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Asylum processing thrown into doubt by High Court

STEVE CANNANE, PRESENTER: The High Court has turned nine years of policy on its head by ruling that
asylum seekers held in offshore detention can have their cases reviewed in Australia's courts.

The decision opens the way for hundreds of appeals and longer stays in a detention system already
bursting at the seams.

The Federal Government says there are serious ramifications and it will announce its response in
the coming weeks.

Susan McDonald reports from Canberra.

SUSAN MCDONALD, REPORTER: It was from inside Sydney's Villawood Detention Centre that two Sri
Lankan Tamils learnt of their High Court victory.

SARA NATHAN, REFUGEE RIGHTS ADVOCATE: I've spoken to them and they're really happy that they have
the right of appeal in the High Court.

SUSAN MCDONALD: The men who came by boat more than a year ago were due to be deported.

They pleaded injustice in the review of their refugee claims on Christmas Island. The High Court
unanimously agreed: "The inquiries were not made according to law and were not procedurally fair."

The court has, for the first time since 2001, given them rights to legal appeal in Australia's

DAVID MANNE, LAWYER: This is a landmark decision not only for our clients and other asylum seekers,
but the rule of law in this country.

SUSAN MCDONALD: Refugee lawyer David Manne says the outcome removes a key reason of Coalition and
Labor governments for offshore detention.

DAVID MANNE: We also call on the Government to abandon the offshore processing regime, which the
High Court has unanimously ruled is fundamentally flawed.

SUSAN MCDONALD: The Greens won't wait for Government action. They'll introduce a bill into
Parliament next week giving all asylum seekers equal access to the law.

SARAH HANSON-YOUNG, GREENS SENATOR: So that all people, when they arrive, whether it's on Ashmore
Reef or on the shores of Bondi or the Sydney International Airport, will all have access to the
same rights of protection.

SUSAN MCDONALD: The Government's taking legal advice and says it won't be rushed into responding.

JULIA GILLARD, PRIME MINISTER: Let's not get ahead of ourselves. We've got a High Court decision.
The Government will take legal advice on it.

SUSAN MCDONALD: It's the Immigration Minister's job to map out the path ahead. He's not ruling out
new legislation.

CHRIS BOWEN, IMMIGRATION MINISTER: This is a significant judgment. It has significant
ramifications. It needs to be worked through in a methodical and calm manner, which is what I'll be
doing in coming weeks.

SUSAN MCDONALD: Chris Bowen has been given some advice. He says the High Court's decision won't
undermine the Government's proposed asylum seeker centre in East Timor. And he'd been told cases
from the past can't resurface.

CHRIS BOWEN: The advice to me is that this changes potentially the way we deal with things going
forward, but the people who have already left Australia were dealt with under the law as it stood
at that time.

SUSAN MCDONALD: But there are currently 145 detainees who will now get access to Australia's
courts, and many more will follow.

CHRIS BOWEN: It certainly does mean that the length of time for some people in detention, if they
take up their appeal rights, would be lengthened.

SCOTT MORRISON, OPPOSITION IMMIGRATION SPOKESMAN: People will have to remain in detention. The
Government, with already a detention crisis which is out of control, may well decide to just let
people out.

SUSAN MCDONALD: The Government is bracing for a system that's overcrowded to be even further
stretched, and each appeal not only puts pressure on capacity, it comes with added costs to the
taxpayer for legal aid and government lawyers.

Susan McDonald, Lateline.

Labor responsible for High Court ruling: Morrison

STEVE CANNANE, PRESENTER: A short time ago, I spoke with the Opposition's immigration spokesman
Scott Morrison. He was here in our Sydney studio.

Scott Morrison, welcome to Lateline.


STEVE CANNANE: Now you say that the High Court decision is based on changes that the Federal
Government made in 2008.

How did they make themselves vulnerable to this judgment?

SCOTT MORRISON: Well, what the minister then, Senator Evans, did in the middle of 2008 is he said,
"We're not going to Nauru anymore. Everyone's going to come to Christmas Island where they'll be
processed, and on every single case, we will look at whether I will lift the bar or not."

And he put in place what he called a non-statutory process or an informal process to consider these
applications. And effectively what the High Court has said is that that wasn't good enough.

It failed procedural fairness tests, and as a result, every decision effectively made since then
has been subject to review.

STEVE CANNANE: But if you look at the judgement, it's all about the Migration Act, and that was
brought in in 2001, or it was amended in 2001 by the Howard Government.

SCOTT MORRISON: Well, it was, and what the judgment today found was issues such as detention, the
excision, people's status as an offshore entry person was all upheld today.

Where the trouble occurred today is with the changes that were introduced in the middle of 2008.

STEVE CANNANE: So you think it's got nothing to do with that act that was amended in 2001?

SCOTT MORRISON: Well, the act has been there for a long time; it's been there for over 50 years.

STEVE CANNANE: But no-one's challenged that part of the act, have they?

SCOTT MORRISON: Ah, no. What has happened in the six years, seven years that we had these
provisions operating, there were no successful challenges.

What was challenged in this case was that there was a lack of process in relation to the use of
some information that was done by the assessors, and this was by assessors that had been set up in
a new process by this government.

So, what they decided today was that the changes put in place by Senator Evans were not up to
scratch. And as a result, we now have an enormous mess and everything these guys touch turns to

STEVE CANNANE: Have you sought legal advice as to whether this High Court decision would impact on
your policy of having offshore processing on Nauru?

SCOTT MORRISON: Well, the decision's just been handed down today, but we - it's our understanding,
and I've spoken to Senator Brandis today, SC, Phillip Ruddock, former attorney-general, and as the
minister himself has said, that issues of offshore processing in a third country sit outside this
judgment today.

STEVE CANNANE: So you don't think it'll affect Nauru?

SCOTT MORRISON: No, I'm - we're very confident about that. I mean - and for this reason: Naura has
a completely different system operating there.

What we had in Nauru was a situation which was not described as detention. What this court case
today was all about was detention, and there are a set of rules set down for that and there are a
different set of rules set down for Nauru. And ultimately, Nauru is another country which doesn't
have access to appeals to the High Court.

STEVE CANNANE: David Manne, the lawyer who led this case in the High Court, told me this afternoon
that he thinks it's conceivable that the decision could have broader implications for offshore

Are you certain that it wouldn't have an impact on processing in Nauru?

SCOTT MORRISON: I'm very confident. And, look, I think there's plenty of people who'll want to use
this court case to throw shoes at the old Howard Government policies on this issue and I think
it'll be as successful as the shoe-thrower the other night on Q&A.

We need to look at what this judgment actually looked at, and it was the decisions taken by Senator
Evans as minister.

What he thought was going to be a better process, ended up being an abysmal process, and now is
basically taking the floor out of this government's asylum processing system and created yet
another crisis.

STEVE CANNANE: Chris Bowen said on the 7:30 Report tonight that if you had a system up and running
in Nauru, a processing centre, and it was run by Australian officials, you could potentially face a
High Court challenge.

SCOTT MORRISON: Well, Chris Bowen will use any excuse to not pick up the phone and speak to Nauru.

STEVE CANNANE: So would you have Australian officials running that centre?

SCOTT MORRISON: Well, if Chris Bowen's right, then that means the 47,000 applications that were
made offshore for protections visas in Australian missions and with Australian officials around the
world or the thousands of other applications that are made for skilled visas and others would all
be reviewable by the High Court. So...

STEVE CANNANE: But are you planning to have Australians run that centre?

SCOTT MORRISON: Well, Australian officials were involved last time. Australian officials were
involved last time.

STEVE CANNANE: So couldn't that potentially mean that they could face a High Court challenge?

SCOTT MORRISON: No. No. Because in Nauru, it is a sovereign country in another place, just as his
proposal for East Timor would have, you know, potentially Australian officials working there as

But we're talking about third countries, and this government needs to get serious about
third-country processing, and this judgment today demands it. In fact, if they don't, then this
mess will just continue.

STEVE CANNANE: You describe the judgment today as a terrible judgment. What did you mean by that?

SCOTT MORRISON: Well I think it has terrible consequences for Australia.

It's no reflection on the judgment made by the High Court. I think the High Court has called it as
they've seen it, as they have every right to do, but there are terrible consequences, both for the
taxpayer, both for the integrity of our system.

Let's not forget that this judgment didn't say that these individuals were bona fide refugees. Bona
fide refugees don't end up appealing decisions, because they get yeses.

And what we don't want to see is a return to the bad old days when people game the system, where
they come and they seek to make appeals endlessly in order to protract their stay in Australia.

And, sad to say, as a result of this judgment, and without any genuine action taken by Chris Bowen,
that's what's going to happen.

STEVE CANNANE: The ruling effectively means an asylum seeker who arrives here by boat has the same
legal rights of appeal as an asylum seeker who arrives here by plane. What's wrong with that?

SCOTT MORRISON: Well what it says is that is the case under this government's flawed system. The
Government has the opportunity to introduce its own legislation, which may further restrict any
rights of appeal.

I mean, they could be looking at that at the moment. I suspect Immigration officials are busy
working away in Canberra tonight doing just that.

STEVE CANNANE: But you don't think that's an injustice, that people who arrive here by boat have
different legal rights to people who arrive here by plane?

SCOTT MORRISON: We want to stop people coming by boat. We want to do that for a number of very
important reasons.

One is people die at sea. We want to stop that. We don't want to encourage people to get on a boat.
People who come by plane do not face those sorts of risks.

People who come by plane also come with legitimate paperwork, they come with passports, they come
typically with a visa for entry.

Less than 10 per cent of those who come by plane actually come in the same way someone by boat does
without documentation, with no clue of who they are. So that puts very real risks on the Australian
Government in trying to make a proper assessment.

STEVE CANNANE: But if the people who come here by boat have a flawed system that they go through,
they're processed by somebody who doesn't get the decision right, they have no avenue for appeal.

You don't think that is denying natural justice?

SCOTT MORRISON: We had rights of appeal to a second case officer, which is the same process which
was used by the UNHCR all around the world. So that was the system we had when we were in

The Government decided to change that in July of 2008, and as a result of those changes, we have
the High Court decision that has been brought down today.

STEVE CANNANE: Now, as part of that decision brought down today, the High Court judges found that
those assessing the claims of the Sri Lankan asylum seekers failed to consider all their claims for
seeking refugee status and did not give the men the chance to view information about their home
country as it was put to them by the processes.

They didn't get a chance to combat that. Do you think on that basis those men were denied natural

SCOTT MORRISON: Well, the court has found that. The High Court has found that the process that the
Government put in place was found to be flawed and that the treatment of some information - there
was other criticisms made of information not shown to a minister.

But let's not forget why this obligation and this expectation was created, and that is because the
minister thought he could put in place a non-statutory process and he said he would say, "people
will all go to Christmas Island, and everyone - I will make it a judgment about whether I lift the
bar or not."

And that set up, in effect, what the court has now said was a statutory process which had a higher
bar. Now, that is what they've done. These new obligations and higher obligations were put on the
process and it's failed and we are in the situation we're now in.

STEVE CANNANE: So how's the High Court decision about that, because that sounds like a process?
High Court decisions are about laws.

SCOTT MORRISON: But that's what they made the judgment on. They said...

STEVE CANNANE: Did they change a law in 2008?

SCOTT MORRISON: No, they didn't. This is exactly what the Government has failed to do. If the
Government had actually looked at making a change to the law, which protected a system of
assessment that they wanted introduced on Christmas Island, then they may not be in the situation
they're in today.

I mean, we did that back in 2001 when we set up the process in Nauru. We said - we put in place
changes to the act which enabled us to remove people from where they were intercepted, transiting
through Christmas Island and to put them in Nauru.

And there was a process for that to be assessed and that process has been upheld. There has been no
challenge that has been successful to that process.

What the Government has done is try to go down an informal process and the High Court has said,
"no, that doesn't work. It doesn't cut it. And as a result, every decision you've made in the last
two years is open to question".

And that is an abominable outcome. It's diabolical. And the Government can't get away with just
saying, "oh, look, this was all done by the Howard government".

Not true. Take some responsibility for the decisions they've taken and live with the consequences
because the Australian taxpayer is certainly going to have to.

STEVE CANNANE: Scott Morrison, we'll have to leave it there, but thanks for coming on Lateline.

SCOTT MORRISON: Thanks for your time, Steve.

High Court's asylum decision allows 'fair' hearings

STEVE CANNANE, PRESENTER: For his take on today's High Court decision, I'm joined by barrister and
human rights advocate Julian Burnside, who's in our Melbourne studio.

Julian Burnside, welcome to Lateline.


STEVE CANNANE: Now you weren't involved in this case, but you've been involved in other cases in
relation to refugee law. What do you think are the major ramifications of this decision?

JULIAN BURNSIDE: Well, the most important point of it is that if Australia is going to deny people
the right to seek protection or to get a protection visa in this country, the process by which
that's decided has to be a fair process.

Now, I'm actually surprised at the Opposition reacting the way they have done because I think most
Australians would say that if someone engaged by the Government is going to make a life-and-death
decision in relation to a person, well then they should at least be fair.

And I was a bit surprised also at Scott Morrison saying, "well, you know, you don't need appeal
rights because bona fide asylum seekers, bona fide refugees," he said, "don't need to appeal
because they get a yes"... well the problem is if the process isn't fair, they may get a no when
they ought to get a yes.

STEVE CANNANE: How often has that been the case when there's been a no at the beginning and a yes
later down the track?

JULIAN BURNSIDE: Oh, quite often. In - I think in about 40 per cent of cases where a departmental
officer has said no, the Refugee Review Tribunal has later said yes, and even though the ability to
appeal from the Refugee Review Tribunal to courts is very limited, I think those appeals succeed in
about 10 per cent of cases or more.

And, don't forget, getting it wrong in relation to a claim for protection may mean a person loses
their life.

STEVE CANNANE: We've just heard Scott Morrison also say that the decision was about changes that
went on when Labor was in power in 2008. He said it's not about changes that the Coalition made to
the Migration Act in 2001. Is he right?

JULIAN BURNSIDE: I don't agree with that assessment. The problem arises under the tail end of the
Pacific Solution legislation which the Coalition brought in in 2001, and part of that was that they
excised bits of Australia from the migration zone and said that if anyone lands in those excised
bits, like Christmas Island, then they're not allowed to apply for a protection visa.

And under the previous government they could be carted against their will to Nauru where they would
languish for years whilst the Government waited for some other country to take them.

Now, what Minister Evans did in 2008 was to say, "well, we'll have this informal non-statutory
procedure to assess whether or not I'll let them apply for protection". And what the High Court has
said is that that informal non-statutory procedure, with all of the consequences that it has, has
to be fair.

And that means that the court is able to intervene if the process isn't fair. And again, I think
most Australians would reckon it's a reasonable thing for a person whose rights are at stake and
whose life may be at stake, that that person should be treated fairly.

STEVE CANNANE: Could the Government legislate its way around this High Court decision?

JULIAN BURNSIDE: Ha ha. I'm not going to offer any opinion about how that might be done.

STEVE CANNANE: But they could?

JULIAN BURNSIDE: Um, I think it would be difficult. I don't think they could circumvent it

They might be able to take some of the force out of it. But I really do hope that they won't try,
because I agree with the point that you made to Scott Morrison: why is it reasonable that a person
who claims asylum having arrived by air should be - should have greater legal protection than a
person who arrives here by boat?

When you look at the recent history of Australia, far more people who arrive here by boat turn out
to be fair dinkum refugees than people who arrive by plane and ask for asylum.

Over the last 15 years, on average, about 90 per cent of boat people turn out to be fair dinkum
refugees, whereas only about 20 per cent of people arriving by plane seeking asylum turn out to be
genuine refugees, and it's not hard to figure out why.

Because it is a very dangerous voyage, as Scott Morrison never tires of pointing out, and you've
got to be desperate if you're going undertake that voyage.

Why are people desperate? Because they're fair dinkum refugees and they'll do anything they have to
escape persecution. And frankly, I think most Australians would do the same thing. If they were in
the same position, what would they do? They would probably jump on a boat and try and get to

STEVE CANNANE: What impact has - will this High Court decision have on the court system itself.
Will it clog up the courts?

JULIAN BURNSIDE: Well, it may cause a bubble as first, but I would hope that in response to this
the Government will make sure that the process it puts in place is demonstrably fair, and if it's
demonstrably fair, well then it's very likely that there will be not too many people who seek to
appeal. I think that's not an unreasonable assumption to make given the level of success that most
people have.

STEVE CANNANE: And how far could these appeals go back? Could we be seeing cases going back as far
as to 2001 when the Migration Act was amended?

JULIAN BURNSIDE: No, I think for practical purposes only people who are still in Australia will
have a practical right to challenge the adverse decisions.

STEVE CANNANE: One of the criticisms of detention under the Howard era was that people were in
detention for too long, sometimes for three or four years.

If you have a system where there's endless appeals going on and the court system is clogged up,
could you be revising a time when people are in for long periods, creating tension, creating mental
illness, leading to a counter-productive situation?

JULIAN BURNSIDE: Well that depends on whether you assume that a person who's waiting for a decision
has to remain in detention all that time. Now, I can't think of any good reason why a person should
remain in detention after they have had the basic health and security checks.

It's purely a matter for the Government to decide whether it wants to keep people in detention
indefinitely until they get an outcome at the end of any appeal that they might have.

STEVE CANNANE: But you'd have to have a major policy shift for that to happen and so the major
likelihood is that they would be stuck in detention for a long period of time?

JULIAN BURNSIDE: Well, you know, Senator Evans' announcements in July, 2008 did suggest that the
Government would have a new philosophy of immigration detention, and I hope that they will actually
start to apply that new philosophy.

You know, earlier today I think I heard one member of the Opposition say, "well, look, you know,
this is going to be terribly expensive because there's going to be all these appeals". Well,
offshore processing is incredibly expensive. The use of Nauru is 10 to 20 times as expensive per
head as processing a person if they are staying in Villawood or in Baxter or in Curtin even.
Holding people on Christmas Island is much more expensive than holding them in detention on the

And of course releasing them into the community on bail-type conditions to make sure that they
stick around for removal if necessary, holding them in the community is much less expensive than
holding them in detention, and it's also more humane and it also avoids the inevitable mental
health consequences when people are held indefinitely in detention.

STEVE CANNANE: Scott Morrison just told us that he's confidence that the High Court decision would
have no impact on the Coalition's policy of offshore processing in Naura. Do you agree with his

JULIAN BURNSIDE: I think there is a fairly interesting argument that even if they are held in Nauru
for processing that the decision-making could be subject to the effect of this High Court ruling.
It's not automatic, but I think he's too confident about that.

STEVE CANNANE: What about the Government's proposed processing centre in East Timor, could that be
subject to this decision?

JULIAN BURNSIDE: Ah, it depends on how it's set up. And, you know, the idea of an East Timor
processing centre has some possible merits, depending on how it's done. The crucial thing is, first
of all, that the processing has to be fair, and I would be very interested to hear some member of
the Opposition say, "we do not think that people ought to be treated fairly when they are applying
for protection".

And the second thing is there has to be a guarantee of re-settlement once people are assessed as
genuine refugees. The problem with the Pacific Solution, apart from the fact that it involved
exploiting Nauru, which is essentially bankrupt and at the moment doesn't even have a functioning
government, the difficulty with that is that it left people in limbo for years even after they had
been assessed as genuine refugees.

You know, there were people who were picked up from the Tampa in 2001 who were held on Nauru until
2006 until they were then eventually brought to Australia.

Now I can't think of any good reason why people who were ultimately found to be refugees should
have been held on a desert island in the middle of the Pacific at enormous public expense rather
than doing the obvious thing and bringing them to Australia since they had already arrived in an
Australian territory at Christmas Island.

STEVE CANNANE: Julian Burnside, we'll have to leave it there, but thanks for talking to us.


they had arrived on Australian territory on Christmas

Anti-bikie laws unconstitutional: High Court

STEVE CANNANE, PRESENTER: The High Court has handed down some other important decisions today.

In Adelaide it's ruled that South Australia's anti-bikie legislation is unconstitutional, in a
decision that could affect moves by other states to introduce similar laws.

The High Court agreed with gang members that a section which prevents bikies associating with one
another is in breach of the Constitution.

From Adelaide, Rebecca Brice reports.

REBECCA BRICE, REPORTER: Bikers of all denominations met to show their pleasure at the High Court's

MICK MACPHERSON, FINKS SPOKESMAN: We knew that it was unjust and we're now the law-abiding citizens
and now they're the outlaws because they've written something which was illegal to start off with.

MIKE RANN, SA PREMIER: Any bikie, whether they're at the Talbot Hotel now, sinking a Jim Beam,
popping a pill or going out the back to fire up a bong, needn't celebrate too early.

REBECCA BRICE: The Government had appealed after two Finks raised the case in the South Australian
Supreme Court which ruled the section unconstitutional.

CRAIG CALDICOTT, LAWYER FOR FINKS: This is bigger than bikies. It's about your right to associate
with whomever you like whenever you like.

REBECCA BRICE: Six of the seven judges found the move to prevent bikies from meeting, phoning or
even writing to one another went too far. It amounted to enlisting magistrates to carry out the
wishes of the Police Commissioner.

Chief Justice Robert French said the section was repugnant. He said: "Courts and judges decide
cases independently of the executive government."

The Premier Mike Rann, who's built a reputation of being tough on crime, isn't smarting from the
loss; instead he's upping the ante.

MIKE RANN: My advice to the bikies is: if you celebrate now, wait and see what we're doing next.

JOHN RAU, SA ATTORNEY-GENERAL: There will be legislation in the Parliament within months which will
address all of the matters raised here.

REBECCA BRICE: The decision is expected to have implications for other states which joined the
action and have been planning or have introduced similar laws.

But not all states have taken the same approach.

JOHN HATZISTERGOS, NSW ATTORNEY-GENERAL: The issues that were the subject of the South Australian
decision are not issues which parallel in the New South Wales case.

REBECCA BRICE: In an extra blow, the South Australian Government will be forced to foot the bikies'
legal bills.

ISOBEL REDMOND, SA OPPOSITION LEADER: What is the estimated total cost to the taxpayer for the
failed Supreme Court and High Court challenges to the anti-bikie legislation?

'FERRET', FINKS MEMBER: Mike Rann has egg on his face now. He's used the - he lost in the Supreme
Court. He used taxpayers' money to try and wipe the egg off his face in the High Court.

TOM MACKIE, DESCENDANTS MOTORCYCLE CLUB: He'll go down in history as the Premier that united us,
politicised us and now legalised us. And that's not what he wanted to go down in history for.

REBECCA BRICE: The cost of the High Court action is expected to run into hundreds of thousands of

Rebecca Brice, Lateline.

Students could take ATO for millions

STEVE CANNANE, PRESENTER: In another landmark High Court ruling today in Melbourne, the Tax Office
may be forced to repay millions of dollars to students around Australia.

Former student Symone Anstis won her court battle against the ATO after it rejected her claim for
education-related deductions. She was receiving Youth Allowance while she studied at Melbourne's
Australian Catholic University.

SYMONE ANSTIS, STUDENT: It just seemed unfair that since I was being paid to study, that I wasn't
able to claim the expenses. I guess I realise that it will affect lots of students, but I just
didn't realise it would go all the way to the High Court.

STEVE CANNANE: Today's decision could pave the way for thousands of Youth Allowance recipients to
claim tax deductions. The Tax Office says it's considering the impact of the judgment and has asked
students to be patient.

Business underway at G20 summit

STEVE CANNANE, PRESENTER: The G20 Summit in Seoul has formally been opened.

It's hoped the leaders will be able to reach an agreement on overhauling the global financial
system. But a row over currencies and trade balances is threatening to overshadow that project.

Chief political correspondent Mark Simkin reports from Seoul.

MARK SIMKIN, REPORTER: The leaders got down to business - big business. They want to reshape the
global financial system.

Banking is high on the agenda and Julia Gillard took her fight with Australia's big four to an
international audience.

JULIA GILLARD, PRIME MINISTER: Our domestic debate, however, at the moment is overshadowed by
community concern and anxiety about mortgage rate increases. And as a result, the Government is
moving to increase competition in our banking sector.

MARK SIMKIN: The Prime Minister's written speech directly accused the banks of ripping off
consumers, but she pulled the punch when delivering it.

JULIA GILLARD: We want to better empower consumers to move away from banks when they are unhappy
with their banking arrangements and believe that they are being ripped off.

MARK SIMKIN: One of the targets was in the audience. ANZ's chief executive defended his decision to
raise rates by more than the Reserve Bank did.

MIKE SMITH, ANZ CEO: I actually feel that the customers in Australia get pretty good value for the
services that they have. I think what we haven't done very well is explain ourselves and been as
transparent as we should have been.

MARK SIMKIN: The G20's considering tougher rules for banks, although ironically, the Government's
lobbying for Australian institutions to be exempted.

WAYNE SWAN, TREASURER: There will be absolutely no fig leaf or no excuse for any domestic bank to
blame any interest rate rises on the decisions that are taken here.

MARK SIMKIN: These protestors want more radical changes to the global financial system. The police
arrested this woman when she tried to set herself alight.

Amid two days of talks, two minutes of silence. The British, Canadian and Australian leaders
commemorated Remembrance Day and the 60th anniversary of the Korean War.

An Australian who fought on the frontlines here helped Julia Gillard pay tribute to the dead. It's
the first time he's been back.

VETERAN: Marvellous how it is now. You wouldn't believe it.

MARK SIMKIN: Seoul isn't the only thing some of the veterans liked the look of.

VETERAN II: You're one of the best-lookers in Parliament.

JULIA GILLARD: Ohhh! He's a cheeky one.

MARK SIMKIN: The leaders will try and resolve the foreign exchange war that's straining US-China
relations. Julia Gillard called for a ceasefire, arguing countries shouldn't manipulate currencies.

Mark Simkin, Lateline.

Oil fire caused Qantas engine explosion

STEVE CANNANE, PRESENTER: Oil fire in the engine is the preliminary finding of the cause of last
week's Qantas A380 mid-air drama over Indonesia.

The European Aviation Safety Agency has made the initial finding and recommended the Trent 900
engine be subjected to repetitive inspections.

Qantas says it's not planning to fly its A380s until the airline is certain they are safe, which
could be at least a fortnight.

Karen Barlow reports.

KAREN BARLOW, REPORTER: Grounded until further notice, the Qantas fleet of flagship A380s are still
being checked after last week's catastrophic failure of a Rolls-Royce Trent 900 engine.

OLIVIA WIRTH, QANTAS: Qantas is working very closely with Rolls-Royce engineers, we're working very
closely with Airbus and also authorities in both Australia and overseas to ensure that we can get
the A380 back in the air, we can get it back safely and we can do it as soon as possible.

KAREN BARLOW: Qantas says passenger disruptions will be minimal. The airline has 250 aircraft,
including 26 Boeing 747s, which are now covering the A380 flights for at least the next fortnight.

OLIVIA WIRTH: Unfortunately we are unable to tell our passengers when the A380 would be back in the

KAREN BARLOW: Europe's air safety authority has found the preliminary cause of the incident.

In an emergency air-worthiness directive it says, "... oil fire ... may have caused the failure of
the intermediate pressure turbine disc." The EASA says, "... if not detected, (this condition)
could ultimately result in uncontained engine failure".

And that's exactly what happened, with large parts of the engine casing piercing the wing and
raining down on the Indonesian island of Batam.

Aviation engineers say this is an engine design fault that can be easily fixed. Many say Qantas is
very lucky the engine disintegration was not worse and that the oil fire was not closer to the fuel

While the Qantas incident investigation is underway, the European Aviation Safety Agency is
demanding repetitive Trent 900 inspections. Singapore Airlines has replaced three engines on three
of its A380s.

CHEW CHOON SENG, SINGAPORE AIRLINESS CEO: The truth, the facts of the matter as to what happened,
you know, what was the causes and so on, I can't speak to that because the investigations and so on
are still going on and it's more something that Rolls-Royce is in a much better and more valid
position to address.

KAREN BARLOW: Rolls Royce is yet to make a public comment on its faulty engines.

Karen Barlow, Lateline.

'Honeymoon Killer' released to detention centre

STEVE CANNANE, PRESENTER: The future for American Gabe Watson remains uncertain following his
release from a Queensland prison early this morning.

The so-called "Honeymoon Killer" is now in a Victorian immigration detention centre.

The Australian Government is demanding assurances from Washington that he won't face the death
penalty if deported.

From Brisbane, Natalie Poyhonen reports.

NATALIE POYHONEN, REPORTER: Gabe Watson's first moments as a free man started under intense

He left the confines of a prison cell, but was immediately transferred into immigration custody and
taken to Brisbane Airport before being sent to a Melbourne detention centre.

But there's confusion over when he'll ultimately be sent back to the United States.

UNNAMED MAN: The only thing I've been told is that it could take weeks or it could take months.

NATALIE POYHONEN: The convicted killer could be released into the community if he's granted a
temporary visa.

CHRIS BOWEN, IMMIGRATION MINISTER: He is entitled to make an application to me, which I will then
be duty-bound to consider.

NATALIE POYHONEN: Gabe Watson has completed the 18-month sentence for his wife's manslaughter
during their Australian honeymoon in 2003.

Authorities in his home state of Alabama want to charge him over Tina Watson's death and they've
promised he won't face execution if convicted.

But the Australian Government says that guarantee has to come from a federal level before they hand
him over.

CHRIS BOWEN: Once we have that, then I would take steps to deport him expeditiously to the United

NATALIE POYHONEN: But Alabama's top prosecutor says their Federal Government doesn't have control
over the state's actions.

DON VALESKA, ALABAMA ASST ATTORNEY-GENERAL: Not under the US Constitution or Alabama Constitution.
I mean, we are a sovereign state and they haven't interfered in our proceedings before.

NATALIE POYHONEN: Tina Watson's family say they don't know what's going on.

TOMMY THOMAS, TINA'S FATHER: He's been given a lot more consideration and treated more like the
victim than our daughter Tina has been.

NATALIE POYHONEN: Gabe Watson will be detained for at least another night while the deportation
negotiations take place.

Natalie Poyhonen, Lateline

place. And now to the weather: And that's all from us. If you would like to look back you would
like to look back at tonight's interviews with Scott Morrison and Julian Burnside or review any of
Lateline's stories or transcripts, you can visit our website. And you can also follow us on Twitter
and FaceBook. Leigh Sales will be

back tomorrow night. Goodnight.

Closed Captions by CSI. This Program is Captioned Live.

Good evening, and welcome to Lateline Business, I'm Ticky Fullerton. Tonight, the number of people
in work is booming but a unemployment with more people out looking for jobs.

There are a large number of people that are going to work because they have to, people are having
to add more paid work to the labour market just to make the bills pay.

What to do with the mining money, mining money, the original thinking behind Norway's sovereign
wealth fund sovereign wealth fund still sounds like a good alternatively.

Dual purposes at the time, one was to stabilise the economy, avoid a so-called Dutch disease,
overheating the domestic economy, and the other was very much to spread was very much to spread the
wealth over many generations.

And ka Optus keep making inroads into Telstra?

The major players have a fight on their hands retaining market share.

To the markets and Wall Street snapped a losing streak on rising oil prices. The threat of higher
interest rates is still very much alive despite a surprising rise in unemployment. Australia's
unemployment rate jumped to 5.4% in October, a 6-month high. But the increase came courtesy of a
record number courtesy of a record number of Australians flooding back to the jobs market. Here's
Philip Laskar. You might have thought the surprising jump in unemployment would raise questions
about the wisdom of the Reserve Bank's latest interest rate hike. On the contrary.

Overall I think there's numbers are consistent with an economy that's still moving along at a
pretty solid pace.

Although unemployment jumped from 5.1 to a 6-month high of 5.4% high of 5.4% there was a solid pick
up in employment and at 65.9% the participation rate has never been higher. In other words, a
record number of Australians were either working or looking for work.

Usually, you know a strong labour market encourages new entrants in and that's why we're seeing a
rise in participation and participation actually hitting record levels.

But the story behind the record high participation rate is not universally positive.

There are a large number of people going to work because they have to, people are having to add
more paid work to the labour market just to make that's really not a good thing. I think we need to
start asking ourselves about the share and the distribution of income in the country, not just how
many people are working.

But the rise in the number of people working or willing to work will help keep a lid on the wage
inflation the Reserve Bank watches so closely.

That's an encouraging sign but I don't think that Reserve Bank is going to rely on that to help
contain inflation over the medium term. We know that this terms of trade shock, the accompanying
investment boom that's pending as well as the construction activity is going to place additional
pressure on sure if the supply is going to be enough.

And that tells me that whilst the Reserve Bank is probably likely to pause in December, we should
expect more interest interest rate hikes interest rate hikes as we go into 2011, probably in
February next next year.

And most economists say that despite today's spike in unemployment the Government's mid year
economic forecast of a jobless rate of 4.75% by the middle of next year is still credible.

Going forward I think participation will stay high but by the same token the economy will generate
enough jobs to absorb those extra workers and so as a result by the beginning of next year, at
least for the first few months of next year we see the unemployment rate falling below the 5%

And that's what some would call full employment. Overseas now and the storm clouds are gathering
again over Ireland. Bond yields have spiked alarmingly as rumours sweep the markets that the
country will not be able to pay its debts. Aside from Europe's sovereign debt woes, the other big
head winds for the global economy, currency wars and trade imbalances, look to fudge at the G20.
Joining us live from London to discuss this a little more is dooifd Buik from GPC Partner. Let's go
to Seoul first. The Americans began attacking China's trade surplus call fg targets but it's the
American printling presses, isn't it, that have got the most flak?

Good evening, Ticky. Yes, I think you're absolutely right. you're absolutely right. The question is
that there is a very, very strong gathering feeling now that there is no evidence actually works.
It does create an environment, maybe a false environment, of environment, of better confidence but
whether it actually creates growth is very much in doubt and because the President of the United
States is absolutely adamant that he will not deal with the growing budget deficit, you can't
really blame China, seeing that what he's doing to the United States is almost certainly
inflationary and it was almost certainly keeping the dollar unreasonably low allowing exports to
pick up yet in the same breath he's turning to China and saying please revalue your yuan and the
answer is why should he? China has, of course, a very, very strong economy which was upgraded by
one rating agency this morning, slightly disturbing the fact that PPI came in at 5%.

Yes, what sort of an impact what sort of an impact has that increased inflation figure, is it going
to have?

Well, I think the other thing it is going to have is that they will of course turn against of
course turn against the banks and put even greater restrictions on capital and also on lending,
which they did last week. They are obviously very conscious of the fact that if PPI is that high
got to be very careful on inflation and they are about the inflow of hot money. So that has, you
know, something that has to be very carefully watched. I think to be honest, apart from rhetoric
and brew ha ha we're not going to get much out of Seoul in the next couple of days. There are
thing, of course, that China wants and that is greater say in membership in the IMF which is
totally understandable is totally understandable but I always believe when politicians take the
dirty linen out and wash it in public it has a very dire effect and I think dire effect and I think
the conversations will be much more meaningful between President Obama and also the Chinese Premier
than they would be seen all over the headlines in the newspapers.

As you say, President Obama doesn't look like he's going to back down. China and indeed Germany
with trade surpluses don't look like they're going to back down. Mervyn King, the Bank of England,
said yesterday the world economy is facing difficult and dangerous times, how is all this going to
play out?

The fact is that I mean he is obliged to say what he has said, Mervyn King, because of what the
stance the UK Government has tried to take by cutting public it's in his interests to see the
imbalances ironed ow. I think this is an ongoing process and I don't see any outcome at all. I
think basically what we can hope for is some accord until we move on to the Next G 20 meetings. In
terms of coming up with something concrete I simply done see it.

Move back to Europe and Ireland, this buyers' strike in the Irish bond market, what's that going to
to do for the country?

I think the situation is a lot more dire than the quaitious and governor of the Bank of Ireland has
said. They are and they had a considerable amount of foresight covering their entire financing of
their debt up until April next year but the problem is with the banks, which as I understand,
they've got something like they've got something like ?85 billion worth of liabilities and they've
been asked to make further cuts in their expenditure, the Irish Government, of 6 billion. The rate
for the 10-year bond is 8.6 which is a full 6% above what Germany has to pay and there is no way
that anybody can see that they can sustain interest rates interest rates of that level. Mr Horitan
said quite candidly only 35% of this debt that's been created by the bank has to be met by the
Irish Government. I don't know where he expects the rest of it to come from because people have
lost billions and millions of pounds all over the world investing in this banks who have lent
against property.

If the Irish Government Government does run out of cash early next year do you think the EC bsm - B
will step in?

They are obliged to. I think they will go money is cheaper there than it is coming out of the ECB.
They have to stand behind each other otherwise huge cracks in the validity of the euro think
Ireland is in a dire state of disrepair.

Good to talk to you, thanks for joining us. Changing of the guard today at the Fairfax media AGM
with the farewell speech by John B Fairfax. The company which has had mixed results in the past few
years is moving future in digital media but some shareholds were more interested in the quality of
Fairfax Fairfax journalists criticising the metropolitan mast heads for printing biased reports.
death of print journalism has long been talked about but for most shareholders the immediate future
of newspapers seems assured.

I think the physical newspaper will decline. I don't think it will ever disappear because everybody
likes to physically hold a newspaper and read it although I can understand that younger people do
not often buy newspapers.

Media is on the downturn, media is on decrease so they're battling that society doesn't want
newspapers anymore.

While debate continued over the future of newspapers behind closed doors, non-executive director
John B director John B Fairfax decided it was time to leave after 50 years in the industry making
his retirement speech. But Mr Fairfax said he doesn't need to spell out the significant changes
that have taken place over time and he looks forward to the future of this company with great
optimism. And although those changes alluded to the rise of the digital media, Fairfax leaders say
it will flagship papers.

In my view we need to continue those mast heads in those businesses for as long as they are
profitable and I think that's for a long time into the future.

That printed word is still very fundamental to so much of our way of life and developing our own
thinking processes in community.

The company was hit hard by the global financial crisis. It had a net loss of $380 million in the
2009 financial year but was able to claw its way back into last financial year posting a profit of
$282 million. And where 7 to 8 years ago the metropolitan newspapers accounted for accounted for
70% of the company's assets, it's now diversified with the 'Age' and 'Sydney Morning Herald' only
worth 10%.

More people now are exposed to Fairfax and its journalists, journalists, by definition, than at any
other time in Fairfax life.

But online sites generate a smaller yield than print with Fairfax week.


its pricing strategy next week.

Our paid online models need to be similar to, as another industry to say pay TV industry.

Shareholders did get a chance to have their say with one well known activist, Jack Tilburn, taking
aim at chairman Roger Corbett.

I was completely 110% disappointed with his corporate governance which I think was unforgiveable
and unforgettable. It was complete dictatorship.

Several shareholders also complained of the organisation's called the 'Age' and 'Sydney Morning
Herald' newspapers left wing rags with anti-Israeli sentiment. Claims the company rejects.

I took quite some time today to defend our journalists and their independence. The board does not -
it's interested, of course, fair play and appropriate bs and all that stuff but it leaves the
balance of balance of the papers to the judgment of the editors and the publishers.

The company says it's seen improved trading conditions for the first 4 months of the financial year
and an increase in revenue 4% and expected to announce high single digit earnings growth in half
year results. Australia's largest steel maker Bluescope Steel is warning that it may post a loss
for first half next year if the current tough conditions continue. COE Paul O'Malley told
shareholders at the company's AGM in Melbourne that they were facing major headwinds, steel prices
are low, iron ore costs are high and the strength of the dollar is hammering earnings. Australian
exports are the worst performing part of the business and growth in the US is weak.

We are in a very volatile cycle in the second quarter of this calender year that as a company we
made nearly $200 million. So you don't have to see much of a drop in the exchange rate or an
increase in steel prices increase in steel prices and the earnings power of this business comes
through. We're very lucky as a company we're very well positioned in the growing markets of China
and South-East Asia.

Bluescope's China business is performing well with another record year ahead with the Asian
business overall remaining solid. Optus has lifted half year net profit by 19% on the back of a
performance by its mobile phone division, however maintaining that growth may be hard in the face
of an aggressive campaign by Telstra to regain market share. The real battleground in the
Australian tele communications sector is in the mobile space and at the moment Optus is doing well.
It's a point not lost on shareholders like Arnhem Investment Management.

Delivering 10% revenue growth on the mobile side which is very strong and keeping keeping the
margin at the same level which is always the

profit was up 19% to $345 million with the bottom line also helped by tight control of costs which
rose only 2%.

We added 189,000 new mobile customers in the quarter, 143,000 of these adds were post paid
customers an the numbers bring customers to 380,000.