Subjects: Middle East; Minister Reith; Telstra; economy; Sir Donald Bradman; Bill Hayden’s comments; reconciliation; Olympics; Denis Napthine.
E&OE……………………………………………………………………………………
FAINE:
Good morning to you Mr Howard.
PRIME MINISTER:
Good morning Jon.
FAINE:
Your response, your reaction to the situation in the Middle East.
PRIME MINISTER:
Quite devastated. It is heartbreaking that it seemed so close. It did seem possible that after all the years of agony there might be a peace settlement, and I think what has happened is absolutely tragic. I can only hope like everybody else around the world that somehow or other, and the United States must be involved because the United States is the (inaudible) world power. The United States has in the past been able to bring people together. It’s difficult, particularly as President Clinton’s term is running out. But nonetheless that may in fact give him even greater authority. But I as somebody who’s followed anxiously the search for peace in the Middle East, and who was there in April of this year, and I saw Ehud Barak and then I went to Gaza to see Yasser Arafat. And I think I may have mentioned on this program I was accompanied on that visit by Izi Liebler who’s a very significant figure in the Jewish community in Australia and around the world and the atmospheric was that after all the years of agony the Middle East was moving at long last towards an historic settlement. And it is a tragedy what has occurred and it’s appalling……prospect of an appalling loss of life, and I can only add my voice to those of hundreds of world leaders in pleading with the extremists on both sides to lay off and to give peace a prospect. I think both Barak and Arafat are men of goodwill and both want peace and both of them are trying. And I think it’s tragic what’s occurred.
FAINE:
Do you issue a warning at this stage to Australian tourists?
PRIME MINISTER:
Oh yes I must. No doubt the Department of Foreign Affairs and Trade will issue a consular warning in the normal fashion. But I would publicly reinforce that. It’s clearly a very dangerous part of the world and I would encourage Australians to travel there with extreme caution and only if absolutely essential.
FAINE:
Do you call Australian citizens in the Middle East to leave the area?
PRIME MINISTER:
No I don’t think I should do that because I think that’s probably at this stage without further advice an over reaction. But I’m really addressing my remarks to people who might be contemplating going particularly to the Gaza area.
FAINE:
And Prime Minister do you have a word for the Australian Arabs and the Australian Jewish community?
PRIME MINISTER:
Well I do. But it’s a word of acknowledgment of the fact that they’ve always put the unity of Australia ahead of other considerations. I think one of the great things about this country is that we have been able to prevent the spill over into our society in terms of violence any way by and large of passions felt about issues distant from our shores. This applied in relation to the break up of the old Yugoslavia when you think of all the people of Serbian, Croatian descent, the different religious backgrounds. While they felt very strongly about what was happening, the had very strong views, they didn’t take it out on fellow Australians.
FAINE:
Likewise with the Irish.
PRIME MINISTER:
Yeah, I think we’ve done that well and I have no doubt that people of the Jewish faith will feel very keenly and strongly and I understand that and I empathise with that. And equally people who are concerned about the future of the Palestinian cause they will feel keenly. But in the end they are Australians before anything else and they’ve always behaved like that and I congratulate them for it.
FAINE:
To move to domestic matters if we could. Dominating the newspapers and current affairs radio and television programs today is the ongoing Peter Reith Affair. You said a few days ago when news of this was broken in the Canberra Times that it’s not a hanging offence. Why not?
PRIME MINISTER:
What was not a hanging offence was his action some years ago in wrongly, when he was not a Minister, giving details of his Telecard number for emergency use by his son. The question of liability, legal liability for the amount is something that’s being considered by the Solicitor General and I don’t want to say a great deal more about that until I have the Solicitor General’s opinion. I know that means that the matter goes on until the opinion is attained. Unfortunately in these situations when you are confronted with what you must do and you decide a certain course of action, you have to really stay with that course of action for it to have any credibility. I don’t like what’s happened and I know why people are angry. Can I just say two things about Mr Reith’s involvement in the matter. The first thing is that he hasn’t got a dollar, he hasn’t got a cent. People keep talking about repayment. He hasn’t got the $50,000.
FAINE:
No but the taxpayer…..
PRIME MINISTER:
I’ll come to that. I acknowledge that. The other point I would simply make is that he wasn’t given details of this Telecard account as it accumulated. Now I would think most people listening to this program would think that if they were presented with a very large account and they hadn’t been given any details of it as it accumulated, wouldn’t automatically agree to pay it. That would be the normal human reaction: “nobody told me, if somebody told me I could have cancelled the card, I could have stopped it accumulating”. Now, those things have to be said because I’ve heard a lot of analogies drawn between Mr Reith’s situation and the situation of people who are wrongly paid a social security entitlement. You’re dealing there with repaying money that people shouldn’t have got in the first place. Now having said that, and that’s really no answer to the taxpayer saying well we shouldn’t have to pay it, we are trying to establish what all the facts are and I’ve had a police investigation. It said no criminal liability is involved. I’m now having the Solicitor General look at the matter. And when I get the Solicitor General’s opinion I will have something further to say about the matter.
FAINE:
You’ve suffered more than $50,000 worth of political damage over the issue. Peter Reith, I’m sure, if he could wind back the clock would simply pay the money and get on with doing what he does in your party so well which is run his portfolio and be the Government’s hard man.
PRIME MINISTER:
Well he’s a very good Minister and he’s done a lot.
FAINE:
Well why don’t you just say look put an end to it, kick in the 50 grand? Not that he’s short of a buck is it?
PRIME MINISTER:
Well I don’t know his precise financial circumstances. People make those claims. I don’t know his precise financial circumstances and beyond wanting to know about potential conflicts of interest I don’t seek to know too much about my colleagues financial circumstances. I don’t think beyond a certain point I’m not sure it’s entirely all my business. But it’s a situation when we’ve established a procedure I hope that the Solicitor General’s opinion is available before too long but I don’t know when. We’ll have to wait. He is entitled to a proper examination. I mean one of the reasons for establishing the police investigation in the first place was that it may have been possible to establish whether the money could have been recovered from people who have improperly run up the account.
FAINE:
Well that now seems extremely unlikely.
PRIME MINISTER:
Well it does seem extremely unlikely but you can’t blame either Mr Reith or the Government for wanting to investigate whether that was possible.
FAINE:
No indeed. You could ask Mr Reith to put the money in and then in the event that you find some one who’s responsible he can get his money back.
PRIME MINISTER:
Jon, when I get the Solicitor General’s report….I’m sorry, opinion, I will have something further to say about the matter.
FAINE:
If we took a quick straw poll, if we took six calls on our talkback line now what would you expect they’d say?
PRIME MINISTER:
They would all say which is understandable, that somebody other than the taxpayer should meet the bill. That’s what they would say.
FAINE:
So why don’t you just say to Peter Reith I’m sorry it’s a breach of ministerial guidelines. You did something stupid, you’ve got to pay?
PRIME MINISTER:
Well I’ve determined on a course of action, he came to see me on May and told me about what had happened. He told me that he hadn’t been given details of the bill. I said right we’re going to have a police investigation. That was the right thing to do. And I didn’t announce that then because normally you don’t announce that police investigations are being carried out. It alerts people to cover their tracks. It would be foolish, it would prejudice the investigation. I’ve got the results of that and it says no criminal liability. I’ve now sent it off to the senior legal adviser to the government – a respected Sydney QC, David Bennett. And everybody recognises his legal ability and he will give me an opinion.
FAINE:
If he could give an opinion that says Peter Reith is liable for the money….
PRIME MINISTER:
Well of course Peter Reith would pay it.
FAINE:
But don’t you also then have to demote him because he then is found to have incurred a liability against the Commonwealth that was unauthorised and in breach of guidelines. You’re between a rock and a hard place there.
PRIME MINISTER:
Politics often presents Prime Ministers with difficult situations. Let me get the opinion. Let’s see what’s in it. I’m not going to hypothesise beyond what I have said earlier about Mr Reith’s response in a particular set of circumstances. I’m not going to hypothesise until I get the opinion.
FAINE:
Now I rang around yesterday and spoke to a number of people in publicly listed companies, in the private sector, in privately owned corporations, one of Australia’s largest law firms. Everyone told me that if this sort of conduct occurred with an executive in the employ of any of those organisations, not only would they be required to pay it back but they’d either lose their job or be demoted. Why should it be any different to Peter Reith?
PRIME MINISTER:
Well, without knowing who you’re talking about and precisely what was said, I can’t respond to that.
FAINE:
But you’re open now to endless allegations of double standards. Hypocrisy is the headline in almost every newspaper this morning.
PRIME MINISTER:
Well I don’t accept that this is analogous to somebody being required to pay back something they weren’t entitled to because Mr Reith has got no personal gain from it. That’s the difference. If Minister Reith has been personally enriched as a result of this that would have been……
FAINE:
He’d be gone.
PRIME MINISTER:
No, he’d have……well if he’d have been personally enriched that would have amounted to fraud. But he hasn’t been personally enriched.
FAINE:
No.
PRIME MINISTER:
Well surely therefore there’s a difference.
FAINE:
The issue is that the taxpayers…..and no one’s going to pick up the bill.
PRIME MINISTER:
Look Jon, I’ve already……well let’s wait and until we get the Solicitor General’s opinion.
FAINE:
Alright. Are you surprised at the strength of the public reaction?
PRIME MINISTER:
No I’m not.
FAINE:
Do you think he’s been singled out for special treatment?
PRIME MINISTER:
Well there’s a lot of people in the Labor Party that don’t like him because he is very effective. Peter Reith is a very effective Minister. He’s very capable. He plays politics hard because he believes in a lot of things. He is remembered very hard by the Labor Party, the unions and some sections of the media because of his very effective role in the waterfront dispute. And there’s a certain element of payback as a result of that. Peter understands that, I understand that. I have a lot of regard for his ability. I think he was foolish to give his card to his son. I told him that when he first raised the matter with me. That of course occurred back in 1994 when we weren’t in government, I wasn’t leader of the party. And, but of course that action has cast a long shadow. He understands that. He’s not enjoying it. We’re working through a process. When I get the Solicitor General’s opinion I’ll have something further to say. But I don’t know what is going to be in that opinion any more than I knew what was going to be the result of the police inquiry. Remember that by committing it to the police, it was open to the police to find that both Mr Reith and/or his son could have been prosecuted. So don’t anybody suggest I’ve been trying to protect Mr Reith’s hide.
FAINE:
No no, there’s no suggestion…..
PRIME MINISTER:
Well there has been actually. There’s been a constant suggestion by the Labor Party and some sections of the media, not you, but some sections of the media have been saying it has been a cover up. This was the absolute antithesis of a cover up. I mean the Minister comes to me on the 8th of May. On the 10th of May it is in the hands of the federal police.
FAINE:
Why weren’t we told on the 10th of May? [inaudible]
PRIME MINISTER:
Because if you do that Jon you prejudice the inquiry.
FAINE:
In what regard?
PRIME MINISTER:
Well you’re announcing that you’re investigating….the police are investigating the misuse of Mr Reith’s Telecard. The people who’ve misused it are thereby alerted to destroy any evidence…..
FAINE:
What Singapore, Finland, Thailand?
PRIME MINISTER:
But how do you know that people using it from Finland and so forth aren’t now in Australia. You don’t know. You don’t announce, it is not the normal practice to announce, it is not the normal practice to announce that a police investigation is being….
FAINE:
This isn’t a normal case though.
PRIME MINISTER:
Well in relation to allegations against public figures, there are a lot of them. Many of them are ill founded. In this particular case Mr Reith had not known until last year that his card had been misused. I mean nobody told him. Do you understand?
FAINE:
I do understand.
PRIME MINISTER:
I think in fairness, I mean in know the strength of…..
FAINE:
It’s like losing your Bankcard and not telling [inaudible] and charges keep on being occurred [inaudible].
PRIME MINISTER:
I know but there are different treatments of those situations according to the circumstances. It is not universally treated in the way you suggested a few minutes ago. In many cases in relation to credit cards the liability is not ultimately borne by the holder. It is sometimes borne by the issuer.
FAINE:
Have you handled it wrongly?
PRIME MINISTER:
No I don’t. How can I be accused of handling something wrongly when it was first brought to me…..
FAINE:
Because now it comes out in media leaks rather than your open and honest approach to government…..
PRIME MINISTER:
Well I’ll just answer the question. When it was brought to my attention I said I’ll get the advice of the Attorney General. The Attorney General’s advice was to have the federal police investigate the matter and that is exactly what I did. And it is not the usual practice when the police are asked to investigate something to announce it because what you do is run the risk of prejudicing the inquiry. I mean I didn’t know at that time who’d had access beyond what Mr Reith had told me. I didn’t know whether his son had given access to somebody else. I didn’t know any of that and if I had announced that we were having an inquiry I would have been criticised for prejudicing the inquiry. Everybody who understands these processes knows that and it’s a cheap shot from the Opposition and others to say that I should have announced it. I followed the correct procedure: I get the police inquiry; DPP says no prosecution on a criminal basis; I now go to the Solicitor-General; and, when I get his opinion I will have something further to say on the issue.
FAINE:
To move to other things. Telstra – are you still committed to a full sale of Telstra and if so when?
PRIME MINISTER:
Yes we are committed to a full sale of Telstra. That full sale won’t be proceeded with until we’ve put in place satisfactory arrangements to deal with the issues arising out of the Besley Report. Besley said that generally speaking the service levels were good and adequate but there were some areas of concern. We are now looking at ways of addressing those areas of concern. We’re going to present a plan. Until we put in place satisfactory arrangements to deal with those deficiencies, we’re not going to go to the next step of introducing legislation but it still remains our policy, once that issue is dealt with, to sell the rest of Telstra. But it may be a few months before the legislation is introduced. It was always going to be the case that the legislation might not be introduced until next year.
FAINE:
Do you want to sell the rest of Telstra before the next election or do you put it off now until after the next election?
PRIME MINISTER:
Well, that depends on the Senate, doesn’t it?
FAINE:
Well, it depends on whether you put it to the Senate.
PRIME MINISTER:
Once we have put proper arrangements in place to deal with the areas of concern raised in the Besley Report, yes we will then consider the introduction of legislation. Exactly when that will be I can’t say at the moment.
FAINE:
Well that’s a hint then that you’d like to respond to Besley, put some legislation through the Senate and the election won’t be until some time away in order for you to get all that done.
PRIME MINISTER:
The election is due at the end of next year, which is a little over a year from now, and it’s a question of dealing with things in accordance with the undertakings we made. We made an undertaking, gave a commitment, that we would not proceed with the sale of the rest of Telstra until we have got satisfactory certificates regarding service level. Now we’ve been given a generally satisfactory certificate but Besley has said there are some areas that need fixing and we’re working out the plan to fix those areas and we want that in place before we go any further. Now how this works out time scale wise I don’t really now.
FAINE:
So are you ruling out an early election?
PRIME MINISTER:
I’ve never promoted the idea that there would be one, so why should I be required to rule it out?
FAINE:
Because I’m asking you whether they’ll be an early election.
PRIME MINISTER:
My current intention is to have the election at the end of next year and that has been my intention. I see no reason to change that intention and I would surprised if anything were to happen between now and the latter half of next year to alter that intention. Now I can’t swear on a stack of Bibles that there will be no circumstances but I think three years is short enough. I see no merit in going earlier just for the sake of going early and my current intention would be to have the election around about when it’s due. Three years will be up in October of next year so I guess any election shortly before or after that or whatever would be the normal time. People should not try and read anything into that. It is my current intention, generally speaking, no extraordinary circumstances, to have an election at the end of next year, ok?
FAINE:
With the price of Telstra shares where they are, you don’t mind deferring the sale of the rest of Telstra hoping that the share price will recover, surely?
PRIME MINISTER:
John, I don’t want to say anything that bears upon market sentiment about the share price. We have a policy, and that policy will be adhered to. That policy is to sell the rest of Telstra subject to satisfaction regarding the areas identified by Besley.
FAINE:
Turning to the economy then, on a broader sense, this morning’s news. Wall Street markedly down, oil prices, in particular now with the Middle East crisis, shooting back up, the Australian dollar I don’t need to remind you is in the doldrums, interest rates have been going up recently, bankruptcy and credit card indebtedness levels are up, the business activity statement is about to hit in particular the small business sector, the post Olympics slump, if I can throw that in as well with the building start statistics showing that they’re down, it’s not looking all that good is it?
PRIME MINISTER:
No, in human terms can I put against that the fact that yesterday we had the best unemployment figure for ten years and isn’t that in the end what it’s all about?
FAINE:
That’s looking back
PRIME MINISTER:
It’s looking back a few days, it’s looking back to the last month and the current projections from both the Treasury and the Reserve Bank regarding employment as advised to me very recently are still very strong. Now, you’ve identified a few things. Many of them are transitory, others not so transitory. Clearly with what is happening in the Middle East it’s only natural that there’ll be a short-term kick up in the price of crude oil and that may go on for a while, I don’t know. I have no control over that. Clearly it’s a concern. Generally speaking the economy remains very strong but we are not complacent about that. We don’t pretend for a moment that everything is perfect but you can’t deny that we’ve had consistently strong growth over four per cent, we’ve got the lowest unemployment rate for ten years, the lowest youth unemployment rate for over twenty years, we’ve had very low inflation over the last few years, lower interest rates and they have gone up a little they are still lower than what they were, much lower than in 1996.
FAINE:
They’re going to be going up again though surely.
PRIME MINISTER:
I don’t know, I don’t speculate about the future level of interest rates. I do not. There are mixed views in the markets about that. The National Bank of Australia the other day disagreed with what you have just said. I don’t know. I don’t know add my voice to any of the speculation except to point out that some say they will go up more, others say they won’t. There’s a bit on each side on that. So looking at the whole picture the economy remains very strong but you have to keep working on it. The tax reform process has gone far better than anybody expected. Yes, there will some glitches. Yes, there will be some interest in how people respond to the first Business Activity Statement. I know that is the next hurdle, so to speak, in relation to tax reform but nobody can possibly assert, other than that taxation reform has gone far better than the Labor Party and all our critics in the media – many supported us on tax reform – it’s gone far better than I expected.
FAINE:
Did Sir Donald Bradman ask for the legislation that you put through?
PRIME MINISTER:
Let me answer it this way. I’ve had some discussions with him and his family and it seemed to me to be the right way of going.
FAINE:
Special treatment for Sir Donald Bradman.
PRIME MINISTER:
Well, I think it’s a special situation. What we’re doing is, let me say, we’re not doing other than preventing the use of his name in circumstances suggesting a connection where that connection doesn’t exist. People shouldn’t assume that if their name is Bradman that they can’t use that in connection with…. But the idea is to prevent the commercial exploitation by suggesting a link that doesn’t exist. When you contemplate for a moment the place that he occupies in Australian history as well as Australian sport and the quite unique status he has in the history of this country it is a special case and I make no bones about that. I believe on those grounds, it’s the right thing to have done.
FAINE:
Just to clarify, he did ask for?
PRIME MINISTER:
I had a request from his family.
FAINE:
On his behalf?
PRIME MINISTER:
Yes, of course. I wouldn’t have done it if I hadn’t believed for a moment it was requested.
FAINE:
The former Governor-General, Bill Hayden, lashed out at the Stolen Generation Report the other day in a significant speech that’s been widely reported. He said that he thought Sir Ronald Wilson’s report was a very thin investigation that accepted untested recollections of alleged forced removals and so on. This has led to another round of debates about reconciliation and stolen generation. The Olympics went better than anybody was expecting. It really was sensational but this issue lingers on.
PRIME MINISTER:
But Jon you will never have an end to debate on public issues. People are entitled to have their point of view. One of the difficulties with the reconciliation debate is that there are some who really adopt the stance that unless the rest of the community accepts their version of reconciliation, then the rest of the community doesn’t believe in reconciliation. The whole tone of the attack on me is that I don’t believe in reconciliation. Now that’s wrong. I do. It’s just that my approach to it is a little different.
FAINE:
Is Bill Hayden right?
PRIME MINISTER:
Well Bill Hayden is entitled to his opinion. There are some things he said in his speech that I agree with. There are others I have no comment on. But he has a right to express his view. He made the very legitimate point that there are many people in the community who really are getting a little tired of the debate about whether there should be a national apology or not and they really think what we should do is move on to address current disadvantage. Now that is my view. I’ve made it very plain what my position is in relation to a national apology.
FAINE:
Did your views on reconciliation change at all over the Olympics?
PRIME MINISTER:
The only change, if you can put it that way, or the only reaction I had in the context of the Olympics was that I think the enthusiasm of people demonstrated that we were already a lot more reconciled than many people had allowed for. I think it’s very wrong of people to try and hijack the atmosphere of the Olympics for their particular version of history. I think that is a hugely wrong thing to do. People are running around saying this proves such as such in relation to the debate on indigenous people, this proves something else. Why can’t we just all enjoy the fact that the country was very united and cohesive because that’s, in essence, what we are as a people and not try and sot of use the Olympic atmospheric to win our particular side of the political argument.
FAINE:
Very briefly before the news, Prime Minister, you’re attending the Liberal Party State Council meeting this weekend. Dr Denis Napthine, the Opposition Leader, the Liberal Leader here in Victoria, seems a little embattled. Do you still support him as Leader of the Opposition?
PRIME MINISTER:
Yes I do. Being Opposition Leader for the first twelve months after an election defeat, particularly an unexpected one, is about the worst job in politics. I, of course, recognise that these are matters for the State parliamentary party but I like Denis, I think he does a good job. In the circumstances, nobody could have done any better.
FAINE:
Denis Napthine in Victoria and Kerry Chikarovski in New South Wales between them hardly rank a combined 20 per cent approval rating in the polls and that’s in the main states for Liberal leaders.
PRIME MINISTER:
That’s always the case early months after, anyway, people vote differently at a State and Federal level. They really do.
FAINE:
Doesn’t it worry you?
PRIME MINISTER:
The thing that I am most occupied with is the quality of government at a federal level. That is the ultimate glittering prize and the ultimate responsibility in Australian politics. That’s what I’m preoccupied with but I find Denis a very good person to work with and I think he’s done, in the circumstances, a very good job.
FAINE:
Prime Minister, thank you very much. We’re out of time. Good to see you again and thank you for your time this morning.
[ends]