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Jobs surprise puts rate rise back on agenda

SHANE MCLEOD: Those paying off a mortgage might not be happy but the Reserve Bank's decision to
raise interest rates earlier this week has been vindicated after some better than expected
employment numbers out this morning.

In a surprise outcome, the unemployment rate has fallen to 5.7 per cent, defying expectations the
figure would spike to 6 per cent.

In addition, almost 41,000 jobs were added to the economy in September despite predictions of more
losses.

The better jobs outlook has put another interest rate rise well and truly on the agenda.

For more, I'm joined here in the studio by our business editor Peter Ryan.

And Peter first to the raw numbers. Are we now seeing more evidence that the economic emergency is
over?

PETER RYAN: Well Shane, some economists on Tuesday had worried that the Reserve Bank was taking a
pretty big risk in raising rates before unemployment peaked.

Even though the RBA Governor Glenn Stevens said calm down a few weeks back, there's no convention
in saying that can't be done.

Well, today that punt paid off with unemployment falling to a seasonally adjusted 5.7 per cent in
September, and that's down from 5.8 per cent where it had been sitting for three months.

Bu the big surprise is employment with 40,600 jobs added in September when economists had been
tipping a fall of 10,000 jobs, so economists have got it wrong again.

Also there are 35,400 full time jobs that are new and the participation rate has risen slightly to
65.2 per cent

SHANE MCLEOD: State by state, how do the numbers break down?

PETER RYAN: Well Shane, the overall figure might look good, but in the Prime Minister's home state
of Queensland, unemployment is running at 6.3 per cent and in Western Australia it's 5.8 per cent
and these are two states that have been hurting badly from the fall in the mining boom.

But on the other side, in New South Wales for example, the jobless rate has fallen to 5.6 per cent
and that's not a bad result given the state's reputation of being something of a basket case
economically at the moment.

SHANE MCLEOD: Now does this put the prospect of more rate rises well and truly on the agenda?

PETER RYAN: Well Shane, it's looking as though a rate rise in November on Melbourne Cup Day is now
shaping up as a near certainty, given that unemployment is moving lower.

And if that trend continues some economists believe even a follow up in December or early in 2010
is a possibility.

As the Reserve Bank noted on Tuesday when it pushed rates up to 3.25 per cent, the emergency is
over and the 49-year low rate is history.

This is actually a far cry from the gloomy estimates earlier this year from Treasury and in the
Budget that an eventual unemployment rate of 8.5 per cent was possible because of the financial
crisis.

That figure was downgraded some time ago when things started looking a bit rosy. And today's result
adds to the view that Australia is indeed in the midst of a remarkable recovery and the envy of
other developed nations around the world.

SHANE MCLEOD: Now it's taken a while but some of the banks, have they started moving in passing on
Tuesday's rate hike?

PETER RYAN: Yes, it's been an interesting waiting game as to who would move first but this morning,
just before the ABS (Australian Bureau of Statistics) released the employment figures, it finally
happened.

And the ANZ is the first to move, announcing it will pass on the full 25 basis points to customers.
Its standard variable home loan rate goes to 6.06 per cent from the 12th of October.

The ANZ says credit card rates are under review but that some deposit rates might be going up by as
much as 0.5 per cent.

No word yet from the other banks, but now that one of the Big Four has finally moved, you'd have to
expect that the rest would follow.

SHANE MCLEOD: And Peter Ryan, there was a big surge in the Aussie dollar earlier this week after
that rate rise announcement. What's happened after this employment result?

PETER RYAN: Well, put simply, the dollar went right through the roof in expectation that interest
rates will rise.

It was hovering around 88, 89 US cents for most of the morning, but at 11:30 Eastern Summer Time
this morning when the number hit, it surged close to 1 per cent, and Shane, a short time ago it was
buying 90.1 US cents.

SHANE MCLEOD: Wow, quite remarkable. Peter Ryan thank you.

Turnbull digs in on leadership

SHANE MCLEOD: If the strategy was to deflect the spotlight away from his leadership woes, it
doesn't seem to have worked.

Malcolm Turnbull has moved to end the constant sniping from within his party about his leadership
by calling a media conference and releasing a policy on reducing government debt.

But questions about his leadership tenure dominated.

He was flanked by Joe Hockey, who sparked the latest round of instability with his admission
yesterday that he'd been sounded out for the top job.

Mr Hockey has declared the only person he wants to knock off is the Treasurer Wayne Swan and says
Mr Turnbull has his unqualified support.

Malcolm Turnbull says he understands that as Opposition leader he has to put up with a lot. He's
called for unity, but stopped short of publicly laying down the law.

From Canberra, Alexandra Kirk reports.

ALEXANDRA KIRK: It's been a while since the Coalition released some policy. The vacuum's been
filled by a non-stop bout of discontent with Malcolm Turnbull's leadership - his style, his stance
on emissions trading and continued poor polling.

It gained some dangerous momentum when frontbencher Joe Hockey revealed yesterday that he'd been
sounded out to take over from Malcolm Turnbull as Opposition leader, sparking predictions that the
Turnbull leadership was terminal.

MALCOLM TURNBULL: Okay, we're all set to go? Okay, everyone's right. Okay, right well I'm here with
the shadow treasurer and the shadow finance minister to release our plan to pay off Labor's debt.

ALEXANDRA KIRK: Malcolm Turnbull stoked the fires with his back-me-on-emissions-trading-or-sack-me
ultimatum. Many took the advice to heart, opting for the latter. Releasing the Opposition's policy
today provided an opportunity for Mr Turnbull to tackle the problem head on, or at least that's how
it turned out.

After the policy statement:

MALCOLM TURNBULL: Billions of dollars are being spent unwisely with no real benefit to the
community. Now we have four key principles and they're outlined here in this plan.

ALEXANDRA KIRK: The focus was squarely on the leadership and deep ructions caused by his position
on emissions trading.

MALCOLM TURNBULL: Questions?

REPORTER: ... plans who will be the Prime Minister if you do get in to office? Will it be either
you go or not...

MALCOLM TURNBULL: (laughs)

REPORTER: ... (inaudible) mean this plan if you do get into office?

MALCOLM TURNBULL: Well it will certainly be me.

TURNBULL SUPPORTER: Hear, hear.

REPORTER: Can you back that up?

JOE HOCKEY: Absolutely.

MALCOLM TURNBULL: And Joe will be the treasurer and Helen will be the finance minister.

REPORTER: No plans for a leadership spill?

MALCOLM TURNBULL: Certainly not.

ALEXANDRA KIRK: Malcolm Turnbull says there's no chance of him standing aside for the good of the
party, quickly.

Standing next to him was his shadow treasurer.

JOE HOCKEY: Malcolm has my absolute, unqualified support. He always has had that. He continues to
have that. He will have that into the future.

ALEXANDRA KIRK: Joe Hockey insists he has just one person in his sights.

JOE HOCKEY: The job I want is Wayne Swan's job. I want to knock off Wayne Swan. He is the only guy
I want to knock off.

ALEXANDRA KIRK: But he hasn't categorically ruled out taking over as leader. He was asked whether
there were any circumstances in which he'd accept the top job or if he sees himself as a future
leader.

JOE HOCKEY: I, look, can I promise you that we can look into crystal balls, we can speculate, it's
a waste of time. There's only one job I want, it's Wayne Swan's. I want this guy to get Kevin
Rudd's job. I want that, I really do. And you know what? I want Australians to want that as well.

ALEXANDRA KIRK: That may silence the barrage of damaging public criticism - anonymous and otherwise
- for now. But Joe Hockey hasn't ruled out accepting the leadership if others move against Malcolm
Turnbull, who still has to manoeuvre his way through the emissions trading minefield.

There was no ultimatum or tough talk from Malcolm Turnbull today; instead some advice on disunity.

MALCOLM TURNBULL: Well unity is absolutely vital and that is what we, that's what we have and we
certainly get sort of outbreaks of disorder from time to time, every political party does that from
time to time, particularly when they're in opposition but everyone recognises before too long that
we have to be united and that's absolutely vital.

ALEXANDRA KIRK: In fact he tried to make light of the unrelenting criticism, bracing himself for
more of the same.

MALCOLM TURNBULL: Can I just say this to you, as the leader of the Opposition you have to put up
with a lot. So it's almost, so I think you need broad shoulders and a thick hide in this line of
work as we all three of us do.

ALEXANDRA KIRK: The harsh words came from Cyprus, from Alexander Downer, now a United Nations
envoy, who has seen plenty of destabilising and disunity in his time.

ALEXANDER DOWNER: Changing the leadership will be fatal to the Liberal Party. They've only just
changed the leadership. In the life of one Parliament to go through more than two leaders, you
know, it'd be very, very untidy for them. They need to just consolidate, they need to be much more
disciplined than they've been and they need to make sure that they craft good and strong messages.

ALEXANDRA KIRK: And not just fatal?

ALEXANDER DOWNER: I think that would be extremely foolish to start playing with the leadership yet
again. Changing the leader again would be absolute folly for the Liberal Party. They need to just
consolidate behind Malcolm Turnbull and make sure that they are a disciplined team, they make a
decision, stick with the decision, and then if they do that they'll gradually rebuild public
confidence.

But I mean, continually changing the leader and a few months after Malcolm Turnbull has become the
leader, they don't think they're surging ahead enough in the polls so change the leader again,
they'll become a laughing stock if they do that.

SHANE MCLEOD: Alexander Downer ending that report from Alexandra Kirk.

Vanuatu quake prompts Pacific panic

SHANE MCLEOD: There's been panic in parts of the Pacific after a large earthquake struck 300
kilometres north-west of the Vanuatu island of Espiritu Santo, prompting tsunami warnings across
the region.

The quake measured 8.1 on the Richter scale and prompted concerns there would be more damaging
waves.

Schools in New Caledonia and low-lying parts of Fiji have been evacuated.

In Vanuatu, there have been reports of alarm, as in some areas the Government's been urging people
to leave coastal areas and to travel to higher ground.

Simon Santow begins our coverage.

SIMON SANTOW: After last week's devastation in Samoa and other Pacific islands there was no
question that authorities would take another large quake in the area seriously.

Seismologists put the latest earthquakes in the high sevens or even as large as 8.1, more than
enough to put tsunami alerts in place.

Marc Neil-Jones is the publisher of the Vanuatu Daily Post newspaper in the capital, Vila.

MARC NEIL-JONES: Occurred around 9.15 this morning and the shock lasted, there was more concern
over the length of the shake, which was they're estimating around a minute. There was an aftershock
which was, wasn't as powerful but they had one, another one about five minutes ago. When I was on
the phone there was another big shake which they felt was a similar size.

SIMON SANTOW: He says the reaction from some people was to panic.

Douglas Charley is from Vanuatu's Department of Geology.

He told Radio Australia that it's too early to know if there's any significant damage.

DOUGLAS CHARLEY: At this stage it's too early to say something. We had a big problem here for
communication to let people from the north, north parts of Vanuatu but we are able to communicate
via the mobile phone with other person there to warn them that there will be a tsunami and there
will be, they advise to go up to the high ground this time.

RADIO AUSTRALIA REPORTER: So you're not sure if there will a tsunami but you're worries about it?

DOUGLAS CHARLEY: Yeah, yeah because if the magnitude 8.1 and we're expecting something like it
could generate the tidal wave.

SIMON SANTOW: Newspaper publisher Marc Neil-Jones says the tsunami alert system is ineffective
anyway.

MARC NEIL-JONES: The reality is, within the south Pacific, communications in countries that are
developing are not as technically advanced as in the Western world. There is no chance that you're
going to get a tsunami waning coming out of the regional Pacific Tsunami Warning Centre and relayed
to people who are going to directly in any line of fire within the frame of time that is needed.

SIMON SANTOW: Ben Healy is the owner manager of the Deco Stop tourist lodge at Luganville on the
island of Espiritu Santo.

He estimates that several hundred tourists, mainly from Australia and New Zealand, are holidaying
on the island but he says the danger seems to have passed.

BEN HEALY: You just heard a few (inaudible) just had a second shake. This one's actually more
intense than the first, which was about three quarters of an hour ago. There's no damage here,
again, where we are.

SIMON SANTOW: Your hotel or lodge is built on fairly firm foundations?

BEN HEALY: Yeah we are, yup we're about elevated probably a few hundred feet about sea level on
quite a solid coral base overlooking the Segond Channel, out over towards Aore island. We've got
probably a dozen, probably two dozen people coming up here at the moment just as a precaution.

SIMON SANTOW: When the quake struck, how did the word get out about a tsunami warning and the size
of the earthquake?

BEN HEALY: Yeah I'm not actually quite sure how the word got out. As I felt the shake I got onto a
(inaudible) based internet site and got the information and then I only heard the tsunami warning
as people have been coming up to the Deco Stop saying that the warning had continued but I haven't
heard it on radio or anything like that.

SIMON SANTOW: And is there a range of geography? Do you have some reasonably high parts like where
you are as well as the coastal areas or are most people living around the coast?

BEN HEALY: Um no there's a lot of elevated land, especially up on the west coast, which is the
remotest part of the island. Through the centre of the island it's quite elevated but tends to be
relatively flat up to the western area. But most of the population don't centre around the town and
then up the east coast, down on the sort of waterfront area.

SHANE MCLEOD: Ben Healy, the owner of the Deco Stop tourist lodge in Luganville on the Vanuatu
island of Espiritu Santo, speaking there with our reporter Simon Santow.

Samoa suffers setback on road to recovery

SHANE MCLEOD: The tsunami warnings across the Pacific caused panic in Samoa - a nation still
reeling after being struck by killer waves just a week ago.

Our correspondent Kerri Ritchie is in the capital Apia. I spoke to her amidst the scramble to
higher ground.

Kerri Ritchie in Samoa, I can hear sirens behind you. What's happening there in Samoa?

KERRI RITCHIE: Well I'm standing at the top of the Aggie Grey's Hotel right in the heart of Apia.
I'm here with the cameraman Simon and we're just climbing up to the very top up a stairwell. The
alarms have sounded about 10 minutes ago.

Pretty much confusion, I mean we're getting mixed messages here about what the size of this is. The
latest I heard was that it was four centimetres and that we didn't have much to worry about but
everyone's worried. I mean, racing down the main street in cabs, police sirens going, everyone,
Samoans are just running.

We hadn't heard anything until about 10 minutes ago but now it's just ... (sounds from background)
I'm with a group of tourists. I mean everyone's sort of a little bit worried, but I think it's
mainly the locals that have fled up higher ground because they've seen what happened out at
Lalomanu and they're just petrified that it could be about to happen again.

SHANE MCLEOD: So there's no official word on what's happening; you're just hearing those sirens
which are the tsunami warning system?

KERRI RITCHIE: I got a text message from another journalist here to say that it was going to hit, a
tsunami in the same area that the tsunami hit, but now, I can see the water from where I'm just
getting now, Shane.

Look, I can't see a wave or anything but there's about probably 30 people at the top of this hotel,
at the top of Aggie Grey's and we didn't get an official until the siren started but we were text
messaging each other and people were saying, you know, it's not a warning, it's a watch, and then
all of a sudden that changed and became a warning in a matter of minutes and that's when we grabbed
our gear and moved out the back of the hotel.

SHANE MCLEOD: This must be very traumatic for the people there in Apia.

KERRI RITCHIE: Absolutely. I mean, you know, yeah, if you see the damage at Lalomanu it's just wipe
out and I think everyone in Apia has been staying put here so they're not adding to the worry in
Lalomanu by getting out there but now it has moved to Apia.

We still don't know what size we're expecting. Some people said it would be, you know, four
centimetres but no one here seems to know. They're running up to the TV crews asking if we know any
better but we don't so, yeah, we're just standing and waiting.

SHANE MCLEOD: And what about government officials? Have you seen any police, any rescue workers,
anyone giving directions on what to do?

KERRI RITCHIE: No it's really the young guys that stand out the front of the hotel that just herded
everyone in and no, I think, I'm not sure where all the government people are or where all the
rescue crews are.

The main street was just chaos and of course the first thing to go down are phone lines and no one
can ring out to find out where anyone else is. So that was what happened last time, the phones went
down. So they've gone down again. People are text messaging each other, seems to be the easier way
of getting through, but no, Shane, no one here other than some scared tourists on top of a
building.

SHANE MCLEOD: Our correspondent in Apia Kerri Ritchie and shortly after I spoke to her the Pacific
Tsunami Warning Centre cancelled its warnings across the region.

Queensland dusts off tsunami plans

SHANE MCLEOD: Authorities in Queensland have been keeping a close eye on the quake near Vanuatu.

The tsunami warnings that followed stretched all the way to the Queensland coast, with fears a wave
could strike the Great Barrier Reef and offshore islands.

Port authorities dusted off evacuation plans before the watch was cancelled mid-morning.

Our reporter Annie Guest spoke to seismologist Mike Turnbull from the Central Queensland
University.

MIKE TURNBULL: Being above magnitude seven, they have the propensity to cause a tsunami.
Fortunately it looks as if they haven't done so.

ANNIE GUEST: Well indeed, warnings and watch alerts were put out and cancelled in Queensland and
then a general warning across Australia and the Pacific and New Zealand. Can you just rate those
different alerts for us?

MIKE TURNBULL: There's a number of alerts ranging from actively a tsunami is coming, that you need
to evacuate, through to there could be a tsunami so just keep your eye on the news and your ear on
the radio to find out what's happening.

ANNIE GUEST: And essentially, that was the latter, that is was a downgrading.

MIKE TURNBULL: Yeah. It was the latter. There could have been a tsunami, keep your eye out, but as
it turned out there is no tsunami, so pretty much now the danger is passed.

ANNIE GUEST: Yes, now that some hours have passed, can you categorically rule out a tsunami
happening?

MIKE TURNBULL: I'm pretty certain that we can say there is no tsunami danger from this one for the
Australian coastline. If there was a tsunami danger from this, the Vanuatu Islands and the Solomon
Islands would have had inundation within a quarter-of-an-hour to half-an-hour after when the
earthquake's occurred.

ANNIE GUEST: What is the relationship between this activity this morning and that that we've seen
in the region in recent times?

MIKE TURNBULL: There seems to be three things going on. We've had the activity over near Samoa last
week, which was quickly followed by activity over underneath the Sumatran Islands. Those two events
are independent of one another and coincidental.

ANNIE GUEST: So seismologists remain confident that there's no relationship between the Indonesian
quake and the rest and it's just a terrible coincidence?

MIKE TURNBULL: Yes. Yes. There's no relationship between those two. This one that occurred this
morning north of Vanuatu, it's still quite considerably further west of the Samoan earthquake, but
may have some connection to the Samoan earthquake.

ANNIE GUEST: And is there any way of predicting where and when the next earthquakes will be and
what the severity could be?

MIKE TURNBULL: No, unfortunately there's no way of predicting where or when the next big earthquake
in the area might occur. What we do know, however, is that throughout the north of Australia and
around through the Samoan area down to New Zealand, around about 94 per cent of the earth's
earthquakes occur in that area.

We've had large and very devastating earthquakes in the past. We will have those sorts of things
into the future, we just don't know where or when.

SHANE MCLEOD: Seismologist Mike Turnbull from the Central Queensland University, speaking to Annie
Guest.

Obama told more troops means more recruits

SHANE MCLEOD: The US Senate Foreign Relations Committee has heard any increase in US troops to
Afghanistan is likely to be seen as anti-Muslim and a recruiting tool for extremists that could
result in more terrorist attacks abroad.

Today is the eighth anniversary of the US war in Afghanistan and President Barack Obama has again
convened a meeting of his war council to discuss strategy and troop numbers to the future.

From Washington John Shovelan reports the committee was also told Al Qaeda's presence in
Afghanistan has been vastly diminished and all the terrorist plots from the past four years have
come from Al Qaeda in Pakistan.

JOHN SHOVELAN: The Obama administration is reviewing its strategy in Afghanistan but there is a
core element of that which won't change.

BARACK OBAMA: We will target Al Qaeda wherever they take root. We will not yield in our pursuit.

JOHN SHOVELAN: Al Qaeda has long ago been forced from Afghanistan into neighbouring Pakistan. As
few as 100 Al Qaeda remain and even that's in dispute.

But there is a strong argument being put to the President that if the Taliban regain control in
Afghanistan, Al Qaeda will just leak back across the border from Pakistan.

Republican Senator John McCain is a strong advocate of that view.

JOHN MCCAIN: I don't think it's a proper reading of both history and the situation to somehow think
that Al Qaeda will not quickly emerge in Afghanistan if it falls to the Taliban.

JOHN SHOVELAN: But this is overly simplistic, says Marc Sageman, senior fellow at the Foreign
Policy Research Institute and formerly of the CIA and the Afghan Task Force.

He told today's Senate Foreign Relations Committee hearing about confronting Al Qaeda that Al Qaeda
may return with or without the Taliban in power. It just depends on finding a host tribe that will
conceal them.

MARC SAGEMAN: Right now, as I said, they're in Pakistan and even if they return to Afghanistan, I
think they will return in the same way they are now in Pakistan. They've been hiding. They don't
really want to be targets for either our drones, missiles or special forces units going there to
eliminate them.

So the type of threat, things have changed. It's not going to be the type of training camps, huge
training camps that we saw in the 1990s.

Right now what we see, even in the few plots that are projected to the West are really small rented
houses, half a dozen people who get a few days' training and they're not as well trained as the
previous guys in the 1990s. You're talking about a very different threat.

JOHN SHOVELAN: Dr Sageman has analysed all terrorist plots by Al Qaeda, its affiliates and home
grown terror groups, against the West since the first attempt to blow up the World Trade Centre in
the early '90s.

There have been 60 in total with spikes around 9/11 and the invasion of Iraq.

Last year there were three. Over the past five years he says 80 per cent of the terror plots have
been home grown. And in the past seven years he says all the Al Qaeda training has been done in
Pakistan.

The committee today was told increasing US troops in Afghanistan would increase anti-Western and US
sentiment in Pakistan and could be destabilizing for the government.

Mr Sageman says it would also unite the different factions and tribes in Afghanistan against the US
and its allies.

MARC SAGEMAN: It's me and my brother against my cousin, but me and my cousin against a foreigner.
So if we send 40,000 Americans, they're going to be foreigners no matter what. Even though they are
well seen but that will coalesce every local rivalry, they'll put their local rivalry aside to
actually shoot the foreigners and then they'll resume their own inter-nation fight.

JOHN SHOVELAN: President Obama has received the request from General Stanley McChrystal for more
troops.

It's understood a meeting on Friday of his National Security Council will begin looking at the
numbers of additional troops that he has requested.

John Shovelan, Washington.

UN report confirms widespread poll fraud

SHANE MCLEOD: One of the factors still complicating the puzzle in Afghanistan is the credibility of
its recent elections.

A leaked United Nations document reveals that there was unmistakable and widespread vote rigging.

Only last week the UN's deputy special representative in Afghanistan, Peter Galbraith, was sacked
for speaking out about the depth of election fraud.

Bronwyn Herbert reports.

BRONWYN HERBERT: There's been ballot box stuffing and lodging of votes from polling stations that
were never opened.

Now the United Nations' own figures on voting in Afghanistan have been leaked and the numbers don't
add up.

In some provinces more than 100,000 ballots were cast, though the UN estimates as few as 5,000
people actually voted.

Election workers began recounting some suspect ballots on Monday however they were ordered to check
just 10 per cent of the votes cast in 3,500 ballot boxes.

Abdul Rahim Nawakhtyar is from the Afghan Independent Election Commission.

ABDUL RAHIM NAWAKHTYAR (translated): As of yesterday evening we had inspected 161 fraudulent ballot
boxes and today we are hoping to inspect more boxes so we can finish the process by tomorrow, then
we will send the results to the Electoral Complaint Commission and they will decide on it.

BRONWYN HERBERT: The election rigging revelations come a week after the second highest ranking UN
official in Afghanistan, Peter Galbraith, was sacked after accusing the UN of turning a blind eye
to fraud.

PETER GALBRAITH: In some cases there were four to 10 times as many votes recorded as voters
actually appeared. By some calculations it could be that up to 30 per cent of the votes for
President Karzai were fraudulent.

BRONWYN HERBERT: Professor William Maley was an observer at the election and told AM that he too
was aware of the discrepancies.

WILLIAM MALEY: I don't think there's any doubt that we witnessed industrial scale fraud in
Afghanistan. I was there as an (inaudible) observer and within 24 hours of the close of the poll,
informed people were very well aware that there have been major efforts to orchestrate fraud in a
number of key parts of the country.

BRONWYN HERBERT: There's now been eight years of military action in Afghanistan to oust the
Taliban.

The Taliban pledged in a statement posted online they don't pose a threat to the United States.

The Islamic Emirate of Afghanistan said their aim was:

EXCERPT FROM STATEMENT (voiceover): Obtainment of independence and establishment of an Islamic
system in the country and not to attack the West. We did not have any agenda to harm other
countries, including Europe, nor we have such agenda today.

BRONWYN HERBERT: Retired major general Jim Molan says Afghanistan faces similar governance and
troop issues that Iraq did.

He says the revelations of widespread election fraud shouldn't be used as an excuse to stop sending
forces

JIM MOLAN: Using the failure of that election to say we shouldn't be in Afghanistan because why
should we fight for an illegitimate government.

BRONWYN HERBERT: How do you believe this latest revelation will impact Australia's military
commitment?

JIM MOLAN: I don't think it will impact on our military commitment because we've already made our
mind up that we are not going to take over from the Dutch next year. I would also suspect that
we've told the Americans we are not going to make a significant increase in the number of troops in
the future.

Where I think it will be interesting is if President Obama has now got to find, if he makes the
decision, of all the options he's being offered, to find another 40,000 to 50,000 more troops, and
he has to find them out of the US, then I think he will start looking at his allies totally
differently.

BRONWYN HERBERT: The Foreign Affairs Minister Stephen Smith was unavailable to speak with The World
Today.

But in a statement the Minister for Defence Senator John Faulkner says he was "aware of the very
serious issues which have been raised regarding the election in Afghanistan," and as he has "made
clear in Parliament there is a process for examining these issues and it remains important for that
process to be respected and finalised."

A ruling on whether President Hamid Karzai won or will face an election run-off against Opposition
leader Abdullah Abdullah is expected next week.

SHANE MCLEOD: Bronwyn Herbert reporting.

iiNet fights back on copyright claim

SHANE MCLEOD: Australia's third largest internet provider has told the Federal Court it should not
be held accountable if its customers illegally download movies and TV shows.

It's the third day of a hearing in Sydney where 33 of the world's largest film and TV companies are
suing iiNet for breaching copyright.

Meredith Griffiths has been in court this morning. She joins us now.

Meredith, on Tuesday the entertainment companies outlined their case. They were accusing iiNet of
doing nothing to stop these illegal downloads. What's happened since then?

MEREDITH GRIFFITHS: Yes, well that opening address Shane did actually take till about lunchtime
yesterday, so it wasn't until yesterday afternoon that iiNet's barrister, Richard Cobden SC took
the floor to begin his defence.

He really began that defence by saying that the number of copyright infringements alleged to have
occurred in this case, that those numbers have been highly exaggerated.

If you recall on Tuesday, the court heard how the film companies hired inspectors to sign up to
iiNet accounts and then use those accounts to share films and TV shows with other iiNet users,
saying that as they tracked how often they did this and it was nearly 100,000 times in the past 59
weeks.

Now Richard Cobden has actually disputed that number, saying that if an iiNet user did download a
film, say Batman, illegally, he concedes that is a breach of copyright, but he says it's one breach
of copyright.

He says if that film then stayed on the user's computer, on their hard drive, and was accessed by
other people or other computers for them to download the film, he said that's actually not further
examples of copyright breaching by that iiNet user. In that way the numbers come down quite a bit.

SHANE MCLEOD: The criticism earlier this week was that iiNet had been made aware of this and did
nothing. Has the company responded to that allegation?

MEREDITH GRIFFITHS: Yes, well the film companies are saying that since they've been telling iiNet
about this, iiNet should then disconnect the users or suspend their accounts. But Richard Cobden,
iiNet's barrister, says it's not reasonable for the film companies to be demanding that iiNet be
the judge, jury and executioner when it comes to these infringements.

He's saying the film companies themselves could do more. He says if they can hire these
investigators to indeed track people who are illegally downloading films, he says iiNet should be
going after those people directly - he says the film companies, I'm sorry, the film companies
should be going after those users directly, rather than attacking the internet service provider.

Furthermore, if you recall the program at stake here is the BitTorrent program that people use to
share files. This was described by the film companies' barrister on Tuesday as the program of
choice for people who want to breach copyright, but today the court's heard that the major film
studios involved in this case, like Fox and Paramount and Warner Brothers, all actually have
contractual deals with BitTorrent and that their logos appear on BitTorrent's website.

So Richard Cobden has asked why the film companies can't deal with their partner, BitTorrent, to
try to crack down on this film piracy.

SHANE MCLEOD: Meredith Griffiths at the Federal Court in Sydney, thank you.

Committee backs human rights bill

SHANE MCLEOD: A landmark report released by the Federal Government today recommends Australia enact
a human rights act.

Australia is the only major Western democracy without one.

Rachael Brown is in Melbourne and has just been given a copy of the National Human Rights
Consultation Report.

Now Rachael, it's a fairly comprehensive document, I'm guessing?

RACHAEL BROWN: It is 500 pages. The federal Attorney-General Robert McClelland has described this
report as the most significant exercise in participatory democracy in Australia's history.

Its primary recommendation, as you said, is that Federal Parliament enact a national human rights
act. Other measures include improving parliamentary scrutiny of human rights, improving access to
justice and addressing Indigenous disadvantage and exclusion, and also look at other groups that
are falling through the cracks, such as the homeless, people with mental illness, children with
disabilities.

And the Government will consider all these recommendations and provide a response.

Now Philip Lynch, who directs the Human Rights Law Resource Centre, welcomes the report and he said
it's a chance for the Rudd Government to show vision and leadership and to promote human rights and
dignity as being as central to Australia's culture and identity as things like beaches, boomerangs,
the Anzac spirit and the Ashes.

SHANE MCLEOD: Five-hundred pages. It sounds like it's been in the works for some time?

RACHAEL BROWN: Indeed. The committee chair, Father Frank Brennan, who you'd know as a law professor
and human rights advocate for the past 30 years, took his team around the country for four months.
There's been roundtables in places from Christmas Island, to Palm Island, to Kalgoorlie, Alice
Springs, there's been websites, Facebook pages, a national telephone survey.

And they've had over 35,000 public submissions with more than 80 per cent of those calling for a
human rights act. The Coalition's opposed to this. You might remember the Fraser government decided
against such an act in '81 because of federal implications. Labor is divided.

Father Frank Brennan says there needs to be more known about education; that people have little
knowledge about their human rights, what they are and how they're protected. But he also said
change will take some time.

FRANK BRENNAN: Even if all our recommendations were implemented tomorrow there would still be
vulnerable Australians missing out, especially on the essential economic and social rights of
greatest concern to the community - health, housing and education.

Responsibility for meeting these needs cannot rest solely with government and the vulnerable
themselves. We need to take responsibility for each other.

SHANE MCLEOD: Father Frank Brennan there and Rachael Brown in Melbourne, the advocates of a human
rights act have been saying that this would have benefits for Australia as well. What would it do
for Australia's reputation?

RACHAEL BROWN: Well many camps have been arguing for a human rights act for some time.

I spoke to prominent Australian QC and human rights advocate, Julian Burnside, who says such an act
is long overdue.

JULIAN BURNSIDE: We are the only Western democracy without formal human rights protection in our
legislation. That's a very striking thing given our history. We were very important in the
formation of the Universal Declaration of Human Rights in 1948 but in the last decade or so our
human rights reputation has suffered dramatically. I think this will be a really great step back
towards the light.

RACHAEL BROWN: Would this give Australia leverage in cases, recent ones we've heard of - Stern Hu
in China, the two Australian businessmen detained in Dubai?

JULIAN BURNSIDE: Certainly if Australia implements formal, legislative human rights protection, it
will give us more authority when we speak about human rights matters. In recent years when
Australia has spoken out about human rights matters, a substantial response from international
organisations has been, well, look at your own back garden.

SHANE MCLEOD: Human rights advocate Julian Burnside QC speaking to our reporter Rachael Brown in
Melbourne.

Report urges more people to butt out

SHANE MCLEOD: Getting people to stop smoking could deliver substantial benefits for the economy,
according to a new report out today.

It says a realistic cut in smoking rates to 15 per cent could save thousands of lives and many more
cases of smoking-related sickness.

The target has already been reached in California and, as Alison Caldwell reports, it's a goal that
researchers say could be achieved here too.

ALISON CALDWELL: Researchers from Deakin University and the National Stroke Research Institute
co-authored the report called The Health and Economic Benefits of Reducing Disease Risk Factor.

The report studies the health, economic and financial benefits of achieving lower smoking targets
in Australia - targets which have already been achieved in California where 15 per cent of the
population smokes cigarettes.

The report is based on 2004-2005 figures, which found that 23 per cent of the Australian population
smokes tobacco.

It recommends a new target of 15 per cent and says 5,000 lives would be saved each year were that
the case.

ROB CARTER: The figure that we're talking about is approximately $1 billion.

ALISON CALDWELL: Professor of Health Economics at Deakin University, Rob Carter.

ROB CARTER: What was different about this study is we actually looked at realistic reductions in
terms of smoking prevalence. So that, you know, the number of people who are smoking at the moment
is 23 per cent in Australia, and rather than just saying well, can we get that back down to zero,
which is not really realistic, what we did is to say let's look at a country that's similar to us
who has achieved a lower rate.

So what we did was to look at California, and their smoking prevalence rate is down at 15 per cent.
So basically what we said was, we should be able to achieve that rate because someone else has
actually achieved it.

ALISON CALDWELL: The report examined the impact of reaching the target on the health sector, on
industry, government and on daily life in the average household.

ROB CARTER: The daily activities that we're talking about, you know, are things like caring for
children, who does the shopping, who does the cleaning, and most of us perform those roles. The way
we costed that impact was to say, well if you couldn't do it, what would be the cost of someone
else doing it for you.

I guess it's basically helping families function better that people often don't realise.

ALISON CALDWELL: Over a lifetime it's estimated there are just over five million working days lost
and more than 9,000 early retirements due to smoking related illnesses.

The report says just over one million days are lost from household production because of ill health
while 66,000 days of leisure time are lost due to smoking related illnesses.

It concludes smoking rates of 15 per cent would reduce the number of cases of smoking related
diseases by 158,000. It says there would be 2.2 million fewer working days lost and an extra 3,000
early retirements avoided.

When it comes to household production, the report says a 15 per cent target would result in 373,000
fewer days lost to illness.

ROB CARTER: I think it's really important to realise that it's still, that the smoking rate is
still too high, that we can do better, that others quite similar to us have done better and that if
we were able to do that it would really still have quite large impacts.

ALISON CALDWELL: But the report is out of date, according to the head of the National Preventative
Health Taskforce, Professor Rob Moodie.

He says current smoking rates are at 17 per cent. He believes a more realistic target to aim for
should be around 9 per cent.

ROB MOODIE: Well it's actually below 20 per cent at the moment, by the way, so it's not going from
23 per cent down to 9 per cent, it's going from something like, you know, 17 per cent. So it's
absolutely reachable.

We're a very low taxing nation on cigarettes, we're 16th out of 18 OECD countries. A packet of
cigarettes here is much cheaper than it is for example in London or Ireland or Norway or even
Toronto. So you know, there are adjustments that we can make.

SHANE MCLEOD: The chairman of the National Preventative Health Taskforce, Professor Rob Moodie,
ending that report from Alison Caldwell.

More concerns over the NSW planning process

SHANE MCLEOD: To New South Wales where another well connected Labor figure says he met with state
planning officials and the minister to lobby on behalf of clients seeking approval for their
projects.

The Greens say the entire planning process has fallen under the sway of developers and influence
peddlers who do their bidding.

But the former federal Labor MP turned lobbyist and planning lawyer Gary Punch is one who says his
role in the planning process has been entirely appropriate.

Timothy McDonald reports.

TIMOTHY MCDONALD: The Greens and community groups have long contended the system is broken, and
favours cashed up developers over community groups.

SYLVIA HALE: Labor mates are certainly very instrumental and important when it comes to getting
decisions that favour significant developers.

TIMOTHY MCDONALD: State Greens MP Sylvia Hale sits on an inquiry into planning decisions
surrounding land at Badgerys Creek in Sydney's west.

The inquiry was convened after the death of developer Michael McGurk, who was shot outside his
Sydney home.

Allegations had emerged that McGurk had a tape which suggested potentially corrupt dealings between
developers and politicians.

Those allegations were hotly denied but the Greens say the committee shone a spotlight on
politicians who leave Parliament and then use their influence to become lobbyists.

It emerged from a submission that the former federal Labor identity Graeme Richardson met with the
head of the planning department Sam Haddad over Badgerys Creek.

Now, another former Labor identity says he too met with Mr Haddad, although for a different
project.

Planning lawyer and lobbyist Gary Punch is the former federal Labor MP for the electorate of
Barton, in Sydney's south.

He says it's normal for lobbyists and planners to meet with the department and that's as it should
be.

GARY PUNCH: You know, this notion that somehow we can simply put something on paper and put it in a
mail box and that will suffice for the planning system to function is complete nonsense.

TIMOTHY MCDONALD: The problem, according to the Greens, is that it's all too often former Labor
identities who use their contacts to secure political access and press their case.

Ms Hale says it makes the system skewed in favour of developers.

SYLVIA HALE: They have an access which is denied to ordinary members of the community. It's not so
much often their professional qualifications as the fact that they know people and they can
presumably pressure people to do favours, at least to give them very strong entry.

TIMOTHY MCDONALD: Gary Punch is well connected in Labor circles but he's also a planning lawyer.

And even though he's met with the Planning Minister Kristina Keneally at least once, he says
there's no problem with the way things are working.

GARY PUNCH: Yes, I've had one meeting with the minister and that principally concerned a matter
which was very close to her electorate. So, you know, the role for the minister, in the New South
Wales planning system, is much, much less than it has ever been and I think what you're seeing is a
striving by the people who run the planning system to embed in it the various levels of
professionalism that make up the planning mosaic.

TIMOTHY MCDONALD: The former planning minister Frank Sartor says there's nothing wrong with
developers meeting with department heads or even ministers.

But he says if they have no particular technical expertise, it adds nothing to the process for them
to discuss the merits of a proposal.

Sylvia Hale says she agrees, and moreover says there needs to be public scrutiny.

SYLVIA HALE: Just refuse to talk about it, perhaps that's the appropriate code of conduct that
should be adopted by those people. And if the merits are discussed then that should be made
publically known.

TIMOTHY MCDONALD: But Gary Punch says the system isn't broken and doesn't need to be fixed.

GARY PUNCH: We have public declaration on registered lobbyists, we have a range of protocols that
operate within the Department of Planning, and of course, what it really comes down to is a good
old fashioned note-taking that goes on from both sides at any meeting.

So I think these issues have very largely been dealt with.

SHANE MCLEOD: That's lobbyist and planning lawyer Gary Punch ending the report from Timothy
McDonald.

Gold rises to new high

SHANE MCLEOD: Fears about inflation and a weaker US dollar have sent the gold price to another
record high for the third day in a row.

The market price of gold has jumped to just above $US1,050 an ounce, and it could climb higher.

The Australian dollar is also on the move against the greenback, spurred by US dollar weakness and
Australia's rise in interest rates.

More from finance reporter Sue Lannin.

SUE LANNIN: That traditional safe haven gold is on the rise again.

The US budget deficit is growing, interest rates are near zero in North America and that's making
the US dollar weak.

Commodities analyst Jonathan Barrett says everyone wants to buy.

JONATHAN BARRETT: The weaker dollar, their concerns of inflation, there's demand out of India for
physical, so all these things are combining to push the price, and what we actually feel is
occurring is that we've broken to record highs and then we've got those people that then buy into
the market on a break to new highs.

SUE LANNIN: How high will it go in the short term?

JONATHAN BARRETT: One-thousand-and-fifty is the key. If momentum can continue and we break 1,050 it
can quite happily trade to 1,070 but I must stress, we've got to see those drivers actually being
reinforced in order for that price to remain at these levels.

SUE LANNIN: In the long term gold will continue to rise because there is a shortage of supply and
fewer and fewer new discoveries.

But Jonathan Barrett doesn't think it will break the $US2,000 mark anytime soon.

JONATHAN BARRETT: Look, I think that at the moment we've got that supply, supply equals demand. If,
obviously supply, ah, if demand picks up then, you know, well is there enough supply to meet the
market?

I think that is an interesting question. We haven't explored everything we need to explore, and as
the price moves higher then it becomes more efficient to actually mine deeper and extract gold from
different areas and that becomes more.

Also, one has to think that there's a lot of scrap out there, scrap gold and obviously that comes
back to the market.

Overall, US 2000, I think that's something we just have to take each step as it comes, because as
the price goes over, it goes higher, it only introduces more people to the market.

SUE LANNIN: Commonwealth Bank chief currency strategist, Richard Grace, says the weak US dollar is
the key driver for the rise in the gold price but he says speculators are also on the hunt because
of a crackdown on oil trading.

RICHARD GRACE: The regulators are trying to stamp out speculation in oil and the reason for that is
because of what we saw last year when oil went over towards $150 a barrel and really helped tip the
global economy into a recession. So regulators are trying to stamp out speculation in oil and so
speculators are turning to other markets such as gold to where they can undertake some speculation
in the markets without the fear of regulators tracking their positions too heavily.

SUE LANNIN: The weakness in the greenback has also boosted the Australian dollar, plus the Reserve
Bank's rise in interest rates.

Richard Grace says he expects it to go higher.

RICHARD GRACE: Looking for it to reach 93 cents by the end of the year from its current level and
then press on into the middle of next year up to around 98 cents.

SHANE MCLEOD: The Commonwealth Bank's, Richard Grace, ending that report by Sue Lannin.