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Seniors not to blame for Budget problems: Abbott

Seniors not to blame for Budget problems: Abbott

Alexandra Kirk reported this story on Monday, February 1, 2010 12:10:00

ELEANOR HALL: The Federal Opposition is accusing the Government of blaming older Australians for
its own economic problems. Tony Abbott said it is not their fault that Kevin Rudd has gone on a
spending spree and needs to reign in the budget.

The Government is releasing its Intergenerational Report today and it will use that to hammer home
the need to cut the expensive Commonwealth private health insurance rebate in order to pay for
Australia's ageing population. But the Opposition says it will continue to block this in the

And now one of Australia's foremost health economists has told The World Today that he doubts the
intergenerational problem is as serious as the Federal Government says it is.

In Canberra, Alexandra Kirk reports.

ALEXANDRA KIRK: The summer break is over. Federal politicians are back in Canberra and limbering up
for an election year.

TONY ABBOTT: Well, good morning everyone. Nice to be back, eh. Sort of?

ALEXANDRA KIRK: Tony Abbott is getting ready to face Kevin Rudd across the despatch box for the
first time tomorrow and giving a taste of the election battlelines.

TONY ABBOTT: We have a very important job as a Coalition over the next fortnight. We have to save
Australia again from Mr Rudd's great big new tax and we won't let the Australian people down.

ALEXANDRA KIRK: But before their first encounter, Mr Abbott will unveil his climate change package.

TONY ABBOTT: We will tell the Australian people tomorrow precisely how much we think it will cost
to have an effective climate change policy.

REPORTER: Can you give us any sense of whether it is going to be big hit or just a small impact...

TONY ABBOTT: Look, all will be revealed tomorrow. I see over the weekend Mr Rudd was talking about
some kind of mega-tax, well, I mean the only person who is addicted to tax around here is the Prime
Minister. I think the Prime Minister must have been hallucinating when he started talking about a
mega-tax from the Coalition.

ALEXANDRA KIRK: For its part, the Government faces the prospect of trying to cut costs to get the
Budget back into the black and is also stretching its gaze all the way out to 2050 with the
Treasurer Wayne Swan releasing today the third Intergenerational Report.

WAYNE SWAN: There is a need for continuing budget discipline and that small adjustments that are
made now will pay very big dividends over the next 40 years and that is part and parcel of dealing
with the ageing of the population.

ALEXANDRA KIRK: One of the Government's immediate problems is trying to get the Senate to stop
blocking Labor's planned means test on a 30 per cent health insurance rebate, worth a tad under $2
billion over the next four years. The Government says it needs the money and needs the Senate

WAYNE SWAN: Their opposition to the means testing of the private health insurance rebate is having
a fundamental impact on the Budget, not just $2 billion over the forward estimates but $100 billion
over 40 years. Those are the sorts of adjustments that must be made if we are going to deal with
the pressures on the Budget that arise from the ageing of the population.

TONY ABBOTT: The Government's attempt to means test the private health insurance rebate is an
absolute breach of an election promise.

ALEXANDRA KIRK: Tony Abbott is also critical of all the Government's talk about an ageing
population and the need to get more older Australians to stay in work or go back to work.

TONY ABBOTT: It is not seniors' fault that the Government is under cost pressure. It is the
Government's fault that it has been on this massive spending spree and this idea that somehow
senior Australians are to blame for our economic problems, it is wrong, it is demeaning to great
people who have worked hard for our country.

ALEXANDRA KIRK: The chief architect of Medicare, health economist Professor John Deeble, thinks the
ageing population isn't a huge problem and will be ameliorated by immigration.

JOHN DEEBLE: Well, you know it can be overstated. Many of the European countries, in fact most of
the European countries have got an age distribution that is much older than us. Australia is not a
very old country at all and it hasn't driven them into destruction. They have been able to
accommodate the support of those people who are past working age and they are by no means poor.

We have got to make a trade off between our present wealth and prosperity and long life and if we
want to live a long time, we may have to give up some of the goodies that we have when we are
young. It is as simple as that. We may have to trade some flat screen televisions for living long.

ALEXANDRA KIRK: And it is as easy as that?

JOHN DEEBLE: It is as easy as that. We will have to give up something if we want to live a longer
life not working.

ALEXANDRA KIRK: Do you think that it is right to try and encourage older workers to either work a
bit longer if they want to or come back into the workforce?

JOHN DEEBLE: Yes, I think that is not unreasonable. I mean I am a bad one to ask because I am 79
and I am still working so extension of the working life, extension to 67 I think that they are
talking about, is the first step.

ALEXANDRA KIRK: Professor Deeble does think, though, that the Federal Government's private health
insurance rebate should be means tested.

JOHN DEEBLE: The public hospital system was never designed to treat everybody for everything and as
technology grew and the demand for hospital care grew, the private sector grew up but it has got to
be regarded as part of a whole national system. It is ridiculous to think that the public and
private systems exist independent of each other and they are not part of a national scheme.

Now if that is so and if for the public system, people pay through their tax, the rich pay more
than the poor do, for good reasons that everybody would generally support I think, then it follows
that the other half of the national scheme is going to be done the same way.

Now they have level premiums, which means that they get the same result. That if the rich pay a bit
more levy, the rebate has got to phase out as income rises. Simple.

ELEANOR HALL: Sounds simple. That is Professor John Deeble from the ANU ending that report from
Alexandra Kirk.

My School website to expand

My School website to expand

Simon Santow reported this story on Monday, February 1, 2010 12:14:00

ELEANOR HALL: Rather than backing down on its controversial national schools website, the Federal
Government says that parents have been asking for more information and it is promising to expand
the 'My School' site. Indeed the Prime Minister made this his first election commitment of 2010.

The Government says it will invite parents to fill out a survey about issues like bullying at their
child's school and will publish the results online.

But Simon Santow reports that teachers and parent groups are already raising concerns about the way
that that information is to be presented.

SIMON SANTOW: The My School website might be less than a week old but already the Federal
Government is planning to expand it, starting with giving parents a say on the merits of individual
schools and their teachers and then sharing that feedback with the world via the web.

JULIA GILLARD: We will work with our experts at the Australian Curriculum Assessment and Reporting
Authority to put this together.

Our authority has worked on the My School website. It has brought the data that you have already
seen on the website to fruition. We will work with them on the best way of surveying parents so
that we do get accurate information about how parents feel on issues like how a school is dealing
with bullying, how a school is working with the local community, what approaches it is taking to
teaching and learning and how a school is managing that important transition for secondary school
students into the world of work or the world of further study.

SIMON SANTOW: So if the feedback from parents was that bullying was rife in a particular school,
how would putting it on a website help?

JULIA GILLARD: Well, more information I believe always helps. It helps to focus the mind on
addressing the issues and problems. It helps to focus the conversations happening between parents,
teachers and the principal about how to improve the school and obviously from the point of view of
government, it also raises issues for us to respond to.

For example, with the current My School website, we knew that it would show that some schools were
falling behind in performance on literacy and numeracy and attendance and retention to Year 12.
That is why we have already decided that we will invest more than $2 billion of new money in new
programs to make a difference.

SIMON SANTOW: The Government's approach has been met with fierce resistance from teachers and
expanding the concept isn't likely to mend fences any time soon.

ANGELO GAVRIELATOS: These are very dangerous propositions. Unfortunately they are driven by
populist politics.

SIMON SANTOW: The president of the Australian Education Union, Angelo Gavrielatos, says the
website's fundamental problem is that it doesn't compare apples with apples.

ANGELO GAVRIELATOS: Teaching is now a popularity contest. Teachers have a job to do and they
execute it professionally. That is what the main essence of teaching should be. We are concerned
about the direction that this may be going in.

Ultimately we support parents' right to quality information, accurate information. What we have in
the public domain at the moment is information that is inaccurate.

SIMON SANTOW: While teachers might concede the Government's hitting on an area of great concern to
parents, the group representing parents of public school kids thinks the level of concern in the
community is being dramatically overplayed.

PETER GARRIGAN: It is very easy to say this is what parents want. Which parents are we talking
about? I am not aware of our organisation or any of the peak parent bodies or even the state bodies
who represent the parents in those local communities being asked what parents want.

SIMON SANTOW: Peter Garrigan is the president of the Australian Council of State School
Organisations. He says much of the so-called new information on the My School website is freely
available elsewhere.

PETER GARRIGAN: The best way to make an assessment, if you're moving into a community is to
actually go to the school, have a talk to the parents, have a talk to the principal. Have a walk
around the school community through the school itself and see how the children interact with
themselves and also with the staff and then have a look at the report that the school has to
produce every year.

That gives you some good base data and some good grounding to determine well is this the best
school for my child.

SIMON SANTOW: For private school parents, there's in-principle support for expanding the amount of
online information but there's also caution about the way it's presented, especially giving
opinions about the merits of particular teachers.

Ian Dalton is the executive director of the Australian Parents' Council.

IAN DALTON: What we find is more important for parents is how a school basically fits a child's
individual needs and so it is not so much about individual teachers or so on, it is about whether a
school is meeting the needs of individual students within their student cohort.

SIMON SANTOW: So what sort of information can be put on a website that can convey that information
to the satisfaction of a parent?

IAN DALTON: Well, possibly the parent survey might be okay but we would be very cautious about how
such a survey would be worded because we believe that it is very important that these sorts of
processes are constructive and that you are encouraging parents to provide honest assessments if
you like and not to provide a particular critique of schools.

So we would look forward to working with the Government to try and put that sort of survey together
because it would be very sensitive and needs to be done properly.

ELEANOR HALL: That is the executive director of the Australian Parents' Council, Ian Dalton, ending
Simon Santow's report.

Climate panel under more scrutiny

Climate panel under more scrutiny

Simon Lauder reported this story on Monday, February 1, 2010 12:18:00

ELEANOR HALL: The credibility of the world's climate change authority has taken another hit today,
with accusations that it based a claim about disappearing forests on a report by environmental

The IPCC cited a report by the environment group WWF to back the claim that large tracts of
Amazonian forests will disappear because of diminishing rainfall. An expert on the topic says that
the UN body's conclusion is still sound, but a leading climate change sceptic says people now have
real reason to doubt climate change scientists. The WWF says its own report didn't make the claim
in question.

Simon Lauder has our report.

SIMON LAUDER: For many years scientists struggled to have their concerns about climate change taken
seriously. Now that they've been heard, every detail in their paperwork is being scrutinised. That
scrutiny recently uncovered what the Inter Governmental Panel on Climate Change admits was a
mistake - it's claim that Himalayan glaciers will be melted by the year 2035.

Now an article in London's Sunday Times says carries the headline "UN climate panel shamed by bogus
rainforest claim". The article questions the IPCC's decision to cite a WWF report to support its
claim that 40 per cent of Amazonian forests could disappear as a response to declining rainfall and
even be replaced by tropical savannah.

The chief executive of WWF Australia Greg Bourne says that's not what the WWF report said and he
wants to know where the IPCC conclusion came from.

GREG BOURNE: My understanding is that in the Fourth Assessment Report whilst they were looking at
all the detail, they then cited one of our reports. A report from yes, the year 2000 and yes, it
was about forest fires.

SIMON LAUDER: Did they misinterpret it?

GREG BOURNE: My guess, Simon, is that they have misinterpreted or grabbed a piece of data which
probably shouldn't have been quoted in that particular way but I guess the key thing to me is that
when you are compiling from thousands of pieces of information, a report as big as the Fourth
Assessment Report, they will occasionally make the small mistakes and this I think was a small
mistake and we'll look into where the quotation came from and I am sure IPCC will as well.

SIMON LAUDER: The revelation that the panel cited a paper from a campaign group plays into the
arguments of vocal climate change sceptic Lord Christopher Monckton.

CHRISTOPHER MONCKTON: The game is up. The science is in. The truth is out. The scare is over.

SIMON LAUDER: Lord Monckton, who is in Australia for a speaking tour has questioned whether members
of the panel are profiting from climate change mitigation initiatives.

CHRISTOPHER MONCKTON: There is now growing doubt about whether one can trust the Intergovernmental
Panel on Climate Change.

SIMON LAUDER: Professor William Laurance from James Cook University has been studying Amazonian
forests for 14 years. He says the IPCC's conclusion is sound, but it's been undermined by sloppy

WILLIAM LAURANCE: I think that the IPCC's foundations here for saying that large expanses of the
Amazon are vulnerable you know, rest on a very strong footing and in fact I would say the figure 40
per cent is probably conservative.

SIMON LAUDER: And is that backed up peer-reviewed papers?

WILLIAM LAURANCE: Definitely. There is a whole array. Our own work published in major scientific
journals and these include some of the world leading journals like Nature, Science, Ecology,
Conservation Biology. I mean these are among the world's most eminent scientific journals. There is
many, many works that have been published providing the foundation for what I have just been

SIMON LAUDER: So what is the IPCC doing, do you think, citing references from non-peer-reviewed,
campaign-group-backed papers when it has got all this science for the same conclusions.

WILLIAM LAURANCE: Yeah, I honestly don't know about that. The IPCC has clearly made a mistake here.
They have cited something that is not a primary reference and obviously it has weakened the IPCC's

People such as, sounds like certain journalists are picking on that and saying look, you are not
basing this on as strong a foundation as you could and that creates, obviously the potential for
doubting the IPCC's overall conclusions.

SIMON LAUDER: The chief executive of WWF Australia Greg Bourne agrees that the IPCC risks damaging
its own credibility.

GREG BOURNE: There is no doubt about it. It is embarrassing for the IPCC but the climate sceptics
are attacking the detail because the big picture in unequivocal and they cannot attack that.

ELEANOR HALL: That is the chief executive of WWF Australia Greg Bourne, speaking to Simon Lauder in

Inflation gauge points to rate rise

Inflation gauge points to rate rise

Peter Ryan reported this story on Monday, February 1, 2010 12:22:00

ELEANOR HALL: There is further evidence this lunchtime that inflation is back as the Reserve Bank's
big economic headache And that has made a rate rise this week a near certainly

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

So Peter, these are not official inflation numbers. Where does this latest research come from?

PETER RYAN: Well, that is right Eleanor. Not official data but closely watched private data from TD
Securities and the Melbourne Institute and it certainly adds to the argument that Australia's
economy is getting warmer by the month, and that with limited capacity in the economy, there might
be a risk of overheating.

So the gauge shows that consumer prices rose 0.8 of 1 per cent in January. That 2.6 per cent
annually. That is right in the middle of the RBA's target zone and it follows last week's higher
than expected official data from the ABS that we saw in the consumer price index.

But it's the pace of both inflation and the recovery that will perhaps have the Reserve Bank
worried enough to push the rates' button according to Annette Beacher, senior economist at TD

ANNETTE BEACHER: One thing that we have seen in the last couple of months is that the unemployment
rate has plummeted to 5.5 per cent so for example if the Reserve Bank was worried about lack of
spare capacity three months ago, they must be really worried about the spare capacity now.

If it looks like the economy will be fully employed in the next couple of months, that again comes
back to inflation and does suggest we could see some pressures on inflation through wages and skill

ELEANOR HALL: That is TD Securities senior economist Annette Beacher.

Peter, the jobs market might be strong, but there's been a steep correction in the number of jobs
being advertised. How significant is that?

PETER RYAN: Well, once again, this is a private-gauged and once again, closely watched, it is from
the ANZ, it is the monthly job ads series which measures job advertisements in both newspapers and
on the internet. Now the number of vacancies advertised last month tumbled by 8.1 per cent from
December to 134,000 jobs or so advertised per week and that is the biggest monthly fall in the ANZ
job ad series in nine months. Even so, to put this into context January's result is still up 7.1
per cent from the cyclical low recorded in July 2009.

There are some seasonal factors at play given the Christmas season, and anecdotal evidence that the
withdrawal of government stimulus hurt Christmas sales and hiring.

ANZ's acting chief economist Warren Hogan says the correction underscores the fragile nature of the

WARREN HOGAN: Certainly this does put a bit of a question mark on just how quickly the demand for
labour was improving and therefore, you know give some question mark on how rapidly the economy is
coming back from the low point of early last year.

ELEANOR HALL: That is the ANZ's acting chief economist, Warren Hogan and global stock markets are a
bit jittery at the moment, Peter. Is there still talk globally of a double-dip recession?

PETER RYAN: Well, there's been a lot of optimism about a V- or U-shaped recovery, but hopes are
coming off a very low base and there has been a bit of talk as well about the W-shaped recovery
perhaps coming back. There are signs of slow growth in the United States, but unemployment is
sticking above 10 per cent, and while job fears remain consumers just aren't spending

And as you said, Wall Street fell 3.5 per cent last month. Shares in London fared even worse on
concerns mainly that trillions of dollars of debt are weighing down governments and there are
concerns that the world is breaking into camps for a period of stagnation. We are seeing Britain,
Ireland, Spain, Greece, Ireland, Japan, the United States submerging in debt. The emerging camps -
China, India and Brazil.

Australia is on the good list but our economy is hostage to any correction that we might see coming
out of China over the next few months.

ELEANOR HALL: Peter Ryan, our business editor. Thank you.

Intergenerational Report forecasts income drop

Intergenerational Report forecasts income drop

Sabra Lane reported this story on Monday, February 1, 2010 12:26:00

ELEANOR HALL: The nation's third intergenerational report, on the consequences of an ageing
population has just been released. The Treasury analysis, which the Federal Government's been
sitting on since last year, points to a drop in incomes and a drop in the nation's GDP.

Sabra Lane has been scouring through the 164-page report this morning, and she joins us now from

Sabra, what are the main points in the report??

SABRA LANE: Well Eleanor, the Government has been telling us now for quite some time that the
population of Australia will grow from about 22 million now to 35 million people by 2050. That is
seven million more than was forecast in the last international report just three years ago.

The Government says it has been talking about these figures deliberately as it wants the nation to
have a debate about the consequences. So here is a breakdown of some of those key figures.

The number of people aged between 65 and 84 years will more than double over the next four decades
and the number of very old people, they are classed in this report as people aged 85 and over, will
quadruple from about 400,000 today to around 1.8 million in 2050.

In short by 2050, a quarter of our population will be aged 65 and over compared with around 13 per
cent today and that is a big problem because as proportionally there will be few taxpayers working
to support those older Australians. There will be five workers, there are five workers now to every
retiree and that will shrink to about 2.7 workers in 2050 to every retiree.

ELEANOR HALL: So what does this report project the effect will be on the nation's bottom line?

SABRA LANE: Well, it will have a huge impact. Real GDP per person over the next 40 years, it will
be an average 1.5 per cent compared with around 1.9 per cent over the past 40 years.

Nationally, GDP growth will slow to under 3 per cent. It means, the report warns, that living
standards will grow at a slower pace than what they have over the last 40 years. The report says
that incomes will be 3 per cent lower than what were predicted in the last intergenerational

The Treasurer Wayne Swan will say that the impacts on the Budget will be huge if left unchecked and
an economist, Chris Richardson says the impact is ginormous.

Mr Richardson from Access Economics has had a very quick look at the report and a short time ago I
asked him for his first impressions.

CHRIS RICHARDSON: Points to a future Australia which is bigger but not better. A bigger population
mostly thanks to more migrants arriving but incomes looking a little less than the last time the
Government made these projections in 2007 and for my money, the Budget actually looks worse rather
than better.

SABRA LANE: Why do you say that? Are there some hidden messages tucked away on the pages here in
this report?

CHRIS RICHARDSON: You have got to make it to page 41 but buried in the detail, the Government notes
that the first one percentage point of national income, about $13 billion of savings, is already
assumed to happen. The Government has promised in coming years to do unspecified spending cuts to
get the Budget back into better shape.

Now these projections already assume that. Take that out of the equation and these numbers are
worse than last time.

ELEANOR HALL: That's Access Economics' Chris Richardson there. So Sabra, can you give us an idea of
what the report is suggesting about the impact on the Budget deficit by say 2050?

SABRA LANE: Eleanor, I'd have to go back through the graphs. There are a plethora of graphs and I
don't have that figure just to hand at the moment.

But I mean, it basically says that the pressures on the health Budget for example would be massive.
Of course, with Australians living longer there would be more pressures on the doctors, medicines
and caring for older Australians. Today a quarter of all total spending is spent on health, on
age-related pensions and aged care. By 2050 it says these things will take up half of all spending.

Real health spending on seniors will increase seven-fold and spending on those 85 and over, the
figure that we just talked about before, will increase 12-fold.

It says if steps aren't taken to close this fiscal gap over the years ahead, the Budget deficit
will be 3.75 of a per cent of GDP by 2050.

ELEANOR HALL: And a big part of the pressure of course is the health care. We have already seen
some interesting politics on that. What is likely to be the political reaction to this report from
the Opposition?

SABRA LANE: Oh, we are seeing it already. The Government is ramping up pressure on the Opposition
over its decision to block the means testing of the private health insurance rebate. The Treasury
report specifically looks at that. It says the costs, that measure alone would save $2 billion in
the current Budget forward estimates.

It says it will save $100 billion to the year 2050. Mr Swan will talk about in the Press Club that
the tax and transfer system will also be one way of handling these costs.

Of course, that report was given to the Government just before Christmas and we haven't seen that
yet so we will see answers to that no doubt in the weeks and months ahead.

There will also be more pressure on the Opposition to pass the carbon pollution reduction scheme.
It comes back into Parliament tomorrow.

This Intergenerational Report says without an emissions trading scheme that water availability in
Australia in 2050 it says quote "will be severe".

More immediately the Government will announce today $43 million, a $43 million ageing package to
retrain and support older Australians in the workforce so helping keep them in the workforce or
perhaps to coax some retirees back into the workforce as a way of increasing the nation's
productivity and about half a million dollars for its Golden Gurus program. You might remember
Eleanor that was announced at the 2020 summit nearly two years ago.

A program aimed at harnessing retirees and putting them to good work in schools and in the
workforce by mentoring young people but really these figures are just a small drop in the bucket of
what will be needed in the years and decades ahead.

ELEANOR HALL: Indeed, Sabra Lane in Canberra.

Analysis of Intergenerational Report

Analysis of Intergenerational Report

Eleanor Hall reported this story on Monday, February 1, 2010 12:30:00

ELEANOR HALL: Joining us now with his response to this report is the chief economist with AMP
Capital, Shane Oliver. He has been a close observer of these intergenerational reports since the
first one was released by the Federal Government almost a decade ago.

Shane Oliver, thanks for joining us.

SHANE OLIVER: Thank you.

ELEANOR HALL: Now we heard earlier in the program that the architect of Medicare John Deeble says
the Rudd Government is exaggerating the problem of the ageing population and that the Opposition
says the Government is scaremongering on it.

You've been listening to our correspondent's rundown of the report there. We have been also hearing
that the Government will be in deficit by around 3 per cent by 2050. Do you think the report does
fairly represent the demographic challenges Australians face?

SHANE OLIVER: My feeling is that the report is a fair representation of the challenges Australia
faces. The situation may not be quite as dire as was projected in the first report eight or nine
years ago but that is largely because the population has grown faster and also measures to try and
deal with the ageing population such as you know, encouraging people to stay at work for longer
along with the fact that the mining boom has led to a big increase in government revenue.

But my feeling is that these figures would reflect the best information available to the Australian
Government and the Treasury and therefore it is a pretty good guide to the pressures Australia
faces going forward as the population ages.

ELEANOR HALL: So if an ageing population pushes the Federal Government into a deficit of around 3
per cent by 2050. That doesn't sound like a huge number but what would it translate to in terms of
tax increases for example?

SHANE OLIVER: Well, to try and close that gap, a 3 per cent gap for example would require an
overall tax increase of around 15 per cent. Now of course that can be levied on households or
businesses or a combination of both but whichever way you are looking at it, taxes would have to

The alternative would be that we cut government spending. In other words services are reduced. So
whichever way you cut it, either we run with higher budget deficits off into the future or
alternatively, we are going to have to cut back in terms of government spending or expect a higher
tax rate so which either way you look at it, with the population ageing and people living longer,
there will be a cost to that.

ELEANOR HALL: Of course the head of the Treasury has been leading a massive review of Australia's
tax system. Do you expect that the Henry Tax Review will recommend tax increases to deal with this
ageing population issue?

SHANE OLIVER: I am not sure that the Henry Review will deal specifically with the ageing population
but I think the Henry Review will include measures designed to broaden the base of the tax system
and one area that seems to be getting some look in there is talk of a broader tax on Australian
mining companies.

We are going through a mining boom. Obviously minerals and energy are a national resource and there
is talk that the national resource tax, resource rent tax might be put in place to tap into that.

So that is sort of one thing that can be looked at and also measures to try and reduce tax
expenditures or and ensure a compliance with the tax system is sort of other areas to look at but
whichever way you cut it, Australia will have to look at higher tax revenue going forward to deal
with this problem.

ELEANOR HALL: Well, there is also option, of course of increasing productivity. The Prime Minister
has been talking a lot about that lately. Do you think that productivity could be pushed up
sufficiently to cover such a large Budget deficit?

SHANE OLIVER: I think productivity can be enhanced. We have seen a steady slowdown in productivity
growth over the last decade or so from the strong productivity growth we saw through the 1990s but
it is difficult to get it up to the high levels we had back then.

Obviously dry, growing the size of the pie so to speak will make it easier, and less painful, in
terms of paying for a health cost of an ageing population. So productivity is a nice way to go but
I think it is worth noting that the huge productivity gains we had in the 1990s were on the back of
the deregulation that occurred in the 1980s and going forward, there is not a lot more we can

It tends to be relatively minor things like deregulating professions and local newsagents and all
those sorts of things and federal/state relations where I think the gains might be somewhat less
than what we had from the deregulation moves of the 1980s.

So, productivity growth can help but I don't think it is going to be a big part of the answer here.

ELEANOR HALL: There are some tough options ahead. Chief economist with AMP Capital, Shane Oliver,
thanks very much for joining us.

SHANE OLIVER: Thank you.

Americans charged with trafficking Haitian children

Americans charged with trafficking Haitian children

Lisa Millar reported this story on Monday, February 1, 2010 12:34:00

ELEANOR HALL: Now to Haiti and the concerns about the safety of those children who survived the
earthquake. Overnight, Haitian police charged 10 US citizens with child trafficking.

The Americans are part of a Baptist church group called the New Life Children's Refuge. They were
arrested as they attempted to take 33 children out of the country. They say they were only trying
to rescue abandoned and traumatized children.

But Haitian officials have imposed new controls on adoptions since the earthquake because of fears
that the disaster would leave children open to exploitation.

This report from North America correspondent Lisa Millar.

LISA MILLAR: The children are now in an orphanage while officials try to locate their families. One
of the girls told George Willeit from the SOS Children's Village in Haiti that she thought she was
being taken to a summer camp.

GEORGE WILLEIT: We will reunite them with their parents or with their relatives because we already
know that some of these children still have parents because an elder girl, who might be 8 or 9
years old told us crying, 'I am not an orphan. I do have my parents. I thought I am going to a
boarding school or to a summer camp. We don't know exactly to the Dominican Republic. I do have my

LISA MILLAR: The Americans who tried to take the children out of Haiti have been charged and will
face their first hearing tomorrow. The group's spokeswoman Laura Silsby says they were simply
trying to rescue the young earthquake survivors.

LAURA SILSBY: In the course of the timeframe we had them with us, obviously the entire team deeply
fell in love with these children. They are very, very precious kids that have lost their homes and
their families and are so, so deeply in need of, most of all, God's love and his compassion and
just a very nurturing setting.

LISA MILLAR: The group's website describes the Haitian Orphan Rescue Mission. They were taking them
by bus across the border to the Dominican Republic where a hotel was being turned into an

But Haitian officials have cracked down on any movement of children fearing that the chaos
currently existing across the country was leaving children vulnerable. Laura Silsby says they just
didn't have the right documents.

LAURA SILSBY: The mistake obviously we made is we did not understand that there was additional
paperwork required.

LISA MILLAR: Clint Henry is the pastor at the Idaho Baptist church were at least five of the group

CLINT HENRY: I know there have been illegal activity that has been going on down there. It is
unfortunate that we would be associated with that.

LISA MILLAR: Kent Page from UNICEF in Haiti was amazed that the Americans had thought their actions
were acceptable.

KENT PAGE: You can't just go and take a child out of a country no matter what country you're in.
This is not what is done. There are processes that need to be followed. You can't just pick up a
child and walk out of the country with the child. Clearly, no matter what your best intentions are.

LISA MILLAR: Orphanages were destroyed in the earthquake and many of the children who were living
there weren't actually orphans but had been left by families who couldn't afford to care for them.
The Haitian Government has halted many types of adoptions but it is worried even legitimate aid
groups have flown young earthquake survivors out of the country before every effort could be made
to find their parents.

Now only the Prime Minister can authorize the departure of any child.

This is Lisa Millar for The World Today.

ICAC investigates McGurk allegations

ICAC investigates McGurk allegations

Barbara Miller reported this story on Monday, February 1, 2010 12:38:00

ELEANOR HALL: To New South Wales now where the state's corruption watchdog has begun hearings into
allegations surrounding the dealings of the murdered Sydney businessman Michael McGurk. Mr McGurk
was shot dead outside his home on Sydney's north shore in September last year.

In the months leading up to his death he told various associates and journalists that he had a
recording of a conversation with a property developer, which implicated senior officials and
members of the NSW Government in corrupt dealings.

Our reporter Barbara Miller is at the Independent Commission Against Corruption and she joins us
now. So Barbara, what has been said so far about this tape recording at the centre of the inquiry?

BARBARA MILLER: The ICAC commissioner Eleanor David Ipp, QC has confirmed the existence of this
recording. It was made in February 2009, that is seven months prior to Mr McGurk's shooting and it
is a conversation of about an hour and a half in length, between Mr McGurk and the property
developer Ron Medich.

Now following the taping of that conversation Mr Medich told various business associates and two
journalists who were named that the content of it was enough to bring down the New South Wales

ELEANOR HALL: And have you heard what's on that tape?

BARBARA MILLER: We've heard one excerpt so far. We have been told that several will be made public
the audio quality is very poor and we were very reliant on a transcript we were also being shown.

Now the content of that excerpt was a conversation relating to a proposed development application
on the New South Wales south coast. Ron Medich appears to suggest that the New South Wales head of
planning, a man named Sam Haddad could be influenced by payment and that he and others may, in the
past, have been influenced by payments in similar situations.

Now immediately following the playing of that excerpt the counsel assisting the commission, Jeremy
Gormly did however say that that claim may simply have been a boast on the part of Mr Medich or it
may have been an attempt to fob off Michael McGurk who was coming up with some other suggestions of
the way forward, the best way forward.

ELEANOR HALL: And will Ron Medich who, as you say, was on that tape, will he be appearing to answer
questions about the tape recording?

BARBARA MILLER: He will be. We were initially told he would appear today. We were also told that
the former Labor powerbroker Graham Richardson would appear today and that Sam Haddad would also be
appearing in front of the enquiry.

However, some issues have arisen, some technical issues relating to the transcript and dispute over
the transcript of that audio recording and proceedings here have been adjourned until tomorrow

ELEANOR HALL: And Barbara, no one has yet been charged over Mr McGurk's death. Is this enquiry
going to address that?

BARBARA MILLER: Not at all. David Ipp, QC was very clear. It is not an enquiry into Michael
McGurk's murder. It is an attempt to clarify some issues, to obtain some additional information and
to determine whether any work practices need to be changed to reduce the likelihood of corrupt

ELEANOR HALL: Barbara Miller at the New South Wales corruption enquiry in Sydney, thank you.

Israel prepares to build Egypt border fence

Israel prepares to build Egypt border fence

Anne Barker reported this story on Monday, February 1, 2010 12:42:00

ELEANOR HALL: Israel is preparing to build another massive fence - this one along its border with
Egypt. The Government says its aim is to stop not only the smuggling of weapons but also of African
asylum seekers.

Thousands of Africans fleeing conflict in Sudan, Eritrea and Ethiopia are prepared to risk jail or
shooting by Egyptian soldiers to slip over the border into Israel. But the Israeli Government is
warning that a flood of African migrants will threaten Israel's Jewish demographic.

Middle East correspondent Anne Barker reports.

ANNE BARKER: Night time is when the Sinai Desert along Israel's border is most active. Under cover
of darkness African refugees slip through a wire fence into Israel, in the hope of a new life.

It's a dangerous business - in recent years Egyptian border guards have shot around 50 Africans -
many have been killed.

ISMAIL AHMAD: They give you instructions like when you cross the border - to follow the
instructions in order not to get across to Egyptian security on the border.

ANNE BARKER: Ismail Ahmad is a refugee from Darfur in Sudan. He paid people smugglers thousands of
dollars to transport his wife and children across Africa, then Egypt, in the hope of finding asylum
in Israel. He's one of about 20,000 Africans who've entered Israel in the past five years - mostly
from Eritrea, Ethiopia or Sudan.

ISMAIL AHMAD: I thought of either come to Israel. I may not go back. I may not meet my family again
so I put a risk on taking them to cross the border illegally and come to Israel.

ANNE BARKER: Ismail Ahmad's family is lucky - as genuine refugees they're on temporary protection
visas that allow him to work, and his kids to attend school but only a tiny fraction of Africans
are granted refugee status and even then they receive only short-term visas, renewable every few
months. Now Israel is hoping to stop the influx of Africans altogether.

(Benjamin Netanyahu speaking)

"We are going to create a barrier because otherwise the flood will come and we won't be able to
withstand it", says Israel's Prime Minister Benjamin Netanyahu.

"There is drug smuggling, slave trafficking, and in addition there is a possibility of a
significant increase of infiltrators into the state of Israel."

The border with Egypt though is porous and vulnerable. But the Israeli leader admits to another
motive - to protect Israel's Jewish demographic.

(Benjamin Netanyahu speaking)

"We established a Jewish democratic state which relies on a Jewish majority within a democracy," he
says "and not on a flood of illegal workers".

Israel's very creation was as a haven for Jewish refugees. Today Jews make up around 80 per cent of
the population - but some fear the demographics could change, because of the high Arab birth rate,
or the influx of refugees.

But refugee advocates like lawyer Anat Ben-Dor say humanitarian concerns should come first.

ANAT BEN-DOR: This is I think an Israeli paranoia which is fed by the conflict with the
Palestinians. Israelis are always busy counting how many Jews and how many non-Jews - this should
be stopped. And I think that if we are secure in our identity we should treat people as human

This is Anne Barker in Jerusalem for The World Today.

Australian film wins award at Sundance

Australian film wins award at Sundance

Timothy McDonald reported this story on Monday, February 1, 2010 12:46:00

ELEANOR HALL: It's rare that a film director wins a high-profile award for his first feature-length
movie. But Australian writer and director David Michod has done just that, with his new film about
the Melbourne criminal underworld. Animal Kingdom has just won the world cinematic drama award at
the Sundance Film Festival in Utah.

As Timothy McDonald reports.

ANNOUNCER: What is utterly assured storytelling, great performances, taut script, clean editing and
the way it made us burst with thrill, excitement and pleasure, the world cinema grand jury prize
for dramatic film making goes to Animal Kingdom.

TIMOTHY MCDONALD: The Sundance jury heaped praise on Animal Kingdom, but the film's writer and
director David Michod didn't even show up to the ceremony.

DAVID MICHOD: No (laughs). Yeah, no, it was funny I had a ticket booked out for after our last
screening and contemplated staying around for the awards because the response to the film had been
so strong and then just coming about the idea of changing my flight felt like a jinx.

TIMOTHY MCDONALD: And that left one of the film's actors Joel Edgerton to take full advantage of
the situation.

JOEL EDGERTON: David, you do not deserve this award. I am only saying that because he is watching
live on the internet.

Australians are not very good at patting themselves on the back so it is kind of fitting that I am
here to do that for you, David. You really do deserve this award. For everybody that worked on the
film, I know they would say exactly the same thing.

TIMOTHY MCDONALD: The film itself is miles away from the glitz of an awards night. It tells the
story of a troubled 17 year old in Melbourne caught between his own crime family and a policeman
who wants to save him.

Stories of the criminal underworld may have become abundant and popular fare on the small screen
but David Michod says he was aiming for something very different.

DAVID MICHOD: Basically the movie is, is quite dangerous and menacing and hopefully thrilling so
yeah. I mean it is not all doom and gloom. It is real people and quite often these real people are
charismatic and sometimes even entertaining characters themselves but I wanted to take the film and
the characters seriously.

TIMOTHY MCDONALD: The award could mean a lot to David Michod's career, because Animal Kingdom is
his first feature length film. Directors seldom win so many plaudits on their first outing but it's
also rare for them to pull in so much acting talent.

One of Australia's leading lights in Hollywood Guy Pearce acts in the film, as does Ben Mendelsohn
and Jackie Weaver. David Michod says it wasn't too difficult to convince the actors to be a part of
the project.

DAVID MICHOD: I think it was one of the things that I found most reassuring when we were trying to
raise money and prepping the movie was that actors especially that we were sending the script to
seemed to be responding positively and quickly. You know, which made us feel like we were doing
good things hopefully.

TIMOTHY MCDONALD: But he says making the film was tricky, and at times it filled him with anxiety.

DAVID MICHOD: You only have the luxury these days to screw your first movie up so it was just, it
was very important to me that it be as good as it could possibly be and that carried a whole load
of anxiety with it as well.

TIMOTHY MCDONALD: David Michod hopes the film's success at Sundance will also help him get it
released in the US.

ELEANOR HALL: That is Timothy McDonald and the now award-winning film director David Michod.

Medical technologies could replace doctors

Medical technologies could replace doctors

Carly Laird reported this story on Monday, February 1, 2010 12:50:00

ELEANOR HALL: A doctor in the United States is predicting that members of the public will soon be
able to use technologies like smart phones to monitor and even treat their own health conditions.
People predisposed to diabetes will be able to monitor their glucose levels, pregnant women will do
their own ultrasounds and medication may even be administered remotely.

As Carly Laird reports.

CARLY LAIRD: Doctors have been using technology to keep tabs on us for years but soon we'll be able
to access the same data ourselves.

Dr Eric Topol, is the director of the Scripps Translational Science Institute in California. He
explains some devices that are already on the market.

ERIC TOPOL: Most recently there has been an introduction of a headband which basically detects
brainwaves and tracks every minute of sleep.

CARLY LAIRD: And so this information, is that then transferred to a sleep specialist?

ERIC TOPOL: Well, it could be but most of it is really goes right to the consumer. It actually
coaches the individual on what they need to do to get better quality sleep so it is all done
through the web.

CARLY LAIRD: He says technological developments in recent years have created a perfect storm for
innovation of new medical devices.

ERIC TOPOL: Well, it is occurring at multiple levels. On the wireless side, we have now pervasive
connectivity. We have a lot of bandwidth with 3G and more to come. We have got the smart phones,
over four billion individuals with cell phones and smart phones and then of course, we have got
these ingenious sensors so that all coming together so quickly.

CARLY LAIRD: But he says this is just the beginning of a revolution.

ERIC TOPOL: One of the big ones is patients doing their own imaging so they'll have an ultrasound
and that will be connected to a device like a cell phone and that will acquire and then transmit
over the web, images. So for example, women who have a risk of breast cancer or patients with a
heart problem could send the images of their body directly to their physician for interpretation.

CARLY LAIRD: And there's some good news for those who have trouble remembering to take their

ERIC TOPOL: The other thing of course is that medications can be tagged and that would be another
way for wireless either tracking that the person who has actually taken the medicine or even
activating the medicine at the appropriate dose and time remotely.

CARLY LAIRD: So is that something that would be underneath the skin that would let the medication
go into the bloodstream?

ERIC TOPOL: Exactly but it wouldn't be under the skin. It would just be a patch on top of the skin.
We are trying to do everything noninvasively. You know, no involvement of procedures or anything in
the body.

CARLY LAIRD: But Dr Topol says one of the biggest improvements will be integrating these
technologies with genomics - that is the study of genetics.

ERIC TOPOL: Well, that is how you prevent diseases. If you know someone's at risk, you know, you
really know this person is at risk before they ever get the disease. Let's say for example
diabetes, you would have a glucose sensor and you'd be tracking this to pre-empt the problem.

They find out where is the glucose high. Is it during the night or is it from certain foods that
they are eating that they didn't realise and for that individual, that knowledge of what is off the
track and what changes, as you say, in lifestyle need to be made. The same for blood pressure.

CARLY LAIRD: But with so much information available to consumers, is there a danger of

Dr Steve Hambleton is the vice president of the Australian Medical Association.

STEVE HAMBLETON: You are quite right to identify self-diagnosis as a major risk because it is
difficult to put together what exactly the diagnosis for an individual patient and there are clues
to that diagnosis but you've got to look at the whole person and think that is what medical
practitioners are trained to do.

But down the track, I think some of these things have got great opportunities because people are
motivated to actually look after themselves properly and if they were able to measure things that
we can't measure today, that could be a great health benefit.

CARLY LAIRD: Do you think it will take the strain off doctors, surgeries and hospitals?

STEVE HAMBLETON: Well, I think it will defer the strain. I think we have made some great gains in
the health promotion, health prevention right now. Our smoking rates are coming down. Our
cardiovascular disease rates are coming down so it probably isn't going to take the pressure off.
It is probably going to defer that for later.

CARLY LAIRD: And he thinks remote monitoring will benefit Australia's rural areas.

STEVE HAMBLETON: I guess we are talking about the next generation of medicine. Allowing someone to
actually manage a large group of people and provide the advice and information they need is going
to be a great advantage to the bush.

ELEANOR HALL: Dr Steve Hambleton, is the vice president of the Australian Medical Association. He
was speaking there to Carly Laird.