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Transcript of press conference, Parliament House

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JOURNALIST: Mr Hawke, what is your response to Senator Button's comments on the steps this morning about the quality of the debate on privatisation from the leadership level?

PM: When I had a report given to me I naturally spoke to Senator Button and asked him what he had said. There was some suggestion that he had been making a veiled attack upon his Prime Minister. I couldn't believe that was true and of course he confirmed that. He had intended neither attack nor disrespect. He was saying to me that he believed that at the highest levels of government, including himself, that more needed to be done to discuss the issues - a position with which I am entirely happy.

JOURNALIST: Mr Hawke, is there any prospect now of private capital injections into public authorities to make them operate more efficiently?

PM: What we are doing at the moment, Geoff, and you will recall that I made this position clear last year, is that this term is going to be characterised by a detailed examination of the micro-economy. And that involves looking at getting the most efficient public and private sector

structure that we can. There is a whole range of considerations that we are pursuing in looking at the review of the Australian micro-economy. Some of those would be relevant to the both the private and the public structure.

For instance, considerations like trying to improve the efficiency of our whole transport system and communications system. Others go more particularly to the public sector. For instance, there is a review of the whole range of government business enterprises to try and ensure that we get the best possible structures, the best possible

relationship, between government and the authorities that operate in this area. And I certainly want to preface anything else I say on this issue by making it clear that if you look at the whole of my public record, including the period before I came into this Parliament, I have always had and retained the conviction that there is an important place

in the Australian economy and society for an efficient public sector. I have that on both philosophical grounds, if you like, and also on the grounds of the nature of our country. It has been, is and, as far as I can see into the

future, it will always be the case that there are some

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PM cont: things that will only properly be done by the public sector. Without being exhaustive on this, look at the question of Telecom, look at the question of Australia Post. At all stages of the discussion I have made it clear

that it would be, as far as I am concerned, beyond contemplation that you would shift the ownership of those enterprises out of the public sector. The position that I have advanced is that within that framework, as we go

towards the 1990s and therefore towards the 21st century, we have got to ask ourselves questions about priorities. And specifically going to your question, Geoff, we have got to ask ourselves in regard to all existing enterprises whether,

in terms of assessing the priorities of government, we can in all areas sensibly afford the injection of public funds into all those enterprises at a level which would be necessary to enable them to operate at their greatest level of efficiency and competition. And it is really that question that I and the Government are looking and which within the Party we will want to see discussed. I have got to make the point again that distinguishes us in the Labor Party from the Liberals. I notice, for instance, that Mr Howard has put out another one of his opportunistic little press releases on this issue. There is some attempt in that, as I can understand what he is saying, to try and

identify the arguments that I have advanced with his so-called philosphy. it is a fatuous exercise because there has not been, and will never be, any identity between the position that I hold on this matter and the ideological vandalism which characterises the Howard and the Liberal positions. They have an anti-public enterprise ideological

stance. They take the view that necessarily, in all circumstances, the private sector is good and the public sector is bad. That is not only ideological vandalism but it is also economically absurd and it is certainly socially objectionable. So there is no common ground between us on this issue. It is very much a case-by-case consideration

that is required. And it is in that sense that, right from the very beginning, I have isolated from consideration enterprises, as I say, such as Australia Post and Telecom. Rather it is a question of looking at certain enterprises and making a judgement, in terms of your question Geoff, whether it is the best use of resources to inject public funds into areas where there are alternative ways of ensuring that the functions currently carried out in a solely public way may be better done another way.

JOURNALIST: To come back to Senator Button's criticism this morning, Mr Hawke. Last year he made a similar criticism about the leadership in this debate, a fact that he now is prepared to whip his own back in the process, surely does not diminish his criticism of your leadership in this debate?

PM: I just invite you to look at the transcript of the answer I have already given on this, Kerry. Naturally, I spoke to John this morning and he said to me - and he is not a person who I think is going to say it to me if he doesn't mean it - he made it quite clear he intended no criticism or

reflection on me. And let me say this, even if he had or


PM cont; even as others do, I am not ruffled by it even it were the case because at all points I have taken the view that what I want to see happen is a rational discussion. If that can be arrived at in part by some people saying it may

have been initiated better or differently, I remain quite unflapped by that. The important thing is that there be the discussion within the Party and within the community. And as far as I am concerned that discussion will continue.

JOURNALIST: Mr Hawke, is Australian Airlines emerging possibly as a bargaining chip in the course of any future factional negotiation? In other words, are you prepared to be more flexible to enable -PM: I wouldn't use any enterprise as a bargaining chip. The issues that, are involved here are too important. I

repeat, Heather, what I said before. From the very beginning of any sort of public exposure of thinking on my part on this, I have made it quite clear that what you are

involved in is a case-by-case consideration. Right from the beginning there has been the unqualified exclusion on my part from consideration of Telecom and Australia Post. They have never been on the table, as far as I am concerned, for

reasons which I have put. The sensible thing is to look at this on case-by-case basis. You mentioned Australian Airlines. I merely repeat the point that I have made before, recently, that, and perhaps I can elaborate on it a

little bit more as you - and I think as I heard up here Australian Airlines was mentioned. Let there be no doubt that when the decision was made by the Labor Government in the immediate post-war period to establish the national

airlines commission, which was TAA, that was without any question a sensible, proper decision because what Australia was doing then was emerging into a new period of its existence in the post-war economy. And clearly in that

post-war economy a national airlines system was going to be an intrinsically important part of the way this country developed. And it made infinitely good sense that in those circumstances the Government should operate an airline, in a

sense to establish standards - standards of service; standards of safety; standards, if you like, of penetration; how these sorts of things are going to be established. It was an excellent and sensible decision. That was over 40 years ago. And the world doesn't stand still and Australia doesn't stand still and the capacities of government change and the responsibilities of government to the people change. And I am simply saying it is sensible to ask ourselves the question at a time where government is going to have

increasing demands upon it to do things that only government can do, as to whether the use of limited resources in running an airline is sensible. As I made the point, a very

small minority of our population use the airlines. And to put it at its largest, I believe that an Australian Airlines either totally in private hands or an Australian Airlines with a significant private holding, with therefore

correspondingly diminished demands upon public resources, could perform the functions of Australian Airlines at least as well as they are now and I would say, arguably, better.

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PM cont: So all I am saying is that it is intelligent for government and the community to ask itself these questions. As I emphasise, if you look at the changing nature of our population; an aging population, we are going to have more

demands upon our resources to care for the aged; we are going to have increased demands upon us in terms of providing education and training facilities. And we must, as a community, place ourselves in a position where we do

those things as well as we can. And particularly to do that in an environment where, looking at Australia compared with the rest of world, there will be understandable demands upon

government to try and lower taxation regimes. So, in a sense, you are going to have, if you meet those legitimate expectations about lowered taxation regimes, you are going to have relatively lesser resources than you would otherwise have. And correspondingly, in many important areas, greater

demand for functions and services that only government can and will provide. And so it is in that sense that I say Australian Airlines must be amongst those enterprises that on a case-by-case basis you address this question to.

JOURNALIST: Just to very briefly follow up on that. Some Ministers in your Government have been saying that you should and will narrow and define the debate of what options you think should be looked at. Is Australian Airlines one

of them or can you narrow it -PM: I don't have to do something new, and in terms of saying now I am going to narrow it. From the very beginning, and the public record will show it, I didn't have a carte blanche approach. I specifically said, I can

remember when I spoke at the Victorian ALP Conference, in that contribution I excluded Australia Post and Telecom. The essence of what I was saying then was a case-by-case consideration and I don't change from that. I wonder - I don't know whether anyone is going to ask a question about

this, you probably will, but it is relevant to what I am saying now. I would just like to refer to this latest piece of outright deception, lie, by Mr Macphee in this area. The Honourable Ian Macphee has released a new release. And its heading is a lie. He said "leaked Cabinet document", note his heading, "leaded Cabinet document shows government deception over timed local calls and privatisation". And goes on to say that "this leaked Cabinet document" is

referring to a sale of AUSSAT. Just let's get this straight. There is no Cabinet document which proposes the sale of AUSSAT. What in fact happened in the latter part of last year, in October last year, was that there was a draft document by officials which referred to this issue. And let me just read to you the relevant passage upon which Mr Macphee, the Honourable Ian Macphee, is relying for his heading of "leaked Cabinet document". There is no Cabinet document. There is an officials' draft and in that it said

"sale of AUSSAT to a private company with related business activities, eg media information, could strengthen it". There is the line upon which we have the Honourable Ian Macphee saying "leaked Cabinet document ... government deception ... sale of AUSSAT". There is no recommendation

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PM cont: in any document that comes to the Cabinet when the officials' document was finalised this whole thing was modified, no recommendation came, no recommendation has been considered by the Cabinet for the sale of AUSSAT. And let me make this point clear, not only is there no proposal

before Cabinet to sell all or part of AUSSAT, but I say this, if such a proposal were to come from officials I would reject it. But that is the measure of the duplicity and of the deception and the outright dishonesty of the Opposition

on this issue.

JOURNALIST: Should the questions that you have posed about Australian Airlines, Mr Hawke, also be posed about Qantas and the Commonwealth Bank?

PM: I think you need to ask the questions about the Commonwealth Bank and Qantas. But let me say this - you would have a different framework in your mind, I think Kerry, in the way you would think about Australian Airlines

than you would about Qantas. There are different sorts of considerations which, by definition, apply to Qantas than apply to Australian Airlines. When you are talking about Qantas you are talking about an international flag carrier which has some identity with the nation of Australia as far as the rest of the world is concerned. And I would have a different framework in my mind in thinking about Qantas.

JOURNALIST: Does that still mean partial sale is acceptable to Qantas?

PM: All I am saying is that I am responding to your question about 'do you think about Qantas'. I think you think about Qantas but I am saying that a different set of considerations is in your mind than if you are talking about Australian Airlines. I think there is one point, by the way, that I should make about Australian Airlines because

there are those of malevolent mind, or perhaps innocently misguided, you can never be sure when you are talking about these range of matters, who have tried to suggest that part of my thinking on the issue of Australian Airlines could possibly confer some advantage upon my well-known friend,

Sir Peter Abeles. Let me make it clear that at all points in my thinking about this and my discussions about this, it has been made clear that any consideration of what is best for Australia and Australians in regard to the ownership and

the composition of Australian Airlines would always, as a necessary condition of those considerations, involve the proposition that Ansett could not acquire any part of Australian Airlines. That is fundamental to my thinking and

always has been.

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JOURNALIST: In the light of what you have just been saying for the last 15 minutes could we actually cut through the sign language. Are you in favour of some sort of private capital ... Australian Airline? Do you have a position on this yourself in

the light the discussions ... which have been released already?

PM: I don't know what this sign language to which you ... refer is. I would have thought that if you had read the transcript of what I have been saying as a cool analytical intelligent exposition of points of view if you want to describe that as sign

language" that is up to you Paul. I would have thought equally that on your part a cool intelligent reading of what I have said would indicate that obviously in my mind I think that there is a case for changing the priorities that Government has. Let us

take the case of Australian Airlines. I think it is crystal clear from what I have said that I think that there is a case, a very strong case for arguing that given the demands that there are and will increasingly be upon Government, for instance in the area of provision of facilities and income for the aged, that I

find it difficult to justify as a matter of priority the utilisation of scarce public resources to provide a funding base for running an airline as compared to the provision of those same resources for those things which as I say only Government can and

ever will provide.

JOURNALIST: Is it a case than Prime Minister of either or, either you fund social welfare or you fund Australian Airlines and the ...?

PM: It is not as simple as that. You have got to remember the first part of the exposition that I gave here because I am trying to do justice to what I know on your part is a keen interest in what is the overall framework of thinking. You will recall that what I said is that what the Government is very much about in

this third term is to provide as far as it can by Government decision the best sort of micro economic framework that you can in this country. And part of that analysis has got to be on the one hand what sort of things do you do to improve the environment

for the private sector. The other sort of thing that you have to do is to look at the public sector in all its manifestations and make the decisions which are going to ensure that the public sector is as efficient as possible and therefore that will in

some areas of the public sector enterprises ... there would be no question of the change of ownership will nevertheless involve a consideration of what sort of things do you need to do to free up Government business enterprises, statutory authorities in the public sector. It is quite clear that if you look at some of the

inhibitions that they have upon them that you must come to the conclusion that some of those inhibitions must be removed so that they can operate more efficiently. Let me by way of example illustrate what I mean. It is increasingly clear that in some public sectors that they are being very very much constrained,

rendered relatively in effective by the limitations which they have upon them in regard to salaries.

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PM (cont) Without going into details which I could very specifically, that you have examples where people in chief executive or near executive positions in government business enterprises or the equivalent are being paid salaries infinitely below what their relevant counterparts are being paid in the private sector and that that is in fact successively producing a

situation where these enterprises in the public sector are incapable of either attracting or retaining the best services. Now that is absurd because it means that public sector enterprise is simply not going to be able to be in a position to provide the best service either in regard to what it does currently or to possible extension of its activities if it can't get the best people. So what I am saying in a rather lengthy answer to your question is that it is not simply a question of public or private

ownership or the mix, it is a question of considering how you make most effective the various enterprises that are operating in the public and the private sector.

JOURNALIST: What is your position on the Commonwealth Bank?

PM: What is my position on the Commonwealth Bank? My position on the Commonwealth Bank is in terms of the answer that I have already given Michelle that these things should be looked at on a case by case basis is that we should look at how the Commonwealth Bank is operating now. Is it the same sort of institution as we

come to the 1990s as it was in the past. Does it perform the

same services; is it competitively placed; are there ways in which we may be able to make the Commonwealth Bank a more efficient institution and a more productive institution, one better able to serve the Australian people? That is the sort of

question that should be addressed to the Commonwealth Bank and when we think about it. Now the addressing of that question doesn't imply any answer, it certainly doesn't imply the answer that the only thing to do with the Commonwealth Bank is to sell

it. Doesn't imply that answer. What it does imply is that some changes maybe necessary and it implies that there is an obligation upon Government to consider those questions that I have put and to try and see how best the service which is either actually being provided by the Commonwealth Bank or is potentially capable of being delivered by the Commonwealth Bank will be best delivered.

JOURNALIST: Prime Minister if you detect clear Party and community opposition to privatisation sometime before the National Conference will you seek to end the debate before

National Conference?

PM: No I won't seek to end the debate before the National Conference. Just let me make this point. I think it is next Saturday we will have been in Government for 5 years. I just ask you to remember some of the areas of discussion and decision making that have been involved in that period some of which have

involved not just on the part of the community but on the part of large sections of the Party - fear, apprehension, opposition - without being exhaustive fringe benefits tax, assets test.

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PM (cont) I would suggest to you that there were probably points of which the majority of the Party believe that it was not sensible to go ahead with the assets test and the fringe benefits and the capital gains tax. And certainly if you go outside the Party to the community there was an absolute crescendo of prejudice and attempts to mystify the areas in question. Now I personally was not diverted on any of those issues by these fears or apprehensions within the Party or by the crescendo of prejudice outside the Party. I believe it was an obligation to address these issues certainly within the Party to discuss them

through as much as we could and in the end make the decisions that I believe were right. I have no hang up about the fact that our attitudes within the Party, which in the literal sense of the word represent total conservatism, that is no change. And that is the most conservative position that you can have in life, no change to anything that exists in the present. Now I have no hang up about the fact that some of my colleagues within the Party are being total conservatives, saying no change in anything. That is fair enough but because that attitude exists in some quarters I am not going to cease from discussion and debate.

JOURNALIST: Can I cheat and ask a question on a different ...

PM: No, you had another one.

JOURNALIST: Referring to the Commonwealth Bank, is one of the options you are talking about the possibility of the Commonwealth Bank merging with a private ... Australian Bank?

PM: I am not talking about it but I suppose conceptually you could say that would be a consideration that would be a valid think on the plate in terms of the answer I gave to Michelle.

JOURNALIST: Just changing the subject -PM: Yes sure -

JOURNALIST: Are you aware of any member of your staff or former member of your staff -PM: Let's be specific Peter -JOURNALIST: Namely Peter met with Eddie Kornhauser and Sir

Terence Lewis ...

PM: I saw the reference today and having no doubt who this mystical Peter probably would have been -JOURNALIST: Well who was it?

PM: Peter Barron. I see a look of surprise on your face. I contacted the same Mr Barron. I had no recollection at all of Mr Barron having ever spoken to me about any meeting with Sir Terence and I checked with him and my recollection was right. He

said in fact that he had met him briefly and the circumstances as he informs me are that he was on private holiday with his family on the Gold Coast.

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PM (cont) He went to have a social drink with Eddie Kornhauser, known to me, a friend of mine and known to Mr Barron. He went to Mr Kornhauser's apartment, had a drink with him, Sir Terence was there. The matters of discussion in what was a social occasion were so monumentally inconsequential that he didn't mention to me

on his return from his holiday on the Gold Coast with his family that he'd even met him. Beginning and end of matter Peter.

JOURNALIST: Mr Hawke how much of a setback do you think the decisions of the policy committees made over the last . .\ ?

PM: Could I just say one point Peter. ... you would see it

follows from the answer I have given to you that I have absolutely no apprehension, fear, qualms about anything which may emerge on that matter in the inquiry before Royal Commissioner Fitzgerald. I am not sure that that total lack of apprehension which I have on that matter will be shared by everyone else in

the community.

JOURNALIST: How much of a setback do you see that the decisions that have been made by the Policy Committees in the last few weeks and the decision on Monday in Melbourne, how much of a setback is that to the sorts of ideas ... that you have got and

how much will it restrict what ...?

PM: Well obviously the honest answer is that some of the things that you have referred to haven't been helpful to the sort of approach that I want to see. By which I mean the processes of discussion and possible final outcome, they haven't been helpful and I concede that, it would be stupid not too. But I don't in any sense see those matters to which you have referred as

stopping the processes of discussion. I have been in many situations where and as some of these people have been in this gallery for a long time, I have been in many situations not only on policy matters but on other aspects of the affairs of this Party where the judgement has been made that Hawke has had it. I am used to that assessment. It has never upset me.

JOURNALIST: ... National Conference decides that there should be no private injection of private funds in public companies, would you be prepared as some stage to go against the ALP policies if you thought ...?

PM: No I wouldn't go against ALP policy.

JOURNALIST: On the matter of Lech Walesa's trip to Australia. Have you spoken to the Polish Ambassador today about this?

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PM: Yes I have. I had the Polish Ambassador Mr Pierzchala into my office at 2.30 this afternoon and I did two things. I gave him a letter to General Jaruzelski to say that I strongly hoped and wanted the decision of the Polish authorities to be to allow

Lech Walesa to leave Poland and to come to Australia for the Congress of the ICFTU. He has undertaken to see that that letter is immediately transmitted to Poland and I added by way of conversation to the Ambassador the arguments that I thought were

relevant and those arguments essentially are that I believe that it is right that Mr Walesa should be allowed to come here. And I also made the point that in terms of Polands own interests that I thought that they should see that those interests would be advanced by a decision to be seen as ready to allow one of its

citizens ..^ a controversial one, to come to this country. I made the point that there are often occasions where people go from Australia to international fora to visit particular

countries and purport to put positions for Australia or representatives of Australia with which I don't agree with but that I think Australia's position is enhanced by being a country which allows that sort of thing to happen. So I put a very

strong representation both as I say by letter and by representations to his Excellency. Whether those representations will be successful I don't know, I hope they are.

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JOURNALIST: Apart from Australia Post, Telecom and Aussat, are there any other major public instrumentalities which you would rule out ... as being candidates for sale ...?

PM: If you put it the other way the only ones, in a sense, that I'm addressing my mind to are, I think one needs to look at Australian Airlines, one in a sense needs to look at Qantas, one needs to look at the Commonwealth Bank, perhaps one needs also to look at the Commonwealth Serum Laboratories. Apart from that, I'm not addressing my mind

to any other commonwealth instrumentalities. That's the other way of answering your question.

JOURNALIST: So is that your defining statement now or are we going to get another one in a few weeks?

PM: Well aren't you a clever little girl. First of all to describe it as a defining statement and your clever little final addendum "or are we to get -

JOURNALIST: Well Gareth Evans said -PM: - "or are we to get another one in a few weeks?" I've

put my position today in a way which is totally consistent with the way in which I've advanced and discussed this issue from day one. I haven't said anything to you different today than what has either been explicit or implicit in what

I've said from the beginning. I don't intend to change that approach between now and the June conference.

JOURNALIST: What social welfare services will suffer if nothing is privatised?

PM: That's the wrong way of putting it. Let me preface the answer by saying that I am extremely proud of the record that we have in five years, in terms of increasing in

absolute terms, and also of increasing in targeting terms, the provision of government services in the whole social welfare area. Without being in any sense exhaustive about it, I refer to three important areas. I refer to the fact

that in our time in government there's been an 8.2% real increase in the standard pension rate. I refer to the fact that we have initiated a one half billion dollars a year family allowance supplement program. I refer thirdly to the fact that we have more than trebled the allowances for needy secondary students. There are many more. So in all the

difficult economic circumstances that have confronted us in these five years we have continued to improve, in general terms and also the targeting of, public funds to those in the community most in need and we will continue to do that. I'm making no more than the obvious statement that to the extent, whatever that extent is, that public funds are used to do things which can be at least as well done by the private sector or by participation and involvement of the private sector, then to that extent whatever it is, then

there are less funds available to do other things.

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JOURNALIST: Including tax cuts, Mr Hawke?

PM: I don't put it in those terms. The way I put it before, Nikki, was that I'm on the public record and the Treasurer is on the public record that we are reviewing the business tax system and that obviously that review is not going to finish up with a status quo. Both Paul and I have

said that obviously considerations of changes in the business tax regime must necessarily involve the consideration of personal tax scales. So that review will continue and obviously Paul will have something to say about

those things in the May Statement. But what is relevant to your question is that there is no capacity, when you're running the affairs of a country, just to take one issue like the question of the use of public funds in the running

of commercial enterprises, you can't say now we're just going to put that in one box or one category over there, put a seal around it and say that it has no effect upon the decisions that you take in other areas on the revenue and expenditure side. There is an inter-relationship. The

inter-relationships will have different force and be more obvious in some cases than others. But there is an inter-relationship between them all. _^

JOURNALIST: Given the fact that son. Tour personal prestige will ride on the outcome of s , ivatisation exercise, and given that there's so mU% ,'osition within the Party ranks, is privatisation worthy irawl given the

fact there seems to be no public ... for

PM: I'm glad you asked that. In the who! of my public career I haven't made the judgement, before I came into the Parliament or since I've been in it, I've never accepted the judgement of the media, and I won't now or into the future,

accept the judgement of the media as to whether my prestige is on the line or not. What judgement they wish to make about outcomes is for you to make and it's part of the way we operate. Can I just use this as an example. I go back

to the early 1970s. I was out of step, I guess, with the majority of my Party at that stage in judgements that were made about the Middle East. There was a reflection in my Party that what was happening in Australia generally and in most of the world, that because of the oil crisis you could

see, and it stuck out so starkly, because of that oil crisis you could see a dramatic change in judgements about Israel and the Middle East and how people should perceive that

situation. I had a clear judgement about that issue which I expressed privately and expressed publicly, very strongly, that I wasn't going to commit my judgement about the right of Israel to exist on the basis of that being unpopular or uncomfortable. And I can assure you that it was both unpopular and I can assure you it was uncomfortable. I was

told at the time - it is so directly relevant to your question - I was told at the time by friends within the Party, they said "you're damaging yourself within the Party on this issue, you're out of step". I said well, so be it.

It's something I believe and I'm going to say it. On this PM (cont): issue, obviously on the evidence so far, there is a majority of spokespersons - I don't know about rank and

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file by the way, of members or supporters of the Party - but clearly in terms of those who have spoken, there is a majority who don't identify with the sorts of things I've been saying. But I believe I have a responsibility to see

that these issues are considered. I hope that in the process of that consideration, leading up to and at the conference, that there will emerge some changes in the existing situation. I am not without hope that that will be

the case. If it's not, if we emerge with exactly the same position, that we do emerge as the true conservatives who want no change, then I'll be disappointed. But I'll accept it.


JOURNALIST: ... tax cuts. Do you believe personal tax cuts ... fiscal drag ... within the tax scale?

PM: I'm not avoiding that question, what I want to say is this. I think that we've got to, and we will, look at the whole question of the personal tax regime. You rightly identify that there is a question both of rates and of

additional impost which can occur without any change in rates. Both those matters have to be considered and will be considered in the review.

JOURNALIST: You said that there will personal tax cuts in the life of this Parliament. Can you be more specific about ... tax cuts ... -

PM: No I can't be because we have made no decision. So I'm not in any sense avoiding it. There will be two questions that will be considered. What changes will be possible and when? Those matters are still under consideration.

JOURNALIST: On Queensland, does Mr Goss' accession suggest that the Party in Queensland will be able to sort out its difficulties now?

PM: I have deliberately, up until the changes made, not made any public comment on whether a change was wise or not. Now that the change has been made, let me say two things about that and then go to the final part of your question.

I congratulate Mr Warburton on the decision he's taken. It's obviously, whether it's Mr Warburton or anyone else, an extremely difficult decision for any leader to make a decision to resign. I respect the decision he's made. It's obviously one that Neville Warburton has made on the basis that he thinks that that will be best for the future of the Party. I congratulate him on it. I welcome the election of Mr Goss. I believe that he will provide a fresh new impetus and that change will be a plus, in my judgement, to the Party. I wouldn't believe that Mr Goss himself, or anyone else associated with the Labor Party in Queensland, thinks that that is all that needs to be done. It's not. The Party has to look at itself, it has to make sure that what, to this point I think has been too much internal arguments, is diminished and there is more concentration on ensuring a


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PM (cont): more effective ALP apparatus. I think that the change of leadership will be part of that process. I believe it is evidenced that within the Parliamentary party and with other parts that there's an understanding of the need for change. What we've got to understand is that if you look at the Federal election there was evidence that

there's a great preparedness on the part of a large number of Queenslanders to respond positively to the Labor Party. They did with the increased seats that we won there, the ...

seats that we won, we were very close in Dawson. There is no reason why a re-invigorated Queensland ALP can't make, in the State as a whole, new inroads.

JOURNALIST: For the record, can you briefly explain the basis of your friendship with Eddie Kornhauser and do you have concern about the fact that Mr Lewis' diary alleges

business dealings between Mr Kornhauser and Abe Saffron?

PM: The relationship between Mr Kornhauser and myself. I've known him for, oh I couldn't say how many years, a very, very long period of time. I have a personal friendship, I've played tennis with him, he's a friend. As

to the second, I am not privvy to, do not seek to be privvy to, the business dealings of all my friends. I think that on my knowledge of him that Mr Kornhauser is an honourable man arid therefore I make no pre-judgements about any

implications that may be drawn from the fact that there is some notation to that effect. As I say, to my knowledge, Eddie Kornhauser is an honourable man and I would be surprised if anything emerges which would disprove that.