O'BRIEN: Prime Minister we might start with the Olympic torch in Canberra on Thursday and the protest over Tibet, that's pro-Tibet probably and pro-China.
Are you comfortable that all security aspects of the Australian leg are covered? That protest can and is likely to be expressed, but contained.
PM: Well, practical measures have been put in place by the AFP Commissioner Keelty. What can be done at a practical level is being done. Of course, we don't know how this is going to unfold in terms of numbers of protestors on either side of the equation but what I can say loud and clear, that if any protestor, irrespective of their political point of view engages in unruly disruptive, violent, unlawful behaviour, then the police will come down on them like a tonne of bricks.
Peaceful protest, yes. Violent protest, under no circumstances.
O'BRIEN: If there is a breach of security, and one has to ask whether you can confidently guarantee that no Chinese officials will engage in direct contact with any protester, in other words, they will remain aloof from any scuffle, unlike London or Paris.
PM: Well the advice that I have got from the Australian Federal Police is that the physical security of the Olympic Torch will be provided by Australian security officials only.
That is the Australian Federal Police. That is why I have said that to the Australian public.
And it is the role of representatives of the Beijing Olympic committee will be simply to attend physically to the lighting and relighting of the flame itself. This torch, so that your viewers understand, is not just a single torch carried throughout, it is a series of different torches, every, you know period of 100 - 200 metres or so, there is a new torch.
So there is a lighting and relighting process to be undergone, but all security, and I say this again, all security is to be provided by Australian officials and Australian officials only.
O'BRIEN: Well you have no doubt seen these Chinese officials in the blue tracksuits described as paramilitaries, recruited from specialist squads in the Chinese People's armed police. That does clearly suggest they are there to do more than simply relight the torch if it's extinguished.
PM: The Australian Federal Police have a responsibility here which is to provide the security and, I am therefore confident, to intervene if anyone else seeks to provide security. That's why the clear understanding, as I am advised between the Australian Federal Police and Chinese Authorities. Is that representatives of the Beijing Olympic Committee are there to assist with the simple physical lighting and relighting of the torch or the flame. That's a complex mechanical procedure.
But around the physical security of the torch bearer and the physical security of the event in toto - that is the exclusive responsibility of Australia security officials.
O'BRIEN: And just so we are absolutely clear about this, if any Chinese were to step beyond that bound, Australian security officials would act in a restraining fashion.
PM: That would be my absolute expectation and that is simply asserting the laws of the Commonwealth of Australia. In this country, we provide physical security. And in this case because it is the ACT, through the vehicle of the Australian Federal Police. And all practical measures, for the greatest extent possible have been, laid in, put in place by the Australian Federal Police.
But I go back to what I said before about protesters, any violent activity, any unlawful activity, whether it is, whatever side of the argument people are on, whatever their political motivation, any violent or unlawful activity, the police will come down on like a tonne of bricks.
O'BRIEN: On the Summit Mr Rudd, you have, you are going to formally respond to the participants by the end of the year. But are you confident that there are at least 10 or 12 good, practical ideas on the table, that will translate into effective policy?
PM: I am not going to pre-judge our final process here, Kerry.
O'BRIEN: But you have been a policy wonk for a long time, what are your instincts about what you have seen?
PM: Oh some good stuff there, of course there is. I mean take for example what people said about the economy. A very simple, but I have got to say, commanding objective, and that is to create a seamless national economy.
Where the rubber hits the road on that, it would be a commitment to dismantle interstate boundaries, boundaries or resistances to trade. That is a single regulatory market. And whether we are talking about a market for water, a market for carbon, a market for energy or electricity, these are big reforms, including for surface transport.
If we are to go down that path, and I think there is a lot of economic logic behind doing it, it will have a big effect on how we conduct the future meetings of the Council of Australian Governments.
O'BRIEN: In other words, one big commission charged with that sweep of responsibilities?
PM: That is if we went down that way, the Council of Australian Government's may rise to the occasion itself in doing that. But you see we are an economy which is partly fragmented into six separate state and two territories economies, by virtue of the regulation which has accumulated over many decades, and in the case of the states, centuries.
Therefore, if you are a business seeking to operate nationally, we at least should be providing our people, our business operators with the same opportunities as national economies currently have in Europe, which is an ability to rock around the place across the market of half a billion people.
We still have resistances when it comes to a market of 21 million.
O'BRIEN: How attractive to you is the idea of a sweeping two year review of the entire taxation system and I might add, in fairness to the opposition that Malcolm Turnbull as Shadow Treasurer has already commissioned precisely that for the opposition.
PM: Sure, sure, sure. Oppositions should do that sort of thing. The, for the Government, and remember for the 11 years, or 12 years that the Howard Government was in office, the opportunity for a top down review of the entire taxation system was there.
Instead, they went for, partial activity on consumption tax, and a partial activity on business tax and business regulation.
O'BRIEN: I think you would have to acknowledge, and I don't want to get bogged down in this, I would like to move on, but I think you would have to acknowledge that embracing a consumption tax was one of the biggest single tax reforms in this country's history?
PM: Well I would disagree with that. I think it is a different form of taxation, but when you come to the overall impact of income tax, of company tax, personal income tax, company tax, indirect taxes, the transaction taxes of the states, and the overall effect of the combined taxation system, measured against global tax competitiveness, the previous Government didn't do anything of the sort. They had 12 years to do it. The last time this was looked at top down was a long time ago as we were told on the weekend I think by David Morgan, some 23 years ago.
So to answer your question directly, I actually think we are getting to that time where we need to have a top down look. I wont committ to the next two years to take the other part of your question, but I think it is time we actually looked at a root and branch reform of the Australian taxation system.
But we will come back formally on that later in the year.
O'BRIEN: I notice one of the Summit participants, the media commentator and author David Marr got one idea just listening at the Summit opening to the national anthem, get rid of it, was his idea, find a better one.
Do you actually like Advance Australia Fair, do you think it does this nation justice as an anthem?
PM: Look the question of the Australian national anthem was settled quite a long time ago.
O'BRIEN: You just don't want to go there?
PM: It's fine. I mean, I even know both the
O'BRIEN: Does it stir you, does it stir you when you have to stand as you do all the time listening to Advance Australia Fair and the words of Advance Australia Fair. Does it stir you?
PM: It does and the reason it does is when you've got verses like, for those who come across the seas we've boundless plains to share. That that should be the resolve of any Australian Government, unlike the one that we replaced which seemed to pull up the shutters when it came to our proper international obligations particularly to refugees who found themselves in real strife.
For reasons such as that I think the anthem says what we aspire to as a nation. It think Australians sing it and sing it with passion and when it comes constructing Australia in the 21st century, I think there are bigger challenges ahead of us like fashioning the Australian Republic, in this area that your now talking about than rewriting with a team of musicologists a new national anthem.
O'BRIEN: Well the Republic is hardly a new big idea. It's already labor policy. But purely pragmatically, do you really think that the majority of Australians and the majority of people in Australian States, are likely or will embrace a republic before the Queens reign come to an end?
PM: Hard to say is the answer to that one Kerry. Remember the republic referendum bit the dust less than a decade ago. Partly because the republican side itself of the argument was split down the middle - direct elects as opposed to the parliament appointing an Australian head of state. That's why you've got to get this absolutely right.
What I found impressive about the sentiment at the Australia 2020 Summit was peoples desire overwhelmingly I thought for us to move to a republic and to become a republic. There was a sense of inevitability about that. But...
O'BRIEN: But I don't know how many of your selected thousand guests were actually monarchists, obviously not many of them.
PM: Well I'm not so sure
O'BRIEN: And whether that was truly representative of the Australian people.
PM: Well I'm not so sure a whole bunch of monarchists applied, I mean they would have been entirely welcome to and I'm sure they will have their say, but the key thing is this. The Australia of the 21st century will be a republic.
The question I think to arise is the process by which we get there, what stages should be gone through to get there. Because the truth is were unlikely to achieve a positive outcome on this unless there is a wide spread national consensus. I'm glad there was a debate on the republic, there doesn't seem to be a whole lot of demurring on it, but we've got to get the actual proposal right.
O'BRIEN: On next months budget and come at us looming closer and closer and coming back to tax. It's been reported that this budget may not include in it's longer term projections, your second term tax reform goal expressed during the election campaign of reducing the income tax rates from 4 down to 3. Down to 15, 30 and 40%. Is there a concern developing within the Government that, that goal in that timeframe is not affordable, is not going to be affordable given where this economy and the global economy is headed?
PM: Well that second part of Labors tax policy going into the last election was always stated in terms of the conditionality being a national and global economic circumstances. We were up front about that at the time
What now we are about to implement is much needed tax reform and tax changes for low to middle income earners. There's $31 Billion worth of those tax cuts coming up through this budget.
In terms of second stage, second wave of course that lies further down the track and we would not dare expect to lodge that up front in these budget papers. But I'm not going to go into the detail of what may or may not be more broadly in the budget papers on the overall question of tax or on the overall question or our expenditure priorities. But I would simply go back to what we did say at the time that second stage of collapsing the rates from four to three will be subject to global economic circumstances.
We want to get what were doing right now, right first then we will address ourselves to what happens in a second tranche.
O'BRIEN: Very briefly as this close to the budget, are you confident that you can meet your expressed target of bringing in a surplus of at least 1.5% of GDP?
PM: Well I said very clearly in January this year that was our target, that's our aim and that's the one we have been working to internally and it's been frankly hard work. Because of the impact which that has on expenditure. But what's our undertaking here, a responsible exercise in economic management because we face a time of global economic uncertainty. Secondly to honour our pre election commitments, that's absolutely fundamental. So many of them go to the financial pressure which working families are under and thirdly to honour our commitments to invest in Australia's future, in Broadband, Education, Health care and the rest. These are all expensive.
Getting it right within an envelope and still deliver a 1.5% of GDP surplus is tough going but we've got to do that because the inflation pressures which Australia is still suffering from.
O'BRIEN: So are you confident you're going to get there?
PM: Well, were still labouring in the field, Cabinet was working on this again today, and we have still got a little while to go. But that's the target and remember we inherited an inflation rate the highest this country as seen in 16 years courtesy of the previous Liberal Government.
O'BRIEN: Close to time Mr Rudd, very quickly your work ethic and the effort your demanding of those around you is already become the stuff of legend. Did you take on board Kim Beazley's observation recently drawing on his thirteen years experience as a Minister and years further as opposition leader that something has to give. That you cant hope to sustain your current pace over time or presumably expect others to do the same.
PM: Well Kim was a very effective Defence Minister and worked his way through a number of Government Ministries and did a first class job for Australia. Each of us is different.
I have a simple view that your given a mandate from the Australian people to implement some important changes for Australia's long term future. As I've said to you on many occasions before I have no interest in being Prime Minister of this country for the sake of being here. I always believe in seizing the day, do what you can today, plan for tomorrow, work ahead, measure what you do and so
O'BRIEN: But you've got a whole string of people around you that you have to rely on not just Ministers and not just your bureaucrats but all the other bureaucrats of every other department, as I say the pace of work so far has become the stuff of legend. Something does, I mean at some points your going to have to pace yourself if your there for the long term?
PM: Ok, were taking a careful measured approach to the future, you'd expect that of us. But you know your not here just to fiddle your thumbs and I always believe in 100 percent effort. Sometimes we're going to get it wrong and I will get it wrong from time to time and you will probably be the first one to pounce on me when I do, and that's the way it should be.
O'BRIEN: One of the first, and to those who see you as a control freak, keeping Ministers and staff on a tight rein, what do you say?
PM: No, look all of us are measured and evaluated by the Australian people and therefore you could just go out there and drift along into the future or you can plan the future and if you plan the future, you've got to measure what you do and that's why for example in the operation of the Council of Australian Governments, we've set ourselves 4 meeting dates for the year, I've said where we want to get to with each of those dates. I don't know whether we are going to arrive at the end point in each of those areas of work that we've got underway but what I know for certain is, If you don't set yourself some targets, your never going to get there. Take for example the Murray Darling, that's been kicking around for 12 months, 14 months. We finally got there at the last meeting and now we have a single authority to manage the Murray Darling river system, Australia's largest inland river system.
I think by being focussed about things you can get there.
O'BRIEN: Kevin Rudd, we're out of time. Thanks for talking with us.
PM: Thanks very much Kerry