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Economy stalls amid global crisis

Reporter: Stephen Long

ELEANOR HALL: The Australian economy has gone backwards for the first time in eight years.

The economy contracted by half a per cent in the final three months of last year - and grew by just
0.1 of a per cent in the previous quarter.

The news has surprised some economists who thought that stronger than expected figures for retail
sales and capital expenditure would see the economy continue to expand.

The stock market fell by more than two per cent immediately after the announcement and the Aussie
dollar shed half a cent against the Greenback.

Joining us now with the details is economics correspondent, Stephen Long.

So Stephen, there have been some indications that the economy would keep growing however slowly.
What has taken it backwards?

STEPHEN LONG: The biggest drag, Eleanor was a fall in inventories which is presumably businesses
running down stocks in anticipation of a downturn and possibly a recession; but overall these
numbers were weaker, weaker than expected.

The numbers for consumption and investment were weaker than the partial indicators suggested they
would be and also the big contribution that stopped it being a lot worse was a fall in imports and
import volumes. And that to me, would probably be a sign of the weakening of the economy with less
people buying stuff and less imports coming in.

And so, it is a pretty bad number and even though we aren't in recession technically on a very
technical definition, if you look at the non-farm and only just, only just - if you look at the
non-farm economy where after all most of us live and work, it has gone backwards for six months now
and gone backwards fairly strongly; 0.8 per cent seasonally adjusted. So the news is pretty bad.

ELEANOR HALL: The Government has injected a lot of money in to try and prevent a recession. What is
the prospect now that Australia can avoid falling into recession?

STEPHEN LONG: Well, on that very technical definition of two quarters of negative growth, it is
possible that we will avoid a recession. Because of that rundown of inventories, you would expect
that number to stabilise a little bit and not be such a drag in the next quarter.

But it is a very, very line ball proposition and pretty much anyone's guess and also that is a
purely technical definition. The fact is, 0.1 of a per cent positive versus negative. I mean, it is
neither here nor there - the economy is very weak.

And even the Reserve Bank which has taken a fairly upbeat view about the prospects is saying that
it is pretty much borderline. Malcolm Edey is an assistant governor of the Reserve Bank and he
spoke this morning in Sydney before the release of the numbers. Have a listen to what he had to
say.

MALCOLM EDEY: A recession is a significant period of economic contraction. It is pretty clear that
the major advanced economies like the United States, the Euro area, Japan, are in a recession by
that definition.

As far as Australia is concerned, I think the last forecast that we published which was a few weeks
ago in our quarterly economic statement, said that we think that growth will slow to about zero
over the period to June 2009. So on that basis, we would be borderline by the definition that I
gave you.

ELEANOR HALL: Fairly downbeat Malcolm Edey, assistant governor of the Reserve Bank there.

So Stephen, how is the Reserve Bank's decision to leave rates unchanged looking now?

STEPHEN LONG: Well, a month is neither here nor there but what I would say is that they are very,
very upbeat in bullish commentary about the prospects for the economy and how well we have been
going.

Probably looks a little bit shaky in the light of these numbers and I think it certainly ups the
likelihood that the Reserve Bank will look at further rate cuts as we move ahead, possibly in the
next month.

And I think most of the market economists and the financial market betting is anticipating that we
will now see further rate cuts and three-and-a-quarter per cent won't be the bottom as some
expected yesterday.

And I'll just stress the point that really it could be that we are actually in a recession now. I
mean these numbers are estimates and clearly things are pretty bad, Eleanor.

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

Figures prompt fresh look at federal budget

Reporter: Eleanor Hall

ELEANOR HALL: Well, someone who's also been monitoring the national accounts figures closely and
looking in particular at what they'll mean for the federal budget is the director of Access
Economics, Chris Richardson. He joins us now in Canberra.

Chris Richardson thanks for being there.

CHRIS RICHARDSON: Thanks Eleanor.

ELEANOR HALL: So did the Reserve Bank make the wrong call yesterday?

CHRIS RICHARDSON: It was a brave call. Australia is very, very well positioned against most other
rich nations around the world. Our economy is now shrinking. If I ignored the technical definition,
and I am happy to, I would say Australia is in recession already and it will get worse.

It is nice that we are better than many other economies. I worry that the Reserve Bank was a little
too brave. Even just in the last handful of weeks, things have gotten worse internationally.

Most importantly, you would now say that a number of banks in the US really are insolvent and do
need to be nationalised for a while so that money can start to flow again in the US economy.

That means that Australia and the whole world has to wait on the US political system to take the
big gulp and nationalise.

ELEANOR HALL: You say Australia is already in recession. Do these numbers put an end to the hope
that Australia can sort of ride it out when so much of the rest of the world is falling, in some
places, into very deep recession?

CHRIS RICHARDSON: I think our hope disappeared several months ago. Australia is very well
positioned against most of the other rich countries but the news around the world is extremely bad.

The simplest way to say it is the global banking system broke last September and because of that
recession is absolutely sweeping around the world and it is infectious. The more nations that catch
it, the more Australia is liable to catch it as well.

I can't imagine a scenario in which this isn't the very ugly year for Australia's economy.

ELEANOR HALL: The Federal Government has been trying to soften the public up for some bad numbers
but are these better than even the Treasurer may have been expecting?

CHRIS RICHARDSON: It is just one set of figures and it may have been worse than, certainly worse
than the Government hoped; but it is not the end to it. Australia comes late to this crisis; in
part because China gave us such superb protection all the way through probably until about
September last year.

However China too, has now slowed notably and China's slowdown is Australia's recession.

ELEANOR HALL: Do you believe the numbers from China - the official numbers?

CHRIS RICHARDSON: There is always a bit more politics than statistics in some of the numbers that
come out of China - but it clearly has slowed. And part of the slowdown there was deliberate; they
were trying to slow down because the economy was growing too fast.

But when this crisis hit the global banking system, it also hit confidence around the world and
especially hard in China and immediately construction demand fell away there; which meant demand
for steel and hence Australian iron ore and coal fell away too.

As the prices for Australian coal and iron ore fall away, it means the news in the short term does
get worse for us. Again, this is a short term thing, we get over this. But 2009 will be ugly.

ELEANOR HALL: And Chris Richardson, what will these growth figures for Australia mean for the
forward estimates and for the sort of budget we're likely to see in a couple of months time?

CHRIS RICHARDSON: During the boom federal Treasury's estimates are of the budget kept getting
better but getting better too slow, as indeed did Access Economics' matching estimates.

I think the same will be true on the way down. The Government's estimates of how bad the budget is
will continue to worsen for a while.

ELEANOR HALL: Chris Richardson from Access Economics, thank you.

CHRIS RICHARDSON: Thanks.

Terrorist attack causes havoc in the cricket world

Reporter: Simon Santow

ELEANOR HALL: To Pakistan now where authorities still haven't caught the gunmen responsible for the
attack on the Sri Lankan cricket team - an attack which killed eight people and injured several
more.

A dozen or so masked men staged the brazen attack as the cricketers travelled on a bus to the
Gaddafi stadium in the Pakistani city of Lahore.

Simon Santow has our report.

SIMON SANTOW: The Sri Lankan cricket team is now safely back on home soil - but it should be
competing in a test match against Pakistan.

Instead in the relative calm of Colombo, the players are left to look back at the nightmare of
Lahore less than 24 hours ago.

Their team bus was ambushed from four different directions.

Small groups of gunmen had arrived at the Liberty Square round-about in the heart of Lahore and not
far from the Gaddafi Cricket Stadium.

City police chief Haji Habibur Rehman.

HAJI HABIBUR REHMAN (translated): At around nine o'clock about 12 terrorists were there. They were
wearing masks. They came by rickshaw according to our information and they tried to attack the Sri
Lankan team. The police put up a lot of resistance and I am very proud of my officers. They
sacrificed a lot. Five were killed and four or five were injured.

SIMON SANTOW: Police and witnesses say the gunmen used rifles, grenades and even a rocket launcher
in a frenzied attack lasting a few minutes.

Englishman Paul Farbrace is the team's assistant coach and was on the bus.

PAUL FARBRACE: I got hit in the arm. There were three of us all on one side quite close to the
front of the bus. Either side of me, the two lads that sit one in front, one behind, one hit in the
chest, one got some back and back of his head injuries and mine was in the side of my arm.

SIMON SANTOW: Also fired upon was a minivan trailing the team bus.

In it were Australian umpires Simon Taufel and Steve Davis and other officials.

STEVE DAVIS: It seemed like ages and suddenly the door opened and a policeman came into the van and
then he laid across the top of Chris and Hussain. I think he was more trying to protect himself and
then the door closed and we just wondered how long we were going to be there.

I really thought that was the end of it. I thought that was our moment. There was some yelling and
shouting of 'try and get this van out of here' because the Sri Lankan bus evidently had, the driver
had fortunately not been hit down. He drove their bus to the stadium and we were left there.

ADAM SPENCER: Because at this stage the driver of your bus, of course, had been killed and there
was no-one who could move the bus if you wanted to.

STEVE DAVIS: That's right and a policeman got into the driver's seat and just hurtled the bus, our
bus towards the stadium and we got Hussain into the ambulance people and we just went into the
stadium. Pretty shook up obviously.

SIMON SANTOW: The chief executive of the International Cricket Council Haroon Lorgat says Pakistan
will have to play all of its matches overseas.

HAROON LORGAT: I think it is difficult to see international cricket being played in Pakistan in the
foreseeable future.

SIMON SANTOW: It's been more than 10 years since Australia accepted an invitation to play test
cricket in Pakistan.

PETER YOUNG: Elite cricket in Pakistan is off the agenda in the short term. We are still keen to
play Pakistan and world cricket, if it is to be a genuine global sport, needs Pakistan cricket to
be healthy.

SIMON SANTOW: Peter Young from Cricket Australia says already tight security for the Australian
team will now be reviewed.

PETER YOUNG: We have a very careful, close and expert approach to assessing security these days,
regardless of where we travel. Regrettably we live in an increasingly uncertain world and we have
to take facing security very, very seriously just as say the Olympics does.

If you recall the Olympics when it was played in Sydney, the ring of security that they had to put
around the Olympics is the sort of thing which unfortunately is becoming increasingly common in
global sport.

SIMON SANTOW: Some of Sri Lanka's cricketing luminaries are questioning why their team was allowed
to take a risk.

Former captain, Hashan Tillekeratne:

HASHAN TILLEKERATNE: They all knew that they hassled me as security problems in Pakistan and after
Australia and India refused to come to Pakistan, I don't know why we wanted to send a cricket team
to Pakistan.

SIMON SANTOW: It seems certain that the days of taking risks over a cricket tour have come to an
abrupt end.

ELEANOR HALL: Simon Santow reporting.

Cricket no longer immune to terrorism, say diplomats

Reporter: Emily Bourke

ELEANOR HALL: The world's leaders have unambiguously condemned the deadly shooting in Pakistan.

And Australia's Foreign Minister Stephen Smith says the targeting of cricket players represents a
worrying new shift in terrorist tactics.

Emily Bourke has our report.

EMILY BOURKE: The United States is the latest country to condemn the attack on the Sri Lankan
cricket team.

But during a press conference with the British Prime Minister Gordon Brown, the US President Barack
Obama spoke broadly about the fight against terror in both Pakistan and Afghanistan.

BARACK OBAMA: Obviously we're deeply concerned but let me just make a general statement: both Great
Britain and the United States share a deep interest in ensuring that neither Afghanistan nor
Pakistan are safe havens for terrorist activity.

The truth is that the situation in Afghanistan has deteriorated. The safe havens for al-Qaeda
remain in the frontier regions of Pakistan.

EMILY BOURKE: In Washington the US State Department's Gordon Duguid was more forthcoming about
America's outrage.

GORDON DUGUID: We condemn this vicious attack on innocent civilians but also on the positive
relations that Pakistan and Sri Lanka are trying to enjoy. This is not just an attack on
individuals: this is an attack on peaceful, normal relations.

EMILY BOURKE: There has been no claim of responsibility but some Sri Lankan officials fear a
possible link with the military offensive against ethnic Tamil rebels in the island's north.

In Pakistan, the Prime Minister Yousuf Gilani has described his country's relations with Sri Lanka
as 'very good'.

But he has conceded Pakistan's image has suffered.

YOUSUF GILANI (translated): Our relations with Sri Lanka are very good. They came here on our
invitation and their protection was our responsibility. I feel that this incident has humiliated
the country and the whole nation. This has tarnished the prestige of Pakistan.

EMILY BOURKE: The head of Pakistan's Interior Ministry, Rehman Malik said his country is in a state
of war while also suggesting the masked gunmen may have come from outside Pakistan

REHMAN MALIK: The democracy of the country is being undermined. Pakistan is under continuous
aggression and the father has been targeted with the view to bring bad name to the country and I do
not overrule foreign handling.

EMILY BOURKE: By striking South Asia's most popular sport, Pakistani security analyst and retired
army lieutenant general Talat Masood says the attack shows a frightening shift.

TALAT MASOOD: I think it is shocking in a way especially against cricketers and Pakistan is one of
those countries which loves cricket. So it is a great shock not only to those people who are there
in Lahore but also to the entire country, and I sure to the entire international community.

Because sports in the one area where we thought that, you know, the militants should not be
operating and it appears that, you know, they are not sparing any area.

EMILY BOURKE: The Australian Foreign Minister Stephen Smith says the assumption that sport and
indeed cricket is out of bounds from terrorism no longer applies.

STEPHEN SMITH: This makes the point, irrespective of what position you occupy, irrespective of what
pursuit you follow, you are not immune from terrorist activity and that is why Australia and
international community need to stare down the terrorist threat that we see in this region.

I made the point when I returned from Pakistan that the very clear impression I was left with when
I had my conversations with President Zardari and Foreign Minister Qureshi and Chief of the Armed
Services Kyani, that Pakistan now understood that what it was dealing with was not just a problem
associated with the Afghanistan-Pakistan border, which had implications for Afghanistan, but this
was very much an existentialist threat to Pakistan itself.

ELEANOR HALL: That is the Australian Foreign Minister Stephen Smith ending that report by Emily
Bourke.

Ambassador speculates on foreign involvement

Reporter: Eleanor Hall

ELEANOR HALL: Pakistan's ambassador to the United States, Husain Haqqani, says he was shocked by
the attack and that he would not yet rule out any international terrorist group from being
responsible for it.

But he would not be drawn on reports that a Pakistani Minister is already pointing the finger at
India.

Ambassador Haqqani spoke to me from Washington earlier today.

Ambassador Haqqani, what was your reaction when you got the news? Were you shocked at the targeting
of a cricket team?

HUSAIN HAQQANI: It certainly was a shock and nobody expected the Sri Lankan team to be targeted. In
the past when the Australian tour was contemplated and the Indian tour, people did raise security
concerns on grounds of Australia's involvement in the Iraq and Afghan military operations alongside
the United States.

Sri Lanka seemed like a very safe bet. Nobody in Pakistan has any animus towards Sri Lanka and it
was not expected that there would be such an attack on Sri Lankan players.

ELEANOR HALL: What is the latest from Pakistan? Is there any word yet on who was responsible for
this attack?

HUSAIN HAQQANI: When the Indian side blamed Pakistan within minutes of the Mumbai attack, Pakistan
took the position, which was the correct position, that allegations should not be levelled without
proper investigation.

I think because of that, we will stick to that principle and not start sharing titbits of
intelligence. We would rather complete the investigation and then ascertain who was responsible.

ELEANOR HALL: Are you saying that there are some hints, some signals about who might be
responsible?

HUSAIN HAQQANI: I don't think it is appropriate for us to get into this speculative round or
discussion.

ELEANOR HALL: Now you say that there was immediate finger pointing after the Mumbai bombings and
there should be no finger pointing now. However Pakistan's Shipping Minister is quoted in Reuters
as blaming the Indian Government saying that it is trying to destroy Pakistan's international
reputation in retaliation for the Mumbai attacks. What is your view of that position?

HUSAIN HAQQANI: I think I have already stated my position and I will stick to that.

ELEANOR HALL: You are saying that the Pakistani Shipping Minister shouldn't be making these sorts
of comments?

HUSAIN HAQQANI: I am not a television or radio anchor person so I don't indulge in commenting on
other people's statements. I only make mine.

ELEANOR HALL: How damaging is this for the Pakistani Government which had guaranteed the Sri Lankan
teams security?

HUSAIN HAQQANI: Terrorism is a global reality. Unfortunately no-one can guarantee 100 per cent that
there would be no act of terrorism. The good and important thing is that the Pakistani security
personnel laid down their own lives to protect and save the Sri Lankan cricketers. So in that sense
Pakistan kept its word and did fulfil its end of the bargain.

ELEANOR HALL: Do you think this was an attempt to destabilise the Government?

HUSAIN HAQQANI: I think that the Government of Pakistan and democracy, a government in Pakistan
that is resolved to fight terrorism and a democracy in Pakistan is something that terrorists
certainly do not like.

So to that extent, the terrorists in each of their targets; whether it is the Mumbai attacks,
whether it is the attack at Lahore, whether it is all the other terrorist attacks that have taken
place, including the Marriott Hotel bombing in Islamabad, the purpose has been to undermine
democracy, to weaken Pakistan's Government that has the people's support and that has the resolve
to fight terrorism.

The terrorists would prefer a government that did not have the kind of resolve that President Asif
Ali Zardari and Prime Minister Gilani have shown.

ELEANOR HALL: And to what extent do you think the terrorists have succeeded? Has this damaged
Pakistan's international reputation and indeed its authority at home?

HUSAIN HAQQANI: I think that it is important to remember that every act of terrorism confers on the
terrorist a degree of strength in the sense that they feel ah, we got away with it. So it is very
important to find the terrorists, punish them and make sure that future acts of terrorism do not
take place and that terrorists in their safe havens are eliminated.

ELEANOR HALL: The Indian Government is calling on the Pakistani Government to, as it says - to once
and for all - dismantle the terrorist networks in Pakistan. Is that a fair call?

HUSAIN HAQQANI: I think that the entire international community needs to work together to eliminate
all terrorist networks that operate in any part of the world. We all need to share intelligence. We
all need to share with each other the information that will enable the dismantling of terrorist
infrastructure wherever it might exist.

ELEANOR HALL: So does the Pakistani Government need more international assistance to deal with this
insurgent threat - particularly in the country's north-west?

HUSAIN HAQQANI: Pakistan has been working with the international community to ensure that we get
more support and build greater capability for our armed forces as well as other intelligence
services in dealing with the insurgency and the terrorist threat throughout Pakistan.

ELEANOR HALL: Now you have also been Pakistan's Ambassador to Sri Lanka. You know well the
situation there. Do you think there is any chance that Tamils could be responsible for this attack?

HUSAIN HAQQANI: Terrorist groups that attack governments and wage insurgencies can act and attack
anywhere. So without, again, going into the speculative round of who is responsible without the
investigation having been completed, I would not rule any group or any potential group out.

ELEANOR HALL: Ambassador Haqqani, thanks very much for speaking to us.

HUSAIN HAQQANI: Pleasure talking to you.

ELEANOR HALL: That is Pakistan's Ambassador to the United States, Ambassador Husain Haqqani
speaking to me from Washington.

US foreign policy shifts on several fronts

Reporter: Kim Landers

ELEANOR HALL: The Obama administration has given some clear indications today that it has no qualms
about shaking up US foreign policy.

The administration reached out to Russia for help in dealing with Iran's nuclear ambitions and on
the same day it began making overtures towards Syria.

Washington correspondent Kim Landers has our report.

KIM LANDERS: Relations between the United States and Russia have been strained lately. So when
Americans awoke to a newspaper report that President Barack Obama had sent a secret letter to his
Russian counterpart, it sounded intriguing.

The New York Times claimed that Barack Obama had told the Russian President Dimitri Medvedev that
he'd back off deploying a US missile shield in Eastern Europe if Moscow would help stop Iran from
developing nuclear weapons and long range missiles.

Barack Obama has confirmed he's written a lengthy letter to the Russians.

BARACK OBAMA: The way it got characterised, I think, was as some sort of quid pro quo. It was
simply a statement of fact that I have made previously which is that the missile defence program to
the extent that it is deployed, is designed to deal with, not a Russian threat, but an Iranian
threat.

KIM LANDERS: The US missile shield is due to be installed in Poland and the Czech Republic and it's
vehemently opposed by Moscow.

The US insists it's designed to protect Europe and America from a long range missile attack by
Iran, which Washington believes is trying to develop nuclear weapons.

President Obama says he's striving for a 'constructive' relationship with Russia.

BARACK OBAMA: I've said that we need to reset or reboot the relationship there. Russia needs to
understand our unflagging commitment to the independence and security of countries like Poland or
Czech Republic. On the other hand we have areas of common concern - the issue of nuclear
non-proliferation and the issue of terrorism.

KIM LANDERS: Defence Minister Robert Gates is also trying to soothe Russian suspicions.

ROBERT GATES: And so I don't think anybody was trying to put the Russians on the spot. This really
was about saying - look here is the cause of the concern, can we do something about the cause and
if not, then what can we do together to deal with a potential threat to you, the Russians as well
as Western and Eastern Europe.

KIM LANDERS: Russian President Dimitri Medvedev says he's pleased the US seems to be indicating a
more flexible approach to the missile shield program.

Barack Obama's letter to the Russians was delivered three weeks ago. It's is an early gesture from
his fledgling administration of how he might reshape American foreign policy.

There's also been a change in Middle East diplomacy. During a visit to Israel, Secretary of State
Hillary Clinton has announced that the US will dispatch two senior envoys to Syria. They'll begin
discussions with the regime of President Bashar al-Assad.

HILLARY CLINTON: We have no way to predict what the future with our relations concerning Syria
might be. Again, we don't engage in discussions for the sake of having a conversation. There has to
be a purpose to them. There has to be some perceived benefit accruing to the United States and our
allies and our shared values.

KIM LANDERS: Hillary Clinton's statement is the most significant sign yet that the Obama
administration is considering restoring ties with Damascus. There are plenty of foreign policy
challenges facing the Obama administration.

President Obama has ordered a review of the Afghanistan policy and he's sending Vice-President Joe
Biden to Brussels next week to hold talks with NATO allies and top officials there about both
Afghanistan and Pakistan.

This is Kim Landers in Washington for The World Today.

Clinton visit sets scene for showdown

Australian woman charged over Ramos Horta shooting

Reporter: Sara Everingham

ELEANOR HALL: An Australian woman has been charged over last year's attempted assassination of the
East Timorese President Jose Ramos Horta.

Angelita Pires is among 28 people charged over the attack.

East Timor's prosecutor-general says she has been charged with conspiracy and faces up to 12 years
in jail.

Sara Everingham has our report.

SARA EVERINGHAM: Just over a year after the East Timorese President Jose Ramos Horta was shot down
outside his Dili home and Prime Minister Xanana Gusmao's convoy was ambushed East Timor's
prosecutor-general has announced 28 people have been indicted over the attack.

The prosecutor-Ggneral is Longinious Montiero.

LONGINIOUS MONTIERO: On this particular indictment we accuse 28 defendants which, based on the
investigations made, might be responsible for certain crimes committed during, while, before the
11th and after the 11th of February.

SARA EVERINGHAM: Most of those who've been charged are former soldiers, three are civilians. Their
charges include attempted homicide and using illegal weapons to disrupting the public order.

Longinious Montiero says he's confident the cases are strong.

LONGINIOUS MONTIERO: For the overall case we have some confident.

SARA EVERINGHAM: That's not good news to the family of 42-year-old Angelita Pires who's been
charged with conspiracy. Pires was born in East Timor but her family fled to Darwin in 1975.

She's the former lover of rebel leader Alfredo Reinado who was shot and killed in the attack on the
11th of February.

She's long maintained her innocence and her brother spoke in her defence on local radio in Darwin
this morning.

ANTONIO PIRES: She is confident in the sense that she knows that she didn't, that she was not
involved. However though from our perspective we fear simply because of our understanding of the
way the law operates in East Timor.

SARA EVERINGHAM: Twenty-three of those who've been charged are in prison.

The prosecutor-general says the rest are in East Timor but not in custody

LONGINIOUS MONTIERO: The rest of them, they are in the bail. Some will be in house arrest, some in
town arrest but at least they're around Dili and all of them being notified about these
indictments.

SARA EVERINGHAM: Because she's been a suspect Angelita Pires has been unable to return to Australia
and the prosecutor-general expects the restrictions on her movement will stay in place. If
convicted she could serve a maximum of 12 years in prison.

LONGINIOUS MONTIERO: For particular guess there will be between three to 12 depending on the judge
and other things. How to defend herself based on our applications.

SARA EVERINGHAM: Longinious Montiero says the high level charges such as attempted homicide could
attract gaol terms of up to 20 years.

He says the court documents name Marcelo Caetano as the person who's alleged to have shot the
President. It could be two months before a date is set for the trial of the 28 people facing
charges.

ELEANOR HALL: Sara Everingham with our report.

Victoria's fire threat eases

Reporter: Rachael Brown

ELEANOR HALL: Victorian fire authorities this morning declared that the state's fire threat has
eased and that people can return to their homes.

The town of Flowerdale was one of those communities hit hard by the fires and its oval has been
transformed into a temporary accommodation centre.

But Flowerdale residents were surprised to learn that they'd be charged rent.

Rachael Brown is in Flowerdale and she joins us there now.

So Rachael, what's does this temporary community at Flowerdale look like?

RACHAEL BROWN: Well what used to be the community's hub of recreation, there is still a cricket
pitch there and a tennis court has now become the community's accommodation hub.

There are portables, caravans, children are still carrying on as you would expect, running around.
I saw some laughing, throwing rocks at each other and thoroughly enjoying being shown the army
helicopter. They were treated to sit in that today.

But you can tell they are a bit sick of the upheaval. I watched one woman carry her laundry and was
quite surprised to be meeted by a whole team of cameras. But the reason we were out here today,
some of the temporary accommodation has started to be put up.

They kind of resemble IKEA kits someone said to be and watching it, it was like a tetris game being
put together and those houses, those temporary accommodation, will house 25 families to start with.
It could be up to 45 depending on how many families decide to take up the opportunity and they
should start moving in next week when those temporary accommodation units have power.

We spoke to one resident, Michael Minton and he explains why he'll definitely be staying.

MICHAEL MINTON: As long as it takes to rebuild. You know, as soon as possible. We would like to
build a property here or purchase a property and however long that is going to take. We don't know.
We've been told the clean-up is going to be quite a lengthy procedure. So we have no idea really.

INTERVIEWER: There must be a real feeling of community here simply because you are all in the same
bucket, put it this way, the same boat.

MICHAEL MINTON: That's right. Yeah, if we were on our own, if it happened just to us we would be
overwhelmed by it, just wouldn't know where we would be. But because everyone has had the same, is
in the same boat, the support and being able to talk about with other people about it has made it a
lot easier.

ELEANOR HALL: That is Flowerdale resident Michael Minton who is taking up the opportunity for that
temporary accommodation.

So Rachael, those moving in will have to pay rent. What can you tell us about that?

RACHAEL BROWN: Yes, I was surprised by that. For the first 12 weeks it will be free but the Premier
John Brumby explained after that residents will have to pay a nominal fee of $40 to $50 a week for
the standard units and that is for a basic maintenance fee.

And then your larger houses, your two to three bedroom houses, families might have to pay up to
$100 a week and caravans also have to pay a small maintenance fee for up keep.

Now we asked the Premier why the money couldn't have come out of the bushfire appeal fund but he
explained why he thinks rent is appropriate.

JOHN BRUMBY: And that makes it sort of fair across the board otherwise you know you are going to
have some big disparities between different groups and different families and some in private
accommodation and some in motels and so on.

So it's, it's, it's, I think a very modest amount but it is an appropriate balance and to be honest
I don't think it is going to cause difficulties to families.

ELEANOR HALL: That is the Victoria Premier John Brumby and our reporter Rachael Brown in
Flowerdale.

Federal Government sets a goal by degrees

Reporter: Alexandra Kirk

ELEANOR HALL: The Federal Education Minister said today that by 2025, she wants 40 per cent of
young Australians to have a university degree.

Julia Gillard was responding to the Bradley Review of Higher Education which called for an
injection of $6-billion to overhaul the sector.

But while she was sympathetic to the goals the Minister would not commit just yet to the price tag.

In Canberra, Alexandra Kirk reports.

ALEXANDRA KIRK: The Federal Government's 'education revolution' is on its way, albeit more slowly,
now, thanks to the global recession.

JULIE GILLARD: The Bradley Review was initiated in easier economic times. Since then we have seen
the global financial crisis, the global recession and its impact on our economy including its huge
impacts for government revenue.

We have got to be very careful with every government dollar in the current times.

ALEXANDRA KIRK: The Deputy Prime Minister and Education Minister, Julia Gillard, says it's time for
major structural reform of the higher education system and today she's outlined the principles
underpinning the Government's overhaul.

Broadly following Professor Denise Bradley's findings; Professor Bradley and her team pushed for 40
per cent of young Australians to have at least an undergraduate degree by 2020.

Ms Gillard says the Government accepts the challenge.

JULIE GILLARD: I announce today that our ambition is that by 2025 40 per cent of all 25 to 34 year
olds will have a qualification at Bachelor level or above.

ALEXANDRA KIRK: That's five years slower than recommended.

The Bradley Review also proposed a voucher style model - shifting from funding institutions to
funding students - letting them drive demand. The Government's accepted the broad thrust of the
idea but stopped a bit short.

JULIE GILLARD: All universities will be funded on the basis of student demand from 2012. This means
that we will fund a Commonwealth supported place for all domestic students accepted into a
eligible, accredited higher education course at a recognised public higher education provider.

Universities will not receive funding for places they do not deliver.

ALEXANDRA KIRK: The funding floor will be maintained this year and the next two, to help
under-enrolled universities adapt to the new system and ensure unis don't grow too quickly at the
expense of quality.

JULIE GILLARD: And the current cap on over enrolment will be raised from five to 10 per cent from
2010 and then wholly removed in 2012.

Let me be clear about one important point. This is not a voucher. Students will not be receiving a
set dollar entitlement to be re redeemed at an institution of their choice.

ALEXANDRA KIRK: The Government won't reveal how much it will spend until Budget night - the Bradley
Review urged an extra $6-billion boost. But the Minister will flesh out more details on education
equity and the TAFE system over the next few days.

To ensure taxpayers get value for money there's to be a new national regulatory and quality agency
to accredit providers and audit the standard of university degrees.

JULIE GILLARD: The era of directives about what Australians can study and where, and the cultural
war waged by politicians against subject offerings, course content and research subject matter, are
over. If I could characterise this system in just four words it would be this 'politicians out,
students in'.

ALEXANDRA KIRK: The vice-chancellor of the Australian National University, Professor Ian Chubb
likes what he hears so far.

IAN CHUBB: I think broadly Alex it is the right direction to take.

ALEXANDRA KIRK: Are you disappointed the Government hasn't put a dollar figure now onto it?

IAN CHUBB: Well, yes but I am not surprised. I mean I have been saying all along that I think that
we could expect to wait until the Budget to see if any dollars come. But I think what we wanted was
a vision and I think that, you know, that plus the other speeches that the Minister today referred
to will paint the vision out for us.

ALEXANDRA KIRK: Do you think that mergers will be inevitable now as a result of the changes?

IAN CHUBB: My personal view is that structural arrangements between institutions should change and
it should be improved. Now whether that goes to a full merger or whether it goes to memoranda and
pathway agreements and exchanges and cross-crediting and all of those sorts of things, I think is a
very important part of the agenda for the future.

ALEXANDRA KIRK: Do you accept that the global financial crisis will mean that the extra funding to
the tertiary sector will have to be spread out over a much longer time?

IAN CHUBB: It depends on how long and how much (laughs). So you could make some very significant
inroads to some of what is needed by a reasonable injection relatively soon and let it grow. I
mean, whilst the dollars aren't attached, the implications are there that dollars will have to flow
to support that growth.

ELEANOR HALL: Professor Ian Chubb is the Vice-Chancellor Of Australian National University. He was
speaking to Alexandra Kirk.

Gandhi's gear to go under the gavel

Reporter: Meredith Griffiths

ELEANOR HALL: India's Mahatma Gandhi has long been revered internationally as a peaceful protester
who renounced worldly possessions to live amongst the poor.

But now more than half a century after his death, his simple belongings are at the centre of an
unholy row.

A US auction house has sparked a cross continental dispute by preparing to sell some of Gandhi's
possessions as Meredith Griffiths reports.

MEREDITH GRIFFITHS: A New York auction house is a far cry from the commune that Ghandi set up to
lead a self-sufficient and simple life.

But later this week, collectors are due to descend on Antiquorum Auctioneers to bid for Ghandi's
worn leather sandals, a pocket watch and simple brass bowl and plate and his pair of distinctive
round wire-rim spectacles.

They're being sold by James Otis, a self-declared Gandhi disciple who says he obtained the
possessions from the Indian leader's family

JAMES OTIS: I don't think many people know that Gandhi himself believed in auctions and he in fact
auctioned off many of his own gifts that he'd got. I think he stated that such that he believed in
the competitive good nature of people bidding on things, if the money were to go to good causes.

And my intent is to provide and give a majority of the money that I get from these items to teach
non-violent theory, to promote those that believe in non-violence, like Nelson Mandela or like
Corazon Aquino or Vaclav Havel.

MEREDITH GRIFFITHS: But his plans have upset Gandhi's descendants. The activist's great-grandson
Tushar Gandhi says the items belong to the people of India.

He's been trying to raise at least $US300,000 to have a serious chance of buying the items at the
auction but he hasn't come up with the cash.

TUSHAR GANDHI: It was too late to go to the people and hope that common Indian people would be able
to donate for such a large amount of money as required and so we have fallen very short of it and
as I said in the beginning, we don't have even enough money to qualify to enter the bidding
process.

So that initiative of mine has failed; but not because people did not donate. It's just because the
kind of people who were enthusiastically donating, were not really in the position to donate the
kind of money that is required in this auction.

MEREDITH GRIFFITHS: The High Court in Delhi has issued an order to put a stay on the auction and
India's Tourism and Culture Minister says the Foreign Ministry would ask the US State Department to
prevent the sale.

But Tushar Gandhi is urging the Indian Government to go further and secure the items itself -
saying they're a crucial part of the country's inheritance

TUSHAR GANDHI: Two days. Two days remaining and effectively only 12 hours remaining for us to do
anything, to be able to ensure the return of the goods and I am emphasising on this, the return of
Bapuji's belongings to India.

Because stopping the auction is one thing, but ensuring that what belongs to India comes back to
India, is a totally different ball game and I hope the Government of India understands this
difference and behaves in a manner where it will be guaranteed that those things will come back to
India.

What belongs to India, what belongs to the father of the nation comes back to India.

MEREDITH GRIFFITHS: James Otis says he's planning to meet with Indian officials to discuss the
auction.

He has suggested he may give up the items.

JAMES OTIS: I've mentioned many times that if they might be interested in increasing the amount of
money that they give to their poor, they currently now give one per cent of their GDP to the
poorest of India.

I've suggested that if they give five per cent of the GDP to the poorest of India I would gladly
donate all of these belongings to the Government.

MEREDITH GRIFFITHS: The auction house says that selling the items would actually make them more
available to the public.

It's set a price of $20,000 to $30,000 for the glasses, sandals, watch and crockery but expects the
bids to go much higher.

ELEANOR HALL: Meredith Griffiths reporting.