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(generated from captions) Virginia you're a gardener and you know that one of our best summer annuals is petunia. This of our best summer annuals is a one is one of the best. It's

called Million Bells. We're remember that. Thank you going to the Show tomorrow,

much, Mark. Indeed. Before we go a brief recap of our top stories. It's suspects in the assassination stories. It's I merged three

of a senior Hamas leader were travelling passports. travelling on Australian innocent victims of identity says they appear to have been

theft. And Australia has another gold at theft. And Australia has won

Olympics in Vancouver. Lydia Lassila claimed top honours the ladies' freestyle aerials. It's the ladies' freestyle skiing second gold at that's ABC News. Stay with us now for Kerry O'Brien and the 7.30 Report coming up next. And we'll leave you tonight Melbourne Zoo's baby which is finally been given Melbourne Zoo's baby elephant

name. Mali is the Thai word the jasmine flower. Enjoy your evening. Goodnight. Closed Captions by CSI

Tonight on the '7.30 Report', the long and painful

the long and painful road to

recovery for burns victims. I

had many grafts there, I don't

think I can put a number on

it. Now the Australian medical

team aiming to create a living

skin. An amp, leg, suit and zip

it on to the body. We'd like to

think we could grow something

like that in the laboratory.

Captioned. This Program is Live

Welcome to the program. Kevin

Rudd was in full damage control

today. Over the Government's

botched home insulation scheme.

Going to radio stations for

interviews, and calling a

caucus meeting to instruct all

MPs and Senators to get out

into the streets of Australia

and limit the fallout. After

freezing the chaotic insulation

program for three month, the

Government's last attempt to

save jobs in the industry with

a $41 million rescue package

has been ridiculed by some of

the companies it's designed to

help. The Government suspended

the scheme Friday after it was

linked to 93 house fires and

four deaths. Company managers

say while they wait three

months for a revamped program

industry has to start again, activity in the

industry has effectively been

frozen and the rescue package

will do little to stop small to medium businesses from collapsing. In a moment I'll

talk with the Prime Minister,

one such business in first Heather Ewart reports on

Melbourne. Outside this small

insulation business on the edge

of Melbourne's CBD workers wait

to hear what the future holds.

They know the signs aren't

good. For the past two days

they've been told to stay at

home. 14 of them stand to lose

their jobs, since the

suspension of its Home Government announced a

Insulation Scheme. I have never

been in a situation like this

before. I don't know many who

have, I literally don't know

what I'm going to do. Inside

it's a grim story. The

managers of Connec 2 Green

Energy, know the writing looks

Piles of as though it's on the wall.

Piles of insulation are stacked

in the front doorway, next to

useless and impossible to sell.

They doubt they can hang on until the Government declares

its intentions in June. All up,

what do you stand to lose? Our

jobs. Our business. Pretty much everything, really.

everything, really. Look, we'll

try to get through to 1 June.

We don't think we can. When the

scheme is relaunched, we have

no idea why it stopped for

three months, it's a test of

the toughest, I have no idea

why they stopped it for three

months. Probably it will send

us broke. We have to consider bankruptcy as an

option. Connec 2 Green Energy bankruptcy as an

was set up eight months ago in

direct response to the

Government's insulation scheme,

which paid rebates for every

home insulated. The business

partners had previous

experience doing service and

sales contracting work for

energy companies and consider

themselves to be reputable

operators who played by the

rules. We chose premium stock.

It cost more. We had a qualified electrician in the

roof, an electrician is not a

low wage, it's expensive, but

we believe the Government will

support us, as we invested in

quality in the name of this

program. We check all our work

and had zero complaints. We

watched others cutting corners

and saw dangers. The one danger

they didn't she was rogue

operators, and those cutting

corners, may put them out of

business with the Government

suspending a program supposed

to run until the end of next year. Despite insulating 200

homes with no record of complaint, they are mystified

as to why they were never awed

Ted. Basic audit principles

would be audit the first 5-10

jobs of each installer, once

they pass, you audit one in

100. What do you want from the

100. What do you want from the Government. Some help. Some

help. As workers filed in to an

upstairs meeting room at

lunchtime yesterday to hear

from the boss, there appeared

to be no help on the

horizon. Cameron and myself

will chat to each person

individually over the upcoming

days about their future role.

I'll be brutally honest,

there's no money in the

seven workers bank. By it end of the day

seven workers were laid off.

There was a fresh announcement

from the government of a $41

million rescue amount to

help. Connec 2 workers

completed a job in outer

Melbourne knowing they wouldn't

be paid. Maybe there's some

hope. The managers don't think

some of $41 million won't help

me pay staff this week or next

week. That's because they say me pay staff this week or next

there's not enough to go around

to 7,000 companies they

estimate employ 40,000 people.

These costs can't be covered

by 40 million divided by six or

7,000 businesses, they can't

survive for three months until

the program release, the

businesses are closing the

doors this week. Mr Rudd, Mr

Garrett, I implore you find good businesses

good businesses and use them.

Let us help you. Let us help

you audit the 160,000 homes

that you believe to be

rechecked for the quality of

the install. It's a last ditch

attempt to stay afloat. You had

to lay off seven workers

yesterday, will you have to lay

off more today. We need to lay

off another sevenment That

pretty much wraps your business

pretty much wraps your business up. Correct. Were you ready for

that? Not at all. No. No, not

at all. Not prepared

whatsoever. As the workers and managers say their final

goodbyes, they continue to hope

for a miracle. Heather Ewart

with that report, I'm joined by

the Prime Minister in our

Sydney office. Kevin Rudd, you

have just seen that story. Reputable business, seven

Reputable business, seven laid

off yesterday, seven laid off today, company facing

bankruptcy, how quickly are you

going to get the money out to a

firm like that. Well, we have

taken action to establish this

insulation workers' assistance

fund. And as of next week we'll

begin assessing those firms

which will qualify for

assistance in terms of their

employees. You see, with

companies like that,

companies like that, based on the nature of the report just

done by Heather Ewart,

obviously there are many, many

in the vast majority of the

installers are good companies

doing an honest day work. Our

challenge is to sift out those

that have evidence of a pattern

of wrong insulation, thereby

creating a safety problem. But

right at this moment seven

workers, in that one business,

out of work yesterday, seven out of work

out of work today. As of now,

what is their income while they

wait for your bureaucracy,

which now has to have a

question mark over it to some

degree after what's happened,

gets this latest program

rolling, starts to get the 40

million out. What we announced

yesterday was three sets of

measures, the first dealt with providing support for

employers, and employees, where they are operating

they are operating within the

business. The second relates

to the support we can give

through the job services

network to find alternative

employment, and the third in providing training places

interim or long term to assist

people into longer term

permanent jobs, can I add

another point. Hang on...

..I need to make another point.

The Home Insulation Program was

finite, it was designed as part

of the stimulus strategy

of the stimulus strategy to

conclude at a fixed point. That

was another 14 months away.

This has come to an abrupt

halt. That's correct, but prior

to this the Employment Minster,

Mark Arbib had in place a range

of transitional training

programs to take these workers from where they are now into a

new set of skills, on to long

term unemployment. That is a

lot of collateral damage

because of a botched Government scheme. Well let's

scheme. Well let's not try and

sugarcoat this, and I don't

begin to for one minute. This

program has created real

problems on the ground, it has

resulted in a will the of

difficulty for a lot of people.

As Prime Minister of the country I accept responsibility

for that. My job now is to fix

it up. OK, you said on Sydney

radio this morning that the Environment

Environment Department hadn't implemented the program

perfectly, something of an

understatement I would have

thought. Where exactly did the

Department go wrong, in your

view? Well, what we had - let's

put it into its context. What

Minister Garrett did is

establish standards for the

industry which didn't exist

before, the home insulation

industry that, is one for the

training of workers, (2), for

training of workers, (2), for

the first time the national occupation of occupational

health and safety sfarnds for

the industry and (3) a quality

standard under the building

code for the use of this

insulation product. I have to

stop you there. They are the

standards. Peter Garrett has

explained it for three weeks,

you for several cases, you went

on Sydney radio, it was on the

radio, in the newspapers, in

the parliament. We have heard

the parliament. We have heard

that. What went wrong? Well,

plainly what has gone wrong is

that those who were rorting the

system, those who were shonky

operators were not picked up by

the compliance mechanisms established. That's the

problem. So what went wrong

that the Departments compliance

mechanisms did not work. Well, plainly, in the case of

plainly, in the case of these

installations where we had a

safety concern arise as a

result, we see evidence plainly

of the system not having worked

as it needed to. Yes. What went

wrong, where did it go

wrong. Compliance, means you

have a compliance system

providing quality control and

assessments of installations in

each home. I understand what

the compliance is, I'm saying what went wrong with the

compliance system, how did it fail. It failed because it

didn't pick up a pattern of

shall I say wrong install

aches, badly done installation

by a certain number of firms,

that is what went wrong. The

Minister had established a

series of risk management

strategies across the program,

mindful of the advice which had

come forward from the risk

assessors originally. But it

assessors originally. But it failed. Yes. But it failed. I'm

saying to you loud and clear,

this - there's no point

sugarcoating it one bit. This

program has produced a real

problem for people, both

workers and the companies and

for households, there's no

point beating around the bush

about it, accept responsibility for it and get on and fix it. OK, there were clear - what

I'm getting to really is who will

will take responsibility, it's

not enough, I suggest to you to

say the buck stops with you.

That's a kind of Peter Beattie

strategy, something is wrong,

I'll fix it, sorry about that. Who will take real

responsibility for the failure.

There were clear early warning

signs to your Environment

Department from various

authoritative resources early,

from industry, State and

territory agencies, bleak warnings, months before the

program was rolled out. Despite

all the steps your Department

of environment says it took and Peter Garrett accepted as a

result of those warnings, we

know that the very things

warned against happened.

There's been house fires,

there's been deaths, untold

shoddy and unsafe installationing, you have been

forced to collapse the scheme.

What is that, if it is not a

fundamental incompetence -

fundamental incompetence - fundamental incompetence by

your Department. Well, as I

said before, the compliance

systems have not worked. The

Department of the environment

is responsible for ensuring that

that those compliance systems

worked across the board.

Plainly there is a major

problem there. So is your

Department incompetent in the

way it's been done. Let me

answer the other part of your question and premise which I

said, you said, "Taking

responsibility as the head of Government doesn't mean anything", I disagree with

that. If it doesn't mean

anything, it's a form of words. It's not. What has

happened in the period in which

the problems alive in this

program, and there are many

that we have to deal with, that

means that I, as Prime

Minister, have to step up to

the plate, and put in place the

systems and the personnel to

make sure we deal with the

problems for workers, and that's what

that's what we announced

yesterday; the problems for

businesses in transition to the

scheme we proposed to bring on

from 1 June, and thirdly for households as well. They are

the three concrete area of

work. If you say it's a form of

words, I don't agree with you,

because on the ground my yob is

to make sure the practical problems experienced by people

are met. How do you get the

message back to the people who

were responsible for the

implementation of this program, including your Minister that

this has been a massive

failure, that this has been a fundamental collapse in public

trust of the your Government's

policy in this regard. Another

early warning came as you know

from a risk assessment report commissioned by the Department

of environment by Sydney law

firm Minter elsome, there's an irony found in

irony found in their risk

register. This five page chart

which on page 2 gives an

assessment of political risk, and they found it was an

extreme risk politically, they

said apart from other risks.

They recommended, "Close

engagement with Minister,

Minister office, Prime Minister

and cabinet coordinator

general", your Minister only

saw the document for the first

time this week. This week. Extreme political risk apart

from all the other risks. How

do you feel about that. Why

don't you hand me the document.

I think it would be useful to

look at what it has to say. One

of the things that are contain

ed within the document in the

period that I have looked at it

also goes to the question of

how you deal with some of the

safety concerns which have been raised. Installation quality

and compliance is one. There

are about two or three others

going to the safety of the

program. What the document demonstrates, as I have read

it, is that the strategies put

forward at that time were

judged by MinterEllison to be

capable of managing the

risk. That was presented to the

Government on 9 April. On 29

April your Environment

Department had a phone hook-up,

as you are well aware now, with

all the State and Territory

agencies that would have been

involved in part at least in

oversight of how this program

was to be implemented in terms

of things like quality control

and health and safety

requirements. The very clear

message that came from the

State and Territory agencies was it doesn't matter

was it doesn't matter how

perfect your regulations look

on paper, we do not have the

wherewithal, the manpower, the

expertees to deliver on this.

Because it is such a massive

program and you are trying to

do this too quickly. What I

would say in response to that

is that the MinterEllison

report which you handed to me

has three specific sections

and of quality going to the question of safety

and of quality control and the

proper training of workers,

those three sections of the

report which you have skipped

over in what you said, the

conclusion by MinterEllison was

the strategies put in place by

the Minister were effective or

capable of tollerably managing

the risk. Mr Rudd you are

ignoring the fact that this was

on 9 April, but on 29 April the

people charged around this

country via the States with the

supervision of the regulations

and the processes and the

procedures were yelling loud

and clear that risks from huge

and regulations could not be in

force. For the period when this

respect was delivered, which as

you said was in April, and when

the guidelines for the program

were introduced in June and

early July, the Minister I'm

advised received not just input

from risk assessment documents,

risk assessment meetings

involving not just Minter

elsons, but a range of other

people, and the Department in

response to that put together

the guidelines for the program. Now... The bottom line, Mr

Rudd, is that those State

agencies n that phone hook up

and the warnings they gave were

and the warnings they gave were

right. Na is what happened,

warn ings came true. Without

going to the detail of that

hook-up, and you said I'm

familiar with it, in terms of

detail, I am not. What I am aware of having gone through

the document is the contents of

what was available if to the

Department through the

MinterEllison report. Let me step

step back, you said this was

gone through quickly. The

bottom line is the Government

sought to respond to the global

financial crisis. We

understand that of Let me

finish my sentence. We could

use it as an excuse to getting

things wrong. I don't intend to

do so, I intend to accept responsibility. Therefore to take responsibility to fix

things up, for workers, firms and

and households concerned. What

have you learnt from this, what

has Peter Garrett learnt from

this. I think I'm disappointed

in myself for not asking more

questions. In the pace of

events last week, it's easy in

hindsight to say we should have

have time. asked more questions, we didn't

have time. I accept

responsibility for that. I'd

say on top of it though the big

challenge now is to deal with

the practical problems of the

type referred to in the program

you mentioned. I take seriously

the 7 jobs just referred to. 14678 The 7 jobs referred to as dismissed today, and

seven yesterday. I don't seek

seven yesterday. I don't seek

to lighten the contact of the

program put together by Heather

Ewart at all. I take each

seriously, why do we step up to

the plate with our response to

the global financial crisis,

with programs across the country. Because we didn't want the economy to

collapse. Plainly this program

has been implemented infectively, and you have

problems. Our job so to step up

to the plate. With workers

losing their job, our

losing their job, our job,

through the stimulus strategy

was to protect hundreds of

thousands of jobs while lost worldwide. In this industry

there's 6,000 jobs at stake. I

take each one of those jobs

really seriously, which is why

we are intending to step up to

the plate to try to make a difference on the

ground. Briefly, Mr Rudd. There

are the people - the families

who have lost children

who have lost children who have

died. There are the people who

have been put out of business.

Andrew Lofthouse their homes There are the people who have

through fire. There are the

people - there are people who

have loft their homes through

fire. There are people worried

about whether their homes are

safe. There'll be many people

listen to this and will be

hearing you say sorry, but they

would be

would be saying Who in your

Government and bureaucracy will

feel the pain they have felt

and are feeling. Well, in our

system of Government I am

responsible for the lot of it.

In terms of the accountability

of that to the Australian

people, they'll make that plain

when we next go to the

election. I accept that. That

is as it should by. Can I add

one thing to what you have just said, which

said, which is when it comes to

this program nationwide, and

the impact which it has on

households, based on the survey

done by Government of some

15,000 households, which is

started in large part on those

suppliers who have been judged

to be unprofessional or

incompetent or dodgy, the

findings so far is

findings so far is that 92% of

households have no safety risk.

Secondly, that means that we

have a challenge to bring that

as close as possible to 100%. And that is what we are

resolved to do. That, however,

is vastly different to someone

saying there's a security

problem for safety problem with

all households, that defines

the problem I must get on with,

that's the problem the

Government must get on with to

make a difference, make amends

for what has been frankly a

program which has failed the people's expectations of the

Government, and failed the high

standards I have set for myself and the Government as well. Kevin Rudd, thanks very

much for talking with us. If

you've ever suffered a burn,

you know just how excruciating

it can be. Consider then those

who survived burns to 80% of

their bodies, only to live with

the scars and endless surgery.

The most common treatment is

skin drafts, it's only the top

lair of skin that's been

replaced. It can't stretch, or

crow hair, there's little

feeling and perspiring is

impossible. Doctors at the

Sydney burns foundation told

the '7.30 Report' they are

developing what they hope will

be the Holy Grail of burns

be the Holy Grail of burns

treatment. Full thickness

replacement skin which could

transform the lives of burns

survivors. Trials are set to

begin on animals this year. If

successful there's hope that

three-dimensional skin

transplants could be a reality

within a decade. Philippa

McDonald has this exclusive

story which contains images

which may distress some viewers. In

viewers. In the Riverina strict

there's been heavy losses from

a fire front near Junee. The

point changed direction, we

sort of got trapped. I don't

think there's any way you can

describe it. It's complete

agony. It's - yes, I never felt

anything like that before, you

wouldn't wish it on anyone. It

was just - there was nowhere

you could go, you were

surrounded by fire. It

surrounded by fire. It was New

Year's Day 2006, and farmer

John Heffernan was trying to

save a neighbouring property in

Junee in south-west NSW when

the fire turned on him burning

80% of his body: I was burnt

pretty much from my neck,

around my neck, all the way

around my neck to my waist and

all the way down my arms, and

all the way down my arms, and down the back of my legs as

well. It's been a long road to

recovery. 8.5 months in

hospital, and 15 major

operations with more to come.

His skin is so fragile the

slightest knock can take a long

time to heel. They've had to

replace my skin from my - from

wherever I got burnt,

wherever I got burnt, and they

do mult Mr Surgeries, and some

areas couldn't heel up, they've

had to go and put a graft on

that. I had many grafts, I

don't think I can put a number

on it. Professor Peter mates,

who heads up Sydney's Concord

Hospital Burns Unit treated

John Heffernan. He says the

current treatment has come a

long way, but can never fully

repair deep tissue burns. If I

have a burn that goes through

all layers of the skin, I

replace all the layers with

only a very thin, thin

layer. Whilst it will close the

wound, it has o elastisty, it

cannot sweat, it cannot

regulate temperature, it does

not metabolise, produce

anything, these are functions

of the normal skin. Sydney

University and concord's

hospital Burns Unit teamed up

to create the Sydney Burns

Foundation to intensify

research efforts into the

creation of full thickness

replacement skin. Doctors take

a small skin biopsy from the

patient and isolate skin stem

cells, the cells are grown in a

sell culture in the laboratory.

By Day 2 1, the cells expanded

500 times and grown into a

skin-like sheet which can then

be transplanted back to the

same patient. The problem is

the laboratory can only grow the laboratory can only grow

the top lair of skin, the

epidermis. The hope is that one

day this laboratory will be

able to grow a full three-dimensional

three-dimensional skin which

can perform all the vital

functions of healthy skin.. An

amp, a leg, a suit, and zip it

on to the body, we'd like to think we can grow something

like that in the laboratory,

which the patient won't

reject. Good morning, how are

you. If successful, full

thickness replacement skin will transform

transform the lives of those

who endure the most severe

burns. OK. I arrived home and

stopped and got a tractor with

a tank on the back to - the

biggest mistake of my life. I

should have left it

there. Bernie Schulte, a

retired highway patrol officer

was badly burnt trying to save

his property near Orange

his property near Orange two

months ago. We'll take some of

the skin from your stomach

where you don't have burns. The

62-year-old is about to have

skin from one of the few areas

on his body not burnt graft on

to his back. It's still a

hurdle. I have to get through

it yet. That's the hard part,

it's getting so close, and I

don't want to miss

don't want to miss out. The

ICU people can now really keep

almost everybody alive. But it

is upon the plastic surgeon now

to make the life worth living.

If that person then leaves the

hospital and is a complete scar

that can't move around, can't

use the hands, can't eat properly, can't do the personal

hygiene, the question is to be asked are

asked are we failing our

patients. It costs on average a

million to care for a patient

with severe burns. Can I have

some irrigation please. In this

operation eight surgeons are

working over eight hours using

microsurgery to try to restore

the palm of a patient's hand.

Two previous operations have

Two previous operations have

failed. If we were able to

access skin which was basically

like normal skin, but grown

elsewhere, we would avoid all

this complicated expensive

surgery. What kind of time

frames - that's a hard question. The Sydney Burns

Foundation work to replicate

the bodies largest organ is

closely watched by

closely watched by leading burns specialist like Professor

Fiona Wood, who came to

prominence with her

revolutionary treatment with

victims of the Bali

bombing. Returning to normal

function after burn injury is a

huge effort. I'm inspired by

how people can take on the

injury and push back. Our job

is to give them the best

possible options of care. This knew work from

knew work from Sydney, I think,

is a fantastic one, I'm looking

forward to being involved in

the clinical trial when it's

ready. Trials of full thickness

replacement skin grafts are set

to begin on mice and pigs later

this year, and it's hoped on

humans within three years. We've embarked upon this

program to - to set up a foundation, to raise

foundation, to raise funds, to attract high quality

researchers, because we, as

surgeons or physicians aren't

able to do the sorts of things

that are really needed. John

Heffernan has already defied

everyone in terms of his

recovery, but he's hoping the

development of replacement

living skin may one day give

burns survivors a

burns survivors a better

quality of life. Flexibility,

probably, is the biggest

things, and the toughness of

it, I'd say. With the full

thickness skin, I think it

would - I think it would heel

up quick and be handy, yes. Philippa McDonald with

yes. Philippa McDonald with

that report. Time now for John

Clarke and Bryan Dawe on the

Government's $250 million

windful concession to commercial television. Senator

Conroy, thanks for your

time. Nice to see you, what are we talking about. Broadcasting policy Channel 2, isn't

it. ABC. Fine, we may as well,

continue anyway, talk about

broadcasting anyway. Pardon. We may as as well

We may as as well talk about it

anyway, since I'm here. We are part of the broadcasting industry. ABC. Technically, I

suppose. Of course we are. I

suppose you are right. I have

never seen you up there. Up wrx On the slopes. Slopes. Have

you got a lodge do you go there

fore the day, I have never seen

you up there. Senator Conroy

why have you given the

commercial television

corporations a subsidy of $250

corporations a subsidy of $250

million. I haven't, I read

that. What have you done. Waive

the licence fee. To the tune of

how much. $250 million. Who did

had they owe the licence tee

tox To the Government. And who

has that Government money now

that you have waivered the

fees. Commercial TV licence

holders. That's my point,

why? So they can keep the

money. In what sense isn't this

a subsidy. It's not a subsidy. If it

If it were a subsidy, we would

give money to them. Same

thing. It's not the same

thing. Same concept. It's

different wording. No. Tony

Abbott had an audience with

Rupert Murdoch. We know. Do you

imagine that's in any way

similar to Rupert Murdoch

having an audience with Tony

Abbott. Why do commercial

broadcasters need help from the

broadcasters need help from the Government. Because they are

success. . They are going so

well you need to give them

money. It's very competitive

out there. Are you serious.

There are three of them. There

are three - SBS carries commercials. Why don't you fund

though. You are not a skier. No

I am not. I didn't think I -

some of these ideas are better

understood at altitude. What

things. What we are doing is encouraging Australian content to tell our

to tell our stories. You want

to stimulate the creative

community. We may as well do

that while up there. Doesn't

the system need changing. We

are. The point I make is we

waive the fees. Do you have the

right model We have a market

model. Stuff if it rates they

keep it on, if it doesn't they

take it off. The market is

domestic 'Advertiser. It's

Australia. Isn't the market the world television

world television market. Don't

we buy programs from Britain and America. I don't

understand, I had goggles on,

be fair, I couldn't hear

anything. Senator Conroy,

thanks for your time. You think

we should sell television

programs that the market for

television programs, can we get

glue vine. It's cold. That's

the program for the night and

the week. Don't forget

'Stateline' tomorrow, I'll be joining you again

joining you again Monday, for now, goodnight. Closed Captions by CSI