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Sector welcomes comprehensive review

Sector welcomes comprehensive review

The World Today - Wednesday, 17 December , 2008 12:10:00

Reporter: Tanya Nolan

ELEANOR HALL: But first, the Federal Government says it is the most comprehensive review of
Australia's higher education system in more than 20 years.

The Bradley Review was handed to the Minster this morning, and she is promising to respond to it
early next year.

But that is shaping up as a difficult challenge politically.

Not only does the review recommend that the Government spend an additional $6.5-billion on the
sector, it makes several recommendations that are guaranteed to arouse controversy.

Including a proposal for a student voucher-style funding system.

Tanya Nolan has our report.

TANYA NOLAN: Emeritus Professor, Denise Bradley, insists her review of higher education isn't just
about universities, but is a critical economic and social issue for Australia.

The report, compiled with the help of other tertiary and private sector specialists, contains a mix
of government and market-driven mechanisms to lift the nation's higher education participation and
performance.

Some call it radical, others bold, but the unanimous view is that it's a much needed dissection of
how the tertiary education sector is working and where it's going wrong.

The vice-chancellor of Perth's Edith Cowan University, Kerry Cox, had been one of a number of
vice-chancellors who'd been worried the Bradley Review wouldn't recommend a significant injection
of much needed cash into the sector.

He says his fears have been allayed.

KERRY COX: Well we're dealing with theory at present, the importance of these reviews is what
happens to them in the longer term, how they're taken up, how they're implemented.

But in the context of the proposed changes, to higher education, to tertiary education in
Australia, I think that that's a very commendable starting point, that injection of additional new
money.

TANYA NOLAN: The review points out that Australia is slipping, dropping to 9th out of 30 OECD
(Organisation for Economic Co-operation and Development) countries with the number of 25 to
34-year-olds holding degree-level qualifications.

And it's recommended the Government set targets to lift those numbers. It says by 2020, 40 per cent
of those aged between 25 and 40 should have, at a minimum, a bachelor qualification.

And 20 per cent of all undergraduates should be from poor backgrounds.

Dr Carolyn Allport is president of the National Tertiary Education Union.

CAROLYN ALLPORT: Well, it's bold, and it's certainly something everyone has been talking about.
Whether it's realistic or not, well that's really about the degree of investment that the
Government would be prepared to put towards such a program.

TANYA NOLAN: Representing tertiary education staff, Doctor Allport is particularly concerned about
any recommendations that will help attract and retain quality staff; something she worries isn't
specifically addressed by the Bradley Review.

CAROLYN ALLPORT: If we're to attract people into our university, then we may have a much greater
chance of encouraging more students to attend university. After all, we've had almost no increases,
very, very few increases in staffing levels.

TANYA NOLAN: The National Union of Students says the targets to lift overall student numbers by an
extra 330,000, within the next 12 years is achievable.

National president Angus McFarland worries about the method recommended to achieve it.

He says the introduction of student vouchers may hurt the quality and diversity of the education on
offer.

ANGUS MCFARLAND: Do we really want to triple the amount of lawyers and accountants we have, and go
backwards in the number of teachers, nurses and scientists that we have? If we just lift caps and
regulations on university places, you are going to see areas of national priority fall behind in
the amount of graduates we have coming out of our universities.

TANYA NOLAN: One of the more comprehensive recommendations contained in the Bradley Review centres
on changes to the income support system, to help reduce the financial barriers for students wanting
to go to university.

The National Union of Students says it's a key way to get more lower income students into tertiary
study. And it was the only part of the Bradley Review on which Federal Education Minister, Julia
Gillard, would be drawn this morning.

JULIA GILLARD: We did get from many in the higher education system, concern about the amount of
time that students now need to spend working to support themselves. The impact that has on the
quality of campus life and the impact it seems to have on completion rates of higher education
courses.

So, that is something that I'm concerned about, something that I will think through in the context
of responding to the Bradley recommendations.

TANYA NOLAN: The Minister says she will respond comprehensively to the review in February or March
next year.

ELEANOR HALL: Tanya Nolan reporting.

Universities back budget deficit to fund reforms

Universities back budget deficit to fund reforms

The World Today - Wednesday, 17 December , 2008 12:14:00

Reporter: Lyndal Curtis

ELEANOR HALL: Universities are urging the Federal Government to go into deficit to fund the reforms
recommended in the Bradley report.

The CEO of Universities Australia, Glenn Withers, says the report is timely and that spending the
money will boost skills and productivity, and even help the environment.

GLENN WITHERS: To get that right, is really an investment, it's not just a diversion of money, it's
an investment that pays off in future tax.

Just to give you a small example; your average graduate has a lifetime income of about 1.5-million
more than your average school leaver who doesn't have further studies. That means about 500,000 of
extra taxes for every graduate.

Those taxes pay for the pensions, pay for the future health, pay for the future defence forces. And
that's an investment, and deficit funding is only temporary if that's what's needed.

LYNDAL CURTIS: So the Government could afford to go into deficit expecting a payoff in the long
term?

GLENN WITHERS: Really it can't afford not to, this is the area that drives the economy, we love in
universities to talk about many of the other things we do culturally and socially, critically and
the like. But, we're the core of skills and productivity when you really get down to it and think
about it.

LYNDAL CURTIS: Denise Bradley recommends that the funding follow the students, what some people
have dubbed the voucher system. That's been quite controversial in the past, but is it time for
such a system, and can the university wear such increased competition?

GLENN WITHERS: Certainly the focus on students is central to Australian universities more than
most; we've already done that for a long while. We only get 40 per cent of our funding from
Government, and only 20 per cent in direct grants. So, students have always mattered to us for the
past decades in ways that doesn't apply elsewhere.

So we're got a pretty student oriented system, this is fine tuning that in new ways, and the detail
of how that will work out we have yet to really see and work through with Government. But, we have
absolutely no problem with student choice being at the centre of the system.

The only qualifications I would really add is that if you're running a system with strong demands
side influences, not just what academics want to do, then there's also employers and there's also
government national priorities along with what students want to do.

We've got to get that balance right, and how we're going to do that is what we need to talk to
Government about.

LYNDAL CURTIS: It's clear from the report and the recommendations that disadvantaged students,
students from poorer backgrounds, Indigenous students, are missing out. And some of the top
universities have a very low proportion of disadvantaged students.

Do you agree with the recommendations to increase the number of students from a disadvantaged
background who get into university?

GLENN WITHERS: Absolutely. Again Australia's future depends upon creating the knowledge workers
that this century is going to need, and we need to use the skills of every Australian.

LYNDAL CURTIS: Is it somewhat of an indictment though, on universities now, that they haven't done
enough to get disadvantaged students in?

GLENN WITHERS: We're about on par with most of the countries of the world, it's not an easy thing
to do that, and so much is dependent upon the education system and other factors beforehand.

But, what Bradley is doing that will really help us in universities, beyond what we can do
immediately ourselves, is things like increasing income support arrangements for students. That if
many a student feels they have to work rather than go to university, there's not much university
can do about that.

LYNDAL CURTIS: Do lecturers worry about the amount of time their students have to devote to their
working life rather than their studying life?

GLENN WITHERS: Very much so. Particularly because, in Australia, we've got the highest share,
actually, of working students amongst our student body of most comparable countries.

One way of helping fix that though, that universities themselves are trying to do, which will
increase participation, we've been doing it in the last few years, is work integrated learning.
Your work can count towards your assessment in certain courses, and you negotiate with employers so
that you have a joint deal on that.

And the work is intellectually relevant, academically appropriate, and you're getting paid and
doing work at the same time, and that makes you job ready as well, which will help a heck of a lot
with employment prospects.

LYNDAL CURTIS: The review does talk about the prospect of university mergers, although Denise
Bradley says there might be very few of them, but particularly to promote higher education in rural
and remote Australia. Is that a real prospect and how many universities do you think really need to
merge to make the system work better?

GLENN WITHERS: Regional and rural and Indigenous participation are amongst the most intractable
problems, and so some sort of institutional solutions which is specialist regional delivery, in a
university system, would be appropriate.

And I think Bradley there is actually reflecting something that's already developing in the sector.

LYNDAL CURTIS: How much do universities themselves have to promote change in order to make this
system work, or are they just expecting it to be delivered by the Federal Government?

GLENN WITHERS: We've changed a lot of course, but we have a mutual responsibility. I think what the
Government will expect, quite obviously, is reform alongside any money they provide. They're not
going to provide money for the status quo.

LYNDAL CURTIS: The report sets a target of having 40 per cent of people aged between 25 and 34
with, at least, a bachelor degree, is that achievable?

GLENN WITHERS: It certainly is. We were up amongst the world's top about 15 years ago in
participation rates in university and shares of population with degrees. We've fallen backwards
over the past decade with some declining funding, the worst in the OECD (Organisation for Economic
Co-operation and Development). We've slipped back more than any other country.

But, what we can do is repeat what we've already done, if it exists it's possible, and exists
elsewhere, that is these sorts of levels of target and aspiration are achieved in other countries.
No reason Australia can't do it.

ELEANOR HALL: That's the chief executive of Universities Australia, Glenn Withers, speaking to
Lyndal Curtis in Canberra.

Which bank can't trade

Which bank can't trade

The World Today - Wednesday, 17 December , 2008 12:18:00

Reporter: Stephen Long

ELEANOR HALL: There's embarrassment today at Australia's biggest home lender.

Trading in Commonwealth Bank shares was halted this morning, when a two-billion capital raising by
the bank went awry.

The bank launched the big share issue just yesterday, but was forced to shelve it and admit that it
was carrying more bad debts than the market had expected.

Economics correspondent Stephen Long joins me now with more on the story.

So Stephen, what went so wrong at the CBA?

STEPHEN LONG: A monumental stuff up is one way it's being described Eleanor, and that seems fairly
accurate. CBA sought on the market to raise about two-billion in capital yesterday and was steadily
doing so through the course of the day, at about $27 a share.

Its shares ran up during the day, finished above $29. It put out a statement that evening saying it
had completed this institutional placement, raised two-billion in new capital, but buried in the
statement was also the disclosure that it now expected its bad loans to be around 60 basis points
with the majority in the first half.

Now that means that about 0.6 per cent of its gross loan book is dud loans, and that was far more
than the market was expecting.

Naturally there was anger from people who'd brought the shares, not knowing that this was the case,
and from people who'd brought the shares outside of the placement on the market, thinking that this
was going to be the last of the capital raisings.

Now in the last few minutes, there has been a statement on the wires, which quotes a term sheet
from UBS which is seemingly raising new money and it says that Commonwealth Bank is seeking to sell
$1.65-billion in new shares.

Now at first blush that seems to be on top of this two-billion, although it is somewhat vague and
unclear, Commonwealth Bank has gone to ground - I haven't been able to raise anyone there this
morning to clarify the situation.

But there have been reports that they held an emergency board meeting before they sought to have
their shares trading halted this morning. And basically people are baffled at how they could get it
so wrong, and there's a lot of anger about the confusion and the lack of adequate disclosure.

ELEANOR HALL: How serious is it that a company like Commonwealth Bank is forced to suspend its
shares?

STEPHEN LONG: Well it raises all sorts of questions, it was actually sensible that they sort to
suspend their shares, seek a halt in trading whilst this was clarified. The real issue is the fact
that they went out and raised new capital and then suddenly low and behold, announced that they had
more bad loans, more dud loans on their books than had otherwise been disclosed.

This was being billed widely as the last of the capital raisings, we've seen most of the big banks
go out and seek to raise capital because clearly loan losses are going up with the collapse of
Centro and Allco, and exposure to various highly-leveraged companies that are going to the wall.

But this was billed as being the last of the big capital raisings, seemingly not, and it certainly
has led to a lot of fear in the market place too about what is next.

ELEANOR HALL: Well how much of a concern is it that banks like this are still discovering more bad
loans?

STEPHEN LONG: Well it is a big concern and it's become something of a joke really, because each
time one of the big banks has declared that this is the last of their exposure, suddenly low and
behold there's more exposure that's being disclosed, and to quote the Carpenters, I would hazard a
guess that "we've only just begun".

Because if you look at it, it's the very highly-leveraged companies that have borrowed up big time,
gorging on cheap debt during an era where credit was cheap and readily available, and asset prices
were rising that have been hit now, what we're seeing is a global recession flowing out of these
problems.

And as unemployment rises, as business turns down and all of the economic indicators suggest that
is happening here as well as overseas, it's hard to imagine there won't be another round of loan
losses, small to medium enterprises and bigger enterprises that borrowed heavily, and were running
on thin margins expecting that good times would roll on and indeed people with home loans who are
going to lose their jobs.

So I think that there's more to come.

ELEANOR HALL: Stephen Long our economics correspondent, thank you.

Wall Street rallies on latest rate cut

Wall Street rallies on latest rate cut

The World Today - Wednesday, 17 December , 2008 12:22:00

Reporter: Kim Landers

ELEANOR HALL: Well now to the big economic news overseas, in the United States overnight, the
Federal Reserve slashed official interest rates to their lowest level ever.

Wall Street rallied on the central bank's announcement of an interest rate between zero and a
quarter of one per cent.

And the Federal Reserve made it clear it is also willing to use other polices alongside its zero
rate plan to deal with the recession and fight deflation.

Washington correspondent, Kim Landers, reports.

(Sound of Wall Street closing bell)

KIM LANDERS: A surprised Wall Street has surged after the Federal Reserve's historic decision to
effectively cut official interest rates to zero, while also pledging broad support to revive the
troubled economy.

The Dow Jones Industrial Average soared 360 points.

It was as if Wall Street had given the US central bank a standing ovation.

Bruce Kasman is the head of economic research for JP Morgan.

BRUCE KASMAN: There's no doubt this is one for the history books, the Fed effectively put interest
rates at zero, told us it was going to keep it there for a long time, and has begun the process of
using its balance sheet to try and achieve its goals of getting growth going here.

KIM LANDERS: This is the tenth interest rate cut by the Federal Reserve in just over a year.

The surprise and historic move to set a target of between zero and one-quarter of a per cent sends
the central bank into unchartered territory.

The Federal Reserve says it's willing to keep interest rates low for an extended period.

And in addition to the rate cut, it says it's prepared to expand a plan to purchase large amounts
of debt issued or guaranteed by Government sponsored mortgage agencies.

It's also considering other ways of tapping its burgeoning balance sheet to support the economy.

Despite the highly unorthodox move, the US Treasury Secretary, Henry Paulson, couldn't be enticed
to say much about the decision.

HENRY PAULSON: I think we're all very fortunate that, that we have a Federal Reserve that's willing
to do what's necessary to help us to get through some very challenging and historic times here.

KIM LANDERS: But, he says the Bush administration and the Federal Reserve have stemmed a string of
financial failures which could've sent the economy into freefall.

HENRY PAULSON: And I don't think there is any single action that we can take that's going to be a
silver bullet and get us through this problem quickly. But, it's just going to take a lot of work,
the kinds of things we've been working on with the Fed to help get credit flowing again.

KIM LANDERS: The next daunting task facing the Bush administration is how to stop America's
domestic car industry from collapsing.

The President isn't ready to announce whether, or how, he'll go ahead with a proposed $US14-billion
bailout. But, he's made it clear that what he calls a disorganised bankruptcy of the car makers
could create enormous difficulties.

GEORGE W. BUSH: I feel a sense of obligation to my successor to make sure there is not a, you know,
a huge economic crisis, look we're in a crisis now, we're in a huge recession, but I don't want to
make it even worse.

But, on the other hand I'm mindful of not putting good money after bad, so we're working through
some options.

KIM LANDERS: Asked in an interview on CNN if he's close to announcing something, George W. Bush has
given this reply.

GEORGE W. BUSH: We're told that, that the automobiles are, you know, teetering here, teetering
there, and obviously taking in their concerns, and taking in the concerns of all the stakeholders,
and we'll try to get this done in an expeditious way.

CNN REPORTER: But, you can't be the President that oversees the collapse of the auto industry in
the US?

GEORGE W. BUSH: Well, I'm, I've obviously made a decision to make sure the economy doesn't
collapse. I've abandoned free market principles to save the free market system. I think if people
review what's taken place in the last six months, and put it all in one, in one package, they'll
realise how significantly we have moved.

I'm sorry we're having to do it, and I'm not real happy about the fact that there have been
excesses in the financial markets which are affecting hard working people and affecting their
retirement accounts.

Having said that, I'm very confident that with time, the economy will come out and grow and
people's wealth will return.

KIM LANDERS: The Treasury Secretary, Henry Paulson, says the car makers will get the money "as
quickly as we can prudently do it".

Adding that the Bush administration: "needs to do this, but we need to do it right".

This is Kim Landers in Washington for The World Today.

Mining bust not all bad

Mining bust not all bad

The World Today - Wednesday, 17 December , 2008 12:27:00

Reporter: Annie Guest

ELEANOR HALL: Unemployment in Australia is on the rise and the mining industry is the latest to lay
off staff. But for some, that's good news.

Farmers who struggled to find workers during the mining boom are welcoming employees into their
sector.

In Brisbane, Annie Guest reports.

ANNIE GUEST: Unemployment is on the rise and more and more companies are shedding jobs.

But for some, this festive season will bring more cheer than it has for a long time.

ANDREW WILSMORE: A lot of farmers will have a very happy Christmas.

ANNIE GUEST: Andrew Wilsmore is from the National Farmers' Federation.

While parts of south-eastern Australia in particular continue to struggle, some central and
northern areas are coming out of drought and producing good crops.

There's another reason for good cheer, farms can at last find workers.

ANDREW WILSMORE: We were hearing some very difficult stories of farmers having to take their
children out of school for the harvest, and you know, working themselves quite hard.

ANNIE GUEST: With the lure of super salaries in the mines, it seemed few people wanted farm work.

Now mining companies are shedding more than 500 jobs in Queensland, and more are expected to follow
elsewhere when Rio Tinto details its cuts.

It's not known how many will find jobs elsewhere. Before these people were laid off, unemployment
had already risen by 0.1 of a per cent to 4.4 per cent in November.

But the Farmers Federation's Andrew Wilsmore says miners are already moving from the tip truck to
the tractor.

ANDREW WILSMORE: Certainly those that are in non-drought areas, or have received some decent
rainfalls in the last season are having a burgeoning time of the mining workforce returning to
agriculture.

It has certainly been a Godsend, because they were living on the skin of their teeth in trying to
get crops put in the ground or getting them out, or looking after their cattle herds. So
significant return from the mining workforce back into agriculture.

ANNIE GUEST: Do you have any numbers on just how many ex-miners are now heading to farms for work,
and exactly whereabouts across Australia are you seeing this?

ANDREW WILSMORE: It's happening across most of the parts where we've had a good agricultural
season, and where there's a mining presence, so that's, it is happening in large parts of
Queensland, in areas like Emerald for example, parts of South Australia, it's also occurring in
Western Australia as well.

So it is certainly happening across the board, it's very difficult to put numbers to how many
people are moving from mining into agriculture, we've noticed the latest Australian Bureau of
Statistics indicated that our farm workforce has jumped by about 20,000 from earlier this year.

Now some of that will be attributable to the mining boom, but equally some of it is also attributed
to us having a very good season and needing staff to harvest it.

ANNIE GUEST: So that's 20,000 on top of a total workforce of how many?

ANDREW WILSMORE: 294,440 is how many were directly employed in the farm sector, so what... that
figures down about 90,000 from where we were pre-drought, so to see it rise by 20,000 is a strong
indication of our sector's versatility and growth.

ANNIE GUEST: In South Australia, the doors are still open for new workers.

Grant King is from the Limestone Coast Development Board, it covers an area in south-eastern South
Australia with a population of about 60,000 people.

GRANT KING: Our region continues to need plant operators and truck drivers; people to work in meat
processing plants, certainly the traditional trades, electrical engineers, mechanics, plumbers, the
like - are still in demand.

As are people in business administration and accounting.

ANNIE GUEST: Are those jobs still going to be on offer for now though with the downturn in the
economy?

GRANT KING: Look, I think it's fair to say there'll be some impact, usually this region in South
Australia is the last to feel any impact, again particularly with blue gum harvesting scheduled to
become quite a big industry in the next 12 months, that those opportunities will exist.

ELEANOR HALL: That's Grant King from South Australia's Limestone Coast Development Board, ending
that report from Annie Guest.

ANC to face its first real foe

ANC to face its first real foe

The World Today - Wednesday, 17 December , 2008 12:32:00

Reporter: Andrew Geoghegan

ELEANOR HALL: A new party launched in South Africa overnight could pose the first real challenge to
the ruling African National Congress, the party of Nelson Mandela.

The new party is called the Congress of the People. It's made up largely of ANC defectors who are
planning to challenge the ANC at the next election.

As Africa correspondent, Andrew Geoghegan, reports, the new party is attracting widespread support.

(Sound of crowd chanting)

ANDREW GEOGHEGAN: For the first time since the end of Apartheid in 1994 South Africa has a real
opposition.

MOSIUOA LEKOTA: The history of South Africa will never be the same again.

(Sound of crowd cheering)

ANDREW GEOGHEGAN: Thousands of people have gathered at a stadium in the city of Bloemfontein, in
the heart of the country, to launch the Congress of the People.

Former Defence minister, Mosiuoa Lekota, has been chosen to lead COPE, a party born out of
disillusionment with the ruling African National Congress.

MOSIUOA LEKOTA: Ours shall be a truly non-racial party, which will provide a home and voice to all
South Africans - irrespective of race, class or gender.

(Applause)

ANDREW GEOGHEGAN: The new party says the ANC Government is corrupt and out of touch, and claims
that the lives of many South Africans have not improved since the end of Apartheid.

MOSIUOA LEKOTA: When there is a systematic attack on the values that define us as a nation, we, the
Congress of the People, will hold hands with all South Africans to defend the values that define us
as a nation.

We have taken this stand, because we are the party of the future.

ANDREW GEOGHEGAN: Corruption allegations dog ANC leader Jacob Zuma, the man most likely to become
the country's next president.

He addressed a rival rally across town.

JACOB ZUMA: Comrades, the ANC is a learning organisation, we have learned from the mistakes of the
past 15 years. Especially the manner in which we may have, to some extent, neglected the people's
movement in our focus on governance.

ANDREW GEOGHEGAN: On the streets there are signs that the tide is turning against the ANC.

SOUTH AFRICAN MAN: Now the ANC, which was the party which was dominating, has got the opposition,
which is good for South African politics.

SOUTH AFRICAN WOMAN: I'm very, very, very, very glad that there is this wind of change going on in
our country. Because it's going to help in many ways.

MOSIUOA LEKOTA: The numbers of those who go and vote for us will increase every day from now until
election day.

(Applause)

ANDREW GEOGHEGAN: The true test of support for the Congress of the People will come next year when
South Africans go to the polls.

ELEANOR HALL: That's Africa correspondent, Andrew Geoghegan.

UN gives green light to fight pirates on land

UN gives green light to fight pirates on land

The World Today - Wednesday, 17 December , 2008 12:36:00

Reporter: Sara Everingham

ELEANOR HALL: The United Nations Security Council has unanimously backed a US resolution that
authorises countries to take their fight against Somali pirates onto Somali soil.

Pirates have seized another two ships off the Yemeni coast in the last 24 hours adding to the
dozens seized this year.

And the signs are that the lawlessness is set to continue.

Sara Everingham has our report.

SARA EVERINGHAM: International military forces are already allowed to take action against pirates
in Somali waters.

Now, for the first time they can take the fight onto Somali soil.

A resolution adopted by the UN Security Council allows states, for one year, to take all necessary
measures that are appropriate in Somalia to suppress acts of piracy and armed robbery at sea.

The US has been pushing for the changes, but Pentagon officials concede an attack on Somali soil
has its risks, including the possibility of civilian casualties.

David Shinn is the former US Department Coordinator for Somalia and a former ambassador to
Ethiopia.

DAVID SHINN: I wouldn't attach too much importance to it, in that I think it will rarely, actually
be used. Even the US Secretary of Defence, Robert Gates, plus several senior uniform military
officers have commented publicly in recent days that there isn't sufficient intelligence on the
ground, along the coast of Somalia, in order to carry out any kind of hot pursuit action on the
ground itself.

SARA EVERINGHAM: This is the fourth resolution on piracy the security council has passed this year.
It's estimated 100 ships have been seized by pirates off the Somali coast in the past 12 months.

Foreign navies have been unable to stop the attacks. David Shinn isn't sure the latest resolution
will help. He says the piracy problem won't be easily solved.

DAVID SHINN: In the first instance you have to solve the problem on the ground, and only then when
you have a government that controls Somalia, can you stop the problem on the high seas.

SARA EVERINGHAM: If political stability holds the key to stopping piracy, you can expect more
reports of hijacked boats.

Somalia's President has just added to the already rocky political climate in the country. He's
sacked Somalia's Prime Minister Nur Hassan, in spite of the opposition of the country's Parliament.
Nur Hassan is furious.

NUR HASSAN (voiceover): He doesn't have the power to dismiss the Prime Minister, the power to
dismiss the Prime Minister belongs to Parliament.

SARA EVERINGHAM: Kenyan Foreign Minister, Moses Wetangula, has condemned the move, imposing
sanctions against Somalia's President.

MOSES WETANGULA: As far as we are concerned there are not two governments. There is a government
and a cabinet headed by Prime Minister, Nur Hassan, and the President is Abdullahi Yusuf, and it is
important to inform them that the time of the transitional federal institutions has now seven
months to go, and they could be engaged in side shows when the storm is coming.

SARA EVERINGHAM: The storm he's talking about is the Islamic insurgency. It, along with other armed
groups, have been making daily advances. The transitional government only controls parts of the
capital, Mogadishu, and the town of Baidoa.

Nur Hassan says he's been ousted because he's been open to dialogue with the Islamist insurgents.

NUR HASSAN (voiceover): The aim is very clear, he's against the reconciliation process, he's not
thinking that the reconciliation process is the key to peace in Somalia. Instead of thinking about
peace in Somalia, he's thinking of his own position.

SARA EVERINGHAM: The transitional government in Somalia is backed by the Ethiopian military, but
it's due to leave the country at the end of the year.

David Shinn the former US ambassador to Ethiopia, says the transitional government is losing
ground.

DAVID SHINN: It was weak anyway, it's even weaker now. That's going to be bad for the international
community in terms of having any group with which it can work in the coming weeks.

And I think you're also seeing an increase in the authority on the ground of the more extremist
Islamist contingent, the al-Shabab group. And they will pose a real threat to taking Mogadishu when
the Ethiopians leave. As they say they will by the end of this year or the beginning of next year.

ELEANOR HALL: David Shinn who's the former US state department co-ordinator for Somalia, he was
ending Sara Everingham's report.

Security flaw found in Internet Explorer

Security flaw found in Internet Explorer

The World Today - Wednesday, 17 December , 2008 12:40:00

Reporter: Michael Edwards

ELEANOR HALL: Microsoft says it's working to fix a major flaw in its Internet Explorer Program
which is putting millions of people around the world at risk of online fraud.

The flaw means that hackers can take control of the computer via Internet Explorer and steal the
computer user's passwords.

Internet analysts say that millions of people are at risk and that anyone going online should
exercise extreme caution.

Michael Edwards has our report.

MICHAEL EDWARDS: A large percentage of the world's internet users access the web using Microsoft's
Internet Explorer program.

But a serious security flaw has been found in the browser which puts these users at risk.

Nick Broughall is an internet expert from Gizmodo, an online IT magazine.

He says it's a serious problem.

NICK BROUGHALL: Essentially there's a flaw in the design of pretty much every version of Internet
Explorer which allows hackers to control your system or install malware on your system if you
happen to view certain images that are on certain websites.

MICHAEL EDWARDS: Experts estimate hackers have compromised as many as 10,000 websites since the
flaw was found.

Millions of users could be at risk.

Nick Broughall says the major concern is identity theft.

NICK BROUGHALL: What Microsoft have found doing their research into this flaw, they've found that
most of the sites that are exploiting flaw have password stealing malware installed... installing
on people's computers.

So for the most part, yeah, it's your passwords that can be stolen, things you're your credit card
numbers if you type in your credit card number.

Malware is a nasty, nasty thing.

MICHAEL EDWARDS: Computer security experts says Internet Explorer users should be careful accessing
websites originating in China as well as pornographic websites.

Microsoft says it's investigating the problem and that it's working on a solution.

Nick Broughall says Explorer uses in the meantime should check their security settings and be
careful when browsing the internet.

NICK BROUGHALL: With this particular problem, at the moment, there's nothing you can do short of
really monitoring the websites that you visit to stop it. It's, it's really a doozy. Microsoft is
releasing a patch, probably tomorrow in Australian time, that should cover it up and that should
come through the automatic update on your, on your computer.

But aside from that there's not too much. You should probably head in, if you've got IT privileges,
you should head in and set the security level to high, and make sure your antivirus software is up
to date.

MICHAEL EDWARDS: Microsoft says there's no need for Internet Explorer users to switch browsers.

But Nick Broughall says this is something they should consider.

NICK BROUGHALL: Certainly another reason for people to consider other browsers, rather than just
stick with the default.

ELEANOR HALL: That's online expert Nick Broughall, ending that report by Michael Edwards.

Banks under fire for irresponsible lending

Banks under fire for irresponsible lending

The World Today - Wednesday, 17 December , 2008 12:44:00

Reporter: Simon Santow

ELEANOR HALL: They may have fared better than some of their international counterparts but a review
of Australian banks has found they're continuing to engage in bad lending practices.

The review was commissioned by the banking sector and it has found that, despite the credit crunch,
banks are continuing to write loans that are irresponsible.

Banks say they'll take the recommendations seriously, but they insist there's nothing fundamentally
wrong with the way that they do business.

Simon Santow has our report.

SIMON SANTOW: Jan McClelland says the year-long review process was a good opportunity to look at
what banks do well and at the same time it helped identify the problem areas.

JAN MCCLELLAND: I'm suggesting that the code include a key commitment to responsible lending, and
I'm also suggesting that there be stronger provisions in the code in relation to approval of credit
and also the making of unsolicited offers of credit limit increases to customers.

SIMON SANTOW: The Australian Bankers' Association may have paid for the review, but chief
executive, David Bell, isn't so sure about this particular finding.

DAVID BELL: No institution in the world is perfect, and banks are certainly not perfect. But having
said that, the evidence is on the board, banks in Australia are responsible lenders, and the
evidence of this is that the levels of defaults on our loans are very, very low.

And more broadly, if you compare our banking system with the rest of the world, we're in fine
shape. And the reason for that is because we are good and responsible lenders.

SIMON SANTOW: David Bell says the non-bank lenders are much less rigorous about who they lend money
to and give the industry as a whole a bad name.

DAVID BELL: The evidence from a whole range of sources shows that default levels, the levels of
delinquent loans, if you compare the banking sector to the non-APRA(Australian Prudential
Regulation Authority) regulated sector, there is a dramatic difference which shows the fact that
banks are good and responsible lenders.

SIMON SANTOW: Are you seeing a flight towards banks in these times? Are you seeing more customers
coming back from the non-bank sector?

DAVID BELL: Look, I haven't got those exact figures to hand, but I have seen information, or
evidence that shows people are, are if you like, moving towards banks. I guess you can understand
that, because we are strong and safe institutions and we are good lenders.

SIMON SANTOW: The review takes aim at a growing cash cow for banks, the so called exception fees.
Fees charged for everything from overdrawn accounts to dishonoured cheques.

JAN MCCLELLAND: I have made recommendations that there be full disclosure of such fees in material
that's provided by banks. But also that customers be advised of accounts which have low or no
exception fees.

SIMON SANTOW: Christopher Zinn is from consumer advocate group Choice.

CHRISTOPHER ZINN: Basically, all they're being pushed to do now is give full disclosure of the
fees, we'd argue that there is still a role actually for a challenge; legally are these fees
actually fair? We would argue not.

As far as we're concerned it's not just a question of disclosure, it's really a question of
notifying consumers that they're going to be hit with these fees and giving them the very real
option to avoid them.

At present that really doesn't exist, there are one or two banks that will send you an SMS if
you're about to overdraw an account, or do something that might expose you to a penalty fee, that's
right, the technology allows that.

But, many of the other banks are really dragging their feet. So, we think there's far more scope
for them to give people due warning that they might cop a fee like this.

SIMON SANTOW: It's a criticism the banks won't wear.

David Bell from the Bankers' Association.

DAVID BELL: Banks in Australia have taken steps to offer exception fee-free accounts, they have
reduced or got rid of exception fees, and our argument has always been is that the market should be
allowed to work.

It has worked, there is competition there, and these fees are coming down. We have listened to what
the community has said.

SIMON SANTOW: Choice says it's still receiving complaints from bank customers upset about being
bombarded with offers for increased credit.

Christopher Zinn, again.

CHRISTOPHER ZINN: We've heard stories just in the past few months of teenagers being sent
inducements to increase their credit limit up to, from five or $6,000, up to 10 or $12,000. So, one
would wonder about the due diligence which is done in sending out those offers.

ELEANOR HALL: That's Christopher Zinn from Choice speaking to Simon Santow.

Pioneer of bionic ear concerned about problems here

Pioneer of bionic ear concerned about problems here

The World Today - Wednesday, 17 December , 2008 12:48:00

Reporter: Alison Caldwell

ELEANOR HALL: On the thirtieth anniversary of the development of the cochlear implant, the
Australian scientist behind the technology has expressed concern about the number of people with
hearing problems who don't seek help.

Professor Graeme Clark has just taken up the inaugural post of Distinguished Professor at La Trobe
University where he'll continue his research on the next generation bionic ear.

Professor Clark spoke to Alison Caldwell.

GRAEME CLARK: Today or the next few days was momentous celebration in a way, because that was the
time a colleague and I discovered how to code speech using electrical signals, and that's what
people throughout the world said was not possible.

And that led to cochlear, that led to the most major breakthrough in hearing speech for deaf people
for the last 200 years. So, it was a quiet event at the time, but it's a momentous and a joyful
celebration.

That has meant that we've arrived, perhaps in cricketing terms, getting first innings points, we've
climbed the first mountain, but we still have a long way to go.

We can give children very good speech and language if they're operated on and trained at a young
age. We can give adults good speech language mostly, but they don't do very well in noise like a
lot of deaf people, and they can't hear and appreciate music very well.

So, in answer to your question, I would say we're hopefully a little more than halfway, but we've
still got a long way to go to get a complete outright win.

ALISON CALDWELL: Something like one in six Australians suffer from a hearing problem. But, there's
nowhere near that many people that actually do anything about it is there?

GRAEME CLARK: That's right. We have in Australia alone, nearly 100,000 people with a severe
(inaudible) hearing loss, and that means that they don't get really adequate help with a hearing
aid. And we know now that people even now with an implant can do better than people with a severe
loss, and a hearing aid in many cases.

So, there are many people who could really benefit, and we need to get the message across, we need
to continue to improve the performance and give them better results in noise, and let them realise
how important it is.

But, also the other aspect of this new unit that is being set up at La Trobe University, is it will
be combining research to improve and understand how hearing works, at the same time speech and
language, and of course those two go together.

We hope that this will be the new direction for the development of the cochlear implant. We've
reached a plateau in results, and what we do need now is a better connection with the auditory
brain. We're working with the University of Wollongong to use new materials and techniques.

But, we also have an excellent opportunity out at La Trobe to study the brain. We actually have,
particularly through Dr Tony Paolini's expertise, the ability to record from single brain cells,
and also shall we say, a hundred brain cells together.

And the brain doesn't work with single cells all connected, it's a whole group of cells and that's
what's exciting too.

ELEANOR HALL: That's Professor Graeme Clark who developed the bionic ear, speaking to Alison
Caldwell.

Jamestown nun the wiser, as last of the flock flies

Jamestown nun the wiser, as last of the flock flies

The World Today - Wednesday, 17 December , 2008 12:54:00

Reporter: Loukas Founten

ELEANOR HALL: Fewer Australians are taking up a career in the church, and that's hurting country
towns which rely on their clergy for more than just Sunday preaching.

In the South Australian outback community of Jamestown, the impact of this national trend is
particularly stark.

For more than 120 years the Sisters of St Joseph have served the town in the South Flinders Ranges.

But now Jamestown's last nun is leaving.

Loukas Founten has our report.

(Sound of school bell and children playing)

LOUKAS FOUNTEN: School's out for another day at St Joseph's School and Sister Eunice Barry opens
her door to let out a cheeky-faced six-year-old.

Sister Eunice has worked with hundreds, maybe thousands of children in her time.

Like other Josephite nuns, she travels around to local schools to help those most at need.

Sister Eunice Barry made her commitment to God 65 years ago.

EUNICE BARRY: I had a strong call to be a religious because of reading catholic periodicals. My
sister entered the convent and my brother became a missionary of the Sacred Heart. So it was quite
easy for me really to follow my religious vocation.

LOUKAS FOUNTEN: The Sisters of St Joseph were the first religious order to be founded by an
Australian. Mary MacKillop, a teacher from the south east of South Australia wrote up the rules of
the sisterhood in the 1860s with Father Julian Edmund Tenison-Woods, a Parish priest also from the
area.

The sisters emphasis educating the children of the poor, and more importantly go wherever they're
needed.

Sister Eunice has spent the majority of her life travelling around South Australia working in a
number of schools.

But now after 16 years in Jamestown, Sister Eunice has decided to move back to Adelaide.

The Principal of St Joseph's Parish School at Gladstone, Ros Oates, says after working with Sister
Eunice for ten years, her presence in both the school and community will be missed.

ROS OATES: We talk about Mary McKillop a lot, but to actually have a Josephite nun that comes in
once a week and is a living example of, I suppose of what we epitomise in regards to Mary McKillop,
is really important. And that's something we're really going to miss.

LOUKAS FOUNTEN: Sister Eunice's departure from Jamestown has highlighted the shortage of sisters
across the nation.

In days gone by, up to four sisters were posted in Jamestown, those numbers slowly dwindling until
Sister Eunice was left as the lone sister more than ten years ago.

EUNICE BARRY: Yes, it's a sad fact that there are no sisters able to come back to Jamestown. There
will be sisters around, but not actually in Jamestown. Which is a sad reflection that not many now
are entering religious life.

LOUKAS FOUNTEN: Sister Ruth Egar from the Sisters of Mercy facilitates the office of Vicar in the
Archdiocese of Adelaide.

She says only two sisters have joined the Sisters of Mercy in Adelaide in the past ten years.

RUTH EGAR: The Sisters of Mercy in Adelaide about 25 years ago at least, we started withdrawing
from the country places. So, we saw the writing on the wall much, much earlier, and have no country
places at all now.

But the Sisters of St Joseph have tried to honour their great commitment to rural life. But, I
guess they're just at the stage now where they perhaps can't fill the gaps.

LOUKAS FOUNTEN: Sister Ruth says the orders are now less visible due to less institutional
involvement and relaxed dress standards, but she doesn't think the move away from religious life is
a cause to panic.

RUTH EGAR: Strangely I don't. I think that the Holy Spirit works in great ways, always has in the
Church, and the Church goes through many, many changes in its lifetime. But, always there are very
committed, faithful people with great love who'll rise to the fore and take the Church into another
new place.

LOUKAS FOUNTEN: Sister Eunice is also optimistic.

EUNICE BARRY: Yes, it is a challenge to recruit people. There are some very wonderful young people
out there, and I'm sure God is calling some of them. But, maybe we have to wait a while to see
where the Holy Spirit is leading them.

LOUKAS FOUNTEN: After Christmas, Jamestown will be served by nuns from surrounding areas, but
Sister Eunice won't be letting up, she'll be visiting the sick in an Adelaide hospital.

As in the rules of the Josephite sisterhood, she's going where she's needed.

EUNICE BARRY: I hope it all goes well and there will be a blessed future for you and for me.

ELEANOR HALL: Jamestown's last nun, Sister Eunice Barry, speaking to our reporter, Loukas Founten.