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Leader of Democrats addresses comments made by Gary Gray about election funding, and political ethics

MATT PEACOCK: Pru, yesterday, on the program, Gary Gray, the National Secretary, on another subject, corporate sponsorship of Federal Cabinet, argued that it was acceptable and yet later we saw Ministers like Robert Ray saying that the PR company that had arranged this rent-a-Cabinet scandal was a little overzealous in its linking payment to one-on-one access to the Prime Minister, and it won't happen again. What's going on?

PRU GOWARD: Well, I think that's pretty well right. If it happens at all, it will be back to the wink and nudge stage that so often dominated corporate Australia's relationship with whatever government is in power, but it will never be put in print like that again, and it has severely embarrassed the Government, and the Prime Minister was very categoric, I thought, in his removal from it. The Liberals do it quite differently. See, they, for example, only charge $250 for their business delegates to attend their council meeting, compared with the $3,000 the Labor Party charges. But then, they just expect their colleagues in the business community to ask other business associates for donations. But on yesterday's program, Gary Gray made comments that suggested that Cheryl Kernot and the Australian Democrats had been involved in election funding fraud. Now, his comments are not endorsed by the ABC and we apologise for any embarrassment these statements may have caused. And with me now is Cheryl Kernot, Democrats' Leader. Thank you for coming in.

Well, Gary Gray was referring to an electoral return allegedly made by the Democrats' New South Wales division. It was a tough criticism. Does he have a point?

CHERYL KERNOT: Well, I understand that there has been an investigation going on for four years now and, considering that all the people concerned are readily available, considering that in four years no charges have been laid, considering the way it keeps being brought up strategically from time to time, it is my belief that the whole matter is politically motivated and used as a little bit of political intimidation.

PRU GOWARD: Of the Democrats?

CHERYL KERNOT: Yes.

PRU GOWARD: In other words, you're not so good yourselves?

CHERYL KERNOT: Well, that's what he's trying to say.

PRU GOWARD: And you deny it?

CHERYL KERNOT: I deny that. Four years of an investigation, Pru. No charges laid.

PRU GOWARD: And you don't expect there to be?

CHERYL KERNOT: Well, I don't know enough about the details to know that, but I know that the people concerned believe that they've done nothing wrong.

PRU GOWARD: Now, your code of conduct that you announced yesterday for politicians says that politicians should avoid placing themselves under financial or other obligations, and to ensure that the public interest is dominant in their considerations. Now, surely, ideally, politicians at least believe that's what they do now.

CHERYL KERNOT: They do, and I think most people who come here have a sort of an understanding of what's expected of them, but we don't have anything codified. And I think if you look at what's been happening around the world, you can see that because election campaigns are now so expensive - Gary Gray said $100 million to run the two big political parties in this country - the temptation is there. And I think we've got to remove the link by saying: Here is a code of conduct; here is somebody who will administer it; here is somebody who will enforce it.

PRU GOWARD: What's the punishment if you don't adhere to the code of conduct?

CHERYL KERNOT: Well, first of all, it will go to the Ethics Committee of Parliament, which will include some community representatives. I think that probably the greatest punishment will be public censure. However, I think you could range from what we've seen in the United States, the forced resignation of that Senator. Two, you could have expulsion. But, you know, I think in the first instance you have a complaint made, you have a mechanism to deal with it, and then you have a range of sanctions. We don't have anything like that at the moment at all.

PRU GOWARD: Of course, because it's party-based, there is really less need and opportunity for individual politicians to be financial compromised, isn't there?

CHERYL KERNOT: Well, that's probably true and I know that parties have a code of ethics which say that individuals shouldn't accept donations. But I'm not only talking about financial obligations, I'm talking about the primacy of the public interest. I mean, if you take the case in Brisbane, obviously somebody had a perception that it was an okay thing to do, and until Cabinet Ministers were asked in Question Time to say it wasn't, then we were in limbo.

PRU GOWARD: Can I just ask you a quick one about industry superannuation. I know the Democrats have been fond of the idea that investment ought to be a bit more channelled, but do you accept that that is not fair to fund members who, after all, depend for their retirement on it?

CHERYL KERNOT: I accept that and that's why, when we were on the Superannuation Committee, I said, 'All right.' The Government recommendation was, 'We'll have a look at this again in three years.' Now, we've been compelled to give them $200 billion worth of this nation's savings.

PRU GOWARD: Tax cuts.

CHERYL KERNOT: There should be some quid pro-quo whereby that pool of money is used productively for Australia. We're selling off the farm. I care about Australia's economic independence. It may not have to be by compulsion, but I agree with Gary Weaven. Something's got to be done. The culture has not changed significantly enough in the last three years. Why don't you say to young people, 'Are you prepared to take a short .. a medium risk over a longer period of time by investing your money here?' Why don't we start with parliamentarians? You could ask me. I'll tick a box. I'll tick a box ....

PRU GOWARD: Would you?

CHERYL KERNOT: Yes, I would, because I believe in this country. I believe there are some great things in this country worth investing in, and I would like to have the opportunity to pick the box which says, 'Here, do it.' We don't offer people that choice. That's not compulsion.

PRU GOWARD: That's going to be a trick question for people coming into Parliament House this morning ... Cheryl Kernot, thank you for your time this morning. Democrats' Leader, Senator Cheryl Kernot.