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US Fed may cut rates to zero: economists

US Fed may cut rates to zero: economists

The World Today - Thursday, 30 October , 2008 12:10:00

ELEANOR HALL: But first to the dire economic signs coming from the United States. The US central
bank this morning slashed official interest rates to a half-century low in an attempt to cushion
the economy, which is almost certainly heading into a deep recession.

The Federal Reserve cut its benchmark interest rate by half a percentage point to just one per

It is the second reduction in a month and several economists are now predicting that the central
bank could even cut rates to zero.

Business editor Peter Ryan has our report.

PETER RYAN: Today's one percentage point cut is the latest move to prevent a recession in the
United States - adding to coordinated global rate reductions, massive liquidity injections, bank
bailouts and in some cases, nationalisations.

Dramatic action is an understatement - but economists wonder if anything is working.

RORY ROBERTSON: The Fed has cut its funds rates from five and a quarter to one and the
disappointment for the Fed so far is that the predominant mortgage rate over there, which is a
30-year fixed-rate mortgage, it has been about six per cent the whole way through.

So for all the Fed's efforts to support the economy with lower rates, the key interest rate in that
economy, the predominant mortgage rate, has basically settled at sort of six, six and a half per

PETER RYAN: Rory Robertson is an interest rate strategist at Macquarie Bank. He says the US economy
is in such dire straits that rates could fall as low as zero.

RORY ROBERTSON: I think that the US economy needs all the help it can get and I think there will be
quite a big debate within the Fed over coming months about whether it would make sense for it to
cut below one per cent.

One per cent is where is got back in the early 2000s recession. I think it doesn't really want to
go below one per cent but the size of the recession and the size of the problems in the US economy
might actually force it to do what they had been doing in Japan for a while.

PETER RYAN: Is there a real possibility though that rates could go to zero?

RORY ROBERTSON: Sure, sure. That is what they are there for. The Fed funds rate simply is a tool to
be used to help manage the economy.

The simple rule is, when unemployment is falling, the Fed tends to increase its Fed funds rate and
dampen wage and price pressures. When unemployment is rising sharply, it tends to cut its funds

It has been doing that now for a year. It has come from five and a quarter per cent all the way
down to one and if this deepening recession that is unfolding in the US right now, the Fed may be
forced to cut further.

PETER RYAN: Another economist Roger Kubarych agrees the gloomy outlook could see rates plunge.

ROGER KUBARYCH: It is certainly technically feasible. It will depend on the numbers. It will depend
on the stock market and whether there are any more big business failures that will completely wreck
consumer confidence.

PETER RYAN: Roger Kubarych says there's a precedent for rates going below zero if the world falls
into recession.

ROGER KUBARYCH: Don't forget the Swiss did a negative equivalent of federal funds in the 1970s.
They had imposed a tax on bank deposits at the Swiss national bank so the effective interest rate
for a big Swiss bank, putting money in the Swiss national bank was negative.

PETER RYAN: With rates now at the lowest in 50 years, commentators are updating their analogies as
the market worries central bankers have exhausted their collective bags of tricks.

COMMENTATOR: Don't people on the market get a little bit freaked out when rates come down this low,
because you know, if you are in gun fight and you have only got one bullet left, it is a little bit
of a scary situation.

PETER RYAN: But the chief economist at Credit Suisse, Neil Soss, says the cutting has to stop
sometime, and that the Federal Reserve needs to revise its strategy.

NEIL SOSS: There needs to be, at some point pretty soon it seems to me, articulated an exit
strategy. Something that doesn't treat the financial system as an emergency ward of the state but
rather something that says, OK, you are out of the intensive care unit. Now you are in a
rehabilitative phase and some day we are going to let you out of the hospital.

PETER RYAN: Investors are now turning their attention to tomorrow's official growth numbers, which
are expecting to show the US economy is close to flat-lining in a prelude to recession.

Matthew Zeman is a futures trader based in Chicago.

MATTHEW ZEMAN: If those numbers come out poor, it is going to kind of snap everybody back to
reality and kind of away from this euphoria that we have seen the last two days. I think the market
is going to continue to focus on the fundamentals and you know, we need to see continued
improvement in the credit markets as well.

PETER RYAN: With interest rates sliding in the United States, the question is what will Australia's
Reserve Bank do when they meet next week?

RORY ROBERTSON: I am guessing the Reserve Bank is going to cut by half a point next week.

PETER RYAN: Macquarie Bank's Rory Robertson believes that after this month's one percentage point
cut, there's a long slide down.

RORY ROBERTSON: The Reserve Bank took six years to lift its cash rate from four and a quarter per
cent to seven and a quarter per cent so a six year tightening phase in gradual steps. My guess is
that the Reserve Bank will reverse all of that tightening within a year.

So the first cut was in September. I think that by next September we will see Australia's cash rate
down to say four and a quarter per cent.

PETER RYAN: But any dramatic cuts could be limited, with inflation still running at five per cent.

The deputy governor of the Reserve Bank Ric Battelino said in a speech this morning that Australia
can avoid a recession but he suggested that the inflation "overhang" will remain a key issue in the
setting of Australia's monetary policy in the months to come.

ELEANOR HALL: And that is business editor Peter Ryan.

Opposition says carbon trading scheme 'irresponsible'

Opposition says carbon trading scheme 'irresponsible'

The World Today - Thursday, 30 October , 2008 12:14:00

ELEANOR HALL: The long awaited Treasury modelling on the cost of a carbon emissions trading scheme
is being released today.

But the Federal Opposition is urging the Government to delay the scheme's introduction in the light
of the financial turmoil gripping Australia and the world. It says the Treasury data is outdated
because it doesn't take the economic crisis into account and that it would be irresponsible policy
to act on it.

But the Federal Government is vowing to push ahead with its plans to get its carbon trading scheme
up and running by 2010.

In Canberra, Kirrin McKechnie reports.

KIRRIN MCKECHNIE: It's the final piece of the puzzle in the Federal Government's plan to tackle
climate change.

But the Treasury modelling assumes the drought will be over, the dams will be full and it hasn't
factored in the global financial crisis.

ANDREW ROBB: They are blindly heading towards that start date, irrespective of what else is
happening around the world - even the biggest financial meltdown since the Great Depression.
Companies are beside themselves.

All of the discussions I'm having, they just cannot understand why this Government is so committed,
so ideologically committed, to an early start date irrespective of what impact it might have on
jobs and emissions heading overseas, on the environment, whatever.

KIRRIN MCKECHNIE: Andrew Robb is the Opposition's emissions trading spokesman. He thinks a 2010
start date is crazy.

ANDREW ROBB: Industry is saying to me that they are going to be consumed over the next year or two
just physically trying to cope with the flow on affect in the real economy of the financial

Now to superimpose in the next 12 months on top of that, a new tax on many of these industries that
are trying to compete against countries that will have no such impost.

It fills them with great fear about what it will mean for the viability of their business, what it
will mean for jobs and all of these factors must be taken into account. Yet you listen to the
minister, Minister Wong, you listen to Mr Swan, they appear oblivious to what is going on out there
in the real economy.

KIRRIN MCKECHNIE: But the Prime Minister Kevin Rudd was standing firm on Fairfax Radio this

KEVIN RUDD: Our ambition remains, as I have said to you before on this program Neil and that is to
introduce the program in 2010. The reason for it is, the economic cost of inaction and delay is
greater than the economic cost of action. That's been our long standing view and we believe it's
the right course of action not just for the environment, but the economy.

KIRRIN MCKECHNIE: The Government says the Treasury modelling shows an emissions trading scheme will
benefit the Australian economy and could actually make the nation more competitive on the
international stage.

Kevin Rudd says although the country is in the grips of economic turmoil, the Government cannot
ignore the next looming economic challenge of our time - climate change.

KEVIN RUDD: The key thing is when you introduce a carbon pollution reduction scheme which is what
we're doing, it's necessary long term for the environment otherwise the economic impact through
rising sea levels, coastal inundation, further and more intense drought as well as the impact on
tourism in the wetlands and elsewhere, is huge and that all costs jobs.

It's important to act both for the immediate term, and for the long term. You cannot simply delay
the challenges which are rolling down the railroad tracks towards us as well.

KIRRIN MCKECHNIE: The Greens Senator Christine Milne agrees the world's financial woes are no
excuse to delay.

CHRISTINE MILNE: I would challenge Andrew Robb to say where does he want the economic stimulus then
to come from? Does he want it to just be given out in handouts to stimulate wanton consumerism that
doesn't actually build us any competitive advantage in the economy?

My view is that we've got a climate crisis and a financial crisis. We should be investing in the
real economy and investing in public services that get us to the transformation to a low carbon
economy as quickly as possible.

ELEANOR HALL: That is Greens Senator Christine Milne ending that report by Kirrin McKechnie in

UK diplomat says financial crisis is a climate change opportunity

UK diplomat says financial crisis is a climate change opportunity

The World Today - Thursday, 30 October , 2008 12:18:00

ELEANOR HALL: The Federal Opposition might be calling it crazy for the Government to press ahead
with its carbon trading plans but Britain's high commissioner says the world's political leaders
should see the global economic crisis as an opportunity rather than an obstacle to taking action on
climate change.

High Commissioner Helen Liddell, who was Britain's Energy Minster between 1999 and 2001, says the
financial turmoil could become a circuit-breaker ushering in a new low carbon industrial

Along with the Federal Climate Change Minster, the high commissioner is attending the Carbon
Markets Conference on the Gold Coast and she spoke to me from there earlier today.

High Commissioner, thanks for joining us.

The Australian Treasury is releasing its modelling of the economic impact of an emissions trading
scheme today but the Federal Opposition is already urging the Government to delay the introduction
of the scheme because of the global financial crisis. What is your reaction to this suggestion of a

HELEN LIDDLE: Well, frankly that is a matter for the politicians in Australia but the point of view
of the British Government is that we need to get underway as quickly as possible with addressing
the issues of reducing our carbon emissions and emissions trading is one way to do that.

Businesses are crying out for certainty. What's going to happen? What is the carbon price going to
be? How do we plan for the future?

ELEANOR HALL: But if we are talking about certainty in planning for the future, the argument about
delaying the scheme is that the Treasury modelling out today doesn't take account of the global
financial crisis and is therefore out of date. Won't the crisis change modelling for all countries
quite significantly and isn't it reasonable to delay things until that can be done properly?

HELEN LIDDLE: Well, it is not for me to enter into the debate about delay but what I will say is
the present financial turmoil will pass. We have been through this before. Perhaps in not such a
dramatic way but we have been through it before.

The issues of climate change are with us for centuries into the future and really the prize will
lie with those who take leadership.

You know, 10 years ago in Britain we set up our own emissions trading scheme - the first in the
world. And at that time everybody said, oh dear, this is far too risky.

Within five years we had more than doubled the amount of carbon that was being saved in Britain and
as a consequence of that, Britain now leads the world as a financial trading market in carbon

ELEANOR HALL: You were Britain's Energy Minister, how hard was it politically to drive the sort of
cuts that Britain is now committed to which I think are an 80 per cent reduction in emissions by

HELEN LIDDLE: Yeah, at the beginning it was pretty, pretty hairy. The business community shouted
rather loudly but frankly we hear very little about that now because it has actually led to their
increased efficiency because they'd recognised that energy is an expensive commodity.

ELEANOR HALL: And yet the suggestion is that Australia should only commit to a 10 per cent
reduction in emissions by 2020 if the rest of the world fails to reach a strong agreement at
Copenhagen. What are the risks do you think that the global financial crisis will push climate
change down the agenda for the world's leaders?

HELEN LIDDLE: I think there are some naysayers who would quite welcome trying to put climate change
onto the back burner. They tend to like the world as it is rather than the world that we would all
like it to become.

But Australia is working closely with the rest of the developed world and the developing world in
the run-up to Copenhagen and are a very, very valuable partners of those of us who want to keep the
world united and see a real deal coming out of Copenhagen.

There is a staging post in the next few weeks at Poznan in Poland where we will get a true measure
of the situation and of course, by then, we will have a handle on what the next US administration
is likely to be.

ELEANOR HALL: You say that the naysayers will be using the financial crisis to push the climate
change issue down the agenda. Do you not see that, particularly in the United States where the cost
of the crisis is so high, that there could be legitimate arguments for pushing it down the agenda?

HELEN LIDDLE: Well I think the United States, I think both sides of the presidential debate at the
moment, recognise that the United States can no longer ignore the challenge of climate change and
indeed there will be changes in the whole industrial make-up of the United States and indeed most
countries as a consequence of the financial turmoil that we have gone through.

We can either see this as an opportunity to stick our heads in the sand and hope that the turmoil
goes away, that climate change goes away or we can say here is the chance for a new industrial
revolution. Here is a chance to regenerate our economies in a more carbon neutral way and the
companies that seize the opportunity have great benefits to them.

Our Carbon Trust in the United Kingdom has been doing a lot of work on the business outcomes that
are likely to be for businesses and businesses that get ahead of the game are likely to reap
benefits of 80 per cent and more.

ELEANOR HALL: You almost seem to be suggesting that the financial crisis could indeed be a catalyst
for driving countries towards more carbon-efficient economies?

HELEN LIDDLE: I believe it could be. I believe the regeneration programs that we are going to see
coming out of countries because everybody has concentrated on the turmoil over the past few weeks.
Understandably, the scale of it has been massive.

If somebody had said a month ago that we would see governments re-capitalising banks and in some
cases, overtaking banks, people would have thought we were mad but that is what is happening but
now we need to turn to what comes next.

How do we regenerate our economies? How do we protect the most vulnerable from the challenges of
global downturn and that means looking at reinvestment, looking at infrastructure, looking at new
ways forward.

And I also believe that, as I said at a conference the other day, that this can be a catalyst for
getting settlement to the Doha Round. It can be the means of being the circuit breaker, making
people wake up and decide whether they want to take a step forward into the abyss or if they want
to take a step back and look to the future.

And if we keep sucking our teeth and saying oh dear the world is in a terrible state, we will be
paralysed. The worst thing that can happen to us now is drift. What we need now is leadership.

ELEANOR HALL: High Commissioner, thanks very much for joining us.

HELEN LIDDLE: You are very welcome, thank you.

ELEANOR HALL: And that is Britain's high commissioner to Australia, Helen Liddle who was speaking
to me earlier from the Gold Coast.

Obama's $4-million ad airs

Obama's $4-million ad airs

The World Today - Thursday, 30 October , 2008 12:22:00

ELEANOR HALL: To the United States now where the Democrat presidential contender, Barack Obama,
today fired the biggest media salvo of his election campaign.

Senator Obama paid around $4-million for a 30-minute spot on prime time television that has been
broadcast simultaneously on three of the biggest networks in the country and while it went to air,
Senator Obama was holding rallies in the critical state of Florida including his first joint event
with the former president Bill Clinton.

Our Washington correspondent Mark Simkin is at the late-evening gathering and joins us now.

So Mark, this is the first time we've seen Bill Clinton campaign with Barack Obama. How is the
crowd reacting?

MARK SIMKIN: Well, there is a huge crowd gathered here. They are still streaming through the very,
very strict security to get in to this open-air arena. It is cold. It is late. It is still hours
before this program will officially begin.

It is going to begin at 11pm local time but I think it is a sign of the enthusiasm in this crucial
swing section of the crucial swing state of Florida that so many people are here and are so excited
about seeing the former president, Bill Clinton, the last person to win Florida, the last Democrat
to win Florida, to see Barack Obama potentially the next president and of course, also keen to see
the relationship and interrelations between the two men.

ELEANOR HALL: Yes, why has he waited so long for Bill Clinton to appear with Barack Obama?

MARK SIMKIN: Well, there is the charitable and the not-so-charitable explanation I suppose.

The charitable one is that he is the real big gun. He is the absolute superstar or was up until
this year, the superstar in the Democratic firmament. Bringing him out at the end makes his impact
even more potent and he is obviously a key campaigner for the Democrats and Barack Obama.

The less charitable explanation of course is that Barack Obama and Bill Clinton, from all reports,
don't get on. Bill Clinton is still very upset about the way he and his wife were treated during
the primaries and so he hasn't been the most enthusiastic backer of Barack Obama and that could
explain part of why it has taken so long for him to appear on stage next to the Democratic nominee.

ELEANOR HALL: And Mark, just fill us in on how critical Florida is in this campaign?

MARK SIMKIN: Well, it is absolutely critical. I mean of course, as Al Gore found out, it is a state
that can decide an election by just a few hundred votes.

It is very important and I think what at this stage of the campaign, where are the candidates
campaigning - Ohio, Pennsylvania, Florida almost exclusively.

Both candidates are here today. I think that is a sign of just how important this very big state
is. It is the biggest of the swing states. One-tenth of the electoral college votes that you need
to get to the presidency are here, up for grabs in Florida.

ELEANOR HALL: Now Senator Obama has just launched this multimillion-dollar ad campaign, which the
Republicans have no chance of matching financially at this stage of the campaign. What is the
strategy of the Democrats here?

MARK SIMKIN: Well, it really is a flexing of the financial muscle for a start. Over US$4-million
for this extraordinary 30-minute ad. It is all about showing some autobiographical detail of Barack
Obama. Filling in the gaps there, trying to dispel the rumours that he is unpatriotic and a Muslim.

It is about presenting a prescription for economic reform. It is about showing that he is touch
with the working class but also potentially presidential.

It is all about advertising. It is an infomercial essentially...

ELEANOR HALL: An extraordinarily long one.

MARK SIMKIN: Yes, indeed. A 30-minute ad and here's how it began.

(Extract from Barack Obama advertisement)


BARACK OBAMA: With each passing month, our country has faced increasingly difficult times but
everywhere I go, despite the economic crisis and war and uncertainty about tomorrow, I still see
optimism and hope and strength.

We've seen over the last eight years how decisions by a president can have a profound effect on the
course of history and on American lives but much that is wrong in our country goes back even
farther than that.

We've been talking about the same problems for decades and nothing is ever done to solve them.

This election is a defining moment - the chance for our leaders to meet the demands of these
challenging times and keep faith with our people.

(End of extract)

ELEANOR HALL: That is just a small part of that 30-minute commercial that was run just a short time
ago by Democrat presidential candidate, Barack Obama.

Now Mark, his Republican rival John McCain has already dismissed the commercial and he has also
sharpened his character attacks. Is there any evidence that these tactics are working?

MARK SIMKIN: Not really. There is some evidence that the polls are starting to tighten in this last
week. That is what often happens though in these campaigns.

All the evidence to date has been that the negative campaigning from the Republicans is actually
hurting John McCain rather than Barack Obama.

You are certainly right. There has been a sharpening of the tone. The William Ayres, the domestic
terrorist who did have some not particularly strong associations but associations nonetheless with
Barack Obama, that has been raised again by John McCain today and as you say John McCain has been
mocking this TV ad.

There is some risk for the ad because it has pushed the baseball association; it has pushed back
the start time of a crucial World Series baseball game to accommodate this ad. And John McCain is

ELEANOR HALL: Risky politics.

MARK SIMKIN: Yes absolutely. People wanting to... people are messing with sport, with politics is a
very risky thing indeed. If you are tuning in to see a crucial game of baseball and you get a
political pitch instead and John McCain is saying well here is Barack Obama behaving like god and
mocking him for that.

ELEANOR HALL: Mark Simkin in Florida, thank you. That is our correspondent there.

Australians surveyed for views on US election

Australians surveyed for views on US election

The World Today - Thursday, 30 October , 2008 12:26:00

ELEANOR HALL: While the presidential candidates are making their final pitches in the US, in
Australia the US Studies Centre has been surveying Australians and Americans for their views on the
US election.

And the survey shows that among Australians there is overwhelming support for the Democrat
candidate, Barack Obama. The centre at the University of Sydney conducted the survey of 12,000
people both here and the US in the midst of the economic crisis in the last month and it released
the results of its survey today.

To tell us more I'm joined now in the studio by the US Studies Centre's visiting Professor Simon
Jackman from Stanford University who conducted the research and who is also our regular commentator
on the US election.

Simon, good to see you in the studio.

SIMON JACKMAN: Good to be here.

ELEANOR HALL: Now you found that if Australians could vote next week they'd support the Democrat
candidate by a margin of 4 to 1. That seems an incredible margin. What reasons did Australians give
for their enthusiasm for Barack Obama?

SIMON JACKMAN: I think if you had to pin it down to perhaps just one thing, it is a desire for
America's standing in the world to improve and a strong belief, an overwhelming belief, that Barack
Obama will be the candidate who will deliver that.

Over 70 per cent of our respondents thought that if Barack Obama were elected that would happen.
That America's standing in the world would improve so not only among significant proportions of
Americans are we seeing this yearning for change, we are also seeing it among our Australian
respondents as well.

ELEANOR HALL: Now, it is interestingly that while you had a majority of Australians saying that
they thought that Barack Obama should win, less than half of them said that that thought that he
would make a better president in terms of Australia's interests. Now why that disparity? Is there
some concern about Barack Obama's commitment to Australia?

SIMON JACKMAN: I wouldn't say so much that. Also in the survey we found 33 per cent of people
thought it wouldn't make a big difference in terms of what happens here in Australia as to whether
McCain or Obama became president.

But nonetheless, the really interesting thing about that is, to turn it back around, among that 33
per cent of Australians who say it really doesn't make a difference, even among those people Obama
is preferred by 60/40 or even a bigger margin so Australian support for Obama comes with not too
many strings attached.

They would really like this guy to become the next president of the United States and I take it
back to this yearning for change and it's somewhat unconditional. Less so about what will happen
directly here to them in Australia but more about the atmospherics that would surround an Obama
presence and what that would imply for the world perhaps.

ELEANOR HALL: Now you conducted this survey in the midst of the economic crisis so perhaps not
surprising that the vast majority of respondents said they were unhappy with the direction in which
America is heading but what did they tell you about which direction it should go or why they had
that overwhelming response?

SIMON JACKMAN: Well, yeah. What was really striking is that we asked Americans the classic right
track, wrong track item and we also asked Australians if they thought America was on the right
track or the wrong track.

And Australians thinking about America, Americans thinking about America, you get overwhelming
support, 80/20 are telling you America is on the wrong track, and it is about the economy.

We had the great luck or the great misfortune depending on how you look at it, to be in the field
just after the Lehmann Brothers collapse and the next two weeks as the wheels were coming off Wall
Street and the economy, the economy, the economy. That is reflected in our numbers that we got out
of this poll just as it was reflected, I think, in the tracking polls we are seeing in the United
States - this one-way traffic for Barack Obama from about mid-September on.

ELEANOR HALL: And you found that more than two thirds of Australians and Americans said they felt
some anger or shame about the US in recent years. Now is that largely about American foreign

SIMON JACKMAN: Yeah, for the most part but also with a hefty dose of unhappiness with American
domestic policy.

ELEANOR HALL: From Australians?

SIMON JACKMAN: Yeah. One word that comes through in some of the open-ended responses is certainly
for the Americans it is "competence" or words that would imply judgements about the competence of
the Bush administration with some of the things that have happened not just overseas, I think that
is the dominant consideration, but not exclusively.

People unhappy with the way that American domestic policy has been concerned and people, very
high-profile events that many Australians would be aware of like the response to Hurricane Katrina
for instance and indeed overshadowing everything, of course, the response or the lack of response
or the delayed response to dealing with the financial crisis.

ELEANOR HALL: Now if Barack Obama is elected, he will be the first African-American to be
president. Did you look at whether the very fact of having a Black American in that position would
change the US image in the world?

SIMON JACKMAN: No we didn't poll specifically on that but one thing we are planning to do is to go
back into the field, reinterviewing some of our Australian respondents and our American respondents
after the election and we are very interested in this question.

Is the mere fact, the symbolic act for the most part, say six weeks into his presidency, eight
weeks into his presidency, the mere fact of having an African-American take the oath of office as I
fully expect he will on January 20.

ELEANOR HALL: You have been predicting that for us for quite a while.

SIMON JACKMAN: I am sticking to it at this point. The very fact of that, that highly symbolic and
emotionally charged event that it will be, will that in and of itself be enough to start to turn
around perceptions of America around the world and we are deeply interested in that before we even
get to review much policy follow-through from the Obama administration.

ELEANOR HALL: Now we've just been hearing from our correspondent in Florida about this $4-million
advertisement that Barack Obama has just had aired on three US TV networks - how do you predict
that will go down with voters? Especially coming in the middle of that sports coverage.

SIMON JACKMAN: Yeah, it pushed back the broadcasting of the World Series but um, look, I was
actually of two minds about this.

I wonder if it is piling on at this point. I can do this because I have so much money and I am
going to, you know. I wonder if it plays into the messianic critique of Obama-ism. The cult of
Obama. I was of two minds about this.

Look, there are, our survey found that 18 per cent of Americans in late September think he is a
Muslim. Only five or six per cent of Australians think that and that is an interesting finding even
of itself but 18 per cent of Americans are telling you that he is a Muslim and there has been, I
think perhaps it is worth his while to spend, at this point it is a trivial amount of money for
him, $4-million is nothing compared to what he has been able to raise.

Maybe it is worth sort of going out there in the closing week as the attacks from the Republicans
have gotten very heated and very emotional, to go out there and one last time remind people that I
am a safe pair of hands. I share your values. I am not a Muslim and trying to close the deal.

It is unprecedented and I think, you know, the answer is we just don't know because we haven't seen
anything like this.

I think Ross Perot was the closest we'd seen and before that you almost have got to go back to John
Kennedy's father buying him TV time back in a kinder and gentler age where I imagine it cost a lot
less than $4-million.

ELEANOR HALL: Well, I guess we will find out early next week. Simon Jackman thanks very much for
joining us here in the studio and we will be talking to you again next week.

SIMON JACKMAN: It is a pleasure, thank you.

Big name support for Indigenous jobs plan

Big name support for Indigenous jobs plan

The World Today - Thursday, 30 October , 2008 12:30:00

ELEANOR HALL: The biggest names in business and in Indigenous affairs have met at the Prime
Minister's Sydney residence to show their support for a plan to find 50,000 jobs for Aboriginal

The idea was developed by the mining billionaire Andrew Forrest. It's not an ideal time to begin an
employment plan, during a financial crisis, but the Prime Minister Kevin Rudd says it's time to fix
a great Australian wrong.

Brendan Trembath has our report.

(Sounds of people gathering.)

BRENDAN TREMBATH: The big names get together at Kirribilli House in Sydney.

This group includes the executives in charge of some of Australia's best known companies including
the News Corporation founder Rupert Murdoch. He's one of the leading supporters of a plan to find
50,000 jobs for Indigenous Australians.

RUPERT MURDOCH: We are all obviously, in this room, convinced of the need, the obligation and the
desirability of reconciliation between our peoples, all our peoples, in this country.

But I sense, over a long time, I've sensed it has never been a stronger feeling throughout the
country that this is the time, or it is past time, that we did this.

BRENDAN TREMBATH: Now's not an ideal time to begin a recruitment drive. A global financial crisis
which has shaken world stock markets has still to be contained.

But the prominent Aboriginal adviser Noel Pearson says it would be wrong to delay getting started.

NOEL PEARSON: Even in these darkest tribulations, Australia is still a country of tremendous
opportunity and too few of our people have enjoyed the fruits of that opportunity.

BRENDAN TREMBATH: The Prime Minister Kevin Rudd is also an advocate of starting the Indigenous
recruitment plan sooner rather than later.

KEVIN RUDD: You know, we are in the midst of a whole lot of bad news at the moment but this is a
good day for Australia. This is a good day for Australia. It is a good day involving good people
seeking to do good things for the long term and the very long term.

BRENDAN TREMBATH: The recruitment plan is the idea of Fortescue Metals Group founder Andrew

In his home state of Western Australia he grew up with Aboriginal children and is a well known
supporter of Aboriginal causes.

ANDREW FORREST: And we are not here as I have stressed before, looking for capital. We are not here
looking for you to impact to all your shareholders what you have to report at the end of each year.
We are here looking for your leadership because quite simply, employment covenant works with the
Government for the first time in history.

Not telling us as employers what we are going to receive from training. Not telling Indigenous
people for the first time, what they are going to be trained into. But coming and saying what do
you want? Coming and saying and agreeing and then committing to say to the employers of our
country, whether or not you can come up with 1 or 1000, you have made a huge difference in the life
of an Aboriginal person or an Aboriginal people.

Saying to you, even as a way, ladies and gentlemen to cut costs. We will train Aboriginal people to
the specifications you tell us and we will help them get to their place of employment when you need

That is a huge step and what I have found is that in the second intuitive initiative which the
Aboriginal people gave to the employment covenant that hang on, getting them there trained, getting
them there useful, having the Government step up and deliver people which you want to employ, part
of your natural turnover, part of your normal business sustainable growth, even in tough times.
That is very smart for employers and even smarter for blackfellas.

BRENDAN TREMBATH: Before signing what's known as the Indigenous Employment Covenant the Prime
Minister Kevin Rudd thanked his VIP guests for coming to his Sydney home.

KEVIN RUDD: As Prime Minister of the country, I just have one thing to say to you today and that is
thank you because you could have not come. It is a tough time. Everyone has got a lot of other
stuff on their plate.

I understand that more than many in terms of what is going on out there but you know, the great
thing about this country is that we don't suspend the nation when we are dealing with a current
challenge or crisis.

The business of the nation goes on and part of the business of the nation is to fix and to set
right this great historical wrong.

ELEANOR HALL: That is the Prime Minister, Kevin Rudd ending that report by Brendan Trembath.

Traffic jams as petrol prices reduced

Traffic jams as petrol prices reduced

The World Today - Thursday, 30 October , 2008 12:34:00

ELEANOR HALL: There were traffic jams in parts of Sydney and Melbourne this morning as a group of
independent petrol station owners cut their prices by up to 40 cents a litre.

Selling petrol for less than a dollar a litre may cost them, in the short term but independent
retailers say it's necessary to highlight the power of supermarket chains.

But while Australia's petrol commissioner says he can understand their frustrations - he says the
real problem lies at the wholesale end of the market.

And consumer advocates say that the campaign, while well intentioned, could be misguided.

Michael Edwards has our report.

MICHAEL EDWARDS: It's price elasticity at its most simple - if you sell something cheaply enough
customers will come - especially when the product is petrol.

Around a dozen independent petrol stations in Sydney, joined by several operators in Melbourne, cut
their prices to 99 cents a litre this morning.

FEMALE DRIVER: Oh, it probably saves me $100 in this car so it is good.

MICHAEL EDWARDS: But the goodwill was short-lived. The discount only lasted an hour. The retailers
are hoping its impact carries on though.

Their objective is to draw attention to what they say is anti-competitive behaviour by larger
operators in the market.

Nina Ibrahim runs an independent station in Melbourne.

She says the shopper docket petrol discount schemes run by big supermarkets are squeezing smaller
operators out of the market.

NINA IBRAHIM: Our margin is slowly eroding. Our volume is eroding and if this will continue to
happen, eventually we will be pushed completely out of the market and competition would not remain.

MICHAEL EDWARDS: The action was organised by Sydney independent petrol station owner, Marie

Ms El-Khoury started dropping her prices earlier this month hoping the publicity would draw
attention to the situation.

Ron Bowden is the chief executive of the Service Station Association, the peak body representing
independent owners.

RON BOWDEN: In recent years, say the last five years because of supermarket activity and because of
the previous government's actions, we have seen a marked concentration of market power in the
retail industry in the hands of the supermarkets and the oil companies.

This is a bad thing. It is bad thing because it is driving out of business the independents like
the El-Khourys and that is vital to ensure that competition remains in petrol retailing.

MICHAEL EDWARDS: Ron Bowden says if independent retailers are driven out of business, it's the
motorists who'll eventually pay.

RON BOWDEN: Can anyone be sure that when the independents have gone and it is just the supermarkets
and the oil companies, that this level of discounting will continue?

Because before the independents got into the game, back in the 1960s, there were nine oil companies
in Australia. All doing business the same way and there was no competition and there was no

It was the independents that broke into the market in Melbourne in the late '60s and started to
import a bit of petrol that opened the way for the discounting that you see today that has made the
Australian retail side, the most competitive in the world.

We are going to lose that if we lose the El-Khourys. We are going to lose that if we allow the
supermarkets and the oil companies to regain total control of this industry. That is what is at

MICHAEL EDWARDS: But the man appointed by the Government to keep an eye on petrol prices is
sceptical about whether the tactic will work. The petrol commissioner, Joe Dimasi says competition
at a retail level is important but the wholesale end of the market is most important when it comes
to pricing. He spoke to ABC local radio in Sydney.

JOE DIMASI: Competition is good for everybody so to the extent that we people trying different
things and competing, that is always good.

But I have got to say what's really important is competition at the wholesale level. That is the
crux of the issue as far as I am concerned.

We have four petrol companies: Caltex, Shell, BP and Mobil. And they produce or import almost all
of Australia's petrol and it is really competition between these companies that drives the price of
petrol in Australia.

Competition at the retail end where we see the retailers trying very hard to compete over each
other, has an effect. It is important as well but it is really the wholesale market that is

MICHAEL EDWARDS: The consumer advocate group, Choice, says independent retailers may be too focused
on the price of their product.

Choice's spokesman, Christopher Zinn says the campaign has highlighted some important issues but it
will take more than just price competitiveness for the independents to survive.

CHRISTOPHER ZINN: it has been a terrific stunt which has highlighted the issue but at the moment,
some of their public statements I've saying that you know, we just need motorists to put away the
shopper dockets and support independents. That is a very nice feel-good thought but really you have
to be able to back it up.

What independents can do is offer a localised, personalised serve for example in a petrol station,
that might be pumping the gas, it might be cleaning the windscreen like in the good old days.

Whatever it is, they really need a point of difference from the big boys as it were and that's the
kind of thing that can enhance business.

ELEANOR HALL: That is Christopher Zinn from Choice ending Michael Edwards's report.

Police bashed criminals as 'community service', watchdog finds

Police bashed criminals as 'community service', watchdog finds

The World Today - Thursday, 30 October , 2008 12:38:00

ELEANOR HALL: In a report released today, Victoria's corruption watchdog says detectives
responsible for investigating armed robberies modelled themselves on violent characters in a
Quentin Tarantino film.

The Armed Offenders Squad was disbanded and reformed under a different name two years ago, when
three detectives were caught on tape assaulting a suspect in an interview room.

But one corruption expert says that might not be enough to solve the problem.

In Melbourne, Jane Cowan reports.

JANE COWAN: Earlier this year Victorians were shocked to see their police forces' supposed best and
brightest bashing a suspect they were supposed to be interviewing.

(Sound of yelling and swearing)

JANE COWAN: Caught on a camera secretly planted in the ceiling of the interview room, the suspect
is repeatedly slapped and kicked. Pinned to the ground and hit with a telephone when he asks to
call someone.

DETECTIVE: Want a phone call? Here it is. Here's your fucking phone call.

(Sound of yelling)

DETECTIVE: You piece of shit (inaudible) attitude do you?

JANE COWAN: Afterwards the detectives tell him not to "bleed everywhere".

DETECTIVE: Well you don't sit there and shove your fucking head (inaudible) at me. Sit down. I
didn't tell you to get up. You sit down like the dirty piece of shit you are.

JANE COWAN: Confronting as it is, the Victorian police watchdog says this type of incident wasn't
unusual within the squad responsible for investigating armed robberies, non-fatal shootings and gun

The Office of Police Integrity examined four decades of the squad's history and found a
disproportionate number of complaints against its detectives for using excessive force in arresting

The OPI found an elitist subculture developed among the members of the Armed Offenders Squad. An
"us vs them" mentality led them to take the law into their own hands.

Members adopted an unofficial uniform - they became renowned for wearing black suits, white shirts,
dark sunglasses and a team-issue black tie, all in imitation of the costumes worn by a network of
violent criminals in the Quentin Tarantino film "Reservoir Dogs".

The so-called "men in black" regalia was also worn by the sole female member of the squad.

The OPI says this identification with the characters in the film was deliberate, to the extent that
a well-known image from the movie was used to advertise the squad's annual social function.

The squad also developed its own emblem, altering the official Victorian police badge on official
documents so that it was covered by two intersecting gold revolvers.

The OPI says all of this points to an unyielding clique or brand, separate from the broader
organisation of Victoria Police.

Members of the Armed Offenders Squad assume a "noble cause" doctrine where the ends justifies
pretty much any means, and bashing a crook is seen as, quote "community service".

GARY CROOKE: It is probably made more manifest in these squads because it is much easier for them
to claim the mantle of we are at the tough end and therefore we have got to be tough.

JANE COWAN: Gary Crooke QC helped set up the Office of Police Integrity and is a former chair of
the then National Crime Authority.

GARY CROOKE: All this business about the Rambo-style aggression and the uniforms and the cult that
they developed for a particular squad is nothing but quite dangerous because it impacts on this
whole duty to do things properly.

JANE COWAN: In Victoria, the police force says that it has attempted to address this problem by
switching to a taskforce model so the squad has been disbanded and now operates as a taskforce but
how likely is it that this sort of unhealthy culture is still operating among elite squads around
the country?

GARY CROOKE: Yes, I think there is nothing much in a name. Call it what you will, that is not going
to solve the problem.

You have got to look at the underlying causes and just this expectation that they are above the
law. That has got to be addressed at senior level and by supervision and by training and anyone
that can't bring him or herself to appreciate the responsibilities, just has to be put flying a
desk or even out of the police force.

JANE COWAN: When the three Victorian detectives were charged over the videotaped incident, the
Police Association criticised the OPI's investigation, encouraged industrial action in response to
the squad's disbanding and led a protest rally.

In its report, the OPI says the militancy of that action in the absence of any criticism of the
conduct shown on the video was unhelpful.

Gary Crooke QC agrees police unions across the country can sometimes be part of the problem.

GARY CROOKE: Very rarely do you see them supporting any person who might be an internal witness
that might report this sort of conduct.

Their support seems to go overwhelmingly to the people who are being investigated, even in the face
of the most clear and cogent evidence that they have done the wrong thing.

It is all to do with anger and robust aggression to say well what are you doing looking at us?

ELEANOR HALL: Gary Crooke QC is the former National Crime Authority chairman. He was speaking to
Jane Cowan.

Adelaide zoo's flamingo hospitalised after bashing

Adelaide zoo's flamingo hospitalised after bashing

The World Today - Thursday, 30 October , 2008 12:42:00

ELEANOR HALL: The greater flamingo is one of the most famous exhibits at Adelaide Zoo but now its
elderly resident is in the zoo hospital after apparently being attacked.

For decades the flamingo mingled freely with zoo visitors. But yesterday afternoon it was found
badly beaten and four young men have now been arrested and charged.

In Adelaide, Margie Smithurst reports.

MARGIE SMITHURST: The 75-year-old flamingo in an icon of the Adelaide Zoo. It roams freely around
its lagoon and onto the footpaths and has delighted several generations of visitors and is a
favourite with zoo staff.

So when keeper Charlie Romer got a call yesterday afternoon saying the bird was in distress, he
raced across the zoo.

CHARLIE ROMER: Sometimes once in a while you get a call over the radio to say that something has
happened and generally it is usually a false alarm but on this occasion I moved pretty swiftly over
to the flamingo exhibit and found the bird in real distress on the ground.

MARGIE SMITHURST: And what did it look like?

CHARLIE ROMER: Yeah, it couldn't stand. It looked like it had been hit over the beak. There was a
lot of blood coming out of its beak and eye so it looked like some object had hit it. It was unable
to stand and it was looking like in real distress, flapping around.

MARGIE SMITHURST: And could you gauge what had happened to it by its injuries?

CHARLIE ROMER: I was pretty distressed myself. You know it is a 75-year-old bird and you couldn't
imagine, you know, when you see a bird with an injury like that, it is really quite distressing.

So, no, I couldn't gauge completely what was wrong with it, if it had hurt its leg. Obviously it
had some major issues with its beak and the eye because there was a lot of blood coming out there
so I just tried to, I grabbed it and took it out the back and tried to comfort it.

MARGIE SMITHURST: Bird keepers say the injuries had to have been caused by an attack and probably
with a blunt object.

Keeper Brett Backhouse says zoo staff are shocked.

BRETT BACKHOUSE: We are pretty upset. This is probably one of our favourite birds. You know, to me
personally he is up there with my favourites and I know the other keepers as well really love him.

It's a species that is just an amazing animal and he is such a nice bird. It is an honour to come
in and work with him all the time and it was just a shame to see that sort of thing happen to such
a great bird.

MARGIE SMITHURST: The bird was taken to the animal hospital and kept there overnight.

Vet David Schultz says while the bird's now been stabilised, its injuries are worrying.

DAVID SCHULTZ: We warmed the bird up. We gave it fluids. We gave it some anti-inflammatories to try
and reduce any inflammation in the brain and he seemed to respond quite well to that.

Overnight we have been monitoring him fairly closely and this morning he is certainly looking a lot
better but we are still not quite out of the woods yet.

MARGIE SMITHURST: Not long after the bird was found, police were questioning some young men on the
other side of the zoo and they've now charged four men - two 17-year-olds, an 18-year-old and a
19-year-old with ill-treatment of an animal. They all face up to four years in jail or a $50,000
fine if found guilty.

The Adelaide zoo says the bird is one of only a handful of flamingos in the country. With its big
beak, long legs and pink, white and black feathers, the greater flamingo is the most recognisable
of the flamingo species. It's common to parts of Africa and southern Asia and is known for its
showy rituals.

The head of South Australia's zoos, Chris West says the attack on the bird is appalling and will
upset many people beyond the zoo staff.

CHRIS WEST: He is just an icon. He is 70 years old. He has been at the zoo from the '30s. He is the
oldest resident at the zoo. He is just a symbol of the beauty of nature and because he stands close
to people, he has been wonderful as an ambassador because people get a real connection when they
stand so close.

MARGIE SMITHURST: The bird's companion of many years, a male Chilean flamingo, is now roaming
around the lagoon alone.

CHRIS WEST: Whilst they don't get on terribly well, they do sort of push each other around a little
bit. Like two grumpy old men but they will certainly miss each other if they are apart for any
length of time.

MARGIE SMITHURST: The attack comes a week after an international zoo conference in Adelaide, where
zoos were discussing their roles as havens for endangered animals.

ELEANOR HALL: Margie Smithurst in Adelaide.