HOST: Prime Minister, good morning. Welcome.
PM: Good morning, Barry.
HOST: And to that, you've said no election before 2013.
PM: Well, I think with his election call, what Tony Abbott was really saying to all of us is even he doesn't believe that his campaign of negativity can last all the way to 2013. That's why he's so desperate for an election now.
I mean, he was born to say no, and that's what he's been doing.
HOST: So you don't buy the argument that you need a mandate for a carbon tax?
PM: Well, I think all of this sort of melodramatic performance on Budget reply night was basically Tony Abbott needing to increase the melodrama in the moment, because he can't talk about the past - he can't talk about his support for Work Choices, his health care cuts, the fact that one of the reasons he's not Prime Minister is that he had an $11 billion black hole in his costings last election - and he's got nothing to say about the future, so the only option he's got is to puff up and be as dramatic as he can in the moment and just say ‘no, no and no'.
Ultimately, Barry, I think Australians are going to see through this and I think the fact that Tony Abbott is so desperate for an election shows that even he knows they're going to see through it.
HOST: But as it stands now, the carbon tax will be fully operational before people get their first opportunity to vote on it.
PM: Well, at the last election, Barry, of course I said to the Australian people we needed to tackle climate change by pricing carbon, and we will be pricing carbon.
Yes, of course, I also said that my preferred way of doing it wasn't a carbon tax. I wanted an emissions trading scheme, and we will get there, to that emissions trading scheme. I didn't mean to mislead anybody, Barry, but in the parliament that we have now, in order to get to that full emissions trading scheme with a floating price, we will go through a fixed price period, but that's about tackling climate change, and on climate change, of course, some days Tony Abbott believes in it, some days he doesn't, but to effective action to tackle climate he always says no.
HOST: OK, well, on the Budget now, and on the surplus, a surplus in two years, to what extent is that based on a wing and a prayer?
PM: Well, it's based on all of the normal modelling that Treasury does and Treasury forecasts, the same agency that Prime Minister Howard relied on and, you know, Prime Minister Hawke before him, and so the list goes on.
HOST: But did you take their most optimistic assessment and then run with that?
PM: No, we didn't. The terms of trade assumption in these Budget figures is a conservative assumption with the terms of trade actually slightly decreasing over time, so we've taken a very prudent approach, as advised by Treasury.
HOST: Now, on the family payments issue, indexing the thresholds, did you do that because the system is already unsustainable?
PM: Well, we did it because we want the system to be sustainable for the long-term, not just over these four years of the Budget period, but over the next 10 and 20 years, and Barry, I think there's been a fair bit of carry on and mischaracterisation of these measures.
This is a pause in indexation. It will affect around two per cent of families. Rates of payment, fortnightly, will continue to go up, so that's the sort of change that we've made.
We made a comparable change in the past, and then Tony Abbott supported it, and indeed said it didn't go far enough - it wasn't tough enough. Now, we can't have, you know, people like Tony Abbott lecturing on the one hand ‘get a bigger Budget surplus or a sooner Budget surplus', and on the other hand criticising every cut we make, and the media coverage which has suggested that somehow I or the Treasurer think people on $150,000 are rich is completely ill-informed. We've never said that.
What we've said is we need to make our system sustainable, and of course we will target benefits at families most in need. This is a measure that affects two per cent of families.
HOST: So, you're not saying that they're rich, but what are you saying about them, that their comfortable enough to get on without welfare, that it's time to stand on their own two feet?
PM: What we're saying to families on $150,000 a year is the best thing we can do for them is keep the economy strong, make sure that they've got the benefit of work and opportunities, make sure that we're not adding to inflationary pressures. We need to deliver a Budget surplus so we don't add to inflationary pressures as our economy continues to strengthen, because that would flow through to their cost of living.
Of course, Mr Abbott is a risk to all of that. He hasn't told us yet whether he will oppose or support the Government's cutbacks. That is, he hasn't told Australians yet whether it's his intention to blow the Budget surplus, to risk increasing inflationary pressures, and to risk greater cost of living burdens on people's shoulders, including people who earn $150,000 a year or more.
HOST: Yeah, but when I say ‘what are you saying to these people?', you are saying to them, aren't you, that at $150,000 they no longer need welfare?
PM: What we're saying to them is we have a means-tested system of support for families. We always have. There's always been a point at which benefits cut out. We are choosing to keep that point the same for two years so that we can get sustainability in the system. There will still be benefits-
HOST: -And just for two years?
PM: Well, we paused in the past Barry, so the current-
HOST: -And then extended it.
PM: And the extended it, that's right.
HOST: So you might extend it beyond two years?
PM: Well, Barry, we've made the decision in the Budget that you've seen, but we're still saying to those families, and let's be very clear about it, in terms of their access to things that government provides: they want childcare, and they get the childcare rebate at higher levels as a result of the actions of this Government; they want their child to go to a great school, and their school will be better because of the actions of this Government; they may need the public hospital system in the middle of the night with an emergency with one of their children, and that hospital will get the benefits of our new investments and new health reform; they may want their son or their daughter to get an apprenticeship or a university place, and we're investing in both of those.
HOST: But back to that question, though - you said it's a two-year freeze. If the Budget is in surplus at the end of two years, would you then lift the freeze?
PM: Our intention is to stay with what we've announced in this Budget, Barry - not to add to it.
HOST: For two years.
PM: That's right, so the family payment system would go back to the normal indexation arrangements after that.
HOST: Now, the newspaper have done case studies on people earning $150,000 and they constantly make the point that they don't feel as if they're rich. What have you been, your reaction is, to see these case studies through the week, and you see so many people stepping forward and saying ‘well, I don't feel rich.'
PM: Well, I'm not surprised by that, because no-one's every said they are. I haven't, and the Treasurer hasn't. We understand that people can struggle with cost of living pressures earning $150,000 a year. We understand that, and one of the reasons we're so determined to bring the Budget to surplus in 2012-13 is to make sure we're not adding to inflationary pressures and adding to the cost of living pressures which would go on their shoulders.
To do that, we've got to make a series of choices - tough choices, not easy choices - and pausing indexation and affecting two per cent of families was one of the choices we made, whilst we continue to increase the rate of family payments fortnightly for other families, and of course whilst we bring new benefits for families with teenagers, because the family payment system has been an old-fashioned model which somehow assumes kids are likely to leave school at 16 and draw their own pay packet. In the modern age we know that's not true, we need to keep them at school, so we've increased benefits for teenagers provided they're engaged in full=time education.
HOST: Can we talk about the surplus? The debt, the net debt, is at $106 billion, or will be next financial year. When will that start to fall, and when can you reduce it, when can you cut it out all together?
PM: Debt will be paid off by the end of this decade. That's what the Budget papers are telling you. We can only do that by returning the Budget to surplus, so once again we see the problem with Tony Abbott just engaging in negativity and saying absolutely no to everything.
If you no to the savings, then you put the Budget surplus at risk. If you put the Budget surplus at risk you risk increased inflationary pressures, increased cost of living, and of course you also increase debt.
HOST: Now, Tony Abbott's Budget in reply speech, and the reviews are in. I'll just give you a couple of things that people are saying.
Paul Kelly wrote ‘zero for economics but infused with the killer instinct.' Graham Richardson said ‘pathetic as a response to the Budget, but littered with little gems that strike chords in the lounge room.'
So, this is fairly typical, I think, of the commentary coming in. The consensus is that you're putting out policies but Tony Abbott is trashing you on the politics.
PM: Well, I just don't accept the thesis behind this commentary.
Australians, ultimately, don't judge politicians on whether or not they see them make a nice speech - they judge politicians on what they're going to do for people's lives.
People sit in their homes, they sit in their workplace, and they think ‘gee, I need a job. I need the economy to be strong. Who's got the best plan for that? I need my child to a great school. Who's got the best plan for that? I need decent healthcare? Who's got the best plan for that? I need to make sure my working conditions are fair to me. Who's got the best plan for that?'
And across all of those areas Tony Abbott's basically said bored by economics, bored by creating jobs, bored by health reform, except the cutbacks he's been historically associated with, nothing to say on improving schools - and the list goes on.
HOST: But there's this constant criticism in the media that your Government is not getting the message through. Why is that such a struggle?
PM: Well, we get the message out there, Barry, as best we can. We've explained this Budget up hill and down dale, and we will continue to do so.
Of course, in terms of newspapers and media outlets, they'll make a selection about what they want and what they put in these media outlets, but we will be there, patiently explaining.
Barry, I think in terms of the kind of commentary we see here, and the comparisons, you know, I'm determined to be building a better nation. I don't concern myself with the 24-hour media cycle and the day-to-day political plays. I'm there, out delivering the policies this nations needs for its future.
If you like, I'm there as the architect as we're building the nation, building this new building. Tony Abbott's interesting because he's like the kid with the baseball cap on backwards, going past shouting a slogan and spraying some graffiti. Well, it might be intriguing, but it's not leadership.
HOST: OK, on asylum seekers now, and the first boat has arrived since your new policy, in effect. The Malaysians are not ready to take them, I gather?
PM: Well, we are working on the agreement with Malaysia. Of course, last weekend I released the statement between me and the Prime Minister of Malaysia, with our commitment to enter this agreement.
HOST: So, where will they go, if Malaysia is not ready?
PM: Well, Barry, I don't think it's any mystery to anybody in Australia that we are in discussion with Malaysia, and I released the statement with the Prime Minister of Malaysia. We are working with PNG as well. We will hold these asylum seekers, pending removal.
The message here to people smugglers and to asylum seekers in the pipeline is don't come to Australia expecting to be processed, because you won't be. You will be held, pending removal.
HOST: So you're saying that you will hold them, perhaps, until Malaysia is ready to take them?
PM: We will hold them until we can remove them.
HOST: On the population debate now, no targets and no projections, but how do you properly put in place all the appropriate infrastructure and services ahead of time if you don't have numbers in mind?
PM: Well, you've got to understand growth patterns community by community.
We've got parts of this country that want more growth. There are some regional areas that are desperate to grow because they've got great job opportunities there. We can be working with them to get that growth, get more migrants there - that's what the regional visas are about - and working with them on the infrastructure they will need to support that growth. That's one of the things that will happen out of the Minerals Resource Rent Tax.
Then, in our outer suburbs, we've got pressures of growth. We can work with communities to deal with that congestion, and to deal with things like people driving a long time to get to work. We can bring more job opportunities locally, and there's a Budget measure to deal with that.
We, of course, can work, too, with our capital cities on innovative solutions for the pressure that inner city suburbs feel, and all of those things are dealt with in the population strategy, and many of them have been dealt with in the Budget.
HOST: But when Treasury says it's inevitable that Australia will have a population of 35 million by 2050, wouldn't it be prudent just to accept that and then plan for it?
PM: But the plan, Barry, is a plan that makes sense in communities. I mean, we are going to see growth in some communities. We will see other communities that don't grow. So, we've got to understand this community by community and be meeting need.
There's no point saying let's have a lot of people go where there are no jobs whilst communities that have got jobs are crying out for more people. That's that the population strategy that we've announced is about - sustainability and getting people where they are needed - and that's what the Budget measures are about, more migrants into regional Australia, more investment in regional Australia.
Regional town are already a great place to live, but many people think ‘gee, can I spend all of my life here? What about when my child needs a great-quality secondary education? What about when they need a university place?'
The investments that we are making in regional Australia will mean it's a great place to live throughout your whole life cycle.
That'll make a difference to regional growth rates, and often the jobs in our modern economy are in regional Australia because of the strength of the resources boom.
HOST: And, finally, I feel as if I should get down on one knee and ask this question - are you going to marry Tim?
PM: Barry, it's not necessary for you to get down on one knee. Indeed, I'm not sure what the viewers would make of that.
There's a lot of publicity about this this morning, Barry. We're very happy the way we are we. We've got no present plans. There is, to use the phrase of your panel, no rock on the finger, so I think everybody can just say, well, we're a happy couple and that's a good thing.
HOST: And he did actually say that, ‘we're happy with the way things are', and that's how you feel as well.
PM: Yes, that's how I feel as well, Barry. If we need to discuss this on the Insiders, that's how I feel as well. There may be some words exchanged during the course of the Bulldogs-Richmond match later today, though. Tim's a Richmond supporter.
HOST: Thanks for your time this morning.
PM: Thank you.