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Meet The Press -

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April 17th 2005


MEET THE PRESS PRESENTER, PAUL BONGIORNO: Hello and welcome to Meet The Press. Challenging the way
Australians are hired, fired and paid. Today, Workplace Relations Minister Kevin Andrews and the
Howard Government's radical industrial relations agenda. And later, shareholders demand more
safeguards after the jailing of corporate crooks, Ray Williams and Rodney Adler. But first - what
the nation's press is reporting this Sunday April 17. In Melbourne, the Sunday 'Herald Sun' reports
on Australia's increased Iraq commitment. "PM farewells troops to Iraq." John Howard will today
tell 450 crack troops they have the nation's best wishes and support. In Brisbane the 'Sunday Mail'
has "Bring him back." The surgeon dubbed 'Dr Death' Jayant Patel over botched operations at
Bundaberg Hospital faces extradition from America. The Sydney 'Sun Herald' leads with "Hypocrite
Costello urged New South Wales to raise taxes." State Treasurer Refshauge has produced documents to
back the claim. The Melbourne 'Sunday Age' has "Market fears $15 billion plunge" - a mid-week
collapse in confidence could prompt a stampede on the Stock Exchange. And the Sydney 'Sunday
Telegraph' reports, "Adviser to leave." The paper says long-time Howard confident Tony Nutt has
indicated his willingness to quit his inner office post, renewing speculations about the Prime
Minister's future. Last week the Industrial Relations Commission began hearing what is most likely
its last minimum wage case. Our guest today has included abolishing the Commission on his list of
things to do when the Government takes control of the Senate in July. Welcome back to the program,


PAUL BONGIORNO: Well, before we go to your portfolio areas, the biggest news of the week, of
course, was the Medicare safety net broken promise. Now, not your portfolio, but Tony Abbott said
that the decision was taken by the Cabinet ministerial team of which you are a member. How badly
damaged do you believe the Government's credibility is as a result of this broken promise?

KEVIN ANDREWS: Well, Paul, this is a situation where there is quite clearly a blow-out in costs
beyond what was expected when this issue was first raised and considered. That's against a
background of an ageing population in Australia. The Cabinet had to look at this and take a
responsible decision about the future. What's in place, though, is a very generous safety net
beyond anything that was in place beforehand, which Australians will still have. And particularly
those who want to make use of specialist services, they would reach the safety net virtually with
one visit to a specialist that involves any sort of procedure or even fairly minor operation.

PAUL BONGIORNO: So, you don't accept that the Government's credibility has been damaged?

KEVIN ANDREWS: Well, as the Prime Minister and others have said we're sorry for the change, but
we're also pointing out that the reasons for this is because there is a cost here. Costs just don't
come out of some endless bucket of money. It's the taxpayers' money at the end of the day and we're
trying to look at how we can responsibly spend it, provide a safety net, but also do this in the
context of an ageing population in Australia.

PAUL BONGIORNO: Shouldn't Health Minister Tony Abbott at least do the right thing and offer to
resign? After all, he was the one who just six months ago he was giving a "rock-solid, iron-clad"
commitment. He was the one that, even though thrown a lot of objections at that time in the
interview about cost blowouts, still gave that commitment.

KEVIN ANDREWS: This decision was taken by the Cabinet, Paul. It's a collective decision - that's
how the Westminster system operates in Australia - and it was a Cabinet decision.

PAUL BONGIORNO: Back in 1999 during the republican campaign debate, Tony Abbott of course opposed
that. He said that politicians can't be trusted. I guess in light of this back then he was right,
wasn't he?

KEVIN ANDREWS: No, I don't think that's the case. From time to time we have to adjust policies. All
Governments do that and it's responsible to do so. This is an adjustment of a policy to take into
account the circumstances that we're facing. A big part of the problem is that in politics in
Australia things are put often in such adversarial black and white terms that any adjustment of a
policy is then sometimes seen and portrayed as some sort of back-flip from a position that you

PAUL BONGIORNO: If can I come in there. Your side of politics has been hitting Labor over the head
for over 10 years now with the LAW-law broken promise by the previous Labor Government. A promise
taken, by the way, Treasurer Dawkins at the time, in the name, as you are today, of fiscal

KEVIN ANDREWS: Well, that's true. That was something which the Government of the time put into law.
It was something which we attacked. I've got no doubt that the Labor Party will attack us over
this. But we will go ahead and explain it was a responsible thing to do. And I think Australians
know that we've got an ageing population and we simply, as I said don't have a bucket of money. We
have to raise it from taxpayers and we have to be responsible about how we spend it.

PAUL BONGIORNO: Going to the minimum wage case for our lowest paid workers, the Industrial
Relations Commission began hearing the case on Tuesday. The unions see a sinister motive in your
plans to abolish it.

GREG COMBET, ACTU SECRETARY (April 12): Why change it? There's only one answer to that - the
Government and the employers, big business, want to reduce minimum wages.

PAUL BONGIORNO: Minister, what other explanation can there be?

KEVIN ANDREWS: We've been arguing before the Commission in each of the minimum wage cases for the
last few years that the concentration should be on the low-paid and that the Commission should take
account the prospects of those Australians, tens of thousands of which still don't have a job.
Whilst we've got unemployment down to a 28-year low, we could do better in Australia, and there are
tens of thousands of people still without a job that we believe there is some responsibility to try
and help. So this is matter of balance, but we believe that you can have a more rigorous approach
to setting the minimum wage in Australia. You can still have increases in wages under that as they
do in the UK. What we're proposing is simply a different way of going about it, applying more
ongoing economic rigour and monitoring of the outcome of the wage from time to time.

PAUL BONGIORNO: Minister, you've seemed reluctant to give any guarantee that no worker will be
worse off as a result of any changes you bring in.

KEVIN ANDREWS: Well, if you look at our record, Paul, workers have been much better off.


KEVIN ANDREWS: We've seen something like a 13% increase in real wages.

PAUL BONGIORNO: That's true but will you give a guarantee into the future they won't be worse off?

KEVIN ANDREWS: As I and others have said, we're not about slashing real wages for Australians. What
we'll see is a safety net outcome this year which will undoubtedly award wage rises to Australians.

PAUL BONGIORNO: Minister, you seem reluctant to give that...

KEVIN ANDREWS: On the basis of that we will move forward. What we want to achieve is continuing
rises in real wages for Australians, but at the same time to try and ensure that more Australians
can actually get a job.

PAUL BONGIORNO: You seem reluctant to give that guarantee, maybe in light of what happened to Tony
Abbott, I don't blame you, but the Prime Minister is quoted in the 'Financial Review' last week as
saying that he would give that guarantee. Are you and he not at one on this?

KEVIN ANDREWS: No, we're saying the same thing. What we're both saying is that we don't want to see
Australian workers worse off. We want to see their real wages continue to rise, but I'm not going
to get into a sterile argument about giving guarantees or not giving guarantees, particularly when
minimum wages are not set by the Government itself, it's set by a different body. Even today, the
Arbitration Commission could say that we're not going to award an increase in wages this year. I
think it's unlikely, but it's done by a different body. I don't see much point in me getting into
this debate about guarantees and not guarantees. Look at our record - 13% increase in real wages.

PAUL BONGIORNO: Coming up - we ask, is it reform the Government is really after or a workplace
power grab?

PAUL BONGIORNO: You're on Meet The Press with Workplace Relations Minister Kevin Andrews. And
welcome to the panel, Misha Schubert, the 'Age' and Brad Norington, the 'Australian'. In his
Menzies lecture on Monday, the Prime Minister said he wanted cooperation not confrontation with the
States over industrial relations reform. That didn't wash with Labor's Stephen Smith.

SHADOW INDUSTRY MINISTER, STEPHEN SMITH (April 5): When the full detail of the Government's
industrial relations changes emerge, you can be reliably assured that they'll be extreme, they'll
be based on politics, they'll be based on ideology and they'll have one effect - individual
Australian employees and their families will be worse off. Their wages will be reduced, their
entitlements will be stripped and their safety nets, like the minimum wage, will be removed.

PAUL BONGIORNO: All of that raises questions for Brad Norington.

BRAD NORINGTON, THE 'AUSTRALIAN': Thanks, Paul. Minister, we've heard what Labor has to say. You've
said that you want to impose a federal takeover of State industrial relations. Why not prove Labor
wrong and adopt a sort of less divisive means of doing it and negotiate with the States?

KEVIN ANDREWS: Well, I raised this with the States at a meeting of the Workplace Ministerial
Council, and the Victorian Minister, Rob Hulls, where we have one single State had said to me that
he would walk arm in arm with me around Australia seeking to convince his Labor colleagues. When we
had that conversation what we had was a response around the table from every Labor industrial
relations minister flatly rejecting the idea that we should have a national system. So, my door's
always open, Brad, but nobody's come knocking on it recently.

BRAD NORINGTON: There's been creeping doubts in recent days among some lawyers that the Federal
Government has the power to take over State industrial relations. Are you getting nervous about
this, or are your lawyers giving you the green light?

KEVIN ANDREWS: No, I'm not nervous about it at all. We've had advice, we've had advice back in the
1990s when we were looking at this as a Government after we were elected. We've had more recent
advice. And can I remind you that the first time the corporation's power was used was in fact by
the Keating government back in 1993 with their industrial reform bill. So, there's been over a
decade now of reliance on the corporation's power. It won't amount to a total national system
because our estimate is that that would bring about 85%, maybe tops, 90% of workers into a national
system. So, there would still be a place for state systems if they wish to retain it. I couldn't
see the sense of that personally, but we'll wait and see.

MISHA SCHUBERT, THE 'AGE': Minister, you've also got a raft of changes proposed to secret ballots
on union's strike action in the workplace. But we're in a situation now where we've had 14 years
worth of economic growth, employment growth at record highs. Aren't you essentially fighting an old
battle against the unions that you've already won?

KEVIN ANDREWS: Not at all. What Stephen Smith was saying was the sort of rhetoric that the Labor
Party used back prior to the Workplace Relations Act. It's reactionary, expected to be said. He's
playing to his own constituency. But what we've got from the Labor Party is wanting to go back to
even prior to reforms that Paul Keating put in place. It's quite clear that in those industries and
sectors of the economy where there is greatest workplace flexibility, there is also the best
productivity growth and that means higher wages and more jobs for Australians as well. So, we
cannot stand still in Australia. We have to continue to move forward. We live in a globally
competitive economy. We are reminded of that every day in the media and what we want to do is to
ensure that, not just this generation of Australians but the next generation as well, will have to
same opportunity for jobs and higher wages as we're getting.

BRAD NORINGTON: Minister, when it comes to the right to strike, you want secret ballots that would
drag out the process, you want to put strict limits on the timing of strikes so that they can only
be held on a very narrow time frame. Why not just ban them, because it is going to be very hard to
either call them or stop them?

KEVIN ANDREWS: Well, we've put in place in the Workplace Relations Act provisions for protected
industrial action such as strikes. We're not saying that people shouldn't have a right to strike,
but it ought to be done in a particularly constrained manner under the law, rather than something
that just leads to total disruption within the workplace itself. So we're retaining a right to
strike but saying that there should be some parameters around the way in which it operates.

MISHA SCHUBERT: Minister, in the industrial relations case at the moment over the minimum wage, the
Government is effectively supporting a cut in the minimum wage, you're proposing an increase that's
less than inflation. Isn't this somehow proof that your reform agenda is about reducing the minimum
wage over time?

KEVIN ANDREWS: Well, as I understand, the latest figures around inflation and the CPI is that our
proposal is about on line with that. So we're not proposing to reduce the minimum wage beyond that.
I would think in the future that any sort of base position for the minimum wage would have to be
inflation. Nobody is suggesting we go beyond that. We're not taking away a minimum wage. All we're
doing is saying let's have a more rigorous way in which we apply the minimum wage each year. Now,
that works quite well in the UK. I was there a week or so ago talking to their commission that sets
the minimum wage and also to government ministers under the Blair Labor Government who are quite
happy with the way it works there. So, it's not a radical proposal - it's simply updating the way
in which we adjust the minimum wage, rather than rely on a mechanism that was essentially first
established over a century ago in totally different conditions.

BRAD NORINGTON: Well, if you want more economic rigour and monitoring of the minimum wage, why not
impose stricter conditions on the Industrial Relations Commission and give them the resources to do
that, rather than taking it holus-bolus out of their hands?

KEVIN ANDREWS: Well, there's a number of ways we're considering, Brad. One was to look at the
perimeters under which the Industrial Relations Commission sets the minimum wage, another was to
look at having perhaps a specialist arm or division of the Industrial Relations Commission, a third
is to have a separate body whose full-time job is to not just set the minimum wage but to monitor
it on an ongoing basis.

PAUL BONGIORNO: Minister, can I just clarify...

KEVIN ANDREWS: I prefer the latter.

PAUL BONGIORNO: Can I just clarify one thing with you? Are you saying that whatever change you
bring in that the Government won't be responsible for whether wages go up or remain the same? Will
you leave that decision to an independent body or will you bring it back to say yourself, the
minister of the day?

KEVIN ANDREWS: I'm not sure that I want to be setting the minimum wage, Paul. I think that's a
no-win situation whatever is decided. Currently it's done independently. In the UK it's actually a
recommendation that's made by the commission to the government, but I think in all but one minor
instance that's been accepted by the Government.

PAUL BONGIORNO: You don't want that, do you?

KEVIN ANDREWS: It does seem to me though, that having commissions set the minimum wage is an
appropriate way to go forward rather than the Government itself.

MISHA SCHUBERT: Minister, as part of your Welfare to Work package, one of the things that's been
considered is the idea of asking single mothers who are on welfare benefits to go out into the
workforce again once their children start school. Why not put the same obligation on stay-at-home
mums who are married or living with a partner?

KEVIN ANDREWS: With single mums, and we've got over 600,000 of them, we know that their period of
time on welfare can be many, many years 10 to 12 years often for many of these people. That means
that the skills that they might need to go back into the workforce are diminished. We know also
that they live in more conditions of poverty than others because of the situation they're
unfortunately in. I just believe that they have the same aspirations as other people have. The
single mum who unfortunately through divorce or separation who's in say her mid-to late 30s with a
couple of kids has the same aspirations as other people, and I think what we need to do is to find
ways of encouraging them to go into the work force. It won't simply be obligations. There will be
assistance and support from Government in this package as well.

PAUL BONGIORNO: OK. Thank you very much for joining us today, Workplace Relations Minister Kevin
Andrews. Coming up - Williams and Adler are behind bars. But just how well protected are
Australia's millions of shareholders? And disgraced businessman Rodney Adler's inability to face
the fact of his own criminal behaviour is the theme of this week's cartoon. Bill Leak in the
'Australian' has the new convict saying, "Is there is a thief in here? Someone's pinched my
business section."

PAUL BONGIORNO: You're on Meet The Press. The corporate watchdog ASIC had two big wins last week
with the jailing of white-collar criminals Rodney Adler and Ray Williams. They notoriously robbed
shareholders in one way or another of millions of dollars. John Curry is Chairman of the Australian
Shareholders Association. Welcome to the program, Mr Curry.


PAUL BONGIORNO: Misha has some questions for you.

MISHA SCHUBERT: John Curry, were these sentences long enough and will they do anything to deter
other corporate crooks in the future?

JOHN CURRY: I think the sentences were probably realistic. In the case of Mr Williams, I think
those shareholders and creditors who've lost significant sums of money would probably argue that
through his mismanagement then the sentence should have been longer. But, however, let's wait and
see - that sentence is under appeal.

MISHA SCHUBERT: Do you think these convictions represent a sign that we're getting tougher on
corporate crime in Australia or are these just sort of fluke, once-offs?

JOHN CURRY: I think they're a sign that the business conditions and the business climate is
changing. They will send a message to all directors that they must act responsibly, certainly must
act honestly in the interests of shareholders, and must act morally and ethically. The judge said
in his decision that this was a totally immoral situation.

BRAD NORINGTON: Mr Curry, do you have any concerns that ASIC in its prosecution of Mr Adler ended
up dropping some of the more serious charges in what amounts to some kind of plea bargain here?

JOHN CURRY: Well, I do have some concerns about that, but I'm a little comforted by the fact that
apparently there are further charges pending against HIH executives, and until those charges have
been announced it's a bit hard to say what evidence Mr Adler might or might not have given to ASIC.

BRAD NORINGTON: Do you think that the performance by ASIC in the recent times is a sign that it is
getting tougher with corporate crime?

JOHN CURRY: Yes, I do and I think that's good. We've seen a number of aspects of the law that have
been strengthened in the past year or so. We've seen APRA, for instance, have significantly more
responsibilities with a new board. We've seen the ASX corporate governance guidelines been
introduced. All of these have changed the climate for directors and I think to the good.

MISHA SCHUBERT: Have they also changed the climate in terms of pay and conditions? Do you see any
hope there that we might be moving towards a situation where senior executives who drive companies
into the ground will, in fact, one day be forced to walk away with nothing rather than with
multimillion-dollar pay-outs still?

JOHN CURRY: Certainly, shareholders would expect that executives only be rewarded if shareholders
themselves are rewarded. That is a fairly fundamental aspect of our law of remuneration today. But
I think, in the longer term we're going to see much more emphasis placed on companies acting
ethically and honestly and also contracts being drawn that provide for payment or lack of payment
when there's poor performance. For instance, where executives walk away with a couple of years
salary really have been fired, then that's wrong. Contracts should provide that the executive
should not receive significant bonuses or payments for a period after they leave a company so that
they cannot ramp it up in the short-term to get a benefit.

BRAD NORINGTON: In your view, are shareholders advised quickly enough of changes in directorships?

JOHN CURRY: No, they're not. We've seen a number of instances where a director is required to
report a change in their shareholding within 48 hours of that shareholding change taking place. We
know that in a number of cases, this has not happened and sometimes directors advise the market
weeks or months afterwards. Now, a director is an inside trader - and I say that advisedly. So that
it is most important for the market to know when a shareholding changes takes place, buy or sell.

MISHA SCHUBERT: Mr Curry, what can be done to tighten that problem?

JOHN CURRY: I think when it is discovered that these have happened that there should be a report
made by the ASX to the market and the company themselves and the director should be fined. There
should be significant penalties for such a thing because the market is trading on an uninformed

PAUL BONGIORNO: Has the Government given you any indication whether it is thinking the way you do?

JOHN CURRY: No, it hasn't. It has reduced the period from five days to two days but in a number of
jurisdictions overseas, that has to be advised to market instantly and I see that as coming in

BRAD NORINGTON: In Australia, do you see that the company directorships system is too much like the
old buys club, a network that is hard to crack and directorships keep getting shared around?

JOHN CURRY: I do see that. Hand in hand with that comes the situation of directors who are simply
on too many boards and shareholders aren't getting their value because they are spread so thinly.
But, I think, basically, there are still a number of the old boys club type appointments. For
instance, he's on the board that I'm on therefore he should be on this other board that I'm on.
There must be a large pool of qualified talent out there that can provide a lot of expertise to
companies. It's not being tapped and I think that's a great disadvantage to Australian companies.

PAUL BONGIORNO: Isn't one of the problems is that boards see themselves or can see themselves as a
sinecure to be a rubber stamp for management?

JOHN CURRY: Yes, they can and I think directors have to take a far greater interest in what happens
in their companies. They have got to be very familiar with the various committees they are
operating and have to know the business quite well. I think that there are many excellent directors
but there are some who are simply occupying a board seat. Those people should be weeded out by
their peers on that board.

MISHA SCHUBERT: Mr Curry, what else needs to happen in Australia for smaller shareholders to be
empowered when they are out gunned and out numbered by the major institutional shareholders?

JOHN CURRY: Well, I think that the shareholders need to get together as a group. The Australian
Shareholders Association encourages that. But they also need to work more closely with the
Institute of Company Directors and with companies themselves to try and lift the level of
governance. On a number of instances the ASA has worked with institutions and we believe we've got
a common cause in some of those actions and that has been successful in a number of resolutions
being withdrawn from meetings.

PAUL BONGIORNO: Do you fear that as the HIH episode fades from view that maybe the Government will
be less willing to keep pumping millions of dollars into prosecuting these big white collar crims?

JOHN CURRY: I hope not. Because I think it is important that ASIC be funded adequately. When a
crisis comes along like HIH there was additional funding given. But I think that ASIC needs to have
ongoing funding. For instance, you have to have a major embezzlement or something like that for
ASIC to be interested in it today. It's got to be more than $1 million or $2 million.

PAUL BONGIORNO: Thank you very much for joining us today John Curry and thank you panellists, Misha
Schubert and Brad Norington. Until next week it's goodbye from Meet The Press.