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Opposition to the East Timor Solution builds

Opposition to the East Timor Solution builds

Broadcast: 09/07/2010

Reporter: Nick Harmsen

A key union player instrumental in Julia Gilard's promotion to Prime Minister has come out against
her East Timor plan.


LEIGH SALES, PRESENTER: The East Timor Solution is back on.

Yesterday Julia Gillard backed away from naming the island as her preferred location for processing
asylum seekers.

Today, she was busy talking down any suggestion of her plan's imminent demise.

But the list of critics now includes a key union player who helped deliver Ms Gillard the

The Prime Minister's facing more unease in Western Australia, where border security and the mining
tax have eroded Labor's electoral hopes.

Political reporter Nick Harmsen.

NICK HARMSEN, REPORTER: In the Wild West, diplomacy is direct. Julia Gillard found herself the
target of an egg ambush at the hands of an unhappy voter.

ALLAN ADAMS, WA POLICE: He was upset with some Government policy relating to his business. Not
specifically relating to his business, but relating to business overall.

NICK HARMSEN: The shot missed; it hit a police officer instead. The alleged assailant has been

JULIA GILLARD, PRIME MINISTER: Perhaps a Western Australian thought I needed to have some scrambled
eggs this morning for breakfast.

NICK HARMSEN: The Prime Minister has been walking on eggshells, trying to unscramble the
Government's message on asylum seekers.

Yesterday, Julia Gillard appeared to walk away from East Timor as her preferred destination for a
processing centre, but it's now back squarely on the agenda.

JULIA GILLARD: Those critics who want to declare the approach dead in a week are mistaken.

TONY ABBOTT, OPPOSITION LEADER: It's very clear that what the union and factional warlords have
managed is a transition from one incompetent prime minister to another incompetent prime minister.

NICK HARMSEN: Paul Howes was one union boss who led the charge in rolling Kevin Rudd.

PAUL HOWES, AUSTRALIAN WORKERS UNION: Every single union leader that I spoke to was very
enthusiastic - not just supportive, but excited about the prospect of Julia Gillard being the Prime

NICK HARMSEN: But the AWU secretary is less pleased with her border protection policy.

PAUL HOWES: I'm not happy with the Government's response to this. I'm not happy with what the
Coalition's doing on this. I accept that we've largely lost the debate, that we haven't been
successful in convincing the Australian people.

NICK HARMSEN: The Foreign Affairs Minister has been busy convincing Australia's neighbours of the

Stephen Smith has just returned from Papua New Guinea, which like Australia and East Timor, has
signed the Refugee Convention. But it's not being considered as a back-up option yet.

JOURNALIST: Manus Island and PNG: are they in the offshore mix?

JULIA GILLARD: Well, our focus here is on the dialogue with East Timor. I couldn't be clearer about

NICK HARMSEN: With the wheels of diplomacy now turning, the Prime Minister is maintaining a
diplomatic tone back home. The mining tax severely wounded Labor's chances in WA and Julia Gillard
is keen to cauterise the issue.

She's already appeased the major miners and today she spent some time with the minor ones.

SAM WALSH, RIO TINTO IRON ORE: I think it was a constructive conversation and I think the Prime
Minister showed that she is willing to listen.

DAVID FLANAGAN, ATLAS IRON: I think we've got a way to go, actually. It doesn't feel like this is
something that we're gonna wake up tomorrow and it's all solved.

NICK HARMSEN: The mining tax may have hastened Kevin Rudd's demise, but come tomorrow he'll be
flying high on his way to the US for a week-long leadership forum.

Nick Harmsen, Lateline.

Internet filter postponed for more review

Internet filter postponed for more review

Broadcast: 09/07/2010

Reporter: John Stewart

The Government's much criticised plan to censor the internet has been put off again.


LEIGH SALES, PRESENTER: The Government's controversial plan to censor the internet has been put off
for at least a year.

The Communications Minister Stephen Conroy said today that more time was needed to review what
types of online content would be banned.

In the meantime, three internet service providers have agreed to voluntarily block websites
containing child pornography.

John Stewart reports.

JOHN STEWART, REPORTER: There's been plenty of opposition to the Government's plan to filter the
internet and today the Communications Minister moved to delay the controversial policy for another

Senator Conroy says that more time is needed to review what material should be included in the
refused classification rating and what websites will be banned.

STEPHEN CONROY, COMMUNICATIONS MINISTER: The aim of this review will be to examine the current
scope of the existing RC classification and in particular whether it adequately reflects current
community standards.

JOHN STEWART: Senator Conroy says the Government's list of banned sites will remain secret, but the
blacklist will now be reviewed each year by an independent expert and those whose internet sites
are blocked will be able to appeal against the decision.

While a 12-month review of the refused classification rating is underway, three internet service
providers, Telstra, Optus and Primus have agreed to block child pornography websites.

STEPHEN CONROY: They have agreed that as soon is as practicable, they will block child abuse URLs
on a list provided to them by the Australian Communications and Media Authority.

JOHN STEWART: Optus today admitted that blocking access to child porn sites will not stop the more
secret internet file transfer networks.

solution. There is many, many peer-to-peer and virtual private network type traffic which will not
be captured by this particular filter. So we work with the Federal Police to address all of those
sorts of other issues to make sure we do what we can.

JOHN STEWART: The Greens say the Government's decision to delay the mandatory internet filter is an
admission the policy is flawed.

SCOTT LUDLAM, GREENS: Most of the really toxic material is not actually traded on live websites on
the world wide web, it's on the dark net and it's in places where the filter simply won't be able
to reach.

JOHN STEWART: But Christian groups say the voluntary blocking of child porn sites by internet
service providers is a step in the right direction and want a mandatory filter applied to all
Australian ISPs.

LYLE SHELTON, AUSTRALIAN CHRISTIAN LOBBY: Why that's controversial, why parties like the Greens
don't support protecting children this way is very disappointing, but really all the filter will do
is give effect to the existing laws which are being circumvented by overseas internet websites.

JOHN STEWART: Those opposed to the mandatory internet filter say the list of banned sites will be
subject to pressure groups and political whim.

SCOTT LUDLAM: We are worried about future scope creep, that whatever the Attorneys General might
decide is appropriate to filter next July might be very different three months later the next time
some moral panic comes down the line.

STILGHERRIAN, TECHNOLOGY BLOGGER: The conservative Christian groups will be lobbying very hard to
add everything they want to add to that category. You'll have people opposed to the filter wanting
to remove things from refused classification which they think go too far. And every lobby group
that has something that they don't wanna see on the internet - gambling, whatever it might be, they
will all be lobbying hard.

JOHN STEWART: Senator Conroy says the 12-month delay is not designed to appease international
critics of the plan including Google and the United States Government.

JEFF BLEICH, U.S AMBASSADOR TO AUSTRALIA (Q&A, April 12): We have been very clear: the internet
needs to be free. It needs to be free the way we have said skies have to be free, outer space has
to be free, the polar caps have to be free, the oceans have to be free.

JOHN STEWART: And now the Government may be free of another controversial election issue.

John Stewart, Lateline.

Search giant Google found guilty

Search giant Google found guilty

Broadcast: 09/07/2010


Google has been found guilty of breaking Australia's privacy laws by collecting private information
from wireless networks.


LEIGH SALES, PRESENTER: The internet search giant Google has been found guilty of breaking
Australia's privacy laws.

The privacy commissioner investigated Google for using its Street View mapping vehicles to collect
private information from wireless networks.

The practice happened in more than 30 countries and the Communications Minister has called it one
of the world's largest privacy breaches.

Despite that accusation and the guilty finding, Google will escape punishment, as there are no
sanctions for breaching Australia's privacy laws.

However, a separate Federal Police investigation into whether the snooping broke the
Telecommunications Act is still underway.

A successful prosecution for that offence could see Google employees fined or even jailed.

US, Russia complete biggest spy swap since Cold War

US, Russia complete biggest spy swap since Cold War

Broadcast: 09/07/2010

Reporter: Norman Hermant

The US has swapped 10 Russian agents for four Russians charged with spying for the West.


LEIGH SALES, PRESENTER: The biggest spy swap since the end of the Cold War appears to have taken
place in Vienna.

10 people who pleaded guilty of spying for Russia were deported from New York last night.

A short time ago, two planes involved in the swap - one Russian, one American - parked side-by-side
on the tarmac at Vienna Airport for about an hour and a half as vehicles shuttled between them.

In return for the 10 spies, Russia pardoned four agents it alleges were spying for the West.

The ABC's Moscow correspondent Norman Hermant reports.

NORMAN HERMANT, REPORTER: It's been a quarter of a century since the world has seen a spy swap like
this. After pleading guilty to acting as illegal agents in the US, it's believed the Russian spies
are on their way to Moscow. Some, or perhaps all, were on this jet that landed in Vienna.

It parked on the tarmac next to a Russian airliner. Media reports say the Russian agents are
expected to arrive in Moscow later today.

Earlier, as their every move was followed in New York, president Dmitry Medvedev pardoned four
convicted spies in Russia. It was clear a swap was in motion.

One of those released by Russia is military researcher Igor Sutyagin who was jailed in 2004. The US
has always maintained that he wasn't an American agent.

US GOVERNMENT SPOKESMAN: We deny that he's a spy.

NORMAN HERMANT: The 10 Russian agents who appeared in court in New York all agreed to be deported
from the US. The lawyer for the so-called "femme fatale" spy, Anna Chapman, says it's unlikely
she'll ever return.

ROBERT BAUM, LAWYER FOR ANNA CHAPMAN: Under the agreement that she signed, she can only come back
to the United States after direct authorisation by the United States Government. It is highly
unlikely they would ever grant such authorisation.

NORMAN HERMANT: It's clear Moscow wanted this deal to happen quickly. The lawyer for the
Peruvian-born Vicky Palaez says her family was offered money and housing to convince her to agree
to plead guilty.

JOHN RODRIQUEZ, LAWYER FOR VICKY PALAEZ: The promises made by the Russian Government to my client
were $2,000 pension for life - for life, wherever she travels, that she can go to Russia and upon
arriving in Russia she can leave and go to any country in the world.

In this case she's going to Peru. But she can't go to the US, and that was the agreement.

NORMAN HERMANT: Russia's Foreign Ministry says this exchange is taking place in the context of
improved US-Russian relations, but in intelligence circles here this is seen as a black day.

Four high-profile convicted spies are going free in exchange for 10 agents who analysts say after
years in America gave Russian intelligence next to nothing except for considerable damage to its

Norman Hermant, Lateline.

What has Obama changed in Washington?

What has Obama changed in Washington?

Broadcast: 09/07/2010

Reporter: Leigh Sales

Jonathan Alter is the author of 'The Promise', which charts the first year of the Obama
administration in meticulous detail.


LEIGH SALES, PRESENTER: When Barack Obama was campaigning to become United States president, he
promised to change business-as-usual in Washington.

But from the economic stimulus to healthcare to national security, American politics is more
polarised than ever.

Jonathan Alter is the national affairs columnist for Newsweek and the author of 'The Promise',
which charts in meticulous detail the first year of the Obama administration.

He joins me live tonight from New York.

Mr Alter, thanks for your time.


LEIGH SALES: You've written that, "From the start, Obama was boxed in, not only by the mess Bush
left him, but by the contradictions at the centre of his appeal." What do you mean by that?

JONATHAN ALTER: Well, you have to remember that Barack Obama ran for president as a unifier. The
idea was to get beyond left and right and move to a new, less partisan place in American life.

But he also wanted to get a set of things accomplished, big things like a healthcare reform that
we've been debating in the United States for close to a century so that we don't have so many
uninsured Americans. And those two ideas were at odds with each other, because when he wanted to do
these big things like revive the economy, get healthcare reform and a list of others, that ran
right up against partisan opposition.

So he was unable to both get big things done and change the tone of our politics. He succeeded in
getting an awful lot done and being a successful president in terms of accomplishment, but failed
to change the tone.

LEIGH SALES: Well he must have known that those two things would butt up against each other. Why
then in the campaign would he promise to change business-as-usual in Washington, given the obvious
difficulties he was going to have?

JONATHAN ALTER: Well, two explanations: one is it's politically advantageous for him to position
himself as above the fray as much as he could. It's what we call presidential - you know, a more
appealing posture for an American politician.

But he was also surprised at the level of the opposition. And when I interviewed the president late
last year and asked him what his biggest surprise was, he answered that in the early days of his
administration, in January of 2009, he went to the Republicans on Capitol Hill and asked for their
cooperation in preparing a stimulus package to prevent another Great Depression in the United
States, which we were headed for; we were losing close to three quarters of a million jobs a month,
and if we'd stayed on the pace that we were on in early 2009, we would have been in another Great
Depression with perhaps 20 per cent unemployment by the end of 2009.

So drastic action was needed. The President expected that they were gonna cooperate. Not on
everything, but that they would be willing to negotiate - the Republicans, the other party. And he
told me that the biggest surprise of his presidency was that, "They weren't more interested in

What the Republican Party decided was that being an obstructionist party, just saying no to every
one of the President's initiatives except for the war in Afghanistan, would be smarter politics for
them and give them a better chance of regaining control of the United States Congress this fall in
the mid-term elections. And so they pursued a policy of obstruction, and the President was
surprised by that.

Some other might say, well, you know, "He was naive. They were always going to do that." But there
were quite a number of Republican economists who believed that we needed a stimulus, that we needed
to do some things differently on the economy. So I don't think he was naive. It was just a
particular not terribly patriotic strategy that was adopted by the Republican Party within the
United States.

LEIGH SALES: We heard a lot during the Bush years about how the power players in Cabinet, Rumsfeld
and Powell and Rice, squared off against each other and competed for the president's ear. Talk us
through the dynamics of the Obama Cabinet.

JONATHAN ALTER: Excuse me? Who's the what?

LEIGH SALES: Talk us through the dynamics of the Obama Cabinet.

JONATHAN ALTER: OK. Ya. You know, it is a less contentious place. Now that might - those disputes
may develop over time. In some administrations it takes a couple of years before the real fissures
in a Cabinet are clear, but he has a very good working relationship with the Secretary of Defence,
Robert Gates, who's a holdover from the Bush administration, and arguably the most influential
member of the Cabinet, and they have a strong relationship.

And his relationship with Hillary Clinton, the Secretary of State, is also very strong and
surprisingly unfraught. It doesn't have a lot of the dynamics - sort of angry dynamics that you
would expect considering that they'd had a very bitter contest for the Democratic nomination in
2008. At the staff level, there's a lot of sniping between the State Department staff and the White
House staff, but Obama and Clinton get along well professionally. They're not close personally, but
they have a working lunch every week and are in quite good contact.

The Treasury Secretary, Tim Geithner, and the chief economic adviser, Larry Summers, who had been
Treasury secretary in the Clinton administration, they really dominate economic policy. They get
along well enough with each other. They are old friends. One might have suspected some tension
there. But there's been something of an issue that I explore in the book in them having too tight
of a circle around Obama when it comes to advising him on economic policy. And they kept people out
who they probably should be hearing from more.

Now in terms of military policy, I'm sure that you've heard about the firing of General McChrystal

LEIGH SALES: We have of course.

JONATHAN ALTER: ... just recently. Yes. And the - there's a back story to that that I explain in
'The Promise'. This was not General McChrystal's first trip to the woodshed to be rebuked by the
president of the United States. Last year in 2009 there was arguably insubordination on the part of
General McChrystal.

At the time, President Obama blamed it on the joint chiefs-of-staff and he summoned Admiral Mike
Mullen, who is the top military officer in the United States, the chairman of the joint
chiefs-of-staff, to the Oval Office and dressed him down for boxing him in. And when I asked the
President if he was jammed by the Pentagon, his answer was, "I neither confirm nor deny that I was
jammed by the Pentagon."

We all know what that means: he was jammed by the Pentagon. They were trying to force him into a
long, open-ended commitment in Afghanistan that he was not prepared to undertake. And indeed, when
he's ...

LEIGH SALES: Speaking of - sorry to cut you off there. Speaking of Afghanistan puts me to
international affairs. Are there any world leaders to whom Barack Obama is particularly close and
relies upon?

JONATHAN ALTER: I think he has good cordial relations with all world leaders. I know this doesn't
sound terribly dramatic, but he's not - unlike some prior presidents, he's not the kind of guy who
relies on other people, and maybe that can hurt him at certain times. So, for instance, you know,
president Clinton had an extraordinarily good relationship with prime minister Rabin of Israel, who
was almost like an older brother to him in the '90s. And president Bush had various relationships
that were stronger or weaker at particular times.

There have been some tensions between president Obama and prime minister Netanyahu that they're
trying to kind of paper over. He did not get off to a strong start with Gordon Brown in Great

But generally speaking those relationships have been good. He has better relations with heads of
state who are closer to him in age. He likes to put a lot of the old controversies of the past
behind him. He's not interested in what he calls "relitigating the past".

So where there's some generational common ground, he tends to have a little more rapport with those
foreign leaders.

But I think it's - you know, it's important just to finish up very quickly on Afghanistan, to
understand what the policy is now in the United States, and it's one that the president had to
impose over some very strong objections from the Pentagon and from Hillary Clinton, as a matter of
fact. And that is, a quick-in, quick-out approach to Afghanistan.

To get 100,000 troops in fast, retrain the Afghan army, but not occupy the country any longer than
necessary. It's already the longest war in American history. It recently surpassed Vietnam. And he
is determined to at least begin withdrawing troops next year; 2012 at the latest.

They're gonna begin a major de-escalation. And if McChrystal and General Petraeus, Hillary Clinton,
some of the others that had their way, we would have had an open-ended commitment in Afghanistan.
So, I think it's important for our allies in Australia and the rest of the world to understand this
is something the president feels strongly about, that he does not want to just be sitting there
forever in Afghanistan.

LEIGH SALES: Jonathan Alter in New York, thank you very much for your time. We'll leave it there.

JONATHAN ALTER: Yeah, thanks so much for having me.

Batteries get solar-powered plane through the night

Batteries get solar-powered plane through the night

Broadcast: 09/07/2010


An experimental plane has flown for 26 hours using only electricity generated by on-board solar


LEIGH SALES, PRESENTER: After flying through the night, an experimental solar-powered plane has
landed safely in Switzerland.

The pilot flew for 26 hours using only solar energy stored during the day. One of the project's
founders says they're on the verge of perpetual flight.

BERTRAND PICCARD, SOLAR IMPULSE PROJECT: After landing, we have shown that with renewable energies
and energy savings, you can achieve impossible things.

LEIGH SALES: The team will now build a more advanced aircraft to cross the Atlantic before
attempting a flight around the world powered only by the sun.

Japan struggles with $16 trillion public debt

Japan struggles with $16 trillion public debt

Broadcast: 09/07/2010

Reporter: Mark Willacy

Japan's new prime minister has started slashing public spending as he tries to rein in the largest
public debt of any industrialised country.


LEIGH SALES, PRESENTER: Japan has the largest public debt of any industrialised country and there
are fears it could be the centre of the next global financial crisis.

Japan's new prime minister, Naoto Kan, has fiscal reform as his number one priority and he's
already started wielding the axe against hundreds of government jobs.

But eventually he may have to raise taxes, a move that's spelt political suicide for many of his
predecessors, as North Asia correspondent Mark Willacy reports from Tokyo.

MARK WILLACY, REPORTER: It was a dazzling display of Japanese innovation and technical prowess.
Streaking across the Australian night sky, the Hayabusa spacecraft returned to Earth carrying the
first rock samples taken from an asteroid.

But back in Tokyo, another wing of Japan's space program has just been clipped. The showroom which
proudly displays the achievements of the Japan aerospace exploration agency, including the Hayabusa
mission, will soon be shut because of budget cuts.

KAZUO TACHI, JAPAN AEROSPACE EXPLORATION AGENCY: We feel extremely regretful. It's very unfortunate
to lose a place where so many people gather. Last year alone we had more than 170,000 visitors.

MARK WILLACY: The aerospace showroom has an annual budget of $1.3 million and is just one of dozens
of government-funded agencies which have had their money switch switched off, all in an effort to
curb Japan's stupendous debt.

RICHARD JERRAM, CHIEF ECONOMIST MACQUARIE SECURITIES: The level of debt's quite shocking. The gross
debt is about 200 per cent of GDP, twice the output of the country in any given year.

MARK WILLACY: Japan's public debt stands at $11 trillion - that's an 11 with 12 zeros on the end.
This year's deficit alone is estimated to be $400 billion, or 6.4 per cent of GDP.

For the country's new prime minister, tackling public debt and balancing the budget by 2021 is
priority number one, and he's even mentioning the dreaded "G" word to shock Japanese out of their

NAOTO KAN, JAPANESE PRIME MINISTER: Japan is currently facing a difficult situation, with the worst
fiscal situation among developed countries. We cannot sustain public financing that overly relies
on issuing bonds. As we can see in the Eurozone confusion that started from Greece, there is a risk
of default if the growing public debt is neglected.

MARK WILLACY: To prevent a Greece-style meltdown, where Japan loses the confidence of the bond
markets and its interest rates start to climb, Tokyo has to start cutting its $11 trillion worth of
debt and that means even small outlays like this popular space museum face the chop.

To that end, the centre-left government has unleashed its razor gang. Its task is to cut spending
and to flay hapless bureaucrats who stand in the way.

One of the projects to be axed is this $1.6 million 3D movie theatre. Located in the countryside,
it's used to study how the brain reacts to different types of scenery. This lawmaker wants to know
why people would want to see 3D pictures of the countryside in a cinema when they could step
outside and see the real thing.

RICHARD JERRAM: The striking thing about these show trials they had of wasteful government spending
was actually how little waste they found. I mean, last year they only really managed to cut about
0.2 per cent of GDP through an examination of all the waste. And in the end it didn't really
realise very much savings at all.

MARK WILLACY: Richard Jerram believes the Japanese Government needs to do more than just cut
wasteful projects.

RICHARD JERRAM: Most companies, 70 per cent of companies, never pay tax. Most individuals pay a
very low average rate of tax, and the sales tax, the consumption tax is only five per cent. And so,
what they really need to do is to try to bring more people into the tax base, broaden the tax base
and then they'll be able to reduce the deficit.

MARK WILLACY: While much of Japan's government debt is publicly held and financed by the country's
ample savings, the fear remains of a massive meltdown when those savings run out. So that means
even the triumphant space program has to take a hit.

VOX POP: I think they'll make a terrible mistake if they only think about money. Today children are
visiting this place and we should continue to provide them with dreams.

MARK WILLACY: But it seems not even dreams of space will stand in the way of cutting this
stratospheric debt.

Mark Willacy, Lateline.

The Long view on the economy

The Long view on the economy

Broadcast: 09/07/2010

Reporter: Leigh Sales

Economics correspondent Stephen Long joins Lateline


LEIGH SALES, PRESENTER: Joining us for our regular Friday chat is cconomics correspondent Stephen

Stephen, we just heard about Japan's debt woes. A sign of the times?

STEPHEN LONG, ECONOMICS CORRESPONDENT: Very much so, Leigh. Europe is having to go down the same
route as Japan and massively cut government spending and sack public servants, cut their wages. And
really there are a lot of parallels between what happened in Japan where you had the bursting of a
huge asset price bubble, particularly in the housing market, and then you had a lost decade of
economic growth. Europe could well be in for the same. You could say it's got a touch of the
vapours, turning Japanese.

LEIGH SALES: Back home, executives from the collapsed broker Sonray Capital have been told not to
leave the country. How's it looking for clients who had their money with Sonray?

STEPHEN LONG: Very bad. The situation is that there is close to $50 million which has gone missing
from clients' accounts that's been lost and you have a situation where there are about 3,000 people
who had accounts with Sonray. It looks like they will get back, at best, on the initial estimates,
about 30 cents in the dollar.

Now there are some people who had their retirement savings in those accounts - tens of thousands,
hundreds of thousands of dollars. The only upside to this, Leigh, is that it's highlighted the high
risks involved in the form of gambling that is known as trading contracts for difference, or CFDs.

LEIGH SALES: So, what are they exactly? Just decode that for us.

STEPHEN LONG: Well CFDs, which Sonray amongst others was involved in, they're what's known in the
finance jargon as a leveraged derivative. Now, derivative means that you're taking a position in a
stock, for example, but you're not buying that stock or share, what you're doing is taking a bet
that it will rise or fall in value and you're buying exposure to the movement in the price. And the
leverage is that you only have to put up a small amount of money; you effectively borrow the rest.

So, you might typically with a CFA put up five per cent of the value of the position, so you're in
effect getting a 95 per cent loan, 20 times leverage. So, if - so you buy BHP stock and put up
$10,000, a $200,000 position with the leverage and BHP shares go up 10 per cent, you double your
money. If it goes the other way, you can lose 200 per cent of the money that you put up. And a lot
of people don't realise that.

Now, these contracts for difference have been marketed on prime time TV and drawn in a lot of
ordinary punters. There's estimated 35,000 to 50,000 people - ASIC is releasing a report on this
next week and they're very, very worried about the risks, and that's just one of the risks.

LEIGH SALES: There's others too?

STEPHEN LONG: Yes, one of the risks is that the companies involved in this typically pool the money
of the clients, people who have a separate account, but your money can go to make up a shortfall in
a position in another account, which is one of the things that happened at Sonray. And also, if a
whole lotta people make money, you can effectively bust the bank and bring down the broker.

So it's a higher-risk position, probably not suitable to a lot of the retail investors who are
getting into it.

LEIGH SALES: We'll be interested to see that ASIC report. Thank you very much. See you next week.

STEPHEN LONG: You're welcome.

Wool growers enlist unlikely help against wild dogs

Wool growers enlist unlikely help against wild dogs

Broadcast: 09/07/2010

Reporter: Kirrin McKechnie

Donkeys may be the unlikely saviour of Queensland's livestock industry, which loses $70 million to
wild dogs each year.


LEIGH SALES, PRESENTER: Wild dog attacks cost Queensland's livestock industry nearly $70 million a

But one wool grower is bringing hope to the sheep industry, with the aid of an unlikely saviour.

From Queensland's Southern Downs, Kirrin McKechnie reports.

KIRRIN MCKECHNIE, REPORTER: On Bruce McLeash's sheep property at Karara outside Warwick, sheering
is in full swing. Like any wool grower, he's at the mercy of volatile international wool prices and
the dry weather conditions that plague the Southern Downs.

But his number one problem is wild dogs, literally savaging his business.

BRUCE MCLEISH, WOOL GROWER: I actually had a case here where, prior to sheering, I lost 200 full
wool sheep and then in the proceeding six, eight weeks after, I lost another 200 shorn. So, that
year we actually lost 400 sheep.

KIRRIN MCKECHNIE: Bruce McLeash says over the past three or four years, the wild dog problem in
these parts has soared.

BRUCE MCLEISH: The density of wild dogs in - closer-in country, which I call sorta in the ranges,
national parks, forestries, places like that. The density of the wild dogs has got to the point now
where they're getting pushed out and they've gotta go further to search for food and obviously in
those areas there's been not enough done to suppress the numbers and they've just got to a point
where it's exploded. And I've got friends or neighbours in the area here that have never had a wild
dog in their place and they're just losing hundreds of sheep at the moment.

KIRRIN MCKECHNIE: One of those neighbours is Jonathan Carsons.

JONATHAN CARSONS, WOOL GROWER: They started January last year. We bought a mob of lambs and within
two weeks - we bought 240 lambs, and in two weeks they'd taken 40 lambs out of that particular mob.
We were lucky we - I moved them out of the paddock and two weeks later we were able to trap that
dog, but ever since then they've been hitting us with a vengeance.

KIRRIN MCKECHNIE: In the last 18 months, he's lost about 900 sheep to brutal wild dog attacks. That
equates to a loss of more than $70,000.

JONATHAN CARSONS: I don't think we can go on doing this forever - with the losses we're sustaining
at the moment. To replace those sheep: $80, plus to get them on to your property and then you've
gotta wait another 12 months before you get any income from them. You know, why do it?

KIRRIN MCKECHNIE: Many of his neighbours have decided there's just no viable answer and have moved
out of sheep altogether, but that just makes Jonathan Carson's flock all the more susceptible to

The financial and emotional blows every time he comes across mauled sheep in his paddocks is
clearly taking its toll.

JONATHON CARSONS: Black dog sort of starts to get at you a little bit and you never know when he's
gonna bite you.

BRENT FINLAY, AGFORCE: It's very confronting when anyone who goes out and find where dogs have been
in their sheep or cattle. It is, it's a huge emotional thing. You got the worst animal welfare
impacts I've ever seen are wild dog attacks on sheep. It's just - they rip and tear and then they
leave them to die.

KIRRIN MCKECHNIE: Brent Finlay is talking from experience. AgForce's sheep and wool president
regularly loses stock on his Warwick property.

BRENT FINLAY: My area where my property is and my near neighbours I think in the last sorta 18
months, we're talking about $150,000 of damage.

KIRRIN MCKECHNIE: He says last year AgForce commissioned a study on the economic impact of dog
attacks on Queensland's livestock industry. The results were staggering: wild dogs ripped $67
million out of the industry.

BRENT FINLAY: Farmers can consistently go out and find up to 10 sheep dead, maybe even more in a
single day from where dogs or a number of dogs have got into them and that's happening every day.

BRUCE MCLEISH: Wild dog is still one of the only animals with sharks and a few others that actually
does not kill their prey before they feed on it. So they're a very cruel animal. They will eat a
sheep alive. And to find that after you've nurtured the sheep right through - well, these are shorn
now, but to the point where they're full wool, you've drenched them, you've crutched, you've fed
them through droughts and then to have them eaten alive - and they're still alive when you find
them and they've had all their back end chewed out. It's pretty sad.

KIRRIN MCKECHNIE: At wit's end, Bruce McLeish started looking around for solutions.

BRUCE MCLEISH: And I heard of a story near Toowoomba where a lady had a donkey just as a pet
running with her free-range chooks, and she went out in the morning and there was a fox that had
been stomped to death with her free-range chooks. And I thought, "That's strange. I've never heard
of anything like that." And I got on the internet and actually over in Canada they use guard
donkeys a lot for fat lambs and cattles to stop coyotes and wolves.

KIRRIN MCKECHNIE: Graziers have long-trialled unusual guard animals to protect their flocks, from
Maremma dogs to Alpacas, so Bruce McLeash thought he'd give donkeys a go and he says the results
have been extraordinary.

BRUCE MCLEISH: Donkeys will actually live with the sheep, they'll feed with them and camp with them
and when a dog turns up, they will actually go out of the mob of sheep and they will chase them,
they will try and stomp them and bite them. When they get a smell of a dog, a donkey is a very
alert animal, very inquisitive. And when they get a whiff of the dog coming, they will actually
start doing the old "Eee-oor". And we'll be at night here on a still night and you'll actually hear
the donkeys out there calling and ... But their aggressiveness is that they're very fast at
stomping and they'll try and bite, and they will just chase and chase.

KIRRIN MCKECHNIE: With dog numbers exploding in this region, graziers like Bruce McLeash swear by
donkeys over other forms of guard animals such as alpacas, because donkeys are more successful in
fending off dogs that hunt in packs.

He's already seen a dramatic drop in the number of his sheep killed.

BRUCE MCLEISH: A donkey won't eradicate a wild dog, but it might save - if a dog does come in, we
might only lose one out of that paddock, instead of 10 or 12 sheep in one hit.

KIRRIN MCKECHNIE: Donkeys are not the only answer to a problem that's plaguing farmers to the point
of desperation and depression, but they are proving to be an effective weapon in the war against
wild dogs.

Kirrin McKechnie, Lateline.

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