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(generated from captions) Good evening. Welcome to Lateline. I'm Tony Jones.

was left carrying the can tonight, The Prime Minister among his ministers knew trying to explain who was dipping into its reserves that while Telstra

to pay shareholder dividends, it was under-invested the company knew

by $2 billion to $3 billion. still in the country, Well, neither of the key ministers, senator's Coonan and Minchin,

Communications and Finance, responsible for to stick their necks out. are willing in the crucial Upper House But staying

we will have a live debate regarded as critical to the sale, between the man who's vote is Senator Barnaby Joyce,

spokesman Senator Stephen Conroy. and the Labor communications That's coming up.

But first our other headlines. The butler did it. the US of "terrorism" The former UN ambassador accuses to cut an anti-poverty program. over plans Smoke on the water. flooded New Orleans Fires rage through

in Washington. as the political heat intensifies David Clarke, defends himself And NSW Liberal party powerbroker, that he's an extremist. against ongoing claims

has been accused of The Howard Government information on the state of Telstra. deliberately covering up sensitive briefed the Government last month, The company's chief executive of Telstra's outlook painting a grim picture of investment was needed and warning that up to $3 billion to fix infrastructure. it would have been illegal The Prime Minister says on to other shareholders. to pass that information it's a scandal. But the Opposition says Narda Gilmore reports. From Canberra,

the Prime Minister last month When Telstra boss Sol Trujillo met on the state of the company. he gave a frank assessment kept secret, until this week. The details of his briefing were a major government scandal. We have on our hands shareholders had a right to know The Oppostion says all Telstra in infrastructure about the massive under-investement borrowing from its reserves and that the company has been

to pay dividends. have an obligation Didn't the Prime Minister knew the true state and value to ensure that mum and dad investors of Telstra? his hands were tied. John Howard says The reality is from the Department of Finance that according to the advice I have and from my own department, for the Government to have done so. it would have been against the law obligation to inform shareholders. He says it's the company's

won't discuss the details John Howard still

of his meeting with Sol Trujillo. Tonight on the '7:30 Report', if he was shocked the Prime Minister wouldn't say

by the Telstra chief by the information presented $2 billion to $3 billion shortfall or whether his ministers knew of the in investment funding. of what precisely my ministers knew The question in relation to particular things,

relation to those particular things I would have to speak to them in before I could answer that question. it's a cover-up, The Opposition claims protecting the share price with the Government focussed on in the telco. before it sells its remaining stake to Sol Trujillo, Why didn't he say combustible information here. "Sol, this is pretty "This is highly market sensitive. "This is relative to the shareprice. as a shareholder, "If you're telling me the other shareholders?" "shouldn't you be telling with the company At all times in our dealing we've made it very clear make full and continuous disclosure that of course, that company should to the Stock Exchange and it has never occured to me would have done anything but that. that the company is now investigating Corporate watchdog ASIC

complied with disclosure laws. whether Telstra has John Howard says role as majority shareholder the debate proves the Government's and regulator can't continue.

this conflict of interest The most sensible thing is to end and complete the privatisation. Telstra sale legislation The first of the Government's was introduced to parliament today. to have it delayed Labor failed in its bid until after the ASIC investigation but despite the Governemnt's wish interest, to end what it calls a conflict of still seems a long way off. an actual sale Will we sell at any price? Certainly not. Will we sell at any price?

described the behaviour Yesterday, the Prime Minister as 'disgraceful' of Telstra executives but he's under fire for suggesting the company's prospects. they should be talking up What the market requires is honest should say is and what the Prime Minister and nothing but the truth. he requires them to tell the truth Trujillo is the whistleblower here who is the disgrace. and the Prime Minister is the person about the company. I'm not asking anybody to tell lies about the company. I'm not asking anybody to tell lies That's absurd. I never said that. But he's standing by his position saying that it is possible about the company for senior executives to be positive as well as being honest. Narda Gilmore, Lateline. It isn't just the federal Opposition commercial information about Telstra concerned over how sensitive has been handled. One former board member says has been withheld, if sensitive information for Telstra management then it's extraordinarily serious and the Government. telco regulator And according to a United States over there, who dealt with Sol Trujillo to rankling the regulators. the Telstra CEO is well accustomed As Rachel Carbonell reports. Sol Trujillo The new Telstra chief executive of the Government has rattled the cages and the corporate regulator. record in the United States And according to some, if his past that shouldn't be a surprise. is anything to go by, how Mr Trujillo has been operating In just analysing how or looking at in terms of his relations with the Government down there, it certainly struck a familiar chord

with their aggressive and sometimes arrogant stance toward the government regulators. Tony Mendoza was a United States telecommunications regulator when Sol Trujillo was head of a Minnesota telco five years ago. Mr Mendoza says anti-regulation comments from Mr Trujillo were common -

and the cost of regulation was often used as scapegoat for other management issues. Those statements were probably made

in the interests of increasing his bargaining leverage

in respect to some of the conditions in the legislation authorising the sale of the company, in trying to weaken some of those conditions. Mr Trujillo says regulation could shave $850 million from Telstra's profits and a leaked private briefing document for the Federal Government paints an even bleaker picture. The Australia Securities and Investments Commission is now investigating whether Telstra has met its disclosure duties. Former Telstra director, Peter Redlich says if sensitive information was witheld from the market then it's a big problem for everyone involved. If that in fact occurred, I would have thought it's a serious breach of corporate law. I mean, if management knew this and didn't make it public, that's extraordinarily serious. If the shareholder knew, then that's also extraordinarily serious.

However, Mr Redlich doesn't think the current board will be too distressed by the controversy

over the future of Telstra and he predicts they will stick by Mr Trujillo. I've got to say though, I've got to admire the three amigos because they have brought out into the open the public debate.

Issues that are very relevant to Telstra and should be very much scrutinised by the public and now they are. The head of the Government's regional communications inquiry in 2002, Dick Estens says it's no secret that a huge amount of money needs to be outlayed by Telstra, particularly in regional areas. You know, you've got a lot of copper wire services out there that are been in there far past their use-by date. You know, some of these services are pretty ricketty

and will need upgrading in the next year or two. You know, you can't have situation where Telstra's sold and there's not a fund out there to keep the program rolling. Dick Estens says the National party's $3 billion trust fund is a reasonable way to overcome the regional infrastructure problem and once adequate competition has been reached in the telecommunications industry, it may be possible to loosen regulation. It's really important in rural, regional and remote Australia,

where I think something like 60% of Australia's GDP comes from,

that we have good infrastructure. You know, we're major export earners and it's not about a money grab. It's about, you know, getting the wealth of Australia out there. Telstra released the government briefing document to the stock market today, with a note saying it wasn't intended for public release, but because it had been leaked,

Telstra was now making it available to all shareholders. Corporate law experts say the release of the document

is unlikely to have any affect on the ASIC investigation. Rachel Carbonell, Lateline. Australia's former ambassador to the United Nations, Richard Butler, has accused the United States' government of terrorism over its plans to abandon United Nations targets to reduce global poverty. The US has moved 750 amendments to a draft declaration on the United Nations' millenium development goals,

which aim to alleviate global poverty by 2015. The Federal Government is being urged to fight the amendments, but it says it believes the US is negotiating in good faith.

Hamish Fitzsimmons reports. Ten years ago,

as Australia's ambassador to the United Nations,

Richard Butler, chaired meetings which led to the a declaration to reduce world poverty. Now the United States has moved 750 amendments to that declaration, which Mr Butler has responded to in a typically blunt manner. They're trying to destroy the document. 10 years ago I chaired the 50th anniversary of the UN and the Syrians were the terrorists. They tried to destroy the document on the 50th. This time, the 60th anniversary, the terrorists seeking to destroy

a declaration of all countries agreeing with each other is the United States.

World leaders, including the Prime Minister John Howard, meet next week to endorse a final declaration

on the so-called millennium development goals agreed on in 2000. These set measurable targets for health, human rights, AIDS, the environment, education, and reducing poverty by 2015. The proposed US amendments seek to delete the use of the phrase "millennium development goals"

in any declaration from the summit next week. US ambassador John Bolton says his country does not support the subsidiary targets and indicators in the package. The 11th hour moves have alarmed aid groups, who are urging the Australian Government to fight the amendments.

What we would want to see is a clear unequivocal statement from Prime Minster Howard in the lead-up to the summit to the millennium development goals

to increase Australian aid to meet agreed United Nations targets

and to commit to very specific measures from the summit

for governments to contribute to poverty reduction over the next 10 years. I hope you're right that the Australian Government will join with the overwhelming number of the world's countries and resist this terrorist attack on the document for the 60th anniversary. The Foreign Minister, Alexander Downer, didn't want to be interviewed, but a spokesman told Lateline the Australian Government believes the US is negotiating in good faith and Mr Butler's comments are typically anti-American. There is frantic lobbying at the UN to try and salvage the final declaration. Today the US indicated it may be willing to accept the use of the phrase "millennium development goals" provided it can be properly defined.

Hamish Fitzsimmons, Lateline. There was mixed news today on the fate of two Australians missing in the aftermath of Hurricane Katrina. A 75-year-old Australian who was trapped in the city has now been reunited with his wife. But the Department of Foreign Affairs says it's still trying to find an Australian factory worker who was last reported to be in Baton Rouge. Emergency crews in New Orleans are still removing people from the city as the political blame game heats up in Washington.

Norman Hermant reports. It is a cruel irony that in a city largely under water, one of the biggest problems now is fire. In New Orleans, it's up to helicopters to put out the flames. In Washington, it's George W. Bush who's trying to keep a lid

on the political firestorm that's followed the bungled response

to Hurricane Katrina. Today, he said he'll lead an investigation to find out what happened. It's very important for us to understand the relationship between the federal government, the state government

And the local government when it

comes to a major catastrophe.

As for who's to blame for a relief effort that left tens of thousands stranded, the President says that will come later. the President says that will come later. I think one of the things people want us to do is play a blame game. We have got to solve problems. We are problem solvers. There will be ample time for people to think about what went right and what went wrong.

But with large parts of New Orleans now largely ruined, many members of the US congress are demanding answers right now.

Why the Why the hell couldn't a truck

Why the hell couldn't a truck load of water, a truck load of

medicine, a bus load of

physicians, people who could

physicians, people who could bring help and care and hope to the

people, why couldn't they get

through? It was criminal to

abandon thousands and thousands of

men and women, mothers and children,

grandparents, to rot in the squalor

of complete government neglect. Congress has announced two inquiries of its own. And the President's performance will be a target for democrats.

The buck stops at the President's

desk. The President said he'll

lead the investigation into what

went wrong. He needs to look only

in the mirror. Just like on the ground, it's still too early to judge the scale of the political damage.

Already, republicans are rallying around the President.

I was in New Orleans at Khmer

Rouge and let me tell you I saw his eyes,

Rouge and let me tell you I saw his eyes, I saw compassion and

hurt and tears and I saw passion

and I saw leadership. Amid the

bodies, floating in the water,

bodies, floating in the water, there are still some who refuse to leave

New Orleans. Relief supplies are

still pouring in to a nearly empty

city and even though it is

city and even though it is predicted that New Orleans won't spring back

to life for months, there are at

least small victories in one part

least small victories in one part of the city last night , the lights

were once again shining. Back now to our top story on the high political price of privatising Telstra. The Prime Minister claimed today to be the best friend of mum and dad investors, even those who are still holding Telstra shares

and though he evidentaly knew the truth about Telstra,

he says it would have been illegal for him to reveal what Telstra had told the Government in private briefings. That dilemma, he argues, is further proof that governments have no business running businesses. Apparently, the public had no right to know, from the Government at least. But what about the senator whose vote will allow the full sale? Did he know the truth about Telstra? Well, the National's Barnaby Joyce joins us now and to debate him Stephen Conroy is the Opposition communications spokesman

who also joins us in our Parliament House studio.

Barnaby Joyce - thanks to both of

you for joining us, first of all.

you for joining us, first of all. Barnaby Joyce, would you advise

your mother or any Queensland mum

and dad, for that matter, to bow

Telstra shares right now? Well,

Tony, what I do know is that

Tony, what I do know is that Telstra provides an extremely good return

provides an extremely good return on their shares; that provides an extremely good return on their shares; that Telstra was one

of the highest priced Telcos

aroundment I wouldn't be advising

anybody because that would be seen

to be giving undue advice from a

position where I could possibly

influence the price. I think the

problem is with the advice running

around, it is like someone talk

about their family and wanting to

tell everybody the bad things and

none of the good things so everyone

thinks your family is a bunch of

ratbags. If you were talking to

your family, would

ratbags. If you were talking to your family, would you advice them

to buy Telstra shares right now?

Just think you were talking to your

mum? If I were to do this I would

be breaking the law because I would

be in a position where I could

influence the price and I wouldn't

want to do that bus I like to abide

by the law if I can. Alright.

Stephen Conroy, how low do you

believe Telstra's shares could go?

Well there's, been a range of

analysts in the papers today

talking about a figure with a three in front

talking about a figure with a three in front of it. There was

one report that Mr Burgess from

Telstra pointed to that had the

shares as low as I think $2.87.

shares as low as I think $2.87. That one came from a Morgan Stanley analyst,

Stanley analyst, Andrew Hines.

He's essentially telling his

clients to get out of Telstra

shares because on average, if you

look at the average price of tell

cos around the world, Britain,

France, the US, it should be valued at

France, the US, it should actually be valued at $2.87. What do you

think? Well, I think that's right.

I mean, what those analysts have

done is they've looked around the

world, they've seen what the

multiples are, they've seen the

multiples are, they've seen the sort of share prices that the

of share prices that the equivalents to Telstra have and they've worked

out that the only reason that

Telstra's prices are as high as it

has been is because the government

have been complicit with the board

and management to Telstra in and management to Telstra in pouring money out

and management to Telstra in pouring money out to shareholders, via

dividends, special dividends and

then share buy backs and they've

been pumping the shares up to

been pumping the shares up to fatten up the cow to make it more

attractive so they can flog it off

and the market is now starting to

see through that. Barnaby Joyce,

let me go back to you. Were you

aware when you decided to vote yes

to the full Telstra sale that first

of all 14% of all lines have faults

causing 14.

of all 14% of all lines have faults causing 14.3 million fault calls or

that it Its workforce is ageing

and inadequately trained or its

equipment is obsolete or for that

matter there was underinvestment in

the company to the tune of 2-3

billion? Were you aware of those

things? I think everyone knew

there were major problems out there,

Tony, and with due respect the

Tony, and with due respect the Labor Party was going to flog

Tony, and with due respect the Labor Party was going to flog off --

Cut it out, Barnaby. It's like Bob

again. The issue is we, National

Party, obstructed the deal that

Party, obstructed the deal that gets regulations in place that's caused

these problems that actually gives

the mechanism to fixing these

problems. We acknowledge that we

need a stronger customer service

guarantee, stronger universal

service obligation, stronger

service obligation, stronger network reliability framework. We

acknowledge that the reliability framework. We acknowledge that the regulation is

as strong as the trust fund that

as strong as the trust fund that the National Party has carved out and

they are obviously inviting because

Mr Burgess tells us so. We've

Mr Burgess tells us so. We've heard these arguments from you before.

What I'm trying to find out is if

you were aware of what the

government was aware of? Were you

aware, for example, instead of

making much-needed investments,

Telstra was actually borrowing from

its reserves to pay dividends? Well,

its reserves to pay dividends? Well, I obviously didn't know

that, Tony, but what I did know

that, Tony, but what I did know is there's a lot of problems out there

in regional Australia and they were

problems we had why the government

owned 51.8% of Telstra. What we

owned 51.8% of Telstra. What we have to do is we have to be the people

that fix the problems. The National

Party fix the problems. Otherwise

Party fix the problems. Otherwise we just go on with what we've got. I

know that the Liberal Party and

Telstra are unhappy with the extent

that the National Party has carved

out of the deal and the Labor Party

independents want us to deliver

nothing and between that is the

National Party that's actually ex

tracted the deal that hopefully can

fix this and people will talk about

it being a secret. It's certainly

not a secret now. It's out there.

People can see it. There's no more

information out there that can drop

out. People acknowledge that the

board has a very open -- Can I

interrupt you. Wouldn't it have

changed your negotiating position interrupt you. Wouldn't it have changed your negotiating position

pretty substantially to know that

over the past 3-5 years Telstra

believed it needed an extra $2-3

billion, that's before you even

start your negotiations as to the

future? Yeah. No, that's a fair

question, Tony. But to complay with

their licensing agreements, they

have to fix up the network with

their money and we've been asking

questions, the National Party have

been asking questions about how

been asking questions about how much does Telstra intend to put into

their capital expenditure budget to

fix up their problems to comply

fix up their problems to comply with their licensing objects? We are

making sure the custom me service

guarantee, the network reliability

framework does this -- Come back

framework does this -- Come back to my question. Would you not have had

a different negotiating position if

you'd have known what you know

you'd have known what you know today and what shareholders know today,

only as a result of something being

revealed in parliament? Well, it

is a moving feast and one thing we

can be certain of is that Telstra

won't be sold in the near future,

both the minister says that and now

the Prime Minister says that, so

what the National Party has got is

both the money to roll out new

things, the legislation to fix what

is currently there and you still

is currently there and you still own Telstra. That's pretty much a dole.

Telstra. That's pretty much a boxed dole. Alright. Stephen Conroy, if

Senator Joyce sticks to his guns

here it doesn't matter what you say

during the course of this argument

it will still be sole. Barnaby went

to the elections promising

Queenslanders he'd vote against the

sale. It was an election commitment.

He made that statement over and

He made that statement over and over again. He said before he was sworn

in he'd be standing up, there were

lots of things he grade with the

Prime Minister, he said, but not

Prime Minister, he said, but not the sale of Telstra. Barnaby has backed

down and bought off for a very,

down and bought off for a very, very modest amount, particularly when

modest amount, particularly when you now see that Sol Trujillo and

Telstra have acknowledged that

there's a $5 billion need to

modernise the structure. Barnaby

says, "We get nothing." This

government has been dividend

stripping Telstra to fatten up the

share price. If they hadn't been

engaged in that practice, that

engaged in that practice, that money would have been used to invest in

that network, to modernise and put

in those cutting-edge technologies

that the company needs to get a

revenue stream of profits and to

push the share price up into the

future. They've been fattening up

the cow to flog it off. Barnaby

Joyce, what do you think about that?

Do you believe there's any truth at

all? A lot of people in the country

are going to look at this, taking

money out of it reserves to pay

dividends, including, as it turns

out, $2.5 billion to the government,

which has again into general

revenue? Well, let's start with

what I actually had to do. What I

had tow do with the unanimous

resolution from our state

conference, which I took to

Canberra, which we ex tracted

everything on that resolution,

everything on that resolution, which I took back to Queensland and asked

the people of Queensland within the

management committee whether they

wanted it or not. They said they

liked the deal and wanted to go

forward with and that's the

information I was dealing with and

the information I went forward with.

Now you have new information,

don't you have new negotiations

necessary, that's my point?

necessary, that's my point? The point is that the Labor Party

can't have it both ways. What

can't have it both ways. What about you? Can we stick with your

position first because you've just

explained that you went to your

people in Queensland with a certain

set of facts. Now the facts have

changed. Shouldn't you go back to

them? Well, I think that what's

going to happen now obviously is

that Telstra, whilst it's been bucketed, bucketed

that Telstra, whilst it's been bucketed, bucketed in the press and

bucketed everywhere, including now

tonight by the Labor Party, that

it's not going to be sold for quite

a while. It won't - the minister

says it won't be sold this year.

says it won't be sold this year. The Prime Minister says there's no fire

sale on it. So we've got quite a

sale on it. So we've got quite a bit of time up our sleeve to start

fixing a few things and obviously

the direction will be to Telstra to

start spending money on their

capital expenditure to fix their

network up. But do you need now to capital expenditure to fix their network up. But do you need now to

go back to the people who've told

you to vote yes and say to them,

"Look, there's a new set of facts

available to us now, do we need to

re-think our position?" Do you need

to do that or is it set in cement

now? Nothing is set in cement.

There are phone lines and they

operate and we haven't had a call

from the committee members in

Queensland -- Probably can't get

through. This is the deal that the

National Party has extracted. I

National Party has extracted. I know the Labor Party hates this

infrastructure. Oh, Barnaby.

We also have on board -- Okay.

Barnaby Joyce, can I just interrupt

you there to go to Stephen Conroy.

You don't believe in the

public/private partnership. I saw

you apused about that suggestion.

you apused about that suggestion. We asked Helen Coonan

suggestion. We asked Helen Coonan in the parliament in Question Time was

she aware of any the parliament in Question Time was she aware of any proposals

whatsoever beyond the else ledged

whatsoever beyond the else ledged $3 billion and she just said no and

billion and she just said no and sat down. Barnaby is the only person in

the country who believes mythical

money will be bouncing in there -

it's the Barnaby effect we're

calling it. $3.1 billion doesn't

work like this. If we put this in

the pot, what are you pulting in?

They get the onus of it -- Let's

talk about the pot. It's a $2

billion fund being created of which

Barnaby will be allowed to spend

Barnaby will be allowed to spend the interest on it which is $100

interest on it which is $100 million a year. He's got $1 billion --

I'm proud of that. We get that

before it is even sold. Hang on,

hang on. Excuse me one second.

hang on. Excuse me one second. We're talking over each other to such a

degree that I'm sure the viewers

will be having trouble to work out

who is saying what. Barnaby Joyce,

can I come to you with this pretty

strait point. If the government

received, as Telstra said it did in

the last budget, $2.5 billion, just

in dividends from Telstra, doesn't

that put in perspective the $3

billion deal that you struck with

the government because that's

actually just - well, 80% of that

figure is what the government

already received just in dividends

from Telstra? But it also

apparently the mums and dads --

In one year. -- the mums and dads

shareholders that they are upset

about got the dividend stream. In

fact it was one of the highest

paying dividends in the country.

All Australians have been a

benefactor of that. You don't

benefactor of that. You don't think they should have get it; is that

right? The point is we must deal

with the cards on the table. The

National Party must deliver for

Queensland and ruram and regional

Australia and by doing that we have

to get the trust fund put aside and

the regulations in place and these

regulations are obviously working

because every time I hear a Telstra

executive tell us how terrible they

are because they actually deliver

services back out to regional

Australia and I'm proud of that.

I'll wear those regulations like a

badge of honour. Stephen Conroy,

the Prime Minister says the fuss

over the past 48 hours has actually

proven how wrong it is for the

government to be both the regulator

and the majority shareholder in a

company like Telstra. He's right,

isn't he? Absolutely not. The

government own 100% of Australian

Post and they regulate it. This is

just one of the Prime Minister's

furphies to cover the fact he's

furphies to cover the fact he's been caught and Sol Trujillo has blown

the whistle on him and what we've

seen is the Prime Minister go on

seen is the Prime Minister go on the attack, attack the Telstra

executives for telling the truth.

The truth is they've underinvested.

We have 14% of phone lines, that's

1.4 million Australian phone lines

have faults. That as the sort of

information that has come out in

information that has come out in the last few days. The Prime Minister

says, "Oh, it was secret. I

says, "Oh, it was secret. I couldn't do anything about it." Let's be

clear - there was no legal impediment to the Prime Minister

picking up the phone to Don Mcgeky

and saying, "This is red hot. This

is market sensitive. You must

release it." No legal impediment.

release it." No legal impediment. He was happy enough to pick up the

phone yesterday to say, "Shut them

up. Tell them to stop telling the

truth." Didn't mind picking up the

phone there. What's stopped him in

the last month of picking up the

phone and saying as the majority

shareholder to the board, "This is

red hot. It is market sensitive.

red hot. It is market sensitive. You should release it."? Apparently

no-one picked up the phone to you

no-one picked up the phone to you to explain the trouble Telstra was

genuinely in when you were

negotiating your deal with them,

which, as it turns out, is not that

much different from one year's

dividends that the government

received. Can you now say

received. Can you now say absolutely for sure that you will vote for the

full sale of Telstra? Tony, we've

got the regulations in place to fix

the phone system. We've got the

money in place to roll out new

money in place to roll out new broad band and new mobile and we still

band and new mobile and we still own Telstra. So I reckon that's a win

for the National Party because both

the minister and the Prime Minister

have said in the near future

have said in the near future they're not going to sell it. We've got the

money, the regulations and Telstra.

That's a win. Can you say

absolutely for certain right now

that you will vote for the full

that you will vote for the full sale of Telstra? Look, Tony, you never

ever commit yourself to something

totally but I'm still happy with

totally but I'm still happy with the deal we've got on the table. To

commit to tomorrow when I don't

commit to tomorrow when I don't know what tomorrow holds is always folly

otherwise -- I mean, two days ago

you didn't know what the new

information was coming out. I mean,

does it worry you that you've just

learnt all of this new stuff?

What worries me if the National

Party wasn't in place we would

have got the deal when the Labor

Party sold the CBA - nothing.

Party sold the CBA - nothing. When they sold Qantas - nothing and the

Labor Party, Mr Beazley has to be

strait on this - he intended to

sell-out. He did in 1995 and still

does now and nothing -- That is

does now and nothing -- That is just untrue, Barnaby. Untrue. Let me

untrue, Barnaby. Untrue. Let me say one thing - if, if the shares are

still in government hands and the

Labor Party comes to power, do they

commit tonight - does Senator

commit tonight - does Senator Conroy commit tonight to immediately

rescind it and put legislation

through the parliament to put it

back and have it maintain

permanently in public hands? He

could do it now for you. We're out

of time. Virtually a quick yes or

of time. Virtually a quick yes or no to that retorcal question? We'll

repeal the situation if it's 51% --

Qualification. There was a

Qualification. There was a qualification. Thank you, Senator.

qualification. Thank you, Senator. If they haven't sold the

shares will they repeal it. The

answer is yes. Give me a number.

answer is yes. Give me a number. >>U I've joined the game of talking

I've joined the game of talking over you it sounds like. I'll have to

you it sounds like. I'll have to ask you both to stop just for a minute

so we can say goodnight to you.

Stephen Conroy and Joyce jis Joyce,

thanks to both of you for joining

us. Thank you, Tony, thank you

Senator Conroy. Thank you. The man at the centre of allegations that he's driving a right wing push to take over the Liberal Party in New South Wales has broken his silence. Responding to comments from former and current Liberal Party members, including a federal front bencher, State Parliament senator David Clarke has denied he's an extremist. Tom Iggulden has the story. After avoiding the broadcast media in his home State of NSW during his two years in parliament,

Mr Clarke chose neutral ground to answer claims he has extremist political views and tactics. Hello, Mr Clarke. How are you? Welcome to Melbourne. Thanks very much. The split between Mr Clarke's right faction and the party's moderates has reverberated all the way to the top with two Federal Government ministers this week expressing their views on Mr Clarke's role in the party. After Health Minister Tony Abbott told parliament on Monday

that Mr Clarke's conservative religious convictions shouldn't stop him from being in politics, Human Services Minister Joe Hockey called on Mr Clarke to explain his views. And today, he did just that - to a point. Does he believe that terminancy of pregnant - of pregnancy - termination of pregnancy should be stopped at NSW hospitals? Well, that raises all sorts of issues. I'd have to sit down and I'd have to think through in very specific areas. That's something for the Federal Government, so it's not something that we deal with in the State. Now, does Mr Clarke believe we should reintroduce corporal punishment in schools? No, as a father of two boys in schools, I don't support that at all. Does Mr Clarke believe that we should criminalise homosexual activity? No, I'm not seeking the recriminalisation of homosexuality. And Mr Clarke says he'll sue former Liberal party candidate Irfan Yusuf after he claimed Mr Clarke had proposed using anti-Semitic

and anti-homosexual rhetoric to recruit Muslims to the party. That character has a very colourful and interesting background and I don't think he's very welcome in the Liberal party. and hasn't been very welcome for some years. Mr Yusuf told Lateline tonight he's yet to hear from Mr Clarke's lawyers. Back in Melbourne, Mr Clarke also defended claims he was behind a whispering campaign about moderate former leader John Brogden's inappropriate behaviour at a function that led to his sudden retirement. Did you hear those rumours around the State Parliament of NSW? Those specific rumours, No. Never heard them? No. Never promoted them?

No, absolutely not. That is absolutely for sure and I want to make that very, very clear and I'm not aware of anybody in the parliamentary Liberal party who was going around promoting them. And he denied his right-wing faction had control of the NSW division of the party. You know, you talk about factions,

the people on those bodies are democratically elected and the grassroots membership of the party chooses who goes those various bodies. And as for whether he's an extremist? I take a conservative view, but I don't take an extreme view. Mr Clarke added he didn't think the party in NSW was divided. Tom Iggulden, Lateline.

To the markets now.

Now to the weather. And that's all for this evening.

If you'd like to look back at tonight's interview or review any of Lateline's stories or transcripts, you can visit our website at: www.abc.net.au/lateline I'll be back tomorrow night, so please join me then. Goodnight. Captions by Captioning and Subtitling International.