HOST: Prime Minister, good morning and welcome to AM.
PM: Good morning Sabra.
HOST: A lot of Australians would be scratching their heads this morning and thinking what was that all about yesterday.
PM: Sabra, I think Australians understand what it was about. Clearly Labor needed to resolve the leadership contest, it was resolved yesterday and as I said yesterday, we are now getting back on with the job.
We've got lot of important things to do in 2012. Our economy's changing, I think Australians know that. They're seeing job losses in some sectors and then spectacular growth in others. That requires us to focus on the economy, skills and we'll deliver a skills package through COAG, a budget surplus, we'll get that done in May, making sure that we're getting ready for the new economy with the National Broadband Network, with our clean energy future from 1 July, making sure we deliver the minerals resource rent tax. So Sabra, that's my focus and that's the work we're getting on with.
HOST: What was it designed to do? Was it designed to crush Kevin Rudd's leadership ambitions for good?
PM: What it was designed to do was resolve the Labor leadership contest and it's done that. Yesterday, what you saw was both me and Kevin Rudd come out of the Labor Party room and indicate that we would work as a united Labor team to deliver our agenda and our vision of the country's future and also to be very clear about the choice between the Labor Government and our conservative opponents and the choice couldn't be clearer.
A budget surplus on our side, $70 billion hole on theirs, just to take one example.
HOST: But a third of your caucus don't have belief in you to do the job and also Kevin Rudd said yesterday when he addressed caucus he didn't want to stand idly by while the next generation of Labor leaders is wiped out. They're both pretty damning for you.
PM: I'm pretty confident, Sabra, that we can win the 2013 election. We've got 18 months to go before that election and during those 18 months, we will be building the new economy Australia needs so people have jobs and opportunity.
We'll be continuing to provide a package of benefits to working families, paid parental leave, our new education tax refund, more money going into childcare than ever before and of course we'll be building a new platform for the future and fairness in the future and that is a better way of helping Australians with disabilities and their families so we've got to lot of work to do.
Australians will get to judge it in 2013, but in 2013 the choice will be very clear too, the choice between us, prepared to grapple with the challenges of the future and our conservative opponents, the Liberals, who keep saying that you can stand still in the face of change.
Australians are a very commonsense people and I think they know you can't stand still.
HOST: When did you decide enough was enough? It's been suggested that Simon Crean and Wayne Swan were as strident as they were in criticism against Mr Rudd to flush him out for a challenge, for you to call on a spill while he was overseas to extinguish his momentum, to crush his numbers.
PM: Sabra, what happened last week is plain and transparent from the events. I made a decision to hold a ballot and announced that decision. It followed Kevin Rudd's decision to resign as Minister for Foreign Affairs.
HOST: Your warm praise of him yesterday during your press conference, on his record as Prime Minister and Foreign Minister, your words, are they the words that you should have uttered last year at the national conference when you tried to airbrush him from history?
If you had acknowledged that then maybe you would have avoided what happened over the past week?
PM: Well, look I don't accept much of this analysis about last year's national conference, but the past is the past Sabra and I'm looking to the future and getting on with the job we were sent here to do.
We've been doing that job for 18 months, doing some incredibly hard things, bringing a lot of strength and determination to getting big reforms done like carbon pricing, even against hysterical scare campaigns from the other side of politics.
We're now going to take that same strength and determination into making sure we've got the economy we need for the future and we're getting a fair go for working families, as we embrace that future.
HOST: But many people are still quite confused, a man that many believe was treacherous during the 2010 campaign, if you felt so strongly he'd been two-faced against you and the party, why did you appoint him Foreign Minister?
PM: I believed Kevin Rudd had the capacities to be a good Minister for Foreign Affairs and indeed he's been a great Minister for Foreign Affairs and I talked about some of those achievements yesterday.
HOST: But you talked about the sabotage of last week. This is someone you then reward with being Australia's chief diplomat overseas. How does that marry?
PM: Sabra, yesterday and in the days in the lead up to yesterday, I have said some things about 2010 and the circumstances that led me to put myself forward for the leadership.
I thought the Australian public should have an explanation of that and I regret not providing that explanation at the time in 2010.
I've also yesterday said some things about the government that Kevin Rudd led and of course the government had remarkable achievements too, remarkable achievements delivering the Apology to the Stolen Generations, remarkable achievements in advocating Australia on the world stage and most amazing of all, the way Kevin Rudd guided the nation through the global financial crisis.
So I've told the plain, simple truth about some of the great things and some of the difficulties.
HOST: Can you ever see a time when you'd bring him back off the backbench?
PM: Kevin Rudd's made it clear he will be on the backbench servicing a local community he loves and he lives in as the Member for Griffiths.
HOST: And do you trust him when he says he won't challenge again, he's renounced his leadership ambitions?
PM: Sabra, I think anybody who watched Kevin Rudd speak yesterday could see the emotion, but they could also see the candour and what he said yesterday is he would be supporting me as I lead our political party and the nation through to the 2013 election, which I am confident we can win because the choice between us and our opponents is so stark.
It's a choice between whether you shape the future or whether you pretend you can stand still, whether you support jobs or whether you don't, whether you look after working families or ignore their needs, whether you deliver a budget surplus or a $70 billion black hole.
HOST: Will the departure of Mark Arbib make it easier now for you to unite the party?
PM: Mark Arbib did a great job in his various portfolios. I worked with him when he was in the employment portfolio and Apprenticeship Kickstart was his idea, getting kids into apprenticeships during dark economic days where they could have missed out on that opportunity in life.
Mark will now go to the next stage of his life. He clearly thought that it was something that could add to healing within the party.
HOST: Do you think so, that's the question. Do you think so? And he said he was uniquely placed within the party, being a factional powerbroker to do this. Should more of them go?
PM: Well Mark came and spoke to me yesterday. I understood what was motivating him. I understood how he thought that as a gesture, if you like, making the move away from politics, that could help with healing in the party and of course I want to see us as a united team delivering the big program of work we've got in fronts of us and I'm very confident we'll be doing that.
HOST: Do you think more of them should go?
PM: Look Mark Arbib made his own decision, a personal decision, and I'm not going to generalise from his personal decision to anybody else.
HOST: His decision means now that your reshuffle is going to be more substantial than what it was going to be. What's going to happen to people like Chris Bowen, Robert McClelland, Martin Ferguson, Kim Carr, people who advocated against you being the leader?
PM: Well nice try Sabra, but I made it clear yesterday that I'll announce the reshuffle in my own time and I'm not going to be speculating on it before I announce it. So I'm not answering any of these questions. I'm sure that will disappoint you, but that's the way it is.
HOST: Kevin Rudd said there shouldn't be retribution, will you take those comments on board?
PM: You can ask the question a million ways. I will judge my team the way I've said that I'm going to judge it - on merit and the capacity to take the fight up to the other side of politics.
That's what will drive my decision but I'm not going to be speculating on individual aspects of it before I deliver that decision.
HOST: I'm not asking you to speculate on individual aspects, I'm asking whether retribution is going to be part of it.
PM: Well I've given you the answer about how I will judge my team. I'm not going to speculate in any way Sabra.
I'll deal with the reshuffle in my own time and I'll announce and I'm not speculating about it before I announce it.
HOST: You said that you were wrong to have not explained the events of 2010 more fully. Have you been badly briefed?
PM: Look my decisions are my own. I took a decision in 2010 that it wasn't appropriate at that stage to explain matters internal to the Government. I took that decision because I thought it wasn't the appropriate thing to do with Kevin Rudd having just left the position of Prime Minister. I was concerned about that and obviously I was concerned too, as I got there as Prime Minister and needed to do a lot of work to make sure we were ready to fight the 2010 election and since the 2010 election it's been lot of work since.
But I do think it left Australians mystified as to why the changes happened and I've dealt with that in recent days, but it's not my intention, Sabra, to keep dealing with that. My focus is on 2012, 2013 and Australia's long term future.
HOST: It may not be your focus but one press conference doesn't explain the whole of 2010 and people would like you to explain it.
Other names that are being put forward as possible replacements for Mark Arbib are Kristina Keneally, Warren Mundine, Michael Fullilove, are these the sorts of people you would like to see in the party?
PM: Look I'm not going to speculate about who might fill that Senate vacancy either.
HOST: OK, there speculation this morning that with the departure of an internationalist like Kevin Rudd, that that will harm Australia's bid for the UN Security Council seat. Is The bid over?
PM: We will keep pursuing the UN Security Council bid. As a Government we've been very committed to it.
Of course Kevin Rudd was very personally committed to it. Across Government ministers have been playing their part, I've been playing my part, pushing our case for the UN Security Council and it's a very simple proposition about Australia being able to have its voice heard at that level on the world stage.
It was never going to be easy. It's not easy to get your way on to the Security Council but we will be pushing full forward with that bid.
HOST: Prime Minister, thanks for your time this morning.
PM: Thank you.