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it's very impressive Well, for what it's worth, How could I not? how you stood by the show. on anything or anyone. I never give up if I hadn't slept with him. None of this would have happened But he's such a wanker. It's not your fault. were beautiful and he was right. He can't be all bad. He said you than waking up with him. I can't think of anything worse Well, I can. I slept with Tom. It's true. ALL: What?! and ended up in bed together. We got drunk at the party fit into prison. You two are going to any better? Does that make you feel Yes, it does. That is worse. Oh, my God, they're coming!

we should agree for the record If he is in any way injured, I thought we were a team! Carl was the one that hit him. Sam. sharing a cell with you, except I love you all, but I'm not It's not looking good. We're not going to go to prison. it's not going to get any worse Quick thought, if we shit on Nancy's desk. Oh, my God! Stay where you are! where I can see them. Keep your hands Easy, easy, easy! Argh! Ow! Ow!

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(ALL SCREAM) How does it feel? You've lost, Nancy!

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This program is not subtitled

This Program Is Captioned

Live. Tonight, the bush

philosopher deals with his

changing fortunes. You stare

out the window of the plane,

you see the sky, see the

clouds, you're happy to be

alive and that's the space I

live in.

Good evening, welcome to

Lateline. I'm Leigh Sales.

Well, this wasn't Tony Abbott's

best week as Opposition Leader.

Most of the pundits and the

controversial worm gave the

health debate to Kevin Rudd. Mr

Abbott then lost one of his

most seasoned colleagues from

his front bench with Senator

Nick Minchin's decision to step

down, that prompted a Cabinet

reshuffle most notable for the

removal of Barnaby Joyce from

the finance portfolio. Kevin

Rudd has his on trouble, State

Premiers skeptical about his

health plan, falling personal

popularity according to the

polls and the likelihood of

interest rate rises. Kevin

Rudd is sewn as a confected

media-driven, spin-doctored,

managed politician. I am proud

to be part of a Government that

did not blink when we looked

like going into recession and

the stimulus, the scale of it

and the breadth of it is what

has kept us from

recession. Joining Lateline

tonight are Labor's Maxine

McKew and the Coalition's

George Brandis. That's coming

up but first our other

headlines. The health debate in

the United States takes an ugly

turn. Pressure grows on the

Pope over his handling of

sexual abuse claims. And

changing the landscape, a

celebration of the place which

nurtured some of Australia's greatest painters. The

Government has wasted little

time in turning up the heat on

the Coalition's new water

spokesman. Barnaby Joyce has

been challenged to reveal his intentions about national water

policy just a day after he was

given the job. The Senator

still believes his own

colleagues contributed to his

downfall but he maintains he's

not bitter about it. Political

reporter Hayden Cooper. The

only cut I'll ever make.

Hello, Mr Joyce. What a

fantastic day. It's lovely to

be here in Adelaide on this beautiful Adelaide day Beautiful autumn day here

Beautiful autumn day here

in...Canberra. Just when they

feared they wouldn't have

Barnaby to kick around anymore,

the critics have spied an

opening in his new job. The

water problems we've got at the

moment Barnaby doesn't believe

appointed him in the first Mr Abbott should not have

place. Senator Joyce who

opposes water purchase has been

selected by Tony Abbott as the

man to handle the future of the

Murray-Darling Basin. Come on,

Barnaby, do you believe that or

don't you? I'll be who I am.

People know that. That's

probably why I'm not Finance

Minister. The Queenslander has

had an average 24 hours but

some reflection time up in the

air has brought him down even

more sanguine than before.

Life's an amazing thing. It's

too sthOrt be bitter about

anything. You stare out the

window of the plane, you see

the ski, see the clouds, you're

happy to be alive and tats the

space I live in. In the new

space of regional development,

infrastructure and water, the

Shadow Minister is starting

cautiously. As it's my first

day and I've been up since 3:00

in the morning I'm not going to

jump into the intricacies of policy's position at this point

in time. In the past he's

opposed Tony Abbott's policy of

a referendum on Murray-Darling

water rights and he's not one

for changing. I've never given

up by views on anything. In Sydney, Tony Abbott spent the

day trying to win back the seat

of Bennelong. He was feted by

supporters. We like you,

tony. But confronted by some

harsh critics too. Weak man

who'll never be Prime

Minister. You're doing a great

job, Tony. Got to be a bit of

opposition somewhere, hasn't

there? Where do you stand? My daughter's gay, she can't have

a family. The Opposition

Leader rejects Senator Joyce's

complaint that critical

colleagues brought him undone.

It's a shame that people seem

to be more intent on being

anonymous and in the background

than having the fortitude to,

you know, be upfront and be a

man because I know they're

blokes. The only people who

have been criticising Barnaby

are the Labor Party and they're

unhappy because he's been

telling home truth about

them. He's told his

frontbencher to hit the road

attacking Government waste.

It's been a difficult week for

the Opposition Leader. The health debate didn't go his

way, a senior frontbencher

called it quits and he's had to

step in to sort out the Barnaby

Joyce problem but he's now

trying to wrest back the

momentum using an old favourite

issue, asylum seekers.

Christmas Island detention

centre is almost over-run. The

boats keep arriving and the

Government's been forced to

shift 51 people to the

mainland. Mr Rudd has lost

control of our borders and

because he's lost control he's

lost interest. Now, he has got

to pay attention here. It's

just not good enough. Tony

Abbott's also carrying on the fight against the Prime

Minister's health reform plan.

One of his Liberal colleagues

was flying the flag in

Canberra, frustrating an

otherwise all Labor meeting of

Treasurerers. In relation to

the key issues there was no

progress made today. They did

agree on something, easing the

housing shortage by speeding up

land releases. We've agreed on

a program of work with a

timetable, with the states and

that work is ongoing as we go

through the rest of the

year. Back in Bennelong, some

voters have no time at all for

politicians. Excuse me,

please. You're obstructing the traffic. Human traffic has a

different meaning entirely.

She doesn't like the media

perhaps. In Washington,

Republicans have come out

swinging over suggestions that

they've incited an ugly

backlash against Democrats over

President Obama's health care

changes. A senior Republican

Congressman has told reporters

a bullet was fired through his

office window and he blames

Democrats for trying to

politicise the attacks. North

America correspondent Craig

McMurtrie reports. In Iowa city

Barack Obama wasn't buying into

the row directly but he's

taking pot shots at Republicans

for fear mongering. Leaders of

the Republican party, they call

the passage of this bill

Armageddon. Armageddon. And and

end of freedom as we know it!

So after I signed the bill I

looked around to see if there

were any asteroids falling

or... (APPLAUSE) But no-one's

laughing in Congress. The

office of a New York Democrat

was evacuated after a

threatening letter with white

powder was found. Accusations and threats are flying across

the Web and a senior Republican

called a press conference to

say Democrats aren't the only

ones being targeted. Just

recently I have been directly

threatened. A bullet was shot

through the window of my

campaign office in Richmond

this week. Republican whip

Eric Cantor blames Democrats

for fanning the flames. To use

such threats as political

weapons is reprehensible.

Enough is enough. It has to

stop. Congressional leaders at

separate press conferencess

tried to calm things down.

Must remove all doubt in

anyone's mind that those

expressions and those acts of

vandalism and those threats of

more have no place in the civil

debate in our country. The House Republican leader says

other issues like Iraq have

also generated angry reactions

and he says there was unacceptable behaviour from

both sides of politics in the

heated health care debate.

Threats and violence should not

be part of a political

debate. John Baner says it's a

grass roots revolt. Republicans

will keep fighting to repeal

the health care changes. My

attitude is go for

it. (APPLAUSE) The atmosphere

remains highly charged.The Catholic Church has been rocked

by a new child sex scandal

involving an American priest

accused of molesting 200 boys

at a school for the deaf.

Victims and their lawyers claim

15 years ago when the current

Pope was a cardinal he covered

up a case. John Stewart

reports. Arthur Budzinski says

he was 12 when he was first

molested. He's one of 200 boys

from Milwaukee's St John's

School for the Deaf believed to

have been molested by Lawrence

Murphy between 1950 and 1974.

The victims say he assaulted

them while hearing their

confessions. It started when

he was 12 years old. He

reported to many people,

Milwaukee police, Saint Francis police and no-one helped

him. Before becoming Pope,

Cardinal Ratzinger, as he was

then known, was in charge of

the Vatican's morals watchdog

which received complaints about

priests. According to church

documents from the mid 1990s,

two Wisconsin bishop s urged

him to approve a church trial

of Father Murphy. The Pope

knew from many years - for

many, many years he knew. But

Father Murphy wrote to the

future Pope pleading for mercy,

say he he was sick and that he

wanted to, "Live out the time I

have left in the dignity of my priesthood." Cardinal

Ratzinger's then deputy who is

now the Vatican's Secretary of

State, ruled against a trial.

Lawyers representing the

alleged victims claim the

Vatican covered up the

scandal. The Pope is involved

in an international, worldwide

conspiracy to avoid scandal to

protect themselves, their

reputation at the peril of the

children. At the Vatican, the

Pope received a rapturous

welcome before addressing a

youth rally. While not

referring specifically to

sexual abuse cases, Pope

Benedict said the word of God

shows the way to prevent

falling into the abyss of

drugs, alcohol and addiction to

sex and money.

TRANSLATION: The art of being a

human being demands

renuncations. The renuncations

that help us to find the way to

life. His spokesman says the

20-year-old case was

investigated but wasn't pursued

because the priest was old and sick.

TRANSLATION: I think, having

read the 'New York Times'

article, that this is the

umpteenth attempt to unjustly

sully the name of the Pope.

Outside the Vatican, a protest group called itself the

survivors network of abuse by

priests held a demonstration

about the Vatican's failure to defrock Father Murphy before

hoe died. He did die a priest.

Father Murphy died in his

vestments in an open casket, a

man who raped and molested 200 childrench that is

unacceptable. The Vatican has

described the scandal as a

smear campaign but some

theologians are saying it's

much more serious. This

scandal right now is

unparalleled because it's a

perfect storm. It directly

involves the current Pope, it

involves a cardinal in the vat

valuate and it involves three

local archbishops. Before he

died in 1998, Lawrence Murphy

admitted to abusing children in

his care.

Well, on Tuesday Kevin Rudd

and Tony Abbott faced off in a

health reform debate and

Australia fixed its eyes on a

worm but white ant were on the

political radar this week as

well. Barnaby Joyce has blamed

anonymous critics from within

his own team as part of the

reason he was dumped from the

finance portfolio in

yesterday's Coalition reshuffle. To discuss the week

in politics I'm joined by Brisbane by Senator George Brandis, shadow

Attorney-General, and in Sydney

by the parliamentary secretary

by the parliamentary secretary

for infrastructure, transport,

regional development and Local

Government and no stranger to Lateline, Maxine McKew. Welcome

to both of you. Hello.

Hello. Let's start with the Coalition reshuffle which was

the big news at the end of the

political week. George Brandis,

as I said, Barnaby Joyce has

said he was white-anted from

within his own party. Is that

true? Look, I never heard that

and I think that frankly - I wouldn't overstate that.

There's always a bit of

grumbling in political parties

and people covet peach other's

positions. I'm sure Maxine, you

covet the next Ministerial slot

that might be open for you.

There was a high level of

respect and appreciation in the

Coalition and around the shadow

Cabinet table for the job that

Barnaby Joyce had done because

as Tony Abbott said today, what

Barnaby Joyce did in his unique

cut-through way, is he

popularised the issues of debt

and deficit. Barnaby is one of

those politicians who reaches

people who don't ordinarily

engage in politics, people who

don't necessarily watch shows

like this. I think he has

always been, for as long as

he's been in the shadow Cabinet

and will continue to be in his

new important role representing

regional development, a key

member and most respected

member of the Coalition front

bench. We have had this

discussion he was highly respected, Tony Abbott said he

did an out stBeding job, if

that was the case wouldn't he

still be in the job? A front

bench line-sup like a cricket

team. You've got to have your

line-up with the very skills

the team captain wants and Tony

Abbott is the captain as it

were of our team. There is any

one of several people on the

Opposition front bench who

would make a very fine finance

spokesman. Barnaby Joyce was

one, Andrew Robb is another, a

couple of years ago Peter

Dutton did a very good job in

that capacity but I think most

people would agree that Barnaby

Joyce has a unique connection

with regional and rural

Australia and the time he's

been in the parliament which is

only five years it should be

remembered, Barnaby has

absolutely made himself the

voice and the champion of

regional and rural Australia so

I can well understand why Tony Abbott would have thought - and

I agree with him - that $could

be no better person on the

Opposition front bench to

represent regional development

and regional and rural

Australia than Barnaby Joyce.

Maxine McKew, is Kevin Rudd

going to take leaf out of Tony

Abbott's book and reshuffle the

Government front bench ahead of

the election? He's got no need

to do a reshuffle. If I could

pick up on one of the point you

made, George, you medicationed

a lot of people who have been

in the shadow finance portfolio

and I think that says

everything. What we've seen

this week is Tony Abbott

indulged Barnaby Joyce for four

months. He knew hoe he was

taking a big risk and indeed

Tony Abbott himself a big risk

when it comes to economic

management. Many of his

colleagues told him not to have Senator Joyce in that important

portfolio area but he went

ahead instead. Now he's being

moved to regional development

and George, you're right, this

is a critical area but also an

economic area. I'm a believer

that we're on the cusp of a

significant regional revival in

Barnaby Joyce's home State,

George your home State, you've

got a big growth summit coming

up in the next week or so, this about significant population pressures in the southeast

corner which is very

challenging and offers

opportunities for other growth

areas in regional Queensland. I

hope that Senator Joyce is up

to the sophisticated, strategic conversation that will be

required to plan for that

growth but I have to say on the

basis of what we've seen while

he's been in the finance

portfolio I'm not particularly

hopeful. You say of your own

team there's no need for a

reshuffle. Given that, if I can

pick up on something George

said earlier, is that

disappointing for someone like

you that there may not be a

Ministerial slot open for a

while? There may not be. I'm

not diss appointed. I started

in the early childhood

portfolio. Do you not have

ambition to move? Yes, and everybody in the Labor party

has ambitions including every 1

on the back bench who aren't

even in the middle seats,

Leigh. What's the compelling

reason for a reshuffle? None.

Speak of people on the back

bend, George Brandis, was it a

mistake for Tony Abbott to turn

down Malcolm Turnbull's offer

to return to the front bench?

Well, first of all I'm not sure

that an offer was made. There

was a press report that implied

that yesterday morning but I

can well understand Tony

Abbott's reason and I think it

was a good reason for as long

as the Emissions Trading Scheme

legislation is before the

parliament on which Malcolm's

view was over taken by party

opinion y think it would

frankly embarrass Malcolm to be

a member of a shadow Cabinet

which has taken a different direction from the direction

which he led it. The important

thing is Tony has said there

will be a senior portfolio

offered to Malcolm Turnbull in the event the Coalition wins

the next election and there

should be because Malcolm

Turnbull I think post people

wouldic knowledge is one of the

most talented people to have joined the Australian

parliament, on either side, for

many of long year I would

agree with that but all the

more significant that someone

of Malcolm's caliber is not on

your team going to an election

you want to win. He is on our

team Can I raise someone else

we haven't mentioned this week

and that is Senator Nick

Minchin's departure from the

parliament. He is going to be

missed from his party and

indeed by a ought lot of people

in the parliament. A straight

shooter. Very much both a

social and economic

Conservative but I would think

that Conservatives like Nick

Minchin, even though he helped

prupole tab toot the

leadership, would be in

something of two minds. Clearly

there are Conservatives like

Nick who are in line with Tony

Abbott's social views but will look at his economic management

and be thinking, "Where's he

going?" Abbot owes more of his

economics to someone like BA

Santa Maria than a Milton

Freedman. You've got Malcolm

sitting there on the

backbenchers a free marketeer,

believes in a market mechanism

for emissions trading. Quite

right, I agree with him. But I

would have thought there are

still big fishes there in the

party in terms of, if you like,

your Liberal wing and the

economic drives. Senator

Brandis? Let me let you in on

a secret, Maxine. The only economic management we talk

about in the Coalition is your

economic management, your

disastrous economic management

that has taken Australia from

the strongest position in the

OECD when the Coalition left

office to the worst public debt

that this country has ever seen

in peace time. You can be a

commentator, Maxine, you can be

a commentator but at the sharp

end of politics this is about

the Rudd Government's performance and the Rudd

Government's performance in

economic management has been

lamentable. I am proud to be

part of a Government that did

not blink when we looked like going into recession and the

stimulus, the scale of it and

the breadth of it is what has kept us from recession and

George, the only figure to look

at is the fact we have

at is the fact we have 5.3%

unemployment. If I can interrupt there are some other figures to look at and those

are the figures to do with the school buildings program. We've

seen some example said come out

about ridiculous costs for

school building projects. How

do we know what the extent of

that is? Could it be another

insulation program where there

are - there is example after

example of these price gouging

cases taking place? Let's break that down. Example after

example. As Julia Gillards

hapointed out, we're talking

about 20,000-plus projects

across something like 9,500 schools and the national

hotline has had fewer than 100

complaints. If we just come to

NSW, Education Minister Verity

Firth has had an audit under

way and where there have been

problems - and there's one in

the papers today - that has

been addressed. Should the

states follow their lead? They

would have different systems in place but of course there

should be absolutely proper

accountability. Leigh, this is

a beat-up. I have about 40-odd

schools in my electorate. I am

in touch with their principals

and the P and Cs, the P and Fs

all the time. Overwhelmingly, I

mean, people are saying this is

a miracle come true. It's meant

2 to $3 million, keep in mind, of modernisation programs in schools across the

country. This the same sort of

rhetoric we heard around the

insulation program, that it was

a small number of isolated

cases, that generally

everything was going well and

then it was proven not to be.

I'll just answer that - I could

answer it many ways, I'll just

give one example, for instance

the new member for Bradfield,

Paul Fletcher, raised a

question in the parliament to

Julia Gillard just recently

about the Gordon East Primary

School and claimed all sorts of

things about what was not going

on there. Do you know he hadn't

even been in touch with the

principal? He'd never visited

the school. Julia Gillard rang

the principal and said there's

not a problem. Julia sliced and

diced him. What's happening

here, I think we've got the

Liberals softening everybody up

to can the rest of the program

and that will be the phase 3

school. God up any principal in phase 3 because the Liberals

are coming after you. George

Brandis s that that the case?

No, the fact is that the school

halls program has been a

systemic failure. Those aren't

my words. Those are the words

of the NSW teachers federation,

not famously known to be

supporters of the Coalition.

It's all very well to say this

is just an isolated example

here or there. The pity of it

is that you pick up the

newspaper every morning and

there's a new example. There

were two examples in this

morning's - reported in this morning 's Australian

newspaper. So much so that

there are now three auditor

general's inquiries at State

and Commonwealth level into

this program. There are reports

that pins principals in

Victoria are being threatened

with the cutting-off of funding

to their schools if they raise

their voice to criticise

wastage and mismanagement in

the project. This is strikingly

similar, chillingly similar to

the insulation program. It a

poorly managed, poorly

rolled-out, poorly administered

wasteful program for which the

Rudd Government frankly is

entirely - the wastage for

which the Rudd Government is

entirely responsible. I'd

like to move on to different

issues because we're going to

run out of time. George Brandis, let's talk about this

week's debate. How surprised

were you to see the return of

Kevin 07 to debate Tony

Abbott? I was at the debate. I

must say that, like a lot of

people who were actually there

in the room, I thought Tony

Abbott won the debate hands

down and I think that what we

saw was that Kevin Rudd had a

political strategy and a media

strategy. It was notable, by

the way, for example, that - to

those of us in the room - that

Kevin Rudd never once addressed

or engaged Tony Abbott

directly. It was an all

scripted, spin doctored, face

to camera performance even at

that point in the debate when

he said, "I reach out to you,

Tony, join with me and cooperate." He didn't so much

as look at Tony Abbott, he looked straight down the

camera. This was a TV

show. Maxine McKew, the consensus was that Kevin Rudd

did win the debate publicly,

unlike what Senator Brandis

says. That may be so but he

certainly far from won the

battle. The states are still

not signed up to it. The Western Australian Treasurer

said today no progress had been

made towards a deal. The

Victorian Premier made a list

of 10 points that still need

answering. When will the Government provide detail on

the policy? You're right there

are a lot of question out there

but consider this, Leigh, this

the biggest change to the health system since the

introduction of Medicare in the

19 70s. Unlike George y thought the Prime Minister came along

to the debate this week

absolutely in command, in a

very clear way spelt out what

he sees as the road ahead and

that is the need for a national plan, that is the Commonwealth

to take on the dominant funding

role for our hospitals and for

primary care and that of course

means more doctors and nurses,

better aged care, better dental

care, better primary care. It

is a comprehensive integrated

system. You're right, we are

not there yet but the Prime

Minister and Health Minister,

Wayne Wayne Swan today, they

are working towards the COAG

meeting on April 19 so there's

lot to put in place, as you

know. We think this requires

something like a third of the

GST back from the states. Of

course that's contentious issue

but I'll put this to you.

Message if we continue with the

status quo - imagine if we

continue with the status quo, State Budgets will not be able

to cope. The only thing they'll

boo able to fund in 30 or 40

years is health. There's a

compelling reason for change.

George Brandis, the Coalition agrees there's compelling

reason for change. We heard

Maxine McKew outline the broad

parameters of what they want to

see and Senator Brandis,let me

put it to you that broadly

speaking the Labor policy is not that different to what the

Coalition itself wants. You

both want more localised

control of hospitals, you want

less bureaucracy, you want a

more streamlined fee structure. Don't you thing the public

would be happier if there were

less manufactured controversy

and more concentration on the

areas on which both sides

agree? Firstly, we're not

manufacturing a controversy,

we're doing what an Opposition

ought to be doing and that is

holding the Government to

account and expose ing the

mismatch between its rhetoric

and reality. It's Tony Abbott

who put the notion of control

of public hospitals by local

boards on the public agenda.

When Kevin Rudd last had responsibility for a health

system he was the chief

bureaucrat in Queensland, he in

fact abolished control of

public hospitals by local

boards so fast forward 20 years

and Tony Abbott has put the

issue back in the forefront of

the health debate and the Labor

Party is following his

lead. Shouldn't it be a fairly

simple matter to work together

on Senate There's a

fundamental difference. The

Labor's plan f you analyse it,

is to iman additional level of

bureaucratic control, not a

single extra dollar, not a

single extra bed, not a single

extra doctor or nurse. What the

Labor Party's proposal is is

basically changing the

bureaucratic mix. What the

Liberal Party has proposed is

genuine local control without

an intervening extra tier of bureaucracy. Maxine McKew,

you've been around politic as

long time. How unusual is it to

see speculation surrounding a

Prime Minister's longevity in

the job just two years into his

first term? I don't think we

are seeing that. I think there

have been endless - not endless

but quite a number of newspaper

columns suggesting there are

concerns. I've seen some

excitable columnists quoting

unnamed sources. I certainly

haven't seen that in the last

couple of weeks. There is no

question. On an issue as

significant as the Future Fund

ing of the health system,

you're seeing in Kevin Rudd

someone who's absolutely in

control of that area, who is

working constructively with all

of the states, with a national

plan for health reform. How

confident are you that if Kevin

Rudd is re-elected he will

serve out a full second term as

Prime Minister? Absolutely

confident. I mean, you know,

that's what he would go to the

people and take a plan to them

and of course I expect him to

serve out his full term. I

think here we are two years in,

again let's look across at our

friends in the United States

and what we've seen in the last

week. Only a matter of weeks

ago people were writing off

President Barack Obama who's

been in office for a shorter

period than Kevin Rudd has and

now he's pulled off an

exceptional victory, something

that Democrat Presidents have been working on since

Roosevelt's days and look how

different the commentary is,

Leigh. I've been in politics

enough to not get carried away

by excitable

commenterary. Senator Brandis,

is Kevin Rudd a Barack Obama? is Kevin Rudd a Barack Obama?

I'm afraid Kevin Rudd is no

Barack Obama. Sorry, Leigh,

your question? I just wanted

to know if you thought Kevin Rudd was Barack Obama. You've

answered it for me and in fact

we are out of time. I think

Kevin Rudd is increasingly seen

by the Australian people for

what he is, a confected,

media-driven, spin-doctored, managed politician, not the

real deal at all. You must

have been practising that, have been practising that, George. We shall leave it

there. Senator George Brandis,

Maxine McKew, thank you for

joining us tonight. Thank you Thank you.

Now for his Friday night

commentary on economics and

finance I'm joined by Economics

Correspondent Stephen Long.

Let's start with the US,

President Obama looks set for

another big intervention to

help the economy? Yes, the

reports out of Washington,

Leigh, are that he's about to

announce a major program for home owners to restructure

debt. What's interesting is that it's fought focussing just

on people who are looking at

losing their homes through

foreclosure but those who are

in negative equity, that the

debt is worth more than the

house and the Government looks

like they're going to back stop

that and restructure the

mortgages through an

association of Government - a Government association. What's

not clear is who will carry the

can, wleB whether that means

there is a new wave of losses

for the banks as the mortgages

shrink and the repayments on

the restructured debt shrinks

but there are reports saying

that that will be the case but

the trade-off will be that the Government will guarantee the

mortgages so the banks aren't

hit by defaults. Clever

politics. I'm sure that he'll

get a lot more kudos for

bailing out home owners than he

did for bailing out banks and

it might signal something of a

shift to the left for the Obama

administration but the

economics are compelling as

well in the sense that

consumption is still terrible

in the US. Demand's been hit by the fact that people just don't

have money, the unemployment

rate's at 10% and the economy's

in the doldrums. This might

potentially free things up.

You would have to think though

it would be very controversial

because the banks wont be at

all happy if they have to wear

the losses and also if the

Government's going to guarantee

it, all the people who are upset about debt and Government

spending aren't going to be

very happy either. What about

the people who thought

universal health care through private health insurance, what

are they

are they going to think about

this some They'll so love it.

Let's move over the ocean to

Europe. What do you think of

the bail-out of Greece, the EU

nations have agreed to? What

bail-out of Greece? That's

what I think about it. This is a Claytons bail-out. Germany

has had its way and if you look

at the fine print, although the

EU has a officially pledged

EU has a officially pledged $20 billion to assist Greece,

it's not actually in concrete

and any nation can have a right

of veto over the money going

ahead and they want Greece to

make promises. Germany will be

hard ball on that and they've

already got their way against

the wishes of the EU President. The International Monetary Fund

will be involved if Greece

needs a bail-out. Would

Germany stand by and let Greece

fail? It potential ly might.

I'd have to say it looks at

this stage as if there's a lot

of domestic politics involved

in this and Angela Merkel is

playing to a home audience

which is pretty hostile to the

EU and worried about the idea

of Germany fronting up cash but

push come to shove it's a real

wait and see. We'll keep an eye

on it. Thank you. A painting by Sidney Sidney Nolan went to auction

last night and fetched a record

$5.4 million. Nolan's early

career was nurtured in a place

that's celebrated in an

exhibition which hopened

recently in Melbourne. Heide in

Melbourne's north was for years

the home of John and Sunday

Reed, wealthy patrons to many

of Australia's most significant

artists. Hamish fits Simmons artists. Hamish fits Simmons reports. These gardens

nurchedered and inspired some

of the most influential artists

Australia has produced. When

John and Sunday Reed bought a

derelict cow farm on the banks

of the Yarra outside Melbourne

in 1935, they had big plans. They, having travelled and read

widely, wanted to create a local culture that was

internationally inspired so modernist ideas, progressive modernist ideas, progressive

ideas were very important to

them but they were also really

keen to develop a home-grown

Australian culture. Albert

Tucker, Arthur Boyd, Sidney

Nolan, Charles Blackman, Joy

Hester and many other were all

regular guests. John and Sunday

Reed were independently wealthy

and their financial freedom

allowed them to act as patrons

to emerging Australian artists.

John and Sunday Reed's support

was material, sometimes

financial but to my mind the

moral support they offered

artists for the development of

their careers was essential to

what we now know was a site,

Heide, that transformed

Australian art. The Reeds'

first house on the property,

now called Heide 1, has been

refurbished and a new

exhibition and sumptuously

illustrated book looks at how

the physical side of Heide

influenced those who lived and

stayed there. Sunday Reed

wanted to create a place of

ideas and great physical beauty

that would nurture body and

mind. This idea that Heide

would become a place where

people could receive

sustenance, particularly in the

really difficult periods of the

Depression and the Second World

War, was a great attraction to

people so they could explore

the library with its fantastic

imported books and journals and

also come and have a really fantastic eating experience. The most important

meal of the day wasn't lunch or

dinner but afternoon or arvo

tea as Joy Hester dubbed it.

Arvo tea was a time when people

came together at the end of a

working day t was a time of conviviality, great conversation. This when the cakes and

cakes and the scones and the other typical afternoon tea

items would appear but it was a

perfect time for people to

gather. Set over 16 acres, the

Heide gardens range from native

woodland to French influenced

gardens and a huge herb and vegetable area that continued

to inspire. One of Australia's

most celebrated chefs, Shannon

Bennett, extended his culinary

arm there last year, opening a

cafe in the ground of the

property using Sunday Reed's

vast garden to supply his kitchen. I think she was one

of the best in terms of her inspiration. She was a

vegetarian, all of her food

came from the gardens and all

of the artists that stayed with

her worked in the gardens and

they were basically self-sustainable. People

flocked to this place to see its different moods its different moods from season

to seize To many the gardens

are just as big a drawcard as

the art. Making sure the

kitchen garden at Heide remains

true to the vision of Sunday

Reed is important to its

custodians. It is an icon in

Victoria. It I think it is the

best story garden in Victoria.

It's got an amazing story. Look

at the influence on the artists

that worked in the guard Their

influence on their careers. It

is so important and I have a

very strong determination to

make sure that garden is

brought back to its former

glory. And plans for that are

already well under way.

Australia's best-known prize for portraiture, the Archibald

Prize, has gone to Melbourne

artist Sam Leach who painted a

portrait of comedian and

musician Tim Minchin. The

relatively small work won from

a field of 489 entries and 34

finalists I wanted to get a

sense of him being a guy who

thinks fairly deeply about

things but I don't want to say

there's a hidden side of Tim

because what I've met from Tim

he is a funny guy but he is a

careful thinker. Sam Leach

takes home a $50,000 prize and

a $25,000 Wynn prize for his

landscape painting. It's the

third time the same artist has

won both prizes. To the


That's all from us. If you'd

like to look back at tonight's

discussion with George Brandis

or Maxine McKew or review any

of Lateline's stories or

transcripts you can visit our

website and you can also follow

us on twitter and Facebook.

I'll see you again on Monday.

Enjoy your weekend. Goodnight.

Closed Captions by CSI

What a fantastic series. So many fabulous guests. Let's have a little look at some of the highlights -

what guests would you like to see again? (ALL SHOUT) Me too. Let's start the show! THEME MUSIC CHEERING AND APPLAUSE Thank you very much!

Thank you! Yes! Welcome! Welc- OK, two tired. Welcome to a look back at my favourite bits of the series. Think of this show as my Christmas present to you all. Well, it was either this or a box of chocolates from the all-night garage. We've had some wonderful guests and I'm really looking forward to sitting back and listening to them chat with a nice big glass of wine in my hand.

Just like I did the first time round. But what a series it was. And it all started with this - How are you? Last time I saw you we were on a plane going to America.

That's right. It was Air New Zealand. Yes. And they got whisked off on a little trolley. Oh, that sounds good. That's a hell of a service. All I got was a glass of champagne. Can we say "whisked" on BBC1? I think so. Just can't say "whisked off". You can say "piss off" though, can't you? Yes. It's all going downhill. I know. Minutes in. "Goodnight." We read with interest that you are trying for another baby.

(GASPS) Right now? Sorry. I'll get out of the way. We had a bash on Sunday, didn't we, Pen? Oh, you old charmer. Let me have a bash! No, we HAD a bash, on Sunday. Oh, I see.

When you get to my age you have to plan it, dear. I turn now to the world of the internet. And, ah... I'm slightly diminishing opera here.

No, it's not diminishing, what it is, it's dogs who sing opera. No, seriously. Obviously, when I say "sing", they don't really sing opera. Not in the original Italian. Actually, really what it is, is it's nice dogs - you know, what do dogs want to do? They want to sleep and eat. So these dogs, mostly, are just trying to sleep

and then their owners get a video camera and put on opera quite loud. Just to annoy them. So, let's enjoy their efforts. So, first up, it's an Alsatian. He couldn't be more asleep. He doesn't really want to wake up. And yet the opera means he must. Here we go. Look at him. Look, he's asleep. SOPRANO SINGS (DOG HOWLS) Alright, that's - (HOWLS) Thank you very much. This is so sweet, it's a little dog, a little dog called Basil. I believe Basil's in Canada. Now, I don't mean to criticise Basil... ..well, you'll see, he doesn't... You'd never give him a full aria. I think he'd always be in the chorus.