Exclusive: Raghuram Rajan explains how to fix the economy

Professor of Finance at the University of Chicago Booth School of Business and former RBI governor Raghuram Rajan offers his prescription to revive the distressed Indian economy.


There are signs of deep malaise in the Indian economy. Growth is slowing significantly and there is currently little fiscal space available to the government to spend more. Corporate and household debt is rising, and there is deep distress in parts of the financial sector. Unemployment, especially amongst youth, seems to be growing, as is the accompanying risk of youth unrest. Moody’s just sounded the alarm on India’s credit rating. Given that in late 2017, even after the economically ill-advised demonetisation and the poorly implemented roll-out of the Goods and Services Tax (GST), Moody’s had upgraded India’s sovereign rating, it can hardly be accused of bias. Repeated government allusions to a $5 trillion economy by 2024, which would necessitate steady real growth of at least 8-9 per cent per year starting now, seem increasingly unrealistic. What is going wrong, and how do we fix it?

The government’s economic travails seem to contrast with its successes — until the recent debacle in Maharashtra — on its political and social agenda, including effectively abrogating Article 370 and building the Ram Mandir in Ayodhya. Yet these might be two sides of the same coin — the reasons why the government has succeeded in its political and social agenda may indeed also be why it has not delivered on its growth ambitions.

Legacy Problems

To be sure, Prime Minister Narendra Modi’s government inherited a number of problems when it took charge in 2014. A large number of infrastructure projects had stalled because of difficulties in land acquisition, lack of inputs like coal or gas, or the slow pace of obtaining government clearances. Existing power producers were running into difficulties as heavily indebted power distribution companies delayed payments or stopped buying. India experienced the absurdity of surplus power capacity even as power demand went unmet. As more promoters ran into financial distress, bad loans on bank balance sheets increased, slowing the flow of new credit.

The agricultural sector was also in a mess. In part, this resulted from decades of misguided government intervention such as distorted pricing and subsidies — which resulted in anomalies such as a water-short nation exporting water-thirsty rice. In part, this resulted from neglect; successive governments did little to eliminate the hordes of middlemen who took their cut as food travelled from the farm to the fork; instead, governments spent scarce resources on loan waivers, a form of misdirected cash transfer, rather than on improving farmer access to new technologies, seeds or land. Prime Minister Modi was elected, not just because his record in Gujarat suggested he would resolve these legacy issues, but also because he promised reforms that would enhance growth and employment.

The Need for Growth-Enhancing Reforms

And reforms were overdue. The liberalising growth-enhancing reforms in the 1990s and early 2000s, undertaken by governments from a variety of political leanings, focused on removing some of the shackles that constrained Indian growth, such as the requirement of hard-to-get licences to open businesses, the reservation of certain sectors for small businesses or for the state, and the high tariffs that kept Indian business uncompetitive. The NDA government under Prime Minister Atal Behari Vajpayee was the last steady reformer, but it was voted out of office before it could turn to the most difficult reforms, on the business environment, labour, land and the role of the public sector. The UPA coalition that was elected in 2004-2009 did not have the internal consensus to pass growth-enhancing reforms, while the one that followed in 2009-2014 was paralysed by scams and opposition non-cooperation. Cross-party consensus emerged only for redistribution-increasing reforms, such as the national rural employment guarantee scheme (NREGA) and the National Food Security Act. As growth slowed after the global financial crisis, the lopsided focus on redistribution put pressure on the government’s fiscal health. Starting in 2012 under finance minister P. Chidambaram, the UPA started refocusing on restoring macroeconomic stability.

As with the UPA, the successes of the Modi administration have been in redistribution. but enhanced spending without revenue growth has led to a deterioration in government finances

The Modi government initially continued this process, aiming to bring fiscal spending under control and halting the window-dressing that accompanied past budgets. It approved the RBI’s emphasis on arresting inflation. And as the mounting dud loans in the public sector banks dramatically slowed their lending, it supported the RBI’s clean-up by passing the Insolvency and Bankruptcy Code (IBC). The important GST reform, aiming to unify the Indian market and improve tax compliance, as well as the Real Estate (Regulation) Act, aiming to clean up practices in the real estate sector, were also genuine attempts to improve India’s institutional structure.

Yet, as with the UPA’s attempt to improve environmental regulation, the Modi government found that reforms that attempt to change existing practices have unintended consequences, which tend to slow activity. For instance, as promoters started recognising they could lose their firms in bankruptcy, they (rightfully) stopped treating bank loans as risk capital. Bankers, too, became more risk-averse as they saw they had to recognise losses, not just evergreen them and pass them on to their successor. That meant new sources of risk capital had to be found, not by abandoning reforms as suggested by the affected interests, but by reforming more; for instance, by improving corporate governance and attracting foreign investors or by enhancing the evaluation capabilities of Indian insurance companies and pension funds and allowing them to take more risk. It also meant the government had to de-risk projects by making it easier to acquire land and get the necessary clearances. In other words, growth-enhancing reforms needed follow-up. The government had to appreciate the unintended consequences of its actions and reform further.

The Modi government’s record here is decidedly mixed. For example, while it showed substantial political acumen in navigating the GST legislation through Parliament, the executive thoroughly mishandled the roll-out. The government creditably understood the need for remedial action. However, frequent changes to procedures and rates have undercut compliance and added to confusion and uncertainty-for instance, the prospect that GST rates for autos might be brought down has dampened auto sales recently. Moreover, follow-up tweaks have been in the wrong direction — inspectors have been given powers to stop and search vehicles, thus vitiating the intent of creating a system that provided its own incentives. Collections are far below what was anticipated, and the growth benefit less than it might have been. Given that the Centre has offered minimum revenue guarantees to the states to persuade them to vote for the Act, this is likely to add to its already onerous fiscal burden.

At least on GST, the government continues to try and improve the system, though what is needed is a clear medium-term plan based on experience, describing what will be fixed and when rather than constant short-term fine-tuning that adds to uncertainty. In other areas like banking sector reform, early attempts to improve governance of public sector banks, for example, by setting up an entity like the Bank Board Bureau, have been stifled by bureaucratic manoeuvring and lack of political will. Public sector bank boards continue to have little independence, and the new diktat on merging banks, delivered from the finance ministry, will occupy management energy which needs to be spent on cleaning up bad loans and resuming sensible lending. More problems are building for the future with the focus on Mudra lending and loan melas, even as banks are given the regulatory dispensation to overlook the rising non-payment on these loans.

As for the unfinished reforms on the business environment, land acquisition, labour and the role of the public sector, the Modi government has shown surprising timidity. Initially, it appeared to entertain the idea of reforms in these areas. However, these reforms were largely put on the back burner as soon as the Opposition alleged the government was in the pockets of business. The government did improve India’s ranking on the World Bank’s ‘Doing Business’ indicators, but while some procedures may have been simplified in Delhi and Mumbai (where the World Bank measures progress), business sentiment does not suggest that the fundamental difficulties in doing business have changed. With the growth benefits of the reforms in the Vajpayee era nearly exhausted, and with legacy problems unaddressed, growth has been slowing dramatically.

PSU bank boards continue to have little independence and the recent diktat on merging of banks will occupy management energy that needs to be spent on clearing up bad loans

As with the UPA, the successes in the five and a half years of the Modi administration have been in redistribution. So the Jan Dhan programme has rolled out bank accounts for all, the Swachh Bharat programme is building toilets for all, the Ujjwala Yojana is distributing gas connections to poor women, Ayushman Bharat is rolling out medical services to the poor, while the Mudra programme combined with loan melas is attempting to give business loans to anyone who has a need. The government has steadily increased spending on the UPA’s flagship NREGA programme.

Redistribution is a worthy goal and many of these programmes have benefitted the poor. However, enhanced spending without strong revenue growth has led to a deterioration in government finances, especially as inflation is no longer available to erode the value of government debt. Even the Comptroller and Auditor General has had to call out the government for resorting to off-balance sheet fiscal irregularities once again. Indeed, the pressure is now falling on the private sector as many government entities stretch out payments so as to avoid recognising spending.

What has gone wrong?

To understand what has gone wrong, we need to start first with the centralised nature of the current government. Not just decision-making but also ideas and plans emanate from a small set of personalities around the Prime Minister and in the Prime Minister’s Office (PMO). That works well for the party’s political and social agenda, which is well laid out, and where all these individuals have domain expertise. It works less well for economic reforms, where there is less of a coherent articulated agenda at the top, and less domain knowledge of how the economy works at the national rather than state level.

Furthermore, somewhere along the line, the political and social agenda has assumed priority, perhaps because the centre of power has more comfort with it, and it has insufficient political bandwidth and space of mind to do both. In particular, implementing the political and social agenda requires the accumulation of political power, which is achieved by populist economic measures. Growth, although it is often a stated objective, has assumed secondary importance, especially if it requires actions that may have significant political costs.

Extreme centralisation might work if it was supported by a coherent economic vision at the Centre. Previous governments may have been untidy coalitions, but they consistently took the path of further economic liberalisation, withdrawing the government from tasks it did poorly and enhancing competition. The Modi government came to power emphasising ‘minimum government, maximum governance’. This slogan is often misunderstood. What was meant was that government would do things more efficiently, not that people and the private sector would be freed to do more. While the government continues the creditable drive to automation — direct benefits transfer to recipients is an important achievement — the role of the government in many spheres has expanded, not shrunk.

Extreme centralisation, along with the absence of empowered ministers and the lack of a coherent guiding vision, ensures reform efforts pick up steam only when the PMO focuses on them, and lose impetus when its attention switches to other pressing issues.

Such extreme centralisation, coupled with the absence of empowered ministers and the lack of a coherent guiding vision, ensures that reform efforts pick up steam only when the PMO focuses on them, and lose impetus when its attention switches to other pressing issues. Often, these efforts take the form of grand gestures because the problems are large and require significant response — so we get demonetisation, bank mergers, corporate tax cuts. However, such episodic moves are not necessarily well-timed or synchronised towards a larger vision, so any associated economic benefits are diluted. Moreover, the follow-up to deal with the unintended consequences is inadequate since the line ministries are disempowered.

The starting point will be to recognise the magnitude of the problem, to not brand every internal or external critic as politically motivated, and to stop believing the problem is temporary and that suppressing bad news and inconvenient surveys will make it go away.

So, for example, the Make in India initiative — which presumably is also meant to draw foreign direct investment (FDI) and global supply chains to India — is undercut by constant fiddling with tariffs and taxes, as well as rule changes intended to favour domestic incumbents. A case in point is the RCEP trade pact, where India’s refusal to participate seemed a sudden decision. If India does not participate (though it still might), it risks becoming an even less attractive investment destination. Foreign investors have not exactly been surging to invest in India — FDI today is not much higher in dollar terms than in 2007-2008, even though the economy is much bigger [see graphic: FDI]. Unfortunately, domestic businesses have not been investing either, and the stagnation in investment is the strongest sign that something is deeply wrong.

Well of uncertainty: Regulation such as RERA, though wellintended, has exacerbated the slowdown (Photo: Chandradeep Kumar)

What can be done?

The starting point has to be to recognise the magnitude of the problem, to not brand every internal or external critic as politically motivated, and to stop believing that the problem is temporary and that suppressing bad news and inconvenient surveys will make it go away. Furthermore, even if some of the problems are legacies, the government, after five and a half years in power, needs to resolve them. A massive new reform thrust is needed, accompanied by a change in how the administration governs. Decentralisation is critical for economic growth. While the Centre has to give direction and political impetus to reforms, it cannot hold on to every rein. It has to start by empowering its own ministers, and also engage the states since many of the actions need state support. To regain the trust of the states, the Centre could start by amending the terms of reference of the Fifteenth Finance Commission, which seem to push for a reversal of the revenue devolution put in place by past commissions. A coherent agenda would include:

Put out the spreading fires

The construction, real estate and infrastructure sectors are in deep trouble, and so are lenders to it like the non-bank finance companies (NBFCs). In turn, this is hurting rural areas which relied on land sales and employment in construction for supplemental income. No doubt, some of the initial stress has mitigated, especially for well-managed NBFCs. However, a number of NBFCs still face problems, and the longer they fester, the bigger the eventual losses will be, and the more likely it will be to spread to banks that have lent to NBFCs as well as to construction projects.

Instead of pouring good government money after bad, the sector first needs to be cleaned up, starting with the NBFCs, but continuing into the big distressed developers. The starting point could be a quick asset quality review of the largest NBFCs by the RBI, with a clean chit given to those that are well-capitalised, while those that are undercapitalised should be asked to raise capital quickly, with a government-supported fund providing capital to those who cannot at a stiff price. The government is sensibly applying the IBC to NBFCs that are insolvent. In parallel, developers who are in default should be put into fast-track bankruptcy, with super-priority loans made available from the government-supported fund (if no other funding is available) so that they can complete projects. Some steady pressure should be placed on real estate developers, especially those that get financial help, to reduce the overhang of unsold properties. A full-fledged fire sale, however, is in no one’s interest.

“A massive new reform thrust is needed, along with a change in how the administration governs. decentralisation is critical for economic growth. the centre has to give direction and political impetus to reform, but it cannot hold on to every rein”

Similar attention should be paid to reviving stalled infrastructure projects. The power sector, where the government’s UDAY programme to reform power distribution companies has gone seriously off track, needs special attention — the muted investment and the distress amongst existing producers will put a ceiling on India’s future growth since power cannot be conjured up instantaneously. The Centre and states should come together to ensure power is adequately priced and metered, and that past contracts are adhered to so that producers have confidence they will be compensated. Best practices across states should be shared. There should be more competition within state-owned distribution companies, especially among units facing customers — for instance, by breaking up that function, and possibly privatising some of it. Competition could also be encouraged from other out-of-state distribution companies — including allowing producers to sell to the highest bidder on the national grid. As in the past, the Centre could offer bonuses for reforms, but unlike the case with UDAY, they should do so only when the results start coming in.

Finally, the telecom sector deserves special mention, for it is where a promising growing sector has morphed into a deeply distressed one, which is heading toward a monopoly or duopoly through much of the country. In the short run, the objective has to be to preserve sufficient competitors in the sector-once again, the Centre is creditably starting to move after disregarding mounting problems for a while. In the longer run, India should re-examine its regulatory process and ensure a level playing field within the sector.

Create an environment for investment and growth

India needs a re-energised reform programme that focuses on liberalising capital, land and labour markets. With the right attention, sectors that are distressed today, such as agriculture, construction and power, can become engines of growth.

Agricultural reforms should ensure easier access to inputs like seeds, technology, power, finance and insurance. They should allow for greater leasing of land and cooperative sharing of resources like tractors. They should effect greater connectivity, both virtual and through logistic networks, of the farmer to warehouses, rural industry and final consumers. As these reforms are implemented, constant and distortionary government intervention at every stage of production, including in pricing and procurement, should be eliminated. Much of it should be compensated by a direct cash transfer to farmers based on acreage. The broader intent should be to enable some farmers to move out of agriculture, allowing the remaining farmers to enjoy scale economies.

Land acquisition today is extremely difficult, which then impedes construction, not just of highways and railroads, but also of industrial plants, office parks and affordable housing. India needs to accelerate the mapping of land and the process of establishing ownership title, especially in the poorest states. It also needs to establish a more transparent process of determining and altering land zoning, as well as registering changes in ownership, recognising that some agricultural land will inevitably have to be used for development. Finally, while forcible land acquisition should be used extremely rarely, the Centre should draw on the best practices in states to modify the legislation on land acquisition so that it becomes easier to implement while protecting the interests of the seller.

As economist Arvind Panagariya has reiterated often, India needs to encourage firms of greater scale, which will have the productivity to make India competitive. An important element here is to allow more flexibility in labour contracts. Today, industrial firms are either forced to make their workers permanent after a year on the job, or keep them dangling on short-term contracts, where they are fired periodically so that they have no claims to permanence. Faced with this Hobson’s choice, employers ensure much of Indian labour is contractual and impermanent, so that firms have little incentive to invest in their training and workers have little job security. Government needs to amend legislation, after discussions with unions and employers, to allow for an intermediate contract where workers gain rights steadily over time (such as greater severance pay) but do not have to be made permanent. Existing permanent workers can be grandfathered.

Promote domestic competition

One spur to greater domestic efficiency is competition. India needs to increase internal competition steadily by reducing tariffs and joining free trade agreements judiciously. Exports today are import intensive, and India cannot make more in India if trade barriers are high. Indeed, one of the surest ways to take India back to the Hindu rate of growth is to reverse the steady trade and investment liberalisation begun in the 1990s. To those who argue that India is uncompetitive, its history should suggest that keeping barriers to competition high is the surest way to ensure it remains uncompetitive. As India brings down barriers, its business sector will cope, innovate and reinvent itself. This is not economic theology, it has been India’s own experience.

“Labour contracts need more flexibility. currently, indian labour is contractual and impermanent. so, firms have little incentive to invest in their training, while the workers have little job security”

To attract more investment, India has to become more predictable on tax and regulatory changes. Rather than making these changes in bureaucratic backrooms, based on dubious rationales and influence, these have to come out in the open. Proposed changes should be put out for comment, debated and, when implemented, should allow time for industry to adapt. Some regulatory agencies in India already follow this process, more need to. It may also be worthwhile having an independent watchdog economic agency (like the Competition Commission) that evaluates the impact of each new important regulation on costs, competition and productivity, and encourages rethinking where necessary. Investors will gain more confidence that regulatory changes are appropriate, and there will be less resort to an untrained judiciary for remedial action.

Labour contracts need more flexibility. Currently, Indian labour is contractual and impermanent. So, firms have little incentive to invest in their training, while the workers have little job security.

More generally, minimum government should mean reining in government where excessive, and making it more transparent and predictable where it is truly needed. Government should withdraw, where possible, from directly doing business. The recent announcement that a number of firms will be privatised is welcome, but this should not be seen primarily as a resource-raising exercise. Nor should government assets be sold to already-dominant family enterprises in the economy, exacerbating the concentration of economic power. Instead, the focus should be on creating a governance and incentive structure for the privatised firms so that their employees and assets can be used most productively for national development. That will require thoughtful design.

The government will not shrink everywhere. To improve governance, government may have to expand its capabilities, especially in areas like environmental regulation or regulating the quality of education, food and health. For India cannot overlook its service sectors, which could become new engines of growth, producing many jobs even while making its people more capable of doing those jobs. Reforms in education, healthcare, tourism and finance, easing the way for entry and investment while protecting the consumer experience, could be India’s new path to economic development. For instance, India’s doctors and hospitals could treat more of its own people, as well as the world, if India facilitated the opening of more medical colleges and hospitals. At the same time, it should make the accreditation process and the regulation of service quality transparent and rigorous so that quacks and the incompetent are ferreted out. Regulators should encourage the development of new technologies to collect information and assess customer experience, and should themselves make more use of these.

There are plenty of commissions and books that have opined on each of these issues, so the government does not have to look too far for advice. And there are plenty of Indian experts, some within the government itself, who can guide the reform process in specific areas. However, this requires the government to trust and empower expertise, including in its own institutions, as it manages the reform process.

An unconstrained government, bulldozing its way by empowering its investigative and tax agencies, will cow valuable criticism, paralyse officials and make businesses wary about long-term investment.

There is a tendency for those in power to want more control, and this government is no exception, especially given the social and political agenda it is focused on. Yet an unconstrained government, attempting to bulldoze its way by empowering its investigative and tax agencies, will cow valuable criticism that allows it to adjust course in a timely way, paralyse its own officials who fear similar actions by future governments, and make business wary about long-term investment. Our investigative and tax agencies should be professionally focused on true and egregious criminality — is it not worrisome that no large bank fraudster has been brought to book in recent years? However, professionalism also means agencies should not be permitted to go on fishing expeditions, should be wary of appearing to criminalise all business, and should certainly not give the impression that they are being used for political retribution.

On the tourist track: Tourism as well as healthcare, education and finance could be the new path to development (Photo: Shutterstock)

The immediate challenge

India is in the midst of a growth recession, with significant distress in rural areas. At the same time, economic commentators like Ananth Narayan place India’s true consolidated fiscal deficit at between 9 and 10 per cent of GDP. These are alarming numbers, especially as India’s debt is no longer being eroded by high rates of inflation. India needs fiscal space to deal with its legacy problems, as well as to target resources to its most needy citizens in rural areas. India has to cut back on unneeded spending, become more transparent on the size of the fiscal challenge, and put in place mechanisms that will get us back to fiscal health over the medium term.

Demand is weak, which ordinarily means more stimulus to encourage private spending. With the stress in the financial sector, monetary policy has limited effectiveness. On the fiscal side, recent corporate tax cuts, which were a short-term boost to stock prices, may not deliver much-needed business investment when there are so many other impediments. Given scarce resources, India should not jump immediately to a permanent tax cut for the urban middle class to boost consumer demand. Instead, while growth-boosting reforms are being put in place, scarce fiscal resources are perhaps best targeted toward supporting the rural poor — for instance, by bolstering the NREGA programme and by funding rural road construction.

Instead of building gigantic statues to national or religious heroes, India should build more modern schools that will open its children’s minds, make them more tolerant and help them hold their own in the competitive globalised world of tomorrow.

India can obtain more fiscal room today if it shows that it recognises the need to bring government spending in line with national savings over the medium term. It has to be careful about seemingly easy ways out. Privatisation, for example, is worthwhile if well-designed, but whether a mutual fund buys a government bond or stock sold by the government in a privatisation will not alter the fact that the government is absorbing scarce national resources for spending. Similarly, the government cannot endlessly take on contingent liabilities without recognising they will have to be paid for — recent proposals to boost bank deposit insurance to Rs 5 lakh per individual, while popular, will mean an enormous liability. The costs will be seen when weak cooperative banks, that will gain more deposits as insurance limits are boosted, fail. Instead, deposit insurance should be raised only in parallel with improvements in the governance and regulation of the cooperative sector. The broader point is that India needs a full accounting of its contingent liabilities, including on entitlements like food security and Ayushman Bharat, if it is to give a convincing picture of its fiscal health.

Finally, India needs to lay out a credible roadmap and time frame over which it will return to fiscal rectitude. As suggested by the FRBM committee, a commitment to bring public debt down to a target level over the medium term, and the creation of a watchdog institution like a fiscal council to limit creative accounting, will ensure India has some fiscal space to act today. Of course, India has consistently postponed fiscal consolidation when consolidation has required hard choices. Much as with inflation targeting, the government will have to think long and hard about how it can limit its own future flexibility. The rewards in terms of low interest rates and fiscal space will be well worth it, much as inflation targeting has brought India low inflation and a stable exchange rate. It does mean, however, that the government will have to accept institutional constraints on its own actions.

The Political and Social Agenda

Majoritarianism is popular across the world, and India is no exception. Apart from fomenting social tension, which India can ill afford, Hindu nationalism will detract from economic growth — which will exacerbate social tension further. Instead of allowing the government’s political and social agenda to crowd out its economic agenda, would it not be better if economic well-being was the route to political and social regeneration?

The best way to integrate our minorities is to give them a better pathway through good schools and excellent liberal colleges to the promise of India. The best way to integrate our peripheral states into the mainstream is to give them stronger justification to be part of India, to make full economic integration irresistible. But this means embracing a different path to the one India is on. It requires more political decentralisation even while India integrates economically. It also means different economic policy choices. For instance, instead of building gigantic statues to national or religious heroes, India should build more modern schools and universities that will open its children’s minds, making them more tolerant and respectful of one another, and helping them hold their own in the competitive globalised world of tomorrow.

The actuality of robust inclusive economic growth is a far better way of achieving the agenda of a strong united India. India has a powerful government today, with a charismatic popular prime minister. It can hope that growth will revive in due course and it almost surely will. But it will be far less growth than what India owes its youth. Hopefully, the government will read the writing on the economic wall.


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“PEACE, AT ALL COSTS” – By Des Kelly


An encouraging Media Release, to say the least. 

With the upcoming Elections almost upon us, the National Peace Council’s endeavour to have peace at all costs, is the best news that I have heard, for a long time, and, as such, this is something that must be read as widely as possible.

Soon, there will be a new President. He will have to ensure that the change-over will be effected with as little chaos as humanly possible. He will have to understand that IF there are any possible changes of policy affecting the PEOPLE of Sri Lanka, they WILL HAVE TO BE changes for the GOOD!!.. 

A weak President is useless anyway. The new one must be a “leader” and not a “follower”. His 2nd in Command, the Prime Minister (whoever it is), or will be, in the future, will have to realize that, where the President is the Captain of the Ship, so to speak, he, the P.M. will have to “steer” the ship in safety, for the entire journey. This said, I congratulate the Peace Council of Sri Lanka, hoping against hope, that, after next week, there will be “Peace at all costs” for our beautiful Motherland.  

 Desmond Kelly.
(Editor-in-Chief)  eLanka.


National Peace Council

of Sri Lanka

12/14 Purana  Vihara Road

Colombo 6

 Tel:  2818344,2854127, 2819064


E Mail:  npc@sltnet.lk

Internet:  www.peace-srilanka.org


Media Release


The outcome of the forthcoming presidential election on November 16 is fraught with uncertainty with anxiety about the future.  There is concern about both the continuation of policies on the one hand and the reversal of policies on the other hand, which reflects a polarized polity.  Whether in economic development, health, education or reconciliation, government policies promoted by one government are abandoned by the successor government.  This threatens to be the case even with international agreements which can have far reaching consequences.  As a result Sri Lanka has not enjoyed the benefit of change with continuity which is essential for political stability and economic development.

The National Peace Council urges the presidential candidates to publicly pledge at this time that whoever wins the election, they will seek a minimum consensus between political parties with regard to those areas in which governments tend to reverse the policies of their predecessor government. They need to take the position that even though presidents change the state continues for national and international legality. This could be the non-partisan task they set for themselves before the dissolution of parliament for the general elections that are to follow.  For a start, they could seek such minimum agreement on national security, economic development and constitutional reform so that whatever government is in power, they will build on the positive legacy of the government that came before and not engage in politically motivated policy changes. 

There needs to be a process of consensus building on particular issues.  Sri Lanka has failed for too long to turn the corner and to get to a new level of development that is sustained.  This has been especially the case with the ethnic conflict which has been brought into focus time and again by politicians of all political parties in their quest for election victories.  In particular, the new president who assumes power needs to function within the restrictions of power put in place by the 19th Amendment.  The new president will need to utilize the moral authority he gets upon securing victory to build consensus on longstanding problems that remain unresolved keeping in mind that he will be the president of all Sri Lankans and not merely of the majority that voted him into power. 

Governing Council

The National Peace Council is an independent and non partisan organization that works towards a negotiated political solution to the ethnic conflict in Sri Lanka. It has a vision of a peaceful and prosperous Sri Lanka in which the freedom, human rights and democratic rights of all the communities are respected. The policy of the National Peace Council is determined by its Governing Council of 20 members who are drawn from diverse walks of life and belong to all the main ethnic and religious communities in the country.


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Prime Minister – Speech, State Dinner – The Rose Garden, The White House – Friday 20 September 2019



The Hon. Scott Morrison MP
Prime Minister





PRIME MINISTER: Well he got me, Dame Mary, my great, great aunt would be very, very proud.

Mr. President, First Lady Mrs. Trump, thank you so much Mrs. Trump for the amazing night you’ve created for us here.

Ladies and gentlemen, friends, Jenny and I are truly grateful for this wonderful honour and the hospitality that you Mr. President the First Lady have extended to us and to our country.

As we join you here tonight, in the home, your home, and that of the American Presidency.

This of course was once the home of President Teddy Roosevelt who I’ve always greatly admired. He was also a New Yorker, he was also unconventional.

He was no captive of the establishment. He was also accomplished. Indeed some might say a maverick. He was his own man. He was a do-er and above all he was inspired by the great character of the American people. There is nothing he believed his nation could not do.

And this is the heart of American greatness. Mr. President, your belief in America and its people echoes this great spirit of that great president.

And it’s backed up by your life’s experience and the passion and work of your Presidency.

And Mrs. Trump, your kindness, warmth, and quiet grace in the welcome to Jenny and I and especially here tonight has been very special. And as Jen has said, very sweet.

General Washington once said it is infinitely better to have a few good men than many indifferent ones. But the same is true of the friendship of nations.

Australia will never be accused of a indifference in our friendship to the United States.

And tonight Mr. President we are reminded that the United States feels the same way especially under your leadership.

I’ve noticed tonight the Marines who are on duty tonight, and I thank you for your service. But not just to the United States but to our alliance as well.

In 1943 the US Marine 1st Division was engaged in the first ever large scale U.S. offensive against the Japanese at Guadalcanal. At the same time Australian forces were in New Guinea also locked in the fiercest of some battles against the Japanese.

We both prevailed each doing our bit. Each carrying our own weight.

When the US Marine 1st Division arrived in Melbourne after six months of heavy fighting they were welcomed with a rendition of the Australian fake anthem Waltzing Matilda.

More than 75 years later the first division still plays Waltzing Matilda whenever they ship out.

It’s true Mr President, we have been in a lot of battles. But we have also stood together to realise the dividend of peace. Prosperity that comes from our embrace of enterprise and free markets and the rule of law. Our great immigration societies, education, liberal democracy and a commitment to the fulfilment of human potential.

This has been importantly included in our work together to expand the frontiers of science, technologies, and exploration.

To reach into space as we first did together 50 years ago.

When you launched, and we kept Apollo 11 in contact through the honeysuckle project, with earth and we beamed those most famous of images of all time to an enthralled and inspired humanity.

Events that no doubt inspired a young Andy Thomas from Adelaide who’s with us here tonight to launch into space on the Endeavour. Almost 30 years later. And now we hope to do this again under the vision of your Presidency, Mr President.

Our generation and our times call this great republic and our great Commonwealth to live up to the calling of young free nations to continually point the way to freedom.

In Australia we are reminded of this friendship by the great spire with the eagle atop that looks out across our nation’s capital in Canberra.

And earlier today we gifted a bronze statue of Les ‘Bull’ Alan, an Australian soldier carrying a wounded Marine off the battlefield on steep slopes in New Guinea in 1943 for is gallantry he was awarded the US Silver Star and the Military Medal whilst fighting alongside US troops.

Mr President we would be honoured if you would permit Australia as a gift to erect a life-sized memorial of this image here in Washington, at a place of your choosing, as a constant reminder of our dedication to our American friends and the bonds we have formed.

But for now ladies and gentlemen please join me in a toast.

To 100 years of mateship, and to 100 more.

To the people of these United States to the President and his magnificent First Lady.

And may God bless America.


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Prime Minister

Scott Morrison


Friday 28 June 2019


This week is Sir Peter Cosgrove’s last as Australia’s 26th Governor-General.

On behalf of the Government and people of Australia I thank Sir Peter and Lady Cosgrove for their service over the last five years.

Sir Peter has been one of our most approachable Governors-General.

Australians from all walks of life felt like they knew this Governor-General. It didn’t matter if it was a palace or a pub, Sir Peter would shake your hand, look you in the eye and start a conversation.

Sir Peter concludes a lifetime of public service to Australia.

He commenced his studies at the Royal Military College, Duntroon in 1965 and was commissioned as a Lieutenant in 1968. He led the INTERFET peacekeeping mission to East Timor in 1999 and rose to Chief of the Defence Force in 2002. General Cosgrove retired from the ADF in 2005 after 40 years’ service.

Sir Peter has always taken an active role in supporting, encouraging and engaging with the men and women of the Australian Defence Force.

General Cosgrove’s initial retirement in 2005 was interrupted with a request to oversee the rebuilding after Cyclone Larry, as well as various community and business appointments, and culminated in him being asked to be Governor-General in 2014. 

For the past five years, Sir Peter and Lady Cosgrove have served Australia with distinction.  

Over the course of his time as Governor-General, Sir Peter and Lady Cosgrove visited over 200 local communities across Australia. One third of all their activities have been in regional and rural communities. They have even visited inmates in our prison system.

Their Excellencies have made a particular effort to engage with young Australians. Last year, 25,000 school students visited Government House and most had the opportunity to ask questions of the Governor-General. Sir Peter is the first Governor-General to regularly Skype with classes in remote schools.

Australia is grateful for their commitment to our country over a lifetime.

Jen and I wish them a long, happy and uninterrupted retirement.


 Contact: Rosa Stathis, 0417 669 223

The Hon. Scott Morrison MP, Sydney

Press Office of the Hon Scott Morrison MP, Prime Minister, Canberra


IMPORTANT: This message, and any attachments to it, contains information  that is confidential and may also be the subject of legal professional or other privilege. If you are not the intended recipient of this message, you must not review, copy, disseminate or disclose its contents to any other party or take action in reliance of any material contained within it. If you have received this message in error, please notify the sender immediately by return email informing them of the mistake and delete all copies of the message from your computer system. 

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Prime Minister – Media Release – Ministry



Prime Minister


Sunday, 26 May 2019



Australians have re-elected our Government to get back to work and get on with the job of delivering for all Australians as they go about their own lives, pursuing their goals and aspirations for themselves, their families and their communities.


My Government’s new Ministry brings together the experience and stability of service in key portfolios, while bringing in new members that will add their own experience, skills and passion to the job ahead.

My new Ministry will be tasked with delivering our commitments to:

  1. Create 1.25 million more jobs over thenext five years
  2. Maintain budget surpluses and pay down debt
  3. Deliver tax relief for families and small businesses
  4. Guarantee increased funding for schools, hospitals, medicines and roads
  5. Keep Australians safe, including online, and keeping our borders secure

The Ministry maintains record representation of women in the Cabinet, including Australia’s first female Minister for Agriculture, Bridget McKenzie, while Marise Payne adds the role of Minister for Women to her responsibilities as Minister for Foreign Affairs. Australia will have its first Indigenous Cabinet Minister in Ken Wyatt as Minister for Indigenous Australians. Ken will be supported by a new National Indigenous Australians Agency, attached to the Department of Prime Minister and Cabinet.

A key focus for all of my Ministers and their Departments will be lifting performance on government service delivery. This will include congestion busting on regulatory and bureaucratic roadblocks, making better use of technology and better integrating service delivery across portfolios. The goal is to make it easier to deal with and access the Government services Australians rely on. Ben Morton be Assistant Minister to the Prime Minister and Cabinet.

Stuart Robert joins the Cabinet as Minister for the National Disability and Insurance Scheme (NDIS) and Minister for Government Services. A new Services Australia agency will be established, along the lines of Services NSW, to drive greater efficiencies and integration of Government service delivery and making best use of technology and digital applications.

Top of the list for improving services will be ensuring we deliver on the National Disability Insurance Scheme, working to our goal of the NDIS supporting 500,000 Australians by 2024/25. The NDIS is a major social reform and there is much work to do to improve the delivery of these services on the ground.

Our economic team will be led by Josh Frydenberg as Treasurer and Mathias Cormann as Minister for Finance; delivering Australia’s first Budget surplus in 12 years and tax relief for hard-working Australians and their families.

They will be supported by Michaelia Cash as Minister for Employment, Skills, Small and Family Business in fulfilling our pledge to create 1.25 million more jobs over the next five years and will be supported by Steve Irons as Assistant Minister for Vocational Education, Training and Apprenticeships. Christian Porter will take on the role of Minister for Industrial Relations in addition to his duties as Attorney-General, to create fairer workplaces and enforce the rule of law through the Australian Building and Construction Commission.

The Deputy Prime Minister will continue in his role delivering our $100 billion National Infrastructure Programme, including the National Water Grid, supported by Alan Tudge, who has been promoted to Cabinet, to continue his work of congestion busting in our cities and implementing our plan for Australia’s future population.

The economic team will also be supported by Michael Sukkar as Assistant Treasurer and Minister for Housing to implement our First Home Loan Deposit Scheme, as well as more affordable housing and Jane Hume taking to the role of Assistant Minister for Superannuation, Financial Services and Financial Technology.

Karen Andrews, as Minister for Industry, Science and Technology will work closely with industry stakeholders to create more and better paid jobs in traditional and emerging industries, and to continue championing science, technology, engineering and mathematics as key career paths for women.

As the Minister for Indigenous Australians, Ken Wyatt will be focused on delivering our Closing the Gap refresh, in partnership with Aboriginal and Torres Strait Islanders and the states and territories.

As the National Broadband Network nears full roll out and social media becomes an even more prominent front in the fight to keep Australians safe, Paul Fletcher, as Minister for Communications, Cyber Safety and the Arts brings extensive experience and insight to the task.

In social policy, Anne Ruston has been elevated to Cabinet as Minister for Family and Social Services and Luke Howarth as Assistant Minister for Community Housing, Homelessness and Community Services.

As Minister for Health, Greg Hunt will lead the charge on mental health, in particular combating youth suicide. In coming months he will lead an implementation forum of the nation’s experts to deliver on the government’s youth and Indigenous mental health initiatives.

I will also appoint a Minister for Aged Care and Senior Australians and a Minister for Youth and Sport in Richard Colbeck who will ensure there is a strong voice for the issues facing younger and older Australians, particularly as the Royal Commission into Aged Care Quality and Safety continues.

Dan Tehan, as Minister for Education, will have a laserlike focus on boosting the outcomes of Australian students, working closely with early childhood educators, states, territories and tertiary education providers.

Australia’s regions have suffered through fire and flood in recent months and David Littleproud as Minister for Water Resources, Drought, Rural Finance, Natural Disasters and Emergency Management will serve as an important voice for our regional communities at the Cabinet table. Matt Canavan as Minister for Resources and Northern Australia will continue our government’s work to support our mining and resources industries and help develop Northern Australia.

Our experienced foreign affairs and national security Ministers in Marise Payne as Minister for Foreign Affairs, former Army Reserves Brigadier Linda Reynolds as Minister for Defence, Peter Dutton as Minister for Home Affairs and Simon Birmingham as Minister for Trade, Tourism and Investment will help guide our country through the uncertain times and global economic headwinds. They will be supported by Alex Hawke as Minister for International Development and the Pacific and Assistant Minister for Defence helping drive our Pacific ‘step up’ agenda.

Sussan Ley will return to Cabinet as Minister for the Environment with a focus on practical and local environmental outcomes as well as waste reduction and recycling, assisted by Trevor Evans. Angus Taylor will continue as Minister for Energy and his portfolio will take on Emissions Reduction to ensure we have a strong focus on lowering Australians’ power bills and meeting our 2030 emissions targets. Warren Entsch will also serve as Special Envoy for the Great Barrier Reef.

After consulting with the Minister for Foreign Affairs, I intend to recommend to the Governor-General that Arthur Sinodinos be appointed Australia’s next Ambassador to the United States of America and I intend to recommend to the Governor-General that Mitch Fifield be appointed our next Ambassador to the United Nations. They would be exceptional representatives of Australia and our country’s interests abroad. Both Senators have made enormous contributions in their public service and were given the opportunity to continue their service in the Ministry and Cabinet.

My Government has a significant agenda to deliver and we are ready to get back to business. I have high expectations of my Ministry and clear goals for each of their roles.

It is important for the future of our country that we meet those goals and deliver for Australia.

Media contact: Rosa Stathis, 0417 669 223
Prime Minister’s office


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Prime Minister


Minister for Health


Thursday, 2 May 2019


A strong economy provides millions of Australians cheaper and free medicine

A re-elected Morrison Government will invest $308 million to cut the cost of life changing prescription medicines for over 1.4 million Australians with chronic conditions who require multiple medicines.

This will help Australians suffering from chronic conditions such as heart disease, high cholesterol, arthritis, asthma, diabetes and cancer.

From 1 January 2020 the threshold to receive free or further discounted medicines through the Pharmaceutical Benefits Scheme (PBS) will be lowered by 12 scripts for pensioners and concession card holders and the equivalent of 2 scripts for non-concession card holders.

Prime Minister Scott Morrison said pensioners and families would qualify much sooner for free or further discounted PBS medicines.

“This change will save patients up to $80 per year but more importantly it means over one million Australians will be able to access free medicine even quicker,” Mr Morrison said.

“Families who require multiple medicines per month and pensioners with multiple chronic conditions will get the most benefit.

“Our strong economic management means we are providing Australian patients with access to life-saving and life-changing medicines quicker than ever before.”

Health Minister Greg Hunt said the PBS covered over five thousand brands of medicines, which without subsidy could cost tens or hundreds of thousands of dollars for patients.

“Through our subsidy of PBS medicines the cost has been reduced on average by 89 per cent,” Mr Hunt said.

“We have a clear policy to list every new medicine on the PBS recommended by the independent experts the Pharmaceutical Benefits Advisory Committee, in stark contrast to Labor.

“Since 2013 we have made over 2000 new medicines listings on the PBS through an investment of over $10.6 billion.

“Labor never decreased the safety net when they were in Government and they stopped listing medicines on the PBS.”

In 2011 when, the current leader of the opposition, Bill Shorten was Assistant Treasurer, Labor took the unprecedented step of stopping the listing of new medicines on the PBS.

Labor’s 2011-12 Budget stated “given the current fiscal environment the listing of some medicines would be deferred until fiscal circumstances permit”[1]. This included medicines for asthma, chronic obstructive pulmonary disease, endometriosis and IVF amongst others. A strong economy ensures that the Morrison Government is able to invest in essential health services.

Recent new PBS listings for lung cancer were costing patients $88,000 per year, cystic fibrosis $250,000 a year and arthritis over $16,000 per year.

Through the PBS Australian patients access medicines for $6.50 per script for concession card holders or $40.30 per script for general patients in 2019.

The Morrison Government’s plan for Strengthening Australia’s World-Class Health System is providing Australians with access to quality medical care, record hospital funding, affordable life-changing medicines and breakthrough research for new drugs and treatments.

Medicare funding is at record levels. Almost nine out of 10 Australians who visit the doctor have no out of pocket costs with GP bulk billing rates at a record 86 per cent, up from 82 per cent under Labor.

Hospital funding is up 60 per cent since Labor left office in 2013 and the Morrison Government is providing an additional $31 billion for hospitals from 2020-21 to 2024-25 to employ more nurses, doctors and specialists, delivering – in partnership with the states and territories – more surgeries and medical services.

Media contact: Rosa Stathis, 0417 669 223

Coalition Campaign Headquarters

[1] 2011-12 Health Portfolio Budget Statement, outcome 2, page 121,http://www.health.gov.au/internet/budget/publishing.nsf/Content/2011-2012_Health_PBS


IMPORTANT: This message, and any attachments to it, contains information that is confidential and may also be the subject of legal professional or other privilege. If you are not the intended recipient of this message, you must not review, copy, disseminate or disclose its contents to any other party or take action in reliance of any material contained within it. If you have received this message in error, please notify the sender immediately by return email informing them of the mistake and delete all copies of the message from your computer system. 

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Prime Minister


Wednesday, 1 May 2019


More support for older Australians

The Morrison Government will continue to prioritise better support for older Australians by investing in a new targeted research centre, funding a new program to combat loneliness while ensuring the aged care workforce meets growing demand in the future.

$34 million will be provided to establish a new Aged Care Workforce Research Centre, which will examine new ways to deliver care for older Australians and training and education for aged care providers, drawing on the world’s best practice.  

Prime Minister Scott Morrison said older Australians deserve our support.

“Older Australians have built our country and they deserve our respect and support for the choices they want to make.

“This funding will deliver better support and care for older Australians, while ensuring we build the workforce to meet the demands of an aging population.

“As a nation we must continue to support our older Australians and I remain absolutely committed to doing more.

“A strong economy means we can make these important decisions and invest in the essential services Australians rely on – without higher taxes.”

For some older Australians, retirement brings new challenges and stresses and sometimes that can lead to social isolation and loneliness, with a third of all seniors living alone.

A re-elected Morrison Government will invest $10 million to develop a Seniors Connected Program to address the silent battle of loneliness that thousands of older Australians live with every day.

The program will work with local community groups, including schools and sporting clubs, as well as with grassroots organisations dedicated to supporting older Australians.

Funding will boost support for organisations like the Friends for Good phone service, which offers support services outside normal business hours and on weekends, while also expanding Village Hub projects across the country.

Today more than 1.3 million Australians access or use some form of aged care, with that number expected to grow to an estimated 3.5 million Australians by 2050. This will have a profound impact on the demand for skilled workers within the aged care sector.

A re-elected Morrison Government will prioritise the growth area of aged care with the goal of reaching 475,000 aged care workers in Australia by 2025, with significant growth projected in personal care workers, nurses, support staff and allied health professionals.

Aged care will be the first sector where a pilot program will be undertaken under the Morrison Government’s $41.7 million Skills Organisations package to support future jobs growth.

The Morrison Government will expand the Community Visitors Scheme which aims to improve the quality of life of residents of aged care homes and consumers of home care packages who are socially isolated or lonely and would benefit from a friendly visitor.

The Scheme helps to establish links between people living in aged care homes and their local community. It can act as a vehicle for intergenerational connection, providing young Australians with the opportunity to talk with and learn from older Australians.   

Part of the Seniors Connected Program will encourage volunteering activity by Australia’s seniors. Many senior Australians choose to volunteer because they still have so much to contribute to the community. Volunteering offers connection and a sense of purpose. 

Media contact: Rosa Stathis, 0417 669 223

Coalition Campaign Headquarters


IMPORTANT: This message, and any attachments to it, contains information that is confidential and may also be the subject of legal professional or other privilege. If you are not the intended recipient of this message, you must not review, copy, disseminate or disclose its contents to any other party or take action in reliance of any material contained within it. If you have received this message in error, please notify the sender immediately by return email informing them of the mistake and delete all copies of the message from your computer system. 


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Prime Minister

Minister for Cities, Urban Infrastructure and Population


Wednesday, 1 May 2019


New projects to get Queenslanders home sooner and safer

The Morrison Government will fund thirteen new congestion-busting projects across South-East Queensland with a further $226.25 million funding boost.

Prime Minister Scott Morrison said the projects would help thousands of people living in South-East Queensland.

“People are sick of sitting in traffic and these local and practical measures will help people get home sooner and safer,” Mr Morrison said.  

“By managing money and running a strong economy we are able to invest record funding in road and rail projects which improve the lives of so many Queenslanders.

“This funding will fix local traffic pinch points and bottlenecks that have the most impact on congestion, helping everyone get home sooner.”

Minister for Cities, Urban Infrastructure and Population Alan Tudge said these projects make it easier for people to get onto the train and easily accessible station carparks are critical to this. 

“These three new commuter car parks will take up to 1,200 cars off the road,” Mr Tudge said. 

“This entire package is a transport strategy that is smart and clear and will make a tangible effect.”

The projects include:

  • Commuter car parking at Beenleigh Station
  • Commuter car parking at Loganlea Station
  • Commuter car parking at Coomera Station
  • Upgrading the intersection at Oxley Drive and Brisbane Road, Arundel
  • Upgrade of High Road and Easterly Street between Sabre Street and Old Logan Village Road, Waterford
  • Upgrading the Henry Road-Dohles Rocks Road, Griffin
  • Upgrade the Klinger Road & Boardman Road intersection, Kippa-Ring
  • Upgrading Beams Road between Lacey Road to Handford Road, Bracken Ridge
  • Level crossing removal at Boundary Road, Coopers Plains
  • Upgrading Rochedale Road and Priestdale Rd intersection, Rochedale
  • Upgrading Beaudesert-Beenleigh Road between Milne St to Tallagandra Rd, Beenleigh
  • Upgrading Chambers Flat Road between Park Ridge Road to Derby Road, Park Ridge 
  • Upgrading the Kenmore Roundabout at Moggill Road, Kenmore

The projects will bolster the significant investment across South-East Queensland that includes an additional $500 million for the M1 between Daisy Hill and the Logan Motorway.

It also includes the recently completed Gateway Upgrade North project from Nudgee to Bracken Ridge, which would not have been possible without a $861.8 million Coalition investment.

There has also been a $112 million investment for Stage 3a of the Gold Coast Light Rail project following $95 million for Stage 2.

In February the Morrison Government pledged to work with the State Government and local Councils to develop a City Deal for the region.

These commitments are all part of the Liberal National plan which is seeing $25 billion invested in road and rail projects across Queensland.

Investments across South East Queensland include:

  • M1 Pacific Motorway Upgrade Program – $1.775 billion, including:

o   Gateway Merge – $115 million

o   Eight Mile Plains to Daisy Hill – $500 million

o   Daisy Hill to Logan Motorway – $500 million

o   Mudgeeraba to Varsity Lakes – $110 million

o   Varsity Lakes to Tugun – $500 million

  • Gateway Motorway – Bracken Ridge to Pine River – $800 million
  • Gateway Upgrade North – $861.8 billion
  • Brisbane Metro – $300 million
  • Gold Coast Light Rail Stages 2 and 3A – $207 million

Regional Queensland is also receiving significant investments to better connect the regions including:

  • Bruce Highway Upgrade Program – $10 billion, including:

o   Pine River to Caloundra Corridor – $1.42 billion

o   Cooroy to Curra Section D – $800 million

o   Rockhampton Ring Road – $800 million

o   Mackay Ring Road Stage 1 – $397.9

  • Toowoomba Second Range Crossing – $1.1 billion

Media contact: Rosa Stathis, 0417 669 223

Coalition Campaign Headquarters: T: (07) 3557 7533


IMPORTANT: This message, and any attachments to it, contains information that is confidential and may also be the subject of legal professional or other privilege. If you are not the intended recipient of this message, you must not review, copy, disseminate or disclose its contents to any other party or take action in reliance of any material contained within it. If you have received this message in error, please notify the sender immediately by return email informing them of the mistake and delete all copies of the message from your computer system. 


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