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Opposition Leader discusses Shepherdson Inquiry report; Qantas takeover of Impulse; Woodside; and government purchasing.

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Kim Beazley - Andrew Carroll - ABC Radio 4QR, Brisbane -Shepherdson Inquiry Report, Qantas Takeover Of Impulse, Woodside, Strategic Government Purchasing Policy

Wednesday, 09 May 2001

Kim Beazley - Interview with Andrew Carroll Subjects: Shepherdson Inquiry Report, Qantas Takeover Of Impulse, Woodside, Strategic Government Purchasing Policy

Transcript - ABC Radio 4QR, Brisbane - 2 May 2001


CARROLL: Well, while all the pressure seems to be on the internal and external performances of the Federal Liberal Party this morning, Federal Opposition Leader, Kim Beazley has returned to the home of Labor's most recent and greatest successes and he joins me now in the studio. Good morning, Mr Beazley.

BEAZLEY: Lovely to be with you.

CARROLL: Thank you for your time. Before we get into the machinations of the Liberal Party and I am sure you would be delighted to do so - are there any lessons for Federal Labor out of the Shepherdson Inquiry?

BEAZLEY: Yes there are and we have been learning those lessons as the inquiry has gone along. We, of course, had a very close relationship with Peter Beattie with the structures that were put in place in the Queensland branch to deal with their cleaning up their act, and the changes in rules and the changes in personnel. So the Shepherdson Inquiry had a significant impact on the way in which the Labor Party both the federal and the state level structured their affairs. The actual report itself, at the end of the day, basically was just confirmatory, you know, what came through from that. I haven't read it yet but there are obvioulsy some references there to pre-selection matters for all parties, so I will take a look at that. But I think basically the situation, the changes needed have been done and the situation has moved on and I think that was pretty evident in the reaction to the report yesterday.

CARROLL: All right. The inquiry itself certainly highlighted a range of issues and a range of personalities in the ALP in Queensland. Are you convinced that you do not have in your own Party at the federal level, rorters, people who are willing to manipulate the electoral system for their own benefit and the parties...?

BEAZLEY: Well, what I am confident about now is that we have the rules in place that prohibit that. And we are just about complete the procedures which will ensure that is a difficult thing to do. Political parties are a vigorous and contested bunch of characters and bodies and you are always going to get people looking at the main chance. The point is - get the rules in place which deal with it. Get the rules which ensure procedural fairness and make absolutely clear that you may not, in the way in which you operate, offend not only rules of your own party but the law of the land. I think we have done all of that. Of course, political parties have got to maintain internal vigilance on these things and there will be people who make attempts in the future, the point is it will be very, very much harder.

CARROLL: The Premier here, of course, has put his whole political future on having a clean team. Do you have a clean team?

BEAZLEY: Well he did and the response was effectively there from the Queensland people and, yes, I believe I have too.

CARROLL: Getting onto the Liberal Party. It almost seems as though we are into self-destruct mode at the moment.

BEAZLEY: I look at the headline in the Bulletin - "Mean, tricky, out of touch and not listening". I think I could add an extra headline to that - "and cynical". You know, you have seen the Liberals out there today trying to explain this leaked memo from their President Stone. Saying -'oh yes, well, that was a couple of weeks ago but we are not mean, tricky, not out of touch and not listening anymore, we have changed'. All this does is explain that that huge poultice of money that they have been throwing out in the course of the last couple of months represents no change of heart but an effort to use taxpayers' funds to save their political skin.

CARROLL: But how can you say no change of heart?

BEAZLEY: Mean and tricky. What are they trying to do diabetics? In the cover of darkness, of course, in that leaked memo of last weekend. What are they trying to do to cholesterol sufferers? A bit of trickiness in terms of OK we will give the doctors a wage rise but we will take it off the benefits that you get when you go to see a specialist. What about the pensioners and the clawback. And tricky - take a look at what was leaked about what their intentions is to Telstra. They know they have got a bit of a problem with their privatisation proposals, so what do they say? We will take it off now but in 2003 we will put it back on in the last year of the next Parliament. If you don't think that all constitutes meanness and trickiness, albeit at a level at which they try to suppress from public view - and all of these things have occurred since then, since this particular report was written - what you have got to say is that there is a response for show, it is panic-stricken and is out there in all its full-blown cynicism - but there is also a continuing response which reflects their true attitude. Enmeshed in all of this is a party that has no longer got the unity or the sense of direction to govern, and that is quite clear. You have got massive internal divisions in the Liberal Party - massive divisions in the National Party - massive divisions between the two parties. Bob Hawke used to say, 'if you can't govern yourselves, you can't govern the country'.

CARROLL: You are assiduous reader and understander, I believe, of history. Given the fact that the Liberal Party has had such bad results here in Queensland isn't it understandable that the Queensland members would try and actually get the federal organisations, both sides of the Coalition, to change their approach and what is happening is, in fact, understandable and quite reasonable?

BEAZLEY: Liberals are panic-stricken all over the country. But what they are talking about is

perception. They are not actually inviting John Howard and Peter Costello to change their personalities, direction, develop new policies or whatever. They are saying alter perceptions. You saw Warren Entsch on the TV virtually confirming that this meeting took place, as indeed have a number of other participants only they said the barbs are directed at Howard not Costello, so there is obviously disagreement with Shane Stone's interpretation - not with the underlying realities but his interpretation as to who was in the gun. You get Warren Entsch out there saying perception is everything in politics, so you have got to change the perception. Don't worry about the reality. I mean, if you can find some way of keeping on slugging the less well off in the this community - by all means find it - but find it in a way that doesn't get found out.

CARROLL: All right, let's get onto some other matters now. Should the ACCC approve Qantas' takeover of Impulse?

BEAZLEY: Well, firstly, let's be worried about jobs and regional routes. That is the first thing that you have got to be worried about with the foreshadowed demise of Impulse. Impulse actually serves in rural and regional Australia a lot of important locations and whatever Allan Fels does he has got to bear that in mind. Secondly, there are jobs. We are entering into a period where jobs are difficult and saving jobs is absolutely critical. So I would hope that Allan Fels as he looks at all of these arrangements, and I don't know the intricacies of them, bears in mind -jobs and services.

CARROLL: So he should approve it?

BEAZLEY: If it protects jobs and services, yes. It is a very difficult task here in this country to get into place a competitive aviation operation. You know, in the United States they fly 65 per cent of the world's paid passenger miles and that sustains four national airlines, a lot of regional ones but four national airlines in the United States. In Australia we fly one and a half per cent of the worlds paid passenger miles and currently until this happened with Impulse we are trying to sustain four nationwide airlines. So it doesn't surprise me that difficulties would occur. What worries me is that the difficulties which occur may create sets of circumstances which mean that jobs are lost and that regional services go. And if you talk to people in regional Australia, particularly in regional NSW where Impulse is very active they are extremely worried about that possibility.

CARROLL: So it is the role of government then to start interfering and getting involved in these massive decisions in the private sector that have an impact on people?

BEAZLEY: Oh no, you asked me about what Allan Fels approach should be.

CARROLL: All right. But extrapolating from that.

BEAZLEY: My advice to Allan Fels is bear that in mind, that's all.

CARROLL: All right. Therefore, do governments then have a role in trying to ensure that the private sector provides the types of services that you are talking about?

BEAZLEY: Look, governments have a role in giving encouragement. We don't run a two airlines policy anymore - highly regulated, high prices operations - we don't do that. The government's role in the first instance is to do these things: One, ensure the safety of the system. And there is a real question mark over the effectiveness of Anderson's operation of CASA and his Ministerial responsibilities as far as that is concerned. That is an area of substantial problem and difficulty and that is their first responsibility. Their

second responsibility is to encourage the development of services to areas which are ill-served and to suggest to airlines as they come in that they deal with them properly. And the third is to encourage a level of competition to keep fares down.

CARROLL: The extension of that question is, gets us back to Woodside and what you, as a government, would have done in terms of the Shell-Woodside decision?

BEAZLEY: Look, we have accepted...

CARROLL: I know you have accepted but what would you have done?

BEAZLEY: ...and the issue has moved on. We had a concern in relation to Woodside which we expressed and it was this: Is the national interests served - not by foreign ownership of minerals production. If there is no foreign investment in Australia's minerals provinces there will be no development of them. Now that has been as plain as the nose on your face for forty years. So there is no sense getting into an argument about foreign investment or foreign ownership. Is the minerals province going to be developed or the resources province going to be developed on the basis of a pace which suits Australia's balance of payments, or are we going to be dominated by the marketing priorities of another firm? That for us was the key issue. Frankly, in all the things that Costello and Howard have had to say about it since then we have not been able to get at the nub of the answer to that question which was the starting point. It is not sufficient to get out there and say, we don't want foreigners to own Woodside -foreigners already do own Woodside. What we wanted to get at was; what is the marketing priorities that are going to be established here? What are the rules going to be laid down? You see I have a very different set of priorities from this Government in regard to foreign investment in relation to the minerals provinces. My concern is jobs in this country. I don't believe that over the last six or seven years we have had the pressure on these companies coming in to exploit these mineral provinces to ensure that their internal construction is done from Australian sources. My electorate in Kwinana, the numbers of people engaged in the construction, fabrication, steel fabrication industry have gone down from 4,000 to 1,000 because increasingly those developing mineral provinces in WA have gone off shore. Now governments can play a substantial role in jaw-boning these companies to do the right things by jobs here, and it is time that governments got back to doing that. Now the State Government in Western Australia, and I think the State Government here, and Peter Beattie is actually starting to do that and put the weights on these companies to do it. So my quarrel is, what was their explanation in regard to marketing because we don't actually hear anything on that and what is your strategy in terms or ensuring that foreign investment in those minerals provinces provides jobs here.

CARROLL: Now you are in Brisbane to announce a new public procurement policy. How will that benefit local industries then?

BEAZLEY: Massively. The Commonwealth and the states are massive purchasers of goods and services. The Productivity Commission says 10 to 15 per cent of GDP, that is $60 to $90 billion are actually state and Commonwealth purchasers. The Commonwealth outside defence and outside its GBEs, like Telstra and Australia Post purchases about $10 billion a year. And what we say is that while we want value for money, value for money should include industrial objectives and industry development. So you have got ... life support of your contracts. So what we are saying is change the practices to ensure and coordinate between the Commonwealth and the states, use the Council of Australian Governments to do that, to ensure that we are getting maximum jobs opportunities out of the way in which Governments spend money. There are a couple of practical suggestions. Imposing the industry guidelines on contracts,

currently they operate at $10 million drop it to $5 million. With the government business enterprises currently it is $30 million drop it to $25 million and keep the pressure on to put it further down. So that we have as part of the objectives with all the contracts which are let - Australian jobs, Australian industry.

CARROLL: Is it a buy Australian procurement policy?

BEAZLEY: Yes it is basically. It is a buy Australian procurement policy. That is the sense in which it operates.

CARROLL: ...(inaudible)...

BEAZLEY: No, because, look, I don't necessarily, it is Australian jobs that I worried about here.

CARROLL: Australian first?

BEAZLEY: There will be some buy in Australia first. We have got a large number of people, companies, who seem to be Australian brand names which are in fact foreign owned. I mean, Holden, Ford, Mitsubishi, whatever. It is buy in Australia that is what this exercise is about. To provide jobs...

CARROLL: So you are going to be saying to the bureaucrats and across the states as well as through the Commonwealth, you have got to consider Australia first in anything that you do where government purchasing policy is involved?

BEAZLEY: That is ..., of course, starting with the Commonwealth and negotiating with the states - that is the nub of it. The states are beginning to get their act together since we have had Labor Governments come into place. You saw an excellent agreement reached between Bracks and Carr on stopping bogus competition, costly competition between the two States and...

CARROLL: I don't think we fully joined in that, Queensland...

BEAZLEY: ...and switching over to focusing not so much on beggar thy neighbour policies but on let's mutually benefit and have a win win here. Let's focus ourselves when we do our acquisitions and the like on what is good for Australia, what is good for Australian industry and Australian jobs. This is an attitude that we can get into and I am sure basically all the state Labor Governments will take that view that they want to use their government purchasing effectively to ensure industry. Now we have seen dramatically demonstrated in the IT outsourcing of this Government how not to do it. And I feel extremely bitter about this because I started the process at looking at IT outsourcing but not from the point of view of saving money to the Commonwealth but building a domestic Australian based IT industry. And they have let those contracts in such a way that they have lost money and that they have put IT development essentially in the hands of foreign companies and a lot of it out of the country. And then when they put in their corrective they said, you know, in sneaky little bottom line paragraphs, the pressure on the IT companies in future contracts, to do things in Australia, should be lessened. Now, we say that is going down exactly the wrong road and we will be saying more about the IT issue on outsourcing in the future but the same motivation will apply to that -we need to ensure that dollars are spent here. Now, ISONET the Commonwealth Industrial Supplies Office Network, which does a very good job but with thin resources, has identified this: If you spend $1 million well in Australia, you will get $1.2 million worth of value added. You will get 22 fulltime jobs, you will save $200,000 in social security benefits and you get $320,000 in tax. Not a bad outcome for spending a million bucks of the

taxpayers' funds well anyway.

CARROLL: All right, Kim Beazley, so in a policy sense over the next few months then we are going to then see if policies like this, more releases, I mean, given the background of accusation by the Prime Minister that you are a policy free zone. Is this now a decision by the Opposition to release policy, policy, policy in the lead up to the election? We are going to know everything about what you are going to do in government over the next few months, are we?

BEAZLEY: Of course. But not over the next few months. You have been seeing it over the last six months or so we have been releasing policy. You, of course, know that the Government is talking baloney because you know that on our website now there is 70 released policies - this will make it 71 when it goes out today and guess how many there are on John Howard's website for his future vision for Australia? Nil. But we have been talking policy for sometime now and this is in continuation.

CARROLL: Kim Beazley, thank you for your time.

Ends Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.

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