ABC Radio National — Peter Dowding Interview

ABC Radio National — Peter Dowding Interview INTERVIEW WITH PETER DOWDING ABC Radio National — Premiers Past — Sunday, 18 December 2011 ANDREW DODD: Today on Premier’s Past, we meet Peter Dowding, the Labor Premier of Western Australia from 1988 to 1990. Peter Dowding was the leader just after Brian Burke, the Premier who would later go to prison, and just before Carmen Lawrence, the nation’s first female Premier. It was a period dominated by the scandals known as WA Inc, and Dowding was right in the thick of things as the government did increasingly desperate corporate deals with characters like Alan Bond and Laurie Connell. Peter Dowding took on the role after Brian Burke chose to step down, but he had to bide his time before taking over. PETER DOWDING: Oh, it was really quite bizarre and very uncomfortable. Brian, as always, wanted to orchestrate the whole thing, and to his own personal climax, and it was always, therefore, going to be very difficult to be a sort of Premier-in-waiting. I mean, unless I’d hopped on a plane, basically, and gone oversees, I was going to be around for that period between December and February, and he was insistent that he wanted to do his term through to a complete conclusion for his, you know, autobiographical date. ANDREW DODD: It seemed that he wanted to notch up the five-year time line. PETER DOWDING: Look, the whole thing was orchestrated, and from that time on, it became clear over the couple of years that I was there that Brian was always in the background wheeling and dealing and doing deals with the feds. And, in fact, I think, although he has never admitted it to me, I have pretty good reasons to think that he orchestrated my downfall as well. ANDREW DODD: Well, we’ll talk about that in a moment. Not long after you’d been in office—we’re going forward now to April 1988—there was a poll that showed that nearly half of the respondents, 48 per cent, said they had no opinion of your performance as Premier. What was going on that they would have no opinion? PETER DOWDING: [Chuckles.] That was terrific, wasn’t it? [Chuckles.] Look, I don’t think that’s very unusual, is it? The point is that the public, generally, don’t have much knowledge of people who aren’t in the leadership position and it takes a while for the leader to stamp his or her position and become known and accepted, and I had always played a bit of a role in public life, but I hadn’t been a really high profile minister. I’d had some very high profile ministries, but they’d always been overshadowed by the way Brian really ran the joint and I think a lot of people just didn’t know who I was. ANDREW DODD: We’ll talk about WA Inc in a moment, but I think it’s important before we do that to acknowledge that other things happened in your term in office. What were your priorities walking into government? What did you want to try and achieve taking over from Brian Burke? PETER DOWDING: What had drawn me into politics in the first place was, really, the Court of Disputed Returns. I did a court case for Ernie Bridge in the Kimberley—the Court of Disputed Returns. It went for nine months, basically, up and down the Kimberley hearing witnesses, and Ernie asked if I would stand as his running mate for the North Province, the Kimberley–Pilbara Region—at the next election, and that is when I agreed to enter politics. My heart was really in social issues, and, to a significant extent, in Indigenous issues. And when I was Premier, one of the priorities I put in place was to try and elevate Indigenous issues in the way in which government made its decisions, and I formed a special cabinet subcommittee which everything had to go through which focused on ensuring quality responses to Indigenous requirements. ANDREW DODD: I want to look at something that happened early on in your term as Premier. It centres on a $5 000 donation which had been made by the Teachers Credit Society to the ALP, and this opened a can of worms in which it was revealed that there’d been a loan of some $25 million to the Teachers Credit Society and that that body was deeply involved in loans and big corporate deals that had been playing at the big end of town and racking up tens of millions of dollars in bad loans. This ended up in being exposed and the donation going back to that body. What was going on? PETER DOWDING: I don’t remember the donation going back, but the Teachers Credit Society was like a lot of organisations, financial institutions, in the 1980s, coming out of a mini-depression in the early 80s and thinking that they could play with the big boys and, of course, there was a couple of areas in which loans were made where Rothwells was involved, and, basically, there just wasn’t a proper level of prudential attention, and in some cases there were worse things going on. ANDREW DODD: This idea of people being ill-equipped to deal with the big boys at the big end of town could also be said of state government, couldn’t it? This is the issue: that Brian Burke had taken you into a policy Dowding Interview — 18 December 2011 Page 1 ABC Radio National — Peter Dowding Interview position where, effectively, the government was playing at the big end of town and playing in a corporate sense. Did you back his strategy when he initiated it and took it on? PETER DOWDING: I don’t think the government was playing in that way as you describe. In the 80s people did not have an experience of financial institutions falling over, and the idea of financial institutions that were not banks falling over didn’t concern the federal government because it didn’t control or manage those financial institutions. So, when the government originally went in and, with business, agreed to bail out Rothwells when it fell over and support the Teachers Credit Union, this was because the institutions represented places where lots of people had money on deposit that was suddenly at risk, and people felt the government had a responsibility to get in and try and help people work their way out of that situation. ANDREW DODD: Well, you raise the topic of Rothwells. This is really the thing that was at the centre of all of the allegations about WA Inc—the government’s preparedness to help Rothwells out of its own financial difficulties, first, by offering a guarantee of $150 million, and then through a series of very convoluted loans. How heavily were you involved in that negotiation and the setting up of the deals with Rothwells initially? PETER DOWDING: I was called into a meeting with a number of other ministers on a Saturday or Sunday, I think, in which the parlous state of Rothwells was laid out, and Burke’s response to it was to say that if the captains of industry were prepared to put money into assist it, then so would the government by way of a guarantee. The individual ministers had very little detail on the material, and there were merchant bankers and various advisers there who were making assertions about the state of Rothwells, and on that basis it subsequently went to cabinet and was approved. And that’s really the beginning of a very long and unpleasant involvement with Rothwells and the fallout from it. ANDREW DODD: It just seemed that the government kept on digging—you know, that old adage that when you’re in a hole, you shouldn’t keep digging. Well, that’s exactly what you were doing because it kept escalating into a worse and worse situation, ending up with the bright idea of trying to tie the rescue package for Laurie Connell’s Rothwells bank to the purchase of the Kwinana petrochemical plant. Whose idea was that? PETER DOWDING: When you say, ―you keep digging‖, that’s precisely what happened. You make a commitment, and once you’re in for $50 million or whatever the number is, and suddenly it is said to you that there’s another short-term liquidity problem, what do you do? Do you say, ―I’m going to close you down‖, and run the risks associated with that, or do you say, ―Well, we’ll find a way to support you through this liquidity period‖? If you believe that Rothwells was rotten to the core, you wouldn’t give them anything. And in the December before the election, after I had brought in my own people to look at the situation and was convinced then that Rothwells was rotten to the core, I pulled the pin on it—and to the great dismay of a lot of my colleagues and, I’m sure to the great dismay of some of the people involved in it. It was obviously a very difficult decision because the election was coming up. ANDREW DODD: My understanding of it is that under the deal, Dallas Dempster received $50 million for his half-share of this Kwinana project, Laurie Connell received $350 million for his half-share but the quid pro quo was that Laurie Connell was meant to buy off loads of dodgy Rothwells loans, thus averting the collapse of the bank and saving some 700 jobs.

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