Nick Efstathiadis

By ABC's Alan Kohler

Posted August 01, 2011 08:18:50

Creative: American greenback (Thinkstock: Hemera)

Photo: In 2011, the US government is underwater to the tune of $US4 billion a day. (Thinkstock: Hemera)

There's something quite pleasant watching our politicians arguing about whether Australia should save the planet, while in Washington they argue about whether to allow the government to borrow enough money to pay its salaries.

Not that I'm suggesting Australia's political debate is edifying, it's just that it's a lot more edifying than America's. It's a bit like when I first moved out of home, and the people in the apartment next door used to have all night fights spilling onto the landing and into the street. It was both upsetting and fascinating.

The US "domestic" is a little scarier, since if they choose to default we're all in trouble. But they probably won't. The news out of Washington this morning is that a deal is close and could be finalised today. The humiliation of this episode will last for much longer.

The deal centres around $US3 trillion spending cuts over 10 years, which is a start. The Congressional Budget Office predicts total deficits over the next 10 years at $US9.5 trillion, so if that's all the spending cuts they can manage, then economic growth will need to deliver a lot of extra revenue.

At the heart of the United States' problem, it seems to me, is that rarely - perhaps never - in the history of the world, has a nation bankrupted itself for so little benefit.

Karl Marx once likened the economic impact of war on a country as being "exactly the same as if [it] were to drop a large part of its capital into the ocean", but surely that has never been more true of America's military spending.

In 2010 US defense spending totalled $US689.1 billion, or 4.7 per cent of GDP. It got as low as 3 per cent of GDP in 2000, and has steadily increased since 9/11. It's true that Osama Bin Laden has been killed and there have been no more massive terrorist attacks on US soil, but the US military is mired in a losing conflict Afghanistan, trying to wriggle out, and wasting billions in the meantime.

Worse, America's welfare spending is $US2 trillion a year - equivalent to all tax revenue - yet its health care system is regarded as among the worst in the world and poverty remains endemic.

It's been said that the US combines a left-wing welfare system with right-wing taxes and defence spending, and that's certainly true according to the numbers.

In 2010 total tax revenues were $US2.16 trillion, or 15 per cent of GDP, and total outlays were $US3.46 trillion, or 23.8 per cent of GDP. Two trillion dollars of the spending involved mandatory programs (Social Security, Medicare, Medicaid, Income Security and other programs), and $US1.35 trillion was "discretionary", including defense.

In 2011, the US government is underwater to the tune of $US4 billion a day. On current CBO projections, public debt is projected to be $US23.8 trillion by 2021.

One of the amazing facts being touted in the US at the moment is that Apple Inc has more cash than the US treasury - $US76 billion versus $US74 billion – which raises a fascinating question: how can a nation with such a wonderfully creative and profitable corporate sector have such a dreadful political system and bankrupt public sector?

US businesses have led the world for more than a century and are now in the process of reinventing themselves to lead the world into the digital age. And it's not just Apple, Google, Amazon and Facebook, but the American manufacturing sector is also now automating at world-record pace.

Yet US company tax revenue in 2010 was $US191 billion, an absolutely piddling amount. It's never been more than 2.5 per cent of GDP. Reagan cut it to 1.1 per cent of GDP and it's currently 1.3 per cent.

Perhaps that's part of the answer. Domestic corporate taxes are passed onto the consumers, of course, but America's companies cover the globe and profits are transferred home, where they seem to be taxed lightly.

Meanwhile on Saturday morning, our time, we learnt that the US economy is slowing down again as consumer spending runs out of puff - unsurprisingly since house prices are falling again and unemployment is stuck above 9 per cent.

The negotiations on Capitol Hill will cut government spending into the teeth of a serious economic slowdown, reducing the potential for tax revenue to rise as a result of growth in incomes.

America really does possess the best and worst of capitalism.

Alan Kohler is editor in chief of Business Spectator and Eureka Report, and as well as host of Inside Business and finance presenter on ABC News.

The best and worst of capitalism - The Drum (Australian Broadcasting Corporation)

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Nick Efstathiadis

Natalie O'Brien July 31, 2011

EXCLUSIVE

"Propaganda against us" ... the Lebanese consul-general, Robert Naoum, back in Australia. An arrest warrant has been withdrawn.

"Propaganda against us" ... the Lebanese consul-general, Robert Naoum, back in Australia. An arrest warrant has been withdrawn. Photo: Jon Reid

A CRIMINAL investigation is under way into allegations that staff at the Lebanese consul-general's office in Sydney have been paid wages in cash while illegally pocketing Centrelink payments.

The revelations come just days after the consul-general, Robert Naoum, returned to Sydney agreeing to pay off his unrelated debts in return for an arrest warrant being withdrawn. Now federal police have been called in to examine claims that his office has been defrauding the Commonwealth.

It is alleged some staff, among more than a dozen at the Edgecliff office, collected welfare and, in at least one case, a dole payment. At the same time, the consul-general's office had not been paying tax, superannuation or workers' compensation for its locally engaged staff.

Some staff allegedly made a profit by selling cigarettes and alcohol bought within the diplomatic tax-free quota. It is claimed large sums of cash were sent from Australia to banks in Lebanon to avoid the scrutiny of authorities. But Mr Naoum told The Sun-Herald yesterday the allegations were just "propaganda against us".

However, his spokesman agreed the office did not give staff statements of earnings; nor did it deduct any tax on behalf of employees. It was up to the employees to declare it, he said.

"We have our own system," the spokesman said. That system of paying staff was regulated by the laws of the Lebanese government.

"They work according to regulations by the Lebanese government, not the Australian government. Australia has nothing to do with how we pick and pay them or how we pay tax. This is an internal system between the government of Lebanon and its employees."

He said Fair Work Australia had approached his office recently about a case involving an employee but he said the authority's laws were "irrelevant" to its operations.

The spokesman categorically denied Mr Naoum had knowledge of any wrongdoing, and said no staff had sent cash back to Lebanon or sold duty-free goods. He dismissed the claims as an attempt to defame the consul-general and extract cash from the Lebanese government.

A spokesman for the Minister for Workplace Relations, Chris Evans, said the matters were being treated seriously and had been referred to the appropriate agencies.

In an unrelated matter, Mr Naoum, who has been consul-general since 2004, had faced being arrested and forced into bankruptcy if he did not pay tens of thousands of dollars in legal bills.

He came under the spotlight two years ago when he unsuccessfully took defamation action to stop a Greenacre journalist, Nabil Dannawi, publishing material about him.

Mr Naoum appealed and lost again, and had costs awarded against him. Then he argued he did not have to pay because he had diplomatic immunity. The courts disagreed, finding he was not acting within the scope of his official immunity.

A warrant for Mr Naoum's arrest was issued about the time he left Australia in April for Lebanon after he ignored an order to appear in court over his legal and court expenses. Mr Naoum returned only last week.

Mr Dannawi's lawyer, Richard Louis Mitry, confirmed the matter had been resolved on "confidential terms". Mr Dannawi told The Sun-Herald it was "unfortunate this case had to go so far. But there was interest in it internationally, and the good thing to come out of it is that it threw some light on the limitations of diplomatic immunity."

The allegations about Mr Naoum's staff were brought to the attention of the MP Tony Burke's office months ago. Mr Burke, the Minister for Sustainability, Environment, Water, Population and Communities, told The Sun-Herald a "staff member formed the judgment that the issue was described as potentially involving criminal matters and was told it was already in the hands of the police".

A Foreign Affairs Department spokeswoman said Australians employed by a foreign state were "entitled to minimum employment conditions, including wages, leave and safety conditions and protection" and must pay tax.

Mr Naoum's spokesman said consulate staff had signed an agreement with the Lebanese government on pay and conditions.

Diplomatic dole scandal

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Nick Efstathiadis

Leesha Mckenny Religious Affairs July 30, 2011

Wafer thin ... the Australian Communion bread industry is fading.

Wafer thin ... the Australian Communion bread industry is fading. Photo: Reuters

THE humble Communion wafer can become the body of Christ, many Christians believe, but changes of a profane kind might yet signal the end of Australia's artisan altar bread industry.

Two of the few NSW producers - including Ozanam Industries, the country's biggest - have bowed out, while an imported crumble-free range whose makers say is ''untouched by human hands'' is increasingly the wafer of choice in Australian churches. Ozanam, a St Vincent de Paul Society company that switched off its machines last month, said it passed on the work to the Poor Clares at the Bethlehem Monastery in Campbelltown ''as they were seeking an extra source of revenue''.

However, that decision unwittingly helped end decades of tradition for the order, which has stopped making wafers to become a stockist of Cavanagh's, the American, Catholic-affiliated company that supplies much of the world's Communion wafers.

The extra workload to supply 300 parishes, schools, religious houses and nursing homes was too much for the ageing nuns, said its abbess, Sister Catherine.

''The average age of our sisters here is 70, so the altar bread production was quite intensive - the work involved, the baking and the paste-making and all that …'' she said. ''It was a very, very sad time for us to have to give it up, after having made them for over 60 years.''

They had also discovered that some customers were switching to Cavanagh's, which churns out 20 million white, wholemeal, embossed or Christmas wafers a week. ''And we thought, 'Oh, my gosh,''' Sister Catherine said. ''It seems that most of the parishes prefer them.''

Mike Grieger, the director of Australian Church Resources, which has supplied Anglican, Catholic and Lutheran markets - ''or anyone who wants it'' - with Cavanagh bread for 25 years, said that although all wafers were just flour and water, the US wafer was a better product.

In an industry in which denominational loyalties give his competitors an edge - even if he said nuns did not always deal well with clients on the phone - the Adelaide-based Lutheran aims to never run out.

The standard 2.9-centimetre ''people's host'' was his biggest cross-denominational seller, while rich Catholic dioceses favoured the 3.8-centimetre special.

''It's a product where if someone wants it they've got to have it,'' he said, ''whereas sometimes I think that the others are a little bit inconsistent. You might ring up a monastery [to order], for instance, and they are at prayer.''

Mr Grieger now supplies hosts to all of Tasmania's Catholics through a religious order that had made its own Communion wafers until its machine broke down. ''[Parishes] probably still think that the convent makes it, when in actual fact we ship it across to them,'' he said.

While Catholics might be migrating to Cavanagh wafers, another growth market remains strictly Mr Grieger's domain. He is also the country's largest supplier of gluten-free altar breads - increasing used by coeliac Catholics and priests, in defiance of a Vatican ban.

''I know others who would come in here and would frown on us because we've even got it in our catalogue, because they would think that we are theologically incorrect,'' he said.

The Carmelite Monastery in Queensland, one of the few that still makes altar bread, supplements its small stock with Cavanagh's - bought from Cistercian monks in Victoria, who began importing it in 2000.

Nonethelss, the Carmelites are planning on stepping up, not bowing out. Sister Moira Kelly said the ageing congregation had imported a semi-automatic machine from Italy to provide affordable local bread to the small Toowoomba diocese.

Cuts would need to be made elsewhere, she said. Its Easter candle-making would stop.

''We just think its a lovely work for contemplative communities to do,'' she said. ''Our prices are much lower than the Cavanagh ones. It is important that we don't let the big companies just rule our lives.''

Not even a miracle can save Communion wafers from US hegemony

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Nick Efstathiadis

Jessica Irvine July 30, 2011

We may not be as miserable as we seem.

WE DON'T like carbon taxes and we don't like boats. Mention population growth and we're at each other's throats. We don't like interest rate rises and we disdain debt. We can't stomach liars and we never forget.

Australians, it seems, are a grumpy bunch these days. And, yet, we have perhaps never had more reasons to be happy. The drought has broken. Incomes are growing. Unemployment and inflation are low. We survived the global financial crisis in better shape than almost any other developed nation.

In a speech this week, the governor of the Reserve Bank, Glenn Stevens, described how the China boom had delivered the ''biggest gift'' since the 1850s gold rush.

''Yet it seems we are, at the moment, mostly unhappy,'' he said. ''Measures of confidence are down and there is an evident sense of caution among households and firms.''

Something has clicked in the minds of households since the global financial crisis. We've stopped shopping, for one, prompting retailers such as David Jones to downgrade profits and others such as Just Jeans and Portmans to close doors.

Westpac's regular survey of consumer sentiment shows people are as downbeat about their household finances as they were in the 1990s recession. Ask any economist the reasons for this faltering confidence and practitioners of the dismal science reel off a list of woes: the US and European debt crises, political fearmongering about a carbon tax, floods, the threat of higher interest rates, falling house prices, looming painful restructuring in industries exposed to a

higher Australian dollar. But just because we don't feel like going out to buy a fridge this weekend, does that mean we are unhappy?

''No, absolutely not,'' says Bob Cummins, a professor of psychology at Deakin University. Although satisfaction with government is the lowest it has been in decade, and lower than when the Howard government was ejected in 2007, Professor Cummins says this, and confidence in the economy, make up only a small part of our total ''mood happiness''.

In fact, according to the Australian Unity Wellbeing Index, Australia's longest-running survey of wellbeing, of which Professor Cummins is the lead author, we are as happy as we've been in the past decade and have been since Kevin Rudd posted us $1000 cheques in late 2008. ''That cheered everybody up like you wouldn't believe.''

Professor Cummins says people as individuals experience macro-economics differently from the way economists often think. The flipside of global financial turmoil is that it reminds us how well we are doing by comparison.

A higher dollar hurts industry but means we can go on holiday. And lower retail sales mean we are building a comforting debt buffer.

The truth, Professor Cummins says, is that some of us just enjoy a good whinge, particularly about politicians. ''Some people actually get off on it because it is an opportunity to slag off at people who can't get back at you.''

We target our scorn at politicians, in particular, because their generally low standing makes this a socially acceptable way of being rude.

And whingers in search of an outlet have a growing array of means to broadcast their discontent: talkback radio, television, Twitter, Facebook and blogs. But the impact this has on happiness is limited, Professor Cummins says, because if people get too upset by the increasingly vicious nature of political debate, they can simply switch off.

''If people find that they're being personally upset by it, they will cut off from it, turn off the television, because it's discretionary. You don't need to be exposed to it.'' Indeed, it could be our very prosperity that is driving some of the pettiness of some complaints.

According to a professor of psychology at Murdoch University, Craig McGarty, humans tend to ''normalise'' to their conditions. ''If you're living in a luxury penthouse and your airconditioning breaks, you become unhappy,'' he says.

Ultimately, humans, through their social interaction, tend to lift one another up more than drag one another down.

''People can together arrive at negative states but that's a relatively rare event. If it was common we'd all exist in a permanently negative state. The general experience, especially if you think of natural disasters and other stresses, is that people strive incredibly successfully together to overcome disaster and respond to negative circumstances.''

Perhaps we're not such a miserable lot, after all.

Don't be fooled by the endless whingeing

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Nick Efstathiadis

Sid Maher From: The Australian July 29, 2011 12:00AM

Video: Govt releases draft carbon tax bills

Company officials who fail to comply with the government's carbon tax could face up to ten years in jail. Sky News29 July 2011

A NEW carbon cop will be given sweeping powers to enter company premises, compel individuals to give self-incriminating evidence and copy sensitive records under a carbon tax package that will force about 60,000 businesses to pay 6c a litre extra for fuel.

The tough new powers of the Clean Energy Regulator were included in the fine detail of the carbon tax package released yesterday, which enshrines national emissions cuts of 12 million tonnes of carbon dioxide a year after 2016, if the government of the day rejects targets proposed by its Climate Change Authority.

The package, which shows that the government will cement in law the body of its carbon tax structure in a bid to force Tony Abbott to win the approval of both houses of parliament to complete his promise to scrap it, also tasks the Productivity Commission with inquiries into assistance to trade-exposed industries, international climate change action and the future of fuel taxes.

Related Coverage

As it released the exposure draft of the 14-bill package -- which will set up the $23-a-tonne carbon tax, the mechanisms to pay compensation for households, the Climate Change Authority and the Clean Energy Regulator -- the government said it planned to introduce the bills in September and plan to have them passed by November. The schedule raised hackles with some interest groups for allowing only three weeks of consultation.

The exposure draft of the legislation gives sweeping powers to the Clean Energy Regulator, which will police the scheme, and the climate change minister will have the power to demand information from corporations covered by the scheme.

Fraud or attempts to subvert the scheme can be punished by up to 10 years in jail or fines of $1.1 million for corporations.

Inspectors working for the regulator will be able to obtain warrants to search premises of companies covered by the act and search or examine any activity on site as well as copy documents.

The regulator will have the authority to demand information from company officers even if it could incriminate them.

The enforcement provisions will be further strengthened by an extra $12.8m over four years for the Australian Competition and Consumer Commission.

Climate Change Minister Greg Combet's spokesman said the safeguards were similar to the compliance provisions in other areas of business law such as corporations and consumer law.

The Clean Energy Regulator will administer a rigorous inspection regime and will be able to issue infringement notices and seek the imposition of penalties by the courts. "Most of the penalties are fines which will apply to corporations if they break the law," the spokesman said.

"There are a few offence provisions that could lead to jail terms, but they relate to serious criminal conduct such as deliberately falsifying records or stripping the assets of companies to evade liability."

Mr Combet said the government's plan to separate economic growth from long-term damage to the environment was an economic reform similar to floating the Australian dollar and introducing major tariff reforms.

And Wayne Swan seized on a $20 billion liquefied natural gas investment by Origin Energy and ConocoPhillips at Gladstone in Queensland as evidence of the benign impact of the carbon tax on the burgeoning LNG industry.

The Minerals Council hit back, saying the legislation clearly showed that the tax on a range of fuels would increase on a "carbon tax equivalent" rate.

"Australian Tax Office data shows that this tax increase will directly affect up to 60,000 businesses from 1 July, 2012, and nearly 100,000 companies when an additional 40,000 road transport businesses are captured by the tax on 1 July, 2014," an MCA spokesman said.

He added that it would raise $3.3 billion in the first three years and $16bn to 2020, including the change to aviation excise.

The government has consistently claimed the tax would directly apply to only 500 firms. Last night it argued the fuel treatment in the scheme did not change those figures as the companies concerned faced no extra administrative arrangements and were not liable to directly pay for pollution permits. This was limited to about 500 companies that emitted more than 25,000 tonnes of carbon dioxide equivalent a year and would be liable to pay for pollution permits.

The MCA spokesman said that, based on Australian Taxation Office data, from July 1 next year, 22,500 construction firms, 5300 manufacturing businesses and 1500 mining operators would pay more for fuel.

A spokesman for Mr Combet said the government announced on July 10 that there would be a carbon price for off-road business fuel use through reduced fuel tax credits -- but this would not apply to the agriculture, forestry and fishery industries. He said households paid 38c a litre in fuel excise and would pay no more.

"By contrast, off-road business fuel use is normally free of excise, due to fuel tax credits," he said. "The government will reduce the fuel tax credits by around 6c a litre. This will not impose any additional administrative burdens because businesses already fill out the forms for fuel tax credits, but it will create incentives to improve fuel efficiency and lower pollution from the transport sector."

Tony Abbott, speaking yesterday in the northern NSW electorate held by Tony Windsor, taunted Julia Gillard to resume her carbon tax promotion tour. "The Prime Minister is hiding . . . refusing to talk to the Australian people," the Opposition Leader said. "Not only did she not wear out the shoe leather, she didn't even wear the shoes in. At the first sign of a blister she's back in her office hiding . . . because she knows the more she talks about this tax the less people like it."

Carbon cop handed tough new powers | The Australian

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Nick Efstathiadis

My comment: “ONLY IN AUSTRALIA”

Margaret Scheikowski July 28, 2011

A public servant injured on a work trip while having sex with an acquaintance at a motel was entitled to compensation, a judge has been told.

The woman's barrister, Leo Grey, said sex was "an ordinary incident of life" commonly undertaken in a motel room at night, just like sleeping or showering.

The woman, who cannot be named, is challenging the rejection of her workers' compensation claim for facial and psychological injuries suffered when a glass light fitting came away from the wall above the bed as she was having sex in November 2007.

In his statement, the man said they were "going hard".

"I do not know if we bump the light or it just fell off," he said.

"I think she was on her back when it happened but I was not paying attention because we are rolling around".

In the Federal Court in Sydney yesterday, Mr Grey said the woman's employer had sent her to spend the night at a NSW rural motel ahead of a departmental meeting the next day.

He submitted errors of law were made by ComCare, the federal government workplace safety body, in rejecting her claim.

The barrister referred to previous cases, including when compensation was granted to a worker who slipped in the shower at a hotel.

But Andrew Berger, for ComCare, said the sex was not "an ordinary incident of an overnight stay like showering, sleeping or eating".

While sexual activity was an ordinary incident, it was not necessary, he added.

Describing the case as "by no means easy", Justice John Nicholas asked if the woman had been injured in a motel gym on an exercise bike, would that be compensable.

Mr Berger said it would depend on all the circumstances but it would "probably fall on the compensable side".

Mr Grey said there was no suggestion the woman had engaged in any misconduct and noted the absence of any rule that employees should not have anyone else in their room.

"This is not the 1920s after all," he said.

She was entitled to compensation because she was at "a particular place", as specified in the legislation.

The activities had not occurred "outside the place", such as in the bandstand in the local park, he said.

Mr Berger submitted the sexual activity was not a reasonably foreseeable part of an overnight stay, while Mr Grey argued it was not a "far fetched" scenario.

Mr Berger said there was not a sufficient nexus between the cause of the injury, sexual activity, and her employment.

The judge will deliver his finding on an unspecified date.

Work trip sex 'like going to the gym'

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Nick Efstathiadis

Richard Willingham July 27, 2011

Czech President refuses security check

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Play Video

Czech President Vaclav Klaus refuses to pass through a security checked at Parliament House.

EVERY person visiting Parliament must go through security scanners or they will be barred from entering, even if that visitor happens to be the Czech President.

Vaclav Klaus, who gained notoriety for stealing a pen while holding a press conference with Chilean president Sebastian Pinera, yesterday refused to undergo a basic security check and was not allowed into Parliament.

Mr Klaus, a prominent climate change sceptic, had addressed the National Press Club and was on his way to do an interview with the ABC's 7.30 show.

President of the Czech Republic Vaclav Klaus.

President of the Czech Republic Vaclav Klaus. Photo: AFP

The 7.30 producer Michelle Ainsworth greeted Mr Klaus, Peter Gregory from the Institute of Public Affairs (the group that paid for the President to visit Australia), and three other Czech men at the main entrance, ushering them past school children to the security scanners.

''As soon as Mr Klaus saw the security thing, he said, 'I'm not going through there','' Ms Ainsworth said.

She asked a security guard if the Czech President would be allowed to go through without a check. She said the security guard replied: ''I don't care who he is, everyone's got to go through security.''

''I relayed it back to Mr Klaus and he said, 'If you want to do the interview, you can come back to my hotel'. He just turned around and walked out.''

The show did not take up Mr Klaus's offer. Mr Gregory declined to comment and the Czech embassy was unavailable. The secretary of the Department of Parliamentary Services, Alan Thompson defended his security staff.

''All of us go through the normal metal detectors - the only exception being the Prime Minister of the day,'' Mr Thompson told The Age.

He says special arrangements for visiting heads of state to enter without security checks require ''an early notification''. President Klaus arrived with ''no notice at all''.

''If we'd had a little bit of forward notice, I'm sure we would have been able to accommodate him.''

One hundred and forty security staff provide a 24-hour, seven-day service securing Federal Parliament.

Staff are not given discretion to allow unscheduled visitors to bypass the ordinary system of checks. With

TIM LESTER

 

Czech not cleared in Parliament visit

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Nick Efstathiadis

July 26, 2011 - 2:38PM

Ninety-four-year-old Phyllis Johnson saw a blur of red fur as she was taking the Sunday washing from the line in the backyard of her home in Charleville, south-west Queensland.

She says a red kangaroo - taller than her 160-plus centimetres - ploughed through the clothes and slammed her to the ground, then kicked her.

She got to her feet and grabbed a broom to try to fend it off.

Striking at it several times, she escaped to the safety of her granny flat.

Her son Rob Johnson arrived home from church to see his mother huddled inside and a roo in his shed.

"She fought it off herself with a bit of help from the family dog," Mr Johnson said today.

"When she told me the roo was still here I went and had a look and found it in my workshop.

"Then it had a bit of a go at me."

Mr Johnson said he picked up a stick to scare it but the roo didn't flinch.

He then ran inside and phoned the police.

Senior Sergeant Steve Perkins says it was one of the most unusual call-outs he had had.

Even two male officers who arrived found the roo difficult to subdue.

Both were forced to ward off an attack with capsicum spray.

"It was aggressive. It attacked one of the officers," Senior Sergeant Perkins said.

He sprayed it with capsicum spray and then it turned its attention to the other officer who also had to deploy the spray.

The animal hung around the Johnsons' home, but National Parks and Wildlife officers have since taken it away.

Mr Johnson said he hoped the roo would be relocated somewhere away from homes.

"It's not frightened of people at all," he said.

"It's a real danger.

"If my mum didn't have the broom to chase it away, it could have killed her."

He said his mother had a huge gash to her leg and was recovering at Charleville Hospital.

AAP

Roo sees red over Phyllis, 94, and her washing

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Nick Efstathiadis

Kirsty Needham July 25, 2011

Immigration Minister Chris Bowen will sign a bilateral agreement in Kuala Lumpur.

Immigration Minister Chris Bowen will sign a bilateral agreement in Kuala Lumpur. Photo: Jessica Shapiro

ANALYSIS

THE federal government will sign its long-awaited refugee swap with Malaysia today before a large Asian media contingent, with the hope that this will loudly broadcast to people-smuggling syndicates that Australia has shut its door to boats.

Asylum seekers arriving by sea since May 7, when the deal was first touted, have revealed they were kept in the dark about the policy change by the people-traffickers who shunted them through remote villages in Indonesia before boarding wooden boats to Christmas Island.

Boat traffic has slowed, but more than 500 asylum seekers have arrived since then — almost enough to fill the quota.

Immigration Minister Chris Bowen and Malaysian Home Affairs Minister Hishammuddin Hussein are to sign a bilateral agreement in Kuala Lumpur, witnessed by stakeholders including the International Organisation for Migration, the UN high commissioner for refugees, Malaysia's police force and human rights council.

For it to work, and "break the people smugglers' model", as Prime Minister Julia Gillard has repeatedly promised, the message has to get through this time.

The document will be scrutinised by sceptical refugee groups in Malaysia and Australia, concerned at the precedent of sending the next 800 asylum seekers — including children and unaccompanied girls — to a country where registered refugees have had no legal rights and live a vulnerable existence supported only by UNHCR as they wait years for resettlement.

During tough negotiations UNHCR has insisted the 800 "transportees" be provided with a legal right to work and guarantees that they will not simply be deported back to the countries they fled by Malaysian police.

Malaysia allows refugees registered with UNHCR to live in the community, rather than detaining them as Australia does. But as families wait years for resettlement, their access to health services and schools is limited by meagre incomes.

Illegal foreign workers in Malaysia are routinely rounded up by police, and it is this risk of arrest if refugees are caught working, or without identity documents, that has caused the greatest problems for the 95,000 asylum seekers in the country.

The Malaysian government this month embarked on a program to fingerprint all 2 million legal foreign workers before an amnesty on August 1 for illegal workers, whom it has offered to deport without penalty. The biometric registration is designed to overcome the trading of black-market identity documents.

To counter-accusations Australia has abrogated its responsibilities under the Refugee Convention, the government has promised millions of dollars to expand UNHCR and IOM operations in Malaysia, and has said it will fund the education, health and resettlement costs of the 800 transportees, who will be clearly identified to Malaysian authorities. Australian officials will have oversight of the program, including monitoring "vulnerable cases".

How this will be done needs to be spelt out in the agreement, which the government will release publicly, and two separate deals with UNHCR and IOM.

Home Affairs Minister Brendan O'Connor told ABC's Insiders program yesterday that both governments had closely involved the UNHCR. "This is an innovative approach and we believe it will undermine the people-smugglers model."

Regarding the more than 500 asylum seekers in limbo on Christmas Island — who arrived since May 7 but won't be accepted by Malaysia — Mr O'Connor appeared to back down from the previous tough line that they would be processed in another country. "Those people that arrived after that date should not assume they will be settled here," he said.

They are unlikely to be sent to Papua New Guinea any time soon. PNG has told the government it wants to reopen a processing centre, but Mr O'Connor said "that is some time off".

Kirsty Needham is immigration correspondent for The Sydney Morning Herald and The Age.

Deal done, now for making the message heard

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Nick Efstathiadis

Cosima Marriner July 24, 2011

Sarah Farah, a traditional and healthy  shopper ... "I have two children and I like to buy healthy foods".

Sarah Farah, a traditional and healthy shopper ... "I have two children and I like to buy healthy foods". Photo: James Brickwood

EACH time you swipe that ubiquitous loyalty card at the checkout, exactly what you bought, when and where, is being recorded.

The major supermarkets, Woolworths and Coles, are using information about shoppers' habits to build detailed customer profiles attached to their loyalty programs.

They know if you regularly buy ham and tomatoes at lunchtime, or if you stick to one shampoo brand but will happily buy whichever toilet paper is on special. Whether you like a bottle of sauvignon blanc on Friday nights and use your petrol discount on ''cheap Tuesday''. Not to mention your age, sex, address and employment status.

Grace Ramos, a traditional and convenience shopper ... "I love cooking from scratch, but with three children and one on the way there are times where I go for convenience".

Grace Ramos, a traditional and convenience shopper ... "I love cooking from scratch, but with three children and one on the way there are times where I go for convenience". Photo: James Brickwood

By comparing the information with other customers, supermarkets can pre-empt shoppers' decisions.

''Loyalty programs help you pick up patterns in shoppers' behaviour because you can look into their basket,'' Coles's chief financial officer, Tony Buffin, said. ''So we know men who come in to buy newborn nappies also pick up a few beers … if we change a product assortment we can predict what people will want to buy.''

It is a powerful tool in the low-margin grocery business, particularly as new competitors such as Costco and Aldi expand.

Aaron Irwin, the convenience shopper ... "I go for the cheapest items, the specials, the dollar dazzlers".

''Supermarkets have access to a huge amount of information. Most people don't know what that data is being collected for, the detail of that data, or how it is being analysed,'' Deakin University consumer behaviour lecturer Paul Harrison said.

''We're highly manipulated when we do the grocery shopping. People like to think they're in control. They're not.''

Soon supermarkets will be able to track shoppers via GPS as they walk through the store and send their mobile phones details of specials in that aisle.

''It's about, 'what's in it for me?','' head of digital for TNS Global in Australia, Jonathan Sinton, said. ''People don't mind marketing offers; it's when [they are] irrelevant they don't like it.''

Supermarkets dole out petrol discounts, frequent flyer points and special offers to persuade customers to spend more money with them more often. A Clubcard customer of British supermarket chain Tesco visits four times as often and spends three times as much as casual shoppers.

Emily Amos, the head of Woolworths' Everyday Rewards program, said the programs were extremely valuable for the company.

''When people come up the escalator they turn right or left, to Woolworths or Coles. It's about making sure when they come to us they're happy with the range they get.''

Six million Woolworths customers and an estimated 7.5 million Coles customers are prepared to sacrifice some of their personal information for points. Ingrid Just, a spokeswoman for Choice, said the ''promise of free stuff'' is enough to lure shoppers back to the same stores ''without looking around for a better deal''.

As most people visit the supermarket a couple of times a week, loyalty card information can detect changes in consumer behaviour, which dictates ordering of stock and decisions about store layout.

If Pantene shampoo is out of stock, Mr Buffin said Coles can predict how many customers will choose Elvive or Dove instead, and how many will go to Woolworths to buy Pantene.

''It tells you about the customers actually in your stores and enables you to map your customers across their lifecycle,'' Ms Amos said.

Loyalty schemes are also using technology to manipulate the buying decisions of targeted groups, such as families with young children or affluent singles.

Shopping trolleys fitted with computer screens and GPS trackers are now being trialled in some IGA stores.

Customers swipe their loyalty card to bring up their shopping list on screen, then the computer tells them where each item is located. The screen flashes up specials available and they can scan purchases to track their spending.

Smartphones also hand the customer more purchasing power: they can research products on the internet on the spot and check if they are cheaper nearby. ''People are starting to use their phone as an in-store shop assistant,'' Mr Sinton said.

''Every store has to make sure they've got the cheapest products.''

Privacy experts are concerned that information collected from the loyalty card could be used against the shopper if passed to third parties, such as insurance companies, or by law enforcement authorities trying to track down someone.

But Woolworths and Coles are adamant they handle all their customer information with care. ''If we didn't, our customers would never come to us,'' Mr Buffin said.

''We make sure we use that information very carefully.''

FINER FOODS, LUNCHBOX OR CALORIE LOADER?

IF YOU are willing to experiment with new products and are time-conscious, you are a ''Finer Foods'' shopper. And if you regard food as fuel and your microwave gets a good workout, then you are a ''Convenience'' shopper. These are two of the six main categories the British supermarket chain Tesco uses to group shoppers based on the products they have in their trolley. Products are divided into 25 categories including Adventurous, Convenience, Lunchbox, Home-Brand and Calorie Loaders. The Sun-Herald asked shoppers at supermarkets in Sydney to nominate their shopper profile and main product categories based on their purchases.

PRICE WAR'S LATEST FRONT

ICE-CREAM has become the latest battleground in the price war between the two major supermarkets, Coles and Woolworths. Coles announced it would drop the price of its home-brand ice-cream from $4.19 to $2.19 for two litre tubs. Woolworths said Coles's move was in response to it cutting ice-cream prices. On Friday, the Competition and Consumer Commission ruled Coles's milk price-cutting was not predatory.

Shoppers are spoon-fed

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Nick Efstathiadis

July 23, 2011

"He said, 'look, at the end of the day we're either bound for glory or oblivion'." ... Arthur Sinodinos.

"He said, 'look, at the end of the day we're either bound for glory or oblivion'." ... Arthur Sinodinos. Photo: Wolter Peeters

Deborah Snow chats with the new president of the NSW Liberals.

Arthur Sinodinos knows a thing or two about managing ''the elephants'', as he calls them. He had a ringside seat during the drawn-out struggles between John Howard and Andrew Peacock in the late 1980s and an even closer view of the more recent shoving contest between Howard and Peter Costello.

Now he contemplates what advice he would offer Tony Abbott and Malcolm Turnbull on how to avoid another clash of the Liberal titans.

''My advice to Abbott? Keep doing the job he's doing, keep the pressure on the government, lead from the front, don't look over his shoulder.''

He pauses for a sip of pinot grigio over lunch at the George Street eatery est, which sits across the road from his new employer, the NAB.

''And in Malcolm's case, knuckle down and keep doing a great job as the communications shadow.'' He pauses, pondering the chunk of John Dory on the end of his fork. ''And, umm, you never know your luck in the big city.''

The cheeky, dry-as-dust afterthought is a reminder of why Howard used to say of his long-time aide that he ''suited my temperament'' because he could ''make me laugh''.

Sinodinos worked for Howard twice, once in the 18 months before Peacock deposed his rival in 1989 and then again from 1995, after Howard clawed back the Liberal leadership and was gearing up for the election which swept him to power.

The second time around, Sinodinos was comfortably ensconced in Treasury when Howard came calling.

''I was enjoying where I was and I think he sensed the hesitation in my voice, because he said, 'look, at the end of the day we're either bound for glory or oblivion'. I thought, well that's a pretty good attitude, sign me up. I couldn't resist that. It was a bit like, yeah, we'll stare death in the face and whatever happens, happens. That appealed.''

The pair went on to forge one of the most successful working relationships in modern Australian political history, Sinodinos serving first as economics adviser and then, for nine long years, as chief of staff, the most powerful and trusted position in the prime minister's private office.

''What surprised me about him is how tough he could actually be in arguing or prosecuting his point of view, even with a welter of media or other opinion against him. What struck me was that capacity to keep going in circumstances where others might give up,'' he says.

He remains staunchly loyal to Howard, despite having arranged his own exit some months before the latter's final fall from electoral grace.

''We still catch up. I'm still very keen to protect his interests if I have the capacity to do so, and vice versa. He's been very good to me in that regard,'' Sinodinos confides.

''These relationships - without trivialising it - it's a bit like people who have been in a war, who have been in the trenches together. I feel that towards a lot of them. If I get a call from someone I was in government with, they are the people you tend to call back first.''

Instinctive fealty to his old boss has some Liberals worrying about Sinodinos's ability to remain impartial after his election to the presidency of the NSW party. Sinodinos won in an internal party vote yesterday.

But he insists he'll remain his own man, even with the jostling state Liberal factions and the competing egos of Howard, Turnbull, the federal leader, Mr Abbott, and the newly triumphant Premier, Barry O'Farrell, to contend with.

''I hope what I can bring to the role is a reputation for being an honest broker,'' Sinodinos says.

''I don't want to bring to it either a personal agenda or an agenda focused on a particular faction.''

And no, he says, there is no use in Liberals playing down the fact that factions exist in their party.

''Groupings do exist and that's not necessarily a bad thing if it cuts down some of the transaction costs of getting things done internally … My job is to make sure that the contestability between them does not become destructive.''

Top of his to-do list will be broadening the party's fund-raising base and lifting the quality of NSW Liberal candidates in the next federal election after the ''mixed bag'' of individuals chosen last time.

He is diplomatic about the recent unseemly dust-up between the former Howard ministers Peter Reith and Nick Minchin over the federal presidency, insisting it ''did no lasting damage'' and it was ''good to shake the tree''. And he is receptive to party reforms proposed by Reith, who recently delivered a postmortem on last year's election.

But surprisingly, he thinks part of the electorate's sullen mood reflects a sense that the natural order of succession was overturned on both sides of politics.

''The next PM after Howard was either going to be [the former Labor leader] Kim Beazley or Costello in the natural order of things. And both of them are out. That has probably played with the public's mind,'' Sinodinos says.

''I don't think they see some of the current generation of politicians as senior, in the way that they saw a Beazley or a Costello or some of those. One of my beefs is that we seem to finish leaders off very quickly and then move on to the next one.''

The amiable Sinodinos was a ''straight-laced'' kid growing up in Newcastle in the 1950s and '60s. His parents, Dionysus and California, migrated separately from the picturesque island of Cephalonia, in the Ionian Sea.

Dionysus had been a seaman working the coastal shipping routes along the east coast of Australia who got stranded here by World War II. California, named by a relative who'd visited the US, came out in the early 1950s. The pair had known each other in childhood but had little contact in between. It was, Sinodinos says, an ''an arranged marriage in the sense that the two families knew each other''.

Sinodinos spoke almost no English until he started school. His parents made a ''conscious effort to fit in'' with the new country but their social lives revolved around the Greek Orthodox Church, through which Arthur, many years later, met his own wife, Elizabeth.

''The church attitude was quite outward-looking,'' Sinodinos recalls. ''They didn't take the attitude that we are somehow a Greek island in Australia … I think that actually promoted the integration of Greeks into Australian society.''

Sinodinos absorbed a strong anti-communist world view from his mother, who was shaped by her experiences as a farmer's daughter during the Greek Civil War.

An avid consumer of news and current affairs, he left high school with marks high enough to enter law or medicine at the University of Sydney but opted to study economics in his home town before moving to Canberra to join the Finance Department in 1979.

Sinodinos first crossed paths with his future employer after crashing one of Howard's famous budget after-parties with a mate in the early '80s. ''Neither of us had been to a party where the alcohol flowed so freely,'' he jokes.

Bitten by the political bug, he would sometimes amble down to Parliament House after work to drop in on debates.

But he didn't meet Howard formally until '87, when a friend working in Parliament asked him to come down and interview for a job.

''Howard seemed an interesting sort of character: plucky. He'd been through some of those battles on privatisation. He seemed to be a fighter.''

It was a quality Sinodinos saw in spades once he'd joined the leader's tight-knit team. Sometimes the pluck became sheer obstinacy, as it did when the former Liberal minister Ian McLachlan revealed a supposed pact under which Howard would cede to Costello after two terms as leader.

The move, meant to nudge Howard towards retirement, simply prompted him to dig in further.

''This is where the doggedness and stubbornness comes in. When you back this sort of guy into a corner, he is going to do the opposite of what you want,'' Sinodinos says of that episode.

''The funny thing is, we'd have these eruptions [between Howard and Costello] from time to time but the work of the government always got on. The prime minister's office and the treasurer's office worked perfectly fine through those times. The elephants were over there dancing away but the rest of us were getting on with the job.''

He thinks one of the keys to Howard's success was his ability to avoid conveying any sense of crisis, even when there was tumult behind the scenes.

''The art is in being able to make sure that the urgent does not crowd out the important.''

These days Sinodinos lives in Rose Bay and is enjoying life as a senior adviser to NAB's top business clients. He sounds lukewarm about ever standing for Parliament himself. In 2009 he was talked of as a possible successor to Brendan Nelson in the plum seat of Bradfield but ''I thought it was a bit too early to try my hand at that sort of front-line politics, and maybe I never will''.

Besides, there are plenty of other distractions in life just now, not least his one- year-old daughter Isabella and 10-year-old son, Dion.

The man who loved Abba, The Beatles and Elton John as a youth is now married to a woman who sits on the events committee of Opera Australia. But he remains relentlessly mainstream in his musical and literary tastes. He has a fondness for novels by Len Deighton and John le Carre and is at present deep in a book on contemporary China.

As for his migrant heritage, he remains closely involved with the Greek community but says it has been 10 or 15 years since he danced up a storm and broke a plate.

''The people I admire are the ones who actually break the plates on their heads,'' he says with a straight face. ''I haven't tried that one.''

Howard's right-hand man to honest broker

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Nick Efstathiadis

Dylan Welch July 22, 2011

The Opera House in <i>Inspire</i>.
The Opera House in Inspire.

AUSTRALIAN citizens continue to travel to Yemen to meet and train with al-Qaeda associates, which may explain why the use of an image of the Sydney Opera House in an online terrorism magazine has so startled Australia's counter-terrorism officials.

The image, revealed by The Age yesterday, was used to illustrate the introduction to a section on bomb making in the latest issue of Inspire, an English-language magazine published by associates of al-Qaeda in the Arabian Peninsula.

The group, based in Yemen, has played a role in all the recent high-profile terrorist attacks in the US and Europe, including the Fort Hood shooting, the failed Times Square bombing, the ''underwear bomber'' plot and last year's cargo bomb plot.

Australia's intelligence agencies and police are treating the image with concern because of the possibility it might encourage ''lone wolves'' - people who commit terrorist acts without direct contact with terrorist groups. Such people are particularly difficult to detect.

''[Inspire] is trying to equip usually disgruntled young men with the skills they need to develop weapons of destruction: how to construct a bomb; how to use weapons,'' federal Attorney-General Robert McClelland said yesterday.

The image will also concern Australian intelligence officials because of the role al-Qaeda in the Arabian Peninsula plays, along with Yemen, in the global jihad - attracting Western-born Muslims who can be trained in the Middle East and then sent back to the West to undertake attacks.

Worryingly, Australians are among that group of travellers. It is known that several dozen Australians have travelled to Yemen, had contact with elements of al-Qaeda in the Arabian Peninsula, and then returned here in recent years.

Western intelligence agencies also struggle to monitor these people, as they tend to fly to Middle Eastern hubs such as Dubai and then drop off the radar, with concerns they have taken land routes to Yemen. It is hard to track them in Yemen.

Monash University terrorism expert Professor Greg Barton said Yemen was a useful haven for al-Qaeda, given the lack of central government control coupled with ready access to reliable infrastructure.

''[It's] a wild west-type state that's reachable and there's no control of the borders. And the chances of people tracking your transit [to Yemen] are very low,'' he said.

Western intelligence agencies also continue to monitor whether the explosive-training camps al-Qaeda has run in Afghanistan and Pakistan are being set up in Yemen. Intelligence sources have told The Age that it remains to be seen whether al-Qaeda in the Arabian Peninsula has that capacity, but the potential for Western recruits in Yemen to receive such high-end training is a concern.

Fears over Australians' links to al-Qaeda

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Nick Efstathiadis

July 22, 2011

Strict bail conditions imposed ... Tolga Cifci.

Strict bail conditions imposed ... Tolga Cifci. Photo: Domino Postiglione

The court cases of Tolga Cifci and Wassim Fayad are ready-made for hefty doses of hyperventilation by portions of the media, particularly commercial broadcasters.

They are among four men who allegedly broke into the Silverwater home of Christian Martinez, who, despite his name, is a Muslim.

The media have been full of it, because in allegedly whipping Mr Martinez 40times with an electrical chord for drinking alcohol, the accused are said by the police to have chosen a "particularised usage of religious law".

That is police talk for applying sharia as punishment for some-thing that in our legal system is perfectly legal.

It's doubtful that sharia specifies the use of electrical cables in this sort of retribution, but that might not be the worst of it. Suggestions have emerged "from one local Auburn source" that the victim may have owed money to a number of people. If so, this could be a normal bit of roughing-up to speed the return of outstanding funds – not unknown in Australia or other common law countries as a method of settling debts.

It could be regarded as a form of mediation. (Indeed, a number of former judges-turned-mediators quietly admit that their method to achieve a breakthrough in negotiations is to pick on the weaker of the disputing parties and metaphorically beat them on the head with a rubber hose until they surrender.)

Already, we can identify subtle eliding of western and sharia traditions.

The federal Attorney-General, Robert McClelland, has pronounced that the government "is not considering and will not consider the introduction of any part of sharia into the Australian legal system".

The NSW police commissioner, Andrew Scipione, has also made himself crystal clear: "I've said it before and I'll say it again. There is no place in Australia for sharia law, full stop."

Maybe he should have said "semi-colon", because in the middle of 2009 the then assistant treasurer, Nick Sherry, announced that Australia "should be open to the potential for Islamic finance to operate in Australia". Last year Sherry gave a speech at the Islamic Finance Conference in Melbourne in which he said that Australia was in the fortunate position to be a financial hub in the Asia Pacific region with Islamic finance as its "crucial plank". To that end there was a review of Australian taxation laws so that Islamic financial products and services could be provided on a parity with the other stuff already on offer.

Clearly, the government is keen for Australia to dip into $1.6 trillion worth of Islamic investment.

As academics Ann Black and Kerrie Sadiq write in the University of NSW Law Journal, finance is part of "good sharia law", which has an emphasis on profit sharing instead of charging interest and excluding investment in things contrary to Islamic principles.

If we can made a quid out of adapting our principles to include Islamic methods of finance and investment, then sharia has a welcome place in our system.

On the other hand (a phrase with a special meaning in parts of the Muslim world) Black and Sadiq point to Islamic family law, such as the recognition of polygamy and Muslim divorce, which is regarded as "bad sharia law".

The hudud punishments of hand severing, stoning to death and beating with cables are confined to a few countries, such as Saudi Arabia, Sudan and Iran. As far as we know there is no credible proposal that they be allowed to function in parallel with the Australian legal system, although you wonder when you see Australians screeching at accused persons as they are driven away in police vehicles.

The vast majority of Muslim countries and Muslims have moved on from the middle ages. It was interesting to see a number of Islamic organisations condemn the alcohol-tippling/debt-recovery punishment. Sheikh Taj el-Din al Hilaly, of the Lakemba Mosque, said the attackers should be "assessed for a mental disorder" and those found guilty deported. Guilty of a mental disorder takes our law into uncharted waters, so maybe it's best to say no more about it.

In Britain there are close to 100 sharia tribunals that deal with matters such as domestic relations and inheritance, with appeals to the civil courts.

In Australia, law reform commissions have recommended that aspects of Aboriginal customary law be permitted to function alongside white man's law. The Law Council of Australia welcomes that and, indeed, it has been recognised in the Northern Territory.

Our system of laws is not immune from the the imprecations of Christian fundamentalism, either. For instance, the Reverend Fred Nile is forever trying to impose some sort of Christian sharia on his flock, the people of NSW. Maybe he should be allowed to have his own courts to impose special punishments on prostitutes, gays, and students who skive off from scripture classes.

justinian@lawpress.com.au

Why 'good' sharia is championed in some surprising quarters

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Nick Efstathiadis

Kirsty Needham July 22, 2011

The Gillard Government's refugee swap deal with Malaysia has been settled, with documents expected to be signed on Monday.

AFTER months of difficult negotiations, the Gillard government has finally clinched its refugee swap deal with Malaysia.

Immigration Minister Chris Bowen is set to sign the deal on Monday at a ceremony in Kuala Lumpur, putting the seal on a plan that Labor hopes will stem illegal boat arrivals in Australia and neutralise one of its most difficult political issues.

But the government still faces challenges, with another boat carrying 52 people intercepted yesterday, bringing to more than 450 the number of asylum seekers who have arrived in Australian waters since the Malaysia plan was announced in May.

c

Asylum seekers at a detention centre in Malaysia, where the government is set to sign a refugee swap deal with Australia. Photo: AP

Under the deal, Australia will take 4000 confirmed refugees from Malaysia, in exchange for which Malaysia will take 800 boat arrivals from Australia.

But it is believed the Malaysian government will accept only people arriving after Monday's signing, which places pressure on the Gillard government to strike a deal with Papua New Guinea to deliver on its insistence that recent arrivals won't be processed in Australia.

Last night Mr Bowen's office refused to confirm that the Malaysia deal would be signed on Monday. But The Age has been told the signing by Mr Bowen and Malaysian Home Affairs Minister Hishammuddin Hussein will go ahead, and be witnessed by representatives of the United Nations High Commissioner for Refugees and the International Organisation for Migration.

Sources said the two refugee agencies would not be signatories to the document, but they had agreed it would operate in parallel with their own policies for protection for refugees, and side-deals with Australia.

UNHCR endorsement is crucial because the agency will have responsibility for processing and resettling the 800 asylum seekers sent to Malaysia.

But UNHCR approval has been hard won, after the agency's Geneva head office pushed for the deal to ensure human rights guarantees and rejected several earlier drafts. The commissioner, Antonio Guterres, was peppered with hundreds of protest emails from Australians.

UNHCR approval is critical for the Gillard government to have the refugee exchange accepted by Labor's Left faction, which was concerned that unaccompanied children would be sent to Malaysia.

The UNHCR has welcomed Australia agreeing to accept 4000 refugees for resettlement, but had been cautious about sending boat arrivals from Australia to a country that is not a signatory to the Refugee Convention.

About 95,000 refugees in Malaysia have no legal work right, are at risk of arrest, have no access to government schools and healthcare, and must wait years for resettlement in other countries.

Australia has committed $292 million to the deal, which will include covering the UNHCR's costs in ensuring the healthcare, education and eventual resettlement in third countries of the 800, who will be issued with identity documents stating they are not illegal migrants.

Negotiations to reopen the Manus Island processing centre in PNG - where the government hopes to send recent boat arrivals - have been stepped up after stalling for several months due to political instability and the resignation of Prime Minister Michael Somare.

Foreign Minister Kevin Rudd, who along with PNG Foreign Secretary Michael Maue has been attending the east Asia summit in Bali, said yesterday Australia had to be cautious

about rushing into an asylum seeker deal with PNG. Mr Rudd said negotiations with PNG depended on how the country's political crisis unfolded. "We have to be cautious with how we proceed," he said.

Mr Rudd pledged to personally assist with the negotiations "in whatever human way I can" between now and when he goes into hospital for heart surgery on August 1. He was expecting to meet the PNG Foreign Secretary while in Bali.

Another complication for the Gillard government is a High Court challenge to the decision that all those who arrived by boat after May 7 will be processed in third countries.

Yesterday the court signalled that a legal challenge on behalf of a woman and her four-year-old son, who are facing removal from Christmas Island, would proceed in conjunction with a second challenge in October.

The woman and child are among those to have arrived on Christmas Island since the ''people swap'' plan with Malaysia was announced.

Speaking outside the court, Refugee and Immigration Legal Centre executive director David Manne welcomed the court's intention to hear the case as a priority. The woman and her son arrived after May 7, but the woman's husband is in Australia after his claim for refugee status was upheld. ''They're currently being detained indefinitely on Christmas Island and every day is another day of damage,'' Mr Manne said.

With DANIEL FLITTON, MICHAEL GORDON

Deal done on refugees

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Nick Efstathiadis

 AM Liz Hobday Updated July 21, 2011 09:11:44

Related Story: Changes planned for olive oil labelling

Map: Australia

Australia has become the first country in the world to approve voluntary national labelling standards for olive oil.

Up until now many people buying olive oil have been confused by labels such as "premium" and "extra light".

The president of the Australian Olive Association, Paul Miller, says most of the terms used to label olive oil are meaningless and do not tell the buyer whether the oil is fresh or refined.

"Most of the world olive crop is swept up off the ground and the oil when it's made has off flavours, it's often rancid and so it needs to be taken to a vegetable oil refinery to be made edible or palatable," he said.

"That refining process changes the oil and refined olive oil is a much lower grade than extra virgin.

"The new standards say that consumers should be told whether an oil is refined or whether it's extra virgin."

Mr Miller hopes the new standards will stop the use of terms such as "extra light", "pure" and "premium" on labels - instead, they will have to tell you what you are buying.

"What we really want is that if an oil is labelled extra virgin that it is, that it doesn't contain any refined olive oil," he said.

"That people are getting what they should be getting when they are buying that and if want to buy lower grade they need to know its a lower grade.

"So for example terms like extra light - our research has shown that consumers may think that's low fat extra virgin olive oil, when in fact it's the most refined product."

About half of the olives grown in Australia are produced in Victoria.

Rob Culkin-Lawrence from Birregurra Estate Olives in the state's south-west has welcomed the new standards.

He says consumers should be able to taste when they have got the good oil.

"A good olive oil is an extra virgin olive oil so has a very, very low acid level. Good olive oils are routinely fruity, they can take on a number of tastes," he said.

"I pressed an oil this year that had a taste of banana which is quite regular but it just had a beautiful note to it."

Mr Culkin-Lawrence says most imported olive oils are not much good.

"By far the majority I have tasted, I would say that they're 18 months, two years old when they come into the country," he said.

He says while the standards will be good for consumers, there will not be a huge effect on Australian producers because most of the olive oil made here is extra virgin and any refined oil is usually exported.

Australia represents just 3 per cent of the world market in olive oil, but Mr Miller says the national standard is a world first, and other countries are watching with interest.

"[The labels have] had a lot of support from Europe for this outcome, a lot of support from the US, a lot of support from growers and producers from around the world who have all been expressly concerned about this," he said.

"I'm proud to say that Australia has taken the lead and we're the first ones to take it on."

Australia takes the lead on olive oil labels - ABC News (Australian Broadcasting Corporation)

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Nick Efstathiadis

AAP reporters July 20, 2011 - 2:39PM

AAP

Prime Minister Julia Gillard has warned asylum seekers at the Christmas Island detention centre that illegal protests will count against their refugee claims.

"If you commit a criminal offence it will count against you," she told reporters at Gundurrah, in southern NSW, on Wednesday.

"You don't get any changes to the process and treatment of your claims by misbehaving."

A male detainee has been arrested after about 50 asylum seekers late on Tuesday ran amok using improvised weapons, starting several fires and breaching compounds within the centre.

Australian Federal Police (AFP) officers made a number of attempts to defuse and de-escalate the riot, but these were not successful, an AFP spokesman said.

Police fired bean bag rounds, tear gas and percussion bombs to control the situation.

"The AFP will continue to assess possible offences committed and to identify those involved in violent behaviour," the AFP spokesman said.

An immigration spokesman said three asylum seekers climbed onto a roof after the riot to stage a protest but later came down.

On Sunday night, a group of 11 asylum seekers climbed onto a roof at the centre's main compound, which mainly holds single adult males.

The AFP said no detainees remained on that roof.

Home Affairs Minister Brendan O'Connor told reporters in Melbourne the disturbance at the centre was now a peaceful protest.

He said participation in violent protests would only harm the chances of refugee approval.

"If people are wanting to have their applications for asylum properly processed this is not the approach you take," he said.

"As a result of the changes the government has made to the character test, the chances of them seeking asylum or having themselves properly processed can indeed be affected by such behaviour."

Mr O'Connor denied the latest protest proved immigration detention centres were becoming unmanageable.

An asylum-seeker swap deal with Malaysia was a long-term solution to the unrest, he said.

"We're going to find a sustainable solution in order to prevent people smugglers continuing with their business."

Meanwhile, in Darwin, a small group of asylum seekers has ended a six-day rooftop protest at the city's Berrimah detention centre, immigration officials say.

An immigration spokeswoman told AAP that Serco, the security company responsible for managing the centre, had successfully encouraged a group of four men to end their protest action on Wednesday morning.

The department declined to speculate about reasons for the protest.

© 2011 AAP

Gillard warns protesting asylum seekers

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Nick Efstathiadis

Sue Dunlevy From: The Australian July 20, 2011 12:00AM

ELEVEN major drug companies have threatened to stop bringing new medicines to Australia and halt clinical trials over the Gillard government's decision to let cabinet choose which drugs get subsidised on the pharmaceutical benefits scheme.

The companies have been joined in their outcry by consumer groups, academics and doctors, who have condemned the process and warned that cabinet's new role in approving every new medicine subsidy risks a situation where drugs may be funded only if they will win votes.

More than 50 consumer, medical and pharmaceutical groups have raised a storm of protest at the new policy in submissions to a Senate inquiry. They warn that the lack of formal criteria to guide decisions will leave cabinet open to claims it is "unfair or biased".

For 62 years, governments have accepted the advice of the independent and expert Pharmaceutical Benefits Advisory Committee about which medicines should be subsidised. In February, the Gillard government deferred seven PBAC recommendations to save about $120 million.

Related Coverage

Until February, cabinet only had a role in considering subsidies for medicines that cost more than $10m a year. However, in almost every case it approved subsidies for high-cost drugs recommended by the PBAC, which applies a rigorous cost-effectiveness test to drug approvals. Only two drugs -- Viagra and nicotine patches -- were knocked back by cabinet.

Now the government says cabinet will have a role every time in deciding which drugs should get a subsidy, after PBAC has completed its cost-effectiveness studies.

Eleven drug companies, including the world's largest, Pfizer, as well as GlaxoSmithKline and Astra Zeneca, say the uncertainty that results from cabinet's new drug subsidy process means clinical trials may stop, and it will be difficult to mount a business case for bringing new medicines to Australia.

The government's new subsidy approval policy stunned drug company chiefs as it came just months after legislation was passed to cement an agreement with pharmaceutical companies that would cut $1.9 billion from the price government pays for medicines over four years.

This memorandum of understanding was meant to deliver business certainty to medicine companies for the next five years.

In the memorandum of understanding signed before last year's federal budget, the commonwealth said it undertook "not to implement new policy to generate price-related savings from the PBS during the period of the agreement".

The Department of Health and Ageing says PBAC recommendations have always required government approval and "this is not a new pricing policy".

"It is taking a consistent approach to all listings with a financial impact by ensuring they are subject to the same processes already applied to those listings with a financial impact greater than $10m in any year," its submission says.

Drug companies have told the Senate committee that cabinet's decision to defer drug subsidies breaches the spirit of this agreement and is the reason drug companies may decide not to bring new medicines to Australia.

The government says there has not been any breach of the agreement and the companies are still actively seeking to list new drugs on the PBS, with 62 submissions at this month's meeting of the PBAC, a similar number to previous meetings.

Pharmaceutical company Janssen says it spent $12m on PBAC fees, training for mental health nurses and building up stocks of its schizophrenia drug after it was approved by PBAC, only to have it knocked back by cabinet.

"The current lack of predictability in Australia's reimbursement system is likely to affect the priority given to introducing new medicines in Australia compared with other nations," Janssen has told the Senate committee.

GlaxoSmithKline says: "Increased uncertainty about the use of a medicine in Australia will make it increasingly difficult for us to secure local sites as part of global phase II and phase III clinical trials."

Drug company Novo Nordisk has warned that, unless the government gives an assurance the new subsidy policy will be reversed, "this will most certainly impair Novo Nordisk's ability to bring its significant pipeline of innovative anti-diabetic medicines to Australia".

iNova Pharmaceuticals says it wants to bring new medicines to treat asthma and chronic obstructive pulmonary disease and skin cancer to Australia. "However, arrangements to bring these therapies to Australian patients require certainty of the PBS listing timeframes which is currently proving difficult in light of the recent PBS deferrals," the company says.

Health Minister Nicola Roxon is on leave and was unavailable for comment last night but she has strongly defended cabinet's new role in approving drug subsidies.

"While PBAC's enduring success is reflected in the fact successive governments have rarely had to differ from its recommendations, ultimately it is and always has been government's responsibility to decide whether to list a new drug," she told the Consumers Health Forum in April.

Medicines that could be held back from Australia include drugs being developed to treat cancer, diabetes, heart disease, and mental health and respiratory problems.

The drug companies argue that approving the drugs could create savings in the long run through reduced health costs.

The Department of Health and Ageing in its submission to the inquiry justifies cabinet's new role in medicine approval on the grounds of "current fiscal circumstances". It says that although subsidies for seven new medicines were delayed, 124 new medicines were listed on the drug subsidy scheme between January 1 and July 31 this year at a cost of $561m over five years. A further 33 medicines worth $287m will be listed later this year.

Some life-saving medicines can cost up to $40,000 a year, and government subsidies are essential to make them affordable to patients, cutting their cost to just $34.20 a month, or $5.40 for pensioners.

Warning PBS row will stall drugs | The Australian

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Nick Efstathiadis

EXCLUSIVE: John Ferguson From: The Australian July 20, 2011 12:00AM

AN influential Liberal Party adviser quit last night after admitting sending vulgar anti-Coalition messages that undermined federal and state MPs.

Daniel Bevan quit the office of Victorian senator Scott Ryan after The Australian uncovered evidence of back-biting, sexist and apparently racist messages in his Twitter account.

It is believed he resigned after being confronted by Senator Ryan about the content of one of his Twitter accounts, which attacked senior federal and state Liberals and included dozens of references to female genitalia.

Mr Bevan becomes the fifth Victorian Liberal forced to quit after abusing social media and the internet since the 2008 "Red

Ted" blogging scandal erupted inside the party's Melbourne headquarters.

He also has quit the party's powerful state executive, which effectively runs the organisation between state council meetings.

Related Coverage

A furious Senator Ryan, the Coalition's opposition spokesman for small business and competition, said he had no idea the Twitter account, which posted messages under the pseudonym "Santos--Halper", was being used by a staff member.

Senator Ryan last night said in a statement: "I spoke to Daniel this afternoon about these matters. He has resigned from my staff."

Mr Bevan is believed to have volunteered his resignation just hours after denying to The Australian he had sent the messages.

"This was a silly thing to have done. What I did was stupid and I've resigned," Mr Bevan said last night.

Targets of Mr Bevan's Twitter rants include federal opposition health spokesman Peter Dutton, Victorian Premier Ted Baillieu, Victorian Treasurer Kim Wells and Victorian Health Minister David Davis.

Mr Bevan singled out the Baillieu government, suggesting that it would wreck the economy and that the state's AAA credit rating would be lost under Mr Wells. Liberal insiders also believe the Twitter site includes a vulgar reference to former Liberal senator Judith Troeth.

On Mr Davis, Mr Bevan wrote: "David Davis' (sic) voice makes me want to self harm."

On Peter Dutton, he wrote: "If Peter Dutton is a future leader of the Liberal Party, it's more pharked (sic) than even I thought."

Party sources said there was no choice but to deal with Mr Bevan, given the blogging scandal that tore through the party in 2008 when four Liberals were sacked for either undermining Mr Baillieu or using racist comments.

Mr Bevan bragged on the eve of the Victorian state election last year that he would "welcome every newspaper in Victoria into the cancerous cell". This will be seen as a direct reference to Mr Baillieu having attacked a so-called cell in the Victorian Liberal Party in 2008 that had worked against his leadership.

The Australian has copies of several pages of tweets sent by Mr Bevan, including one awarding the Seven Network's Mark Riley "C . . t of the Year".

There also was a reference to "M's of every variety at DFO", which a party source said appeared to refer to Muslims. When contacted by The Australian yesterday morning, Mr Bevan denied the offending account was his.

"Not mine," he said. "But I understand what's going on."

Victorian Liberal Party state director Damien Mantach said the behaviour could not be tolerated. "Under no circumstances does the party accept such behaviour, particularly from senior office bearers," he said.

Liberal aide Daniel Bevan admits anti-Coalition tweets | The Australian

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