Brisbane
HOST: The Prime Minister, Julia Gillard, is in the Sunshine State for the announcement and says it is great news for Queenslanders. Here's what she told me a short time ago.
PM: What it means for Queenslanders is that DisabilityCare - the new way of providing support for people with disabilities - will be rolled out right throughout Queensland.
It means between now and mid-2016 that Queensland will increase investment into DisabilityCare because the sad truth is Queensland is behind other states. It's in fact the state with the worst per capita spend on people with disabilities.
Then from mid-2016 to mid-2019 the full DisabilityCare model will be rolled out. That means in the year that it's in first operation - 2019-2020 - the state will put in $2 billion, we'll put in $2.1 billion.
People with disabilities will be in control of their future. They will be able to work out what package of care they want, and source that package of care.
And people won't be put on the kind of merry-go-round they are on at the moment where there isn't enough care, some people miss out entirely.
Some people only get enough support for one shower a week, some people have had to fundraise privately for their wheelchairs, get their mates to put in some money; all of the things that have made it such a pressure for people with disabilities and their families.
HOST: Prime Minister, will there be a trial site in Queensland as there is in other states?
PM: Queensland hasn't negotiated a ‘launch site' as we call them, and we deliberately call them launch sites because I think people with disabilities thought if we said we were going to do a pilot or a trial, then the full scheme would never come.
Launch sites are happening in New South Wales, the ACT, in Victoria, in South Australia and in Tasmania.
But there has been no launch site agreed here in Queensland.
HOST: Is there scope for that to still happen?
PM: Well look, no proposal has been put forward to us for a launch site. I think really, given Queensland has got a lot of ground to catch up because it has lagged behind the other states, the effort needs to be put in to lifting up to the benchmarks that other states have as they've done their launch sites.
HOST: On another issue that you're still trying to convince the State Government to sign up to, that is the Gonski education reforms, are you any closer on that front do you think?
PM: Premier Newman and I haven't discussed that today. We were very pleased and delighted to be announcing that DisabilityCare is coming to Queensland.
So that's an historic day. I've got more work to do with Premier Newman. I do want to see the schools in this state benefit from $3.8 billion of new resources.
That's a lot of money, but our kids deserve it, and every child in every school should be getting the resources put into their education that they need to get a great education.
HOST: Speaking of money, and that's been a key point over the past week. Yesterday we saw the announcement that your Government will scrap the increase to Family Tax Benefit payments. Today there's news the Government will also defer carbon tax compensation.
The Opposition says both are broken promises. What other bad news is on the cards in this year's Budget? It's under a week away now.
PM: Well the Budget will be next Tuesday and so people will get all of the budget facts and figures from there, but to go through these issues with you; first on Family Tax Benefits.
We're a Government that's very much focused on creating jobs and working with families on the pressures that are on them.
We have cut tax so if your family for example earns $130,000 a year, to pick a figure, then you are $2,500 better off as a result of tax cuts.
We're providing paid parental leave, more money into child care, the Schoolkids Bonus.
Where interest rates are now, if you have got an average mortgage, that's costing you $5,500 less than it used to.
Now a lot of these things are contested in politics. Mr Abbott says he would take the Schoolkids Bonus away. Mr Abbott says that he would reduce the tax-free threshold so people would pay more tax.
So that will be the contest leading up to September.
On the Family Tax Benefit increase that we have said we would deliver next year, we're in a period in our economy that there is a lot less tax money coming into the government than was expected: over-hang from the global financial crisis and strong Aussie dollar are the factors there.
And so to make a saving, a responsible saving decision, we won't provide that benefit now.
HOST: The tax revenue to the government won't be what was forecast, down about $17 billion at this stage.
Can you explain why there is such a great difference between what was forecast and what's now becoming reality?
PM: Yes I can. Unfortunately it's going to require me to use some economic terms, but I will explain them as I go.
HOST: Let's see how we go.
PM: Okay. We are in an usual economic period. We measure what our economy does and is worth in two ways.
One's called Gross Domestic Product, which is really a measure of all of the activities in our economy - that's real GDP.
One is nominal GDP, which is a measure of everything we are doing in our economy times by price.
Now normally prices are going up, so nominal GDP is bigger than real GDP.
We are in this incredibly unusual period - an unprecedented period - where for a sustained period of time now nominal GDP has actually been less than real GDP.
Now what does that all mean in practical terms? By this stage you roll you're rolling your eyes going ‘heavens above'.
What it means is for businesses - because prices aren't rising, we've got very low inflation, people are competing against imports that are cheaper because of the high Aussie dollar, people when they're exporting overseas aren't getting the returns they are used to because of the pressures of the high Aussie dollar - so they are not able to put prices up much.
That has hit into company profitability, that has then hit into company tax, and the big reductions in tax money expected have been company tax write-downs.
So if you were an economist you'd be going ‘gee this is one for the history books, never seen this before'. If you are a government, what it means is that there is less tax money coming in than was very reasonably expected.
HOST: Just before I let you go Prime Minister, and I know time in tight. Yesterday we saw graziers from across Queensland meet in Richmond.
The federal agriculture minister Joe Ludwig was there to hear their concerns and to hear their plight at the moment.
The industry is in crisis - that's the message from graziers. What more can the Federal Government do to help them?
PM: I know Minister Ludwig attended that meeting yesterday and he will take on board what was said to him there.
In order to make proper decisions, obviously he's gone to the meeting, he's got all of the information and he will now bring that back for proper government processes.
But I do realise that it's very, very tough out there and I'll make sure that I stay in contact with Minister Ludwig who wants to hear from industry and understand the full dimensions of the problem.
HOST: Prime Minister thanks so much for your time this afternoon.
PM: Thank you.