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Live. Tonight, another Live. Tonight, another

Vietnam. Gaddafi promises a

bloodbath in response to any US military intervention in TRANSLATION: We Libya.

TRANSLATION: We will fight to

the last man and woman to

defend Libya.

Good evening. Welcome to

Lateline. I'm Tony Jones. With

analysts predicting Libya is on

the individual of a bloody

civil war, the Australian

Foreign Minister has been one

of the world's most vocal

proponents of a no-fly zone.

We'll shortly be joined by

Kevin Rudd from Kevin Rudd from the Afghan

capital Kabul. Mr Rudd's unannounced visit comes less

than 24 hours after the perils

of using US air power were sadly demonstrated. NATO

commander in against, General

Petraeus, has ordered an

investigation into an attack by

US helicopters which killed

who nine Afghan boys ageded 9 to 15

who were collecting firewood in shortly to Mr Rudd. First, it's

a deal, the Prime Minister

secures the numbers in the

Senate to pass the $1.8 billion

flood levy. The hardest words -

60 years after World War II,

Japan says sorry to Australian

prisoners of war. And charging

Private Manning, the US

Wickham soldiers accused of being

Wickham Point's source faces 34

charges including one which

carries the death penalty. Forces loyal to the Libyan

leader Muammar Gaddafi have

struck at rebel held towns in

the east of the country. On Wednesday, the Opposition forces repelled similar attacks

as the struggling Government

attempted to regain control of

the strategically important

port and oil town of Brega. While Colonel Gadafi reportedly ponders

ponders a plan to allow peace

keepers into his country,

Opposition Leaders continue to

call for Western intervention

but that looks unlikely in the near future. Middle East correspondent Ben Knight

reports from Ajdabiya. This was

the first call to arms for the

Opposition forces in the east

of Libya and it didn't take

them long to get moving.

Hundreds of men rushed south to

this staging point, 70km away

from the fighting. Some from the fighting. Some of the heavy weapons have only just

been taken out of storage and

there was a frantic effort to

put them another. As they did,

word came through that the

Gaddafi forces had already been

pushed back out of Brega, the oil port town they'd captured

overnight. This is the front

line of Ajdabiya. You can hear the gunfire in the background

and people celebrating, they believe that they have won in believe that

are Brega and we can see here there

are more fighters on their way

down to join the battle. Most

fighters are civilians and are

driving to the battle in their

own cars. This man normally

works at a university. No, I'm

not scared. I am very happy now. I This is as close as the

fighting has come to the

Opposition stronghold of

Benghazi since this began. Holding on to territory, Benghazi since this revolt

especially a major oil port especially a major

like Brega, is as important to

these rebels as proving can beat Muammar Gaddafi's these rebels as proving they

army. They appear to be well

prepared with anti-aircraft

guns, rockedt launchers and

even a tank but Muammar Gaddafi

still has the scpafrs he used

it. A massive weapons store

near the staging point was bombed early in there were more air strikes

near the fighting further near the fighting further south. People fleeing Brega

were clearly terrified at what

they'd seen. You must not go

to Brega. As Opposition fighters continued heading

south, ambulances sped the

other way. Some of the injured

were taken to this hospital in

Ajdabiya but not all could be evacuated. Because

evacuated. Because once you go

to take them they will shoot

you. They will shoot you and they're using you. They will shoot you and

They have taken hostages and

they're using them as human

shields so we cannot shoot

them. The Opposition militia

appears to have won its first

defensive battle but taking on

Tripoli is out of the question

question and after a week of hesitation the Opposition

leadership is now saying it

wants foreign powers to start

making air strikes on the capital to stop more attacks capital to stop more attacks

like this and that's exactly what Colonel Gadafi is

promising. In a

to a group of supporters,

Colonel Gadafi said there would be thousands of deaths if the West

West intervenes in West intervenes in Libya. TRANSLATION: The plot TRANSLATION: The plot now is to

control Libyan oil, Libyan

Territory and reoccupy Libya

again. This is impossible. We

will fight until the last man,

Libya from the last woman in defence of

Libya from south to north, from

east to west. But for the

moment the prospect of any

intervention seems unlikely as the international community debates the merits and practicalities

a no-fly zone. In the end it

reports Muammar Gaddafi is may be a moot point anyway with

peace-keepers into considering a deal to allow

peace-keepers into the The plan was proposed by one of

the last of his international allies, the Venezuelan

President shaufrb and it's

backed by the Arab League.

Given the defiance shown by the

rebels in Brega, it may be the

last chance for Colonel Gadafi

to save face. Questions about

how a minority Government is answered today. Julia Gillard

achieved cross bench agreement

that will see her flood levy

pass through both Houses. But the complex compromises and

deals she's making to get deals she's making to get her

agenda through are already

making life tricky for the

Prime Minister. More from our

political correspondent Tom

Iggulden. It's being called

Labor's Green revolt. Three

Labor Senators have approached

the Prime Minister to drop

Labor's support for a bill that

would give Territories more power to

The bill's being moved by the dprooens leader. They've

started to realise started to realise that they've got Prime Minister

or is it Prime Minister Julia

Brown? They're not too sure. Some Caucus members raised

concern with me about the

breadth of the legislation. Can

I say there is nothing unusual

about that process. I see

Caucus members frequently. Any

of them would like to talk with

me I'll explain why it's an

extremely good bill, why it

enhance democracy in this country country if we get it through

the parliament. Come Question

Time there was no respite from the bitterer debate over carbon tax. For the fourth

straight sitting day the Opposition moved a censure motion, cutting short questioning of the Government

and giving Tony Abbott a soap

box. She needs an honesty

transplant but she looks behind

her and she can't find a single

donor. We have now got donor. We have now got this

done every done every day at 10 to 3 so the Leader of the Opposition

can get on before 'Play

School'. If the Opposition was feigning confusion about the

Prime Minister's name, the Government was Government was playing tit for

tat. Tony Hanson or Pauline Abbott sitting

Abbott sitting in that seat. The Australian people are

better than you are, far better

than you are. They are confident people who are

rejecting your race basing. They are confident They are confident people

rejecting your playing the politics. They are confident people Nation policy agenda. The

Prime Minister accused members

on this sides of the House of a

deeply offensive and untrue political tactic political tactic and she should withdraw. If it assists the

House I withdraw and I say to the Opposition they should

reject the political tactics of

Cory Bernardy. They should

reject the politics of reject the politics of their Shadow Minister wanting to play

with grief. They should reject

the One Nation emails that lead

their economic policy. Almost

lost in the Government secured passage

through parliament of its flood levy. Nick Zenophon signed on

after getting the Government to

agree to make states take out

flood insurance policies and to

conduct an inquiry as to why

Queensland doesn't have one. No longer will State Governments be able to Governments be able to gamble

billions of dollars of

Australian taxpayers' funds

because they haven't taken out

proper insurance for their

assets. The Queensland

Government will be held to account by Senate inquiry

that's been agreed to today. It Zenophon make s with the Government. He loses his

balance of power when the new

Senate's sworn in in July. I

think you all know I'll continue to be a pesky,

persistent bastard. There's persistent bastard. There's

other things you can do to keep Governments to account.

Minority government's been no bad thing for Julia Gillard so

far. The flood levy's shown she

can get most of what she wants

if she's prepared to compromise

with the cross-benchers. The

carbon tax presents a bigger

challenge. The independents are vulnerable and will need to show she can

stand up to Julia Gillard where

she needs to show she's in

charge of the climate change

agenda. She's in Washington next next week meeting with President

parliament take as 2-week

break. Crowding at the Christmas Christmas Island immigration

detention centre has forced the

Federal Government to build a

new facility in Darwin. It will have 1500 beds and will be

built at Wickham Point at the

cost of $9 million. 500 beds will be available by the middle of the year to the middle of the year to house

single men. Another 400 beds

will be added to the Darwin

Airport Lodge motel which is used to accommodate asylum

seekers. It's taken 60 years

but Japan today finally

apologised to Australian

soldiers for the brutal

treatment they received as POWs

during World War II. A group of

five diggers, now aged between

85 and 94, 85 and 94, was invited to Japan

by the ministry. Today they met the

Minister, Seiji Maehara, who offered them

offered them an apology for

their suffering. Some say it's

too late and too little

that the current generation of Japanese

Japanese shouldn't be held

accountable for the sins of

their forefathers. North Asia correspondent Mark Willacy

reports from Tokyo. From

Japanese prisoners of war more

than 60 years ago to honoured than 60 years ago to honoured guests of the Foreign Minister

today in Tokyo. There's men the imperial army These old diggers came here on

a mission and with a message,

delivered by 94-year-old Really

Richards. The important Richards. The important thing to our members, there are many

of them, as you know, are looking for an looking for an official

apology. These men survived the

worst of Japanese barbarity.

From the horror of Singapore's

Changi prison to the hell of

some of these former prisoners

an apology is too little too

late. This apology would be

worthless and worthless and they've got some

bloke who would apologise now,

it's not worth a pinch of

effort. But today, 66 years after Japan's surrender, the

country's Foreign Minister

Seiji Maehara uttered the words

many former POWs have long

waited to hear. It was a deep and expressed the suffering that was inflicted on us and it was a

very moving experience. He

said to consider it a formal

apology from the Government.

Even those who'd Even those who'd expressed some skepticism about an apology

were moved by the Minister's remorse.

remorse. We've waited a long

time but it was sincere and at

much better time than I've seen

before in 1944 so this is really really good. By inviting these

former POWs to Japan and apologising for their brutal treatment, the

treatment, the centre left Government here in Tokyo Government here in Tokyo is

showing that it is willing

confront the terrible sins of

Japan's wartime past and for

their part, these old men have

also shown a remarkable capacity for forgiveness. I

believe very firmly if any

individual holds bitterness,

there's only one person who suffers. That's the person who is being

is being bitter. I think in

order to have better future

it's very important to put

right what was wrong in the past. The Japanese government says it's now planning to

invite more former Australian

prisoners to visit,

acknowledging that with each

passing year fewer of these

remarkable men remain. The NRL betting betting scandal has blown wide

open with the arrests of a

player manager and a former

Elias are accused of attempting

to defraud betting agy agencies

over last year's matcheen

Canterbury and North Queensland. Bulldogs Queensland. Bulldogs forward

Ryan Tandy faced court today

charged with lying to opolice

investigating the game. He now

faces additional charges.

League chief David Gallop has called the latest called the latest development

alarming. Norman Hermant

reports. As Ryan Tandy arrived

for his first court appearance

since he was charged

lyinging to the NSW crime

commission, police were yet to

reveal the NRL betting scandal

had deepened. Across town, his manager Sam Ayoub and former first-grade player John Elias were arrested. We will be alleging these individuals dishonestly

dishonestly placed bets on the

NRL game between the Canterbury

bulldogs and the North

Queensland Cowboys on 21 August

2010 in the knowledge that the outcome of that game had been predetermined. Authorities

started investigating the round

24 game after a betting plunge

on the first points being scored from a penalty. Tandy

gave away a penalty in gave away a penalty in the

opening minutes. Ugly-looking tackle and tackle and the penalty comes

right in front of the posts. Ryan Tandy was stood

down by his club after he was

charged last month. He's

pleaded not guilty to all

charges which now include

giving false evidence about his

access to a TAB bet placed on an earlier game against the Gold Coast Titans

in June last year. NRL rules

prohibit players from betting prohibit players from betting on games. As the investigation

widened, police seized a

computer from Ayoub's offices

in Sydney's inner west. It's a

seriously alarming development.

I can't comment on the guilt or innocence of those that have

been charged. These are

serious allegations which go to

the heart of the game and ultimately erode public confidence. Ayoub and Elias

were granted bail to appear in

court next month. They face up court next month. They face up

to 10 years jail if convicted.

Police haven't dismissed the prospect of others being charged. In Washington,

President Barack Obama is

coming under attack for being missing in action over the

Libyan crisis. The US leader

hasn't been heard from for days

on the issue. A former senior

member of the White House told Lateline the US is

standing on the sidelines.

Here's north America correspondent Craig The US President arrived

unannounced in the White House

briefing room but not to talk

about Libya. Barack Obama was

responding to the deaths of two

US airmen in an attack at Frankfurt airport. I am saddened saddened and outrage ed by this

attack that took the lives of

questions went unanswered. I

will have a chance to take some is questions tomorrow. He

hasn't spoken publicly about the Libyan crisis for now and that has increasing numbers of American columnists, opinion writers and analysts

scratching their heads. From

the venerable 'Washington Post' to online's

to online's Daily Beast, there

are claims of a President

missing in action. Slate

magazine and the acerbic Christopher hitchens have condemned the

pathetic dithering response.

Michael Singer's a Middle East

specialist who served on had

White House national Security

Council in the Bush

Administration. No-one is

going to shed any tears over

Muammar Gaddafi and his fate

but for some reason the US has been been very relectant not only to

act in terms of intervening

inside of Libya utbut even sending humanitarian tent to

the borders has happened

quietly. Two US aid teams have

been dispatched to fleeing into Tunisia and Egypt.

The US Secretary of State says

it's the latest in a number of

quick aggressive sets. Billions

of dollars in Gaddafi assets have

have been frozen, the US has imposed an imposed an arms embargo and

suspended operations a at its

Libyan embassy. We Libyan embassy. We defend

Colonel Gadafi must go now

without further violence and

bloodshed. Warships have been

moved into place. Previously

Hillary Clinton said imposing a

no-fly zone was under active consideration but today on

Capitol Hill she was playing it

down. We faced a similar

situation in the Balkans where

there were

there were many, many

why it was not viewed with

favour that weed would set up a

no-fly zone for a lot of

similar reasons, the difficulty

of it, the maintenance of it,

the appearance of it, and

eventually it was determined

that it was in the interests of

the peace and stability of the region etc. I think that we

are a long way from making that

decision. The Pentagon has

called a no-fly zone a

complicated and risky

operation. There's a lot of frankly loose talk about some

of these military options and

let's call a spade a spade. A

no-fly zone begins with an

attack on Libya to destroy the air defences. That's the way

you do a no-fly you do a no-fly zone. The

Obama administration explained to the safety of Americans in

Libya and embassy staff. There are countless other

consideration. The Pentagon has

saided it's already saided it's already heavily committed, there's a Budget

crunch on in Washington, this

concern about how a US

intervention would be received

in the Arab world and there's

no sign of UN authorisation but

as Libya teeters closer towards a

a possible civil war, Michael

Singer believes the argument in favour of intervention will dissonance of a sort dissonance of a sort between

the speeches and action. You

see Hillary Clinton going to

Capitol Hill and saying the

consequences are dire for

what's happening in Libya, what's happening in Libya, that a strong and strategic response

needed from the United States

yet the image I think the world

has from the United States now is

is of a country standing on the

sidelines, of not making statements statements even quite as

forceful as our European allies are willing to make on the

issue. He argues the US should

be pressing much harder at the

United Nations. Obama ally are calling for a

no-fly zone, like the Democrat

chairman of the Senate foreign

relations committee. Event

this powerful demand a powerful

response. Our commitment now to

the ordinary people who are the ordinary people who are

risking their lives to win

human rights and democracy will

be remember remembered for

generations within the Arab

world. We have to get this right. His critics accuse Barack Obama

passive. He faces an agonising

choice - risk a new military intervention and the possibility of worse violence

in a volatile region in a volatile region or risk

being seen as unwilling to help

being seen as unwilling to help the Arab region.

In Christchurch, authorities

have officially given up all

hope of finding any more

suravivers in the rubble of

last week's earthquake. The

death toll stands at 161 but the final body count is likely to exceed

to exceed 200. It's a grim blow for the for the residents who are

struggling to rebuild their lives. From Christchurch, Kirrin McKechnie reports. They're the words everyone's

been dreading. Today we

transition from rescue to

recovery. With no signs of life

amidst the rubble, authorities

have now all but given up hope

of finding anyone alive. These are the words are the words that

this city, none of the

families, none of the friends here and overseas, I would

imagine nobody anywhere wanted

to hear. As the earthquake crisis enters its tenth day,

tensions are starting to fray

in some of the worst-hit

suburbs. Many still have no

power or water. For some, access to power or water. For some, access to a flushing toilet is a half a a half a kilometre walk. Use a

plastic bag and a hole in the

backyard. We've got to go all

the way across the other side

of town just to have a warm shower. That gets frustrating.

But for Matthew Leech the worst

could yet be to come. Strong aftershocks threaten to send

the house next door crashing

into his. He and his wife have been forced to been forced to move out of

their home. Ned, they're living

in their car. Inside the house

is the worst feeling because

the sharp jolts and you

immediately just panic. The

pair are trying their hardest

to keep their spirits up.

Well, just have to carry on day

by day. In reality, the

rebuild effort is more likely rebuild effort is more likely

to be year by year. The safrs

on the look-out for high-flying

young women with a taste for supersonic travel. Australia currently has no female fighter

jet pilots but it's not for

want of trying. It's the only

time of year when seeing a

fighter in the skies does want

seem unusual but what you won't seem unusual but what you won't

see is a woman flying one.

We've certainly got a couple of

female air combat officers who

fly in the Super Hornet, just no pilots at the moment.

Females are welcome to be jet

fighter pilots yet only 17% the safrs female. The ADF

currently has a strategy called

the recruitment of women

strategy. We are trying to

increase the number of

in the Australian Defence Force

by 2017. Historically, women

have had a limited role in the

Air Force. MOVIE REEL: This is

proof of women's aptitude for

valuable war work. Part of this

recruitment drive is to break

any misconception s that may

still be held about what

can do. We've had women go

through the training process

but haven't made it but haven't made it yet and

there's nothing stopping them.

It will happen one day. height and weight restrictions

for the jet fighters rule some

of the more petite women out.

This reporter fitted the bill,

but male or female, it's not a

job for everyone. Absolutely

surreal. These go incredibly

fast. They go up to 1,000 km/h

and actually they're only

of jet fighters. The US has

some female fighter yet pilots

but the US Air Force also

remains male-dominated. We remains male-dominated. We are

outnumbered in the air crew

career field but being a woman

in air crew is just as fun as

being a man. This year the RAAF celebrates its 90th birthday. The Australian War

Memorial is one of the nation' Memorial is one of the nation'

busiest tourist attracts but

like many other cultural struggling financially. Now

it's won a reprieve with an

announcement of an extra $8

million a year. The money's

come in time to get in memorial

in shape for the centenary of

the Anzac landings in 2015.

Julia Gillard is putting her

money where her mouth is. I

became concerned that we were not

not funding the war memorial in

a way which was sustainable

over time. For years,

Government efficiency dividends

have been putting the squeeze on

year it lost 7 jobs but in the

wake of a review of the institution's funding

arrangements, the future is

looking rosier. I can looking rosier. I can today announce we will make available

an additional $8 million each year for the

year for the war memorial. It

means that lot of the

activities we've restricted can

be reinstated. It completely

takes away the possibility of

losinging 20 staff positions in

the next Budget so it's great

news. The announcement comes

for the centenary of the 1915

Anzac landings. A special

Ministerial portfolio has been

created to oversee the

anniversary. To coincide, the anniversary. To coincide, the

galleries that tell the story of World War I will be revamped

with the help of a one-off,

$1.7 million grant. The those

who've been calling for the

boost say it's an important

investment. The war memorial's

function is both a memorial and museum and participate of the Australian public of what went

on and from that we hope to

learn the lessons of war.

While the war memorial can While the war memorial can now

breathe a sigh of relief, the

capital's other cultural

institutions are wondering when

their reprieve will come. The

National Museum is calling for

voluntary redundancies and the

National Library is also

shedding staff. I would hope

that the Government would give

a similar consideration to the

needs of the other cultural institutions. But at the moment


Now to tonight's interview

with Foreign Minister Kevin

Rudd who's on an unannounced

visit to Afghanistanch just as

the prospect of foreign

military intervention is being

hotly debateded, news emerged

yesterday in Afghanistan of a

tragic misuse of US air tragic misuse of US air power, the NATO

investigation into an attack by US helicopters which killal

nine young Afghan boys ageded 9

to 15 who were collecting firewood firewood in the mountains.

We're joined now live from

Kabul by foreign Minister Kevin

Rudd. Thanks for being there.

Let's start with this horrific

incident. Will you be asking

questions of the US questions of the US authorities

about how nine children could

have been targeted in this way

and killed by US helicopters?

Of course, Tony. Any loss of

civilian life in Afghanistan is wrong in itself and wrong in itself and forthmore, it requires a continued review

of the way in which these sorts

of operations are conducted. I

note that General Petraeus has

order an investigation, I note also also that NATO has indicated

that if necessary when these

sorts of incidents occur,

appropriate disciplinary action

should be await to see what the

investigation reveals but I

will be of course raising this with General Petraeus and

others when I'm here in Kabul

where I've just arrived. I know

you've only just arrived but

one survivor of the attack, an

11-year-old boy, is reported as 11-year-old boy, is reported as

saying the helicopters hovered

over the boys, rose up, fired

rockets and then shot the boys

one after the other using their

canons.dise this, at the very

least, razor raise serious questions about inrules of engagement? That's why I'll be raising this of course with

General Petraeus here in Kabul.

As for the detail of what actually transpired, it's important to await important to await the investigation. The account from

the little boy you've just

referred to is of course

horrific but let's establish

all the facts. Can I also note

as way of general principle that based on my information

the number of civilian deaths overall as a result of Coalition operations in Afghanistan has decreasing. These dreths unacceptable, however. I also

note that the number of note that the number of

civilian deaths rising from Taliban operations is

increasing. This is important

to get to the facts of this incident. Nine young boys dying

is not acceptable. You've been

active in calling for NATO air

power to be used to impose a no

-fly zone in Libya. Does this

Afghanistan incident suggest to

you the kind of dangers that could arise out of using foreign air could arise out of using foreign air power in Libya?

When it comes to the dangers being faced by the Libyan

people, Tony, I think we need

to look no further than the

Gaddafi regime which has shown

no principles, no constraint,

no humanity whatsoever in the

mass violence it's deployed

against the people of Libya.

The question of no-fly zones arises arises because, as I'm advised, a number of active units within

it and therefore the prospect

of those units being deployed against civilian targets is

real and given the

regime and the attitude of

Gaddafi himself, anything Gaddafi himself, anything is

therefore possible. That's why

we in Australia have argued for

some time now that no-fly zones

should be considered and I notice this is now being notice this is now being actively examineded within NATO

and elsewhere. The US Defence

Secretary Robert Gates has warned Congress modest no-fly zone would be a

very big operation and would

necessarily begin with attacks

and aerial bombardment of lib yfs's ground-air defences. Is

that what you imagine would

happen? The precise nature of a

a no-fly zone and its precise

operational characteristics

hinges on the definition of it,

the scope, the rules which

pertain to it. We always have to keep that in balance on associated with it, which are

real, against the risks on the

other hand of these uniOfts the Air Force Air Force being deployed

against civilian targets and a

further large-scale loss of civilian life. The

civilian life. The bottom line

is the Gaddafi regime is not finished. It is demonstrated by

its actions and its words what

it intends to do to the

civilian population who are not

loyal to it and therefore our

argument is that we exercise all necessary precautions in trying to

protect the civilian population

and this is one of them. How

do you respond to calls from the Libyan Opposition the Libyan Opposition or

elements of the Libyan Opposition Opposition for air strikes

against the African mercenaries

who are taking orders from

Gaddafi? The imposition of a

no-fly zone is one thing, that

goes to preventing or taking

all actions possible to prevent

the actual use Air Force against its own

population. As for any further

drkt military engagement, that

of course is another matter of course is another matter all together. As the Secretary of State of the United States has

said most recently, and I

believe accurately,er all other

option should of course be kept

on the table but the next most

logical option is the one we

are now discussing and that

concerns no-fly zones. As

Australia is a strong proponent

of this idea, is it prepared to supply strike fighter aircraft as it did as it did in

time I looked at the map, Tony,

we were actually a long way

away from Libya, therefore when

it comes to the deployment of possible assets with a no-fly

zone, the first place that

people would look would be NATO itself and approximate Air

Forces to give it affect. This

is why NATO is considering the matter internally and that is

where it should be properly where it should be properly

deliberated upon. The principle

at stake is a humanitarian one.

next week and see large-scale

strafings and bombings of the civilian population in Libya by

the Libyan Air the Libyan Air Force y thing

many people would question why

we had not acted in this manner. Given the obvious sensitivities about military

intervention in Arab countries,

would it be better

would it be better if the Arab

League, who have suggested this

possible, would be the ones who

impose the no-fly zone, the 22-nation Arab League? Well,

I've just arrived here in Kabul

and been handed one report of a

statement from the Arab League

concerning no-fly

course the position of the Arab

League is important, in fact

it's been quite significant and pivotal in the pivotal in the UN Security Council's decision only several

days ago to refer the Libyan

regime to the International

Criminal Court for for the

other measures announced by the Security Council so therefore is important and if the reports

I have seen are accurate in

terms of its position on the

no-fly zone, then of course

it's possible for states within

the Arab world to assist but as

I said, these matters are now

being actively deliberated upon withininate scpo that should

also be occurring. What do you

make of the intervention from the Venezuelan President, Hugo

Chavez, who claims to have come

up with a peace place or a

model for a peace plan, some kind of intervention to

moderate within Libya between

the opposing forces? the opposing forces? I there is a quite clear

principle here which is that

the Libyan dictator, Gaddafi,

is acting in defiance right now

of international humanitarian

law. It is his action which

must be sceesed. Those who are

seeking to oppose Libyan regime

are simply seeking to themselves on the one hand and secondly, bring secondly, bring about fundamental political change in

a regime which has been

authoritarian for more than

last 40 years. As for shauB's

plan, I have not seen any

detail attached to it, I notice

even President Chavez has said

while he continued to support

the Libyan regime he had

problems with Gaddafi himself.

If Hugo Chavez is saying that I

think we can safely conclude that in fact there that in fact there are and the international community

should be speaking with one

voice and through the actions, through the UN Security

Council, including the one

which we have advocated concerning a no-fly zone. Mr

Rudd, time for a couple of

quick domestic questions. I

appreciate you're a very long

way away but I've got to ask

you this because a lot has

happened since you left. Was

Julia Gillard right to make tackling climate change the defining

defining issue of her Prime

Ministership? Well, can I just

say here and now, look behind me I'm in Kabul,

Afghanistan. I've just been in

Tarin Kowt where we have 1,500 Australian Australian troops. I've been

expressing to them the of the Australian Government

and people for what they're

doing and as well as seeing

what progress, real progress

they've made on the ground,

both in the security both in the security space but

also in economic and social

programs as well, that's my

focus. I don't think it's

really right to get into domestic political questions

from this distance, given I've been away for several day. I

appreciate that. One more

international question, that

that the Foreign Minister of

Japan has just made a unique,

as we understand it, first-time

apology in 60 years to

Australian POWs. Were you aware

of that and what is your

response to that apology? No y

was not aware of it but I do know the Foreign Minister Seiji

Maehara very well and I have

found him to be a very effective and very principled

colleague to deal with as

Foreign Minister of Japan. We

are in fact closely cooperating

on the whole area of nuclear nonproliferation, nonproliferation, arms control and and disarmament as we speak and

a number of other foreign

policy and aid measures

concerning Egypt and the Middle

East. It does not surprise me,

therefore, as terms of what you

have just said, because I believe this would reflect a

principled position on the part

of the Japanese Government, however, at Kabul I haven't

received a text of what the Minister has said so I'd

reserve further comment until

that stage. Can I add one point? Yes,

point? Yes, go ahead. One point just point just about Afghanistan.

Can I just say where I've been

the last day or two in the

province of Oruzgan where our

troops are and in Tarin Kowt, there are measurable

improvements in the security space, economic space and

social space. The perimeters in

which people are operating are much further than they were much further than they were

before. It's still not a done

deal but I would like to say to

your viewers we should be proud

of what our aid workers and

others are doing on the ground,

together with the men and women

of the ADF. Your aircraft was a

little late in arriving because of bad weather so we didn't

have a chance to have any

briefing on where you've just

come from. We're interested come from. We're interested to

hear that but unfortunately

we've run out of time. We we've run out of time. We have

to leave it there. Thank you

very much for being there in A quick look at the weather


That's all from us. If you

would like to look back at tonight's interview tonight's interview or read any

stories or transcripts you can

go to our website or follow us on Facebook Closed Captions by CSI This Program Is Captioned Live.

Live. Good evening and welcome to Lateline Business. to Lateline Business. I'm Ticky Fullerton. Tonight,

on the exchange. ASIC sets out

a timetable for competition

with the ASX but investors

still have lots of questions. Which exchange you might be

buying or selling on, what your brokers' arrange want are, will there be there be any changes in any

costs shareholders will

incur. Also on the program, we

talk to the tax commissioner

about progress on persuading

private equity to reveal where those potentially

point in time I'm encouraged by the response of the association. They'll work with

us and lift levels of

transparency. That's what we want. But will private equity want. But will private equity

play ball? It would be

better if we could get a clear

and precise position from them

right away as to where they

are. I think they're on a

voyage of discovery in trying

to understand exactly what we

do for a living. To the markets

and a flat day despite a The All Ordinaries inched up on

oil stocks and miners, the

ASX200 closed 3 points higher, ASX200 closed 3 points higher,

a better day for a better day for Japan's Nikkei and Hong Kong's hang seng. The end of Australia's 20-year

monopoly on share trading moved

a step closer today with ASIC

releasing a timetable for the

introduction of competition for

stock market services provided

by the ASX, meaning a

foreign-owned competitor could

be up and running by the end of the

reports. It's in very slow reports. It's in very slow

going, Chai-X global, which is

partly owned by Japanese

investment bank numura a plied

for a licence three years ago.

ASIC says that licence could be

granted next month when the

regulator says it should have

full market integrity rules

worked out. I think there's a

real risk we have less

integrity with two operators

initially. Generally when new systems are set systems are set up they're inefficient. ASIC says the operator will need to test its systems but could be fully op

erational by September although investors investors have questions.

There are issues such as chess

arrangements, which exchange

you might be buying or selling on, what your broker's

arrangements are, will there be any changes in any any changes in any costs that

shareholders will incur?

Initially it might though there will be a lot of

positives and lower fees but we

don't have detail around regulation, around the ability

of the operators to give best prices. The incumbent operator,

ASX limited, points to the

regulation of trades executed

in dark pools, in other words

in dark pools, in other words

off market trades by large

institutions to charge clients

or themselves on each side of

the transaction. The ASX says it's an issue unresolved by ASIC.

ASIC. ASIC doesn't have the

resources it perhaps needs to get this done quickly enough

but they need to look at

it. The ASX said the

announcement of timetable for

competition and the prospect of increased increased competition

reinforced the rationale for

its merger with the Singapore

exchange. They would say that,

wouldn't they? They want the

deal to go ahead. The Australian shareholders'

association suspects the deal

will go ahead, hins regulatory haste. There's got

to be some reservations amongst

many parties as to the

effectiveness of the ASX when it becomes under the control of the SGX and

the SGX and that the need to

have an alternative has become

more important. Although it

remains to be seen whether the

new reality is a highly

competitive market or a cozy

duopoly. Tax, it seems, has

become a risk factor for wealthy individuals looking equity in Australia has been in the doldrums since the global the doldrums since the global

financial crisis and now the tax office has multinational deals under

That attention is making the

local industry very nervous as

it works to get back on its

feet. Here's Michael Troy. They

freely admit their services don't come cheap but private

equity firms say nay have

fallen on hard times and are

struggling to raise capital

from wealthy clients keen to get a high get a high return.

here's a picture book, where's

my cheque, are over. The only

big deal to go through in

recent times was for

Healthscope which was bought by the US-based private equity

group TPG Capital and the

Carlyle Group for nearly $3

billion. It really did bring

back into the marketplace lot

of people who'd refleet ed to

Hong Kong or gone back to

Europe or the United States Europe or the United States and didn't want to didn't want to play anymore.

But there are fears this breakthrough may be short-lived with tax considered a big risk

factor. Last year the ATO

failed in its bid to stop TPG Capital sending $1.4 billion

from the Myerer float out of the country tax-free. TPG

Capital was able to take advantage of a tax treaty which allows profits to leave

Australia if they are to be

taxed in the US. The case

though has prompted the tax office to take a office to take a much closer

look at such deals. We'll all

eventually iterate into an

answer with the ATO. It would

be better if we could get a clear and precise position from

them right away as to where

they are. I think they're on a voyage of discovery in trying to understand exactly what we do for a living. The tax issue has made international investors think twice.

Especially with the growth of

Asian markets. We are sort Asian markets. We are sort of participating on the edge or the participate of the world

that is changing the most over

the next 50 years and

increasingly the slower growth

economies of Europe and the US are portfolios. Tax is just one of

the many challenges facing

private equity like the Cooper

review of superannuation. Jo-I

don't think it's a real worry.

It is, however, It is, however, creating

additional priorities for super

funds and so as an industry private equity needs to make

sure that it remains relevant. David Jones from one of Australia's leading private

equity firms, Champ, says the

industry remains There are better times ahead for Australian business and for private equity. Private equity

is hopinging the problems with

the tax office can be sorted out soon out soon to avoid any more

damage to the industry.

Coincidentally, today is also

the annual conference of the Australian Tax Office. I spoke to to the tax commissioner,

Michael D'Ascenzo, shortly

after he gave his speech in

Brisbane. Michael D'Ascenzo,

thanks for joining Lateline Business. Thank you. You

talked about the floods and the cyclone today. you offering particularly to small businesses? I think there's been a lot of there's been a lot of

businesses affected and it's going to

going to be a long haul for many to work their way through

the difficulties. The thing you

should do is take for granted

that the ATO will be empathetic

and try to do what we can to help people over the line where

we can so if you still have a

viable business left we'll work

with you in terms of deferment of of payment options, we can remilt

remilt interest, we can help

you work out your amounts that you owe. Just do whatever we

can basically to make it as

easy for you to get back on the road. Now you've come out strongly this week asking

private equity to identify

their investors to the tax

office, to prove that they're

exempt from Australian tax R.

You confident that private equity will agree to equity will agree to this?

Well, basically the argument

had been not so much in of private equity but the off

shore leveraged buy-outs we're talking about. We're saying,

look, if the ultimate owner is

in a tax treaty subject then

they're not going to be subject

to tax but we need to know

that's the case. What I

understand just in newspaper reports is that the

reports is that the Australian

private equity and collective

investment vehicle in our

representatives are saying that

they'll work with us to try to

do that and I'm locking forward to it's still possible for private

equity to use complex sphrurs

that can block identities as

indeed happened with TPG and

Myerer? Again, we've got our

position clear on what we thing

the law is we're very happy to the law is we're very happy to work with the association to

say what they say they will fly

to do and that is to make

things as transparent as

possible. I think if we have

good levels of transparency the system will private equity doesn't do this,

will you look to a change in

the law? There are already

laws here we can use in terms

of liabilities and assessments. It's a

collection of the tax at the

end of the day and that's a question of what question of what we look at if

we have to. At this point in

time I'm very encouraged by the

response of the association. They'll work with us and lift

levels of transparency. That's

what we all want. You talk

about this tax gap caused by