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TRANSCRIPT OF PRESS CONFERENCE

NEWCASTLE

3 AUGUST 2010

Subjects: The economy; Interest rates; National Rental Affordability Scheme; Federal Election
campaign; Paid Parental Leave.

PM: Thank you very much. I'm joined by Jim Arneman, our candidate for Paterson, and by Sharon
Grierson, our Member for Newcastle. Now, to those journalists who have been travelling with us, I'm
sorry. Wayne Swan, in order to meet his commitments in Melbourne, has had to commence his journey
back to Melbourne so the logistics changed from the earlier press conference this morning. So I
apologise for the Deputy Prime Minister and Treasurer not being here.

Now a little bit earlier today, the Reserve Bank announced that it was keeping official interest
rates on hold. Official interest rates would be kept at 4.5 per cent. Now this is obviously welcome
news. It's welcome news for families and for businesses around the country that are doing it tough.
When we first came into Government we inherited from the previous Government of which Mr Abbott was
a senior member, a high inflation environment with inflation at 16 year highs. We set about
expanding capacity in the economy by investing in infrastructure and investing in skills. Then, of
course, the global financial crisis and global recession started engulfing our world, including
impacting on our economy and at that time we made the right economic choices to keep people in
work.

Today, we have official interest rates at 4.5 per cent. We have inflation at 2.7 per cent within
the Reserve Bank's band and what this means for families around the country, compared with the
interest rates that they were paying when Mr Abbott was a senior member of the Howard Government,
they are paying 6.25 per cent, sorry, they're paying the official rate 4.5, obviously different
from the 6.75 that the official rate reached when Mr Abbott and Mr Howard were in Government - a
difference of 2.25 per cent.

Now what those numbers mean for Australian families if they've got a typical mortgage, say around
$300,000, we're talking about mortgage repayments being around $2,800 less per year. So official
interest rates staying on hold is good news.

Now, on a day like this it brings into sharp relief the fact that economic management is at the
centre of this election campaign. As Prime Minister I am saying to the Australian people, loud and
clear, that what happens with our economy determines everything else.

When the global financial crisis threatened, we made the better economic choices - the better
economic choices to keep people in work. If we'd done what Mr Abbott had advocated then we would be
in a recession now, we would have an additional 200,000 Australians unemployed. We would be picking
our way through that economic problem. Instead, of course, we are positioned to build for growth
but that requires us to have the better economic plan for the future - the better economic plan to
bring the Budget back to surplus in 2013, the better economic plan to keep supporting jobs, the
better economic plan to keep having decent conditions at work for working Australians under the
Fair Work System.

The better economic plan to keep investing in skills, particularly the skills and capacities of our
young people through Trades Training Centres, getting the real skills they need for life and for
work. The better economic plan with supporting increased superannuation for hard working
Australians. Greater national savings and better retirement incomes for the future.

The better economic plan by investing in the infrastructure we need for the future, particularly
the National Broadband Network, with its power to transform our economy and the better economic
plan with reductions in company tax and special supports for small business.

Now if you run through each of those categories, either Mr Abbott is opposed or he can't tell you
what it is that he would do. He can't tell you when the Budget would come back to surplus under
him. We certainly know he'd return to the worst aspects of Workchoices. We know company tax would
go up under him and we know he wouldn't support the special tax breaks for small business. We know
that Mr Abbott wouldn't support increased superannuation for working Australians. He would not
build the National Broadband Network. He doesn't want kids to have Trades Training Centres and the
opportunity they need to get real skills for real jobs.

So as we count through the things that are important to the future of this economy at the heart of
this election campaign, I am here with the better economic plan for the future and I'm sure, on a
day like this, when we see official interest rates stay at current levels, Australians will be
thinking to themselves about who can make sure our economy continues to grow in the future and
people have got the benefits that flow from a strong economy.

I'm very happy to take any questions. Yes.

JOURNALIST: (inaudible)

PM: Oh look, Mr Abbott's words are a matter for Mr Abbott.

JOURNALIST: Prime Minister, you used an interest rate to underline your better economic
credentials. Are you sort of borrowing from John Howard's 2004 mantra about interest rates? Are you
saying interest rates will remain lower under the Labor Government and what do you say to voters
(inaudible) over the course of the next term as the economy improves?

PM: Look, I would not say to Australians the deceptive and misleading things that have been said
about interest rates by the Liberal Party and members of the Liberal Party. Mr Abbott's made
statements about interest rates during the course of this campaign, so has Mr Hockey. I mean these
statements have been deceptive in the past and they are not honest statements now.

Of course, in the past we saw the Liberal Party go out and claim to Australians that they would
keep interest rates at record lows and then we saw ten increases and we saw official interest rates
hit 6.75 per cent. Now, Mr Abbott and Mr Hockey have sought to try and re-enliven those sorts of
things in this campaign. It wasn't believable then and it's not believable now.

The Reserve Bank sets interest rates independently but the Government can do some things to take
pressure off interest rates. The Government can invest in the skills and capacity and
infrastructure of the Australian economy. We can plan for growth. That's why National Broadband
Network is so important - planning for growth in the future. That's why our other major
infrastructure investments are so important. That's why our education revolution is so important
and there's no more important part of it than training the next generation of trades people in this
country. Mt Abbott wants to cut all of that back, take away those trade training centres, take away
that infrastructure like the National Broadband Network. Yes.

JOURNALIST: (inaudible)

PM: Well look I've heard about these comments from Mr Pyne, and you know, what it indicates is once
again the Liberal Party grand indifference to the quality of schooling in this country. They could
not care less. Twelve years, twelve years of inaction. Twelve years of chatter.

They were always going to get something done: they were going to get national curriculum done-
didn't do it. They were going to get transparency done- they didn't do it. Well I became Education
Minister and I got these things done and the important thing about MySchool, the vital thing about
MySchool is it gives parents more information than they've ever had before, parents are entitled to
know when their child's school is going well so they can go down and applaud the teachers and
congratulate the principal.

But there are also entitled to know when their child's school is doing badly. So that they can go
down to the local school and say: we need to do better and as a government we would be there
standing by to do better.

I simply do not agree with Mr Pyne that it's proper appropriate or indeed right to turn a blind eye
to children being in bad schools. But it's the Liberal Party's track record. My track record and my
promises in this campaign are different: if we're re-elected we'll keep reforming Australian
education, empowering school principals, building Trades Training Centres, providing computers in
schools and as we announced yesterday, providing new Tax Family Benefit levels for teenagers
attached to being in schooling because I want young people to get the skills they're going to need
for the future economy. I don't want to risk them being on the margins of our economy for the rest
of their lives.

Yes, Hugh.

JOURNALIST: There's a Comsec report out that says that in the retail sector maybe half of the
industries are in deflation as retailers have to cut their prices to find anyone who will go into
shops and buy stuff. What does this say about continuing weakness in the economy with implications
to jobs in the future, profits obviously for those companies. How deep a malaise still faces our
economy and can try and emerge out of it?

PM: Look there are businesses out there doing it tough. There are particularly small businesses
doing it very tough indeed. And what that means, is that we need to step up and provide support.
Reducing company tax, it's about enabling our businesses to get on with the job. Providing tax
breaks for small businesses so they can buy new capital and equipment and get tax break help to do
that. These are the benefits that I want to provide to assist businesses that are feeling the
pressure. Mr Abbot says: well company tax up, no breaks for small businesses. Now that's a risk to
our economy.

It's a risky approach. And Mr Abbott has basically made every big economic call wrong. He made the
wrong call in the face of the global financial crisis. And let's just imagine where those
businesses would have been if we'd adopted Mr Abbott's plan and not provided economic stimulus they
would be in a very deep hole now because the economy would be in recession.

We made the right economic judgments then, we had the better economic plan and to support those
businesses for the future we're making the right judgments now, standing for re-election with a
better economic plan. Mr Abbott of course would see increased tax for those businesses and no
special support.

Yes.

JOURNALIST: Prime Minister isn't this why economic policy experts are becoming increasing
frustrated with both sides of politics for not laying out big bold economic reform? Do you have any
plans to unveil any big bold economic reforms that would rival the feats of the Paul Keating and
Howard Governments?

PM: Well can I say with respect building the NBN, the transformative technology of our century. I
want Australia to have it. I don't want us to end up exporting jobs effectively because places like
Korea does and we don't. I want to build on the Hawke/Keating legacy, build national savings, build
superannuation. That's part of my economic plan. I want to cut company tax. That's part of my
economic plan. I want to invest in the skills and capacities of Australians, particularly young
Australians.

That's my economic plan and of course I believe standing here today I can point to some of the
things that we have done to assist businesses with the red tape burden on their shoulder. I talked
before about national curriculum and MySchool. They were difficult reforms but as Minister for
Employment and Workplace Relations I also had this nation take the step it needs to for uniform
occupational health and safety laws. There would have been no bigger reform on the agenda of
business than that national reform and of course I've delivered it. So these things are important
for the future of business, the future of a strong economy and when we turn to Mr Abbott what we
see is either nothing spelt out, no plan to get the budget back to surplus or opposing us on those
things that would keep our economy strong.

Yes?

JOURNALIST: Prime Minister (inaudible) factor on housing affordability but another is the supply of
housing. We've seen a lot of discussion in this election on the demand for housing reform and
whether or not we should have suppressed population growth. Do you have any plans to boost the
supply and therefore make homes for affordable?

PM: Well this Government has taken some important measures to assist with housing supply. Of course
our National Rental Affordability Scheme has been one of those measures. Having a dedicated
Minister for Housing driving policy and its implementation has been important and also we created
the Home Saver Accounts to help people get that all important house deposit together and whilst
providing economic stimulus we certainly supported the residential construction sector by
supporting first home buyers, particularly with additional support for people who were buying a to
be constructed home, a newly constructed home.

If we look at the future already in this campaign I've announced our program to enable and
facilitate the development of affordable housing in regional centres where there are jobs and where
we need more people. This is a modest measure but an important measure to help those regional
cities that want to grow, to grow, with affordable housing and for those who deserve our care and
compassion we've also been investing in social housing as well.

JOURNALIST: (inaudible) Cambodia who escaped while on an excursion to a bowling alley at the
weekend. Do you think the taxpayers should be funding illegal immigrants to be go on outings in the
community?

PM: Look detention management arrangements are basically the same now as they were under the
previous Government. We have them managed by a company. I believe the company in that case is
Serco. If it does the wrong thing then there are fines and penalties under the contract.

Mark.

JOURNALIST: Prime Minister it seems we've entered something of a parallel universe here. We've got
an Opposition Leader who doesn't want a debate and a Prime Minister who does. Is it possible that
Mr Abbott might be a bit scared of the (inaudible)?

PM: Well Mark Riley, I will allow you and others to come to their own conclusions but I think what
Mr Abbott is fearful of is a debate on the economy because he doesn't have an economic plan for the
future. And what that means for Australians is he doesn't have a plan about them having a job. He
doesn't have a plan about the skills and capacity of our economy. He doesn't have a plan about
supporting their kids to get the skills they need for the jobs of the future. He doesn't have a
plan to reduce company tax. He's got a plan to put it up. He doesn't have a plan to make sure that
our economy keeps growing, so I'm not surprised really he's running from that debate.

JOURNALIST: Why, if the economy is so important, why did you knock back the opportunity for further
debates a couple of weeks ago and what did you mean at the time when you said you'd debated Mr
Abbott enough?

PM: Well look I have debated Mr Abbott a lot as people know on national television and of course in
the Parliament having been opposed to him in various capacities over the years. What I was asked
last night is whether I would have another debate and I said I would have a debate on the economy.
I'm still waiting for Mr Abbott to take that challenge up.

JOURNALIST: But Ms Gillard-

PM: Yes, Mr Coorey.

JOURNALIST: One of the reasons (inaudible) Channel Seven to (inaudible) you said today anywhere,
anytime. (inaudible), Monday the 16th?

PM: Let's just be a little bit fair here with the question. I was asked on television last night
whether I'd debate Mr Abbott. I said I would debate Mr Abbott on the economy. Then the television
station involved nominated Sunday night. I didn't nominate Sunday night. Now, if Sunday night
doesn't suit Mr Abbott because of his campaign launch I understand that, so we'll do it on another
night.

JOURNALIST: But Ms Gillard, you've criticised Tony Abbott for changing his mind, why are you
allowed to change your mind on this issue and get away scot-free on it?

PM: I criticised Tony Abbott for not having an economic plan for this country. Hasn't changed his
mind on that. He's never had an economic plan for this country - one thing he's been remarkably
constant on. There's never been a day in this campaign that he had an economic plan for the nation.
I think that should be the subject of debate.

Malcolm Farr.

JOURNALIST: Your predecessor said he didn't want Australia to stop making things but do you agree
if perhaps (inaudible) in Newcastle to ask what are you going to do to improve on his efforts to
make sure that jobs aren't exported (inaudible)?

PM: I'm expecting a shout out over my shoulder now, Newcastle.

JOURNALIST: I'm a Queenslander.

PM: Sharon - she'll correct you on those things. On Australia making things for the future, you
know, I believe we can be in the future a country that manufactures goods. And one of the things we
achieved when the Global Financial Crisis was threatening this nation, is we worked. We worked with
our manufacturing sector so, for example, our car industry came through.

Now, if we'd accepted alternate economic advice it could well and truly have been possible that our
car industry did not come through in whole or in part. We got our car industry through. Making
things in this country is important. It's about investments in skills. It's about investment in
infrastructure. It's about working co-operatively and respectfully with businesses. It's about
investing in innovation. As the Prime Minister, as a Government, we are committed to those things.
Once again, I don't think we've heard any economic plan from Mr Abbott on these matters.

We'll go to the back and then come forward. Yes?

JOURNALIST: Do you believe your Government deserves some credit for today's interest rates
decision?

PM: Well what I believe is this - that the Government, when we were threatened with the global
financial crisis, took a set of decisions. We did what had to be done in a moment of great
pressure. We did what had to be done to keep Australians working. And I acknowledge now and I've
acknowledged in the past, not everything went according to plan. Not everything was on track. And,
you know, we've responded where things were not on track in relation to the insulation program and
some other matters. But what I would say is this - we had a choice. We had a choice - do you step
up, do you try and make a difference, do you try and keep Australians in work? And we said, yes you
do. Faced with that choice Mr Abbott said, 'no you don't, you just let Australians get thrown out
of work'. I fundamentally disagree with Mr Abbott's choice, there's nothing more important to the
safety and security of families than having a job. It's about a pay packet, it's about meeting your
obligations, it's about feeding your family, paying your mortgage and it's about the dignity and
self worth that comes with work. That's what we put a priority on.

Yes, Alex.

JOURNALIST: If Tony Abbott (inaudible) why is it that voters (inaudible) more capable on economic
management than you are?

PM: Well, I'm not going to comment on poll details. But I am, during this campaign, going to be
lying out very clearly, as I've sought to do today and at earlier points in the campaign. The
differences between me and Mr Abbott when it comes to the economy, we've got a decision as a nation
to make on the 21st of August and there are only two possible outcomes. When people wake up on the
22nd of August either I'll be Prime Minister with my economic plan, or Mr Abbott will be Prime
Minister and he doesn't have one.

JOURNALIST: Prime Minister will you be going to country areas in this campaign and if so when?

PM: Well we will be travelling right around the country.

JOURNALIST: Including country areas?

PM: Look we'll be travelling right around the country. You should expect to see us in many
locations and places.

JOURNALIST: Prime Minister you've criticised Tony Abbott's paid parental leave levy as a Coles and
Woolies tax but the Managing Director of Coles, Ian McLeod, has said that he doesn't believe the
levies will actually push up grocery prices or what have you. Relatively small in fact on grocery
prices and the biggest impact will be rising electricity costs which, you know, is another factor.
So are you running a scare campaign on this? What will you do to stop rising utility prices? And
just your general comments on what you think about that?

PM: What I would say on cost of living matters is this - as a Government we have understood that
families are cost of living pressures. There are many people, many people who are doing it tough.
Many people who at the end of the week or fortnight looking at what has come in the pay packet and
what needs to go out and they are trying to work out how this all adds up. And what is important to
them - decent working conditions, not being at risk of having their penalty rates stripped away.
WorkChoices did that and Mr Abbott supports WorkChoices. Having a Government that has provided tax
cuts for three years in a row, that created the Education Tax Rebate to take the pressure off when
you have got the cost of getting the kids to school - and I have extended that to school uniforms.
Taking the pressure off when you are meeting child care costs by increasing the Child Care Tax
Rebate to 50 per cent.

And just yesterday in this campaign I announced another measure to assist with cost of living
pressures, and that is ending the old fashioned structure of family tax benefits system, which
seems to assume that kids leave school at 16 and you didn't really need to have family benefits for
them at a realistic level any longer. Somehow a 16 year old got less than a 15 year old. Yesterday
I announced that we have stepped forward and for families that get the maximum rate of family
benefit it's a difference of more than $4,000 per teenager. Now, these are important measures.

Mr Abbott is there with a company tax increase. That will put pressure on prices. You used the
terminology 'a small increase' - well there are many Australians who when collect up items in the
supermarket get the trolley to the checkout, what in some people's eyes might be a small increase
is a big deal for them. A big deal about whether that basket of groceries that they need that week
is affordable. My economic plan is to put company tax on businesses like Coles and Woolworths down.

JOURNALIST: (inaudible) in New South Wales for the last three days and you've visited six seats,
all of which are Labor-held seats. Now (inaudible) Newcastle?

PM: Well I am standing here with Jim Arneman.

JOURNALIST: (inaudible) electorate of Newcastle, you are not likely to lose this seat. Is that a
sign that's where the battle ground is now, in Labor-held seats, trying to defend territory rather
than to gain new seats.

PM: You will see us campaigning in many places around the country.

JOURNALIST: Prime Minister, given the Reserve Bank today (inaudible) sluggish. So, do you think
middle income earners deserve another new tax cut to cope with living costs?

PM: What we are announcing in this campaign is what is affordable. During the course of this
campaign there have been days I have faced some criticism for being pretty forensic, pretty
determined to make sure that proposals are affordable. We won't be announcing anything in this
campaign which means that we are doing anything other than bringing the Budget back to surplus in
2013. I am determined the Budget will be back in surplus in 2013.

JOURNALIST: (Inaudible) do you still think the Rudd Government had lost its or do you think it was
convenience of taking power (inaudible)?

PM: I indicated when I became Prime Minister that there were a set of issues, that I was concerned
the Government had lost its way and that the Government was not at that stage designing appropriate
solutions to.

And of course the list includes - having a sustainable Australia, not a big Australia. It included
dealing with our mining companies to get a set of arrangements about what became the Mineral
Resource Rent Tax. It included dealing with policy positions for asylum seekers for the future, and
I have designed my proposal where we are in dialogue with East Timor about. What I said when I
became Prime Minister, indeed in my first statement, I acknowledged that good work had been done to
keep Australians working during difficult days, that's what I am saying today as well.

JOURNALIST: (inaudible) working against you, have you found any evidence (inaudible)

PM: What I have said on these questions, is that I am not going to be diverted by them. If I am
elected as the Prime Minister on the 21st of August, what I will do is I will run a traditional
Cabinet system of Government. People will have their say in the room and they will hold their
silence outside the room. They are the appropriate rules for a Cabinet system of Government. Thank
you very much.