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Thursday, 9 July 1998
Page: 5340


Senator ABETZ —My question is directed to the Leader of the Government in the Senate. Can the leader inform the Senate of any additional information received from Indonesia regarding Mr Keating's multi-million dollar piggery deal, which has implications for parliamentary standards and the protection of the Commonwealth's revenue base? What would be the capital gains tax implications of such a transaction that he may wish to outline?


Senator Faulkner —Madam President, I rise on a point of order. A number of points of order have been taken in this chamber recently about hypothetical questions. I think they have been taken wrongly and unfairly, but on this occasion I draw your attention to the question that Senator Abetz has asked and ask you to rule it out of order. It is quite clearly contrary to standing orders. That is a hypothetical question.


Senator Abetz —On the point of order, I remind Senator Faulkner and the Senate that I am not asking anything that is hypothetical. I am talking about additional information actually received, not fabricated like those from the other side. This is actual information received which has implications for parliamentary standards. That is clearly within the province of the Leader of the Government to answer. I also asked about the protection of the Commonwealth's revenue base. That is also something clearly within the province of the Leader of the Government to comment upon. So, Madam President, clearly all elements of the question are in order.


The PRESIDENT —I believe that the question is in order but the manner of answering it may indicate a breach of the standing orders. I will deal with that if that is the case.


Senator HILL (Environment) —The point is that the Australian Labor Party have been making a big issue of conflict of interest and, to use Senator Robert Ray's expression, perceived conflict of interest. They have attacked our side and they have attacked our ministers on the basis of what they say is conflict of interest.

In the case of Mr Keating, he was Prime Minister of this country when he was conducting this highly complex set of arrangements—he was selling his half interest in his pig venture to Indonesian businessmen while at the same time he was negotiating a defence treaty with the President of Indonesia. This is as a Prime Minister dealing with the highest matters of state with Indonesia while at the same time he was negotiating the sale of his piggery interest to Indonesians. What about a conflict of interest or perceived conflict of interest in that regard?

Yes, we have received further information from Indonesia overnight. That information purports to be a statement of record of what Mr Keating's solicitor instructed in relation to dealing with the transaction.


Senator Carr —Should he not have signed the treaty?


The PRESIDENT —Senator Carr, cease interjecting!


Senator HILL —I have caused inquiries to be made this morning upon which I believe that the statement is authentic.


Senator Carr —Oh, you believe, do you?


Senator HILL —The first paragraph states:

"HE"—

that is, His Excellency Mr Keating—

is to sell the half-ownership of the Parkville and Glengallan piggeries to William Soeryadjaya for a purchase price of US$6,000,000.

It goes on, at item 2:

In order to reduce tax liability and to avoid any possible political backlashes—

Senator Carr—

the payment of the US$6 mil is structured in the following manner:

It goes on to a series of structures. It tells us how the first instalment of $2.5 million would be divided into a direct fund transfer. Then it goes on to say:

The remaining US$1.9 mil would be treated in a way that it would look like an equity injection of the same amount to the company, whereas it would actually be channelled out of the company for the benefit of "HE".

The document then talks about the remaining $3.5 million, which it says would not be recorded in any official document.


Senator Carr —So you would not have signed the treaty.


Senator HILL —Conflicts of interest! What does the Labor Party say about this? This was going on while this man was the Labor Prime Minister of Australia. Out of the Prime Minister's office he was seeking to sell his business to the Indonesians at the same time as he was negotiating defence treaties with the Indonesians. All this evidence suggests at the very least that he was conducting that transaction in a way to minimise taxation consequences and to minimise any political embarrassment. This is a serious matter and it should be considered as a serious matter. To further assist in that consideration, I table the document to which I have referred.