Governor General, Telstra Share Price, ACCC Chairman – Interview with Catherine McGrath, ABC AM

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Governor General, Telstra Share Price, ACCC Chairman – Interview with Catherine McGrath, ABC AM


Interview with Catherine McGrath

Thursday, 29 May 2003

8.00 am

SUBJECTS: Governor General, Telstra Share Price, ACCC Chairman


Treasurer, Good morning.


Good morning Catherine.


Peter Hollingworth has finished his term now, as the search begins, what sort

of Governor General should we have and what sort of consultation should there



Well, obviously the most important thing will be somebody who is competent

to discharge their Constitutional duties. Somebody who will have a great deal

of trust in respect of their pre-Vice Regal role, and will bring that to the

Vice Regal role, and somebody who can discharge the other duties of meeting

Australians and going out to all the other areas of Australia and including

people. They will be the kind of qualities that would be looked for, I would



If there had been checks last time, or if the Prime Minister had looked more

into his past, do you think it would have made a difference?


I don’t think so, because I remember when Peter Hollingworth was appointed

Governor General, I don’t recall anybody saying at the time that he was unfit

because of abuse allegations in Queensland. Mr Beattie, who has been particularly

loud on this subject, congratulated the appointment, and the Leader of the Opposition,

Mr Beazley, congratulated the appointment. So, I don’t recall anybody saying

at the time, that it was known that Dr Hollingworth had mishandled sex abuse



And what about you, when the Prime Minister asked you, what did you say to



Well I didn’t know that there were these kind of allegations against Dr Hollingworth…


On broader issues, did you raise any issues with the church and State for example…


Well the Prime Minister told me that he was proposing to appoint Dr Hollingworth.

We discussed pros and cons in relation to that appointment, but I can tell you

this, I certainly didn’t know that there were child abuse allegations against

Dr Hollingworth and I never raised that in that conversation…


No, but pros and cons, what cons did you raise?


Well I might have raised other things but I…


Well can you share them with us…




…Robert Hill has shared them with the public…


No, I don’t think it’s right…


…Mr Downer has…


…I don’t think it is right to go into that, because the conversations

that we have on all manners of confidential things, we keep confidential. But

I can tell you this, I was not aware, nor was the Prime Minister, and as far

as I can – and nor was Mr Beattie or Mr Beazley – as far as I can remember,

nobody did, nobody was.


Well next time, would you expect to be consulted more?


Well it’s – look, the Prime Minister’s not obliged to consult in relation to

this. The Prime Minister is obliged to make a nomination to the Queen, and the

Queen acts on his advice. That is the Constitutional position, it has been the

Constitutional position for a very long period of time, it has been followed

by Labor Prime Ministers. It has recently been endorsed by Labor Premiers.


Is it the best way though?


Well under our Constitution it is the way. That’s the point, and when the public

were asked in a fair referendum, not so long ago, whether they wanted to change

the system, they voted no. So as far as I am concerned, that means this is the



So you heard Simon Crean’s view there, pushing for a four-year term, what do

you think of that?


Well, there have been a couple of referendums on that already and they have

been defeated. Personally I have never been enamored with the idea of a fixed

term. I think there is something to be said for four-year terms, yes, yes of

course. More interesting of course, was Mr Crean saying that he thinks the Senate

should lose its powers to break to, to stop Appropriation Bills, perhaps he

can induce his colleagues in the Senate to stop blocking budgets which he has

done in relation to the last two. It’s a bit rich for Mr Crean to go out and

make a speech on reducing the Senate power over money bills when he is in the

process of blocking his second Budget in a row.


Treasurer, if we can move on to the next issue we mentioned in our introduction,

which was Telstra, the Telstra share price. Now, in Senate estimates last night,

Dr Ian Watt, the Finance Secretary admitted that the price had been inflated,

$5.25 was put in the budget papers instead of the market price of $4.75. How

do you explain that away?


Well the Government has always said that it wouldn’t sell unless there was

a commercial price. We have made that clear before…


No but this is an issue of Charter of Budget Honesty…


…there are two things here. The Government has always said that it wouldn’t

sell at a non-commercial price and it has been pretty clear what price we have

named in the past, and that’s the process we followed in relation to that…


…(inaudible) the market price.


No, I am sorry. In relation to the Budget we have previously put in the commercial

price at which we would sell. That is in relation to the Budget. There is a

second statement called net worth. It’s a statement which I have never referred

to in a Budget. It does not affect the bottom line. None of this affects the

bottom line, $2.2 billion surplus. None of this affects that. The Budget which

is the revenue and the expenses for a year, this does not come into that…


But Labor, which was…


…no, no, no, let me explain it to you. Well Labor is not alleging that,



…Labor is not alleging it…


Well, no I did see…


…they are asking about…


…no, no, no, Catherine, there is a very important point, because I did

see some people say in the press that this knocks around the Budget. It does

not knock the budget around at all…


Well I can’t assert what other people in the press are saying…


…ok, well you and I are in furious agreement on that, so let’s come to

what it is net worth…


…can I ask you about the (inaudible) budget…


…no, no, I will come to what it is, which is net worth. Now net worth

is an attempt to produce a balance sheet of everything that the Commonwealth

owns. We try and do it in two ways. We do it on the GFS process and we do it

on AAS31. AAS31 is the private company standard, GFS is the IMF standard. In

relation to the valuations, they differ. For example, in relation to the GFS,

what you try and do is you value at market equity, whereas your defence platforms

you put zero value on. The outcome of the net worth in relation to that statement

is minus $46 billion. In relation to AAS31, what you do is you put historic

value, but your value defence platforms in. The outcome of that calculation

is minus $48 billion. They are the sums that we are talking about, and they

are the different valuation issues that are involved


Treasurer, Graeme Samuel the interim chairman of the ACCC. NSW, South Australia,

Queensland and the ACT are still opposed to that. Are you picking a fight here?


No, I asked the State governments for nominations for the ACCC Chairman. The

Victorian government supported by, that Tasmanian government, WA and the Northern

Territory supports Graeme Samuel. NSW nominated a man called Tom Parry, who

was supported by one person, Michael Egan. Graeme Samuel was supported by four

governments, and has the support of the Commonwealth. Now, in those circumstances

he is clearly the preferred candidate and we have appointed him. He is also

the best qualified candidate. As recently as yesterday I asked Professor Fels

again, who he recommends as the most qualified person to take over his job,

and it was Mr Graeme Samuel. So we have the most qualified person who has the

most support amongst the states, and a majority support including the Commonwealth

which funds the organisation and is responsible to the Federal Parliament. So

in those circumstances I don’t see how anybody else could possibly have been

appointed to the job.


Treasurer, thanks for you time.


Thanks very much.