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Kerry O'Brien speaks to Kevin Rudd -

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Kerry O'Brien speaks to Kevin Rudd

Reporter: Kerry O'Brien

Opposition Leader Kevin Rudd speaks about the potential for conflict arising between his political
aspirations and his wife's business affairs, in light of questions about whether she pays her
company's staff fairly.


KERRY O'BRIEN: If this week was a tennis match, the first two sets went to Labor, but John Howard
has just picked up the third, and for the moment at least, the pendulum has swung back to the

In the spotlight today, the business affairs of Kevin Rudd's wife Therese Rein, and whether she
pays her staff fairly.

Regardless of her statement and his public explanation late this afternoon, a damaging story was
allowed to run for most of the day suggesting a double standard in the Rudd household on the very
issue that has been Labor's ace policy area - fairness in the workplace.

The claim in two newspapers this morning was that Ms Rein's multi-million dollar employment agency
had acquired another company and put staff on individual contracts, not AWAs [Australian Workplace
Agreements], and bought out penalty rates, overtime and shift allowances, for an extra 45 cents an

Ms Rein is in London but her company's statement today said that they discovered through their own
efforts last December that some staff had been paid less than they should have, and that they were
recompensed in full by April this year.

But this is not the first time that the potential for conflict between Kevin Rudd's political
aspirations and his wife's very successful business affairs has become apparent. And they're both
doing some serious thinking tonight.

The Labor leader joins me now.

Kevin Rudd, you've admit embarrassment over your wife's employment contracts for the workers. If
she's done nothing wrong, why are you embarrassed and why on earth has it taken so long today to
come up with an explanation?

KEVIN RUDD, FEDERAL OPPOSITION LEADER: She's in London, that's the answer to the second part of
your question, and London's a long long way away and in a different time zone.

KERRY O'BRIEN: Not with communications the way they are these days.

KEVIN RUDD: Hang on. I first heard this issue was being raised about seven o'clock last night when
I was off to the State of Origin in Queensland and a matter of high religion, and went to the game
and attended to it when I got back, and in London it's already a different time of the day, so at
that stage, not fully knowing the facts it took some time to put together the details.

KERRY O'BRIEN: So what's wrong? Why are you embarrassed?

KEVIN RUDD: No, no. We're just saying we wanted to be as thorough as we could in terms of the
details of these arrangements. It was not just her who was in London, it was her CEO and chairman,
of the relevant part of the company.

So it was the question of finding the right people in a different time zone. So by the time we
finally settled this in terms of her company's statement on these matters and she'd already been
through the details, it was already about 6am in the morning London time.

It wasn't any slackness on her part.

KERRY O'BRIEN: So why the embarrassment?

KEVIN RUDD: Well I just think, if you're in my position and you're putting yourself up as the next
prime minister of Australia, you don't want these sorts of things to happen. It's as simple as

And, when it came to Therese's arrangements, and I love her dearly and I've always supported her
and her chosen career and business, to buy this company, which she did last July, then obviously,
perhaps, greater efforts could be put in to make sure all things were done according to [inaudible]
and they weren't.

KERRY O'BRIEN: Would you agree that 45 cents an hour for compensation for loosing all those basic
extras overtime etc., sounds a rather paltry sum, almost as paltry as you've been painting

KEVIN RUDD: Well on the individual amount, I'm still in no real position to comment on that cause
it may vary between one individual and the other in this company which employs I think 200 or 220
people. It's one part of a company which Therese has been building up since 1989. It's a very
relatively recent acquisition. I also don't know what's the average amount of overtime worked in
this place. Secondly, what are the standard hours of work? Is it 38, 37.5? The surrounding details
I'm not familiar with.

KERRY O'BRIEN: But on the face of it, if that's an average would you agree that 45 cents an hour as
compensation for all of those things, sounds a rather paltry sum?

KEVIN RUDD: What I'm pleased about is that Therese when she became aware of this through a review
of what was going on about five or six months after the company was bought, at the time when the
Fair Pay Commission determined the new minimum wage and they were trying to apply the new wage to
the different classifications within her company and they didn't think it was right so they brought
in external consultants and worked out there had been wrong classifications, she then acted and
acted voluntarily.

KERRY O'BRIEN: Isn't it true your wife put her own name to the deal on the letter of offer?

KEVIN RUDD: I'm uncertain of that. It wouldn't surprise me if that was the case at all. Because, as
the statement said today, she takes personal responsibility for this. It's her company, her baby.
She's been building it up for a long, long time and this was a relatively new acquisition.

The other thing she has said today is she'll now review all her common law agreements with all of
her staff to make sure there's no other problems and if there are I'm sure appropriate adjustments
will be made.

KERRY O'BRIEN: Let me come back to the point about the 45 cents an hour. If it's true as I
understand it that your wife's name might actually have been on the letter of offer that presumably
outlined the buyout of those things, on the face of it 45 cents an hour, a rather paltry sum?

KEVIN RUDD: Well we're all in large corporations and or governments for that matter, and her
company employs a total of about 1,200 people around the world, she'd be acting on the basis of
advice. What she told me today was she had legal advice from the country's most reputable legal
companies about making sure that the basic entitlements that were reflected in the relevant award
in terms of the salary and the package which was constructed on that was entirely consistent with
legal arrangements when it came to common law agreements.

KERRY O'BRIEN: Was it also fair?

KEVIN RUDD: Plainly, her discovery after the event was no, but she did, she needed time to work her
way through that. But when she did act on it and discovered of her own volition there was a
problem, no pressure from outside organisations or whatever, she did the right thing. She's a very
good person, my wife.

KERRY O'BRIEN: Would you agree given how vociferously you've tried to use individual examples of
the intrinsic unfairness of the Government's AWAs, not all of which have turned out to be factually
correct by the way, that Mr Howard and his colleagues were remarkably restrained in their criticism
of this issue today?

KEVIN RUDD: That's a matter for them in terms of their political tactics in Parliament. When it
comes to the whole question of individual firms, Darryl Lea and the others, Spotless. Can I just
say, having sat around the tactics table of the Australian Labor Party for quite some time when
these individual AWAs, and I say again my wife has never used AWAs, but when AWAs roll in the door
in the case of Darryl Lea, zero additional benefit at all, and on the case of Spotless, something
similar, there's a lot of time, effort and scrutiny which goes into looking at those AWAs before
they're ever raised in Parliament.

KERRY O'BRIEN: On that issue of scrutiny what about the motel? Yesterday the City Motel that it
seemed, and this is a point that the Government did go after you on today, was picked up by Labor
from a press report and not checked out and that motel, City Motel has lost business as a result
and that the facts aren't as accurate as Labor was portraying?

KEVIN RUDD: In the Parliament itself no reference was made to the name of the company at all.

KERRY O'BRIEN: But Julia Gillard, your shadow minister, did identify that company in a radio

KEVIN RUDD: When it comes to what she was talking about the Parliament in the debate, and I didn't
hear the interview concerned, was the fact that this was an AWA being used broadly across the
hospitality industry in NSW as I understand it. And that her concern was that not with individual
employers who are operating within the laws which Mr Howard has laid down for all Australians to
comply with.

Our objection and our attack is always on the laws themselves. And the fact that when it comes to
Mr Howard's unfair laws they've gone too far. We need to restore the balance and part of that is
also having a robust independent umpire.

KERRY O'BRIEN: It must now be clear to both you and your wife that if you want the keys to the
Lodge you're going to have to find a better way to neutralise your wife's business affairs than
what you've done so far?

KEVIN RUDD: This has been a sober wake up call for us both, I think. It's been an embarrassing day,
I admit that. My wife, she's always been dedicated to her own business, I'm proud of what she's
done. She started with nothing back in 1989. Half a secretary in an attic officer in Brissie and
now employs 1,200 people around the world. I understand in modern Australia women have their own
careers and I've respected that all the way through, and I still do. And we've hoped beyond hope
that we could reconcile the two universes...

KERRY O'BRIEN: I hear a "but" coming?

KEVIN RUDD: Well it's getting tough. I chatted to Therese a little while ago and we'll have more
discussions about how this might be dealt with.

KERRY O'BRIEN: Is it inevitable that your wife will have to sell her business?

KEVIN RUDD: What we've set up till now and after taking advice from a range of people including
former senior public services is this, that the responsible course of action would be, if we won
the election to go to Peter Shergold who's the secretary of Mr Howard's department, and ask for his
advice about how we would manage any conflict of interest.

KERRY O'BRIEN: But you'd be going to the person who would be answering to you and asking him to
tell you what to do in a situation where your wife's business has all those Government contracts. I
mean, I come back to it. You're saying that's what you were going to do, that also suggests now
you're going to have to review that?

KEVIN RUDD: We are giving it serious thought about the way ahead. It's a tough thing for my wife.
This has been embarrassing, I accept that.

KERRY O'BRIEN: But is she acknowledging to you that she, too, is going to have to rethink?

KEVIN RUDD: We've started to talk that through. She's a formidable lady in her own right.

KERRY O'BRIEN: This will test your powers of negotiation, seriously I would have thought.

KEVIN RUDD: I've been married for 25 years to this wonderful woman, Kerry, and I don't always win.

KERRY O'BRIEN: Since we're talking about individual contracts, your predecessor Kim Beazley first
promised to tear up Australian Workplace Agreements a year ago. You and Julia Gillard have
obviously put intense scrutiny on this since you've became leader and you've reaffirmed the
promise. Yet, you still can't say how you'll enforce the ripping up of valid AWAs, not matter how
much you might not like them, valid AWAs, if workers want to take you up on that promise and for
those workers who are happy with their AWAs and want to renew them, you still can't say what you'll
replace them with. So is that really good enough for an alternative government at this late stage
in the peace?

KEVIN RUDD: Well can I say you've got about 1,000 times more detail from us on industrial relations
policy than you ever had from Mr Howard before the last election. Once he obtained the control of
the Senate he raced away with it and brought his policy WorkChoices out into the field and
legislated with no pre-election commitment whatsoever.

KERRY O'BRIEN: Perhaps that took him winning in the Senate took him as much by surprise as anybody.
Labor's had a year to plan how it's going to implement its policies and there is still this
glairing area where you don't have the answers yet?

KEVIN RUDD: Julia and myself are currently consulting with businesses up and down the country about
transitional arrangements between the existing industrial relations system and what we'd replace it

We're very mindful of the fact that a number of companies right across the country. Some 3 per cent
of employment right across Australia currently has AWAs are engaged in contracts which affect their
business. We're mindful of that.

That but we've also got to make sure that people who have been very badly affected, very badly
affected, have a way through as well. So this is a detailed consultation with business. Not just
with the mining industry, with general business as well and we intend to get it right. I've said
before we'll be finetuning the detail when it comes to our industrial relations policy and this is
part of it. We will do this well prior to the election. People will be very clear about where we
stand on this.

KERRY O'BRIEN: You've put a lot of effort into trying to lift Labor's and your economic credentials
in the eyes of the public but the polls would strongly suggest that voters still aren't buying the
line. They still see the Government as significantly superior in that regard.

One wonders how much more you can do and how much more you can add that's going to in any way
impress them anymore than you have or to the extent that you've already failed to do?

KEVIN RUDD: My job, Kerry, is to put the case to the people. How they respond is ultimately a
matter for them. I'll be working hard to make sure they know the comprehensive plan for Australia's
future and that means the economy. Productivity growth? Right now, zero. The argument we'll be
advancing is "How do you lift productivity growth rather than hope and depend as Mr Howard and Mr
Costello do that this mining boom will last forever?" We're confident we will punch through with
that message. We've had $32 billion worth of tax giveaways in the last election, sorry I meant the
last budget. That's washing its way through the community that has its effectives. It's the
advantage of incumbency. But we intend to be competitive and we intend to have a very cogent case
to put to the Australian people on the economy, as we believe we already do.

KERRY O'BRIEN: Kevin Rudd, we're out of time, thank you for talking with us.

KEVIN RUDD: Thanks, Kerry.

(c) 2007 ABC