade.

LISA MILLAR: How do the players look?

ALISON CALDWELL: The players, Lisa, looked, I could say that Hawthorn looked nervous. They looked
like a first time sort of premiership contender. They were all wearing their dark glasses when they
first got onto their cars which was a bit frustrating for some fans but then they took them off,
they started to look a lot more relaxed.

Geelong looked like, they looked extremely healthy. They looked happy. They looked relaxed. They
weren't wearing sunglasses. They were all with their children and they looked ready to play another
great game.

Now we spoke to, ABC Radio spoke to a few of the players. First of all Geelong's Paul Chapman who
has been out injured for a while but he has come back in. His hamstring has repaired and this is
what he had to say.

PAUL CHAPMAN: Definitely really enjoying it as much as last year so obviously thinking about
tomorrow more so. Body is really good, the hamstring is great and as I said just looking forward to
getting out there with my 21 buddies and bringing home the bacon.

ALISON CALDWELL: So that was Paul Chapman from the Geelong Cats. We also spoke with Campbell Brown
from the Hawthorn football club. The Hawks fans are hoping for a lot from him tomorrow. Here is
what he had to say.

CAMPBELL BROWN: Feel good. Feel good so a few blokes are a little bit nervous not knowing what to
expect but the week has been really good.

You know, we got there on our own merit and we are playing some pretty good footie at the moment
and we match up well against Geelong too so really looking forward to the contest.

Especially last week. I think that is probably as good as we played all year.

LISA MILLAR: That is Hawthorn player Campbell Brown. Alison, what's the atmosphere like in
Melbourne been these past few days in the lead up to a Grand Final?

ALISON CALDWELL: Well Lisa it has been like a real spring festival. It has been like a carnival. In
Federation Square each day we have had guests, various football players talking to people. There
has been bands playing. There has been music. It has just been a really buoyant atmosphere and
today with this beautiful weather, people are just screaming out, bring on the grand final. The cup
is up there on the stage, gleaming in the sun. The atmosphere has been spectacular.

LISA MILLAR: Alison, I know we should try to stay neutral on all events but I think you should
declare your bias here and now. Who do you think is going to win?

ALISON CALDWELL: Yes, my bias is with the Geelong Football Club. I hope and pray that the Geelong
Cats will take away a back to back premiership but look, the Hawks are looking extremely dangerous.

LISA MILLAR: Alison Caldwell, I am sure and I hope that you will have a great weekend. Thanks very


LISA MILLAR: Alison Caldwell there in Melbourne.

Expert turns allergy theory on its head

LISA MILLAR: Rising allergy rates among children have puzzled Australian doctors for years.

The conventional wisdom has been to exclude from kids' diets foods such as peanuts and eggs to try
to prevent what can be a debilitating and even dangerous condition.

But at least one expert is turning that theory on its head.

He's pushing for more and not less exposure to problem foods at a very early age.

Simon Santow reports.

SIMON SANTOW: They're a sign of the times.

Prominent notices up on the walls of childcare centres, pre-schools and schools advising of the
severe health risks if little Johnny or Jackie comes into contact with this or that food.

The condition is called anaphylaxis.

Maria Said is President of Anaphylaxis Australia.

MARIA SAID: The prevalence continues to increase and you know, science needs to catch up and find
out why so if we've got information that says that exposure builds tolerance in animal models then
we need to progress that further.

SIMON SANTOW: Professor Andrew Kemp from Sydney's Westmead Children's Hospital believes it's time
to rethink the strategies used to prevent allergies.

ANDREW KEMP: What is happened is that fool allergy particularly in increased quite a lot over the
last 15 or 20 years. In some cases it has perhaps gone up two or threefold over that sort of period
of time.

SIMON SANTOW: For this paediatric allergy and immunology expert, it's all about increasing exposure
to the potential nasties - not hiding away from them.

ANDREW KEMP: We shouldn't be restricting the access of young infants or babies as they start to eat
solids to sort of what are called non-allergenic foods. It may well be by letting them get exposed
to the allergenic foods as well, they might even have potentially less allergy although that point
has yet to be proven but I think we are proposing that in general, the idea of excluding things
isn't working well and isn't particularly helpful advice.

SIMON SANTOW: Parents rely on advice developed by the National Health and Medical Research Council.

That advice is often dispensed via community nurses during formal parenting classes following the
child's birth.

The council's guidelines were last updated in 2003.

Nutritionist Professor Katrine Baghurst took part in those deliberations but isn't formally
involved in a standard review currently underway into the guidelines.

KATRINE BAGHURST: There are, of course, lots of issues that play into the age at which you
recommend breast feeding. A whole range of nutritional issues. Things like gastrointestinal
infections and the new issue that has arisen that some people now say that they have some evidence
that there would be some benefit of breast feeding only going to four months around the issue of

That evidence face they've got, hopefully will submit to an HMRC and that will be considered along
with all the other evidence around nutrition, around infections, to come to a decision about
whether the guidelines stays as it is. Whether it moves.

SIMON SANTOW: Professor Baghurst says research around allergies and children is always evolving.

KATRINE BAGHURST: The guideline that we put out there was one that was supported by the WHO, by the
American Academy of Paediatrics and by the Royal Australasian College of GPs so all thouse evident
foodies have the six month thing.

We looked at the evidence that was available at the time and agreed with them and our own

Six months seems to be the optimal time, looking at all aspects of health and nutrition of infants,
there is no reason really to exclude things from children's diets just because they may cause some
problems without having evident that that particular child has an allergy to it.

Though I think that is a slightly different issue from the breastfeeding one.

SIMON SANTOW: For the parents of kids with severe allergies, there's a little anxiety that
encouraging the eating of solids at a younger age and with fewer exclusions could lead to
anaphylaxis not being taken as seriously as it should be.

Maria Said.

MARIA SAID: It can happen just so quickly. You know one moment you have got a well child, a piece
of crust with a smear of peanut butter and the child can be having breathing difficulty and you
know, lying limp in your arms.

We need to know about how to exposure the child, when to expose the child. There needs to be
further research before people are going to accept this as maybe being the way to go.

LISA MILLAR: Maria Said the President of Anaphylaxis Australia ending Simon Santow's report.

Financial crisis weighs on aid meeting

LISA MILLAR: The world's financial troubles are casting a gloomy cloud over a meeting of political
and philanthropic leaders who've gathered at the UN to review the progress on the Millennium
Development Goals.

They've recommitted themselves to reducing global poverty, with pledges of $16-billion in aid and
there have new commitments on malaria and education.

But some leaders say with the finance markets in meltdown, it's a folly to talk of increasing aid
for the poor.

Ashley Hall reports.

ASHLEY HALL: Outside the meeting of world leaders and philanthropists at the United Nations General
Assembly, actors and musicians launched a new campaign to end world poverty.

It was a star-studded event, attracting the likes of Australian model Elle Macpherson, musicians
from the Black Eyed Peas and Kristin Davis, an actor from the TV series Sex and the City

The group's spokesman Kumi Naidoo summed up their views:

KUMI NAIDOO: When we look at the money that we are asking for, it's a fraction, one tenth at most
of the $700-billion bail-out package that magically seems to have been found to address the crisis
caused by the greed and bordering on corruption on the part of bankers in the United States and

ASHLEY HALL: The global financial crisis and how much it will cost to solve is also weighing
heavily on those minds inside the meeting.

France's Foreign Minister Bernard Kouchner says it's "sort of unfair" to be talking about poverty
goals when Western countries are battling a credit crisis.

He says he'll be making no new commitments to help, and that it would be lying to promise people
more money for development in a time of financial crisis.

But the British Prime Minister Gordon Brown is having none of that.

GORDON BROWN: This would be the worst time to turn back. Every global problem we have requires
global solutions involving all the continents of the world.

ASHLEY HALL: Spain's Prime Minister Jose Luis Rodriguez Zapatero agrees.

JOSE LUIS RODRIGUEZ ZAPATERO (translated): We cannot excuse non-fulfilment of our obligations
because of the market situation. We cannot find the excuse of any circumstances to evade our
commitments. It is not just a question of ethical, non-replaceable aims. It is a question of acting
with responsibility, stability and international equilibrium.

ASHLEY HALL: The Millennium Development Goals aim to end poverty and to improve education, health
and environmental outcomes for the world's poorest.

In a range of measures, there have been improvements recorded in many of the Goal's target areas
especially in Asia and Latin America.

New data from the World Bank suggests the number of people in extreme poverty is expected to fall
by half by 2015

But the UN Secretary General Ban Ki-Moon says not a single African country is on track to reach all
of its targets.

BAN KI-MOON: While we are moving in the right direction, we are not moving quickly enough.
Subsahara (phonetic) in Africa actually saw the number of poor increase between 1990 and 2005.
Women and girls suffer persistent bias and neglect evidenced by disturbing gender gaps in health,
education, employment and empowerment.

The current financial crisis threatens the well-being of billions of people. None more so than the
poorest of the poor. This only compounds the damage being caused by much higher prices for food and

ASHLEY HALL: So far, there have been pledges of about $16-billion in aid.

The founder of Microsoft, Bill Gates has pledged more than $170-million to a three billion campaign
to eradicate malaria by 2015.

He's talking up the benefits of philanthropists, private business interests and governments working
together to meet the Millennium Goals.

BILL GATES: So the opportunities for innovation are incredible and the Millennium Development Goals
can guide the search for new discoveries by showing us where innovation can bring the biggest

ASHLEY HALL: The United Nations has also announced a new initiative to strengthen health systems to
decrease the number of women who die in childbirth.

But the Executive Director of Oxfam Australia Andrew Hewitt says the problem with these summits is
few countries deliver on their pledges.

ANDREW HEWITT: The world's leaders have not put the money where people's mouths are. The fight
against poverty has unfortunately gone backwards in the last year or two.

Aid promises have not been delivered upon. The food price crisis is causing more than 100 million
more people to go to bed hungry every night and the effects of climate change are exacerbating
poverty around the world

LISA MILLAR: Andrew Hewitt, the executive director of Oxfam Australia, ending Ashley Hall's report.

Chika campaign gains momentum

LISA MILLAR: It's been a case that's fascinated the Japanese but gone virtually unnoticed in

Chika Honda spent a decade in Australian jails for a crime she's always insisted she didn't commit.

She was part of a Japanese tour group arrested for importing heroin in 1992.

Many Japanese see her case as a great miscarriage of justice and now the makers of a documentary
called Chika are hoping their work will help overturn her conviction.

As Nance Haxton reports from Adelaide.

NANCE HAXTON: Chika Honda was 36-years-old when she finally arrived in Australia from Japan for a

Little did she know that she would spend the next decade in prison in Australia, after she was
arrested on heroin-smuggling charges at Melbourne airport.

The case against her was strong. Customs officials found 13-kilograms of heroin concealed in
luggage belonging to her and three of her friends.

But Japanese-Australian artist Mayu Kanamori says looking at the evidence in more depth shows that
Chika Honda's case should be re-examined.

MAYU KANAMORI: Whether it is the documentation from the court case or the investigations also other
investigative reports that came out of Japan, these things all point to the innocence of Chika

NANCE HAXTON: It was after hearing about the case and the media attention it was receiving that
Mayu Kanamori visited Chika Honda in two Melbourne prisons.

After several of these visits she created and directed an award winning radio documentary on her
case, which has now evolved into the play Chika.

MAYU KANAMORI: But when I met her, I knew she was far too naive, is that the right way to say it. I
just knew that this woman could not have done that.

NANCE HAXTON: Chika Honda was released on parole in November 2002 and now lives in Japan.

She tried unsuccessfully to get a visa to come back to Australia to see the play.

Chika Honda is not alone in seeking a pardon.

The case has received great publicity in Japan where it is known as "The Melbourne Incident", and
Bond University Professors Paul Wilson and Eric Colvin have gathered evidence which they will use
in a petition to the Governor-General to overturn her conviction.

Mayu Kanamori says she hopes the show adds momentum to the campaign.

MAYU KANAMORI: I am hoping that her name is going to be cleared as soon as possible. Every time I
see the production myself, a tear comes to my eye because she says when her name is cleared she can
come to Australia again to see her friends.

The amazing thing about the Chika Honda story is that she is not bitter. She is not bitter. Of
course she wants her name cleared but she is not bitter about the Australians. She has made
Australian friends in prison.

She has had many supporters and she would dearly love to come and visit the country and meet her
friends again.

LISA MILLAR: Creator and narrator of Chika, Mayu Kanamori ending Nance Haxton's report.