MITCHELL: Prime Minister Julia Gillard, good morning.
PM: Neil, good morning.
MITCHELL: And congratulations on being Prime Minister.
PM: Thank you very much. I've sprinted in to your Canberra studio after a very long press conference. So I'm very, very sorry to have kept you waiting.
MITCHELL: Oh no, I understand. We've been taking parts of the press conference as well. Could I- I won't keep you too long- if we can get some of the detail. 20th of May, Simon Crean said the 40% tax was non-negotiable. 26th of May, Wayne Swan, Deputy Treasurer or Treasurer rather now Deputy Prime Minister, said the 40% tax was non-negotiable. Where's their credibility?
PM: Well this is a completely different tax structure Neil. We've got rid of the resource super profits tax proposal and replaced it with two arrangements- a mineral resources rent tax and a petroleum resources rent tax. So yes, it is structured differently. And Neil I've obviously stamped my authority on these negotiations, the way I wanted them conducted. And I wanted to reach an outcome that got us a fairer share of the mineral wealth, but also got us in a situation where we could have some goodwill and keep going forward. And we've done that.
MITCHELL: It's reported today that Wayne Swan's a bit grumpy because he feels he's been made to look a bit silly. Is that right?
PM: Well that's completely ridiculous Neil. Wayne Swan has been sleeves rolled up in a windowless room for a couple of days. You know, flew straight back in from the G20. One moment he's shaking hands with President Obama. The next he's here in Canberra working very, very hard with Minister Martin Ferguson alongside him to get this breakthrough that we were able to announce this morning.
MITCHELL: Am I correct in understanding that the new formula brings in $1.5 billion a year less?
PM: It's Neil- just to be accurate- it's $1.5 billion over the forward estimates.
MITCHELL: Oh, the four-
PM: So that's four years of budgeting. And so there have been some changes, because we wanted the revenue to match the expenditure. Key question here Neil, we have committed of course to return the Budget to surplus in 2013. We will do that. And I just made reference to Wayne Swan flying all those air miles back from the G20. I mean, at the G20 the other nations are sitting round the table saying gee, we hope we can halve our deficits by 2013. We'll be in surplus. What the package does is it- the company tax reduction is to 29%. So that has been a change from the earlier package. And then there was a resource exploration rebate that the industry basically said to us they didn't want.
MITCHELL: Well the $1.5 billion had been budgeted across those four years. Was it, is that entirely- where was that going to be spent? Entirely on the company tax cut?
PM: Yes. This, the package that was in the Budget for the resources super profit tax was a self-contained package if I can use that terminology. So money in, money out. Now of course with the new mineral resources rent tax there's $1.5 billion less of money in. So we have also changed expenditure, so there will be $1.5 billion less of money out.
MITCHELL: No other cuts?
PM: No, that's it. That's it. So it's the resource exploration rebate that the industry told us they didn't want. And the company tax change from now being to 29. It was- so it's 30% to 29%. In the original package there was a further reduction to 28%.
MITCHELL: And you don't need to do, to make any other cuts other than that change to the company tax rate? You don't need any other cuts to make up the $1.5 billion?
PM: No, the two cuts that make up the $1.5 billion, that change to the company tax rate and not proceeding with the resource exploration rebate that the industry didn't want. That's it.
MITCHELL: Doesn't small business though, they don't get an early start now on the company tax, do they?
PM: Small businesses still get an early start on the movement to 29. And small businesses still get the special tax breaks we promised them when they buy items of equipment, a rebate there.
MITCHELL: How much of this is predicated on the China boom continuing? How much of it is predicated on growth?
PM: Well, the growth assumptions, obviously in the Budget basically have stayed the same. I mean, we know that we are experiencing a minerals boom, and we will continue to experience a minerals boom. What this new taxation arrangements are about is making sure as we experience that boom that Australians are getting a fairer share. And that fairer share is being used to support infrastructure, particularly in mining communities, to back in our superannuation increases for Australians to 12%, the small business measures that were in the original package, and a company tax reduction to 29%.
MITCHELL: Will you need other cuts in your next Budget?
PM: No Neil, this is a self contained, you know, package, the way that I have explained it to you.
MITCHELL: So the superannuation boost for the lower income earners, that still goes ahead?
PM: Correct.
MITCHELL: The 50% tax down on interest earned on the first $1000 I think, 50% tax discount on that?
PM: Yep. The only changes Neil, the only changes are the ones I've described. So we could go line by line through the whole federal Budget, but the things that are changing are the two things I have described to you.
MITCHELL: Well, haven't we had enormous, enormous pain and even a lot of money wasted both by the Government and the mining industry on advertising over something which on this basis was fairly simply solved?
PM: Well Neil, you say simply solved. It's taken a lot of hard work. And it took a new approach.
MITCHELL: No, I don't mean to under- demean the work you've done on it. But what you seem to be saying here is you'll come up with a formula that keeps the mining industry happy, at very little pain to the Budget. Now, if it was that simple, why did we have to go through all this agony?
PM: Well look, you know, people will have their analysis of how we got here. But one of the things that I wanted to do as Prime Minister, and I made it pretty clear in my very first press conference, the very first time I spoke as Prime Minister, which was I thought we'd lost our way on a few issues. I thought some steps needed to be taken to fix those problems, to, you know, get us back where we needed to be. This was a big item on my to-do list, and we've got it done. It took injecting goodwill into the conversation. We'd lost that goodwill.
There was a lot of heat, a lot of fury, a few vindictive, you know, statements and words. And obviously that was shattering the ability of people to work together side by side to get a good outcome. I believe I injected goodwill back into the conversation by getting the Government ads off the TV. I think the mining industry very generously responded to that and got their ads off the TV. And then everyone took a breath, a moment of pause, and got back into it with the sense that we can fix this rather than the sense that this needed to be about acrimonious fighting.
MITCHELL: So did Kevin Rudd muck it up? Is that the bottom line?
PM: Well Neil, look, people will, you know, analyse the past. They'll analyse this deal. Not everybody will be happy. That's the nature of politics. But I did think this required us to have goodwill and respectful conversations. We've done that, and it's paid dividends.
MITCHELL: So did Kevin Rudd muck it up?
PM: Well Neil, you know, I've taken a different approach. And obviously I believe the approach has paid dividends with this breakthrough signed last night and announced this morning.
MITCHELL: It's not an answer. You don't- fair enough, you don't, I can understand, you don't want to answer, you don't want to go back in that sense. But it would seem that he wears it.
PM: But Neil, the important thing for me as a new Prime Minister- I understand, you know, some people know a bit about me, some don't know very much about me at all. I understand Australians are looking at me and saying, well, you know, who's this new Prime Minister, who is Julia Gillard, who's this woman. Well the best thing that I can do is show the Australian nation what I'm like by my conduct and my actions.
I am the kind of person who across, you know, my life, I'm not shy of a fight if a fight needs to be had. But I have found over my working life that if you can get people round a table, you know, some remarkable things can happen. And when people sit around a table in an environment of trust and goodwill and respect, and we've seen that on display this week.
MITCHELL: So are we seeing the future style for your Government? Consensus?
PM: You know, as Deputy Prime Minister I think I've shown that I am prepared to get people together and work together. I'm not, you know, I'm not shy of a fight. I mean, I had for example a fairly interesting set of discussions with the Australian Education Union about My School. That's just one example. But I've also found that if you do sit down with people, you can work things through.
So, you know, you should expect me to do the kind of things as Prime Minister I've done as Deputy Prime Minister. Got national curriculum underway, thirty odd years of talking about it. We actually got us on a path to deliver it. Occupational health and safety laws- thirty odd years of talking about them, we're now on a path to deliver uniform national laws. The whole Fair Work Act, getting rid of WorkChoices. Sat for countless hours in a business advisory group with trade unions in a workers advisory group. Not everyone left those rooms happy, but we got sufficient consensus to get the job done.
MITCHELL: Compromise or backflip, this one?
PM: Look, you know, I would obviously say a product of genuine negotiations. We've given a bit. We've compromised a bit. The industry's compromised a bit. We've shaken hands across the table.
MITCHELL: Week one is now finished, just about finished. How do you feel?
PM: Look, I'm feeling, you know, I feel physically, I feel fine Neil. If you're worried if I'm not getting enough sleep or not eating right-
MITCHELL: I hear Kevin Rudd used to sleep three hours a night. How are you doing?
PM: Well you know, I like a little bit more sleep than that Neil. So I do get a bit more sleep than that. And, you know, I'm looking after myself and eating my veggies and doing all that kind of stuff. So I'm feeling, I'm feeling fine and I'm feeling full of enthusiasm and determination to keep, you know, moving ahead, moving forward, particularly having solved this problem. There's a lot more for me to get through.
MITCHELL: I was going to ask that- this was a priority obviously, week one. What's next on the list?
PM: Well Neil, you should expect to hear some more from me in coming weeks about the kind of policy predispositions I'm bringing to being Prime Minister. You should see me working through some of the other questions I think are concerning the community. One of those, obviously, is the question of asylum seekers. I'm not pretending that there are any easy answers here or that, you know, one tough slogan and a bit of chest-beating makes all of the difference. Of course it doesn't. But I'll work my way through methodically those kinds of issues.
MITCHELL: The insulation issue's still causing a lot of pain in the community too, people still waiting for checks.
PM: Yes, I believe Minister Combet is doing a good job there in a difficult set of circumstances. Neil, this scheme became a mess. There's no point trying to put a gloss on it. It became a mess and we're dealing now with the consequences of that, including through the inspection regime that Minister Combet's overseen.
MITCHELL: I know you need to get away, but I was watching you and Tony Abbott at that funeral yesterday of the soldier. Even though, well, you were part of the Cabinet I suppose that sent that man to war effectively, or continued it, how did you feel? I mean, it must be an awful thing to go through.
PM: It's, I thought it was very important that I was there and that Tony Abbott was there. Because this isn't, you know, about party politics in any way, shape or form. It's about the, you know, national leaders sending a message that we understand what remarkable things we ask our serving personnel to do. And this was a very brave young man and an amazing family Neil. A dignified, amazing family coping with loss. So I felt privileged to be there. I mean, it's their choice, the family, whether I'm there or Tony Abbott's there, or they want to have their, you know, own private mourning and grieving. They did want us to be there as a sort of physical embodiment that the nation was mourning too. And I believe the nation does mourn when we lose brave soldiers like Ben Chuck.
MITCHELL: Have you yet been briefed on the outlook in Afghanistan?
PM: Yes, I sat down on Saturday with Angus Houston who of course is the Chief of the Defence Force, with our Minister, John Faulkner, who's a very experienced Minister. You know, I think John's reputation in Australia is as a very safe pair of hands, a very determined person. And we went right through the strategic outlook in Afghanistan.
MITCHELL: So no reason to change your mind on Afghanistan?
PM: No reason to change my mind Neil. And I don't say that easily. I certainly don't say it easily. We went to Afghanistan because it was a place that terrorists were being trained, who then unleashed their terror on citizens around the world, including Australians. 9-11, Bali, we've lost Australians to these terrorists trained in Afghanistan. We went there to make sure that we were addressing that incubation of terrorism. We're there now, training the Afghan National Army to stabilise Afghanistan, to make sure that it's not there training terrorists who come and harm Australians, and to also make sure it's a safer place for the Afghan people.
MITCHELL: Very quickly, I see speculation today that interest rates could drop. What do you think?
PM: Well look, I don't speculate on interest rate movements Neil-
MITCHELL: Oh, I thought-
PM: That'd be inappropriate. I am travelling to Sydney later today where I'll meet with the Reserve Bank Governor, so I'll obviously be able to get his perspectives face to face.
MITCHELL: Will you get to Melbourne for the football tonight?
PM: I won't be in Melbourne for the football tonight I'm sorry.
MITCHELL: Oh, but you're supposed to be playing full forward I think.
PM: Oh Neil, my training efforts have been woeful. I just couldn't possibly do that.
MITCHELL: You'll remember you told me you'd be in Mars before you were Prime Minister.
PM: Well I don't think your studio is quite Mars-like. I haven't seen any little green men running around. I'll let you know if I see one.
MITCHELL: Will you support John Howard for the ICC?
PM: Well look, I'm happy to say I would. I think, you know, John Howard, passionate, passionate cricket fan, I share some of the concerns he's voiced publicly about the kind of factors that are influencing this decision. So I'd be very happy to offer full support for John Howard to get this role.
MITCHELL: The Prime Minister is the title. What's the honorific? Miss or Ms?
PM: Maybe it's just Julia.
MITCHELL: Oh, I don't know about that. And I have to offer- I've said to every other Prime Minister from any party, every two weeks, welcome on the program any day you like. If we can organise a regular spot, we'll put it before you, and if you can have a think about it we'd appreciate it.
PM: I'll certainly have a think about it Neil. And obviously I do want to be able to talk to people right round the country, and radio's a fantastic way of doing that. It's the, you know, the voice in your car, in your lounge room, in your bathroom even in the mornings when you're having a shower. So it's a great way of staying in touch and making sure I'm hearing concerns through talkback too.
MITCHELL: Well, you are a Victorian.
PM: I am a Victorian. I'm a Victorian now. South Australian girl originally. Victorian now.
MITCHELL: Thank you very much for your time.
PM: Thanks Neil.