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Former Finance Minister comments on the Government's parliamentary performance today and Government policy directions

PAUL MURPHY: Observing the Government's performance today from the vantage point of the public gallery was the former Finance Minister, Senator Peter Walsh. A Keating supporter, Senator Walsh says Bob Hawke survived yesterday's challenge because of a show and tell ballot system and because of Left Wing support. This will increase the influence of the Left in the Government and Senator Walsh is concerned about the consequences in terms of key policy decisions. Senator Walsh has joined us now in our Canberra studio, and to talk to him, our chief political correspondent, Maxine McKew.

MAXINE McKEW: Senator, as Paul said, you popped into the House of Reps during Question Time today. How did the Government benches look to you?

PETER WALSH: Well firstly, let me say it is not unprecedented for me to go into the House of Representatives for Question Time. When I was Finance Minister, I was rarely able to do so, but the demeanour of the backbench was to say the least, far from euphoric.

MAXINE McKEW: And you put that down to the fact that they have lost their best parliamentary performer?

PETER WALSH: Well, the Prime Minister had a number of difficult questions to answer.

MAXINE McKEW: Is Mr Hawke going to be able to withstand sustained questioning, do you think, about his deliberate misleading of the electorate in the 1990 campaign?

PETER WALSH: I really think that that issue is much less important than the policy questions which the Government will have to decide.

MAXINE McKEW: Do you think the electorate will see it that way, though?

PETER WALSH: Yes.

MAXINE McKEW: Mr Hawke, after all, was saying one thing publicly, and now it's revealed he was saying quite another privately.

PETER WALSH: Those sorts of stories are fascinating to people inside Parliament House, but I doubt very much whether the electorate is terribly concerned about it. I think the electorate is more concerned about unemployment.

MAXINE McKEW: Well, do you think .. how do you think Mr Hawke looks after yesterday's vote, then? Has he been enhanced or diminished by the events of yesterday?

PETER WALSH: Certainly not enhanced. But let me say again, the things that really matter are the policy decisions which the Government will be required to make, over the next, well the next couple of years, I suppose.

MAXINE McKEW: And what are your concerns about the directions of some of those policies now?

PETER WALSH: The litmus test will be Coronation Hill. If the Government fails that litmus test of Coronation Hill, the response might as well be abandon hope, because that will be a very clear signal that it is not going to deal with the country's fundamental economic problems in the way that they should be dealt with. Every time one lobby or other succeeds in closing down a mine or stopping one opening, more Australians lose their jobs.

MAXINE McKEW: Well now, do you see Mr Hawke as a captive of the Left, after yesterday? And if so, he's going to surely come down against mining at Coronation Hill.

PETER WALSH: I don't necessarily see him as a captive of the Left, which is another reason why I believe the Coronation Hill decision is of critical importance.

MAXINE McKEW: Which way do you think it will go then?

PETER WALSH: I wouldn't like to speculate. I hope it goes the right way.

MAXINE McKEW: But surely the committee that Mr Hawke had established to look into that, was stacked, if you like, with those who believe that mining should not proceed. Does that not suggest that we will not see mining at Coronation Hill?

PETER WALSH: Well, I don't think whatever the committee report should be taken into consideration by the whole Cabinet or by the Prime Minister. The decision is a clear cut one. Australia cannot afford to stop the development of profitable mining operations. We have done far too much of that in the past. It has been a major contributor to our present economic plight and our longer standing economic peril.

MAXINE McKEW: What are your other concerns about perhaps, economic policy directions, given the greater prominence now that the Left has?

PETER WALSH: There has been a push around for some time to spend ourselves out of recession. The only expenditure which can be sustainable or will succeed in the long term, the only employment generating expenditure is investment in the tradeable sector. Any attempt to kick-start the economy through housing, hospitals or whatever, unfunded public infrastructure spending, may produce a short term revival but at greater long term cost, particularly of course, if it is not accompanied by the absolutely essential fundamental restructuring of the Australian economy. And by restructuring, I mean a major shift of resources into the tradeable sector, at the same time as consumption is held static or declining.

MAXINE McKEW: You don't see John Kerin as new Treasurer, perhaps providing some counter-balance to that push that perhaps will come from the Left?

PETER WALSH: I think John Kerin will provide some counter-balance to that but the Treasury ... the Treasurer's position is a job where you have to be very decisive, and decisive pretty quickly. It has not been John's ... that is not in John's personality but I hope that he will make the necessary transition.

MAXINE McKEW: Are you suggesting he's not tough enough for the job?

PETER WALSH: Not necessarily not tough enough, but quick decisions have to be made in Treasury, and put very firmly. I hope John can do that.

MAXINE McKEW: Now with a number of Ministers having declared themselves for Paul Keating, what do you think the dynamics of the new Cabinet will be? I mean, will there be a lot of tension?

PETER WALSH: I was never in the Cabinet under those sort of circumstances. There was, in the seven years and a bit that I was there, there was no factional tension within the Cabinet and never in my recollection, did the Cabinet divide on factional lines on issues. But I think it's inevitable that there must be some tensions, at least for a limited period of time.

MAXINE McKEW: Just a final point, Senator - what do you see as the likelihood of either a second Keating challenge or of Mr Hawke grooming another successor, perhaps someone like Simon Crean?

PETER WALSH: Well, Paul said yesterday that there would be no further challenge initiated by him and, well, I have no doubt that that was Paul's view yesterday.

MAXINE McKEW: Perhaps initiated by others, though?

PETER WALSH: I don't want to make the judgment about whether that is ruled out or not.

MAXINE McKEW: Will the test be how well Mr Hawke performs in the coming months?

PETER WALSH: That will certainly influence the judgment of people inside the Caucus, and particularly of course, of people inside the House of Representatives.

MAXINE McKEW: Senator, thanks very much indeed.