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(generated from captions) a climate change policy. While

I disagree with what Tony says

about the personnel cost, we need people to administer

it. We have one last question from Joanne Zeilinga. Youth rebellion in various forms has

been a feature of society

across many generations. The

scale of the London been amplified due to Twitter,

Facebook and the Blackberry.

Could the riots be a symptom of social media rather than social policy. Let's start with Deborah. There has been a lot Deborah. There has

of blame levelled at social media during the course of the

London riots? I don't know.

I'm with Tony. I don't think we

know what has caused this. I

guess one theory is Great Britain can't export those

people anymore, they used to

send them here, didn't they? (LAUGHTER) (APPLAUSE). You

don't think they should start

doing that again? No, but on a serious note because people's

livelihoods have been lost,

lives have been lost, I think

that there is a class system in

Great Britain that really is

going to keep generating these

way problems. People will find a

way to come together to have

their voice heard and this was

voice a very ugly way of having that

voice heard. I don't think you

media. I think that was the media. can blame it on the social

tool but there are other

causes, there are other reasons

for that. The impression I got,

when I was in the military, we

did studies as to who is likely

to survive in wars, the 18 to

25-year-old age group which you think physiologically should be

the best survivors weren't. The

real survive ors were those who

were married, had kids, had

some reason to be there after a

war. When you look at the young

people, they fit that profile.

They have nothing to lose, They have nothing to lose, nothing to live for. You have

has hit, they have left school, got a global financial crisis

they have been unemployed. Most

young people think they are

and life hasn't looked good. going to be dead at 30 anyway

They get caught up. It was

resonant of other eras where

youth lost the plot a bit and

need to lock on to something. I

don't know. Sometimes I find it compelling but otherwise

blaming Twitter is like blaming

umbrella s for bad weather. It was going to lesbian mothers in the UK was going to happen. Armies of

teaching their kids Tweeting

courses? How did the French revolution happen without

Twitter? I I don't think

social media is to blame for

the riots at all. We know that

people are - people marginalised communities feel people are - people in

disconnected. Social media is a

tool that helps connect people

with their communities. As much as David as David Cameron has called to

ban social media because it

helped to organise the riots,

maybe a little bit. It also

helped to massively mobilise

the clean up. There the clean up. There was a hash

tag, there was places for

people to meet and clean up. A

blog raised ?20,000 for an

89-year-old bash barber

89-year-old bash barber who

had been cutting hair in his

shop in Tottenham in 40 years,

they raised ?20,000 in a day to

help him. That is a massive

power of social media as well. That's all for.. Well said. Please thank well. That's all we have time

Jackie Kelly, Tony Burke, Deborah Cheetham, Stella Young, Malcolm Turnbull Malcolm Turnbull and Lachlan Harris. (APPLAUSE). Next week,

on Q&A, our panel will include Neo-Conservative commentator visiting American

Daniel Pipes, author and third generation Australian Muslim Hanifa Deen, Liberal Party king

maker Nick Minchin. We will see

you again next Monday. Until then, goodnight.

Tonight - a foot in both

camps. That's the coalition's position. We support the mining

industry. But we don't want to

see prime agricultural land

destroyed. We think that the be respected. And that's rights

making miners a bit fractious.

Do we really want to move to a system where suddenly the

Australian people no longer

benefit from the extraction of

resources or that single land holders can hold Australian wealth hostage? wealth

This Program Is Captioned

Live.

Good evening. Welcome to

'Lateline'. I'm Ali Moore.

Stock markets are rising and the level of volatility has

dropped, but for how long? The

problems that sparked last

week's extraordinary financial

nervousness haven't gone away,

with a real question mark over

the ability of economic and

political leaders to fix them

mpt tonight we get an

assessment of where the global economy

Spence, Professor at the Stern

School of Business at New York university and an adviser to the Chinese Government. Also

we'll cross to the Nationals' Barnaby Joyce land holders should have the

right to say "no" to mining

companies coming onto their

land. First our other headlines. Internal doubts. A government backbencher says

she's worried about the welfare

of asylum seekers sent

offshore. And the Vatican versus Beijing. The Catholic Church in a battle of wills

with China of Bishops. Parliament reconvenes tomorrow in what

promises to be the start of a

historic session. The legislation Labor's time in power will soon

be introduced, and set in

motion major changes to the economy that will have Julia

Gillard judged as either a

visionary or a villain. More

from political correspondent

Tom Iggulden. The cherry

blossoms are out. The win der

break is over. And the season for talk has

welcome people to the First Ministery meeting for this

parliamentary session. The

raft government's set to introduce a

legislation in raft of make or break

parliamentary session. legislation in the new

Everything from the carbon tax

to the mining tax and to the mining tax and its health reforms. So there's a

big legislative agenda in front

of us. The coalition's been

put on the back foot before the

first vote. Tony Abbott's been

forced to moderate his opposition to coal seam gas exploration

an old saying an Englishman's

home is his castle. Well it's not! Well it should be. And the thing is And the thing is that if you don't want something to happen

on your land, you ought to have

a right to say no. Music to

the ears of farmers who've been

battling to keep mining companies off their land but

not to the themselves. Do we want to move

to a system where the

Australian people no longer

benefit from the extraction of resources? resources? Mr Abbott has now

stepped back. It's important we

come to a balanced approach.

Which acknowledges the importance of the mining industry to Australia's

economic future. But which

protects prime agricultural

land and respects the rights of

farmers. He speaks two statements to two different

audiences because all he is is

trying to harvest votes wherever he can. Muddled, naive and ultimate ly confusing

politics for everybody. Is he

going to support farmers in

their right as he did on Friday

to say no to coal seam gas rolling over their farmlands?

The Greens have been pushing to

change the law to give farmers

more power over mining

operations but Tony Abbott says

he's not plan. We're not going to

support the Greens, because the

Greens are just full stop. There is a little

bit of the same discomfort in

the opposite direction but

we're working here on the

national interest, on the

interest of farmers on the

land, not on whether Tony

Abbott and I like each

other. There will be no support

from the government on the

issue. We don't agree with the

Greens at all on to coal seam gas. There are

many good analysts who agree

with this proposition and that

is that gas is the transition

fuel to a low fuel to a low carbon economy. In reality the farmers

versus miners issue is one for

the States. They after all have

ultimate responsibility for granting exploration licences

and facing growing community

anger, State premiers of both

political persuasions have been

tipping the balance in favour

of farmers. The Federal

Government's plans to send

asylum seekers to Malaysia will be scrutinised by the

bench of the high court in

Canberra next Monday. The

government is facing internal criticism over the policy, with

one backbencher saying she's

concerned for the safety of people sent offshore. Lawyers

for the first group of asylum

seekers due to be sent to Malaysia are looking for

forward to their day in court

but government may have

problems closer to home. One of

its own says she's worried about offshore processing. I'm

very concerned that we can't really guarantee the safety of

the individuals, the 800 who

will be sent there. I do not

think that opening Manus Island will actually assist the

process, but that's my personal

view. I have expressed that

inside caucus. I think Manus Island is going back to

something we said we wouldn't

do, Pacific Solution.

Melbourne the High Court indicateed heard as soon as possible.

Australia's Human Rights

Commission intervened in the

case on behalf of case on behalf of unaccompanied

minors in the group and the

court made no decision about

examining an affidavit examining an affidavit by the Immigration Minister Chris

Bowen describing how he decided

Malaysia was a suitable place

to send asylum seekers. In the

norm al course of things, any

evidence that is to be tested

is able to be presented in court. In the affidavit

minister the says he began discussions to send people there on the advice of the department of

Foreign Affairs and Malaysia's

assurance it is wanted a new approach in the way it treats sooim. Does the government

really have the legal power to

expel them to Malaysia instead

of allowing them to stay in

Australia and seek refugee

protection here? These people

fear for their safety if expelled to Malaysia. In Canberra the Greens are looking

for coalition support for a

Senate inquiry to pressure the government into releasing details of its people with Malaysia and plans to

reopen Manus Island in Papua

New Guinea to asylum

seekers. We do need scrutiny of

these types of arrangements. We

need to be able to get to the detail. If not just to find out

how much it's going to cost,

how young people, vulnerable

children, are going to be

Katered for. The coalition

hasn't indicated if that support will be support will be forthcoming.

Joining us now in our Parliament House studio is Barnaby Joyce, opposition

and water. Many thanks for

joining us. My pleasure.

Before we get to the coal seam

debate, the Greens are pushing

for an inquiry into the for an inquiry into the Senate

into both a December to reopen

Manus Island and also the

Malaysian deal for asylum seekers. You're the Nationals

Leader in the Senate. Will you

support the Greens on that

call? Well, let's see, with

everything the Greens say, it's something else when you

actually see the legislation.

The coalition did support Malaysian deal. We supported Nauru. As soon as the Malaysian

deal came out I owed an op ed

in the Canberra 'Times' stating

specifically what the issues

were, the Amnesty reports that had been out there. With the

Malaysian deal the Labor Party

managed to do something I

thought was unique, annoy both

the left and right of politics,

showing that in their

belligerent views of trying not

to say the word Nauru they were

willing to do anything, including sending people to a

country which the Amnesty report had shown that we had issues of people basically

being sold into ... Is that a

yes or no to supporting the inquiry? Tell what's piece of legislation and I will

give you a response. It's not

actually a piece of legislation

at this point. It's just an inquiry into the facts, but I

take your point, you can't make

a decision now. Let's move on

to the coal seam gas issue. Do

you agree with Tony Abbott that if you don't want something to

happen on your land you should

have the right to say "no"? Not

only that, it's the nation

should be able should be able to say no. When it destroys an aquifer, there

should be an immediate no. In fact, it's peculiar fact, it's peculiar to find out

that Mr Emerson who you just

had on earlier stating how

outrageous Mr Abbott's position

was, does he not realise was, does he not realise Mr

Burke put up 300 conditions on

coal seam gas? That is his own government putting conditions

on coal seam gas. We seem to be

on the same page

destroying prime agricultural land or unnecessarily interfereing with that land,

that should also be a rule-out

. We've also had . We've also had today Anna

Bligh putting a buffer zone of

2 kilometres from residential

areas of 1,000 people or more.

This is I believe by reason of the pressure that we have been

placing on them. Where those

issues have been dealt with, I

think it's very important that

farmers get a fair deal. What

they're getting at the moment

is 75 c for every $1,000 that

the coal seam gas company

operates. That's

of the complete inequity in the dealing negotiations that are

going on at the moment. Under

what circumstances do you

believe a land holder should be

able to say no? If it's going

to damage the aquifer or

destroy the aquifer, that's something something not only the land holder should have an

an interest in. If it's going to destroy the usage of prime

agricultural land, that's

something not only the land holder should have an holder should have an interest

in but our nation should. heard your representative from

the mining company before talk about how this would unnecessarily impede mining companies. That is a load of

rubbish. The history of this

right to petroleum and gas is

something that is not been

going for hundreds of years. It

started basically with a 1915

Act in Queensland to take the

asset off the farmer it across to the States. In

later guises we see it from the

1930s through other States back

to 1981 Neville Wran taking the

last section of it from New South Wales. It's not something

that's been written in history

like Magna Carta. If you want

to go back to the common law

plin, you will find that it's

only silver and gold that is actually attached to the Crown.

Those things which were part of

the soil were part of the land

and this was certainly coal and ... Your own resources

spokesman says mineral assets belong to the people of the

State and he says "the moment

we step away from a

well-defined legal process anarchy prevails". It's

correct, they do belong to the

State but they belong to the

State because the State

basically pilfered them in the

guise of the way Neville Wran

did it in 1981, in the way that

in 1915 in Queensland by reason of the First World War,

everybody felt they had to

secure the assets. But from

World War is now over but these

assets were never given

back. Are you saying there is

not a well-defined legal

process? What I'm finding quite obvious. There is inequity

between the farmers' bargaining

position and the miners'

bargaining position and it's

never better represented the

pecuniary return to the farmer,

less than 75 c and the coal seam gas operator getting

$1,000. Now, if I said you get

$1,000 or I get $1,000, you 75 c, do you consider that a

good deal? Do you consider that

a representation of a fair

bargaining position? I presume

you would say no. I would say

to the lady representing the mining industry, what's her

consideration of that as a

deal? Let's go back to the

reasons you say you'd be able

to say no. Prime agricultural

land and damage to aquifers. Do

you know of any company on any project right now that would be able

able to say categorically for

however many years out there'd be no is the point of the Senate

inquiry we have at the moment.

That Senate inquiry will come to

to a conclusion later on in the

year. It is looking into

precisely this issue. We hope

at end. Inquiry we have the

capacity to bring together basically

basically a sign-off from all

parties involved, so that we

can progress the issue. What

the Greens wish to do obviously

is pay wedge politics. amazing how the Greens have

managed to approach every media

outlet with their position.

They say they're going to

contact me. I'm looking for a message on my phone. Haven't heard from them yet and I won't

because it's wedge. To go back

to this point of being able to

block access to land, if your

inquiry finds there are no

guarantees about protection of

aquifers, if your inquiry finds

that there should be greater protection for prime agricultural do to put in place

restrictions? What's in your

mind as a possibility? We've

seen already with the movement from such people as Anna Bligh

that the pressure from the

inquiry is starting to have effect. I've heard Campbell

Newman talk about the golden

triangle and making sure it doesn't come onto prime agricultural land. We've

brought this issue to the front

of the agenda in Australia.

That is something that I'm very

happy is happening. It's

something we've fought are for.

What we can clearly say is Australia who believes we

should be able to destroy

aquifers. Even the Labor Party

despite the representations of Mr Emerson

Mr Emerson who obviously

doesn't know what his doesn't know what his Cabinet

colleagues are saying nor other

people in the Labor Party

Cabinet understand that even

the Labor Party themselves put

300 conditions on the use of

coal seam gags. We're almost

out of time. I'm just trying to

understand if you can't get any guarantees about protection guarantees about protection of

aquifers, do you ban mining? Is

what you're proposeing? I think

that all parties will be saying if you if you can't get the protection

of aquifers, you won't have an

argument in this Parliament.

I've not heard one person say

that will allow mining

companies to destroy aquifers.

What if there is uncertainty, given that you have a massive industry that's already been

approved and has licences to

operate in Queensland in

particular? That's a very good

What is he going to do if they

do destroy aquifers? Hes a given

given a condition that they have to

have to make good and how on

earth can they do it? What do

you do, go down 900m and fix it

up? Phoney, that will be fascinating. You must've

evolved into a mole. Thanks for joining us tonight. My

pleasure.

The man accused of murdering

Sunshine Coast teenager Daniel

Morcombe has appeared in a

Brisbane court. Lawyers for the

41 err yield0 say he will fight

the charges and will be

appealing for bail in

Supreme Court. Today, Daniel's

parents Bruce and Denise

Morcombe visited the site where

hundreds of searchers are trying to find the boy's

remains. The accused man who

can't be identified for legal

reasons appeared briefly in the

Brisbane Magistrates Court. He

sat silently without handcuffs in in the dock wearing a brown prisoner's jumper and jeans. In

the circumstances he is doing alright. The

is accused of murdering schoolboy Daniel Morcombe who

disappeared while waiting for a

bus on the Sunshine Coast almost eight years ago. He is

facing five charges, including

indecent treatment of a child

and interfering with a corpse.

The accused man's lawyer says

he will defend the charges. We

will apply for bail when we

have undertaken all the

necessary work. The man was

taken to the Arthur taken to the Arthur Gorrie correctional centre west of

Brisbane where he will be kept

separate from other prisoners

for his own safety. Bruce and

Denise Morcombe didn't attend

today's appearance. They said

they weren't sure anything

could be gained from seeing the

accused man, apart from it being extremely upsetting.

About 100 police and SES

difficult search in dense

scrubland on the Sunshine

Coast. They hope to give the

Morcombes what they now want

most, a son to bury dignity. Bruce and Denise

Morcombe visited the site today

which they've described as a

muddy jungle. I need to know

where Daniel is and what sort

of area he was taken to. The

Morcombes say the web site dedicated to their son's

foundation has been overwhelmed

with donations and messages of support since the accused man's arrest. It does make you stronger T makes you feel

you're not alone. Saturday

night was such a shock. Don't

know how we feel at the moment.

It's been really nice to read

all these things. The

Morcombes' lawyer praised the family for their brave determination in persisting with the search for are in

son. Most of us in everyday life cannot stand crimes

against children. The second

and I think almost equally the

same on the same level is the drive that has been shown by

Bruce and Denise and the boys,

but particularly Bruce and

Denise. They've resolved that

they would not stop until they

found out what happened to Daniel. Despite their tragedy

the Morcombes are determined to continue fighting for child

protection. They're hoping the

Queensland Government will help to fund was not for the generous

donation of a businessman on

the coast to pay the rent here,

we actually would've run out of money some money some months ago and the foundation logically would've told the. We'll sit down with

the Morcombe family and work

through how government and the

family can make sure the

foundation continues to be a

very effective one. After

almost eight years of investigations, today was just

the beginning of what's

expected to be a long court

battle for the Morcombes. But spent searching for their son

has taught them how to be patient. And they're preparing

themselves for a long road ahead. The accused man is due

to reappear in court next

month.

While relative calm has

returned to the markets the

long-term view isn't so rosy.

There's still considerable concern about whether sovereign

debt issues in Europe will be whether the US can get its

economy moving again. At the

same time as it tries to cut

spending. To discuss the

outlook I'm joined by Professor Michael Spence a Nobel laureate

economist and author of 'The Next Convergence: The Future of Economic Growth in a

Multispeed World'. He also advised the Chinese Government

on its latest five year plan.

Many thanks for joining

us. Thank you. It's fun to be

with you. The head of the World Bank says the problems the US and Europe are pushing

the world into a new danger

zone. Do you agree with gha

assessment? Yes, I do. I there is a resetting of equity

markets in terms of growth and

it's compounded by this growing

lack of confidence in adequacy

and aggressiveness of the policy responses on both sides

of the Atlantic. Let's look at

the US, for example. What does

that danger zone mean? They

have a real crisis at the

moment in terms of cutting

doesn't seem to want to

move? No, I think that both markets and policy makers expected much higher growth for

most of the post-war period and

they've been wrong and they're downward resetting that. This interacts with the fiscal

situation, the fiscal whole

that we've dug ourselves into is much deeper if the prospect

of growth rates are low. The

whole debt ceiling debate that

we saw ever

weeks indeed months being

played out, do you think that

that weakened the US? If you

put it together with the

parlous state of the economy,

did it signal perhaps did it signal perhaps something deeper about America's future

position in the world? Well, it

certainly I think damaged our

image and the kind of

confidence that we've enjoyed

from other countries, and

investors generally. So I think

it did no good at all. It

should not have happened. It should not have been should not have been held

hostage to a difficult debt debate.

debate. I don't think there is

immediate damage in terms of

yields but I think it

reinforced the notion that the

policy making process has sort

of lost its centre of focus and

maybe even its orientation that

there's a feeling of gridlock

and disconnectedness of the reality

reality of the challenge that you you mentioned. What about in

Europe? Of course, we get

package after package but

collectively to those packages

amount to the right decisions?

Dot political leaders there

have the wherewithal to address the enormous problems Europe

faces? I think they do, but so

the packages you're referring to, there now have been

several, are basically what you

might think of as defering a

problem. They can't come to an

agreement on a full-blown package with burden sharing

built into it. Other citizens of the country in

question, creditors and so on

and so they're providing

liquidity support so that you

don't have a kind of lock-up based on lack of access to the

market. So I think your

characterisation of Europe is

accurate and I still think there's a reasonable

possibility they can get their

arms around this but with many countries and different points

of view in their citizens, it's

not an easy process. What's your reading of what's likely

to happen in the volatility has subsided but

it's not very far away, is

it? No, it's not far away. The

most important thing that

happened last week when Spain and Italy looked like

they might go into a downward

spiral with ever rising yields

and risk spreads was the European Central Bank intervened. That did settle

markets and buy time. It was an

important intervention, Ali.

Of course, Australia has the

buffer of Asia and more

specifically China. How specifically China. How much of a buffer is China if you look

ahead? How long can it keep

growing at the pace that it has

been? It can been? It can go on for quite a

long time. China has - much

like Australia, it has

excellent balance sheet on the

public sector side, limited

debt, limited external debt,

lots of resources with which to

try to buffer shocks. I mean,

they have - if you are going to

argue against that position they have an enormously complicated set of complicated set of transitions

to naff gate in the next five-year plan that's coming

up. They could stumble in any

one of a number of one of a number of dimensions

on this. It's far from a done

deal. The last thing I would

mention is if America mention is if America and

Europe turn down which is very

likely to happen if this thing

goes the wrong way on the loss

of confidence and the resetting

of growth downward that will

almost surely be the one thing

that will pull down growth immediately in economies, the binge ones like China. Indeed, the question

would have to be sow

self-sustaining that growth is

in China. Because there's a lot

of talk about China moving

towards domestic demand but

really, they are incredibly

reliant on the US in particular

buying what buying what they're

selling? That's exactly right.

The way I've calibrated is t is if the major industrial

countries experience very low

growth they can sustain the

growth but if we take a big downturn they

lost aggregate demand. In

China as you say it's not a

done deal. What do you think is

the most likely potential

stopper on that growth? Is it

inflation? Is it environment? The environment is

a major issue but it's longer

term. The short-term potential

stoppers are loss of control

landing from the asset bubbles,

social unrest intentions

getting out of control and some

major failure in making the

making the structural transitions on the demand side

of the economy so they can

drive the economy from a combination of domestic consumption and high-return

investment. If we look at the

bigger picture, China now has a

per capita income of something

less than $5,000. What happens when that hits $15,000 or

$20,000? What does that do to

the global economy, to global

governance, to coordination? First of all

they'll start to slow down and

are mock like us, grow at 2.5,

3.5, 3%, something like that.

'Cause they will be an advanced

economy by then. They'll also

be the world's largest economy

and India won't be far behind them. So we have the two future check go in a very different

direction in the next decade or two. Buysically we'll have a global global economy in which they'll

have enormous power and influence and we will be

reliant on them to participate

along with the current set of

advanced countries and Brazil

and possibly a number of others

in create ing a global

governance system that

maintains stability, equity and

so on. They understand that's the role

India a little bit behind.

Nobody can know for sure how they'll discharge those

responsibilities, but I responsibilities, but I think on balance are pretty well

align ed. They won't be so

dominant that they can dictate

so they need to be an active and constructive participant.

A final brief question. If you

were a betting man, I have no

idea whether or not you are, but if you were, would you

think that the best bet is that

China will be able to do this or that it will or that it will go off the rails? I have a fairly strong feeling that they will get this

job done and make it on a roughly 20 to 25 year time

horizon to full blown high

income status. I believe the

same thing about India. In the

shorter run I think they may

suffer some slowdowns and

they'll certainly have some

shocks to deal with along the

way. In the course of those 25 years the

years the Asian growth is big enough to enough to put enough pressure on natural resources and the environment to actually stop

the process so they're going to

have to not now but now invent a new or slightly

different or altered growth

pattern. That's different from the ones that their

predecessors including us in the

the advanced countries have used or they probably won't

make it. It's going to be a

very interesting times indeed.

Michael Spence, many thanks for

joining us. Thank you,

Rebels in Libya advanced into the key western city of Zawiya just 50

kilometres from the capital Tripoli. Now apparently controlling most of the city,

jubilant fighters sell operated

in the main square, cheering as

the Libyan flag was torn down

to be replased by the rebels'

new flag. In response, Libyan

state television broadcast a

public address delivered by

phone by the Libyan leader

Colonel Gaddafi. The blood of

the martyrs is fuel for the

battle we'll beat them in are in places whoever they are and

the Libyan people will be victorious and they will celebrate in the squares

without bombing. Zawiya is on

a critical route for transporting food, fuel and

weapons into Tripoli. There is

a growing rift developing

between China and the Vatican

over the elevation of Bishops. Beijing Beijing has ordained a number

of Bishops in recent months without papal approval. China

sees that as foreign

interference and is now considering another seven

candidates for ordination. Unlike elsewhere in the world

the Catholic Church in China is

operated not from Rome but by a local government authority. So

when Bishops are a pointed

they're selected by what's

called the Chinese Catholic

Patriotic Association. For a

long time this infuriated Rome

had been an attempt to heal

this division from both sides. The Communist Party and the

Vatican somehow found a way to agree on the selection of

Bishop after Bishop. The key appointment seen as a major

turning point was when they

together approved the new

Bishop here in Beijing. It

seemed the relationship was on

the mend. Now it's fallen apart. At the beginning of the

year there were statements

where Australia warned that

this was going to happen. This

Hong Kong based father is

deputy editor in chief of the

Catholic newspaper the Catholic newspaper the Sunday

Xeer. He thinks the church is possibly being caught up in a

more general crackdown in China

including the arrest of human

rights lawyers, artists and

activists. He says he could see

that Beijing wanted to pick a

fight when in recent weeks, it

chose two new Bishops, knowing

they'd be totally unacceptable

to Rome. Then religious officials started forcing other

Bishops to attend these government sponsored

ordinations. One Bishop said "I

live in terror that the phone

will ring and I will be order

ed to go to wum of these

ordinations." They really

pressure them. They take off

their phones off them, they

arrive under police escort, the

Bishops say later that the

security even comes to the toilet with them, they sit in

their bedroom at night. They can literally do Force them to be part of

this? Force them to be part of it. The sudden appointment of

a series of Bishops without

papal blessing has led the

Vatican to take off the gloves

too. Pope Benedict has called

the appointments illegitimate,

and said that those who

willingly participated in

recent ordinations, including

the new Bishops, will be excommunicated.

excommunicated. He's also

called on Catholics to ignore

the authority of those Bishops it sees as illegitimate. The Vatican it's never reacted before. It's never really talked never really talked about excommunication before. This

time they said with niece two Bishops they under stood the situation very well, they understood what the

consequences were and by their

action they've fallen into a state of being ex

communicated. Yet many of

China's roughly 10 million

Catholics still hold out hope that this brewing conflict is

only temporary. All we can is pray and pray hard for God

to let China and the Vatican

establish diplomatic ties as

soon as possible. This man can remember when things were much

worse especially during the

cultural revolution. As a

believer born in the 70s,

before the 1980s I didn't even

step into a church. I secretly learned the bible. All of this was an underground activity.

But millions of

Catholics, like other Christian denominations, remain

underground. These are also

called house churches because

they gather in they gather in informal locations. The official

Catholic Church is accused by

the underground worshippers of not being closely enough in

step with the Pope's wishes.

But the Pope has called on the

two groups to come

together. Our faith, the way we

worship and our ceremonies are

all identical. There are differences, so I hope that in

the future we can unite. Yet

observers say that recent

events are making that less and

less likely. There was progress

being made. I think this latest

fiasco has probably put that

cause back a long, long way.

And really almost in every part

of the country now, people are

on edge. In the early 17th century, the Jesuits China after a long absence.

They used their scientific

knowledge to gain acceptance

from the emperor. For example,

they helped build the old tower behind me, which was used to

observe the stars and the planets. But the church knows

it can be tough going here in

China and hundreds of years

after building that tower, it's still struggling in its dealings with Beijing. It's unclear

unclear why the Vatican is so forcefully opposed to these it's a problem of process or

people. But there are more

Bishops due to be ordained in China in the coming weeks, meaning unless there's a meaning unless there's a change

of heart, this might looks like

it's going to get worse before

it gets better. Now to the

weather.

want to look back at tonight's

interviews with Barnaby Joyce

an Michael Spence or review any

of our stories or transcripts,

you can visit our web site. You can also follow us on Twitter

and Facebook. I will see you again tomorrow.

Closed Captions by CSI This Program Is Captioned

Live.

Good evening. Welcome to

Lateline Business. I'm Ticky

Fullerton. Tonight a $400

million loss but the Leighton Holdings boss is unmoved. I

really believe the share holders were well informed all

the time. We've been dealing

with some very big issues but I

think we did so responsibly,

quickly and openly and we're

moving forward strongly from there. Acquisitions making their mark. Internet service provider iinet lifts revenue by

50%, but tax changes drag

profits down. Company's

performing very well. It's on a

good growth trajectory. Doing

very nicely, thank you.

getting on with the job instead

of screaming like some of its

competitors are. And too hard

to call. Engineering and

services company UGL unveils another record profit but

refuses to give any guidance

for next year. The US in of the

last week or two or three has

seen dramatic change in

could have an effect on our US

business. To the markets. The Australian stock market

continued its fightback today after a positive weekend lead

from Wall Street.

Shares in Leighton Holdings

surged 8% today despite a more than than $1 billion than $1 billion turnaround which resulted in

loss of $409 million. It's been a

a tumultuous year for

Australia's biggest

construction company, and the flow

flow of red ink has

flagged but what excited

investors was an order book

totalling $46 billion and the

prospect of good times ahead.

Tracey Kirkland reports. Down

but far from out. Today's

profit results didn't surprise anyone. Leighton Holdings'

full-year loss of $409 million

was expected, a drop of 167% on

last year's $650 million

profit. It was a buoyant CEO David Stewart today's announcement, confident the worst is over. We're

through this difficult patch in

our existence. We are very

positive about the business and opportunities abound in all our

sectors. Work in handstands at

$46.2 billion and we have a

full pipeline of opportunities. There

we are in are perfectly placed

for growth. The loss was

largely due to a series of

writedowns. In April, the company reported a company reported a profit

downgrade citing problems with

several large projects. The Brisbane Airport Link joint

venture had been hit by design

and access issues, planning problems and Queensland's

severe wet weather. The weather

was also to blame for costly delays at the desalination

project in Victoria. And there

were problems with the company's stake in the Middle

Eastern based contractor there

was no final dividend but

investors did get plenty of

next year's profit forecast. details including strengthening

Lleyton now says it will be at

the top end of 600 to $650

million. As we move through the

first half of next year, then

get to completion on Airport

Link and VDP you will start to

she that underlying strength come through and hence come through and hence the

support we have for the

forecasts next year. We think

Lleyton will be a very significant beneficiary from that work coming out of the

mining infrastructure. Albeit

we didn't see it in this result

and probably see some of it in

the 2012, but 2013 and beyond we expect to see we expect to see that

significant uplift in Lleytons'

outlook on the back of cautious. We'd still be looking Some however were more

at some of the aspirational

targets an querying whether or

not Lleyton are still chewing

off significant amounts of risk particularly in the growth of

the offshore book. We're still

not entirely clear on the

intentions of the Spaniards and

indeed the Germans and how that

plays out in the boardroom.

There are still some things

lingering that we'd like to see

resolved. However, most

investors threw caution to the wind

rocketing to finish the day at

$21.46. Australia's second largest Internet services provider iinet has posted a net

profit of just over $33

million. While that's down

slightly on last year, revenue

has soared. The Perth-based

company says it's due to the

growth of new customers and contributions from its latest acquisitions. Netspace and IIPT's consumer

is often considered a quiet

achiever and one to watch. This company's performing very well. It's on a good growth trajectory trajectory and it's doing very

nicely, thank you. It's getting

on with the jumping instead of

screaming like some of its

competitors are. The company

proft posted a full year net

profit which was down slightly

on last year but ref has soared

up 50% on last year to almost

$700 million. Chief financial

officer David Buckingham says

revenue was driven by two recent acquisitions. We

acquired NetSpace in April of

2010 so we had a full 12 months

of that business in the results. And we bought another business called AFT, the

consumer division of AFT so

we've had another nine months

of that customer base coming through our results. They're

generally speaking more

valuable competitors than their major competitors. Roger

Montgomery says a higher tax

bracket has contributed to a

lower profit result this year. Because of deduction that the company

received in 2010, they paid a

lower tax rate of about 11%.

This year they've had to pay

the full tax rate of 30%. That's impacted their net

profit after tax. But if you

adjust for that, the profit

growth has been substantial

over 20%. Despite the solid result, iinet's Telecommunications will are the shareholder Amcom

distribute its $ --

31 million iinet shares so its investors. Some of those

shareholders will sell them on

the market anyway which could

push the prize down but some

may look at this company and

decide that the shares are

cheap. That's certainly our

view. It's also the view of the iinet board who are buying back

shares at the moment. The

company says it's excited by the increased market opportunities the National

Broadband Network will bring. But telecommunications analyst

Kevin Morgan says the roll-out

is already behind schedule and

iinet will continue to utilise the copper network. The

roll-out won't go out on time.

They have a considerable amount

of money tied up in providing

service over the Telstra copper. That's a high-margin

business and what they'll do is

continue to move their

customers from the Telstra whole

reselling onto their own

network that will lift their margin substantially. David

Buckingham says for the next

year the company will concentrate on moving

customers to the iinet network

and billing systems but it will consider further acquisitions in the future. Our in the future. Our balance sheet is nicely placed. Wer

we're comfortably geared at

only 40% debt to equity. We to

have head room to pursue more acquisitions as acquisitions as the opportunities come along. Some

of their customers, have landed them in court.

Iinet is being caught up in a

protracted legal battle over who was responsible for unauthorised file sharing of

music and movies that occurred

on its network. A number of Hollywood

Hollywood studios represented

by an Australian copyright

group took the company to court in