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Suspected terrorist attack on two international hotels in Jakarta

Suspected terrorist attack on two international hotels in Jakarta

Geoff Thompson reported this story on Friday, July 17, 2009 12:10:00

PETER CAVE: There appears to have been a coordinated terrorist attack on two major International
hotels in the Indonesian capital Jakarta.

Bombs have exploded at the Ritz Carlton hotel and there has been a second bomb at the Marriott
Hotel which was bombed in 2003.

Some reports say the facade of the Ritz Carlton has been blown off in the attack and local police
say there have been a number of deaths and many people are trapped and some are injured.

The explosions came at the height of the morning peak hour.

A spokesperson from the Australian Department of Foreign Affairs says they are aware of reports of
the explosions and that the Australian Embassy is urgently seeking to identify whether any
Australians have been killed or injured.

I'm joined on the line by our correspondent Geoff Thompson. He is on the roadway which runs between
the two hotels.

Geoff, what can you see?

GEOFF THOMPSON: Look I am walking towards the (inaudible) now. There are all media crews walking
away from it and I can't see any smoke anymore. It seems that this attack is meant to, at least the
first one is meant to have happened at about eight o'clock this morning. It is not still burning if
that, indeed to what it was.

Now it is, there doesn't intend to, you know, the face of the Ritz Carlton being blown off. There
is no indication of that. It may be the lower floors. But certainly this is a very full building
and the upper floors still look intact.

From where I am standing I can't yet see any damage but obviously the squad cars (inaudible) as we
get closer.

PETER CAVE: There was a suggestion that the bomb at the Marriott may have gone off on the first
floor in the dining room. Is that what you've heard?

GEOFF THOMPSON: That is what I've heard. The reports are, seem to, may have had something to do
with the generator.

I can see some damage now. I am just walking past the police sign and I can see ... OK - media - the
police are stopping me from going any further. Right, they are pushing me back.

I am looking at some, (inaudible...) in front of me there is some broken glass, there are some trees
that have been blown into the street and this is at the bottom of the JW Marriott and we can't go
any further here.

But it looks like it seems to have been on the ground floors. The ground floors where I'm standing
(inaudible)... broken glass.

There is glass strewn across the street so it seems to be a lower floor attack.

PETER CAVE: Geoff, we've got a very bad phone line Geoff, but we'll bear with it for the moment.

Tell me a little bit about the area where it happened. It is the main hotel and embassy district
isn't it? Not far from the Australian embassy.

GEOFF THOMPSON: That is right. This area is just a few blocks away from the Australian Embassy.
This is the Mega Kuningan district with a sort of circle and probably the most developed circle in
Jakarta that has luxury hotels, luxury restaurants, that sort of thing.

Very popular with foreigners and ex-pats. The closest thing you have in Jakarta to perhaps
Singapore's whole (phonetic) development.

So, you know, in terms of wanting to target foreigners, this is where you would do it.

PETER CAVE: Geoff, there was only this morning on AM a report that this bombing or a bombing in
Indonesia may have been about to happen. What can you tell us about that?

GEOFF THOMPSON: Well, I mean this report obviously the timing is everything and this report has
come out from the Australian Strategic Policy Institute which they spoke to a lot of former Jemaah
Islamiah prisoners and these are mostly young guys that have done time already and been released.

And what they say in their really quite revealing interviews is that these young JI disagreed with
what they call their NATO leaders and that is their cute acronym for "No Action, Talk Only".
Meaning that they don't agree with some of the senior Jemaah Islamiah leadership now that it seems
to be moving away from (inaudible) attacks on foreigners and that sort of thing.

Now this could either be a good instance of that or it could be evidence of the fact that Noordin
Mohammed Top, Indonesia's most wanted terrorist who was involved in the previous attack on the JW
Marriott and elsewhere is still on the run. It could be a splinter group of Jemaah Islamiah.

Also the timing of this, almost immediately after the Indonesian presidential election showing
that, perhaps just trying to show that Susilo Bambang Yudhoyono's much lauded efforts to tackle
terrorism in Indonesia are not going completely according to plan as we have, I think, quite clear
evidence of this morning.

PETER CAVE: Geoff, we have Dr Carl Ungerer from the Australian Strategic Policy Institute on the
line now. I might let you go and have a bit of better look around and come back to you in a little
while.

GEOFF THOMPSON: OK, talk to you soon, Peter.

Jemaah Islamiah could be behind Jakarta bombing says ASPI expert

Jemaah Islamiah could be behind Jakarta bombing

Peter Cave reported this story on Friday, July 17, 2009 12:14:00

PETER CAVE: Just this morning on AM, there were warnings about the potential rumblings from within
the Jemaah Islamiyah terrorist organisation.

It was behind the Bali Bombings in 2002 in which 88 Australians were among 202 killed.

Dr Carl Ungerer from the Australian Strategic Policy Institute warned that young members of that
group were defiant and intent on bombing Western targets. Here is part of what he had to say.

CARL UNGERER: Many of the younger JI members have not been reformed. They do not accept either the
rehabilitation program that has been offered to them in the present system or the kind of
traditionalist view amongst JI that there should be a cessation of the bombing campaign.

They do not accept this. They are gravitating towards these more hardline elements. They are more
interested in continuing the armed struggle that they talk about.

PETER CAVE: Well, Dr Carl Ungerer, sadly you were very right.

CARL UNGERER: It seems so Peter, although I think we have got to be very careful here in the
immediate hours after this event to, not to blame one group or another too quickly but clearly it
has all the hallmarks of a coordinated attack that JI has become known for.

PETER CAVE: What were the rumblings you were hearing in those interviews with the younger JI
members?

CARL UNGERER: Oh, precisely that. That these hardline splinter groups were simply not accepting of
the view that things were not well amongst some of the JI leadership. That they should move towards
a consolidation phase and they believe that the continuation of a bombing campaign was the only way
that they were going to achieve their political objectives.

PETER CAVE: How strong is the organisation within Indonesia at the moment?

CARL UNGERER: It is hard to say at the moment, Peter. JI has splintered into a number of sub-groups
and factional elements and indeed very small groups of individuals could have in fact carried out
this event without the knowledge or acquiescence of any other parts of the organisation so it is a
weakened organisation. It is very different from the formalised structure of a few years ago but
the danger in that is that these smaller splinter groups who are intent on a violent bombing
campaign, retain that capability to do this sort of thing.

PETER CAVE: Noordin Mohammed Top, the Malaysian terrorist leader who was linked to the bombings in
Bali is still said to be active. Is there any chance that he may be linked to anyone who carried
out a bombing like that?

CARL UNGERER: It is impossible to say at this stage Peter. Top is a sort of senior recruiter and
one of those who has maintained this very strict hardline view of what JI should be on about but
until we get further evidence, it is impossible to say whether he or who was involved in this
particular act.

PETER CAVE: The Australian Federal Police and the Indonesian police have been working together on a
plan to try to turn around some of these younger people. Is there a suggestion that this hasn't
worked?

CARL UNGERER: There is and the interviews that were conducted by Hoodis Mail (phonetic) over the
last few months had demonstrated that. That some of the younger members of JI who are now
transitioning out of jail had simply not accepted any of the kind of rehabilitation programs. Do
not want to work with the police. Actively rejects that idea and now are transitioning back into
society so that is what our report tried to highlist.

PETER CAVE: Dr Carl Ungerer, thank you very much for joining us this morning.

CARL UNGERER: Thanks Peter.

Gordon Nuttall sentenced to seven years in jail

Gordon Nuttall sentenced to seven years in jail

Nicole Butler reported this story on Friday, July 17, 2009 12:18:00

PETER CAVE: In Queensland the disgraced former Queensland government minister Gordon Nuttall has
today been given the maximum sentence of seven years' jail.

On Wednesday, Nuttall was found guilty of 36 charges of corruptly receiving payments totalling
$360,000 from two businessmen.

Nicole Butler is at the Brisbane District Court, where Chief Judge Patsy Wolfe handed down the
sentence.

Nicole, what can you tell me what reasons that Judge Wolfe gave for this sentence?

NICOLE BUTLER: Well, Peter, Judge Wolfe spoke for an hour and a half before handing down that
maximum sentence of seven years. Judge Wolfe did say that Nuttall's offence didn't require a
cumulative sentence so it is seven years for all 36 charges of corruptly receiving payments.

She took into account Nuttall had no prior criminal history. She said he had undoubtedly attracted
public humiliation and acknowledged the family had undergone enormous stress. But ultimately the
maximum sentence was imposed as Judge Wolfe explained the most important principle in cases like
this involving a government minister is that as a deterrent and she wanted to make it clear the
community denounces that sort of conduct.

PETER CAVE: So when will Nuttall be eligible for parole?

NICOLE BUTLER: He'll actually be eligible for parole earlier than normal because of what Judge
Wolfe called his cooperative conduct during the trial; so he will be eligible for parole in
two-and-a-half years in January, 2012.

PETER CAVE: His family were very upset when the sentence was handed down. What has it been like at
the court room today?

NICOLE BUTLER: Well, Peter, Nuttall has always been quite a distinguished looking man. Nice suit
and tie and flower on the lapel but today there was no tie. He was unshaven and he did look like a
man defeated although there weren't as many tears as there were yesterday.

The family though again, very distressed, crying throughout proceedings, holding each other. His
son Andrew just flew back from overseas to be there and as they were leading Nuttall away, the
family were calling out they loved him, telling him to stay strong.

He replied I love you all and Nuttall's barrister, John Rivet says Nuttall is in shock at receiving
the maximum sentence and his family is absolutely devastated.

PETER CAVE: Did the judge have anything to say about the two men who allegedly made those payments
to Gordon Nuttall?

NICOLE BUTLER: Well, Judge Wolfe did say that, sorry with regard to those two businessmen, Harold
Shand and Ken Talbot, they are both due to stand separate trials over their alleged involvement in
the payments. One is later this year, one is next year.

Judge Wolfe said today, nothing I say today should be taken to involve any assumptions about the
strength of those cases. She said in sentencing I am only concerned with the evidence against
Nuttall so she made the point of making them very separate and said those businessmen deserve their
own day in court.

PETER CAVE: Nicole Butler, live on the line from the Brisbane District Court.

Govt says productive talks with Chinese official re Hu; Opposition says Labor too timid

Govt says productive talks with Chinese official re Hu; Opposition says Labor too timid

Alexandra Kirk reported this story on Friday, July 17, 2009 12:23:00

PETER CAVE: The Federal Opposition is keeping up the pressure on the Government to take a stronger
stand with the Chinese Government over Stern Hu's arrest and detention.

Mr Hu, a Rio Tinto executive, has been detained in a Shanghai jail for almost two weeks. He's had
one consular visit, as the Australian Government's repeatedly sought more information and demanded
the matter be dealt with quickly.

While China issued strongly worded warnings for Australia to butt out of its affairs, the Foreign
Minister Stephen Smith says his meeting late last night with a Chinese vice-minister for Foreign
Affairs was "productive".

The Opposition has dismissed the Government's response as "timid and weak".

From Canberra, Alexandra Kirk reports.

ALEXANDRA KIRK: Stern Hu and three of his Rio Tinto colleagues are being accused of bribery and
stealing state secrets.

The Chinese Government is ramping up the rhetoric. Its message is to butt out, saying the "noise"
some people are making is "interference in China's sovereignty".

And a Chinese government spokesman's declared the actions of Rio Tinto staff have caused losses to
China's interests, expressing a belief that Stern Hu and Rio are quote "fully aware of this".

But Australia's Foreign Minister Stephen Smith has a different view after his meeting with a
Chinese vice foreign minister last night in Cairo.

STEPHEN SMITH: That doesn't sit with the meeting that I had and the statements made to me, which
are that the investigation against Mr Hu and others associated with him who are also under
detention is ongoing.

ALEXANDRA KIRK: Mr Smith's view is he has made some headway.

STEPHEN SMITH: It was a good and productive conversation so at least I am satisfied there is a
channel there, an open channel of dialogue and I suspect that will be required for a period of time
because as I said before, we are in, I think, here for the long haul.

Secondly it is quite clear that the investigation has not concluded or completed. The Chinese, just
as we, are waiting for that investigation to conclude so a determination can be made as to whether
charges will be laid against Stern Hu.

ALEXANDRA KIRK: The Foreign Minister says Australia's consular agreement with China only allows for
one consular visit but has left open the option for pushing for more.

STEPHEN SMITH: If, at any point in time, Australian officials believe it is necessary or essential
to seek access over and above the access set out in the consular agreement then that will be done.
It is not something that we have come to a conclusion about at this stage.

ALEXANDRA KIRK: Is it time to ramp up the pressure, raise it with your Chinese counterpart and the
Prime Minister Kevin Rudd with President Hu Jintao because so far your representations appear to
have come to naught.

STEPHEN SMITH: The Prime Minister has made it clear, as I have, that if and when we believe it is
appropriate to make such representations at our equivalent levels, we will.

ALEXANDRA KIRK: And you don't believe that that time has come yet?

STEPHEN SMITH: I have also made it very clear that I have regular meetings with Chinese Foreign
Minister Yang and when I have one of my regular meetings with Chinese Foreign Minister Yang then I
will raise this matter.

That, in very many respects, goes without saying.

ALEXANDRA KIRK: And is one on the radar?

STEPHEN SMITH: One, one, one meeting or one phone call will not solve the problems and the
difficulties now facing Mr Hu and facing the Australian Government as we, in our view, do
everything we can to protect his interest and to do our best to see a positive and a successful
outcome for him.

ALEXANDRA KIRK: The Opposition remains critical of the Government's approach. Frontbencher Andrew
Robb, who's in China for talks on climate change, says Chinese authorities have been forthright in
communicating their position domestically. He contrasts that with the Rudd Government's response.

ANDREW ROBB: While Kevin Rudd has been tugging his forelock for 10 days, there has been a megaphone
operating up here in China, being pushed as the number one story on state run media everywhere and
it seems like a very deliberate attempt to escalate the issue, at least in China.

The Australian Government response has looked extremely timid and weak. I don't know any of the
details of course of the case but I did some work with Rio Tinto before entering Parliament and I
found the company had very strict ethical policies forbidding bribery and this needs to be said at
the very least that needs to be said and it is not being said.

PETER CAVE: Opposition frontbencher, Andrew Robb there.

China's economic confidence puts Hu in more difficult position: Beazley

China's economic confidence puts Hu in more difficult position: Beazley

Alexandra Kirk reported this story on Friday, July 17, 2009 12:28:00

PETER CAVE: The former Labor leader, now academic, Kim Beazley says China's strong emergence from
the global financial crisis has boosted that nation's confidence in the world and its price
negotiations and the operations of its laws.

He says that's put Hu Stern in an even more difficult position.

Mr Beazley told Alexandra Kirk in Canberra the strong reaction from China should be kept in
perspective.

KIM BEAZLEY: I'd be surprised if the Chinese didn't react to pressure that way. That doesn't
necessarily mean that they won't respond. The fact that they come out and give warnings about
keeping off their patch.

I mean what Kevin Rudd said to them privately, and it would probably have been useful if it had
stayed privately, a few days ago was that the world was watching them. They are making calculations
about investments in China and all those sorts of things on the basis of how this case is handled
and the Chinese would rather handle it without the world watching and without that sort of pressure
being placed upon them so naturally there is pushback but that doesn't mean they'll take no notice
of it.

The Government's intentions, and they do try to keep it this way, is to proceed systematically and
quietly on this so that Australia does not put itself inadvertently or unknowingly into a position
where we lose massive face and the Australian Government and people start to look ridiculous.

That is why Kevin Rudd is so circumspect about who he phones and the circumstances in which he
phones them and the bloviating of the Opposition is neither helpful nor is it very erudite.

ALEXANDRA KIRK: It appears that nothing really has shifted. The Government hasn't made any inroads;
it has only got one consular visit. Nothing has moved and Mr Hu is sitting in jail. No charges have
been laid; so really can you say that the Government has achieved anything in any of this?

KIM BEAZLEY: Well, yes they have obviously achieved something. They have got the Chinese attention,
hence the sorts of reactions that you are seeing.

They have also got the attention of other parties to the trade relationship with China. A very
heavy party in the case of the United States,

The Chinese are proceeding according to their own law in the investigation of this case and we have
got to quietly do the best that we can with it.

ALEXANDRA KIRK: Do you think that the consular agreement that was done in 1999 which sets out what
sort of access Australians in China do have - for example to lawyers, to their family and consular
representation - that it's time that that were revisited and improved?

KIM BEAZLEY: It is always going to be a work in progress. We've also got to understand how the
ground is shifting here. For the last 20 years China has largely been on the back foot in
discussions about what is the appropriate legal and rights regime around a capitalist system and
the Chinese have been obliged to respond constantly to Western pressures about transparency, about
judicial independence and the like.

They haven't liked it but since the global financial crisis, no more. They regard the West or at
least the Western model as having massively lost face and so you can see a confidence in the way in
which they are approaching price negotiations and the way in which they are approaching usage of
their law, the attitudes that they have to a national who has become a foreign national.

All these sorts of things are in there in the mix and it speaks of very great self-confidence.

ALEXANDRA KIRK: So in this case you think Stern Hu might suffer a bit of collateral damage because
of the strong position that China now finds itself in and considering that only in the last 24
hours or so we have seen that their growth figure is something like 7.9 per cent. Has that
emboldened the Chinese in a way?

KIM BEAZLEY: Well, Stern Hu is in an even more difficult position because of I think probably
self-confidence in relation to the Chinese Government's international outlook.

Now over time, hopefully that will change. Over time, hopefully we will get back to the point where
the Chinese are listening seriously and maybe over time, this case will become quite seminal,
particularly if it is, as it seems to be, taken up by other countries in a trading relationship
with China.

PETER CAVE: The former Labor leader Kim Beazley, now an academic.

And in news just in, Rio Tinto has released a statement saying that the allegations of bribery
against Stern Hu and the other Rio employees are without foundation. It says it remains fully
supportive of the four executives.

Government declares a crackdown on alcohol advertising in sport

Government declares a crackdown on alcohol advertising in sport

Di Bain reported this story on Friday, July 17, 2009 12:33:00

PETER CAVE: There are fresh calls from the Government to crackdown on the lucrative alcohol
advertising that sporting codes receive from the big brewing companies.

Newspaper reports say the Government's Preventative Health Taskforce has made a key recommendation
to stop alcohol companies from advertising in sport.

Sporting codes argue it would be a bad idea because much of that revenue goes back to grassroots
and community sport.

But anti-alcohol campaigners say the number of alcohol ads for sporting events is getting out of
hand.

Di Bain reports.

DI BAIN: It is a debate that has been brewing in Canberra for years. After a Senate inquiry last
year, Family First Senator Steve Fielding put the proposal before Parliament but it was knocked
back.

He says if the Government's Preventative Health Taskforce has recommended the ad industry be banned
from sponsoring major sporting codes, then it should now take a stand.

STEVE FIELDING: Up until now the Rudd Government has been hiding behind the alcopops tax. It is a
blatant tax grab. It would do very little to address binge drinking and the Government does have to
put these tighter restrictions in place. They need to set a date for this to happen.

DI BAIN: Senator Fielding argues that sport will benefit if it is stripped of the alcohol
advertising revenue.

STEVE FIELDING: People are saying that look, this will rob sport of millions of dollars and sport
will go backwards because of it. I remember the arguments when we looked at cigarette advertising
restrictions and the same thing was said about sport would go backwards. It never did.

DI BAIN: Independent Senator Nick Xenophon also supports the ad ban and he wants the Government to
prepare the sporting sector for a phase out period.

NICK XENOPHON: Three to five year phase out is quite reasonable. It allows sporting codes to look
at alternative sponsorship and the Commonwealth Government rakes in billions of dollars from
alcohol excise each year. They need to do the right thing to make up that shortfall.

They need to make it easier for sporting codes to wean themselves on alcohol advertising and given
the billions of dollars they rake in from alcohol taxes, the Commonwealth needs to step up to the
plate.

DI BAIN: The alcohol industry won't say how much money in total they spend on sponsoring sporting
events. There's estimates of $300 million a year. On ABC Local Radio in Melbourne, the AFL CEO
Andrew Dimitriou wouldn't reveal what the AFL gets in ad revenue.

RED SYMONS: How much do you get?

ANDREW DIMITRIOU: It is none of your business ...

RED SYMONS: Oh, don't make me look in the paper.

ANDREW DIMITRIOU: Flows into development of the game, Red.

RED SYMONS: Right, millions. $300 million?

ANDREW DIMITRIOU: Our broadcasters rely on advertising of all sorts including alcohol but we are
involved in responsible alcohol drinking policies, educating all people in our industry and that is
the best way to go about it.

Banning everything is not going to solve the world. There is a lot of banning going on, Red. Ban
this, ban that.

RED SYMONS: Nanny state.

ANDREW DIMITRIOU: Um, yeah. What is going on?

DI BAIN: The Brewers Association which represents large beer makers like Fosters, who invest
heavily in sport ads, has dismissed the report. Its CEO Stephen Swift says it doesn't surprise him
that the Preventative Health Taskforce would want to crack down on the alcohol industry but says
there is no evidence to support arguments that alcohol ads encourage bad drinking habits.

STEPHEN SWIFT: You know there was a Senate inquiry into it only last year and there wasn't any
general groundswell then for this. I think the Australian consumers are very well aware about
alcohol and its properties and its benefits when it is consumed in moderation and its risks when it
is not.

DI BAIN: The head of Vic Health, Todd Harper says there are studies which show alcohol advertising
has a big impact on young people.

TODD HARPER: We know that alcohol marketing significantly influences young people's decisions about
drinking and their intended alcohol use. Young people are very sophisticated when it comes to
perceiving alcohol for example as a necessary ingredient of success whether it is sporting success,
success in friendships, so we need to be careful here that we are not inadvertently creating
problems for our community in terms of alcohol harm through the vehicle of sport.

We should protect the sports from a situation where they become I think the conduits of harmful
alcohol messages in our community.

PETER CAVE: Todd Harper from Vic Health ending that report from Di Bain.

Wall Street rallies as Roubini says worst might be over

Wall Street rallies as Roubini says worst might be over

Sue Lannin reported this story on Friday, July 17, 2009 12:37:00

PETER CAVE: Wall Street rallied again overnight as investors grow more confident that the global
recession is ending.

A speech by the US economist Nouriel Roubini said that the US recession could be over by the end of
the year. That was seized on by investors.

But Professor Roubini later put out a statement saying that he had not changed his economic outlook
and that any recovery will be weak.

Other economists and market watchers though think the worst may be over.

Finance reporter, Sue Lannin.

SUE LANNIN: When Nouriel Roubini talks the markets take notice.

The Professor of Economics at New York University is a well known bear who predicted the global
financial crisis.

Wall Street added to this week's gains after Professor Roubini made a speech in New York repeating
his view that the US recession would finish by the end of 2009 but any recovery will be shallow.

Justin Urquhart-Stewart from Seven Investment Management in London agrees we are not out of the
woods yet.

JUSTIN URQUHART-STEWART: Well, certainly there was quite a remarkable turnaround based on well, not
a lot really. We had some astonishing figures out of Goldman Sachs and they were generally positive
news but I think you have to take a step back and say the global economy might well come out of
recession technically by the end of this year but the global economy has been very seriously
damaged and the ability to be able to start going back as we were before I'm afraid is not going to
be happening for some considerable time.

SUE LANNIN: The market's optimism was also boosted by a good profit result from US banking giant,
JP Morgan.

But the bank's chief financial officer, Michael Cavenagh warned of more write offs ahead.

MICHAEL CAVENAGH: When you look at home equity prime and subprime, you are going to see the charge
offs continue to trend higher versus prior period and in a couple of the cases, prime and subprime,
we up our future guidance but the second point is that each of these portfolios, I just want to say
it once, they are flowing to the early delinquency bucket and the dollar value of loans that are
sitting in the early delinquency bucket has started to stabilise so that is a new trend versus what
we have seen previously.

SUE LANNIN: Fariborz Moshirian is Professor of Economics at the University of New South Wales.

He thinks a corner has been turned but the lack of credit and a downturn in international trade
will hamper any recovery.

FARIBORZ MOSHIRIAN: It is going to slow down the process. In other words on the one hand we are
seeing less lending by the US banks. On the other hand we are saying that international trade is
not basically flowing well, protectionism is very strong plus massive budget deficit in the United
States are negative factors for a sustained global recovery.

SUE LANNIN: The Australian market has rallied nearly seven percent over the past few days as
optimism grows in the US and China.

Martin Lakos from Macquarie Private Wealth says he believes the market bottomed in the March
quarter.

MARTIN LAKOS: We've seen the market rally hard and pull back 9 per cent since the middle of June.
Although we have seen a very sharp rebound from those lows over the last three days, certainly
there is some more information that has now emerged that is inspiring markets to rally so the
outlook really is probably a little bit more positive.

In fact our numbers suggest that earnings will be down about 19 per cent across the broad market
but that hasn't changed for three months. That is that analysts are no longer downgrading.

SUE LANNIN: Do you think a corner has been turned?

MARTIN LAKOS: It certainly does look like that. We have now seen the bottom of markets and that
bottomed out in March of this year.

There is still a lot of water to go under the bridge for markets. There is no doubt about that.
Best example of that is the CIT Group in the US which is a medium-sized lender to small to medium
enterprises in the US.

That is in financial trouble so there will be ongoing negative surprises to come into the economy
and into markets but broadly speaking, markets are really looking for that broad recovery and all
leading indicators at this stage would be suggesting that is the case.

PETER CAVE: Martin Lakos from Macquarie Private Wealth ending that report from Sue Lannin.

Separate police investigation into Theophanous rape case revealed

Separate police investigation into Theophanous rape case revealed

Rachael Brown reported this story on Friday, July 17, 2009 12:41:00

PETER CAVE: A Melbourne court has learnt today of a separate investigation into the handling of the
rape claim levelled at Victoria's former industry minister Theo Theophanous.

The committal hearing is underway for Mr Theophanous who is charged with raping a female friend in
his parliamentary chambers in September 1998.

Today the courts heard that the minister wrote to the then deputy police commissioner Simon
Overland complaining about his charge and treatment and this year a police investigation into that
was launched.

Rachael Brown is at the Melbourne Magistrates court.

Rachael I understand there's been further claims of fabricated evidence in this case?

RACHAEL BROWN: There have Peter. There has already been claims during this committal of fabricated
emails, fabricated witness statements. Today we have heard a story of fake text messages.

Now the court has heard the mobile text messages of greetings, of happy birthday, happy new year,
that the defence is relying on to prove there was no rape - because why would a victim send
greetings to her attacker - we have heard today that they were actually fake. That they originated
from a number in Greece that isn't even in existence. That they never came from the victim's,
alleged victims, phone.

Now the prosecution says it is unfair of Theophanous to rely on these texts to defend himself when
they were fake.

Now the defence lawyer has come back and said well it was actually Theophanous that exposed the
text emails, sorry the text messages as fake. That he had alerted Simon Overland earlier this year.
Too many misgivings he feels he has with the case including these fake text messages, as they were.

Mr Ritner says the fake texts are part of the conspiracy, part of a fraud perpetrated against Theo
Theophanous.

PETER CAVE: A conspiracy? What did the Magistrate make of that?

RACHAEL BROWN: Well, the Magistrate seems to have grown a bit weary of the circular arguments
involving the legitimacy of these text messages. He said this case has turned into an OJ Simpson
style case where parties get out on the court steps and announce their thoughts and plans to the
press.

Now speaking of the media, the Fairfax journo who broke the story of the alleged victim's story is
in the stand today.

She told us how she was contacted in 2006. She said she kept the alleged victim's confidence until
this year, sorry late last year, didn't publish it and it wasn't until Theo Theophanous came out in
October 2008 to defend rumours he was under investigation and that he had no case to answer, that
the complainant calls the journalist, said she was ropable and said she wanted to tell her story
and that was published the next day.

PETER CAVE: So Rachael, where to from here?

RACHAEL BROWN: Well, Peter we are now into day 10 of the committal and it was supposed to go for
seven days. The journalist is still in the stand. We will be hearing from closing arguments or into
next week and then of course, there is the Magistrate's decision to be made. He'll have to decide
if there is enough evidence to send it to trial and as a side issue, Mr Theophanous has lodged his
pre-selection nomination with the Labor Party headquarters and it will be up to the national
executive to decide whether Mr Theophanous will remain in Parliament after next year's election.

PETER CAVE: Rachael Brown at the Melbourne Magistrate's Court.

More earthquakes hit New Zealand

More earthquakes hit New Zealand

Kerri Ritchie reported this story on Friday, July 17, 2009 12:45:00

PETER CAVE: The Shaky Isles just keep on shaking.

The South Island of New Zealand has been rattled by up to eight sizeable aftershocks since
Wednesday night's powerful earthquake, which measured 7.8 on the Richter scale.

Experts say there's a very real possibility of another big one on the way.

New Zealand correspondent Kerri Ritchie reports,

KERRI RITCHIE: Wednesday night's earthquake off the west coast of New Zealand's South Island is the
biggest quake to hit in the world so far this year.

One mother living in Central Otago captured all the action on her video camera.

She was terrified - but on the tape her young child doesn't sound too fazed.

MOTHER: Earthquake.

CHILD: Mama, are earthquakes bad?

KERRI RITCHIE: Dr Mark Quigley lectures in Geological Science at the University of Canterbury in
Christchurch.

He's an expert on earthquakes and knows exactly why there was only minor damage.

MARK QUIGLEY: One of the main reasons is that the direction of the fault plane ruptures really
influenced the way that seismic energy gets focused on the earth's crust and this particular
earthquake seemed to send most of its energy out into the west - sort of moved the part of the
South Island up and shoved it to the west.

KERRI RITCHIE: Wednesday nights' quake was the same magnitude as the one in 1931 which struck the
North Island city of Napier and killed more than 200 people.

Dr Quigley says there's a good explanation why this time no-one was killed, or even injured.

MARK QUIGLEY: A lot of New Zealand towns closest to the earthquake, you know 100 kilometres away or
so, are situated on either very shallow river sediments or hard rock and so those sort of towns do
much better than for instance Christchurch which is situated on deep thick alluvium which tends to
amplify seismic waves and would be more dangerous.

KERRI RITCHIE: South Islanders were woken up this morning by a magnitude 5.6 quake and more are
expected throughout the day.

John Hamilton is the director of Civil Defence in New Zealand.

He says New Zealanders are alert when it comes to quakes but they're not really prepared.

JOHN HAMILTON: Our surveys indicate that something like 80 per cent of the population understand
what the impact is likely to be but it drops down to less than half of us have taken the steps of
getting even the basic survival water and food items together which will help us get through such
an emergency.

KERRI RITCHIE: He says New Zealanders need to get earthquake survival kits organised.

JOHN HAMILTON: It is going to hit us at some stage, we just can't tell when. Get your gear together
now so that you are better prepared for the event when it comes.

KERRI RITCHIE: And the next big one is only a matter of time according to Dr Mark Quigley.

New Zealand gets around 15,000 earthquakes every year.

MARK QUIGLEY: When we look at the alpine fault behaviour through time, we see that it ruptures
every 200 to 300 years in a series of big earthquakes, magnitude 8, so even bigger than this 7.6
which recently occurred and the last one that we can see in the geologic record is from 1717 so in
some respects the alpine fault is overdue. It is perhaps pregnant if you want to put it that way
for a big earthquake.

PETER CAVE: Dr Mark Quigley, a lecturer in geo science at the University of Canterbury in
Christchurch.

State won't help Aboriginal Legal Service

State won't help Aboriginal Legal Service

David Weber reported this story on Friday, July 17, 2009 12:50:00

PETER CAVE: Western Australia's Attorney General says the state won't provide funding for the
Aboriginal Legal Service despite its threat to withdraw lawyers from the courts.

The Legal Service says its workload is too high for it to provide a proper service, with some
lawyers handling more than 50 clients a day.

By some measures, Western Australia has the highest incarceration rate of Indigenous people in the
nation.

But the state's Attorney-General says that Aboriginal Legal Services have always been funded by the
Commonwealth.

He says that while he may support a push for more federal funding, the state is unlikely to provide
financial help.

David Weber reports.

DAVID WEBER: The Aboriginal Legal Service says the threat to withdraw lawyers from the courts
should be taken seriously.

The chief executive Dennis Eggington made the comment on The World Today yesterday.

DENNIS EGGINGTON: I think that we're gonna have no alternative at the end of this particular
contract with the Commonwealth Government if we aren't able to get any extra funding. Now I say
that Peter because currently we're funded under contract for 25 lawyers in this state and we've
currently got 37 employed and most of those or the extras are only employed up until the end of
June 2011. So if we take the figures we would have a dozen or more lawyers out of the system and
that would really cause problems about servicing the current courts we do.

DAVID WEBER: The state's Attorney-General says the WA Government has not provided funding to the
service in the past, and it's not likely to do so in the future.

Christian Porter says he would support a push for more federal funding.

CHRISTIAN PORTER: Whilst the states administer the criminal law, it has always been the case that
the ALS has a federally-funded body and we would give every support to ALS based on what data they
have at the moment with respect to increased service delivery during times of economic downturn to
lobby the Federal Government for more money.

DAVID WEBER: Are you concerned at all about the threat that lawyers might be withdrawn from courts
and people won't have that representation?

CHRISTIAN PORTER: Well, I must say that I have only seen a transcript of what Mr Eggington has said
on radio but simply there being increasing levels of work, which I don't doubt there are and which
occur in times of recession for all criminal service providers, that seems to me not necessarily to
be the justification for pulling services out of court.

I mean the Commonwealth Government funds legal aid to provide court services and I think that that
sort of potentiality seems an unusual one for me but I think that is one that the Commonwealth
Government would need to be queried with respect to.

DAVID WEBER: Would the State Government then consider an application from the ALS for some kind of
funding because you said that there hasn't been an application or you are not aware of one anyway?

CHRISTIAN PORTER: Well, there hasn't been a formal budgetary application. Certainly not before the
last state budget but I'll have a conversation with Mr Eggington but again it would be
extraordinary across the practice in all the states and territories if the West Australian State
Government determined to spend money to pick up the slack where the Federal Government may be
underfunding.

DAVID WEBER: Although WA does have an extraordinarily high level of Aboriginal incarceration so
perhaps it is appropriate?

CHRISTIAN PORTER: Well, we have under Labor had an increasing proportion of Aboriginal
incarceration which as I say has dropped in the early days of the Liberal/National Government.

We also have a higher Indigenous population than many of the other states but yes, we do have a
high level of Indigenous incarceration which is something that we are working to decrease but again
that would seem to me to be justification for the Federal Government to provide proportionately
more funding to states with greater Indigenous populations as a percentage rather than a matter for
the states, whether it be us or territories like the Northern Territory, to make up for a lack of
federal funding.

DAVID WEBER: Although the state is doing relatively well in terms of its budget and its future
outcomes so shouldn't WA be able to pay for this itself?

CHRISTIAN PORTER: Well, I don't know what you are measuring our state doing well. We are certainly
one of the few states that has been able to return a budget surplus but nevertheless, our state
budget is under greater stress than it has been since, for many years, because we are suffering the
greatest economic downturn since the Great Depression so our state is under, state budget is under
immense pressure.

PETER CAVE: Western Australia's Attorney-General Christian Porter speaking to David Weber.

Farmers receive support for mulesing

Farmers receive support for mulesing

Kathryn Stolarchuk reported this story on Friday, July 17, 2009 12:53:00

PETER CAVE: The Australian wool industry has a new ally. The biggest wool processor and supplier in
Europe has come out in support of Australian farmers, saying the 2010 deadline to get rid of the
practice of mulesing is unrealistic.

But the animal's rights groups say the farmers have had enough time.

Kathryn Stolarchuk has this report.

KATHRYN STOLARCHUK: Some of the biggest clothing companies in the world are refusing to buy
Australian wool. But Australian farmers have recently received support from Europe's largest wool
processor and supplier.

EXTRACT FROM LETTER FROM LAURENCE MODIANO (voiceover): AWI has spent $20 million to find a solution
without much success, and I can assure you that unless St George (the patron saint of shepherds)
performs a miracle, there will be no alternative to mulesing by 2011.

KATHRYN STOLARCHUK: Laurence Modiano is the director G.M. Modiano and the Australian Wool
Innovation.

That's some of what he had to say in a letter to retailer, Marks and Spencer.

And farmers are buoyed by his support.

Mike Norton is president of the WA Farmers Federation.

MIKE NORTON: I think it is an excellent move by Laurence. Laurence can see both sides of the
argument and I believe that he can see that the predicament that the wool growers are in and what
he has done is lobbied the retailers to see reason in relation to the problem and why Australian
farmers use the on-farm practice of mulesing.

KATHRYN STOLARCHUK: He maintains that for the time being, mulesing is still the best way to protect
sheep.

MIKE NORTON: There's been $20 million spent on the project over the last six years and we still
don't have an effective alternative to mulesing. We certainly have some processes which are better
than what we had before but we don't have the silver bullet that's going to prevent us in a lot of
areas in Australia from stop mulesing completely at this point.

KATHRYN STOLARCHUK: But animal's rights groups say farmers have had enough time.

ANGIE STEVENSON: Like, how much time do they want? Enough is enough. 2010 was agreed upon by all
the wool growers, by People for the Ethical Treatment of Animals, by Animal Liberation so let's
stick to the 2010 deadline and relegate mulesing, which is a brutal procedure, relegate it to
history.

KATHRYN STOLARCHUK: Angie Stevenson is from the Animal Liberation group.

She says farmers who want to mules beyond that 2010 deadline face further fall out with
international customers.

ANGIE STEVENSON: If one of the biggest producers of wool, be it Sunshine based in China, are
suggesting that their customers want un-mulesed wool then, what is the wool industry thinking? They
will have no market, they will have no buyers left if they do not implement alternatives to
mulesing very quickly.

KATHRYN STOLARCHUK: And it doesn't look like the farmers and animal rights supporters will be
coming to an agreement anytime soon.

ANGIE STEVENSON: If wool growers want to have a future in growing wool, then they have to evolve
and move with the ethical times. They cannot continue to torture and cut off shades of skin off
their sheep and hope that the rest of the world will accept that because they are too lazy to do
anything else.

PETER CAVE: Angie Stevenson from the Animal Liberation group ending Kathryn Stolarchuk's report.

Australian man injured in Jakarta bombing

Australian man injured in Jakarta bombing

Geoff Thompson reported this story on Friday, July 17, 2009 12:55:00

PETER CAVE: An Australian man has reportedly been injured in the blast at the Marriott.

A caller called, Jim told Fairfax Radio's 3AW in Melbourne that his son had phoned to tell him of a
massive blast.

TALKBACK CALLER JIM: He was in the building and all of a sudden there was an enormous explosion and
he was bleeding from the left leg although from what I can gather the injury is not serious and
lost his hearing in one ear but he thinks that he will recover from that and he is on his way to
hospital and he doesn't know the extent of any injuries to other people but no doubt there would
be.

PETER CAVE: Caller Jim on Melbourne radio 3AW this morning.

Let's go back to Geoff Thompson who is outside the Marriott Hotel in Jakarta. Geoff, what else have
you been able to find out over the last hour?

GEOFF THOMPSON: What we are hearing from police Peter, is that they are now saying that six people
are injured. Now local TV is reporting ... sorry dead, and local TV are reporting that up to 11
people are dead. We are hearing that up to 18 people are injured. It is obviously a confused
situation at the moment.

The security authorities got in and shut this place down very quickly and it is hard to get in to
where the actual site is but I did actually meet an Australian embassy official in the area who
actually had a child who was injured in the blast. Not seriously, just a cut foot, something like
that.

What I did learn is that Australian embassy officials do use these two hotels and adjoining
buildings for accommodation. There are Australian embassy officials staying in those buildings but
preliminary checks suggest that no embassy staff have been hurt or otherwise.

So that is where we are at at the moment.

PETER CAVE: Geoff, have you had a chance to see the extent of the damage to both hotels?

GEOFF THOMPSON: Can't get in there at the moment, Peter. It is like a sort of circular, it is a
like a big roundabout that only has certain access points and those access points have been, at
least the ones we tried, have been cut off.

All the access, when the explosion first happened but security gone in and closed those roads off
pretty quickly.

We are working our way around the various access points trying to get closer to see firsthand but
apart from some glass and blown apart trees in the distance, I haven't been able to see it myself.

TONY EASTLEY: Are the ambulances still going in and out or does it appear to be under control now?

GEOFF THOMPSON: No there are ambulances still, we have ambulances come and go and health workers
coming and go. As I said before, there doesn't seem to be anything, any flame or anything
continuing like that. That seems to have been put out.

The other thing is the police have not yet confirmed that they are terrorist attacks. That is of
course, what is expected. They do say that there seems to be two attacks in two different hotels
and I can tell you now they were about 10 minutes apart or 10 seconds apart. It was the first
attack was at 7.41 this morning and the second attack was at 7.55.

The first one being at the JW Marriott. The second one being at the Ritz Carlton.

PETER CAVE: Geoff Thompson live on the scene there.

Matt Brown our national security correspondent joined me in the studio.

Matt, what are Australian authorities going to do about this bombing?

MATT BROWN: It is very early days obviously. I can tell you as of this minute, there has been no
formal request made for assistance by the Indonesian authorities although the Australian
intelligence and law enforcement agency heads have scrambled, cancelled all their meetings to
prepare for a national security committee meeting mid-afternoon on the east coast.

What that means is that they will be providing their best advice, advice they can get about what
they think has happened but also how they might be able to help depending on what the Indonesians
ask for.

Federal agency in Jakarta will be going to the scene where Geoff is now. They will also be in
talking to their Indonesian counterparts. I expect that the Prime Minister will make a statement
this evening as a result of what those agents in Jakarta are telling their superiors and what that
national security committee meeting decides.

In the past Australia has provided forensic medical experts that can help identify the remains of
people who have been victims but given the low number of casualties, maybe that is not necessarily
appropriate.

It would be especially useful if suicide bombers though have been involved and also there the is
Australian Bomb Data Centre which can help trace the kind of explosives used, maybe even things
like the components in the explosives which can give them clues to get to whose done this.

PETER CAVE: There seems to have been what the security forces like to call "chatter" that a bombing
was about to happen.

Will they be able to go back now and work through that to try and find out who organised it?

MATT BROWN: If that is the case, yes. They can certainly use that. It is a very valuable tool. The
Indonesian terrorist organisations have spent a lot of energy setting up websites with password
protected access to bomb making material instructions, that kind of thing.

They are also been able to look at who has been making phone calls in that region. Work out who
else they were calling. Look for patterns that can establish just by looking back at the phone
records, what are the networks, what are the groups of people, the clusters who are calling each
other.

PETER CAVE: Matt Brown.