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Jobless rate surges

Jobless rate surges

The World Today - Thursday, 9 April , 2009 12:10:00

Reporter: Stephen Long

ELEANOR HALL: First to the latest on the unemployment rate which has hit its highest level in five
years with full-time employment collapsing.

Official estimates say unemployment has surged to 5.7 per cent, up a full half a percentage point
in the space of a month. The economy shed nearly 35,000 jobs last month.

Joining me in The World Today studio with more details is our economics correspondent Stephen Long.

So Stephen, take us through the main numbers in this official estimate.

STEPHEN LONG: Eleanor, it's a very, very sharp rise in unemployment in the space of a month. Forget
the statistical numbers. Look at the real numbers. We've got an extra 53,000 people in March cast
onto the dole queues, looking for work. And the unemployment rate now stands at, unemployment
numbers now stand at more than 650,000 Australians out of a job.

And pretty much we've got a big rise in people looking for full-time work and part-time work as the
resilience, seeming resilience of the labour market has just collapsed. And the decline in
full-time work is very, very stark. Nearly 40,000 full-time jobs lost in the month.

There was a small rise in part-time employment - 4200 jobs - but that barely went anywhere towards
offsetting that.

ELEANOR HALL: Well this is a very steep jump in the jobless rate in just one month. What would this
mean if we were to continue like this until the end of the year?

STEPHEN LONG: Well if it continued at this rate until the end of the year we'd have double digit
employment by Christmas.

ELEANOR HALL: Unemployment?

STEPHEN LONG: Sorry, yes, a double digit unemployment rate by Christmas.

ELEANOR HALL: Which no-one really has predicted officially have they?

STEPHEN LONG: No, but we do have predictions of double digit unemployment from some economists next
year and if it were to continue like this it would be stark, but that would be a very, very
high-end estimate.

I think the way to read what's happening with this big jump is if the statistics are right, if
they're accurate and we can't read anything definitive into one month's figures, it would suggest
really that we've moved beyond the phoney war period where some economists were deluding themselves
into thinking that the Australian labour market was really strong and would just not be hit because
up until now, we'd actually seen employment in Australia continuing to grow.

This is the first month where employment has gone backwards and we now have two months with a
really, really big collapse in full-time jobs growth. And what that suggests to me is that
employers who were trying to keep skilled labour have now put up the white flag and said things are
too tough; we've got to let people go.

That is certainly the view of a number of economists, including Stephen Walters the chief economist
at JP Morgan.

STEPHEN WALTERS : Well I think it shows clearly that we're in recession. I think the debate about
whether we're in recession or not is not material.

It's very clear that output is contracting and what we've seen firms doing is firstly cutting
contractors and their temporary staff. They've moved through the phase now of cutting hours worked
and finally we've reached the point where firms are reluctantly cutting staff as well.

So I think very clearly firms are in retrenchment mode. They're cutting people now as well as
hours. They're cutting their capital spending programs and that all is all clearly symptoms of the
economy being in recession.

ELEANOR HALL: That's JP Morgan chief economist Stephen Walters.

So Stephen is the rise in joblessness concentrated in any particular states?

STEPHEN LONG: Well it's worst in New South Wales as it has been for some time and the unemployment
rate in New South Wales is now just shy of seven per cent Eleanor.

But what's really, really interesting is just how rapidly the jobless rate is rising in the
one-time boom state of Western Australia. It's now just shy of five per cent - 4.9 per cent
unemployment in WA - and that's up nearly two percentage points in the space of just three months.

So as the mining boom has collapsed it seems, jobs growth in WA has gone the same way. So we no
longer have a tale of two economies. We've basically got a convergence on a bad news situation with
unemployment around the country.

ELEANOR HALL: Now we saw the Reserve Bank cut rates this week by a quarter of a percentage point.
Does this rise in the jobless rate mean that more cuts and perhaps steeper cuts will be coming?

STEPHEN LONG: Well the Reserve Bank was clearly expecting unemployment to go up. So I don't know
how much the staff will be swayed by this but my suspicion is that as this jobless rate rises,
you're going to see basically a vicious cycle where this actually starts to hit the real economy
harder and takes us deeper into recession.

And the expectation of most economists and the financial markets will be that the Reserve will have
to cut and cut hard. And we know that the banks only passed on less than half, most of the big four
banks, and one of them none at all of that rate cut which certainly dampens its effect.

A lot of economists are now saying that the cash rate will fall as low as two per cent in
Australia. It's at three per cent now. And it's also quite likely that the Reserve Bank will be in
a position where it's a little bit shocked by the fact that so little of this was passed on by the
banks and it might have to revise its strategy.

ELEANOR HALL: What could it do? Just cut deeper or potentially not cut at all?

STEPHEN LONG: Well, well the situation is I don't think that the staff actually wanted to cut. They
wanted to wait and see. Unemployment is a lagging indicator. But if we keep seeing steep rises in
the jobless rate feeding into the real economy they'll have no choice but to cut...

ELEANOR HALL: Stephen...

STEPHEN LONG: And perhaps by big, big hacks rather than incremental measures.

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

Opposition slams Government on jobs

Opposition slams Government on jobs

The World Today - Thursday, 9 April , 2009 12:14:00

Reporter: Lyndal Curtis

ELEANOR HALL: The Federal Opposition is predicting that unemployment will rise further. The
Coalition's employment participation spokesman Andrew Southcott has told our chief political
correspondent Lyndal Curtis that the Government's spending to create jobs isn't working.

ANDREW SOUTHCOTT: Well what it shows, last year and this year Kevin Rudd has spent $72-billion to
create or support 330,000 jobs. There's no evidence of any of those jobs being created; quite the
opposite. We saw almost 35,000 jobs lost from the Australian economy in the month of March alone.

LYNDAL CURTIS: But unemployment is a lagging indicator. Is this not a sign of the way the economy
fell towards the end of last year showing up in the figures now?

ANDREW SOUTHCOTT: Well you're right. Unemployment is a lagging indicator. And if you will remember
it was up, right up until September the Government's number-one priority was fighting inflation.
They had a war on inflation. They had a five-point plan to deal with inflation. And all of those
things do add to higher unemployment; unemployment higher than necessary.

We also see in the area of youth unemployment almost one in four teenagers who are looking for
full-time work are unemployed and this is the highest it's been since 2001 and we are approaching
the sort of levels we last saw in youth unemployment in the mid-1990s. And youth unemployment has
not been a very, a big focus of the Government until very recently.

LYNDAL CURTIS: The Government has already said that it expects unemployment to go above its seven
per cent forecast. How high do you think it'll go?

ANDREW SOUTHCOTT: It's, I don't have those figures. I saw that ACCI (Australian Chamber of Commerce
and Industry) felt that unemployment may be as high as nine per cent by the end of the year.

What the, what we see around the world and also from previous recessions in the early 1980s and
early 1990s is that unemployment rises very quickly and it takes a long time to get unemployment
down. And it's absolutely critical that we do keep job seekers actively looking for work; we do
keep them engaged and actively looking for work.

LYNDAL CURTIS: There have been some positive signs. Consumer confidence appears to be up. There's
signs of health in the housing industry. Is it a possibility that unemployment will go up for a
shorter time than people might have expected before things get better?

ANDREW SOUTHCOTT: It's, look it's hard to say. The Government's forecast is for seven per cent by
June next year. Only six weeks after they made that forecast they already indicated that they felt
it was going to be higher.

Throughout all of this unfolding economic downturn the Government's forecasts have always been the
most optimistic. You're right, there's mixed signs there in the economy but this is a very sad
development.

ELEANOR HALL: That's the Opposition's employment participation spokesman Andrew Southcott speaking
to Lyndal Curtis about the latest unemployment figures.

Timber industry cuts down hours to save jobs

Timber industry cuts down hours to save jobs

The World Today - Thursday, 9 April , 2009 12:18:00

Reporter: Michael Vincent

ELEANOR HALL: One industry that is making some radical changes in an attempt to deal with the
threat of job losses is Australia's timber sector.

From tomorrow, dozens of sawmills, logging coops and woodworking shops across the country will shut
down for 10 days while other timber companies cut their working week to four days.

The changes have been agreed between the forestry union and employers in an attempt to stave off
job losses in the industry, as Michael Vincent reports.

(Sound of sawmill)

MICHAEL VINCENT: It's not unusual for saw mills to fall silent for the Easter break but the union
says never before have so many closed their doors for so long.

MICHAEL O'CONNOR: Well it's the worst downturn in living memory for many people who have worked in
the industry.

MICHAEL VINCENT: Michael O'Connor is the national secretary of the CFMEU's Forestry and Furnishing
Products Division.

MICHAEL O'CONNOR: Basically there wouldn't be a sawmill in the country that's not been affected by
the downturn.

As far as I'm aware nearly every wood processing plant in Tasmania is going on a 10-day shut. We
have board plants that are taking leave. We've got companies going on four-day weeks. The amount of
leave that's being brought forward is unprecedented in this industry. People can't recall a time
when so much leave was being used to try and protect jobs from possible redundancies.

MICHAEL VINCENT: Michael Moulden is one of those thousands of workers who's taking the 10 days'
leave.

MICHAEL MOULDEN: Yeah, look, I'm a married man with three kids and a mortgage and obviously it's
not easy to tell them that, yeah, we're downing tools for an extended time and it's, you know it's
never easy.

MICHAEL VINCENT: He's worked at the Carter Holt Harvey saw mill in the south-east South Australian
town of Mount Gambier for six years and has seen the effects of the latest downturn.

MICHAEL MOULDEN: There's been a lot of cutbacks here via production and overtime and things like
that, that were once I suppose the luxuries of having the job.

MICHAEL VINCENT: When you talk to your family about it, was your family happy at least you might be
spending some more time with them?

MICHAEL MOULDEN: Well I think we'd all planned to have the Easter break but certainly not the
extended break because obviously because the financial situation, it means that a lot of people
won't be going anywhere and doing too much.

There's only so much you can do around home and you know, that's the reality of it I think, that
you know, it's a bit of doom and gloom everywhere. And yeah, no, I suppose we've taken it and just
tried to manage it the best we can, I suppose as everyone does. But it's not easy.

MICHAEL VINCENT: South of Hobart is the town of Geeveston which was built around the timber
industry more than 150 years ago. Local resident and the Deputy Mayor for the Huon Valley Council,
Laurie Dillon.

LAURIE DILLON: Well it makes you wonder whether, what the future is, whether it's the start of
something that's going to get worse. I don't have a handle on the future of the timber industry but
I have heard that they have reduced hours at the Neville Smith mill earlier. This is only an
extension of that. So there is something happening in the industry that's slowing it down.

MICHAEL VINCENT: Does it hearten you at all that the employers and the workers are trying to save
their jobs?

LAURIE DILLON: I think it's encouraging that people are willing to work together to do it because
I've seen other instances around the world where companies haven't been able to reach these
agreements. It keeps the harmony and willingness to accept that it hurts both sides and when there
is an upturn in it, both sides will benefit. So I think from a social point of view it's very good
to see that.

MICHAEL VINCENT: The body which represents employers, the National Association of Forest Industries
also has its eyes on the future.

NAFI CEO Allan Hansard says businesses are recognising the value of their employees.

ALLAN HANSARD: We should remember just over a year ago, we had skills shortages in a number of
areas in our economy and also in areas of our industry. Now we're a little bit more forward looking
than some industries I think and we recognise that we can be first out of the blocks here when the
recovery does come if we're smart about how we manage the recession and that means that we're smart
about maintaining our skilled workforce as well.

ELEANOR HALL: That's the CEO of the National Association of Forest Industries Allan Hansard
speaking to Michael Vincent.

Chocolate a sweetener for tough times

Chocolate a sweetener for tough times

The World Today - Thursday, 9 April , 2009 12:22:00

Reporter: Michael Edwards

ELEANOR HALL: One sector of the economy that seems to be surviving, if not thriving, during the
economic turmoil is the chocolate-selling industry.

While a surge in chocolate sales in the lead-up to Easter is hardly surprising, what is giving
retailers some optimism is that they are seeing a 15 per cent rise compared to the same period last
year.

Michael Edwards headed to the shops to find out why.

SHOP ATTENDANT: Ah, two bilby toys and another milk bilby. That comes to $69.85.

CUSTOMER: And I want to get...

MICHAEL EDWARDS: The staff at Haigh's Chocolates store in central Sydney were just about run off
their feet this morning.

VOX POP 1: Oh, trying not to buy up too big.

MICHAEL EDWARDS: Has your spending changed at all this year?

VOX POP 1: No, probably not but you know, I'd rather get a small amount of nice chocolate than a
huge amount of not so good chocolate.

MICHAEL EDWARDS: Okay, so the recession-proof chocolate.

VOX POP 1: (Laughs) Well it's actually my strategy every year so I'm not sure it's changed that
much.

VOX POP 2: Some eggs for my family, my children and my nieces and my nephew.

MICHAEL EDWARDS: At a time when many industries are struggling it appears chocolate is holding firm
amid the economic turmoil. At this store people queued up down the street waiting to buy.

SECURITY GUARD: It's been like this since 7.30 in the morning, yesterday, it's been like this since
8.00 and the queue was all the way down to Pitt Street.

MICHAEL EDWARDS: For these shoppers chocolate is a relatively cheap way to make yourself happy.

VOX POP 3: Yeah, because it's something small. It's not like you're lashing out and buying
something quite big. It's sort of something nice and small and a nice treat to give to someone,
some nice chocolate.

MICHAEL EDWARDS: The economic downturn biting, everything like that - that's not affecting your
choice of chocolate obviously?

VOX POP 4: No, not this year.

MICHAEL EDWARDS: Not this year?

VOX POP 4: No.

MICHAEL EDWARDS: Why is that?

VOX POP 4: Because I've got three children.

MICHAEL EDWARDS: And they just won't accept anything less?

VOX POP 4: No, they will accept something less. I suppose I'm spoiling them.

VOX POP 5: I think it's a nice little luxury that you can enjoy and makes you feel good. Everyone
loves chocolate.

MICHAEL EDWARDS: Retailers are reporting that chocolate sales are up by 15 per cent from the same
time last year.

Margy Osmond is the chief executive of the Australian National Retailers Association.

MARGY OSMOND: Well look I think in times of doom and gloom there's no doubt that there's a certain
affection for confection. Everybody seems to be out there buying chocolate and with Easter rushing
at us, eggs and bunnies seem to have been at the top of everybody's list.

A number of our members are saying that they're seeing, you know, double-digit growth on the sale
of chocolate compared to last year.

MICHAEL EDWARDS: But Margy Osmond says not all retails sectors are doing quite so well.

MARGY OSMOND: Well I think what you're seeing is less sales in the area of homewares for example.
We saw a bit of a surge in that over the Christmas period but that's dropped back a little.

(Sound of lights changing at pedestrian crossing.)

MICHAEL EDWARDS: And back on the streets of Sydney not everyone was walking around in a state of
chocolate-induced euphoria.

VOX POP 6: Everybody is still spending but they're just being a bit cautious and trying to keep a
little bit aside I think in case things do turn bad.

So far I haven't seen too much effected in my family but you know, everybody's just sort of waiting
for something to happen I guess.

VOX POP 7: We usually get together like the whole big family for Easter and everything but this
year we've decided not to do anything. You know, we'll just wish each other happy Easter and
exchange some Easter eggs and that's about it.

ELEANOR HALL: That's some Easter shoppers in central Sydney ending Michael Edwards's report.

Optus says yes to broadband stake

Optus says yes to broadband stake

The World Today - Thursday, 9 April , 2009 12:26:00

Reporter: Lyndal Curtis

ELEANOR HALL: The Opposition has condemned it as a reckless venture but Optus begs to differ. It's
confirmed that it is looking at options for getting a stake in the Federal Government's new
broadband company.

The director of government and corporate affairs at Optus, Maha Krishnapillai has told chief
political correspondent Lyndal Curtis that Optus is considering offering the Federal Government its
fibre optic network in return for a stake in the new broadband company.

MAHA KRISHNAPILLAI: Oh look yeah, there's a few ways of doing it and we certainly want to see the
details around how that would work. But as we've indicated in our discussions with the Government,
we could really give the Government a head start in terms of using existing infrastructure and then
rolling out to the last mile very quickly in many areas and we think that's a great opportunity for
the Government and obviously for us and the industry.

LYNDAL CURTIS: Would the benefits then of that plan for the Government be that it wouldn't have to
build as much?

MAHA KRISHNAPILLAI: Absolutely. And we'd need to work through all the details of that and how that
might work.

The key we've said all the way through this process is that we do not want any one player, Optus
included, to become a monopoly provider of those services. So we are certainly not saying that we
would control in any way that NBN (national broadband network) company. The Government would have
50 per cent ownership as they've indicated at the moment and no player would have more than 20 per
cent equity in that organisation.

LYNDAL CURTIS: Is it possible to give a ballpark figure on what your existing fibre optic network
is worth and then how much of a stake in the company you may be looking at doing if the swap went
ahead?

MAHA KRISHNAPILLAI: No, look we'd still need to work through how that would all work and we're keen
to understand from the Government what their preferred way of doing this is and how we can
understand those sorts of things so, and it wouldn't be just Optus obviously. There's other players
I'm sure who would be looking for similar sorts of arrangements.

What we would be doing is saying we'll give you a head start in terms of using the fibre. We'll
give you some committed, potentially, some committed customer base so you've actually got, if you
like, the revenue flowing through from day one on this business, in order for us to be integrally
involved in rolling out the next generation network.

LYNDAL CURTIS: Is the current network you have and that other companies have up to the job or would
it itself need to be upgraded to offer speeds of up to 100 megabits per second?

MAHA KRISHNAPILLAI: Well this is a brand new network so we would actually have to design it from
the ground up. And what we would need to work out is what elements of our network would be
appropriate in that network design and which elements we would be looking to be able to use and
which elements we wouldn't.

So it is, it's a brand new network which we know we've got some fibre assets that may be
appropriate. We've certainly got as you're aware satellites and other assets to push broadband out
to 100 per cent of the Australian population and we're looking to work with them on not only fibre
but also satellites and other solutions.

LYNDAL CURTIS: There have been some people, including the Opposition and some analysts saying that
the Government's plan is not financially viable. Do you believe it is?

MAHA KRISHNAPILLAI: Oh look, we've certainly said all the way through that this is such an
important investment for this country to enable productivity growth.

I think the thing that people sometimes forget is that broadband when it gets introduced into
leading countries, and Australia has been an absolute laggard in broadband in world terms, in
leading countries leads to significant GDP growth - 0.2 to 0.4 to 0.5 per cent growth in the
overall economy.

Now why is that? Because businesses become more efficient and productive; because consumers and
others are able to use a much wider array of services.

So any assumptions we make about whether it's commercially viable or not are obviously based on
today's world. We are talking about the world of the next few years. So first of all, assumptions
around usage I think are misplaced.

Second of all, in terms of the actual build of this particular network we need to see obviously
some of the detail around how that would be done but we are confident that it commercially will
stack up because we have already done similar exercises ourselves in our bid through the
Government's RFP (request for proposals).

LYNDAL CURTIS: Has Optus begun talking to the Government about the options yet?

MAHA KRISHNAPILLAI: Oh look it's only very early days. We were very keen to continue some early
discussions from the other day but you know it's very, very early days and we need to see quite a
bit more detail.

I guess the short answer is we are very encouraged that this is a sea-change policy which will
radically reshape the sector and radically reshape the ability for all other companies to be
involved in providing services.

ELEANOR HALL: That's Maha Krishnapillai from Optus speaking to Lyndal Curtis in Canberra.

Six dead as Indonesians go to the polls

Six dead as Indonesians go to the polls

The World Today - Thursday, 9 April , 2009 12:30:00

Reporter: Geoff Thompson

ELEANOR HALL: To Indonesia now where election-related violence has killed six people in the
province of Papua.

Voting in the national parliamentary poll began earlier today with 170-million people eligible to
vote. And while President Susilo Bambang Yudhoyono has been running on his record and promising to
continue to tackle corruption, concerns remain about voting irregularities.

Joining us now from Jakarta is the ABC's correspondent, Geoff Thompson.

So Geoff tell us about this deadly violence in Papua.

GEOFF THOMPSON: Well Eleanor, we're getting very conflicting reports. The police spokesman Papua
confirm only one person being killed but people from the separatist movement if you like say that
six people are dead and the Associated Press is certainly reporting that as a confirmed figure.

Now it seems that overnight there have been attacks in at least four locations at an oil depot in
Biak and a couple of security posts at Abepura and also at a campus, a university campus in
Jayapura. And through these attacks and the response to them, it appears that at least six people
have been killed.

ELEANOR HALL: Is there opposition to the election in Papua?

GEOFF THOMPSON: Look there certainly is because, well from the separatist movement because they see
Indonesia's ownership if you like of that part of the world was done unfairly from the so-called
Act of Free Choice in the 1960s.

Now it is a low-level rebellion but it's also true that Papua is still pretty much run as a police
state and of course it's impossible for journalists such as myself to actually get there to see
what's really going on because we're effectively blacklisted and not allowed to travel there.

ELEANOR HALL: So how is voting going where you are now in Jakarta?

GEOFF THOMPSON: Look I'm standing in a 'kampung', that's Indonesian for a little village, in
central Jakarta and it's like a bit of a day out at the fair. People are sort of, there are stalls
selling fruit while people come and go from polling booths.

But even here you hear concern that people aren't being, aren't registered on the list and that
people who are registered on the list are actually dead and things like that. And the real concern
is that those sorts of problems could escalate if a significant number of the electorate feels
disenfranchised after today.

ELEANOR HALL: Well political analysts are predicting victory for the party of the incumbent
President Yudhoyono but is it likely to be straightforward?

GEOFF THOMPSON: Look it's expected to be that straightforward in the sense that his Democrat Party
will get the most seats in Parliament. He's unlikely to be able, almost certainly will be unable to
govern alone. He'll need to form a coalition with other parties.

Now it, there are wild cards in this election such as the other former general Prabowo Subianto.
Now he could get anything from three per cent to 15 per cent of the vote.

Now you know if President Yudhoyono's party can't get the coalition partners it needs and someone
like Prabowo Subianto who was once accused of attempting a coup in this country can get those
coalition partners, it begins to get more complicated for the incumbent President.

ELEANOR HALL: Why has SBY remained as popular as he is?

GEOFF THOMPSON: Look incumbency is a large part of it and it's also a period of Indonesian history
where not a lot has happened in the sense that, you know, he managed to achieve peace in Aceh;
there's been a sense of stability in the country which is unprecedented; there is economic growth -
while the rest of the world has been in a downturn Indonesia is still growing because it's so
reliant on domestic demand. And there is a real commitment to fighting corruption and economic
reform through his dynamic Finance Minister Sri Mulyani Indrawati.

Now all those things go in his favour but the opposite view is that he, he has support by default
if you like because there aren't many other exciting candidates opposing him.

ELEANOR HALL: Geoff Thompson in Jakarta, thank you. That's the ABC's Indonesia correspondent there.

Government awaits request for more diggers

Government awaits request for more diggers

The World Today - Thursday, 9 April , 2009 12:34:00

Reporter: Hayden Cooper

ELEANOR HALL: The Foreign Affairs Minister says a request for more Australian troops in Afghanistan
is inevitable.

Stephen Smith and the Defence Minister Joel Fitzgibbon are in Washington for annual talks with the
US administration and Afghanistan is the dominant theme.

But while Mr Fitzgibbon has already met the man leading the war, General David Petraeus, he says
there has been no formal request for more Australian troops yet.

Hayden Cooper has our report.

HAYDEN COOPER: With the alliance entering a new phase this is the first Australia-US ministerial
meeting of the Obama era and the Australian visitors were welcomed to Washington by the Secretary
of State Hillary Clinton.

HILLARY CLINTON: We have few better friends in the world than Australia and it is such a joy to
work with the Australian Government. We have a lot of common values and common interests and common
causes that we pursue. So Mr Minister, thank you for being here.

HAYDEN COOPER: When the formal talks are held tomorrow many topics will get a mention but one will
get much more than that. Afghanistan remains the most pressing matter confronting the alliance.

STEPHEN SMITH: The request hasn't come yet and I don't expect it will come in the course of the
AUSMIN (Australia-United States Ministerial) consultations.

HAYDEN COOPER: The Foreign Affairs Minister is still waiting for word on whether more Australian
troops are needed. NATO has boosted its contribution by 5000 mostly to improve security during the
country's presidential election in August.

But Stephen Smith says the call for more Australians won't come in the next few days.

STEPHEN SMITH: Well I expect weeks rather than months. I don't think we're too far away. But
obviously Mr Fitzgibbon and I will want to return to Australia to consult further with the Prime
Minister and our Cabinet colleagues. So I don't think we're too far away; certainly weeks rather
than months.

HAYDEN COOPER: Raspal Khosa is a research fellow at the Australian Strategic Policy Institute in
Canberra. He expects any increase in troops to be kept to a minimum.

RASPAL KHOSA: If we follow the lead of the European NATO states there would be some force
protection element that would increase, I would say maybe a company group, maybe an extra 150 in
that role.

And we would probably provide some additional training elements. Now these take the form of
20-to-40-man teams known as operational mentoring and liaison teams that are embedded within Afghan
units.

HAYDEN COOPER: Stephen Smith says no decision has been made.

STEPHEN SMITH: We are looking very carefully at the potential for us to make a greater civilian
capacity contribution; to make a greater training capacity. These are obviously very sensible
things to do. I've also made it clear in the past we're looking at what more we can do on a
temporary basis to help ensure the election in August is a full and free election conducted in an
atmosphere of peace and security.

HAYDEN COOPER: Before the AUSMIN talks have even begun the Defence Minister Joel Fitzgibbon has
already held one of the most important meetings of the trip. He spent 45 minutes with General David
Petraeus, the US central command chief responsible for the Afghanistan war.

JOEL FITZGIBBON: We had a good conversation. He was upbeat. He was enthused by the new strategy and
that of course is a new strategy that the Australian Government supports and welcomes.

HAYDEN COOPER: But try as he might, Joel Fitzgibbon can't escape the unwelcome distractions from
home over his links to China and his troubled relationship with the defence bureaucracy.

Today it emerged that the Chinese Government held a stake in the company owned by Helen Liu, Mr
Fitzgibbon's friend who helped to fund his election. The minister is dismissive of talk that
Chinese officials had marked him as a future star.

JOEL FITZGIBBON: Well very clever Helen Liu apparently. She decided more than a decade ago that one
day I'd be the Defence Minister and that would maybe present her or her companies with some
opportunities. I suspect that Helen Liu is the only person in Australia who was on that bet more
than a decade ago.

HAYDEN COOPER: Joel Fitzgibbon says he still hasn't spoken to the Prime Minister about the matter.
The deputy Opposition leader Julie Bishop believes that can mean only one thing.

JULIE BISHOP: The Prime Minister is seeking to distance himself from Mr Fitzgibbon. That means Mr
Fitzgibbon is a dead man walking.

ELEANOR HALL: And that's the deputy Opposition leader Julie Bishop ending that report from Hayden
Cooper.

Americans make first moves to reach out to Iran

Americans make first moves to reach out to Iran

The World Today - Thursday, 9 April , 2009 12:38:00

Reporter: Oscar McLaren

ELEANOR HALL: In a significant shift in its policy, the United States has moved to reopen direct
diplomatic dialogue with Iran over its nuclear program.

US Secretary of State Hillary Clinton says the US would now be a 'full participant' in the
six-party talks on the issue.

Last month the US President Barack Obama promised what he called a 'new beginning' in the United
States' relationship with Iran. But while the Iranian leadership has responded with greater
openness to the US administration, Iranian presidential elections in a little over two months mean
that the situation remains unpredictable.

Oscar McLaren filed this report.

OSCAR MCLAREN: Almost three decades ago the United States broke off diplomatic relations with Iran
after the US embassy hostage crisis. In 2002 President George W. Bush declared the country part of
the 'axis of evil' and to this day the State Department accuses Iran of being a state sponsor of
terrorism and of seeking nuclear weapons.

But the State Department spokesman Robert Wood says the United States wants this situation to
change.

ROBERT WOOD: We the United States outlined the President's and the Secretary's goal on Iran which
is to explore diplomatic solutions to the very serious areas of concern. A diplomatic solution
necessitates a willingness to engage directly with each other on the basis of mutual respect and
mutual interest. We hope that the Government of Iran chooses to reciprocate.

OSCAR MCLAREN: The US says it will join the other permanent members of the UN Security Council and
Germany to invite Iran to diplomatic talks over its nuclear programs and it's asked the European
Union's foreign policy chief to arrange them.

ROBERT WOOD: The P5 plus one political directors discussed next steps in addressing international
concerns about Iran's pursuit of a nuclear weapons capability and affirmed their unwavering
commitment to a negotiated diplomatic solution to those concerns.

OSCAR MCLAREN: The Iranian President Mahmoud Ahmadinejad denies that his country is seeking any
nuclear weapons but he has left the door open for a more cooperative relationship with the Obama
administration.

MAHMOUD AHMADINEJAD (translated): If a hand is extended to Iran with honesty and justice, the
Iranian nation will welcome it. But if it's a hand with an apparent honesty and a covert dishonesty
the Iranian nation's response to that will be the same response it gave to Mr Bush.

OSCAR MCLAREN: There are factors which will complicate any new relationship. Iran has arrested the
journalist Roxana Saberi, a dual citizen of the United States and Iran. The judge in her case
Heydarifard says she was caught with expired press credentials.

JUDGE HEYDARIFARD (translated): She is charged with espionage. She was working under the cover of a
journalist without permission and went to some governmental centres. She collected classified
information through some connections she had with the personnel of some of these centres and
submitted it to the American intelligence agencies.

OSCAR MCLAREN: It's a case which has attracted the attention of the US Secretary of State Hillary
Clinton.

HILLARY CLINTON: We have asked the Swiss who as you know are our protectorate in Iran to obtain the
most accurate, up-to-date information. I will, as will the rest of the department, continue to
follow this very closely and we wish for her speedy release and return to her family.

OSCAR MCLAREN: Today is also Iran's self-proclaimed 'nuclear technology day' when the President is
expected by many to announce developments in the country's nuclear energy efforts.

It's taking on a particular significance given that there are presidential elections approaching in
little over two months.

Ron Huisken from the Strategic and Defence Studies Centre at the ANU says the US approach could
affect the political process in Iran.

RON HUISKEN: The possibility is there that an America that comes at least half way could help the
non-hardliners if you like have a bigger say in how Iran responds.

OSCAR MCLAREN: But he says the President Ahmadinejad is unlikely to change his own bellicose
approach to the US, and observers shouldn't read too much into his apparently more open approach.

RON HUISKEN: It's also been supplemented by other senior comments to the effect that until the
United States makes measureable or observable, real changes in a number of areas, mostly
unspecified. It's like saying we'll react positively if you give us everything that we want, not
dissimilar to the North Koreans. You know their negotiating position is we want to be accepted as
is or we build more bombs.

The real test is an Iranian Government that comes along and says we're prepared to change our
attitudes. We're prepared to look for the possibility of positive gain to work through differences
and achieve something acceptable to both of us.

ELEANOR HALL: Ron Huisken from the Strategic and Defence Studies Centre at the ANU. He was speaking
there to Oscar McLaren.

Top terror cop caught showing secrets

Top terror cop caught showing secrets

The World Today - Thursday, 9 April , 2009 12:42:00

Reporter: Stephanie Kennedy

ELEANOR HALL: In a dramatic move in Britain authorities today brought forward a raid on 12
suspected terrorists because of concerns about a security breach.

One of Britain's most senior police officers has now apologised for an extraordinary blunder that
jeopardised the anti-terrorism operation. The operation involved raids on a number of locations and
was hastily brought forward once authorities became aware of the breach.

I spoke to our reporter Stephanie Kennedy in London a short time ago.

Stephanie what can you tell us about these arrests and the nature of the threat that these men
posed?

STEPHANIE KENNEDY: Well early in the evening armed officers raided eight locations in northwest
England. One of the locations was a university in Liverpool and just outside the library of the
university police swooped on two men in their early 20s. They were handcuffed and arrested and the
students were actually told to stay inside the library and away from the windows.

At the same time in the suburbs of Manchester a house was raided and three men were arrested. An
internet cafe was also searched and at a hardware store two security guards were taken in for
questioning.

All in all 12 men were arrested. The police have not actually said what the nature of the threat is
but there is speculation that it was a plot related to Al Qaeda.

ELEANOR HALL: And are these men British nationals?

STEPHANIE KENNEDY: No Eleanor. At least 10 of the men are Pakistan nationals and they're all here
on student visas and police say another man is a British national.

ELEANOR HALL: Now this raid was brought forward because of a security blunder by Britain's most
senior counter-terrorism officer. Tell us about that. What happened?

STEPHANIE KENNEDY: Well it doesn't get much worse than this Eleanor. The man in charge of Britain's
counter-terrorism operations, one of the highest-ranking officers at Scotland Yard, Bob Quick,
accidentally revealed details of the operation.

As he arrived at Downing Street for a briefing at the Prime Minister's office, he got out of his
car and he was snapped by photographers but he was holding a pile of files and on top of the files
was a clearly marked document with the word 'secret' and that document outlined the names of the
suspects, the locations of the raids and the chief police officers that were to be involved in the
operation.

Well when the police realised what had happened they stuck a 'D Notice' on the media. That's
literally a gag on the media. It's an agreement between the Government and the media not to publish
something that threatens national security.

But unfortunately it was too late. The photograph had already been distributed overseas so the
police had no choice but to launch the raid immediately.

Chris Grayling is the Conservative spokesman and he's highly critical.

CHRIS GRAYLING: And regardless of whether the cameras were there or not, nobody should be walking
up Downing Street with secret documents under their arm, visible to passers-by, visible to a
camera, with details of a sensitive operation on them. This is quite unacceptable. Huge question
marks over Bob Quick's judgement and his ability to do his job to be frank.

ELEANOR HALL: That's the Opposition spokesman on national security Chris Grayling.

Stephanie are police saying whether the raid was compromised by the release of this information and
the fact that the raid had to be brought forward?

STEPHANIE KENNEDY: Look the police aren't commenting on that at the moment but it quite frankly it
completely jeopardised the whole operation.

It's not known if the police had already collected enough evidence to charge the suspects but what
it meant was that police officers weren't prepared for the raids. Because the raids were brought
forward from a pre-dawn raid to a raid in the early evening, police really lost the element of
surprise.

Usually here in the UK when police launch raids they're always about 2am. They're never in broad
daylight. But this one was in broad daylight. It was early evening. There certainly was, you know,
there was, darkness had not yet fallen.

And this whole operation could have endangered people's lives. When these houses and properties and
the universities were raided men, police officers were armed and they were arresting potential
terrorists. So this was a very, very dangerous operation which was carried out in broad daylight.

ELEANOR HALL: And what does this mean for the future of Bob Quick, the man who revealed the
information?

STEPHANIE KENNEDY: Well needless to say people are calling for Mr Quick's head but at the moment
the Government is standing by him. The Government has been asked questions about this security
blunder but has so far refused to comment and no doubt the fallout from this case will consume the
Government for the next few days.

ELEANOR HALL: Stephanie Kennedy in London, thank you.

Govt defends economic policies, despite jobless surge

Govt defends economic policies, despite jobless surge

The World Today - Thursday, 9 April , 2009 12:46:00

Reporter: Eleanor Hall

ELEANOR HALL: Returning now to our top story - the half a per cent jump in the unemployment rate to
5.7 per cent.

The Employment Minister and Deputy Prime Minister Julia Gillard says it's 'sobering news' but she
told reporters in Canberra a short time ago that without the Federal Government's action to address
the economic downturn the results would be even worse.

JULIA GILLARD: Having seen these figures today they will obviously be received by Australians as
bad news. They will be received by Australians with a sense of concern about their fellow
Australians who have lost their jobs.

This global financial crisis and global recession is significantly impacting on this country. Ever
since the global financial crisis and global recession started the Rudd Government has been clear
with Australians that we aren't immune but we can act to cushion Australians from the full force of
the global recession. We've acted decisively to do that and we will continue to support Australians
as they deal with this news.

REPORTER: Minister, how much worse would it be? You say it would be worse if you hadn't acted. How
much worse?

JULIA GILLARD: Well clearly through our economic security statement, through our jobs and
nation-building plan, we've acted to support the economy and to stimulate demand.

The retail sales figures show that; the housing construction figures show that; show the impacts
and effects of our first economic stimulus package and our first homeowners boost. Those things
would not have been there in our economy, generating and supporting jobs if the Government hadn't
acted.

Then with our $42-billion nation-building and jobs plan, obviously its effects are moving into the
economy now and over the coming months its effects will be moving into the economy through
particularly the biggest school modernisation program this country has ever seen.

As you make those kind of investments, obviously they support economic activity and support jobs.

REPORTERS (speaking at the same time): Stimulus package was needed... We know that it's probably
the highest...

JULIA GILLARD: Well with the nation building and jobs plans of course is moving to work in the
economy now with the biggest school modernisation program the country has ever seen. That stimulus
is being rolled out in the economy as we roll out construction projects.

REPORTER (interrupting): But will another one be needed?

JULIA GILLARD: Well obviously the Government is continuing to monitor the effects of the global
recession and global financial crisis on this country but we didn't wait for today's figures before
we acted. We didn't wait. We acted in anticipation of these figures by already providing the
$42-billion nation-building and jobs plan and of course by already announcing our investment
international broadband and our economic stimulus plan last year.

REPORTER: Minister is there room for more action if more is needed in terms of fiscal stimulus?

JULIA GILLARD: Well at every point since the global financial crisis started and the global
recession started to bear down on this country, the Rudd Government has been prepared to act. We've
acted decisively. We've taken a number of steps to already support employment in our economy.

We were told by some to wait and see, to sit back and just let worse figures than these roll in the
door before doing anything. Well we deliberately and decisively rejected that approach. We acted in
anticipation of these figures.

ELEANOR HALL: And that's the Deputy Prime Minister Julia Gillard speaking to reporters in Canberra
a short time ago about the latest unemployment figures which show a sharp rise in the jobless rate
to 5.7 per cent over the last month.

Archbishop urges everyone to help each other

Archbishop urges everyone to help each other

The World Today - Thursday, 9 April , 2009 12:50:00

Reporter: Alison Caldwell

ELEANOR HALL: Christian leaders say hope is at the heart of their Easter messages this year.

But in a rebuke to the Rudd Government and its message to Australians to spend more to assist the
economy, Melbourne's Anglican archbishop is warning people to start saving and to look after one
another, not just themselves, during these difficult times.

In Melbourne, Alison Caldwell reports.

ALISON CALDWELL: Hope and renewal are at the heart of Anglican Archbishop Philip Freier's Easter
message.

The Archbishop of Melbourne says tens of thousands of Australians are facing particularly difficult
times ahead in the wake of the bushfires and the global financial crisis.

PHILIP FREIER: I think in the present situation of the world we're clearly in a place of much more
uncertainty than we have been in recent years and I think that many of the things that we thought
were, you know, conventional wisdoms, ways in which we could be assured of our financial prosperity
and a whole lot of areas are much less certain for people. And I think for many people that will
make this Easter quite different to the ones they've had over the last 10 or 15 years.

ALISON CALDWELL: And what will you be advising them as a way of dealing with that?

]

PHILIP FREIER: Well I think increasingly we have put our frame of reference for our lives on things
about our prosperity, things about our comfort. And I think that the message of Christianity is
always one that there is a reference point with God and God's love for us which goes beyond those
things.

And I think that Easter for me is always a good opportunity of opening up this horizon of God,
God's claim over our life, the purposes of our life, and finding within that a source of hope even
in our difficult or bleak times.

ALISON CALDWELL: What would you say to politicians and to business leaders about their
responsibilities and what they need to be doing at a time like this?

PHILIP FREIER: I think that understanding that essentially our lives if they're just about
ourselves are going to be somewhat diminished lives and that's a curious thing to say when we've
got many community values which are focusing on us and us as consumers.

And I think probably my message to politicians would be to encourage us and to lead us to use the
grid of citizenship and who we can be as citizens, not just as consumers. I think we run a great
risk of always looking at things and entertainments if we are focused on as a consumer.

So for instance you know our recent economic situation in Australia has seen that grid of consumer
being used to stimulate economic activity whereas there are probably other ways we could look at
things and some of the values of even previous generations of thrift or saving or economy, they
haven't been ones that have been promoted. It's been more go out and spend and I think there's some
danger in just always narrowing down who we are into that model of consumer.

ALISON CALDWELL: Archbishop Denis Hart is the head of Melbourne's Catholic Archdiocese. He agrees
hope is the best message for people this Easter.

DENIS HART: Easter is always a time of hope. It's a time when we believers know that Jesus rose
from the dead. But it challenges us human beings to look beyond the very big difficulties that we
have at present. We've struggled through the bushfires and to come together after that and I think
that's brought out a tremendous amount of good in people.

Now at the moment people are losing jobs. Others are fearful because of reduced ability to finance
their lives. I think it's important for us to be prudent. I think in the community we all have to
be together whether government, whether Church and community groups, to look out for those who are
really struggling, to help them know that people are ready to walk with them even in these most
difficult times.

And I think my experience as it was with the bushfires is that if people are really thoughtful of
others they can help those who are facing tremendous difficulty to go ahead with hope to reshape
their lives, to adjust to the difficult situation and to come through to the end of it with a hope
and with an ability to move forward in the future.

ELEANOR HALL: Melbourne's Catholic Archbishop Denis Hart, ending that report from Alison Caldwell.