PM: I congratulate the National Party on their retaining the seat of Gippsland, a seat which they've held for the last 86 years.
The people of Gippsland have said loud and clear their concerns about impacts on household budgets. From the global oil crisis, and from rising interest rates, both of which hit the family budget hard.
The Government has taken tough decisions, including cutting Government expenditure. But that's been necessary to put downward pressure on inflation and downward pressure on interest rates because interest rates hit family budgets, household budgets, hard.
The Government remains determined to take tough decisions for the future because that's necessary to deal with Australia's future challenges - not avoid them. Because if we avoid them, that puts further upward pressure on interest rates into the future. And that hits all household budgets hard.
It's our resolve, as the Government, to take these tough decisions for our long term future. It's in the national interest that we do so. It's also in the interests of household budgets in the long term that we do so as well.
It means that on the way through that there will be political set backs - I understand that. But our resolve to take tough decisions in the national interest and in the interests of families for the long term remains continuing.
JOURNALIST: Does a swing of over 7 per cent surprise you? It's a lot bigger than expected, isn't it?
PM: Well, when you take tough decisions for Australia's long term future and the future of working Australians, it means that there will be political set backs. That's simply the truth of it.
JOURNALIST: Is it a sign, as, Warren Truss says, that rural Australia feels you have broken your promises to them?
PM: All Australians in rural and regional Australia have an interest in making sure that there is downward pressure on interest rates, downward pressure on inflation. Because that affects all household budgets.
We need to take tough decisions for Australia's long term future because you avoid those decisions, it means that there is further upward pressure on interest rates and that hurts the budgets of all Australians, country and city.
JOURNALIST: Do you very much feel like the honeymoon is over for your Government?
PM: The Government's elected to take tough decisions for the future, and that means that there will be political set backs along the way.
JOURNALIST: So this is a set back?
PM: The Government was elected to take tough decisions for the long term future, tough decisions to keep downward pressure on inflation, downward pressure on interest rates, and that means that there will be political set backs on the way through.
But our resolve remains to act and to govern in the national interest, and to act and govern in the long term interests of all Australian families. If you avoid those challenges, the problem gets worse longer on.
JOURNALIST: Do you think it's about time we had a by-election in Mayo now?
PM: What Mr Downer does is a matter for Mr Downer and the Liberal Party.
JOURNALIST: Do you think the Liberal Party (inaudible) to distract from the Gippsland results?
PM: Well, that's a matter for the Liberal Party.
I'm elected to govern for all Australians, and tough decisions are necessary for the long term.
Family budgets are under real pressure. Household budgets are under real pressure. Which is why we have got to continue to make tough decisions to put downward pressure on inflation and downward pressure on interest rates - because interest rates are the enemy of all families.
JOURNALIST: Speaking of tough decisions, does New South Wales Labor have some tough decisions to make about its leader? Would you support John Watkins as Premier?
PM: Oh, this is a matter entirely for the New South Wales branch of the Labor Party.
I've always expressed my support for the Premier, and that continues to be the case.
JOURNALIST: But would you support John Watkins if he became Premier?
PM: I've always supported Premier Morris Iemma, that remains the case.
JOURNALIST: Prime Minister, we've seen a spate of child neglect cases around the country. I'm just wondering if there's any plan for like a federal oversight in the same way that you've talked about for health for child protection bodies within the state?
PM: You know, I think, as a nation, we must do better and can do better for the protection of our little ones. I think that would be the feeling of all Australians, particularly on a day like today.
A national framework for child protection is necessary. We can do better, and must do better, for the protection of our little children because what's happening is absolutely revolting.
JOURNALIST: Just on Zimbabwe, Robert Mugabe's due to be sworn in. Do you have any plans to make any representations about what is happening over there on the international stage?
PM: Mr Mugabe has no political legitimacy at all. What we've seen is the destruction of democracy in Zimbabwe. And Mr Mugabe's legitimacy should be challenged by the entire international community, and not just by Australia.
In Zimbabwe, the people who suffer are the poor people of that country. I've been there for a few weeks myself some years ago. People should not be suffering from a lack of food in a country so rich in resources. In Zimbabwe they are because Robert Mugabe's destroyed the country's economy, destroyed their democracy. He deserves the universal condemnation of the international community.
Australia for its part will now examine a tougher range of sanctions against members of the Zimbabwean regime.