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ALP members of Senate Print Media Committee issue a dissenting report rejecting the Committee's findings and criticising the conduct of the inquiry

MONICA ATTARD: A bitter fight has broken out in Federal politics over the findings of the controversial Senate inquiry into the print media. The inquiry looked at whether Prime Minister Paul Keating sought to influence coverage of the last election in return for allowing the Canadian media baron, Conrad Black, to increase his stake in Fairfax. Both Mr Keating and Mr Black have denied the claim. But the Coalition and Democrat committee members have found against the Prime Minister - their findings based primarily on these comments Mr Keating made in Seattle last year.

PAUL KEATING: I had a conversation with him late last year when John Hewson had offered him 50 per cent equity in the John Fairfax and Sons, and I said to him I wouldn't consider that. I would consider going to 25 per cent because his claim was that he couldn't run the business at 14.9 per cent, that he'd just concluded that day, a meeting at the Opera House, where he'd been pilloried in running the business with 14.9 per cent. And I said 'Well, we'll think about it, but we want a commitment from you that the paper will be balanced. And if there is any notion that, you know, of bias, that is, that you barrack for the Coalition on the basis of his conservative proclivities in other places, then there is no way you would qualify as a kind of owner we would like'.

Now, as it turned, I think the Herald's coverage was - I won't say it was balanced because I think the whole media wrote the Government off in the election campaign. But that said, that was in part of course the fault of some of our so-called often-quoted Labor strategists, but we'll leave them for another time. So, therefore, after the election, I .. you know, on behalf of the Government made good a commitment to reconsider them and took them to 25. But there's been no further specific requests and certainly no commitment.

MONICA ATTARD: The Prime Minister, Paul Keating, in Seattle last year. Well, the Labor members of the Senate inquiry have issued a dissenting report rejecting the majority's findings. The ALP Senators have attacked the inquiry as a 'witch-hunt' and say Mr Keating was pre-judged from the beginning by the Coalition and Democrat members, including Democrat Leader Cheryl Kernot who's under attack for siding with the Coalition. Senator Kernot is speaking here to Lyndall Curtis.

LYNDALL CURTIS: Senator Kernot, you expressed concerns at the start of the committee process that it would be a political witch-hunt. Hasn't it turned out exactly that way given the majority finding against the Prime Minister was primarily based on his Seattle comments made before the committee started?

CHERYL KERNOT: And the evidence of independent witnesses as well. But you're right, it's been very hard to eliminate that element from the committee. But the fact of the matter is it's been a policy committee as well and there are some very important findings and recommendations on changing the role of the Foreign Investment Review Board, and that leads on to, I think, a wider discussion about foreign investment policy in this country. That's been worth doing because when all the dust has settled those recommendations will still stand.

LYNDALL CURTIS: Why didn't you accept the evidence from Conrad Black that .. he said when the Prime Minister said 'balance' that he meant balanced; he didn't want partisan coverage?

CHERYL KERNOT: Because I don't know any politicians who when they say 'balance' mean 'Yes, and I want you to be fair to the Opposition, the Democrats and the National Party as well'. I mean, unfortunately, that's one of the things about politics that people are there to gain an advantage for their arguments and their side.

LYNDALL CURTIS: You believe the Prime Minister wanted partisan coverage in return for increasing Conrad Black's stake in Fairfax, yet the stake was raised even when the Prime Minister said in Seattle that he didn't believe the coverage was balanced?

CHERYL KERNOT: I believe he attempted to use the unique leverage in his position, and I think that that too goes back to the process. It wouldn't matter whether it was Paul Keating, John Hewson, Alexander Downer. The processes are such that Treasurers and Prime Ministers can operate in secrecy and make important decisions about foreign investment, and that's not the way it should happen. That's the issue.

LYNDALL CURTIS: The committee's majority finding against the Prime Minister: Does that carry any power or weight? Is there anything the Senate can do to censure the Prime Minister?

CHERYL KERNOT: No, I don't think our Prime Minister would respond to what a Senate committee has said. But it's on the public record and it's for the people of Australia to judge whether they think this was appropriate behaviour for this Prime Minister or any other.

LYNDALL CURTIS: Senator Kim Carr, a Labor member of the committee, has accused you of doing a deal with the Coalition, saying you backed their findings against Mr Keating in return for your recommendations for changing the FIRB. Is that the case?

CHERYL KERNOT: That is absolutely outrageous and untrue, and do you want to know what the truth of the matter is? - Senators Carr and Loosley came to me and said 'If you'll vote against Senator Alston and derail this committee, then you can have all your FIRB stuff'. I rejected that. I said 'I don't take bribes'. Now, it's a bit hypocritical and dishonest of Senator Carr to turn around and say that this has happened. Ironically, at the beginning of the inquiry, I wouldn't have known what the Opposition's policy on foreign investment was. I believe it's true that I have driven their policy focus, the Foreign Investment Review Board policy focus of this inquiry. It was my term of reference.

LYNDALL CURTIS: Turning to the recommendations on the Foreign Investment Review Board, what are the chances of making it more open and accountable?

CHERYL KERNOT: Well, I don't expect the Government to respond in a hurry because, you know, the way this place works is you never acknowledge that somebody else has done good work. But the Treasurer is on the record as saying that he has always thought there needs to be some change to the Foreign Investment Review Board. That's one avenue. Secondly, if the Coalition were to win government, they are firmly on the record now as establishing a much clearer direction for their own foreign investment policy. I would expect them to honour the commitment they've made by the majority recommendations in this committee report. But in the meantime, I think .. look, if you go back to the Arnott's case, there is a lot of incredibly genuine public concern about the way foreign investment policy in this country operates. All we need to do is make the information that goes into the decision-making more accessible, more open, more transparent, and people can make their own judgments.

LYNDALL CURTIS: What about public servants who refuse to answer committee's questions during the course of the inquiry - do you want them to be more accountable and will you continue to seek information they didn't provide, as the inquiry continues?

CHERYL KERNOT: That's a very difficult one and I think that made the inquiry's job particularly more difficult than it already was. I noticed the comments of Mr Lavarch, today, and it's interesting how they wheel him out each time, isn't it? Does it mean that Senators Carr and Loosley are winning or losing the argument?

I believe that public servants have a very important role to be accountable to the public, but I understand the difficulty when the Ministers of the day direct them to behave in the opposite manner. I have a Private Senators Bill before the Senate which would resolve the impasse of who decides what should be divulged. It shouldn't be in the hands of the Executive; that's one clear principle; it shouldn't be left to politicians in the Senate, either, to judge the public servant. Quite clearly we need a resolution. If Mr Lavarch is so outraged by the sanctions in his Government's own Parliamentary Privileges Bill, why hasn't he done something about it?

MONICA ATTARD: Senator Cheryl Kernot.