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Tonight - the race against time in China. A rare triumph as a survivor is pulled from the rubble
but as rescuer s continue to be hampered by bad weather and aftershocks the death toll rises.

The relief effort mounted by the Chinese Government has been rapid and it has been huge. And we
mend the Chinese Government for that.- commend the Chinese Government for that.

CC

Good evening. Welcome to Lateline. I'm Tony Jones. Less than 24 hours after delivering a Budget it
claims is anti- inflationary, the Government is facing the prospect of a wages break-out. A senior
NSW union leader has told the '7:30 Report' the push is on for wages to keep pace with inflation at
a minimum. And that a return to pattern bargaining is a real istic proposition.

John Robertson is at liberty to talk about anything he would like to talk about and he's at liberty
to put his view. On the interview I saw he put his view that there should be pattern barring ing
and in the very next breath he conceded he was in conflict with the Government on that question,
that is not our policy.

Does the Government agree that workers should expect their wages to keep pace with inflation? You
will see that's a question Julia Gillard is very reluctant to answer. That's coming unemployment
fi, first, our other headlines - heavy weather, the struggling aid effort in Burma now face s the
threat of a possible second cyclone. Mountain mama - West Virginia hands a big win to Hillary
Clinton but analysts predict the end is nigh. And on Lateline Business, Chinese take out a share
surge for BHP Billiton on speculation a

15,000 dead, 40,000 missing in China quake

15,000 dead, 40,000 missing in China quake

Broadcast: 15/05/2008

Reporter: Stephen McDonell

In China, as rescuers push to the heart of the earthquake disaster, they are finding entire towns
virtually obliterated.

Transcript

TONY JONES, PRESENTER: In China the full horror of Monday's earthquake is slowly being revealed.

As rescuers push to the heart of the disaster they're finding entire towns virtually obliterated.

The State press is now reporting an official death toll of nearly 15,000, with 40,000 buried or
missing.

The AFP news agency says an Australian search and rescue team has been unable to travel to the area
because of the shattered transport system.

China correspondent Stephen McDonell reports from near the epicentre.

STEPHEN MCDONELL, REPORTER: The first aerial shots of Wenchuan, close to the epicentre begin to
show the extent of the destruction there. Buildings have been reduced to rubble, roads twisted and
torn and not a person to be seen.

But as much needed aid is dropped, survivors emerge.

Closer to the regional capital Chengdu, rescuers have been working for days.

At a school where hundreds are feared dead, troops rush bodies away from the scene. Then a rare
moment of triumph as a student is found alive.

But for most there's only loss and pain.

This women fainting with grief.

At another school there was more grief as rescue workers fought to free the trapped and injured.

At this building they used microphones to pick up voices and video cameras to find the victims.

Eventually a survivor was freed, but it was a painful escape.

China's deputy leader Premier Wen Jiabao has been comforting the victims. He told this girl "don't
cry, the Government will take good care of you".

As well as strong aftershocks, rain has increased the dangers of the rescue effort raising fears
that more buildings will collapse.

The worst hit areas are north of Chengdu on the road to Beichuan in town after town, the
destruction is everywhere.

As we've come further and further into the mountains we've seen more evidence of the carnage caused
by this earthquake.

In this village every house has been destroyed, more than 50 people have been killed and those that
remain, they're homeless and they say their food is running out.

We witnessed a makeshift funeral for an 80-year-old man in the rubble of his house. Villagers told
us he was a veteran of the Korean War.

Entire regions are without water so it's being trucked in from the outside.

Mianyang's main stadium is a dedicated meeting point, with thousands of people buried in this
region huge crowds are gathering to search for missing loved ones.

And still the trucks keep coming bring waves of rescue workers. Their time is running out to save
many more people.

Stephen McDonell, Lateline.

Second cyclone brewing off Burma coast

Second cyclone brewing off Burma coast

Broadcast: 15/05/2008

Reporter: Tony Jones

There are fears tonight that Burma could be hit by another cyclone developing off the coast.

Transcript

TONY JONES: And to that other natural disaster in our region, and there are fears tonight that
Burma could be hit by another cyclone which is developing off its coast.

It's a threat which would hamper further relief efforts already marred by bad weather and an
intransigent Burmese Government.

Five more American aid flights have delivered their cargoes to the military junta in Rangoon.

But Washington is pushing for an increased humanitarian role, including approval for three
warships, laden with supplies to help survivors.

BRYAN HAMPSON, CORPORAL, US AIR FORCE: I wish they would allow us to come and do like what we did
with past disasters like the tsunami in Indonesia, when we come in and give them the aid they need.

TONY JONES: Aid agencies are under no illusion about the extent of their mission.

MARCUS PRIOR, WORLD FOOD PROGRAMME: Right from the very beginning we planned an initial response to
750,000 people for six months because people have lost everything.

TONY JONES: Reports continue to emerge that even now only a small portion of aid is reaching
survivors with the junta hoarding the best of it.

Budget shakeout: has Swan got the balance right?

Budget shakeout: has Swan got the balance right?

Broadcast: 14/05/2008

Reporter: Hayden Cooper

It was billed as an inflation-busting Budget but it seems not everyone is convinced that Federal
Treasurer Wayne Swan has the balance right.

Transcript

TONY JONES, PRESENTER: It was billed as an inflation busting budget but it seems not everyone's
convinced that Wayne Swan has the balance right.

The treasurer and the Prime Minister have launched the long hard sell of the Budget as the
Opposition ramps up the criticism.

Today the Government's been defending the new means test for some welfare payments.

And it's also acknowledged that close to half a million people are likely to drop private health
cover as a result of budget changes.

From Canberra, Hayden Cooper reports.

HAYDEN COOPER, REPORTER: Finally something tangible to fight over.

WAYNE SWAN, FEDERAL TREASURER: Last night this Budget began a new era of investment in the future.

MALCOLM TURNBULL, FEDERAL SHADOW TREASURER: What kind of voodoo economics is he peddling?

WAYNE SWAN: It's a bit rich getting that question from the Liberal party. They're the best friend
inflation ever had.

HAYDEN COOPER: Self promotion comes naturally in Canberra, but even more so on the day after the
Budget.

(Kevin Rudd laughs)

Direct from the PM's office, or from the corridors of the press gallery, the Budget blitz was
unstoppable.

WAYNE SWAN: We place a lot of importance on delivering our election commitments and we have
delivered all of them.

MALCOLM TURNBULL: What is Wayne Swan on about? Because what he's got is a budget that is
stimulatory, it actually adds to inflationary pressures.

HAYDEN COOPER: The Opposition claims the treasurer's made a rookie error by forcing up the prices
of goods like alcohol and luxury cars.

MALCOLM TURNBULL: Where's the inflation fighting in that?

HAYDEN COOPER: And it may even try to reverse the alco-pop tax hike in the Senate. Already, the
pressure from Government is on.

NICOLA ROXON, FEDERAL HEALTH MINISTER: Our measure will reduce by 43 million bottles, 43 million
375 mill bottles per annum, every year.

HAYDEN COOPER: On the new $150,000 means test for the baby bonus and family welfare, there's
division in the Liberal ranks.

BRENDAN NELSON, FEDERAL OPPOSITION LEADER: Well we'll just have a look at this.

RADIO PRESENTER: You haven't got an opinion on that?

BRENDAN NELSON: Well we'll just have a look at the fine print on this.

MALCOLM TURNBULL: I think as a means test it's probably in today's age, it's probably around the
right point.

HAYDEN COOPER: Easy ammunition for the treasurer.

WAYNE SWAN: Mr Speaker, they don't know whether they're Arthur or Martha. The Liberal party have
lost their way.

HAYDEN COOPER: Still some experts argue the means test is too soft and it should be set much lower.

IAN MCAULEY, UNIVERSITY OF CANBERRA: Those cut off points, 150,000 some for family benefits, some
for individual benefits are very, very generous.

Only about five per cent of households have incomes above 150,000. They could have been made
significantly lower.

HAYDEN COOPER: The level of spending is the other line of fire for both sides.

The Liberals doubt the treasurer's gone far enough in cut backs.

MALCOLM TURNBULL: All of his pre-Budget rhetoric was a complete con.

HAYDEN COOPER: The Government says Malcolm Turnbull's suddenly dropped his opposition to cuts.

LINDSAY TANNER, FEDERAL FINANCE MINISTER: I ask myself the only explanation I've been able to come
up with, Mr Speaker, is that somehow the member for Wentworth has managed to clone himself. And
there are actually two Malcolm Turnbulls out there.

He's managed to clone himself. And there is no truth in the rumour he used his ego as the stem cell
either, by the way.

HAYDEN COOPER: But even the treasurer and finance minister themselves are at odds over just how to
describe the spending cuts.

WAYNE SWAN: A modest tightening, Tim. That's how I'd describe it. A modest tightening.

LINDSAY TANNER: A significant contraction of fiscal policy.

HAYDEN COOPER: Today did bring confirmation of one figure - treasury expects 485,000 Australians to
ditch their private health insurance, now that they no longer have to pay the Medicare levy.

WAYNE SWAN: I can confirm the treasury analysis. Yes.

HAYDEN COOPER: By now, Wayne Swan knows that keeping everyone happy is impossible. Pensioners and
carers say they've been ignored in this Budget, while others believe nothing's been done to counter
inflation.

But tomorrow, the focus shifts to the Opposition leader as Brendan Nelson meets his big test - the
Budget reply speech.

Hayden Cooper, Lateline.

Industry applauds infrastructure fund, calls for details

Industry applauds infrastructure fund, calls for details

Broadcast: 14/05/2008

Reporter: Rachel Carbonell

The Federal Government is soaking up the praise of the business sector after the release of its $20
billion Building Australia fund - a shot in the arm for ailing infrastructure investment.

Transcript

TONY JONES, PRESENTER: The Government is soaking up praise from the business sector after the
release of its $20 billion Building Australia fund - a shot in the arm for ailing infrastructure
investment.

But it's also facing increasing calls for details.

The Opposition says it's nothing but a Labor party slush fund.

Rachel Carbonell reports.

RACHEL CARBONELL, REPORTER: The Government is billing it as nation building.

WAYNE SWAN, FEDERAL TREASURER: The greatest modernisation of the architecture of the Australian
economy ever contemplated in our peace time history.

RACHEL CARBONELL: It says it's fixing the big infrastructure backlog it inherited.

ANTHONY ALBANESE, FEDERAL INFRASTRUCTURE MINISTER: We're setting about repairing years of neglect
by those opposite.

We all know that capacity constraints at our ports, on our roads, in our rail lines all add to
inflationary pressures in the economy.

Congested roads and rail lines add to the cost of moving freight from the farm gate to the kitchen
table, and from the mines to the ports.

RACHEL CARBONELL: The jostling and sniping over just where the money will go has begun.

MALCOLM TURNBULL, FEDERAL SHADOW TREASURER: It's put $20 billion into a Building Australia fund. A
Labor party slush fund, paid for with the savings of Australians.

There's no guarantee that the money will be spent wisely.

We will not know what financial or economic return the fund is required to seek. You could not
raise $20 for infrastructure in the public market with that lack of detail.

RACHEL CARBONELL: Questions are being asked about whether the infrastructure funding which will
come close to an election year will be good for the country or good for the party.

LYNDAL CURTIS, ABC JOURNALIST: Will you commit to releasing details of Cabinet discussions on why
projects were either accepted or rejected, so we can be sure you're not indulging in massive
pork-barrels for either your own re-election purposes or those of State governments?

WAYNE SWAN: Well I'm not committing to any of those things. But what I do commit to is a completely
open and transparent process, which will be out there for all to see as we go through the process
of establishing the funds.

RACHEL CARBONELL: The Government's answer is a new policy advisory body called Infrastructure
Australia, which will bring the Commonwealth, the States and Territories and the private sector to
the same planning table.

It's being described as independent and arm's length. But the Government is already able to reallot
for few landmark projects on its wishlist.

Among them, fixing Melbourne's East-West road and rail connections and the Western Ring road,
plugging the gaps in Brisbane's Gateway motorway, and tunnelling under Sydney for a new metro rail
link.

And there's more.

ANTHONY ALBANESE: In Adelaide, transport sustainability study. In Perth, looking at the airport
transport master plan including a rail link.

Doing this work now means that we'll be ready to go when the $20 billion fund comes online.

RACHEL CARBONELL: The Government's planning approach has the thumbs up from the industries which
will provide the muscle for all of this infrastructure building.

BRENDAN LYON, INFRASTRUCTURE PARTNERSHIPS AUSTRALIA: There's consistent challenges that we face in
infrastructure as the economy continues to grow, as our population continues grow our
infrastructure needs will similarly continue to grow.

It's not something where you can just set and forget. A growing country has significant needs in
infrastructure and the Government will need to be mindful of that.

RACHEL CARBONELL: Brendan Lyon is thinking even bigger and even longer, nominating a freight rail
link from Brisbane through Sydney to Melbourne. And a world class motorway between the same cities
has top of his list.

Rachel Carbonell, Lateline.

Not everything in the economy is about the Budget: Gillard

Not everything in the economy is about the Budget: Gillard

Broadcast: 14/05/2008

Reporter: Tony Jones

The Deputy Prime Minister and Minister for Employment and Workplace Relations, Julia Gillard,
speaks about reaction to the Federal Budget and whether enough action has been taken to keep
inflation down and the possibility of a wages breakout.

Transcript

TONY JONES, PRESENTER: And after mixed reviews for Labor's first Budget the main question is
whether enough has been done to keep down inflation.

Add to that the news that unions' New South Wales secretary and party heavyweight John Robertson is
virtually threatening a wages breakout, and it's clear the Government still has a lot of work to do
to reinforce its economic strategy.

With that in mind I spoke to the deputy prime minister and minister for industrial relations and
education, Julia Gillard just a short time ago.

Julia Gillard thanks for joining us.

JULIA GILLARD, DEPUTY PRIME MINISTER: Thank you, Tony.

TONY JONES: Now your inflation fighting credentials have taken a bit of a battering today, in the
eyes of many commentators.

So let me start with the question that I tried to get an answer from Lindsay Tanner on last night.
Do you now own the economy? If anything goes wrong from now on, is it the Government's
responsibility?

JULIA GILLARD: Well obviously there's a history here. And the history is of the Howard government's
more than decade of neglect.

And those things aren't going to be fixed overnight, Tony. So they do affect the economy today, and
they will continue to affect it into the future.

In my own area of education for example, the skills crisis that the Howard government allowed to
grow is going to affect the economy for some time to come.

It's going to be a capacity constraint on our economy that people can't get skilled workers.

So whether you're trying to build a billion dollar project in the north west of this country or
whether you're in the suburbs trying to get a plumber to come around to your house, you're going to
know about that skills shortage for a long time to come.

Are we addressing it? Yes.

Is it affecting the present? Yes it is.

And is it in our present because of the actions of Howard government? Well of course, that's simple
logic.

TONY JONES: Alright. We were talking about inflation though, and it's a simple question really.

If inflation continues to go up after an inflation fighting Budget, has your strategy failed?

JULIA GILLARD: Well Tony I'm glad I talked about skills because inflation is obviously driven by a
series of factors in our economy.

We have delivered an inflation fighting budget but the skills crisis is the kind of problem left to
us by the Howard government that puts upwards pressure on inflation and upwards pressure on
interest rates. The infrastructure constraints in our economy also put upwards pressure on
inflation and interest rates.

Those things are not the subject of an overnight fix. They can't be fixed by Wayne Swan handing
down a Budget on a Tuesday evening in Canberra.

What Wayne can do in that Budget and what he did do in that Budget was deliver measures that will
make a difference over time.

TONY JONES: So you can't rule out interest rises, coming after an inflation fighting Budget? And
you can't rule out either that inflation will continue to go up?

JULIA GILLARD: Well Tony, we are using the leavers in the Government's hands to make a difference
and one of those leavers and it's a very big one, is the Budget.

And all of our budget settings have been calibrated to deal with the inflation problem we inherited
from the previous government.

TONY JONES: Yes, but it's gone beyond that now. Because as many people among the economic
commentators are saying, having given more than $30 billion in tax cuts, you're also adding hugely
to the pressures on inflation.

So if inflation goes up, will you go back to the drawing board and ask yourselves whether you've
got the settings right?

JULIA GILLARD: Well Tony, can we go through the inflation fighting score card of this Budget,
you're pointing to tax cuts and to some criticism by commentators, but of course this is a budget
that delivers a surplus at 1.8 per cent of GDP.

This is a budget where new spending has been funded from savings. Indeed in the forthcoming
financial year we've saved $7 billion and we're putting out $5 billion of new spending measures.

So we've actually saved more than we're spending.

We've done those things deliberately.

They haven't been easy, generating that surplus hasn't been easy. Finding the savings hasn't been
easy. We've done it because we wanted to deliver an inflation fighting budget.

Now I know...

TONY JONES: In spite of all those things you've done you've just admitted that you can't guarantee
that inflation won't keep going up.

JULIA GILLARD: Well Tony you're trying to create a world that doesn't exist in reality.

The Budget is very important. And it was vital that the Government delivered an inflation fighting
budget and we did.

Of course other things are going on in the economy - the consequences of the skills crisis are
showing, the consequences of years of neglect of infrastructure are showing. Obviously our economy
is affected by events in the global economy.

Those things are in the mix as we look at the economic settings over time.

You can't just reduce all of this to everything in the Australian economy today is about last
night's Budget.

Can I say this to you, if you were an employer hiring tomorrow and looking for a skilled person,
say a skilled tradesman, your inability to get that person tomorrow wouldn't be a result of last
night's Budget. It's obviously been a problem a long time in the brewing and it's a result of the
under-investment by the Howard government.

TONY JONES: Alright. Here's another key and stark challenge that you face and that is the potential
that wages will start to follow inflation upwards and we've just heard tonight from the New South
Wales union leader John Robertson that his union and others that he's talking to in New South Wales
will not accept anything below increases in wages in line with inflation.

That's around 4.5 per cent right now. Will you as a Government accept that level of increase and
what will the effect of it be on the economy?

JULIA GILLARD: I had the opportunity to see that interview, Tony, and I saw John Robertson make the
point that as a union representative acting on behalf of members, he obviously didn't want to see
people's living standards decline.

He also in that interview indicated that there was great importance in productivity increases and
talking to employers about productivity gains.

Now, what the Government is saying is we will deliver the fair and balanced workplace relations
system we promised Australians before the last election. It's a system that will be a decentralised
one.

Enterprise bargaining based and what that means is people will be bargaining in their workplaces
for increases that are based on productivity gains.

So that is our message to everyone. Our message to everyone in the country that the system will be
fair, it will be balanced and it will have productivity at its heart.

If you are sharing...

TONY JONES: But John Robertson is actually talking about a sort of pattern bargaining arrangement
where by all increases at least match the rate of inflation. So people's wages keep track of
inflation.

Is that legitimate?

JULIA GILLARD: Well, John Robertson is at liberty to talk about anything he would like to talk
about and he's of course at liberty to put his view.

On the interview that I saw he put his view that there should be pattern bargaining and in the very
next breath he conceded that he was in conflict with the Government on that question, that is not
our policy.

Now, Mr Robertson is freely expressing his view. He's entitled to do that so. That's the nature of
the Australian democracy and I think that that's fantastic.

But John Robertson was also saying he understands the Government's policy is that there will be no
pattern bargaining.

TONY JONES: Okay. But should workers expect that their wages will keep pace with inflation, as a
minimum?

JULIA GILLARD: What workers, working families should expect is from this Budget they have been
delivered benefits by the Government which we think are important to taking the pressure off.

We wanted to make sure that working families got the benefits of tax cuts, of things like the
increase in the child care tax rebate, the education tax rebate, all of those things that are going
to help with the household budget.

What working families should also expect is that the Government is going to deliver its
pre-election workplace relations promises.

That means they will be in a workplace relations world where they will have a safety net they can
rely on that no one can strip away. Of course WorkChoices was all about shredding the safety net.

And then in their workplaces they can bargain with their employer for wage increases that are all
about productivity.

TONY JONES: Okay. As a matter of principle, should workers expect their wages at least keep pace
with inflation?

JULIA GILLARD: Well what we're saying to working families is we want to obviously take pressure off
them.

What working families have as disposable income is of course about what comes in the pay packet but
that is a mix of what they're paid and how much tax is taken out. And then of course how much
income is left over is also a function of the sorts of relief they get from benefits like child
care tax rebate.

This Budget has delivered for working families, it's delivered the Government's promises.

TONY JONES: Julia Gillard, I am sorry you're not answering the question. As a matter of principle,
should they expect their wages to keep pace with inflation?

JULIA GILLARD: As a matter of principle, working people should expect that they've got a fair and
balanced industrial relations system that gives them the safety net that no-one can strip away from
them.

The Government's going to give them that and then they will be bargaining in their workplaces.

TONY JONES: Is this a question you can't answer?

JULIA GILLARD: It's question...

TONY JONES: For political reasons?

JULIA GILLARD: No, it's a question I have answered, Tony.

The industrial relations system, our future workplace relations system will give people a safety
net they can rely on. It will give them a fair bargaining system.

In that bargaining system people are obviously going to be talking about productivity trades and
arrangements.

TONY JONES: Let me try asking it in a different way. Would it be legitimate for workers to ask for
wage increases that keep pace with inflation?

JULIA GILLARD: Look, of course in bargaining people are going to ask for things and then people are
going to have a conversation about what is achievable.

Now, of course I expect from time to time you go and see ABC management and when you have those
conversations you might well say, Tony that you should be paid double, triple, 10 times what you're
paid now. And ABC management probably says, Tony, I'm not so sure about that, and then you have a
conversation and you settle your wage.

The national wages debate is about those conversations all round the country.

TONY JONES: Would it hurt the economy if all workers asked for wage increases and got wage
increases that kept pace with inflation?

JULIA GILLARD: What of course we are designing as a system is a system where people have got
enterprise-based outcomes.

So in Labor's system it is not about economy-wide variations, it's about bargaining in your
enterprise.

We want people focused on the productivity challenge and of course we know that if people are
sharing productivity gains then their real gains, sustainable gains, they are not gains that feed
into inflation.

So you're asking me a question that effectively doesn't exist in the workplace relations system of
the future, the one that we will deliver, the fair and balanced system because it will all be about
an individual enterprise.

TONY JONES: Okay. Let's move on to education, your other portfolio.

Brian Toohey writes today in the 'Financial Review' that despite all the talk about education
revolution spending on higher education is actually going backwards in this financial year, in the
coming financial year.

Is that true or not?

JULIA GILLARD: Well, Brian Toohey might like to note that the Government in this financial year, in
this financial year, is delivering half a billion dollars to universities to assist them with
urgent capital needs.

Once again, a legacy of more than a decade of neglect by the Howard Government.

And then in the forthcoming financial year we're delivering on our promises, including our promises
to phase out full fee paying degrees because we think students should go to university based on
merit, not capacity to pay.

Then in July after the next financial year, so in July then we will deliver the first payments out
of our fund, our new education investment fund, and that fund will have in it a total of $11
billion to enable higher education institutions and vocational education and training institutions
to renew and rebuild.

We have higher education review in progress, led by Denise Bradley, a very respected figure in the
sector and of course we are going to await the outcome of that review to map a strategic plan for
higher education for the next decade.

We are moving from the days where the Howard Government neglected higher education except to fiddle
with its industrial relations to a new era in which we will have a vision for higher education in
this country for a decade and beyond.

TONY JONES: Alright. But where is the money for struggling students to keep them afloat in a time
when rents are rising and as we know inflation is eating up part of their income, their meagre
income in many cases, fuel costs and other rising costs and in particular as I've said rent?

The tables show that money for student assistance is actually going down over the next four years.
What happened there?

JULIA GILLARD: Well, we've doubled the number of scholarships, Tony, that are available. We are
moving them from 44,000 to 88,000. That is delivered in this Budget. And of course for students who
get a scholarship that makes a very big difference to the affordability of education.

Yes, there are broader student financing questions than scholarships. I acknowledge that and we
have specifically asked the Bradley review in its terms of reference and in its report to address
the question of student financing and make some recommendations to Government.

TONY JONES: Julia Gillard, was the Cabinet made aware of treasury estimates that your Medicare
surcharge changes would create an exodus of nearly 500,000 people from private health care funds?

JULIA GILLARD: Well obviously, Tony, I don't talk about what happens in Cabinet. I am not going to
make any speculation about Cabinet discussions.

TONY JONES: Okay. Let's put it in another way. Did you know about these figures before today?

JULIA GILLARD: Well what we knew about the Medicare surcharge is it hadn't been indexed. It was
always supposed to be an arrangement applying to high income earners and the Government in this
Budget has moved the thresholds to make it an arrangement applying to high income earners as it was
always intended to.

But because the former Government hadn't indexed the thresholds we had it cutting in at what people
would, I think, acknowledge as middle incomes.

TONY JONES: Did you know as a Government that treasury thought up to half a million people would
actually leave private health care funds as a result of the changes you were contemplating?

JULIA GILLARD: Well obviously the information is available to Government, Tony, and obviously
information is considered but I am advising you of why we took the decision.

We took the decision because we did not think it was fair to have that tax penalty apply to people
on middle incomes.

TONY JONES: Okay. But what happens if 500,000 people now arrive on the doorstep of the public
system, having left private health care?

How much extra funding will you have to put into the public system to cope with that?

JULIA GILLARD: Tony, I think this is one of the issues at the heart of our health care debate which
often isn't represented well in the public.

People who are privately insured are still reliant on the public system for a variety of purposes.
Certainly if you had a critical health event, if you had a health emergency, if you went over with
a heart attack and the ambulance came, whether or not you were privately insured your chances of
living or dying would depend on whether or not the public hospital you got taken to responded well
to your critical health needs.

So people with private health insurance rely on the public system for a variety of purposes and
need a strong public system.

Yes, if there are people who used to be privately insured who drop that insurance there may be some
procedures they turn to the public system for.

But it's not as simple as saying all of their health care needs used to be in the private sector
and suddenly all of that is being switched to the public sector. That isn't right.

TONY JONES: So you don't expect any increasing burden on the public health system if half a million
people leave the private health care system?

JULIA GILLARD: Clearly, what I am pointing out is the picture is more mixed than its being painted.

The Government is also making substantial investments into health, substantial new investments into
health, into the public hospital system, into health right across the board, including preventive
health care because we'd certainly prefer people didn't have those critical health emergencies like
the heart attack I've just describe.

And we are going to be continuing to work with our State and Territory colleagues on health reform,
a process being led by the minister for health, Nicola Roxon. And that will make a real difference
to everyone, public or privately insured, because there are times that everyone needs the public
health system.

TONY JONES: Julia Gillard, we will have to leave you there.

We thank you very much once again for your time, and to see you straight after the Budget.

Thank you very much for being there.

JULIA GILLARD: Thank you.

Analysts say end is nigh for Clinton

Analysts say end is nigh for Clinton

Broadcast: 15/05/2008

Reporter: Mark Simkin

US Senator Hillary Clinton has won an overwhelming victory in the latest Democratic primary but it
looks like it is too little too late.

Transcript

TONY JONES, PRESENTER: Hillary Clinton has won an overwhelming victory in the latest Democratic
primary but it looks like it's too little, too late for her to win her party's presidential
nomination.

With just five primaries remaining, the front runner, Barack Obama appears to have an
insurmountable lead in both pledge delegates and super delegates.

North America correspondent Mark Simkin reports.

MARK SIMKIN, REPORTER: Once again, white working class voters flocked to Hillary Clinton, raising
fresh questions about Barack Obama's ability to attract a key constituency. Many of them said the
candidate's race influenced their vote.

FEMALE VOTER: She understands the middle class person and that really is one of the big reasons I
am for her.

FEMALE VOTER: I think a woman will do a better job at being a president.

FEMALE VOTER: I really like her energy, I like the fact that she is a woman.

MARK SIMKIN: The New York Senator scored more than twice as many vote as her rival - one of her
biggest wins of the campaign.

HILLARY CLINTON, US DEMOCRATIC PRESIDENTIAL CANDIDATE: You know I never give up. I will keep coming
back and I will stand with you as long as you stand with me.

MARK SIMKIN: Hillary Clinton's campaign is still $20 billion in debt and has virtually no chance of
erasing Barack Obama's lead in elected delegates.

He didn't even visit West Virginia today and is focusing on Senator McCain rather than Senator
Clinton.

BARACK OBAMA, US DEMOCRATIC PRESIDENTIAL CANDIDATE: And his own answer to the problems created by
George Bush's policies is give them another four years to fail.

Just look at where he stands and you will see that a vote for John McCain is a vote for George
Bush's third term.

MARK SIMKIN: Hillary Clinton's only realistic hope of capturing the nomination is to convince party
insiders she is more electable than Barack Obama.

HILLARY CLINTON: I am in this race because I believe I am the strongest candidate.

(Cheers)

The strongest candidate to lead our party in November of 2008, and the strongest President to lead
our nation starting in January 2009.

MARK SIMKIN: The undecided party heavy weights are being lobbied mercilessly.

GREG PECORARO, SUPERDELEGATE: I have received calls from Senator Clinton, from Senator Obama and
from a number of surrogates on their behalf, people like Chelsea Clinton, Senator John Kerry,
governor Kathleen Sebelius of Kansas, some former Clinton administration officials, former chairman
of the Democratic National Committee.

All kinds of people like that.

MARK SIMKIN: So how does it work? The phone rings, your phone rings and it's one of the candidates
on the end of the line?

GREG PECORARO: It's usually on my cell phone and there's usually the person who is calling me right
at the other end of the phone saying, hi Greg, this is Hillary Clinton or Barack Obama or whoever
it might be.

MARK SIMKIN: The Clinton backers believe Barack Obama isn't electable but Greg Pecoraro thinks the
African American will make history.

GREG PECORARO: I think he's been the front runner throughout most of these contests and I think he
remains there today.

MARK SIMKIN: Is there a risk, though, that as this process keeps playing out, the longer it goes
the more damage the candidates could do to each other and the Democrats' chance to win the White
House in November?

GREG PECORARO: There's a risk to that. But I think, I have never said that the problem's with the
length of the campaign. The problem was with the tone that was developing in the campaign.

And we were seeing a lot of negativity but the night of the critical most recent critical primaries
in North Carolina and Indiana we saw a significant change in the language.

I am confident that neither Senator Clinton nor Senator Obama would want anybody to say that they
were the cause of us not being able to unite the party.

MARK SIMKIN: So why is Hillary Clinton staying in the race? Officially she wants all the States to
vote but unofficially her advisers are now floating the idea of the former first lady returning to
the White House as Barack Obama's vice-president.

40 per cent of Democrats think it's a dream ticket but it's not clear if Barack Obama is among
them.

BARACK OBAMA: Senator Clinton is still competing. We haven't resolved this nomination. I haven't
won the nomination yet.

So what I've said is I am not going to talk about vice-president this or vice-president that until
I've actually won.

MARK SIMKIN: It won't be long until Barack Obama does declare victory though. There are only five
contests left in this extraordinary battle.

Mark Simkin, Lateline.

Two arrested over bombings in India's Jaipur

Two arrested over bombings in India's Jaipur

Police in India have arrested two men over a series of bombings in the city of Jaipur that killed
more than 60 people.

Transcript

TONY JONES: Police in India have arrested two men over a series of bombings in the historic city of
Jaipur that claimed more than 60 lives.

A curfew is imposed after the explosions overnight which killed 63 people and wounded 216.

Five blasts ripped through a jewellery market crowded with evening shoppers.

Police are unsure whether they were suicide attacks or if the explosives were detonated on parked
bicycles.

Local hospitals were inundated as survivors were brought in.

There are no known links to any extremist group and no-one has yet claimed responsibility for the
attack.

A quick look at the weather now - a few showerers for prth Perth, a shower or two in Adelaide, a
possible storm in Brisbane, a fine day but an evening shower for Melbourne. And fine for the other
capital cities. That's all from us. Lateline Business coming up in a moment. If you would like to
look back at tonight's entire view with Julia Gillard or view any of our stories or interview, you
can visit our website. How here now near is Lateline Business with Ali Moore.