PM Transcripts

Transcripts from the Prime Ministers of Australia

Transcript 22070

Interview with Fran Kelly Radio National

Photo of Howard, John

Howard, John

Period of Service: 11/03/1996 to 03/12/2007

More information about Howard, John on The National Archive website.

Release Date: 08/12/2005

Release Type: Interview

Transcript ID: 22070

KELLY:

Prime Minister thanks very much for joining us.

PRIME MINISTER:

Good morning Fran.

KELLY:

Mr Howard, let's start with the Gerard matter, because you and the Treasurer have both said that no one in the Government knew of any tax issues between Mr Gerard and the Australian Tax Office at the time of his appointment to the Reserve Bank Board. Isn't that a major breakdown in the process right there to not know this? The Financial Review told us years later.

PRIME MINISTER:

Well years later, that's the relevant point. Years later.

KELLY:

In all that time, nobody knew?

PRIME MINISTER:

Well Fran, I can only repeat what both the Treasurer and I have said and that is that this appointment was handled in a perfectly normal way. Peter and I discussed it. It came to Cabinet. It was supported in Cabinet. On the face of it Mr Gerard was eminently qualified. He was a manufacturer, the largest private sector employer in South Australia. He came from a smaller state. All of the things that we constantly try and do to stop something like the Board of the Reserve Bank looking as though it's just an outpost of Sydney and Melbourne. And when this thing came forward, he signed a declaration about conflicts of interest in his tax affairs and I didn't know about this stuff and neither did Peter. And it's all very well with the benefit of hindsight. And bear in mind again that of itself it is not a disqualification to have a difference of opinion with the tax man. There are at any given time, as we speak, there would be hundreds of public companies in Australia that have differences over their tax affairs.

KELLY:

They don't all get representatives on the Reserve Bank Board of Australia.

PRIME MINISTER:

No but the point simply is this Fran, that if you applied the rule that whenever there is a difference of opinion between a person's company and the tax man, that that person is automatically disqualified from any kind of public service, then you would be robbing yourself of the talents and the availability of many people.

KELLY:

Absolutely. Absolutely. I agree with that.

PRIME MINISTER:

We have to be realistic about this. I mean, it's terribly easy from the pristine detachment of political commentary; no disrespect to you, but I do think we have to inject into this whole debate a sense of practical business realism. Everyday people have disputes with the Tax Office.

KELLY:

Prime Minister we're talking about a major allegation by the Tax Office of tax evasion and while no one's presuming guilt...

PRIME MINISTER:

We're also talking about the fact that this matter was settled and there were no admissions or findings in relation to evasion. I think we have to step back and be a bit realistic. I mean I am totally opposed to people rorting or minimising their tax. Totally opposed to it. And we have been very tough on that and we'll continue to be. But I do think the whole thing has lost a sense of perspective. But anyway, I can tell by the tone of your interrogation that I'm not likely to convince you.

KELLY:

Well no, it's just that you say this was handled in a perfectly normal way, yet we now know, I mean the Treasurer said in Parliament yesterday that his Chief of Staff hadn't approached the Tax Commissioner on other Board Appointments, just on the appointment of Robert Gerard, therefore that's not normal procedure.

PRIME MINISTER:

No, I think if you look at what the Treasurer said, he didn't quite put it in those terms. But when I said it was done in the normal way, questions were asked. Bearing in mind that we do not have a right to know the private tax affairs of individuals because of the secrecy provisions of Section 16 of the Income Tax Act. Now people conveniently forget that. They say 'oh all Costello has to do, or Howard's got to do is ring up the Tax Commission and say tell us about this bloke.' You can't do that and neither you should be able to do it. And no Government of either political stripe is sensibly going to change that necessary protection against political interference.

KELLY:

Prime Minister there's claims in the media today from a retired Tax Office Auditor that two major tax audit cases, unrelated to Robert Gerard I should say, were settled after interference from a Minister. Will you look into that?

PRIME MINISTER:

Well, if that person is prepared to provide the information, the details. I mean he's made the allegation. Let him name the minister. Let him come and see the Treasurer or me and give us the information.

KELLY:

Will you be inviting him to do that?

PRIME MINISTER:

I've just done so. I mean it's very easy to get on the airwaves and make these allegations, and you repeat them. People draw deeply with their breath and think 'this is terrible'.

KELLY:

Well it would be terrible if it's true.

PRIME MINISTER:

Well I don't know the circumstances. But it's easy to make generalised allegations. But I can say to my knowledge, this Government in the whole time, and I make no allegations about the former Government. I've always operated on the principle that there's a respectful distance between the Tax Commissioner and the individual. From time to time people make representations to me; people write to me, people speak to me complaining about the Tax Commissioner. People are always complaining about the Tax Commissioner. He's got a difficult job but in the end he's the boss when it comes to the private affairs of individual taxpayers, as he should be. That doesn't mean to say that a Treasurer shouldn't be talking in general terms about the administration and sometimes there are individual cases where taxpayers themselves waive the secrecy provisions. They'll come and see the Government, or a group of them will come and see Members of Parliament and say 'you know, here are my tax affairs, will you take this matter up on my behalf?' Well of course that's a different matter because they've waived their privacy and their secrecy. But if people have got allegations of improper conduct and bear in mind it is not improper for somebody to approach a Member of Parliament and disclose all their tax affairs and ask, armed with that knowledge, somebody to go into bat for them. But if people have got improper allegations, they want to make them, well they can make them. But until they're specific, they really don't contribute anything.

KELLY:

Its nineteen minutes to eight on Breakfast. Prime Minister it's been a big year for you. If someone had said to you after the last election that within the first six months of the new Senate you'd have the Telstra sale legislation in place, Welfare-to-Work changes through, the new IR system and controversial counter terrorism laws, would you have believed them?

PRIME MINISTER:

No, I don't think I would have had on my radar screen a year ago the new counter terrorism laws. Certainly we had Telstra, workplace relations reform of some kind, and the welfare-to-work probably not a specifically formed intention. It has been a very good year, but we've done all the things we should have done. There seems to be a strange reluctance to accept that the people of Australian deliberately voted to give the Government a slim majority in the Senate. We have not abused that, nor have we failed to utilise the responsibility that was given to us by the Australian people.

KELLY:

I think there's no doubt of that Prime Minister.

PRIME MINISTER:

Well there's no point in being in Government if you're not prepared to govern for the future. That is our responsibility to use our Senate majority to govern for the future and if you look at all of these measures, welfare-to-work is designed to get people off welfare, off the dole, back into work. And that must be a good thing for the community and for the individual. IR reform will greatly strengthen the economy. In the years ahead people will look back on these reforms and say thank heavens the Government had the courage and the foresight to make changes that further strengthen the economy. The best way to protect workers in this country is to have a strong economy. Because only a strong economy will lead to more jobs and higher wages. You can have all the regulation in the world, you can have all the theoretical protections in the world, but if the economy is sluggish, people lose their jobs and their wages don't go up.

KELLY:

What about the criticism that it's all happening too quickly without proper scrutiny? Senator Natasha Stott Despoja said there was about seven seconds per amendment for the IR Bill.

PRIME MINIISTER:

Fran, we have been arguing for almost ten years to change the Unfair Dismissal Laws.

KELLY:

Sure, that's different to the Parliament debating it though and the legislation.

PRIME MINISTER:

No we have actually debated changes to unfair dismissals. We've debated them on forty occasions. Twenty five to thirty years ago, Neville Wran and Labor Premier of New South Wales said that the Commonwealth should have power over industrial relations. That's an issue, the principles of which have been debated over long years. I made a statement to the Parliament in May of this year, that's seven months ago, in which I outlined in some detail the changes that have been given effect to. The Welfare-to-Work measures were announced in the Budget.

KELLY:

Yeah, but there's a difference between announcing a policy in a Budget and then looking at the detail of legislation and scrutinising it properly isn't there?

PRIME MINISTER:

Fran, over the seven months that have elapsed since the Budget was brought down, the principles in that legislation have been discussed in great detail. And if my recollection serves me correctly, there was a Senate Committee Report on it. There's been discussion within the backbench. There's been discussion with church groups. We have made a lot of changes to that legislation to our original proposals. Not the framework of them, but the detail of them. This suggestion that it's rushing things through to make a detailed in-principle announcement in May, either in a Budget or a Parliamentary statement, and then to ask the Parliament to pass the legislation before Christmas is ridiculous. That's seven months. That's hardly rushing something through and as far as anti-terrorism is concerned, there is an urgency in this and that urgency is supported by the six Labor Premiers of the States of Australia. And bear in mind also on anti-terrorism, the Labor Party is complaining about the process yet they support the bill. I mean you can't have it both ways. And this is Mr Beazley, I heard him on your programme yesterday, complaining about things being rammed through, yet he put his hand up to support them. He's having two bob each way. I'll protect myself politically by supporting the counter-terrorism legislation but I'll try and get a little cheap shot on the way about the process. I mean, that's pretty unconvincing.

KELLY:

Prime Minister, as you look towards your agenda for next year it seems that you'll be able to do that without interference from leadership speculation. Were you pleased by Peter Costello's move yesterday to hose down that speculation?

PRIME MINISTER:

Fran, Peter and I will continue to work very closely together as the two most senior people in the Liberal Party section of the Government and he is the best Treasurer Australia's had and we'll continue as a partnership to make good decisions and do good things for the future of Australia.

KELLY:

As we move towards the end of the year the polls are a lot closer than they have been for a while, you're not necessarily in a winning position. Do you still think you can beat Kim Beazley for a third time?

PRIME MINISTER:

Fran, I think the Government's position is about where I would expect it to be, given the big policy changes that we have implemented in recent times. Whenever you have a big change - and IR is a big change; although it is a fair change - you always lose a bit of bark because it is easy for the critics to say this is terrible, it's outrageous, it's going to cut everybody's wages and lead to people being intimidated and suppressed. I mean, none of that is true. But they're the allegations and if you are to be a Government for the future. If you are to be a Government that vindicates the judgement of the people then you have to accept that you will go through periods of political adversity and nothing in the polls at the present time the least bit surprises me and of course I note that we are, what, two years away from the next election, so I think the Government's position is a good position because it's a position based on doing things and governing well and governing with courage and strength for the future of the country. There is no point being in Government if you don't utilise the opportunity that democratic responsibility has given you.

KELLY:

Does that mean you are confident of beating Kim Beazley a third time?

PRIME MINISTER:

What I am saying Fran, is that this Government is doing what the people asked us to do in October of last year. They put us back, they increased our majority, they gave us a wafer thin majority in the Senate. We have used that sensibly, responsibly, but soberly and we will go on doing that.

KELLY:

And you'll be leading that charge?

PRIME MINISTER:

Fran, you know what my position is on that. I said it in, what, June wasn't it of 2003. Everybody knows it and I really don't want to add to that.

KELLY:

Prime Minister, can I just ask your reaction to the comments from the former Liberal Prime Minister Malcolm Fraser who is a speech a few days ago and on this programme again, was critical of the direction of the Liberal Party under your leadership. He called the party a party of fear and reaction? Were you offended by that description from someone who is so steeped in your party's traditions as Malcolm Fraser?

PRIME MINISTER:

Fran, I have adopted a practice of not commenting on things that Mr Fraser says. He is a former leader; we worked together as colleagues in Government. I don't think anything is gained by my commenting on what he said.

KELLY:

It is pretty harsh criticism though isn't it?

PRIME MINISTER:

Well Fran, I don't comment on what Mr Fraser says.

KELLY:

Prime Minister, Van Nguyen was buried in Melbourne yesterday. You have previously warned Singapore that the execution might harm the links between the peoples of our two countries. Do you think it is likely to have any impact on cabinet as cabinet sits down to discuss Singapore Airlines pitch to come onto the Pacific route?

PRIME MINISTER:

We wont allow what happened in relation to that to influence our decision on things like Singapore Airlines. That having being said, there are strong arguments for and against changing our policy and it quite possible that issue will not be dealt with for a little while yet. We'll wait and see, but, all the arguments are not in favour of changing the policy. There are very strong arguments put by Qantas that the current polity, at least in the near term, should be kept. On the other hand I believe in the value of competitive tension in any market. But you have got to be absolutely certain that each participant in the market is coming from the same launching pad as far as Government support and so forth was concerned. Qantas stands well and truly on its own feet and it has been a very successful company since it was privatised and it is Australia's flagship but on the other hand it is not entitled to a monopoly anymore than anybody else is, but I can assure you we're not going to cross decide, if you like, in relation to these things. We are not going to say because we're unhappy about a particular domestic decision of Singapore that automatically will be held against it. But, that should equally not be taken as saying that we are going to agree with what Singapore Airlines has put.

KELLY:

Prime Minister, you also said that it is unrealistic to expect Australia to lead a campaign against capital punishment in the region or more broadly, but as the Bali Nine will face the courts in Indonesia over the coming months and a death penalty lies waiting for them too potentially, will the Government start a campaign now, or have you already begun a campaign to have that penalty knocked back, or brought back for the Bali Nine?

PRIME MINISTER:

Well our views on that are well known. But I do not believe that if you are trying to persuade a country after a conviction has taken place not to go ahead with the death penalty, I don't believe launching off from a general campaign of opposition to the death penalty necessarily helps, I mean we have...

KELLY:

Will you start campaigning now before the conviction?

PRIME MINISTER:

The problem with that is that the immediate repost is well the people have not been convicted. A lot of people have said to me, a lot of lawyers have said to me, not all of them, but a number of them have said to me to start asking for the death penalty to not be imposed on somebody implies that those people are going to be convicted. You have to understand this that no country likes being told by another country what its laws should be. You can imagine the outcry in this country if the Foreign Minister of Indonesia came to Australia and started putting his fist on the table and saying- I want certain laws passed in this country, dealing with this or that thing that effects people in Indonesia. I think most Australians would say that he should mind his own business. Now, we don't agree with the death penalty, it will never be brought back in Australia; we will always if somebody is convicted plead clemency. We'll take part in international moves to put pressure on countries to get rid of the death penalty but this idea of putting it at the top of our foreign policy agenda in South East Asia is unrealistic.

And, can I just make the observation - with great respect to the Opposition and others who've talked about this issue recently. I don't recall that over the last ten years there has been a concerted campaign from the Opposition for us to put abolition of the death penalty front and centre in out dealings with countries in South East Asia. Whenever there has been a conviction of an Australian then naturally they have asked us- and we have not needed asking to plead for the person's life; we have been successful in some cases and unsuccessful in others. But it is a little bit opportunistic of some in the Opposition to give the impression that in some way or other they have been pushing for years for a more vigorous campaign. The fact is we have to realistic about these issues. Countries in South East Asia, China, the United States, they'll decide their criminal penalties. We have a right to protest loudly and strongly when an Australian is involved and I will always do that. And I can make that commitment to the Australian people. But you also have to bear in mind that these countries are sovereign independent nations and they have a right to their own laws and we do ourselves damage if we sound as though we are hectoring them and giving them moral lectures all the time.

KELLY:

Alright, Prime Minister John Howard, thank you for joining us.

PRIME MINISTER:

Thank you.

[ends]

Transcript 22070