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Live. Tonight - Labor's

election post-mortem. We must grow and rebuild Labor's

membership across Australia.

significant and profound What we're releasing is a

proposal to really engage the

Australian public on the progressive side

make a concerted effort on that in the future.

Good evening. Welcome to

'Lateline'. I'm Ali Moore.

China is our biggest trading

partner and increasingly a

dominant force in the global

economy, but it's also a growing military power, stranging

dynamics in the Asian region.

It's a new reality Australia

has to plan for when China

challenges American supremacy

in Asia, what will it a far less powerful ally I do

think Australia as we look into

the future 20 or 30 years has

to recognise the possibility

our interests and America's

interests might not coincide.

It might be the United States

loses interest in Asia, that's

not impossible If we had a major crisis and a major power

in the region was trying to coerce Australia in a strong

way, in a way we desperately

need to

we'd be on our own. That's the

China debate Australia has to

have coming up later. Also

tonight we'll quiz former Premier Bob Carr Premier Bob Carr on Labor's

bout of self-analysis. First

the other headlines. Days of

rage, the death toll rises as

the Middle East is rocked by

more demonstrations. Forrest

felled, a court's ruling could

see the billionaire mining

magnate banned from directing

his own company. And a growing

problem - more and more Japanese mothers

their babies. After a

disastrous campaign that just

narrowly avoided handing Labor

are humiliating defeat, questions

are being asked about how the

party can do a better job next

time. Most of those

discussions are happening

the behind closed doors, but even

the relatively minor details of

a report into Labor's campaign

put into the public domain

today are causing ructions.

Here's our political

correspondent Tom

Iggulden. Labor's three wise

men were appointed to find out what went so wrong in the last

election. Former Premiers Bob

Carr and Steve Bracks, along

with Senator John Faulkner, finished

finished their report for

Labor's national executive

month. Today part of it was

released, but only the part

that deals with Labor's rank

and file the. The main recommendation, giving

non-party members a say in

pre-selecting candidates. We know this has been a feature of

and the political fabric in the US

and Canada and some other

countries, but we believe it's areas around the country. The time

formula wouldn't be exactly the

same as the American system. Non-members would get 20% of

the vote, ALP affiliated unions

another 20% and 60% to local

ALP members. But the idea already has some in the party

wondering if that's what's

going to help Labor revive its

slumping membership. I would

probably describe primaries as

selections the most corrupt of the

selections because it simply

becomes about who's the richest

person that's able to raise

campaign. It's not a system I

find attractive at all. I

think it will completely

and devalue the role of the rank

and file member of the Labor

Party and will actually lead to an Americanisation of politics

that I wouldn't support. But

Steve Bracks has another way of

describing his idea.

Democratisation of the party,

having the national executive,

whole of the party membership, a portion of it, elected by the

having primaries so that Labor

supporters in seats be. Unions are luke-warm about who the candidate will

the idea, which could

potentially dill ute their sometimes controversial

influence in pre-selection

closely at that process and races. We'll be looking

having a discussion with our

affiliates about the process

as long as the best candidate recommended in the review, but

is put forward for the party, a

candidate that will represent

the interests of its branch and

of its local constituents, then

that would be okay by the union movement. For all the toing and

froing about the role of the

Labor Party's rank and file, leadership and its senior

campaign team in particular are

the main concern of the review.

National secretary Carl beetar

is, according to media

on the verge of being dumped, as recriminations begin

following Labor's near loss. Those aspects of the review

weren't released today. The other matters are really a matter for the national exec it

I have. We're very pleased

that the review focuses on the

future, on the way forward for

the party, and is not about naming, blaming or shaming anyone. Today's report side-steps another issue that's

come under scrutiny since Kevin

Rudd won Government, giving the Prime Minister the power to

choose min sters. The leader

should pick their front bench

team and I will continue to do team and I will continue to

that. But that's not the end of the discussion, say the

report's authorise. The report

contain s a discussion and

argument about that important

issue and, as we speak, our

colleagues in the national

executive are looking at how we

will progress those recommendations. The national executive meets to the secret and publicly released elements of the report

in April. To discuss the report's recommendations

further, I was joined a short

time ago by the third member of time ago by

the review committee, former

NSW Premier Bob Carr. Bob Carr, welcome to 'Lateline'.

Plerkure to be here The report

released is very membership

focused. Given the breadth of

the terms of reference where is

the rest of the report Well,

there was a detailed analysis

of the last election, that has

gone to the national and they can make a decision

about whether that's released

to the public. In the spirit of reports that the Labor Party

has had before, indeed that the

coalition has had before, into outcomes, I think it's unsatisfactory election

appropriate that the party make

a considered judgment about

what is going to be publicly

released and what is going to

be absorbed by the party organisation. Would you be urging them to release as much

as possible? I want as much of

it to come out as possible. We

had meetings with rank and file branch members who are very

concerned about the their party. I want to see

them able to read as much of their concerns and our

responses to their concerns as

possible. But there is some material about campaign

technique s and there will be a

legitimate concern that that be

considered by the party but not

necessarily shared with our

opponents Could that be used as

an excuse, though, that the question remains why would

someone join the party if the

upper echelons of the party are

going to keep them in the dark about very like analysis of campaigns, like

like policy development, like all

all those things we've not yet

seen? Oh, no, I mean, the

material that rank and file

members are interested in potential members are

interested in is out there

now. There's no analysis of the

election campaign, no

examination of performance.

No, no, but that's material,

detailed material, about how

the party ran the technical

side of the election. That is

there for the party to be

considered. You don't think

rank and file would like an

analysis of that, would like to read that? of the election, I'm talking about

about very technical insider

stuff. What is out there today

is what is vital to the future

of the party as an organisation, which is participation, broadening the

party, a party that moves

beyond the 100-year-old branch

structure that we've all worked

with and becomes an online presence, a party in which rank

and file members participate in

the election of a proportion of

the national executive which is

a first, a party

offering an amnesty to people

who were disillusioned with it

over one or two issues, saying

to them, "Come back, think about us about us again," and a party

that's prepared to experiment

with a primary system. These

are big changes and they're all about involvement

about involvement and they're all about participation. I'll

get to the primary system get to the primary system and some of your other suggestions

in a minute, but I guess you say it's the technical aspects

that have not been released.

Let me ask you what was your review's assessment of what

went wrong with the election

campaign? Clearly it was not a

satisfactory election campaign. What was it that wrong? In the past, when

first-term Governments went to

the people at the State or

national level, they've been

emphatically returned. At the

national level, very national level, very often with reduced majorities, at

reduced majorities, at the State level almost invariably

with increased majorities, first-term Governments. A first-term government that saved Australia from a

recession that was dragging down just about all of the

developed world and rebuilt,

among other achievements, the

nation's school systems is entitled

be returned with a vote of

confidence. What was your

analysis of what went wrong?

Oh, a range of things, they're

technical, the substantive policy decisions, clearly a

week of leaking against the

party did enormous damage, and

clearly going to the party

after a change of leader meant

the party was wrong footed at

the very start of the campaign.

Nonetheless, given the fact

that the Government had saved

Australia from the global

financial crisis, given that they

they were, among achievements, rebuilding the nation's schools, we're

entitled to expect, branch

members were entitled to expect

after an intense campaign and a

final day manning election

booths, that Labor would be emphatically

returned. I guess the point is

that it wasn't by any stretch

of the imagination. Hence our

report, hence our report and

hence the analysis we've

carried out. Who does your

report sheet home the blame to,

for example poor policy decisions, like the climate

change committee, for example,

like the real Julia gaf, do you

sheet that blame home directly

to the Prime Minister? We've

presented our report to

campaign. I want the party, so

do my colleagues John Faulkner

and Steve Bracks, to be able to

absorb that, the party to be

able to absorb that and decision about its release.

After talking to branch members

in all the States, we share

their concern with those

aspects of the aspects of the campaign in particular. Let me talk about

climate change. The Labor

Government put to the Senate on two occasions legislation for

an emissions trading scheme.

It was blocked by the Senate. Kevin Rudd faced his

legislation being knocked back

by a combination, a coalition of the liberal of the liberal and National

Party on the one hand and the Green political party on the

other. It was a Labor Government attempting

right thing, but being told

that the Senate wouldn't allow

it to implement its policy. It

was wrongfooted. I think the message

message from branch members was

we can't be held - we can't

blame a Labor Government for

that, but there might have that, but there might have been a strong package or alternative

measures in place until, on a

third or fourth attempt, in the trading scheme would pass. What

about the real Julia? Well,

let's put that in context.

Again, I'm not unveiling what's

in a report still to completely considered by the

national executive, but talking

about our encounters with

branch members. It would be

listed by a lot of people as a campaign

campaign mistake, but consider

this. It came after an

extraordinary week when leaks

had buffeted the Labor campaign,

campaign, and what was needed

was a remodulation of the campaign to get the media and

the electorate thinking about

other things. So are you saying

it worked? I'm saying it may not have been perfect, it may

not have been the most arrangement of language in the

world, but what else was the leader to do, what else was the

Prime Minister to do, and it

worked. It got the campaign

away from that relentless focus

on leaks, which were doing so

harm, on to policy issues. But,

as you say, it was a poor fer

formance in the election

overall. I'm saying something

different from that. I'm

were far from per effect and it

delivered the outcome we wanted

in getting the media and thereby the electorate

following the campaign day by

day focused on substantive issues, not on who was leaking what. So this report has come

up with a number of

recommendations about how to

improve membership and, as you

mentioned, one of them is

proposing a US-style primaries

for choosing candidates. Now,

already that's met some resist

ans, admittedly Stephen Conroy

hasn't read the report but said

this afternoon I would probably

describe primaries of the

about who is the richest person

who can raise the most money,

it would devalue the role of

the rank and file. I've got a

lot of sympathy for those criticisms. Then why propose

it? Because it's subject to

these limits. We seriously

debated this and we're asking for an experiment only in

non-held seats and open seats,

so it doesn't become universal.

Second, we're capping the

proportion of voters in a

primary who are registered

party supporters, as opposed being party members. So we're

limiting that capacity. It's

not like the broad-acre US

primary that mandates massive advertising budgets to reach people and then to get them to

turn out. So I would regard a

recommendation on primaries as being capped and limited and fundamentally experimental. But you expect pushback, obviously?

I've got reservations about

it. I'm pretty familiar with US politics. When I look at

how primaries have worked

there, it's not just the big money excessive influence they give

to public sector union s that

end up having more influence

over the democratic party than

what it can do in State Government. Is this limit the union movement?

Sorry? Is this specifically designed to limit the union

involvement? I think it's

pretty neutral on that. It's

neutral, neither one nor the

other. I think it's a worth

while experiment. I under

stand Senator Conroy's reservations. Bob Carr, many

thanks for talking to

'Lateline'. My pleasure.

Thank you. Prime Minister

Julia Gillard has now got the

vote she needs to get the

planned $1.8 billion flood

through the House of Reps.

Independent Tasmanian MP Andrew

Wilkie says he'll vote for the

levy after making a deal with

the Government on higher

education. But the Government

still needs the support of

Independent senator Nick

Xenophon to get the levy

through the upper house.

Thousands of Egyptians have

crammed into Tahrir Square to

celebrate their success in toppling President Hosni

mood is far darker elsewhere in

the Middle East, with dozens

dead and hundreds injured in

anti-government demonstrations

in Bahrain and Libya. Middle East correspondent Ben Knight

reports. A week after Egyptian protesters forced their President out of office,

Libyans are hoping to do the same to their long-standing

leader, Colonel Gaddafi. This

footage posted on YouTube

purportedly shows demonstrators

marching through the streets of

Benghazi chanting were also demonstrations reported in other cities,

including the capital, Tripoli,

which a led to clashes with security forces and pro-government forces. We

TRANSLATION: We came here to the the square because we love our

leader. Everybody from educational institutions and the General public

administration came here to the

square because of their love

for the leader. We cannot do

without our leader. Libyan

State television has been

showing these pro-Gaddafi protests, but there's been very

little to see or hear from

those who oppose him. Once

again, it's YouTube and Twitter

that have been showing the other other side of the stour story,

although the information they

provide is impossible to

verify. Mobile phone videos

show protesters lighting fires

and stopping traffic. At least 20 demonstrators are reported

to have been killed. There

have also been deaths in

Bahrain, security forces staged

a brutal assault to clear protesters gathered in Pearl square early on Thursday

morning. The capital, Manama

is now under police control.

The demonstrators focus turns

to hospitals and morgues, where

many of their comrades ended

up. At killed and hundreds injured.

More than 200 pieces inside

his body. He was sleeping. They shot him when he was

asleep, this man and this man. That man was speaking with the

police, please don't shoot,

don't shoot, they shoot him in

his head. See what they do on

his head, see on his head, let

all the people in the world see

what they are doing. The raid has earned Bahrain's Government

a rebuke from its ally, the

United States. I called my counterpart in Bahrain this

morning and directly

morning and directly conveyed our deep actions of the security forces,

and I emphasised how important

it was that, given that there

will be both funerals and

prayer s tomorrow, that not be

marred by violence. But the Bahraini Foreign Minister says

the actions were justified.

The country was working on the

brink of sectarian abyss, so it

was a very important step that

had to happen. Police took

every care possible. The minister meeting of Foreign Minister s from the Gulf, called to

discuss the growing tensions in

the region. This is the outcome. Victory for the

demonstrators. Thousands demonstrators. Thousands of

Egyptians are again on the

streets of Cairo, but this time

it's a celebration, marking a

week since they ousted their

own dictator, Hosni Mubarak.

Following Hosni Mubarak on the way

way out will be three of his ministers, who have been arrested

arrested on charges of

many hope will show that the

interim military Government in

Egypt intends to implement at

least some of the change

demanded by the protesters.

Japan has called in the ambassadors of Australia, New

Zealand and the netherlandses

and told them to take action

against the anti whaling group

Sea Shepherd. Tokyo has

confirmed it has cut short its Antarctic whale hunt for this season and says it was due to

the activities of the militant

environmental group. The

annual hunt was officially

called off today. Around six

weeks early to ensure the safety of its crew. The Japanese Foreign Minister says

the three countries could have

done more to prevent what he

describes as obstructionist

activities. Environmental groups say groups say Japan's announcement is the best sign so far that

Japan's hunting days may be

coming to an end. p shall

Well, earlier this week the

Defence Minister, Stephen

Smith, was forced to announce

all three of the Navy's out of commission at the same

time. The announcement called

into question once again just

how well prepared Australia is

to deal with our region's complex strategic environment,

particularly one in which China

is playing an increasingly

important role. The rise of

China poses major defence

questions for Australia, but

it's a debate many are hesitant

to put in the public domain.

To discuss the issues, we're

joined tonight by two people

who have written extensively on

the subject, Professor Ross

Babbage of the kok oda foundation, a think tank specialising in security issues, with me in the

Sydney studio. In Canberra

we're joined by Professor Hugh

White of the Australian

National University. He's the

author of 'Power Shift: Australia's Future Between Washington and Beijing'.

Gentlemen, welcome to

'Lateline'. Nice to be with

you, Ali. First to the agreed

points between you. I guess

the main one is that China's

rising power is changing the

strategic landscape in Asia.

The question is what does China

want to do with that power.

Ross Babbage, you've written

there are dark clouds on the

in store, you're not an

optimist? Well, I hope for the

best, but I think we have to

plan for all eventualities.

The reality is what we've seen

over the last decade in

particular is a remarkably fast expansion of military

capability in China, which is

making the region feel very

uneasy and, in particular, potentially challenging the United States and its close

allies in the western Pacific

very directly. The issue is

not so much now, it looks

disturbing now, but the issue

we face as defence what are we going to do and

plan for for 2030, because if China continues this

trajectory, if it develops much stronger capabilities stronger capabilities and

indication s are that will

probably be the case, we have

to decide what we ourselves

will have in place by 2030. Otherwise the Australian

Government may not have the

full range of options it might

need in that time frame. Hugh

White, you've also written there's a real chance of bad

outcome? Yes, Ali. Iz agree

with Ross that the rise of

China and the way in which China's growing power challenges the order

last 40 years is a big issue

for Australia and one which

we're not yet addressing

effectively. I'm a little less

pessimistic than Ross, because

I think there is a chance if we

play our cards right, if

America plays its cards right,

if China plays its cards right,

that the region can accommodate

China's growing power into a

new a order which avoids the

kind of serious strategic

competition which I think both

Ross and I feel would otherwise

occur. I put a big emphasise on

can to avoid the bad outcome as

well as following Ross's

suggestions, making sure we

prepare for the bad outcome if

it occurs. That would suggest

that either China doesn't want

supremacy or the US is prepared

to back away and share. Are

either of those realistic

outcomes? Well, they're both

very problematic. I'm sure

China would like to lead Asia,

I'm sure America would like to

keep on leading Asia. They

also want to live in a peaceful

region. I don't think China hostile region and I'm sure

America doesn't. The question

is are the two countries

willing to negotiate, willing

to work together to find a way

to share power in Asia in a way that accommodates China's

growing power, maintaining a

big role for the US and avoids

the emergence of a kind of

hostile competition, a kind of

Cold War in Asia, which I think

both Ross and I fear might

otherwise occur. I guess my

point is we should work as hard

as we can to try to promote

that kind of agreement, avoid

the worst outcomes, if we can, as well as with it if that's what eventuates Ross Babbage,

there's another dimension, that

of course is the incredible economic interdependency

between US between US and China and indeed

Australia. I know you're on

the more pessimistic side, but do you think the economic

interdependency tends to

ameliorate some of your

concern? Well, I think we have the

the opportunity of working with

both sides here, and that is

the economic inter dependency

is important and will probably

grow. In fact, it's a very messages, if you like, that

reinforce our diplomatic

efforts to do what Hugh has

talked about, looking for

favourable outcomes. I'm all for that, no doubt about that.

The problem with pursuing

diplomatic avenues - I'm not suggesting Hugh is suggesting

that in isolation, but if we

tried that - it's a bit like as

one senior diplomat said like

one hand clapping. You really

need both. You need strong

diplomatic economic sort of

working together partnerships,

all sorts of things going on.

That's all very positive. But

at the same time we have ensure against the possibility

that the military capabilities

of China will not be used

downstream in a way which would

really seriously challenge our

interests. Hugh White, how do

you take out that sort of

insurance? There are a couple

of things we can do. The first

one, as I've said, I think Ross

agrees, we need to work very

hard to make sure we avoid the

bad outcome if we can, but we

also need to start working now - Ross is absolutely right

about this, we need to start

now - ensuring that Australia

has the kinds of capabilities

that can provide us with

sufficient strategic weight to

look after ourselves to we need to do if Asia becomes

more contested. Because

defence planning takes so long,

because the decisions we take

today will only deliver

capabilities 20 or years into the future, if we

want Australia to have a

different kind of armed force to deal with a different kind

of strategic environment in

2030 or 2040, we must take

those decisions now. So one of

the things I strongly agree

with in Ross's report is that

the kind of approach we've

taken to thinking about our

Defence Forces in the last 40

years, when peaceful, won't work to prepare

us for the bad outcomes which

both Ross and I agree are

possible over the next 20 or 30

years. You talk there about

looking after guess my main question would

be, Ross Babbage, can we be, Ross Babbage, can we even

think about doing that? Do we

not stick with the US by dint

of necessity? Look, I think we

should stay with the US. There

are new things and creative

things we can do with the US.

I think the alliance where we

may be able to take it could be a

a very powerful leaver, if you

well as perhaps in our front

pocket to some extent. So I'm

suggesting it is very

important. But in analysing

the options for the the options for the future, I

think it really is important we consider a range of possibilities, and we need, I think,

think, to have some discipline

about considering some

possibilities for doing it

differently. I'm not

suggesting that they would be

preferred, but just for

analytical rigour it makes

sense to look at more than one

path. Hugh White, all the way

with the USA or are there

problems with that? What if

America were to be side tracked by America were to be involved in

a very deep, long engagement with China that fundamentally,

economically, as well as strategically, didn't suit Australia? That's a very

important question, Ali. I

think the US has been fantastically important for

Australia and for the whole

region for a very long time

now. I think one of our aims

should be to make sure that the

US continues to play a strong and constructive role, the

strongest role it can in Asia

consistent with not being too

adversarial with China. But I

do think Australia as we look into has to recognise the possibility that our interests

and America's interests might

not coincide. It might be that the United States loses

interest in Asia, that's

impossible. It might be it remains engaged in Asia but

takes a different, perhaps a

tougher approach to China than we're comfortable with. In those circumstances, Australia

would have a big choice, do we

support the United States as it

gets drawn deeper and deeper

into a more and more contested

relationship with China when we

might not think that's

justified, or do we take a huge

step, the historic step, of stepping alliance and trying to go it

alone? Going it alone would be

terribly hard, terribly

difficult, terribly scary, difficult, terribly scary, but

staying alive with the United

States if it was drawn into a

Cold War with China would also

be something we wouldn't want

to do unless we were really

sure it was in our interests.

That's a question we have to

keep very much open in our own

minds. Against that backdrop,

Ross Babbage, how do we

prepare? You can't even

possibly imagine that China

could match - Australia could

match China in terms of

military force. What does Australia do?

right. There's no way in my

view we can match, you know, if

you like, ship for ship,

submarine for submarine,

aircraft for they might deploy, soldier for

soldier, absolutely. There are

smarter ways of doing this,

asymmetric approaches, to look

at what the PLA may be like in

2030, its strengths and weaknesses, and then to

emphasise in our own capabilities that emphasise in our own investment

capabilities that have higher

leverage, to deter, if you behaviour which might threaten

our interests. So hit where our interests. So hit where we

might hurt? Well, pressure

maybe, rather than hit. In

extremists we might have to

hit. But we have hit. But we have to actually

make it very clear to any

potential opponent that if they seriously challenge our vital interests, then that's not going to be cost free. Hugh

White? I do take a slightly different approach to this

question, Ali. I think Ross is

right, we have to think very

creatively about how it might

be possible for a country of

Australia's size to use force to support our interests

in a much more contested Asia

over the next few decades. But

I put less emphasis in thinking

about how to do that than Ross does on deterrence on trying to

hit back at China where it hurts, because I think that's

very hard for a country of

Australia's size to do effectively, not just because

China is a big country and it would would take an awful lot of

force to make an impact that

would make much difference but

also you always have to ask

what can the Chinese do back to

us. I don't see things we

could do to put could do to put pressure on the Chinese, that they couldn't do

back to us. I would put more

emphasis on us being able to

stop the Chinese doing it is

what they're trying to do to

us. I'd take us. I'd take a more direct

approach to being able to

dominate our own air and

maritime approach, being able

to stop China or any other

hostile power projecting armed

force towards us. That itself

is a very demanding task. I was going

going to take that's an

enormous task in itself.

Enormous task, but it's more

manageable than trying to

impose huge costs on the

in Beijing. It's closer to us

and we're so to speak getting

them coming towards us, rather

than us going all the way

towards them. Also it limits the risk of escalation, for a smaller power in conflict with

a bigger power, one of the important things is to make

sure the bigger power doesn't

bring too much force to bear.

I think limiting the risks of

escalation is very important. I

know that one of your

recommendation s that you're

egrieved the media has focused

on, perhaps we consider buying

up to 12 muk leear powered submarines.

Could that sort of fleet in

itself serve the purpose that

Hugh White is talking about, in

other words deny access to our

own zone? Well, in the gaming

that we've done on a range of

contingencies, I won't go into

a lot of detail about that, you

can use a really powerful

submarine force and in fact unmanned underwater vehicles are different sorts operating

in partnership in a range of

ways. You can use them in the way Hugh would like to use

them, I'm not ruling that out.

But at the same time you can use use them in a range of other

ways, depending on the specific

circumstances which could cause

enormous pain and you could

make it clear to a potential

opponent that you have the potential to

pain. Whether you actually use

it that way or not is an open

question, and in fact a degree

of ambiguity can be powerful

here in these sorts of circumstances. I suppose my

tendency is to think of this is

like the big foot and the ant

and we're ant. Not quite so

much an ant. Besides, you

know, I agree with Hugh in debate, and that is that there

is scope for us to marshal

supporting forces and not just

forces but I mean diplomatic

AIDS and partners and so on

throughout the region and

certainly with the US and other

countries. So that if in fact

- I just hope we never get to

this situation. If we had a

major crisis and if we had a

major power in the region

trying to coerce Australia in a

really strong way, in a way we

desperately need to resist, I

don't think we'd be on our own.

We could use our forces

creatively, but at the same time -

- create great uncertainty in

the leadership of the other

side about how we play cards

and caution them to be very careful about how they proceeded As you both say, this is very much the

scenario we hope doesn't scenario we hope doesn't come

to fruition, but the point is

that we need to make plans now

for whatever we think we're

making plans for and by 2030

those decisions that we take

now will be the position that

we're in. Hugh White, how well

placed, how well prepared, are

those in a position to make

these sorts of decisions to

make them now? Look, not very

well, I don't think, Ali. of people in Government who understand the significance of China's rise and the

transformational effect it's

having on the Asian order, not the least of course is Kevin Rudd, who Rudd, who really does

understand these things very

well. But we've seen the Government very reluktant

politically I think and

diplomatically to acknowledge

the way in which China's rise

poses the sorts of questions

we've been discussing here in

this interview. I think the problem we

problem we have is the

Government is too timid

politically and diplomatically

to really go to the United States

about these things and for that

matter to explain to the

Australian people just how big

this challenge is and how different our structure might

need to be. The fact is we've

had 40 very peaceful years. Understandably Governments want

to reassure people it will keep

on being like that. That might

not be the right message to

convey, it's not the right message to convey, until we do

that it will be hard for the

Government to go to defence and

say you need to start thinking about these things differently

and for defence to start

putting forward some of the creative talking about here today. Of

course Ross Babbage you can't

go past the point we've

headlines about preparedness or

otherwise of defence. Well,

yes. Defence itself has

reform and do a much better job

of many of the things we've

been talking about tonight, the acquisition process clearly

needs a lot of work to actually

smooth the processes and be

much more cost effective in

delivering quality outcomes.

There's a lot of other things

that are required. Having said

that, overall, there is a lot

of skill and capability in our

national security system national security system and I think there is the potential,

although as Hugh says I think easy for Government to manage

the sorts of challenges we

face, but we have to. Frankly, the public expects the Australian Government to step

up to this, to be

with it about what's coming and

to be honest and open about the options and what might really

be required. I frankly think

the public is very sensitive

about the issues, the public

opinion polling over the last

40 years is very consistent and

they're not very tolerant about Governments who try to fudge these issues. It's a very

important set of challenges we no you fascinating debate and classic

case of known unknowns and

unknown unknowns. Professor

Ross Babbage and Professor Hugh White,

White, thank you for joining 'Lateline'. Thank you.

Thanks, Ali, a pleasure. p

shall The billionaire mining

magnate Andrew Forrest faces

being banned from running the

company he created, Fortescue

Metals Group. In a rare win for the Australian Securities &

Investments Commission, FMG and

Mr Forrest were misled the market over three

agreements with Chinese

companies. Minsi Chung reports. The

reports. The case has its roots

in 2004, when Fortescue Metals

Group and Andrew Forrest were

seeking to carve a slice of the

lucrative Asian iron ore

market. FMG told the Australian

Australian stock market it had

binding agreements with three Chinese companies to build

mine, port and rail

infrastructure in the Pilbara.

But ASIC took legal action,

claiming the agreements were to negotiate, not to build. In

2009, a Federal Court judge

found FMG and Mr Forrest were

not guilty of misleading and

deceptive conduct.

appeal, the full court has overturned that decision. The

court is yet to decide whether

Mr Forrest will be banned from

acting as a director. He could also face a fine of up to $4.4

million, while the company

could be liable for up to $6

million. But it's unlikely the

decision will go unchallenged.

FMG and Mr Forrest can it the High Court, and given

the high stakes, an appeal is

likely. In a statement, FMG

says it's disappointed with the

result and is reviewing the

finding. The

after the Perth magistrate's

Court cleared FMG of charges

relating to the death of a

worker in the Pilbara during

cyclone George in 2007. Plp

Forrest was not in court for

either decision. FMG shares

have been placed in a trading

halt. When a hospital in Japan

opened a so-called baby hatch where mothers can leave their

a national debate about family

values in this socially conservative country. Since

the hatch began operation three

years ago, dozens of babies

have been left there, women coming from across the

country to put their children

in the care of the hospital.

But there's still vigorous argument in Japan about whether

the hatch is helping women cope

with unwanted pregnancies or actually encouraging parents to

abandon their children. North

Asia correspondent Mark Willacy

reports from coke Moto in south-west Japan. They're the

unwanted and the abandoned. In

a country obsessed with family honour and honour and social cohesion, these children are an

embarrassing stain on Japan's

pride. But at least here at

this or fan age they're given

the care their parents couldn't or wouldn't provide.

TRANSLATION: We take in

newborns and children up to the

age of 2 who can't be looked

their parents, we give them

love and care. The orphanage is full. The staff struggle to

give each of these children the

sort of care they deserve.

Once this would have been

unheard of in Japan, a nation

in which the family was a

strong and sacred unit.

TRANSLATION: More and more mothers

mothers are suffering from

depression. Poverty is growing too, making raise children. Child abuse is also increasing. Dr Tajii

Hasuda decided to do something about the growing number of

abandoned babies. So the

director of the hospital upset

many in Japan by opening a

hatch where mothers could

safely leave their babies.

TRANSLATION: When I size a baby

baby left here, I feel happy

because the mother has left it

in a safe place where it can be

cared for. It also breaks my

never know its real

parents. The baby hatch allows

women to discreetly leave their infants in a safe environment.

As this demonstration shows,

once the baby is put in the

hatch, an alarm is triggered

and a nurse immediately

collects the child and checks

its condition. TRANSLATION: The youngest baby left here

still had the umbilical chord attached. It pains me to think

of it. Over the past three

years, we've had 57 infants left in the baby hatch. Many

of the children left in the

baby hatch end up at the orphanage, and after those

toddlers turn 2, those whose parents won't take them back

will be sent to a children's

home. Experts here in Japan

say the reasons that women abandon their babies include they're too young or too they're too young or too poor

or they're not mar he ooed or

they've had a child of the

result of extra marital affair.

Critics say it encourages

parents to give up their

children instead of learning to

love and nurture them.

TRANSLATION: This is the only

baby hatch in the whole of

Japan, and women come from all over the country to leave their

babies. Without this option,

they might dump their newborns

in the garbage or at a toilet,

so I don't think women encouraged to leave their children just because of the

baby hatch. In fact, the

hospital argues that since the

baby hatch opened, more and more pregnant women and new

mothers are seeking help.

TRANSLATION: The number of

callers to our counselling

service has increased 20 times

since the baby hatch opened.

So we believe we've saved the

lives of more than 300 babies

in that time. At the orphanage

it's bath time. Here these

children are safe from neglect, abuse and indifference.

TRANSLATION: Japan used to

have a family oriented society,

but now parents think about

their own rights before those

of their children. Now the

parent comes first. At least

here these children do come

first. Now to the weather.

Rain for Melbourne, Hobart and

Darwin. Morning drizzle and a

possible afternoon shower in

Adelaide. A shower or two in

Canberra, the chance of a shower for Brisbane, partly

cloudy in Sydney and mostly

sunny in Perth. That's all

from us. If you'd like to look

back at tonight's interview

with Bob Carr or the discussion

with Ross Babbage and Hugh

White or review any of 'Lateline''s stories or

transcripts, visit our website.

You can also follow us on

Twitter and Facebook. I'll see

you again on Monday. Enjoy

your Closed Captions by CSI * THEME MUSIC You're home early, Dad. Is that why they call it speed dating? Well, it was just a complete embarrassment. I think that I liked everybody. Even the mingers. Didn't get one positive response - not one. I mean, that can't be right, can it? No, that can't be right, Dad. MOBILE PHONE RINGS Oh, it's the speed dating people. Ahem. Hello. How's it hangin'? Two of them put my name down? I see. Both formal complaints. If you're still looking for a woman, Vernon, there are some intriguing ads here, you know. In the Lonely Hearts section. Yeah, Lonely Hearts. That's perfect. Because you're really lonely, aren't you, Dad? Look, Dad, you said you were only going to doss down here for three days. But you've been here for three months now. I think there are more important sections that you could be looking at.

Like the jobs section or the "rooms to let" section or the "stop annoying your kids and move out of the cupboard so they can put the hoover back in it" section. It's a bedroom. It's a cupboard. You're living in a cupboard. Look. Anything smaller will come with "Dad" written in flowers on the top. You know, if you're desperate, you can find some of these ads really quite tempting. Dad's not interested. He's got other priorities, haven't you, Dad? I'm not sure that I have, actually, Milly. I've just come to the rather sudden end of what I thought was 25 years of very happy marriage. I accept that some people might find something humorous in your mother leaving me for the European Commissioner for Soft Fruit. Who also happens to be only five feet tall and Belgian. But I feel that your mother has ripped out my heart

and chucked it still bleeding in a skip. Oh, Dad! I think my first priority is to get my leg over. Dad! What, some pathetic middle-aged fumblings just to get your own back? Sounds rather good to me. Here's a good one, Vernon. "Attractive petite female seeks handsome professional in his 30s." Oh, sorry. I could pass for 39. Where, in an IQ test? And she's looking for someone into cultural pursuits. Oh, that means she's ugly. How do you know that?

Usual code, you know. Go on, give me another one. All right. Down-to-earth. Fat, boring and ugly with a moustache. Special lady. Myra Hindley. Tender, sexy, romantic, good-looking European lady. Albanian waitress in search of a visa. So obvious. Well, why don't you put in an ad of your own? Like what? Fit, fun...flirty... ..slim, with it, happening kind of guy. Uh, musician, cross between Johnny Depp and let's say Victor Mature. Which is code for overweight, jobless, penniless sponger, cross between Johnny Rotten and Victor Meldrew. Seeks lady 40-50... 40-50?! My age? No, thank you. Put 18-35. 18? Oops. What? What, my age? Like me? No. What, like my friend, Rosa, then? Cos I could call her for you. I could say, "You remember my dad used to babysit for you? You'll never guess what. He's turned into a dirty old man. You know, we used to sit around watch Bananas In Pyjamas? Well, funnily enough..." Obviously I don't want to go out with someone your age. Just wanna wake up to something a little bit firmer. Not something that looks like a trifle that's been left out in the rain. Oh! ..would like to have it off with anybody. Would that work? Your piles playing up again? No. Why don't you sit down, then? Because I'm wearing my old pulling trousers. They're a little bit on the snug side. Not the ones you used to wear at uni? Yeah. What waist are they? 28. And you are...? 38 when I'm holding it in. It take it you're going on the pull, then? Oh, no, no, no! I... I have already pulled. Oh, no. Not Lonely Hearts. Don't do it, mate. You are destined for a big... Wow! Not bad at all. Hold on. What picture did you send her?