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(generated from captions) Tonight, Far North the superstorm. Queensland seeks shelter from

The cyclone this size hasn't

hit this area in most people's lifetime.

lifetime. And we certainly

haven't had one with such a big

storm surge that will arise

from those very, very destructive winds that will start about midday tomorrow. Live. This Program Is Captioned

Good evening. Welcome to

'Lateline'. I'm Ali Moore.

We'll talk to the mayor of

Cairns in a moment to update

the emergency facing Far North

Queensland. Also tonight -

'Lateline' has obtained a Gillard Government briefing document, outlining Australia's

plans for

processing centre in East

Timor. We've asked the

government to comment and have

some other assessments of the

unanswered questions in this leaked plans. There are huge

document and really at the core

of them is the central concern

raised by the East Timorese government and some in the East

Timorese community and that is

seekers transferred to East how to avoid having asylum

Timor and then languishing in

limbo for years. Frankly I

think it would be an impossible

burden for East Timor. But

for any of the countries in the

region. Our exclusive report

from 'Lateline''s Peter Lloyd

in a moment. First, our other

headlines. Guns and roses. Egypt's military says it will not use force not use force against

removal of President Hosni protesters demanding the

Mubarak. Carbon commitment. The

Prime Minister says addressing

climate change will be a

defining reform for her

government. And only the

lonely. The single person

household is rapidly becoming the dominant demographic in Tracy. Worse than Cyclone Japan. Bigger than Cyclone

Larry. That's how cyclone Yasi

has been described as it storms

towards the Queensland coast. It's currently Category

could reach the most intense

level of 5 before it smashes

into land somewhere between

Cairns and Innisfail. Thousands

of people have fled the region

and nursing homes and hospitals

have been evacuated.

Meteorologists say it could

remain a cyclone as it tracks

inland as far west as Mount

State's far north are preparing Isa. Queenslanders

for the worst. Expecting

anywhere up to 8m anywhere

through 11m of water through

the house. A bit scared and

some of the people are dry

retching apparently. Cyclone

Yasi is likely to be a category

4 packing winds up to 250

kilometres an hour with a storm

front almost 500 kilometres

across. The premier left no

doubt about just how bad it's going to

going to be. Ladies and

gentlemen, this storm is huge and it is life

threatening. This is an

highest biggest system ever to enormous system. Margably the

hit the Queensland coast. hit the Queensland coast. So it is the worst case scenario. Authorities

Authorities expect it to cross

between Innisfail and Cooktown,

which puts Cairns right in the

firing line. The size and

extremity of this storm will

take down powerlines. Will take out electricity substations. The city's hospital has been

evacuated with critically ill

patients being flown to

Brisbane later tonight. Two Defence Force planes will form part of an part of an 11-strong airlift.

have been put on notice. There Residents in low-lying areas

will be mandatory evacuations.

Already, the storm is twice

size of Cyclone Larry, which

devastated the town of

Innisfail in 2006. The damage

bill from that was more than $1

billion. I was here for Cyclone Larry. It was very scary.

That's why we're out doing it again. Definitely lots of

damage. As far south as

Townsville, people are heading out of town. Residents lined up

for 200 seats on a specially

organised train at $20 a

seat. I'm not from up here, so

it's pretty full-on. And so get it's pretty full-on. And

to my family down south. My dad

has been pretty sick. Jai I

was pan jiking trying to get a

flight tonight. There were no

flights out of Townsville. Nursing homes have been evacuated with elderly patients taken to higher ground. As well as cyclonic

winds and hundreds of

millimetres of rain,

likely to hit as far south as

Mackay. Please make no mistake.

This storm is a deadly event.

People need to take between now and tomorrow morning. Authorities have

warned communities need to be

prepared to do without food, water, power and phone lines

for an extended period of time.

It's another stern test for

Queenslanders, since December

last year, devastating floods

have claimed 40 lives. And the clean-up bill from floods stands at $5.5 billion. The mayor of Cairns Val

Scheer joined me a short time

program. Thank ago. Welcome to the

start with the very latest program. Thank you. Let's

information that you've got on

cyclone Yasi. Still heading for

a direct hit on Cairns late tomorrow night? Yes, it is,

heading directly for Cairns.

And tomorrow morning, we're

expecting that we'll pass over

warmer water and we'll actually build in intensity so that it's

an upper Category 4. At this

some time between 9 o'clock stage, it will cross

Thursday tomorrow night and 3 o'clock on

Thursday morning. And the most

worrying thing about it is that there's a very big happening with it, a tidal

surge that could be 2.7m above the normal - the highest

astrological tide. Yet looking

at Cairns you're on the

Esplanade, it all seems very

calm? If we didn't have all

of Meteorology we wouldn't those forecasts from the Bureau

realise that there is a massive system swirling Coral Sea and just scaring

everyone to death. How well

prepared are people for what's coming? We're as well prepared

as we can be, but a cyclone this size hasn't

in most people's lifetime. And

we certainly haven't had we certainly haven't had one

with such a big storm surge

that will arise from those

very, very destructive winds

that will start about midday

tomorrow. So we'll have - we

will be battered with winds for

probably 10 hours or so. Then

the cyclone will pass over the

to be battered by winds and of

course have rain as well as all

of that storm surge water that

will be in all the low-lying

areas. Take us through what a storm surge of that

magnitude will mean? Look, it's

pretty hard. I mean we're just listening to the experts telling

telling us that the water will

actually come in before the

cyclone makes land fall and it

will actually sort of be forced

along into the low-lying areas,

and inland as far as it would go, being

So that obviously is going to

inundate quite a lot of houses.

We're actually asked more than 30,000 people to evacuate,

that's all those low-lying

areas from Port Douglas the

Northern Beaches of Cairns and

right down to bramp ston beach near Innisfail. People have been asked to leave and stay

with relatives, family or

friends they may have who live

in some of the hillside areas

of Cairns. And we've had to -

we will be opening tomorrow morning some evacuation centres

anywhere to stay. I understand

that those people have been

told to move before tomorrow

morning or at least before 8 o'clock tomorrow morning. that it's likely to be too

difficult to move

around? That's right. We don't

want people trying to move with

gale-force winds and so our

evacuation centres are opening

at 6am tomorrow, and we're hoping that people will all

move in that time and be well

and truly inside shelter by 8

or 9 o'clock, and really ready to batten day, with those winds that we

know are coming. 30,000 people

is an enormous number of

people. Has the process already

begun? Are people heeding the warnings? It's huge, yes. People have already today, some of them have moved

up onto the Atherton Tablelands

in behind Cairns. Others are staying with friends.

Everyone's been in the shops.

Making sure that they've got a

supply of non-perishable food.

Their batteries, we're assuming

that the power will go off w

that amount of wind, and the soil is really wet and soggy

from what's been a very wet

season. So the trees are going

to go over the powerlines will

go down and people will be relying

relying on radio to get

information. How rattled are

the locals? I don't know that

people are rattled. I think

there's a bit of fear and

trepidation there. They

certainly as I said just the

whole vision that we get on the

- on television, with

Australia, with this huge mass

coming towards it, is enough to put

put fear in almost everyone. We're trying to calm people

down and saying don't panic.

You just need to make sure that

you're well prepared and that

you are inside, and that you're away away from any of the storm

surge. Of course it's Chinese

new year as well. You have

something like 10,000 visitors

in the area over the next week

or so. How well prepared are

they? That's right. We had a

fabulous new year festival on

Saturday. And lots of

celebrations going on there. And And people visiting from Shanghai and from Guangdong in

southern China. All of the

hotels are really up to speed

on the cyclone warnings. They

will be making sure that people don't venture out tomorrow.

Most of our businesses will actually close down tomorrow,

and the main priority is for

people to be with their

families and in the safety of

their homes. Which is where

they're least likely to be hurt. What about the evacuations evacuations of the hospitals? I know certainly

with help from the military.

Has that gone smoothly? Is that

complete? The planes started at

7 o'clock tonight, I think

about 11 planes all up. They

were evacuating patients to Brisbane. The Cairns Base

Hospital is actually on the

Esplanade. People could've been taken up to the first floor,

but all of the services are on

the ground floor. And they

wouldn't have been able to

provide the high level of care that's needed

that's needed for those

patients. Also anyone who's

been living in any been living in any of the

nursing homes that are anywhere

near the storm surge have also

been relocated. So it's been a massive logistics effort today.

We'll need to feed all those

people who are in the

evacuation centres tomorrow.

And ensure that they're all

registered. And accounted for.

So this just requires the

highest level of cooperation.

So today, we've been meeting

with the State disaster group,

with the premier, on

teleconference in Brisbane, our district broader State Government group and then of course my local group that I

head up, the council group that

really needs to be there as a

first line of response. If this is as bad as expected, with with the hospital evacuated,

what are the facilities for medical care? The Queensland

Health has actually set up an

alternative emergency base in

the southern part of Cairns. In

an area that's above a flood

level. So that will be operating at 9 o'clock

tomorrow. And of course, we

still have a lot of doctors around Cairns and I'm quite

sure that they will come to the

fore and that everyone will be

there sort of willing to help

in whatever way they can, if

there are any emergency cases. Of course, Queensland's still

recovering from the floods.

From a personal perspective,

people must be extremely wary

of disasters, personally, how

nervous, how anxious are you

about what lies ahead over the

next 24-48 hours? It's really

the last thing that we wanted.

I mean, Queensland's - central just had the tragedy of the

floods and we didn't want or

need this, but it's happening

and we're just going to have

deal with it. So certainly

Cairns also has been doing it

tough over the past couple of

years economically. We were

just getting back on our feet

and feeling really confident in

the tourism industry and in our

other industries as well so

this will be a big setback if

we end up getting a lot of

damage as is predicted at the moment. A true case of plan for

the worst and hope for the best. Thank you for joining

us. Thank you. The Gillard Government's

plans for an asylum seeker

processing centre on East Timor

would see the construction of a facility capable of housing as

many as 4,000 people close to

the nation's air and seaports.

The information is contained in

a 23 page regional assessment centre concept document obtained by

obtained by 'Lateline'.

However, many issues remain

unanswered, in particular just how one of the how one of the poorest nations

will deal with the influx of so many asylum seekers. many asylum seekers. In her second week as Prime Minister, Julia Gillard tried to defuse

Labor's political crisis over

border protection. Building on

the work already under way in

the Bali process, today I announce that we will begin a

new initiative. In recent days,

I have discussed with President

Ramos Horta of East Timor the possibility

possibility of establishing a

the purpose of receiving and

processing irregular entrants

to the region. It had echoes

of John Howard's policy of processing asylum seekers offshore on the Pacific island

of Nauru. But Julia Gillard's

solution was to look to a

country emerging from 25 years of Indonesian occupation, the

first new nation of the 21st

century. This is the century. This is the plan

obtained by 'Lateline'. Titled

a regional assessment centre

concept, it runs to 23 pages.

There are three options on the for a detention centre with

beds for 1,000 asylum seekers.

There would be room for 600 in

one men only compound and a

second compound to house 400 families and children. The

second option is twice the

size, two all-male compounds

and two 400 bed compounds for families. But even 2,000 beds

may not be enough. The proposal

says alternative options could

be used to provide a surge capacity for up to seekers. Negatives for East Timor are obvious. This is a

country that is struggling very

much to feed and house its own

people, much less deal with an

influx of upwards of 6,000 new

mouths to feed. They don't have

the infrastructure at the

moment to supply the basic

amenities to the East Timorese,

if you come in and build a purpose-built centre for asylum

seekers that could well cause

all sorts of

of jealousies of why these

people coming into the country

are getting better treatment

than people who are there by

birthright. Eight years ago, when in opposition, Julia Gillard thought offshore

processing was bad policy. We

think the so-called Pacific Solution which is their main

policy has been a costly and unsustainable farce. Julia Gillard's East Timor proposal

is a plan without a budget. It makes no specific promises how much Australia is willing

to pay. But it lists a series

of benefits to the poor nation

East Timor. New roads, upgraded

air and seaports. And a air and seaports. And a host of other so-called community

services such as water, sewage treatment, electricity,

telecommunications, education

and medical services. Australia

is looking to the International Organisation for Migration IOM

and United Nations High

Commissioner for Refugees the UNHCR to

UNHCR to run the centre.

medical and translating Security,

services would be earmarked for multinational organisations employing mostly imported

foreign workers. It's not clear

what jobs would be open what jobs would be open to

locals. The document makes only a vague statement that Timorese can expect employment

opportunities in a variety of

roles. Local produce does get a

look-in. Australia is promising

the catering company will try

to buy local vegetables to

support the Timorese

economy. Frankly I think it would be an impossible burden

for East Timor but probably an impossible burden for any of

the countries in the region.

It's proposed that demountable

buildings like these would be

used in the used in the Timor detention centre. With much of the

supplies and equipment needing

to be shipped to East Timor,

Canberra is looking to Dili for

tax breaks. It is expected that

these essential items would not

be subjected to Timorese import

taxes or duties. New arrivals

at the centre would be required

to provide biometric samples such

scans to help verify their identity. Some asylum seekers would be free to mingle with

the East Timorese, but not all. In some In some circumstances, some form of segregation form of segregation and

restraint may be required. In Australian detention centres,

asylum claims are decided by officials from the departments

of immigration. But in the

Timor Solution, the government

wants the UNHCR to do that

job. What's clear from the document is that there has been absolutely no promise, no agreement by those international agencies that. In fact it's quite clear

there hasn't been. So it's

merely speculative. Those whose claims are rejected will

be offered what is called

reintegration package before

being sent back to their home

country. After that, things get legally complicated and there's

a heavy burden on one of the

world's poorest countries with

a roster of just 17 swrujs.

Australia is asking East Timor

to set up and run an appeals tribunal for asylum seekers

whose claims are rejected. Where exactly they'll stay in happening isn't clear but those

who lose are automatically

declared illegals and then it's

up to East Timor to round them up and deport them. The

proposal would seem to be

requiring or imposing on Timor

a very significant burden when it's already dealing with enormous and complex challenges

in its own legal system. The Australian Government believes

the detention centre could be

up and running within a year of

a site being chosen and fully operational within two years.

When he appeared on 'Lateline'

last year, East Timor's

President was clear that he did

not want his country to become

the dumping ground for asylum seekers

seekers from around the region who want to reach Australia. If

there are displaced persons, refugees in Indonesia who are

bona fide refugees who have no

criminal record, who are eligible on eligible on legal and

humanitarian grounds to be

transferred to a country like

Australia, New Zealand or

elsewhere, then that's elsewhere, then that's where

they should go. What happens

next is not clear. The

Australian Government is still

trying to arrange a meeting of

Asian nations to discuss the

East Timor plan. But the

country's own council of

ministers has already rejected

it. The Immigration Minister

Chris Bowen has unavailable for However he has issued a

statement in which he says the document provideed to East

Timor is intended as the basis

for ongoing discussions. The

minister says that given the two governments two governments are still in

talks, it would not be

appropriate to comment further.

Mr Bowen maintains the Gillard

Government is committed to developing a regional response to the problems of irregular

migration through a regional

protection framework and the

establishment of a regional

processing centre and that

leaked document will be placed on our web site.

Egyptian protesters are

gathering for a massive

in Cairo as they step up their

efforts to force President

Hosni Mubarak from power.

Organisers say they hope 1

million people will take to the

streets in the biggest rally

since protests began just over

a week ago. Egypt's army has

vowed until not use force

against the crowd, which is

expected to march on the

presidential palace. The

to head off the protests but as

Ben Knight reports from Cairo,

it's unlikely to be enough to

save him. It's been called

save him. It's been called the

Million Man March, the call for

Egyptians who oppose Hosni

Mubarak to make a definitive

statement that could end the standoff. The army have

promised they won't fire on

protesters even if ordered to

but more than that, they say

they respect the legitimate

demands of effectively saying it's

prepared to commit treason by

defying the President, and it's another body blow to Hosni

Mubarak. A huge boost to the protesters. It's still relatively relatively early in the morning in Cairo. This is something

that we haven't seen in

previous days. People are

already arriving in the square.

Now, in the past week, the

protests haven't really

gathered any kind of head of

steam until around the middle

of the day. Perhaps it's

because the army have said they

won't fire, perhaps it's because they feel that today

could be a very, very

significant day. A turning

expecting a very large crowd in

the square here. Cairo is still

under curfew at night but there

is a shift in the atmosphere in

the city. In the anarchy of the

last few days is calming. In

the square, the protest was

once again noisy, but peaceful.

And it appears to be getting

more organised. Meanwhile, life in Cairo in Cairo is only getting

harder. With the protest now in

its eighth day, foot prices are

rising as supplies run farmers come to the city one

day and the next day they

don't. They're afraid they

might be attacked and robbed on

the way. But that's not the

only problem. We have no money.

I want a shop here. But I have

no money. The ATM cards aren't

working. And I don't have any

cash. Hosni Mubarak still has

plenty of supporters. But their

the massive crowds that gather

every day in this capital city.

And neither the President nor

the protesters are shifting. But this stand-off But this stand-off is going to

end one way or another. It's

hard to see a way out from here

for Hosni Mubarak.

I spoke to Ben Knight a few

years ago. Ben especially with

the statement from the military

that they won't use force

against protesters, is there sense Egypt is entering the end

game? I would absolutely say so

because the statement actually

said much more than that. It

wasn't just that the army

wouldn't use force against the

protesters. It was that protesters. It was that the army said it respected the

legitimate demands of the

Egyptian people. And it was a

long statement and the wording

was very - almost encouraging,

almost affectionate, talking

about this very strong link

between the army and the people. And

people. And that is what I think has sealed it, if

anything is going to. And the

square today. It's an amazing

sight. It's only the middle of

the day here. This is normally

just when the protest has been

gearing up as we've seen over the past seven days but people have been coming in

since very early on. The army

is in complete control. They

have the square blocked off. There is only one way to get

in. They have two tanks sitting

on the road there is a narrow

channel between them. People

are coming in, they're being

directed, everyone is being searched, everyone is going frisked, has to show their ID

card. One line or men and one line

line or women but the absolutely happy. The mood is

excited. And I get the feeling

that people know that they have

won. Whether it's true or not,

they feel that they have won.

They're simply waiting to hear

the moment when it finally

comes through. Now that may or

may not happen. But that is the

feeling in the square today.

And there is a big screen up.

People have got it up almost as

if they're preparing to watch Hosni Mubarak's concession

speech or watch as his

limousine drives to an airport

food and drink being handed around. It's quite an

incredible scene there is a

huge number of people and more

are still coming. Is there any

indication that the President

will go? We're getting no

indication from the President

that he will go. But I think

when Hosni Mubarak woke up this

morning, if indeed he slept,

and saw some of the Egyptian

newspapers then he would've been feeling extremely

uncomfortable. In fact one of

them I just saw is being waved

around the square quite a bit. A massive front-page

a soldier and a young Egyptian teenage boy in a happy embrace. As if both were thinking the

same thing. This is the chant

that's been often heard over

the past few days. The people

and the army we are one. When

this statement came out last

night, it confirmed it for the

people. When the army said it

respects the legitimate demands

of the Egyptian people, that's

a not so coded message, because

the demands of the Egyptian

people, at least the ones that square, is that Hosni Mubarak leave. If the army is saying it respects that demand

then it has abandoned its

President. It has said it will

defy his orders. I don't think

you can get much clearer than

that. For a man who has relied

on the army, he has supported

the army, he has made it into a

significant fighting force, he has now lost the army, I has now lost the army, I don't

think there is any way he can

hang onto power. You describe a

scene of great optimism. Is it

likely to be a peaceful

resolution? I absolutely do. I absolutely do. great concern amongst everybody

that something is going to go

wrong. That first bullet or

that first attack is that first attack is going to

happen somewhere, and in the

confusion and in the adrenaline, that it's going to

turn into something bad. But

people are determined not to

let that happen. And that is

why they are so happy that the

army is there and doing this,

that they are so happy that the

army is there, securing the

square. Being a presence.

Checking everyone's ID.

Frisking people. It's not just

the army that's doing tmpt the

civilians this as well. But the sense in

that square at the moment,

there is no anger any more. The

anger has been done. The only

optimism, there is only hope, and as I say, excitement. The

people in that square believe

that they have won. You say

they believe they've won, but I

guess the question becomes won

what? Who takes the place, who

fills the political void? It's

not as though people aren't

thinking about that. It's as if

they've chosen to think about

that later. I ask a lot of

people this question. What do you do Mubarak leaves Egypt if indeed

that's what's happened? The

answer always, from pious

Muslims to working people, to

middle class people, to university professors, the

answer is always the same. The

Egyptian people will look after

T we will be fine. Now, there

is going to be a massive power

vacuum if that takes place. It

could be the army steps in and says we will

says we will look after running

the basic services. But it's

just such an unknown. It's such

a large country. You are effectively dismantling

system that operated under the

aegis of one man for so long.

There will be a power vacuum.

It will be a very, very difficult time for Egypt if

they wake up they wake up to find the man

who has been President for 30

years is no longer there but

the people are confident they

will be able to do it, that everybody is on the same bus.

Ben Knight, many thanks. Thanks, Ali. Julia

Gillard has moved her plan to

price carbon emissions to the

top of her reform agenda. Comparing it to the radical

economic transformations of the

Hawke Keating era. But the Greens programs to pay for Queensland's flood

reconstruction undermines her

credibility on the issue. More

from political correspondent

Tom Iggulden in Tom Iggulden in Canberra. With

Parliament's first sitting for

Julia Gillard's make or break

year just around the corner, the Prime Minister's apparently

warming to the challenge. It's

a very hot day in Melbourne.

Quite a hot room. With former

Liberal Prime Minister Malcolm Fraser looking on, she told a

business lunch in the southern

capital she wants to continue

reignited when it won power in

1983. And she's put one issue

at the top of her reform

list. Above all putting a price

on carbon. A fundamental

structural reform as

significant in our time as the

reforms of the Hawke and

Keating governments were a

generation ago. Hawke and

Keating floated the dollar. We

will price carbon. In a

big-picture speech about where she would like

nation the carbon issue drew

top billing. The carbon price

will drive another sweeping technological revolution like the information technology revolution swept economy in the 1980s and 1990s. New technologies bringing new

jobs and demanding new skills.

Using the abundant resources of

this nation, solar, wind,

geothermal, that currently go

to waste. But the Greens charge that ebbing support charge that ebbing support for those technologies can be

demonstrated by where the government's choosing to cut programs, to pay for Queensland's flood reconstruction. If you look at

the solar flagships program, a

program that is designed to get large-scale solar infrastructure up and running,

we're talking about $250 million coming out of that

program. And solar's not the

only casualty. There's also the

$800 million to be taken out of

the green cars fund and the

scrapping of the global carbon capture and storage

institute. We also asked a

number of questions about the impact

impact of the a number of the programs. We have some further information

that's going to be provided to

us as a result of our inquiries

over the next couple of days.

With yet another potentially traumatic and costly weather

event on the way, the Greens

are ramping up pressure on the government ahead of

negotiations over the proposed

flood levy. It's not a one-off

event. And the government really ought not to be

continuing to say that. And if you recognise it's not a

one-off event, if you recognise

that we are going to have these

climate related events

different tack. You take a tack

which is serious about

transforming the economy. And

that in turn has drawn fire from the opposition. from the opposition. Firstly, the Greens cannot prove a

connection between a particular

natural event and climate

change. And secondly, even if

there was some vaguely

respectable argument to do

that, to do so when the people

of North Queensland are facing this crisis is political

opportunism of the worst

sort. The government's

budget cuts if the Queensland

disaster bill escalates, as now

seems likely with cyclone Yasi

pairing down on Cairns and surrounding communities. A real-life storm that's already

raising political winds in

Canberra. It's being described as a

national crisis in Japan. It's

not political deadlock or

economic meltdown, but

loneliness. Within a couple of

decades single person

households will be the dominant

demographic in Japan, and there

have been a litany of cases recent times of dozens of people dying alone. Increasing

incidences of divorce a

plummeting birth rate and a lengthening average life span

are making life an extremely solitary experience solitary experience for

millions. But some see this lonely demographic as an

untapped business opportunity.

In an empty park in Tokyo, this

person is phoning a

albeit one he has never met.

This man offers a

sympathetic ear, but at a

price. We charge $12 for every

10 minutes. We have about 1,500

registered customers. He

operates the Listening Well

Club, a phone service for

lonely people to call in and discuss their personal problems. Basically, I don't have anyone I true feeling to. I have a

friend I can tell superficial

stories to, but no-one I can

speak honestly with. So I use

the phone service instead. Ever since Ever since his divorce, this

man has relied on the listening

well club for someone to talk to.

to. I talk about my job. And

grumble about my boss mainly. I

can't talk about this with

anyone else because they might

regard me as petty. So I use

the Listening Well Club instead. A former he regards himself as a natural

listener. He's also a natural

businessman. Cashing in on the

latest Japanese malaise.

Loneliness. The most popular

topic s are the general

problems with relationship, particularly at work. 20 to 30% of my customers just grumble.

But there are grumbles and

there are genuine hard-luck

stories.

This woman spends her days

visiting the sick and the

dying. Many of her patients are

ending their days alone.

This afternoon, she is visit

ing this man in a tiny one-room

apartment where he is destined

to die. My doctor says I have cancer.

cancer. I don't know how long I

have left to live. I might die

tomorrow or the day after. Like thousands of others in

Tokyo every year, this man is

destined to become a victim of

a lonely death. By building up

a relationship with a lonely

person and growing a friendship

with them, I think we can help

ease their loneliness and

sadness.

This man has no family. And

he knows he hasn't got long

left. So he's thankful for

nurse's visits. I feel cured by

her visits because I'm always

at home alone. At times like

that, I think of the worst

things, so I feel thankful I can chat with her. My

building up a relationship with

a lonely person and growing a friendship

friendship with them, we can

help ease their loneliness and

sadness. Back at Listening

Well Club, this man is is still

on the phone and still making

money. His business is booming just like the epidemic of loneliness here. But he denies

it's easy money. Once I had a

woman who talked about her

problems at work for seven

hours. Her story took 30 minute

bus she repeated it for seven

hours. Seven hours may feel

like an eternity, but in Japan,

loneliness can last a lifetime.

Now to the weather. The

chance of storms in Sydney, a

few showers in Canberra and Melbourne, the

usual afternoon or evening

storm in Darwin.

That's all from us. If you want to look back at tonight's

interview with Val Scheer or

review any of Lleyt line's stories or transcripts you can

visit our web site and also

follow us on Twitter and Facebook. Tony Jones will be

here tomorrow. I will see you again on Friday. Goodnight. Closed Captions by CSI This Program Is Captioned

Live.

Good evening. Welcome to Lateline Business. I'm Ticky

Fullerton. Tonight - if you

want to get ahead, get a

strategy. How retailers should respond to respond to the on-line challenge. If you're not there,

then don't complain about the

fact that your business is

being eaten away by the

Internet. Also on the program

- the RBA takes its first look

at the impact of the floods.

And plays it And plays it very straight. They're very

concerned about not

overestimating the impact of

the floods and its impact on performance for 2011. Rates

meanwhile remain on hold but

our experts thinks the only way

is up. You'd have to say at least one more rate rise is

probably assured and I wouldn't

be surprised if we end up end

of the year with two more rate

rises. To the markets where

miners and energy companies

offset pressure on insurers.

Australia's change resisting

retailers have been told to get

back in their box, and the rebuke comes from within their

own ranks. The big boys lick Jerry Harvey and Premier

Investments Solomon Lew are

fighting a loud campaign

against GST exemptions for

on-line purchases from

offshore. But those were the broader view of the sector

think the tax row is a red

herring and that Australia's

retailers must adapt or die.

The debate has assumed added

poignancy with the Reserve Bank

today noting households remain

cautious in their spending.

Retail is changing and whether

the existing players like it or not, Internet shopping will

only get bigger. It's now put into the hands of the average

consumer, the ability to be able to research product and

service and to be able to see and compare prices from a whole bunch of retailers and

therefore to have the power in

negotiation terms to be able to

go into a store and say I have seen this somewhere else

cheaper, I know exactly what I

want. I probably know more

about this item than you do. So

don't talk to me about that.

This is what I want, this is the price

prepared to match it or I will

walk out. Which means although

the Internet only accounts for

about 8% of the $240 billion

retail market, it influence s 100% of pricing decisions. It's

hitting the bottom line hard

and that's why a group helded

by Harvey Norman boss Gerry

Harvey and just group owner

Solomon Lew is campaigning to

end the GST exemption for

on-line imports of under $1,000. Internet business

services provider Net Registry

is a member of that group which

is known as the retail

coalition. It's a reverse protectionist measure by the

government that supports

foreign retailersoers at the expense of local retailers. It's distorting that equal

playing field across the globe

that the proponent s of

globalisation support. But not all retailers are impressed

with the retail coalition's

tactics. They've done a

significant amount of damage to

the brand of retail. And I

think they've done damage to

the issue about reform. This man is also head of the

Australian Sporting Goods

Association. He says there's no

data to support the claim that the the GST anomaly is doing any

damage. Until we can work out

the areas where people are

buying, what they're buying

on-line and the reasons why

they're buying on-line, we

can't appropriately analyse make a decision on whether or not the threshold should be

$1,000 or $400 or zero. Here's

a couple of examples which

undermine the argument that the

GST exemption on on-line sales

is hurting Australian retailers. This is a

Manchester United soccer shirt

which sells for about $130 at

stores like Rebel Sport. You

can buy it on-line in and have it delivered to your door here in Australia for well

under $100. Dymocks sells hard

cover copies of Harry Potter

like this for $4 5 it costs

just $2 1 on amazon.com which

is less than Dymocks can buy it

for whole sale. Russell

Zimmerman is red of the

Australian Retailers Association and also owns two shoe shops in Sydney. He believes traditional retailers

should stop whingeing and instead embrace the net. It's

vital they are part of the

Internet. They get involved in that space that competitive offer on the

Internet to ensure that those

customers who prefer to shop

via the Internet and don't want

to come and buy their goods face face tor face have the

opportunity to buy them on the

Internet. Retail analyst Peter

Ryan takes it further. He says

for bricks and mortar retailers

to succeed in the Internet

world they'll have to offer

more than just a good price. They've got to rethink

the kinds of goods that they

stock, they have to rethink how

it is that they can it is that they can provide

some sort of value add to the customer. They also have to

give away margin unnecessarily. With Internet

sales tipped to double in the

next four years, retailers are

pinning their hopes on the recently Commission inquiry into the industry finding some long-term

solutions. It may be Australia's biggest natural

disaster, but the floods have

yet to change the Reserve

Bank's thinking. As expected

the RBA kept official rates on

hold and reserved its final

judgment on the floods' impacts. That final judgment

could change if the latest business survey is any guide.

The devastating floods may have

blown a state economy and many

thousands of lives way

offcourse but not the Reserve

Bank. The reserve is basically

saying there will be a

short-term adverse impact on

both prices and growth. But

it's essentially saying it's

prepared to look through that.

It will focus on the

medium-term outlook for the

economy. On that basis it

doesn't see a major impact from the floods. While the RBA

acknowledges it's too early to

be sure, its preliminary assessment

assessment is that overall demand from the rebuilding effort in Queensland is

unlikely to have a major impact on

on the medium-term outlook for

inflation. So as expected the

cash rate stayed at 4.75%. They're very concerned about not overestimating the

impact of the floods and its

impact on overall the economic

performance for 2011 in

particular. The RBA would've

seen an improvement in business

conditions in December's

National Australia Bank survey, with rises in trading

performance, profitability and employment. But beginning to dent confidence. We were very

concerned in terms of what it

was showing. I mean, you look

back and you can probably

understand why confidence is so

bad. But we were also a bit

surprised when actual activity

levels were as bad as they were

in Queensland. While the

nation's business conditions

improved, Queensland's

confidence and conditions

measures plunged to levels not

seen since the height of the

global financial crisis. And

the January survey, which will include flooding in Brisbane

and Victoria, is yet to be seen. In the short going to be larger than what

Treasury said. Treasury talked

in the financial year of an attraction of around about half

a per cent. We're talking around .8, .9

detraction. Manufacturers have been battling more than the

floods. A key manufacturing

index was below 50 again in

December for the fifth straight

month which means the sector continued shrinking. The

Australian industry group says

it's a symptom of a strong

Australian dollar, and wage

pressures hampering growth as manufacturers compete with the

mining industry for far as the Reserve Bank is concerned, the resources boom is still the main game. There's short-term impact but the

long-term global impact of demand from China and India

ultimately is more important. That's why Australia is in good

long-term shape. That's why

interest rate forecasts haven't

changed much, despite mother

nature's intervention. We were

looking at a tightening in the

next few months some next few months some time. Now

we're looking at a tightening

occurring maybe around May or

the middle of the year. Having

kept the lid on the economy through last year's increases the the RBA has

bought some time so it can

easily afford to play a it

whatting game. Oil giant BP

has posted an annual loss of nearly $5 billion after the

disastrous spill in the Gulf of

Mexico. BP recently upped its estimate of the cost of the

blow-out to just short of $40 billion. Dividends were

suspended and the company is

selling off assets to raise

cash. Announcing the results in

London a short time ago, BP CEO

Bob Dudley put the emphasis on

future growth pointing to

fourth quarter profits of $4.5 billion and dividends for shareholders.

Little change on the share

market today but plenty going

on. Earlier I spoke to Marcus Padley at Patersons Securities. The first Reserve Bank statement of statement of the year. What does investors make of it? Not

a lot, really. It didn't

surprise anybody. Left interest

rates unchanged as expected and

went into a long verbal about

floods in Queensland and what

impact that will have but

basically monetary policy

doesn't produce lettuces or

bananas. Even if prices do pop

up short term they will look

through that and leave them,

and leave monetary policy

it is. There are brokers expected

expected to leave it on hold possibly until the second half

of next year. I saw one

expecting a rate rise in May

but looks like steady as we and keeping watch for all those

factors that could push them

around, but no need to move now. What about cyclone Yasi?

The market must've been

focusing on the possible impact

of it? Certainly. If you look

at the aftermath in the stock

market of the Queensland floods

there are a whole bunch of

profit warnings from related companies.

far more focused I think on the

agricultural sort of sector, particularly mangos, avocados,

sugarcane, I think 95% third of Australia's sugarcane

is in the region that's going

to be affected and 95% of the

bananas in the country are affected

affected as well. So that will

hit those sectors. There aren't

too many specific stocks except

the usual ones which got hit in

the floods which is the

insurance companies with falls

in IAG and QBE today, and also

Suncorp group and Bank of Queensland also affected

today. The energy sector had a

good day today. How much was that to do with that to do with the unrest in

Egypt? You have to see a sustained oil price rise for