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The Shadow Minister for Communications discusses media ownership issues and alleges that the Government is manipulating the John Fairfax sale to produce an owner with whom it can deal

RICHARD ACKLAND: The battle for the Fairfax newspapers is hotting up. The latest twist is that the Opposition is now accusing the Government of doing a deal with Kerry Packer - which seems just incredible. Well, with more, here's Pru Goward.

PRU GOWARD: Thanks Richard. And now to that war for the empire - the Fairfax newspaper empire, the river of gold, the newspaper empire. The Federal Opposition is edging slowly towards declaring the Packer-Black bid unfriendly. The latest step forward is the claim by Communications frontbencher, Warwick Smith that, quote: `There's a growing suspicion in the community that a deal has been done to deliver the next election to Labor'. Warwick Smith argues that a successful Tourang bid would mean almost 80 per cent of our print would be controlled by two groups: Rupert Murdoch's News Limited and Kerry Packer's Tourang group. Now when you consider Mr Kerry Packer's TV interests as well, argues Mr Smith, that concentration becomes more pronounced.

Well, earlier, I spoke to Warwick Smith, and I asked him what he meant by the suspicion of a deal being done to deliver the next election to Labor.

WARWICK SMITH: It would appear that the very broad perception is that the Government has entered into, or is seeking to enter into, or seeking to manage the whole Fairfax sale process in a way that will produce an owner with whom they can deal. Now that's the suspicion and that's the matter that's concerning people, because the fundamental principle that people are objecting to is that any outcome that leads to any greater concentration of the media in this country, is fundamentally unhealthy for our democracy and ought not to happen; and we've had that policy for some considerable time, at least since 1988. Despite what some others are saying, we have been saying we are concerned about any greater concentration.

PRU GOWARD: But it's an enormous leap, isn't it, Warwick Smith, from arguing that the Government seemed to be allowing a concentration of ownership, to saying that they're doing that in exchange for, well, what amounts to a morally corrupt deal with the Packer group?

WARWICK SMITH: Well, we haven't said they've entered into a formal deal. We're saying that there is a suspicion because of the unbelievable quietness from the Government leadership about the fact that so many are concerned of concentration, yet they don't seem to be ... that test, and that's the one that they're failing to answer, except for Senator Button, and the division there is the matter for concern. Pru, I have to say, too, that back in 1985, it was Senator Button in that celebrated comment in the Cabinet that had been reported widely and is now even appearing in books about the period, when he said to the Prime Minister: `Well, Bob, who of your mates is it that you want us to help?'. Now with that background, I think we've all got some legitimate concerns to wonder whether or not we're not seeing the emergence of something similar; that's the matter that's worrying us.

PRU GOWARD: Sure, but when you look at the bids, it's difficult to see in a small country like Australia, how you can avoid an increased concentration because the Packer-Black bid is undoubtedly the one that's going to be able to afford to bid the most amount of money.

WARWICK SMITH: Well, that's possible, but the other bidders that are there - and there's still the prospect of a float - would give you a less concentration in terms of a broad result. I mean, if the Packer-Black bid is successful, over 78 per cent of the print media would be controlled by two groups; whereas, if it's either of the other options, you would only get to 67 per cent. Now, 67 per cent is a very high ... in any event, so there are options there. And certainly it's a matter of money that we haven't seen and we won't see, I suppose, the final bids that are placed on the table, but I don't believe that the bidders can afford to be too far away from each other in terms of price that they might be offering to the receiver. So, I mean, what we're saying is `Look, there are options other than creating a duopoly within the media, and they're the ones that ought to be canvassed'.

PRU GOWARD: Yes, the history of media ownership in this country is not good. I mean, you consider the actions of the Fraser Government - your own side - in changing the rules so that Rupert Murdoch could continue to own television licences here. It's just been a very unhealthy record, hasn't it?

WARWICK SMITH: Well, the chop and change in media policy, I suppose it's fair to say, has been reflected on both sides, but the former Prime Minister is coming to the print media inquiry on Tuesday, and we'll let him defend his record. What I'm concerned about is what's happening now, and what the Opposition parties might do from this point on, and I think we need to embrace base principles. And the principle that I think is most important and pre-eminent in all of this, is to say that no government ought to permit or allow or encourage or in any way enter into arrangements that will give you such a huge concentration in the media.

PRU GOWARD: Is there any chance that you and the Democrats will combine in the Senate to force through legislation that ensures that, or that stops over 20 per cent being foreign - any way at all?

WARWICK SMITH: Well, I think the Democrats have joined with me last week in some amendments to the Broadcasting Amendment Act, and they are concerned, and I'll certainly, as I did last week, discuss with them and negotiate with them. We have supported cross-media ownership rules and we want those rules to be effective. We have talked about and encouraged a proper embrace of the trade practices principles, which has been lacking in this country over the last little while, and we'll talk to the Democrats about that as well. So, I don't rule out the possibility that they might join with us again. They are concerned about it, as they should be.

PRU GOWARD: When you say that a deal has been done, the suspicion that a deal has been done between the Packer group and the Government, what evidence do you have that Kerry Packer's group favours the Government?

WARWICK SMITH: Well, I think that .. I don't have any direct evidence because it's all circumstantial, and that's why one uses the word the `suspicion' of a deal.

PRU GOWARD: Well, doesn't that make it irresponsible to accuse people of a deal, when you have no evidence?

WARWICK SMITH: No, not when I say .. what I'm saying is `Look, look at the track record. You saw the percentages of foreign ownership lowered specifically to facilitate the Packer takeover of the ailing Bond empire to stop a foreign group taking over the Bond empire.' It's well known, well reported that that actually took place, and here you have a government who now, given the opportunity, four times last week in Question Time I asked the Deputy Prime Minister and the Minister: `Do you believe that greater concentration will result from this process?', and they would not answer. Now that has to leave in people's mind a question mark as to what actually is going on. It's easy for the Government to scotch the suspicion and the perception of seeking to facilitate one bidder or the other by simply standing up and committing themselves to the very principle that I'm talking about.

PRU GOWARD: Yes, but I take it that that's what the ABT - the Australian Broadcasting Tribunal - and the Trade Practices Commission are going to be doing this week?

WARWICK SMITH: Well, one would hope so. They're supposed to meet this week to make a decision as to about how they proceed, but they have statutory obligations. A government has a moral obligation to set forward to the community what they believe the principles are that underpin the legislation that the regulators are charged to administer.

PRU GOWARD: Warwick Smith, we'll leave it there, but thank you very much for joining us on Daybreak this morning.