JOURNALIST:
We are pleased to have on the programme from Canberra joining us right now is the Prime Minister John Howard on this Wednesday morning. Prime Minister, good morning.
PRIME MINISTER:
Good morning. How are you both?
JOURNALIST:
We're well thank you and you're coming to Adelaide on a nice day. Obviously part of your day will be spent with the campaign here. There was a time when certain Labor Prime Ministers weren't welcome but they probably want to know how you do it. There's just such a difference between the federal performance in South Australia and the state. Are you going to talk about that with them?
PRIME MINISTER:
No, I am going to talk about ways in which I can help and one of the things that I can do is to point out immediately that during this election campaign Mr Rann will undoubtedly say how strong the South Australian economy is and claim all of the credit. But most people when they step back and think about it realise that the strength of the economy is determined by national economic policy. It's been my experience in more than 30 years in politics that when the economy is bad, the Federal Government gets the blame, which is fair enough because it's got all of the major economic levers, and when the economy is good state Premiers fall over themselves to claim the credit. But the truth is that it's national economic policy that has delivered low unemployment, low debt and so many other things for South Australia. And I would hope that South Australian voters would keep that in mind and put aside the more extravagant claims that are going to be made by Mr Rann during his campaign. This campaign will be tough for the Liberals; I think Rob Kerin understands that. But there is no such thing as an unlosable election and there's no such thing as an unwinnable election and once the campaign starts, the sides have equal time, or should have equal time and you can always see very big changes.
One of the things I'll also point out today is that as a result of the GST and contrary to what Mr Rann said in a quite misleading leaflet he distributed last week, as a result of the GST, South Australia over the last few years is about $400 million better off than it would otherwise have been had the GST not been introduced.
JOURNALIST:
Prime Minister in the area of the GST, New South Wales and Victoria are really seething about how much they get versus the rest. Is South Australia in danger once you start mucking around with that equation?
PRIME MINISTER:
Well this is a matter for the states. We have a grants commission which is a body that over the years, an independent body, the states have always supported and they make recommendations as to how the federal money should be divided between the states. Now if the states agree amongst themselves to alter the allocation recommended by the grants commission then the Federal Government is perfectly happy to alter the allocation. But what I suspect will happen is that the states who claim they don't get enough money will say they want more money, the states that according to them get more money than they should will say they're entitled to every dollar they get and they'll turn around and say well the solution to this is for the Federal Government to provide yet more money. Now that is not going to happen. The states are entitled to come to me and say look, we've agreed on a different formula, but I doubt that that will happen. And there are arguments on both sides. It is true that Queensland in particular, and Western Australia to a lesser extent get greater than 100 per cent of the dollars that are contributed in GST from their states. But it is also true, and it is particularly the case with Queensland that it's more expensive to maintain services in that state because firstly it's a very big state, and secondly it's heavily decentralised. Whereas in South Australia and Victoria, most of the people live in the capital cities, in Queensland it's a lot different; 60 per cent of people live outside Brisbane. It's the only state in Australia where the majority of people don't live in the state capital. So there are arguments for and against and from my point of view, I'm not going to play favourites amongst the states. We have an independent body, it's made an allocation. Whenever the allocation has suited an individual state in the past it's always said aren't the members of the grants commission inspired statesmen and when they make an allocation they don't like they say it's all the fault of the Federal Government. So I say to the states, if you want to agree on a different allocation, come along to me with a signed bit of paper agreeing on that different allocation and I'm quite sure the Treasurer and I will facilitate it.
JOURNALIST:
It's a quarter past eight. Talking to the Prime Minister John Howard up there in Canberra. The headlines today - Prime Minister warned of kickbacks. Everyone knew. The Australian staffer at the UN, this diplomatic note went to your Department, to Foreign Affairs, it went right across the top of Cabinet. Where does that leave your argument now that you just didn't know anything about it?
PRIME MINISTER:
Well it doesn't alter it at all.
JOURNALIST:
Why not? I mean when your Department warned of Saddam's Hussein's push to get kickbacks, why was that not then a matter, a top matter to be pursued and watched?
PRIME MINISTER:
Well can I make a couple of points. Firstly and most importantly is that we have an independent inquiry which is investigating all of these things and we really should wait for that inquiry to report. That inquiry has had full cooperation from the Government and will continue to receive that cooperation.
JOURNALIST:
And yet a Senate Committee, you stopped a public servant from actually speaking at it.
PRIME MINISTER:
Well there's a very good reason for that; because we've got an independent inquiry being conducted by an eminent lawyer. You don't have a dog and bark. I mean we've appointed an independent inquiry. We are the only Government in the world that's done this and we've got a transparent, open process. Now going back to this cable, many of those headlines this morning, particularly the one in The Australian, that Australian headline especially was just quite misleading. You would get the impression reading that that everybody in the Government knew that AWB was paying kickbacks. That was the impression that the headline created and there can't be any ifs, buts or maybes; that was the impression created by that headline. Yet when you read the cable, you find in fact that the diplomat in New York told the Government in Canberra that they had received assurances from AWB that kickbacks had not been paid. They did not believe for a moment they had been paid. It also shows that the diplomat in question Bronte Moules had in fact done her job very well by pointing out to AWB that United Nation's Security Council Resolutions must be observed and warned AWB against any suggestion that the sanctions resolutions could be avoided. So you have a situation where the document on which that headline inferring that everybody knew kickbacks had been paid, said virtually the direct opposite.
JOURNALIST:
But it did say did it not Prime Minister, it did say that Saddam Hussein you're sending soldiers against us, Saddam Hussein is pushing to get kickbacks. Does it not look now like the Government...
PRIME MINISTER:
Oh, you say does it look now.
JOURNALIST:
We're just looking at the fact that this has come to the top of your Government across several Departments. Are we not in a position now as Australians to say well hang on, at the worst view, you were told, and at the best, you deliberately neglected to follow this up?
PRIME MINISTER:
Well, I reject completely your allegation that we deliberately neglected it.
JOURNALIST:
Well let me rephrase the question.
PRIME MINISTER:
No, I'm sorry, well I mean now come on, you just said, just a moment ago, you just said that we deliberately neglected. Now...
JOURNALIST:
No I asked why wouldn't Australians be entitled to ask that question.
PRIME MINISTER:
Now, come on, you can't, that's, with great respect, you're now trying to rephrase the question.
JOURNALIST:
They were my words John Howard.
PRIME MINISTER:
Yes, well they're wrong. You admit they're your words.
JOURNALIST:
Well okay. So Australians would be wrong to think that?
PRIME MINISTER:
You would be wrong to think it and Australians would be wrong to think it.
JOURNALIST:
So what should we think about this Sergeant Schultz situation?
PRIME MINISTER:
Well it's not a Sergeant Schultz situation. How can it be a Sergeant Schultz situation if we have an eminent lawyer who is conducting a thorough investigation and is receiving full cooperation from the Government? There has been no evidence produced before the commission demonstrating that Ministers in the Government were told that AWB had paid kickbacks. That is the issue.
JOURNALIST:
Isn't the issue now that you were warned and that therefore we would expect the Government to be on it, at its keenest, to pursue that matter and to watch that it didn't happen?
PRIME MINISTER:
Well the evidence that was presented yesterday which has produced this quite misleading headline especially in The Australian, the evidence there was of an attempt, according to the diplomat, of Saddam Hussein's regime to perhaps violate the sanctions regime. The response of the diplomat as far as I can see it, was first class. She warned of the obligations of AWB. She then reported that she was satisfied on the basis of the assurances given by AWB that no kickbacks had been paid. Now it's all very well five years later for people to turn around and say you know 'you should have done this, you should have done that.' People have reacted, you know, and your listeners know, from the circumstances of the time, and when you look at that cable, that shows the story of a diplomat doing her job. It doesn't show negligence. It certainly doesn't show a deliberate piece negligence as you had suggested a few moments ago. Now can I just say again, we did not know that kickbacks were being paid by AWB. The suspicions of that first arose in the context of the Volcker Inquiry which was long after the Oil-For-Food Programme had ended. At all times I encouraged not only the Government, but also I instructed the Government and I encouraged AWB in no uncertain terms to cooperate fully with the Volcker Inquiry. Now after we got the Volcker Inquiry, alone amongst the Governments of the world we established a full inquiry with the powers of a Royal Commission. Now you couldn't be more open and I am quite happy for the blame to fall where it may. I'm not trying to hide anything, and I repeat, the allegations that we knew all along and the inference in that headline this morning in The Australian is unmistakable. And that is that everyone in Canberra knew what, knew what; that kickbacks were being paid by AWB.
JOURNALIST:
The copy doesn't say that Prime Minister. We have to leave it...
PRIME MINISTER:
Well the headline does. You know as a journalist the impact of headlines.
JOURNALIST:
Yeah, Prime Minister, we thank you very much and we appreciate the chance to talk to you before you coming to Adelaide today. Thanks for your time.
PRIME MINISTER:
Thank you.
[ends]