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Qantas to axe up to 1,750 jobs

PETER CAVE: In another sign that the global financial crisis is continuing to deepen, Qantas has
announced heavy jobs cuts and a major downgrade of its full year profit.

The airline has slashed its profit forecast by more than half and has confirmed that more than
1,700 jobs may go.

Qantas doesn't plan to cut routes at the moment, but it will ground aircraft and dramatically
reduce spending to weather turbulent times ahead for the global aviation industry.

I'm joined now in the studio by our business editor Peter Ryan.

Peter, you've been listening in to a briefing on the cuts announced this morning. What is Qantas
explaining and how is it explaining its actions?

PETER RYAN: Well, Peter, Qantas has been in 'cutting mode' for some time but says there's been a
quote 'rapid and significant' deterioration in just the past two weeks and that caused a revision
of what was already a very cautious profit estimate.

Full year profit had been expected to come in at around $500-million - now the airline is only
expecting between $100-million and $200-million and even then there's the proviso that there are no
further changes in market conditions or fuel prices.

But the financial crisis has hit Qantas where it hurts and that's at the premium end of the
international business.

There's lower demand for first and business class seats, and discounting around the world, in some
cases up to 50 per cent, is starting to bleed Qantas dry.

As a result, Qantas chief executive Alan Joyce says drastic measures are needed in drastic times to
save $800-million in capital expenditure.

ALAN JOYCE: We're taking a further five per cent reduction in flying capacity affecting our
frequencies with Qantas domestic and international services. We are cutting our freight capacity
both domestically and internationally. Our grounding, the equivalent of 10 aircraft, and we're also
make those aircraft available for sale.

We are deferring aircraft orders including four Airbus A380s by between 10 and 12 months. And we're
deferring 12 737-800s by 14 months and we are exploring with Boeing options about the 787-8
aircraft which include reducing in the near term the number of aircraft to be delivered.

PETER CAVE: Qantas' chief executive Alan Joyce.

Peter, that's the financial hard medicine. What about the deep job cuts that we foreshadowed in the
intro?

PETER RYAN: Yes, well Peter we've just heard the financials but the human cost in this story is
much bigger and Alan Joyce admits today's response will have a direct and quite brutal impact on
the 34,000 people who work at Qantas.

Mr Joyce said another 500 management jobs will be axed but most of the pain will be felt at the
ground level with up to 1,250 full-time equivalent positions going from around the country and
overseas.

Mr Joyce says he's doing his best to protect as many jobs as possible through the use of long
service leave, annual leave, natural attrition, part-time work and also leave without pay.

ALAN JOYCE: Redundancies are a last resort. We will be trying a range of workplace initiatives to
manage the downturn, such as asking people to take annual leave, asking people to take long service
leave, leave without pay and promoting part-time and job sharing.

What we are announcing today is about the firming of a long term business strategy - not diverting
from it

PETER CAVE: Alan Joyce again.

Peter, has the Federal Government reacted to the news as yet?

PETER RYAN: Peter, the Federal Government would have seen this coming given the signs of stress in
the global aviation business but they would not have known the depth until the announcement hit the
stock exchange this morning.

But it's clearly another strain as the Government tries to stem the tide of unemployment which is
expected to easily exceed seven per cent in the coming months.

The Minister for Employment and Workplace Relations Julia Gillard spoke in Canberra shortly after
this morning's announcement.

JULIA GILLARD: Clearly this is very unwelcome news and it is going to be very distressing for those
Qantas workers who are shortly to be told that they have been made redundant and those Qantas
workers who are asked to explore other potentials to try and avoid redundancy.

It is a very difficult time for them. It is a very difficult time for their families. I would like
to say that I think it is pleasing that Qantas is taking an approach, in relation to the 1,250
jobs, that it is going to explore all options with redundancies as a last resort.

We clearly believe the most important thing in the difficult period following the global financial
crisis and in the midst of the global recession, is for employers to do all they can to retain
staff.

PETER CAVE: The Minister for Employment and Workplace Relations Julia Gillard speaking in Canberra
a short while ago.

How is the share market reacting this morning?

PETER RYAN: Well Peter, the news from Qantas came before trading opened this morning but when it
did open Qantas shares fell as much as 11 per cent. The profit downgrade was clearly a shock to
investors and they've simply run for the doors in shock and all this on a day when the overall
share market was actually two per cent stronger and the mood was exacerbated by comments from Alan
Joyce that the airline will be prepared to act again if market conditions go further downhill.

PETER CAVE: Our business editor, Peter Ryan.

Fiji in turmoil, as censors sharpen knives

PETER CAVE: The ABC's Pacific correspondent Sean Dorney has been deported from Fiji as the Junta
led by military strongman Frank Bainimarama continues its crackdown on media coverage of what some
are already calling a new military coup.

Fiji's Court of Appeal ruled last week that the interim government, which seized power in 2006, was
unconstitutional but Commodore Bainimarama's ally President Josefa Iloilo simply abolished the
constitution and sacked the judges.

We hope to be speaking to Sean Dorney a little later in the program but Fijians are awaiting the
next step from the military government.

The abrogation of the constitution has left the legal system in turmoil and military officers are
now censoring the news.

A decree banning public gatherings almost saw a major regional meeting of the Methodist Church
stopped.

But the tourism industry is relieved that Australia is not threatening tighter sanctions.

Michael Vincent reports.

MICHAEL VINCENT: Once again, freedom of association and freedom of the press don't exist in Fiji.

It is a country under military rule and without a judiciary.

All judges were sacked on Friday when the President abrogated the constitution.

The president of the Law Society Dorsami Naidu and his colleagues turned up at the High Court this
morning, but couldn't get in.

When The World Today last spoke to Mr Naidu he was being 'interviewed' by police.

Intimidation has reached into newsrooms with military censors watching over journalists and banning
any stories which don't portray the military in a positive light.

But the military has failed to stop a meeting of the Methodist Church.

Heads of the church from around the Pacific had gathered in Suva for a conference - its first
topic: church-state relations.

President of Fiji's Methodist Church, Reverend Ame Tugaue, says he had to apply to police this
morning to allow the meeting to go ahead.

AME TUGAUE: Of course there was a decree not to hold a meeting. I called the police officer and
also the police commissioner not to disturb our meeting because we did not really know of the
decree so he said okay.

MICHAEL VINCENT: The Methodist Church is a pillar of Fiji society.

But it is not planning to confront the military directly.

Reverend Tugaue.

AME TUGAUE: Sometimes we have differences just like a father who has many sons or children,
sometimes they have differences. In Fiji it is like that.

MICHAEL VINCENT: Would the church in Fiji like to see democracy restored?

AME TUGAUE: Of course yes. The church is a democratic fellow, a relationship. The government too,
we want democracy to come in. But since now it is just the military is just dictating all things.
We don't want a head on.

MICHAEL VINCENT: You say you don't want a head on with the military?

AME TUGAUE: Head on minister fight against them.

MICHAEL VINCENT: You don't want that?

AME TUGAUE: No we do not want to be violence against them.

MICHAEL VINCENT: What about peaceful protests?

AME TUGAUE: Peaceful protests too, they don't like that. We'll just have to share to individual
people here our terms, what God wants. We just keep on praying to God because God has his own plan
too, for Fiji.

MICHAEL VINCENT: Tourism is a major part of the pacific nation's economy.

The Fiji Island's Hotel and Tourism Association is relieved that Australia and New Zealand aren't
considering imposing trade sanctions because both countries make up 60 per cent of its arrivals.

Association President Dixon Seeto.

DIXON SEETO: Your, I think, Foreign Minister Mr Smith said very clearly that nothing would be done
to harm Fiji tourism. That is, I think, a very encouraging statement and also statements about not
imposing trade sanctions and things like that, I think that is a very responsible attitude and
responsible statement because that will, if that happens, the common folk, the ordinary people will
suffer the most so I am happy that is being said.

I think there is also a signal from the New Zealand side to a similar extent but definitely Mr
Stephen Smith's comments were very, very encouraging and I certainly hope that that will be played
out in the future.

MICHAEL VINCENT: Does the Hotel and Tourism Association have any opinion on democracy?

DIXON SEETO: Ah... you know that is a very difficult question because we are basically a trade, a
trade and a commercial organisation and not a political party.

PETER CAVE: The Fiji Island's Hotel and Tourism Association President Dixon Seeto ending that
report from Michael Vincent.

Government against economic sanctions for Fiji

PETER CAVE: The Federal Government says it's inevitable that Fiji will be expelled from the
Commonwealth and the Pacific Islands Forum but says Australia won't go down the road of trade
sanctions against Fiji as we've already heard or discouraging Australian tourists from going there.

The Foreign Minister Stephen Smith says that Fiji is a self-imposed military dictatorship, but the
Government won't support any sanctions that would make life more difficult for the Fijian people.

Australia, though, is being urged to push for Fijian soldiers to be banned from taking part in a
raft of United Nations missions, a major source of funding for the Junta and foreign exchange for
Fiji.

And as the Foreign Minister heads to Bali for a meeting on people smuggling, he insists that a
boatload of people who turned up on Christmas Island last week, does not represent a breach of
Australia's border security.

From Canberra, Alexandra Kirk reports.

ALEXANDRA KIRK: Australia has already imposed travel sanctions on members of Fiji's military regime
and limited ministerial contact, but the Federal Government says it doesn't want to do anything
that makes life any harder for the Fijian people.

The Foreign Minister Stephen Smith is rejecting calls for Australia to toughen its travel
advisories to discourage Australian tourists from visiting Fiji.

STEPHEN SMITH: One of our great concerns is that Fiji's move away from democracy has seen a very
serious deterioration in Fiji's social and economic circumstances.

And so we don't want that to be compounded.

ALEXANDRA KIRK: Neither is the Government contemplating sending troops to Fiji in a bid to restore
democracy.

STEPHEN SMITH: Well, we certainly don't have in mind military action of any description.

ALEXANDRA KIRK: But pushing for Fiji to be expelled from the Pacific Islands Forum and the
Commonwealth, is another matter altogether.

STEPHEN SMITH: Well, certainly Fiji is now effectively a self-imposed military dictatorship. Unless
there is some sort of reversal of the events that we've seen in recent days, then frankly I regard
that process as almost being inevitable.

ALEXANDRA KIRK: Tougher sanctions are out but the Government's considering lobbying other countries
to follow the lead of Australia and New Zealand.

Jon Fraenkel from the Governance in Melanesia Program at the Australian National University says
Australia doesn't have a magic wand and is very limited in what it can do. He says grandstanding
doesn't work and that Commodore Frank Bainimarama's administration is impervious to ultimatums,
threats and sanctions.

JON FRAENKEL: One of the lessons of this whole experience is that these ultimatums and threats from
overseas are not really working. What is determining the course of the situation in Fiji is what
goes on within Fiji. That is ultimately the decisive determinant, although I think it is useful for
neighbouring powers to make statements of condemnation about some of the atrocities that are
happening in Fiji, some of the human rights violations that are happening in Fiji.

There is not much more that can be done externally.

ALEXANDRA KIRK: Mr Fraenkel says it's important to keep open the lines of communication so if the
regime eventually is willing to negotiate, it's possible to do so. In the meantime he says
Australia can keep pointing out the regime's shortcomings.

So is there anything more do you think that Australia can do?

JON FRAENKEL: No. One thing of course that could be done however is to stop UN troops, the United
Nations taking troops from the Fiji military forces because the Fiji military forces is effectively
a creation of UN peacekeeping missions abroad.

ALEXANDRA KIRK: The UN Secretary-General Ban Ki-Moon blocked the move, saying the UN would stop
Fijian soldiers going on new missions, but the missions to Sinai and Iraq continue.

Meanwhile Australia's Foreign Minister Stephen Smith is heading to Bali today to co-chair a meeting
on combating people smuggling.

He says the focus will be highlighting cooperation between nation states. Mr Smith insists
abandoning the Howard government's Pacific Solution hasn't contributed to the big influx of asylum
seekers - almost 400 in the past eight months. He says other factors are at play.

STEPHEN SMITH: One is seasonal factors. Another is the fact that we know that the people smugglers
are now much more sophisticated and much more daring in what they are attempting to do.

ALEXANDRA KIRK: Just last week one boat arrived on Christmas Island undetected by Australia's
border protection officials. How did it slip through the net?

STEPHEN SMITH: Well, it didn't slip through the net. Our approach here is to ensure that
unauthorised boat arrivals don't reach the Australian mainland. Christmas Island, as you know, is
about 1,000 miles north of Australia.

If the boat had been picked up in international waters it would have been taken to Christmas Island
in any event so the outcome is precisely the same.

ALEXANDRA KIRK: Well, how was it that it arrived on Christmas Island undetected?

STEPHEN SMITH: Well we're dealing with enormous bases of water and as I say, our focus is on
ensuring that we don't have unauthorised boat arrivals on the Australian mainland and that is what
we've been doing.

ALEXANDRA KIRK: But the Opposition's immigration spokeswoman Sharman Stone blames the Labor
Government's new policy.

SHARMAN STONE: When the message went out loud and clear that if you are in the people smuggling
business, give it a go and I am afraid the first numbers of boats were very small numbers on board.

We do know one was going down when it was rescued. We know that there were bodies washing up in
Indonesia, tragically.

Now we are into the bigger boats so we do have a new surge and I think that's a real problem. The
whole thing is, at the moment, I think, basically out of hand.

PETER CAVE: The Opposition's immigration spokeswoman Dr Sharman Stone ending that report from
Alexandra Kirk.

Spector found guilty of murder

PETER CAVE: The legendary US music producer Phil Spector is likely to spend the rest of his life
behind bars after being found guilty of murder by a Los Angeles court.

The 69-year-old was convicted of shooting dead the actress Lana Clarkson at his home six years ago.

Spector became famous in the 1960s with what was known as the 'Wall of Sound' recording technique,
but in recent years had become better known for his eccentric behaviour and his love of guns.

Barbara Miller compiled this report.

(Music- Tina Turner, River Deep Mountain High)

BARBARA MILLER: He produced Ike and Tina Turner, the Righteous Brothers, the Beatles -

changing the way music sounded with what was known as the 'Wall of Sound' technique.

Music commentator, Glenn A. Baker.

GLENN A. BAKER: This bombastic cacophonous sound that really was not just the kitchen sink but
about three or four kitchen sinks hurled into the mix and the idea was to get not one piano but
three or four. Not one guitar but four or five.

Get them all in the studio and as Tina Turner once described it to me, run around like a little
Napoleon in a high pitched squeaky voice saying, 'play this, play that, do this, do that'.

(Music- Tina Turner, River Deep Mountain High)

BARBARA MILLER: In recent years though, Phil Spector had become known as an eccentric recluse who
loved guns.

GLENN A. BAKER: He had his moment. He had his time. It lasted from the early 60s to the early 70s
and after that he did very, very, very little beyond live behind the gates of his mansion in Los
Angeles and I suppose just give out the aura of being Phil Spector.

BARBARA MILLER: And that aura was?

GLENN A. BAKER: Menacing. A little bit whacky and crazy which I think he cultivated. I have a
friend in London, quite a famous rock journalist who, after trying for years, was given permission
to go to LA and interview him and he went there and he was quite excited and as he said to me, he
said I was certainly careful about the questions I asked him because he conducted the entire
interview training a loaded revolver on me. That was not uncommon.

BARBARA MILLER: For some then it almost seemed to make sense when Phil Spector was accused of the
murder in 2003 of the actress Lana Clarkson.

Her career had dried up and she was working as a hostess in a club, when Phil Spector invited her
home for a drink.

A few hours later she was dead - shot in mouth at Spector's LA home.

After hours of deliberation, the jury finally came to the unanimous decision that Spector was
guilty of second degree murder.

The jury forewoman says it was a tough call.

JURY FOREWOMAN: Because you are talking about another human being and we all have hearts. We all
have people we love and you try to really, really evaluate another human being and it's really
difficult.

(Sound of The Righteous Brothers, You've Lost that Loving Feeling)

BARBARA MILLER: Phil Spector's lawyer Doron Weinberg says there will be an appeal.

DORON WEINBERG: Not only because I don't believe Phillip Spector murdered Lana Clarkson but also
because I am very, very certain that under the proper legal standard that his guilt was not proven,
not nearly proven beyond a reasonable doubt.

BARBARA MILLER: If the conviction stands, Phil Spector, who's 69, is likely to spend the rest of
his life in jail.

Mick Brown is a biographer of the producer.

MICK BROWN: His legacy should have been as one of the great geniuses, one of the great architects
of rock and roll and that is now obscured forever and he will be remembers as the man who murdered
Lana Clarkson, which is very sad.

(Sound of The Ronettes, Be My Baby)

BARBARA MILLER: But Glenn A. Baker says Spector's legacy stands regardless.

GLENN A. BAKER: Some of the greatest records ever made, ever made, ever made. I mean it redefined
record production. He was the first producer people knew of apart from George Martin.

BARBARA MILLER: Phil Spector, who sat quietly as the verdict was read out, faces sentencing next
month.

PETER CAVE: Barbara Miller reporting.

Unions claim PM has broken pre-election promises

PETER CAVE: Prime Minister Kevin Rudd and his deputy Julia Gillard have been accused of making
false promises about the building industry watchdog, according to senior union officials who handed
over half a million dollars to Labor before the last election.

The Rudd Government will abolish the controversial Building and Construction Commission (ABCC)
early next year but it's yet to finalise exactly what will fill its place.

Unions are angry at the suggestion the Government will maintain the coercive powers of the building
commission.

Officials from the CFMEU (Construction, Forestry, Mining, Electrical Union) and the Electrical
Trades Union say that Kevin Rudd promised to make commission inspectors redundant the day he was
elected in 2007.

They say that Julia Gillard gave assurances that human rights issues would be restored and asked a
union official to 'trust her' on Labor's workplace policies.

Alison Caldwell reports.

ALISON CALDWELL: Senior union officials have accused the Prime Minister Kevin Rudd and his deputy
Julia Gillard of breaking promises to abolish the Australian Building and Construction Commission.

They say half a million dollars was paid to the ALP during the election campaign on the back of
those promises.

Victorian Electrical Trades Union secretary Dean Mighell.

DEAN MIGHELL: We decided that we wouldn't actually hand over the money until we had assurances that
the horrible Building and Construction Commission, that imposes such terrible laws on Australian
construction workers, was abolished and that was the trigger and the money was handed over.

ALISON CALDWELL: So you are saying that our Prime Minister, but then Opposition leader, Kevin Rudd
promised to abolish the ABCC?

DEAN MIGHELL: Absolutely and if I understand it, the same promises were given to other unions. I
mean it was the trigger point for us agreeing to chip in a lot of money.

ALISON CALDWELL: What were the exact words that Kevin Rudd gave? When you say he gave us the
assurance, what can you remember him saying?

DEAN MIGHELL: Well his assurances were to us that the task force inspectors be made redundant the
day he got elected.

ALISON CALDWELL: Bill Oliver is the Victorian secretary of the Construction Forestry Mining and
Energy Union. He says he asked Kevin Rudd if he would be different to Tony Blair, who'd gone back
on promises to unions about restoring rights.

BILL OLIVER: I specifically asked him that question and his response to me was well 'trust me, I'm
not Tony Blair' and I've got to say that every construction worker out there at the moment feels
that they've been let down by Kevin Rudd and 'trust me' doesn't seem to have a true ring in our
industry when it comes from Kevin Rudd's mouth.

ALISON CALDWELL: The unions are nervous and angry about recent statements by the Government in the
wake of the release of a review which recommended keeping tough controls on building workers and
unions.

The report by former Federal Court judge Murray Wilcox recommended hanging onto powers which force
workers to answer questions about their workplace activities. He said interrogation powers are
necessary because there's still a degree of industrial unlawlessness and a code of silence in the
industry.

Since then the Government has said a tough cop is still needed on the beat of the building and
construction industry.

Dean Mighell again.

DEAN MIGHELL: Yeah, well it is like you know changing the number plates on a car. Might have a
different owner but it is still the same car.

There wasn't any massive unlawlessness. I think there was 34 cases brought against the CFMEU over
about four years by the ABCC and that is the laws that prevent union officials going on site and
having health safety meetings - laws that would prevent workers coming together after there had
been a death in the industry to raise money because it would be an illegal stop-work meeting.

I mean they are the sorts of laws that Murray Wilcox will have found that unions have breached.
There is no wholesale, widespread unlawlessness. It is a myth.

ALISON CALDWELL: The Howard government set up the Building and Construction Commission.

Opposition spokesman Tony Abbott says it's still needed.

He says union claims of broken promises underlines his concerns about Prime Minister Kevin Rudd.

TONY ABBOTT: What's really an issue here is the Prime Minister's character. First of all, you
shouldn't make bad promises but second, you shouldn't break promises and I guess the other question
hovering over all of this is the whole nasty backroom money laden deals which seem to be a part of
Labor politics in particular.

ALISON CALDWELL: Denying the union's claims, Deputy Prime Minister Julia Gillard says Labor only
made one promise about the issue before the last election.

JULIA GILLARD: They're simply wrong. We gave one promise. One promise only. The promise that the
ABCC would stay, with its full resources and powers, until 2010. In 2010 it would move into being a
specialist inspectorate within our new industrial umpire, Fair Work Australia.

People who follow these things closely would know we are on track and in a process to deliver that
promise on time and in full and that's what the Wilcox report has been about.

There was one promise, one promise given, one promise being honoured.

PETER CAVE: Deputy Prime Minister Julia Gillard, ending Alison Caldwell's report.

Tense Thai stand-off continues as protesters dig in

PETER CAVE: To Thailand now where anti-government protesters still resisting efforts by the
security forces to disperse them, after yesterday's street battles in Bangkok that left two people
dead and more than 100 others injured.

As dawn broke, around 2,500 red-shirted protesters were dug in around Government House, the offices
of the Prime Minister.

I am joined on the line now by the ABC's correspondent based in Bangkok, Karen Percy.

Karen, what's been happening overnight?

KAREN PERCY: Well, unfortunately we saw some clashes between civilians. Locals in their communities
fed up with what has been happening with these street protesters and that's where we saw these two
men die.

They were essentially civilians. They were parts of communities who took on the red-shirts to say
please stop this because as the pictures you have been seeing over the past day or so have
revealed, there's been anarchy on the streets here.

Buses burned, people basically taking over areas of the city that they shouldn't be and now the
military says they have taken back control of the various intersections around the city that had
been overrun by these people from the United Front for Democracy Against Dictatorship.

They are, as you say, mostly back at Government House and there was a tense night indeed for those
people inside Government House, fully anticipating that the military might move on them. That
hasn't happened as yet but I think there is some determination that these people are going to be
moved on sooner rather than later.

PETER CAVE: The protesters have been outside Government House for three weeks now. How much longer
can they expect to hold out, do you think?

KAREN PERCY: Well, on a logistics perspective, probably a couple of days. They are very well
resourced in terms of food and water and the kind of facilities they need to be able to stay in
place but if there is only 2,500 of them now and they can't have more come in and as we understand
it now, the Thai military has cordoned off a big swathe of streets leading up to Government House.

They have got barricades, they have got check-points and one of the key parts of this particular
protest has been the ability to bring more people in to revitalise and revive people.

That's not going to be possible now, so physically they will be able to stay on for a couple of
days but I think there is a real understanding that the end is nigh even if it is just this
particular part because these people seem extraordinarily determined to be able to push through and
they want political reform.

Political reform is necessary here but there are so many people questioning why you would want to
go about it this way.

PETER CAVE: Indeed, I've seen pictures of the demonstrators piling up gas cylinders around their
encampment. I have seen gas cylinders used to blow up tanks in Croatia and Bosnia. They are not
mucking around.

KAREN PERCY: They are not. They have been used at the various barbeque and cooking stores that have
been set up around, but that's right and in fact yesterday one of the big concerns was that a
number of large tankers that are used to fill up the small tanks were in fact parked at these
various intersections and that was what was concerning locals as well because, you know, if those
were to go off, you are looking at very, very large explosions indeed and yes, if they have, as we
are hearing and as you say you have seen, they've been putting these propane tanks around, that
could be very, very dangerous indeed.

But in that particular part of the city, Government House, there aren't a lot of locals if you
like. It is an area that is fairly contained to government offices, government buildings. There is
a military centre there and there is also the palace not far away so the people they would be
hurting is themselves and I guess that sends a message of how determined they are going to be here.

PETER CAVE: Karen, just very briefly, there are also reports the soldiers aren't loading their guns
with blanks anymore.

KAREN PERCY: We are hearing that yes, live rounds have been fired into the air at this stage but it
does show that yes, there is a step up here of what is going on. We are hearing that the Prime
Minister Abhisit Vejjajiva has in fact, Interpol has been asked to try and find Thaksin Shinawatra.
He is the former convicted Prime Minister who is said to be egging on these protesters so I think
they might, they are trying to track him down to shut up that other avenue of geeing up and getting
these people motivated.

PETER CAVE: Karen Percy live on the line there.

Qld economy takes another hit, but President sees the light

PETER CAVE: Over the weekend, the US President Barack Obama said he was starting to see glimmers of
hope for the American economy.

But here in Australia there are no such cautious notes of optimism, with yet another blow dealt to
Queensland's struggling economy.

The financial crisis has forced the Brisbane Airport to delay its two biggest infrastructure
projects.

Nicole Butler reports.

NICOLE BUTLER: There's been a sharp drop in airline passenger numbers thanks to the global economic
crisis.

Brisbane Airport Corporation spokesman, Jim Carden says the entire aviation industry is feeling the
hit.

JIM CARDEN: At the moment we're looking at a slightly above zero growth rate for this year.

NICOLE BUTLER: That's quite a drop given industry growth was previously at 17 per cent.

JIM CARDEN: That's a 17 per cent growth in passengers every year and we were urgently looking at
how to deliver the infrastructure to meet that growth.

Currently the global economic situation has slowed passenger growth down, which means the demand
for the infrastructure that the airlines use at Brisbane Airport has also slowed.

NICOLE BUTLER: Demand has dropped so much that the Brisbane Airport Corporation has been forced to
delay its two biggest infrastructure projects.

The billion dollar parallel runway will be postponed for up to three years - construction is now
expected to begin in 2018.

And the final stage of a $750-million expansion of the domestic terminal has been put on hold, with
completion likely in five years

But Mr Carden says construction won't proceed until a deal is struck with the airlines on charges
to use the facility.

JIM CARDEN: Obviously you're talking about a lot of money, very large pieces of infrastructure.

But we need to make sure we get the projects just right.

So we never build anything unless we have agreement with the airlines and we're still working on
that agreement for the domestic terminal expansion, ultimately.

NICOLE BUTLER: The infrastructure projects hadn't been put out to tender, so no jobs have been
lost.

But its estimated up to 10,000 construction positions have been forgone.

And the Sunshine State's struggling tourism industry is reeling again.

Daniel Gschwind is head of the Queensland Tourism Industry Council.

DANIEL GSCHWIND: It is a worrying sign of the times, unfortunately.

The airport is responding to the same demand reduction that the tourism industry more broadly can
see.

And of course it is a worrying sign for the industry generally.

But we understand that their response to the circumstances, they must ensure that they remain
financially viable.

NICOLE BUTLER: Mr Gschwind says that the state and federal governments need to act.

He says with big players in the aviation sector feeling the pinch of the economic crisis, it shows
that smaller operators are truly struggling to survive.

DANIEL GSCHWIND: The second largest industry in Queensland is facing unprecedented challenges,
challenges that will require a coordinated response between industry and the Government to make
sure that we dig ourselves out of this hole as quickly as possible.

PETER CAVE: Daniel Gschwind from the Queensland Tourism Industry Council ending Nicole Butler's
report.

Investors block move to wind up their company

PETER CAVE: Still in Queensland and still out near the airport, investors in the toll road company
BrisConnections have voted against the move to wind up the company at a unit holders' meeting in
Brisbane.

The meeting was called by rebel investor Nick Bolton, who wanted to liquidate the company.

At issue is nearly $800-million owed by unit holders in instalments for the company's partly paid
securities.

Some unit holders said they weren't informed about the obligation to pay instalments when they
bought into the company, in some cases very cheaply indeed.

A legal attempt to block the meeting by investor Macquarie Group was dismissed by the Queensland
Supreme Court this morning.

Joining me now from the meeting is our finance reporter Sue Lannin.

Sue, what's been happening there?

SUE LANNIN: Well Peter, it's been a very, very heated meeting. We've seen very, very angry unit
holders; angry because they have lost so much from the value of their investments; angry about a
lack of disclosure. In the last half hour though, the resolution that was put to wind up the
company, as you said by Nick Bolton, that has been voted down.

More than 64 per cent of votes were against the motion to liquidate the company but in the last few
minutes a very dramatic development.

It has just emerged that Nick Bolton, this is the head of Australian Style Investments, who
actually put this resolution to wind up the company, he's turned around and he has voted against
the resolutions. So that really suggests that this has been some sort of ploy by Nick Bolton to
actually do a deal with some of the major backers such as Macquarie Group and Deutsche Bank.

PETER CAVE: And where does leave all the mother and father investors? The small investors?

SUE LANNIN: It really leaves them out in the cold. They have seen a tremendous, as we said, a
tremendous loss in value. Their units, the securities, they were floated in the middle of last year
at $1; on the first day of trade, the units, the price went down 60 per cent. It is basically flat
lined since then; the units are now at one-tenth of one cent.

So basically people can't even trade them.

What has been happening is there has been these off market offers made by companies, including Nick
Bolton's company. So he has been able to buy around 20 per cent of the company.

For the unit holders, the small retail investors, they're still owing around $780-million in
instalments that they've got to pay, because when they bought these units, sometimes for say
one-tenth of one cent, they thought they were really cheap but because they were stapled securities
- so that means you have basically got two shares together - they were still owing, they were still
required to pay further instalments because the units were only partly paid, so it is still a very
serious situation for them.

Last week there was an attempt to strike a deal. Macquarie Group, which again is one of the
investors, they wanted to do a deal whereby the retail investors didn't have to pay these
instalments because some of them are up for millions of dollars, some are up for hundreds of
thousands of dollars, but that deal fell through last week.

But the chairman of BrisConnections Trevor Rowe said today that there was still, there was going to
be negotiations going on in the hope of reaching some outcome for retail investors.

PETER CAVE: And so where is this whole sorry saga headed now then?

SUE LANNIN: Well, it is hard to say. It is being touted as a vital piece of infrastructure.
Basically these three toll roads will link the northern suburbs of Brisbane with the airport and
the central business district of Brisbane but the whole issue is how this debacle is worked out;
what's going to happen to the retail investors?

One key thing that has emerged out of this is that the corporate regulator ASIC and the Australian
Securities Exchange, they've now put in place new rules so stockbrokers are required to obtain a
signed statement from retail investors saying that they've read the product disclosure statement.

That was one of the key issues; that the retail investors allegedly did not understand that they
had to pay further instalments.

There has also been an issue raised of further legal action. Veteran investor Jim Burns, a former
advisor to Alan Bond, has said he is going to launch a legal case against the company, a
$50-million legal case for misleading...

PETER CAVE: Sue, we are going to have to leave it there. Thank you very much. Sue Lannin on the
line from Brisbane.

Cuba set to come in from the cold

PETER CAVE: In another break from the foreign policy of the Bush administration, President Barack
Obama has lifted some of the restrictions on US citizens travelling to Cuba.

Cuban Americans will now be allowed to visit family members whenever they want and they'll also be
allowed to take unlimited money transfers with them, and make unlimited money transfers.

The White House says the changes will help to promote freedom in one of the few remaining communist
nations.

Washington correspondent Kim Landers reports.

KIM LANDERS: In the Cuban capital Havana there's no shortage of tourists, with most coming from
Canada, Europe and Britain, like Alan Sainsbury.

ALAN SAINSBURY: There are particular areas, the hotels they have developed in Guardalavaca and the
islands, which are very good.

KIM LANDERS: Last year was a record for tourism in Cuba, with almost 2.5-million visitors.

But even though the United States is just 145 kilometres away, most Americans have never been to
Cuba, thanks to a travel and trade embargo that's almost 50-years-old.

Now President Barack Obama is easing some of those restrictions for the estimated 1.5-million
Americans who still have relatives in Cuba.

They'll now be allowed unlimited travel to the communist nation and they'll be able to send as much
money as they like to their relatives too.

But those changes apply only to Cuban-Americans and the US trade embargo on Cuba won't be lifted.

British tourist Alan Sainsbury isn't sure the Cuban tourism industry can cope with more visitors.

ALAN SAINSBURY: Cuba is not ready for mass tourism but you still have problems of servicing; staff
are not particularly friendly, not smiling.

KIM LANDERS: The shift in US policy towards Cuba has been welcomed in Miami by the powerful Cuban
American National Foundation, which has spent decades opposing any conciliation with the Castro
regime in Cuba.

Francisco Hernandez is the foundation's president.

FRANCISCO HERNANDEZ: He is a president that is bringing in a new message. A message of hope, a
message of understanding and this is something that the Cuban Government is not used to.

KIM LANDERS: Peter Kornbluh is the director of the Cuba Documentation Project at the National
Security Archive in Washington.

He says President Obama has kept an election promise.

PETER KORNBLUH: He has done so at a time, I think, not of his choosing. At the end of this week he
will be going to the summit of the Americas in Trinidad and facing literally a parade of
Latin-American presidents who want him to normalise relations with Cuba and so he has chosen this
week to try and take a little bit of the wind out of the pressure he is going to face in Trinidad
by making this policy change now.

KIM LANDERS: As I understand it, this is far from the beginning of an end to the isolation of Cuba
by the United States?

PETER KORNBLUH: You know the truth is that it is the United States itself that is most isolated on
Cuba. Every country in Latin America now has relations with Cuba except the United States. Over the
last three or four months we have seen literally a caravan of Caribbean and Latin American
presidents going to Cuba as if to say to the United States, you know, the rest of us can meet with
Raul Castro and Fidel Castro. It's only the United States of America in the Western Hemisphere that
seems to hold Cuba at arms length.

KIM LANDERS: So is it time for the nearly 50-year-old trade embargo to be dropped?

PETER KORNBLUH: It is way past time for the United States to completely change its approach to
Cuba. If there was ever a policy that has failed, it is five decades of the US effort to kind of
tighten the screws on Cuba, isolate Cuba and somehow, through this policy of pressure and
professional hostility, undermine and overthrow the Castro Government.

There could not be a longer, slower, failed US policy in the history of US foreign policy, frankly.

KIM LANDERS: This is Kim Landers in Washington for The World Today.

ABC correspondent caught up in latest Fiji crisis

PETER CAVE: Well, back to our earlier story on Fiji and the deportation of ABC's Pacific
correspondent Sean Dorney.

Sean is now back in Sydney. He joins me on the line from Sydney Airport.

Sean, can you take us through what happened to you?

SEAN DORNEY: Yes, yesterday morning probably, what, 9 o'clock local time, I was having a cup of
coffee with a Fijian journalist and one the screen just behind us was Australian network because
Fiji 1, which is the main local television station there, runs the ABC's international service in
its downtime and my story from Sunday night came up - the one showing that the Fiji Times had run
huge blank papers where their censored stories would have gone and also the interview I did with
Daryl Tarte, the chairman of the Fiji Media Council saying that there was just total censorship in
Fiji.

Minutes later I got a phone call from a senior official from the Information Department who asked
me to go in for discussions because they were not happy with my reporting.

I did go in and we had a discussion and he said, 'Look, immigration officials are on their way to
take you to the airport and send you out of the country,' and I asked could I go to my room and
pack and he said yes.

I told him I had been expecting this. When I got to the room, about 20 minutes later he rang up
saying 'Look can we reach a deal whereby you leave the country voluntarily,' and I said, 'Penne,
sorry my job is to try and report the news. My visa is valid for a few more days, I intend to stay.
If you want me to go, I'll comply but no, my job is to report the news'.

So, about two hours later I got another call from him and then I went to the Information Office and
two journalists or a journalist and a cameraman from TV-3 in New Zealand were pulled in then with a
policeman in their car.

The three of us were taken into a room and our mobile phones were taken off us after a short while
...

PETER CAVE: So you were in effect, arrested?

SEAN DORNEY: Well, we were detained and we were detained for about five hours but there was no
official, you know, 'you have the right to stay silent'. No definitely not; they wanted us to talk.

No, we were held there and we were told that we were being deported; that immigration officials
would come. There was a slight, few moments of anxiety I suppose because the TV-3 cameraman tried
to film what was going on and naturally enough they weren't terribly pleased by that and so ...

PETER CAVE: Sean, you may or may not be aware that Edwin Nand from Fiji Television was arrested for
sending that film out of the country.

SEAN DORNEY: I was not aware of that. He interviewed me outside the hotel in that interim period
between the first call and the second call. There was another journalist from the Fiji Times who
interviewed me in my room and she was pretty despondent because she said no matter what I write, I
know it is not going to be printed because Major Neumi Leweni, the Secretary for Information there,
has extraordinary censorship powers under the emergency regulations and today, for instance, not a
word of her story appeared in the paper.

In fact there wasn't a single thing in today's Fiji Times about the events of the last four or five
days.

PETER CAVE: Sean Dorney, who's live there on the line from the airport in Sydney, arrived back just
a short while ago from Fiji after being deported.

Wombat redefines recycling

PETER CAVE: The industrial town of Burnie in north-west Tasmania has had more than its fair share
of job cuts over the years.

Last week another 280 jobs were slashed from the town's main employer, Caterpillar.

But when Felicity Ogilvie visited Burnie she found at least one cottage industry that's booming
with very few costly overheads and a natural resource that is very unlikely to run out.

Here is her report from Burnie.

FELICITY OGILVIE: Over the years thousands of jobs have been lost from the Pulp and Paper Mill in
Burnie.

It used to employ 4,000 - now just 300 locals work there and the paper mill is so run down it could
soon be closed.

But there's another paper maker in town that's going from strength to strength.

At Creative Paper, Darren Simpson, makes handmade paper out of a material no one else wants.

DARREN SIMPSON: Doesn't sound very pleasant, does it? (Laughs)

FELICITY OGILVIE: The ingredient Mr Simpson is adding to his paper is wombat scats.

DARREN SIMPSON: Back in 2005 we did a kangaroo poo paper and the whole idea and concept of that
was, in Africa for many years they have been using elephant dung to make into paper.

So we knew, as paper makers, we knew that as long as the animal was eating a plant fibre we could
use it, but the whole wombat idea come from the tourists themselves.

As people were coming through and we were showing them the samples of our paper, they would throw
questions at you like can you make it from sheep poo or can you make it from koalas and the one
that kept popping up more than any other was the wombat.

So we thought well, the customer obviously wants it so we thought let's give it a go and it
happened to turn out to be a very nice paper.

FELICITY OGILVIE: The natural looking paper is a hit.

VOX POP: It won't be long before we will all be farming wombats by the look of this paper here.

FELICITY OGILVIE: Would you consider buying this paper?

VOX POP 2: I think you're about 40 years too late because I am happily married now and I don't
write love letters to me wife anymore.

DARREN SIMPSON: When we are boiling it, it does smell horrific as you can imagine, but once it has
been sterilised and rinsed properly there's no scent left to it.

If anything it just gives you a nice organic smell.

FELICITY OGILVIE: And how clean is this paper? I mean you are using poo to make paper. How clean is
it?

DARREN SIMPSON: It is very, very clean. It's very fibrous so basically once you break it up,
basically what you're look at, is as if the animal has just eaten grass and it has just gone
through its system.

PETER CAVE: And that was Darren Simpson from Creative Paper ending that report from Felicity
Ogilvie.