Paul Keating senses the political danger of the loans affair. For a start its mere name has a haunting resemblance to the 1975 loans affairs which brought down the Whitlam Government.
Unlike Whitlam, Keating has engaged in decisive early damage control. First, he has taken the wind out of Jeff Kennett’s sails by giving him what he wants: lots of extra loan-raising capacity.
The essence of the Federal Opposition’s complaint is that the Treasurer, John Dawkins, hid from the Loan Council and its members (the Premiers of the States) the fact that Victoria had borrowed well beyond Loan Council authority, and further that he hid this from the public and misled the Parliament about it.
Remember the accusation against Whitlam: that the Commonwealth had borrowed beyond Loan Council authority. Remember Whitlam’s implausible defence: that the 20-year loans were exempt from Loan Council approval because they were “”temporary”.
Keating’s action has been smarter. After last week’s Commonwealth-Victoria agreement, Kennett is unlikely to co-operate in hounding the Treasurer. Mr Kennett’s new loan-raising capacity is ostensibly to bail out the state after the ravages of Labor, but it will also be used to fund retrenchment for thousands of state public servants unneeded after Kennett hacks into the public sector. Keating is apparently willing to wear that one.
Keating has made noises that Victoria must behave in a socially cohesive manner, but that will do nothing to stop Kennett’s industrial-relations policy from going through.
In the interests of Australia’s long-term financial stability and to ensure the stability of the currency, Keating has behaved like a statesman and given Victoria what it needs to get itself together again. As a completely incidentally side-effect, Victoria and Jeff Kennett will do nothing to attack Dawkins.
The second act of damage control is Keating’s determination to keep Dawkins away from the Senate committee inquiry that has been set up to investigate the affair. A Dawkins appearance would be especially politically dangerous for Labor. Labor is in a 3-4 minority on the committee against three Liberals and a Democrat. Moreover, one the of the Liberals is the formidable Bronwyn Bishop. Her questions would be newsworthy and damaging enough, leave aside the answers.
However, Keating’s refusal to permit Dawkins to expose himself to the “”unrepresentative swill” of the Senate committee is on very solidly based on constitutional and legal grounds.
The Constitution provides that the powers, privileges and immunities of each House, their members and committees shall be the same as the House of Commons until the Parliament provides otherwise.
In the 1992 loans affair, the powers and immunities compete. On one hand, the Senate or a committee of it, can demand anyone appear before it and answer any question. Failure can result in jail, for whatever period the Senate determines. On the other hand, Dawkins can claim immunity as a Member of the House of Representatives.
Standing Orders of both Houses provide that if a Member of the other House is to be called, that member must agree. But even if that member agrees, the House he or she is a Member of can still forbid attendance. Dawkins has said he will not attend, but even if he wanted to, Keating (with superior numbers in the House) could stop him.
It is clear why Keating wants Dawkins not to attend at all. Erskine May in House of Commons Practice@ says that once a Member submits to questioning he is treated like any other witness. He cannot pick and chose which questions to answer.
However, an interesting question arises. What if the Senate committee calls the Secretary of the Treasury, Dr Michael Keating. There is a precedent: the 1975 loans affair. In that instance, Sir Frederick Wheeler simply told the committee that his Minister had instructed him not to answer and he would not. It was a claim of Executive privilege. The Senate committee did not press the issue and it rested.
The precise extent of Executive privilege to prevent parliamentary scrutiny is untested in Australia. In America, of course, Congress can demand answers from the Executive. In Australia, because our Executive is the Crown, the legislature has been more reluctant to flex its muscle. And the legislature has often been controlled by the Executive anyway. Our powers are less separate than in the US.
The guidelines tabled in the House in 1978 on official witnesses’ appearance before committee specifically states that Loan Council documents and proceedings attract privilege. But, of course, the issue here is the fact that the extra Victoria loans were not made part of Loan Council documents and proceedings.
Legalities aside, there is a greater political danger in not appearing. Dawkins will be unable to rebut other evidence before the committee and thus might attract an adverse finding.
In any event, the inquiry is a sleeper that may stir any time in the lead up to the next election. Another lose cannon is the NSW Premier, John Fahey, who says that as a member of the Loan Council he was misled by Dawkins’s conduct and wants retribution
Recalling the Whitlam loans affair, there was another conservative Premier acting as a dangerous lose cannon. Gosh, history is a funny thing.