PM: Thank you very much, good afternoon.
As Prime Minister, I strive to lead a government of purpose and a government of unity.
I have always been and continue to be crystal clear about the values that drive me, drive this Labor Government.
We are the only political party prepared to face up to modern challenges and to shape a future that will deliver for all.
We are the only political party capable of strengthening our economy and managing it in the interests of working people.
We are the only political party dedicated to opportunity for all, not just a few, particularly the opportunity for every Australian child to get a world class education.
This sense of purpose and these values are what drives me and what drives the Government.
And even in the last fortnight those values and this sense of purpose was on display, when we saw the best monthly job creation figures in 13 years.
When we created a new and fairer deal for childcare workers.
When we passed into law Disability Care Australia, the most important institution created in our nation since the creation of Medicare.
But while purpose was driven us on, unity has eluded us.
And that unity spectacularly eluded us last week.
Like Australians around the nation, I was appalled by the events of last week.
My political party, the Labor Party that I love very dearly, was self-indulgent.
Our eyes were on ourselves rather than doing what we should - being focused on the nation.
It was an unseemly display but out of that has come clarity.
It is now very clear indeed that I have the confidence of my colleagues to lead the Labor Party and to remain as Prime Minister.
It is also clear that Kevin Rudd has appropriately acknowledged he will never lead the Labor Party again.
In these circumstances the leadership contest that has been within Labor is over.
So today, as a government, we can be united and with a sense of purpose - a government of purpose and a government of unity.
In the months ahead, I am determined that we will show to the Australian people self-belief, not self-indulgence.
To show them that we have always got our eyes on them and their needs, not our eyes on ourselves.
My challenge, our challenge, is to get up every day determined to do better that day for the Australian people than we have done the day before.
In a world where our future is not assured there's nothing automatic about a strong and prosperous future for our nation.
In a world where our future is not assured we must get up every day determined to make the right decisions to shape a strong, smart, fair future or our nation.
To get up every day to make sure we are meeting the needs of families under all of the the pressures of modern life.
And as a political party too we must get up every day determined to win the only political contest in Australian life that matters, and that is the contest between the Government and the Opposition come 14 September.
That contest is about whether or not on 15 September, I will lead a majority Labor Government or Mr Abbott will lead a Liberal Government focused on taking money out of the hands of Australian families, cutting jobs and cutting services.
Today, I announce the team of Ministers and Parliamentary Secretaries I have selected to get on with the job of governing in the interests of all and to lead our campaign for Australia's future.
I will be today recommending a range of ministerial appointments to the Governor-General.
First, Minister Anthony Albanese is being promoted and will take on the critical role of Minister for Regional Development and Local Government, taking over the work done by Minister Crean across regional Australia since the 2010 election.
Minister Albanese will add these responsibilities to his current portfolios of Infrastructure and Transport. These portfolios complement each other.
He will be supported by Catherine King in the outer ministry as Minister for Regional Services, Local Communities and Territories and as Minister for Road Safety.
As the Member for Ballarat she is one of our strongest voices in regional Australia and she will build on the excellent work she has done as a Parliamentary Secretary.
Tony Burke adds Arts to his existing portfolio. He has a long-standing interest in the arts and is a very keen recruit to this task.
He will be assisted by Michael Danby as his Parliamentary Secretary, whose lifelong commitment to the arts started when, as a teenager, he worked in his mother's art gallery.
The critical human capital and productivity portfolio of Minister for Tertiary Education, Skills, Science and Research will be taken by Dr Craig Emerson.
Craig will retain his current roles as Minister for Trade and Competitiveness and Minister Assisting the Prime Minister on Asian Century policy.
I believe this combination has great synergies in our Asian Century agenda.
That means of course that we are seeking to secure for our country all of the economic opportunities that can flow from this century of change in our region.
Dr Emerson will bring a personal passion and credibility to this role.
Craig will be assisted by two junior Ministers: Don Farrell as Minister for Science and Research, and Sharon Bird as Minister for Higher Education and Skills.
They are both proven Parliamentary Secretaries and are ready to take on these new responsibilities.
As part of today's changes the Department of Climate Change will be merged with the Industry Department and will become the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education.
As such Greg Combet is now the Minister for Climate Change, Industry and Innovation and his Parliamentary Secretary Yvette D'Ath will also have a revised title.
Gary Gray joins the Cabinet as Minister for Resources and Energy, Minister for Tourism and Minister for Small Business.
He brings personal knowledge and experience to the role, as of course he is a former senior resources sector executive.
He has been a tireless advocate for business in his own community and across the state of Western Australia and he will bring that sense of purpose to promoting the interests of the tourism sector and small business.
Energy policy is of course no longer just about supply as we move to a cleaner and more productive economy, energy efficiency is central to energy policy and it will be central to the work undertaken by Gary Gray's department, the department known as DRET.
Gary will be assisted in tourism by Don Farrell and in small business by Parliamentary Secretary Bernie Ripoll.
His current roles as Special Minister of State and Minister for the Public Service and Integrity will be taken by the Attorney-General Mark Dreyfus.
Jason Clare joins Cabinet as a full member while retaining his current responsibilities.
Jan McLucas is appointed as Minister for Human Services. Jan is a very experienced parliamentarian, having served as a Shadow Minister and Parliamentary Secretary since 2007 and I'm delighted that I've been able to promote her to this role.
Further Parliamentary Secretary appointments are as follows.
Andrew Leigh will be Parliamentary Secretary to the Prime Minister, to me. Andrew will bring to this position his distinguished academic record in public policy and economics.
Matt Thistlethwaite will become Parliamentary Secretary for Pacific Island Affairs and Parliamentary Secretary for Multicultural Affairs.
Matt strengthens our team with his ability to focus on the large multicultural communities in Sydney; obviously the lead Minister, Minister O'Connor, is Melbourne-based.
Amanda Rishworth, a great local campaigner, becomes Parliamentary Secretary for Sustainability and Urban Water, retaining that portfolio in my original state of South Australia where I think it belongs.
She will also be Parliamentary Secretary for Disabilities and Carers.
Shayne Neumann MP, who before his parliamentary career ran a successful law firm, will be Parliamentary Secretary to the Attorney-General and Parliamentary Secretary for Health and Ageing.
I am happy to take questions.
JOURNALIST: Prime Minister, you say your Government governs for all.
A couple of your Ministers have expressed, or departing Ministers have expressed, concern about the reversion to class warfare, issues concerning the focus of the Government not being at the middle ground.
What do you say to that today?
PM: My focus is on Australian classrooms and what happens in them and that's at the centre of Australian political life and the life of our nation.
We as a political party have always been dedicated to ensuring that there is opportunity for all.
That kids get a chance at a great life by getting a great education.
That people get a chance at a great job and prosperity for their family.
That's what drives me, that's what drives Labor; it's driven us in the past, it's driving us today and it will drive us in the future.
JOURNALIST: Prime Minister, Anthony Albanese seems to be a protected species in Labor.
A lot of his contemporaries, who were doing as he did last week, in Kevin Rudd's office talking about numbers and about how they thought they might be able to defeat you have stood down, you've said took the honourable decision, and Anthony Albanese has been promoted.
Can you explain the difference in your approach to those?
PM: A number of my colleagues determined to resign from the executive, from being a Minister or a Parliamentary Secretary. They've taken those decisions and I have described those decisions as an honourable course.
For Minister Albanese of course he has given a public explanation of his position. I have always been able to work with Minister Albanese well. He has been very central to the life of this Government.
And I believe he will serve very well and with a very strong sense of loyalty into the future.
JOURNALIST: Prime Minister, further to Kieran's question on criticisms from the outgoing Ministers, Martin Ferguson was saying that the class envy, the class war which started back in May 2010 with the beginning of the RSPT as it was then.
He also said that your party, the Government, needs to improve relations with the business community and start acting in a more inclusive way.
Do you take on that criticism or do you deny its veracity?
PM: Well, former Minister Ferguson will offer his own views.
But my views are as follows. It is in the Labor tradition to have profit-based tax for turbocharged sections of the economy that are very profitable.
I'll remind that it was a Labor Government that brought in the Petroleum Resource Rent Tax, a tax designed to tax the most profitable part of that industry, when it is at the peak of its profitability.
It is therefore in the absolute mainstream of Labor tradition to have a similar arrangement for other sections of the resources sector, and that's what the Minerals Resource Rent Tax is; a tax for when mining ventures are at their most profitable so that can be used for the benefit of the Australian nation.
Both of them, both taxes - the PRRT and the MRRT - recognise that the underlying asset that is being exploited belongs to the Australian nation as a whole.
As for the Government and our relations with the business community, we each and every day have to do better and strive better than the day before.
I have said that to you, I am determined that I and the Government, every member of it, gets up every day determined to do better than we have done the day before.
So I am always prepared to pursue deeper and better relationships with stakeholders in Australian society, including the business community.
But I have very deep connections and continuing exchange with the business community now.
I have invited them to the table in new and innovative ways including the tripartite council I have brought together and the work we've done through the Business Advisory Forum at COAG.
I'm always open to building on that for the future.
JOURNALIST: Two questions if I may. Stephen Smith spoke about zero tolerance from now on.
Between now and the election, if any people in the Cabinet or frontbench starts destabilising, will you not hesitate to push them out as you did with the others last week?
And on a completely separate matter, Kyle Sandilands, do you regret appearing with him on the lawns of Kirribilli yesterday?
PM: I'll take the second part of it first. What I did at Kirribilli yesterday was have around a large number of children from Bear Cottage.
Bear Cottage is a service for very, very ill children. Indeed for children who are on some occasions in the last stages of life; they don't have long to live.
And what I did yesterday was spend some time which meant between chocolate, sunshine, games and Kyle appearing in a rabbit costume, people had a smile, had a joke, had a laugh, engaged the hour.
I think as Prime Minister, making those kids happy for an hour is a very good use of my time.
On the first question, as I said last week and I'm happy to say it again, the contest within Labor is over, it's done, we can now proceed with unity to the next election and beyond.
There of course should be no tolerance for any conduct which diverts eyes from our proper purpose, which is concentrating on the needs of the Australian people.
JOURNALIST: Prime Minister, on the Climate Change Department merger, do you expect to save money from that, first question?
The second part is, what will you say to criticism that you're watering down your commitment to climate change by doing that?
PM: To the second I would say that would be irrational indeed.
Anybody who thinks you can survey the names of departments and somehow come up from that survey as to what a government's policy priorities are I think is really engaged in a fool's errand.
On the reason for the merger, we of course, in delivering carbon pricing and in its initial implementation, had to have a sizeable number of people who were doing the very complicated policy work and then of course overseeing the initial implementation.
We are well into the implementation now. Carbon pricing is working well, so it is inevitable, natural, logical that the number of people you need for the task has reduced.
So yes, compared with the peak of the staffing of Climate Change when the policy work was in full flight and when the implementation work was in full flight, of course part of the natural cycle is less resources are needed.
And given all of that, it makes sense logically to merge it with Greg Combet's other department and when you stand back from it of course, what is putting a price on carbon about?
It's about the future of jobs, the future of industry and the best innovation we can have in our economy, which is why that is the logical fit.
JOURNALIST: Did you have a dysfunctional Cabinet up until the events of last week?
Does this give you a chance to change the way the Cabinet works, refocus it, is there any indication of a change in direction with the announcement today?
PM: I've been very clear with you about our priorities as a government.
It's about jobs, it's about opportunity, it's about getting every child a great education, it's about getting ready for the future including having the best of infrastructure like the National Broadband Network.
It's about building the new institutions of fairness like Disability Care Australia.
It's about making sure that we support families under day-to-day, very modern pressures with that precious task of family life. That is what drives the Government. That's what we are working on.
Of course, I will work properly with my Cabinet colleagues.
I do want to make sure that Cabinet is functioning and functioning well.
And I am very confident with this Cabinet that it will do so.
JOURNALIST: Prime Minister, I have spoken to key Aboriginal leaders across the country who say they were hoping for a new Indigenous Affairs Minister today.
That's not the case. Is Labor ostracising black voters across the country?
PM: We are ensuring that Indigenous Affairs is in the most capable hands that it can be in and that is Jenny Macklin's hands.
JOURNALIST: (Inaudible) she is the right person?
PM: She is a fantastic Minister doing remarkable work and I never for one second considered not having her continue in that role. She is an amazing person doing a great job.
JOURNALIST: In your answer to Mark's question, you said you can work well with Mr Albanese. There is an implication there that you work less well with some of the Ministers whose resignations you've accepted.
Can you tell us in your mind, what is the distinction between the support they offered for Kevin Rudd and the support Mr Albanese offered?
And secondly, do you accept the criticisms of the likes of Martin Ferguson and Simon Crean about some decisions that have been made and the way they've been communicated, and will you be changing your approach?
PM: I will be doing what I've outlined today. So that's what I'll be doing.
On Minister Albanese I'm not going to be dragged back into what I have rightly described as an appalling week.
Minister Albanese has been very clear publicly about his conduct last week. I've always felt a sense of comfort with Minister Albanese and his position.
I felt that last week, I feel it now, it's appropriate for him to not only continue but to be promoted and that's why I've taken the decision.
JOURNALIST: You didn't feel it with others; you didn't feel the same way?
PM: I think Minister Albanese has dealt publicly with this matter. I don't have anything to add on that. I'm not recanvassing the events of last week. It's done and dusted.
JOURNALIST: On the specific criticisms that have been made of your style and decision making from Mr Ferguson and Mr Crean, what do you say to those criticisms?
PM: Being in Cabinet comes with a set of rights and it comes with a set of responsibilities. My Cabinet colleagues as selected by me today will be fulfilling both.
JOURNALIST: Ms Gillard, on the class issue, I think that criticisms have not just been of the mining tax and so on but also the rhetoric of the Government, of Wayne Swan, of yourself on occasions, the attack on the billionaires and so on.
Do you think with hindsight that that language could have been, should have been chosen better?
PM: I think for us as a Government we have got to be clear about our values and about our priorities, and as a Labor Government we do govern in the Hawke and Keating tradition.
And if I can give what you I think is the best example of that and much under-commented on in the modern age, it is that we are the only political party presenting at the next election with a belief in the power of markets and their role in a modern economy.
I believe in the power of markets, as did Hawke and Keating. I believe you can have well-functioning markets that enable you to run a nation and a society of fairness.
Mr Abbott doesn't believe that. Look at his climate change policy. It would make a Soviet central planner blush, his climate change policy.
So in the mainstream of the Hawke-Keating tradition, we believe in the power of markets, we believe in their efficiency. Of course they've got to be properly regulated; we believe that markets can be used to strengthen an economy.
We've overseen growth in our economy at the worst time in the global economy, so a lot of the nonsense you hear about do we believe in growing the pie or better distributing the pie, we have grown our economy and yes, we believe that its benefits should be fairly shared and that that growing economy should be managed in the interests of working people.
That is the Hawke-Keating tradition. That is the tradition of this Labor Government.
JOURNALIST: Prime Minister, you've created a couple of super-ministries and a couple involve a fair bit of domestic and foreign travel, particularly Dr Emerson's and Mr Albanese's ministries.
Do you think that they will have too much on their plate and how disruptive are all of these changes in the lead-up to the budget and having Ministers with ERC and so forth?
PM: The budget preparation will continue as it is continuing now.
In terms of the balance of work for Ministers, I did very directly consider that.
To take a Minister like Dr Emerson, number one he is assisted in the trade portfolio by a Parliamentary Secretary so he does have a team to support him.
Number two of course, Minister Emerson is now a very experienced Trade Minister. So he's not dealing at the upswing of the cycle where you've got to learn every bit of what's in these very complex transactions.
If you want him to give the oration about everything that's under consideration in all of the international trade negotiations he involves himself in, well, good luck and we'll see you back in June because that's how long it will take.
So because of his experience and that depth of knowledge, I am very confident he can perform both roles. And there are clear crossovers between these roles.
We obviously discuss resources when we come together like this because of their importance to our economy. But don't forget the importance of international education.
Don't forget that that's one of our big trade items, and don't forget it's the sort of thing that is often discussed at international meetings because we seek to encourage people to come here and study in Australia and pay good money to do so.
JOURNALIST: Prime Minister, do the independents - just on Anthony Albanese - did the independents indicate to you that they would like him to remain as Leader of the House?
PM: I didn't speak to the independents about Minister Albanese's role as Leader of Government Business. I did speak to the independents and talk to them about Minister Albanese performing this role.
One of the agreements we have with the independents is that there be a minister in this role.
JOURNALIST: Prime Minister, one of the things did mention out of last week was the media laws. It was obviously something that you believed needed to be reformed. Will you be taking a new package to the election campaign?
PM: As we indicated last week, those - we succeeded in getting two media law Bills through that are important to our media market and to their operation; one the licence fee rebate which recognises the changing economics of free-to-air television; two the verification that there wouldn't be a further free-to-air network given the changing economics of free-to-air TV.
The expanded mandates for the ABC and SBS, the further support to community television, and all importantly, the obligations about Australian content across the multichannels, recognising the changing platforms across which everybody works whether they be public broadcasters or commercial broadcasters so we did succeed in getting that through.
On the other Bills, I've indicated that they were over at the end of last week; that is the Government's position.
We made an endeavour to get them through. That endeavour wasn't successful.
So that is the end of those Bills. As for any further statements on media policy, you should not expect them to be in the form of the Bills before the Parliament last week.
JOURNALIST: Prime Minister, continuing on the independents and their involvement in these changes, is it reasonable to say that the chances of any substantial increases is regional funding is now greater under Mr Albanese than it was under Mr Crean?
PM: Our funding, remarkably increased funding for regional Australia, is already there in the Government's budget papers so I would refer you to all of the decisions we've taken for the benefits of regional Australia.
Of course the independents represent regional seats and so Mr Oakeshott, Mr Windsor, you would expect them to be fierce advocates of regional Australia and they are.
As is so many of my own political party - Catherine King, for example, who has been appointed as a Minister today; just one example of a Labor person who fiercely advocates for regional Australia.
We've responded to that advocacy by already allocating new resources and we will continue to allocate from those resources.
JOURNALIST: Prime Minister, the current generation of union leaders today basically described Martin Ferguson, his views, as being 30 years out of date and really not understanding the reformist spirit of the Hawke-Keating Government.
Do you agree with those views? And secondly, what do you say to the suggestion that Gary Gray will be too close to the resources sector having worked for Woodside for seven years?
PM: I'm not going to involve myself in the details of that debate.
What I would say for the reforming agenda of this Labor Government, is I think when we look at the history of workplace relations reform, we've got to understand the history in a time sequence.
I very much supported the enterprise bargaining focus of the Hawke and Keating Governments.
It was controversial at the time; came against a backdrop of a far more centralised system and they moved to enterprise bargaining including the ability of people to enter an enterprise bargain without the involvement of a trade union.
That concept, enterprise bargaining, possible with unions, possible without unions, is at the centre of the Fair Work regime that we have brought into effect.
What that means is under Hawke and Keating they had a very centralised system and moved to a system with more movement in it.
Then of course, the Howard Government of which Mr Abbott was a key member, blew that out of the water and went to a system where working people's conditions could be smashed and people could be sacked unfairly and never have any say about it, against that backdrop of having blown up any Australian understanding of how workplaces should work, we've introduced the Fair Work system.
And at the heart of it is the concept that came out of the Hawke-Keating era of enterprise bargaining.
On Gary Gray, Minister Gray I think brings appropriate expertise to the portfolio of Resources and Energy.
JOURNALIST: Did Minister Albanese or any of the other Ministers you retained offer at any stage their resignations in discussions you've had?
PM: No, I did not and I did not seek them.
JOURNALIST: Prime Minister, Simon Crean today went on Alan Jones and discussed a fair few things. Amongst others, he said one message you have to get is not to attack superannuation.
I think he put it that the Government shouldn't build their surplus by attacking the surplus of retirees. What do you say to that?
PM: Well, superannuation is a precious Labor creation.
It is only in this country because of the work of Labor Governments and it only be increased in this nation for working people because of the work of this Labor Government.
And so superannuation is only ever safe in Labor hands.
In the hands of the other side of politics, what you see is the cuts that Mr Abbott wants to impose on some of the lowest income Australians in our nation, the people who most struggle for a dignified retirement because they retire with very low superannuation balances.
So, I can assure everyone, superannuation - that is a system which gets working people a decent retirement and treats working people with the dignity - that will always be at the core of what we do.
JOURNALIST: What about new taxes on nest eggs?
PM: Well look, I have already ruled out, as you would be aware, taxation on the withdrawals that come in the retirement phase.
JOURNALIST: Prime Minister, how are these changes, particularly the merging departments, impact on public service numbers? Will we see a decrease or increase?
PM: These changes in and of themselves are not impactful on the total number of public servants.
Obviously there are people moving to take different responsibilities, but for Climate Change, that has been happening for some time now, obviously people who were in the absolute depths of the policy work weren't needed to keep performing that policy work once the model was struck and legislated and done.
People who were there at the absolute height of the implementation, many of them have gone to other functions already because we are well into the implementation phase, and as you all know, every bit of nonsense we had to listen to from the Opposition about what carbon pricing would mean and how the implementation would work has been proved spectacularly wrong.
JOURNALIST: Prime Minister, why did you keep Mark Butler and Bob Carr in their current positions and are you concerned at all about what role they played in the destabilisation?
PM: Well, clearly not.
JOURNALIST: Prime Minister, you said that the leadership was done, it's all over.
Was there a sense of satisfaction that you finally disposed of Kevin Rudd last Thursday, and if he is running for Griffith, how will you campaign with him?
PM: I've described last week as appalling for good reason and so that was my sense of feeling about the events of last week.
As I've said over the weekend when I was asked these questions, I will campaign with all members of the Labor team, including Mr Rudd.
JOURNALIST: At the start when you said unity spectacularly eluded us, last week was appalling, Labor was self-indulgent.
Is that in a sense you trying to - is that sort of an apology to the Australian people for what happened and trying to - because a lot of the polls and pundits and people on your own side say there is no way Labor can win the election now.
Are you trying to, I guess, apologise to the people?
PM: Well, the words mean, Phil, what the words mean.
And on the question of the election, as I said in my statement to you at the start, the only genuine contest there is in Australian politics is whether on 15 September there is a majority Labor Government led by me with a clear plan for the nation's future, with a plan to keep growing and strengthening the economy and a plan to support working families, or whether Mr Abbott is Prime Minister, with all of his negativity, with his plans to take money away from Australian families, and his plans to cut jobs and cut services.
That's the real contest.
Thank you very much.