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Transcript of doorstop interview with Peter Reith MP

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Deputy Leader of the Opposition E&OE


With the Parliament resuming tomorrow, I call upon the Treasurer to release all of the relevant documents on the Loan Council affair. He's been simply selectively leaking documents at inconvenient hours to suit his own political purposes. By releasing some documents, he's

acknowledged that's in the public interest that documents do be released and I therefore call on him now to respond to my Freedom of Information request and supply all of the documents. His continuing failure to do so can only reinforce the Opposition's claim that he is running a massive

cover-up of the Victorians breaching of their global borrowing limits.

Q The minute he released yesterday - it showed that he had followed the advice that the Treasury had given him. So, if you are criticising the actions that he has taken, are you also critical of the Treasury?

A Well, I'm certainly critical of the Treasurer in his conduct on this matter. The fact is that that advice that was released yesterday showed that his principal responsibility was to safeguard the integrity of the Loan Council and he has conspicuously failed to do that. And for that reason, I believe there is additional pressure on him now to release the further documents because that document then in its recommended strategy was that he should write to Mr Sheehan. He did that on 27 July. They then had a comprehensive meeting on 29 July at which all of these matters were apparently discussed. He then wrote again on 7 August. I have no doubt that there was a minute from Treasury advising the Treasurer to write that letter. That minute is, I believe, dated 5 August and we'd like that minute

released. That would show that, upon the conclusion of the meeting with the Victorians, there was other advice given to the Treasurer. We'd like to know what that advice was and I would believe that that would give us a better steer as to exactly what advice he got.

He has conspicuously failed to produce that advice. He's been asked by one of the members of the Loan Council, Mr Fahey, the Premier of New South Wales, to release that further advice and he should do so immediately.

Q You seem to have some details of that minute on 5 August and so do you know what it says?

A Well, if I had that minute I would release that minute.

Q How disappointed are you that the Democrats still wont give you a full inquiry?

A Well, I had a very constructive meeting with the Democrats this morning. WeVe ensured that they have all the information available to them that we have available to us and they are considering the matter. We will certainly hold further discussions with the Democrats if they wish to do so, either late today or early tomorrow. The Parliament resumes at 2 o'clock. Presumably in the next 24 hours or so they will conclude their initial position.

Q (inaudible) You didn't have much luck convincing Mr Dawkins to hand over papers or resign.

A Well, I don't think there is any doubt that Mr Dawkins should resign.

Q The Democrats don't agree.


Parliament House, Canberra, A.C.T. 2600


A Well, I don't say that the Democrats are necessarily the final adjudicators on this matter but we would hope that they would believe that it's in the national interest that there be a Senate inquiry into it. But we will obviously review that when we have the Democrats' position.

Q Do you believe a Senate inquiry would lead to John Dawkins' head on the platter?

A Well, I think he ought to go now, obviously. But I think a Senate inquiry would certainly bring forward further information and that would be in the public interest.

Q Would it be in the interests of the economy, though, to have a long inquiry on this?

A Well, I'm not saying that it would be a long inquiry. We've raised the question of the duration of an inquiry with the Democrats but that's on hold as they, you know, come to their principle view.

Q But even the suggestion of an inquiry has led to the dollar dropping to a new five year low this afternoon.

A Well, I think the markets are naturally concerned that the Federal Treasurer should bring down a budget which he knew to be inaccurate and that's a reflection on that. I think the state of the markets is also a reflection on the fact that Moody's downgraded Victoria and when you have a clear breach of the global borrowing limits, which is really the first serious breach of the global borrowing limits in the history of that arrangement, naturally there would be some concern. But that is entirely on the head of the Treasurer, who set

out on a course to deceive the Australian public in the Federal budget and for which he ought to resign forthwith. And we've had backup support, generally speaking, on that issue from commentators in the financial markets - Macquarie Bank this morning.

Dr Chessell, who was formerly head of the Treasury's section on this issue, has also been very critical of the failure of the Treasurer to observe the proprieties of the Loan Council arrangements.

Q But do you think that pursuing this for political reasons could hurt the economy, Mr Reith?

A But this is the biggest loan scandal affair since Khemlani and it is our obligation as an Opposition to pursue this Government so the facts are out in the open. And it is no argument for this Government to say, ‘Oh, we had to keep it confidential.* That was exactly the same argument that Whitlam ran when the Khemlani affair was first exposed and we intend to hound Mr Dawkins until he resigns. He ought to go. This is an absolute outrage that he should sit back and see the Australian public deceived in his very own budget.

Q Didnt the Treasury advise him to keep it confidential?

A No, they did not advise, they did not advise him that. They canvassed three options. One, which was to set or endorse the application for the temporary purpose borrowings. Secondly, to endorse with conditions. And, thirdly, they canvassed the possibility of the Commonwealth refusing such an application. But their advice to him was, under the

heading "Advice", was that he ought to, first of all, preserve the integrity of the Loan Council and, secondly, that he ought to write. Now there is no question that there are further Treasury minutes and, if he wants to make his claims about relying upon Treasury's advice, let's see the minutes. Let's see the advice that he's actually had from Treasury. And he wont reveal it because he is master-minding a cover-up and still thinks he can get away with it.

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Q So are you prepared to hound John Dawkins, regardless of the consequences for the economy?

A Well, it's n o t... Look, the consequences for the economy of having a Treasurer who sets out to deceive the Australian public in the Federal budget are certainly adverse. And in my view, on that basis, he ought to go and go immediately. And it's no good him trying to attack the Opposition for the fact that he has deliberately misled the Australian public in the Federal budget and for that reason we will continue to hound him. And anyway, I

mean, this sort of business we're going to keep the dirty linen, the dirty laundry, behind closed doors is no way in which to address Australia's fundamental debt problems.

Q Mr Reith, the Treasury advice did say that to raise the issue publicly when the advice was given would have adverse financial implications.

A Well, isn't Mr Dawkins all over the place, because yesterday he was saying, O h, but it was all in the budget documents, anyway." And then when you read the table, in fact, it's not there because the State figures are not disaggregated. He says, "Oh, well. Look. Yes, you've got to keep it confidential." And in the next breath he says, ‘It was all revealed in the Nicholls report." So, look, this whole confidentiality thing is just a complete furphy. What we need now is just an open statement from Mr Dawkins, backed up by the documents, as to what went on and he ought to resign, full stop.

Q Do you believe that the figure in the budget didnt include the $1.3 billion of breached loans?

A Well, the fact is that those figures were not disaggregated and Moody's and the other rating agency look at the particular circumstances of each State. And, as the figures are not disaggregated, you cant ascertain the position. And he knows that. We know that. In fact, we looked at that table well prior to raising this issue. That is a complete furphy and you shouldnt fall for it.


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