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Not one house built out of $700m Fed Govt fund

PETER CAVE: For decades politicians have been promising to tackle the seemingly intractable problem
of Indigenous housing.

Now the Rudd Government has been forced to defend claims that the largest ever investment in new
homes in the Northern Territory has failed to deliver.

Seven-hundred million dollars in housing program was announced by the Howard government and adopted
by Kevin Rudd. But two years on not even one new house has been built.

Emma Griffiths reports from Canberra.

EMMA GRIFFITHS: In the Northern Territory more than 60 per cent of Indigenous people are living in
overcrowded homes. In some cases dozens of people can live in the one house and the conditions are
known to contribute to chronic health problems and education difficulties.

When the Federal intervention rolled through, the Howard government allocated $670 million to build
new homes and fix up others. The initiative is called the Strategic Indigenous Housing and
Infrastructure Program and it was picked up by the Rudd Government.

Earlier this year the Indigenous Affairs Minister Jenny Macklin announced that work had begun to do
up more than 300 homes in the Tiwi Islands, Groote Eylandt and in Tennant Creek. That work is due
to be finished by the end of next year. But of the nearly 1,000 new homes promised under the
program not one has been built.

Jenny Macklin insists the program is on track and says other housing programs are still delivering.

JENNY MACKLIN: Over the last 18 months we've actually seen more than 90 homes built in the Northern
Territory. What we also know is that there's been a need to do significant upgrades of homes and
that has started.

In Tennant Creek for example, which I saw just a couple of weeks ago, new kitchens, new bathrooms,
new ceilings, major refurbishments which give people virtually a new home.

We're also insisting on doing things differently from the past. We know that we can't keep doing
things the same way. We're insisting on high levels of Indigenous employment so that skills are
left in communities when these houses are built.

EMMA GRIFFITHS: The Opposition says the program has collapsed under the Rudd Government. The
Country Liberals Senator in the Northern Territory is Nigel Scullion.

NIGEL SCULLION: It's all fallen in a great hole and that's simply because they just simply don't
have the willpower.

I brought this to the attention of the media and the Australian people about five months ago. And I
can remember it running in the media and Macklin's office came out with a media statement, you
know, "Nigel is a bonehead". Of course we have in fact built over 60 houses. He's got it wrong.

Well of course Estimates' processes revealed that they were the 60 houses built under previous
programs and were nothing to do with this program whatsoever. So now they are naked of spin and
excuses.

EMMA GRIFFITHS: Jenny Macklin's predecessor in the job is the former Liberal minister Mal Brough.
He still spends time touring remote Indigenous communities and has heard firsthand the
disappointment of elders. He says the new Government has brought in a flawed system that's wrapped
the process in red tape.

MAL BROUGH: What they changed, which was their right as a new government coming in, was the way in
which those houses were to be delivered.

So the alliance model of housing was nothing to do with the Howard government or myself as the
minister. That was a decision made by the new minister and the new Government, which is their
right. But unfortunately I think it was a mistake and I did echo that to the department even after
I left the portfolio.

EMMA GRIFFITHS: This is another example isn't it of Indigenous people in Australia being let down
by successive governments though isn't it?

MAL BROUGH: Yes it is. I don't ever run away from the fact that Liberal governments, both state and
federal, have let down Indigenous Australians and I'm disappointed that the Opposition today is not
asking serious questions on a regular basis in Question Time and keeping this issue in the
forefront of Australian consciousness. It's absolutely necessary if we're going to continue to make
headway.

PETER CAVE: The former Coalition Indigenous affairs minister Mal Brough ending that report from
Emma Griffiths.

Australia and China foreign ministers to hold direct talks on Stern Hu

PETER CAVE: Two-and-a-half weeks after the detention of Rio Tinto executive Stern Hu in China, the
Foreign Affairs Minister will be talking to his Chinese counterpart about the case.

The Opposition has been urging Stephen Smith and the Prime Minister to raise the matter directly
with their counterparts.

Mr Hu hasn't been charged but Chinese officials continue to say that they have a very strong case.

Our chief political correspondent Lyndal Curtis reports.

LYNDAL CURTIS: It's later than the Opposition wanted but Stephen Smith is going one better than the
Coalition calls for him to pick up the phone and speak to his Chinese opposite number.

He's told Sky News he'll be talking face-to-face to China's Foreign Minister during the day at the
ASEAN meeting both are attending in Thailand.

STEPHEN SMITH: I expect in the course of the day to speak to Foreign Minister Yang and I'm very
happy at the end of the day to let people know what's occurred.

LYNDAL CURTIS: China's Vice Foreign Minister, who Mr Smith met last week, is quoted in Chinese
media as saying Stern Hu's case will be handled in accordance with the law and the Australian side
should look at is as an individual case and treat it properly.

Mr Smith has acknowledged the matter is now one for the Chinese legal process although he's urged
China to move that process along.

STEPHEN SMITH: I've often made the point in this case and in others that when Australians go
overseas and they get themselves into difficulty, they have to deal and we have to deal with the
law and the practice of the country that we're in.

So under Chinese law he is detained. There is no set timetable for the bringing of a charge.

But I will continue to make the representation that I've been making - not just the representation
that I've made to Vice Minister He, but our officials have been making as well in Canberra, in
Beijing and also in Shanghai - that this is a matter which it is in everyone's interest to deal
with expeditiously.

LYNDAL CURTIS: He's repeated his assessment that the matter will not quickly be resolved.

STEPHEN SMITH: This is a difficult and sensitive matter. It's a complex case. We have a much better
idea now as to the circumstances relating to Mr Hu's detention but it's not going to be solved by
one phone call as some people have been asserting or indeed one meeting or one conversation between
a couple of ministers.

As I've said you know this may well go for some time and our officials will continue to be
assiduous in the representations we make about Mr Hu and his situation.

LYNDAL CURTIS: Mr Smith isn't though willing to speculate about any penalty Mr Hu might face.

STEPHEN SMITH: If and when he is charged we will then have a much clearer idea about the precise
nature of the charge obviously but also what possible penalties that he may be up for.

But I don't want us to get ahead of ourselves. There's no point contemplating the range of
penalties when we currently don't have any charges that have been laid against him.

LYNDAL CURTIS: While the relationship with China may be strained the Foreign Affairs Minister has
given his strong backing to Indonesia in the wake of the terrorist bombings in Jakarta.

STEPHEN SMITH: Indonesia has got a very good track record and we're very pleased with their
efforts, on the one hand on bringing terrorists to justice - they've arrested over 200 terrorists
over the recent period, the last half-a-dozen years or so and brought more to justice than any
other country; so we're happy with that.

And we're also very happy with the cooperation that we get with them at Australian Federal Police
and other agency level.

LYNDAL CURTIS: He's praised Indonesia's efforts to promote understanding between different
religious faiths and tackle radicalism.

STEPHEN SMITH: Across the board, whether it's their education system, whether its
counter-radicalisation, whether it's the efforts they make on interfaith dialogue whether it's the
counter-terrorism efforts they make through their police and intelligence and other operational
agencies, we are very pleased with the work they do.

And for ourselves, as we have repeatedly, we continue to regrettably make the point that there
continues to be a risk of terrorism in Indonesia, in Jakarta and Bali, and we strongly condemn the
events that have occurred and we continue to urge people to be vigilant about that.

PETER CAVE: The Foreign Minister Stephen Smith; our reporter in Canberra, Lyndal Curtis.

Banks demand money back from Queensland Police

PETER CAVE: A man credited with helping to launch Queensland's Fitzgerald Inquiry 20 years ago says
people should not be surprised by the new misconduct revelations.

The former Brisbane policeman and New South Wales ICAC (Independent Commission Against Corruption)
investigator Nigel Powell says incidents of police publicly bashing people were a sign of bigger
problems uncovered by Queensland's crime watchdog.

Those issues range from police offering criminals rewards for confessions through to officers
rewarding themselves with reward money put up by the banks.

Today the banks are demanding their money back.

Annie Guest reports from Brisbane.

ANNIE GUEST: The former detective from Queensland's once notoriously corrupt licensing branch Nigel
Powell says there have been signs of rot in recent times.

NIGEL POWELL: It wasn't surprising. I'm not saying that you know everything's widespread and sort
of drama like that. I'm not saying that.

What I am saying though is that the signs have been there that the bad aspects of police culture
are still there and have been there for some time.

ANNIE GUEST: Speaking on ABC Local Radio he cites well known incidents of uniformed police publicly
bashing homeless people in full view of cameras as evidence.

Other evidence has been uncovered by a two-and-a-half-year investigation by the crime watchdog.

It found criminals paying police, officers arranging sexual liaisons for prisoners to elicit
confessions, police manipulated by a criminal informant - already known as a liar - officers
passing confidential information to informants, and police preventing prison authorities from
monitoring an inmate's calls.

Twenty-five police were implicated in misconduct that also included improperly releasing prisoners
and Armed Robbery Unit officers suspected of raiding funds donated by banks to fight crime.

DAVID BELL: Our view is that this report has cast a very serious pall over the whole scheme.

ANNIE GUEST: David Bell is the chief executive of the Australian Bankers' Association.

DAVID BELL: I shall be writing to the Queensland Police Commissioner seeking a return of our
$10,000 and I intend to provide that $10,000 to Crime Stoppers.

ANNIE GUEST: The Crime and Misconduct Commission suspects officers used the fund for personal
purposes because, of 77 transactions investigated, more than half couldn't be properly accounted
for.

DAVID BELL: I haven't read the report in detail but the bits I have read make me very concerned
about what has happened to the funds that the ABA provided to the Queensland Police under very
specific conditions some 10 years ago.

ANNIE GUEST: Queensland Police have already abandoned the bankers' funds but the Police
Commissioner Bob Atkinson says it could be repaid.

BOB ATKINSON: If they do ask us to do that we'll certainly consider that but they haven't made that
request to date.

ANNIE GUEST: But some who won't be considering repaying any money are the 11 people who quit the
police service before the investigation was finished.

They'll keep their superannuation and presumably any money received from criminals and that
included car finance.

The Police Union's Ian Leavers has backed them.

IAN LEAVERS: If the allegations were true and all the information was true, what the CMC have said,
we would have 20 or 30 police before the courts. In fact we three.

ANNIE GUEST: The union's defence has been criticised by the Commissioner.

BOB ATKINSON: I think the Police Union has to take a stand where there is inappropriate behaviour
and I think they have to take a strong stand they have to support the officers who expose that and
they have to disown the officers who engage in it.

ANNIE GUEST: A recently retired Queensland Police officer agrees. Referring to himself only as
Mark, he told ABC Local Radio he worked in patrols where he saw people doing the wrong thing.

MARK: If you do the wrong thing you should be disciplined and there shouldn't be, you shouldn't be
backed up. There's no grey; there's no grey.

ANNIE GUEST: Of the 25 police implicated by the crime watchdog's report, three have been charged,
11 quit and others disciplined. Eleven are still working.

The Commissioner says he's confident their misdemeanours are limited to errors of judgement in
responding to the misconduct around them.

Bob Atkinson also says he sees no need to offer his resignation. He also has the support of the
State Government.

PETER CAVE: Annie Guest reporting from Brisbane.

Australia's stem cell scientists set for regeneration

PETER CAVE: There's a sense of renewal and regeneration amongst Australia's stem cell scientists
today.

Last year the Federal Government threatened to shut down its main research body, the Australian
Stem Cell Centre, because of mismanagement.

But the centre has a new CEO and board and today it's releasing its five year plan aimed at
building on Australia's strengths in the field.

It's also detailed funding for 32 projects that include plans to try to use stem cells to
eventually diagnose schizophrenia, to mend bones and to treat gum disease.

Meredith Griffiths reports.

MEREDITH GRIFFITHS: It's been a bumpy ride for stem cell researchers in Australia.

As well as the political and ethical stoushes over the technology, the future of the research
seemed at risk last year when the Government threatened to stop funding the Australian Stem Cell
Centre which had been set up in 2002.

Board member Christopher Juttner says the centre had to rethink its direction after the CEO and
board resigned.

Today it's releasing a five year strategic plan and announcing a new portfolio of 32 research
projects. Christopher Juttner says the new plan will make it easier for stem cell researchers to
work together.

CHRISTOPHER JUTTNER: The reason is that building on the considerable strengths in stem cell
research in Australia, and Australia does have considerable strengths, we want to see the centre
beyond 2011 having a legacy based on really having established a new way for stem cell research to
work in this field, providing also some core activities that will support stem cell research for
everybody who is working in that field.

MEREDITH GRIFFITHS: Has the centre actually been able to attract any new scientists in the past few
months or the past year because of this new management approach?

CHRISTOPHER JUTTNER: Yes, absolutely. There are numbers of people, I think around a third, who
haven't previously been linked to the Stem Cell Centre.

MEREDITH GRIFFITHS: The centre's research will now be organised through four collaborative streams.

Professor Andrew Elefanty from Monash University will be running the section using embryonic stem
cells.

It's received funding for eight projects including a new cardiac program but will also be able to
build on areas of strength.

Professor Elefanty says his lab has been making blood cells for many years but will now be able to
intensify its search for therapeutic benefits.

ANDREW ELEFANTY: One will be trying to make new blood stem cells which can be used in the case of
patients who need a bone marrow transplant but happen not to have a suitable donor.

And the other sort of major area of application of making blood cells is actually making mature
cells, mature red blood cells which carry oxygen around or mature neutrophils which help to find
infection, because there are a number of clinical conditions in both cases where patients have an
inadequacy of red cells and an inadequacy of their white cells.

MEREDITH GRIFFITHS: Associate Professor Ernst Wolvetang from the University of Queensland will be
leading the group looking at induced pluripotent cells. These are adult cells that are reprogrammed
to act like embryonic stem cells and turn into any type of tissue the body needs.

Dr Ernst Wolvetang says some of his researchers will now be able to try to work out what causes
schizophrenia by taking cells from people with the mental illness

ERNST WOLVETANG: We are now going to take skin cells of those people and turn them into these
primitive iPS (induced pluripotent stem) cells and we make neuronal cells out of them, so brain
cells, and then ask the question at what stage these cells start to show schizophrenia-like gene
expression changes.

One, it would be a way to really pinpoint gene expression changes that could be used for diagnosis.
But even more excitingly we will be able to use those cells to screen for drugs that may be able to
revert those changes in gene expression.

MEREDITH GRIFFITHS: While the Australian Stem Cell Centre has laid out its plan for five years,
board member Christopher Juttner says its funding is only guaranteed for the next two.

CHRIS JUTTNER: So that we are in conversation with the Federal Government about continuing some
level of funding. We have always been encouraging the researchers to seek funding from outside
sources and they have been successful in achieving funding from outside sources. So, that we've got
to work towards a viable transition where if there is no further Federal Government funding the
research will be able to continue with competitive grants.

MEREDITH GRIFFITHS: It's a lengthy process to make sure stem cell therapy is safe and efficient so
clinical applications are still years away and scientists will be watching closely when the first
trial on humans starts in the US later this year.

PETER CAVE: Meredith Griffiths.

Obama hits prime time to sell healthcare policy

PETER CAVE: In the United States President Barack Obama is battling slumping poll numbers as he
tries to counter the growing criticisms of his economic and health policies.

He's used a prime time media conference to defend his campaign to overhaul America's health system,
calling it vital to pulling the economy back from the brink.

Health care reform is a central plank of the President's domestic agenda but public support for his
handling of the contentious issue is starting to wane.

Washington correspondent Kim Landers compiled this report.

BARACK OBAMA: Good evening. Please be seated.

KIM LANDERS: This was Barack Obama's 10th news conference since taking office six months ago and
the timing was critical. He held it during prime time in the US to guarantee a national television
audience. And he did it in a bid to convince Americans and the Congress to back his ambitious
health care reforms.

BARACK OBAMA: This debate is not a game for these Americans and they can't afford to wait any
longer for reform. They're counting on us to get this done. They're looking to us for leadership
and we can't let them down.

KIM LANDERS: With the US in a deep recession, unemployment rising and the deficit ballooning,
healthcare reform is set to be Barack Obama's biggest test yet.

Forty-seven million Americans don't have health insurance but the President's far reaching plans to
bring affordable health care to all Americans have left many worrying who will foot the bill.

The growing public unease with his approach is partly due to an onslaught from his Republican
critics and some within his own Democratic Party remain sceptical.

But Barack Obama says the time is right for a health care overhaul. That, quote, "The stars are
aligned".

BARACK OBAMA: I'm the President of the United States so I've got a doctor following me every minute
(laughter) which is why I say this is not about me. I've got the best health care in the world. I'm
trying to make sure that everybody has good health care, and they don't right now.

KIM LANDERS: America's health care costs are a huge factor in the skyrocketing deficit and the
President has also used his prime time media appearance to defend his economic policies.

BARACK OBAMA: We've been able to pull our economy back from the brink. We took steps to stabilise
our financial institutions and our housing market and we passed a recovery act that has already
saved jobs and created new ones.

KIM LANDERS: Barack Obama is also grappling with the wars in Iraq and Afghanistan, a battle over
climate change legislation and his self imposed deadline to shut down Guantanamo Bay.

And six months after taking office his popularity is fading. A Gallup poll shows Barack Obama's
approval rating has dipped to 55 per cent.

The White House says they are, quote, "darn good numbers". At the same point in his White House
tenure George W Bush was on 56 per cent, Jimmy Carter was on 67 and Bill Clinton was on 41 per
cent.

Bill Clinton was the last President to try, and very publicly fail, to reform health care.

Darrell West is the vice-president and the director of Governance Studies at the Brookings
Institution. He's not marking Barack Obama's six month report card too harshly.

DARRELL WEST: His poll numbers are starting to slip, unemployment is getting close to 10 per cent
and Americans are starting to have a few doubts about some of the current directions of his policy
initiatives.

KIM LANDERS: As the criticism of the President's health and economic policies has grown, the White
House seems to have responded by putting the President out there more often. He's been appearing in
the media, doing lots of interviews, lots of public appearances. There's been a big dose of Barack
Obama recently. Is he overexposed?

DARRELL WEST: I don't think he's overexposed. I think on an issue that is really the central issue
of his domestic agenda he has to be the person out there selling his proposal. He has to be the one
explaining why we need to do this, what we're going to do and justifying his particular approach.

KIM LANDERS: Jennifer Duffy is a senior editor with the Cook Political Report, an independent
newsletter. She says any president who started with such high popularity has to endure some
erosion.

JENNIFER DUFFY: But what we're really seeing here is not so much that he's becoming less popular
but that voters have some concerns about his policy. They still like him, they just have concerns
about health care, they have concerns about whether the stimulus package is working.

KIM LANDERS: President Obama has again stressed today that he inherited the worst recession in half
a century but Americans seems keen to put talk of the past behind them and they're now grading the
new President on how he's handling the economy, particularly the impact of his trillion-dollar
stimulus package.

JENNIFER DUFFY: First of all Americans are pretty fond of instant gratification. The stimulus I
think may be the very first example of that and I think the White House has tried to reset the
expectations to a certain degree but in a number of states, especially in the Midwest, we have had
failing economies much longer than other states. Asking for patience is a hard thing.

KIM LANDERS: As one commentator here in the United States put it, the icy cool President Obama is
finally starting to sweat.

This is Kim Landers in Washington for The World Today.

Italian publication sues PM Berlusconi

PETER CAVE: The scandal surrounding Italy's colourful Prime Minister Silvio Berlusconi is getting
sleazier, with one of the country's largest publishers suing him for abusing his office.

L'espresso publishers served Mr Berlusconi with a writ after he accused the magazine of a
"subversive attack against him" and called on business leaders to boycott advertising with the
company.

Earlier this week L'espresso's left leaning magazine published lurid audio tapes which purportedly
reveal that Mr Berlusconi slept with a prostitute.

Mr Berlusconi initially denied he was involved but after intense public pressure he's offered a
simple explanation saying he's "no saint".

Di Bain reports.

DI BAIN: Over the past week La Repubblica has been allegedly exposing the secret life of Italy's
most powerful man, billionaire Prime Minister Silvio Berlusconi.

It's published audio tapes and transcripts which surfaced in leaked wire taps which emerged during
a corruption investigation.

The tapes reveal conversations which purport to involve Mr Berlusconi, an escort called Patrizia
D'Addario and the man who hired her.

The latest conversation reports a visit Patrizia D'Addario was preparing to make to Mr Berlusconi's
official residence in Rome.

She's said to be speaking here with Giampaolo Tarantini, the man who allegedly hired her. He tells
her Mr Berlusconi doesn't use condoms.

(Sound of recording in the background)

(Excerpt of recorded conversation, translated)

GIANPAOLO TARANTINI: I don't want to talk. I wanted to tell you that at 9.15 I will pick up the
driver and we will go.

PATRIZIA D'ADDARIO: A thousand for the night.

GIANPAOLO TARANTINI: A thousand. I have already given it to you. And if you stay with him he will
give you a gift. Ah, you will see that he does not use a condom.

PATRIZIA D'ADDARIO: But it doesn't happen without a condom. How do I trust him?

GIANPAOLO TARANTINI: But it is Berlusconi.

PATRIZIA D'ADDARIO: But who are you? Lord, do you know how many people remain?

GIANPAOLO TARANTINI: Do you know how many tests he does?

PATRIZIA D'ADDARIO: I know but you know for us women it is also better. But what I mean...

GIANPAOLO TARANTINI: You can decide. However he doesn't consider you as an escort, understand? He
regards you as a friend. That's how I took it.

(End of excerpt)

DI BAIN: A man who is allegedly Mr Berlusconi can be heard telling the woman to wait for him in
"Putin's" bed while he showers.

(Sound of recording in the background)

(Excerpt of recorded conversation, translated)

SILVIO BERLUSCONI: I'm also going to have a shower and after, after will you wait for me in the bed
if you finish first?

PATRIZIA D'ADDARIO: What a bed. Is that Putin's?

SILVIO BERLUSCONI: It is Putin's.

PATRIZIA D'ADDARIO: Oh, how pretty, that one with the curtains.

(End of excerpt)

DI BAIN: The lawyer for 72-year-old Mr Berlusconi has disputed the veracity of the tapes but at an
event in Italy Mr Berlusconi didn't.

(Sound of Silvio Berlusconi speaking)

SILVIO BERLUSCONI (translated): I'm no saint, by now you've figured that out. Let's hope that those
working at La Repubblica understand that too.

DI BAIN: Mr Berlusconi's flamboyant lifestyle has been scrutinised in depth over the years. His
wife has filed for divorce because he allegedly consorted with a minor. A topless women and a naked
man were also photographed at his villa on Sardinia.

There's concerns his actions are hurting Italy's international reputation.

Mr Berlusconi controls much of the Italian media which hasn't been broadcasting the latest
allegations.

L'espresso Media Group which owns La Repubblica accuses the Prime Minister of trying to exert
control over the Italian media and in doing so abusing his office.

They're now taking Italy's Prime Minister to court.

Last night Mr Berlusconi's lawyers said that they might counter-sue over the publication of the
recordings.

PETER CAVE: Di Bain reporting.

Nazi gnome causes a stir in Germany

PETER CAVE: A German artist has been has become embroiled in a row after he created a garden gnome
with its arm raised in a Hitler-style salute.

Prosecutors have been investigating whether the "Nazi gnome" breaks Germany's strict laws banning
Nazi symbols and gestures.

Stephanie Kennedy reports.

STEPHANIE KENNEDY: He's only 40 centimetres tall but the pint sized golden gnome has been at the
centre of a controversy in the German city of Nuremberg.

The plastic gnome giving the Hitler salute was put on display at an art gallery a few weeks ago.

The gallery's owner is Erwin Weigl.

(Erwin Weigl speaking)

ERWIN WEIGL (translated): It's a garden gnome with a long beard like all garden gnomes. One hand is
lowered and the other is held up high.

STEPHANIE KENNEDY: But since World War II the Nazi gesture has been strictly forbidden under German
law.

Artist Ottmar Hoerl has made hundreds of Nazi gnomes hailing the Fuhrer. They've been on show in
Belgium, Italy and Bavaria.

But it was at the Nuremberg rallies where Hitler developed his cult of personality. The Nazi gnome
of Nuremberg has struck a raw nerve and complaints were made to the police.

Ottmar Hoerl says he's produced the golden gnome with the Nazi salute as a warning against right
wing extremism.

(Ottmar Hoerl speaking)

OTTMAR HOERL (translated): It's my gnome but I didn't put it in the art gallery. Someone must have
bought it and put it in there. But I don't know what all the fuss is about. With my gnomes I'm
highlighting the dangers of political opportunism and right-wing ideology. I get the feeling that
this gnome has reopened an old wound.

STEPHANIE KENNEDY: One Jewish critic described the gnome as completely tasteless.

Erwin Weigl the gallery owner says people shouldn't take the gnome so seriously.

(Erwin Weigl speaking)

ERWIN WEIGL (translated): I don't think it's against the law. It's just a gnome who's waving at
someone. It's not my fault if other people think it's a Hitler salute. Until now I haven't come
across anyone who's been offended. Everyone has just had a chuckle because it looks comical with
its hand held up high. It's just funny and has no Nazi connotations.

Obama holds his hand up in a salute. So did Caesar. There are lots of people you could quote who
put their hands up and don't make the Nazi connection.

I must say I'm not political but I think you should stop taking everything like this so literally.
It's art and it's art which is thought provoking. And if art can't be thought provoking then it's
not good art.

STEPHANIE KENNEDY: Prosecutors launched an investigation into whether the gnome breaks the strict
law banning Nazi symbols.

Wolfgang Trag is spokesman for the Nuremberg prosecutor's office.

(Wolfgang Trag speaking)

WOLFGANG TRAG (translated): It can of course be argued that by showing the Hitler salute the garden
gnome is indeed meant to criticise the Nazis so there might not be a case to answer.

STEPHANIE KENNEDY: And that's what prosecutors eventually decided. The pint sized gnome is mocking
Nazism, rather than glorifying it and therefore it's not illegal.

This is Stephanie Kennedy reporting for The World Today.

Scientists consider using animals in transplants

PETER CAVE: A debate has begun over whether Australia should change its laws to allow scientists to
transplant animal cells and organs into humans.

The risks of xenotransplantation, as it's known, include infection with unknown agents from the
animals.

But a scientist says there's also much to gain. He says that overseas trials show that diabetes
patients have benefitted from the injection of pig cells and the Australian regulator is neglecting
its duty of care by not allowing xenotransplantation.

As Simon Lauder reports, Australia's moratorium on xenotransplantation is up for review later this
year.

SIMON LAUDER: Type 1 diabetes occurs when the immune system destroys the body's own insulin
producing cells. Without daily injections it can be life threatening.

But the medical director of Living Cell Technologies Professor Bob Elliot is working on another
solution - replacing human cells with animal cells.

BOB ELLIOT: Using those microencapsulated pig insulin producing cells we have in a pilot study
where we've injected these into the peritoneal cavity, the belly cavity of type 1 diabetics, adult
type 1 diabetics, that two of those had shown sustained insulin independence following that
procedure.

One of those, our best patient so far, is still independent, insulin independent six months after
her injection of these cells.

SIMON LAUDER: The technique which is broadly described as xenotransplantation is the topic of an
online forum organised by the Australian Science Media Centre this morning.

The director of the Immunology Research Centre at Melbourne's St Vincent's Hospital, Professor
Anthony D'Apice explains.

ANTHONY D'APICE: It's the transplantation of living, that's the key word, living cells, tissues and
organs from one species to another. So things like pickled (phonetic) heart valves or tendons do
not qualify.

SIMON LAUDER: Putting animal cells and organs into humans is risky. Professor D'Apice again.

ANTHONY D'APICE: The risk of failure such as graft loss, the risk of infection, which is not just a
problem for the patient but possibly for their contacts and the community, and that may be
infection with known or unknown organisms including porcine endogenous retrovirus.

And also minimising risk from immunosuppression. The distance between a pig and a human is
substantial. The amount of immunosuppresion that potentially is required could be substantial.

SIMON LAUDER: Professor Bob Elliot and his team have just received permission from the New Zealand
Government to conduct clinical trials of his technology. He's already conducted trials in Russia.

Professor Elliot says he's reduced the risk of infection from the pig cells as much as he possibly
can by selecting pigs which carry no agent which is known to be infectious to humans.

BOB ELLIOT: We monitor these pigs regularly. They are housed in an environment which does not
permit the entry of external organisms except perhaps through the attendants and they are
thoroughly vetted and must shower in and garb up in sterile clothing and so on. They have sterile
water, sterile bedding, sterile food.

SIMON LAUDER: After a lengthy consultation process the Australian Government put a five year
moratorium on any clinical trials of xenotransplantation.

The National Health and Medical Research Council deemed in 2004 that the risk of animal to human
viral transmission was not well understood.

Professor Bob Elliot says the Australian regulator is blocking the public health benefits of
xenotransplantation. He's keen for the moratorium to end.

BOB ELLIOT: This might be suggested is now unreasonable and I believe you can go a little further
than that, saying that a moratorium which doesn't allow a clinical trial under suitable
precautionary circumstances is failing in the duty of care which isn't just that of physicians or
researchers towards a community but also includes regulators.

SIMON LAUDER: The University of Auckland's Associate Professor Martin Wilkinson was the chairman of
the New Zealand Bioethics Council. He says the Australian Government will have to consider the
possibility that humans involved in xenotransplantation procedures may not be the only ones exposed
to the risk of contagious disease.

MARTIN WILKINSON: Because xenotransplantation raises at least a possibility of a disease spreading
from the recipient to other people this makes it as a clinical treatment or as a research trial
different from others because the people that are affected are no longer just those people who are
consenting.

Having said that we have to be careful what conclusions we draw from it. First of all the risk of
disease from xenotransplantation is highly variable according to the sort of xenotransplantation it
is. So transplanting a baboon's heart is much riskier than transplanting porcine eyelet cells.

SIMON LAUDER: The National Health and Medical Research Council is due to review Australia's
position on xenotransplantation by December.

PETER CAVE: Simon Lauder reporting.

NSW Opposition reveals water supply at risk from mining

PETER CAVE: Planning experts have defended a decision to allow controversial longwall coal mining
under a dam which helps to supply Sydney's drinking water.

The New South Wales Opposition says it has proof that authorities have major concerns about
allowing the mining underneath Woronora Dam in the city's southern outskirts.

It's obtained documents showing there's a real risk that the dam floor will crack under the strain
of the mining operation.

Simon Santow reports.

SIMON SANTOW: It wasn't long ago that Sydneysiders were being urged to conserve every drop of
water.

Now they're being told that the body charged with supplying the city with water is worried that
mining underneath a dam will lead to a potentially huge loss of the precious commodity.

MICHAEL RICHARDSON: I think there's ample evidence in the documents that were provided that both
the Department of Water and Energy and Sydney Catchment Authority have very serious reservations
about what's being done.

SIMON SANTOW: Opposition MP Michael Richardson used freedom of information laws to obtain the
documents which reveal the extent of the concerns at a time when planning authorities and the
Government were considering a proposed extension of longwall coal mining south of Sydney.

MICHAEL RICHARDSON: The original development application has been amended and that they have to
some extent addressed the issues relating to the Waratah Rivulet and they've changed the direction,
they've turned the longwalls underneath Woronora Reservoir around by 90 degrees.

But our information is that it makes no difference whatsoever to the cracking in the bed of the
reservoir. It's almost window dressing.

Mehmet Kizil is a mining expert at the University of Queensland. He says longwall mining is cheaper
and more efficient than open cut mining but it does bring some risks.

MEHMET KIZIL: The way you do longwall mining is you set up a longwall panel. It could be a couple
of hundred metres wide, 200, 300, up to 400 metres wide by a couple of kilometres long.

You set up your mining systems which consists of some shields, steel shields, and a shearer to cut
the coal in the conveyor belt.

It's quick. It's efficient. As you cut the coal, advance, you let the roof to come down and
collapse behind you and that creates a subsidence that goes all the way to the surface. But the
effect of subsidence is reduced as you go up and it depends on how deep you're mining that deposit,
whether it's got clay (phonetic) or not, how deep to mine is how far the mine is from the dam.

It's underneath the dam then you can argue, near the dam you can work out whether it has any impact
at all on the dam.

SIMON SANTOW: The mine was assessed by a planning commission and finally given the tick by the New
South Wales Planning Minister Kristina Keneally.

The department's director of major assessments is David Kitto.

DAVID KITTO: The conclusion of the planning assessment commission was that the mine was unlikely to
have anything but a negligible impact on either the water supply or the water quality in the
reservoir.

SIMON SANTOW: So what assurances can you give the people of Sydney that the dam wall or the floor
of Woronora Dam will not be cracked or impacted in any way by this mining?

DAVID KITTO: Well I guess in terms of the dam wall the mining is going to happen a fairly
substantial distance away from the mine wall so there's almost zero chance of the dam wall being
affected.

In terms of the floor of the reservoir there will be some minor cracking - and I stress very minor
cracking. All the scientific assessment says that there will be no direct connection between the
reservoir and the mine and no, nothing other than negligible leakage.

If in the unlikely event any impact does occur to the supply then one, the company would be in
non-compliance, and two, it would have to either change its mine plan to ensure compliance and if
that's not possible then it wouldn't be allowed to mine any more.

SIMON SANTOW: But presumably you don't want it to get to that situation. You don't want to be
having to repair something.

DAVID KITTO: No, absolutely not...

SIMON SANTOW: So that's the argument, the argument from green groups is you ought not to allow it
to possibly happen. There ought to be no risk.

DAVID KITTO: Well I guess um... if there was... I mean what we're saying now is that the risk if so
low that it's acceptable.

SIMON SANTOW: Peabody Energy Australia is the company behind the proposed mine. Its spokeswoman is
Jennifer Morgans.

JENNIFER MORGANS: My understanding is that the dam committee, and rightly so, has a low tolerance
of risk and Metropolitan Mine is confident it can satisfy all of these conditions to attain the
necessary approvals and minimise the risks.

SIMON SANTOW: But you can't give an unequivocal assurance to our listeners that the dam floor won't
have cracks in it as a result of your mining?

JENNIFER MORGANS: Well Simon, there has been a significant body of scientific work into mining
under reservoirs dating back to the 1970s and Metropolitan have used this body work to design the
mine plan and around the reservoir to meet all of the strict conditions.

PETER CAVE: Jennifer Morgans from the mining company Peabody Energy Australia, ending that report
from Simon Santow.

Scientists believe there may be life on one of Saturn's moons

PETER CAVE: Scientists in the US believe the evidence is growing that there could be life elsewhere
in the universe.

They've found the strongest proof yet that there's liquid water flowing below the surface of one of
Saturn's moons.

The discovery is being published in today's scientific journal Nature.

The researchers say the underwater ocean-like environment is conducive to life but they still don't
know if there's anything living in the water.

Felicity Ogilvie reports.

FELICITY OGILVIE: There are more than 60 moons orbiting the planet Saturn.

The moon where the scientists think there could be life is called Enceladus. It's 1.5 billion
kilometres away from the Earth and is a small, cold and dark place.

JONATHAN LUNINE: Well the surface is ice. It's definitely water ice and when you look at Enceladus
with the spacecraft cameras you see this very bright surface with some very interesting fractures.
And it's from those fractures that the plumes of gas are being emitted. So if you were to dive down
into those fractures you would eventually reach the place where the ice gave way to liquid water.

FELICITY OGILVIE: That's Jonathan Lunine. He's a professor of planetary science at the University
of Arizona.

The plume that's coming from volcanic activity on Enceladus has been measured before by a robotic
spacecraft run by NASA but until now no-one has been able to work out what's below the surface of
the moon.

Professor Lunine and his colleague William Lewis are confident that there's liquid water flowing
under Enceladus because they've found ammonia in the plume.

WILLIAM LEWIS: Ammonia serves as a kind of anti-freeze. It lowers the freezing point of water and
ammonia water mix does not freeze at temperatures above 176 degrees Kelvin. That's around -100
Centigrade.

FELICITY OGILVIE: Other scientists have also been running tests from the NASA spacecraft that's
encircling Enceladus.

In a recent article also published in Nature they found that the water under the surface is salty.

Professor Lunine says it all adds up to a place that's suitable for life.

JONATHAN LUNINE: So we have a somewhat salty liquid water layer and a source of heat and that would
seem to make that deep underground liquid layer possibly a venue for life, although we don't know
that, but it opens the possibility that there could be an environment habitable for life in the
deep interior of Enceladus.

FELICITY OGILVIE: Would it be usual for life to be found that far underground in some, in an
underground ocean-like environment?

JONATHAN LUNINE: Well of course we don't know of any life beyond the Earth and one of the great
questions is whether there is life elsewhere in the solar system.

But on the Earth life is found at great pressures of course at the bottom of our own oceans.

FELICITY OGILVIE: What kind of life would scientists expect to find on Enceladus or is it all just
theories at the moment?

JONATHAN LUNINE: Well it's all theory at the moment. All we've found are the ingredients, the raw
materials that would make life possible, an indication of an environment where life could live and
then a source of energy, the heat that generates the plumes.

Anything beyond that is speculation but I wouldn't expect anything but the most primitive forms of
life, something akin to very, very primitive bacteria or what are now called extremophiles - these
microbes that live in extreme conditions and that are somewhat like primitive forms of bacteria.

FELICITY OGILVIE: They've found a promising environment but it will take another mission to search
for life on Enceladus.

And considering Enceladus is 1.5 billion kilometres away from Earth and it takes seven years to fly
a spacecraft there, the quest to see if there's life anywhere else in the universe is going to take
some time.

PETER CAVE: Felicity Ogilvie reporting. And you can hear more about that story if you go to our
website and you can hear a longer interview.

Foreign companies think bribery works in China

PETER CAVE: A Chinese business consultant says too many Western companies think they have the right
to bribe their way into China.

The arrest of Rio Tinto executive Stern Hu and his three colleagues in Shanghai has focused
attention on alleged corruption in the Chinese steel industry.

Transparency International says that companies from emerging economic giants like China are
perceived to routinely engage in bribery.

One estimate puts the cost of corruption in China at more than $100 billion a year or around 5 per
cent of the gross domestic product.

Finance reporter Sue Lannin.

SUE LANNIN: China's Central Government has made big efforts to crack down on corruption but it
still remains a big problem.

A study by the Carnegie Endowment in 2007 estimated that around 10 per cent of government spending,
contracts and transactions are used as bribes, kickbacks or stolen.

And the problem is also coming from foreign firms.

Bruce McLaughlin runs Sinogie, a consultancy which advises companies wanting to do business in
China. He says too many companies think they have to pay bribes.

BRUCE MCLAUGHLIN: Unfortunately some foreign companies do feel that they have to. They're wrong. If
you're asked to bribe to get something to which you're legitimately entitled then you can either
walk away or you can threaten to go over that person's head.

There is this thing that some foreign companies are still convinced that this is the way business
is done in China and that goes from the smallest foreign companies to the largest.

SUE LANNIN: Bruce McLaughlin knows of foreign companies that have paid bribes and suffered for it.

BRUCE MCLAUGHLIN: One good example would be a foreign paint company which had moved into Zhong Shan
in southern China and they have paid bribes to be allowed to move into an environmentally protected
area which offered low taxes for environmentally friendly companies.

They didn't meet any of the criteria and they shouldn't have been there but they paid bribes to get
in so they could pay the low taxes.

Because of this central government paranoia now there's a policy of rotating staff from city to
city or from district to district and that happened here. The person they paid the bribes to was
rotated away.

Next person came in, discovered that this company was in the environmentally protected area,
violating all the rules and the bribes now counted for nothing - they bribed someone who wasn't
there anymore - and the factory was closed down. They lost all of their capital investment.

SUE LANNIN: And he says there are ways to get around the practice.

BRUCE MCLAUGHLIN: You're dealing with a very multilayered bureaucracy. At one level if you're
looking to invest for example and somebody says well, you're going to need to pay bribes to get
approval there are hundreds of thousands of other towns that would love your investment.

If you're tied to a particular place or tied to a particular problem and somebody starts to ask for
bribes for example, you can easily go over that person's head. Go up - if it's a municipal problem
go to the provincial level, if it's a district problem go up to the municipal level. Even just a
really polite veiled threat is often enough to make things go away.

SUE LANNIN: Corruption watchdog Transparency International says companies based in emerging
economic giants like China are perceived to routinely engage in bribery.

Michael Ahrens the head of Transparency International Australia says China has improved in terms of
cleaning up its act but it still has a long way to go.

MICHAEL AHRENS: Certainly a number of measures have been taken by the Government in Beijing
indicating that they are taking it very seriously. How far these are translated into practice is of
course another question.

SUE LANNIN: There have been high profile corruption cases involving foreign companies in China,
including IBM and Hitachi.

Michael Ahrens says foreign companies need to make sure they get own house in order when doing
business in China.

MICHAEL AHRENS: I think that they are becoming much more wary. Speaking pragmatically now, it is
possible to do business in China without paying bribes and some very large companies are doing
that. It's certainly a risk that companies need to face up to and they need to have very strong
programs in place to train their executives how to resist the pressures to pay bribes.

PETER CAVE: Michael Ahrens, the head of Transparency International Australia, ending that report by
Sue Lannin.