Subjects: Corporate governance; LNG contract; High Court ruling.
E&OE...........
O';BRIEN:
Prime Minister, since we've just had the HIH story, let's stay with corporate governance for a minute, and you gave that speech earlier this week. You said some people have been getting away with murder in terms of corporate excesses. Do you think there's been something of a developing culture - beyond just a few - of greed in the corporate world that's been feeding those excesses?
PRIME MINISTER:
I guess there are some people who are a lot more greedier than others. I still believe that the great bulk of people in corporate Australia are people of integrity. They expect proper remuneration, there's nothing wrong with that. I don't object to company directors being paid very high salaries if they deliver the goods. What people object to a lot, and I object to, is somebody will preside over a company as it goes broke but walk away with a fortune in their pocket. That's what people really object to. And as I've gone around Australia, that is something that people have complained about a lot more to me than virtually anything else, and that's one of the reasons why in the wake of the One Tel demise last year we made that proposal to change the law - and I referred to it again a couple of days ago - to give the liquidators the capacity to reclaim unreasonable enrichments. There are some other changes that we need, but we must avoid an overreaction and we must avoid encumbering the robust but ethical businessmen and women with a whole lot of extra regulation that is only going to make their life more difficult, less profitable and therefore their shareholders worse off and maybe there will be fewer employees. It's balance that's needed.
O'BRIEN:
But isn't it a little more systemic than just a few? The Financial Times has surveyed the 25 biggest US corporations that have gone bankrupt in the recent past, and found that their top executives had creamed over $6 billion in shares and options. Now, a system that is now ingrained in Australia as well as the US - this whole sort of share options package and so on, which is supposed to provide an incentive to give a greater return to shareholders - you don't think that those statistics that I just said could be symptomatic of a wider corporate culture increasingly out of kilter with the rest of the workforce, the rest of society?
PRIME MINISTER:
You can't be too dogmatic about this either way. But there are some big differences between Australia and America. We didn't have the dotcom frenzy that America had.
O'BRIEN:
Well, One Tel.
PRIME MINISTER:
Not to the same degree, though. We had nothing like the soaring NASDAQ. And the other big difference is that America's corporate governance is more susceptible to one-man or one-woman rule than is ours.
O'BRIEN:
But sorry, we did have our own version of the soaring NASDAQ. We had tech stocks that were disappearing over the horizon.
PRIME MINISTER:
No but if you actually look at our whole stock market, it did not go up to the same degree the US's did. We had a lot of speculation. The other thing is that in the United States they make the big mistake in my view of fusing the position of company chief executive or managing director with chairman. And we've kept to the more orthodox practice of separating those roles, and that does act as a break. Now there are a lot of things I can't say about this issue because there are Royal Commissions and inquiries under way. I will await with interest the recommendations of the Royal Commission into HIH and we obviously will have to take that into account in our responses and we will be responding to the audit recommendations of Professor Ramsay quite soon.
O'BRIEN:
That's been there since October last year. I mean your speech… if we';re looking at the way the community is perceiving all of this, your speech took a pretty softly, softly approach on corporate excess. You talk about responding in a quote, a balanced and sensible fashion, of improved self-regulation but not excessive regulation. Put yourself in the mind of a welfare recipient who would say you're far tougher, far harsher, far more punitive, far more regulatory in dealing with them, often over quite minor breaches.
PRIME MINISTER:
I don't agree with that. I mean ASIC's prosecution, for example, over the last few years has put 19 corporate people in jail for crimes…
O'BRIEN:
How many thousands of welfare recipients have been breached and breached and breached?
PRIME MINISTER:
Let's keep a sensible… what I do not want is to clobber the hard working entrepreneurial people that this country needs if we are to continue to generate wealth. I mean you've got to have a balance, and I want wrongdoers punished. I want the existing laws enforced effectively, and we'll add more law if it's needed, but I am not going to just be swept along in a tide that says the answer to this is more regulation, because you really can't legislate honesty and decency and morality in the end, no matter what sort of laws you have. You'll always have some people who will try and get around them.
O'BRIEN:
On a more upbeat note Mr Howard, you would be pretty pleased with the news from China today about the natural gas deal from the North West Shelf - $22 billion over 25 years. How big a coup is that for Australia?
PRIME MINISTER:
Oh, huge. This is the single biggest export deal this country's ever picked up. And this is going to nourish our export income for a quarter of a century. It will reinforce the already very strong links between Australia and China. And it offers the hope of more to come because the Chinese have a growing economy and I make no presumptions about the future. We had to work hard to get this one and we'll have to work hard to get any in the future. But it was a fantastic team effort against very tough competition. And the way in which the Government and the bidders and our Ambassador in Beijing, David Irvine, the way everybody worked together was impressive.
O'BRIEN:
In fact you said in your press release, quote - I especially appreciated the manner in which my strong support for and representations on behalf of the joint venture were received by the Chinese leadership. Are you claiming a personal victory for John Howard here?
PRIME MINISTER:
No I don't claim personal victories. Others can make judgments about that. It was a team effort. The good news is that we have broken into the Chinese energy market, a market of over 1 billion people, 1.2 billion people and growing almost exponentially. We have broken into that. We have a high-quality product. We are a reliable supplier. We deliver on time. And I think it's a gold medal performance for the resource sector in Australia and I congratulate everybody in the bid. It is just a terrific outcome for our nation.
O'BRIEN:
The other major news story today, the High Court ruling which has found that the Government's Refugee Appeals Tribunal has been acting unfairly by implication apparently in thousands of cases. Your reaction?
PRIME MINISTER:
I don't have a detailed brief. The brief that I have so far says that they found in two cases that there had been procedural unfairness and they have returned those cases to the Refugee Review Tribunal. Just how many more are sort of on all fores with those I don't at this stage know.
O'BRIEN:
Thousands.
PRIME MINISTER:
Well, I'll get some further information on that. But look, we're subject to the law. Whatever the law is the law will be followed. It does rather reinforce the point that people in other parts of the world who criticise this country for not treating people properly, I would say to them we have a judicial system, we have a law…
O'BRIEN:
But this is the judicial system that to a very substantial degree you've tried to shut out of the whole refugee process.
PRIME MINISTER:
We do have reasons for arguing that you should try and resolve these things more rapidly. Kerry, I'm waiting to get some more advice on that. We had a couple of other High Court decisions today on Native Title which arguably are also of very important long-term significance to the economic security of this country. I've had rather more briefings on them actually than I have on this.
O'BRIEN:
On this, we're talking about thousands potentially of people, many of whom are genuine…
PRIME MINISTER:
Well, I don't know. I haven't been advised on that.
O'BRIEN:
But at the core, is a unanimous High Court ruling in one case that your Refugee Appeals Tribunal has been operating unfairly.
PRIME MINISTER:
Well no, what it held as I understand it, in these two cases, it had denied procedural fairness.
O'BRIEN:
Yes, operating unfairly.
PRIME MINISTER:
Yes well, tribunals and courts often operate unfairly.
O'BRIEN:
There are…
PRIME MINISTER:
I can't, no, no… look I acknowledge that the High Court has found in these two cases that there was procedural unfairness. I'm not arguing with that, and that those cases have been returned to the Refugee Tribunal for readjudication. Now as to how far it extends, I have a preliminary briefing and that indicates it's too early to make a judgment. So I'm not going to underwrite a figure of thousands.
O'BRIEN:
No, I'm not asking you to underwrite it, but the very strong implication out of this is that there are at least 7,600 people living in Australian communities right now on bridging visas who will now have the right under this ruling to file back one after the other into the Federal Court which could then order them back to the… which could order the Refugee Tribunal to rehear their cases one by one by one, which I would suggest has the potential to clog up your entire system. That must concern you.
PRIME MINISTER:
I have not been given advice to that effect and I'm therefore not going to underwrite that as correct or incorrect. I just don't know at this stage.
O'BRIEN:
Have you also been told that there is a possibility that you may have to revisit your so-called Tampa legislation? That according to the plaintiffs'; lawyers the elements that the High Court, this is the full bench of the High Court, now says were unfair in these cases are actually enshrined in your new Tampa legislation?
PRIME MINISTER:
Well I haven't been told that. And this is an allegation being made by the plaintiffs'; lawyers and plaintiffs'; lawyers and defendants'; lawyers sometimes make allegations that are right and sometimes they're wrong. Now I don't know. I have not got any advice to that effect so I'm not going to try and even respond to that.
O'BRIEN:
This is a case that's taken four years to go through. There is another case that we've heard about today - the case of the Bedraie family featured on Four Corners about a year ago, from the Villawood Detention Centre. They've been trying for two and a half years to prove they're genuine refugees, masses of credible medical evidence of their small boy severely traumatised by the process of being in detention. The tribunal ruled they weren't refugees. Now we learn today they are genuine refugees but only because the full Federal Court ordered the tribunal to reconsider. Now, under your new rules, they wouldn't even be allowed to go to the Federal Court. They'd presumably have been deported by now because of the first finding of the tribunal. Is your system fair? Have you been fair to narrow down access to the judicial system that you say is a great judicial system?
PRIME MINISTER:
Well a moment ago Kerry, you said we faced the possibility of our whole system being clogged up.
O'BRIEN:
Your tribunal, this is your departmental system.
PRIME MINISTER:
No, let me finish. And that was a sort of piece of… a remark "you've got a problem Mr Howard because your system's going to be clogged up". Now you're in effect saying that we shouldn't do anything to try and stop the system being clogged up.
O'BRIEN:
No, obviously you have to balance these things Mr Howard, but at the heart of anything I would think from your perspective should be fairness.
PRIME MINISTER:
Of course fairness is there. And I mean, if you have endless avenues of appeal, you can have situations where courts one after the other are overturning courts below them. We are trying to strike a balance. And one of the great complaints that have been made about this whole detention system is that people are kept too long, it takes too long. Now you always have a trade-off between extensive due process and speedy adjudication. I mean, there's no legal system devised that's quick. I've never struck a legal system anywhere in the world or any legal process that's ever quick…
O'BRIEN:
The price we pay for trying to be fair.
PRIME MINISTER:
There's a trade-off. You see a lot of people, they would draw the line in different places and that is the trade-off you have. I think it's a difficult judgment to make.
O'BRIEN:
John Howard, thanks for talking with us.
PRIME MINISTER:
Pleasure.
[ends]