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(generated from captions) This program is captioned live. Good morning. Welcome to Insiders.

on the region in which we live, It's a poor reflection think Australia needs a bigger army. but those who should know, this week, As the Prime Minister put it increasingly, there are destabilised in the neighbourhood, and failing states and in the next 10 or 20 years experienced in the Solomon Islands expect more of what we have and East Timor, or even worse. country in the region, Because Australia is the wealthiest will always look to Australia he says these countries to take the call. and the army must be ready But how can the army and retention trends reverse recruiting trends and inspire young people to join up is hardly theoretical. in an age when combat this morning, To answer some of those questions the head of Army, Insiders will be joined by

Leahy. Lieutenant General Peter T3 is finally on. And the Telstra sale - background of conflict between the But it's happening against a government and Telstra management. and Telstra management. between the government it's tough to get a good price The Government says about regulation, while Telstra constantly complains has his own theory on that one. but Phil Burgess from Telstra

This whole idea that we shouldn't

have a stoush, we shouldn't be, you

know, mixing it up, isn't a

democratic way. It's not the way

you should do things in a

society. So we find the truth in a you should do things in a democratic

free society by mixing it up in the

marketplace of ideas. Or to put it

simply, you have to break eggs to

get an omelette. a little later on. An issue for the panel at 10 o'clock. And an issue for 'Inside Business' key players in the Telstra sale, Alan Kohler talks to one of the Chris McKay, an adviser to UBS.

. One of the things we've been very

conscious of is structuring the

offer so it best assists existing

shareholders who stay on the

register until the offer. So, we

expect that we'll have an

Minister announced. entitlements offer as the Prime expect that we'll have an attractive

Then at 10.30, 'Offsiders'. in the ball tampering controversy. We'll debate the latest development The umpire says, I'll go - "I'll make it easy for you, "just pay me $660,000." And finally at 11:00, the plight of women in Afghanistan, 'Asia Pacific Focus' looks at

yoke of the Taliban still wearing the were overthrown. five years after the fundamentalists for the latest news overnight, All that coming up, but first it's good morning, Kate Arnott. Barrie, good morning. Criticism of Darrell Hair continues Imran Khan saying with former Pakistan captain, international umpire's future. there's now real doubt about the The Australian demanded $660,000 Cricket Council to quit. from the International

Darrell Hair's tough stance against

alleged Pakistani ball tampering

last week threw the cricket world

into uproar. And former Pakistani

captain Imran Khan accused Hair of

acting like a mini Hitler. This is

quite a surprise, you know, someone

putting a price tag on himself when

there's such a controversy raging

which he's responsible for. It

at his credibility and, you know, which he's responsible for. It hits

umpire whose credibility goes down at his credibility and, you know, an

means that it casts doubt about his

future. In a letter to the

International Cricket Council Hair

asks for a one-off payment of

Australian $660,000 to compensate

for loss of future earnings.

I do not believe he saw it as an

opportunity to make some money. I

think he was under stress. Hair has

issued a brief statement saying:

Even so, the ICC's board will

discuss his future next Saturday. has told his party The Prime Minister

he'll keep his promise to sell off in Telstra, a third of the Government's stock

despite its low share price.

The Prime Minister told his party

faithful in Hobart yesterday that

wasn't the Government's job to run faithful in Hobart yesterday that it

and regulate companies. It is in

long-term interests of the and regulate companies. It is in the

Australian people that this giant

corporation be fully privatised,

I do not apologise for that. The corporation be fully privatised, and

Opposition says Telstra's

infrastructure must be radically

improved before it can be sold off.

And, outspoken Nationals' Senator

Barnaby Joyce has questioned the

timing of the sale. Telstra's

current share price of $3.50 is

of what it was fetching when T2 was current share price of $3.50 is half

sold in 1999. You don't take a poor

cow to market. You would have

waited till such a time in the

future as the price improved. And

the price will improve.

believe the Government's decision the price will improve. Shareholders

keep a 30% stake in Telstra will believe the Government's decision to

create uncertainty for investors.

We think that's a political

decision, not a good economic

decision. The Government will begin

selling off the telco in October. with its nuclear plans Iran is pushing ahead to halt uranium enrichment. just days ahead of a UN deadline Mahmoud Ahmadinejad The Iranian President heavy water plant has opened a high-security to feed a nuclear reactor. Once complete, plutonium as a by-product the Arak project will produce to make atomic weapons. that the West fears could be used Mr Ahmadinejad says to nuclear energy Iran will maintain its right and poses no threat to Israel. the Sydney Swans gave In the AFL last night, aspirations a boost their back-to-back premiership over the Brisbane Lions. with a convincing win to work much harder At the MCG, Richmond was forced to win by 16 points. against a persistent Essendon a dominant display for the Tigers Matthew Richardson turned on and taking 19 marks booting nine goals in a best on ground performance. While in Sydney, to defeat the Brisbane Lions. the Swans overcome a slow start for most of the match The Lions stayed in touch before a final quarter avalanche to 57 points by the final siren. saw the Swans extend the margin In the NRL, both remain in contention the Dragons and the Knights for a top-four finish. tries in the second half The Dragons scored two unanswered to beat the Sharks of the top four, and put themselves within reach while the Knights ran through eight tries to one

in their 36-point thrashing of the Panthers. Two tries in the first half from centre Matt Gidley set up the victory for the Knights in what could be their final showing at home for the season. And in Wollongong, the Dragons extended a 2-point lead at half-time to defeat the Sharks by 14 points. And there'll be more sport later this morning

with 'Offsiders' at 10:30. Now for a look at the weather - mostly fine for Brisbane. Fine in Sydney, Perth, Canberra and Melbourne. A late shower for Hobart. Light rain in Adelaide. And mostly sunny for Darwin. And Barrie, that's the news for now. I'll be back at 11 o'clock. Kate Arnott, thank you. And in case you haven't noticed, there are State elections coming up right along the Eastern Seaboard and the polls suggest remarkably similar outcomes. Take a look at Queensland, first. With an election on 9 September, Newspoll suggests the Labor Government in front 54-46. Now Victoria. With an election due in November, the Labor Government in front two-party preferred - 55-45.

And now New South Wales. With an election due in March next year, again the Labor Government in front 55-45. At the State level, the Liberal and National parties have a real battle on their hands. Why is that so? To try and answer that question and others, we're joined, as always on a Sunday morning by Paul Kelly, political commentator with the 'Australian'.

Paul, good morning. Good morning,

Barrie. Is Not a lot of comfort

there for the Opposition parties in

any of the States? There certainly

isn't, Barrie. As your figures

isn't, Barrie. As your figures show the Liberal Party at State level is

weak and demoralised. We've got an

election under way in Queensland.

We've got upcoming elections in NSW

and Victoria. Now the Liberal

and Victoria. Now the Liberal Party ought to be highly competitive in

these campaigns. These State

these campaigns. These State Labour Governments should be under great

pressure and the Labour Government

in NSW frankly ought to be on the

ropes. This is not the case. The

Liberals look weak or divided or

both, and they've got multiple

problems. They've got problems

problems. They've got problems with tallen. They've got problems with

policy and they have problems

getting their message through. One

of the big questions, of course, is

the extent to which this will have

implications for the Federal arena.

I think there are a number of

I think there are a number of trends at work here Barrie. One is that

incumbency has never been more

important. In this age of detribalised politics the

detribalised politics the advantages of incumbency are very very great.

Another trend I think is that the

Howard ascendancy really conceals

the underlying weaknesses of the

Liberal Party and those weaknesses

have been there for a very long

period of time. I think Howard's

ascendancy conceals that and the

final point to make is to a certain

extent, I think the people are

extent, I think the people are quite comfortable supporting Labor at the

State level, and the coalition at

the federal level. Let's move onto

the coalition at the Federal level

and the big decision on the Telstra

sale but not a lot of optimism

sale but not a lot of optimism about where the share price is headed?

There certainly isn't optimism,

Barrie. The share price is about

$3.50 at the moment. That's less

than half the $7.40 which people

paid in 1999. And the share price

has fallen 30% since Sol Trujillo

became chief executive. John

became chief executive. John Howard is trapped here, he's trapped

between the low share price on one

hand and his knowledge that the

ownership arrangements for Telstra

on the other hand are quite

untenable. So he's decided to

untenable. So he's decided to press ahead with the sale. This is a

calculated gamble. He wants to try

and move 20% in the latter part of

this year and park the other 30% in

the future fund. There's one

certainty about this sale and that

is that it will be bedevilled by

that comment made by Telstra

executive Phil Burgess some time

executive Phil Burgess some time ago that he wouldn't put his mother

that he wouldn't put his mother into Telstra shares. And, of course,

Telstra shares. And, of course, it's also against the background and I

suppose Phil Burgess contributes to

this, about the conflict between

management and Government. How

serious is that? Well that is an

extraordinary conflict and it's a

very serious one. The key to the

announcement this week by the Prime

Minister Barrie was that John

Minister Barrie was that John Howard believes that he's negotiated a

truce with Telstra. And the main

subject of the negotiations this

week between John Howard and the

Telstra chairman Donald McGeky was

about this truce. Now the reason

the truce is necessary is because

the Government has a conflict of

interest here. On the one hand as

the major shareholder it wants to

look after Telstra's profitability,

boost the share price, look after

those stakeholder responsibilities

to the shareholders. Yet, the

Commonwealth, of course, is also

Commonwealth, of course, is also the regulator. So it wants to look

after consumers. It wants to

after consumers. It wants to ensure there's a very competitive

telecommunications market. And

telecommunications market. And that means putting Telstra under

pressure. John Howard is very

pressure. John Howard is very aware of the conflict. The conflict is

one of the reason why Telstra's got

to be sold and it's one of the

reasons why the Prime Minister

reasons why the Prime Minister wants to proceed to sell it. Now the

assurance Donald McGechy gave this

week was during the sale process,

comments by Telstra about the

regulatory regime would be

proportionate, measured and

factional. Now exactly how the

Telstra management will interpret

that we don't know. What we do

that we don't know. What we do know is the war between the Government

and Telstra will continue. It's

and Telstra will continue. It's not over. The truce is only for a

over. The truce is only for a short period of time. But the truce

period of time. But the truce needs to be effective, because that is

very important in terms of making

this sale a successful one. And the

other big announcement this week,

other big announcement this week, of course, was an extra two battalions

for army. How does that strike you?

Very important announcement, an announcement frankly which was

overdue. The army's been very

stretched. Its commitments both

globally and regionally are over

globally and regionally are over the last half decade have been quite

extraordinary. I think the

important point here is the

justification announced by John

Howard. He stressed that

instability in Australia's region

instability in Australia's region is only likely to intensify. He

nominated in particular, Vanuatu

nominated in particular, Vanuatu and potential instability in Papua New

Guinea, saying that these potential

problems in the future were likely

to be even more serious than the

problems in the past such as

problems in the past such as Solomon Islands and East Timor. So I think

the overall message here Barrie is

that after the commitments are

finished in Afghanistan and Iraq, I

think that the focus in Australian

defence policy will return very

defence policy will return very much to our own region and it's by no

means certain if the problems are

means certain if the problems are as severe as John Howard has indicated,

that the announcement he's made

that the announcement he's made this week will, in fact, be enough. We

may well have to do more yet.

Paul, thanks for your time this

morning. Thanks, Barrie.

Well, they certainly spent some money at Tuesday's Cabinet meeting. $10 billion, to be precise. That's what it's going to cost to add two extra battalions to the Australian army. 2600 extra soldiers. That's a huge recruitment challenge for the army. To talk about that now I'm joined from our Parliament House studios in Canberra by the head of the army, Lieutenant General Peter Leahy. Good morning, and welcome.

You're basically talking about 500

extra soldiers a year. It may not

seem like a lot, but it is a lot

when you're losing numbers now?

It is a lot, but it's achievable.

We can improve our recruiting

performance. Certainly with those

soldiers we have in army if we keep

them for longer that can help as

well. It's an achievable problem,

but it's a necessary one. There's

already thim presentation that to

already thim presentation that to do so you'll have to start dropping

standards on weight and health and

things like that? We can have a

things like that? We can have a look at some of the entry standards but

at some of the entry standards but I think what's important is that we

recognise it's not about what you

are before you join the army, sure

people might be overweight. But

we're good at getting people fit.

we're good at getting people fit. I know a lot of young women and men

try try drugs recreational. We

try try drugs recreational. We have targeted testing and when I talk to

soldiers I know what they're saying

to me is very clearly we don't want

people doing drugs in the army.

It's about the culture inside the

army, the way we see each other and

work together. Again, I think

that's achievable. What about with

asthmatics for example, that's come

up during the week, are you now

prepared to take people with that

problem? Well I think the treatment

regimes have improved and we can

make sure that people have the

facilities to be able to make sure

that they're fit. Clearly we won't

be able to take people who suffer

very badly from asthma. But for

those who might have had it as a

child or might be just suffering on

the enls, again concessions can be

made and we can make sure that

they're fit and healthy. But again,

do the job in the army. But do they

have to be capable of doing all

jocks, or are you able to say

because you're an asthmatic you'll

do a desk job, for example? We'd

like to think that most people are

deployable for all sorts of

activities. You've got to lock at

me. I'm older than most in the

army. I've been lucky to keep my

health and fitness. So there are

some areas, and particularly with

the support we get from the army

Reserve, the surgeons and the

lawyers and other professionals who

come and support our deployments,

they're doing very specific jobs

they're doing very specific jobs and we're able to make some concessions,

particularly in the case of

particularly in the case of surgeons on age, they're very skilful and

they help us out and we're very

grateful for. That but it is a

grateful for. That but it is a young man's job out there in the field in

Iraq and Afghanistan you need to be

fit, you need to be hardy and

fit, you need to be hardy and pretty healthy and get on with the job.

You've already said it's not only

about recruitment it's about

retention. In that sense how

important is wages? The Prime

Minister did say on Friday he

Minister did say on Friday he hadn't ruled out the possibility of

increased wages. Is that an

important element? I think that is

an element and clearly when we look

at the package that the Cabinet has

put together for us announced by

put together for us announced by the Prime Minister and the minister,

there are bonuses for retention.

There's ways that we can support

There's ways that we can support our people more. We're saying in

people more. We're saying in regard to retention that you recruit the

soldier and you retain the family.

We recognise that as our families

grow up and our soldiers grow

they're looking for posting tenure,

more stability in one location so

the kids can get to school and stay

there. Our families all recognise

that. Pay is part of that and

that. Pay is part of that and we'll see what comes of. That but what I

see is soldiers don't talk so much

about the pay. They talk about the

opportunity to serve the nation, to

do a challenging job, to be part of

an organisation that the country

an organisation that the country can be proud of. So there's a whole

package there and we'll be working

with our soldiers to see what can

keep them in the army. Because if

we can just keep them for a year or

two longer it will make the whole

problem a whole lot easier. You

concede that rotation is a problem,

do you concede you have a grip on

it? Not yet, but we're taking steps.

About a month ago the army issued

About a month ago the army issued a directive to go for 3-year posting.

That will allow a bit more

stability. We're looking at with

the changes occurring in a number

the changes occurring in a number of battalions, to make larger base Sos

that instead of moving around the

country all of the time from base

country all of the time from base to base we'll be able to keep people

base we'll be able to keep people in the one geographic area. There's a

lot of promise in that sort of area.

Some people like to move. Those

who are not comfortable with that

who are not comfortable with that we will try and keep them in the same

area as much as possible. It's

about a career of advancement. You

do more channelling jobs, you get

promoted. We can work on the

balance just a little bit more.

I think you would concede that the

military generally has a less than

perfect history in terms of dealing

with internal complaints over the

years, particularly with bullying

and a lot of parents have raised

that as an issue. Can you persuade

the community that you're getting a

grip on that one? I think we are.

The Senate and the Government are

supporting us there. I will

acknowledge and I've done it

previously that we make mistakes.

It's like any community, we can

It's like any community, we can make some mistakes. But we are very

clear to our soldiers that we have

clear to our soldiers that we have a zero tolerance for harassment and

for bullying. A zero tolerance for

drugs. Some people get it wrong

every now and again and we'll deal

with them. But I think the kufrlt

inside the Defence Force, inside

army in particular is a strong

culture and I'm very confident and

very proud of our soldiers as I

travel about to see them committed

to serving the nation and being

to serving the nation and being part of the army. Where mistakes occur

we'll be right onto them to try to

make sure that it is about the

individual and that they understand

this is wrong. Don't do that.

What about the bottom line issue

with me, the fear of being killed

with me, the fear of being killed or injured? There was a time when

parents would send their kids off

parents would send their kids off to the army and they'll think they'll

get a trade and it will be useful

for the future. Now there's a real

chance they'll actually see

conflict? Well the history of the

army and the Defence Force in

particular is about service to the

nation and the acceptance of risk

and challenge. The Anzac legend

and challenge. The Anzac legend was born in Gallipoli where many

soldiers were killed and wounded.

It carried through in the Second

World War in Malaysia and Korea and

Vietnam. Yes there are dangers in

military service, but in the way we

prepare our soldiers, the way that

they are trained and equipped and

the way they work together under

strong leaders these days in Iraq

and Afghanistan we're able to

recognise those risks. And when I

talk to the soldiers before they

deploy they know that the risks are

there but they know they're ready

and they are prepared and they're

prepared to face the challenge.

It's something they're very proud

It's something they're very proud to do on behalf of Australia. When you

get bogged down in something like

Iraq and you're doing it

Iraq and you're doing it essentially in support of the United States

in support of the United States that can't help, either. Are there any

instances where you know that

soldiers have left the army because

of that? I'm not aware of any

instances and I've just come back

from Iraq where I saw watched a

battle group working in the south

battle group working in the south of Iraq. They're all very proud.

They're very positive. They're

They're very positive. They're very much aware that they're helping the

people of Iraq. The province that

we're in is making great advances.

The Iraqi security force have been

able to take over control for the

security of the region. We've

stepped back a bit into overwatch

and we're seeing advances. I've

seen on numerous visit nous great

advances in the economy.? a lot of

building going on, a lot of people

out there trying to rebuild Iraq

out there trying to rebuild Iraq and we're very happy to be part of that.

Very happy to help the people.

That's one of the things that I

think motivates our soldiers. They

know they can make a difference and

they see that difference occurring.

The Prime Minister puts a

pessimistic perspective on regional

stability and says the country

stability and says the country could face worse situations than we faced

recently in the Solomons and East

Timor. Do you share that pessimism?

I think what we've got to do in the

Defence Force is make sure we're

able to cope with the potential for

strategic volatility in the future.

We've got to make sure that we can

deal with the sorts of problems

we're seeing now. If you look at

the types of activities the Defence

Force are involved in there's a

Force are involved in there's a very great scope of them. It used to be

just about the defence of Australia.

We'll do that and we'll do that

absolutely, that's our primary task.

But the assistance to disaster

missions in Sumatra, to Pakistan,

peacekeeping and humanity

operations. What I see is --

humanitarian operations. I should

add there are smaller increases to

the support available to us from

Royal Australian Airforce and the the support available to us from the

Royal Australian Navy, it means

we're able to provide the Royal Australian Navy, it means that

with a greater range of options so we're able to provide the Government

that they can deal with the

as they arise. And the Federal that they can deal with the problems

Police are recruiting as well, will

you competing for the same pool of

labour? I think there's a slightly

different labour pool there. My

understanding of the Federal Police,

and I heard the commissioner say

other day that they've got plenty and I heard the commissioner say the

applicants for their 400-odd other day that they've got plenty of

positions - they tend to be a

bit older than our soldiers. positions - they tend to be a little

Probably 27, 28, people who've had

bit more life experience, because Probably 27, 28, people who've had a

they're going to be dealing much

more closely with the population.

They're in doing that policing role.

We're after the younger guys. We

certainly want them to be mature

responsible and act as ams dors for certainly want them to be mature and

Australia, but I don't think

a direct competition between the Australia, but I don't think there's

forces. Is there a competition in a direct competition between the two

terms of demarcation when you go to

a place like the Solomon Islands or

East Timor, for example, or are

responsibilities clearly defined? East Timor, for example, or are your

We're working really well together

and a lot of people probably don't

understand what's happening over in

the Solomon Islands. That's

actually a police mission. The

army, Navy and Air Force went there

in support of a participating

force. We've been working very in support of a participating police

closely with them and it's a great

cooperation there and similarly up

in East Timor, we're able because

the nature of the Defence Force to in East Timor, we're able because of

deploy quickly, to take our

logistics and command and control

and deal with the problem quickly.

But the Federal Police and other

police from around the world were

there pretty quickly. We work

cooperatively and we work well.

We're training together and I'm

confident that in the future we'll We're training together and I'm very

be able to make a very seamless

force. Now there was news over the

weekend that the UN Security

has authorised an international weekend that the UN Security Council

police force for East Timor. 1600

in total. What will that mean for

Australia's military presence?

It means that the sum total of

security and the police and other

agencies will be able to build a security and the police and other UN

secure and stable future for East

Timor. The police and the UN

agencies will concentrate on the

governance, they'll concentrate on

the police and those aspects of

government life and the life of the

people. We'll be there as a

security force. We hope to be able

to take a back step and move away

and not be as prominent on the

streets. With 1600 police they

should be able to cope with most of

that. We'll cooperate with the UN

mission, but I expect that we'll be

able to be a little bit quieter,

because it now is very much about

rebuilding and sustainment and

that's a police and civilian

mission. Does it mean, though, that

you'll be able to reduce numbers

almost immediately? We've been

reducing our numbers fairly

gradually now for about a month and

I'm confident and we've got a new

force lining up to go and we'll be

able to bring some fairly

substantial elements out. We'll

make sure that those security

in country - and it won't only be make sure that those security forces

Australia - but those security

forces in country are able to cope

with that. But as we've seen if

there's a need to deploy quickly

we've clearly demonstrated we can

do. That but I'm confident that the

path that the East Timorese people

and their government is on is one

where that won't be necessary.

Lieutenant-General Peter Leahy,

thanks for your time this morning,

appreciate it. It's my pleasure,

thanks for invying me on. My name is Anthony Leach

consultant in Sydney. and I'm a business development I agree with John Howard's decision of the Australian army, to increase the size requirements in the region. as I believe it meets our security Prime Minister's decision I think the

to increase the size of the army the country now has is a reflection of the requirements with regards to terrorism. ever-increasing security challenges When the Prime Minister talks about I think he's referring to Europe, terrorism raids in the UK. where they've been recent sends is actually a positive one. I think the message it I think it's a good thing that the region sees of its army and muscling up, Australia increasing the size if you like. that Indonesia gets that message, I think it's important to be messed with. that Australia is not I think to some extent Islands and East Timor that activities in the Solomon Government policy in this regard. has had an influence on I'm not really in a position to say with 2600 troops whether two more battalions our security requirements. is enough to cover But the Government is in a position and they have made that decision. where they can best assess that attractive to prospective soldiers Army advertising could be made more of life in the Defence Forces. by showing a more complete package 2000 more gung-ho soldiers We don't necessarily need to have ready to live in Kabul.

We may also need soldiers who have a more strategic outlook. I think it is necessary role internationally. that Australia takes more prominent We should be proud of the efforts

in places like Afghanistan, that our troops have made as post-tsunami relief efforts. Iraq, East Timor, as well spread troops too far and wide. I don't think the government has is probably a positive sign I think taking on more troops and allows us to increase or maintain our international activities

and possibly increase those activities as we see fit.

Well Antony's comfortable with us

taking more responsibilities but

Brian Toohey I'll say this quickly

so it doesn't matter. We spend $20

billion on defence? I think the

interesting thing is defence has

an extremely generous budget. It's interesting thing is defence has got

supposed to have the guideline 3%

real growth for the next 10 years

yet it constantly busts that. It's

way over it. Every other

department if it wants to go over way over it. Every other Government

their Budget, "That's fine, but

you'll make a cut to pay for it.

It's about time defence was pulled you'll make a cut to pay for it. "

into line. I have no objection to

increasing the size of the army but

it should be funded from other

of defence. We've got a terrible it should be funded from other areas

teeth to tail ratio. They seem to

able to go in defence, to go to teeth to tail ratio. They seem to be

Cabinet at any time. You don't

for a budget, you just line up any Cabinet at any time. You don't wait

day of the week and get more money?

At the same time, the operation

demands change all the time, too.

That's not necessarily their say-.

So Government is sending them off

here and there which might not

necessarily be on the books at a

time of the budget. To some degree

that's true. This is a long-term

thing, that's not because some

operation suddenly needs more

troops. One of the reasons they're

so stressed at the moment is a

matter of deliberate choice by the

Government to go into Iraq. We

didn't have to go to Iraq. That

didn't have to go to Iraq. That was a war of aggression which we choose

to go into. It's a complete

disaster but that's one of the

reasons the Defence Force is so

stressed. So it's a matter of

choice that it's so stressed. We

don't have to go to all of these

places. Is the area more unstable

these days as the Prime Minister

seems to suggest, or is it we pay

more attention to the region?

I think there are concerns about

what some Pacific Islands their

futures might be and all Melanesia

and Papua New Guinea in particular,

but to my thinking, there's not

but to my thinking, there's not been a convincing argument yet that the

answer is to send in a couple of

battalions of Australian troops.

You'd argue that a sort of proper

governance and transparency in the

legal and financial systems basic

things like that are much more

important than having our boys and

girls wondering around on tropical

assignments. But there is a

long-term problem with some of

long-term problem with some of these States do collapse. They will

attract the likes of terrorists.

Again, I don't know how Australian

troops could prevent that. I think

that's true and I think in the

that's true and I think in the light of that failed states attracting a

basis for terrorism, clearly we've

made some agreement or undertaking

to be more front and centre in the

region. But you can't help but

think that the Prime Minister's

announcement on Friday or the other

day rather, was also too let's put

the attention on our region, let's

not put the attention on what we're

doing in Iraq, Afghanistan, because

as Brian says, we made a choice to

be in those places. We said no to

the Middle East. I think there was

a slight tweaking of the message.

Lebanon, we haven't said no to Iraq.

Lebanon, sorry. The New Zealanders

look at this with bemusement.

look at this with bemusement. There was a time when they looked after

these regions and now we're saying

we're the top cop. New Zealand

we're the top cop. New Zealand have been good, too, they help out

occasionally. It does appear as if

we're suddenly now taking the key

responsibility. I think the lead

responsibility. I think the lead has been put on Australia, very much so.

I do, too. It's not something

I do, too. It's not something that's been asked for, I think it's been

lobbed on us. As I say, whether

that's the correct response. One

that's the correct response. One of the factors about this recruitment

thing that has got me a bit tossed

and as a military man given your

bearing, you might be able to

answer. I always thought that one

of the great attractions of the

Australian army was that everybody

could fight that when it came to a

crisis the pencil pushers and the

signalmen could get out there with

signalmen could get out there with a gun and do fighting as well as the

rest. But you get from this

rest. But you get from this because they're going to take everybody

they're going to take everybody that when the boom goes up or whatever

when the boom goes up or whatever it does - you would know this, again -

we're going to get all these people

up there fighting while leaving at

home tattooed asthmatics. I think

the general made that point in the

interview, he doesn't want that

situation, he wants everybody to be

fighting-capable? That's not

realistic. There's a lot of people

who's going to be sitting watching

screens, they don't have to be

superfit. You have a two-level -

Air traffic controllers that sort

Air traffic controllers that sort of thing, they don't have to be

superfit. You've the got to be

realistic about this. If you want

to get more people into the army

to get more people into the army you should - Brendan Nelson's been

saying this - you need to lower the

standards in some areas a little.

Doesn't mean you're going to

interfere with how well the job's

done. You join at the Navy to see

cockatoo Island and that's it.

As Peter Leahy said it's about

retention. Recruitment is one

thing, they say we've had trouble

with recruitment advertising. The

armed forces have had the best

advertising in the past decade,

they've had fantastic ads. You've

got to think about what you're

getting people to sign up for.

getting people to sign up for. They have to solve the retention issue,

the lack of awe tonneny people have

within that culture. Maybe they

should bring in something like, if

you serve seven years, you get your

HECS paid for. They've got their

HECS paid for the officers. Say if

you're in the int fantery, why

you're in the int fantery, why would you hang around? You get too old

you hang around? You get too old for the jo, you want to leave but if

the jo, you want to leave but if you stay an extra two years when you

leave if you want to go to uni

leave if you want to go to uni we'll pay your HECS, something real like

that. There was an encounter with

the Prime Minister a week or so ago

when he was visiting Queensland and

certainly it is of concern to

parents. Here's an example.

You've got two children? I do in

Iraq, and one in Timor. I don't

think as a parent, I shouldn't have

to put up with that. Gang God my

daughter wasn't in Timor for very

long. I have two in Iraq. Every

time you deploy somebody we lose

time you deploy somebody we lose our children. You don't even think of

them. If it was your child I bet

you would think twice before you

sent them. J are you arguing they

shouldn't be there? We don't think

they should be there. We've got

three of our own children. Nobody's

child should be sent over there,

child should be sent over there, not defending our own country and

defending our own country and that's what they signed up for, our

country, not everybody else's.

I'm sorry you disagree with us, but

you've had the opportunity -

Our children you're sending, not

your's. I understand that, but my

children didn't choose the military

as a career. His children didn't

enlist with the army and that's a

fair point. Those that do have to

expect to serve? That's a mother

talking there, perfectly

understandable, mothers don't have

to necessarily follow pure logic to

be concerned about their children.

I think that was an instance there.

She's got a point. It's the

Government making the choice. We

didn't have to go into Iraq and we

don't have to go into Afghanistan

and put people's lives at risk. It

is a choice and she can argue as a

political decision with the Prime

Minister about that. It's not the

army's choice to go to these places.

She doesn't have to agree where we

deploy to. You know you're signing

up for deployment and most of them

once they are deployed they want to

go and that's true. Let's move onto

the other big issue of the week and

that's the sale of Telstra.

that's the sale of Telstra. Malcolm Farr Telstra was half-pregnant a

week ago, what will it be in a few

weeks time? Have you done the maths?

You've got to take a step back from

that and ask, "Was there actually a

conjooigal embrace, or did both

parties keep their undies on?

Howard is walking around say

parties keep their undies on?" John Howard is walking around saying I

don't know if I'll privatise

Telstra. 40% will be in the Future

Fund for the next two years or so.

It's like the Future Fund was some

sort of prophylactic as it were.

To keep the analogy going. He

started it. Has anything actually

been achieved? It's sort of a

pretence of privatising Telstra

pretence of privatising Telstra when actually it's still the majority

shareholder still is the biggest

shareholder is still the Government.

Glenn Milne asks who goes before

Glenn Milne asks who goes before the Senate committees, is it Telstra or

the Future Fund? They'll be holding

so many shares. Do you think the

independent Future Fund will argue

for Government policy or maximising

share price? What role will it have

to take? It will argue for

maximising share price. In some

ways Telstra will be worse off.

It's always ranting and raving

it alone shouldn't have a It's always ranting and raving about

competition watchdog looking over

its should scper try to stop it

gouging the prices for customers.

Once the Government thinks it's rid

of having to worry about what price

it's going to get when it

it it will be much more willing to it's going to get when it privatises

back the competition watchdog.

Helen Coonan as Communications

Minister has backed the competition

watchdog. The Finance Minister

trying to get the best possible

price has been less willing to back

the watchdog. The crucial thing is

what happens between now and when

they announce the share price as to

whether there's any backsliding by

the Government on competition

policy. Or backsliding from the

Telstra management on the sort of

campaign they're running. We heard

from Phil Burgess earlier, let's

to something else he had to say from Phil Burgess earlier, let's lfn

during the week. Past management

during the week. Past management has accepted the intrusion on

shareholder value we're not going

shareholder value we're not going to accept. There are all kinds of

accept. There are all kinds of ways to pay for these things, but one

to pay for these things, but one way is not OK. That's to pick the

backpockets of our shareholders.

That's quite blunt and defined.

Any company in a near monopoly

position must expect there to be a

competition watchdog. There's no

country in the world that doesn't

impose competition rules. You can

argue about the level of regulation

and the reach of it? If trouble is

we don't have a competitive

structure for telecommunications.

It's like letting one trucking

company own all the nation's

highways and charge its rivals for

driving on it and then having a

competition watchdog saying we'll

try and set the price. Once the

Government is out of it, perhaps

they'll stand back a little and say,

that's Telstra doing that, not us.

I think it'll help the watchdog,

fact that the Government gets out I think it'll help the watchdog, the

owning those shares. It's not as fact that the Government gets out of

good as splitting the thing up in

the normal competition policy way

into the network and the retail

of Telstra. But I mean, this idea into the network and the retail side

is that there's a democracy, that

this shouldn't be happening. Of

course a democracy supports, it's

the Parliament and the elected

governments of both sides accept

that a competition watchdog has to

keep an eye on Telstra because it's

got too much power. The idea that

you say, "Get the share price up by

letting us rip our customers off,

it's just ludicrous. What approach letting us rip our customers off,"

do you think Telstra and management

will take? The Prime Minister said

after that somebody from Telstra

told him Phil Burgess is not

speaking for Telstra. Which is

unusual for the director of public

policy. He's not speaking for

Telstra and Sol Trujillo put out a

statement saying he stands by him

and Donald McGech yi said it's a

question of how you go about it,

that provided you use measured

language then you're entitled to

explain to the public why you need

to regulate and the impact or why

they resist regulation and the

impact it has on their

shareholdings. They're walking a

fine line. There's a lot of

on McGechy to get Telstra across fine line. There's a lot of pressure

line some agreement to behave on McGechy to get Telstra across the

themselves. The Government needed

this done and off. The gechy

statement had that line, "And we

will behave ourselves in future"

Which was extraordinary but gave an will behave ourselves in future" .

indication of the backroom drama,

the brawl going on between the

Telstra management and the

Government. With a 6pm Friday

announcement. They'd to wait till

the Stock Exchange closed. The

Government might be frustrated that

Phil Burgess is not listening. Sol

Trujillo his boss was speaking soy

Phil's not listening to anybody at

the moment. LAUGHTER Just on the

ongoing issue within the Government

now, and whether it will remain an

issue, Barnaby Joyce says wrong

to sell, they haven't fattened the issue, Barnaby Joyce says wrong time

pig and Don Randall says they

have sold the lot and got it done pig and Don Randall says they should

with. There's division amongst the

coalition? Which will be delighting

Mr Springborg in the Queensland

election. Ejust what he needed a

poo fight over Telstra. I think

it'll disappear, really. It's not

going to hurt the Government as

as the fact that are the people going to hurt the Government as much

going to come in and want to buy it?

Who's going to want to buy Telstra

shares? If there are buyers out

there it's not going to be a

stampede we saw for T2. Even if

$3.50? We don't know what the price stampede we saw for T2. Even if it's

is. That's one of the keys as to

whether or not they backslide on

competition policy to try and keep

the price up. They can hardly put in the product disclosure statement

for the shares, "By the way the

price could go up if we keep

battering the Government over the

head with competition and we'll win

that. " You mentioned and

elections there are elections that. " You mentioned and Queensland

up along the Eastern Seaboard. elections there are elections coming

grim for topz paertds in all States. up along the Eastern Seaboard. It's

-- Opposition parties in all

States? As Paul said incumbency has -- Opposition parties in all

never been so big a tyranny, not

decades, one of the reasons being never been so big a tyranny, not for

that all governments when you look

at them have packed themselves with

staff, with all sorts of powers

outside the reach of Parliament and

it's pretty tough to knock off a

Government these days, particularly

one that isn't so adventurous that

it's scaring the horses. Peter

Debnam in NSW is not incompetent,

he's intent and disciplined, but

he's making no impact. I know

keep saying incumbency, yes that's he's making no impact. I know people

true. Morris Iemma looked shaky a

while back. I think there's a

talent issue here, there is a

and campaigning issue there in the talent issue here, there is a talent

Oppositions there. Debnam might be

no idiot. Is he cutting through,

making an impasse? The frustrations

of being in Opposition now whether

in federally or in the States make

you look like a goose, because they

are so huge. There's a talent gap

between the federal politics

between the federal politics between the Liberal Party at the Federal

level and at the State level. If

someone like Malcolm Turnbull had

chosen to go into State politics

I think he would have become leader chosen to go into State politics and

of the Liberal Party I think he'd

win this election. As Paul Kelly

said at the beginning the NSW

Government, is a shocking said at the beginning the NSW Labour

government. It's got a shocking

record. It should be out on its

ear. It's the law of government.

That runs through to the advisers

well. In the coalition they go off That runs through to the advisers as

to Canberra because they're in

Government. At the State level

stay in the States because they're Government. At the State level they

in government and they enjoy it.

You can't blame them for. That

I guess that is an incumbency issue

as well. In Victorian Ted bailu's

position hasn't been helped by

another confrontation between Peter

Costello and Jeff Kennett, just by

way of background to that let's

a look at how Stateline in Victoria way of background to that let's have

started their piece on this on

Friday night. What are the

Friday night. What are the qualities that make Ted bailu a good leader?

That's easy. He's warm, down to

earth, approachable, focussed and a

good bloke. Ted's qualities are his

openness to ideas. He's just got

incredible work ethic and he's very openness to ideas. He's just got an

very insightful. REPORTER: What are

the qualities that make him a good

leader? Look, can I say to you I'm

the Federal Treasurer, I run

economic policy for the country.

I'm not a political adviser. Ouch.

He is the senior Liberal in

Victoria. He was asked to say

something kind about the State

leader of the party. And he didn't.

That was a non-endorsement of Ted

bailu, no doubt about it. That led

Jeff Kennett to go over the top.

That's the only position he ever

adopts. That is more revealing than

the other comment that's been given

as the example all week, that he's

got to present a plan. He doesn't

need the timeline, he knows when

need the timeline, he knows when the election is. It was a lack of

endorsement, yes. At a certain

point, senior Federal members of

both major parties want to stay out

of the State brawling because if

they say anything they'll be seen

they say anything they'll be seen to be trying to influence things one

way or another. That wasn't

way or another. That wasn't staying out of it, but pretending it wasn't

there in the first place. Taefs

Dorothy Dixer, say something nice

about Ted bailu, essentially. Of

course with Jeff Kennett it raises

that constas conflict between Jeff

Kennett and Peter Costello. You

wonder whether they can ever put it

behind them? Apparently not, I

thought they had but apparently not.

Michael Kroeger has to dip in and

have a go. It's like old times.

It's the last of the great

personality wars. We've seen a mop

between Peacock and Howard, Kennett

and Howard, I guess we'll never see

a Keating-Beazley love fest. But

really the big one now is still

Kennett-Costello. Kroeger on the

outside. Although Peter Costello

outside. Although Peter Costello did say that sort of name-calling

belongs to the '90s which must be

belongs to the '90s which must be an encouragement to everybody, we look

forward to the next session of the

Parliament. With stem cells and

that's a debate for another day.

that's a debate for another day. We have talked about it on this

program. There is a development in

the United States that seems to

the United States that seems to have confused the situation. But what I

want to raise is what drives Tony

Abbott. He's constantly annoyed

about the media's reference to his

Catholicism and saying that drives

his view. So let's hear from Tony

Abbott on this and then Julia

Gillard. Every single position

associated with the so-called

religious right has been argued on

the basis of human values, not

religious teaching. Yet it's now

impossible for stories about

particular politicians on

particular politicians on particular topics to be written without the

addition of gratuitous adjectives

such as a devout Catholic. And I

think Tony's really got an

obligation to just be honest with

people and say his religious views

people and say his religious views - and I respect them - his religious

views mean that he is opposed to

therapeutic cloning. He's opposed

to the creation of embryos. He

thinks that that's offensive and

that's what he believes. And then

he tries to argue the toss on the

science and I think that's what

science and I think that's what miss leads people. Can you understand

Tony Abbott's frustration, or is it

a grey area? It's confusing because

he himself says he tries hard to

follow his religious beliefs. He

highlighted there's more Catholics

in the Liberal Party and that sort

of thing. I think what some

Catholics find interesting, it's

Catholics find interesting, it's one section of Catholic beliefs, what

you call the personal morality he

follows hard. He doesn't seem to

follow the Catholic Church's social

teaching. The last Pope was

teaching. The last Pope was opposed to the invasion of Iraq. He wasn't.

If That supports his position,

doesn't it? It shows he's not

doesn't it? It shows he's not driven by the church? He's not a puppet of

Rome. Or WorkChoices which the

Catholic social teachings seem to

Catholic social teachings seem to be against, et cetera. It's a

against, et cetera. It's a narrower version of morality that he does -

but he does say he follows. He's

keen on being a keen Catholic.

People know what his views are so I

don't see any great problem when he

stands at the election he's not

hiding any of his views. He raises

this all the time. It obviously

troubles him. He did an article two

or three years ago in which he said,

"Yes I am a poor, humble and flawed

follower of the Roman Catholic

faith, however that's not the basis

on which I make my political

decisions. " It's understandable

that that faith will inform his

human values positions. But the

main thing I think, whether his

Calthum pian or what, on this issue,

Abbott has been wrong in science

Abbott has been wrong in science and in the temperament of his

commentses. He has been out of

commentses. He has been out of line in what he's said. As is his won't

he manipulates debate to suit his

argument. He refers to human

cloning. He's very manipulative in

how he argues it. But yes, it does

trouble him and I think people get,

you know, they get angered by the

fact that there's nothing wrong,

Catholics right or left will have

the right to life argument. That

the right to life argument. That is not necessarily a hardline Catholic

view, it's a Catholic view.? but

you argue so strongly for one

element of it and then on the other

elements of it - the compassion,

elements of it - the compassion, the social justice thing - it doesn't

seem to be there. I think that's

what confuses people and makes it

seem a more politicised kind of

contribution to this. You made a

valiant effort on Radio National

this week to make sense of this

development in the United States.

People seemed to shift position as

People seemed to shift position as a result of it scpe shift back again.

Some did, some didn't. I'm elated,

there were just two entirely

different things. It's two

different things. It's two different elements and that's where it gets

confused and many of us don't

understand it and it's hard to know.

One minute we've shifted here

because we've had a breakthrough.

No, we have to go back here. We

No, we have to go back here. We were told at the moral issue was now

defunct. It's not and that's why

Tony Abbott is still talking about

human cloning. He's got a case to

push. And hybrids. And hybrids.

You say Jeff Kennett has one gear,

but Tony Abbott