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Extent of Dakwins cover-up worsens given QLD precedent of 1988

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Peter Reith



Treasurer Dawkins has been claiming that he has done all that is possible to draw Victoria into line with respect to its massive breach of Loan Council borrowing rules.

Mr Dawkins claims he had to keep the issue quiet to avoid undue financial disruption.

This explanation is a load of rubbish.

The soft treatment of the Victorian Labor Government is in sharp contrast to the treatment of the Queensland National Party Government in 1988. It is abundantly clear that Mr Dawkins and Mr Keating have engaged in a politically partisan cover-up of the Victorian Government's breach.

In 1988 when the Queensland Government of Premier Ahern refused to agree to global borrowing limits set at the 12 May 1988

Premiers' Conference/Loan Council meeting, Mr Keating didn't keep quiet about the issue.

He issued a press release saying:

"Mr Ahern also indicated he would no longer accept any global borrowing limit.

As a result the Commonwealth will reduce in 1988-89 its payments to Queensland to the extent that their new borrowings in 1988-89 exceed the amount show in the offer document.

The Commonwealth stands ready to discuss these matters with the State of Queensland and to incorporate the financial requirements of that State within the overall State entitlements.

But in the national interest it cannot accept that any State can seek to take a financial advantage contrary to the benefit of the nation as a whole."

(P J Keating, 12 May 1988)

But the Federal Labor Government did not stop there when it came to the Queensland National Party Government.

Unprecedentedly, the States Grants (General Revenue) Act 1988 included a special clause directed at the Queensland issue. In that Act, Section 7 made the payment of financial assistance under the Act conditional upon a State observing the global borrowing limit proposed by the Commonwealth, and that the


Federal Treasurer could reduce payments of financial assistance to that State by an amount up to the excess borrowing.

Critically, in the 1989 States Grants Act this provision was removed. When introducing that legislation to Parliament on behalf of Treasurer Keating, Minister Assisting the Treasurer, Mr Peter Morris, said:

"One further change from the arrangements put in place last year is that under this Bill the payment of general purpose assistance has not been made conditional on State observance of the global borrowing limits. Such a provision was included in

the States Grants (General Revenue) Act 1988 in response to the refusal of Queensland to agree to the resolution of Loan Council which set the limits, for 1988- 89. All States have agreed to the resolution for

1989- 90. However, should any State in the future fail to commit itself to the global limits or fail to use its best endeavours to observe them, the Government would be prepared to propose the reintroduction of the

provision to this or future legislation."

(My underlining)

It appears that there is one rule for Labor Party controlled States and another set of rules for everyone e lse.

Also critical is that the States Grants (General Purpose) Bill 1992 introduced in the House of Representatives on 7 October 1992 and now before the Senate contains no clause equivalent to Section 7 in the 1988 A c t .

We now know that Mr Dawkins and the Federal Government knew about this issue way back in June.

Victoria have breached their Loan Council commitments.

According to Mr Dawkins the Victorian Labor Government Budget of 12 August 1992 failed to meet the debt reduction strategy he was asking for. He also said he was waiting for the Nicholls Report (released on 21 September 1992). However, this Report only refers to the fact "negotiations" were being undertaken with the Commonwealth Government.

Therefore, why was it that in introducing the States Grants Bill on 7 October 1992, no clause was inserted regarding breaches of global limits (as had occurred in 1988 legislation), when the Federal Government knew about a massive breach by the Victorian


Mr Dawkins and Mr Keating have obviously been involved in a massive cover-up. ^

29 October 1992 Canberra

Contact: Hugh Logue (06) 277 4030 D173/92