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No-one from the ATO was available No-one from the ATO was available to comment. Rachel Carbonell, Lateline. We're joined now by in Canberra by one of those Labor critics,

the Shadow Finance Minister, Lindsay Tanner.

In the US political system, they

have a system of congressional

hearings for appointments like

Robert Gerard's. Would that work in

Australia? I would have

Australia? I would have reservations about heading down that path but we

will have a look at the process of appointing members of the Reserve

Bank board. When Australians owe

money to the tax office or the

money to the tax office or the child support office they are pursued up

hill and down dale and yet here we

have an Olympic standard tax dodger

being appointed to the Reserve Bank

board by the Howard Government. It

just shows in John Howard's

Australia there's one rule for rich

Liberal mates and a different rule

for everybody else. I know you

for everybody else. I know you can't write Labour policy but does the

Gerard case point out the need for

more transparency at least in the

process of appointing to the

process of appointing to the Reserve Bank board? I think it does raise

big questions along those lines. We

will have a look at that and at the

hearing that our

hearing that our committee, the

House economics committee will have

in the new year, I will ask the

governor of the Reserve Bank if he

approved the appointment, if he was

a-aware of the extraordinary tax

issues hanging over Mr Gerard's

issues hanging over Mr Gerard's head at the time and if he has any views

about reforming the process. This

calls into question the integrity

calls into question the integrity of the Reserve Bank board an it's not

an ordinary board. These people

an ordinary board. These people vote to determine the level of interest

rates, they're not an oversight

board, they have an active role in

setting intraaes interest rates in

this country and it shows the

this country and it shows the degree of arrogance and out of touch

of arrogance and out of touch nature of the Howard Government that they

can't see it as a problem here.

can't see it as a problem here. They can't see this giant tax avoidance

scam casts doubt over the integrity

of a board member. Wouldn't you

of a board member. Wouldn't you want to be putting those questions

equally to the tax commissioner?

I think that's a fair call and the

tax commissioner may well appear at

some point before our committee.

It's a routine arrangement we have

every six months for the Reserve

Bank bank board. Obviously there

Bank bank board. Obviously there are questions we want to put to the tax

commissioner as well about this

issue. There's a really fundamental

question of values here. And it's

question of values here. And it's at the core of the Liberal Party and

the core of the Liberal Party and it goes back a long way, and that is

there's a blind spot about tax

there's a blind spot about tax avoid anss by rich people. They reckon

it's OK for rich people like Robert

Gerard to get away with whatever

they can get away, with it's all

part of the game. We had it when

John Howard was trrn with bottom of

the harbour schemes and they think

that's alright. There's a deep vane

of attitude in the Liberal Party

that sort of thing is OK yet

ordinary hard working Australians

are get taxed till the pips squeak

and they don't care about people

like Mr Gerard getting appointed to

the Reserve Bank board while

the Reserve Bank board while they're in the mid of a giant tax scam case.

It's not as if the Labour Party has

been squeaky time in Government

been squeaky time in Government over appointments to boards. It's been

such a long standing political

practice of Governments to stack

bonks and Gareth Evans joked a

bonks and Gareth Evans joked a board is what it needs if it doesn't have

a House of Lords. You might recall

it was that Government that

privatised the Qantas board and

privatised the Qantas board and over 13 years in Government not every

board appointment we made was

perfect but there was nothing as

perfect but there was nothing as red hot as this one, nothing you can

point to in the Reserve Banker

point to in the Reserve Banker other boards that remotely resembles how

outrageous this is. You have

outrageous this is. You have someone who has been fined $36 million in

penalties, paid $150 million to

settle a case so you can imagine

what would have happened if it went

to court. Peter Costello clearly

knew about it. He's refused to deny

he knew about it. Mr Gerard says he

knew about it and he's gone and

appointed him to the Reserve Bank

board. It's no co incidence that

Gerard is a key part of Peter

Costello's power base in the

Costello's power base in the Liberal Party. They don't care about rich

people's tax avoidance but they

chase the little people for every

last cent. You say you will be

questioning the chairman of the

Reserve Bank. What will you ask him

about other possible replacements

because there is the possibility

that Frank Lowy may leave the board

soon enough, if which case a

soon enough, if which case a vacancy will emerge and Labour presumably

will be in the position of fighting

against a potential government

appointee. It's been suggested that

Ron Walker may well be appoint and

he is the ultimate Liberal Party

mate and if we treat these

appointments as some kind of

cocktail circuit reward for Liberal

Party mates, then it really is

Party mates, then it really is going to call into question the integrity

of the Reserve Bank. Let me say

of the Reserve Bank. Let me say this - we are very fortunate in this

country to have an outstanding

institution in the Reserve Bank.

Both under Iain McFarlane and

Both under Iain McFarlane and Bernie fraiser. The is a years of

continuous economic growth that a

lot of that credit is dhow dew to

the Reserve Bank and it's critical

we have a Reserve Bank board that

the community has confidence in.

That's been shaken. We don't want

That's been shaken. We don't want to see the Government further shake

that confidence by appointing

somebody who is clearly associated

with the Government. You say it's

been shaken. The Treasurer's

argument is that tax audits are

argument is that tax audits are very common, especially for high wealth

individuals and if someone disputes

an audit in court they're innocent

until proven guilty in that court.

We've clearly had somebody cop a

plea here. You don't cough up $150

million if you think you're going

million if you think you're going to get off if you're being taken to

court. The really obvious response

to the Treasurer's comment is the

ordinary citizen facing a tax audit

over his workplace expenses or

something like that is not involved

in dodgy insurance, phoney

in dodgy insurance, phoney insurance arrange pths in the Dutch an

tillies. He's not involved with

tillies. He's not involved with $150 million of tax that's been foregone

12 years. This is an extraordinary

case. The

case. The notion that this is

case. The notion that this is normal routine stuff is total rubbish. The

ordinary Australian citizen who

deals with the tax office and is

sometimes in dispute with the tax

office is light years away from

office is light years away from this stuff. That is just nonsense.

Final question - do Labour's

strategists believe this will have

some impact on Peter Costello's

leadership ambitions? It clearly

exposes a real weakness in Peter

Costello f and that's lack of

judgment. Complete lack of judgment.

He has got a responsibility to

uphold standards and here he has

appointed somebody to a critical

position, the Reserve Bank board,

who is right at the heart of an

extraordinary tax avoid antionz

extraordinary tax avoid antionz scam and extraordinary tax avoidance

and extraordinary tax avoidance case and at the very peak of that case

it's months before it's ultimately

resolved he's clearly known about

resolved he's clearly known about it and from narrow political fashional

reasons he's appointed that person.

That calls into question Peter

Costello's integrity and his

judgment, both of which are