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Opposition Leader discusses Iraq; housing; and public liability insurance.

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Subjects: Iraq; Housing and Public Liability Insurance.

CLARK: Simon Crean joins me on the line this afternoon. Mr Crean good afternoon.

CREAN: Philip, how are you?

CLARK: I’m well, I’m well. Prime Minister Mr Howard was talking to my colleague Ray Hadley this morning about Australia’s close relationship with the United States and he said it’s the country’s best guarantee of safety. He says that US President Bush, in pushing for a new resolution to give weapons inspectors greater powers, is on the right track. Do you think President Bush is right, doing what he’s doing?

CREAN: I believe that Bush doing what he’s doing in going back through the United Nations is the correct thing. I do believe that the United States is an important and crucial ally for Australia but what is going to guarantee world peace and world stability is the United Nations exercising its authority. So what I urge John Howard to do is to put more pressure on George Bush to ensure that the United Nations process is pursued. That’s the talk that should be the pressure around, not the war rhetoric.

CLARK: Yeah true enough. Although the United Nations is nothing other than a collection of states. I mean it’s not some sort of ‘lord all mighty power on high’, I mean it’s just the nation states that make it up and if you look at the Security Council of course, I mean there’s some dodgy enough countries there isn’t there, as there is? And as we know countries like France, for example, have been notoriously soft on this issue in the past. The United States may well decide that, well bugger it, we’ll go it alone.

CREAN: Except France has been saying a two-stage resolution. One that sends the weapons inspectors back in and clearly defines what they seek to


do. The second, that determines a course of action depending on what those weapons inspectors find. Now there you have the ability to get France in the cart…

CLARK: Yeah, I made the comment that they’d been soft because in the past they have been very unwilling to support US action, for example the Gulf War and along the like.

CREAN: You see I think the big problem here though, Philip, is this. The Americans on the one hand say, ‘let’s get a tough UN resolution’, and then it starts talking about unilateral action. Now you can’t be asserting both streams of action at the one time and expecting to keep consistency. And my point is it may well be down the track, assessments have to be made by the US and other countries if all other things fail. But here we have a real desire to get the weapons inspectors back in. You’ve heard agreement overnight whereby Hans Blix, the UN weapons, the head of the UN weapons inspectorate under Blix, has said they’ve got a breakthrough for access. It’s true that they haven’t got access to all of the palaces, they’ve got it to some, it’s important off the back off that breakthrough that a tougher resolution through the United Nations is drafted and carried. And I would’ve thought that if you get a tough resolution up like that, you would get countries like France and you’re much better off going through a United Nations process that gets an amalgam of world opinion, not just one perspective of it.

CLARK: Yeah, I said to the Defence Minister Robert Hill when I was talking to him earlier in the program, I said apart from the fact that I don’t think we should be getting involved, I don’t think most Australians want to get involved in this and the longer it goes on I think that feeling almost seems to be strengthening that Australians don’t want to get involved in this, don’t see what it’s got to do with us. What do you think about that?

CREAN: Well what we have to get involved in, Philip, is ensuring that the United Nations authority is upheld. It’s in all of our interests that if you have United Nations process, and it’s all very well when you were saying before ‘they’re just an amalgamation of nations’, but these after all are Sovereign Nations. The United Nations is a mechanism by which they can come together for a collective decision.

CLARK: Sure, but as we know, I mean the United Nations resolutions get ignored all the time by other countries and we don’t kick up a fuss and we don’t seem to holding, hanging our hat off it. I mean, the United Nations resolutions on Israel, for example, have been routinely ignored by Israel for many years.

CREAN: Well again I think that’s a very sweeping generalisation with respect. I think that the United Nations resolutions have been a significant and positive force for advancing world peace and stability. That’s not…


CLARK: Yeah, all I’m saying it’s not a black and white case though is it? I mean it’s not as though, you know, this is the only instance where a United Nations resolutions have been ignored, they haven’t been. They’ve been ignored you know…

CREAN: It depends on how specific they are and, in the case of Iraq, they have not complied with previously determined UN decisions. The real issue at the moment is, what new has emerged that wasn’t there four years ago.

CLARK: Well, exactly. Nothing, the answer is nothing.

CREAN: Well, no, some things have. Whether it’s significant is another question, but that’s not going to be able to be established unless those weapons inspectors go back in. That’s why the critical next step in all of this is getting those weapons inspectors back in.

And I don’t agree with John Howard when he says the agreement overnight by Hans Blix sending them back in is a waste of time. It can’t be a waste of time. If those people have got access, and if they’re insisting on additional access and can’t get it, that’s a relevant factor to report back to the United Nations. The important thing is to get them in there, get them in there inspecting, get them in there reporting back on what they’ve found or what they’ve been denied access to.


CREAN: But get them back in there under the strongest possible resolution available. That’s what John Howard should be urging George Bush to do.

CLARK: If the United States in the end can’t get a United Nations agreement to go over there and do that, and if the United States decided to go it alone, what should we do?

CREAN: Well, again, I think initially that’s a decision for the United Nations. If the United Nations’ authority is not being upheld, it has to come to a collective view as to what it should do in those circumstances. And that’s why it’s so terribly important to keep pursuing the process through the UN. That’s how we went to war in Iraq last time, it was through a UN mandate. It’s what ultimately happened in terms of Afghanistan. It’s how we went in Timor. Why should this be any different, Philip?

CLARK: Hmm, 16 to 5. My guest is the Opposition Leader, Simon Crean. Just on a couple of other topics, Mr Crean. This notion of increasing the affordability for home owners - we’ve been discussing it a bit on the program this afternoon - the proposal put up to split equity in homes by allowing


banks or other financial institutions to take a capital stake in the house. Do you have any response to that?

CREAN: Yeah, well I think it’s a pretty silly idea and it sounds like it’s something that hasn’t been thought through. I mean, just think it through. What’s really being proposed here is to make houses more affordable - yet don’t just expect people to have to pay off a mortgage, they have to pay rent as well? And who do they have to pay that rent to under this scheme? The banks - the very bodies …

CLARK: You’ve got to, I know …

CREAN: … the very institutions that people say are not giving them a fair go now. The real problem with this Government is it doesn’t think through policies that are sustainable over the long term. What you’ve got to do is some of the things that Labor has suggested - nest-egg accounts, matched savings accounts whereby you encourage people, with assistance, to save over the longer term. That’s how you can make housing more affordable. And that’s what the Government should really be looking at, not…

CLARK: Yes, it’s not much…

CREAN: …this half-baked scheme.

CLARK: It doesn’t seem like much of an idea, I must say. Senator Helen Coonan…

CREAN: And it’s a silly sort of idea too, Philip, when you think about it. This is a Government that has really encouraged a boom-bust in the housing cycle. The GST turned the housing sector into its lowest level in history. They then introduced the home-savings grant, which saw the big boom.

CLARK: But are you suggesting you wouldn’t have done that yourself?

CREAN: Well, I wouldn’t have introduced the GST.

CLARK: No, no, apart from that. But that’s ancient history, I mean.

CREAN: No, but that was the biggest hit for the housing sector in history, the introduction of the GST. Let’s not forget that. But what they did to counter it was to then introduce the home-savings grant, which has seen the big boom. But with all of those grants schemes, what they encourage is increased indebtedness and higher prices.



CREAN: What you’ve got is not just the housing bubble - a huge bubble, which everyone’s predicting is going to run into serious trouble - but you’ve also got people with their highest level of household debt in history.


CREAN: They’ve been forced into higher debt to buy their house in an overstretched market.

CLARK: Yes, well that’s not [inaudible]

CREAN: And what you need is greater certainty in the market, evening out this boom-bust cycle.

CLARK: Alright. Just finally on public-liability insurance. Senator Helen Coonan today released a new report by the Government’s Negligence Review Panel. It’s got a lot of recommendations, including capping damages for pain and suffering and so on. I mean, this may well go forward as uniform legislation for the States and Territories, too, in an effort to apparently bring down insurance premiums. It will have the effect of capping victims’ rights, though. Is that the way to go?

CREAN: I think that’s the balance that was always going to be difficult. But bear in mind the States were prepared to come forward with the capping arrangements. What it really requires is the Commonwealth to get in there and ensure that we’ve got nationally consistent approaches to it. And I welcome the capping arrangements, and the Federal Government should be getting behind those but, if it’s to do it, the Commonwealth has to give special powers to the ACCC to ensure that premiums are kept down.

CLARK: [Laughs] Yeah, yeah.

CREAN: You see, they introduced special powers …

CLARK: Tell him he’s dreaming.

CREAN: … when the GST was brought in, to ensure nothing went above ten per cent. Why can’t they introduce special powers now such that, if agreement is reached with the States to cap payments and to give greater certainty as to what will be awarded, that should reflect itself in lower premiums - but not unless you give someone power to insist on that benefit, that advantage being passed back to consumers.

CLARK: Yes, you wonder …

CREAN: Leave it to the insurance companies …

CLARK: … if only it would work.


CREAN: … in an uncompetitive market, they’ll keep the prices up, because they know people are being prepared to bear them. [inaudible] give special powers to the prices watchdog.

CLARK: I know you’re Victorian, Mr Crean, but who’s going to win the Grand Final up here on Saturday, on Sunday?

CREAN: Those Roosters. We Australians have to stick together [laughter]. We’re barracking for the Roosters.

CLARK: Good on you, mate. Bye bye. Simon Crean on the line, the Federal Opposition Leader, with some thoughts on various matters.