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Minister discusses cross-media ownership, particularly Kerry Packer's interest in owning more of Fairfax

PETER THOMPSON: Well, let's now consider the big domestic story of the day which, of course, is Paul Keating's remarkable outburst on Kerry Packer's plans to buy into the Fairfax group. On Kerry Packer's television network, yesterday, the PM of course appeared on the Sunday program to give his view of what's going on, which is a scam launched by Mr Packer and the Optus communications group to pressure the Government into agreeing to plans for regional pay TV monopolies, is the genesis of the current moves, according to the PM. The Prime Minister also aimed his barrage at the Opposition Leader, John Howard, arguing Mr Howard was also involved in deal-making.

PAUL KEATING: Don't let John Howard tell you he denied or sought to deny my claim that he has made clear to Mr Packer that he will suspend the cross-media rules. I can tell you this advisedly, Laurie, he has made that clear, he has made that clear, and when asked by the Herald Sun on Friday if he was perturbed about Mr Packer owning both Channel Nine and Fairfax, he said: There's some case, given the changes in technology, for querying the continued suitability of the current cross-media ownership provisions. He went on in the Financial review to say: I think technology has rendered the cross-media rules redundant. Isn't it coincidental that when all of this is one after he's had a number of conversations with Mr Packer, all of a sudden, the cross-media rules are the go, to make the way clear for Mr Packer to own the two Nines and the Nine Network, and John Fairfax and Sons.

PETER THOMPSON: Well, there's the Prime Minister on Sunday yesterday. To talk about this now, our political correspondent, Pru Goward, joins us again. Pru, how should we interpret this attack?

PRU GOWARD: Well, I think a lot of it is revenge. I mean, I think Mr Keating is clearly worried by John Howard's resurgence and wants to put a mark on him. I think John Howard's opposition to the cross-media rules actually date back long before this fracas, and both he and Paul Keating have observed that technology is leaving particularly the cross-media ownership rules behind. I mean, it is conceivable that the same foreigners who own the papers can, within a very short time, be in charge of the major pay television channels or other channels that beam into Australia from satellite locations well outside the country. But I think Mr Keating is also annoyed by Kerry Packer's endorsement of Mr Howard, and possibly even alarmed by Kerry Packer's attack on that Murdoch Telecom deal which, I think, did generously benefit Mr Murdoch and obviously got up Kerry Packer's nose. And I think that's why Mr Keating was prepared to go so ballistic on the Packer group's attempt to develop those cable monopolies, describing it as a scam to rival Murray Farquhar's gold smuggling.

Now, it's part of Mr Keating's state of anger. I wouldn't have thought it was a state that ought be maintained if he wants to keep the confidence of the electorate, and I suspect there are some very worried Ministers and party hard-heads this morning.

PETER THOMPSON: Of course, one of the things Paul Keating said was to accuse Kerry Packer of hypocrisy about his ownership views. On Channel Nine last week, Kerry Packer made it clear that he thought Australians should own the Australian media, attacking Conrad Black there, of course. But Paul Keating cited sworn evidence given by Mr Packer to the House of Representatives committee some years ago.

PRU GOWARD: Yes, that's right. And, at the time, he didn't refer of course to the Canadian or the United States' experience where there are limits, and, interestingly enough, neither did anybody else on that committee. And we're speaking to Michael Lee in a moment who was chair of it, and I don't think there was any reference made to it when Kerry Packer defended foreign ownership. So I think Mr Keating has clearly got Kerry Packer on that one. There has been a change of heart, but whether or not the electorate is so concerned about changes of heart. I mean, the Government obviously, I think, is moving to supporting diversity of ownership as it sees it instead of opposing foreign ownership. In other words, it's prepared to contemplate foreign ownership if it provides diversity of ownership.

Now, they've got a small problem with how do you explain Rupert Murdoch's stranglehold on the print media if they take that tack, but they've also got, I think, the electorate's basic nervousness about foreign ownership. I mean, Australian's are nationalistic and it's not something they've ever found attractive before. So they've got quite a selling job, if you like. They've got quite a job ahead of them convincing the electorate that foreign ownership doesn't matter so much.

PETER THOMPSON: Well, a high temperature and powerful forces at stake. Michael Lee, the Communications Minister is now with you, Pru.

PRU GOWARD: Thank you. Michael Lee, welcome to the program. I take it you've come in this morning to mop up a bit of blood.

MICHAEL LEE: Well, Pru, I'm not here to mop up anyone's blood. I'm here to answer any questions you might have, and I'm sure you'll have lots of tough ones.

PRU GOWARD: Well, I just wonder whether it's a case for cooler heads prevailing now. The Prime Minister's anger in a way has deflected attention from the policy issues involved onto the Prime Minister's state of mind, if you like. Mr Lee, would you ....

MICHAEL LEE: Pru, can I just jump in and say that all of the issues which the Prime Minister raised yesterday on the Sunday program have been issues that he and I and the various stakeholders have been discussing for months, long before Mr Packer went on a Current affair. For example, the Prime Minister's support for a family channel is something that he raised with me during one of the school holiday periods last year. He has a very strong and ongoing interest in this issue, I can assure you. And on the principles that are involved in the Optus Vision proposal last year, the Prime Minister and I and, not just people involved with the Optus Vision network, but Austel and the ABA and other people, were all involved in discussions about the importance of setting up proper principles to allow open access, and not to have regional monopolies which is what the Packer camp were arguing last year, and certainly what Senator Alston, the Liberal spokesman on this issue, Senator Alston who said that regional monopolies had worked in Britain and America and were something that the Government should give more attention to. So we had an example of a free enterprise party, the Liberal Party, supporting the Packer camp's view that there should be regional monopolies in cable.

PRU GOWARD: But isn't it a bit rough to call that a scam equivalent to the Murray Farquhar scam? I mean, that's a businessman putting up a proposal that clearly suits his interests, and you are absolutely entitled as a government to say no.

MICHAEL LEE: We said no ....

PRU GOWARD: But that doesn't make it a scam.

MICHAEL LEE: That's right. The Labor Government said no, and the Opposition said we should ....

PRU GOWARD: But that does not make it a scam, does it, Mr Lee?

MICHAEL LEE: .. and the Opposition Liberal Party said it was something we should give more consideration to. Sure, Mr Packer has got every right to put up a proposal that he thinks will advance his business interests. What the Government did was to stand up, not just to Optus Vision and their partners, but when Telecom and News Limited heard that Optus Vision were putting forward a proposal for closed access on the cable, they also were very keen to have this adopted because that would have advanced their interest. But the Government stood up to both Optus Vision and Telecom News and insisted that we have open access for these new interactive, broadband services.

PRU GOWARD: And you call that a scam, a scam equivalent to the Murray Farquhar gold scam?

MICHAEL LEE: I call it bad policy, and that's why the Government stood up to it.

PRU GOWARD: So, in other words, Mr Keating took that a bit far when he described it as a scam?

MICHAEL LEE: Well, Pru, you can reach your own conclusions. I certainly know that the Packer camp and other people associated with Optus Vision, did put significant pressure on the Government. They told us they would walk away from a $3 billion investment if we went ahead and stuck by what we thought was proper principles, that is open access on the cable. And you will remember that the day I gave my speech announcing that we would stick by open access, Optus Vision announced that they wouldn't proceed with that $3 billion investment. Now, I am pleased that, in the months since, they changed their minds and they're going ahead with the investment now, but it was certainly a very clear choice for the Government: Would we stick by the principle of open access which would apply to both Telecom and Optus and their partners, or would we have bad policy. And it's clear that the Opposition were quite prepared to sacrifice principles and agree to the monopoly position that was put forward by Mr Packer and Optus.

PRU GOWARD: Mr Lee, the Government's media policy seems to be at some sort of crossroad. It seems that there are limits to foreign ownership - that's one aim of policy - or limits to cross-media ownership - that's another aim of policy. Now, people like Packer are saying: You can't have both. So what do you think it's going to be for the Labor Government, foreign ownership or television networks also able to own newspapers?

MICHAEL LEE: Well, Pru, Mr Packer said on Thursday night that the cross-media rules are a joke. Now, if the rules weren't working, he wouldn't be complaining. Those rules certainly give us a greater plurality of opinion because they affect control, and that's what the cross-media ownership rules are all about. Control is the trip wire, and in some senses it doesn't matter whether Mr Packer is below 15, at 15 or above 15. As soon as he exercises any control at Fairfax while he owns the Nine Network, he will be in breach of the Act, and as everyone knows, there are very significant fines - $2 million a day - he puts his TV licences at risk if he continues to be in breach of the Act, if it's established that he is in breach. So it gets down to a question of whether or not Mr Packer is in control at Fairfax. The only thing that's stopping that today are the cross-media ownership rules, the rules that Mr Howard thinks that we can dispense with today. But the Government believes that you can still have strong cross-media ownership rules until new technology brings in more diversity and new players, but at the same time, we can and will continue to have restrictions on foreign investment in newspapers and in television.

PRU GOWARD: So you don't think it's a case of either-or?

MICHAEL LEE: No, it's certainly not. And I find it a little bit hypocritical for Mr Packer to be complaining about Mr Black, a foreigner, controlling Fairfax, when he was the company that brought Mr Black to town.

PRU GOWARD: It's certainly a remarkable argument. But I wonder whether your problem with defending your stand on the diversity of ownership is that, you know, Rupert Murdoch sitting in here, a foreigner owning well over 60 per cent of our print media and with interests in pay television as well.

MICHAEL LEE: But because he owns newspapers under the cross-media ownership rules, he can't own television, right? That's how the cross-media ownership rules do promote diversity and do affect the investments that News Limited have, and it's very important that we continue to have rules and ensure diversity in our media. Now, we've established the rules; we have the Australian Broadcasting Authority as the independent regulator to look at whether or not people such as Mr Packer are in control of Fairfax, and the ABA are carrying out an investigation at the moment, and that's the proper process that will run its course, and it will get down to whether or not Mr Packer is in breach of the Act, whether or not Mr Packer is in control at Fairfax.

PRU GOWARD: Politically, will it get down to you having to convince the electorate that it's better to have a foreigner in charge of the country's two most influential newspapers than to have Mr Packer, who owns a television network, also in control of those two newspapers.

MICHAEL LEE: No, Pru, I reject this argument that it's a choice between having limits on foreign ownership or having cross-media ownership rules. This government believes that you can have both and that both rules can ensure that we have good policy outcomes in Australia. Now, Mr Howard has said that he believes the cross-media ownership rules should be dispensed with. Well, we all know what the result would be if Mr Howard had his way. And I certainly find it hard to believe that the members of the Liberal Party who kicked up such a song and dance when Packer and Black and the Tourang consortium were bidding for Fairfax - remember the petition that Mr Connolly circulated and other people were circulating? I find it hard to believe that the Liberal Party is sitting on its hands and being quiet while Mr Howard apparently has stuck this deal with Mr Packer, decide that he would wipe the cross-media ownership rules.

PRU GOWARD: Now, what evidence do you have that Mr Howard has stuck this deal? He vehemently denies it and, in fact, he dates his own objections to cross-media ownership rules, you know, back five or six years.

MICHAEL LEE: Well, here's my evidence, Pru, from the Sydney Morning Herald last week. There was a page one story and it said that a spokesman for Senator Tierney, who is the Acting Opposition Spokesman on Communications, said that Mr Howard was now handling the issue and there had already been discussions with the main players, which is the exact opposite of what Mr Howard's spokesman's been saying lately.

PRU GOWARD: That's evidence that there's a deal?

MICHAEL LEE: That's evidence that Mr Howard has been talking to - according to Senator Tierney's spokesman - has been talking to the major players. And I imagine that Mr Packer would be one of the major players.

PRU GOWARD: Bit of a leap there to say it's a deal.

MICHAEL LEE: There are many comments in today's paper, Pru, if you look at it, that if you check them, that make it clear that Mr Howard believes that the cross-media ownership rules should be dispensed with. You certainly don't challenge that.

PRU GOWARD: Michael Lee, thank you for your time this morning. It was nice to speak to you.