Subjects: Warren Entsch; GST, Jeff Kennett comments; tax package;
Kosovo peace deal; aid workers; lamb exports; Geelong road
E&OE..............................................................................................
FAINE:
Good morning John. One of the things on your plate, as I said first
of all, the Warren Entsch affair as it's now being called. The
Labor Party say they'll go if necessary to the High Court to
challenge Mr Entsch's position in Parliament.
PRIME MINISTER:
Well they can if they want to. But they'll have to pay for it.
Yesterday's move in Parliament by the Labor Party was all about
getting the public, the taxpayer, to pay for the High Court's
determination. Now we say that on the basis of our advice, the Solicitor
General, the acting Solicitor General, there's no Constitutional
problem with Mr Entsch. The Labor Party's got an opinion that
says otherwise. So if the Labor Party challenges that it can go to
the court. We're not stopping it going into the court. It's
quite open for the Labor Party to take the matter to court. And it
will be interesting to see whether it does. I mean it has talked about
challenging it, well that's fine. It can challenge it but it
can challenge it at its own expense. This is not an issue of high
principle. This is about the Labor Party trying to score a political
advantage over the Government. Now okay, it's entitled to play
that game, but it's got to pay for the game. You can't expect
taxpayers to pick up the bill. This is the real significance of the
move yesterday because if the Parliament has referred the issue to
the court then the public would have paid the cost of the court case.
But if the Labor Party takes the matter to court the Labor Party's
got to carry its own expense and run the risk of having costs awarded
against it. Just like any other litigant. It really wanted a legal
meal ticket out of the Parliament yesterday and because it's
been denied it, it's running around saying democracy's at
risk. Democracy is not at risk. The court will still decide the law
if the matter comes before the court.
FAINE:
If Mr Entsch is going to go, if he's vulnerable to a challenge,
wouldn't it better for you to be seen to be doing the decisive
thing and making the decision yourself about his future rather than
the court having to do it for you?
PRIME MINISTER:
Well the advice we have is that he's not vulnerable.
FAINE:
At all?
PRIME MINISTER:
Yes. We have an opinion from the acting Solicitor General, Henry Burmeister
QC, a man who worked for Labor governments. So he's not a Liberal
lawyer. He's not somebody from the bar in Melbourne or Sydney
who's a member of the Liberal Party. Or in the case of the Labor
Party they can find some Labor lawyers. But the reality is that his
independent mind has advised the Keating Government, the Hawke Government,
and advised the Howard Government. And he said on the basis of the
established case law, the case law that's there, the man's
not vulnerable. Now I'm not going to look beyond that. I mean
I've got more important things to do like trying to get a decent
deal for our lamb exporters, and getting the tax package implemented.
FAINE:
If the ministerial code of conduct is all about appearances, and saying
to the public look we've cleaned up the way the Parliament works.
Well surely here is an opportunity for you to show that it's
got some meaning.
PRIME MINISTER:
John, the ministerial code was not about cleaning things up. The ministerial
code is meant as a guide for people's behaviour. It's not
meant as a death sentence. There's nothing in the code that says
that if anybody is in any kind of breach, technical or otherwise,
they must automatically be sacked. What happened here was that Warren
Entsch declared his financial interest in some companies, but he neglected
to declare his post as a director and secretary. Now if he had not
said anything about those companies then he would have been in trouble.
But the fact that he declared his financial interest but neglected
to declare his position is not in my view a hanging offence. Now people
will criticise me for that as they have. But that's the decision
I've taken. I think it is ludicrous if we get to a stage where
people are automatically knocked out on that basis because he hasn't
benefited from this mistake. He didn't know about the contract
until after it had been let. There's no evidence that he tried
to nobble the RAAF. There's no evidence that he used his position,
there's no evidence that he's done anything dishonest. He
made a mistake by not, as well as declaring his financial interest,
declaring his formal positions. Now I don't regard that as a
hanging offence.
FAINE:
But it's a running sore politically....
PRIME MINISTER:
Well look, Prime Ministers have running sores and arguments and political
criticisms every day of their life. But I've got to take a decision.
I try to play commonsense judgements. I've got a set of guidelines
that require people to do certain things. If they breach those guidelines,
and there's clear evidence of gross neglect, or malevolence,
or dishonest or unethical behaviour, well, people are out. But in
this case there's no evidence of that and the clincher is that
the man disclosed his financial interest in the companies. And the
thing that really matters, if you own a company, is how many shares
you've got in it not whether you're a director. Because
that determines the real level of your interest. But in this case
Warren declared his financial state but neglected to declare his formal
position as a director. It was a mistake. He shouldn't have done
that but I don't regard that as a hanging offence.
FAINE:
And if it was the other way around, if he declared a directorship
but hadn't told anyone there was financial benefit....?
PRIME MINISTER:
Well that would have actually been worse in my view because the real
thing that matters is the dough you get out of it and he told all
the world that he owned shares in this company. And interestingly
you go to the other part of the form, there was a couple of companies
where he was a director and not a shareholder, and he filled that
out. He honestly believed, I have a feeling people may think it is
that by declaring his financial interest that was enough but the world
knew that he half-owned the company. Because people who have private
companies they talk about ownership rather than shareholdings. This
particular company that got the contract is half-owned by Warren Entsch,
or half the shares are owned by him and half by another bloke. Now
he talks about half-ownership. He doesn't think in terms, and
most people don't think in terms of directorships and secretaryships.
That's language that's more akin to large public companies.
This bloke has not in my view done anything dishonest. I'm wearing
the flack, and I intend to go on doing so because I think it is stupid
to apply an ultra legalistic approach to these guidelines. They were
never intended to operate that way.
FAINE:
A bit of commonsense applied.
PRIME MINISTER:
Commonsense.
FAINE:
Prime Minister, listening to Parliament the other day, before we move
onto other things, listening to Parliament the other day there was
almost a veiled threat from you that if the Labor Party were going
to go this way then there was a lot of other baggage, a lot of other
dirt that could come out about the outside business activities, and
consultancies....
PRIME MINISTER:
No, not dirt...no no. There was no threat. I don't issue threats.
I mean I don't believe that people should be thrown out of positions
on the basis of a technical noncompliance. I think that is ludicrous
because everybody could make that kind of mistake and Mr Beazley acknowledged
that himself a couple of years ago. And as Tony Abbott pointed out
yesterday there are a number of people in the Labor Party backbench
who've apparently have sort of, have got technical glitches in
their disclosure. Now we're not saying they should be punished
or thrown out or anything. I'm not suggesting that they've
done anything wrong, but backing the point that I was making that
once you go down this ultra-legalistic path you're going to basically
frighten a lot of people away from going into Parliament. And the
reality is that we have a lot of people in the Liberal Party who've
had a small business background. They get promoted to a parliamentary
secretaryship in the case of Warren Entsch. Now it's not...doesn't
carry the same status and so forth as a minister. It's a very
heavy burden to say to somebody like that, well you've got to
get rid of all of your financial interests, which essentially is where
the Labor Party is really in reality heading. Now I look at the substance
and I ask myself, okay, he made a mistake. He was careless, he shouldn't
have made that mistake. But there was no intent to defraud or camouflage
because if there had have been he wouldn't have disclosed his
financial interest in the company and that to me was the clincher.
FAINE:
All right, we've got to cover a lot of other ground. According
to a report in today's Australian Financial Review there's
a spectre of a High Court challenge to the GST. The government solicitor
has said there is a question mark over whether or not under the Constitution
you can pass all of those tax laws through one bill at once.
PRIME MINISTER:
I read that report. I haven't seen the legal opinion. But it
sounds to me very much like every legal opinion I've ever read,
and that is they say well our view is X, Y, Z, but of course it's
always possible that somebody could take another view. And from what
I see of the report that's basically it. All legal opinions are
like that. I don't think I've ever read a legal opinion
in my life which says that something is totally and utterly free from
doubt....
FAINE:
Never black and white.
PRIME MINISTER:
Well never, no. And that is the nature of the law. But on balance,
it was quite strong and about as strong as you can ever get.
FAINE:
Are you concerned about the ...?
PRIME MINISTER:
No no, no I'm not.
FAINE:
All right. The Premier, you may be concerned about this, the Premier
Jeff Kennett yesterday in an interview said that he thought it was
unacceptable to have a new GST package in effect rammed down his throat.
PRIME MINISTER:
Well nothing's being rammed down Mr Kennett's throat. In
the end it was our call to do a deal with the Australian Democrats
to get the package up, and it was quite unrealistic given the dynamics
of our negotiations with the Australian Democrats, it was quite unrealistic
of us to say to the Democrats: well we want you to agree to something,
and we've reached tentative agreement, but can we break off for
a week or ten days while I toddle off and sign up each of the State
premiers and chief ministers.
Now that was just unrealistic. What I have done is conclude a deal
which preserves real gains for the States. It guarantees that the
States will be no worse off during the transitional period. It guarantees
that after the transitional period the revenue gains to the States
will be such that they will be much better off than if the existing
arrangement continues. Given that we are paying the entire cost of
the changes out of our budget, and not out of the State budget, the
States have received an extremely good deal. But it seems that the
real rub with some of the Premiers is that in some way there weren't
detailed discussions with them before I signed up with the Democrats.
Well Mr Kennett knows, as well as every other State premier, that
in a situation like that, in the dynamics of such a negotiation it
was unrealistic of me to say: well you're not really negotiating
with Howard and Costello. You're negotiating with us but you're
also negotiating with Kennett, and Court and Carr, and Beattie and
so forth. Now that's just unrealistic and Jeff knows that. We
have got a very good deal. We're going to have a much better
tax system.
FAINE:
Why do you think he's holding out?
PRIME MINISTER:
Well premiers always do that. Always. You should ask him that. I don't
accept the criticism. We're don't intend to, in any way,
renegotiate the arrangement with the Democrats. And as that very good
lift-out supplement in the Melbourne Age demonstrated this
morning this is an influently better system than the present taxation
system. Families in particular will get huge benefits out of it. I
thought it was an excellent supplement and full marks to the Melbourne
Age and I hope every Melbournian reads it because it really
is an excellent lift-out supplement, and it demonstrates very clearly
the family benefits out of this tax package. And that is exactly what
I set out to do two-and-a-half years ago...two years ago, to deliver
a tax package with great benefits for Australian families at the low
and middle income range. You look at that supplement this morning,
it's been done by Access Economics not by the Federal Treasury,
it's very clear that there are very big gains for people in the
middle with families, particularly single-income families whose relative
position has deteriorated and that was demonstrated in a survey that
came out about a week ago, over the last 14, 15 years. And what was
so pleasing about that analysis was that it concluded that the very
goal we set out to achieve has in fact been delivered through this
taxation package.
FAINE:
But at the same time as that coming out, you hear from the St Vincent
de Paul Society that there are 2 million Australians living in poverty,
and BRW at exactly the same time that the hundred richest families
in Australia have gone about 25% richer over the last year. So the
gap between the rich and the poor seems to be getting wider.
PRIME MINISTER:
John, I think the truth is that the well-off in Australia are getting
better off, that's true. There is a lot of evidence though to
say that through a combination of policies over the last 10 or 15
or more years, there have been real gains for people at the lower
end of the income range. There are surveys indicating that there are
fewer people, young people, children living below defined poverty
levels. We don't accept, and I don't think Access Economics
accepts either, but it's a matter for them to speak for themselves,
that the St Vincent de Paul conclusion is a true reflection of the
position. You see the problem with those sorts of analyses is John
is that they look at somebody's income irrespective of their
family circumstances. Now if you say that somebody on an income of
$100 a week is obviously struggling, but if that happens to be a 17
or 18 year old student with a part-time job living at home with his
parents who are in quite comfortable circumstances, you can hardly
say that person's poor. Yet the statistics throw that person
up as earning only $100 a week. And that is the difficulty of so many
of these analyses.
FAINE:
But the poor are doing it tough at the moment.
PRIME MINISTER:
The poor in any....yes, but they are doing it better now than they
were a few years ago because prices are not going up as quickly, and
the value of social security benefits have been fully maintained.
And under the GST package, in particularly as a result of the arrangement
with the Democrats, pensioners are going to get a real increase of
2%. And one of the things that the Labor Party will do if votes against
this package will be to vote against a 2% increase in the value of
the pension. Now this is over and above the compensation needed for
the GST. It's one thing to vote down the compensation to the
GST because you say you're simultaneously voting down the GST
therefore you don't need the compensation. But in addition they'll
be voting down 2% over and above that.
FAINE:
An international story, the major thing happening of course, the peace
deal in Kosovo. Are you confident it will stick, and are you disappointed
that some sort of a deal over the Australian care workers was not
included?
PRIME MINISTER:
Well as to my confidence that it will stick, when I spoke to President
Clinton yesterday morning about our lamb exports, and about our two
aid workers, he expressed a lot of optimism. He said that he thought
this was the real thing and he sounded very upbeat and deservedly
so because it's a huge breakthrough. I can only rely on the reports
I've seen, I can only rely on the tone of that conversation with
the President. And it was very clear from that conversation that he
was very upbeat and the reports seem a lot more reliable. The language
of the Yugoslav President, the fact that the Serbian troops have begun
to pull out. As much as you can do with these things I'm hopeful.
I didn't expect, you know, an immediate breakthrough on the aid
workers yesterday, but clearly, as a result of the peace deal their
prospects are a lot better because in a sense there retention's
a product of the conflict. Now that the conflict looks as though it's
been resolved, then the prospects of them getting out will increase.
But I did raise their position with the President. I've also
written separately to them about it. I've written to the British
Prime Minister and we will continue to lift every effort we can to
try and get them out.
FAINE:
And on the lamb exports, did President Clinton hint that there was
any joy for Australia?
PRIME MINISTER:
Well, he's certainly well aware of how upset we are about the
prospect of them applying quotas. I said that it would really deeply
disappoint the Australian community. It would anger out exporters.
We have arguments in the past that this is qualitatively different
because here is a problem in the American industry, not caused by
our exports, but rather caused by their bad marketing. We'd actually
offered money to help them improve their marketing techniques. And
you've got a group of people as you heard from that segment on
AM a few moments ago, people whose very livelihood in rural
areas of Australia depend on this. And I mean what is so vividly disappointing
for them is that they've worked their guts out to build up a
market and they've done it through efficiency, and now it's
going to be taken away from them by the executive act potentially
of a country that preaches free trade. The point I made to the President
was that if they go ahead and do this it will send a terrible signal
to those countries who don't want to open up agricultural trade.
The Americans say they do, we certainly do.
FAINE:
Did you indicate to President Clinton that there would be retaliatory
measures?
PRIME MINISTER:
No I didn't. I think it's silly in a situation like that
to start talking wildly about retaliation. I mean that is the language
in a sense of defeat because you are already assuming that your arguments
aren't going to carry any weight. You're preparing for what
happens afterwards. I mean if the Americans go ahead and impose restrictions
then we will have to consider where we go from there. But I was intent
yesterday to make the point to him that it will do immense damage
to the trade relationship between the two countries, but it would
also send a terrible signal to the rest of the world. And the Americans
have talked free trade now for years, and if they go ahead and do
this it would be one of the most blatantly protectionist acts imaginable
and it will send a terrible signal. Now in the end of course, when
you talk about retaliation, it's very stupid in trade to cut
off your nose to spite your face, and you've got to be very careful
about issuing bland general threats about retaliation. Because in
the long run Australia's interests lie in expanding world trade
because we are $19 million people. We need exports to grow and to
prosper. Therefore it is not in our interests to see the world throwing
up protectionist barriers.
FAINE:
Not at all. Still on international events, are you concerned by the
slowness of the count in the Indonesian poll, concerned is being expressed
about vote rigging, to put it bluntly?