19 February 1995
Compere: The pressure on the Prime Minister is intensifying. The latest opinion poll show him well behind John Howard and Labor trailing in voter support. Now Paul Keating is engaged in a titanic clash with Australia's richest man, Kerry Packer, over media ownership laws. But Mr Keating has never been one to flinch from a fight and this morning he is in our Canberra studio. To talk with him Sunday's political editor, Laurie Oakes. Goodmorning Laurie.
Laurie Oakes: Good morning Jim. Mr Keating welcome to the program.
Paul Keating: Thank you Laurie.
Laurie Oakes: It's been a long time.
Paul Keating: Well there's always quality whenever you and I meet, it is always a quality event.
Laurie Oakes: Prime Minister are there any votes in media ownership or is it the kind of esoteric issue that only interests politicians and journalists and media proprietors?
Paul Keating: No, I think it is a matter of great interest to the public. You can see that whenever this issue ever arises, the amount of emotions which it stirs, and that's why I think the reason that we see so much antagonistic debate about
the proprietors is because these rules are there for a purpose and they work.
Laurie Oakes:What do you think of Kerry Packer?
Paul Keating: Well I think Kerry Packer is a hard headed business person who has gone about building his life and his empire with great certainty but this fracas has got a history to it and the history is that to do with Optus.
Laurie Oakes In what way?
Paul Keating Well the Packer camp put on the government the notion that we should award to Optus exclusive franchises across the country. Now what that means is this that if Optus lies a fibre optic cable for pay television and
telephones Telecom can't lay a cable in the same street so we would have a gid system. For instance Optus would have Darling Point, Telecom would have Point Pipe; Otpus would have St Kilda, Telecom would have East Melbourne. Now if you take that out over six or seven years what you would find is that as the telephony comes with the pay television half of Telecom's market share, half of the existing market value, I sorry, of Telecom would have been transferred to Optus. Now that's somewhere around $ 7 billion.
Laurie Oakes: But surely what the government elected to do meant there was a continuation or a monopoly?
Paul Keating: : No what we said was, we would allow Optus and Telecom to lay cables in the same street in competition with one another and we gave them a five year period within which both companies could get their licences up.
Now it's a long time since any company has come to the Commonwealth of Australia and said, we want you under pressure to grant to us what will be, over time, the equivalent of six to seven billion dollars. In other words the de facto privatisation of Telecom. Now the government said no, I said no, and Michael Lee said no.
Laurie Oakes But what about the situation where News through its deal with Telecom has public financing Rupert Murdoch's pay TV aspirations.Surely that's of concern as well?
Paul Keating: No. The propositions from Mr Murdoch and Mr Cowley let me say their relation with the government have been completely proper what they have proposed,
they will never own the cable, it will be owned by Telecom, Telecom will charge the pay TV business a fee
and it is front end loaded so that the returns come back
to Telecom first. So there is no problem about that and let me just make this clear, that News Limited was
prepared to have a competitive system but Optus, or the
Packer version of the Optus proposal, was that Telecom
shouldn't be able to lay a cable in the same street as
Optus. Now I said this to them, the last scam I had run
past me that was ever this large to transfer seven or
eight billion from the Commonwealth public purse to an
industrial company, the last thing I saw like that when I
saw reported Murray Farquhar's reported attempts to
take the gold reserves from the Philippines National
Bank. I mean that is the last seam that large.+
Laurie Oakes: Prime Minister that is a bit harsh isn't it?
Paul Keating: No, honestly, that is the last seam that large. I mean that was the sort of weight put on us by the Packer camp and Optus and Mr Mansfield from Optus went and said that on the Allan Jones program because Mr Jones has
been running their propaganda said that we were part of the conspiracy to keep Optus out. That is, how dare we say that there should be competition in every street in the country. How dare Telecom have the right to lay
a cable beside Optus. Now this appearance the other day by Mr Packer has this antecedence about it and understand that the integrity of public policy, the integrity of the protection of the national interest, this government was not found wanting I can assure you.
Laurie Oakes: But Allan Ramsay yesterday, and Allan Ramsay is not a
known sycophant of Mr Packer, he wrote yesterday
about the perception of the government doing favours
for Rupert Murdoch and his business interests in this
country.
Paul Keating: But Allan is a corridor vacuum cleaner Laurie, you know that. I mean he's down there picking up gossip and nonsense around the corridors. Allan gave journalism away 15 years ago.
Laurie Oakes: But do you deny there is that perception?
Paul Keating:Look the perception is wrong. Let me just make this
clear, if Telecom's made a joint venture with Microsoft,
with Mr Gates, is there anything wrong about that?
Why did Telecom do this? Telecom did it because
Optus vision decided Optus would go into the vision
business and become a pay television business. And
everywhere around the world wherever you can get your
pay TV cable under somebody's door the telephony
piggy back is on it. So to protect Telecom's telephony
business they decided quickly to find somebody who
could run a pay television business and they went
through a selection process and came up with News
Limited. News Limited will never own the cable and
the revenues are front end loaded for Telecom.
Laurie Oakes:
Paul Keating:
Laurie Oakes:
Paul Keating:
Laurie Oakes:
Laurie Oakes: Well let's get back to the Fairfax question which was
where we began. Do you agree that the present
situation at Fairfax is so unstable that it can't last, that
something has to give?
Paul Keating: Well no I don't. I don't agree about that at all. At the
moment Mr Black has control of the business with
of the stock.
Laurie Oakes: But Kerry Packer has announced that he is going to
move up to just under 25% of the stock. Rupert
Murdoch is a player. You've got three media moguls
none of whom by law can really exercise proper control,
can really take it over. That is unsustainable isn't it?
Paul Keating: I don't think so. I mean how many public companies do
you know around the country where people have got
of the stock Laurie? I mean, nearly every public
company, the largest shareholder would have five or 10%
Laurie Oakes: Well Mr Black has made it pretty clear he is going to
come to the government and ask to increase his holdings
from the present limit of 25%. What is your attitude to
that?
Paul Keating: Well when he comes we'll look at it. But can I just say, Mr Packer's great claim is that it is a dreadful thing that a foreigner can control this medium. This was the whole import of his address the other day. Well let me just read from the House of Representatives Select Committee where he appeared. It starts off:
Kerry Francis Bulmore Packer, Chief Executive, Consolidated Press Holdings, 54 Park Street, was sworn and examined.
So under sworn oath he says this: The Chairman says:
Do you not agree with the view that there is some threat
to Australia's national interest if too many of our
newspapers are owned or influenced by foreigners?
He says:
Who owns the papers in England? The Daily Telegraph
is owned by a Canadian, Today is owned by an
American, the Sunday Express and Daily Express are
owned by an American, the Mirror is owned by an
Englishman who was a Czech. Lord Robomere is
the only one I can think of who is actually British. The
Express was owned by Breaver Brook for fifty years,
the newspapers in England have always been owned by
foreigners, Lord Thompson, the whole lot. It is a
nonsense argument.
And he goes on to say:
Nowhere in the English speaking world are you
restricted from owning newspapers except here for some
extraordinary reason we're sitting down and saying you
can only have 20% ownership. It is absurd.
So under oath he is telling us, sworn, what he's sworn,
he's telling us that it's absurd to have foreign restrictions
on foreign ownership. He's saying it's a nonsense
Laurie Oakes:
Paul Keating:
Laurie Oakes:
Paul Keating:
Laurie Oakes: argument but in his Walt Disney like appearance on
Disneyland on a Sunday night in more benign mode
Kerry is telling us it is a shocking incursion into the
national interest. Now how does he reconcile his sworn
views to the House of Representatives Committee and
his views the other day?
Laurie OakesWell he sounds a bit like a politician I suppose.
Paul Keating:No, it sounds a bit disingenuous which is what it is.
Laurie Oakes: But are you concerned about Kerry Packer moving up to
just under 25%. Is he breaking any law by doing that?
Paul Keating: No. Look let me make this clear how it works Laurie.
At 15% under the rules Mr Packer is deemed to have
control unless he can prove otherwise and what is
happening before the ABA at the moment is an
examination where the onus is on him to prove he
doesn't control it. So there has always been something
in the public mind that at 15 you're sort of barred. At
what happens the onus of proof changes and he's
deemed to have control. Now he's got to prove, the
onus is on him to prove, not the ABA, the onus is on
him to prove he doesn't control it.
Laurie Oakes: So what he's doing his increase in the shareholding is
totally above board as far as the law is concerned?
Paul Keating: In terms of the ownership and control provisions he has
to establish that. He has to establish he hasn't got
control but the ABA can always examine how the
ownership and control provisions are actually working
and if it finds them inadequate advise the government
and, of course, this could include the associated actions
of the takeover provisions.
Laurie Oakes How does that come into it?
Paul Keating: Well the takeover provisions have an impact of around
and I'm not certain whether Mr Packer will have
one company at 20% or two companies dividing that
stock.
Laurie Oakes Prime Minister we'll take a break and return in a moment.
Welcome back. Prime Minister were suggesting that if Mr Packer reaches the 20% holding that he will have to make a formal takeover bid, that the 25% is irrelevant.
Paul Keating: No I'm not suggesting that. That is for the ABA to make a judgment about Laurie and they obviously will.
Laurie Oakes: There is a review of the television and broadcasting industry scheduled to happen before ' 97. What is the future of that review now in the light of what is happening?
Paul Keating: Well the government must under the Act have a review before July 1997 amongst other things to decide whether to assess the benefits to accrue if more than three stations were given licences. In other words to assess
whether there should be a fourth network. Now let me just say this Laurie, we will have that review, and can I just say for my part I think one of the absent things in Australian television is a family channel. A channel where you're not deluged with violence on the news services. I mean, if you look at the Channel 9 news every night the first two or three stories will be a road accident or a murder or something violent.
Laurie Oakes: Or something out of the House of Representatives.
Paul Keating:Well that generally takes number four or five. And it is
the same with most of the other channels as well. I
think there is, I mean we're pumping violence into our
kids, we're pumping it in news, we're pumping it in
some current affairs programs, we're certainly pumping
it in drama and I think that we should be thinking in this
country about whether we can have a channel which
doesn't affront everybody's sensibilities with murders,
rapes, killings, road smashes and maybe fourth network
Laurie Oakes: Is there such a network anywhere else?
Paul Keating: I think in the US there are stations, whether you would
call them a network, are actually doing this. But if we
don't take some stand against this, I mean, if we were to
throw the system open as John Howard suggests we
would have the American bilge coming in here, we
would wipe out Australian drama, we would have our
kids subjected to this sort of American dramatic
productions and that is why it is important that we keep
cultural control of Australia's drama and media
industries, and can I just say on that very point, don't let
John Howard tell you he denied or sought to deny my
claim that he has made clear to Mr Packer that he will
suspend the cross media rules. I can tell you this
advisedly, Laurie, he has made that clear, he has made
that clear, and when asked by the Herald Sun on Friday,
if he was perturbed about Mr Packer owning both
Channel 9 and Fairfax he said:
" There's some case given the changes in technology for
querying the continued suitability of the current cross
media ownership provisions."
He went on in the Financial Review to say:
" I think technology has rendered the cross media rules
redundant." Isn't it coincidental that when all of this is on after he
has had a number of conversations with Mr Packer all of
a sudden the cross media rules are to go to make the
way clear for Mr Packer to own the two nines and the
Nine Network and John Fairfax and Sons.
Laurie Oakes:
Laurie Oakes:
Laurie Oakes: I would have thought the word John Howard is saying is it is nearly self evident, technology has moved on. You've said similar things yourself. But on the subject of John Howard
Paul Keating:Technology has moved on but that is not to say that we
shouldn't have rules to give us plurality in the media.
Laurie Oakes: Well on the subject of John Howard. It seems to most
people that this row was partly because Kerry Packer
got your nose by saying John Howard would be a good
Prime Minister.
Paul Keating: I've made the point Kerry being a poor judge at the last
three elections. Now I like Kerry but one thing he is
not good at is picking election outcomes.
Laurie Oakes: But he didn't pick an election outcome. He said that
John Howard is decent, John Howard is honest. Now
that is the perception that most people have of John
Howard isn't it?
Paul Keating: Well I've always thought it was basically an ironic remark this remark about honesty. He was quite happy to sit it out when the Tax Commissioner was bellowing almost on a loud hailer about the criminal avoidance of the tax system. He is now playing monkey cunning
Laurie Oakes: But he's the bloke who killed bottom of the harbour and one of the reasons he was out of the leadership was because of that.
Paul Keating: Yes, after the McCabe Le Frankie report and the Costigan Royal Commission made it impossible for him not to act and now he is running around monkey cunning after making clear to the media proprietors he knocked the cross media rules off just as in the last three weeks of the ' 83 election they signed up the two airline policy again for five years. Look Mr Howard is a fixer. He is in the fixing business. He understands, he is in that Menzies tradition: you hand out TV licences, you hand out tariff protection, you hand out two airline agreements, that is the sort of approach[?] he comes from.
Laurie Oakes: The perception of John Howard, though I believe, is that he is an honest, decent man and perceptions in politics are all important. Thank makes him your toughest opponent yet doesn't it?
Paul Keating: I don't think so because John Howard does have a political past. He did get down to 18 as the Bulletin reminded us in 1989 and why did he? Because he was an inadequate leader and he was a poor Treasurer. So there's a history here and I think, and what did he say in these interviews on Friday Laurie. Have a listen to this.
He said:
" There was reform fatigue in the Australian electorate"
in other words those Australians are right out of reform,
those lazy Australians are right out of reform,
"... reform fatigue in the Australian electorate",
and he believed
" there was a desire for gentler policies, i. e. not change
policies" In other words here he is back with ' 70s politics,
politics, reform fatigue, no change, he says that he is
opposed to tax increases, he is opposed to big spending
cuts, he is opposed to interest rates rising, he is opposed
to all the variables in the Australian budget and as the
Courier Mail made quite clear, they said:
" Vague is best"
Vague is best.
Laurie Oakes:John Howard says he is in favour of sensible spending
cuts and hasn't he got you where it hurts with his line
about five minutes of sunshine. Aren't people frustrated
that after the pain of the recession after five minutes
they are back to rising interest rates and looming tax
increases?
Paul Keating: Well you go and tell the 500,000 people who found a
job in the last two years, which has been for them a
summer of sunshine, that it was for five minutes. Or go
and tell the business community you have got five and a
half to six per cent growth and two per cent inflation
that it is a summer of sunshine. This is the problem about John Howard glib lines will not change Australia and make it better and for a man, I mean, what use can Australia have in the 1990s after a period of great change with a modern externally oriented economy
making the change into Asia for somebody who
describes himself as the most conservative leader
Australia has ever had. I mean what use can Australia
have particularly when he is saying, now, last Friday,
that the country has got reform fatigue. I mean, where
do his acolytes like Allan Wood and Des Moore and all
these other people stand now?
Laurie Oakes: But there's a chance he's right isn't it? Australians may
be sick of pain. May be sick of changes. If he's right
you're in trouble?
Paul Keating: Well you can't have any pain Laurie with a 40% real
increase in household disposable income since 1983.
You can't have real pain with strong real growth in take
home pay in real disposable income. You can't have
real pain with the largest rate of employment growth in
any year on record. What he's saying is, I don't want
to see Australia I'll sit it out. My judgment is, he
says, that we don't need any more reform, we'll
basically sit it out and see if we can cruise into office.
In other words a ' 70s solution for a country in a period
of great flux in the 1990s in the middle of Asia.
Laurie Oakes: We're just about out of time but there was an election yesterday. The Labor Party is in trouble isn't it when a town like Canberra votes against it?
Paul Keating: Laurie it's basically a municipal election, a municipal election under the Hare-Clark system and it is still not clear who will end up being the government. There was a swing against the Labor Party but in national terms, if
that is the point you're making, so what.
Laurie Oakes: Well what about in New South Wales? If Bob Carr fails to get up in New South Wales I'm sure the Press Release the day after the election will blame your government, blame looming tax rises, spending cuts and the performance of your government. You won't be able to dodge that will you?
Paul Keating:Well Bob Carr didn't get up last time but we got up two times since, I mean, one time since, so I don't know if there's any logic to that remark. Actually I think Bob Carr will win because I'll tell you this about the Fahey
government, not a thing happens in New South Wales, no projects start, ministers are falling out of the government through one scandal after another and this is a government absolutely dead on its feet and the quicker that Bob Carr can put it in a coffin the better.
Laurie Oakes: Prime Minister thank you very much.
Paul Keating:Thank you Laurie.
Laurie Oakes:Back to you Jim.
ENDS