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(generated from captions) mental health? By the way,

this is not evidence that

is not evidence psychologists

are crazy. Nicola Roxon, did

you first of all withdraw

hundreds of millions of dollars

out of psychology and

counselling. First of all points for creativity in the

way to get your message

through. What we've done is we

have moved some money in mental

health and we've been

absolutely public about this.

We made savings of around $500

million. Most of that was from

the way we paid GPs, but a

portion of that was from the

way we pay psychologists. We

put all of that money

additional $1.5 billion into a

whole new mental health

strategy. The changes that

we've made are ones that are backed up by the changes that we've made, just backed up by the evidence. The

to give you the short snapshot

of it, are ones where there is evidence that shows that

doctors are spending less time

than it was anticipated they

would spend when items were

introduced by the previous

Government. So we are paying

them for the time that they now spend, plus it's mental health, instead of

paying them for double the

amount of time they spend.

Similarly, in the situation of

psychologists, we're paying for

people to have up to 10

consultations a year, rather

than 12. But we have also used that extra money so that people

with severe and persistent

needs that currently are not

getting any proper assistance

can have an unlimited amount of assistance from psychologists,

psychiatrists and others. Yes,

but there have been some changes,

but they have been

haven't taken away an overwhelmingly to target

entitlement from anybody,

haven't said you won't get

services - and we've put more

money in for kids, more money

in for adolescents and more

money importantly in for those

with severe and chronic disease, plus one extra thing

I'm sure psychologists like our

viewer would welcome is several

hundred million dollars to

target those in the most disadvantaged areas where

Medicare hasn't been good at

reaching people because it

isn't where health

professionals are working Let's

see if we can get more agreement from Christopher

Pyne. Do you think they've

done the right thing here?

Tony Abbott as Health Minister and me Secretary introduced the items

or Medicare for psychologists

and councillors, we founded

head space, it's been a great

success. I'm glad the

Government has continued to

fund and support it. Let me

take you to the question. In terms of the question, I'm

disappointed the Government has

cut down on psychologist

consultations. I can

understand other aspects of the

changes they've made. The

reason we put psychologists on

Medicare was because if people

with mental illness haven't got

the money obviously, they're

usually homeless, often out of

jail, usually unemployed with

serious mental illness, they services themselves. If

they're not on Medicare, they

won't go. If they don't won't go. If they don't see

someone when they need the help

they need, there will be a much

greater burden for themselves

and also for the community. So psychologists are I think a

very important part of treating

mental health. I am

disappointed the Government has

taken - I think you need that

guy on your side. He's very

in response. articulate. Make a quick point

in response. I think that people who have mental health

problems, a lot more varied and

the point is the current system

service. is demand-driven and a fee for

service. We haven't been able

to target some of those most

allows us to do that. I'm needy groups. Our package

sorry, that is all we have time

for, so sorry. Please thank our panel, Christopher Pyne, Lee Rhiannon, Sandy Gutman,

Austen Tayshus, Paul McGeough

and Nicola Roxon. Thank you. Next week joined by the Minister for school education, early

childhood and youth, Peter

Garrett, shadow Minister for ageing and mental health Concetta Fierravanti-Wells,

commentator and writer Mike

Carlton, lead singer of the

band Blue King Brown Pa'apa'a,

and independent Queensland MP

and leader of the new

Australian Party, Bob Katter.

Until next Monday, good night. Closed Captions by CSI

Tonight - talking to the

enemy. When government

backbenchers are telling me, the Leader of the Opposition,

that they've got a problem,

inside they are very, very concerned

inside the caucus. I notice Mr

Abbott reckons he talks to

Labor backbenchers. I chat to

Liberal Party frontbenchers

when I cross the chamber, so This Program Is Captioned

Live.

Good evening. Welcome to

'Lateline'. I'm Ali Moore. As

Yemen's President Ali Abdullah

Saleh recovers in a Saudi

hospital from shrapnel wounds the question now country that's desperately what members for Yemen? A

poor, with tribal rivalries,

and a growing al-Qaeda presentation. Whether the

go becoming the third leader to President returns or agrees to

fall in the Arab spring,

there's no clear path to a

post-Saleh era and many fear al-Qaeda under pressure in

Pakistan is wells placed to

exploit the turmoil. Our guest

tonight is Nicholas Burns, former US Under Secretary of

State for Political Affairs. He

Libya will discuss events in Yemen,

terrorism. First or other Libya and the fight against

headlines. The push from the cross-benchers for a complete

ban on live cattle exports to

Indonesia. The climate versus

Xstrata. The legal case which argues Australia's commitment to reduce greenhouse gas

emissions should prevent the

expansion of a coal mine. And

America's most wanted. A month

after the death of Osama bin

al-Qaeda? Laden, who is likely to lead

Tony Abbott's trying to

exploit apparent splits in the

backbenchers have been Lib party saying Labor

approaching him to say they're

not happy. His claim comes as

Labor MP and former human rights lawyer Melissa Parke

says she wouldn't support the

government's Malaysia deal

unless the UNHCR gives its

support. A case of he said/she

said. Tony Abbott says backbenchers have been taking

their complaints about Julia Gillard's government to

him. Last thing I would ever do

is reveal the contents of a

private conversation. But I know because know because they've told me

that there is a lot of

unhappiness inside the caucus.

The government says loose

private talk between political

rivals is a fact of life. I

notice Mr Abbott reckons he

talks to Labor backbenchers. I

chat to Liberal Party

frontbenchers when I cross the

chamber so ... (laughs) ... interesting. Last week the Prime Minister revealed a private conversation she private conversation she had

years ago with Tony Abbott at

an airport after she'd

described Liberal frontbencher Christopher Pyne as mincing and

a poodle. He walked from the

gateway where we got off the

plane all the way to the luggage carousel, congratulating me on my characterisation of Christopher

Pyne. The scuttlebutt about

who said what to who said what to whom in private conversations shows

just how much the gloves have

even though the next election

is not due for a couple of

years. Private conversations

are one thing. Public statements

statements are another. The opposition's been using this against Julia Gillard since she

announced the carbon tax. There

will be no carbon tax under the

government I lead. Now, a two-year-old interview with

Tony Abbott's surfaced where he

also talks about a carbon tax,

after expressing doubts about

the impact of human activity on

climate change. If you want to put a

just do it with a simple tax,

why not ask motorists to pay

more, why not ask electricity

consumers to pay more, and then

at the end of

take your invoices to the Tax

Office and get a rebate. Tony

Abbott wasn't actually arguing

in favour of a carbon tax. He

was talking about all the different options that were

available. Whatever's been

said in the past about a carbon

tax, the government's still got

a job ahead of it to sell it.

Another poll confirmed its unpopularity with voters.

The government says it's seen Treasury modelling showing the

carbon price will help encourage more gas-fired electricity generation.

ABC's been told the modelling's

also showing a 17-fold increase

in non-hydro renewable

electricity generation by 2050. The Climate Change Minister won't publicly release the

modelling for now, or talk about what it's predicting

about the coal industry. It's a very

very comprehensive piece of

work and we'll release it when it's released. And he seized on another report from the Australian National University

saying job losses from the

carbon tax could be absorbed by

other parts of the economy,

which he's calling a repudiation of the Minerals

Council of Australia's Council of Australia's warnings

that 23,000 miners will be out

of a job because of the tax. So

I wouldn't rely too much on the

Minerals Council's assertion

here. Let's not forget in the

resources sector, there's a massive pipeline of investment

in coal and LNG at the and a carbon price is not going

to materially affect that in our

our judgment. The war of words

continues. The Federal

under pressure to put a

complete ban on cattle exports

to Indonesia. Exports to a

dozen abattoirs have already

been halted, after last week's

'Four Corners' report. Now two

private members' Bills are

attempting to force a stronger

line. And some sections of the

meat processing industry

support the move for suspension. I mean, action

needs to happen urgently. We just want the government to

suspend the trade, get everyone

around a table, let's talk

about how we can do it in a way that is sustainable, animal welfare is guaranteed and then

we can move on from in. Meat

and Livestock Australia is proposing its own solution.

It's suggesting restricting

live exports to to just 25

Indonesian abattoirs, under the

supervision of animal welfare

inspectors. Climate change is

being used as a legal argument for

the expansion of a coal mine.

The Xstrata owned Ulan minority

of Mudgee in New South Wales has already won planning approval to double its production but opponents are challenging that decision. They

say if goes against Australia's commitment to reduce greenhouse gas emissions. Karl Hoerr

reports on a landmark case

against coal mine expansion. A

small protest group for a case

that could have big

implications. No new coal! implications. No new coal! We have increasingly robust

evidence that the total cost of climate change under different

scenarios will be enormous. Mining operations Mining operations have long been fought on local environmental grounds. This

time, the argument goes well

beyond one region. A Hunter

environment group says the Ulan

coal mine's expansion should be stopped because it will make climate change worse. Multinationals t size of

Xstrata have the resources to

become responsible global citizens. The plan to

consolidate current operations

would apply for the next 20 years. go years. Maximum production would

go from 10 million tonnes a

year to 20 million. Critics say

over the life of the agreement, 575

575 million tonnes of carbon

pollution will be

created. Expert evidence will

be present ed on the total

volume of carbon dioxide

emissions from the coal and the

true cost of this at a global

level. Bev Smiles says the ahead by the previous New South

Wales Government. At the same

time we've had two other major

very large mines next door to

it, so we're it, so we're looking at

cumulative impact now. If court

approves the expansion,

opponents hope at the very

least conditions will be

imposed on the mining company

so the impact of the plan so the impact of the plan is

reduced. But lawyers for the

mine's owner Xstrata say if the

court demands offsets for the

project it would be guessing

about Australia's future climate company says the approval that

was given was based on more stringent environmental conditions, including air

quality and emissions.

Syrian authorities say at least 23 people were killed and

350 wounded when Israeli troops

opened fire on protesters who

stormed a border fence in the

protesters were marking the

anniversary of the 1967 war

when Israel captured the Golan

Heights from Syria. Israel has acknowledged 10 says they were killed by exploding Syrian mines. Despite

the warning shots that were

fired through the air, still we

found ourselves in a situation

which in angry mob from the

Syrian side tried to reach the

border fence between Israel and

Syria. Therefore we had to the legitimate option of firing towards the feet. The Israeli

Defence Minister e hud barrack

has accused the

government of encouraging the

unrest to distract from

problems in its own country.

Yemen i protesters are continuing to celebrate the

departure of President Ali

Abdullah Saleh from the

country. He was injured in a

shell attack in his compound on

Friday and is recovering from

Saudi Arabia for an operation to removal shrapnel from his

chest. Ben Knight reports. Yemenis have been protesting

here for months. Some of them

died doing it. But now in the

bloc that they call change

square, Yemen is are

celebrating. But officially there's nothing to actually celebrate. The President is

still the President, but he's only only temporarily passed on his powers his Depp pee. The regime

is still in place and the

President's advisers say Ali

Abdullah Saleh will be back. The President will return

to the capital Sanaa after he

has recovered from the injuries

and the burns that he suffered.

He will return back with God's

will, and will come back to

resume his duties according to the constitution. There don't

appear to be many who do believe that Ali Abdullah Saleh

will return or even if he does

that he will be able to his post as President. The

sight of government soldiers

joining the celebrations in the

square makes it look even less

likely. But there are serious

questions over what comes next in

in Yemen. It wasn't the

protesters who brought this

about. It was the military

force of powerful tribal

leaders, some of whom have

their own designs on power and

there are reports that President Saleh's son is President Saleh's son is still

in the capital but preparing The people in Change Square are

not likely to be happy at the

idea of replacing one hardman

with another, wherever he comes from. One Opposition Leader is

calling for unity to stop that from happening. The Planning

Committee is calling on all the

national forces and political

parties to start forming an

interim presidential council,

which will represent all the

national groups. This council

should form a national

government and draft a new constitution which meets

for freedom and well-being.

Stabilising Yemen is crucial to

stop it becoming a stop it becoming a failed

state. And a base for international terrorists. Already, Islamic militants ,

including al-Qaeda, have

managed to take advantage of

the chaos in Yemen to increase

their power. Several cities and

provinces are now beyond

government control and there

are reports of sporadic

fighting continuing between

government forces and tribal

fighters. Even in the capital, some demonstrators have formed

citizen patrols to put an end

to looting. We came out

peacefully. We continued being

peaceful. But when

forces pulled out, we had to protect their government

buildings, the squares, the

people are subjected to

danger. For now, no-one

appears to be making a

significant move to assume

power. But the world is

watching. The US Ambassador has

already met with Yemeni

military commanders, but the

country most concerned is

is likely to be deeply involved

in shaping whatever the future Yemen will look like.

It appears the US

up its campaign of drone

strikes in the north west of

Pakistan. Attacks over the past three days have killed more

than 20 people, reportedly

including the senior al-Qaeda commander Ilyas Kashmiri. As the US trawls through the

wealth of intelligence it says

it gained after the killing of

Osama bin Laden, it's also

looking for the next most wanted new temporary leader of

al-Qaeda, but experts say he's not necessarily at the top of the list. North America

correspondent Lisa Millar

reports. These are just some of

the faces of America's most

wanted terrorists. The list is newly updated, Osama bin Laden

now classified as deceased.

The death of bin Laden marks

the most significant

achievement to date in nation's effort to defeat al-Qaeda.

Other faces, though, are Other faces, though, are now

moving into prime position. The flag-waving and fifth pumping

have passed and the US is focusing on who's next. Clearly

the United States has kill

orders out on a lot of people,

because President Obama has

authorised four times more

drone strikes in his two years

in office than George W. Bush

did in his eight years in office. Peter Burgoyne is one

of few journalist who is have

met Osama bin Laden. The terrorism expert points to

Ayman al-Zawahiri as the next most wanted. The 59 year

Egyptian was bin Laden's No. 2 and is expected to eventually

take control. I've interviewed

a lot of people who know bin

Laden. Even people who

Laden. Even people who don't

like him say he ised a micialg on many levels,

Ayman al-Zawahiri like that. He

describe him as a divisive,

uncomfortable, prickly guy. He

may be lacking his boss's charisma, but it's unlikely to dampen the enthusiasm of

Pakistan's Taliban, reacting here to bin Laden's death. We

have love for his mission and

we had had affection for his

personality. He was an

invaluable asset because he

stood with great zeal against

the American and Zionist

alliance. We have to carry out his his mission. Until he takes

control, al-Qaeda has installed

a temporary caretaker. Saif

al-Adel. He is an Egyptian Special Forces colonel who has

been involved in al-Qaeda since

- before it even existed. He

has been involved with bin

Laden since the 80s. He was

under house arrest in Iran and

spent years away from the battlefield but he is believed

to now be on the Pakistan/Afghanistan border.

This temporary leader is not

considered a permanent

replacement for bin Laden, though.

upset some by opposing bin

Laden's 9/11 plans, arguing

they'd spark US retaliation

that could destroy

But the fact that he's Egyptian

is also an issue, and one that faces Ayman al-Zawahiri as

well. For the Saudis and

Yemenis who make up a lot of

the hard core of al-Qaeda they

want somebody from the holy

land. These are a group of

religious zealots who don't think Egypt is as important.

When and how a decision will be made is

unclear. Some have suggested

the delay points to signs of an internal

internal struggle. Another

element closely watched by the

US is the growth of the Yemeni

branch of al-Qaeda, and the

power held by the American

cleric Anwar al-amount liki. --

al-Aliki. It's a question every

sincere Muslim is concerned

about. He

big threat not only in the US

but a lot of English countries,

he speaks English, colloquial

English, he is an American citizen but he citizen but he is not somebody

of the military or religious

stature of Osama bin Laden. He

won't take over al-Qaeda

central in a month of Sundays.

It just won't happen. But he

has claimed influence over the

20 0 9 Christmas Day 20 0 9 Christmas Day attempted plane booming the Fort Hood

shooting and the attempt attack on cargo planes on cargo planes heading to the US. This counter terrorism

expert warns it's a mistake to concentrates on the names on a

list. The fact remains that if

all we do is terrorism, taking out the next

leader, prevent the next attack

we're a bit like the hamster in

the cage going round and round,

a lot of effort but not a lot

of progress. He says al-Qaeda

has found success in creating a

movement beyond its core, and

the greatest threat to the US

and its allies are the home-grown our countries in Australia, in the United States, we are

concerned not only with people, the foreign-directed threats to

our homelands but also to those

people who have kind of

into this radical, violent

global narrative that says that the west is against all Muslims

and you have to defend the

Muslim nation at all costs.

Those are the most dangerous people. They haven't

necessarily travelled or taken

part in training camps or been in communication with terror leaders but they're inspired

and hard to catch. Matthew lef

Witt wants to see more

strategic counter-terrorism. That means countering the countering the violent extremist message. Getting

involved at the point where

someone might get radicalised

to these ideas so that we have fewer recruits fewer recruits to these organisations moving forward.

We're not there yet. No-one

believed killing bin Laden

would decapitate the al-Qaeda

network . Others have moved to

fill his place on the hit list

and the US the messenger may be dead the

message lives on. Joining me

now to discuss events in the

Middle East and the state

al-Qaeda since the death of

Osama bin Laden, is Nicholas

Burns, former US Under Secretary of State for

Political Affairs and US

Ambassador to NATO during the George W. Bush administration. Let's start with yem yej and

the event in that the event in that country particularly over the weekend,

the Yemeni President is now Saudi Arabia receiving medical treatment. Protesters are

flying flags with the words

"new Yemen". Do you think it "new Yemen". Do you think it

is? It's hard to say. This is a

country that's quite different

than Egypt or Tunisia, it's than Egypt or Tunisia, it's not

homogeneous, it's separated by

historical rivalries among

triks. It's been highly

unstable, really, for the past

20 or 30 years. And for

President Ali Abdullah Saleh to

leave now the question is: will

there be central stability and

authority? It's a very consequential country for the al-Qaeda in the Arabian

peninsula, a tributary if you

will of Osama bin Laden's

al-Qaeda, is a very powerful terrorist group, responsible

for some of the attempted attacks in the US over the ones

that have failed, in the US

over the last several years,

and for some that have

succeeded in the Middle East. What happens there is really

important. Indeed, the CIA

says that al-Qaeda in Yemen is

a more potent threat than al Al in about Pakistan. The US

Government has been of several months right now. Striking at Osama bin Laden and

killing him was a very significant development. It was

a huge blow to al-Qaeda. al-Qaeda has all these

franchises, if you will, these

other operations that might be

mildly in a limited way connected to the main

organisation and some are more

powerful than the home base and that's certainly true of

Yemen. Is there already

evidence that al-Qaeda in Yemen

is capitalising on unrest? I don't think al-Qaeda

in the Arabian peninsula has a

desire to run the government but they want more influence

and they want an environment

where the government is not launching counter terrorism

operations against it. The government of President Saleh

has been highly imperfect. You

have seen the use of force against demonstrators which

against demonstrators which is highly objectionable but they

have tried to strike out

against the terrorist groups

over the last 5 or 10 years.

They've been a very important

partner of the United States.

In this particular case a

change of government might not add up to either stability for the Yemeni people

and certainly might not be

beneficial to countries like my

own that have an interest in seeing terrorist groups

seeing terrorist groups put

down. What does America do in

this instance? I suppose it's

worth noting that it wasn't in

fact the protesters who managed

to get the President out of the

country in the end, it was the

very, very powerful tribes who

managed to get him out. What do

you think, first of all I guess, is the most likely outcome at this point and

secondly what role will

play? The most likely outcome

is had he ont emerge from that hospital in Riyadh and suddenly

appear in Sanaa and take again. He has been negotiating

an exit agreement for himself for the last three or four

months. But he has been

refusing to sign constantly? He agrees and then

he backs off. The US Government

decided about a month ago that

it wouldn't support him any

longer. It felt that he'd lost

credibility in the country and

that we had to take our chances Saudi Arabia? Of course it's a

very big security issue for

Saudi Arabia. What role will

they play and what line do you think they will take? The Saudis are Saudis are very nervous. They

have intervened militarily in Yemen in the last year when

some of this tribal infighting

broke out. U. You spau what

happened when the Saudis became

nervous about Bahrain a couple

of months ago, they sent Saudi

troops. I wouldn't think it's

beyond the realm of the

possible if Saudi Arabia saw the situation in in a direction that was fundamentally against its own

interests, it might inject its

own military force. The Saudi s

are very worried, not so are very worried, not so much instability within the kingdom of Saudi Arabia but the

borders. How woot US respond to

that? I don't think the US would want to see Saudi Arabia take on that

take on that kind of regional

security role. It has a lot of

risks but then again, you've

seen President Obama react quite differently to Saudi

Arabia during the last six

months of this Arab transform

than he did say in Egypt Tunisia. We were quite willing

to cast aside our relationship

with President Ben Ali in Tunisia, President Mubarak in

Egypt, not willing to do so in Saudi

Saudi Arabia. Why? Because we have really significant security interests tied up in

Saudi Arabia. Think of it this way, countering these terrorist

groups, that's an occupation we

have with the Saudis,

containing Iran, the long range

threat of a nuclear armed Iran

and also frankly the oil and

glass that comes out of Saudi

Arabia, all of that amounts to

in essence a hands-off policy,

with the US and other kind of reform in sawed shaud

that you've seen us push for in

North Africa. It makes the US look incredibly hypocritical? I

don't think it is hypocritical. I think in essential the United

States like any other country

has to protect its own

interests in in some cases we

certainly want to see democracy

develop if it can develop in

the Arab world. We've made that

bet in both Egypt and Tunisia. Libya by driving Gaddafi out

but we have concrete interests

of an economic, geopolitical,

counter terrorist nature. It's

difficult to cast those aside.

I wouldn't say it's hypocrisy. I think it's just recognising

that the Arab world has 22

countries. That these crises

are going to play out in a very

different way one to the other

and that you have to protect

your own interests in the

process. It doesn't amount to

in some cases that the deaths

of some are OK, the deaths of

others are not? I don't think

the deaths - I wouldn't say that. I comfortable with the deaths of

certainly not the deaths of

protesters. The US objected

quite strun wussly when the

Bahrain government Bahrain government used

physical force and killed

innocent people in Pearl

Square. It's just to suggest

that over country will look at the Middle East not as the Middle East not as a monolithic entity but as a region that's very diverse, quite complex and if you look

at Egypt, for instance, there's

a reasonable expectation that

with some luck and some hard work, we might see a democratic

society develop slowly gradually over time from the

ground up. There is very little

reason to think that will happen overnight

happen overnight in Saudi Arabia. In millions of people

demonstrateing in the streets of the for change. In Saudi

Arabia you don't. So I think

governments like Australia or

the US will react really to

what the people are dictating

on the ground in these countries. If relation to al-Qaeda you say it was

weakened by the killing of bin

Laden. But it has different

chapters. How do you see I suppose al-Qaeda now as a

global force? I mean substantially weakened with

these chapters never being able

to regain the strength that the

organisation once held, or not? I think al-Qaeda has been substantially weakened because the founder

the founder of al-Qaeda, the

person who was really the heart

and soul of the operation was

killed. He can't just be

replaceed? He can be replaced.

He will be replaced, I think would some difficulty however.

I wouldn't say that this group

is finished. That would be foolish, it would be naive to

think it's finished. These are hard bitten people. They've

proven they're willing to go to extraordinary ordinary lengths to kill innocent civilians this fight against terrorist groups

goes on. May be never ending.

It may go on for years and

years. Therefore we have to be

smart in the way we Quon front

them. I want to look at what

that means for Afghanistan in a

moment but just staying on

Yemen for a minute because the

Saudis have accused Iran of backing rebels in Yemen. Where

do you say Iran fitting into

this very changed landscape in

the Middle East, because of

course, you were the chief negotiator for America in the

three years leading up to

2008? I think Iran is playing a very interesting game. On the one hand it's gone on the

offensive. Iran is fund gd and

arming most of the Middle East terrorist groups that have been

innick kal to the you a authoritarian regime there is.

You see Iran funding trying to sell unrest in places like yem yej and Bahrain. It's

in its interests to do that on

the other hand, the Iranians

have to realise that if you power can succeed in the Middle East, if millions of

people taking to the streets

can topple government, and

that's what happened in Tunisia

and Egypt, it could also happen

in Iran. You remember what

happened in June of 2009 when

Ahmadinejad stole the election,

if you lie, from the Iranian

people. Millions of people on

the streets there, they were

put down by brutal force, but

grievance against the Iranian

government. The Iranians are

trying to capitalise, they're

acting offensively burr they' also quite frightened the

regime. You spent those three

years trying to get Iran to the negotiating table. Do you see

any indication now that

sanctions against Iran, US sanctions, European sanctions, European sanctions

are actually working, that the

Iranian regime has been weakened? I

weakened? I think they're working. I think they're

necessary. Because the Iranians

have turned out every

invitation to negotiation from Bush, from the Russians and the

Chinas into. They're working

but they need to be implemented

in a much more serious in a much more serious way. You've seen financial sanctions

now by the US and the EU. If

the sanctions go on long enough

and if the Iranians continue

with their nuclear weapons

development program, you will

probably see a call for

sanctions against companies

that do business with Iran

particularly in the oil and gas

field. What about the military

option though? Because of

course just two weeks ago, the International Atomic Energy Agency issues a report that

talked of "possible military

dimensions to Iran's nuclear

program". How close do you think they are to developing a

nuclear weapon? What's the time

line? And how long can you be patient? It's clear that they're making progress. It's

clear they're working on this.

It's also clear we have some

time available to the US and other countries ... How much

time? Hard to say. I mean the

IAEA would be would expert on that question but

time enough to construct a

policy that might push the

Iranians perhaps to the

negotiating table, so I think

the trick here is for the US

and other countries to keep military option on the table,

but I think it's very unlikely

it will be used in the short

run. The vast preference of

President Obama is to see Iran

at the negotiating table, try to work out our differences,

through diplomacy. If that's

not possible then the option is

not just for a military strike or offensive military

operations, it's a containment

efforts in essence to surround

Iran, wait for the day when its

government collapses but not to take offensive military

action. You're also the former

US ambassador to NATO US ambassador to NATO if we can

turn to Libya, we've now got

Britain and France deproig

attack helicopters. I note that the Russians say that's one

step away from a land

operation. Can NATO screed? I

think it will. I had my doubts

at the be gng. I didn't think a third

third land war in the Middle

East made sense for my own

country but when the Arab League came

intervene in the inl ternl

affairs of an rar country, when

the Security Council blessed it

I think President Obama had to choice but to go in. Butt US

has stepped back now? Yes and

the problem with the NATO

operation is that is that

operation is that is that it's

had one armed tied behind its

back. It's not used ground

troops. But I think you see

Colonel Gaddafi beginning

left. He is increasingly

isolated. The EU has given

diplomatic recognition and now

some money to the rebel

alliance in Benghazi, and I think it's only a matter of

time now before either

Gaddafi's overthrown from

within its own inner circle, he

a going to be indicted for war

crimes, or else he flees Libya

and seeks refuge in some third

country. You don't see the US

wanting to take over the lead

role again? President Obama

does not wish to take over the

lead role, not with two major

engagements in Iraq and Afghanistan. He wants the European allies, Britain and

France, to take the lead. But

can those countries sustain the

lead? Can they sustain major

military operations for three or four months? Probably not. Such is the state of the European militaries. But I

think Gaddafi might fall before

then. And if not? If not, then

I think you will see NATO do

what it has to do, perhaps with

a reinsertion of a lead

American role to finish the

effort, because stalemate ends

up in a Gaddafi victory. The

only outcome I think that for the Arab world as well as

for the US and NATO is to see

Gaddafi go from power. If we

look at Afghanistan, look at Afghanistan, just this

weekend, US Defense Secretary

Robert Gates says "persistence

would allow the US led

coalition to turn the corner in

Afghanistan by the end of the

year. It has been 10 years.

What does success mean? And

will the allied forces ever get

in? I don't think a

conventional military victory

of the type is possible in Afghanistan. Not

in that particular country, not

given the strength of the

Taliban. So the strategy is to

push the Taliban back. And push the Taliban back. And to

have that military surge dent

the offensive potential of what

the Taliban's trying to do.

It's been 10 long years

on? It's been a long time. To then go to negotiations. You

already see the United States and the Afghan government

trying to talk to elements of

the opposition, the Taliban,

go to the nerktsing table. It

really is probably the only way

to achieve a ceasefire, to achieve a ceasefire, achieve

an end to this war. A conventional military victory, not possible in Afghanistan. What does that mean for President Obama who

just next month is due to start announcing

announcing the plans for the

withdrawal of the US troops.

How does he make that balance

between keeping the line in

Afghanistan, but also I guess satisfying the political

imperative at home? He had

always foreseen that in July

he never said it would be substantial. Given what Secretary Gates said over the

weekend I presume that the US

will leave a very substantial ground force ground force in Afghanistan.

Because we need to continue the

military pressure on the

Taliban, to convince them go to

the negotiating table. Here is

where diplomacy and force are

integrated. I wouldn't see a

dramatic drawdown in numbers

this summer thor Autumn. Is

that domestically political palateable? The President

out of Iraq. He campaigned in

2008 that Iraq was the wrong

war, we should come out of it,

all US combat troops will have

left by the end of left by the end of this year,

he said Afghanistan, however,

required a longer-term effort,

and we've seen we're not going

to leave until 2014. I think

the American people will

sustain that. I think frankly

the economy will be a far

larger and more prominent issue

in the campaign. We've ranged

through the world. Thank you

very much for being so generous with your time. It's a pleasure, thank you.

The Victorian State

Government has been embarrassed twafrs a revealed the twafrs a revealed the then deputy commissioners of the

Victoria Police held a secret

meeting with the premier's closest adviser to discuss

leadership problems in the

force. Sir Ken Jones met Ted Baillieu's Chief of Staff as speculation was building that

the government wanted to replace the Police Simon Overland. Sir Ken left

the force in May after falling

out with Mr Overland. The premier says it's not unusual

for his Chief of Staff to hold

such meetings. Michael meets

with people all the time. That's what we expect of him in

his job. He did that in good

faith. As I said, he doesn't

believe any issues arose to

warrant any further action.

Last month the State Government announced an inquiry into

leadership problems in the

Victoria police. Now just time for the weather.

That's all from

want to look back at tonight's interview with interview with Nicholas Burns or review any of 'Lateline''s

stories or transcripts you can

visit our web sites and you can

also follow us on Twitter and

Facebook. I will see you again tomorrow. Goodnight.

Closed Captions by CSI This Program Is Captioned

Live.

Good evening. Welcome to

Lateline Business. I'm Ticky Fullerton. Tonight - fourth time unlucky for the Hong Kong

float of Resourcehouse, but

Clive Palmer says he

need the IPO and has the cash from Chinese backers. It's

very, very good vote of support

by the Exim Bank of China and

also by the Chinese Government to

to support the project with a

large amount of money. The man

himself may still be bullish,

but potential investors had

serious reservations. Resourcehouse was than control over getting a reservations. Resourcehouse was than control over the resources

themselves, with a fairly handsome flow of royalties back

to Mr Palmer. And he will

talking to the Australian end

of super secret ive Chinese

telecoms giant Huawei. He is trying to shake of allegations

of links to the Chinese

military and win a slice of the

NBN pie. To the markets.

Fresh from the failed float

of his resources house cop in

Hong Kong, mining magnate Clive

Palmer's hitting back at his

critics, claiming he has raised

the money anyway. He has announced an extra $1.2 billion

in funding from China and says

missing out on a share market

listing is no big deal. The

investing community is used to

surprises from Clive Palmer,

but few were surprised by the

weekend announcement that was aban conning the $3.4

billion listing at billion listing at his Resourcehouse mining company on the Hong Kong stock market. The

fact he has been down this path

now for the fourth time is not helpful. It's going to make it

so much more difficult for him with whatever funding options he decides

he decides upon for future of

Resourcehouse. Shortly after

he uttered those words, Clive

Palmer sprang another surprise,

an extra $1.2 billion in Chinese funding for his proposed Queensland and Western

Australian coal ventures and claims claims he didn't need the IPO anyway. It's a very, very big vote of support by the Exim

Bank of China and also by the

Chinese Government to support

the project with such a large

amount of money. So it's very

exciting. Mr Palmer has hit

back at people like Gavin Wendt

and his many other critics

claiming they've got the Resourcehouse story gone. First

time we've ever launched it,

first time the prospectus has

been approved. It was just

people lying to the press or

the press spinning up the articles. Mr Palmer is also

unapologetic for the decision

to walk away from last week's

planned share market listing, factors outside his

control. What we were caught in

really was the movement in

global markets. There was $20

billion wiped off the Australian share market on

Friday alone. Accounting firm Ernst and Young which did some work on the float simp mizs

with that view. Any company

that's going to the market

without a profit history in Hong Kong's relatively unusual. There hasn't been that many

that have got up under the new

listing rules yet. So those

float also get away, but in

periods of stability, whereas

last week was a very volatile

on all world markets and so

they're going to be the first stocks to move away from at that stocks that investors are going to move away from at that point

in time. Long-time resources

sector watcher John Robinson

doesn't quite buy that explanation, though. He

believes the real reason that the the Resourcehouse float was

about 30% overpriced. I think

there were just too many risks

involved in the proposition. I

think that reflected obviously

in the market appetite. John

Robertson thinks there were

also some unusual features in

the proposal which would've left Clive Palmer with 54% of the issued capital. Resourcehouse was in

fact getting a right fact getting a right to mine rather than control over the

resources themselves. With a

fairly handsome flow of

royalties back to Mr Palmer.

This is a model he has used previously, I think it was back

in 2007, a similar done with an ent tie now done with an ent tie now called

Sino iron. Gavin Wendt also

dis Miss The explanation for

axing the Resourcehouse

float. If it's a sound company

with sound projects and good management, even in difficult

market circumstances, investors

will still put Palmer to see if the promised

extra Chinese money actually

arrives and then if the China

First coal projects in Queensland and Western Australia come to fruition.

On the eve of the Reserve

Bank's interest rate decision

most of the data suggest Australia's economy is yet to

rediscover its mojo. The

extreme weather earlier this

year looks to have taken the

wind out of the jobs market. But the Reserve Bank is unlikely to be its No. 1 goal, managing a mining unlikely to be deterred from its

mining boom which has yet to

materialise fully. Earlier I

spoke to our finance correspondent Phillip Lasker.

Since those last weak March

quarter GDP numbers we're not

seeing much data supporting the Australian economy bouncing

back strongly? No, we've had

weak data on credit growth, housing, things of that nature.

Today we saw job ads fall for

the second month in a row. That's only happened - the last

time it happened was in mid

2009, two years ago. Job ads

fell in May 6.5%. Given the

economy is very soft in some

areas, even though we had some

strong retail sales figures recently, retail sales have

been quite weak. We've seen the

Australian dollar affecting manufacturing. People are wondering whether this is a

sign that some parts of the

economy are extremely weak or

even going into recession. I

spoke to the ANZ, and its representative says he's not

worried about these numbers. We

had the very late Easter this

year. Anzac Day straight off the back of that. into the data we can see some

weakness in the first few weeks

of May that didn't persist into

the latter two weeks, but it

was still big enough in those first two weeks that it really depressed the numbers for May

overall. They will be worried

about this weakness extends

another month, but they say

that the mining boom will help

the economy hand these numbers

bounce back. Puts an awful

lot of faith in the mining and

the mining boom continuing

carrying everything forward? Certainly the Reserve

Bank and Treasury,

mining boom to create jobs not

just in the mineth sector but

throughout the economy. Sydney

University's workplace research

centre has done some work on

the type of jobs that are being

create ed in our economy. They

say we're putting too much faith in the mining boom. They

say we're not looking at underemployment, for example.