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Prime Minister discusses Warren Entsch; GST; Jeff Kennett; Kosovo peace deal; Australian CARE workers; lamb exports; Geelong road.



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11 June 1999

 

TRANSCRIPT OF THE PRIME MINISTER

THE HON JOHN HOWARD MP

RADIO INTERVIEW WITH JON FAINE, RADIO 3L0

 

FAINE:

 

Good morning John One of the things on your plate, as I said first of all, the Warren Entsch affair as it’s now being called. The Labor Party say they’ll go if necessary to the High Court to challenge Mr Entsch’s position in Parliament.

 

PRIME MINISTER:

 

Well they can if they want to. But they’ll have to pay for it. Yesterday’s move in Parliament by the Labor Party was all about getting the public, the taxpayer, to pay for the High Court’s determination. Now we say that on the basis of our advice, the Solicitor General, the acting Solicitor General, there’s no Constitutional problem with Mr Entsch. The Labor Party’s got an opinion that says otherwise. So if the Labor Party challenges that it can go to the court. We’re not stopping it going into the court. It’s quite open for the Labor Party to take the matter to court. And it will be interesting to see whether it does. I mean it has talked about challenging it, well that’s fine. It can challenge it but it can challenge it at its own expense. This is not an issue of high principle. This is about the Labor Party trying to score a political advantage over the Government. Now okay, it’s entitled to play that game, but it’s got to pay for the game. You can’t expect taxpayers to pick up the bill. This is the real significance of the move yesterday because if the Parliament has referred the issue to the court then the public would have paid the cost of the court case. But if the Labor Party takes the matter to court the Labor Party’s got to carry its own expense and run the risk of having costs awarded against it. Just like any other litigant. It really wanted a legal meal ticket out of the Parliament yesterday and because it’s been denied it, it’s running around saying democracy’s at risk. Democracy is not at risk. The court will still decide the law if the matter comes before the court.

 

FAINE:

 

If Mr Entsch is going to go, if he’s vulnerable to a challenge, wouldn’t it better for you to be seen to be doing the decisive thing and making the decision yourself about his future rather than the court having to do it for you?

 

PRIME MINISTER:

 

Well the advice we have is that he’s not vulnerable.

 

FAINE:

 

At all?

 

PRIME MINISTER:

 

Yes. We have an opinion from the acting Solicitor General, Henry Burmeister QC, a man who worked for Labor governments. So he’s not a Liberal lawyer. He’s not somebody from the bar in Melbourne or Sydney who’s a member of the Liberal Party. Or in the case of the Labor Party they can find some Labor lawyers. But the reality is that his independent mind has advised the Keating Government, the Hawke Government, and advised the Howard Government. And he said on the basis of the established case law, the case law that’s there, the man’s not vulnerable. Now I’m not going to look beyond that. I mean I’ve got more important things to do like trying to get a decent deal for our lamb exporters, and getting the tax package implemented.

 

FAINE:

 

If the ministerial code of conduct is all about appearances, and saying to the public look we’ve cleaned up the way the Parliament works. Well surely here is an opportunity for you to show that it’s got some meaning.

 

PRIME MINISTER:

 

John, the ministerial code was not about cleaning things up. The ministerial code is meant as a guide for people’s behaviour. It’s not meant as a death sentence. There’s nothing in the code that says that if anybody is in any kind of breach, technical or otherwise, they must automatically be sacked. What happened here was that Warren Entsch declared his financial interest in some companies, but he neglected to declare his post as a director and secretary. Now if he had not said anything about those companies then he would have been in trouble. But the fact that he declared his financial interest but neglected to declare his position is not in my view a hanging offence. Now people will criticise me for that as they have. But that’s the decision I’ve taken. I think it is ludicrous if we get to a stage where people are automatically knocked out on that basis because he hasn’t benefited from this mistake. He didn’t know about the contract until after it had been let. There’s no evidence that he tried to nobble the RAAF. There’s no evidence that he used his position, there’s no evidence that he’s done anything dishonest. He made a mistake by not, as well as declaring his financial interest, declaring his formal positions. Now I don’t regard that as a hanging offence.

 

FAINE:

 

But it’s a running sore politically....

 

PRIME MINISTER:

 

Well look, Prime Ministers have running sores and arguments and political criticisms every day of their life. But I’ve got to take a decision. I try to play commonsense judgements. I’ve got a set of guidelines that require people to do certain things. If they breach those guidelines, and there’s clear evidence of gross neglect, or malevolence, or dishonest or unethical behaviour, well, people are out. But in this case there’s no evidence of that and the clincher is that the man disclosed his financial interest in the companies. And the thing that really matters, if you own a company, is how many shares you’ve got in it not whether you’re a director. Because that detennines the real level of your interest. But in this case Warren declared his financial state but neglected to declare his formal position as a director. It was a mistake. He shouldn’t have done that but I don’t regard that as a hanging offence.

 

FAINE:

 

And if it was the other way around, if he declared a directorship but hadn’t told anyone there was financial benefit....?

 

PRIME MINISTER:

 

Well that would have actually been worse in my view because the real thing that matters is the dough you get out of it and he told all the world that he owned shares in this company. And interestingly you go to the other part of the form, there was a couple of companies where he was a director and not a shareholder, and he filled that out. He honestly believed, I have a feeling people may think it is that by declaring his financial interest that was enough but the world knew that he half-owned the company. Because people who have private companies they talk about ownership rather than shareholdings. This particular company that got the contract is half-owned by Warren Entsch, or half the shares are owned by him and half by another bloke. Now he talks about half-ownership. He doesn’t think in terms, and most people don’t think in terms of directorships and secretaryships. That’s language that’s more akin to large public companies. This bloke has not in my view done anything dishonest. I’m wearing the flack, and I intend to go on doing so because I think it is stupid to apply an ultra legalistic approach to these guidelines. They were never intended to operate that way.

 

FAINE:

 

A bit of commonsense applied.

 

PRIME MINISTER:

 

Commonsense.

 

FAINE:

 

Prime Minister, listening to Parliament the other day, before we move onto other things, listening to Parliament the other day there was almost a veiled threat from you that if the Labor Party were going to go this way then there was a lot of other baggage, a lot of other dirt that could come out about the outside business activities, and consultancies.

 

PRIME MINISTER:

 

No, not dirt.. .no no. There was no threat. I don’t issue threats. I mean I don’t believe that people should be thrown out of positions on the basis of a technical noncompliance. I think that is ludicrous because everybody could make that kind of mistake and Mr Beazley acknowledged that himself a couple of years ago. And as Tony Abbott pointed out yesterday there are a number of people in the Labor Party backbench who’ve apparently have sort of, have got technical glitches in their disclosure. Now we’re not saying they should be punished or thrown out or anything. I’m not suggesting that they’ve done anything wrong, but backing the point that I was making that once you go down this ultra-legalistic path you’re going to basically frighten a lot of people away from going into Parliament. And the reality is that we have a lot of people in the Liberal Party who’ve had a small business background. They get promoted to a parliamentary secretaryship in the case of Warren Entsch. Now it’s not.. .doesn’t carry the same status and so forth as a minister. It’s a very heavy burden to say to somebody like that, well you’ve got to get rid of all of your financial interests, which essentially is where the Labor Party is really in reality heading. Now I look at the substance and I ask myself, okay, he made a mistake. He was careless, he shouldn’t have made that mistake. But there was no intent to defraud or camouflage because if there had have been he wouldn’t have disclosed his financial interest in the company and that to me was the clincher.

 

FAINE:

 

All right, we’ve got to cover a lot of other ground. According to a report in today’s Australian Financial Review there’s a spectre of a High Court challenge to the GST. The government solicitor has said there is a question mark over whether or not under the Constitution you can pass all of those tax laws through one bill at once.

 

PRIME MINISTER:

 

I read that report. I haven’t seen the legal opinion. But it sounds to me very much like every legal opinion I’ve ever read, and that is they say well our view is X, Y, Z, but of course it’s always possible that somebody could take another view. And from what I see of the report that’s basically it. All legal opinions are like that. I don’t think I’ve ever read a legal opinion in my life which says that something is totally and utterly free from doubt....

 

FAINE:

 

Never black and white.

 

PRIME MINISTER:

 

Well never, no. And that is the nature of the law. But on balance, it was quite strong and about as strong as you can ever get.

 

FAINE:

 

Are you concerned about the ...?

 

PRIME MINISTER:

 

No no, no I’m not.

 

FAINE:

 

All right. The Premier, you may be concerned about this, the Premier Jeff Kennett yesterday in an interview said that he thought it was unacceptable to have a new GST package in effect rammed down his throat.

 

PRIME MINISTER:

 

Well nothing’s being rammed down Mr Kennett’s throat. In the end it was our call to do a deal with the Australian Democrats to get the package up, and it was quite unrealistic given the dynamics of our negotiations with the Australian Democrats, it was quite unrealistic of us to say to the Democrats: well we want you to agree to something, and we’ve reached tentative agreement, but can we break off for a week or ten days while I toddle off and sign up each of the State premiers and chief ministers.

 

Now that was just unrealistic. What I have done is conclude a deal which preserves real gains for the States. It guarantees that the States will be no worse off during the transitional period. It guarantees that after the transitional period the revenue gains to the States will be such that they will be much better off than if the existing arrangement continues. Given that we are paying the entire cost of the changes out of our budget, and not out of the State budget, the States have received an extremely good deal. But it seems that the real rub with some of the Premiers is that in some way there weren’t detailed discussions with them before I signed up with the Democrats. Well Mr Kennett knows, as well as every other State premier, that in a situation like that, in the dynamics of such a negotiation it was unrealistic of me to say: well you’re not really negotiating with Howard and Costello. You’re negotiating with us but you’re also negotiating with Kennett, and Court and Carr, and Beattie and so forth. Now that’s just unrealistic and Jeff knows that. We have got a very good deal. We’re going to have a much better tax system.

 

FAINE:

 

Why do you think he’s holding out?

 

PRIME MINISTER:

 

Well premiers always do that. Always. You should ask him that. I don’t accept the criticism. We’re don’t intend to, in any way, renegotiate the arrangement with the Democrats. And as that very good lift-out supplement in the Melbourne Age demonstrated this morning this is an influently better system than the present taxation system. Families in particular will get huge benefits out of it. I thought it was an excellent supplement and full marks to the Melbourne Age and I hope every Melbournian reads it because it really is an excellent lift-out supplement, and it demonstrates very clearly the family benefits out of this tax package. And that is exactly what I set out to do two-and-a-half years ago.. .two years ago, to deliver a tax package with great benefits for Australian families at the low and middle income range. You look at that supplement this morning, it’s been done by Access Economics not by the Federal Treasury, it’s very clear that there are very big gains for people in the middle with families, particularly single-income families whose relative position has deteriorated and that was demonstrated in a survey that came out about a week ago, over the last 14, 15 years. And what was so pleasing about that analysis was that it concluded that the very goal we set out to achieve has in fact been delivered through this taxation package.

 

FAINE:

 

But at the same time as that coming out, you hear from the St Vincent de Paul Society that there are 2 million Australians living in poverty, and BRW at exactly the same time that the hundred richest families in Australia have gone about 25% richer over the last year. So the gap between the rich and the poor seems to be getting wider.

 

PRIME MINISTER:

 

John, I think the truth is that the well-off in Australia are getting better off, that’s true. There is a lot of evidence though to say that through a combination of policies over the last 10 or 15 or more years, there have been real gains for people at the lower end of the income range. There are surveys indicating that there are fewer people, young people, children living below defined poverty levels. We don’t accept, and I don’t think Access Economics accepts either, but it’s a matter for them to speak for themselves, that the St Vincent de Paul conclusion is a true reflection of the position. You see the problem with those sorts of analyses is John is that they look at somebody’s income irrespective of their family circumstances. Now if you say that somebody on an income of $100 a week is obviously struggling, but if that happens to be a 17 or 18 year old student with a part-time job living at home with his parents who are in quite comfortable circumstances, you can hardly say that person’s poor. Yet the statistics throw that person up as earning only $100 a week. And that is the difficulty of so many of these analyses.

 

FAINE:

 

But the poor are doing it tough at the moment.

 

PRIME MINISTER:

 

The poor in any... .yes, but they are doing it better now than they were a few years ago because prices are not going up as quickly, and the value of social security benefits have been fully maintained. And under the GST package, in particularly as a result of the arrangement with the Democrats, pensioners are going to get a real increase of 2%. And one of the things that the Labor Party will do if votes against this package will be to vote against a 2% increase in the value of the pension. Now this is over and above the compensation needed for the GST. It’s one thing to vote down the compensation to the GST because you say you’re simultaneously voting down the GST therefore you don’t need the compensation. But in addition they’ll be voting down 2% over and above that.

 

FAINE:

 

An international story, the major thing happening of course, the peace deal in Kosovo. Are you confident it will stick, and are you disappointed that some sort of a deal over the Australian care workers was not included?

 

PRIME MINISTER:

 

Well as to my confidence that it will stick, when I spoke to President Clinton yesterday morning about our lamb exports, and about our two aid workers, he expressed a lot of optimism. He said that he thought this was the real thing and he sounded very upbeat and deservedly so because it’s a huge breakthrough. I can only rely on the reports I’ve seen, I can only rely on the tone of that conversation with the President. And it was very clear from that conversation that he was very upbeat and the reports seem a lot more reliable. The language of the Yugoslav President, the fact that the Serbian troops have begun to pull out. As much as you can do with these things I’m hopeful. I didn’t expect, you know, an immediate breakthrough on the aid workers yesterday, but clearly, as a result of the peace deal their prospects are a lot better because in a sense there retention’s a product of the conflict. Now that the conflict looks as though it’s been resolved, then the prospects of them getting out will increase. But I did raise their position with the President. I’ve also written separately to them about it. I’ve written to the British Prime Minister and we will continue to lift every effort we can to try and get them out.

 

FAINE:

 

And on the lamb exports, did President Clinton hint that there was any joy for Australia?

 

PRIME MINISTER:

 

Well, he’s certainly well aware of how upset we are about the prospect of them applying quotas. I said that it would really deeply disappoint the Australian community. It would anger out exporters. We have arguments in the past that this is qualitatively different because here is a problem in the American industry, not caused by our exports, but rather caused by their bad marketing. We’d actually offered money to help them improve their marketing techniques. And you’ve got a group of people as you heard from that segment on AM a few moments ago, people whose very livelihood in rural areas of Australia depend on this. And I mean what is so vividly disappointing for them is that they’ve worked their guts out to build up a market and they’ve done it through efficiency, and now it’s going to be taken away from them by the executive act potentially of a country that preaches free trade. The point I made to the President was that if they go ahead and do this it will send a terrible signal to those countries who don’t want to open up agricultural trade. The Americans say they do, we certainly do.

 

FAINE:

 

Did you indicate to President Clinton that there would be retaliatory measures?

 

PRIME MINISTER:

 

No I didn’t. I think it’s silly in a situation like that to start talking wildly about retaliation. I mean that is the language in a sense of defeat because you are already assuming that your arguments aren’t going to carry any weight. You’re preparing for what happens afterwards. I mean if the Americans go ahead and impose restnctions then we will have to consider where we go from there. But I was intent yesterday to make the point to him that it will do immense damage to the trade relationship between the two countries, but it would also send a terrible signal to the rest of the world. And the Americans have talked free trade now for years, and if they go ahead and do this it would be one of the most blatantly protectionist acts imaginable and it will send a terrible signal. Now in the end of course, when you talk about retaliation, it’s very stupid in trade to cut off your nose to spite your face, and you’ve got to be very careful about issuing bland general threats about retaliation. Because in the long run Australia’s interests lie in expanding world trade because we are $19 million people. We need exports to grow and to prosper. Therefore it is not in our interests to see the world throwing up protectionist barriers.

 

FAINE:

 

Not at all. Still on international events, are you concerned by the slowness of the count in the Indonesian poll, concerned is being expressed about vote rigging, to put it bluntly?

 

PRIME MINISTER:

 

Well I haven’t had any advice to that effect as yet. I guess if I were a candidate I’d be living in agony with such a slow count. I’m glad our elections don’t take that long to count. But let’s keep a sense of perspective. This is 211 million people and it’s an extraordinary exercise in democracy. A nation that could be the third largest democracy in the world if it all goes according to the book, and it seemed to be a relatively clean ballot.

 

FAINE:

 

Incredible that it seemed to have gone as well as it has.

 

PRIME MINISTER:

 

I think it’s remarkable. Instead of people whingeing about it being slow, why don’t they applaud the fact that after 40 years, there were pretty authoritarian government, a very authoritarian government, we now have democracy, or the beginnings of democracy in Indonesia. Imperfect though it may be, slow though it may be, it will be a huge achievement because the whole campaign was conducted with very little violence. And I think it’s a huge credit to the Indonesian people. And let’s give some credit to Dr Habibe. He was the man who brought this about and he deserves credit whatever the outcome, and whatever his political future may be. He’s done two great things: he’s brought democracy back to Indonesian elections, and he’s also said that the East Timorese people can vote on their future.

 

FAINE:

 

And finally and briefly Prime Minister, signs going up on Melbourne’s Princes Highway on the Geelong road, no Federal funds here either. The State government has said they’ll kick in 180 or thereabouts million dollars to improve the record fatality so far this year. And no Federal funds.

 

PRIME MINISTER:

 

Well it’s very easy to go by with a thing like that and say no Federal funds. But of course what they don’t say on those signs is that general federal funds to Victoria are going up by 5% this year.. .this coming financial year. They’re going up by a significant amount, 5% may not be the precise figure but it is certainly a real increase in the Federal funds, and of course under the GST, Victoria after the transitional period will be a lot better off. The Victorian Premier has put some views to me on that and we are considering it. We have obligations all around the country. We’ve entered into a number of arrangements relating to roads in Victoria.

 

FAINE:

 

No extra money?

 

PRIME MINISTER:

 

Well, we are considering the Victorian government’s opposition.

 

FAINE:

 

That’s as far as you can go?

 

PRIME MINISTER:

 

That’s as far as I can go, as far as I will go at the present time. It’s very easy for States to single out an issue and say we’d like to do this if only the Federal government would give us some more money. But I say in reply to that that the deal is that we give the Victorian government untied money. They can spend it as they will, and they could always rearrange their priorities. But we are giving the matter some thought.

 

FAINE:

 

Prime Minister, thank you very much for your time this morning.

 

PRIME MINISTER:

 

You’re welcome.

[ends]