BONGIORNO: And it's welcome back to the program, Julia Gillard. Good morning Prime Minister.
PM: Good morning, Paul.
BONGIORNO: We are just going to Victoria. There had been evacuations overnight. Are we heading for a bigger disaster in that state than was first thought?
PM: We are heading for some major problems in Victoria Paul and this is going to strike people as really cruel, given that Victoria is about to mark the second anniversary of the devastating bushfires that hit Victoria and killed so many Victorians.
On the advice available to me, four townships have been the subject of evacuation orders so this is going to get a very tough indeed.
BONGIORNO: So the Commonwealth will be prepared to give as much assistance to Victoria as you have been giving to Queensland?
PM: Oh, absolutely. We work on a formula agreed over time as to how the Federal Government works with state governments in natural disasters and we step up for major natural disasters to 75 percent of the rebuilding costs.
We also have emergency payments available for people. They have already been triggered for the January flooding that Victoria faced and we will work with Premier Baillieu in what needs to be done in these circumstances.
With the January flooding, I said to Premier Baillieu, anything that he needed, which we could supply through the Australian Defence Force, we would do. So we will work together with the Victorian government, the same way as we have worked with the Queensland government to get people through as best we can, as they face these extreme weather events.
BONGIORNO: Prime Minister, that report from Brisbane that the cyclone damage is $2 billion, that is adding to the almost $4 billion in preliminary estimates for the cost of the natural disasters in Queensland.
Can you assure the taxpayers of Australia that the fact that Queensland doesn't have natural disaster insurance, as other states do, that the federal taxpayers aren't picking up more of the tab than they should be?
PM: Yes I can, Paul. The way in which the Federal Government and State Governments approach their insurance arrangements is what is going to give the best value.
The former Howard Government, indeed it was Joe Hockey as the then responsible minister, decided the Federal Government should not continue to be the insured because given the size of the premiums it just simply was not a value for money proposition and I don't make any criticism of him for that, he made a hard headed assessment of whether it was value for money.
Different states have made hard headed assessments. They are in different situations. Queensland, obviously, is more exposed to extreme weather events because of the tropical nature of our north and far north. In those circumstances, it has been better value for money for them to effectively self-insure. And they do have $700 million available from that self-insurance. In other states, different arrangements have been made, Victoria, for example, is insured for road damage.
But whilst we are seeing an extreme weather event in Victoria now, they are not as routine in Victoria as they are in North and Far North Queensland, meaning the financial proposition about whether or not you should insure or self-insure is a different one.
BONGIORNO: Well, $2 billion on top of the $4 billion in Queensland and still to be tallied, the damage in Victoria, $1.8 billion for the levy seems small. Do you really think that you need to revisit how much the levy should try to collect?
PM: The levy will be, as I have announced it, $1.8 billion and a levy that is calibrated so that the more you earn, the more you pay and 60 percent of taxpayers will pay less than a dollar a week.
Paul, I had to make some tough decisions about the right balance between budget cutbacks and asking Australians to directly help. I believe I have struck the right balance and for the further rebuilding we will need to do, after the cyclone and after more floods, so we will find budget savings.
BONGIORNO: So are those budget savings going to be across the board or are they going to be more aimed at say issues like climate change programs?
PM: We will go through the budget and we will make some choices, Paul and they're going to be tough choices. I want to reinforce this point, we have already made as a government more than $80 billion of savings since 2007. We want to make sure that every dollar in the Budget does the best work it can and is directed to the best purpose it can be.
There are no easy choices left now, so in making further budget cuts, there is going to be some pain around and people are going to have to recognise that. That is why in getting the balance right; I thought it was appropriate to also ask Australians to chip in through the levy.
BONGIORNO: It does seem, though, from what you have just said that you are lending some weight to the Opposition's claim that there is fat in the Budget.
PM: On the Opposition's claim, Paul, there's been a lot of politics played by Mr Abbott and his team. Mr Abbott said that budget cuts could be easily found and then his various spokespeople, Mr Hockey and Mr Robb and others, said that they would produce a list of these cuts shortly after Australia Day.
Well we haven't seen any list, Paul, because it is not that easy and last time the Opposition went looking for budget cuts, it got itself in a huge mess and ended up with an $11 billion black hole, so I've got a plan there to rebuild as we need to in Queensland and around the nation.
We need to rebuild. We need to finance the rebuilding. I have got a plan to do that and the proposal that will go before the Parliament for the levy. I would say to Mr Abbott, it's time to stop playing politics with this and help us get on with the job of rebuilding the nation.
GRATTAN: Ms Gillard, your Minister Greg Combet, has flagged the possibility of a two-stage scheme starting with a fixed price on carbon and then moving to a trading scheme. Is this the model the Government is now going to adopt?
PM: Minister Combet is properly outlining models and discussing options with the Australian community. The decision hasn't been made yet about the best mechanism to price carbon and we will work through with the multi-party Climate Change Committee and through internal government decisions to do that, but the objective is clear, we need to change the way our economy works.
That is why I have drawn the comparisons with Hawke and Keating and floating the dollar and reducing tariffs - big structural changes to the economy, changing price signals in the economy. When we brought tariffs down, people said ‘it'll just cost jobs and there will be no benefit'. Well, there have been huge benefits, we changed the price signals to businesses and they got more efficient. Through pricing carbon, we'll change the price signals to businesses and they will get lower pollution ways of manufacturing, of going about their business in all sectors of the economy.
GRATTAN: Speaking about businesses, the Greens of course are a big part of your committee that is devising some scheme and they're anxious that polluters should have to pay.
Can you give a guarantee that effective industries won't be any worse off than they would have been under the carbon scheme that was promoted under the Rudd Government?
PM: A lot of work was done by policy-makers in collaboration with stakeholders to design the various elements of the carbon pollution reduction scheme and it's not my intention to throw all of that work out the door. A lot of good work was done, particularly on the area that you nominate, about how to assist industry with the transition.
GRATTAN: So can you give the guarantee?
PM: Michelle, I know journalists like simplistic guarantees and rule-in, rule-out games. What I can say to you is I will have more to say in the months ahead about how we will price carbon. It is not my intention to discard the work that was well done about matters in the carbon pollution reduction scheme.
A lot of policy work was done. A lot of stakeholder work was done. A lot of thought went into how we would deal with industry transition. We are bringing that to the table as we make the decisions this year.
FARR: Prime Minister, there is some confusion about the deal you are trying to settle with the States on health funding, such that there is the appearance that the Federal Government is retreating from its commitment to be the dominant funder, 60 percent of public health funding for the States, to use that money somewhere else. Are you retreating? What are you after from the States now?
PM: Well, I'm sorry Malcolm if you're confused but I am not at all confused and my objectives here are very, very clear. I will be making them clear to the Premiers in the lead-up to COAG and I've of course already had some discussions.
Objective number one - we do not give additional money for health without reform. Reform is vital. Objective number two - I want to look at the world through the eyes of a patient, of someone needing healthcare. I want to look at the world through the eyes of someone needing to go to a hospital but also look at the world through the eyes of someone needing care in the community and the truth is, too many Australians end up in hospital because they did not get the right care at the right time from the right person in the community and we've got to resolve that.
My eyes are on the health reforms as well as financing discussions, which have been so much in the public domain and public debate.
FARR: OK, Still confused. Are you going to be asking Premier Bligh, Premier Keneally, to change the deal that they have already made? Will there be any alteration to the arrangements with those States?
PM: Malcolm, I'm not going to be able to answer all of your questions today, they will be answered when COAG meets, but I will be saying to every Premier, get to the table on Monday the 14th, Valentine's Day, I'm not sure why we picked it for COAG, but there we have it, get to the table on 14th February, and we will walkout with a national health arrangement.
That is what Australians are expecting us to do. Yes, there will be a lot of focus and discussion on financing arrangements, but Australians don;t walk into doctors' surgeries or into hospital emergency departments chattering to each other about financing arrangements. They walk in, thinking, ‘am I going to get the care I need in the time that I need it?' That is my focus.
GRATTAN: Ms Gillard, there's been a report today that Kevin Rudd has spent nearly half his time as Foreign Minister overseas. Do you think this is a bit excessive?
PM: Guess what, Michelle? Foreign ministers travel. That's what they do. It's inherent in having the Foreign Affairs portfolio.
GRATTAN: But the question is the quantity, the amount.
PM: Kevin Rudd obviously is travelling extensively. Foreign Ministers in the past have travelled extensively and they will in the future, it is inherent in the job. You can't be Foreign Minister unless you get out talking to countries around the world about issues that are in Australia's national interest.
BONGIORNO: So he is not investing time in a future career in the United Nations?
PM: Don't be silly, Paul. He is investing time in advocating our interest on the world stage. That's what Foreign Ministers do.
FARR: Prime Minister, I don't think Tony Abbott is going to be any nicer to you over the coming year. Are we going to see response in kind? You're a pretty good fighter yourself when you get down to it, is it going to be a rough year?
PM: I think what we are seeing from Tony Abbott is playing politics at a time of national crisis. What you will see from me, Paul, is leadership. Yes, in the Parliament, I can give as good as I get, but even taking that feisty demeanour into the parliament, can I tell you, I have been absolutely amazed, absolutely amazed that Tony Abbott somehow thought it was OK to be out fundraising for the Liberal Party during a national crisis like the one we have been going through.
I have been absolutely amazed that he hasn't taken responsibility for an email with his name on it. I have been absolutely amazed that his message to Australians has been, ‘you can afford to give the Liberal Party money, but you can't afford to give money through the levy to help Queensland'.
This is not a good start for Mr Abbott, all about politics. Whereas our eyes are on the national interest - or my eyes are on the national interest at this time.
FARR: Do you believe the levy will get through Parliament?
PM: I will come to the Parliament and say to the Parliament, this is the right thing to do, to rebuild Queensland and rebuild the nation and I will be saying directly in the parliament to Mr Abbott, if it was good enough for him to support levies under the Howard Government, if it was good enough for him to advocate a levy for his election promises, why isn't it good enough to support a levy to rebuild Queensland?
What sort of hypocrisy is this? I don't think Australians are going to be very tolerant of that kind of hypocrisy in the circumstances the nation confronts now.
GRATTAN: One of your critics on the levy, on your own side, was Kristina Keneally, who called for some changes, which you rejected, but despite this, with the very difficult election for Labor coming up in NSW, will you be campaigning shoulder to shoulder with Kristina Keneally during the state election?
PM: I am the Federal Labor leader, Michelle, and I campaign with my Labor colleagues. We have differences of opinions from time to time and I had a sharp difference of opinion with Premier Keneally on this question of the flood levy and I will continue to maintain my view.
FARR: Prime Minister, a number of commentators, from David Williamson to my esteemed colleague on my right even, and rank in file Australians have been critical of your personal response to the floods and the natural disasters. Critical of you saying you couldn't find the right pitch in the emotional register in your response. Now I'm sure you wouldn't say you're lacking compassion, so are those critics too harsh or do you indeed have a problem communicating on that level?
PM: Malcolm, I am a substance not style person. I understand that people will make commentary about political style. My focus is always on the substance and I think at the end of the day, people judge their leaders and their governments by what gets done, by what difference is made in their actual lives.
FARR: Is Premier Bligh all style is she?
PM: That is a silly way of doing the distinction, of course not. People will make comments about style. My style, Premier Anna Bligh's style, Tony Abbott's style, and the list will go on. What people will look to is they will look to substance and what gets achieved for them.
Premier Anna Bligh, during this crisis, has been all substance and she will be all substance in the recovery and I believe ultimately, people will judge each of us on the changes we make in people's lives.
GRATTAN: On the question of substance on a different front, Prime Minister, the post-mortem from the election, the report on that is soon coming out and we understand that it will suggest that the power to choose the Labor front bench goes back to Caucus rather than staying with the leader as it is now. Would you support that change?
PM: I am not going to speculate on the contents of the ALP review. That will be made available to the National Executive on the date that I have selected, 19th February. But I am happy to talk to you about positions I have held for a long period of time. I have been on the public record for a long period of time saying the Leader should pick their frontbench team and I will continue to do that.
FARR: Despite whatever recommendation comes up from the review panel?
PM: I am not going to speculate on what is going to be in the review, but despite who says whatever in whatever context, I will maintain my view. As Leader, I will pick my frontbench team.
BONGIORNO: Prime Minister there is a report that Tony Abbott would like to extend $100,000 low interest loans to small businesses affected by the natural disasters. Would you be prepared to match that?
PM: Paul this just shows that Mr Abbott has spent far too much time playing politics and not enough time checking the facts.
As a part of our natural disaster arrangements, we are already making available concessional loans of up to $250,000 for small businesses and primary producers.
Indeed when Mr Abbott was in government that was a standard part of the natural disaster package too. So he either hasn't done his homework, or he is asking me to cut the amount of assistance to small businesses and primary producers and I'm certainly not going to do that, Paul.
BONGIORNO: OK Prime Minister, before we go, we have a question from THORFI on Twitter. He or she says, ‘given recent climate events and climate change reality, will you be funding the disaster recovery from coal subsidies' he or she believes you pay?
PM: The way in which we will fund the natural disaster recovery, I've made clear how we are going to find $5.6 billion. I will be making clear how we will fund the rest through budget cutbacks. The best thing we can do to deal with the challenge of climate change is price carbon and as I have said, 2011 is the year of decision.
BONGIORNO: Prime Minister Julia Gillard, thank you very much for being our first guest in 2011, hope to see you again later in the year