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Banks slammed for keeping rates high

Banks slammed for keeping rates high

The World Today - Wednesday, 8 April , 2009 12:10:00

Reporter: Simon Santow

ELEANOR HALL: But we begin today with the Federal Government's anger with the banks over their
refusal to pass on the latest cut in official interest rates.

The Treasurer, Wayne Swan, warned the big four banks this morning that they risk blunting the
Reserve Bank's attempt to deal with the economic crisis if they don't allow its cuts to flow
through to consumers.

Yesterday the NAB said it would not react at all to the cut in rates. The Commonwealth said it
would pass on less than half of the cut and Westpac and the ANZ are yet to announce their response.

But both sides of politics are now asking the banks to justify their rationale that they can't
afford to pass on the official rate cut.

Simon Santow has our report.

SIMON SANTOW: Wayne Swan finds himself stuck between the rock of Australia's relatively stable
banking system and the hard place that is the independence of the big four banks when it comes to
passing on rate cuts from the Reserve Bank.

WAYNE SWAN: I can simply observe that if are (phonetic) going to pass through, blunts the
effectiveness of monetary policy and given that we are all in this global financial crisis
together, it will be good if the banks played their part as we go through this part of the cycle.

SIMON SANTOW: The Federal Treasurer told Radio National this morning he's called the banks and
asked them to work in concert with the RBA but his pleas have fallen on deaf ears.

WAYNE SWAN: The banks say that their funding costs now are higher and are therefore saying that is
why they don't have the capacity to pass on this 25 basis point cut. I would like to see them
justify that in the court of public opinion.

I can't see it myself and certainly I have observed that they ought to have the capacity to pass on
this 25 basis point cut and I think people are going to take a pretty dim view of the activities of
those banks that aren't passing on.

SIMON SANTOW: Opposition leader Malcolm Turnbull shares Wayne Swan's frustration.

MALCOLM TURNBULL: I am very disappointed that the banks have not passed them on. The banks have
received enormous support from the Government. They have got the benefit of a deposit guarantee.
They have got the benefit of a wholesale term funding guarantee and really the least they can do is
pass on these cuts in official rates.

The banks are doing very, very well at the moment; particularly the big four. They are doing very
well, competitively and in every other way.

SIMON SANTOW: All four major banks were approached by The World Today to explain their latest
thinking on interest rates, but they chose not to make themselves available for comment.

In written statements both the Commonwealth and the National Australia Bank argued that their rates
were already about a quarter of a per cent lower than the best rates offered by ANZ and Westpac.

They both referred to their own higher borrowing costs and the Commonwealth says it is also paying
the price for 'intense competition' on term deposits.

A spokesman also told the ABC that more than 90 per cent of the bank's customers pay less than the
standard variable rate anyway.

Shaun Cornelius, the chief executive of interest rate comparison website, Infochoice, says
customers ought to think beyond the big banks.

SHAUN CORNELIUS: By and largely, there are a lot of smaller banks and credit unions that have
passed on the majority of the cuts if not all and they tend to have, some of them have some very
low, aggressive variable and fixed rates in the market.

Looking at the Infochoice website there is some rates around five per cent today and that is pre
the recent cuts; so lower than the big four. So there are some good products out there, outside of
the well-known big four banks.

SIMON SANTOW: Ian Rogers is a banking writer and currently edits specialist website, The Sheet.

He's scathing about what he says amounts to collusion and co-ordinated messages coming from the
major banks.

IAN ROGERS: It is important to remember that the banking industry in Australia is an oligopoly and
it is really fair to call it a cartel and it is no surprise that the banks that are in the cartel
would go about undertaking price coordination and cartel behaviour.

And you know, from my following of the public behaviour and the public statements of various banks
over the last few weeks, there has been a clear effort in the normal way the banks go about these
things, which is talking in public about what they are thinking about, to coordinate an increase in
margins on home loans and no doubt on other loan products as well; and that is what is going on.

SIMON SANTOW: So you don't believe them when they say that they really are facing increased
borrowing costs themselves?

IAN ROGERS: Well it is true that the premium that banks have to pay over benchmark rates is higher
now than it was before the crisis but it is also true that the premium the banks pay now is lower
than at the peak of the crisis.

Now obviously some term money raised in say 2006 has to be refinanced this year and so the overall
cost of that funding will go up but it is also true that benchmark interest rates, as influenced by
the cash rate target of the Reserve Bank and every other central bank, are well down.

It is also the case that term deposit money is significantly cheaper at the moment than it was 12
months ago which reflects the easing in monetary policy and whilst there is a lot of competition to
raise retail deposits and particularly term deposits at the moment, the fact is that the cost of
retail funds is coming down at the moment compared to where it was six and 12 months ago.

To some extent banks have a point but mostly they don't and the reason that mostly banks don't have
a point is because it is the oligopoly nature of the industry. It is the cartel behaviour. It is
the coordination in pricing, that really explains why banks are doing what they are doing and they
are doing it because they can get away with it.

ELEANOR HALL: That is banking writer and now editor of The Sheet, Ian Rogers, ending that report
from Simon Santow.

Mortgage industry report weakens banks' argument

Mortgage industry report weakens banks' argument

The World Today - Wednesday, 8 April , 2009 12:14:00

Reporter: Sue Lannin

ELEANOR HALL: The latest report on the mortgage industry certainly doesn't back the big banks' case
that they can't afford to pass on the interest rate cuts.

Research by the investment bank, JP Morgan and Fujitsu Consulting shows that the big four banks
have captured the lion's share of mortgage business in recent months and that they're benefiting
from the Federal Government's economic stimulus policy.

Lower interest rates and the Government's stimulus packages have led to a jump in consumer
confidence this month.

And home loan figures from the Bureau of Statistics show that owner occupiers are pouring into the
market.

Finance reporter, Sue Lannin, has more.

SUE LANNIN: Big bucks from the Rudd Government, lower interest rates and a rise in the share market
have made people feel better.

A survey of 1200 people by Westpac and the Melbourne Institute has found consumer sentiment
increased 8.3 per cent this month and it is up six per cent on the same time a year ago.

Westpac chief economist, Bill Evans.

BILL EVANS: Well we have had a really strong result in April. The Index increased by 8.3 per cent.
That is a lot more than, I think we were certainly expecting and I think that most people would
have expected.

And it comes on top of another good result last month when, although the Index actually fell by 0.2
per cent, it was facing a barrage of very bad domestic and international news; whereas this month
we have seen much better international news and some better domestic news.

SUE LANNIN: The credit crunch has caused a flight to quality as customers seek out the four major
banks.

So much so that the Australian Mortgage Industry Report by JP Morgan and Fujitsu Consulting says
the big four are struggling to keep up with demand.

Banking specialist, Martin North from Fujitsu.

MARTIN NORTH: Well they are certainly writing the bulk of the business currently and if you look at
the competitive landscape compared with a year ago where the non-banks were still there and at one
stage I think the big four had about 75 per cent of market share. They are now above 95 per cent of
new loans.

So there is an argument to suggest that because perhaps competitive tension is a little less that
maybe that is translating into a different proposition for customers.

SUE LANNIN: Martin North says lower interest rates means lower mortgage stress compared to last
year; but he's worried about the future and higher unemployment especially for first home buyers
who have flooded into the market because of lower rates and higher grants.

About one-third of people surveyed say the increase in the First Home Buyers Grant was vital and
the average size of their loans has risen to more than $280,000.

MARTIN NORTH: I think we have got to be a little bit careful with encouraging first home buyers to
come into the market. Now clearly there is a very strong view within Australian psyche that
property is the way to go and so people want to get into the market and I think if they come in
with a reasonable loan-to-value ratio, let's say they have 15 per cent savings, it's not a problem.

But there are still some entering the market with much higher loan-to-value ratios and if they were
to experience unemployment later in the year, potentially, they may get themselves into some
difficulty.

They are also buying into a bit of a bubble. So we have seen prices at the bottom end lift between
five and 10 per cent because of the first owners grant stimulating the market; and my own view is
that property prices probably won't continue to rise but will slide down over the next 12 to 18
months.

SUE LANNIN: Well, is that increase in the First Home Buyers Grant encouraging people to take on
more debt that perhaps they can't afford?

MARTIN NORTH: Well, certainly we have seen 125,000 first time owners move into the market this year
of which over 40,000 used the grant as a way to get in.

Now there are some affordability criteria that the banks use and the real question is whether they
are conservative enough given what we think unemployment is going to do.

I think in some cases, they are probably okay; but I do think at the margins, there have been some
first home buyers lured into a situation where they are probably going to be exposed if
unemployment goes up or indeed if interest rates rise because they are at the moment at a
historically very low level.

SUE LANNIN: The latest figures from the Bureau of Statistics bear out the bubble in the low end of
the market.

The value of home loans increased more than one per cent in February.

Home loans to owner occupiers jumped 2.7 per cent. They were up by nearly one-third on a year ago -
the highest level since 1991.

But loans to investors fell nearly three per cent.

ELEANOR HALL: That is finance reporter Sue Lannin.

Doubts raised over Govt's ability to raise broadband capital

Doubts raised over Govt's ability to raise broadband capital

The World Today - Wednesday, 8 April , 2009 12:18:00

Reporter: Eleanor Hall

ELEANOR HALL: A former Optus executive says that while Telstra's public response to the
government's $43-billion announcement on broadband may have been relaxed, in private Telstra
executives will be fuming.

Paul Fletcher is a former communications advisor to the Howard government and a former director of
corporate and regulatory affairs at Optus and he has just written a book on the highly charged
politics of communications policy in Australia.

Mr Fletcher says there is no doubt that an upgrade to the nation's broadband system is necessary
but that there are big questions over whether the Government will raise the private money it is
looking for.

I spoke to Paul Fletcher earlier and began by asking him whether the new broadband system is
something that his former company Optus should invest in.

PAUL FLETCHER: Well the question for private sector investors will be what amount of traffic will
travel over this new network because that will determine the amount of revenue.

In my book 'Wired Brown Land' I look at the history of the broadband issue in Australia and point
out that in the mid-90s there were two broadband networks which Optus and Telstra built at the time
and those networks have never really generated an adequate financial return and I think investors
as they look at this new network will be thinking about some of the same issues.

ELEANOR HALL: Is there a concern then that the Government will end up stumping up the majority of
this $43-billion? I mean if Optus couldn't actually find the money to put together a viable
proposal of its own, how would it even if it were to decide it was a good investment, how would it
raise the money to invest in this venture?

PAUL FLETCHER: Well, I think the Government's thinking would be that while all of the bidders in
the process were, in its view, unable to demonstrate the capacity to raise sufficient finance to
build the whole network, I presume what the Government anticipates is that those parties may yet be
interested in taking a smaller stake in a bigger network.

But it still leaves open the question, will they be satisfied that there is a sufficient return
available to justify putting money in.

ELEANOR HALL: And are you able to make a judgement at this stage? Do you think it would be a good
investment?

PAUL FLETCHER: Look, I think it is too early to tell; but I think the question that anybody looking
at it would want to answer is - how are people going to use broadband in the future and how much
will they be prepared to pay and undoubtedly as band width has increased, people have started doing
more and different things.

So people today download, you know, large numbers of video clips from YouTube and from television
station websites and so on, in a way that was basically impossible even three or four years ago and
then you can look at applications like telemedicine, distance education.

So undoubtedly, people will do more and different things. The business question here is how much
more will people do and critically, how much will they be prepared to spend.

ELEANOR HALL: Will it necessarily be more expensive for consumers than the existing system?

PAUL FLETCHER: Well, that again is a question that needs to be determined. One of the factors is
the market structure. So a problem that has bedevilled broadband in Australia for at least 10 years
is the market structure.

Today Telstra is vertically integrated. It is the dominant player and whatever else might be said
about the Government's announcement yesterday, they have squarely taken aim at the market structure
and they appear determined to break Telstra's dominance.

ELEANOR HALL: Telstra has been publicly giving a positive response to this but you know the Telstra
players well. Take us inside the boardroom. How would Telstra's directors be responding to this in
private?

PAUL FLETCHER: Well, that is a very good question. In my book I look at the strategy that Telstra
has followed for four years to effectively take on the Government. That strategy appears, now, to
have resulted in the Rudd Government responding with a series of measures that very significantly
affect Telstra's economic position.

So I think that in Telstra's boardroom they would be thinking that this is a very serious challenge
to the company's economic position and that this issue is going to have to be the number one
priority for the new chief executive whoever he or she may be.

ELEANOR HALL: Now the Federal Opposition is slamming this as a reckless enterprise. Is the
Government taking a massive financial risk here or is this sensible infrastructure spending even if
the Government has to stand up most of the cost of it?

PAUL FLETCHER: I don't want to get into a political debate but I suppose that a public policy
question is, given the scale of the investments, do the benefits justify that.

The Government's decision yesterday has really reopened the faultline in the politics of Australian
telecommunications and that faultline is about whether government should have billions of dollars
of taxpayers capital tied up in owning a telecommunications network.

ELEANOR HALL: Is fibre to the home necessary for Australia to be a modern competitive economy?

PAUL FLETCHER: I think there is clear benefit to Australia in having an improved broadband
infrastructure. That means number one, faster speeds; but number two also a uniform quality of
infrastructure.

Because one of the real problems today is that a lot of people can get quite good speeds if you
happen to be close to an exchange, but then a lot of people can't get decent speeds or in some
cases, can't get anything at all. So today's network is a patchwork quilt.

So I think there is a clear public policy benefit from upgrading to a uniform high-speed network.
The question of whether it is fibre to the node or fibre to the home is one that we can only really
judge in a few years time when we see whether the applications emerge that require the higher band
width and whether people will take up the services and are prepared to pay for it.

It is frankly too early to know whether the incremental speed and benefit of a fibre to the
premises network justify the extra investment.

ELEANOR HALL: Paul Fletcher, thanks very much for joining us.

PAUL FLETCHER: Thank you.

ELEANOR HALL: That is former Optus director and Howard government advisor, Paul Fletcher, whose new
book 'Wired Brown Land' was released just this week.

Govt moves to assuage cable concerns

Govt moves to assuage cable concerns

The World Today - Wednesday, 8 April , 2009 12:22:00

Reporter: Michael Vincent

ELEANOR HALL: The last time there was a major roll out of cables in suburban streets - for pay TV
in the 1990s - it sparked massive controversy.

Aware of this, the Federal Government has moved to get the local government association on side
over the installation of the national broadband network.

But the majority of the new fibre optic cables will still have to be strung up on street poles.

And even where there is the opportunity to put the cables underground there's industry opposition
to the Government renting Telstra's pipes; as Michael Vincent reports.

MICHAEL VINCENT: Back hoes or cherry pickers - both options the Federal Government has to install
most of its new network involves heavy equipment in suburban streets.

The expensive option is to dig up roads, footpaths and nature strips and lay down its own pipes or
the cheaper option is to string up its new fibre optic cables alongside existing pay-TV, power and
phone lines.

VOX POP: We'll end up having our cities and urban areas looking like a spaghetti factory.

VOX POP 2: We don't have two lots of railway lines. We don't have two Hume Highways. We don't need
two lots of cables. It is simply not necessary.

MICHAEL VINCENT: Last decade there was vocal opposition in some communities to the big black pay-TV
cables that were strung up in suburban streets.

The Australian Local Government Association has already been in discussions with the Federal
Government to ensure that doesn't happen again.

The ALGA President is Labor councillor Geoff Lake.

GEOFF LAKE: Well, the difference in the early '90s was that the companies that rolled out that
infrastructure at that time were handed a blank cheque through legislative power to steam roll
local communities and simply get that infrastructure rolled out as quickly as possible.

I have received an undertaking from the Communications Minister, Senator Conroy that he will
genuinely involve local councils in the process and the discussion around how this infrastructure
will be rolled out.

We welcome that and we intend them to hold them to that commitment.

MICHAEL VINCENT: What happens if there is opposition like there was in the early-mid '90s when
there were people literally protesting in the streets?

GEOFF LAKE: Well, there is always going to be opposition and councils don't expect the Federal
Government to halt such a nationally significant project as the national broadband network just
because of some local opposition to the roll out of the infrastructure.

But what is important is that there is meaningful discussion and engagement with local communities
at the start of the process and if that happens, I believe that the problems are not
insurmountable.

MICHAEL VINCENT: In Tasmania - where the network rollout will begin - the Federal Government says
70 per cent of its cables will be above ground.

It's getting help from power company Aurora Energy to use its underground pipes for the remaining
30 per cent.

But elsewhere in the country it's widely recognised that Telstra owns the best pipes or ducts.

A spokesman for the Office of Communications Minister Senator Stephen Conroy has told The World
Today it will be using Telstra's facilities and it has the option of legislating to get "further
access" if it needs it.

But there's opposition from some Internet providers to the use of Telstra's pipes at all.

Internode's managing director is Simon Hackett.

SIMON HACKETT: The Government will certainly, I'd imagine, be tendered by a Telstra offer saying it
is okay, trust us, we won't charge you too much.

The obvious question is in 10 years time, what will they charge.

MICHAEL VINCENT: Do you trust Telstra?

SIMON HACKETT: I trust Telstra to act like Telstra and that means that they are motivated to
increase income rather than motivated to increase customer benefit; and therefore I think there is
a risk that as a landlord they would ultimately find a mechanism by which they could punitively
raise the rent.

MICHAEL VINCENT: Could the Government simply buy these ducts, these pipes, off Telstra?

SIMON HACKETT: The problem is those ducts are already running Telstra owned copper cables down them
so they are not empty. They would be shared with this use and existing uses and that is another
argument against actually using them.

So it is one of these things where there is potentially a poisoned chalice here. It looks appealing
to save money this way but I am hoping the Government will actually have the wherewithal to decide
it is worth doing a completely new build.

If they are pitching the whole process on the implicit independence of a new government owned
entity that is ultimately floated, I think it better be genuinely end to end government owned and
not actually sharing bits of Telstra.

ELEANOR HALL: That is the managing director of Internode Simon Hackett ending that report by
Michael Vincent.

Territorians warned of surge in power bills

Territorians warned of surge in power bills

The World Today - Wednesday, 8 April , 2009 12:26:00

Reporter: Margie Smithurst

ELEANOR HALL: Northern Territory residents have just been told that they're going to be slugged
with a huge increase in their power and water bills.

It's estimated some households will have to pay an extra $800 a year.

But the extra costs are only half the increase recommended by a recent review into the Territory's
utilities provider; as Margie Smithurst reports.

MARGIE SMITHURST: Living in the Northern Territory can be a very expensive business.

Rents in Darwin are the highest in the country - a humble two bedroom flat will set you back an
average of $450 a week. Great news if you're a landlord, but if you're not, tough luck.

It's not much better in Alice Springs, where rent prices reflect the severe housing shortage there.

Fruit and veggie prices at the big supermarkets can make you gasp, and for a takeaway coffee in the
Darwin mall, prepare to hand over almost five bucks.

Now, Territorians have to prepare to dig even deeper for the privilege of living far away from
anywhere as power and water prices are going up.

The Treasurer Delia Lawrie broke the news yesterday.

DELIA LAWRIE: The power pass on in terms of prices to residences, large residences are looking at a
$9 a week increase on their existing power bill. They are looking at a $5 a week increase on their
existing water bill. They are looking at a $1 a week increase on their existing sewerage bill. A
total $15 increase.

MARGIE SMITHURST: It's an initial 18 per cent hike on current power and water charges, and starting
in July, will cost large households about $800 extra a year.

It brings the utilities charges in line with the rest of the country's but it's still a big hit on
family and small business budgets.

The Government cushioned the blow by saying the increases were barely half of what it was advised
to charge to make the utilities system sustainable.

An independent report by Australian Energy Regulator board member Andrew Reeves recommended the
Government charge 40 per cent more for power and 60 per cent more for water and sewerage over three
years.

DELIA LAWRIE: The Northern Territory Government will not, in full, implement the recommendations in
relation to the price increases. We recognise that the price increases have a impact on our
households and our small businesses.

MARGIE SMITHURST: Successive Territory governments have historically underinvested in the
Territory's utilities provider.

Last year another independent report found a series of sub-station blowouts that caused regular
blackouts in suburban Darwin were due to entrenched lax maintenance standards and ageing
infrastructure.

Andrew Reeves says someone has to pay to bring the services up to scratch.

ANDREW REEVES: My recommendation was for customers to be paying more of their way to bring the
organisation to financial sustainability over a period of three years. The Government response has
been to take something less than my recommendations but heading in the same direction.

MARGIE SMITHURST: The Government says the rot set in under the Country Liberals leadership and was
entrenched well before Labor came to power more than eight years ago.

But the Territory Opposition leader Terry Mills says Labor has simply ignored the problems, and
could have sorted them out a while ago by reinvesting more customer revenue.

TERRY MILLS: They have been implored for the last eight years to make adequate use of the
$1.2-billion unexpected revenue that has flowed into the Territory.

MARGIE SMITHURST: For households and businesses already doing it tough in shaky economic times,
these extra costs will undoubtedly make things that much harder.

The Territory's Council of Social Services Wendy Morton says the increases couldn't come at a worse
time.

WENDY MORTON: We're already hearing that families are really struggling to meet the costs of rent
or mortgages in the Territory. They are not going to be able to cope with other increases in
electricity and water.

We are going to find an increased number of people accessing emergency relief from community
organisations just to make ends meet.

ELEANOR HALL: That is Wendy Morton from the Territory Council of Social Services ending that report
from Margie Smithurst.

New tremor hits L'Aquila

New tremor hits L'Aquila

The World Today - Wednesday, 8 April , 2009 12:30:00

Reporter: Karen Barlow

ELEANOR HALL: Aftershocks are continuing to rattle central Italy two days after an earthquake
killed more than 230 people in the region.

But people are still being pulled alive from the rubble of L'Aquila.

As Karen Barlow reports, rescuers lifted a 20-year-old woman safely out of the debris of her home
this morning.

KAREN BARLOW: There is no rest in the central Italian city of L'Aquila.

A television crew documenting the relief effort captures the moment of the latest aftershock.

It is a reasonably strong tremor and it shakes already damaged buildings and the nerves of
survivors.

The hope to find more people under the rubble has not totally faded.

A 98-year-old woman spent the past two days waiting for rescue while crocheting, while a
20-year-old woman has been found alive near the epicentre of Monday's initial quake.

FIREMAN (translated): It is always emotional to take out somebody alive, especially after 40 hours
being buried alive. I think this is why in all of the world the job of the firemen is gratifying.

KAREN BARLOW: The rescued woman is Eleonora Calesini.

L'AQUILA RESIDENT (translated): That was a really lucky event. That the woman was in that precise
spot in the house. What we don't know is if Enza was also in that protected spot because if Enza
was a little bit too far from where that woman was found, than she will not have saved herself.

KAREN BARLOW: Around seven thousand police, soldiers, sniffer dogs and other emergency service
personnel and volunteers are searching for survivors and other people have been looking after the
thousands of homeless people who are now living in tents and needing donated food.

L'AQUILA RESIDENT 2 (translated): The people have been exceptional. I didn't expect it. We're
surrounded by angels.

KAREN BARLOW: Cranes have been pulling down unsafe buildings. Destruction is evident for 30
kilometres in all directions from L'Aquila.

And the Italian Prime Minister Silvio Berlusconi has been visiting the rescue command centre.

SILVIO BERLUSCONI (translated): There could be more aftershocks so we want to tell people not to
return home.

KAREN BARLOW: Questions are starting to be asked about the city's building standards as even
supposedly quakeproof buildings crumbled.

In a first estimate, the Government says more than a billion Euros will repair buildings in the
L'Aquila area.

ELEANOR HALL: Karen Barlow reporting.

Footage indicates G20 victim pushed by police

Footage indicates G20 victim pushed by police

The World Today - Wednesday, 8 April , 2009 12:34:00

Reporter: Barbara Miller

ELEANOR HALL: The actions of police officers in London during the G20 protests have come under
scrutiny with the release of video footage showing a man being pushed to the ground by police just
minutes before he collapsed and died of a heart attack.

In the video, released by the Guardian newspaper, 47-year-old Ian Tomlinson is hit with a baton and
then pushed to the ground by a riot police officer in an apparently unprovoked attack.

The footage supports a number of witness statements from protesters and onlookers who said that
police used unnecessary force to control crowds.

Barbara Miller compiled this report.

(Sounds of the riot)

BARBARA MILLER: Thousands of people took to London's streets last week to protest during the G20
summit. Security was tight.

For weeks police had been warning about the potential dangers. They said protestors had made
'almost unprecedented levels of preparations' for the event.

And they'd even advised bankers and staff at major international chains to dress down to avoid
being targeted.

There was some violence, there were some arrests and one man died; 47 year-old Ian Tomlinson.

He collapsed and died of a heart attack last Wednesday evening near the Bank of England.

He wasn't protesting, but was making his way home from his job as a newspaper seller. In video
footage released by the Guardian he can be seen ambling directly in front of a police line. It's
possible he was being asked to move along.

He was moving forward, but perhaps not quickly enough for one riot officer's liking. That's not
clear from the video. But what can be clearly seen is that the officer hits him and pushes him to
the ground with considerable force.

STATEMENT FROM WITNESS 1 (voiceover): Ian Tomlinson had his back to the riot officers and dog
handlers and was walking away from them. He had his hands in his pockets. Here the riot officer
appears to strike Tomlinson's leg area with a baton. He then lunges at Tomlinson from behind.
Tomlinson is propelled forward and hits the floor.

For around 10 seconds Tomlinson seems to be talking to the officers. They do not help him.

BARBARA MILLER: In fact the only people who go to Ian Tomlinson's aid are demonstrators.

He's helped to his feet and makes his way off. A few minutes later though he collapsed and died.

These are the words of a 20-year-old law student who was nearby:

STATEMENT FROM WITNESS 2 (voiceover): He was outside a shop. I think it was a glass fronted shop
when I first saw him he was stumbling along the pavement on the left hand side of the road. He was
disorientated and stumbling and collided with the wall that was jutting out of a shop and then fell
over.

BARBARA MILLER: The video footage of Ian Tomlinson being pushed to the ground backs up statements
from a number of witnesses, including a 38-year-old investment fund manager, who filmed the attack:

STATEMENT FROM WITNESS 3 (voiceover): The primary reason for me coming forward is that it was clear
the family weren't getting any answers. I saw him wandering around. He was just taking a look. He
just got too close to the police line. It was absolutely horrible.

I didn't put two and two together and then I looked at the footage again and I thought, my god, it
is the man they pushed to the ground.

BARBARA MILLER: The Independent Police Complaints Commission which is managing the investigation
into Mr Tomlinson's death said it had been made aware of the video footage and would be assessing
it.

The IPCC commissioner for London Deborah Glass earlier released this statement.

STATEMENT BY DEBORAH GLASS (voiceover): Initially we had accounts from independent witnesses who
were on Cornhill, who told us that there had been no contact between the police and Mr Tomlinson
when he collapsed. However, other witnesses who saw him in the Royal Exchange area have since told
us that Mr Tomlinson did have contact with police officers.

This would have been a few minutes before he collapsed. It is important that we are able to
establish as far as possible, whether that contact had anything to do with his death.

BARBARA MILLER: Ian Tomlinson's widow is appealing for more witnesses to come forward.

JULIA TOMLINSON: It is like a jigsaw isn't it? It is just that one piece of puzzle missing. Someone
out there must know what happened in the few vital minutes, what happened.

BARBARA MILLER: The family says it just wants answers.

They're not alone.

A commentary in the Guardian is critical of the police and the media for their initial response to
the death.

It asks how it's possible so soon after the inquest into the death of the innocent Brazilian man
shot dead shortly after the attacks on London in July 2005, that assumptions about a suspicious
death should be so swiftly made and the official version accepted without question.

We were meant to recall the G20 summit as the start of a new world order, the commentary continues.

It may now turn out to be a rather less glorious view of the mechanics of law and order.

ELEANOR HALL: Barbara Miller reporting.

Samoa facing law and order crisis

Samoa facing law and order crisis

The World Today - Wednesday, 8 April , 2009 12:38:00

Reporter: Kerri Ritchie

ELEANOR HALL: The Pacific Island of Samoa is facing a law and order crisis as well.

Police have introduced a gun amnesty in response to revelations that weapons are being smuggled
into the country from the United States.

Criminal gangs have also been doing a roaring trade in drugs brought in from New Zealand as New
Zealand correspondent Kerri Ritchie reports.

KERRI RITCHIE: The Makoi Boys is just one of the gangs operating in Samoa.

GANG MEMBER: If they looking for us, we walking on the street. We are looking at them. They were so
scared.

KERRI RITCHIE: Its members are teenagers and men aged in their twenties who have armed themselves
with machetes, rocks and axes.

GANG MEMBER: They want us to go to church and help our families.

KERRI RITCHIE: But instead of church, this gang spends its time on the street selling marijuana and
meth amphetamine.

Are you like the bosses of this area?

GANG MEMBER: Yes we want to own this area.

KERRI RITCHIE: An investigation by Television New Zealand has provided a worrying insight into
Samoa's gun culture. Guns of all sizes are being smuggled into the islands from the States. They're
then sold from car boots, for between $300 and $1500. One gang member, who was deported to Samoa
after spending time in jail in the US, was surprised at the range of weapons on offer.

GANG MEMBER: More than I thought, you know. I thought, you know, in the islands, you know, you can
..(inaudible) .. in the islands. You know none of that stuff around here but Samoa but, so I'm more
adapted real quickly. You know, they moved up.

KERRI RITCHIE: Herman Loto Sakaria is a security specialist based in Samoa.

HERMAN LOTO SAKARIA: In Samoa, if you want anything, you can get it. If you really need a gun, you
can find it. There are so many people here and you're related to so many people and they know a lot
of people here.

If South Auckland had access to the guns that you can get here in Samoa, South Auckland would be a
war zone, a different place and if kids were running South Auckland with AK47s they would not
hesitate to pull the trigger, whereas here you can't.

KERRI RITCHIE: Television New Zealand says several major drug lords are operating in Samoa, their
customers include people in powerful positions in the island nation. One drug lord blamed Samoans
who've been living in New Zealand for causing all the problems, by selling drugs to kids on the
island.

DRUG LORD: We do it under the table. We don't go brag about it. We do it discreet. The younger
generation is going all over the place - it's out of control.

KERRI RITCHIE: This drug lord believes he's above the law.

What do you think about the police here?

DRUG LORD: I stay away from their business and they stay away from mine.

KERRI RITCHIE: There are about 500 police officers in Samoa. Assistant police commissioner Lilo
Taioalo says they're looking into the concerns raised about gangs and illegal guns. He says the
gangs aren't visible in Samoa and operate in darkness. He says guns are a problem everywhere, not
just in Samoa.

Last year, Mr Taioalo's boss, the Samoan police commissioner, was accused of smuggling weapons from
American Samoa. A commission of inquiry ruled that he should be investigated but Cabinet decided
that he shouldn't. The case was closed.

This is Kerri Ritchie in Auckland reporting for The World Today.

Boat lands on Christmas Island undetected

Boat lands on Christmas Island undetected

The World Today - Wednesday, 8 April , 2009 12:42:00

Reporter: David Weber

ELEANOR HALL: A Christmas Island resident says a boatload of about 40 suspected asylum seekers
landed on the island last night.

More than 60 asylum seekers were intercepted near Ashmore Island last week, and they were taken to
Christmas Island for health and security checks.

But there's little information about this latest group, which appears to have slipped through
Australia's border protection net; as David Weber reports.

DAVID WEBER: Stephen Watson rang ABC Radio in Perth this morning, and said he believed a group of
Iraqis had arrived at Christmas Island undetected.

STEPHEN WATSON: The navy have been sitting out there all night for the processing of the most
recent 60 or 63 that everyone knows about but under their noses, in comes a nice little boat this
morning with another 40 on it. Tie up to the jetty without anyone's knowledge whatsoever.

DAVID WEBER: Mr Watson said authorities on the island had apparently been alerted because he saw
police taking people from the boat onto the jetty.

STEPHEN WATSON: You know the whole panic system set in where you have got the whole police and of
course all the immigration people all down on the jetty putting them into vehicles to, I'd suggest,
they are going without knowledge. Take them out to the detention centre to have them, again through
the process medically checked. Which is...

REPORTER: And how many do you think Steve?

STEPHEN WATSON: Yeah, there is you know, 40. I am on the understanding they are Iraqis but I don't
honestly know that.

DAVID WEBER: He said he hasn't seen anything like it happening on Christmas Island before.

Mr Watson said asylum seekers were usually brought in by the navy.

STEPHEN WATSON: The process has been that they've come in through the system but when you consider
that the navy are sitting out there half a kilometre from the shore with the processing happening
and one ties up to the jetty at four-o'clock in the morning. I mean it is a bit of a laugh. You
have got to ask yourself what about the early process of seeing who is out there in our waters.

REPORTER: Sure, so as far as you are concerned, they are not escorted. They have just tied up by
themselves?

STEPHEN WATSON: Oh, absolutely. Without any doubt. I mean these people have let themselves onto the
island of Christmas Island with women, children and basically totally unescorted. No knowledge by
anybody in the processing system whatsoever.

DAVID WEBER: Mr Watson has said Christmas Island residents felt they were never properly informed
about what was happening with the processing of asylum seekers.

STEPHEN WATSON: This whole process as far as residents are concerned; and I; it's hard to speak for
everyone but I do talk to a lot of people and we have a consensus generally that, you know, the
residents aren't even in the picture.

We get told what is going to happen here on Christmas Island as a resident. We are treated very
much like second class citizens since the whole process has begun.

ELEANOR HALL: That is Christmas Island resident, Stephen Watson ending that report from David
Weber.

And the Federal Government has confirmed the arrival of this boatload of people.

The Home Affairs Minister Bob Debus says 45 people are believed to be on board, with Customs and
Immigration officials now managing the situation.

He says the group will be detained on Christmas Island to undergo health, security and other checks
to establish their identity and the reasons for the voyage.

But the statement contains no explanation about how the boat was able to land on Christmas Island
undetected.

Satellites enlisted to track world's fire hot spots

Satellites enlisted to track world's fire hot spots

The World Today - Wednesday, 8 April , 2009 12:48:00

Reporter: Rachael Brown

ELEANOR HALL: In an attempt to determine which areas of the globe will be most affected by climate
change, US scientists have used thermal satellite imaging to help map global wildfires.

Victoria's recent deadly fires feature in the research.

But the paper's authors say that despite fire being a major by-product of climate change, it's
often missing from global warming debates.

In Melbourne, Rachael Brown reports.

RACHAEL BROWN: Findings published in the journal PloS ONE, predict climate change will cause major
shifts in global fire patterns and that it will happen fast.

Researchers used thermal infrared satellite data of fire behaviour between 1996 and 2006.

The study's author, Max Moritz, a wildfire specialist at the University of California, Berkeley,
explains there aren't too many areas, unaffected.

MAX MORITZ: The world's deserts tend to be fire free and the equatorial rain forests and then the
very high latitudes, close to the poles, tend to be relatively fire free but as you move away from
those areas, you find more fire prone parts of the planet.

RACHAEL BROWN: Researchers looked at the relationship between the affected regions, and climate
variables, like fuel loads and weather conditions, and they have plotted what changes the planet
can expect if drastic cuts in greenhouse gas emissions do not occur.

Assistant Professor Moritz admits it's just one model, and a whole suite would be needed to
confidently pinpoint areas most at risk.

The preliminary results reveal regions like north east China and central Africa may become less
fire prone in the coming decades

He says this finding will surprise those who assume global warming will always equate to more fire.

But he expects there will be hotspots of fire invasion like those forming in parts of the western
United States and Tibet.

MAX MORITZ: Say the Tibetan plateau or the real equatorial rainforest belt or up in the high boreal
regions of Eurasia. We do see increases over broad areas like that.

But I think one of the more striking take home messages it's about the rate of change that we see
some of these patterns shifting.

So even in the near term, projections from 2010 out to 2039, just the next couple of decades, we
see some fairly extensive shifts in some places increasing and some places decreasing.

RACHAEL BROWN: This year's devastating bushfires in Victoria is cited as a prime example of this
rapid change.

Geosciences Professor, Katherine Hayhoe, from Texas Tech University.

KATHERINE HAYHOE: I don't think anyone expected the type of event that you experienced. As the
Bureau of Meteorology said, it is impossible to attribute any one event to climate change but the
conditions that were experienced during that time were certainly consistent with what we expect to
see from climate change over the coming decades.

Namely shifting rainfall patterns, extended drought and massive heat waves.

RACHAEL BROWN: And how can this study be used to perhaps complement other ones to focus on more
specific regions?

KATHERINE HEYHOE: It is almost like one of those whole body scans you can get when you go to the
doctor, where you get a scan of your whole body and what that does, is it identifies certain places
in your body that might present problems for you and so then you go to a specialist to try to
figure out what is wrong with your joint or what is wrong with your heart or your hand.

And so what our study is like, it is like that whole body scan of the world to identify where some
potential hot spots are in terms of changes in wildfire activity and to inform regional studies.

RACHAEL BROWN: She says while some climate change is inevitable, there are many choices that can be
made now to limit its impact.

Associate Professor Moritz says however, fire is often left out of global debates on climate
change.

MAX MORITZ: Fire is going to be playing a bigger role in carbon cycling, altering air and water
quality supplies across the whole planet; in altering habitats. So basically we need to think about
integrating fire into how we plan.

We are not necessarily integrating fire into most of our climate change studies in as rigorous a
way as we could and in fact, we don't even have a fire chapter in the IPCC - the Intergovernmental
Panel on Climate Change.

And I think that these are directions that we could go to more comprehensively include fire as an
agent of change in altered climates.

ELEANOR HALL: That is scientist Max Moritz from the University of California, ending that report by
Rachael Brown.

Record low water inflows into Murray-Darling Basin

Record low water inflows into Murray-Darling Basin

The World Today - Wednesday, 8 April , 2009 12:54:00

Reporter: Jennifer Macey

ELEANOR HALL: Now to the latest grim figures on the Murray-Darling Basin.

The amount of water flowing into the Basin in the past three months has been the lowest in more
than 100 years.

The Murray-Darling Basin Authority says the next three months are also looking bleak with drier
than average conditions forecast.

Jennifer Macey has our report.

JENNIFER MACEY: Each month, each season, the drought affecting the Murray-Darling River System
break yet another record and the latest drought update published by the Murray-Darling Basin
Authority for April is no different; with two records broken.

The first three months of this year have recorded the lowest inflows in 117 years and the water
flowing into the system for the past three years has dropped by half since the last bad drought 60
years ago.

The Authority's chief executive Rob Freeman says records are normally broken by small amounts but
this one is startling.

ROB FREEMAN: The inflows for this three-year period are less than 50 per cent of the inflows of the
previous minimum, so it is an extreme new record. It is coming on the back of seven incredibly dry
years so we have got soil profiles which are incredibly dry.

What we have got here is a coalition of climate change, climate variability or drought as people
often call it, and a legacy of over allocation of water from previous governments. And certainly
that wouldn't have been to the extent it is back in 1943/46.

JENNIFER MACEY: The Basin is home to more than two-million people and drinking water has been
secured until next year.

But Mr Freeman says this may not always be the case.

He says autumn and winter are also looking bleak with drier than average conditions forecast. This
means irrigators will only see an increase in their water allocations if it rains.

ROB FREEMAN: What we are seeing is that at the start of the water year, allocations are normally
low and then as we get rainfall over winter they step up. What I am saying is that I think the
likelihood of an early allocation, unless we get good rains in Autumn, will start at either zero or
a very small number of the percentage of allocation.

JENNIFER MACEY: The New South Wales Irrigators Council's chief executive Andrew Gregson says many
farmers are already reconsidering their future.

He is now calling on governments to tailor drought assistance to spare other irrigators from losing
their livelihoods.

ANDREW GREGSON: Irrigators pay a two parts charge. They pay a variable charge to the government and
to state water for the provision of the water that they get through their pumps; but they also pay
a fixed charge to have the pump there in the first instance.

So whether they actually are able to access water or not, they have to still pay that fixed charge
and in some circumstances, that can be upwards of $100,000.

We are not saying that the charge shouldn't be levied. What we are asking of government is that
they recognise that this is a major expense for irrigators and that some assistance in the means of
drought support should be given to irrigators to pay those fixed charges.

JENNIFER MACEY: Yet others say farming communities along the Murray-Darling Basin should stop
clinging to past hopes that a big rain will see them through this current drought.

Dr John Williams, the New South Wales Resources Commissioner is a member of the Wentworth Group of
Concerned Scientists.

JOHN WILLIAMS: We have at the moment, something like $12.7-billion assigned to address the issue
and that is a huge amount of money and some of it that Nick Xenophon has brought forward in the
purchase of water - but also he brought $200-million in to try and assist in regional planning and
regional development of communities, to me all makes sense.

Rarely have we had such a nation building opportunity for recalibrating our regional communities to
try and live with less water - something like 60 per cent of what we currently extract. We are
going to have to go into a structural adjustment process that is, I think, built around communities
determining their future where some will leave the industry.

Other industries will be built but it needs really government assistance in actually building the
futures for our regional communities and not letting it just happen without any real assistance to
determine futures with less water.

JENNIFER MACEY: But green groups say the Government shouldn't wait for big plans to be drawn up
before buying back water for environmental flows.

Dr Arlene Buchan is the healthy rivers campaigner for the Australian Conservation Foundation.

ARLENE BUCHAN: Delay after delay after delay in government actions to fix the problem is
contributing towards the severity of the environmental catastrophe which has happened across the
Murray-Darling Basin.

There is lots of money now available to fix the problem. We have the policy setting and the policy
tools to fix the problem; and the Commonwealth Government has to roll out its money quickly and buy
water back for the environment and start the process of repair across the Murray-Darling Basin.

There is no more time to waste.

ELEANOR HALL: Dr Arlene Buchan from the Australian Conservation Foundation ending that report by
Jennifer Macey.