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Tonight - lessons learnt.

This is a blueprint for us to manage future disasters better. We owe it to those people who
suffered in this disaster to learn the lessons and to act on them and that's what we'll

Live.

Good evening. Welcome to 'Lateline'. I'm Ali Moore. The US seems to have pulled pulled back from
the brink of financial disaster with a deal to raise the debt ceiling to go it gets through
congression the US economy has a long way to go before it's out of the woods, with stubbornly high
unemployment and anemic growth on top of the debt rows. If the US can't get its act together that
has ramifications for the rest of the world.

Markets need to be confident that over a period of time there is a pathway to fiscal
sustainability. Running budget deficits of 9 or 10% of GDP is simply not sustainable. can help a
lot with that but the US like a number of other developed economies has to come to grips with
fiscal sustainable. That's what everybody is waiting for do need to see if we're going to see an
end to this global uncertainty.

Treasurer Wayne Swan joins us shortly. Syrian troops kill more than 100 people in a military
crackdown on anti-government protests.

Queensland digests preliminary flood report

Queensland digests preliminary flood report

Broadcast: 01/08/2011

Reporter: Karen Berkman

The royal commission into the floods that inundated almost 80 per cent of Queensland has made 175
recommendations for better handling a future disaster.

Transcript

ALI MOORE, PRESENTER: Two and a half million Queenslanders were affected by the state's devastating
floods earlier this year and today the flood commission released its interim report into the
disaster.

It's made 175 recommendations on how to better handle a similar event in future.

Thirty five people died in December and January when almost 80 per cent of Queensland was
inundated, and the damage bill has topped $5 billion.

Many survivors are still coming to terms with their experience and still have some way to go in
rebuilding their lives.

Karen Berkman reports from Brisbane.

KAREN BERKMAN, REPORTER: The 220-page interim report was compiled with lightning speed in time for
the next wet season.

The commission heard evidence for seven weeks over six months and took 660 submissions. Most of its
recommendations were aimed at the State Government.

ANNA BLIGH, QUEENSLAND PREMIER: I intend to implement them without exception. This is a blueprint
for us to manage future disasters better. We owe it to those people who suffered in this disaster
to learn the lessons and to act on them and that's what we'll do.

KAREN BERKMAN: Thirty recommendations were aimed at Wivenhoe Dam, where late releases contributed
much of Brisbane's flooding. Brisbane's Lord Mayor at the time is now the head of the State
Opposition.

CAMPBELL NEWMAN, QLD OPPOSITION LEADER: Had I been the Premier at the time, we would've acted, we
would've drawn the dam down.

KAREN BERKMAN: The commission found that engineers at Wivenhoe Dam failed to take into account
rainfall forecasts as the dam rose towards maximum capacity, technically breaching the Wivenhoe
manual and potentially leaving the State Government open to legal action.

ANNA BLIGH: It's a question that will have to be tested and I would expect that there will be some
people seeking to test it.

KAREN BERKMAN: Wivenhoe was built after the 1974 floods to mitigate future disasters. Some people
trusted it too much. The report described it as Queensland's most dangerous and most important
piece of public infrastructure.

In October last year, the Weather Bureau was already warning that big rain was coming and the dam
was close to full.

CAMPBELL NEWMAN: Why then, armed with the information they had, why didn't they do something about
the management of Wivenhoe Dam?

And the commissioner has indicated that there are questions about how that all unfolded, and
particularly of concern there's no record of any sort of decision-making process by the minister,
and clearly that needs to be addressed.

ANNA BLIGH: ... he sought both verbal and written advice, and all of that advice confirmed at the
time that there would be very small or negligible impacts of any reduction and that he should not
make such a reduction.

KAREN BERKMAN: The commission also recommended improved standardised training for triple-0
call-takers.

Some of the saddest evidence it heard was about the castigation of a woman trapped in her car on a
flooded road with two children. Donna Rice and her son Jordan had been swept away by the time help
arrived.

IAN STEWART, ACTING COMMISSIONER, QUEENSLAND POLICE: Certainly, we are taking action, as the
commission of inquiry has recommended, to train all of our call-takers, perhaps more appropriately.

KAREN BERKMAN: The inquiry was told that the call centre was overwhelmed when a savage flash flood
tore through Toowoomba. The phone was being manned by an officer not trained for the duty.

IAN STEWART: Sometimes we don't get it quite right. And, yes, a single incident can impact on the
reputation of our organisation and we understand that. And that's why we have processes in place to
deal with that.

KAREN BERKMAN: The people of Grantham were angered by the report, saying it gave no answers, only
excuses.

The commission recommended better warning systems, possibly sirens in small towns like Grantham in
the Lockyer Valley, where 11 people died on 10th January.

FRAN ARNDT, GRANTHAM SURVIVOR: I don't think a lot of people would have lost their lives if we had
have had time to get out.

KAREN BERKMAN: The commission also found that centralised coordination could've sent them more
rescue helicopters on the day of the disaster, but said given the weather, the outcome might not
have been much better.

The mayor thinks the most important recommendation for his town is to clear the Lockyer Creek of
tonnes of debris.

STEVE JONES, LOCKYER VALLEY MAYOR: If we were to have any form of flood, that material will come
down, could deposit up against infrastructure, houses, anything like that and cause enormous
damage. And it's a task that's really beyond an individual council to remove.

KAREN BERKMAN: The damage bill in Queensland is already around $5 billion. Implementing the
recommendations will also be expensive.

ANNA BLIGH: But across a budget the size of the State Government, and some of this will be over a
number of years, this is a very important investment in our safety. The cost of not implementing
these initiatives I think would be far greater in the long term, both in financial and human terms.

KAREN BERKMAN: The commission will deliver its final report next February.

Karen Berkman, Lateline.

US debt deal reaches Congress

US debt deal reaches Congress

Broadcast: 01/08/2011

Reporter: Craig McMurtrie

After weeks of political brawling, US president Barack Obama has unveiled a deal to end America's
debt crisis by lifting the debt ceiling at the expense of deep spending cuts.

Transcript

ALI MOORE, PRESENTER: After weeks of a knock-down, drag them out political brawl, the US president
has unveiled a deal to end America's debt crisis.

Negotiated over the weekend, the compromise will lift the debt ceiling and deliver deep spending
cuts.

But the drama isn't over yet; the deal still has to be passed by Congress.

North America correspondent Craig McMurtrie reports.

CRAIG MCMCURTRIE, REPORTER: Party leaders walked the corridors of Congress all weekend searching
for a way to end Washington's debt crisis. They could hardly have cut it closer.

BARACK OBAMA, US PRESIDENT: There are still some very important votes to be taken by members of the
Congress, but I want to announce that the leaders of both parties in both chambers have reached an
agreement that will reduce the deficit and avoid default.

CRAIG MCMCURTRIE: In direct negotiations between the Senate and the White House, it was agreed to
end the dangerous stand-off and lift the US federal borrowing limit beyond next year's 2012
election, in return for a trillion dollars of cuts over 10 years, with more savings to be
identified by a congressional super-committee by November.

MITCH MCCONNELL, REPUBLICAN LEADER: And we can assure the American people tonight that the United
States of America will not for the first time in our history default on its obligations.

HARRY REID, DEMOCRAT LEADER: And my message to the world tonight is that this nation and this
Congress are moving forward and we're moving forward together.

CRAIG MCMCURTRIE: Both sides say they gave up more than they wanted to. Republicans are unhappy
about potential cuts in Defence spending; Democrats didn't win on the elimination of tax breaks for
the wealthy.

BARACK OBAMA: Now, is this the deal I would've preferred? No.

CRAIG MCMCURTRIE: The US president warned that it's not a done deal yet; the compromise has to
survive votes in both chambers of Congress. With party leaders likely to shed votes from the right
and left, the outcome isn't certain.

Republican Speaker John Boehner held a conference call telling his members, particularly
conservatives, this has been a long battle and we've fought valiantly.

BARACK OBAMA: Now this process has been messy. It's taken far too long.

CRAIG MCMCURTRIE: The standing of both parties and the president has suffered through the long
gridlock. Congress has two days left to force the votes through before the US Government starts
running out of cash.

Deal labelled 'a victory for extremists'

Deal labelled 'a victory for extremists'

Broadcast: 01/08/2011

Reporter: Ali Moore

Washington correspondent Craig McMurtrie reports the US press is describing the last-minute debt
ceiling deal as a victory for Republican extremists and a backdown by president Barack Obama.

Transcript

ALI MOORE, PRESENTER: North America correspondent Craig McMurtrie joins us now from Washington with
the latest developments.

And Craig, as we just heard the president say, this deal's taken far too long. Now we've got a
deal, what's been the overnight reaction?

CRAIG MCMURTRIE, NORTH AMERICA CORRESPONDENT: Well it's interesting, Ali, the morning papers, the
Wall Street Journal in the editorial, the headline is "A Tea Party Triumph". It writes, "In this
deal they forced both parties to make the biggest spending cuts in 15 years."

The New York Times, it has "A Terrible Deal" as its headline on the editorial, saying, "It is a
nearly complete capitulation to the hostage-taking demands of Republican extremists. It will hurt
programs for the middle class poor and hinder economic recovery."

Certainly the overall mood here this morning is Republicans got more than the Democrats and that
the president had to give ground.

ALI MOORE: And how are the two sides spinning it?

CRAIG MCMURTRIE: Well, on the Republican side, they are saying that there were no tax increases,
that they changed the debate in Washington, that they forced Democrats to agree to big spending
cuts.

On the Democrat said, they're saying to their people, "Look, you need to vote for this because
we've pushed out the next consideration of a debt ceiling vote beyond 2012. We've protected
entitlement spending."

And certainly Democrat Party strategists think that they've got a weapon now they can use in the
lead-up to next year's election painting the Republican Party as a party of extremists.

ALI MOORE: Are we going to be going through all this again in two years' time?

CRAIG MCMURTRIE: Ah, well, who knows? But essentially it all comes down to the super-committee now.
That's where the weight is. They're the ones who've got to identify the next round, $1.5 trillion
of cuts.

If they don't, there are automatic cuts and things that politicians on both sides care about like
Medicare and Defence.

And the other things to say about that is the Bush-era tax cuts expire next year before the
election, and the White House, the president, have already flagged that they intend to prosecute
that debate next year as well. So this certainly isn't necessarily the end of this discussion.

ALI MOORE: Well indeed, because there are certainly some conflicting statements about future tax
cuts, aren't there?

CRAIG MCMURTRIE: Well there are. Barack Obama has argued all along that he wanted revenue to be
part of the equation.

Now Republicans are telling people that there are no tax increases; that's certainly true in the
first round.

However, super-committee can look at tax reform, and most moderate Republicans are acknowledging
that that could include closing tax breaks for corporations and wealthier Americans, which would
constitute revenue increases.

But certainly right now, that is not something that John Boehner, the Speaker, is really
highlighting in his discussion with his House members, because of course he's trying to get the
numbers now to get this through the Congress.

ALI MOORE: Which of course is the crucial question and perhaps the place we should've started.
First of all when will the vote happen and will it get through?

CRAIG MCMURTRIE: Well, the latest we're hearing is that the Senate vote likely this afternoon. It's
expected to get through the Senate; it would be a major surprise if it didn't there, and the House
vote probably tonight, maybe tomorrow if they're having trouble getting the numbers in terms of
getting through.

Look, it would be astonishing if you've got the president, the vice president, the leaders of both
parties in both chambers all signing on. It would be extraordinary if it didn't get through.

On the other hand, they've got arch conservatives who aren't happy; they still don't think it went
far enough, and they're not happy about the debt ceiling being lifted.

You've got liberals who think that Democrats gave up too much, and you've Republican defence hawks
who are unhappy about big cuts in defence. So it's by no means a sure thing.

ALI MOORE: Craig McMurtrie, many thanks.

US deficit not fiscally sustainable: Swan

US deficit not fiscally sustainable: Swan

Broadcast: 01/08/2011

Reporter: Ali Moore

Federal Treasurer Wayne Swan tells Lateline a political gridlock has contributed to an
unsustainable budget deficit the US will have to come to grips with.

Transcript

ALI MOORE, PRESENTER: To discuss economic issues both in the US and here in Australia, I was joined
a short time ago from Canberra by the federal Treasurer, Wayne Swan.

Wayne Swan, welcome to Lateline.

WAYNE SWAN, TREASURER: Good to be with you.

ALI MOORE: In the US, the Republicans and the Democrats have agreed on a deal to raise the debt
ceiling, although of course it's still got to get through Congress.

Does it strike you as extraordinary that in the world's biggest economy, the politicians can let a
situation get so out of hand? Is it really the ultimate indulgence, given the stakes are so high?

WAYNE SWAN: Well I think it is concerning that it's got to this stage. I mean, today is an
important first step.

But it's got to pass the Congress and of course I don't think anybody in Washington would be
popping the champagne corks because, as everybody is aware, there's a faction in the Congress, a
faction in the Republican Party, that's essentially against the economics of the 21st Century.

A faction that rejects Keynesian economics, for example. So, they are dealing with some very
difficult circumstances.

So what you've got is essentially a political gridlock around a fundamental and important economic
question, and that is concerning, and that's why markets in other countries in the world have
watched with such trepidation.

ALI MOORE: And even with this deal, though, is there still a question mark over the ability of the
Americans to work out their problems? I mean, this deal doesn't decisively remove the risk of a
ratings downgrade; it really puts off the hard decisions for another day.

WAYNE SWAN: Well this is really only stage one. It deals with the debt cap, and then they have to
move on about putting the United States on a sustainable fiscal course.

That's the really big challenge. When we sit around the G20 and we talk about global financial
imbalances, when it comes to developed economies such as the United States, what markets are
looking for, what the world is looking for is a path of fiscal sustainability.

Now it doesn't all have to happen at once; it doesn't even have to happen soon, but markets need to
be confident that over a period of time, there is a pathway to fiscal sustainability. Running
budget deficits of nine or 10 per cent of GDP is simply not sustainable.

It's true that economic growth can help a lot with that, but the United States, like a number of
other developed economies, has to come to grips with fiscal sustainability. And that's what
everybody is waiting for and we do need to see if we're going to see an end to this global
uncertainty.

ALI MOORE: Why haven't they come to grips with it?

WAYNE SWAN: Well I think political gridlock is a problem in the United States. Political gridlock
has been a problem to a certain extent in Europe. And the contrast with Australia could not be
clearer.

Here we have passed our budget. We've got in place the biggest fiscal consolidation in our history.
When we moved a couple of years ago to stimulate our economy in the face of the global recession,
we put in place fiscal rules or an exit strategy. That's what we're implementing now.

We're back to surplus next year while countries like the US and many countries in Europe are simply
not sustainable. And these matters have to be dealt with on a global scale over time.

That's what the G20's on about. But what you're seeing play out in both Europe and the United
States is the political difficulty of dealing with these very difficult questions.

ALI MOORE: Given that, what risk the US economy could go pear-shaped again? If you look at the
latest numbers, it grew only 0.4 per cent in the first three months of this year; it grew 1.3 per
cent in the second quarter. It's taking a very long time to get going again.

WAYNE SWAN: Yes, it is, but I'm an optimist about the United States. I think there are many reasons
why it can begin to grow and to grow strongly.

There is also a challenge in Europe with fiscal sustainability. But one thing that they have done
in the United States is that they've cleaned up their financial system.

That has been very painful for them. What they have to do now is to clean up their fiscal policy,
and that's what's being debated.

But the real challenge in the United States is they don't have the amount of political agreement.
And with the emergence of the Tea Party, which basically is opposed to fundamental economic
management as we know it, that has complicated that task in terms of the passage through the
Congress and what you see is political and economic gridlock.

ALI MOORE: And because of that gridlock, though, is there a risk that we could get another major
financial crisis?

WAYNE SWAN: Look, I'm an optimist, as I said before. I believe these matters will be dealt with. I
believe that president Obama has the will and has the persuasive powers to put this in place over
time.

He is dealing with a very terrible legacy of fiscal looseness in the United States fiscal policy
that developed over the past decade. I believe that he's capable of dealing with this, and what
we've seen is round one, but we will sit back and wait and see what will happen through rounds two
and three. And I believe the United States is more than capable of dealing with it.

ALI MOORE: That said, I accept your optimism, but at the same time it's a hypothetical that lot of
people are thinking about at the moment, should things go pear-shaped again. If they do, what do
you do? Because the kitty in Australia is bare, isn't it?

WAYNE SWAN: No, no, I don't accept that analysis at all. I would like to make the point that we are
seeing a shift in global economic weight from West to East. So simultaneously with what's going on
in the United States and what's happening in Europe is that there is very strong growth in our
region.

This is going to be the Asian century. And that growth is very important for Australia.

But Australia has some - has got the fundamentals right. We dealt more effectively with the global
financial crisis and the global recession than just about any other advanced economy. We have very
strong public finances, we have very low debt, we have a very big investment pipeline, we have very
well-capitalised financial institutions and we are located in the right part of the world at the
right time.

Certainly, we're not immune from the fallout of what occurs in the US or Europe, but we are at a
very good position with our domestic fundamentals as sound as they could be.

ALI MOORE: But last time there was a crisis you had a good $40 billion that you could throw at it.
When I said the kitty was bare, the budget doesn't allow for any extra spending should you need to
do that spending. So, is the timetable for the commitment to return to surplus defunct if there's
another financial crisis?

WAYNE SWAN: Look, we are not immune from events in the global economy, but we have put together our
forecasts in the last budget. I believe we will obtain those forecasts coming back to surplus in
2012-13. We have very low net debt. But importantly, we have a really strong investment pipeline
into our economy.

Just take, for example, the approval of the Origin LNG project last week up in Gladstone. A huge
project in terms of United States investment and Asian investment in this country and much more of
that is coming through.

And just look and compare, for example, unemployment in Australia, say, to unemployment in the
United States. Unemployment in the United States and parts of Europe is double Australia.

We are in a very good position and we are ideally placed to deploy both fiscal policy and monetary
policy if global conditions were to worsen.

ALI MOORE: Well against all that uncertainty with the US and also with Europe, the Reserve Bank
board meets tomorrow to decide interest rates - I know you won't talk about their decision.

But how worried are you about inflation? Today we got another gauge that showed that inflation's
running much higher than the Reserve Bank's comfort level. And it's not just food, is it? It's
utilities as well, and utilities are not going down.

WAYNE SWAN: No, but we saw a spike in the figure from last week which was driven by fruit prices
and by fuel.

Now some of the commentators have got very worried about what they see to be underlying inflation.
Some claim it is far too high. It is certainly around the middle or a little bit above the middle
of the Reserve Bank's target band when it comes to underlying inflation.

We've got to see how this plays out over time. But the one thing that I'm very confident of is that
we've got the right fiscal policy settings, and the Reserve Bank agrees the Government has got the
right fiscal policy settings. Fiscal policy will not be adding to inflationary pressures in our
economy.

And on top of that, we are making the necessary investments to lift the productive capacity of our
economy by investing in infrastructure, skills and education. We're doing all of those things that
we need to do given the growth prospects that we've got ahead of us.

You see, the economy is a little soft at the moment. That's the impact that has come through from
natural disasters. We've got a cautious consumer. Then on top of all of that we've had this global
uncertainty. But we got strong medium-term prospects in our economy.

ALI MOORE: It would hardly seem to be the environment though where you'd want to see a rate hike.

WAYNE SWAN: Well, that's entirely a matter for the Reserve Bank. They take these decisions
independently.

ALI MOORE: You talk there about a soft consumer. If you're not too concerned about inflation, do
you worry when you see confidence among consumers at its worst since 2009? Stores like David Jones
warning of profits being down 20 per cent, manufacturing activity slumping to a two-year low. It
seems the two-speed economy's getting worse, not better.

WAYNE SWAN: Well I began talking about the two-speed economy, the patchwork economy and the
cautious consumer many, many months ago. It has now being debated publicly because consumers are
cautious.

They are certainly saving more and they are spending less. Part of that reflects the hangover of
the global financial crisis and the global recession. Part of it relates to the international
uncertainty we are seeing.

Part of it I think does relate to the scare-mongering of Mr Abbott and the Liberals who have been
out there talking down our economy and their Tea Party-type behaviour in the political system,
basically trying to wreck everything.

But the fact is the fundamentals in our economy are sound. The Government has got a very good
fiscal policy stance in place, the biggest fiscal consolidation in our history. We are making the
investments to lift our productivity. We're doing all of those things because the fundamentals in
our economy are sound.

ALI MOORE: You say you're making investments to lift the rate of productivity. The Reserve Bank
Governor, Glenn Stevens, says "It's now just about impossible to avoid the conclusion that
productivity growth performance has been quite poor since at least the mid-2000s."

For four of those six years since the mid-2000s, you've been in government. Why has the
productivity performance been so poor?

WAYNE SWAN: Well I need to make a couple of points about that. There has been a structural decline
in productivity over a long period of time, and of course when you put in place the sorts of
measures that we've put in place, they all take some time to work. We don't have available to us
like they had in the early '90s and the late '80s the very big productivity-enhancing reforms that
they put in place.

You can only deregulate the dollar once, you can only bring down the tariff wall once, you can only
bring in enterprise bargaining once. What we've been doing is the hard grind. And that takes a
while to shine through.

But we've been doing it from the first day we were elected, and it's critical we do it because what
we're doing in infrastructure, skills and education and a whole host of other areas - the NBN, for
example, is absolutely critical to lifting our productivity growth performance.

ALI MOORE: Do you acknowledge though that there are plenty of business leaders at the moment who
say they're worried about skills shortages, they're worried about the two-speed economy, they're
worried about investment?

WAYNE SWAN: Well, the investment pipeline is strong, but it is true that in the non-resource sector
of our economy there is weakness.

The Government has laid that out in terms of our fiscal forecasts and put in place the policy
settings to deal with that. I mean, that is why we are putting in place changes in taxation over
time which recognise that not every business is in the fast lane of the resources boom.

It's why we want to bring down the corporate rate. It's why we want to give a significant tax cut
to small business. We recognise that not every business is going to be in the fast lane of the
resources boom and we've got to attend to those issues and that's what we're doing.

ALI MOORE: If trying to fix productivity takes time, when do you think we'll start to see the
impacts of what you're doing?

WAYNE SWAN: Well I'm not going to speculate about that. Productivity cycles run for four, five
years and they are always notoriously difficult to measure in the short term.

But what we are doing is the only thing that a responsible government can do which is attend to
your skills base. At the end of the day, the most important resource we have is not what's in the
ground, it's the skills and the capacity of our people. And the Government has had a skills and
education agenda from day one.

Not just in terms of training, not just in terms of extra money for education, but also lifting the
quality as well. And we're doing that across a variety of areas. But of course, it's a hard grind
over time to get the results that you want.

ALI MOORE: But if the productivity cycle goes four or five years, you've been in government four
years ...

WAYNE SWAN: Yes, and if you take a project like the NBN, it is just beginning to run out now. You
can't put in place a super-fast broadband network in a couple of years. These are long-term
investments, these are nation-building, which will deliver to this country a huge productivity
boost.

Just go and talk to any small business around this country. They know the empowering effect of
something like the NBN. But it takes a while to get it out there. This is a huge microeconomic
reform. It's been the Holy Grail of microeconomic reform, and we've done it and we've done it as a
minority government.

We've got a budget through with a huge skills package at its core as a minority government in
record time. We've got the NBN rolling out. We've got a lot happening out there, but it does take
time.

ALI MOORE: Another issue: why are you so adamant that the GST not be part of the tax summit?

WAYNE SWAN: Well, it's a commitment that the Government has given and I've repeated, because the
Government doesn't want to increase the rate or to spread the base of the GST; I've been upfront
with people about that.

It wasn't actually a core recommendation of the Henry Review. There's a whole range of tax reforms
that can be considered, and if people want to come to the tax forum and talk about it, they can.
I'm just making it very clear the Government is not pursuing that reform.

But we've got a lot of reforms in the pipeline now. Bringing down the corporate rate, giving that
significant tax cut to small business, boosting national savings and particularly the savings of
lower-income people with their superannuation.

We've got a lot of reforms in place and we want to have a fair dinkum discussion about a whole
range of reforms at the forum. There's a thousand pages in that review. We've done dozens and
dozens of recommendations from that review and there's more to be done.

ALI MOORE: But I guess going back to that decision that you made earlier on not to increase the
base or not to increase the rate: why? Was it an ideological decision?

WAYNE SWAN: Well because - well I think it's lazy tax reform. It's one way in which one section of
the community wants to get a tax cut and to hand a tax increase to the average punter. I don't
support that, the Government doesn't support that and we don't make any apologies for it.

ALI MOORE: Wayne Swan, many thanks for talking to Lateline tonight.

WAYNE SWAN: Good to be with you.

World condemns Syrian violence

World condemns Syrian violence

Broadcast: 01/08/2011

Reporter: Anne Barker

The global community has condemned Syria's most recent crackdown on anti-government protesters,
which killed at least 80.

Transcript

ALI MOORE, PRESENTER: Reports coming in tonight from Syria say that security forces have killed
four people after resuming their attack on the city of Hama.

A crackdown on anti-government protestors on the weekend left scores of people dead.

The attacks have received global condemnation and the European Union has announced it will extend
sanctions to include five more people linked to Syrian president Bashar al-Assad.

Even Russia, a longstanding ally of Syria, has called the government's actions unacceptable.

Inside the country, president Assad has praised his security forces for foiling the enemies of
Syria.

Middle East correspondent Anne Barker reports.

ANNE BARKER, REPORTER: The streets of Hama have turned into a war zone since Syrian troops stepped
up their military crackdown on anti-Government demonstrations.

Amateur footage shows security forces in tanks storming the city and firing indiscriminately on
civilians. Residents can be seen ducking the gunfire from shelling and machine guns, while Army
snipers climbed onto rooftops of the state-owned electricity company and Hama's main prison.

Large areas of the city were blanketed in thick smoke from the heavy shelling and buildings on
fire.

Syrian forces began this latest assault before dawn, after besieging the city for more than a
month.

WITNESS: We start hearing some artillery shots. From four directions, artilleries and bombing,
tanker bombing and sometime we hear the - like anti-aircraft shoots against people.

ANNE BARKER: Witnesses say countless bodies were left on the streets. The death toll is predicted
to rise, as hospitals struggle to keep with the number of wounded. Doctors say blood supplies are
now running short.

The Syrian government has blamed armed groups for the violence and accused local gunmen of burning
down police stations and shooting dead two soldiers.

As a majority Sunni Muslim community, Hama has long been a target for forces loyal to the ruling
Alawite regime. It's where president Bashir al-Assad's own father and former president sent troops
in in 1982 to crush a Sunni uprising, massacring as many as 20,000 people.

Memories of that crackdown have no doubt helped to fuel today's anti-government sentiment in Hama.

In neighbouring Turkey, Syrian refugees and supporters have staged their own protest against the
Syrian regime.

MUHAMMED ABDA, PROTESTOR: What happened here was against humanity. Around a hundred people were
killed in Hama. We don't know the exact number, but it's still rising. It's totally against
humanity.

ANNE BARKER: Foreign governments too have joined the condemnation. The United States has accused
Syria of waging all-out war against its own people.

MICHAEL MANN, SPOKESMAN FOR EU FOREIGN POLICY CHIEF: Well we were extremely shocked and appalled by
what happened in Hama yesterday. There's never been any justification for what's been going on. You
cannot justify attacking civilians who are exercising their right to democratic protest. You just
can't send in the tanks and attack them like that.

ANNE BARKER: Human rights groups say at least 1,500 people have now been killed in Syria since the
uprising began in March.

Anne Barker, Lateline.

Malaysian deal worries Christmas Island locals

Malaysian deal worries Christmas Island locals

Broadcast: 01/08/2011

Reporter: Jane Norman

The Government has acknowledged it will do "whatever is necessary" to implement its policy of
sending asylum seekers to Malaysia.

Transcript

ALI MOORE, PRESENTER: Christmas Island locals say they're worried about the prospect of detainees
being forced onto planes and the trauma that may cause.

The first asylum seekers to be dealt with under the asylum seeker swap deal with Malaysia will
arrive on the island on Thursday and the Government has acknowledged again it will do whatever is
necessary to implement its policy.

More from ABC reporter Jane Norman who's on Christmas Island.

JANE NORMAN, REPORTER: There were joyful scenes at Christmas Island airport as these asylum seekers
were transferred to the mainland. But authorities are preparing for a very different reaction when
a group of 54 asylum seekers is escorted onto a plane bound for Malaysia.

JULIA GILLARD, PRIME MINISTER: People will be given an instruction to board a plane. We will be
obviously looking to people to obey that instruction. If it's not obeyed, then we have security
personnel, we have the Australian Federal Police.

JANE NORMAN: Gordon Thompson is the Shire President on Christmas Island. There's been unrest at the
main detention centre in the past couple of weeks and Mr Thompson says residents are concerned
about what happens next.

GORDON THOMSON, SHIRE PRESIDENT: It's going to be very disturbing for the people involved - both
the asylum seeker and the people charged with removing them, and also for the community to be
exposed to that sort of dealing. It could be quite problematic.

JANE NORMAN: The asylum seekers are expected to arrive on Christmas Island on Thursday. While the
Immigration Department is aiming to transfer the group to Malaysia within a 72-hour timeframe, the
Prime Minister has conceded the process could take weeks the first time around.

JULIA GILLARD: We are in the first phase of this. This is the first boat. So those returns will
take some time. When the system is up and in full operation, those returns will happen in 72 hours.

JULIE BISHOP, DEPUTY OPPOSITION LEADER: The Australian Government always has an excuse when it
fails to meet the standards or the promises that it makes. And I believe that the Malaysia people
swap deal is already unravelling.

JANE NORMAN: About 70 Federal Police officers are on the island, but the AFP denies reports they've
been given any special powers to force the asylum seekers onto the plane.

Jane Norman, Lateline.

Rann to resign after 17 years of leadership

Rann to resign after 17 years of leadership

Broadcast: 01/08/2011

Reporter: Nick Harmsen

South Australian Premier Mike Rann has agreed to step down under pressure from factional leaders
but has not yet outlined his timetable.

Transcript

ALI MOORE, PRESENTER: South Australian politics is set for generational change, with the Premier,
Mike Rann, heeding the message from factional leaders and agreeing to stand down.

But he won't leave just yet. Mr Rann will outline his own timetable when he returns from an
overseas trip, leaving his nominated replacement, Jay Wetherill, in limbo.

Mr Rann's resignation after 17 years as Labor leader is expected to prompt a wider shake-up of the
nine-year-old South Australian Government. Nick Harmsen reports.

NICK HARMSEN, REPORTER: Mike Rann's political bell is tolling, but his Cabinet colleagues don't
know when it will stop.

The leader-in-waiting is happy to wait while the Premier thinks through his position on a week-long
trip to India.

JAY WEATHERILL, SA EDUCATION MINISTER: There's no question of a challenge. There's an agreement
transition. Mr Rann will come back and make a further statement about his future.

NICK HARMSEN: Like Labor leaders past, Mr Rann has no choice but to go.

ABC RADIO COMPERE: It sounds like decisions are being made by Labor factional bosses, again taking
it out of the hands of voters.

JULIA GILLARD, PRIME MINISTER: It sounds to me like Mike Rann, who's always been focused on what's
best for South Australia, continues to have that focus.

NICK HARMSEN: Unlike Kevin Rudd, Mr Rann will set his own departure date. Before he goes, he wants
to approve the expansion of the Olympic Dam mine, a project he views as his economic legacy.

NICK XENOPHON, INDEPENDENT SENATOR: Mike Rann's fallen on his sword; the problem is it's one of
those plastic retractable swords.

ROB LUCAS, SA OPPOSITION SPOKESMAN: What we're seeing at the moment is a recipe for chaos. To have
a situation where for an unknown number of months we've got a dead duck Premier.

NICK HARMSEN: At the moment there's also an Acting Premier. John Rau is steering the ship while
Mike Rann is overseas, but his permanent promotion was scuttled by his right faction colleagues.

JOHN RAU, ACTING SA PREMIER: There is a consensus position which has been arrived at amongst
members of the Labor Party, and I support that consensus.

NICK HARMSEN: Mike Rann isn't doing interviews, but he is taking calls.

JENNIFER RANKINE, SA FAMILIES AND COMMUNITIES MINISTER: I spoke last night with the Premier, who's
very chipper.

NICK HARMSEN: Just not from the man he says he wants to mentor.

You've tried calling his mobile phone?

JAY WEATHERILL: Of course.

NICK HARMSEN: How many times?

JAY WEATHERILL: Well, I've tried to get in contact ...

NICK HARMSEN: The Premier's not the only one steering clear of the consensus candidate. Right
faction figures like Tom Koutsantonis and Kevin Foley have long rivalled the left leader. Some
suspect his ascension will prompt Mr Foley to leave politics.

KEVIN FOLEY, FORMER SA DEPUTY PREMIER: I'm a shy, retiring type now with the media.

NICK HARMSEN: Retiring in more than the sense you mean it?

KEVIN FOLEY: No, I'm just not going to give you any comment, Nick.

NICK HARMSEN: If Mr Rann's long-serving former deputy does decide to follow him into retirement,
the party could be faced with the prospect of twin by-elections. Mr Rann's seat would most likely
be safe for Labor, but Mr Foley's would be under threat.

A test of Labor's new look.

Nick Harmsen, Lateline.

Now to the weather. That's all from us. If you want to look back at tonight's interview with Wayne
Swan or review any of our stories or transcripts, you can visits our web site and you can also
follow us on Twitter and Facebook. I will see you again tomorrow. Goodnight.