Interview with Catherine McGrath

ABC AM Programme

Wednesday, 24 May 2006

8.10 am

SUBJECTS: East Timor, Snowy Hydro

MCGRATH:

Peter Costello, good morning.

TREASURER:

Good morning Catherine.

MCGRATH:

What is the situation like this morning in East Timor, in Dili?

TREASURER:

Well what has happened is that a section of the East Timorese military forces, which has been dismissed, has engaged in fighting with the army yesterday, there are reports of casualties in relation to that. It doesn’t appear as if anything further happened overnight – we haven’t had reports of that yet – but the situation is extremely dangerous and Australians are urged not to go to East Timor and if you are already in East Timor you should consider departing.

MCGRATH:

But what is the scene like in Dili? What are your people telling you about the atmosphere, about the ability of people to walk around, the prospects of the day ahead?

TREASURER:

Well it is an extremely dangerous situation and that is why we say to Australians don’t go there, if you are there you should consider departing, there has been gun shots and other fire between these two warring factions, well between the army and the disloyal faction which has been dismissed from the army.

MCGRATH:

Now that faction is led by Major Alfredo Reinado, what do you know, what do the Australians know about him and how dangerous is that element?

TREASURER:

Well look, there were grievances amongst a section of the army, they were agitating over their conditions and they were dismissed. Now, they are still aggrieved. An independent commission is going to look at some of these grievances and we hope that it can sort it out. But when you have a sizeable section of your army dismissed, it is a serious situation, particularly if they are prepared to take up gun fire against the army.

MCGRATH:

But is he himself, Major Reinado a threat, is this a political stance at the moment, or is this definitely a threat of further violence?

TREASURER:

Well look, it is a, they have political grievances, they have industrial grievances, they have now been dismissed and they are now in a situation where they are taking up arms and exchanging gunfire with the army and it is a very serious situation.

MCGRATH:

And are you confident that Prime Minister Mari Alkatiri can deal with this?

TREASURER:

Well he is the Prime Minister of East Timor, he bears principal responsibility for the governance of East Timor, if the Government were to make a request of Australia, the lawfully constituted Government were to make a request of Australia we would carefully consider that. We will also be in a position to protect Australians and we will consider their safety. We have assets which have been pre-deployed, we have had a discussion about the nature of any force if it were requested, Australia is quite ready, we have a good plan but of course it would not be activated unless the Government, the constitutional Government requested assistance.

MCGRATH:

How long would it take if assistance was asked for at midday today?

TREASURER:

It could be done very shortly.

MCGRATH:

Within hours?

TREASURER:

It could be done very shortly.

MCGRATH:

Treasurer, changing subjects, the sale of the Snowy Hydro company is now in the midst of a protest from one of the Prime Minister’s key friends, Bill Heffernan. He wants the Federal Government to buy 25 per cent of the Snowy Hydro. Is that on?

TREASURER:

No the Commonwealth Government has offered for sale its interest in Snowy Hydro and that sale will go ahead. You have got to bear this in mind. The Commonwealth Government is only a minor player in this. The major owner of Snowy Hydro is the New South Wales Government, when the New South Wales Government announced that it was going to sell then the Victorian Government and the Commonwealth followed suit. But the Commonwealth Government has never owned the full thing and the Commonwealth Government can’t keep it in public ownership if the New South Wales Government wants to sell it.

MCGRATH:

What about the legal advice that Bob Brown has received and issued overnight saying that the way that the Government has considered it is not legal, it was not put through Parliament in a proper Bill, it was put through in motions, separate motions to the Senate and the House of Representatives. There will be no Royal Assent, it will not be signed by the Governor General.

TREASURER:

Well good luck to him with his legal advice.

MCGRATH:

So what do you think?

TREASURER:

Well I think the Parliamentary Council and the Crown Solicitors are reputable legal advisers and the Government’s legal advice is that it has been done properly.

MCGRATH:

Would that be appropriate…

TREASURER:

And can I say…

MCGRATH:

…to put it through a…

TREASURER:

…well look, it has gone through two houses of Parliament…

MCGRATH:

Not as a Bill.

TREASURER:

Well it has been voted in favour of in two houses of Parliament, Mr Brown didn’t have a majority.

MCGRATH:

There is a backlash now from some members of the Liberal Party, environmentalists are concerned, a lot of farming groups, local councils on the Murray, there is starting to be a widespread backlash so how do you feel about that? Do you understand their concerns?

TREASURER:

Well look, I think the farmers are concerned that their rights as irrigators are respected, I think environmentalists are rightly concerned that environmental flows are properly respected. These can be done regardless of who actually owns a corporation. If the Snowy Corporation had never been set up in the first place you would still have legislation governing irrigation and environmental flows. And if it is in public ownership you will still need legislation governing environmental flows and irrigation. If it is in private ownership you will still need legislation governing environmental flows and irrigation. So the nature of the ownership doesn’t count, what counts of course is the legislative requirements.

MCGRATH:

Peter Costello, thanks for joining the AM Programme.

TREASURER:

Great to be with you, thank you.