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No problem with stimulus, debt: RBA boss

No problem with stimulus, debt: RBA boss

Stephen Long reported this story on Monday, September 28, 2009 12:10:00

ELEANOR HALL: The Reserve Bank governor Glenn Stevens told a Senate committee this morning that the
recent economic downturn was much milder for Australia than in previous decades and is over.

Glenn Stevens rejected claims that there's too much fiscal stimulus and that the Government
spending will push interest rates too high. He also told a Senate economics committee hearing that
the level of Commonwealth debt is very manageable and he rejected Coalition claims that the Federal
Government is running up a dangerous level of debt.

Economics correspondent Stephen Long joins us now.

So Stephen, take us through the questioning that Glenn Stevens faced this morning.

STEPHEN LONG: Eleanor, this committee is looking at the fiscal stimulus and really the question of
whether it is appropriate or whether further stimulus should really be wound back and that was the
thrust of the questioning, certainly from the Coalition senators and other cross bench senators and
Glenn Stevens was pretty clear on this that he doesn't think that the levels of stimulus right now
are too high and well, no one really knows what the future holds - how strong or weak the economy
is going to be down the track but he is pretty comfortable with where things stand.

Bob Brown, Senator Bob Brown from the Greens was the first to press him on this. Asked him whether
he thought the stimulus should be wound back and he suggested that Senator Brown, with respect,
should rephrase the question.

GLENN STEVENS: It isn't so much should it be wound in because it is going to be automatically. It
seems to me the thing you are really debating is should that process be accelerated.

BOB BROWN: That's right.

GLENN STEVENS: All I can say in response to that is that, I think it is a bit hard to claim that as
of this moment there is too much growth in the economy so I haven't really had a serious problem
with what has occurred on the fiscal front thus far.

The presumption we are making is that things will be delivered and then wind back more or less on
the schedule that is set out in the budget. You know, I'm not sure I'd say that outlook is terribly
worrying outlook really.

It is important these measures be wound back over time but they are on track to be so.

ELEANOR HALL: That is the Reserve Bank governor Glenn Stevens talking to the Senate committee this
morning.

Steven, did he say whether maintaining the stimulus would lead to higher interest rates as has been
said by the Opposition many times?

STEPHEN LONG: Well, he was indeed questioned on this and pressed on this by the Opposition and also
by Senator Steve Fielding and he had to accept that as a basic principle, as you know common sense,
if there is more demand in the economy and the government stimulus is contributing to demand then
that will lead to a higher level of interest rates than if the demand wasn't there.

But he said he questioned the assumption that lower government stimulus and lower interest rates
was a good thing. Whether having a situation where the government was stimulating or doing less to
stimulate the economy and that meant that interest rates were lower was a good thing.

In other words, whether it would actually be in the broad public interest if we had interest rates
low. He said he was extremely grateful and very, very pleased that interest rates hadn't hit the
very, very low levels zero per cent, half a per cent that they have in other major economies and
also he was pressed about whether the government stimulus for instance would lead to asset price
bubbles in housing.

He said that low interest rates were more likely to lead to asset price bubbles in housing and
other markets. So his suggestion was that you have to have both arms of policy working and higher
interest rates aren't necessarily a bad thing although it would be a long time and nowhere in any
sort of near prospect that we'd get back to the interest rates we had, if you go back to early 2008
before the big cuts.

ELEANOR HALL: I presume he was pressed on government debt?

STEPHEN LONG: Oh, indeed he was. He was pressed on government debt and here he was even stronger
that the notion that the government debt is not something that can be sustained, is a problem in
Australia, is really, he didn't use these words but he was pretty much saying that it is one that
just does not stand up to any sort of scrutiny when you compare the level of debt here to overseas.

This is part of what he had to say.

GLENN STEVENS: I think for a country like Australia ought to be seen as quite manageable. You know
we are talking about 14 or 15 per cent of GDP for net debt if it reaches that. Now that certainly
is a significant change from where we started but I'd be pretty sure that most governments in the
world would be very, very happy to have a picture like that ahead of them rather than the one
they've actually got in their own country.

I personally am not greatly worried by the debt sustainability angle here. I don't think that is
likely to be our problem.

ELEANOR HALL: Glenn Stevens again saying he is not too worried about the government debt. Is he
saying that it will put any pressure at all on interest rates?

STEPHEN LONG: No and he said that Australia's government borrowing wouldn't have any material
effect on the borrowing costs that the Commonwealth faces. If there is going to be an effect then
it is going to be through the huge fiscal measures that are being in place in America and Britain
and other European countries which we can't really do anything about.

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

Myer aims to raise $2.3 billion in public float

Myer aims to raise $2.3 billion in public float

Sue Lannin reported this story on Monday, September 28, 2009 12:14:00

ELEANOR HALL: The country's biggest department store is planning to raise $2.3 billion in one of
Australia's biggest share floats. Myer will relist on the stock exchange in November in what
analysts predict will be a very popular public offering. But just a fraction of the money raised
will be used to pay off debt. (*See editor's note.)

The Myer family is selling out and the private equity owners are likely to make around $2 billion
in profit.

Finance reporter, Sue Lannin, has more.

SUE LANNIN: The float of department store Myer is expected to be one of the most popular since
Telstra went public. Myer will list on the Australian Securities Exchange in November with a share
price between $3.90 and $4.90. The company is hoping to raise up to $2.3 billion.

Independent analyst, Roger Montgomery, thinks the share price looks expensive.

ROGER MONTGOMERY: What we have discovered is based on the pro forma or what are the forecast
numbers for 2010 and the payout ratios and various performance numbers. What we've worked out is
that the value of the business is substantially lower than the price being requested.

Now that doesn't mean the price won't go up after it lists but it does mean that over time, over a
number of years, if the performance of the business doesn't improve then the price will probably
fall back.

SUE LANNIN: So Myer is saying that the shares will be priced at between $3.90 and $4.90 a share.
You think that is expensive?

ROGER MONTGOMERY: It does seem to be expensive according to the way I value companies and I have to
admit that I am not interested in losing any money and so I deliberately, I deliberately am
conservative in my valuations but based on the way I calculate businesses, it is worth somewhere
between $2.80 and $2.90 a share.

SUE LANNIN: Retail analyst Rob Orex disagrees. He thinks the float is good value for investors.

ROB OREX: I think it is because the market is lining up in a few ways. Myer has done some good
things already. They have moved EBIT (earnings before interest and tax) from 2.3 per cent to 7 per
cent and it is going on its way to 10. They are opening 15 new stores and they are not being greedy
with the pricing.

SUE LANNIN: You don't think so? The shares will be priced between $3.90 and $4.90 per share.

ROB OREX: That places it at a multiplier of 14.3 to 17.3 estimated earnings. David Jones is trading
at 17.8 which is above that now.

SUE LANNIN: The Myer family will sell off most of its holdings. The private equity owners TPG and
Blum Capital are expected to be left with up to 13.5 per cent of the company. The prospectus says
the owners will make up to $1.9 billion.

Myer's debt is nearly $900 million but only around one-third of that will be paid off in the float.

Roger Montgomery says that's not a good deal.

ROGER MONTGOMERY: About $300 million will go to paying down debt. There some costs, there are some
transaction, what I call, frictional costs associated with the float and that is about $100 million
but $1.5 billion to $1.9 billion will go to the current owners.

SUE LANNIN: Why wouldn't they pay off more of the debt?

ROGER MONTGOMERY: Well, they don't have to and they get more money if they don't.

SUE LANNIN: Rob Orex says that Myer has proved it can pay off debt.

ROB OREX: They are paying off a very large, or they have paid off, a very large chunk of it
already. Partly with earnings and partly with selling the Myer Bourke Street store. So they still
have capacity to pay more.

SUE LANNIN: Do you think it is a good time to launch a retail float? The outlook for the retail
sector isn't so good?

ROB OREX: Well retailing has done OK through this recession and the market has bounced back. While
Myer is still waiting on a sales boost, I think the level of interest in this float indicates that
it is a pretty good time to be launching it.

ELEANOR HALL: That is retail analyst, Rob Orex, ending that report by Sue Lannin.

*Editor's note: This audio and transcript were amended on 28/09/2009 to clarify the date that Myer
will relist on the stock exchange.

Burning cross sparks time for reflection

Burning cross sparks time for reflection

Sara Everingham reported this story on Monday, September 28, 2009 12:18:00

ELEANOR HALL: Religious leaders in the Northern Territory have condemned the burning of a cross
that marked the place where an Aboriginal man was killed in Alice Springs two months ago.

Five white men have been charged over his death and while police say the attack wasn't racially
motivated, the desecration of the cross has prompted reflection amongst Alice Springs residents
about the way that black and white Australians live together in the town, as Sara Everingham
reports.

SARA EVERINGHAM: When Kwementyere Ryder died two months ago his family set up a memorial at the
place where his body was found. It was wrapped with flowers and on it was written "in loving memory
of a loving son, brother, partner, uncle and brother in law with an unforgettable smile". It was
burned on Friday.

It's prompted the mother of Kwementyere Ryder, Theresa Ryder to speak out. She is speaking here to
the Alice Online website.

THERESA RYDER: To see it get destroyed like that, it brings very strong sad feelings to us again,
you know, when we are just getting over this.

SARA EVERINGHAM: The death of Kwentyere Ryder has had a big impact on Alice Springs. He has a large
number of relatives in the town. The accused are from well established Alice Springs families with
connections to the Aboriginal community.

After the death the family of Kwementyere Ryder called for calm to pre-empt any further trouble.
The families of two of the accused men also met with members of the Ryder family to express their
condolences

The Bishop of Darwin, Father Eugene Hurley delivered the service at Kwementyere Ryder's funeral and
called for people to come together. He says he's sad to hear the memorial has been burnt.

DANIEL EUGENE HURLEY: I can only hope that it is a thoughtless and childish act of someone who has
no idea of the sacredness of that simple symbol. I want to believe that because to believe anything
else is to accept that we would inflame the hurt and sadness of the death of this young man by some
cruel act.

SARA EVERINGHAM: Pastor David Kuss is from the Lutheran Church in Alice Springs.

DAVID KUSS: I do know the accused. I do know some of their families very well. I can say that none
of them, the families or the accused would condone this cross burning or any kind of trouble.

I believe it has been very, very clear to the whole Alice Springs community that the Ryder family
are committed to not let tragedy invoke further tragedy so this kind of thing is just wanton
vandalism I'm sure just done to stir up trouble.

SARA EVERINGHAM: Police say the alleged attack on Kwementyere Ryder wasn't racially motivated.

The acting police commander in Alice Springs is Kym Davies.

KYM DAVIES: The circumstances of that incident, it could have been anybody. It just so happened
that Mr Ryder was an Aboriginal person and the people driving the vehicle were white people. We see
a lot of violent incidents in Alice Springs and we would not, we would be at pains to suggest that
they are not racially motivated.

SARA EVERINGHAM: Nevertheless the death and the burning of the cross have prompted reflection on
race relations in the town. Theresa Ryde says Alice Springs has become more racist.

Des Rogers is long-term Aboriginal resident of Alice Springs.

DES ROGERS: I think it has always been here. As I say, I'm not as black as some of my brothers and
sisters but I've been to shops where people obviously don't want to serve you because of those
things but I am big and ugly enough, I just walk away from it nowadays - don't go back to that
shop.

But I see it all the time. You know, particularly people that are living in the creek. You know,
being treated appallingly in the shops by not only the staff but by other people in the shop as
well.

SARA EVERINGHAM: The former Northern Territory administrator and long-term Alice Springs resident
Ted Egan says policies such as the intervention have brought more Indigenous people to Alice
Springs and put more pressure on relations between black and white in the town.

TED EGAN: When shopkeepers say I have had my glass windows replaced 300 times in the last five
years, yes they are going to be frustrated and when you see mindless antisocial behaviour mainly by
Aboriginal younger people around the town aggravated by poverty and disempowerment and alcohol,
there is going to be ongoing friction and the infuriating thing is that it is all capable of being
resolved very, very easily.

SARA EVERINGHAM: How do you think that is?

TED EGAN: Oh, there is a fella named Kevin Rudd in Canberra who should go around and listen to the
real people who understand the real issues and be convinced as he should be that this is the
greatest single social issue in Australia - the future of the first Australians and it is not good
enough that they are just treated as such inferiors at all times.

ELEANOR HALL: That is the former administrator of the Northern Territory, Ted Egan ending Sara
Everingham's report.

Abused teen too old for child protection

Abused teen too old for child protection

Rachael Brown reported this story on Monday, September 28, 2009 12:22:00

ELEANOR HALL: Sexual assault specialists in Melbourne are accusing Victoria's child protection
authorities of failing a 17 year old girl, who says she was being abused by her father.

The treatment centre that the young girl turned to says she's a victim of a system that only
intervenes if the child at risk is under the age of 17.

In Melbourne, Rachael Brown reports.

RACHAEL BROWN: A sexual assault centre at Melbourne's Royal Children's Hospital is worried
responsibility is falling on it to organise crisis care for certain teenagers at risk. The
Gatehouse Centre says a 17 year old girl presented, claiming she'd been sexually assaulted by her
father.

But when a doctor tried to report the allegation to the Department of Human Services, they were
told the child protection unit couldn't be involved, because the girl was 17.

The Community Services Minister, Lisa Neville, says 17 year olds aren't included in the scope of
child protection.

LISA NEVILLE: Because at 17 a young person does not require the consent of their parents to leave
home.

RACHAEL BROWN: The manager of the Gatehouse Centre has told The Age newspaper it made sure the girl
had a safe place to stay that night with a friend, and says it's unfair to expect abused 17 year
olds to manage on their own

But Ms Neville says just because child protection can't be involved, doesn't mean the teenagers are
abandoned.

LISA NEVILLE: For example housing support. We fund also sexual assault services and in fact, you
know the Royal Children's Hospital is perhaps one of the leading health services in Victoria that
provides these sort of supports to young people and has the expertise through the Gateway service
and also through the Centre for Adolescent Health.

RACHAEL BROWN: The hospital says it fell on it that night that she presented to refer her to an
adolescent mental health service and make sure she had a safe place to stay that night. Should it
have been the hospital's responsibility or was this just an anomaly?

LISA NEVILLE: Oh absolutely, all our services have a responsibility to protect and support young
people in this situation and it's very clear in the guidelines that exist for health services that
they are required to follow those procedures - that they need to contact the police, they need to
look for housing and protected environments for a young person in this situation.

RACHAEL BROWN: So it should be the hospital's responsibility and not...

LISA NEVILLE: I think it's a shared responsibility of all of us, wherever a young person presents.

RACHAEL BROWN: But Victoria's child safety commissioner Bernie Geary says the state should review
the mandate prohibiting government involvement for teenagers aged over 16.

BERNIE GEARY: It can be argued that young people can leave home when they're 17 but I don't think
that that is a strong enough argument but I think the general feeling of the community would be
that already we would be looking after those 17 year olds as we do in some other states and
obviously as is proclaimed by the United Nations. In many cases in the system that I know, these 17
year olds are responded to anyway but I think that that needs to be supported by legislation.

RACHAEL BROWN: Today's story is the fourth time in a fortnight the Department of Human Service's
performance has been called to account.

First it was revealed a Victorian man had been raping his daughter for more than 30 years, and
fathered her four children. This followed an Ombudsman's report detailing a litany of failures
within Victoria's child protection system, including two cases where children were placed with
convicted sex offenders.

And last week, the State's public advocate raised concerns that pensioners in supported
accommodation were also being left vulnerable, and forced to offer sexual favours for daily
necessities.

But Lisa Neville denies any suggestion of systemic failures.

LISA NEVILLE: Look I think that, you know, day to day as I've said, we've got thousands of workers
who are doing, overwhelmingly a great job working with, you know, vulnerable children and
vulnerable members of our community but you know, there are lots of complex issues that often are
associated with people who might be in a SRS (supported residential service) or a young person or a
child in the child protection system.

Part of the decision recently to split the Department of Human Services was about trying to ensure
that we had a renewed focus on very vulnerable Victorians.

ELEANOR HALL: That is Victoria's Community Services Minister, Lisa Neville, ending that report by
Rachael Brown.

Philippines floods catch Government flat-footed

Philippines floods catch Government flat-footed

Brendan Trembath reported this story on Monday, September 28, 2009 12:26:00

ELEANOR HALL: Authorities in the Philippines say they're not coping with massive flooding in the
capital Manila that's so far killed more than 80 people and forced nearly half a million others
from their homes.

Tropical storm Ketsana delivered a nine-hour deluge on Saturday that has left some parts of the
city under six metres of water. The Philippines President, Gloria Arroyo, is comparing it to the
Hurricane Katrina disaster in the United States four years ago.

Our reporter Brendan Trembath is in Manilla and he spoke to me just before we came on air.

Now Brendan you were there in Manila when the typhoon hit. What was it like?

BRENDAN TREMBATH: Just incredible rains that didn't stop for more than six hours. The city got a
month's worth of rain just in that short period of time. It was quite incredible. Normal roads were
turned into raging rivers. It just didn't let up and many people were stranded.

We were stranded in a local shopping centre - couldn't get out at all. The taxis would come in but
not leave again because they couldn't get back on the roads.

ELEANOR HALL: President Gloria Arroyo says there was more rain then than in the US Hurricane
Katrina disaster.

BRENDAN TREMBATH: I would certainly believe that because it just didn't let up. The hard thing
about Manila is that it really relies on these main roads that go through the city and as soon as
they started getting clogged up with vehicles stalled it was chaos in this city.

Nothing was happening, stores were forced to close and many people's lives were thrown into
turmoil.

ELEANOR HALL: What is it like there in Manila now? Have the floodwaters started to recede?

BRENDAN TREMBATH: Well the waters are receding and the weather is clearing up. The sun is out at
the moment but still the search continues for people who have lost their lives. Dozens of bodies
are still being found particularly in the east of the city in areas like Marikina and Pasig City.

ELEANOR HALL: Well, a lot of these areas are very poor. There are people living in slums along the
railway tracks. Is it there that the lives are being lost?

BRENDAN TREMBATH: It certainly is and I was in some of these areas yesterday speaking to the
people. They have an amazingly positive attitude considering what happened in their communities.

I spoke to people who were wading through waist-deep water near their homes that were underwater
yet they remained largely positive. It was quite extraordinary to speak to them but they did say
that it caught them by surprise. They weren't expecting this huge flood of water.

ELEANOR HALL: Well apparently it caught the Government by surprise too. There is talk of a lot of
criticism of the Government's response to the crisis. Are you hearing that?

BRENDAN TREMBATH: Certainly am and part of it is the forecasting. What seems to have happened is
the city got this tremendous rain, that huge deluge but that was exacerbated by a high tide from
Manila Bay that these rivers flow into.

So smaller communities along the waterfront, often poorer communities were just hit from both sides
- from the rising tide but also the deluge of water coming downstream.

ELEANOR HALL: And Brendan we are hearing hundreds of thousands of people have been displaced by
this. How big is this disaster?

BRENDAN TREMBATH: Well I think the biggest problem is what you've identified - the displacement.
Certainly a large number of people have been killed and more are missing and probably the toll will
rise but just the people who have been left homeless is really difficult along those waterfront
areas.

I saw quite a few of these homes and clearly they will have to be rebuilt from the ground up but
where I was yesterday, the areas where the water was slowly receding, they were just complete mud
baths so there was nothing that could really be salvaged from these homes. It was quite
distressing.

ELEANOR HALL: So what is your sense now of the capital city? How long before it is cleaned up?

BRENDAN TREMBATH: Well, Manila is a huge place so there are parts of the city that this morning
look unaffected. It actually looks better than previously because the air is clearer but in those
riverfront areas in the east of the city, they'll take months and months to return to some sense of
normality.

ELEANOR HALL: Brendan Trembath, thanks very much.

BRENDAN TREMBATH: Thank you.

ELEANOR HALL: The World Today's reporter Brendan Trembath in Manila.

US wrestles with Afghan strategy

US wrestles with Afghan strategy

John Shovelan reported this story on Monday, September 28, 2009 12:30:00

ELEANOR HALL: The Obama administration's National Security Council will begin a series of meetings
this week to decide whether to change its strategy in Afghanistan.

The administration has been agonizing in public over whether or not to send more troops and
Republican Senator John McCain is now warning that America's allies are becoming nervous about just
how committed the US is to Afghanistan.

From Washington John Shovelan reports.

JOHN SHOVELAN: Tomorrow Australia's Foreign Minister Stephen Smith will sit down with the US
Defense Secretary Robert Gates.

Mr Gates is in the midst of a divisive administration policy debate about the size of the US
commitment to Afghanistan and the strategy it should pursue.

ROBERT GATES: Do we need additional forces? How many additional forces and to do what?

JOHN SHOVELAN: President Obama's civilian and military advisers, along with key members of Congress
in his own party, are divided. On one side there is the chairman of the joint chiefs of staff
Admiral Mike Mullen, Centcom commander General David Petraeus and the US commander in Afghanistan
General Stanley McChrystal. They are all in favour of an extra 40,000 troops and a broad
counterinsurgency strategy like that followed in Iraq after the troop surge of December 2006.

On the other side there is General Colin Powell, the former secretary of state. He has told
President Obama he is sceptical about deploying more troops without a more clearly defined mission.
So too are Vice President Joe Biden and national security adviser General James Jones, among those
sceptical of a major troop increase.

While the administration debates how and how much, Senator John McCain says its allies in
Afghanistan are left just waiting - watching to see if the US policy changes and what impact, if it
does, will it have on their own troop commitments.

JOHN MCCAIN: Our allies in the regions, while we are waiting our friends in the region are getting
very nervous as well as our European allies.

JOHN SHOVELAN: Senator John McCain says the administration must stick to the counterinsurgency
strategy its employing and agree to the military's request for more troops.

JOHN MCCAIN: So we gave people an environment where they could start living some semblance of
normal daily lives. That is a counterinsurgency strategy.

JOHN SHOVELAN: The Vice President Joe Biden is believed to have advocated a more limited
counterterrorism strategy in which US forces would be involved in eliminating Al Qaeda and Taliban
fighters.

JOHN MCCAIN: What the opponents are talking about is a counterterrorism strategy. You can't just
sit off on the sidelines and kill people.

JOHN SHOVELAN: But Gates is doubtful of this strategy.

ROBERT GATES: People that I've talked to in the Pentagon who are the experts on counterterrorism
essentially say that counterterrorism is only possible if you have the kind of intelligence that
allows you to target the terrorists and the only way you get that intelligence is by being on the
ground, getting information from people like the Afghans or in the case of Iraq, the Iraqis and so
you can't do this from a distance or remotely in the view of virtually all of the experts.

JOHN SHOVELAN: There is a lot at stake in this Washington debate for countries like Australia with
substantial troop commitments in Afghanistan. It's expected the President will make his decision in
the next few weeks.

John Shovelan, Washington.

Polanski facing extradition over underage sex

Polanski facing extradition over underage sex

Barbara Miller reported this story on Monday, September 28, 2009 12:33:00

ELEANOR HALL: He should have been the guest of honour at the Zurich Film Festival, but instead
Roman Polanski spent Sunday in a Swiss jail facing extradition to the United States.

The director has been detained on an arrest warrant dating back 30 years. Back then he fled the US
after pleading guilty to having sex with a 13-year-old girl.

While Polanski fans argue the case should be dropped, sexual assault counsellors say the director's
fame and fortune shouldn't get in the way of the fact that he committed a serious offence.

Barbara Miller has our report.

BARBARA MILLER: Life has dealt Roman Polanski some harsh blows. His mother died in Auschwitz. His
first wife Sharon Tate was hacked to death by Charles Manson followers when she was heavily
pregnant.

But the director has also famously found himself on the wrong side of the law, in a case dating
back to 1977. It was then that he had sex with a 13-year-old girl at a party in the home of the
actor Jack Nicholson. He had allegedly drugged the teenager beforehand.

Polanski pleaded guilty, but fled the US before sentencing - later claiming the judge appeared to
be about to renege on a plea bargain. He settled in his country of birth, France, where he enjoys
protection from extradition to the US and great respect.

The French Culture Minister Frederic Mitterrand has protested strongly about Polanski's arrest in
Switzerland describing him as a wonderful man.

FREDERIC MITTERAND (translated): My reaction is one of very, very strong emotion. Roman Polanski is
an internationally recognised film maker who does our country honour in the sense that he has made
many films in France and that he lives here.

BARBARA MILLER: Polanski, the director of Chinatown and Rosemary's Baby, is also highly regarded as
a director.

OSCAR NOMINATION: And here are the nominees for the 75th achievement in directing.

BARBARA MILLER: And in 2003 he won the best director Oscar for The Pianist.

OSCAR ANNOUNCMENT: To Roman Polanski.

BARBARA MILLER: There was outrage among film buffs in Zurich where Polanski was due to receive a
lifetime achievement award about his arrest.

VOX POP: I am ashamed to be Swiss because I don't understand how they can bother this gentleman
after 30 years and sometimes here we are so mild towards other things that are real crimes.

VOX POP 2: It is very, very stupid in a way. Let him go. I mean that is a long time ago and
whatever it was, it is nobody's business.

BARBARA MILLER: But some tourists on the Hollywood Walk of Fame were less forgiving.

VOX POP 3: Time doesn't make the crime go away. If you do the crime, you should do the time.

VOX POP 4: That is a disgusting crime and they should be prosecuted today, tomorrow, 50 years from
now. I think justice should be served and he should be prosecuted and sentenced just like any other
average Joe would be.

VOX POP 5: I think it depends on if it is something like shoplifting or rape. I mean, I think, 30
years later, the store got over the fact that you shoplifted something but this girl, her life will
never be the same.

I mean you can't get over something like rape or murder or something. You can't make it right. You
can't go back and make it right so you know, I think if the victim still feels the pain then the
perpetrator should be able to feel the punishment.

BARBARA MILLER: Karen Willis the manager of the New South Wales Rape Crisis Centre says there's no
doubt that Roman Polanski should be extradited to the US.

KAREN WILLIS: Absolutely. There is no statute of limitations on sexual assaults and 30 years ago he
would be in his mid-40s and a man of that age knows that having sex with a 13 year old is not on
and he has clearly gone ahead.

He can't use an excuse of youthful exuberance or anything else. He was a mature adult and he must
be held account for his crimes.

BARBARA MILLER: Polanski's victim, who's now in her forties, has already sued the director for an
undisclosed amount. She's previously called for the case against him to be dismissed.

Karen Willis.

KAREN WILLS: I am wondering whether that is because she feels that it was OK for a 46 year old man
to have sex with a 13 year old or, and I am guessing, it is more likely that the whole idea of now
30 years later having to go through the court processes, having all of those memories brought back
up when she would have already done the recovery work and been getting on with her life.

To go back there again, that is a big ask for anybody.

BARBARA MILLER: It's not clear why after so many years in Europe Roman Polanski has been arrested
now. This time it's understood US authorities learned of his plans to go to Zurich and contacted
Swiss authorities. A formal extradition request is expected to be lodged within 60 days.

ELEANOR HALL: Barbara Miller reporting.

Merkel teams up with pro-business party

Merkel teams up with pro-business party

Emily Bourke reported this story on Monday, September 28, 2009 12:38:00

ELEANOR HALL: The German Chancellor Angela Merkel, has been swept to a second term at the helm of
Europe's dominant economy.

The face of the German leadership might be the same, but the Social Democrats have suffered a
bruising defeat which will allow Angela Merkel to ditch her coalition partners and team up with the
Free Democrats, as Emily Bourke reports.

EMILY BOURKE: A second term for Angela Merkel was expected, but the emphatic result for her
Christian Democratic Party means the so-called "grand coalition" with the Social Democrats will be
ditched.

In claiming victory, Angela Merkel said she wanted to be the Chancellor for all Germans.

ANGELA MERKEL (translated): We accomplished something amazing. We achieved our goal. A stable
majority in Germany for a new government of Christian Democrats and the FDP and that is good.

EMILY BOURKE: Voters have given Angela Merkel a new coalition partner with the pro-business Free
Democrats Party which grabbed 15 per cent of the vote under the leadership of Guido Westerwelle.

GUIDO WESTERWELLE (translated): We want now to co-govern Germany because we have to make sure that
there is a fair tax- ystem, better education chances and that the citizens' rights are finally
respected again.

EMILY BOURKE: For the Social Democrats led by challenger Frank-Walter Steinmeier, it's been a
humiliating defeat and their worst loss in six decades.

FRANK-WALTER STEINMEIER (translated): Voters have decided and the result is a bitter day for German
Social Democrats. There is no talking around it. It is a bitter defeat, after an election campaign
which we led with great commitment.

EMILY BOURKE: The new coalition has its work cut out especially on the economic front.

But Dr Remy Davison, a senior lecturer in international relations at Monash University, believes
Angela Merkel has benefitted from the global recession and she has a mandate for bold economic
reform.

REMY DAVISON: Germany has accumulated an awful lot of debt in this current crisis. We have seen a
lot of export of jobs off-shoring into Poland and the Czech Republic in the last decade or so and
we have seen unemployment numbers of four to five million in the last few years.

And so Merkel has a a very difficult task ahead of her to convince the electorate that economic
reformism can work, it is the kind of reformism that has taken place in Australia in the last two
decades but for Germany it has been something like shock therapy in the last 10 years or so.

EMILY BOURKE: According to Remy Davison the poor result for the Social Democrats and the record low
turnout doesn't auger well for elections outside Germany.

REMY DAVISON: Well, it is certainly true that Social Democrats in recent elections, that includes
the European parliamentary elections earlier this year, have not performed at all well and if the
polls are correct social democratic parties like the British Labour Party projected to probably
lose quite badly in the next British election.

I think in the case of Germany and also France, what we have seen is the fragmentation or the
splitting of the left. We have in effect, two to three left wing parties in France. We have two in
Germany but you also have the economic dislocation that has occurred in Germany in the last 10
years and what people are really thinking about is not Afghanistan or Iraq but it is about their
jobs and it is about the future of the German economy and getting Germany going again as the engine
of European dynamism.

ELEANOR HALL: And that report was compiled by Emily Bourke.

Analyst wary of wakening Dragon

Analyst wary of wakening Dragon

Eleanor Hall reported this story on Monday, September 28, 2009 12:42:00

ELEANOR HALL: As Kevin Rudd returns from his trip to the United States a China expert is warning
that Australia needs to work on its relationship with the country that could be the world's next
dominant power.

Dr Michael Wesley from the Lowy Institute will deliver the Sydney Ideas lecture tomorrow night at
Sydney University and he is calling for Australian leaders to develop a more nuanced understanding
of China.

When he joined me in The World Today studio this morning, I asked Dr Wesley about the Chinese
leadership's position on the elevation of the G20 forum of world leaders.

MICHAEL WESLEY: China, paradoxically for an authoritarian state doesn't really believe in
leadership or world leadership. China has for decades been calling for the quote, unquote
"democratisation" of international affairs which means that it doesn't think that the United States
should be the leader of the world and the more you look into it, China doesn't believe that there
is any sort of coterie of great powers that should lead the world.

ELEANOR HALL: Is the G20 then something that would fit that or not fit that?

MICHAEL WESLEY: I think China is much more comfortable with a G20 than it is with a G2 which was
what some American commentators suggested and the Chinese couldn't have been less interested in
that proposal.

ELEANOR HALL: It is very interesting isn't it because the G2, China and the US, that adds hugely
one would have thought to China's international prestige. Why would it be opposing such
suggestions?

MICHAEL WESLEY: Well, China has since the Communist Revolution been very much sympathetic to the
views of developing countries. I think everything within China's experience of the last 60 years
has confirmed its views that the world order is basically a rich boys' club so I think the last
thing that China's leadership would want to do would be to join that rich boys' club.

I think they genuinely want to make global affairs much more democratic.

ELEANOR HALL: Is China's talk of democratising international affairs though really saying it
doesn't want other countries interfering in its own internal affairs?

MICHAEL WESLEY: Oh, very much so. I mean that is very much a part of it. It is that no country
should be dictating to any other country the way that it should do its own internal development.

ELEANOR HALL: And you write that if or when China does assume its great power status, it will be
one of the poorest great powers in history. What difference will this make to the way that it
wields its power?

MICHAEL WESLEY: Well, for a very long time in the future, China will see itself as a developing
country. A lot of people sort of look at this cynically and say well, China is doing that so it can
get certain concessions at the WTO and in climate change talks and so on.

But it is very much the ideology of the Chinese Communist Party that China is a developing country
and therefore its acts in very different ways from wealthy great powers because it fundamentally
believes itself to be a developing country still.

ELEANOR HALL: Wouldn't it be naive though to believe that once China became the great power of the
world, if that were to be the case, it would really wield power in a different way from any other
world power?

MICHAEL WESLEY: I think we are watching something that is genuinely unprecedented. The rise of
China is throwing up all sorts of difficulties with our traditional understanding.

We can't rely on historical models too much because there is no other great power that has risen in
the age of globalisation in this way, in which countries' fundamental interests are so entwined and
inter-dependent and other great powers in the past that have risen, I think, would have jumped at
the chance to have become a G2 with the world's leaving power.

An extraordinary concession on the part of the Americans. Even more extraordinary was the fact that
the Chinese didn't want to take it up.

ELEANOR HALL: This week the Communist Party will celebrate 60 years of rule yet of course, it is
also being hailed as having saved capitalism from its recent crisis. To what extent is China still
a communist country?

MICHAEL WESLEY: That is a complex question. China is a very long way from being a capitalist
country. China is still very much a state-controlled economy. There is private enterprise. The
market has been allowed to develop in China but fundamentally China sees itself as a communist
country.

Its thinkers, its party officials, its leaders still believe very strongly that China is moving
along the path to constructing socialism and that eventually the socialist model that China is
constructing will triumph.

ELEANOR HALL: And what does that mean if China becomes the great world power?

MICHAEL WESLEY: That is a good question. There is an open question as to how much and to what
extent China as the largest economy in the world, if it does become that by say the mid-2020s, will
start to restructure global economic processes and global economic institutions.

At this stage, while it is still rising, China has not shown very much interest in restructuring
the way that the global economy works but that is a very big question mark over the future of our
region and our world as to the extent that China will start to use its power to change the global
economic rules and the patterns of global economic production.

ELEANOR HALL: Now you've warned that the costs for Australia of getting China wrong could be very
high. What could they be?

MICHAEL WESLEY: Basically, there are two extremes of getting China wrong. One is to throw our lot
in with China prematurely. To suddenly say we need to be prepared to compromise pretty much
everything to get along with China.

The other extreme of getting China wrong is to say that there is nothing that we need to concede to
China. I think getting China right has to become much more nuanced.

ELEANOR HALL: How would you describe Australia's relationship with China right now?

MICHAEL WESLEY: The way I would describe it is that Australia's relationship with China has become
incredibly complex incredibly quickly. We as a society need to start discussing these major choices
that we are making in international relations because they will ultimately involve our values as a
society.

ELEANOR HALL: And to what extent should Australians regard China as a threat?

MICHAEL WESLEY: I think to regard China as a threat is an over-exaggeration and a very, very
dangerous road for us to go down because it is a very easy fear to raise within a community,
particularly a community like Australia with a long history of concern about the red peril, the
yellow peril and so on and so forth.

The success of China is on balance a good thing for us but it is not something that we need to lose
our heads over and kind of capitulate to everything the Chinese demand.

ELEANOR HALL: Dr Wesley, thanks very much for joining us.

MICHAEL WESLEY: You're most welcome.

ELEANOR HALL: That's China analyst, Dr Michael Wesley, from the Lowy Institute and you can listen
to a longer version of that interview on our website.

Pressure piles on solo sailor

Pressure piles on solo sailor

Charlotte Glennie reported this story on Monday, September 28, 2009 12:46:00

ELEANOR HALL: The mother of a 16-year-old Queensland sailor says sexism is driving those who want
to stop her daughter's voyage around the world.

Jessica Watson wants to become the youngest person to sail solo around the world - but there's
concern that she's too inexperienced to make the trip.

An investigation by Queensland's Maritime Safety Bureau found that the teenager wasn't using some
of the most basic safety strategies when she set off on her journey earlier this month, as
Charlotte Glennie reports.

CHARLOTTE GLENNIE: When Jessica Watson began the preparatory leg of her dream to sail around the
world - she took a handwritten safety checklist with her, which she'd scribbled on a piece of paper
torn from a notebook.

Just hours into her journey she collided with a 63,000 tonne tanker off south-east Queensland. The
state's Maritime Safety Bureau investigated and concluded she was too inexperienced to sail solo
around the world.

Jessica Watson's mother Julie says her daughter never expected the findings to be made public.

JULIE WATSON: She is really disappointed at the level of professionalism from Queensland Transport.
We were assured that, when we asked if the letter would be a public letter, he said no its not, it
is just a private letter between my boss and your parents.

CHARLOTTE GLENNIE: But the findings are now public knowledge. Maritime Safety Queensland found
Jessica Watson's log was irregular and she was sailing without a properly plotted course. The
authority also said she had no fatigue management plan and she hadn't switched on an anti-collision
warning device.

Queensland's Aacting Premier Paul Lucas says the report is very revealing.

PAUL LUCAS: Clearly Maritime Safety Queensland have expressed their concerns to Jessica and one of
her parents concerning the nature of the voyage that she is about to undertake. She needs to be
ready to do it. I don't believe on the evidence that I've read that she is.

CHARLOTTE GLENNIE: David Stewart is the director general of Maritime Safety Queensland.

DAVID STEWART: We have provided some very, very clear recommendations. Recommendations that a
prudent sailor would take on board on undertaking this voyage.

It is a significant voyage and you know, we have already seen an incident between a very large
tanker and the vessel that we are talking about so at the end of the day, we are very concerned
about maritime safety.

CHARLOTTE GLENNIE: Repairs have been made to Jessica Watson's yacht since the collision and her
mother says she's now ready to set sail again.

JULIE WATSON: We have done a lot preparation for this voyage and it is properly the most prepared
boat that you have ever seen on the seas.

CHARLOTTE GLENNIE: David Stewart agrees the yacht is now shipshape.

DAVID STEWART: We can't stop the trip. We have, our issue has been around the safety of the vessel
and the vessel is safe and seaworthy and it can leave port when it is ready.

CHARLOTTE GLENNIE: But Queensland's Acting Premier Paul Lucas still has grave reservations.

PAUL LUCAS: Governments cannot legislate to stop everything. Governments cannot legislate for
common sense. All I say is that this is a very, very serious matter and I appeal to Jessica and her
parents to have a very good think about whether she is, in fact, ready to do this.

CHARLOTTE GLENNIE: The Federal Transport Minister Anthony Albanese is also paying close attention
to Jessica Watson's plans. A spokesman for the Minister says there's nothing he can do to stop the
trip, but he urges Jessica Watson's parents to listen to the concerns of maritime safety experts.

The main sponsor of Jessica Watson's voyage is the skincare company Ella Bache. The World Today
asked the company for an interview but had no response. Other sponsors of the journey include
Panasonic, Jeppesen Marine and the publishing company Hachette. None of the sponsors contacted were
available for interviews but through spokespeople no one said they're reconsidering their
commitments.

Jessica Watson's mother Julie says if her daughter was a teenage boy, she believes people would
view her case differently.

JULIE WATSON: There is a young fella from England, Mike Perham who set sail about a year ago and
just finished. He is currently the youngest circumnavigator. We know him quite well and he faced a
barrage of criticism about his journey but nothing on this level.

ELEANOR HALL: The teenage sailor's mother Julie Watson ending that report from Charlotte Glennie.

Springfield simmers as doughnut burns

Springfield simmers as doughnut burns

Kerri Ritchie reported this story on Monday, September 28, 2009 12:50:00

ELEANOR HALL: To New Zealand now and over the weekend, one of the country's more unusual tourist
attractions was set alight. A sculpture of a giant pink doughnut was a gift from the makers of The
Simpsons to the South Island town of Springfield.

But now the doughnut has an extra hole in it and there are a lot of angry locals, as New Zealand
correspondent Kerri Ritchie reports.

(Theme music from The Simpsons)

KERRI RITCHIE: If you're a fan of The Simpsons, you know exactly where Springfield is - it's where
Homer indulges in his favourite food.

HOMER SIMPSON: Hmm, forbidden doughnut. (Sound of chewing)

KERRI RITCHIE: But there's another not so well known Springfield. It's in New Zealand's South
Island - 65 kilometres west of Christchurch.

Two years ago, 20th Century Fox gave the town a bright pink 4.5-metre-high doughnut sculpture, to
mark the premiere of The Simpsons movie. On the weekend, someone set it alight.

Bill Woods is the chairman of the Springfield township committee and he's very upset.

BILL WOODS: The top is all sooted and at the back it's burnt out and it is beyond repair. I am sure
that we will have to replace it in some form or another.

KERRI RITCHIE: Bill Woods says when the sculpture was unveiled in 2007, 3,000 people turned up to
watch.

ANNOUNCER (in 2007): All right, unveiling the giant doughnut - here in Springfield. Look at it
folks.

(Sound of cheering)

KERRI RITCHIE: But it's now clear not everyone in Springfield likes doughnuts.

The town held a meeting last week to decide whether the sculpture should stay put, in the main
street. The Council had received an anonymous letter, threatening court action, if the structure
wasn't removed.

Malcolm West owns the Springfield Hotel right across from the doughnut.

MALCOLM WEST: Well, looks like Homer has had a really bad day cooking in the kitchen. It is pretty
black. Very disheartening to see. It used to look nice and pink so yeah, we are a bit upset here in
Springfield.

KERRI RITCHIE: He believes a couple of locals are responsible - he says they've always resented all
the fuss the doughnut generated.

MALCOLM WEST: I don't think I have seen a campervan actually drive past without stopping. They
might slam their brakes on slightly down the road. Everybody stops. Everybody takes a photo. I'd
say it is a New Zealand icon.

KERRI RITCHIE: Who is responsible for this?

MALCOLM WEST: Now there is the million-dollar question. Who knows?

There's some disgruntled locals that don't like it. They think that too many people in our small,
300-people in town and there is always people stopping and everything and congregating around it.
They don't like it but the majority love it.

KERRI RITCHIE: The Springfield township committee will hold a meeting tomorrow night to discuss
what to do.

Malcolm West hopes the doughnut can be salvaged.

MALCOLM WEST: At the end of the day we're going to have to look at something that is a bit more
sturdier, that is going to last, that can't be vandalled quite so much because we have a lot of
problems with the sprinkles falling off because we have a lot of people climbing up for photos.

Even a couple of nudies photos have happened here in the past where people get drunk at the pub and
shoot across the road for a quick photo.

KERRI RITCHIE: Homer would be happy.

(Extract from The Simpsons)

CHARACTER FROM SIMPSONS: So you like doughnuts eh?

HOMER SIMPSON: Uh, uh.

CHARACTER FROM SIMPSONS: Well, have all the donuts in the world!

HOMER SIMPSON: Chomp, chomp.

(End extract)

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

ELEANOR HALL: And having a lot of fun.