Berlusconi insists he can still lead Italy

A feisty-sounding Silvio Berlusconi insists that despite defections from his shaky coalition he still commands enough support in parliament to enact urgently needed measures to save Italy from financial disaster.


“We maintain that there are no alternatives to our government until 2013,” when elections are due, the Italian prime minister said, addressing a political gathering by audio hookup on Sunday.

He was defying increasingly loud calls in the country, including from some from his own coalition’s ranks, to either broaden his government’s forces by bringing in opposition centrists or to have Berlusconi step down so that an interim government could be appointed until early elections could be held.

Berlusconi dismissed both scenarios as offensive to the electorate that had resoundingly voted for him in 2008 elections.

“I don’t see (the possibility) of broad backing for a leader put in place to the disrespect of Italians,” Berlusconi said. An interim government, “with a puppet as premier”, was likewise unacceptable, he added.

This week brings the first in a string of votes in parliament on reforms and other stopgap measures to get Italy’s finances in order and revive the dormant economy.

The prime minister insisted that his latest sounding out of his allies in parliament “has verified that we have the numbers, for sure” to pass the measures. But should the government fall short in the votes, Berlusconi said, early elections would be the only alternative.

Still, “We don’t want elections. We want to govern,” he added.

There is growing concern Berlusconi no longer commands enough loyalty among MPs to ensure the quick passage that European and international financial officials say Rome must achieve to avoid falling victim to a dramatic debt crisis like that bringing Greece to its knees.

During an economic summit in France last week, Berlusconi asked the International Monetary Fund to monitor the country’s reform efforts, a humiliating step for the eurozone’s third-largest economy.

If his forces lose upcoming votes on the measures, the Italian president, who has repeatedly called on Berlusconi to take decisive steps immediately to rescue the nation, could intervene and rule that it is time for a new government.

World surf champ Slater not slowing down

Thousands gathered on San Francisco’s Ocean Beach to see the 39-year-old American add to his legend by clinching the 2011 crown on Wednesday with a third round victory at the penultimate event, the Rip Curl Search.


It gave him an unassailable lead over his nearest rival, Australian young gun Owen Wright.

“I’ve dedicated my whole life to surfing and to competing so, to go a whole year and to win a world title and have it all pay off for all that work and effort, it’s a really rewarding feeling,” said Slater.

Since the ASP World Tour rankings began in 1976, no one has dominated men’s surfing like Slater.

While Australia’s Layne Beachley has come the closest with seven world titles to her name, her compatriot Mark Richards with four remains second on the men’s list.

This year he has won three world tour events and reached four of the past five finals.

He shows no sign of departing the scene anytime soon.

“People always talk about my age. I’m 39 going on 40 in a few months and, to me, that’s literally just a number,” Slater said.

“If you can prove people wrong and stay healthy… to me, I don’t see why at 50 I can’t be in better shape than right now, and I think I’m going to be.”

Securing the title at this event was bittersweet for Slater, coming a year to the day since great rival and friend Andy Irons was found dead in a hotel room.

“It’s like someone’s looking over us here – it’s probably Andy.

“It’s sort of weird. I was thinking what’s the chances I do this on the anniversary of unfortunately Andy passing away.

“In a way, it makes it a lot more special for me than any other world title.”

While Wright has lost out to Slater this year, he feels his time will come and he believes it’s possible someone among the current crop of young stars could even challenge Slater’s achievement.

“You only have to look at the younger generation coming through now, like Julian (Wilson), myself, Gabriel (Medina),” said Wright.

“Those guys all have the potential to be on the tour for more than another 10 years and the potential to win world titles.

“Kelly’s been doing 20 years now and 11 is a big feat. I don’t know if anyone’s ever going to match it but there are definitely guys out there who have the potential to.”

Slater wasn’t surprised by Wright’s emergence as his main threat this year.

“Aussies are just competitive by nature. There’s so many surfers, so it never surprises me when I have someone like Owen challenging for the title,” he said.

“The level of surfing there is pretty remarkable.”

Slater’s title clinching heat wasn’t an easy one as he scored 15.13 in the four-foot swell to narrowly beat Australia’s Dan Ross (14.40).

He took until the final two minutes to secure the victory, needing a score of 6.88 from his last wave and scoring 7.6.

“I’ve been pretty stressed about it to be honest,” he admitted.

“I’m just glad it’s over.”

ADFA ‘rife with strife, better than 1990s’

Australia’s premier military officer education institute remains rife with low-level sexual harassment of female cadets but it’s much improved on the 1990s, when high-level sexual misconduct was rampant.


That’s the summation of a long-awaited review of the treatment of women at the Australian Defence Force Academy (ADFA) in Canberra, conducted by Sex Discrimination Commissioner Elizabeth Broderick.

The review found almost three-quarters of female cadets and 30.3 per cent of male cadets at ADFA had experienced unacceptable sex-related harassment.

At the more serious end of the spectrum, 2.1 per cent of women and 0.2 per cent of men reported being forced into sex without consent or against their will.

But Ms Broderick said her review found that the ADFA of 2011 was “a vastly improved institution” compared with the 1990s.

At that time a succession of sexual scandals prompted a broad-ranging review by Bronwen Grey, who found a high level of unacceptable behaviour.

Ms Broderick said ADFA culture had evolved significantly from that period but further reform was needed.

“At ADFA we found, firstly, widespread low-level sexual harassment, an environment where the repeated and sustained telling of sexually explicit stories and offensive jokes is prevalent,” she told reporters in Sydney.

“Second, we found that there were inadequate levels of supervision of cadets, particularly after hours and particularly of first-year cadets.”

Ms Broderick said ADFA complaints processes were cumbersome, creating confusion and anxiety for the person complaining.

As well, ADFA had a high staff turnover – there have been six commandants in the past five years – and that has produced instability and inconsistency.

Ms Broderick’s review was launched amid the public outrage over the “Skype scandal”, in which a male ADFA cadet filmed himself having consensual sex with a fellow female cadet without her knowledge, streaming the video live over the internet to cadets in an adjacent room.

The academy’s deputy commandant, Paul Peterson, said women travelled a harder road at ADFA than men, not because of systemic disadvantage of mistreatment but because of the “challenging realities of service in the military”.

One former staff member said he became aware of a competition among male second-year and third-year cadets to score a treble – to have sex with a first-year female from the army, navy and air force.

A former female cadet cited a strong culture of “commodification” of women, particularly as sexual objects, with female cadets treated by male colleagues as game after-hours rather than as respected colleagues.

Ms Broderick made a total of 31 recommendations for further improvement.

Defence Minister Stephen Smith said he had asked Defence Department secretary Duncan Lewis and Australian Defence Force (ADF) chief David Hurley to assess the best way forward in implementing the recommendations.

Mr Smith said those would be considered alongside the findings of five reviews launched out of the Skype scandal.

These other reviews are looking into use of alcohol and social media in the defence force, personal conduct of defence personnel, management of incidents and complaints and leadership pathways for women in defence.

“ADFA remains the pre-eminent tertiary and military education training institution for future leaders of the ADF,” Mr Smith said.

“The Broderick Review will assist Defence to further develop the strategic direction for the academy.

“Importantly, it also enables Defence to build on its commitment to zero tolerance for unacceptable behaviour and providing a safe and equitable workplace within ADFA and across Defence.”

Air Australia promises cheap overseas flights

Australia’s newest budget airline says it isn’t out to compete directly with embattled Qantas.


From November 15, Brisbane-based Strategic Airlines will add more routes and rename itself Air Australia.

Its planes and cabin crew will change their colours from red, white and blue to the nation’s iconic green and gold sporting colours, with a boomerang as its motif.

Speaking at the airline’s Brisbane launch on Thursday, Queensland Attorney-General Paul Lucas said the airline’s birth should be a warning to Qantas, which has damaged its reputation through debilitating contract negotiations with its workers.

Mr Lucas said Air Australia was poised to shake up the market.

“Those airlines that have been around Australia for a long time need to understand that no-one has a monopoly of calling itself the Australian airline,” he said. “This airline is 100 per cent Australian owned, is hungry … and it is out there wanting to grow its market share.

“That can only be good for tourism and can only be good for Australian customers.”

Chief executive Michael James said the airline would not be competing directly with Qantas or Jetstar and would focus on under-serviced routes, particularly direct international flights from Brisbane and Melbourne.

“We’re on a bit of a different model,” he said. “We’re trying to offer them a different service to fly directly out of these airports.” He added he knew it was a “turbulent and competitive” environment.

The airline will absorb existing Strategic Airlines routes from Brisbane and Melbourne to Phuket and Brisbane to Bali, with Honolulu to be added in December.

Further on, direct flights from Melbourne and Brisbane will also head to the west coast of the USA, Vietnam and Japan. Domestically, Strategic flies to Western Australia’s mining towns, with routes between Brisbane and Port Headland and Perth and Derby.

Those routes will remain, and services to Darwin and Melbourne will be boosted. Sale flights will be available until November 15 from $249 one-way to Bali, $329 to Phuket, and $349 to Hawaii out of Brisbane and Melbourne, running between two and six times a week.

Non-sale prices would then increase by between $20 and $150. No other airline was flying to Honolulu from Brisbane or Melbourne, Mr James said.

“I think it is re-educating Australia that you don’t have to go via Sydney anymore,” he said. Passengers will also be offered their first bag free.

The airline’s frequent flyer program, which is yet to be created, will allow members who fly nine times to get the 10th flight free. Air Australia’s fleet will be boosted from three A320s to six by mid-2012 and one A330 to three by May 2012.

Staff would also increase from around 300 to 3000 by 2021.

Syria regime, opposition plead for help

Syria’s regime has urged the Arab League to help it against the US, which it accuses of involvement in ‘bloody events’, as the opposition calls for the ‘international protection’ of civilians.


The pan-Arab group, which is trying to implement its blueprint to end the Syrian government’s deadly eight-month crackdown on protesters, says it received the request in a letter from Syrian Foreign Minister Walid Muallem.

The letter accused Washington “of actual involvement in bloody events in Syria” and asked the 22-member League to “condemn the involvement and to do what is necessary to end it”, the group said in a statement.

It did not provide any details on the charges of US involvement in the Syrian bloodshed.

But Syria has in the past accused the US ambassador to Damascus, Robert Ford, of inciting violence by visiting protest hubs, before Washington recalled him last month following “credible threats against his safety in Syria”.

In the letter, Syria sought Arab assistance “to provide the appropriate atmosphere to implement the agreement”, said the statement.

Arab League deputy chief Ahmed Ben Hilli told AFP that Syria had sent a letter detailing the steps it took towards carrying out the plan, but he refused to elaborate.

The League has called an emergency meeting in Cairo on Saturday about Syria’s failure to implement its roadmap, which calls on President Bashar al-Assad to open talks with the opposition and withdraw tanks from the streets.


The US State Department said Monday that the Assad regime is beginning to feel the “pinch” from US and European Union sanctions.

State Department spokeswoman Victoria Nuland also said that an increasing number of Syrian military officers were defecting as international condemnation grows.

A month after Syria cracked down violently on protests that erupted in mid-March, the United States and the European Union imposed their first sanctions against the regime and its officials. They have since tightened them.

One goal of sanctions is “to stanch the money that the regime uses… to fund its armed insurrection against its own people”, Nuland said.

Another goal is “to make those around Assad who continue to support him and to continue to support his tactics think twice about whether they are on the right side of history in Syria”, she added.

Elsewhere on the diplomatic front, British Foreign Secretary William Hague called for greater pressure on the regime, rather than military intervention, to end the violent repression in Syria.

“Of course, the UK would like to be able to pass a resolution at the UN Security Council bringing the condemnation of the world on the use of force against civilians by the Syrian regime,” he said.


On the ground, five civilians were killed as heavy artillery clashes erupted between regime forces and presumed army defectors in the central city of Homs, a human rights group reported.

It was the fifth day of a “brutal siege on the brave city”, said the Syrian Observatory for Human Rights.

The opposition Syrian National Council appealed to the international community to send “Arab and international observers, instantly, to the city of Homs to oversee the situation on the ground, and prevent the regime from continuing to commit brutal massacres”.

The SNC urged the United Nations, the Organisation of Islamic Cooperation and the Arab League to act “to stop the massacre committed by the regime” in Homs, which it declared a “humanitarian disaster area.”

It also called for the evacuation of civilians from “areas that are under shelling and destruction” in the industrial city, a tinder box of sectarian tensions that risk escalating into a civil war.

Assad’s forces, it said, had “launched a large-scale attack” overnight on parts of Homs, and that “indiscriminate slaughter is being committed by the regime’s militias.”

The army was “using heavy artillery, rocket launchers, and warplanes to bomb populated residential neighbourhoods” in Homs.

Homs is the only major city to remain outside the regime’s control after military operations in Hama, Deir Ezzor in northeastern Syria and the coastal cities of Latakia and Banias reined in the dissent.

PM steps down in deal to save Greece

The two main Greek political parties have agreed on February 19 as the best date for early elections in the debt-strapped eurozone country, the finance ministry says.


At a meeting held late on Sunday alongside one that grouped party leaders George Papandreou and Antonis Samaras, delegations from the socialist PASOK and the rightist New Democracy agreed the “most appropriate date” for the elections would be February 19, the ministry said in a brief statement.

Earlier, political leaders in Greece clinched an historic deal to form a national unity government to haul the debt-wracked country, and the eurozone, back from the brink of disaster.

Prime Minister George Papandreou crucially agreed to step down, removing a key stumbling block which had held up an accord just hours before nervous financial markets reopen on Monday with the euro in the line of fire.

“An agreement was reached to form a new government to immediately lead the country to elections after ratifying the decisions taken by the European Council,” the Greek president’s office said in a statement.

After a closed-doors meeting between Papandreou, opposition chief Antonis Samaras and head of state President Carolos Papoulias that lasted almost two hours, the statement was passed around to a waiting scrum of reporters from around the world, causing a near-stampede.

“Prime Minister George Papandreou has already stated that he will not lead the new government,” it added.

“Tomorrow there will be a new communication between the prime minister and the head of the opposition on the new prime minister and the new government.”

With patience in Europe and in Greece wearing thin, pressure had mounted throughout the day for an agreement that Papandreou had said was needed to keep Greece in the eurozone.

European leaders had become increasingly frustrated at the political impasse in Athens at a time when they want to press ahead with hard-won agreements reached in late October on tackling the eurozone debt crisis.

Polls published in the Sunday newspapers show the Greek largely in favour of a unity government and also wanting to keep the euro but the country’s EU peers had made clear that they were fed up with the agony and required a clear message — was Greece to remain in the eurozone or not.

If it was, then Greece must take the painful medicine to make it possible; if not, then the country would be on its own.

The accord comes just ahead of a key Eurogroup finance ministers meeting on Monday to discuss whether to release an 8 billion euro slice of bailout cash that Greek Finance Minister Evangelos Venizelos says is needed by December 15 to keep the country afloat.

There will likely be no let-up too in the pressure on Athens to implement stinging austerity measures in return for the cash payment, available under the first May 2010 Greek bailout package.

The new government will implement the terms of an October EU bailout deal that calls for further harsh austerity measures on Greece, already at breaking point due to a shrinking economy and rapidly rising unemployment.

Greek media earlier tipped Finance Minister Venizelos to take over from Papandreou as the talks got bogged down for almost two days in a dangerous game of brinkmanship, with Samaras insisting on immediate elections, which Papandreou resisted as too risky.

The damaging political stalemate threatened to see the country run out of cash within weeks after European leaders secured their

hard-won overall eurozone debt crisis accord at a summit late last month.

Greek business and church leaders piled the pressure on politicians to agree a national unity government as quickly as possible, saying the country’s future was at stake.

“The future of all of us for the next decade is being decided right now,” the Greek federation of enterprises said in a statement Sunday.

“The more the uncertainty lasts, the more the country is literally hanging by a thread,” the group said, calling for a “bold compromise of political maturity and

Meanwhile, Constantinos Michalos, head of the Athens Chamber of Commerce, said the stalemate needed to be broken by Sunday, warning otherwise of dire consequences when the financial markets open again on Monday.

“A solution is required immediately otherwise the country risks finding itself out of the eurozone tomorrow,” said Michalos.

Sunday capped a week that has been tumultuous even by the recent standards of Greece, which finds itself trapped in the eye of the eurozone debt storm.

Papandreou set the ball rolling on Monday with a shock announcement that Greece would hold a referendum on the terms of its October bailout deal which calls for further fierce austerity measures.

The move stunned fellow European leaders, sent global markets into a tailspin and earned the Greek prime minister a humiliating dressing-down by the France and Germany on Wednesday ahead of a G20 meeting.

Hastily retracting the proposal, Papandreou then turned disaster into temporary victory by winning a nail-biting confidence vote early on Saturday by offering to step down in favour of a unity government.

The Greek people, meanwhile, battered by two years of stringent austerity measures that have crippled the economy and sent unemployment soaring, appear to have had more than enough of their squabbling leaders.

“The people are suffering at the moment and they (politicians) are not budging,” said Marianna, a shopkeeper.

“A unity government with whom? With the same people? We will have the same results,” she said gloomily.

“Papandreou. Samaras. They are all the same,” said Takis Karalambos, as he sipped coffee outside a market in Athens.

Holden denies union claims over Commodore

Holden has denied union claims that the design and engineering of the iconic Commodore is likely to be moved overseas.


The Association of Professional Engineers, Scientists and Managers Australia (APESMA) has said Holden had advised it was “highly likely” the Commodore would be engineered and designed overseas after 2014.

The shift would cost 360 engineering jobs in Australia and thousands of job losses in the related auto supply manufacturing industry, APESMA has said.

However, General Motors Holden Australia director Mike Devereux has denied this and described the union comments as disappointing.

He said Holden did have discussions with the union about possible options available to the car manufacturer in the future, but it had not made any decisions yet.

“The back half of this decade … is frankly anybody’s guess. As to what it is Australian customers are going to want to drive in 2016, 2017, that’s what we’re trying to plan right now,” Mr Devereux said.

He said the union’s comments to the media were not only “strains of half-truths” but also damaging.

“It’s illogical if the union’s goal is to secure the bright future of jobs and investment in this country. What we’re seeing today in the newspapers is the opposite of helpful,” he said.

APESMA chief executive Chris Walton said Holden should be able to confirm the future of the Commodore because of the planning time needed in manufacturing the car.

“They would have to make decisions in the next few months,” Mr Walton said.

“What they’re trying to, unfortunately, suggest to the community is you don’t have to worry about that until 2014, when in fact we need to worry about it now.”

He said that because of the lead time in car design, job losses could commence early next year.

“We hope Holden will come out and confirm that they will engineer and design the post-2014 model in Australia.

That would be the best outcome,” Mr Walton told AAP. Mr Devereux gave an assurance earlier on Thursday that the Commodore would be a fully Australian product for a long time to come.

“All I can tell you is that Holden is, for example, the Commodore, 100 per cent designed, engineered, manufactured in Australia today, and the next Commodore, 100 per cent designed, engineered, manufactured in Australia, for many, many, many, many more years,” he told ABC radio in Melbourne.

One thing the union and Holden do agree on is the need for the Australian government to take action.

“The Australian government has historically co-invested in vehicle companies and we support that and we suggest that should tie that money to a commitment from Holden to keep the engineering and design in Australia post-2014,” Mr Walton said.

Mr Devereux said it would also welcome co-investment from the government.

“Australia needs to fight for its right to make things like automobiles in this country,” he said.

Victorian manufacturing minister Richard Dalla-Riva said the speculation was unwarranted, premature and occurring amid enterprise bargaining negotiations. Richard Dalla-Riva said Holden had given a positive commitment to the government and manufacturing in Victoria.

Swan’s surplus dream over: forecaster

Recent economic developments should tell Treasurer Wayne Swan that his dream of bringing the budget back to surplus in 2012/13 is over, and it might not happen for another two years, an independent forecaster says.


In his latest Budget Monitor, Deloitte Access Economics director Chris Richardson says while that outcome would be politically “horrendous”, a surplus next year was a line in the sand drawn by politicians, not by economists.

He says when Mr Swan updates his forecasts in his soon-to-be-released mid-year budget review, he can tell the public that fading global prospects and weak markets at home have delayed the return to surplus, possibly until 2014/15.

“(But) a fired-up opposition will remind the public that no Labor government has run a surplus since 1989/90,” Mr Richardson says.

Access is forecasting a small deficit of $1.9 billion in 2012/13, so Mr Richardson questions whether Mr Swan would still “go for it” and tighten fiscal policy to get over the line with a surplus, despite rising economic risks.

In the May budget, the government forecast a surplus of $3.5 billion in 2012/13.

“With a government under pressure and desperate to get a surplus, it is a big deal, and we suspect the government will try extremely hard to get a surplus in 2012/13, come hell or high water,” he said.

However, revenues have been hurt by weakness in the jobs market and a stumble in company profits, while capital gains revenue will be hit by the downturn in sharemarkets and house prices.

“Both weaker profits and lower wealth generate large and lingering impacts on tax collections,” Mr Richardson said.

Aside from downgrading the 2012/13 budget position, he predicts that the 2011/12 deficit will be $31.2 billion rather than the government’s forecast for $22.6 billion shortfall, while in 2013/14 there will be a $1.7 billion deficit instead of a $3.7 billion surplus.

In 2014/15 he is forecasting a $5.4 billion surplus, only slightly smaller than the $5.8 billion surplus predicted by government.

Mr Richardson said forecasts for world growth are weaker, with downside risks even greater as there is a chance “the ticking time bomb of Europe’s financial markets could explode”.

In Australia, households are saving rather than spending, the government’s stimulus measures are winding down, the recovery in housing construction “has turned to ashes” and a still-strong Australian dollar is boosting imports and eating into exports.

At the same time, capital expenditure (capex) outside of mining is modest.

“Add in risks around what is happening in Europe and the US, and you’d be forgiven for thinking Australia’s economy is in for a bad year,” he said.

“Yet it isn’t, because it has two big aces up its sleeve.”

There is still a lot of the recovery from last summer’s flood to come through, with coal exports likely to jump in early 2012, while mining capex is “not only going like a train, it has a momentum that is hard to stop”, he said.

News Ltd domination ‘laughable’, inquiry hears

Allegations that News Ltd pursues an anti-Labor agenda are absolutely right and its domination of the Australian media is not democratically viable, an inquiry into the media has been told.


Dr Martin Hirst, associate professor of journalism at Deakin University, told the independent inquiry he was “blown away” by newspaper coverage of federal politics, particularly in News Ltd’s national broadsheet, The Australian.

“It seems to me the people that are arguing there is an anti-Labor bias … are absolutely right,” he told the inquiry’s first public hearing in Melbourne on Tuesday.

“Every story about federal politics is slanting in a way that’s against (the government). “If they can find a way of attacking (Prime Minister) Julia Gillard … they will do so.”

Dr Hirst said opinions presented in the Australian media were predominantly centre-right views, and the media often made excuses for questionable behaviour by claiming it was in the public interest.

Robert Manne, professor in politics at La Trobe University, said it was not democratically viable for Rupert Murdoch’s News Ltd to own 70 per cent of the Australian print media, calling the situation “laughable”.

“It is my opinion that the 70 per cent should be broken up,” Prof Manne said.

“I don’t regard it as defensible that one corporation owns 70 per cent of the statewide and national newspaper circulation. “I don’t think there’s any democratic country in the world with a similar profile of newspaper ownership.”

Prof Manne said he had been a victim of the Melbourne Herald Sun columnist Andrew Bolt in 188 articles over several years, attracting thousands of reader comments which were malicious and defamatory.

He expressed frustration that victims of defamatory or inaccurate comments had no right of reply in the publication in which they were attacked, saying he had given up trying to defend himself through the News Ltd paper’s letters pages because his letters were never published.

The fear of being victimised in newspapers was frightening people into silence, he said. He said independence was less important than diversity in the media.

“I don’t have any objection if Rupert Murdoch wants to have papers reflecting his world view,” he said.

“I just want there to be a lot of other papers reflecting different world views. “I do think the relationship between government and citizens is mediated to a very large extent by the media.

“The most important parts of that media are still the papers and what they influence, radio and television, and that still forms the picture of the world for most citizens.”

Eric Beecher, publisher of commentary website Crikey, called for discipline in the media, saying self-regulation was not working. “We need a parent,” he said.

“There is enormous competition for stories, for scoops … as a result of that competition and to some extent, fuelled by the growing commercial pressures, sometimes we overstep the mark.”

He said government funding of the media through an independent body was not ideal but it was required as the current print media business model was in the process of unravelling.

The inquiry, established in response to the UK phone-hacking scandal and chaired by former federal court judge Ray Finkelstein QC, will report to the government in February.

Award-winning director Watt dies

Courage, humour, intelligence, generosity, honour and grace.


With those words, Sarah Watt’s family captured the life of the award-winning Australian filmmaker.

Watt, the wife of actor William McInnes, died at her Melbourne home on Friday after a long battle with cancer.

McInnes and the couple’s two children, Clem, 18, and Stella, 13, said the 53-year-old “died peacefully at home filled with the love she gave to those who adored her – her family”.

“A life of courage humour, intelligence, generosity, honesty and grace,” they wrote in a death notice in The Age newspaper.

Watt, who was diagnosed with breast cancer in 2005 and secondary bone cancer in 2009, and McInnes wrote openly about their lives in the book Worse Things Happen at Sea, released this year.

“It’s a book about saying goodbye to people and realising that shit things happen for no reason sometimes,” McInnes said.

It was Watt’s animated shorts that first gained the writer and director attention, while her 1995 work Small Treasures won awards including best short film at the Venice Film Festival.

Her debut feature film Look Both Ways, starring McInnes, was a triumph, scooping the pool at the Australian Film Institute Awards in 2005.

The low-key movie – live action interspersed with animated sequences – won best film, best director and best original screenplay.

Actor and family friend Andrew Gilbert said the My Year Without Sex (2009) director was able to transform the mundane into something special.

“I think she just had an ability to see in the mundane or in the normal what was going on beneath the surface and to capture it,” Gilbert told the ABC.

“I mean, a lot of people see things and are aware of things, see stories and hear stories, but she just had that great ability to capture them, not only visually but also in terms of making stories and narratives out of them and combining them into something unique.”

On Twitter, Palace Films described Watt as a truly extraordinary artist.

“Terribly sad to hear of the passing of AFI award winner and talented filmmaker Sarah Watt,” Film Victoria posted on Twitter.

In Worse Things Happen at Sea, Watt wrote candidly about her life after discovering the cancer had recurred.

“I don’t want a bucket list – I just want my life that I love for as long as possible,” she wrote.

“Cancer’s a disease, and good people die.”

In the end, Watt got her wish to die peacefully at home, surrounded by her loving family.

“I hope when my time comes I’ll be at home,” she’d told Woman’s

Day magazine.

“William will be there, and offer me a cup of tea, and when he’s making it I will drift off into a nap, then into the longest nap. And William will bring the tea back and it won’t be sad.”