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Lateline -

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Tonight - security failure. Revelations security checks on personnel at Australian military bases
and embassies have been fabricated.

The offshoot of the falsifying of documents a gaping hole in Australia's security, and this has
potentially terrible repercussions. Particularly for our military men.

This Program Is Captioned Live.

Welcome to 'Lateline'. I'm Ali Moore. Tonight - in the US, federal debt reaches its legal limit of
$14.3 trillion US. With the countdown now started to the day when America won't be able to pay its
bills, President Obama has warned of dire consequences, unless Congress approves an increase in the
debt ceiling. The nominal deadline is August 2, but tonight, the No. 2 in the US Treasury tells
'Lateline' legislators can't afford to wait until the last moment.

At going to get concerned. For the moment they understand that this is a thing that happens
periodically and so we do think it's important before the markets start markets start to react to
make sure that we increase the debt limit. This is a circumstance that we've seen before. Congress
has always raised the debt limit as necessary. We have confidence them he do it here but we'd like
not to wait till the last minute. We'd like them to do this sooner not

Neal Wolin later in the program. First our other headlines. Tax attack. Business leaders criticise
the government's carbon tax. Undervalued and underpaid.

Whistleblowers allege security holes in Defence

Whistleblowers allege security holes in Defence

Broadcast: 16/05/2011

Reporter: John Stewart

Three Defence whistleblowers say they have been directly ordered by superiors to falsify security
checks on civilian and military personnel.

Transcript

ALI MOORE, PRESENTER: Tonight, three whistleblowers say security at Australian military bases and
embassies has been significantly compromised by a deliberate fabrication of information to
fast-track security clearances.

The three former Defence workers say they were given direct instructions by senior Defence staff to
fabricate security checks on civilian and military personnel.

They say the fake security clearances have left a gaping hole in Australia's national security and
compromised ASIO's records.

John Stewart has this exclusive report.

JOHN STEWART, REPORTER: Monica Bennett-Ryan, Janice Weightman and Owen Laikum worked at the Defence
Security Authority in Brisbane between 2009 and '10.

The Defence Security Authority, or DSA, is an arm of the Defence Department that is responsible for
conducting security checks on Australian military and government personnel.

MONICA BENNETT-RYAN, FMR DEFENCE SECURITY AUTHORITY STAFF: These clearances were being done for
military personnel, for government employees of all kinds across the board in different areas.
Including, you know, those that were working in any sensitive area.

JOHN STEWART: The three former DSA staff were employed through a labour hire company which supplied
office staff to the Defence Department.

OWEN LAIKUM, FMR DEFENCE SECURITY AUTHORITY STAFF: I went from - all the way from the lowest
restricted, confidential, and then I went to secret and then top secret negative vetting. And then
there's one higher than that: top secret positive vetting. And I'd been through all of them.

JOHN STEWART: The three had jobs called "co-ords" which involved checking documents supplied by
people who'd applied for a security clearance. Once the checks were complete, a report was sent to
ASIO to see whether the applicant was a person of interest on the ASIO database.

The DSA does security checks on a wide range of people, including private security guards working
on Australian military bases, Australian staff working in embassies overseas, air marshals, senior
public servants with access to sensitive information and Defence personnel, including intelligence
officers.

In 2009 the DSA was processing about 23,000 security checks per year.

The three former staff say that a large backlog of applications began to build up and pressure was
mounting to process the security clearances faster.

OWEN LAIKUM: The pressure on you to process it and get them out quickly is high. So if you don't
meet those standards and meet that pressure to get your numbers up, then you're going to lose your
job.

JOHN STEWART: It was this pressure that the three say led to what they believe are thousands of
falsified security checks, with information invented to fill in gaps on security applications,
including top secret level clearances sent to ASIO.

OWEN LAIKUM: Information like where you live or previous employment, they didn't really care about
that stuff. Just make it up, put in some dates, put unemployed for periods that were missing,
addresses, just put the, you know, area address, find a street or kind of make some information up
to fill in those gaps.

JOHN STEWART: And they say the instructions to invent false information from the lowest to the
highest levels of security clearances came directly from senior Defence staff.

JANICE WEIGHTMAN, FMR DEFENCE SECURITY AUTHORITY STAFF: There was a large percentage of the
applications that came my way that did have gaps, did have problems that needed to be phoned up
about. I would think probably at least 25 per cent.

And the analyst started to get impatient with me, because she said, "Well, this is what you do."
And said, "Well we do this all the time," and this is manufacturing certain birthdates, filling in
gaps of addresses.

MONICA BENNETT-RYAN: I put a couple aside, about three or four applications aside from this day's
work and I said, "Um, are these - this has this problem, this has this problem, this has this
problem, this has this problem. You know, there's not enough addresses here, there's no, um,
proper, um, dateline for employment" - questions like that. And one of them didn't have a birth
certificate. And so it was a case of, "These things, these problems exist and what do you want me
to do about it?" And I was told these words: "Be creative."

JOHN STEWART: The three former DSA staff say the information they invented was done at the behest
of their Defence Department bosses who didn't want to make the extra phone calls.

OWEN LAIKUM: Trying to fill those gaps and making it less of a problem for senior management and
the other vetting officers was probably the main priority as a co-order.

JOHN STEWART: The three also say that travel information in top-secret clearances was invented
about where civilian and Defence personnel had been overseas and who they'd met. They also claim
that the falsification of security checks included those of staff who were applying to work in
Australian embassies.

OWEN LAIKUM: Sometimes they wouldn't give the city that they went to in a certain country. You'd
just pick a city that they went to. Sometimes some would write "Asia", so you'd just pick a country
and that and certain things like that.

JOHN STEWART: An applicant could say they travelled in Asia and then you would just make up that
they ... ?

OWEN LAIKUM: I would choose China, because it was one of the main countries in Asia.

JOHN STEWART: All three former DSA staff say the biggest compromise to security vetting involved a
failure to check private security guards who had applied to work on Australian military bases. The
former DSA staff say they were told to invent information in the guards' applications to fast-track
the process.

MONICA BENNETT-RYAN: It was their addresses, their workplaces, there's no - there was no - they
didn't give all the information about relatives, etc., so it was bypassed. Some of the people
didn't even supply birth certificates and that was just let go. They were from all over the world
and some of them were from places where our men are fighting.

JANICE WEIGHTMAN: Who knows who was on the military bases? Who knows about their background? When
there was so much - so many lies, falsification, outright fabrication mixed in with truth, it just
rendered the whole thing nonsense. And how can we - I mean, there were so many like that, who can
say which ones are correct?

MONICA BENNETT-RYAN: The offshoot of the falsifying of documents is that there is now a gaping hole
in Australia's security, and this has potentially terrible repercussions, particularly for our
military men.

JOHN STEWART: The former DSA staff believe that all private security guards working on Australian
military bases now need to have their security clearances re-checked.

Do you think it'd be hundreds or thousands of clearances that were compromised?

OWEN LAIKUM: Um, I'd think thousands.

MONICA BENNETT-RYAN: And so ASIO now has a whole batch of false information mixed with true
information and no-one is able to work that out. No-one can - ASIO wouldn't be able to go through
and work out which was true and which was false. So, the only way to do this is to redo all of the
security guards' applications for security clearances. And, um - and that's what I would like to
see happen, because I think that this is a dangerous situation.

JOHN STEWART: In December last year, three men were found guilty of planning a mass shooting at the
Holsworthy Army Base in Sydney. When the men were first arrested in August 2009, the then prime
minister Kevin Rudd ordered the Defence Department to review security at Australian military bases.

KEVIN RUDD, PRIME MINISTER (August 5, 2009): Defence's advice is that their current arrangements in
their judgment are adequate but they will now undertake an immediate and comprehensive review of
security needs for our Defence bases, including the appropriateness or otherwise of continuing to
use civilian contractors.

JOHN STEWART: Six weeks later, the Defence Department announced that it had upgraded security at
military bases. The review included an investigation into the use of private security guards.

Monica Bennett-Ryan says that she was working at the Defence Security Authority when Kevin Rudd
ordered the review and she was among a group of staff given the job of upgrading security guards.
But again, shortcuts were taken.

MONICA BENNETT-RYAN: I was given the instruction that these clearances were different to the other
clearances because they were being fast-tracked. And what that meant in effect was that if there
were any gaps, they were to be filled in.

JOHN STEWART: The three former DSA workers say that bullying was rife in the workplace. They were
discouraged from speaking to each other and could be sacked without notice.

Monica Bennett-Ryan says that when she asked questions about the fabrication of information in the
security guard re-checks, Defence managers moved her to a desk beneath an air-conditioning unit.

MONICA BENNETT-RYAN: So I said I can't go into that position because it's too cold, and the team
leader who was the, um - who had given me this message from the hierarchy, just ran upstairs
straightaway, literally ran up the stairs straightaway to tell the top person that I had said that
it was too cold in that position and the answer came back: "Wear a jacket."

JOHN STEWART: Monica Bennett-Ryan says she was then sacked by the recruitment agency which had
contracted her to Defence. Owen Laikum says that he was let go by the recruitment agency after he
requested a holiday. Janice Weightman says that she resigned after being demoted for asking
questions about the security clearances.

Last year the three complained to the Minister for Defence, Science and Personnel, Warren Snowden,
about a culture of bullying. After three investigations, Minister Snowdon wrote to the former DSA
staff, "With regard to the complaints made by Ms Monica Bennett Ryan, Ms Janice Weightman and Mr
Owen Laikum, the investigator was unable to find any evidence of bullying or harassment."

The investigations were conducted into management and bullying, but not the handling of security
clearances. Monica Bennett-Ryan says that she explicitly told one of the investigators that
information in top secret clearances had been fabricated.

MONICA BENNETT-RYAN: And so I made sure that she understood that what we were doing was falsifying
documents and that the security clearances that were being put through were false and they
shouldn't have been put through. And she wrote down, I watched her - as I was speaking she wrote
down what I was saying, and I spoke very clearly and I watched her write.

JOHN STEWART: She not only told the investigator, in July last year, Monica Bennett-Ryan also sent
the following email to the investigator: "I think that deceiving ASIO is definitely not in the
national interest and this practice needs to be exposed and stopped. ... Missed information is
creatively 'added' into the database and the applications are rubber-stamped by vetting officers
and rushed through the system so the stats look good."

Monica Bennett-Ryan believes the agency staff or temps like her were being bullied by Defence staff
to dissuade them from asking questions about bending the rules and falsifying security clearances.

MONICA BENNETT-RYAN: It's a shameful thing to do, and I was horrified when I found out that I had
been put in a position where I had to lie to ASIO.

JOHN STEWART: A senior Defence Force staff member currently working within the DSA has backed up
the claims made by the three whistleblowers and told Lateline that none of the clearances done on
private security guards or civilian or military personnel have been rechecked since the three left
the DSA last year.

The three want an independent inquiry into Australia's national security vetting procedures.

MONICA BENNETT-RYAN: It needs to be investigated at the highest levels, all the way through. So the
people at the highest levels of DSA should not be allowed to investigate themselves. This needs to
be something outside of DSA.

JANICE WEIGHTMAN: I think it's very likely that there are a number of people who have slipped
through the vetting process, because with so much fabrication, nonsensical information when you
look at it that way, then that's the threat, that's just what's likely.

JOHN STEWART: What if people watching this say that you're just an embittered former staff member
who's not happy with the way they were treated. What would you say to that?

MONICA BENNETT-RYAN: I'd say that this issue was far bigger than me. This is something that affects
a lot of people. It doesn't just affect all the people working in DSA who are being bullied, all
the people who are having their security clearances, um, botched and are being given information
that is not true. Um, but it affects the whole of Australia, because if there was an incident on a
base and we didn't speak out about it, I didn't speak out about it, I would never be able to live
with myself.

JOHN STEWART: John Stewart, Lateline.

ALI MOORE: In response to questions from Lateline, a spokesman for the Defence Minister has told us
that, "The Government takes allegations of the fabrication of information in security clearances
extremely seriously."

The spokesman said the Defence Department has advised the minister's office that, "There is no
evidence to suggest that security clearances have been compromised," and that, "Defence has in
place a rigorous vetting and quality-assurance process." He added that, "Any allegations of
fabrication of information in security clearances will be investigated by the inspector-general of
Defence".

Executives question return to surplus

Executives question return to surplus

Broadcast: 16/05/2011

Reporter: Tom Iggulden

Business executives say worsening global conditions are threatening Julia Gillard's promise to
return to surplus.

Transcript

ALI MOORE, PRESENTER: As the Prime Minister goes about selling her budget, the Government has been
met with dire economic predictions from top business executives.

After two years of falling tax revenues and worsening global conditions, Julia Gillard has been
urged to rethink her promise to return to surplus.

But the Prime Minister says the mining boom will deliver the result predicted by the Treasurer in
the Budget.

Political correspondent Tom Iggulden reports from Canberra.

TOM IGGULDEN, REPORTER: Signing on for another day selling the budget.

Public opinion's proving hard to shift and the Prime Minister's reaching out wherever she can.
Promoting the budget's skills training overhaul is now part of the Prime Minister's personal
mission.

JULIA GILLARD, PRIME MINISTER: I've been personally involved in reforming our schools education
system and in reforming our university system. It's time now to turn our attention to vocational
education and training.

TOM IGGULDEN: But Tony Abbott's already moved on from the budget and resumed his carbon tax attack
at this Brisbane leather factory.

Two new polls show he's giving the Government a hiding since it announced the tax. Labor's primary
vote is hovering near historic lows. Julia Gillard's lead as preferred prime minister is becoming
more slender with each poll. And the Prime Minister's approval rating hasn't budged since it
plummeted when the tax was announced three months ago, while disapproval has jumped.

She didn't even mention the word poll in her public appearances today.

JULIA GILLARD: I've got one focus and my focus is on keeping the economy strong.

TONY ABBOTT, OPPOSITION LEADER: I think what we've got is a Prime Minister who plainly isn't
listening

TOM IGGULDEN: But the Prime Minister says she's got the policies people will vote for, from the
shopfloor workers to the big end of town where today she met with some of the country's wealthiest
business leaders. One of them delivered the PM a blunt warning on the carbon tax.

KERRY STOKES, SEVEN MEDIA GROUP: Personally I think it's a great way for redistributing wealth in
the country, but for actually curbing carbon use, it's not going to change power generation, coal
or use in this country for at least the next 25 years.

TOM IGGULDEN: And another on the economy.

KERRY STOKES: In fact it's got all the feelings of a major downturn in the economy.

JULIA GILLARD: No, I'm not subscribing to that language.

TOM IGGULDEN: A bank boss urged her to go back on her promise to return the budget to surplus in
2012-13 due to shifting economic sands.

GAIL KELLY, WESTPAC CEO: I think to actually choose to a particular date and to promise or commit
to a particular date, is not the best approach. If you were a business, you try not to do that, you
try not to actually forecast out two years and say I will hit that by then.

TOM IGGULDEN: But the Prime Minister's backing Treasury's forecast of robust economic growth
that'll in turn deliver the surplus on time.

JULIA GILLARD: I'm very confident that Treasury has done the right thing in making those forecasts
because I know from talking to people in this room the strength of the investment pipeline in our
economy.

TOM IGGULDEN: And it's that pipeline that's throwing the Prime Minister a lifeline. If Treasury's
predictions are true, in two years she'll have not only delivered the promised surplus, she'll have
a potent weapon to fight back against those dire economic predictions about the carbon tax.

Tom Iggulden, Lateline.

Community sector work 'undervalued, underpaid'

Community sector work 'undervalued, underpaid'

Broadcast: 16/05/2011

Reporter:

Fair Work Australia has reached an in-principle decision that community sector workers are
underpaid and their work is undervalued.

Transcript

ALI MOORE, PRESENTER: In the first test case of its kind under the Labor Government's industrial
laws, Fair Work Australia has reached an in-principle decision on equal pay in the community
sector.

About 200,000 privately employed community sector workers want a 25 per cent pay rise to bring
their wages into line with the public sector.

Fair Work Australia decided work in the industry is undervalued to some extent, which is partly
gender-based because the workforce is mainly women.

It's asked unions and governments for further written submissions.

More hearings are scheduled to be held in August.

SALLY MCMANUS, AUST. SERVICES UNION, NSW: We want governments, state and federal, to step up to the
plate now and to come beside us and to agree on new rates of pay for community workers that get rid
of the gender discrimination that's been there.

ALI MOORE: The ACTU has also launched a pay claim for $28 a week for low-paid workers.

IMF head accused of attempted rape

IMF head accused of attempted rape

Broadcast: 16/05/2011

Reporter:

International Monetary Fund head Dominique Strauss-Khan has been arrested and charged with
attempted rape and unlawful imprisonment.

Transcript

ALI MOORE, PRESENTER: The head of the International Monetary Fund has arrived at a New York court
to face sexual assault charges.

Dominique Strauss-Kahn has been accused of attempted rape and the unlawful imprisonment of a maid
at the hotel where he was staying.

He had been due to appear at a hearing yesterday, but that was postponed to allow police to carry
out forensic tests.

Lawyers for Strauss-Kahn say he denies any wrongdoing and will vigorously defend the charges.

Meanwhile, a woman in France is considering filing a legal complaint against Strauss-Kahn over an
alleged sexual incident a decade ago.

US about to hit debt ceiling

US about to hit debt ceiling

Broadcast: 16/05/2011

Reporter: Ali Moore

US deputy secretary of the treasury Neal Wolin discusses the consequences of not being able to
reach a deal on increasing the debt level.

Transcript

ALI MOORE, PRESENTER: The United States is due to hit its debt ceiling today and president Barack
Obama has warned there'll be dire consequences for the US economy if an agreement to increase the
federal debt level can't be reached.

It's a key issue for our guest tonight, the deputy US secretary of the treasury Neal Wolin, who's
on a fleeting visit to Australia.

I spoke to him earlier this evening in Sydney.

Secretary Neal Wolin, welcome to Lateline.

NEAL WOLIN, DEPUTY US SECRETARY OF THE TREASURY: Good to be here.

ALI MOORE: If I could ask you first about your reaction to the arrest on sexual assault charges of
the head of the IMF Dominique Strauss-Kahn. Of course he's been the very public face of this major
international financial organisation.

NEAL WOLIN: Well we'll have to see what the facts in this circumstance. Obviously we have a
tremendous amount of confidence in the IMF's ability to do its mission and we'll see how this other
thing plays itself out.

But what's important is the IMF play its important role in the global economy and we are very
confident that it's fully capable of doing just that.

ALI MOORE: Were you surprised?

NEAL WOLIN: Well I think we all saw the news over the last day and again we'll have to see how that
develops.

ALI MOORE: Well the Republican Ron Paul says the incident demonstrates why the IMF has problems. He
says it should be a wake-up call for an inquiry to, "... find out why we shouldn't be sacrificing
more sovereignty to an organisation like that and an individual like he was."

How much damage could this do to the IMF at exactly the time that it needs to be able to devote all
its attention to issues such as the European debt crisis?

NEAL WOLIN: Well, again, Ali, I think the IMF's a big institution. It's one that we have a lot of
confidence in performing the functions that it has. And I think that that's really the most
important thing, is that it's capable of continuing its work and we think that it absolutely can do
that.

ALI MOORE: Well if we can turn to issues closer to home for you.

I guess this is something of a red-letter day for the US. It's the day when federal debt is
scheduled to hit its legal maximum of US$14.3 trillion.

Treasury says the country's got till August 2nd until it's possible you'll begin defaulting. In
reality, though, do you have that long? President Obama has issued some fairly dire warnings about
what could happen with even a suggestion that you can't pay your debts.

NEAL WOLIN: Well, we've reached this debt limit from time to time over the past few decades, and so
I think this is not uncharted territory for us. But as the president and secretary Geithner have
said, it is important for Congress to extend the debt limit to make sure that America honours the
commitments that it's previously entered into.

To not do that I think would be unthinkable and would really create real problems for the US
economy in our capacity to fund ourselves going forward. So we have confidence that the Congress
will, as it always has in the past, increase the debt limit as it needs to do. And we think that
they should do that sooner than later, and both the president Obama and secretary of the Treasury
Geithner have been very clear that that's the right approach.

ALI MOORE: When you say sooner rather than later, do you really have till August 2nd?

NEAL WOLIN: Well, you know, at some point the markets are going to get concerned. For the moment
they understand that this is a thing that happens periodically and so we do think it's important
before the markets start to react to make sure that we increase the debt limit.

This is a circumstance that we've seen before. Congress has always raised the debt limit as
necessary. We have confidence they will do it here, but we'd like not to wait till the last minute,
we'd like them to do this sooner, not later.

ALI MOORE: As you say, it's happened before, but I guess this time it's bigger than ever before,
and also in the past it's always been the last minute, hasn't it?

NEAL WOLIN: Well, you know, Congress has always understood that in the United States we need to
honour the commitments that we've made and that we need to make sure that we have the capacity to
raise the money to do that. I think they'll do that here and - just as they have in the past, and
we just need to make sure that they do it as soon as possible.

ALI MOORE: Well of course the Republicans are calling for trillions of dollars in spending cuts in
return for raising the debt ceiling. As well they've ruled out any increase in taxes. What's making
you confident? On what are you basing your confidence that there'll be a resolution?

NEAL WOLIN: Well the United States will work through its intermediate and longer-term fiscal
issues.

The president and the Republicans in Congress have both said this is something that is critical to
do. We understand that this is something we need to do. In the meantime we do need to raise our
debt limit because it really relates to commitments that the US has made both under Democrats and
Republicans, Congress and presidents past.

And, you know, there's always a certain amount of political activity around these moments where we
reach the debt limit. We've always been clear that in the United States we make good on our fiscal
commitments and we pay the things that we need to pay and that we are obligated to pay and I think
that's the basic thing that will happen here.

In the end Congress will raise the debt limit. I think it's interesting to note that even with the
budget program that the Republicans in our House of Representatives have put forward, the debt
limit would need to increase by $2 trillion over the next year. Everyone understands that needs to
happen and we believe that it will.

ALI MOORE: Given your confidence, is there an element of Chicken Little in what president Obama has
had to say in the last 24 hours? He's talked about the catastrophic consequences for the financial
system of the US and indeed global ramifications if the debt limit is not increased. I mean, is
there an element of Chicken Little there for the benefit, I guess, of Congress?

NEAL WOLIN: I think it's not so much Chicken Little, but I think it is something that presidents
and secretaries of the Treasury have said, both Democrats and Republicans, including President
Obama and Secretary Geithner to make sure that the Congress understands just what the implications
of not increasing the debt limit would be.

We want to make sure we're clear about all the issues related to the debt limit including the
consequences so that everyone understands that the need is really there.

ALI MOORE: Well if we can look at economic growth in the US, hiring is picked up, but not fast
enough to bring down that unemployment rate that seems stuck around nine per cent. Has the recovery
lost some momentum?

NEAL WOLIN: No, I don't think so. I think we're moving through a nice recovery. We've added jobs
for 14 straight months. More than two million people have been added to our payrolls.

I think that this is a recovery that has some headwinds that we're facing, obviously continued
difficulties in our housing markets and so forth. But consumer spending is starting to pick up,
business investment is picking up.

I think you see across various sectors of the US economy, whether it's high tech or manufacturing
or agriculture, quite a broad-based recovery that will continue we think to build. The private
forecasts are for three to four per cent growth in the United States over the next two years. We
think that's a good number and we think that we'll continue along that pace.

ALI MOORE: If I can move closer to our region, you were scheduled to visit Pakistan earlier this
year, but that was cancelled after the arrest of the US citizen Raymond Davis.

You're clearly involved in decision-making regarding assistance to Islamabad. What happens now,
post-bin Laden? Do you wind back the financial assistance?

NEAL WOLIN: No, we're providing assistance to Pakistan. It's a relationship that I think our
president, our Secretary of State Hillary Clinton have made clear is an important one for the
United States.

We have mutual objectives in the fight against global terrorism and we will continue to stay
engaged with the Pakistani government. And we have on-line a range of aid to the Pakistanis, both
after their floods of this past year and in other regards, and I suspect that continue.

ALI MOORE: Do you see relations as having been damaged?

NEAL WOLIN: Well, look, a very complicated set of relations with the Pakistanis, but we are
partners in the fight against terrorism and we will continue to find ways to co-operate and to
engage and I don't think that will be in question.

ALI MOORE: In the past you've urged Pakistan to raise taxes, clearly with one eye on their reliance
on foreign aid. Are they too reliant on foreign aid?

NEAL WOLIN: Well I think the Pakistani government itself has said very clearly that they would like
to increase their revenues. And they have tried and will continue to try in a range of ways. And so
that's an important objective that they've articulated for themselves and we've tried to be of help
to them as they seek to make sure they have an adequate revenue stream to do the things that they
want to do as a government.

ALI MOORE: Well of course, in this region, China is the key player. Australia is very dependent on
Chinese economic growth and the fortunes of the Chinese economy. What is your reading of where
Beijing is heading?

NEAL WOLIN: Well I think that bilaterally the US and China have made important progress in our
bilateral relationship. That's important for our respective economies, but also for the global
economy because we're the two biggest economies in the world.

The Chinese I think have begun to move from an economy that is export-led to one that pays more
attention to domestic sources of growth and we think that's an important element of making sure
that across the globe, we have a sustainable, balanced path for growth as we move forward.

ALI MOORE: Do you see them continuing to grow at the rates that they have been growing?

NEAL WOLIN: Well, you know, it's not for me to speak to or to make judgments about what the rate of
growth will be in China. I think it is important, as I said, for their growth to be increasingly
from domestic demand in a more balanced way than it has been and less dependent on export-led
sources of growth.

ALI MOORE: I understand that you've played a role in advising Treasury Secretary Geithner on
Chinese currency concerns, and I note that at the last strategic and economic dialogue session
between the US and China, China once again agreed with the direction of the yuan - appreciation -
but disagreed with the pace.

Will there come a point when the US will label China a currency manipulator?

NEAL WOLIN: Well, look, the Chinese have made progress in the appreciation of the renminbi. We
think that's important as part of this sustainable balanced growth that has been an important topic
of conversation within the G20, and as a multilateral matter and also bilaterally between us and
the Chinese.

We believe that the renminbi is substantially undervalued still, and as Secretary Geithner has
said, we will continue to pay attention to the pace of appreciation of their currency.

ALI MOORE: But not fast enough?

NEAL WOLIN: Well so far they've made important progress, but as I say, it is still substantially
undervalued and we will be paying attention to the pace of further efforts as they go forward.

ALI MOORE: Well while you've been here you've been pushing a regional Asia Pacific trade agreement,
the so-called "Trans-Pacific Partnership". Why is that agreement so important, given that it leaves
out quite a few key countries, no Thailand, no Indonesia, no China, no Japan?

NEAL WOLIN: Well we think that increasing global trade is an important element of global growth. We
think it's important for our own economy as we seek to increase our exports and we think it's
important more broadly. And there is a group of countries that are included for the moment that
have expressed interest in pursuing this agreement and we will continue along that path.

ALI MOORE: Is it very much if there's no global agreement? Because of the failure of Doha, go
regional?

NEAL WOLIN: No, no, we're still very interested in making progress on Doha, but this is one of a
number of bilateral and multilateral trade efforts on which we continue to seek to make progress.

ALI MOORE: Secretary Wolin, many thanks for talking to Lateline.

NEAL WOLIN: Good to be here. Thank you.

Gaddafi accused of crimes against humanity

Gaddafi accused of crimes against humanity

Broadcast: 16/05/2011

Reporter:

The International Criminal Court's prosecutor has made an application for an arrest warrant for
Moamar Gaddafi for crimes against humanity.

Transcript

ALI MOORE, PRESENTER: An application has been made to the International Criminal Court for an
arrest warrant for Moamar Gaddafi for crimes against humanity.

The court's prosecutor, Luis Moreno Ocampo, says Gaddafi issued orders for attacks on
demonstrators.

Mr Moreno Ocampo has also requested warrants for Libya's spy chief and one of Gaddafi's sons.

Libyan officials have already denounced the ICC investigation as a tool of the West for the
prosecution of African leaders.

Now to the weather. That's all from us. If you want to look back at tonight's interview with Neal
Wolin or review any of 'Lateline''s stories or transcripts you can visit our web site and you can
also follow us on Twitter and Facebook. I will see you again tomorrow when I will be joined by
author Fatima by author Fatima Bhutto, a member of the famous Pakistan Bhutto family. Goodnight.