Subjects: allegations in The Australian newspaper; Stan Howard; National
Textiles; Braybrook workers; unemployment figures; Minister Moore
E&OE..........................................................................................
Well, ladies and gentlemen, I've called this news conference this
morning to reply to the extraordinary editorial attack on the probity
of, not only myself, but also my Government in The Australian newspaper
this morning and also the front page article written by Mark Westfield.
The editorial represents a slur not only on me, but also on the entire
Government. I explicitly repudiate the allegations of impropriety. I deny
absolutely that the Government's decision was conditioned by, and
influenced by the fact that my brother was the Chairman of National Textiles,
or that it was motivated by a desire to protect or to assist my brother
in some way. I also repudiate Mr Westfield's argument that my public
urging of people to support the deed of arrangement was designed to protect
my brother from a more searching examination by either the administrator
or a potential liquidator. That is wrong, and it will be apparent from
something I will say in a moment about an ASIC investigation that a mere
telephone call to my office would have prevented that absurd claim being
made.
But for the record, I deny absolutely that the decision undermined my
probity or that of the Government. To allege that a decision undermines
the probity of the Government or the Prime Minister is quite a serious
allegation. It suggests that there is a lack of incorruptibility. I deny
that the decision was improper, and I desire, I deny that the decision
amounted to favouritism if not corruption in the words of The Australian
editorial.
I should inform you that at the commencement of the Cabinet meeting,
I outlined in some detail my brother's involvement in National Textiles.
I described as best I could recall, any discussion I'd had with him
over a period of eighteen months or two years concerning the company.
They weren't many. In fact, he's always made it a point never
to discuss matters involving his commercial interests with me unless a
failure on his part to do so would represent a failing of his obligations
as a director of those companies.
I have never sought in any way to favour any member of my family as far
as the decisions of the Government are concerned. And this rotten attempt
to suggest that this decision was designed to do that is one that I emphatically
repudiate.
I described the association to the Cabinet. I made a full disclosure
of it. Of course, the association is a relationship, it's not an
economic dependency. He's not dependent on me and I am not dependent
on him. But of course, there is a close association. After the matter
had been discussed, I in fact indicated and commenced to give affect to
it, an intention to leave the room, - the Cabinet room - while the final
decision was being taken. But I was encouraged by my colleagues to remain
because they could not see any point by having made a full disclosure
of the association that I in fact should remain.
The reason why I publicly exhorted on the 7.30 Report, for people
to get behind the deed of arrangement, was that all the advice I had was
that that was the best way of the workers getting their full money as
quickly as possible. That's why I did it. It had nothing to do with
protecting my brother's position. In any event, ASIC has been looking
at the affairs of National Textiles for some days. And, I understand on
advice from the Treasurer, about half an hour ago, that ASIC has decided
to conduct a formal investigation into the company. That doesn't
mean that there's any evidence of wrong doing, it simply means that
they've decided to conduct a formal investigation.
So, if The Australian had bothered to enquire, it might have been
told that. It might also have been told that Cabinet discussed the involvement
of ASIC and the whole thrust of Cabinet was that if it was appropriate
for ASIC to look at this, or investigate it, then that ought to occur.
So, overall the Government of course repudiates these allegations. It
was always going to be difficult for me and the Government to deal with
something where a member of my family was involved. But, unless the absurd
proposition is made that my brother, or indeed any other relative of a
Prime Minister, or senior politician should have no business interests
at all, it is inevitable that this kind of situation can and will arise.
I have sought at all times to dealing completely at an arm's length
way.
And one of the things I find quite extraordinary is that the very same
newspaper carries an article by Mr McGregor claiming that my decision
and that of the Government to support assistance to these workers was
very heavily influenced by the meeting I had with them in Williamtown
last Friday. And that's true. I was heavily influenced by that.
This is not the first time the Government has acted to see that workers
get their full entitlements. We did in Oakdale. And it was also of course
the activity of ASIC with strong support from the Government, that resulted
in the workers at the Cobar mine recovering some 85% of their entitlements.
So the claim that in some way this has been motivated by a desire on
my part to protect my brother is wrong, I totally repudiate it and it
is a despicable slur on me and one the other members of the Government.
Because this is an attack, not just on me, its an attack on the entire
Government. Because the Cabinet was aware in complete detail of my brother's
involvement and were in position of all the facts. And it collectively
took a decision, a decision that we stand by. It included a decision for
the first time in the history of this country to establish a safety net
scheme for workers' entitlements. Any questions?
JOURNALIST:
Will you be taking legal action Mr Howard?
PRIME MINISTER:
I have sought some advice.
JOURNALIST:
Mr Howard could you tell us about the conversation that you did have
with your brother about this matter? And when you first became aware of
the trouble into which the company's heading.
PRIME MINISTER:
Well yes, I think probably a year ago or more my brother would have mentioned
to me that the company had sought some assistance and I think this has
come out in the Senate Estimates in Senator Minchin's Department.
And he said, look, I am not asking for any favours but he said we would,
you know, like a response and apparently there had not been so he had
been informed. And I said, look, I don't want to get involved but
I will see that the thing is dealt with appropriately. I saw Mr Brenda
and Mr Bart, Mr Bart is from National Textiles and Mr Brenda is from Bruck
and I said to them that there was an amount of money available and I said
if their proposal fitted the criteria as determined by Senator Minchin,
they'd get help and if it didn't fit the criteria they wouldn't
get help. I said they weren't going to get any special favours nor
indeed should they, sort of, be specially penalised because of the sensitivity
about my brother's involvement. And I think I also had a discussion
with Senator Minchin and I said to him, look, Stan's involved in
this, I just want you to know. I said, that shouldn't mean that it
gets any favourable treatment but it shouldn't equally mean that
the company gets penalised because of it. It should be dealt with on the
merits.
I think Stan may have rung me the morning of or the day before the company
went into administration. He was...he rang me to inform me that that
was going to happen. He said he wanted me to know in advance and we didn't
discuss any of the details of it but he felt that because he thought it
might get a bit of publicity because of his involvement that I ought to
know about it. And that would have been, I think, the morning of or the
day before, I don't remember. I then didn't speak to him, and
of course we didn't discuss the question of workers' entitlements
at that stage I had no knowledge of that. I simply knew that as a result
of what he told me that the company might go into administration because
sometimes companies go into administration and they are able to meet their
employees entitlements so it didn't automatically follow that there
was a problem for the workers. It subsequently emerged. I then had a few
discussions with Mr Reith over the holiday period about the handling of
the issue, I mean, we were both conscious of the inevitable sensitivities.
Then I think from recollection Stan and I had no discussion about it until
he rang me during my trip to, sort of, just give me an up to date briefing
on where he saw things in relation to what was unfolding. I don't
recall, as I indicated to Richard McGregor yesterday, that there was any
discussion between us about, you know, certainly not about what the Government
was going to do. I mean, he read the papers and he knew that I was being
urged to help and perhaps it may have been understood by him that we were
having a look at things. I don't know but I certainly don't
recall any detailed discussion. Now, that's essentially it.
JOURNALIST:
You never discussed workers' entitlements with your brother?
PRIME MINISTER:
No. Not in...I mean, I have no recollection of discussing the workers
entitlement issue with Stan. I mean, the recollection I have of that conversation
was that he said, oh well, you know, there's a bit of to-ing and
fro-ing on the deed of arrangement and you may have canvassed the same
ground that was appearing in the newspapers about the jockeying between
the bank and one of the individual creditors. I think the individual creditor
Bart. I mean, there was no particular reason why we shouldn't have
discussed things but on the other hand we'd adopted the general rule
of minimum discussion of detail involving his business affairs through
a sensitivity towards suggestions that in some way he was getting favourable
treatment.
JOURNALIST:
Did he get better access to you as a result of it being your brother?
PRIME MINISTER:
Of being my brother? I don't think so. I think he's, in fact,
had less access to me on a whole range of business issues. I mean, he
just doesn't do that. He is not the sort of person who rings me up
in relation to his own business affairs. He goes out of his way to respect
the sensitivities. I mean, we are very close on a personal basis, I am
with all of my brothers, but he understands the potential for mischief
making and that's why he has gone out of his way. But, I mean, you
can get to a ridiculous situation where, I suppose...you know, you
don't want a situation where a company gets penalised because the
Chairman happens to be the Prime Minister's brother. I mean, he is
entitled to have a business and professional career to the full separate
and apart from the fact that he's my brother.
JOURNALIST:
When did your brother first hear that the Federal Cabinet had decided
on a special one-off arrangement...
PRIME MINISTER:
I don't know Paul. I haven't spoken to Stan about this issue
for some days.
JOURNALIST:
Have you met representatives of any other textile company in similar
circumstances seeking assistance?
PRIME MINISTER:
I'd have to check Jim. I'd have to check, I just don't
know. I mean, I meet a lot of people. But I kept a diary note of my meeting
with Mr Bart and Mr Brenda and it was a fairly anodyne meeting.
JOURNALIST:
Mr Howard, why did you have that meeting and not Senator Minchin though?
PRIME MINISTER:
I beg your pardon?
JOURNALIST:
Why was it you that had that meeting, that initial meeting, and not Senator
Minchin?
PRIME MINISTER:
Well, because Mr Brenda, I have known Mr Brenda for a long time and I
didn't think it unreasonable to see him. I see a lot of people. I
mean, that's happens to me all the time. I mean, there's nothing
sinister about seeing people. I mean, let's look at what happened,
the company didn't end up getting any assistance so I don't
think anybody can suggest that, you know, the thing was handled wrongly
or improperly. But if we get to a situation where the motives for any
individual meeting are being questioned well, I mean, you are just in
a, you know, you are permanently bound and gagged from doing anything.
But I would have thought that a willingness on the part of a Prime Minister
to see one of the most prominent people in not only the Sydney business
community, the Sydney Jewish community but also the textile industry in
Australia and to say, well, if you are entitled to Government help you'll
get it but it will be determined by the Minister and not by me. If you
are not, well, you are not.
JOURNALIST:
You didn't think though that perhaps because your brother was involved
it might have been better to separate yourself and allow Senator Minchin
to see him rather than yourself?
PRIME MINISTER:
Well, I would have thought the fact that my brother and I had just, sort
of, kept at arms length and that I'd said to him and my brother that
decisions on the merits are going to be made by Senator Minchin and not
by me. I mean, I, in fact, did the very thing that your question implies
I should have done and that is left decisions to Senator Minchin. I spoke
to Senator Minchin about this and I said I should warn you that you have
got something in your system that involves a company of which my brother
is Chairman. Now, I want you to know that, I want your Department to know
that so that it's all in the open. And I don't want any favours
for National textiles or my brother but equally I don't want you
to clobber them just because Stan's the Chairman. Now, in the end,
he decided on the merits not to give any assistance. My brother did not
then come to me and say Minchin's knocked us back, will you have
another look at it? No he didn't. I in fact didn't know until
after the company had gone into liquidation....into administration
that Minchin in fact had knocked it back.
JOURNALIST:
Prime Minister, are you aware of the case involving the Braybrook workers
in Melbourne whose textile company that went under, under similar circumstances
to National Textiles, and are in an area which has even higher unemployment
than at Rutherford? And would you consider doing the same kind of arrangement
for them that you've done for National Textiles?
PRIME MINISTER:
Well Jim I'm aware of some of the details and look, there are quite
a number of people, and in fact if you go back over the last 15 or 20
years you'll probably find hundreds of thousands of people, or tens
of thousands of people who in different ways have been you know, short
changed on their entitlements as a result of company failure. Now if you
go back to one there's no reason why you don't go back to others
and still more. It's not as if National Textiles is the first one
that we've done. I mean we did do Oakdale.
JOURNALIST:
Well Braybrook existed in the same time frame as......
PRIME MINISTER:
Well no, you say the same time frame but I mean once you go back a couple
of years there's no reason why you shouldn't go back four years.
JOURNALIST:
But Prime Minister, Braybrook was late last year, late last year, and
the textiles industry suffered under restructuring in an area of 16.3%
unemployment, 50% higher than the Hunter. The rules you spelt out to us
under which you made the textiles decision, why wouldn't you also
consider....?
PRIME MINISTER:
Well what was spelt out as a result of the Cabinet decision was that
we would have a safety net scheme and that that scheme would have affect
from the 1st of January. And that was the decision that was
announced by the Government. Now you always have, look I'm intensely
sympathetic with and sorry about people who are affected by these things,
very much so. I mean this is a very difficult issue. I mean as evidenced
by the fact that no federal government has really tried to tackle it before.
And we are trying to get for the future with effect from the 1st
of January a safety net scheme. Now we acted in relation to National Textiles
additionally for the reasons I've outlined. Mr Reith and I have both
said that in the future we might consider once off supplementation in
particular circumstances, but we're not giving any sort of generic
commitment to that. We do have a generic commitment to a safety net scheme.
The funding arrangements are yet to be finally resolved. I would like
and the Government would like the possibility of insurance to be investigated
because we don't think it's unreasonable that business should
look at an insurance scheme. I know they don't like it but this is
something where there are legitimately different views in the community
as to how these things should be funded.
JOURNALIST:
Prime Minister, the people from Braybrook have been on television, quite
moving statements, and they said the only difference they can see between
their firm and National Textiles is that their firm's not run by
your brother. Now can you see why they think that, [inaudible]?
PRIME MINISTER:
Well I'd say to them that that's not the reason. The reason
why National Textiles is being assisted is that you have to start these
things at some stage. And National Textiles is being assisted basically
through a combination of the safety net scheme plus the additional assistance
for the reasons that I've outlined.
JOURNALIST:
And you won't rethink.....?
PRIME MINISTER:
Well my reason for the Government not rethinking that is that if you
rethink that you then have to go back and back, and there will be no end
to it.
JOURNALIST:
Prime Minister did you know about Braybrook, or did your Cabinet know
about Braybrook when you considered the issue about your brother's
company?
PRIME MINISTER:
Well the Braybrook matter was certainly not discussed, certainly not
in front of it.
JOURNALIST:
Did you know about it?
PRIME MINISTER:
I certainly did not have it in my mind when the matter was discussed
in Cabinet.
JOURNALIST:
So can you say that at least one part of this is valid, that they didn't
get the publicity that National Textiles got because your brother wasn't
involved? Haven't they got a point?
PRIME MINISTER:
Well I wouldn't have thought it was a point to the detriment of
the Government.
JOURNALIST:
It's a point to their detriment though isn't it?
PRIME MINISTER:
Well Laurie, if a scheme had been started several years ago by the former
government, or it had been started by the current government when it came
into office then the Braybrook people, the Oakdale people, the National
Textiles people all would have been covered by a safety net scheme. My
reason for saying that we can't go back beyond the 1st
of January is that if you go back beyond the 1st of January
for one or two cases that have received publicity they then provoke further
cases further back, and there is really no end to it. And I don't
think I can, taking everything into account and no matter how sympathetic
I am to individual cases that have been brought to my attention. I mean
just as there's been a focus on Braybrook as a result on this, if
something were done about that there might then be other cases that come
up and going back a number of years. They might go back to five or ten
years and in principle there's probably no reason if you go back
for one why you shouldn't go back for others. I mean it has long
been the case that when governments bring in new benefits and new safety
nets, they make them prospective.
JOURNALIST:
Prime Minister what would you say to some of your critics who are now
suggesting that politics in this case took precedence over policy?
PRIME MINISTER:
Well that can always be said and I would never for a moment deny that
the Cabinet doesn't take political considerations into account in
reaching decisions. I'm not so crass as to assert that. I think there
are policy considerations in relation to high unemployment in regional
areas and I think there are political considerations. I mean we all know
that. I'm on pretending that. My resentment about this editorial
does not relate to the criticism it contains concerning the policy quality
process. I mean I might disagree with it but newspapers have an inherent
right, all political commentators have inherent right to have views about
the policy content and validity of government decisions. But what I am
particularly incensed about is the suggestion that in some way this is
improper or lacking in probity, or suggesting some kind of corruption.
JOURNALIST:
[inaudible] criticised Murdoch newspapers for running a campaign against
the GST and [inaudible] policy. Are you suggesting that this could be
a widening of the campaign [inaudible]?
PRIME MINISTER:
No. Look I deal with things issue by issue, media outlet by media outlet.
And it's a question of dealing with the facts, the circumstances
of each case.
JOURNALIST:
So you don't see what was in The Australian this morning
as a digitorial'?
PRIME MINISTER:
I have said what I feel about The Australian's editorial
this morning. I haven't often called a news conference to deal with
an individual editorial and that's a measure of I think the seriousness
of the attack that this editorial makes on the foundations of trust involved
in a government. And that's what I....I mean by all means criticise
the Government's policies. By all means say they're policies
on the run, say they are politically motivated. I mean I'm not saying
those allegations are correct. That is one category of allegation. It's
entirely another thing to say that this decision was motivated by a desire
on the part of the whole Government full knowing my brother's involvement
to in some way protect or bail out my brother. I mean that is absurd and
wrong and repugnant.
JOURNALIST:
Prime Minister, on this morning's labour force figures Prime Minister,
are you disappointed to see that both employment which is down 26,000,
and the participation rate has fallen by as much as 0.4%?
PRIME MINISTER:
Well Jim, you know with these things you can only get a proper read out
if you look at a long-term trend. Now the participation rate is down,
the employment figure is down. The participation rate and the employment
figures last month were both very strong and that is why there was aberrantly
an increase in the unemployment rate. You can only really look at the
trend. The trend is still very strong. But you know, they do go up and
down each month. I mean we have a much stronger employment scene in this
country now than we had four years ago. All our advice is that the strength
of that was going to continue but to what extent I don't know. It's
very hard to predict. I mean we still have a long way to go with unemployment
but it is true that we have many areas of the country that have virtually
seen off unemployment as we used to understand it but there are still
a number of areas that don't have that privilege.
JOURNALIST:
[Inaudible] approve of Mr Moore's getting of market analysis advice
at taxpayers expense?
PRIME MINISTER:
Well, Mr Moore explained that on AM this morning I thought very
well.
JOURNALIST:
Do other Ministers....[Inaudible]
PRIME MINISTER:
Well, look, I don't know what arrangements other Ministers make
about advice seeking. As I understand it, Mr Moore said he wanted some
economic briefing and I thought he gave a very good reason why he should
have it and his Department went out and got it.
JOURNALIST:
Can't he rely on Treasury for instance?
PRIME MINISTER:
Well, he might