I. sI--f L
PRIME MINISTER
E 0 E PROOF ONLY
TRANSCRIPT OF TERRY WILLESEE TONIGHT 27 SEPTEMBER 1985
WILLESEE: Do you know as yet whether any of the monies paid
to Dr Armstrong can be recovered?
PM: Well, I have sent now all the papers to the Solicitor-
General, I can't answer that question until I get an answer
from the Solicitor-General.
WILLESEE: Would you like to recover those monies?
PMl: I ' would like the appropriate processes of the law
and morality to apply and I can't respond in respect to the
legal position until I am advised by the Solicitor-General.
WILLESEE: Ho0w did Mr Reid explain to you that a 6 year
payout to Dr Armstrong when an agreement existed to
pay only four months notice on termination?
PM: WEll, Mr Reid's position is that he believed, according
to his understanding of the law as it was put to him, despite
the fact that the letter said only four months notice was
required, that there could be some threat of wrongful dismissal
if there weren't the full payout. Now, the letter which
constituted the contract of employment, which was shown
to me for the first time las~ t/, inm ugmetado
all those who advise/ 111crystal clear in this regard.
WILLESEE: Has Mr Reid made a genuine mistake?
PM: As in the case of my request that Dr Armstrong be removed,
so in the case of Mr Reid. I am not in the business of trying
to attack the individuals concerned, go to why what happened
did happen. All I must be concerned with is %.. hat happened and
what happened was not acceptable and in those circumstances I
had no alternative but to ask for the resignation.
WILLESEE: Mr Hawke, there is a lot we don't know, the general
public, about what has been going on. Have there been
any personality problems behind all this?
PM: Well, I don't know, Terry, I don't know. And I certainly
haven't, in any of the decisions that 1 have taken in t1n:'. s
matter, allowed any suggestion of personal consideration to
enter into it. They haven't entered into my consideration
or my decision.
WILLESEE: I i5-possible the $ 240,000 part of Dr Armstrong's
payout may in fact be non-taxable?
PM: WEll, it has been so constructed to achieve that result.
And that is why, in part, I have referred this matter to the
Solicitor-General to see whether, in fact, it is within the
law to have done that. What is certain is that there has
been a tax minimisation contrivance. And in my conversation
with Mr Reid on the phone on the 10th of September and then
by letter on the 17th of September, I made it crystal clear
by reference to tax minimisation that that was not on as far
as the Government was concerned.
WILLESEE: Mr Hawke, you reacted when you heard taxation
being discussed in relation to these payouts. Why didn't
you react when you first saw those rather exorbitant looking
figures that were going to Dr Armstrong? Why no reaction then?
PM: There are two separate issues. And I want to go to them.
As to the amount. The question of the amount arose because
in the conversation I had on the phone with Mr REid on the
19th of August, he told me on the phone that there would
be a large amount of this order because what was necessary
under the contract was to buy the contract out. He said he
has got 6 years to run and that the level of salary he enjoyed
plus the associated long service leave entitlements, annual
leave entitlements, that you are up in that ball-park figure.
So the amount followed from what he had said to me in regard
to the requirements under the contract.
WILLESEE: So you believe you had no alternative but to
accept those figures?
PM: Yes, of course. When the Chairman said to me on the
phone that this was what was required and as under the law
which he properly insisted he had the responsibility of
negotiating this matter, then I understood he was going
away and negotiating in those terms. So the amount came
as no surprise. I notice that the composition was different.
But the question of tax which I now go to as the second issue,
didn't occur in my thinking there when I saw that amou. nt. I
saw it was a different composition, but I just had nc thought
in my mind that the Bicentennial Authority, in finalising this
matter, would involve itself in tax minimisation or possibly
avoidance. I mean it just didn't occur to me. Then ' hen I
spoke on the 10th of September to Mr Reid, when I first said
to him, look I am puzzled about the difference in the composition.
I mean it is not 6 years payment out of an amount of salary,
but you have got certain salary and long service leave
entitlements. And then this great big hunk in there, he said
well this goes to the question of tax advantage for Dr Armstrongø
As soon as that was said, the question mark immediately arose
and I said to him, this is on the 10th, well look, if there
is any question of tax minimisation or avoidance, that is nnt
on and I want you to lot me know in writi. ng just -, ha
involved. And I followce that up with a ij tter
when I came back from New Guinea on the weekend, on t:. e iA
I wrote and spelt that out. So there is the relatior. i; hip
between the amount, Terry, and the tax issue.
WILLESEE: And that takes us up to last night?
PM: Yes.
WILLESEE: Well, the Bicentennial Board has problems at the
top. And when an organisation has problems at the top it
usually filters through. Do you plan any other action with
the Board?
PM: I am very glad you asked that question, Terry, because
it focusses attention where it should be, at the future of
the Authority. And there are just two or three things I
would like to say about that. Firstly, in fairness to
Mr Reid and Dr Armstrong, the impression shouldn't be left
that nothing has been done. A great deal has been done and
I am certain that with the things that are now to be done,
which I will go to in a moment, that Australians can look
forward to a 1988 in which there will a great year, not just
of celebration but of the undertaking of projects which will
have lasting value. Now let me come to the point as to what
we are doing to strengthen, if you like, the operation of the
Authority. I preface it by saying Terry, that I have to operate
under a piece of legislation which separates and distances
the Government and. ' the Parliament from the operation of the
Authority. But what we are doing, I am grateful to Mr John
Utz, who is a member of the Board and the Chairman of the
New South Wales Bicentennial Authority. He has accepted
the interim chairmanship of the Authority. We will together,
I believe, in the near future, appoint a new Chief Executive,
and then as soon as possible get a new Chairman after the
interim chairmanship of Mr John Utz. Secondly, I will be
discussing with M~ r Utz, ways in which we can strengthen the
accountability and reporting process of the Authority to
the Government so that there is a closer relationship between
us, than in a sense is strictly, legally operable under the
legislation of our predecessors.
WILLESEE: Mr Hawke, thanks for those two points. Arnd we have
to wrap it up. Before we go, two things more important.
Two grand finals this weekend, what are your tips?
PM: In Melbourne, all the evidence suggests that Essendon
should win, I will be barracking for the Hawks, but if you
were betting you would have-to bet on Essendon. And in
Sydney, St George. I am going to their breakfast on Sunday
morning, and I must barrack for them although I have a great
respect for the capacities and the club of Canterbury.
WILLESEE: Sounds like an each way bet?
PM: No, I am saying St George.
WILLESEE: Thanks Mr Hawke. Have a good weekend.
PM: Thank you.
ENDS.