O'BRIEN: The Prime Minister joins me now from our Canberra studio. Kevin Rudd, if we can start with oil. You and Brendan Nelson are both arguing over very small savings at the bowser, although his small savings are bigger than your small savings, that's if you have savings in the end.
But isn't it time to look Australians in the eye and tell them the news is only going to get worse on oil?
It may get better in the short term, there may be moments where the price drops a little, but in the long and the medium to long term, it's going to get worse and that there's nothing significant that you can do about it. Now isn't that the case?
PM: Kerry, on global oil prices, no one that I can speak to, either within the Government, that is the Treasury who are looking at the long range forecasting here, or abroad, can give you any confidence about where global oil prices will be in three, six, nine, 12 months time.
It is a very murky future that we face. What we do know for a fact is that right now we have the greatest global oil shock in 30 years. We know for a fact that prices are up 400 per cent since the Iraq war, 100 per cent in the last 12 months alone. It's led to protests and riots in the UK, Spain, France, as well as Indonesia and our own region and South Korea.
So this is a massive shock to the global economy. It's happening across all economies at present. What we need to do is frame an intelligent, long term response to this, and Australia as of when we took over Government did not have a long term energy strategy, a fuel strategy.
We're working on that, six months into office, and we hope to have something to produce later in the year on that score. Dealing with the long term challenge, as well as being mindful of the impact on people's hip pocket now.
O'BRIEN: Well, you talk about it being murky and that you don't really know where it's going to be, but there is a growing and very credible body of advice that with the odd slot going down slightly, that it's simply in the long term going to be going up and up and up.
Richard Heinberg is a highly respected world expert on the oil crisis and when the world reaches the point where known oil reserves reach their peak and then irreversibly decline, he says, over the long term, nowhere for oil prices to go but up.
Now, in that context, isn't it just faintly ludicrous to be arguing over whether you can save a cent a litre here or cent a litre there?
PM: But Kerry, that's why my responses to many of these questions in parliaments in recent weeks have been framed in terms of one, global oil supply, what can be done to boost investment in those countries which are the principal oil exporters? There's a problem there. Two, on the demand side. Global initiatives on energy efficiency and the huge great push countries of China and India? Three, what do you do in terms of energy efficiency in economies like our own? That goes to the whole regime of fuel efficient cars, in particular. Four, what do you do in terms of an alternative fuel strategy? And five, what do you do in terms of public transport, in order to make it accessible, particularly in our metro areas?
This is a long term strategy as well as dealing with the immediate hip pocket impact on motorists who are feeling it right now.
O'BRIEN: But what is your brief description of the underpinning philosophy that says the Rudd Government will not reduce the excise on fuel as a means of alleviating the pain at the bowser for Australians?
PM: Well, our view is that we're faced with, as a government of responsible economic management, we're faced with a long term challenge here. It is about global energy supply, it is about global oil supply and what you do in terms of adjustment at home. That's why the framework we adopt is the five points I've just run through a minute ago.
O'BRIEN: But why can't part of that framework be - I'm just trying to hear a clear statement of philosophy here - why can't part of that framework be short, medium and long term, cutting the excise on petrol, because your revenue is going to continue to grow anyway as the price goes up. Why not try to alleviate that pain for motorists by cutting the excise?
PM: What I said just before, Kerry, I think on a couple of occasions is, this is a long term strategy. The sort of global factors you just pointed to before and you quoted some international experts. As I said, "As well as assisting motorists now". How do you assist motorists now?
A couple of things you can do practically is, what we've sought to do, mindful of what's happening, through global oil prices through the budget. The family budget at the end of the day is aided by tax measures, childcare tax rebate measures and the rest.
A typical young family as a consequence of the Budget we've introduced of a couple of kids, $52 a week better off. Mr Nelson's measure that he's announced in terms of excise, $2.50 a week better off.
O'BRIEN: But before you go any further Mr Rudd, that's not a fair comparison because, in fact, that tax cut that you're implementing is very similar to the tax cut that the Coalition would have implemented if they were going to be in government now anyway. So to line up your 50 bucks against Brendan Nelson's $2.50 is simply a false premise and secondly...
PM: Not at all Kerry actually, no. Can I answer your question first? The Liberals made no promise whatsoever on child care tax rebate, no promise whatsoever on the education tax refund, and furthermore, are opposing right now our measure when it comes to the Medicare levy surcharge. All of those are unique to Labor.
Finally on the tax point, there are $4 billion worth of tax in the original Liberals' proposal which went to the Top End which, in fact, we've taken away from the Top End to give people back in those other forms of income support including the education tax refund.
O'BRIEN: But when you promised those things Mr Rudd in the election, you didn't promise them in the context of helping people with the pain at the bowser from petrol; it was in the context of other specific things you were going to provide those cuts for?
PM: Yeah but, Kerry, standing back from all of that, cost of living pressures affecting families right now fall into what baskets? They fall into the cost of petrol, the cost of groceries, also rents, mortgages, as well as the cost of child care.
What we're trying to do through our family support package and the assistance we've provided pensioners and carers in the Budget is to provide some support in those areas and I'm making a clear contrast point between Dr Nelson's proposal, which is not even supported by Mr Turnbull, the alternative leader.
O'BRIEN: It is now.
PM: Well, who knows where the Liberal Party are, because they are leaderless at present, and divided. And so it's $2.50 on 50 litres fill up a week as against the $52.50 proposal that we have when you aggregate all the measures.
Also, looking at the question of specific taxation treatment, we've said before that tax treatment in terms of the GST treatment of fuel is also part of the Henry Commission of Inquiry and that unfolds.
O'BRIEN: But when you say that the Liberals are leaderless at the moment, the fact is that Dr Nelson is making some headway in the polls and judging by today's poll in the Fairfax Media, he's winning the political debate on oil. At least the political debate.
Do you accept that you have to do better in explaining why it's not a good idea to cut the excise and why people would do better to work out how to consume less petrol?
PM: Kerry, in all the conversations I've had with working Australians around the place in recent weeks, recent months, I know full well that motorists are suffering a lot of pain at present. I've heard that message loud and clear.
What I'm seeking to say in response to that is in helping the family budget you can do that also through the tax system, the child care system and a range of other ways. As I said, that typical family I've spoken of, that's a $52 effect.
Also, can I just say this; the Liberals have had 12 years in office. We had a 33% increase in oil prices last year when they were in. Where do we hear any measure on their part? And it seems in the last six months what we've had is suddenly, this is uniquely the responsibility of, uniquely the fault of the Labor Government. Can I just say, let's put all this into a bit of historical context.
I accept responsibility for the Government. I accept the criticism which is forthcoming. I understand that motorists are under pressure. This is a global challenge. We are trying to work through it both with a long term strategy, which did not exist as of when we took over, as well as the specific Budget measures aimed at helping with the family budget on the way through.
O'BRIEN: Okay, on industrial relations Mr Rudd, you've left it vague with the 10 basic principles of safety net in terms of working conditions that you've confirmed today. You've left it vague on how long workers might reasonably be asked to work beyond a normal 38 hour week under the new safety net.
But at the same time, it seems it'll be left to the individual worker to argue with his or her employer over what's reasonable. Now that's in the eye of the beholder isn't it, what's reasonable? What constitutes reasonable hours?
PM: Well, Kerry you say it's vague-up. We've been very plain about the fact that the industrial relations system we're building is intended to be a fair and flexible one, having abolished AWAs (Australian Workplace Agreements) for the future, honouring our pre-election commitment. And the groundwork for this, the building block, is these National Employment Standards, ten of them.
We announced these prior to the election in broad outline. We spent the last three months negotiating their detail, as Julia Gillard has done an excellent job with representatives of industry and the unions in so doing, and now they are out. They are necessary to go to the second building block which is to provide advice to the Australian Industrial Relations Commission on the modernisation of the awards. And many of the detailed questions that you've just referred to are dealt with in that second phase of the process.
We are rebuilding an industrial relations system which the other mob after 12 years took a meat axe to, throwing people's penalty rates out that window, their overtime out that window, and then having the hide to talk to the Australian people today about cost of living pressures, when they were quite prepared to blow apart the basic conditions which people had previously in the workplace.
O'BRIEN: And how credible do you think you are on family friendly working standard after that rather unfortunate statement the other day, as the biggest employer in the country, you recently told public servants who are unhappy with working hours you're demanding of them, "Get used to it, more to come, that it was going to increase rather than decrease". It is a serious question, isn't it?
PM: Well, you know Kerry, there are 20... We take our responsibilities as employers, the public service, seriously. They are first class people doing a first class job and their professionalism is right up there.
O'BRIEN: But you didn't say that the other day when you essentially eyeballed them. Look, it might not have been intended as such, but it certainly sounded nasty and that was the way a lot of people took it?
PM: Oh well, things may be perceived in one way, what I know is that on multiple occasions since taking Government and prior to that, I've said consistently my admiration for the professionalism of the public service.
But let me just go to one other point. There are 21 million people in Australia, 100,000 or so of them are public servants, and there are 21,900 million people on us as the Government to work really hard to deliver our program. It's a tough business being in Government. I make no apology for that. We will work hard. We will continue to work hard, and, of course, we will abide by the Industrial Relations laws of the Government in so doing.
But, you know, when I encounter senior Public Servants, they are challenged by our desire to have a real professional policy debate with them. Sometimes the odd barney and good on 'em because that's the way it should be in a normally functioning government. We don't do what Mr Howard did to Mick Keelty which was when he dared offer a different view on terrorism, he had the Foreign Minister go out and accusing Mick Keelty, the Commissioner of the AFP (Australian Federal Police) of doing the biddings of al Qaeda, virtually that's what he said.
O'BRIEN: Okay, with the time that's left, the brief time left, Belinda Neal's nightclub experience. If there happens to be an adverse police finding with regard to the integrity of her actions after that incident, what range of actions is open to you and does that include expelling Belinda Neal from the Labor Party?
PM: Kerry, first things first, it's called due process. There is a police investigation under way and everyone should await its outcome. I think that's very important. And apart from the histrionics of the Opposition in Parliament today, the key thing is that this investigation is on and it should be allowed to proceed unmolested.
I noticed when one was on last year, the Liberals unleashed one of their own to rip into the police for daring to conduct such an investigation.
The second point is this, I have said very clearly both to Ms Neal and in my subsequent public remarks that nobody, repeat nobody, is guaranteed of a future in politics. We are expected to do our job properly. I've said before in the case of Ms Neal there appeared to be a pattern of unacceptable behaviour. We've agreed that she has a course of counselling to undergo. Let's wait to see what happens with the police investigation. But I repeat; none of us has a guaranteed future in politics.
O'BRIEN: Very quickly Mr Rudd, the question from Christopher Pyne of a potential Commonwealth law, criminal law being broken, is there any reason why you would not refer that to the Federal Police?
PM: Kerry, my understanding of police investigations, if it's been undertaken by the NSW police, is that if they in the process of their investigations discover any other matter, automatically this flows to other police jurisdictions. Once again, we have a political Opposition posturing on these questions and I just go back to this point. Mr Howard said last year when the current Member for Bowman was under investigation himself through the AFP, that he Mr Howard, was ensuring that his colleagues made no statements in the Parliament on these matters while an investigation was under way. That was the rule then for the Liberals. It seems to be a different rule now.
O'BRIEN: Mr Rudd, we're out of time, thanks for talking with us.
PM: Thanks very much, Kerry