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Rudd says sorry for mid-air outburst

Rudd says sorry for mid-air outburst

Broadcast: 03/04/2009

Reporter: Greg Jennett

The Prime Minister is tonight heading home from London at the end of a two-week round-the-world
trip. But the journey that culminated at the G20 ended on a note Kevin Rudd could not have
expected. He had to publicly apologise to an air force flight attendant he reportedly reduced to
tears earlier this year.

Transcript

LEIGH SALES, PRESENTER: The Prime Minister is tonight heading home from London at the end of a
two-week round-the-world trip.

But the journey that culminated in the G20 has ended on a note Kevin Rudd couldn't have expected.
He had to publicly apologise to an air force flight attendant he reportedly reduced to tears
earlier this year.

At home, the incident triggered frenzied discussion on the internet and the airwaves about Mr
Rudd's personality, and oddly, his dietary preferences.

Political correspondent Greg Jennett reports.

GREG JENNETT, REPORTER: Limos, red carpet and VIP aircraft - they're all meant to make for
fuss-free travel for modern world leaders. But not always.

KEVIN RUDD, PRIME MINISTER: There was a flight I think from Port Moresby and I had a discussion
with, I think, one of the attendants about the provision of food. Didn't last very long.

GREG JENNETT: It's reported as "Rudd rage", the moment in January between Papua New Guinea and
Canberra, when a normally composed Kevin Rudd cut loose on a 23-year-old RAF flight attendant. She
was reportedly reduced to tears. The problem: no special white meat dish for the man who's given up
on red.

So, when two weeks abroad was supposed to culminate in a high point of statesmanship, there was
this:

JOURNALIST: Do you have a bad temper?

KEVIN RUDD: Oh, right.

GREG JENNETT: And more of it, along with regret and humility.

KEVIN RUDD: All of us are human. I'm human. I'm not perfect, you know. And as I said before: if I
upset anybody on that particular flight, I'm really sorry. I apologise for it.

MALCOLM TURNBULL, OPPOSITION LEADER: It certainly deserved an apology, merited an apology. I think
what is also disappointing, however, was the fact that when this was initially raised with his
office, they denied that the incident had occurred.

JOE HOCKEY, SHADOW TREASURER: He should be better than that. We know he can be better than that.

GREG JENNETT: Talkback radio, internet blogs - the story took off. Even amateur medics pushing red
meat consumption were springing up with dire warnings of the dangers of low iron leaders.

JOHN COBB, OPPOSITION AGRICULTURE SPOKESMAN: You can become a wilted cabbage, you can become pale,
distraught. We don't want our Prime Minister pale, distraught or anaemic. We don't want him with
anger issues.

GREG JENNETT: The story got oxygen because it supports a view held by the Opposition and others who
watch the Prime Minister closely that the public image he projects is not the real Kevin Rudd; that
he is more volatile and harder to get along with than most might imagine.

KEVIN RUDD: We're all - we're all human. We all make mistakes, your Prime Minister included. See
ya.

GREG JENNETT: Off for the long flight home, where the domestic economy is again his preoccupation.
And there's better news there: the High Court has cleared the way for the delivery of $8 billion
worth of Government stimulus payments. Lawyer Bryan Pape had challenged the handouts, arguing
they're a gift rather than a payment under tax law.

BRYAN PAPE, LEGAL ACADEMIC: This is a really important case that, until you see the reasons, you
will not know the full implications for it.

ROBERT MCCLELLAND, ATTORNEY-GENERAL: We're very pleased of course that the stimulus package has
been upheld as a valid appropriation of the Commonwealth. And this means that the payments can go
out to about eight million Australians.

GREG JENNETT: The first will start arriving in bank accounts next week. Greg Jennett, Lateline.

G20 leaders unite on rescue plan

G20 leaders unite on rescue plan

Broadcast: 03/04/2009

Reporter: Chris Uhlmann

At the G20 summit in London, leaders have united around a plan to limit the excesses of capitalism.
There will be tougher rules on banks, limits on corporate salaries and a big boost for the
International Monetary Fund.

Transcript

LEIGH SALES, PRESENTER: At the G20 Summit in London, world leaders have agreed on a plan to limit
the excesses of capitalism.

There'll be tougher rules on banks, limits on corporate salaries and a big boost for the
International Monetary Fund.

And capitalists seemed to like the plan, with stock markets soaring around the world.

Political editor Chris Uhlmann reports from London.

CHRIS UHLMANN, REPORTER: Thrown together by the fierce urgency of now. The economic meltdown
demanded unity from the leaders of the world's 20 largest economies.

GORDON BROWN, BRITISH PRIME MINISTER: This is the day that the world came together to fight back
against the global recession.

BARACK OBAMA, US PRESIDENT: There will be, I believe, a turning point in our pursuit of global
economic recovery.

CHRIS UHLMANN: There was always going to be a deal; the only question was of substance.

NICOLAS SARKOZY, FRENCH PRESIDENT (voiceover translation): We would never have believed that we
would have got an agreement so far-reaching.

CHRIS UHLMANN: It beefs up the world's financial rules and drags in hedge funds and the rest of the
shadow banking system, and it threatens sanctions against tax havens.

The International Monetary Fund's war chest will be trebled to US$750 billion, and the frozen
wheels of trade finance will be oiled with an extra $250 billion.

There are no new pledges on government spending, but $5 trillion is already committed.

There will also be a push to limit executive pay.

KEVIN RUDD, AUSTRALIAN PRIM MINISTER: This is the first time the global regulators have stepped in
to, you know, wild, corporate, cowboy behaviour as far as their remuneration's concerned.

CHRIS UHLMANN: Kevin Rudd believes London's deal will resonate in Australia.

KEVIN RUDD: It's been Prime Ministers and Presidents who have struck this deal, but it's small
businesses, tradies and young people who will benefit from it over time.

CHRIS UHLMANN: The leaders will meet again in New York in September.

BARACK OBAMA: You know, it's hard for 20 heads of state to bridge their differences. We've all got
our own national policies. We all have our own assumptions, our own political cultures. But our
citizens are all hurting. They all need us to come together.

CHRIS UHLMANN: Stocks shot up on the news, but not everything ran to plan. The family photo came up
one Prime Minister short.

BARACK OBAMA: Where's the Canadian?

CHRIS UHLMANN: Three hours later, they tried again, this time minus two leaders.

BARACK OBAMA: Where's Berlusconi?

CHRIS UHLMANN: Saving the world might be easier to organise.

It's easy to be cynical about these kind of events and measure progress against what should have
been achieved, but governments move slowly when travelling singly, and at a snail's pace when
travelling in packs. Against that measure, then this meeting achieved considerable progress. But
now, it will be judged by its deeds, not just its words.

Chris Uhlmann, Lateline.

G20 targets executive salary control

G20 targets executive salary control

Broadcast: 03/04/2009

Reporter: Brendan Trembath

High flying bankers earning millions of dollars a year could soon have their wings clipped. World
leaders meeting in London have agreed on a new pay regime where banks would be banned from paying
big rewards to executives who take excessive risks.

Transcript

LEIGH SALES, PRESENTER: The Prime Minister would like to crack down on the salaries of the people
he calls the 'cowboys in the financial markets'. And the G20 leaders have agreed on a new pay
regime where banks would be banned from paying big rewards to executives who take excessive risks.

Brendan Trembath reports on how the plan will work.

BRENDAN TREMBATH, REPORTER: Some of the leaders who met in London apparently wanted a salary cap
for the world's top bankers. But instead came a compromise. The group agreed on a set of guiding
principles on pay and executive perks.

KEVIN RUDD, PRIME MINISTER: These principles will make for a difference. And can I just go to one
core difference? And it goes to remuneration systems in the short-term and risk calculations over
the long-term.

BRENDAN TREMBATH: From September, new international rules on pay will make company boards
responsible for designing and evaluating pay packages. They should reflect risk and not be based on
short-term performance. And salaries should be published regularly. But there are still questions
about just how much governments intend to get involved.

BARACK OBAMA, US PRESIDENT: It doesn't mean that we want the state dictating salaries. We don't.
Executive compensation should be subject to a shareholder vote.

BRENDAN TREMBATH: It doesn't always work in practice, though. In 2007, investors balked at
Macquarie Bank's plan to pay its executives more. Twenty-one per cent of shareholders voted no, but
the board of directors did nothing to change it. The then chief executive Alan Moss earned the
title 'The $33 Million Man'.

'Unrestrained greed', as Kevin Rudd called it, led to the biggest global recession since World War
II. More than 50 banks collapsed, credit dried up and millions of jobs were lost.

ALLAN FELS, AUSTRALIA & NEW ZEALAND SCHOOL OF GOVERNMENT: The executive pay schemes in the
financial sector have been an important cause of the financial problems we've been having. They've
encouraged excessive and inappropriate risk-taking in the financial sector.

BRENDAN TREMBATH: Professor Fels says it's important to target bankers, as they're at the centre of
the financial universe.

ALLAN FELS: I think the clear intent is to clip their wings. It's not punishing people who get
rewards for taking some risk, but a lot of arrangements seem to have got right out of hand.

BRENDAN TREMBATH: To get banks to go along with the new principles, the Australian Government can
rely on its own financial weight. Banks won't be backed by the Australian Prudential Regulation
Authority unless they have proper pay practices.

Executive pay is an emotive subject in many countries.

Professor Fels is conducting a Productivity Commission inquiry into executive pay. Anyone can make
a submission, from the high-flying bankers who might soon have their wings clipped, to the members
of the public who don't earn nearly as much.

Brendan Trembath, Lateline.

Stephen Long with the week in economics

Stephen Long with the week in economics

Broadcast: 03/04/2009

Reporter: Leigh Sales

Stephen Long joins Lateline for the usual Friday night chat on the economic topics of the week.

Transcript

LEIGH SALES, PRESENTER: Here to analyse the outcomes of the London G20 Summit is Economics
Correspondent Stephen Long.

Stephen, what do you make of the end result of the G20?

STEPHEN LONG, ECONOMICS CORRESPONDENT: Well, Leigh, the first thing to note is what's not in the
communique: any commitment to extra fiscal stimulus and any mention of toxic assets and ridding the
banks of those toxic assets - the big issue that Kevin Rudd mentioned on a regular basis in the
lead-up to the meeting. And this stands in stark contrast to the so-called "Sherpas' meeting" and
the communiqué out of that when the finance ministers and central bank governors met in mid-March.

They said that the key priority was getting the flow of lending going again by recapitalising the
banks and ridding them of impaired assets. So what do we make of this? They're presuming that the
Geithner plan is the answer, perhaps. But, it is a surprise that there wasn't more made of the
urgent need to recapitalise the banks, restore lending, other than a vague commitment to doing
"whatever it takes".

LEIGH SALES: So, are there some initiatives out of this that will make a difference in the here and
now?

STEPHEN LONG: The big issue is the tripling of the budget for the International Monetary Fund and
also the fact that they're allocating $250 billion towards restoring trade finance. Now, we know
that there's been a collapse in world trade, a 24 per cent fall in the last three months of last
year and it's continued into this year. Getting trade finance going again, finding a way to
actually get ships moving and allow people to restock their shelves is seen as a key, particularly
to rescuing the emerging economies. But again, there's no detail about how this is going to work.
And the way I read the communiqué, there's also some double counting, because it seems to me that
$250 billion comes out of the money that's been allocated to the IMF.

LEIGH SALES: So, do we have a new world order on financial regulation?

STEPHEN LONG: We had the sketch, a pretty basic sketch. You wouldn't even call it, really, a
blueprint for a new world order on financial regulation. There isn't really detail about how it's
gonna work, Leigh, other than talk that we're gonna do it through the financial stability board, as
it's being renamed, the financial stability forum, which actually missed the crisis in the first
place. But, clearly, there is a plan that there's gonna be more regulation of hedge funds and the
shadow banking system, as you would expect.

But when we talk of a "new world order", what do we mean? In the lead-up to this meeting, there was
a lot of talk about a new world order being a redefining of the relationship between East and West.
And, in fact, there was talk from key opinion leaders about the need for this meeting to forge what
was known as "the grand bargain" between China and the United States, where China would be
convinced to actually save more of its income on a national - sorry, spend more of its income on
its own domestic economy, and the West, and America in particular, would be convinced that it
actually needed to save more and spend less to end the debt-fuelled binge, and the big structural
imbalance of the money flowing from China to the West to fuel that debt-fuelled binge. Now, that
really hasn't been addressed at all in this. Big ask, I guess.

LEIGH SALES: So - well, Stephen, if there are all these shortcomings that you point out, why have
the markets rallied?

STEPHEN LONG: A bit of a relief rally that there was unity at the end, after signs of division. But
I also think that there was a key issue outside of this agenda and that was changes to the
accounting rules in the US, Leigh, which will mean that banks don't have to writedown these toxic
assets to their current values and will therefore be able to book higher profits, at least on
paper. That was a big part of that rally.

LEIGH SALES: Stephen Long, thank you very much. Have a good weekend.

STEPHEN LONG: You too.

ER overcrowding 'killing 1,500 a year'

ER overcrowding 'killing 1,500 a year'

Broadcast: 03/04/2009

Reporter: Rafael Epstein

Overcrowding in the nation's emergency departments is killing 1,500 people a year, according to the
Australiasian College of Emergency Physicians. Recent research suggests that these avoidable deaths
occur because there just are not enough beds in the rest of the hospital system to take emergency
patients once they need more specialised, longer term care.

Transcript

LEIGH SALES, PRESENTER: Overcrowding in the nation's emergency departments is killing 1,500 people
a year, according to the Australasian College of Emergency Physicians. Recent research suggests
that these avoidable deaths occur because there just aren't enough beds in the rest of the hospital
system to take emergency patients once they need more specialised longer term care. Rafael Epstein
reports.

RAFAEL EPSTEIN, REPORTER: Emergency departments are the frontline of any major hospital, and
they're getting busier. Over the last decade, the total number of hospital beds in Australia has
dropped by one-fifth. At the same time, the number of people turning up at emergency has almost
doubled from 3.6 million to six million each year.

PETER CAMERON, MONASH UNIVERSITY: You have an emergency department that has patients in the
corridor, every cubicle full, patients in the waiting area who should normally be on a bed but
can't get into a bed. It means patients queuing up at the triage desk and it means ambulance
trolleys with potentially ill patients lined up at the front door.

RAFAEL EPSTEIN: They call it "access block". They've done all they can for the patient in
emergency, but the patient has to wait to get a bed in another part of the hospital. It can lead to
medical complications, less pain relief, longer hospital stays and more legal action and
complaints.

PETER CAMERON: When it gets to that stage, it is - you are basically managing a disaster situation.
They sometimes die in the waiting room - or have adverse events in the waiting room. It can happen
...

RAFAEL EPSTEIN: It's something that wouldn't happen otherwise?

PETER CAMERON: Yes.

RAFAEL EPSTEIN: Since 2005, there have been three separate studies into increased mortality in
emergency departments. They all found avoidable deaths happened because patients didn't receive the
best care, or they couldn't be moved to other parts of the hospital like intensive care units. With
increases of 20 and 30 per cent, that translates into 1,500 deaths across all Australians hospitals
each year.

NICOLA ROXON, HEALTH MINISTER (archive footage, Sept. 2008): Access block of course isn't gonna
vanish overnight. There are serious problems, many deaths resulting each year from this problem.
This is of course of great concern, and we should always use this sort of information and continue
to collect data to give us an accurate picture of what's going on.

RAFAEL EPSTEIN: But the figures that governments look at are not always accurate.

The Victorian Auditor-General this week slammed the way four Melbourne hospitals gathered such
information. The report said, "... the majority of emergency statistics do not fairly represent
performance."

In some hospitals in NSW and Victoria, patients have been shifted into wards next door to
emergency, but with no change in their access to care. The Victorian auditor said that information
was, "... potentially misleading as the upward trend creates only an impression of improvement."

The Australasian College for Emergency Medicine says the problem requires a system-wide solution.

PETER CAMERON: Limiting the number of patients coming in, and there are various ways of doing that,
improving the capacity of the hospital and that's increasing the number of beds and improving the
flow through the hospital, and then, looking at what happens to people after they leave the
hospital.

RAFAEL EPSTEIN: The Federal Health Minister says she's listening and can considering long-term
solutions. Rafael Epstein, Lateline.

Govt accused of ignoring asbestos woes amid intervention

Govt accused of ignoring asbestos woes amid intervention

Broadcast: 03/04/2009

Reporter: Anna Henderson

Residents of a remote central Australian Aboriginal community have accused the Federal Government
of a double standard that could have deadly consequences. They say the Commonwealth took over their
community under the intervention in a bid to improve the health and wellbeing of children, but it
is ignoring a serious asbestos problem in the town.

Transcript

LEIGH SALES, PRESENTER: Residents of a remote central Australian Aboriginal community have accused
the Federal Government of a double standard that could have deadly consequences. They say the
Commonwealth took over their community under the intervention in a bid to improve the health and
well-being of children, but it's ignoring a serious asbestos problem in the town. And now it seems
this might not be an isolated case. Anna Henderson reports from Areyonga in the Northern Territory.

ANNA HENDERSON, REPORTER: This is Areyonga, 200 kilometres south-west of Alice Springs. It's here
where children once used to draw with toxic asbestos.

JUDY BRUMBY, ELDER: They didn't know it was poisonous 'cause it - they thought it was chalk or
something that they could play with it.

ANNA HENDERSON: There's asbestos scattered throughout the community, here on the sidelines of the
half-finished football oval, near a men's ceremony ground and metres from a water tank. It's also
present in the school and church and the people of Areyonga want it gone.

CRAIG WOODS, COMMUNITY REPRESENTATIVE: We've got the intervention put into the Northern Territory
and because of the health reasons for the kids and yet, you know, the asbestos is not addressed,
you know, because of this intervention.

ANNA HENDERSON: Asbestos in Areyonga is not a new problem. It's been documented in a Federal
Government report published in June last year. Yet this community is still waiting for action.

JUDY BRUMBY: Clean our community. We don't want sick people living in our community. We want
healthy people and children.

ANNA HENDERSON: The asbestos was first identified 18 month ago when workers discovered it near the
new football oval. They've now got real health concerns after unknowingly working so close to the
toxic material. Until the asbestos is removed, work can't continue and the oval sits dormant.

But the concerns about asbestos extend far beyond Areyonga.

PETER FITZPATRICK, COMMUNITY DOCTOR: My understanding from having seen some of the reports from
FASCIA is that it is very widespread, there are many communities in which there asbestos that needs
to be removed.

ANNA HENDERSON: And because the effects of asbestos can take decades to become evident, for the
people of Areyonga, it's a wait-and-see exercise to find out just how much damage it's caused. Anna
Henderson, ABC News, Lateline.

YouTube hit speechmaker discusses G20 politics

YouTube hit speechmaker discusses G20 politics

Broadcast: 03/04/2009

Reporter: Leigh Sales

Daniel Hannan, a conservative British member of the European Parliament, became a YouTube hit,
excoriating the policies and performance of the British Labor Prime Minister Gordon Brown. Joining
Lateline from London at the end of the G20 week, is the speechmaker, Daniel Hannan.

Transcript

LEIGH SALES, PRESENTER: Viral marketing is the dream of everybody with something to sell, whether a
product or a political message. It's an unpredictable phenomenon where something attracts so much
interest on the internet, that once you see it, you can't resist sending it on to your friends, and
then they send it on again to their friends, and so it spreads like a virus.

During the past week, what would normally be considered a dry speech on British economics went
viral. Daniel Hannan, a conservative British member of the European Parliament became a YouTube
hit, excoriating the policies and performance of the British Labor Prime Minister Gordon Brown. In
case you didn't see it, here's a taste.

DANIEL HANNAN, MEMBER OF THE EUROPEAN PARLIAMENT (YouTube clip): When you repeat, in that wooden
and perfunctory way, that our situation is better than others, that we're well placed to weather
the storm, I have to tell you, you sound like a Brezhnev-era apparatchik giving the party line. You
know and we know and you know that we know that it's nonsense. Everyone knows that Britain is worse
off than any other country as we go into these hard times.

LEIGH SALES: Within 24 hours of being posted, that clip had attracted 630,000 hits; now, a week
later, it's about to hit two million.

Joining me now from London at the end of the G20 week is the speechmaker Daniel Hannan. Mr Hannan,
thanks for being with us.

DANIEL HANNAN: Thanks for having me on.

LEIGH SALES: Two million hits; how do you explain why this particular speech of yours went viral?

DANIEL HANNAN: Do you know, I've really got absolutely no idea. I mean, a lot of the bloggers and
the independent non-media people are using the fact to kind of attack the mainstream media, have a
go at the BBC. I've got to say if I were a BBC producer, I'd have made the same call. If I were
trying to think of the five dullest words in the English language, "speech to the European
Parliament" would be, you know, pretty high up the list. That's the funny thing about the internet:
nobody can predict what's gonna tickle people - neither I, nor the BBC producer, nor I dare say,
the ABC producer.

LEIGH SALES: And it's not the first time that you'd posted a speech on YouTube by any means.

DANIEL HANNAN: No, I've been doing it for years and, you know, in the past if I get 800, 900 hits,
you know, I consider that a result. So, you know, it's a funny thing. It's - the internet has
broken down a lot of monopolies, including in politics and in the media. And it's a painful process
of adjustment for people in my profession, and I suppose for people in yours. Not so long ago, a
relatively small number of lobby correspondents and political journalists would set the news cycle
for the next 24 hours, and a minister or an Opposition spokesman who had briefed all of those
people would be pretty sure of getting some coverage. Now, that world, which was so recent, seems
to belong to a different age now. Those structures have been pulverised. You now have millions of
independent online commentators and pundits and consumers deciding for themselves, reaching a kind
of aggregate view of what it is that they find interesting. It's a slightly scary world for those
of us who were brought up in the old system. But it's also, I think, quite a liberating thing
because people can now make up their own minds. You know, the message is disintermediated.

LEIGH SALES: But how do we figure out what people are going to find interesting? Because as you
said, you'd posted lots of speeches in the past. It was, I guess, somewhat to be expected that
you're a conservative and you're attacking Gordon Brown's policies, yet all of a sudden, it seemed
to go viral. Is there any way we can predict these sorts of things?

DANIEL HANNAN: No! I mean, that's the amazing thing about the internet. There was a book called
'The Long Tale' by a guy called Chris Anderson making this point that up until now, everybody - the
retailer, the publisher, the film producer - is trying to second guess the market. And because
we're all human beings and we're all fallible, we do it imperfectly. You don't know what's gonna be
the blockbuster and what's gonna be the failure. You know, a book publisher works on the basis that
maybe one in five books is gonna make a profit and the other four aren't - but he doesn't know
which of the five it's gonna be. The same thing is true in politics now. And a lot of political
parties have been very slow to see this. They still try and press the internet into their existing
structures; you know, they treat the web as one more mechanism to get their message across. It's
way beyond that. You know, maybe in the US they're beginning to understand the full potential of
the internet as a way of raising money, as a way of mobilising campaigns, and above all, as a way
of appealing over the heads of your own party bigwigs, over the heads of the established pundits,
if you think you've got something interesting to say that might strike a chord with people.

LEIGH SALES: You say that they're perhaps old-fashioned in their approach, and I guess you mean
things like when Barack Obama just posts a speech on YouTube or Downing Street puts out a very
anodyne comment on Twitter. Given the unpredictability, though, of these new technologies, is there
really any way that politicians can harness or control their potential?

DANIEL HANNAN: I think so. I mean, I think Obama is quite an interesting example of the phenomenon.
He launched his campaign not by making a big speech, not by calling a press conference, but by
posting a video onto his home page. And it is very easy now that he's there to see his rise as
inevitable, but think back a few months to before the first primaries: the almost total consensus
is that the Clinton family had a unbreakable hold on Democratic party structures, that it was a
shoe-in for Hillary. And five years ago, it would've been. But, the technological revolution
allowed Barack Obama to do something that his predecessors couldn't have done, that Howard Dean
came close to doing the last time round, but it wasn't quite there yet, which was to appeal over
their heads because he had a compelling message and people could hear it for themselves without
needing, you know, a frontman standing with a microphone interpreting it for them. And I think
that's just made an absolutely colossal difference to the way politics is conducted, and I think a
very good one, actually. It's a very healthy thing if the voter goes direct to the source and looks
at what the political parties are saying without needing, you know, the chief political
correspondent to tell them what it means and then makes his own mind up as to which one he prefers.

LEIGH SALES: In your own case, you've now got all of this wonderful mileage that any politician
would love. Do you think that you can convert that into something now more substantial using that
platform, or was it more of a just one-off aberration that you happened to make a speech that
suited the zeitgeist?

DANIEL HANNAN: Do you know, again, I don't know. Nobody knows. That's the brilliant thing about
markets and it's the brilliant thing about trying to predict them. I mean, I make speeches like
that all the time. I think what this one had, maybe, in retrospect, I mean, I don't know, but my
guess is that, you know, there is a real anger in Britain about the extent of our deficit, about
the extent of our debt and about the fact that, you know, we've never had an election with Gordon
Brown. He came in after a kind of internal deal in the Labor Party. He looked as though he was
gonna go to the country last year and then he chickened out at the last minute. So, people feel
unconsulted. And I think a lot of people would've liked to have grabbed the guy by the lapels and
shouted at him because he isn't a very listening sort of leader. Now, obviously, most people don't
get the opportunity to do that. Under a quirk of the rules of the European Parliament, I did get to
do that. And I suppose the next best thing if you can't do it yourself, you get a certain vicarious
pleasure in watching somebody else doing it for you. That, I suppose, is why it caught on. What's
gonna be the next thing that catches on with people? You know, nobody knows. If I could tell you,
if you could tell me, we'd be millionaires.

LEIGH SALES: Let me ask you a bit more about the content of your speech. You say that Gordon
Brown's stimulus spending and the bank bailouts have worsened the situation in Britain. Are you
saying that it would've been better to leave the markets unfettered to sort this out?

DANIEL HANNAN: Well, I mean, the problem was not only a failure of the banks there, there was also
a political failure. We should be careful before we go down this road of saying that the whole
problem was absence of regulation. The underlying problem was that interest rates were kept too low
for too long - that happened in the US, it happened in Britain, it happened in the European Central
Bank, it happened in Japan. But that was a political decision, not a market one. The problem of
sub-prime loans, which is, if you like, the gangrene in the little toe that then spread through the
whole system and poisoned the whole of the banking body - that was not something that developed
because banks took it into their heads. There was legislation both from the Carter era and then
from the Clinton era basically telling them to expand home ownership. I mean, as recently as last
year, the US Congress was telling Fannie and Freddie to make more cheap loans available. So, it's
important that we keep a sense of perspective here. It isn't as simple as to say, "No regulation
was a bad thing; more regulation would be a good thing."

As for the stimulus and additional spending, I mean I don't know how it's been covered in
Australia, but certainly in the UK, there has been a rush to almost euphoric instant judgement in
the aftermath of the G20 Summit, you know. And the phrase you hear repeated again and again on the
BBC is that, you know, world leaders have decided to pump $1.1 trillion into the world economy.
Well, OK, where do you get that $1.1 trillion from if not, you know, in the broader sense of the
word, from the world economy. It's not - no new money that's somehow been sucked in from outer
space somewhere. In other words, we're taking many out of taxpayers' pockets and dispersing it
through these various bureaucracies. And you've just gotta ask: is that gonna be anymore more
efficient than letting people choose for themselves what they'd have done for it.

LEIGH SALES: Given, though, that governments always have an eye on the politics of these situations
and they feel the need to be seen to do something, would any government in the world, no matter how
conservative, be prepared to take a more passive approach and not be pumping money into the
economy, as you put it?

DANIEL HANNAN: Well that was exactly the problem. The was exactly the problem. In the current
24-hour media world, the way the electorates are, it is a very difficult thing for a politician to
say, "I don't think that there's much that can be done about this," you know. I think the most
pernicious phrase in politics is "doing nothing is not an option". It's almost never true, by the
way. It's almost never true. But, it's sort of taken on a momentum of its own. And so, it happened
in Britain, it happened in the US, it happened in Europe. In the immediate aftermath of these
banking collapses, there was a rush towards frenzied activity. And voters initially warmed to it,
for very understandable reasons. If you've got two people and one of them is saying, "I know! I've
got the answer!," and other one's going, "Well, you know, I don't think there's very much we can
do," your instinct, very naturally, is to give the first fellow his chance, you know, to see if
he's right. The trouble is that when it turns out that he was wrong, it's too late to do anything
about it because the additional spending and the additional intervention takes on a momentum of its
own.

And certainly that's what's happened in my country. There was a massive splurge of money - a really
huge one. It didn't work. But by then, a political leader can't go back to his taxpayers and say,
"Well, sorry, guys, you know, that didn't really work. I mean, I've blown your money away and it's
been ..." He has to keep doubling, like a gambler in a casino. "Oh, it hasn't worked because we
haven't done it enough yet. So let's spend more." And if that doesn't work, we'll borrow and spend
what we're borrowing. That happened in the UK until we had emptied the Treasury and exhausted our
credit and forced this extraordinary thing which was the Governor of the Bank of England, who's
normally a very reclusive character, he very rarely gives interviews. He was actually dragged,
blinking, like a kind of mole out of his hole, onto television to say publicly, "Look, we can't
afford this anymore. You know, we cannot do another stimulus package; the coffers are completely
empty." Now, that frenzied activity of the last six months is now going to be a debt that our
children and grandchildren are paying off through higher taxes. You know, we have made permanent
and deleterious changes to our capacity as a country to recover - all for the sake of showing that
something could be done.

LEIGH SALES: The G20's now ended, and the nations have promised to spend US$1.1 trillion to boost
the global economy. What do you think of that? I can guess!

DANIEL HANNAN: A trillion here, a trillion there and sooner or later you're talking real money, you
know. The sums are - what's allowed them to get away with it is that the sums are now so
astronomical that they are literally beyond comprehension. People cannot picture that amount of
money.

But, you know, just break it down: a trillion dollars to boost the world economy. What that means
is basically some of the money is being given in foreign aid and not, you know, thought out,
measured foreign aid in response to remediable identified problems. Foreign aid for its own sake,
to show that we're doing something, which was brilliantly characterised once as an expensive way of
transferring money from poor people in rich countries to rich people in poor countries. Then rest
of it is going to the same big financial institutions on whose watch all of this happened. Now,
I've just gotta guy back and say, "Why is anyone going be better off if it's the IMF or the World
Bank or indeed the national regulators, spending money and deciding how to do it, rather than the
individual, if you like, with his own mini-stimulus package, i.e. in his wallet, going out and
stimulating the economy because he's got that money because he hasn't had it confiscated from him
in tax." You know, if we genuinely think that spending by national or international bureaucracies
is more efficient than letting people make their own decisions; if we genuinely think that
bureaucracies know what to do with our money better than we do, we have utterly failed to learn the
lesson of what happened in Eastern Europe between the Second World War and 1989.

LEIGH SALES: Mr Hannan, we're out of time. I know you've probably had a crazy week, so thank you
very much for coming in to speak with us.

DANIEL HANNAN: Thanks for having me on.

Fortescue Metals being sued for 'misleading investors'

Fortescue Metals being sued for 'misleading investors'

Broadcast: 03/04/2009

Reporter: Leigh Sales

The man who was once Australia's wealthiest citizen will come before the courts next week for
misleading the market. The mining magnate Andrew Forrest and his iron ore company Fortescue Metals
are being sued by the Securities and Investments Commission.

Transcript

LEIGH SALES, PRESENTER: The man who was once Australia's wealthiest citizen will face the courts
next week accused of misleading the market.

The mining magnate Andrew Forrest and his iron ore company Fortescue Metals are being sued by the
Securities and Investments Commission. They're accused of misleading investors over several foreign
deals struck in 2004.

ASIC alleges that Fortescue overstated the substance and effect of agreements with three Chinese
companies. Fortescue says it will vigorously defend itself against the charges.

Malaysia's new PM Naib Razak sworn in