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The selection of the fourth Hawke ministry and future policy directions

KERRY O'BRIEN: Early this morning, the election dust was just beginning to settle. Bob Hawke was recovering from his weekend scare, just getting used to the idea of a fourth term in Government, only to be greeted by his very own bomb thrower. Finance Minister, Senator Peter Walsh, relaunched an economic debate that's likely to determine the direction of Labor's fourth term. Now that the election is out of the way, Walsh came out of the closet to declare that time is running out for Australia, and that the new Labor Government needs the courage to take the hard decisions, in particular, he said, some decisions must be at the expense of the environmental lobby that has just helped to put Labor back into Government.

Senator Walsh's statement comes on the eve of the election of a new ministry, a selection process usually dominated by factional deals that are likely to leave many of Labor's talented MPs languishing on the backbench.

Tonight, with the election behind us, we're talking with three of those hopeful backbenchers - Senator Bob Collins, John Langmore and Senator Bob McMullan - to asses just how much tougher Labor has to be this time round. But first, Mark Bannerman backgrounds Labor's first crucial post-election debate.

MARK BANNERMAN: Today's attack on the green movement is nothing new to Labor or its economic hardheads, like Senator Peter Walsh. The last time Labor's big boys slugged it out on the issue of the environment versus development, the battleground was Coronation Hill in the Northern Territory.

Last October, the Federal Cabinet somewhat reluctantly decided to delay mining at the Hill, subject to further studies. That decision infuriated Energy Minister, John Kerin, who privately told journalists: `I prefer decisions to be taken if there is enough evidence around, because I just don't think we can keep on scaring off capital.' He later backed up those remarks at a conference on industry and the environment.

EXTRACT:

JOHN KERIN: If all the opposing arguments that I'm faced with and Peter Cook's faced with, are put together into a coherent whole, the policy direction would be to head back to the caves and eat grass seeds. But even here, we're told that plants have feelings and corn experiences pain when it's placed in boiling water. To my mind, at present you see a bit too much competitive environmentalism and sanctimonious behaviour by political parties and governments, as they clamour for the environmental vote.

MARK BANNERMAN: The Prime Minister told him to calm down, worried the issue might split Cabinet. He had reason to be concerned when Environment Minister, Graham Richardson, replied in kind.

EXTRACT:

GRAHAM RICHARDSON: Unfortunately, some of the Johnny-come-latelies to this debate, who seek solace and comfort in the term `sustainable development', have misused it by making it something it isn't. In the best tradition of environmental polluters, they have muddied the waters. They think sustainable development means you can mine national parks and develop anywhere, as long as in some sort of sensitive manner.

MARK BANNERMAN: The latest comments by Senator Walsh have reopened the whole debate, and they've taken it one giant step forward. Now he's talking about the Government taking on interest groups, like the environmentalists. It's something he thinks must be done, as he says, `If the political will exists to get the country out of the deep shit it's in.' In doing that, he's also cast doubt on the role of the green vote in helping Labor in last Saturday's election. Those comments drew a surprisingly muted response from Environment Minister, Graham Richardson.

EXTRACT:

GRAHAM RICHARDSON: I have never made the claim that environment won us the election. It was one of the reasons, and one of the other reasons is that we've been able to take the tough decisions to which Peter Walsh has contributed. So, you know, it's a mixture of both. It's just that I acknowledge both.

MARK BANNERMAN: But this is more than a battle over rainforests, national parks and natural resources. Senator Walsh made it clear today there's a battle taking place within the Labor Cabinet over the priorities for the next three years; and he admitted today, time is running out.

EXTRACT (World Today):

PETER WALSH: We've been very successful in just about every area with economic policy, except that chronic Australian problem of the current account deficit.

MARK BANNERMAN: He wants to see the difficult issues, like privatisation, industrial relations reform, and social welfare policy spending tackled. And in his view, the only way to do that is with a talented ministry. Significantly, today, he made a plea for Labor's Caucus to elect the best Ministers and to set factional allegiances aside.

EXTRACT (World Today):

PETER WALSH: I believe that the Caucus, which has the power to elect the ministry, does elect the ministry, but Caucus has a moral responsibility to elect the most talented ministry that we can muster.

KERRY O'BRIEN: So which way will Labor go? Joining me is Bob Collins, the no nonsense Senator from the Northern Territory, and a ministerial hopeful from the right wing faction.

From Canberra, one of the centre left's economic thinkers, a former adviser to Gough Whitlam and Paul Keating, John Langmore. And Senator Bob McMullan, who played such a big role in the ABC's election night coverage, and now hoping to be elected to the ministry, without the support of any of the three Labor factions. He's an independent.

Bob Collins, to you first: to what extent do you echo the sentiments of Peter Walsh, and do you believe it goes beyond just the greens?

BOB COLLINS: Well, to a great degree and, in fact, the whole question of resolving this conflict of environment versus development is the, I guess, the second item on my own agenda that I'd like to see the Government address in terms of priorities, early, in its first term. We certainly do have to grasp the nettle, but we've also got to look after it as well. I agree with Phillip Toyne, the environment is not a boutique issue; it's not a passing fad. I've personally been preaching that particular gospel to Northern Territory developers and on every occasion to the Northern Territory mining lobby, on every occasion, I've had to speak to them over the last three years. It's a permanent fixture on the political landscape.

As far as I'm concerned, it's a welcome one. It just makes it much more difficult to govern, but it's never going to get any easier, and I think the appropriate way to deal with these issues, is through the Resources Assessment Commission and the processes that that offers. Now, of course, the first major litmus test of that process will be the manner in which they deal with the question of Coronation Hill.

KERRY O'BRIEN: And Coronation Hill, of course, is in your own Territory, and you were quite angry about the way that was dealt with before the election.

BOB COLLINS: Well, I said after the decision was taken, even though perhaps it mightn't have been the smartest thing for me to say on the local front, but I thought probably, politically, it was the correct decision to take. Perhaps, though, it should have been referred to the RAC a little earlier in the game because in terms of developing a policy framework for dealing with these issues, you can't adopt a pro forma approach; that's nonsense. You can't draw up a set of guidelines that are going to apply to every one of these projects in a consistent way, but you've got to deal with the opposing forces, if you like, of development and the economy and the environment in a consistent way. In other words, you've got to apply a set of rules to all the players in the game, and those rules have got to stay the same from the start of the game to the end of it.

Now, it's on the record. I don't think that happened in the case of Coronation Hill, but I think the reference of Coronation Hill to the Resource Assessment Commission was the correct thing to do, finally. I think Cabinet made the right decision, and it's going to be, as I say, an interesting litmus test of that process as to the outcome of those deliberations.

KERRY O'BRIEN: John Langmore, how conscious are you of the fact that environmental issues, particularly with greenhouse hanging over everybody's heads, are just going to keep coming back and back and back?

JOHN LANGMORE: Peter Walsh said that we have to lead - that politicians have to lead - politicians also have to follow, and it's quite clear that the community wants both higher living standards and environmental protection. Government is often complex .. it often has conflicting goals and there isn't always just one strategy. There are various ways of achieving both those goals of development and environmental protection at the same time. I believe that we have to respond to the wish of the community to reduce the emission of greenhouse gasses, for example, and that will require tax incentives and disincentives, in order to achieve given goals for greenhouse gas emissions.

KERRY O'BRIEN: But by the same token, and I'd put this to Bob McMullan, I mean, you've got a Caucus which showed last year that it reflects the same kind of tensions that obviously exists in Cabinet over this. Are you confident that Caucus can resolve this, and do you believe it should be resolved quickly?

BOB McMULLAN: Well, it depends what you mean by resolve. I mean, each issue is going to be complex and going to have to be taken on its merits. Bob Collins is quite right. You can't just set down a little framework and say: ` every environmental decision, every development environment debate, it can be resolved'. We just put this little template of principles down and everything, it'll be settled. They're all going to be difficult because it's a very complex balance between the demands for living standards and the concern about the environment.

KERRY O'BRIEN: Well then, Peter Walsh is asking for the impossible, is that right?

BOB McMULLAN: No, Peter's stating a very, very pungently and important part of the debate. He's not stating all of the debate, and I don't think he pretended to be. He's saying let's make sure in our enthusiasm for the environment, which I at least believe is very necessary - I think Peter does too, but he can speak for himself - that we don't forget that Australia's got very profound economic problems. And if we spend all our time thinking about only the environment and not trying to resolve in a balanced way the question of the economic development of the country, then living standards are going to go down, and our capacity to provide the resources to take care of our environment is going to be limited.

KERRY O'BRIEN: Bob Collins, how are you going to do or make all of these nice decisions, if you've got Graham Richardson reminding you from centre stage, that there are 20 Labor MPs in the Parliament who can thank greens and Democrats and their preferences for getting them in there?

BOB COLLINS: Well, I'd in terms of providing that sort of analysis of the result, frankly, I don't agree with either Graham Richardson's assessment, on the face of it, or Peter Walsh's. I think it's far more complicated than that, and was certainly complicated here in the Northern Territory as it was everywhere else in Australia, by the preponderance of local issues. It was Peter Bowers .. well, certainly Peter Bowers is one I'd dare say of many, that I saw, say, before the day - not after, that we weren't going to have a Federal election. We're going to have six State elections, and that's precisely what happened. And the dominant issue during this election campaign was interest rates; that is inextricably linked to the current account deficit and our foreign debt. There is no question in my mind that that has got to be the dominant item, the dominant item on the agenda for this next term of Government.

UNIDENTIFIED: That's right.

KERRY O'BRIEN: Okay. Well, I think it's relevant at this point to move on to one illustration of the kinds of challenges you do have again, particularly in the micro-reform area that we're talking about. And our reporter on this particular item is Dugald Maudsley.

DUGALD MAUDSLEY: The Australian waterfront is one of the most inefficient in the world, costing Australia up to $1 billion per year. After three commissions of inquiry over the last six years, an agreement to reform the waterfront was signed between unions and employers in October, but six months on, and little has happened.

PETER BARNARD: The reform process on the Australian waterfront is taking too long. The reforms are not as extensive as they should've been, and the reforms are too costly.

DUGALD MAUDSLEY: Dr Peter Barnard is in charge of transport policy for the National Farmers' Federation.

PETER BARNARD: The reforms haven't been as extensive or will not be as extensive in Australia, as they are in Britain and New Zealand. Britain has managed to increase waterfront productivity by 65 per cent in the last 12 months. New Zealand has managed to increase labour waterfront productivity by 100 per cent during the last 12 months. Australia, over three years, has an objective of increasing waterfront productivity by 30 per cent. Clearly, by comparison with overseas countries with similar waterfront backgrounds to Australia, the reform process is a failure.

DUGALD MAUDSLEY: And the day we went to film on the waterfront, this seemed to be backed up. When we arrived at White Bay in Sydney, a dispute was on.

UNIDENTIFIED: They get one dog down that end, then they can't pull the other dog through because they've got all the wires dangling around their necks.

UNIDENTIFIED: This is a safer way than what was going on here before.

DUGALD MAUDSLEY: The watersiders were unhappy with the way these steel girders were being loaded, saying it was unsafe, and they refused to work until it was changed. The company called in three surveyors who all said the method was fine.

BRIAN BAILIE: Unions and the employees then say, `We're still not gonna do it.' Now, we .. if they don't do it now, we've just lost patience and we'll say, `You're all going to be fired from that job'. We can't fire them from the industry because they've got jobs for life. Now, in an industry where people are supposed to be getting on with economic reform, that's not a very good example of people who are willing and moving on changes in the industry.

DUGALD MAUDSLEY: Brian Bailie is the Vice-Chairman of PO, the largest waterfront employer in the country. He says the Government must get tough. The time for talking is over.

BRIAN BAILIE: I think that the Government should stop, take a snap look at the process of the waterfront employment. It should then say: this micro-economic reform is not going fast enough. It should say to the employers and the employees on the waterfront: get your acts into gear, or you've got a very limited time.

DUGALD MAUDSLEY: But to do this, the Government must come down hard on the unions, something they're unwilling to do. Seventy to eighty million dollars of goods go through the ports each day - anger the unions and you choke the country.

JOHN COOMBES: Now, we've been accused of carrying an attitude over from the days when the waterfront was really something akin to slavery. If people want to introduce into the new era of waterside workers the same sort of attitudinal problems, well, I suggest they adopt a confrontationist approach with our union. Put a chip on the shoulder of the new employees in this industry, and we'll have another 10 to 20 years of them and us. But, however, if you go about it in the correct way, we'll have a cooperative approach. We'll bring about a new era on the waterfront, and we will hope to get the results that are required.

KERRY O'BRIEN: Now Bob Collins, that particular illustration on the waterfront seems fairly typical of a number of things that the Government did tackle in the third term. There were significant breakthroughs. There've been significant breakthroughs in terms of structural reform generally in the work place, but the Government has still got many critics, in that the pace of change has not been and is not fast enough. And of course, in an area like sale of government assets, like the airlines, didn't happen at all. Now, do you believe that the pace of change this time has to be substantially picked up?

BOB COLLINS: Yes, I do. I think that one of the most crucial areas in micro-economic reform in this country is, in fact, with our entire transport system. There's no doubt that the inefficiency of the transport systems in this country contributes very largely to the problem we've got with our foreign debt - no doubt about that - and it does have to be accelerated.

I mean, we have begun .. this Government has implemented structural reform in this country which has been absolutely revolutionary over the last seven years, and we don't have time to reiterate it all, and the election campaign is over anyway, so why bother, but it's all been done. An enormous amount of it's been done.

The recommendations of the Interstate Commission have begun to be implemented in respect of the waterfront. There's going to be a reduction in the work force of something like 20 per cent over the next three years; there's going to be a far more competitive attitude developed, and a far more commercial attitude developed on the waterfront than there is at the moment. But the one thing I do agree with absolutely also in this country - it's not going to work - is having this confrontationist approach to the unions, and that's going to bring the whole thing to a grinding halt.

KERRY O'BRIEN: But how do you speed things up?

BOB COLLINS: Well, I do think there's only one way of doing that and that is in cooperation with the unions. And I think the union movement has also done enormous things in the last seven years, and I think that the Government really does have to talk seriously to the waterfront unions about accelerating the pace of change on the waterfront, because it's a serious economic problem for this country.

KERRY O'BRIEN: But John Langmore, presuming that you agree largely with Bob Collins, if the unions aren't going to play ball, what does this Government do if there is a clear acknowledgement that the pace of change in transport is not fast enough?

JOHN LANGMORE: The issue, surely, is how you can improve efficiency in the transport system, and that requires investment and substantial increases in investment, both public and private; more research. I was involved in a parliamentary inquiry which showed that there was no research at all on our railway system and far too little on our road system, and also education and training. Those are the three aspects that will build up the dynamism of our economy in every area, and not only the transport area.

So, it's not just a matter of confrontation in the way that was being presented in relation to the waterfront there. Surely, we've shown that through consensus, during the last seven years, much more can be achieved than through confrontation. But that only provides the framework for these other dynamic elements to take effect.

KERRY O'BRIEN: Like what?

JOHN LANGMORE: I mean, through investment, for example. I mean, we've allowed our public infrastructure to run down throughout much of the post-war period. People are very aware of that now in relation to roads. We've got to spend more on our roads and on our railways and on other aspects of the transport and communication system as well, and we'll do that most effectively if we've backed that up with effective research.

KERRY O'BRIEN: Bob McMullan, this is a big question in a way, but cast your mind forward to three years and, in fact, it'll probably only be two and half ....

BOB McMULLAN: Yes.

KERRY O'BRIEN: .... if that. What should this Government be able to carry to the electorate in that time, in terms of micro .. real micro-economic reform. I mean, what do you have to go with?

BOB McMULLAN: Well, I think we have to make sure by that time, that the waterfront reform objective that we set down, have been achieved - the three-year program has been achieved. And I think if we get a 30 per cent improvement, that'll be fantastic. It's always very easy for people who don't have to do things, to just make grand gestures and say: `It should be three times as fast', because, of course, they don't have to do it. If they adopted their tactic, it would reform about as quickly as the Victorian tramway system, which did try and adopt that system and got no change at all.

Now, I think you really need a cooperative program on waterfront and shipping, but then I agree with what John's just said and Bob Collins had referred to, we've got to go on and look at the other areas of transport where actually most of our goods are transported. And there's a few very vocal groups who go across the waterfront, but most people transport their goods by road or rail.

And it's the lack of a proper national freight strategy internally, particularly with regard to rail; that is, I think, the most important infrastructure issue facing Australia for the next three years. And I'm absolutely sure it's more important than the waterfront. It's more important than shipping, even if it doesn't shift farmers' freight so they don't talk about it.

KERRY O'BRIEN: We might play this back to you in a couple of years time. But one issue that I do want to get on to before we go, and to me it's going to be the first test of this Government's resolve, that is, what Bob Hawke does with his ministry, and Peter Walsh has already thrown the gauntlet down there. He says, throw factionalism out the window.

Bob Collins, is that really on?

BOB COLLINS: No, it isn't. Factionalism is not going to be thrown out of the window because - I know this is trite to say it, it's been said a million times, but it's true - factionalism, particularly in the way it's operated in the last seven years in this Government, has given this Government an enormous amount of stability. It's a very workable system. It's a real upside as well as a down side. On the question of selection of ministries, I think it operates in a far too ruthless and inflexible manner and I'd like to see that, certainly, made a little bit less inflexible. I mean, I'd rate my own chances of getting onto the front bench as being a lot slimmer than I am, for that reason.

KERRY O'BRIEN: Bob McMullan, I had an interview with you two years ago where you warned about the problems of creeping factionalism, if you like, and I think you said then that the ministry did not represent truly the most talented people in the Labor Government. I imagine you would say that now.

BOB McMULLAN: Well, I think the ministry is very good. I think the process for choosing it is wrong, and if we continue that process we will inevitably lead to ossification, and we will reinforce that great public cynicism. And I think the biggest political problem, not for the Labor Party, but for the country, is people's cynicism about the political process, and if it looks like our ministry has been chosen by six people in a smoke-filled room, it'll only reinforce that view.

KERRY O'BRIEN: But the deals, the deals are already on, aren't they? The deals are already under way?

BOB McMULLAN: Well, in every choice that's made in every organisation in Australia, people talk, people discuss. I mean, if you're trying to elect the committee of the PC, people talk to each other. You're not going to stop that and nor should you. It's a question of saying after the discussion has gone on, firstly: what are the criteria that people are applying when they have that discussion? And after the discussion that goes on, do you get your kneecaps shot off if you try and break the agreement that's been come to?

KERRY O'BRIEN: Okay. Very briefly. Do each of the three of you believe that when the process is finished, that the 30 most talented members of the Labor Caucus are in the ministry? John Langmore.

JOHN LANGMORE: Well, I think that we can select the ministry through a more open process, and if we do, I think the answer is yes.

KERRY O'BRIEN: Yes, but do you believe that's going to happen?

JOHN LANGMORE: I think there's a process of discussion about whether it'll happen that way, under way, and I can't predict the outcome.

KERRY O'BRIEN: Bob Collins. You're not going to be there, are you, when it's final?

BOB COLLINS: If I'm not one of the 30, I won't agree.

KERRY O'BRIEN: Bob McMullan, I think I know your answer. Thanks very much for participating tonight.