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$2.00 TH U RS DAY May 9, 2013
WWW.THEAUSTRALIAN.COM.AU M.AU U I T THE H E HE HEART OF THE NATION
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PERSONAL OZ { CARS & GADGETS TS P14 }
NEWS { P3 }
SMUT IS JUST A TWEET AWAY
RESISTANCE IS FUTILE
GATSBY GIRL RL SPARKLE
Sexual harassment in the digital age
Aussie newcomer plays Jordan Baker
Soon we will all be Captain Kirk
Your local cinema and entertainment guide { P12}
Monetary guru says action to curb dollar will do more harm than good EXCLUSIVE ADAM CREIGHTON
THE Reserve Bank’s latest salvo into the emerging Asian currency war has failed to dent demand for the Australian dollar, which has clawed back most of Tuesday’s losses following a surprise spike in China’s trade performance. Leading international economists said artificial attempts to limit the dollar’s ascent, underpinned since December by Japan’s aggressive monetary loosening, could be damaging and futile. It clawed back almost half its losses yesterday, climbing back
near $US1.02 following the news that China had posted a surprisingly strong trade surplus last month, suggesting global demand for Chinese goods was strong. John Taylor, the economics professor who designed one of the operating templates for modern monetary policy, warned central banks worldwide against the dangers of unilaterally undermining their currencies. ‘‘If everyone tries to undermine the value of their currency with monetary policy, the results will not be good,’’ Professor Taylor told The Australian yesterday. He argued that damaging commodity and asset price bubbles would ultimately result. The so-called currency wars
COMMENT
A LOWER value for the Australian dollar would be cheered by the Reserve Bank, as well as by the large suite of industry, but it is not the aim of its rate cuts. The bank’s internal studies show there is no statistically reliable connection between the exchange rate and the gap between Australian and overseas interest rates. In any event, the difference between the Reserve Bank’s new 2.75 per cent rate and official
rates in the US and Japan of just 0.1 per cent is still large enough to attract global investors. The Reserve Bank is trying to set interest rates at a level that encourages enough use of credit to support overall demand in the face of the headwinds it is facing. These include the value of the currency, which is eroding profits and killing investment, the peaking of the resource boom and budget deficits. The Reserve Bank does not rule out intervening in the
currency market to ensure there is enough liquidity or to counteract extreme moves. But, with world markets trading about $100 billion in Australian currency every day, the RBA would be swamped if it tried to turn the tide. If central banks in the biggest advanced economies keep flooding them with cash, pushing the Australian dollar yet higher, the Reserve Bank would cut rates even more to support demand.
entail central banks artificially devaluing their currencies in an attempt to boost domestic exports and keep interest rates at histori-
cally low levels to underpin domestic demand. Japan’s central bank has embarked on what some call ‘‘the biggest economics exper-
iment the world has ever seen’’, in effectively printing $US65 billion ($63.7bn) a month to reinflate its economy. While the so-called
bond-buying program in the US is also huge, at about $US85bn a month, the US economy is three times the size of Japan’s.
Rate cuts not designed to lower currency DAVID UREN
The Reserve Bank surprised financial markets yesterday by cutting the official cash rate to 2.75 per cent, the lowest level in 53 years, singling out the sustained high Australian dollar and the country’s waning economic growth rate. Financial markets expect the Reserve Bank to be forced to follow Tuesday’s rate cut with at least two more rate cuts over the coming year. Westpac chief economist Bill Evans, who correctly forecast in mid-2011 that the Reserve Bank would be forced to reverse what had been a campaign of rate hikes, yesterday tipped a further three rate cuts, with the official interest rate reaching a low of 2 per cent by
LOOPHOLE TO LEAVE THOUSANDS WITH NO MONEY, WORK
Asylum-seekers left in limbo Smuggler wants to be sent home
EXCLUSIVE RICK MORTON SOCIAL AFFAIRS WRITER
THOUSANDS of asylumseekers, including women and children, face being left without any financial support from the government and without any right to work, when Labor begins processing ‘‘no-advantage’’ claims. A quirk in the system allows the government to revoke the fortnightly $420 assistance payments for asylum-seekers living in the community if they decide not to leave the country after failing the primary and review stages of their claims. The little-known loophole has already ensnared at least 400 men, women and children who are seeking help from one Sydneybased charity, which is struggling with the accelerating caseload. Should they stay and seek a judicial review of their case, they are left in financial limbo. Charity workers say the severance of payments is the single most burdensome asylum-seeker policy for the sector and will lead to a humanitarian crisis in Australia in years to come as thousands more find themselves with no right to work and no means of support. Melanie Noden, chief executive of the Asylum Seekers Centre in Sydney, said about 400 of her clients — 80 per cent — are living without the fortnightly payment because they are awaiting judicial review of their claims. ‘‘These are people who pose no security threat and who are still very much in a valid part of the claims process but the government has removed their support,’’ Ms Noden said. ‘‘Within a couple of years we are going to have a reasonable
PETER ALFORD JAKARTA CORRESPONDENT
proportion of people who are coming off the double negative review and losing their support payments. ‘‘Assuming not a single new person arrives on a boat, there are going to be thousands in NSW alone desperately seeking support from charities like ours, which are the only agencies keeping them off the streets.’’ The problem is likely to balloon, with people-smugglers increasingly loading women and children on to boats to make the dangerous journey to Australia, as reported yesterday in The Australian. Up to 40 per cent of all passengers are now part of family groups. More than 17,000 have arrived since offshore processing, coupled with the no-advantage test, was introduced last August. Processing of no-advantage claims since this period has not yet begun and the Department of Immigration and Citizenship cannot say when this may happen. Last night opposition immigration spokesman Scott Morrison accused the Gillard government of trying to transfer its responsibilities until after an election. ‘‘During the last election senator Chris Evans sat on his hands while his department urged him to expand the detention network to cater for the growing number of arrivals,’’ he said. Continued on Page 2 SAPUTRO TRI
MORE REPORTS P2
SAYEED Abbas Azad, the most notorious alleged peoplesmuggler in Indonesia in the past five years, wants to be deported to Afghanistan rather than face a 20-year jail term in Australia. The 30-year-old Afghan Hazara, thought to be responsible for sending at least 40 boats to Australia since 2008 and suspected of involvement in two sinkings that cost 300 lives, faced the opening of an extradition hearing yesterday. ‘‘If the government of Indonesia does not want me to stay in Indonesia, deport me to Afghanistan so I can return and re-enter Indonesia legally because I have a wife and child here,’’ Abbas, 30, said. ‘‘If I’m sent to Australia I cannot return and I feel pity for my wife and child.’’ But waiting in the South Jakarta district court cells, Abbas claimed other smugglers or agents had used his name to cover their own activities. ‘‘I never send anybody,’’ he said. ‘‘Before I helped Afghan people, (who) have problems through agent Pakistan gangs, I fought. ‘‘That’s why the agents have the power, have money, now I am in jail.’’ Abbas denied involvement in the December 17, 2011, sinking of a boat off East Java, in which about 200 asylum-seekers drowned. (Though he was in custody at
Alleged people-smuggling kingpin Sayeed Abbas Azad escorted by police and court officers at South Jakarta district court
Continued on Page 2
Pioneer NBN builder walks from rollout that doesn’t add up EXCLUSIVE ANTHONY KLAN
An image of Kim Hayes, centre, and the Haytel Telecommunications team in Mt Isa that appeared in Rural Press publications
THE man whose company laid the first fibre cable for the National Broadband Network on the mainland hasn’t done any work on the $37.4 billion project
for the past 18 months. Kim Hayes, of contractor Haytel, which employs about 50 staff, says he knows a thing or two about the issues facing NBN subcontractors. ‘‘We did a lot of work in Mount Isa and then Miles and Roma (in western Queensland) when it first kicked off but we haven’t done anything since then,’’ Mr Hayes said.
He said the original work on offer had involved laying long stretches of cable in regional and bush areas, but the complexities of working in built-up urban areas, coupled with strict NBN requirements, meant the work didn’t add up. ‘‘The rates were low originally, but with the volume of work you could do, we sort of wore that,’’ Mr
Hayes said. ‘‘But when you get into town and, looking at all the controls they have, realistically you look at your figures, and you can’t make money out of it. ‘‘If, for example, the work costs you $100 and they are going to pay you $80, then you’re not going to do it — it’s pretty simple.’’ Some major contractors handling the NBN rollout are offering
the subcontractors who actually do the work as little as half the rates they are charging the federal government. The low rates being offered to subcontractors have led to complaints about the quality of workmanship by those prepared to do the work. Ipswich City councillor Paul Tully says he thought the $37.4bn
Continued on Page 4 MORE REPORTS P4 EDITORIAL P11 BUSINESS P17
Glacial sea rises ‘not so severe’ JOHN ROSS
SEA level rises triggered by Greenland’s melting glaciers will be far less severe than previously thought, new modelling suggests. European and US researchers predict the impact on sea levels from the island’s melting glaciers could be as little as 7 per cent of previous projections of more than half a metre. The ‘‘state-of-the-art ice-flow model’’ calculates that melting ice from Greenland’s 50-odd glaciers will raise sea levels by between 40mm and 85mm by the end of the century. The estimates, reported today in the journal Nature, are extrapolated from modelling of four ‘‘single-outlet’’ glaciers in southern and northwestern Greenland. The paper says glacier modelling is extremely difficult because of the complex forces at work. ‘‘The complicated behaviour of narrow-outlet glaciers has not yet been fully captured by the ice-sheet models used to predict Greenland’s contribution to future sea level,’’ it says. ‘‘Complex pattern(s) with rapid changes may be transient and not necessarily indicative of long-term trends.’’ Lead author Faezeh Nick, a glaciologist based on the Arctic island of Svalbard, said previous estimates had been based on ‘‘simple extrapolation’’. ‘‘This is the first time we have managed to calculate the contribution of ice dynamic in sealevel rise in a realistic way based on physics,’’ Dr Nick said. ‘‘Now we are more confident about our projections.’’ However, she said the lower projections were still a concern because they confirmed speculation glacial melt would affect sea levels. ‘‘Now we know for sure that atmospheric and ocean warming will result in further (ice) mass loss,’’ she said. ‘‘Mass loss from other glaciers Continued on Page 2
Continued on Page 4
$750^ to meet
Proudly brought to you by Jamie McIntyre and 21st Century Financial Education Summit
GET YOUR PHOTO WITH
ARNOLD SCHWARZENEGGER 12 JUNE PERTH | 13 JUNE SYDNEY | 14 JUNE MELBOURNE
the first quarter of 2015. In his statement, Reserve Bank governor Glenn Stevens noted that the dollar had been ‘‘little changed’’ over the past 18 months, which he said was ‘‘unusual’’ given the decline in export prices and the low interest rates. The high dollar has been particularly damaging for manufacturers and exporters and has been cited as the cause of several major rounds of redundancies and business closures. Holden yesterday announced a $153 million loss and its management partly blamed the
www.Arnold2013.com.au
or call 1800 999 270
and greet Arnold at an exclusive cocktail party with guaranteed photo Also select Dinner Passes available to exclusive high achievers. Limited to only 20 per city. Every dinner attendee gets to ask Arnold a question. *^ Visit website for details.
PANPA NEWSPAPER OF THE YEAR
$2.00 TH U RS DAY May 9, 2013
WWW.THEAUSTRALIAN.COM.AU M.AU U I T THE H E HE HEART OF THE NATION
PRICE INCLUDES GST FREIGHT EXTRA
A PLUS { P9 }
PERSONAL OZ { CARS & GADGETS TS P14 }
NEWS { P3 }
SMUT IS JUST A TWEET AWAY
RESISTANCE IS FUTILE
GATSBY GIRL RL SPARKLE
Sexual harassment in the digital age
Aussie newcomer plays Jordan Baker
Soon we will all be Captain Kirk
Your local cinema and entertainment guide { P12}
Monetary guru says action to curb dollar will do more harm than good EXCLUSIVE ADAM CREIGHTON
THE Reserve Bank’s latest salvo into the emerging Asian currency war has failed to dent demand for the Australian dollar, which has clawed back most of Tuesday’s losses following a surprise spike in China’s trade performance. Leading international economists said artificial attempts to limit the dollar’s ascent, underpinned since December by Japan’s aggressive monetary loosening, could be damaging and futile. It clawed back almost half its losses yesterday, climbing back
near $US1.02 following the news that China had posted a surprisingly strong trade surplus last month, suggesting global demand for Chinese goods was strong. John Taylor, the economics professor who designed one of the operating templates for modern monetary policy, warned central banks worldwide against the dangers of unilaterally undermining their currencies. ‘‘If everyone tries to undermine the value of their currency with monetary policy, the results will not be good,’’ Professor Taylor told The Australian yesterday. He argued that damaging commodity and asset price bubbles would ultimately result. The so-called currency wars
COMMENT
A LOWER value for the Australian dollar would be cheered by the Reserve Bank, as well as by the large suite of industry, but it is not the aim of its rate cuts. The bank’s internal studies show there is no statistically reliable connection between the exchange rate and the gap between Australian and overseas interest rates. In any event, the difference between the Reserve Bank’s new 2.75 per cent rate and official
rates in the US and Japan of just 0.1 per cent is still large enough to attract global investors. The Reserve Bank is trying to set interest rates at a level that encourages enough use of credit to support overall demand in the face of the headwinds it is facing. These include the value of the currency, which is eroding profits and killing investment, the peaking of the resource boom and budget deficits. The Reserve Bank does not rule out intervening in the
currency market to ensure there is enough liquidity or to counteract extreme moves. But, with world markets trading about $100 billion in Australian currency every day, the RBA would be swamped if it tried to turn the tide. If central banks in the biggest advanced economies keep flooding them with cash, pushing the Australian dollar yet higher, the Reserve Bank would cut rates even more to support demand.
entail central banks artificially devaluing their currencies in an attempt to boost domestic exports and keep interest rates at histori-
cally low levels to underpin domestic demand. Japan’s central bank has embarked on what some call ‘‘the biggest economics exper-
iment the world has ever seen’’, in effectively printing $US65 billion ($63.7bn) a month to reinflate its economy. While the so-called
bond-buying program in the US is also huge, at about $US85bn a month, the US economy is three times the size of Japan’s.
Rate cuts not designed to lower currency DAVID UREN
The Reserve Bank surprised financial markets yesterday by cutting the official cash rate to 2.75 per cent, the lowest level in 53 years, singling out the sustained high Australian dollar and the country’s waning economic growth rate. Financial markets expect the Reserve Bank to be forced to follow Tuesday’s rate cut with at least two more rate cuts over the coming year. Westpac chief economist Bill Evans, who correctly forecast in mid-2011 that the Reserve Bank would be forced to reverse what had been a campaign of rate hikes, yesterday tipped a further three rate cuts, with the official interest rate reaching a low of 2 per cent by
LOOPHOLE TO LEAVE THOUSANDS WITH NO MONEY, WORK
Asylum-seekers left in limbo Smuggler wants to be sent home
EXCLUSIVE RICK MORTON SOCIAL AFFAIRS WRITER
THOUSANDS of asylumseekers, including women and children, face being left without any financial support from the government and without any right to work, when Labor begins processing ‘‘no-advantage’’ claims. A quirk in the system allows the government to revoke the fortnightly $420 assistance payments for asylum-seekers living in the community if they decide not to leave the country after failing the primary and review stages of their claims. The little-known loophole has already ensnared at least 400 men, women and children who are seeking help from one Sydneybased charity, which is struggling with the accelerating caseload. Should they stay and seek a judicial review of their case, they are left in financial limbo. Charity workers say the severance of payments is the single most burdensome asylum-seeker policy for the sector and will lead to a humanitarian crisis in Australia in years to come as thousands more find themselves with no right to work and no means of support. Melanie Noden, chief executive of the Asylum Seekers Centre in Sydney, said about 400 of her clients — 80 per cent — are living without the fortnightly payment because they are awaiting judicial review of their claims. ‘‘These are people who pose no security threat and who are still very much in a valid part of the claims process but the government has removed their support,’’ Ms Noden said. ‘‘Within a couple of years we are going to have a reasonable
PETER ALFORD JAKARTA CORRESPONDENT
proportion of people who are coming off the double negative review and losing their support payments. ‘‘Assuming not a single new person arrives on a boat, there are going to be thousands in NSW alone desperately seeking support from charities like ours, which are the only agencies keeping them off the streets.’’ The problem is likely to balloon, with people-smugglers increasingly loading women and children on to boats to make the dangerous journey to Australia, as reported yesterday in The Australian. Up to 40 per cent of all passengers are now part of family groups. More than 17,000 have arrived since offshore processing, coupled with the no-advantage test, was introduced last August. Processing of no-advantage claims since this period has not yet begun and the Department of Immigration and Citizenship cannot say when this may happen. Last night opposition immigration spokesman Scott Morrison accused the Gillard government of trying to transfer its responsibilities until after an election. ‘‘During the last election senator Chris Evans sat on his hands while his department urged him to expand the detention network to cater for the growing number of arrivals,’’ he said. Continued on Page 2 SAPUTRO TRI
MORE REPORTS P2
SAYEED Abbas Azad, the most notorious alleged peoplesmuggler in Indonesia in the past five years, wants to be deported to Afghanistan rather than face a 20-year jail term in Australia. The 30-year-old Afghan Hazara, thought to be responsible for sending at least 40 boats to Australia since 2008 and suspected of involvement in two sinkings that cost 300 lives, faced the opening of an extradition hearing yesterday. ‘‘If the government of Indonesia does not want me to stay in Indonesia, deport me to Afghanistan so I can return and re-enter Indonesia legally because I have a wife and child here,’’ Abbas, 30, said. ‘‘If I’m sent to Australia I cannot return and I feel pity for my wife and child.’’ But waiting in the South Jakarta district court cells, Abbas claimed other smugglers or agents had used his name to cover their own activities. ‘‘I never send anybody,’’ he said. ‘‘Before I helped Afghan people, (who) have problems through agent Pakistan gangs, I fought. ‘‘That’s why the agents have the power, have money, now I am in jail.’’ Abbas denied involvement in the December 17, 2011, sinking of a boat off East Java, in which about 200 asylum-seekers drowned. (Though he was in custody at
Alleged people-smuggling kingpin Sayeed Abbas Azad escorted by police and court officers at South Jakarta district court
Continued on Page 2
Pioneer NBN builder walks from rollout that doesn’t add up EXCLUSIVE ANTHONY KLAN
An image of Kim Hayes, centre, and the Haytel Telecommunications team in Mt Isa that appeared in Rural Press publications
THE man whose company laid the first fibre cable for the National Broadband Network on the mainland hasn’t done any work on the $37.4 billion project
for the past 18 months. Kim Hayes, of contractor Haytel, which employs about 50 staff, says he knows a thing or two about the issues facing NBN subcontractors. ‘‘We did a lot of work in Mount Isa and then Miles and Roma (in western Queensland) when it first kicked off but we haven’t done anything since then,’’ Mr Hayes said.
He said the original work on offer had involved laying long stretches of cable in regional and bush areas, but the complexities of working in built-up urban areas, coupled with strict NBN requirements, meant the work didn’t add up. ‘‘The rates were low originally, but with the volume of work you could do, we sort of wore that,’’ Mr
Hayes said. ‘‘But when you get into town and, looking at all the controls they have, realistically you look at your figures, and you can’t make money out of it. ‘‘If, for example, the work costs you $100 and they are going to pay you $80, then you’re not going to do it — it’s pretty simple.’’ Some major contractors handling the NBN rollout are offering
the subcontractors who actually do the work as little as half the rates they are charging the federal government. The low rates being offered to subcontractors have led to complaints about the quality of workmanship by those prepared to do the work. Ipswich City councillor Paul Tully says he thought the $37.4bn
Continued on Page 4 MORE REPORTS P4 EDITORIAL P11 BUSINESS P17
Glacial sea rises ‘not so severe’ JOHN ROSS
SEA level rises triggered by Greenland’s melting glaciers will be far less severe than previously thought, new modelling suggests. European and US researchers predict the impact on sea levels from the island’s melting glaciers could be as little as 7 per cent of previous projections of more than half a metre. The ‘‘state-of-the-art ice-flow model’’ calculates that melting ice from Greenland’s 50-odd glaciers will raise sea levels by between 40mm and 85mm by the end of the century. The estimates, reported today in the journal Nature, are extrapolated from modelling of four ‘‘single-outlet’’ glaciers in southern and northwestern Greenland. The paper says glacier modelling is extremely difficult because of the complex forces at work. ‘‘The complicated behaviour of narrow-outlet glaciers has not yet been fully captured by the ice-sheet models used to predict Greenland’s contribution to future sea level,’’ it says. ‘‘Complex pattern(s) with rapid changes may be transient and not necessarily indicative of long-term trends.’’ Lead author Faezeh Nick, a glaciologist based on the Arctic island of Svalbard, said previous estimates had been based on ‘‘simple extrapolation’’. ‘‘This is the first time we have managed to calculate the contribution of ice dynamic in sealevel rise in a realistic way based on physics,’’ Dr Nick said. ‘‘Now we are more confident about our projections.’’ However, she said the lower projections were still a concern because they confirmed speculation glacial melt would affect sea levels. ‘‘Now we know for sure that atmospheric and ocean warming will result in further (ice) mass loss,’’ she said. ‘‘Mass loss from other glaciers Continued on Page 2
Continued on Page 4
$750^ to meet
Proudly brought to you by Jamie McIntyre and 21st Century Financial Education Summit
GET YOUR PHOTO WITH
ARNOLD SCHWARZENEGGER 12 JUNE PERTH | 13 JUNE SYDNEY | 14 JUNE MELBOURNE
the first quarter of 2015. In his statement, Reserve Bank governor Glenn Stevens noted that the dollar had been ‘‘little changed’’ over the past 18 months, which he said was ‘‘unusual’’ given the decline in export prices and the low interest rates. The high dollar has been particularly damaging for manufacturers and exporters and has been cited as the cause of several major rounds of redundancies and business closures. Holden yesterday announced a $153 million loss and its management partly blamed the
www.Arnold2013.com.au
or call 1800 999 270
and greet Arnold at an exclusive cocktail party with guaranteed photo Also select Dinner Passes available to exclusive high achievers. Limited to only 20 per city. Every dinner attendee gets to ask Arnold a question. *^ Visit website for details.
