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Lateline -

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Tonight - the Prime Minister stands by his decision to go to war with Iraq, but will he declare a
truce over the PBS amendment... I'm getting legal advice overnight and I'll give a final position
from the government tomorrow morning. This program is captioned live. Good evening, welcome to
Lateline. I'm Maxine McKew. Tony Jones is taking a short break. Coming up tonight - the fate of the
Tasmanian Governor and Air Marshall Ray Funnell defends the letter he signed along with 43 other
prominent Australians against charges of partisanship. He joins former Liberal Senator Michael
Baume in debate. That's coming up shortly, but first our other headlines. Four workers die in an
accident at a nuclear power plant in Japan

Howard stands by actions

Howard stands by actions

Reporter: Kim Landers

MAXINE McKEW: The PM has launched a spirited defence of his Government after a group of former
military chiefs and diplomats accused him of misleading the public about the reasons for going to
war in Iraq.

They also claim John Howard has made Australia more of a terrorist target.

But it's not the only political battle the PM has been fighting.

He's getting legal advice tonight before deciding whether to support Labor's changes to the US free
trade deal which were finally unveiled today.

From Canberra, Kim Landers reports.

KIM LANDERS: After a week long political stand-off over the US free trade agreement, Labor finally
revealed its hand, tabling the three key amendments it's demanding before it'll pass the deal in
the Senate.

SENATOR STEPHEN CONROY, OPPOSITION TRADE SPOKESPERSON: And I now seek leave to table the legal
opinions supporting Labor's amendments.

KIM LANDERS: It wasn't without a hitch, the Greens complaining there hasn't been enough time to
consider the changes.

SENATOR BOB BROWN, GREENS LEADER: Nor is it our role to get things out of the way for the big
parties to have an election.

KIM LANDERS: But with this possibly the last sitting week before an election, Mark Latham outlined
the amendments at a media conference today, saying the threat of multi-million dollar fines would
stop big drug companies from trying to prevent the sale of cheaper medicines.

MARK LATHAM, OPPOSITION LEADER: I would have thought that a $10 million penalty plus compensation
to the Commonwealth, the states and the territories and the generic company, plus the possibility
of the confiscation of profits that you've made - that's quite a substantial deterrent.

KIM LANDERS: Soon after, in Question Time, he pressed the Government for a response.

MARK LATHAM: Will the Government support Labor's policy to protect the PBS and ensure that
Australians have access to cheaper medicines?

JOHN HOWARD, PRIME MINISTER: I'll be very happy when I do see the amendments to have a look at them
and to communicate to the Parliament what the Government's attitude might be.

KIM LANDERS: And tonight, after a quick look at Labor's changes, John Howard had this response.

JOHN HOWARD: I'm getting legal advice on it overnight and I'll give a final position from the
Government tomorrow morning.

KIM LANDERS: The group representing Australia's prescription medicines industry is also getting
legal advice about the changes.

Medicines Australia says much of the debate has been ill-informed and it's called for an end to the
politicking.

The PM's also been fending off an attack on a second front, this time over the war in Iraq.

MARK LATHAM: Doesn't the Government now face an unprecedented crisis of credibility as a result of
its repeated dishonesty?

KIM LANDERS: The debate over whether the Government misled the Australian public about the case for
war has been reignited by stinging criticism from a group of 43 former military leaders and
diplomats, headed by two former Defence Force chiefs, two Navy and one Air Force chief.

JOHN HOWARD: May I say to the 43 who penned that letter, in order to establish a charge of
deception you have to prove that the Government deliberately set out to mislead the Australian
people and they have not done that, Mr Speaker.

KIM LANDERS: And John Howard's questioned the impact of their intervention, saying all but one had
left their posts before September 11.

JOHN HOWARD: I'm not going to cop a charge of dishonesty against myself or against my Government.

The argument that I took this country to war on a lie, is itself a lie, Mr Speaker.

KIM LANDERS: The PM also emphatically denies the involvement in Iraq has made Australia more of a
terrorist target, while one of his Coalition back benchers has launched a counter attack of her
own.

DE-ANNE KELLY, NATIONAL PARTY MP: These doddering daquiri diplomats - would they have done any
different?

KIM LANDERS: As for John Howard, he's prepared to stand on his record.

Kim Landers, Lateline.

(c) 2006 ABC |

Butler resigns as Tasmanian Governor

Butler resigns as Tasmanian Governor

Reporter: Gary Magnussen

MAXINE McKEW: Tasmania's Governor Richard Butler has resigned.

In a statement issued a short time ago, Mr Butler has decided to leave the vice-regal position
after 10 months in the job.

Richard Butler returned to Tasmania from his holiday in Sydney only yesterday, dodging the waiting
media.

Disquiet about his ability to perform in the role of gGovernor has grown, after three senior staff
resigned while he was on leave.

We cross live to the ABC's Tasmanian political reporter Gary Magnussen.

Gary, this resignation - has it been offered or extracted, do you think?

GARY MAGNUSSEN: At this stage, Maxine, that would be speculation.

The Premier left Government House without stopping and explaining his side of the matter to the
waiting media.

The Governor's stand-in official secretary released a statement shortly thereafter, saying that the
Governor would resign effective immediately because of what he has described as a malicious
campaign against him which he judged would continue and would continue to damage the good name of
Tasmania.

MAXINE McKEW: And as the Governor sees it, what has been the nature of that malicious campaign and
why does he consider it to be so debilitating?

GARY MAGNUSSEN: The Governor has alluded to this campaign in the past.

Today one of his good friends and supporters came forward and said that it was a campaign by
conservatives, and also alluded to one of the newspaper groups as well - that were basically
conducting a payback for the Peter Hollingsworth situation.

MAXINE McKEW: And this decision, how do you think the Tasmanians will receive it?

Richard Butler has only been in the job 10 months.

He was put there by the late Jim Bacon who had tremendous hopes for the great goodwill that Richard
Butler would bring to this role.

GARY MAGNUSSEN: It may well be a mixed response, Maxine.

Talkback callers today, for argument's sake, seemed to support Mr Butler.

However, for example, some of that great - some of the great hopes at least that Jim Bacon had for
Mr Butler haven't been fulfilled.

For example, the ambassadorial role opening doors.

In fact, the business community say they've heard nothing from Mr Butler during his time down here,
so that was a great point of contention. Combined with his $370,000 a year salary, which set the
ball rolling in terms of questions being asked and questions, as Mr Butler has pointed out in his
statement, that would continue to be asked, you would imagine, for the term of his - if he were to
see out his full term - for the remainder of that term.

MAXINE McKEW: Just on the question of the staff who resigned at Government House, do we know any
more?

This has happened in the last couple of days leading up to tonight.

Do we know any more about their grievances?

GARY MAGNUSSEN: No, the staff are keeping quiet on exactly why they have resigned, which has led to
more speculation as to why they resigned.

There were some reports there were rows between the Butler family and the staff about the way they
were conducting business at Government House.

But again, at this stage, that is mere speculation.

MAXINE McKEW: How long will the Butler family remain in Government House, and I take it the
Lieutenant Governor also takes over in the interim.

GARY MAGNUSSEN: Yes, the Chief Justice will step into that role now as Mr Butler's resignation is
effective immediately. However, the Butler family will remain in Government House in Tasmania until
September 3, to give them time to organise their departure.

MAXINE McKEW: For those details, Gary Magnussen in Hobart thanks very much indeed.

(c) 2006 ABC | Privacy Policy

lieutenant governor also takes over in the interim. Yes, the chief justice will step into that role
now as Mr Butler's resignation is effective immediately, however the Butlers will remain in
Government House until 3 September to give them time to organise their departure. For those
details, at a Japanese nuclear power plant, coincidentally on the anniversary of the Nagasaki
atomic bombing. Several other workers were injured and the reactor shut down, following a steam
leak that caused the accident. Officials are claiming tonight that the reactor is in a stable
condition, that the steam escaping is not radioactive, and that there's been no contamination of
the surrounding area. Stephen McDonell reports. The Mihama nuclear power plant is 320km west of
Tokyo. There, late this afternoon, workers entered a building housing the reactor's turbines to
take measurements. When steam measuring 200 degrees Celcius filled the turbine room it killed at
least four workers and others are being treated in hospital. The Kansai Electric Power company said
tonight that there's been no radioactive contamination of the nearby area. 10 people are believed
to have sustained burns due to exposure to secondary steam. There are no concerns about the cooling
of the reactor. It is in a stable condition. The steam does not contain radioactive material and
there is no change in the indicators on monitors outside the facility. Few details of the accident
have been revealed so far, with the company and the goverment saying investigations are continuing.
It is regrettable that people have been hurt and killed. I haven't heard the details, but it's
important to find the cause and prevent such incidents from happening again. This accident is bound
to increase public scepticism in Japan's nuclear industry, following the uncontrolled chain
reaction 5 years ago that killed two workers and last year's shutdown of 17 power plants, following
revelations of fabricated nuclear safety documents. Stephen McDonell, Lateline. An Iraqi judge says
former governing council member Achmed Chalabi and his nephew will be arrested as soon as they
return to the country. There are now warrants for the arrest of both. Achmed Chalabi has vowed to
return from Iran to face the charges, but his nephew, head of the tribunal that will try Saddam
Hussein, says he fears for his life if he travels back to Baghdad from London. The political
developments come as Shiia cleric Moqtada al Sadr vows to keep fighting in Najaf. Norman Hermant
reports. They are outgunned and, by all accounts, no match for the powerful force of US Marines
that surrounds them. That the insurgents in Najaf are fighting on is not a surprise to most Iraqis,
but the latest political bombshell is. Ahmed Chalabi - for so long a key US ally in Iraq - is now
facing an arrest warrant. He's wanted on counterfeiting charges, part of an investigation that saw
the offices of his Iraqi National Congress raided in May. Mr Chalabi is in Iran, but says he'll
return to Iraq to clear his name. I have been fighting for many years and we've survived that and
we will not be intimidated by this person who made it his business to attack us in the press and
made it his business to attack the INC and we will confront those lies. Chalibi's nephew, Salim, is
also facing arrest. He's accused of plotting the murder of a top finance ministry official. Salim
Chalabi heads the special tribunal that will try Saddam Hussein and key members of his former
regime. It's not clear if the younger Chalabi, now in London, will return. All of this another
chapter in the dramatic fall from grace for the Chalabis, once favoured by official Washington.
After the raids in May, Iyad Allawi, a long time rival of Chalabi and the interim prime minister
gained the upper hand. Mr Chalabi in turn drew closer to Iran. There is speculation from some in
Baghdad these charges are an attempt by Mr Allawi to crush any political opposition. And any
challenge by Ahmed Chalabi, in terms of setting up his own independent power base, would be viewed
as a personal challenge to Allawi himself. Since takijng charge six weeks ago, Iraq's interim PM
has fostered a reputation as a strong leader. Over the weekend, under heavy US security, he walked
right into the heart of the Shiia uprising in Najaf and urged militiamen there to give up. The
militias, they should lay down their arms and return us to sifvilised people. But dealing with
these fighters is a delicate manoeuvre for Mr Allawi. He has threatened them, but not their
leader., Shiia cleric Moqtada al Sadr. The government is still trying to bring him on board the
political process. He's trying to proper tray these people as criminals rather than blaming MrAl
sad ah for the whole operation. That gives him a chance to back down. But today al-Sadr was
defiant, saying he has no plans to end the fighting. TRANSLATION: "I will stay here and defend holy
Najaf "because it is the most holy city," he said. "And I will stay until here until my last drop
of blood".

Higher interest rates on the way - RBA

Higher interest rates on the way: RBA

Reporter: Karen Tso

MAXINE McKEW: Australia's central bank has sent a clear message - higher interest rates are on the
way.

The advance warning to borrowers was made in the Reserve Bank's quarterly statement on monetary
policy.

Economists had been bracing for more hawkish comments on interest rates despite last week's
decision to leave rates on hold.

Here's finance reporter Karen Tso.

KAREN TSO: The Reserve Bank has given its clearest indication to date that it intends to push up
interest rates from their current level of 5.25 per cent.

The consensus among economists about the timing of a move has narrowed to December after this
statement from the central bank.

"It would be surprising if Australian interest rates did not have to increase further at some stage
in the current expansion."

Even economists with more doveish forecasts are bracing for an increase this year.

DAVID HUDSON, MERRILL LYNCH INVESTMENTS: The message was there was a clear bias to increase
interest rates, but that's not urgent at this stage.

KAREN TSO: The Reserve Bank would need an air tight case to justify a move before the election, but
falling house prices and auction clearance rates means the housing sector is no longer threatening
to destabilise the economy, but there is no doubt the banks want the credit growth back at a more
sustainable pace.

DAVID HUDSON: The Australian and global economy are performing well, inflation remains subdued.

The RBA, I think, views interest rates as being below a normal level and it would be surprising if
it didn't go up from here.

KAREN TSO: Fresh data today confirmed the banks' two rate hikes last year are still making
investors think twice about taking out a mortgage.

Home loans fell another 4.7 per cent in June.

PETER COSTELLO, TREASURER: The Government welcomes the fact that finance appears to be stabilising
on a more sustainable base and that prices may well be plateauing.

KAREN TSO: Meanwhile, the Reserve Bank has revised its forecast for inflation, saying that prices
are more likely to rise than fall because the Australian dollar is no longer strong enough to keep
import prices low.

Exports also appear to have emerged from a trough, although financial marketing are wary about the
outlook after Friday's disappointing job figures from the United States.

WARREN HOGAN, CS FIRST BOSTON: We've had some data in the US in recent days which wasn't
incorporated into this statement which was a little bit softer than many expected.

So I think the Reserve Bank will be sitting and watching the data and keeping the interest rates
where it is.

KAREN TSO: But the US Federal Reserve may not be so content.

It is expected to raise rates by 1.5 per cent tomorrow night in a bid to remove extra stimulus from
the economy.

The US Treasury is comfortable with a tighter policy setting.

It's dismissed the low job figure and predicts substantial job growth for the rest of the year.

Karen Tso, Lateline.

(c) 2006 ABC |

Public servants letter debated

Public servants letter debated

Reporter:

MAXINE McKEW: It wasn't the FTA and the protection of cheap drugs that caught Labor's attention
today during Question Time.

Instead the Opposition zeroed in on a plea for truth in Government by 43 prominent Australians.

As we've heard, the extraordinary collection of former service chiefs, diplomats and public service
heads has come in for a degree of ridicule.

The PM was more measured, suggesting that most of the signatories were in senior Government posts
at a time when the international security environment was very different.

But what of the central charge, that at the heart of our involvement in Iraq was a deception?

I've been joined by one of the 43, that's former chief of the Australian Air Force Air Marshall Ray
Funnell, who still serves as a member of the Government's immigration detention and advisory group.

He's in Canberra tonight.

And in Sydney, Michael Baume, former Liberal Senator and until recently consul general in New York.

He sees some very mixed agendas in today's letter.

Gentlemen, welcome to both of you.

Ray Funnell, to you first.

Today you've been variously labelled, I think, one of 43 grumpy old men at the Commonwealth club or
one of the doddery daiquiri swillers.

How do you plead?

AIR MARSHAL RAY FUNNELL, FORMER CHIEF, AUSTRALIAN AIR FORCE: Well, I'm saddened by those comments,
Maxine.

We put a substantial issue on the table and instead we get that sort of response from the
Government.

We're seeking something better from our politicians.

But if I could just respond along those lines.

I don't believe I'm doddery - I'm about the same age as the Prime Minister and I believe I'm as
physically and mentally able and I don't drink daiquiris.

But please could we get to the major issue - truth in Government.

MAXINE MCKEW: Well, why do you feel that truth in Government is now a fragile concept?

AIR MARSHAL RAY FUNNELL: Because we get across-the-board evidence that the Government is dodging
and ducking and weaving, but it's not just the Government, it's politicians of all stripes and it's
a sad reflection on parliamentary democracy in Australia 2004 - that the people that we elect to
represent us in the Federal Government are not being honest with us.

MAXINE MCKEW: Well, the PM's line of attack today was to say that the world has changed quite
dramatically since you were all in the senior leadership positions.

Now, he has a point, doesn't he?

Since Bali, since September 11, the world is a very different place.

AIR MARSHAL RAY FUNNELL: Yes, the world is a very different place and I and I'm sure the other 42
members who signed that letter have kept abreast of that fact.

But yes, the world is a very different place, but one thing is not different and that is that truth
is fundamental to a vibrant democracy.

MAXINE MCKEW: Michael Baume, to you, why can't a group of people who have served their country ably
over the years make a statement such as this without being subject to the kind of ridicule we've
heard today?

MICHAEL BAUME, FORMER LIBERAL SENATOR: I think they've got every right to make any statements they
like, but it would be nice if there was honesty in statements of this kind as well.

MAXINE MCKEW: Where is the dishonesty?

MICHAEL BAUME: Well, in my view, this statement is full of weasel words.

I mean, it has a lot of motherhood statements but doesn't actually attack the Government as such,
doesn't have the guts, if you like, to come out and say the Government lied.

What it says is always indirect, in passive voice, "Someone did it" - it's by inference only.

MAXINE MCKEW: Well, I don't think the Prime Minister got that impression today.

He sounded as if he was under attack.

MICHAEL BAUME: Exactly.

That the whole purpose of the statement was to make it look as if it was a direct attack.

But, the fact is, many people in my view - I mean, a lot of my friends have signed this, very good
people - I don't think they would have been inclined to have signed it had it, in fact, been the
sort of direct attack that I'm certain the people who are behind it wanted to have.

We've seen that.

MAXINE MCKEW: So, what is it, there is some kind of deception in the statement or what is it?

MICHAEL BAUME: Well, in my view, yes.

For example - I will read you a bit.

"We're concerned that Australia was committed to join the invasion of Iraq...now, presumably by the
Australian Government...on the basis of false assumptions and the deception of the Australian
people."

Now, who deceived...

MAXINE MCKEW: Sorry, what's not clear about that?

MICHAEL BAUME: Who deceived the Australian people?

They're not saying the Government deceived the Australian people.

In fact, the Australian people were deceived either by the CIA or the Americans or the British.

I mean, exactly the same situation as in Britain.

MAXINE MCKEW: OK.

Ray Funnell, can you clear this up for us?

Are you being quite clear as far as you're concerned - you're a signatory to this - that in fact
the charge is it's the Australian Government that has committed the deception?

AIR MARSHAL RAY FUNNELL: Yes, we are.

But, in a way, that misses the point.

The point is about truth in Government.

We want politicians of all stripes to be frank with the Australian people.

But certainly in this case, because it is the Government that makes these decisions, particularly a
very substantial decision like this - we are concerned that the issue wasn't properly put on the
table.

Instead, there was deception involved in the way in which we got ourselves into the war in Iraq.

And I'm sure that everyone else who signed up to the letter was equally clear, as I was, that this
is what we were accusing the Government of doing.

MICHAEL BAUME: But, Ray, who did the deception?

You're saying that - personally you're saying - the Government did the deception.

This statement just says there was deception.

There is no doubt we were misled.

We were misled by the information that was given to us by the Americans, for example.

There is no doubt about the question of being misled.

What there is doubt about and what is a political issue and deliberately raises a political issue
by this statement, that the Government deliberately set out to mislead.

That's what deception means.

Now that's why I think this statement is quite dishonest because it doesn't actually say the
Government deceived, and it doesn't prove, it doesn't provide any evidence whatsoever to establish
that.

MAXINE MCKEW: Ray Funnell, the Prime Minister made much the same point during Question Time today.

He said, "Yes, the intelligence is flawed, but where is the deliberate deception?"

AIR MARSHAL RAY FUNNELL: Well, I think it goes back a long way, Maxine, but essentially the
deception comes about from the reasons we went to war.

And I believe that most thinking Australians are well aware of the reason we went to war.

We went to war because we had signed up with our strong and great ally, the USA, to the war on
terror.

We'd been there in Afghanistan and I believe, from last year onwards, we were signed up as part of
the war on terror to the invasion of Iraq.

Now that is a substantial reason for going to war.

Why wasn't that put on the table?

Why wasn't it put on the table and publicly debated?

Instead, what we got through that whole series of statements through the end of last year and the
beginning of this year, "No, no, we're not committed. No, no, it's all about weapons of mass
destruction. It's all about links between Saddam Hussein and Al Qaeda."

I don't believe that is true and I believe most of the other people who are signatories to that
letter believe that we were deceived.

MAXINE MCKEW: So, essentially, this letter is not so much concerned about the flawed intelligence,
but about the fact that the incorrect rationale was set out to the Australian public, is that
correct?

AIR MARSHAL RAY FUNNELL: Yes, the letter mentions nothing about flawed intelligence.

We didn't raise the issue of weapons of mass destruction.

There is a whole range of things that have been said that we said, that weren't said.

Just read the letter, for God's sake and that would come out.

MICHAEL BAUME: Yes, I read the letter all right and I see that so many of the people who signed it
have also gone on the record saying that they believed there were weapons of mass destruction.

Now, the thing is - you notice Ray's comment was, "I believe the real issue was such and such."

In other words, he has made a subjective judgment that the issue that the Government said prompted
the war was not, in his view, his very subjective view, the real issue.

In other words, this is a subjective disagreement, not a question of deception.

MAXINE MCKEW: Michael Baume, aren't you splitting hairs here?

MICHAEL BAUME: Not at all.

MAXINE MCKEW: It seems to me whatever you think about the motives for various people, and you are
probably right, there are mixed agendas here - there are people who have been badly treated by the
Government. The fact is, this letter signed by 43 Australians has really nailed the real reason we
went to war.

It was because of the alliance and because George Bush put it on the line and said, "You're either
with us or against us."

That's inescapable, isn't it?

MICHAEL BAUME: That may well be an arguable case.

MAXINE MCKEW: No, no.

Is it the case or is it not?

MICHAEL BAUME: No, I tell you, the case is very simple.

The case is we understood, everyone understood, the world understood, there were weapons of mass
destruction.

The argument was - what do you do about it?

That was what the argument was about.

This business about...

MAXINE MCKEW: Sorry, what came first, our decision to go with George Bush into Iraq or the argument
about WMD?

I put it to you the decision came first.

MICHAEL BAUME: Well, you must know a lot more than I do.

What I know is that the issue was Iraq has weapons of mass destruction - what are we going to do
about it?

The argument went forth and forth, through the UN.

A lot of the people here said they would support a war if the UN supported it.

Now, the UN thought there were weapons of mass destruction.

Now, that is the issue and the issue also is this - the question of the agendas of the people
involved in this.

I mean, so many of the DFAT people, the foreign affairs people, are people who have frankly been
discredited by their adherence and support for the dreadful policy the Foreign Affairs Department
maintained, sustained and promulgated which involved keeping East Timor as a colony of Indonesia,
and that was totally improper.

Mr Woolcott has been fighting that fight ever since.

And they've been wrongly claiming that this Government doesn't know how to deal with Asia, when in
fact our relations with Asia are better than they've ever been.

MAXINE MCKEW: Ray Funnell, is the document somewhat tainted by all of these mixed agendas that are
running?

AIR MARSHAL RAY FUNNELL: Oh, come on, Maxine.

What we're trying to do is get the issue of truth in Government.

That's the thing we want discussed.

Instead, we get these attacks on the messenger.

Let's get to the message, not the messenger.

What about truth in Government?

We want it from all our politicians.

This is not a team tended to be partisan, anything but, but it just so happens that the coalition
is in power and so they're making the decisions.

What we seek from our elected representatives is for them to be frank with the people who sent them
to Canberra to represent them.

That's what we're seeking - truth in the Government.

MAXINE MCKEW: Ray Funnell, if it's not partisan, why time the release of this on the eve of the
election?

AIR MARSHAL RAY FUNNELL: Do you know when it is?

I don't know when it is.

MAXINE MCKEW: Pretty soon.

Pretty soon.

AIR MARSHAL RAY FUNNELL: Well, it is pretty soon, but what we get in Australia at the moment is
constant campaigning.

When can you release something that's not going to be described in these terms?

MICHAEL BAUME: It took you a fair while after the British had a similar sort of exercise.

Goodness me, if this was such a vital thing, truth in Government, how about coming out with it to
sit closer to the event?

It seems to me it is only after there's been clear evidence that there is going to be an election
that you've suddenly come out with this and to pretend, to pretend that it is not partisan, strikes
me as extraordinary because the use of words like 'deception' and so on, clearly give an
indication.

As I said to you, a lot of this is motherhood stuff - everyone agrees with it.

If you wanted to push that line, goodness me, if you'd had the last paragraph, I'd have signed it
if you wanted me to as a former diplomat.

MAXINE MCKEW: Ray Funnell?

AIR MARSHAL RAY FUNNELL: Oh, please don't impute motivation in this.

This is not the reason that I and everyone else with whom I discussed it - this is not the reason
why it came forward at this time.

We really were concerned with this issue of truth in Government and that's what we wanted to put
forward.

MAXINE MCKEW: Ray Funnell, General Gration made the point this morning that current service
personnel and serving diplomats also share these concerns about truth in Government.

Is that your understanding as well?

AIR MARSHAL RAY FUNNELL: As far as military people is concerned, yes, it is.

I haven't been discussing this issue with people in foreign affairs and trade or diplomats, but I
have discussed it with numerous serving officers and many of them shared my views.

MAXINE MCKEW: That's widespread then, is it?

AIR MARSHAL RAY FUNNELL: Widespread, I couldn't say that because the Australian Defence Force is a
very large defence force spread right across Australia and overseas.

And I just don't get out and around all that much to those places.

MAXINE McKEW: But to those serving officers you have spoken to, what reservations do they have or
concerns do they have about the issues that you're raising and the consequences?

AIR MARSHAL RAY FUNNELL: I think it's a general concern on this issue of truth in Government.

MICHAEL BAUME: Well, the ADA, the Australian Defence Association doesn't share your view.

As I understand it there will be a letter in tomorrow's Australian in which they are very strongly
critical of this letter, in fact saying, "It's unfortunate timing during a virtual election
campaign detracts from the signatories' claim to a non-partisan intent and therefore the general
credibility of the criticism."

And it says it is inappropriate and the clear impression is they would like to know the people who
didn't sign it.

AIR MARSHAL RAY FUNNELL: Well, that's the Australian Defence Association and they're entitled to
their view.

I don't know who didn't sign it.

I know a few people who were reluctant to sign it.

I myself was reluctant.

I've never signed a letter like this before.

I was reluctant to sign it because one of the things that I suspected would happen has happened and
that is that it has been cast as being a partisan attack on the Government.

That was never its intention.

It was never my intention.

What I'm seeking is truth in Government from politicians of all stripes.

MAXINE McKEW: OK.

Gentlemen, I know we've only touched the surface on this issue and it is a much more complex one
that we've got time for, but for your time tonight. I thank you, Ray Funnell and Michael Baume.

Thanks, indeed.

MICHAEL BAUME: Thanks.

AIR MARSHAL RAY FUNNELL: Thanks, Maxine.

(c) 2006 ABC |

And now for an update on the markets here's finance reporter Karen Tso. Thanks, Maxine. Demand for
credit has helped Australia's community bank to improve its earnings. Bendigo Bank says its net
profit increased by a third in the past year, to $80 million. The bank's strategy of opening over
100 branches in recent years, has paid off at a time when other banks have been reducing services.
Shares in the bank advanced 2%. The All Ordinaries shed nearly 20 points Now, to the weather.
Melbourne - a few showers. Adelaide and Hobart - a shower or two. Canberra - mostly dry. Other
capital cities - fine. And that's all for this evening. Tonight's top stories will be on our
website in the morning at: abc.net.au/lateline. I'll be back again tomorrow night so join me then.
Goodnight.