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Underbelly:
Where it
all began
How to
unstuff
your life
Black Friday
for Clarke
Andrew Rule, News
John Huxley, News Review
Sport
FEBRUARY 7-8, 2009
$2.30 (inc GST)
WEEKEND EDITION
No. 53,467 First published 1831
Bank
warns
rate cut
joy over
KIWIS MAKE IT 2-0
smh.com.au
‘It’s medieval’: the cost of insulting royalty Schools
seize
homes
over fees
Matt Buchanan
and Heath Gilmore
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From the hell of his
Bangkok prison cell, the
writer Harry Nicolaides
reveals the horror of his
daily battle to survive.
Jacob Saulwick
and Danny John
W
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HOME owners are unlikely to
enjoy the full benefit of further
interest rate cuts, after the chief
executive of the National Australia Bank warned it would cost
too much to pass them on.
The comments came as the
Reserve Bank predicted the
economic boost of lower rates
and government spending
would start to grip by the end of
the year, helping the recovery
from a stagnant period marked
by rising unemployment.
But the economic risks intensified as senators holding the
balance of power in Parliament
made it clear they would rewrite
the Federal Government’s
planned $42 billion rescue plan
next week.
Senior Centrelink and Tax
Office executives warned that significant changes to the legislation
would delay for several weeks the
$12.2 billion in bonuses due to
start flowing to low- and middleincome earners next month.
Just three days after agreeing
to reduce rates by the same
amount as the Reserve’s full percentage point cut, the NAB said
the high cost of raising money
from international markets
would prevent a similar move in
coming months.
In a briefing to the sharemarket in which the bank forecast
its profits for the first three
months of its latest financial
year had come in at $1.1 billion,
the NAB chief executive, Cameron Clyne, risked the wrath of
the Government and customers
alike with his stance on another
rate cut.
Mr Clyne said it was ‘‘relatively
unlikely’’ NAB would be able to
pass on any further rate cuts in
full because of the continuing
high cost of raising billions of dollars from credit markets.
In its quarterly statement on
monetary policy, released yesterday, the Reserve Bank highlighted a possible plunge in
business investment.
While the financial burden of
many households has been
eased by lower mortgage bills
and government hand-outs, the
Reserve is worried the next wave
of the downturn will come as
businesses cancel plans to
spend on new warehouses,
offices and equipment.
The bank says companies are
SPOILING FOR A FIGHT
Kevin Rudd secured backing
from the nation’s top business
groups for his $42 billion rescue
plan yesterday. But as minor
parties tried to rewrite the
package, he accused Malcolm
Turnbull of jeopardising the
national interest.
NEWS, PAGE 4
CLASH OF THE TITANS
Inside the battle over the
Federal Government’s billiondollar gamble?
NEWS REVIEW, PAGE 1
finding it difficult to get loans and
are reining in plans because of
concerns about the economy.
Nevertheless, the central bank
continues to predict Australia will
avoid negative growth. Revising
down its numbers, the Reserve
said growth was likely to drop to a
quarter of 1 per cent through the
year to June, but then slowly build
to 1.25 per cent by June 2010.
The forecast, which produced
a similar result to a separate release by Treasury this week, in
effect means the economy will
be flatlining for much of 2009.
‘‘While the international situation is likely to remain difficult
for some time, the combination
of expansionary monetary and
fiscal policies now in place will
help to cushion the Australian
economy from the contractionary forces coming from
abroad,’’ the Reserve said.
The central bank is likely to cut
its cash rate below 3.25 per cent
in the coming months, but might
opt for smaller cuts rather than
repeating this week’s reduction.
The Treasurer, Wayne Swan,
was unavailable for comment
yesterday. But earlier this week
the Prime Minister, Kevin Rudd,
said that after all the assistance
the Government had given the
banks – including two guarantees – they should pass through
interest rate reductions in full
and as quickly as possible.
‘‘Degrading’’ ... the aspiring Australian author Harry Nicolaides was jailed for three years in Thailand over a reference to the
crown prince in his self-published novel. Inset, one of his letters from prison. Photo: Reuters/Sukree Sukplang
THE MATES STATE
The godfather of the NSW Right,
Graham Richardson, has declared
himself a lobbyist but is keeping
mum about which ministers he will
be visiting, saying he didn’t
necessarily have to talk to them,
he could ‘‘get things done through
other means’’.
NEWS, PAGE 9
ITALY HARDENS ITS
HEART TO REFUGEES
Filthy, terrified and mad with thirst,
they are often found close to death,
crowded in their hundreds on tiny
fishing boats. Paolo Totaro reports
on Italy’s way with African
WORLD, PAGE 11
immigrants.
e are woken at 6 and
counted in the cell. Mine is
12 metres long and just
over four metres wide,
holding 50 or 60 prisoners,
mostly Thais, mostly murderers and rapists.
The cell has one toilet, which is a hole in the
ground, and poor ventilation. I sleep in a face
mask because tuberculosis and pneumonia
are common. I’ve been in this jail for five
months, since my arrest in September.
My book, Verisimilitude, was a rather
clumsy first attempt at fiction – only 50
copies were printed and seven sold. I love
Thailand and respect the royal family. It was
never my intention to offend anyone.
For breakfast I have soy milk and a biscuit.
The prisoners wash and shave around
troughs covered in grime. The water is
changed once a week. Then there’s
assembly. We stand to attention as the Thai
flag is raised. We’re asked to pray to a large
gold Buddha. I use the time to collect my
thoughts and think about my loved ones.
The guards make long speeches in Thai. I
imagine they’re about prison etiquette.
I’m then taken upstairs with other
foreigners to clean another cell block.
After that we’re at leisure for a while. I used
to walk around, but I can’t help but encounter
the weak and the feeble – such as men with TB,
languishing on benches. It deadens me. So I
try to spend my time replying to the many
letters I receive. Letters keep me alive.
We are allowed one 30-minute visit a day,
but not on weekends or holidays. The
hardest part is returning to my cell after a
visit from family or friends. I break down
when I think how they’re suffering.
At 12 the lunch bell rings. The food is
mostly fish bones in hot water, extremely
spicy, with rice. I’ve tried it and felt unwell.
I can’t afford to fall sick – the mental strain
is enough – so my family send me some
chicken and a salad every day.
There are 20 or 25 cats that run into the
mess hall before the prisoners. Some men put
cigarettes in the cats’ mouths or do other
unspeakable things to them.
I am barefoot most of my day. It is partly a
security measure so we can’t climb the electrified, barbed-wire fence, and partly custom.
But the floors are covered with fish bones,
saliva and cat vomit, so my feet are black.
Continued Page 2
CANDID CABARET
He’ll happily bare all in public but the
actor Alan Cumming is feeling
apprehensive as he brings his new
cabaret show to Sydney this month.
Fortunately, he could seek advice
from his old friend and grand dame of
Cabaret, Liza Minelli. SPECTRUM, PAGE 8
Mark. The difference behind our
big bonus rate.
SYDNEY CITY fine, sunny 23°- 33°
TOMORROW: fine, late change 24°-34°
LIVERPOOL fine, sunny 22°- 39°
TOMORROW: fine, late change 21°- 44°
PENRITH fine, sunny 23°- 42°
TOMORROW: fine, late change 21°- 44°
WOLLONGONG fine, sunny 23°- 31°
TOMORROW: mostly fine 22°- 31°
EVERY week parents of private
school students are losing their
homes to bankruptcy actions
taken by cash-strapped schools
that can no longer wait for overdue fees.
There had been a 25 per cent
increase in schools pursuing
debtors to bankruptcy in the
past year, said Roger Mendelson, the chief executive of
Prushka, a debt collection
agency that represents more
than 400 private schools.
He said that as a result, ‘‘across
the nation a few homes every
week’’ were sold by trustees.
Mr Mendelson said the number would undoubtedly grow.
‘‘Schools are tightening their
attitudes. Previously schools
were prepared to carry debt and
to put up with parents who had
made promises and paid small
amounts on the drip feed . . .
‘‘There’s been quite a change
with private schools finding it
hard to balance the budget.’’
Mr Mendelson estimated that
many schools were carrying ‘‘seriously overdue’’ fee debts of between $1 million and $2 million.
Some parents owed $70,000.
‘‘A lot of people don’t realise
how often it’s the grandparents
who pay all or part of the school
fees,’’ he said.
‘‘If there’s any segment that
has been hit hardest [by the
financial crisis] it’s either those
who have lost their jobs, or retired people with independent
income.’’
The forecast rise in unemployment meant schools should prepare for hard times. ‘‘This
especially affects a lot of new
schools who bought land in the
past 20 years and built using
debt.’’ Mr Mendelson said religious schools in particular
were affected.
The chief executive of Christian
Schools Australia, Stephen
O’Doherty, said the need to use
debt collectors arose ‘‘from
time to time’’. Parents enrolling
a child at any tightly budgeted,
independent school had entered a contract, he said. An
education was provided in return for a set fee.
‘‘Stand-alone schools are set
up as independent companies.
The directors have a legal responsibility to ensure the financial
health of the school,’’ he said.
‘‘There are occasions when
the parents don’t pay their fees.
Provisions are made for hardship but there are parents
spending their money on other
things, so action is taken.’’
ISSN 0312-6315
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