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IMF warns Australian growth to slow dramatically

IMF warns Australian growth to slow dramatically

The World Today - Friday, 7 November , 2008 12:10:00

Reporter: Sabra Lane

ELEANOR HALL: But we go first to the dire warning from the International Monetary Fund about the
world economy.

Overnight, the international financial body issued its second update of its world financial outlook
in a month and it has revised its predictions down sharply.

The IMF says that 2009 will see reduced growth across almost all of the developed economies at once
for the first time since World War Two.

Australia's economy is one of the few not expected to go backwards.

But the IMF says Australia's economic growth will slow and more dramatically than the Federal
Government predicted earlier this week.

From Canberra, Sabra Lane reports.

SABRA LANE: Only yesterday a number of economists suggested the Federal Government had on a nice
pair of rose coloured glasses on when it published revised budget figures on Wednesday.

Chief economist with AMP Capital Investors Shane Oliver is among those who believe the Government
is being overly optimistic.

SHANE OLIVER: If anything, erring on the side of optimism. Our view is that the downturn in global
growth, the blow to confidence, the loss of wealth, the slump in commodity prices will have a more
negative impact on economic growth going forward. Probably taking growth this financial year down
to one and a half per cent or maybe even a little bit lower.

SABRA LANE: Overnight, the International Monetary Fund issued another update on the world's
finances - slashing many of the forecasts it made only last month.

It says many advanced economies will shrink by 0.3 per cent next year instead of growing by half of
one per cent. The IMF's Jorg Decressin says Australia's economy however, will buck the trend and
continue to grow.

JORG DECRESSIN: Australia is affected on two accounts. It is a raw material exporter and at the
same time, it is very much integrated with other advanced economies and experiencing a slowdown for
the same reasons as the other advanced economies are.

Taking the two together, you know, we see growth in Australia slowing appreciably. In fiscal 08/09
probably hitting around 1.8 per cent.

SABRA LANE: But that figure, of 1.8 per cent is not what the Government predicted two days ago in
its mid-year economic and fiscal outlook.

That forecast predicted two per cent growth. Finance Minister, Lindsay Tanner.

LINDSAY TANNER: We obviously stand by the Treasury projects and this is not an exact science -
modelling the prospective growth for an economy like Australia. The difference between the two is
very slim and clearly both projections indicate that growth is going to slow in Australia.

We are being affected very severely by the international financial crisis and the recession that is
now unfolding in the major developed economies around the world but Australia is still in a strong
position to ride through this turmoil.

We are still expected to have positive growth and employment growth. That is the important thing
and we believe that we are well positioned to deal with the pressures that are coming from these
extraordinary circumstances internationally.

SABRA LANE: The IMF's called on governments around the world to increase spending to counter-act
the negative forces.

The Federal Government's already announced a $10.4-billion dollar economic security strategy. Most
of the money will be injected into the economy next month. The government's hoping people spend it,
rather than save it.

And Lindsay Tanner says the government will act again, if needed.

LINDSAY TANNER: In these troubled and very unusual circumstances, no responsible government could
rule out options of that kind. We don't have specific plans to take action of that kind again but
we certainly stand prepared to do so if that becomes necessary.

Nobody, not the IMF, not the Australian Government can predict exactly where the international
economies of the world are going to head.

These economic problems are of considerable magnitude so we have to stand ready to take further
action if required.

SABRA LANE: A short time ago the Prime Minister revealed he had just had a phone call with US
president-elect Barack Obama. The two discussed Afghanistan and the continuing financial crisis and
Mr Rudd dismisses suggestions that Treasury's forecasts about Australia's growth rate are too
optimistic.

KEVIN RUDD: Absolutely not. The projected growth for the Australian economy both by the IMF and in
the mid-year forecast released by the Treasury are basically about the same. I think there is a
difference of about 0.2.

The bottom line is the global economy has suffered a huge whacking as a consequence of the global
financial crisis. What follows from that is that the Australian economy is not immune. It will
affect growth and jobs as the Treasurer said before and as I have said before.

ELEANOR HALL: That is the Prime Minister Kevin Rudd ending that report by Sabra Lane.

UK financial expert discusses historical rate cut

UK financial expert discusses historical rate cut

The World Today - Friday, 7 November , 2008 12:14:00

Reporter: Emma Alberici

ELEANOR HALL: Britain and the euro zone slashed interest rates overnight, just ahead of that dire
International Monetary Fund forecast.

As we heard the IMF expects economic growth to slow across the world next year and Britain is
shaping up as one of the worst performers.

Its central bank has stunned markets by cutting official rates by one and a half percentage points.

Rates in Britain are now at their lowest level since 1954 and the accompanying statement by the
bank says that rather than concerns about inflation, it is now far more fearful of deflation in
Britain.

Professor Charles Goodhart is the Emeritus Professor of Banking and Finance at the London School of
Economics. He is also a former member of the Bank of England's Monetary Policy Committee.

He spoke in London to Europe correspondent Emma Alberici.

CHARLES GOODHART: Most of those who are wanting a large cut and for the Bank of England to move
forward fairly bravely and aggressively, it suggested one per cent. The majority of commentators
thought that the cut might be a half a per cent.

EMMA ALBERICI: What does the banks one and a half percentage point cut say about their reading of
the UK economy?

CHARLES GOODHART: It suggests they are pretty pessimistic and certainly a lot more pessimistic than
they were three months ago.

The UK economy is contracting really quite rapidly at the moment and I think that it is arguable
that the bank didn't quite appreciate the deflationary effects that the credit crunch seriously
affects were likely to be. Besides that, of course, confidence right round the world got terribly
shaken by the bankruptcy of Lehmann Brothers.

Where I was surprised and remain surprised is the bank's argument that all this can be done without
any concern about future inflation and indeed they go so far as to say that without such a cut in
interest rates, inflation might fall well under, or at least under, the target level of 2 per cent
on CPI in about two years time and that really does surprise me a lot.

EMMA ALBERICI: Especially considering the commentary from the European central bank seems to be at
odds with that reading. They still believe, from what they have said, that the risk is still on the
upside to inflation.

CHARLES GOODHART: Absolutely and that, I think, is where, I think, where a great deal more
clarification is required.

EMMA ALBERICI: And how much lower do you now expect interest rates will get in Britain?

CHARLES GOODHART: I don't think there is any point in trying to sort of, we couldn't foresee for
example either the Lehmann bankruptcy or the fairly devastating effect on confidence worldwide that
that actually engendered.

EMMA ALBERICI: So you actually believe the Lehmann Brothers collapse was the precipitator for all
this mess?

CHARLES GOODHART: I think it had a major effect. I think that there was a rolling series of
developments that followed on from, that made a really difficult financial situation into an almost
total sort of collapse into a state of, let's put it bluntly, widespread panic around the world
that is very, very rarely seen. Thank God.

EMMA ALBERICI: So you are saying essentially that the US Government should not have allowed them to
collapse?

CHARLES GOODHART: Absolutely right. It was a major error.

EMMA ALBERICI: Do you see the Bank of England getting to a point where it drops rates to the same
level as the US? Is there any reason why they shouldn't go to one per cent like they are?

CHARLES GOODHART: It certainly could happen. Not only that, it is far from impossible that they
could go to zero. They could go to zero in the US. They could go to zero in the UK. They are less
likely to go to zero in the European central bank but it is not impossible.

EMMA ALBERICI: Doesn't that put us back to square one? Isn't that where all of the trouble started,
when money was flowing too easily?

CHARLES GOODHART: Yes, absolutely but remember what we have got to do is we have got to deal with a
very, very severe sort of financial crisis which is having spill over effects onto the economy
which again, are likely to be pretty darn severe.

Virtually every measure that you can think of, that you can take in these circumstances, injecting
liquidity, lowering interest rates to very low levels, increasing fiscal deficits, rising
government debt income ratios. All these are measures that although expansionary and necessary at
terms of crisis, could have very severe inflationary effects on asset markets and goods and prices
as and when the economy returns to normal.

So what is going to be necessary is a very agile flexible fleet of foot central banks and
governments so that when we come out of this very difficult situation, that policy gets reversed
really pretty damn quick and the difficulty is going to be actually timing. The timing and the
sequence of taking the expansionary policies to prevent a really severe downturn bringing about a
depression.

And then as and when we get the recovery, completely reversing field and changing the policies
dramatically. It will have to very carefully done.

ELEANOR HALL: That is Charles Goodhart, a former member of the Bank of England's Monetary Policy
Committee speaking to our Europe correspondent Emma Alberici.

Government silent on ABC Learning fee speculation

Government silent on ABC Learning fee speculation

The World Today - Friday, 7 November , 2008 12:18:00

Reporter: Simon Santow

ELEANOR HALL: There are more questions than answers this lunchtime on the future of the collapsed
childcare operator, ABC Learning.

The company's receivers and the Federal Government are both seeking to assure parents and staff
that it's business as usual.

But no details are being released on the extent of the company's debts or how much public money may
be needed to help keep the 1,100 childcare centres in business.

And the Deputy Prime Minister Julia Gillard is also refusing to answer questions about whether fees
will need to rise to keep ABC Learning afloat.

Simon Santow has our report.

SIMON SANTOW: ABC Learning's receivers McGrathNicol are spending today and most likely the next few
days at least, going through the collapsed childcare operators' books.

In the meantime, they're leaving the commentary to the Federal Government and Education Minister
Julia Gillard.

JULIA GILLARD: Good morning Fran.

FRAN KELLY: Julia Gillard, 1200 childcare centres, more than 10,000 staff and 110,000 children -
who is in charge of this rescue and what role and responsibility does the Federal Government have?

JULIA GILLARD: Well a receiver was appointed to ABC Learning yesterday so obviously the receiver is
managing the situation and has all of the legal obligations that you would anticipate in those
circumstances.

SIMON SANTOW: Julia Gillard might have been fielding questions from Radio National's Fran Kelly,
but she wasn't answering too many of them.

FRAN KELLY: What sort of government funds are we going to be contributing to make sure this
happens?

JULIA GILLARD: Well, we will continue to stay working with the banks and with the receiver on this.

SIMON SANTOW: On and on it went, repeating assurances from the receiver that centres will remain
open and that any parent or staff member concerned can ring a hotline.

FRAN KELLY: So let's get clear on this. The care for kids, these centres will remain open, that it
an open-ended commitment. The Government is backing that guarantee?

JULIA GILLARD: The receiver yesterday upon his appointment put out a media statement which was
entitled, "ABC Childcare centres stay open". Centres are open. They are providing care.

SIMON SANTOW: But the minister was reluctant to answer whether any taxpayer dollars had been asked
for or pledged to keep the centres operating or if the Government had any plans to buy any or all
of ABC Learning.

JULIA GILLARD: We are in discussions with the receiver and with the banks.

SIMON SANTOW: The lack of answers and details has the Opposition calling for more transparency.

Spokeswoman Sophie Mirabella.

SOPHIE MIRABELLA: The Government did inherit a very huge surplus and it is incumbent on them to
make decisions and I would have thought that 100,000 in care in about 80,000 families is a crisis
and does require, whether it is some sort of financial assistance, or whether it is some sort of
plan.

It may not necessarily require significant government funds but to have some sort of idea about
what you are doing in government to deal with this crisis would be a starting point, one would have
thought.

SIMON SANTOW: The Opposition wants to know whether parents will be slugged extra, on top of already
high fees, to keep ABC Learning Centres from closing.

Julia Gillard wouldn't speculate.

But the Opposition's Sophie Mirabella isn't ruling that out as an option if it came to it.

SOPHIE MIRABELLA: I would need to look at all the options there on the table and I want to know
before any further commitments, what the contingency plan that is in the Government's intray. What
is their contingency plan?

There may be a way around it. There are a myriad of solutions and we need to look at all possible
solutions. I am not sanctioning a particular course of action but we firstly need to start with the
basics and the basics is, what's the plan?

SIMON SANTOW: Ginny Udy runs SDN Children's Services in New South Wales, a not-for-profit childcare
organisation with more than 20 centres.

She rejects the often repeated commentary that ABC Learning was run on a profitable model and there
was nothing wrong with the business except that it expanded too quickly and took on too much debt.

GINNY UDY: We would look very carefully at any centre and make sure that it did have the potential
to be viable and we would be very interested in the management of centres. That is sort of what we
are good at.

We are not-for-profit organisation. We don't have a lot of money. We haven't got the financial
resources to be buying up the centres but we believe that the Government has an obligation to do
that and to put these centres into the hands of organisations with a proven track record of being
sustainable and delivering good outcomes.

ELEANOR HALL: Ginny Udy is the Chief Executive of SDN Children's Services in New South Wales. Simon
Santow was our reporter.

Burke charged with corruption, giving false testimony

Burke charged with corruption, giving false testimony

The World Today - Friday, 7 November , 2008 12:22:00

Reporter: David Weber

ELEANOR HALL: The former Premier of Western Australia Brian Burke is again facing the prospect of a
jail-term - this time over his lobbying activities.

Mr Burke was charged late yesterday with one count of corruption and five counts of giving false
testimony.

The false testimony charges relate to Mr Burke's evidence at the Corruption and Crime Commission
hearings into the relationships between lobbyists and the State Government which cost three
ministers their jobs.

In Perth, David Weber reports.

DAVID WEBER: Brian Burke is one of four people who've been charged. The charges relate to the
Corruption and Crime Commission's investigations into two development proposals.

They also relate to lobbying involving the pearling industry. Political analyst Peter Van Onselen
of Edith Cowan University.

PETER VAN ONSELEN: It's not surprising that Brian Burke's been charged, but I'm surprised by the
extent of the charges. It had been long speculated that giving false evidence to the CCC was
something he may well be charged with, but for there also to be a corruption charge as well as
others there, that certainly surprises me. We'll have to wait for the details to know exactly
what's involved.

DAVID WEBER: Do you think that he could get a fair trial in Western Australia?

PETER VAN ONSELEN: It's very hard to see how Brian Burke could get a fair trial in Western
Australia because everybody knows him and his name has been so tarnished through the investigation
so whether it's an option or not to try and do a trial somewhere else is a matter for the DPP but I
find it very hard to see how people can't come in as jury members with a certain level of prejudice
from what they've already seen written about and spoken about through the media.

DAVID WEBER: The other men charged include Brian Burke's business partner and former state minister
Julian Grill. Mr Grill has been charged with one count of corruption and one count of disclosing
official information.

And the former Carpenter government minister Norm Marlborough has been charged with two counts of
giving false testimony. Peter Van Onselen.

PETER VAN ONSELEN: I think that the fact that Brian Burke has been charged and the fact that some
of the other people that he's dealt with including Julian Grill and Norm Marlborough have been
charged as well is a pretty good reason why the CCC investigations and hearings from some time ago
probably should've been kept as private hearings rather than public hearings because by virtue of
them being public, so much information is in the public domain.

DAVID WEBER: The Premier Alan Carpenter had taken tough action against ministers after CCC hearings
exposed their links to lobbyists.

Mr Van Onselen says those steps could end up having an impact on the legal proceedings.

PETER VAN ONSELEN: Politics and law merged in a fairly unhealthy way. The politics of the situation
required Alan Carpenter to sack ministers and speak of public wrong-doing. But the legal
ramifications of that are that it may well be that it is very difficult for anyone, particularly
Brian Burke to get a fair trial in the state of Western Australia.

DAVID WEBER: Brian Burke, Julian Grill, Norm Marlborough and Nathan Hondros, the former Chief of
Staff for the Fisheries Minister, are due to appear in court on December the 12th.

Julian Grill's lawyer has issued a statement saying he'll be vigorously defending the charges. The
statement says Mr Grill is disappointed that it has taken the Corruption and Crime Commission so
long to bring the charges given that the hearings finished in February last year.

ELEANOR HALL: David Weber in Perth.

Developers support proposal to ban political donations

Developers support proposal to ban political donations

The World Today - Friday, 7 November , 2008 12:26:00

Reporter: Jennifer Macey

ELEANOR HALL: Property developers are high rollers when it comes to political donations, but many
of them are now supporting proposals to ban donations.

The corruption scandal in Wollongong earlier this year put pressure on the New South Wales
Government to ban donations from businesses and property developers who were seen to be benefitting
from favourable planning decisions.

But while the developers may be on board, the New South Wales Premier Nathan Rees has now backing
away from a promise by his predecessor to implement the ban as Jennifer Macey reports.

JENNIFER MACEY: In an effort to distance itself from the stain of the Wollongong property
developer's corruption scandal, the New South Wales Government announced it wanted to ban all
political donations.

But the now the Premier Nathan Rees is backing away from that promise made by his predecessor
Morris Iemma. He says that while he personally supports more public funding of election campaigns -
a total ban could be too hard to implement.

NATHAN REES: If we were to move down my preferred path which is a ban on donations, publicly funded
elections, then the difficulties are several-fold.

Firstly you have issues across jurisdictions. Secondly there is arguably, arguably you could draw
the conclusion that is a limit on free speech.

JENNIFER MACEY: The New South Wales Government sought legal advice on the issue from constitutional
law expert Dr Anne Twomey from the University of Sydney.

She says a ban in New South Wales could be considered unconstitutional.

ANNE TWOMEY: The problem is that in Australia the political parties work at both the commonwealth
and the state level so the New South Wales branch of the Labor Party or the Liberal Party for
example receive money, donations and that money is then used to support candidates both in state
elections and in commonwealth elections.

So if you passed a law saying that New South Wales branches of political parties couldn't receive
donations at all, that would affect not only state elections but it would also affect their ability
to run campaigns and support candidates in commonwealth elections.

JENNIFER MACEY: And she says if New South Wales were to go it alone - the money would simply be
diverted elsewhere.

ANNE TWOMEY: Someone once described this as like a water bed and you press down in one part, say
New South Wales on the water bed but all the money that is sloshing around inside just pops up in
the other places.

What you have got to do is press down equally right across the country in order to solve this
problem.

JENNIFER MACEY: Dr Twomey says an outright ban could be tested in the High Court on the grounds
that if could prevent the freedom of political communication.

But Robin Banks from the Public Interest Advocacy Centre says this is a weak legal argument.

ROBIN BANKS: And in other countries like Canada where they indeed have a charter right for freedom
of expression there are limits on campaign donations. America has limits on campaign donations and
we are using an implied right. Not even an absolute right to, sorry, the Premier is using an
implied right to argue that he can't do something but it is certainly in the public interest.

JENNIFER MACEY: Are you disappointed with the decision not to implement a ban?

ROBIN BANKS: I think disappointed would be an understatement. I am extremely disappointed. It
sounds like an excuse.

JENNIFER MACEY: And the Public Interest groups have an ally from an unlikely corner. Property
developers too say they support a ban on political donations.

Aaron Gadiel is the Chief Executive Officer of the Urban Taskforce of Australia.

AARON GADIEL: Oh no, I think Australia and New South Wales, all the states, should be moving
towards a ban on political donations. I think that will improve public confidence in the political
decision-making process and make people more comfortable that when decisions are made by
government, that are being made in the public interest.

JENNIFER MACEY: But why would you donate to a political party if you didn't expect something in
return?

AARON GADIEL: Well you don't. When they make donations to charities and to local arts and cultural
organisations, the local education institutions, they don't expect anything in return and it is the
same principle applies to political parties.

JENNIFER MACEY: During the last state election the New South Wales Labor Party received $24-million
in donations while the Liberal Party only managed to raise $13-million.

The Government says it has introduced some reforms for donations. Anything over $1000 now has to be
declared and all gifts are disclosed every six months rather than every election cycle.

But the Opposition leader Barry O'Farrell says the Labor party has backed away from the ban because
it needs the revenue to win the next election.

BARRY O'FARRELL: Thirty years ago New South Wales didn't wait for national action before requiring
public disclosure of political donations in this state. Mr Rees is simply offering excuses because
he and Labor want to try and buy their way to victory at the next state poll.

JENNIFER MACEY: The New South Wales Government says it can't go it alone and will provide its legal
advice to the Federal Government's Green Paper on electoral reform headed by Senator John Faulkner.

A spokesman from Senator Faulkner's office says everything is on the table including caps and bans
on donations and the Government welcomes any input into designing the paper.

ELEANOR HALL: Jennifer Macey with that report.

US braces for wartime presidential transition

US braces for wartime presidential transition

The World Today - Friday, 7 November , 2008 12:30:00

Reporter: Kim Landers

ELEANOR HALL: To the US now where for the first time in 40 years, the United States is undergoing a
presidential transition while the country is at war.

President George W. Bush says he'll meet his successor Barack Obama next week to discuss the war in
Iraq, along with other pressing issues like the economy.

But already in Washington, a shadow White House has sprung up in a downtown office building as
Barack Obama selects his team in preparation for taking office in January.

In Washington Kim Landers reports.

KIM LANDERS: It's another 75 days before Barack Obama is sworn in as America's 44th President.

(Sounds of construction work)

KIM LANDERS: But workers in front of the White House are already building the stands for guests to
watch his inauguration parade. And Barack Obama isn't waiting until midday on January the 20th to
start building his administration.

Hundreds of Obama staffers have begun arriving at a Washington office building to set up a
so-called shadow White House. And groups of people called "parachute teams" are being sent out to
government agencies.

President George W. Bush is vowing to do everything he can to ensure a smooth transition. This is
the first wartime presidential transition since 1968, when Lyndon Johnson handed over to Richard
Nixon during the Vietnam War.

Barack Obama has today received his first post-election intelligence briefing from the Director of
National Intelligence. And from now on he'll get daily briefings that are the same that are being
given to President George W. Bush.

GEORGE W. BUSH: This will also be America's first war time presidential transition in four decades.
We are in a struggle against violent extremists determined to attack us and they would like nothing
more than to exploit this period of change to harm the American people.

KIM LANDERS: Dr James Carafano is a senior fellow at the Heritage Foundation, a thinktank in
Washington DC. He's an expert in defence and homeland security and agrees the new president may
face a security test.

JAMES CARAFANO: Kennedy was tested early on in his presidency. Carter was tested so I don't think
it is unusual that some bad person somewhere would say, let me try to embarrass the new president.
Let me take advantage of him. Let me try to make them look bad. See how far they goes. So I don't
think that is necessarily something that won't happen.

You know al-Qaeda is still around and they do a lot of rhetoric and stuff and they try to claim
responsibility for things but their ability to actually kind of direct an operation you know on the
scale of, on the sophistication of 9/11 has been degraded.

I don't think anybody really argues with that and they have been trying to attack the United States
for a couple of years. If there is a successful attack, it won't be because they necessarily timed
it for the transition. It will just be because that's when they could have pulled it off.

KIM LANDERS: When Barack Obama becomes commander-in-chief he'll face decisions about the wars in
Iraq and Afghanistan. He'll also have to grapple with other security issues like Iran's nuclear
program and Pakistan's fight against terrorism.

Stephen Biddle is a senior fellow for defence policy at the Council on Foreign Relations.

STEPHEN BIDDLE: I think actually the biggest danger in a presidential transition in a time of war
is that the instinctive tendency of an incoming administration to do anything except what the old
people did is one that needs to be avoided.

There are going to have to be some changes. Do you want the changes to be thoughtful, targeted and
carefully selected? You don't just want to broadside, wholesale throw out for the sake of throwing
out everything that the last administration did.

KIM LANDERS: The Bush administration has always opposed timetables for the withdrawal of US combat
troops from Iraq. Barack Obama though insists on a 16-month timetable.

I mean, how difficult is it for the US military and the defence leadership to switch from one
policy to another?

STEPHEN BIDDLE: Well, but I don't think we know the policy they will be switching to yet. The Obama
campaign campaigned on the basis of having all major combat units leave Iraq within 16 months.
Well, that is actually a lot less specific than it sounds.

What is a major combat unit? The campaign acknowledged that there would be a sizeable residual
force left in Iraq even after that 16-month withdrawal process was over.

I think the question of how large the residual is, how it is configured, what its capabilities will
be, what its mission will be, what it can do, all these things are up in the air.

KIM LANDERS: George W. Bush and Barack Obama will meet next week to discuss the Iraq war. The Bush
administration has already arranged security clearances for key Obama transition staffers.

And the president-elect's national security aides are expected to attend special exercises to test
their responses to natural disasters or terrorists attacks. This is Kim Landers in Washington for
The World Today.

Turkey accuses Sarah Ferguson of running fear campaign

Turkey accuses Sarah Ferguson of running fear campaign

The World Today - Friday, 7 November , 2008 12:34:00

Reporter: Stephanie Kennedy

ELEANOR HALL: The Duchess of York, Sarah Ferguson, has sparked a diplomatic row between Britain and
Turkey with a documentary she filmed on state run orphanages in Turkey.

The Turkish government is threatening the Duchess with legal action over the film which has just
aired in Britain.

The film is an expose of the conditions that disabled children are forced to endure in Turkish
orphanages.

But the Turkish Government has accused the Duchess of using the film to run a smear campaign
against Turkey, just it is trying to join the European Union.

In London, Stephanie Kennedy reports.

STEPHANIE KENNEDY: Wearing a black wig and scarf, the undercover Duchess secretly filmed in some of
Turkey's orphanages for children with mental disabilities to see firsthand the conditions.

(Extract from documentary)

SARAH FERGUSON: But it is also the smell. It is that smell. It gets into your bones.

REPORTER: Terribly overwhelming.

SARAH FERGUSON: It was, wasn't it?

REPORTER: It really was overwhelming.

SARAH FERGUSON: I think it was really important that we went into that place upstairs. It was just
so degrading - the whole thing for these poor people.

(End of extract)

STEPHANIE KENNEDY: The documentary shows one boy who is kept in a box because he's hyperactive.

SARAH FERGUSON: And I saw children with suffering from Down Syndrome and other kinds of
disabilities. They are fed on their backs and given no love and no support.

There was one child when I was walking through the orphanage which was crawling on his back to get
a gleam of sunlight from an open window. When I passed him he said good morning to me. He speaks
English. There was nothing wrong with this boy. He just had a disability in his legs.

STEPHANIE KENNEDY: 18-year-old Princess Eugenie accompanied her mother to some of the orphanages
and she was clearly moved by what she saw. Tears well up in her eyes and she says she feels angry.

PRINCESS EUGENIE: Well, I was completely overwhelmed. I mean I walked outside and there was a lady
who was looking at me with these huge eyes. Just smiling from ear to ear and I was just, she was
just so kind and I came in here looking like just, you know to be nice, see what is happening and
she was the one who gave me my day.

STEPHANIE KENNEDY: Even before the documentary went to air Turkey accused the Duchess of smearing
Turkey's image. Authorities say she is trying to sabotage their European Union membership bid.

Turkey's Minister for Women and Family Affairs is Nimet Cubukcu. She says Turkey has nothing to
hide and she's accused the Duchess of York of deception.

NIMET CUBUKDU (translated): Recently representations from the Council of Europe visited these
orphanages without warning. Sarah Ferguson wanted to go there too but her request was declined
politely because of on-going repair works at the orphanages.

Still she went there - circumventing Turkish law - violating our legal system and our constitution
by doing so. She abused the trust of the volunteers and charity workers there.

She deceived these people by saying she would pay substantial donations.

STEPHANIE KENNEDY: While the duchess is no longer a member of the Royal Family her daughters are,
and this diplomatic spat is an embarrassment for their grandmother, the Queen. But Sarah Ferguson
denies any political motives.

SARAH FERGUSON: This is my personal point of view. I am not a member of the Royal Family. I am not
a politician. I went in there to highlight the plight of children and I have.

Now it seems that I have embarrassed the Turkish Government. Well, let's hope that I have
embarrassed them enough in order for them to make changes in the welfare of their children.

I think it is important for the children that are locked in those cages. I really do. I think it is
vital. They have got no-one standing up for them and they can't stand up for themselves. Will
somebody please do something? OK, I will.

STEPHANIE KENNEDY: Turkey's Foreign Minister plans to raise the issue during talks with his British
counterpart in London later today. In London this is Stephanie Kennedy reporting for The World
Today.

Greenhouse rock could help fight global warming: study

Greenhouse rock could help fight global warming: study

The World Today - Friday, 7 November , 2008 12:38:00

Reporter: Ashley Hall

ELEANOR HALL: A scientific study suggests that a carbon hungry form of rock could be a key tool in
the fight against global warming.

The research by two US scientists has found that the rock - which is found mostly in the Middle
East and the Islands of the Pacific - could permanently store more than 10 per cent of the world's
annual carbon dioxide emissions.

The study by a geologist and a geochemist from Columbia University in New York will be published
next week.

Ashley Hall poke to one of the study's authors, the geologist, Peter Kelemen.

PETER KELEMEN: There is basically prior to this time, two serious contenders for methods of putting
fossil carbon dioxide back into the earth and one of them is to pump CO2 gas at high pressure into
pore space in the subsurface.

Basically for example into depleted oil reservoirs and another has been to use rocks which are rich
in magnesium or calcium. To mine them, ship them to the proximity of power plants, grind them up
very fine, heat them to a high temperature, put them in high pressure reaction vessel and react
those rocks together with the CO2 to form solid carbonate minerals and that is called mineral
carbonisation.

What we are proposing is leave the rock in the ground and put the carbon dioxide into these
particular kinds of rocks and it turns out that there are some really significant advantages to
that. The reaction that takes carbon dioxide and combines it with peridotite actually gives off
heat and so if you can get that reaction going fast enough, you can keep a volume of rock at depths
in the earth hot, just from the reaction alone.

ASHLEY HALL: So this is a supercharging of the natural process?

PETER KELEMEN: That is right.

ASHLEY HALL: Once the carbon dioxide is brought into contact with the peridotite it converts to
minerals like marble and limestone, is that right?

PETER KELEMEN: That is correct. Specifically magnesium carbonate or magnasite. Calcium carbonate or
calcite and then the mixture of the two which is called dolomite.

ASHLEY HALL: What proportion of the world's annual carbon emissions could be taken care of in this
way?

PETER KELEMEN: Best case, we would calculate that one could suck up about four billion tonnes of
carbon dioxide per cubic kilometre of rock involved per year and that is about ten per cent of the
human output of CO2 to the atmosphere each year.

ASHLEY HALL: And where is peridotite found?

PETER KELEMEN: Well, the really big deposits, the largest one in the world on the surface or near
the surface is in the Sultanate of Oman which is on the coast of the Arabian Peninsular that faces
India across the Arabian Sea and then coming after that are some big islands in the western Pacific
and the Balkans, particularly Albania which perhaps has the advantage of being within pipeline
range of some really big CO2 emitters.

But there is peridotite in mountain belts all over the world, on all the continents. I guess with
the possible exception of Antarctica.

ASHLEY HALL: How far away from having this technology in commercial use are we?

PETER KELEMEN: I'm not really sure about that. We are just kind of starting out and it is really
hard to scale that kind of thing in the laboratory so we really need to move now towards moderate
scale field tests and do with this in real rocks in real time and I am not sure when exactly that
is going to happen. Probably in the next couple of years but I am not certain.

ELEANOR HALL: Peter Kelemen is the Professor of Earth Sciences at Columbia University in New York.
He was speaking about his research to Ashley Hall.

BOM predicts hotter than usual summer

BOM predicts hotter than usual summer

The World Today - Friday, 7 November , 2008 12:42:00

Reporter: Jane Cowan

ELEANOR HALL: The Weather Bureau has just delivered more bad news for Australia predicting a hotter
than usual summer this year and that means more water restrictions are on the cards for major
cities.

But for drought stricken areas like the Murray Darling Basin it is disastrous as Jane Cowan
reports.

JANE COWAN: The winter rains were described as a shocker.

The bad news is the spring falls haven't been much better according to the Bureau of Meteorology's
Senior Climatologist Dr Andrew Watkins.

ANDREW WATKINS: There has really been little improvement in rainfall since winter. July and
September were a bit better than normal but unfortunately August and October have been extremely
poor. It has been a bad end to the year, the crop and pasture growing season.

JANE COWAN: The period from 2001 to 2008 has been the third driest seven year period on record.

Graph after graph presented by the Bureau of Meteorology in Melbourne today painted a bleak
picture.

This summer is likely to be hotter than usual and the forecast is for average rainfall - not
particularly dry but not wet either.

It is perhaps a sign of how much things have changed that the Chief Executive of the Murray Darling
Basin Commission Dr Wendy Craik actually sees a neutral forecast as good news.

WENDY CRAIK: It is a while since we've had a neutral outlook in the southern Murray Darling Basin.
Usually it is on the negative side so we are quite positive about that because you grasp at small
pieces of good news these days.

JANE COWAN: But average rainfall doesn't translate into good inflows and for every degree the
temperature goes up there's a 15 per cent reduction in water actually making it into the Murray
Darling.

In fact there've been below average inflows to the river for the last 37 consecutive months and
storages in the river system are a third of what they should be at this time of year and Dr Wendy
Craik says the rivers most precious environments are bearing the brunt.

WENDY CRAIK: Most of those places that rely on a regular flood like redgum forests, bird breeding,
fish breeding, all those sorts of things, do rely on a flood to prompt breeding and to ensure
survival.

JANE COWAN: As far as the cities are concerned, residents have dramatically cut their water
consumption.

According to Claude Piccinin from the Water Services Association of Australia, Sydney is best
prepared for continuing dry conditions.

CLAUDE PICCININ: In Sydney the storage has remained stable, about the 66, 67 per cent since
February. That is managed by relying on transfer from the Shoalhaven water system and that does
allow them to manage their water system a lot more effectively than purely relying on water
storages.

JANE COWAN: Cities like Brisbane and Canberra too are showing signs of recovery.

CLAUDE PICCININ: Brisbane and south-east Queensland, there have been increases in storages but the
largest dam that provides water for Brisbane is still at 27 per cent which is very, very low. There
have been some good rains but they are certainly not out of jail at this point in time.

JANE COWAN: Adelaide is heading for a very dry summer, made worse by the fact that it relies more
on drawing from the river than from any storages.

The Water Services Association of Australia's Claude Piccinin says Melbourne is in perhaps the
worst position after its driest September-October on record.

CLAUDE PICCININ: Look, the picture is not pretty. There is no doubt about that. The storage level
is just below 34 per cent. That is not a comfort zone but I will remind you that the industry has
been criticised for the north south pipeline and the augmentation through the desalination process.

I mean it is important to get those projects in line.

JANE COWAN: And nothing's likely to change until at least autumn next year. The only cities where
there's enough water right now are Darwin and Hobart.

ELEANOR HALL: Jane Cowan reporting.

Australian Alps added to conversation register

Australian Alps added to conversation register

The World Today - Friday, 7 November , 2008 12:46:00

Reporter: Catherine Clifford

ELEANOR HALL: Developers and tourism operators are far from happy about the latest addition to the
country's top conservation register.

Nearly 1.6-million hectares of Alpine reserve land across south-eastern Australia were placed on
the National Heritage List today in recognition of their outstanding heritage value.

But alpine tourism operators are already complaining about the extra layer that this adds to the
approval process in the Australian Alps.

Catherine Clifford reports.

CATHERINE CLIFFORD: In announcing the listing, a proud Federal Environment Minister Peter Garrett
said the Australian Alps have a strong association with community groups and a special place in
Australia's natural and cultural history.

PETER GARRETT: This means that the Australian Alps have now been identified as having Australia's
highest heritage honour. The values of the Australian Alps were clearly deserving. An extraordinary
literary history for the settlement culture, important to Indigenous people and many rare and
important species there as well.

CATHERINE CLIFFORD: If tourism developers or operators wanting to perhaps say build something like
a chalet in the alps, would looking to do that, what impediment is there for them now with this
classification.

PETER GARRETT: Look, the impact of the listing means that the environment legislation at a national
level will apply only if there is a proposal which has the capacity to significantly impact on the
natural or cultural or heritage values.

CATHERINE CLIFFORD: What does "significantly impact" mean though in terms of either getting a
development application through or not getting it through?

PETER GARRETT: If there are proposals which are contemplated which are of such an order such as to
raise the question of significant impact then it is something which would be considered in the
course of that process but I don't anticipate that that will be the case.

CATHERINE CLIFFORD: But the Environment Protection and Biodiversity Conservation Act is under
review.

Kirsty Ruddock, a solicitor from the Environmental Defenders Office, says while the Act's got its
problems, it will make a difference with proposals that were never good for the area.

KIRSTY RUDDOCK: There was um, a proposal, I think, last year, well in 2006 where the state minister
had approved a concept plan for the redevelopment of Perisher Village and it is those types of
developments in the future, I suppose, that are going to be now caught by the Environment
Protection and Biodiversity Conservation Act.

CATHERINE CLIFFORD: So if I was a tourism operator who wanted to build a chalet now or perhaps a
miner who had discovered some mineral wealth in this area that is now listed under the National
Heritage List, what impediment would I have?

KIRSTY RUDDOCK: They are going to look at that impact that that development is going to have on
both the area that has been listed and the areas around it and they are going to be requiring you
to do a whole lot of environmental assessments of how it is going to impact on the values that the
listing is going to be protecting.

CATHERINE CLIFFORD: And it's that added layer of approvals and bureaucracy that makes Tom Barry
shake his head. He's lived in the Snowys for more than 40 years, where he's been a councillor, real
estate agent, newsagent and strong member of the community.

He says Minister Garrett's announcement will ultimately punish developers with good ideas who want
to bring money into the region.

TOM BARRY: Well, I just see it as another move for a government and governments tend to do it a
lot. When they can't do something constructive and they are not real sure what to do, they either
set up a committee or they declare a national park or they declare a heritage area.

Doesn't do much for the people that live here. Gives them a warm and fuzzy feeling and in the long
run probably just creates another hurdle for people who want to do something.

People say oh yeah businesses can take place outside. There is plenty of areas outside the park but
to do a lot of the things that people want to do, we need that balance to allow certain activities
and developments within the national park.

ELEANOR HALL: That is Tom Barry, a real estate agent and former councillor from Jindabyne in the
Snowy Mountains. Catherine Clifford reporting.

Disabled director attends film premiere in Adelaide

Disabled director attends film premiere in Adelaide

The World Today - Friday, 7 November , 2008 12:50:00

Reporter: Margie Smithurst

ELEANOR HALL: Its producers say it is the first Australian film to be written and directed by a
person with Downs-syndrome.

The filmmaker - Rachel High - is a graduate of a program where students with a disability attend
lectures at mainstream universities.

Her film premiered in an Adelaide cinema this week and Margie Smithurst went along to opening
night.

MARGIE SMITHURST: This was Rachel High's night. Just before we go in to watch your movie premiere,
how do you feel?

RACHEL HIGH: Really, really happy. Really excited. Really.

MARGIE SMITHURST: And you certainly have got a big turnout here tonight.

RACHEL HIGH: Yes, I do. They are all my friends, all friends.

MARGIE SMITHURST: At 31, Rachel High has achieved her dream and hundreds of friends, well-wishers
and drama colleagues turned out to an Adelaide cinema to see her ground-breaking first film - a 20
minute production with the poetic title of "Brown the Dirt"

RACHEL HIGH: It's about animals. It is mainly a voice on how I believe in animals, you know. How I
feel about them plus I am not a big fan on animal cruelty so I felt that should be addressed.

MARGIE SMITHURST: The film features some of Adelaide's leading actors, but the star is a young man
who like Rachel High, has Down-syndrome.

Cole Larsen is the head of Screen Production at Flinders University. He was instrumental in helping
Rachel High make the film.

COLE LARSEN: Brown the Dirt is similar to children's TV comedy with typically Australian
characters, a bit of slapstick humour, some bumbling adults and a fantastic young Down-syndrome
lead actor, Lorkin Hopper who plays Craig who is a bit of an adventurer and a lover of animals.

(Extract from movie)

LORKIN HOPPER (CRAIG): It is OK. You can come out. The lizard has gone now.

(Music)

ACTOR: Oh, good heavans. A sweet potato pie. We were just looking for something.

(End of extract)

MARGIE SMITHURST: Rachel High's path to becoming a filmmaker really began five years ago when she
was asked to join the Up the Hill project at Flinders University.

Under the program she participated in three years worth of drama orientated classes. John Grantley
is director of the project which is the only one of its kind at an Australian university

JOHN GRANTLEY: The Up the Hill project was set up to include people with intellectual disabilities
in university and it allowed them to develop social networks.

MARGIE SMITHURST: Rachel High got her filmmaking break when she met Cole Larsen during her time at
Flinders. He discovered she'd been writing scripts and stories in her spare time.

COLE LARSEN: And so we got talking about the stories and what she wanted to do and really her
aspiration was to one day make her own film.

So I just sort of said without thinking about anything, well what is stopping you making this film.

MARGIE SMITHURST: Recently a German doctor in country Victoria was refused permanent residency in
Australia because his son has Down-syndrome and would be a cost to the taxpayer.

John Grantley says Rachel High's achievement flies in the face of such thinking.

JOHN GRANTLEY: When Rachel first started, I had found it difficult to get a peep out of her at all.
She has grown in confidence, her self-esteem and just the competencies that she has shown because
she has been able to now show what skills she has and she is her own person now.

ELEANOR HALL: And that report from Margie Smithurst in Adelaide.