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Good morning. Welcome to

Insiders. The Coalition took

fresh heart from an opinion

poll that closed a previously

yawning gap by eight points.

Newspoll has Labor on 55%

two-party preferred to the

Coalition's 45%. As a result,

punters snapped up those

tempting odds that were

available for just a day or

two. The Coalition has been backed in from

backed in from $3.70 to $2.80.

The biggest movement with the

bookies all year. Still, Labor

at $1.43 remains the red-hot

favourite. Dig deeper and there

is encouragement for Coalition

supporters because there is a

real disconnect going on. Labor

needs 16 seats to win

Government in its own right.

Here they are, the 16 most

marginal. The punters have

those Labor favourite to win 14 of

those seats. The exception at

Wentworth and John Howard's Malcolm Turnbull's seat of

seat of Bennelong F Labor is

such a red-hot favourite, they

will be favourites to win seats

beyond the 16 most marginal

right? Well, they are not. They

are favoured to win Blair in

Queensland, but that's it. 15

seats in total, Herbert in

Queensland is line ball. So on

that more forensic examination,

the election is as tight as it

the election is as tight as it

gets, a classic too close to

call. And a fair explanation as

to why they are running a

marginal strategy. Here is the

bad news - the locked in vote

for Labor is much higher than

it was before the last

election. That is, the

percentage of people who say

they have almost certainly made

up their minds. 89% of the

Labor vote is now in that

category. That leaves a soft

vote of just 11% and that

vote of just 11% and that

translates to a touch over five

points in the primary vote. So

what does that mean in reality?

It means that if through the

campaign Labor lost all of

their soft voters, the lot,

they would still record a

primary vote of 42%. In the

past, that has been enough,

just. That is a fair

explanation as to why we

haven't yet gone to an

election. On that polling, John

Howard needs to change more

than votes, he needs to change

trends. On the program this than votes, he needs to change

morning, our guest is the

Health Minister, Tony Abbott.

He's coming up after the news headlines. For that, good

morning, Kath McKenzie. Thanks,

Barrie. The battle to contain

the horse flu epidemic is set

to intensify with a phone hook-up today of state and

territory ministers. The states

are bickering over who should

get the first batch of vaccine

when it arrives later this wants week. The Federal Government

wants Victoria to have

priority, but Queensland and

NSW say they should be

first. Fire has caused

extensive damage to Hobart's

historic Myer building, leaving

the facade in danger of

collapsing. The fire started yesterday burning out of

control for several hours

before firefighters managed to

contain it. An investigation

into the cause will begin this

morning. In the AFL, Port

Adelaide has scored a massive

Adelaide has scored a massive

win over the Kangaroos in their

preliminary final. The victory means Port Adelaide will take on Geelong in the grand final

at the MCG next week. And in

rugby league, Manly will play

its first grand final in ten

years after defeating North

Queensland 28-6 at Sydney

Football Stadium. India has

beaten Australia in the

semifinal stage of the Twenty20

World Championships in South

World Championships in South

Africa. India set Australia 189

for victory and held the

Australians to 173 to set up a

final against Pakistan. And,

Barrie, I'll be back with more

news at 11 o'clock. Kath

McKenzie, thank you. If this

was the last sitting week of

the Parliament before the

election, MPs on both sides got

a lot off their chests on

Thursday. The House of Representatives was more

raucous than it was

raucous than it was for years.

The Opposition implied during

Question Time the Government

was responsible for

backgrounding journalists on

Kevin Rudd's medical history

and that's when it took

off. The Leader of the

Opposition far from having

personal attacks has probably

had the easiest run from the

media of a Leader of the

Opposition in a very long

period of time! This is the last Question Time, or

last Question Time, or could

well be the last Question Time,

before the election. And as far

as you're concerned, you would

want it to be the last Question

Time! It takes courage and

conviction to actually summon

forth the courage and

conviction to put your hand up

and to challenge this man for the leadership of the Liberal

invited down Party. The journalist was

invited down to a meeting in a

ministerial suite, in a

ministerial suite for the

purpose of being supplied with

a file with my name on it which

had been trawled through the

press gallery as a dirt file.

Whose office was it PM? You

are so concerned about the

reputation of your Government,

will you make inquiries about

the Labor Party that? I regard the attempt by

the Labor Party to implicate us

in this smear as a piece of -

it's a base diversion. He was

too gutless to ask the question

himself, Mr Speaker. I can beat the Leader of the Opposition

without resort to smears.

Well, we'll go to our program

guests, the Minister for Health

and the Government's Leader in

the House, Tony Abbott,

anything for either political welcome. Morning. Was there

parties to be embarrassed about

parties to be embarrassed about

in terms of what went on on

Thursday? It was a pretty

robust debate, but what came

out of it was Kevin Rudd's

glass jaw for the world to see.

He got his minions to ask

questions that were a fifthy

smear on the Government and it

turned out to be absolutely

baseless. Kevin Rudd was animated, but you see Peter

Costello in that mode the whole

time? This was the first occasion where Kevin

occasion where Kevin Rudd was

under sustained parliamentary

pressure and anyone who saw the

hyper ventilating quivering

state he was in at different

times during the debate I think

would be quite anxious about

his capacity to manage

Australia in a crisis. It would

encourage you to have the

Parliament sit again before the

election wouldn't it? That's in

the hands of the PM. We are scheduled

scheduled to sit on Monday, three weeks from now. Let's

wait and see what happens. Is

that a reflection in any sense

of how the election campaign

will be fought out? It will be

a tough campaign. There is no

doubt about that. We will be

subjecting the ALP to rigorous

scrutiny. They are untested and

untried. They deserve to be

subjected to scrutiny

subjected to scrutiny because

the public need to know what

the Government and the

alternative Government of the

country are really like. It

does seem as if you've decided

the campaign will be about

Kevin Rudd. You are going to

have to undermine his

credibility and stature and to

do that, it will have to be a

very personal campaign? I don't

think it will be a personal

campaign. It will be about

policies and people's character

and capacity to govern. Nothing else.

else. It will be about political character, if you

like, not about their personal

character. And then, of course,

there is the team. Rudd basically has been presenting

himself as a one-man band. I

think if you were to stack up

the respective frontbenchers,

the comparison is very much to

Labor's zis advantage. If not

personal, negative then. You

talk about the inexperience of

Labor's team. You will have to

Labor's team. You will have to talk about the links with the

unions and that sort of thing.

You are OK with negative? Well,

I mean, it will be a tough

campaign, Barrie. Inevitably we

will end up saying things that

are critical of the opposition,

just as the Opposition, I'm

sure, will be relentlessly

critical of the Government. The

Government did say there was no

evidence in the end that a smear campaign has been

conducted by the Government.

But what about that

But what about that example

that Julia Gillard raised that

an Age journalist was summoned

to a minister's office and

offered what was described as

hot material on Julia Gillard,

a folder marked gig ard. That's

smear isn't it? It depends what

was in it. If all it was was

material that is already on the

public record, one way or

another, but perhaps not much

aired about where Gillard

aired about where Gillard

really stands on things, so

what, big deal. I read a

report of Kevin Reynolds in the

paper this morning saying he

had dirt files on Julia Gillard

and Kevin Rudd and he was going

to expose them at some point in

time. Well, I mean, really and

truly, that looks like a union

leader attempting to blackmail or threatening

or threatening to blackmail the

leaders of his own party. So if

there is any dirt floating

around, I suspect it's much

more likely to be Labor dirt on

Labor people, rather than

anything that the Liberal

Party's got. Kevin Reynolds

went on the record and declared

himself. Do you know who the

minister was who offered the

material? You better ask Jason,

the guy that wrote the

story. My question to you is do

you know who it

you know who it was? No, I

don't. When another minister's

chief of staff goes to a forum,

conducted by miss opponent and

accuses hill of acting like a

Nazi prison guard, is that

smear? It's a tacky thing to

say and the minister in

question has reputated the

statements and the staffer in

question has been told he has

mucked up big-time! With those staffers and

staffers and Senator bill

Heffernan is known to do this

as well, you turn up at an

opponent's tourstop and forum

and interject. Is that a

legitimate tactic? It's bad

form and shouldn't happen. That

is a message to Bill Heffernan

as well? I'm stating it's bad

form and shouldn't happen. What

about Kevin Rudd's medical condition. Is that

condition. Is that

relevant? Look, I think it's

his credibility, not his heart,

that is the issue. It's his political character that is in

question, not his health. I

think that's what was really

exposed for the world to see in

the Parliament on Thursday. If

you put yourself up for PM,

it's reasonable isn't it for

the electorate to know you are

in good health and capable of doing

doing the job physically? Yeah,

but that's an issue for Kevin

Rudd. That which he was

claiming as a vicious smear by

the Government he had sort of

let out himself on the Sunrise

program several years ago.

That's an issue for Kevin

Rudd. Clearly the public is

none the wiser as to when the

election will be called, but is

part of the reason for the

delay, essentially you want to run the free

run the free Government

advertisements on television

and in the newspapers well

before you start paying for

your own? Well, look, Barrie,

the ads that the Government has

been running are perfectly

legitimate ads and it's not

unusual for Governments to run

ads. I notice that the NSW

Government spent $110 million

on advertising between the

middle of last year and March

this year. So what the

Government is doing is

perfectly in order and it's not

at all unusual. Have they got a

week or two to run, the

advertisements? They will run

until such time as they can no

longer run because an election

has been called. What do you do

to turn around a deficit, what

do you do at the late stage to

shift the votes I was referring

to before, the rusted-on votes

for Labor? You try to highlight

your own strengths and your

policies for the future and you

also try to highlight the

problems and risks in the

alternative. You try to point

out that 70% of Labor's

frontbench are former union

officials. You point out that

there is now $80 billion worth of state Labor Government

of state Labor Government debt and do you really want

wall-to-wall Labor Governments

given the record of state Labor

and the fact that this is such

an uninspiring, untried and

untested Federal Labor team? I

didn't put a clock on it, but I

think you spent more time on

the negatives on the Labor side

than the strengths on the

Government side? Our strengths are obvious because we've been

there for 11 years. We have

been a good Government, Barrie.

Not perfect, but a very good

Government. Certainly the best

Government of recent times. I

think when the chips are down,

and people are actually

realised that this is for

keeps, vote for a change of

Government and you change the

country, you put a lot at risk,

I think people will come back

to the Government. Well, only

yesterday the Labor Party has

taken a pragmatic decision to

keep the Medicare Safety Net

afterall. You would see that as a sensible decision, I

imagine? Well, it wasn't just a

backflip, it was a triple

summer salt with pike! In the

process, Kevin Rudd has done serious damage to Julia Gillard

who, for years, has been

calling the shaftynet a sham

and last year said it was a

sign of division, exclusion and

unfairness. So, yes, they've

woken up to the fact that the

Government really is the best

friend that Medicare has ever

had by endorsing our policy,

but why did it take them so

long? If you regard an

adjustment to Medicare as asome

summersalt with pike, how would

you describe the Coalition

accepting the basis of Medicare after

after first rejecting it? Yeah,

well, we've accepted the basis

of Medicare for a long, long

time. We went into the 1996

election promising to protect

and strengthen Medicare. That's

precisely what we've been doing

ever since. Health spending has

gone up from 15% to 22% of the

Federal Budget. We've made a

lot of important structural improvements to

improvements to Medicare,

including the safetynet,

loathed by Labor, but now

apparently accepted. We're just

in the process of extending

Medicare in a significant way

to dentistry. So, look, we

really have been on our record

the best friends that Medicare

has ever had and Labor hates

that because they used to think

they owned health policy. Well, they introduced the policy in

they introduced the policy in

the first place. That's why

they find that frustrating, I

guess? We've improved on it,

dramatically. Labor has triple summersalt with pike yesterday

is a tacit confession that we

have done a good job in this area. What Kevin Rudd says is

because a million people have

factored this into their family

budgets and it's impossible for

them to reverse it? Yes, but

this is a fact of life

this is a fact of life we

recognised and we addressed.

Labor denied for years and

promised to reject and repeal.

Now they've been forced to

accept that what we did was

good policy and this is the

problem with Kevin Rudd,

Barrie. He never seems to have

any policies of his own. On

Medicare, on tax, on water, on

indigenous interventions, he

follows the Government and on

industrial policy he follows

the ACTU, but looks a lot more

like a follower than a

leader. During the week you

brought the Mersey Hospital in

Tasmania for $1. Are you ready

to buy more public hospitals

around the country for that price? The PM has said we'll

see how this goes. I've got to

say, I think this is a much

better model for running public

hospitals than that which is

hospitals than that which is

typically used by the states. It will be a community-controlled public

hospital. So you won't have a

CEO with very little autonomy reporting to distant Director-Generals. You will

have a CEO reporting directly

to a local board that will

include local clinicians. So

all the people involved in

making the actual decisions at

the hospital will be local people. I

people. I just think you will

get a hospital which better

serves the community this way

and I would certainly commend

the model to the states.

Regardless of who runs

hospitals, the question really

is are they well-run and I

think that is a recipe for

better run hospitals. There are

now two dueling dental schemes

out there. It seems the difference though is your

difference though is your plan

covers chronic illness, Labor's

is not limited to those

people? If you look at the fine

print of Labor's policy, they

said it was directed towards

people with chronic illness.

Labor's policy is to resurrect

a scheme dreamt up by Paul

Keating in 1994. A lot has

changed since 1994, but not

apparently Labor's thinking of dentistry.

dentistry. Our policy is a much

better policy than handing over

money to the states which have

made such a hash of public

dentistry. From the public's

point of view, I guess they

would be saying they are

pleased the Federal political

parties are back in the game

and taking responsibility for

dentistry that has been lacking

for 11 years. Well, it hasn't

been lacking. We certain ly,

been lacking. We certain ly,

through the private health

insurance rebate, have put $40

million a year into dentistry.

Labor never put any money into

dentistry that way. Let's not

forget, about 85% of dentistry

in Australia is done

privately. Nicola Roxon, your

opposite number, said she looks

across the chamber and sees

somebody who is bore and

doesn't want to be there in

health? That's a smear. I say

Nicholla is not particularly competent and not particularly

across the issues, but I don't

accuse her of not being fair

dinkum and I think that's the

cheapest shot in the book, the

one she is constantly engaging

in at the moment. Do I look

like someone who is disengaged? Barrie? I don't think anyone

who has watched my performance

could reasonably come to that conclusion. Not disengaged in politics, but perhaps in

health, that was her

accusation. Are you committed

to this portfolio beyond the

election? Of course I am. Yes,

I am. And what I would like to

do, Barrie, I would like to

have the responsibility of

negotiating the next healthcare

agreements. These come up once

in five years. Kay Patterson

negotiated the last lot. That

concluded just before I took on

the job. I have to say Kay did

a good job with the healthcare

agreements. They were big

improvements on the previous

ones, but certainly I would

very much like to have that opportunity. Perhaps you should

have concluded that before the

election? The Government in

power, after the election,

should be the Government that negotiates the agreements

because, let's face it, they

don't start until the middle of

next year. Thanks for your time

this morning. Thanks a lot.

It would be great if the

election was called already. At

the moment there is just a lot

of confusion in politics

anyway. So I will be interested

to see what happens once it is

called. I'm very tired of the

whole lead-up to the election.

Just wish it would be over. I

think Australia is on the brink

of entering an exciting phase

in politics. Right now it

doesn't seem to be moving

anywhere. Kevin Rudd had to hit

the ground running to let

people know who he was and what

he was all about. John Howard

has responded in upping the

ante. It's been a little more

full-on this time around. I

definitely think the

pre-election pressure is

getting to our politicians and

they are behaving like

gorillas, they are seeing who

can beat their chest the loudest. I've watched Question

Time during non-election times

and it's just as revolting! I

think it is getting too

personal to bring someone's

medical conditions into the

campaigning or into the

election sphere. I personally don't care at all that Kevin

Rudd has had a heart operation.

I don't think it's necessary

for me to know. If he thought

he was going to drop dead

tomorrow, I'm sure he wouldn't

be running for Parliament. I'm

not sure if there is a change

in the public mood. I don't

think the polls necessarily

demonstrate changing from one

week to the other a major

shift. I don't think there is

a change in the attitude to the Howard Government whether the

polls have bounced back or forward. I don't think that

those polls reflect what people

will do on the day they go and

vote. It's on that day that

people decide who they will

vote for. I think there was a

big shift towards Kevin Rudd

not that long ago and I think

it's rebalanced a little bit.

This is Tasmania and a lot of

people are getting more

concerned about what is

happening here. Rather than

being a shift towards the Howard Government, it seems to

be going the other way. I think

Tasmania has a significant role

to play in the election. I

think in the seats in the

north-west that we have, that

are so marginal, I think that a

crucial issue. I like to think

I have decided my vote already,

but you never know, someone

could do something that will

make me change my mind at the

last moment. Shouldn't you

always keep an open mind? Always. Annabel Crabb,

they weren't saying they wanted

the election called, but

wanting it over? I'm glad it's

not just us being driven crazy

by the ridiculous suspense. If

you looked at Parliament last

week you could be forgiven for

thinking people were driven by

all this incredible muck-raking

over material that is not

especially mucky. There's a

kind of an aura of hyper bola affecting everybody. It is

clear it's coming through loud

and clear to the punters as

well. Labor is doing an

incredibly slick job of beating

up the muck-raking thing. I

feel vaguely offended that I'm

not being circulated dirt files

regularly. No-one gives me a

dirt file! I don't know why.

There is something unearthly about sitting and watching

Parliament and hearing

politicians talk and argue

about the dirt files you've all

been circulating and I have not

met anyone who has received the

files. They are weather-proofing themselves

about what might be ahead? Yes,

you get in first and claim

smearing dirt units and

ininsulate yourself. Kevin Rudd

has used this as a tactic for

the last 1.5 months. Saying,

don't you worry, wait until

Howard launches the mother of

all attacks on me. It's the

ultimate vote for me or the

kitten gets it technique. When

the personal smear didn't

appear, he was in a bit of

bother. So he had to Jack up a

hint of one this week. I

thought it was a pretty

switched on panel down in

Hobart. When I have coffee, I

will go down there and learn

something! All three of them

were switched on. The dirt

files, don't exist. Both the

Coalition and the Labor Party

collect press clippings and

transcripts from programs like

this and publicly available

documents you can get on a

property register or you can

get on a share file register

and they all have them. They

don't contain dirt, but information. Hiedgeel Hodgman

used to walk around with a dirt

file and openly said that's

what it was. Never opened it,

but had it as a threat. I

think there was nothing in it.

There was probably photographs

of Michael Hodgman in

it. Doing what?! Labor is

doing something serious. What

they are doing is trying to

appeal to pre-existing public

perception that politicians

rake dirt. There is a public

perception there are people in

the Howard Government that do

that. That's exactly what Kevin

Rudd is trying to appeal. To

can I say I think - I prefas

this by saying I know it's

disgusting to talk about this

in strategic terms, my

apologising, but I think he

managed this in a sphrisated

way, the strip club issue. In

most of the interviews he said

some people are saying this

came from the Foreign Minister's office but I

couldn't comment. He did it by

osmosis. This time they went too far to do it in

Parliament. Hang on, before

they got to Parliament, four

Labor frontbenchers and Mr Rudd

himself had been on radio

interviews or doorstops

accusing the Government of

instigating private detectives,

which I loved. That was a

waertgate! Jenny Macklin gets

up and asked the question

directly to Howard in Question

Time and the Government, having

been kicked in the shins all

morning, decides to let one fly

back and Labor says it's a bit

of an overreaction. If on a Government-funded trip or

subsidise ed trip I'm caught in

a strip club in New York, I'm

not blaming Government or the

Opposition. And we are taking

out those 12 pages. Will you

pretend not to see naked ladies

at all? I won't have my glasses

on. Before we go to Kelly kel,

is there a tolerance point for

the electorate and is it fast

running out? Do you reach a

point where if you haven't

called the election by then it

works against you? You can't

pretend it's business as usual.

There are a couple of things in

the way. A Collingwood

supporter may not agree, but

apparently the AFL season is

still going on. There is rugby

league finals to do. And the PM

is inhibited by them. I think

as soon as the siren goes, the

other political siren will be

sounded. That means the PM

wouldn't call an election next Sunday because you have the NRL

grand final. He'll be here

watching the game. I think this

is people like us and people

watching the program focus on.

I think in the regional

centres, no-one cares. In

bakeries in Hobart, they are

running out of patience? They

expect an election before

Christmas and early December.

That will have to be delivered,

that will be OK. I don't think

people out there are demanding

for it to come on. Maybe they

want to see more Insiders programs. Let's check in with

Paul Kelly. Let's go back to the performance in the

Parliament on Thursday. What

did you make of it? It was certainly a spectacular

boil-over on election eve,

Barrie. It is on what

possibly is likely to be the

last day of Parliament in this

particular session, this

particular Parliament. I think

what it highlights above all is

the question of leadership and

the Government needs to focus

on Kevin Rudd's leadership. I

think there is a charge because

there is a sense this could be

a change of Government election

campaign. We've only had five

of those since World War II.

This gives the present

competition between the parties

a particularly sharp edge. I

think we also see some important tactical imperatives

here at work. The Government

has got to target Kevin Rudd.

The Government argument about

Kevin Rudd's leadership will be

that he's not tough enough,

that he is not experienced

enough and a fair weather

traveller and he's engaging in

too many stunts, that he's not

really a conviction politician.

This is the underlying message

from the Government and Labor

wants to discredit that message by discrediting Government.

Labor want to depict the

Government all the time as a

Government that engages in

smears, a Government that is

interesting in dirt files, in

thuggery and the purpose here,

of course, which we saw very

much this week is to try and

ensure that the Government

attack on Kevin Rudd is beaten

from the start. What about the

health angle? Is that an issue

at all? Look, I think the

public has a quite legitimate

right to know when it comes to

the health of political

leaders. Well is important,

given the enormous physical and

mental demands on political

leaders these days, it is fair

enough to expect that we should

know if these leaders have had

significant medical problems or

significant medical procedures

in the past. Of course this has

been a factor. We saw that Mark

Latham did have a health

problem in the previous 2004

election contest between Mark

Latham and John Howard. We saw

in this country going back to

Malcolm Fraser's time, on one

particular time Fraser wanted

to call an election and

couldn't because of his health.

Going back further, John Curtin

n today's world he couldn't

have stayed PM as long as he

did because of his health.

Having said all that, the point

I would make about Kevin Rudd

is while I think Rudd and his

office overlooked that point,

as far as I know there is no

health issue with Kevin Rudd at

all. Rudd has got very high

energy levels and is very fit.

He's walked the Kokoda Trail.

So I think at the end of the

day there is no subsubstantial

point when it comes to Rudd's

health. Newspoll on Tuesday was

more a case of thank God for

small mercies, in a way, but

Government took a lot from

it? It did. I think it was a

good week for the Government.

It started well with the

Newspoll which helped the

Government psychologically.

Bear in mind where the debate

was last weekend about the

Government, about John Howard's

leadership: I think what

happened was the Government

settled down and stabilised.

The leadership issue was clear

with Howard and Costello there,

a declared transition next term

if the Government gets back. So

I think we saw a sense of stability returning to the

Government. No early election

because the early election or

the snap election which may

have been called this weekend

was always designed to solve

the Government's problems. John Howard will give himself

another couple of weeks to have

a good look at Kevin Rudd. I

thought Howard's performance in

Parliament this week was also

fresher and sharper and more

confident. And of course the Government focussed very much

on the economy. Now, just

finally, I want to direct you

to Peter Costello when he was

talking politics with John

Fayne on ABC Radio during the week. The world's largest

economy goes into recession, it

will have an affect on the

globe, including Australia. We

are already seeing the affects

of that. You are seeing the

affects of liquidity dry-up,

interest rates, as between

financial institutions rising

in a very uncertain world. What

that means is it will take

quite a lot of management in

this country. Three years ago

it was an uncertain world

because of a threat of

terrorism, now it's the economy? Well, that's the

mantra, Barrie. You will hear a

lot more of that from John

Howard and Peter Costello

between now and voting day. I

mean, we do have a housing

crisis in the United States.

This has led to very

substantial instability in

global financial and currency

markets. The United States

Central Bank is concerned. It

has significantly cut interest

rates. The background here is

perfect for the Howard

Government. Just consider the

situation: Australia looks as

though it will sale through the

economic tribulations, but in a

global sense, we see an

increase in financial risk, we

see an increase in economic

turbulence and this is the

environment in which John Howard and Peter Costello will

warn the Australian voters to

be very, very careful about changing the Government in this

environment. The other point I

would make about the economy is

tax. We saw Kevin Rudd stumble

this week on tax. I think

that's because tax is not in

Kevin Rudd's head at the

moment. He needs to correct

that. History suggests that

Oppositions tend to get into trouble releasing a new tax

policy during the election campaign. Rudd needs to be

careful of this. He needs to

have tax in his head and he

needs to ensure that the

Opposition tax policy when it

comes will be successful and it

won't see a repeat of previous

mistakes which oppositions have

made in election campaigns on

tax. OK, Paul Kelly, thanks

very much. Look, let's pick up

on the tax point. I wonder why

there is so much pressure on

Oppositions to come up with a

tax policy anyway. Tax is a

normally dealt with around

budget time when you know the

shape of the books. I can

understand the pressure to come

up with philosophy, ideology,

but detail? I think Paul's

point is good, about the danger

that opposition leaders find

themselves in when they start

playing God on issues like tax. Kevin Rudd has been careful

when asked about it to refer

people back to the Opposition's

behaviour at the last budget,

which I think is a sensible way

of handling it. Let's look at

the moment when Kevin Rudd did

slip up on tax during the

week. REPORTER: Do you support

the Government's tax plan, the

tax policy, can you name for me

the rates and the thresholds at

which the rates kick in You

mean the ones... July 1. As of

Jull 1, if you went through the

fourhold s, the high threshold

kicks in at $175,000 and it

cascades. He said I think

$175,000 and cascades down the

spectrum. Tax thresholds don't

cascade. Cascade is a form of

beer, Mr Speaker. It is not a

form of tax threshold. That was a classic got you question from

the journalist. Why ask that

kind of detail? If you don't

know, you ring the Tax Office.

He goes along and asks the

Leader of the Opposition. It is

trying to trip the guy up,

deliberately? Yes, but because

the Opposition Leader has been

saying don't worry, we're

finalising it now, you will get

our full tax policy well and

truly before the election

campaign, creating the elusion

that he and Wayne Swan are up

until 3 in the morning carving

out a tax policy when in fact

it would seem that maybe Mr

Swan is, but Mr Rudd certainly

isn't. I think the questions

are unfair. Politicians get asked them about the price of

bread and the price of milk and

all that. The problem that

Kevin Rudd had was not that he

didn't know the Government's

tax rates, he didn't know his

own tax rates because in a

sense he said he supported the

Government's tax proposals at

the last budget. So if he

doesn't know his own existing

on tax, that poses a problem. I

don't think the question is

fair, but the answer was - as a

general rule, Kevin Rudd is

quite good in deal. He was at

the The Sydney Institute in

June... Sorry to interrupt, but

when they launched the tranche

of their IR policy, Julia

Gillard was over the detail,

but it was obvious Kevin Rudd

wasn't. I agree on IR he didn't

handle it well and on tax he

hasn't, and these are serious

problems because one was his

policy and one was a Government

policy he adapt ed. But by in

large the questions are not fair. He shouldn't answer

them. The best answer would

have been a case of got to zip.

If you answer something like

that, do it with a bubble

entry, flawless or don't answer

it. In many ways, I actually

don't know if people were going

to look at that and think,

"Right, I'm not voting for him,

he can't name the five tax

rates." Who could? I think it

is a matter of political

ballast. It gives the Treasurer

something to go on with. It is

like an insider debate point. I

think it is damaging for the

Opposition in that sense. Why

do they feel the need to come

up with so much detail? It's

not time for a tax policy.

That's budget time. John Howard

got into strife in Opposition

with his tax policy. He had a

major error in his tax policy

in 1997. It's one of the difficulties Kevin Rudd is

faced. He's been in the job nine months. Being Opposition

Leader is a huge job. I said at

the time, they should have been

put him in after the last

election and put in Rudd and

Gillard. He needed the time to

build up across the areas. He

is across many areas, but it's

difficult in nine months to do

all the media he's doing and be

on ton of a number of areas. I

think you have to have a tax

policy in opposition. Even

though we know you can only

pull one together in

Government. You have the

resources of treasury and

finance and you have to do

something in opposition. He

should be aware of broadly

where he's heading. It's not

easy. Can I point out that on

the same day, the Treasurer

stumbled during a press

conference and he got the

quantum of the tax cuts

wrong. It's a pretty basic one.

The highest tax threshold is

basic. So is the size of the

last tax cuts. He said they

were $31 billion and they were

$36 billion. That's it. That's

your campaign over! Peter

Costello had been doing this

for 11 years. Kevin Rudd has

been doing this for 11 months. The answer to your original question, the Opposition has said they will

match the Government's last

budget, which means there will

be another round of tax cuts in

July next year. Why would you

bother sawing don't worry,

we'll have our tax policy up

soon, unless you will

change. Unless you will change

company tax rates? What was

obvious from Thursday in the

Parliament, we're seeing it

anyway, is that the Government

will rely on undressing some of

the Rudd foibles, the

weaknesses in the personality,

the character, or whatever.

And he didn't help himself

during the week when he

contributed this on Today

Tonight. Do you think there are

similarities between you and

the PM? I don't think about

that. I'm just me. Someone

asked me the other day, who do

you model yourself on? I said

Kevin. I'm just me. Last year

he was modelling himself on

Dietrich Bonhoeffer. But he's

found a better role model now.

Move aside Dietrich, I'm now

modelling myself on myself, he

says! It's a classic Kevin

moment! Classic Costello

moment! I think in the time

I've been observing Parliament,

there have been three fun qui

people, Peter Costello, Paul

Keating and Gary Young. Fred

Daly sn, Maybe. Send him an

invoice. Let's move on to the

Peter Phelps and Gary Nairn

chief of staff turning up at a

forum. Mic Kelly went to Iraq

as a soldier and a lawyer and

this was Peter Phelps

question. You took part in it

willingly because you volunteered to go there didn't

you? No, I was a soldier and

did what I was ordered to

do? Like the guards at Belson perhaps? That was during the

forpum. When the forum ended,

Peter Phelps approached mic

Kelly again and took him on

over his involvement in

Somalia. In Somalia, you were

part of the prosecution. I

facilitated and

assisted... Even though you

knew it was a capital case. But

you are opposed to the death

penalty. Yes, I am. Were you

there at the execution? Yes, I

was. You were happy to be there

at the execution... I wasn't

happy to be there. Why were you

there? I wanted to make sure everything had been done in

accordance with the law. You

wanted to make sure he was

dead. No, in accordance with

the law... I love the guy in

the hat. What the hell is going

on!

I know what he's trying to

say. He was critical of policy,

but participated in the policy.

It was hugely clumsy. There

should be one basic rule for

politicians, political staffers

like him and all others, don't

talk about fascism and

communism. These are huge exaggerations. They are

engaged in by others. This is

profoundly stupid. There is no

relationship between anything

that happens here and what

happened in Europe in the '30s

and '40s. You only know that if

you know what happened. Dr

Phelps had no idea. He was

hopeless. He ought to give it

away. It backfired. Mic Kelly

looked very cool under pressure

and handled it well. Phelps

seemed to be advocating mutiny.

I don't know what he thought

Kelly should have done,

deserted or something. Here is

the Insiders poll average where

we average out the four major

polls. New figures from

Newspoll and Morgan. On the

primary vote, the Coalition is

up 1.5 points to 39.5 and the

Opposition down 1 to 48.

This is the first sign of a

recovery in three months. There

is a galaxy tomorrow which

might be interesting. Was it

mentioned? I would certainly

tell you first! I think the

chap in Hobart there, I think

he was spot-on when he said

there would be a rebalance between Labor and the

Government over the next couple of weeks and obviously John

Howard is holding on until

there is some change in the

poll because it might be sort

of high-wire stuff when he does

go, but to go now would be

leaping off the cliff. The

central guy in Your Shout to

whom we've referred several

times also got it right when he

said... I thought the woman was

very good. Terrific. Good

coffee by the sound of

things! He got it right when he

said, "I would like to think

I've made up my mind, but I can

always be convinced." The other

matter is we know Kim Beazley

went down in 1998 on 51% and if

you look at the Newspoll on

Saturday in the Australian,

there is a concentration of

safe seats. It is possible

Labor might need up to 5.1%

across the country to

win. That has to be looked at

as well. I suspect they will

level up. They ought. To as you

know, Labor's greatest victory

ever was bok in 1983 and bok

got about 53%-plus. It's

unlikely that Kevin Rudd will

do better than that. You would

think it tops the vote about

53%. 53.8 two-party preferred

in 1983. Tony Abbott made it clear in the interview earlier

on it will be a combination of

the Government's record and

then going on the attack

against Labor on a whole bunch

of negatives as well. This was

Kevin Rudd's response to the

tactic during the week. I have

a plan for Australia's future,

a plan for an education

revolution and a plan to fix

the hospitals and fixing

infrastructure and broadband

and the workplace and housing

affordability. Mr Howard has a

negative campaign against Labor. Unions, interest rates,

the weather, Uncle Tom Cobbly,

you just watch it roll out.

The last reference, could you

explain that one? Uncle Tom

Cobbly, no! There's a file

coming your way! John Howard

talked about Kevin Rudd lying

through his teeth. Lindsay

Tanner got up and deliberately

used the same term in the

Parliament to see what sort of

an impact he would get. Let's

hear first from the PM. I don't

intend to sit in the kitchen of

some person who has been conned

into doing an interview with somebody who is trying to sell

a plan and looking her straight

in the face and saying that you

will be about $50 a week better

off when you know that you are

lying through your teeth when

you say that, Mr Speaker. The member for Melbourne will

withdraw that remark. It's OK

for him to say it! The member

for Melbourne is named. The

member for Melbourne is

therefore suspended under

standing order 94 for 24

hours. It's the inconsistency

that has got this side of the

Parliament feddup. What we get

is reminisce yapbtant of the

Castle, being asked why rulings

are being made in the High

Court. You sit there and say

it's the vibe! It was a

complete joke. It was ridiculous and highly

inconsistent. What touches me

is that anyone around the

Parliament that still believes

there is any consistency to

speaker's precedent, as soon as

a ruling is made, they note it

down. It is I blamonge there. You couldn't see the

distinction between the two comments. I don't think he had

a terrific week. Then again, I

think it's easier to blame the

speaker. It's the kiddies in

the benches that cause the

problems. It's a tough job and

everyone is going at you. Industrial relations, a significant development during

the week when Spotlight, who

has been in the spotlight once

before, withdrew from the AWAs

and said it was all too hard.

Here's how the company

explained itself on radio. The

issue is we've made a decision

to go back to a more simple

program and we believe that

going with the union on that is

the most appropriate approach.

So it's the uncertainty that

bothers them. So they've

abandoned the AWAs. That's a

significant move. I mean, it

depends how often it will be

replicated by other companies,

but if AWAs are depicted as

being the an thith sis of what

they are meant to be, if they

are messy and hard to interpret

and not very conducive to

productivity, that's not a good

look for WorkChoices all

round. On the other hand,

Spotlight fell over because it

couldn't get past the fairness

test. In other words, the

authorities said their offers

weren't adequate. I think it's

a pretty poorly performing

company. I don't think we

should look at that. Some of

the best companies in Australia

run AWAs and some of them are

big and some are small.

Spotlight couldn't do it, I

don't think it matters much. Do

you think it was blaming the

system for its in adequacies? I

think. So they couldn't get it

through the system. You can't

say the system is oppressing

the workers because the workers

haven't been oppressed and they

are going back to the union

movement and they will look

after them. Like so many other

instances, there is a ready-made argument for both

sides to capitalise onSpotlight. Joe Hockey says,

"There you go, proves our

safetynet has teeth, the

fairness test works." The

Opposition says, "AWAs are a

mess, here is proof." Nobody

wants to make enemies in the

run-up to an election campaign,

but Kevin Rudd makes an

exception with Peter Hendy. He

extension of the Liberal says he sees him as an

Party? What I got out of this

was - I had a feeling that Mark

Latham isn't here is he? The

worst thing Kevin Rudd could

say about Hendy was that he was

a Liberal supporter or backer.

Can you imagine what Latham

would have said? There wasn't

one arse-licker tossed out or

anything. I think he's a

Liberal supporter! There are interesting standards. David

Maher devoted an essay to saying that the Howard

Government is picking on

people, academics who criticise

it. It has been critical of

academics who criticise it, but

Peter Hendy has criticised

Kevin Rudd and Kevin Rudd said

he won't deal with him and he

ought to be sacked. Who is

complaining about that? Nobody

much. I can understand why

Kevin Rudd is annoyed b ut

these things happen. He denies

he said he should be sacked. If

you go to a group of employers

about the executive director of

that group and say you would

find it difficult to deal with

him in Government, it sends out

a clear message. The point is

that Rudd's perception is that

Hendy is not who he says he is

in the sense he is not an

unbalanced representative of

his area of professional

interest. He's not the lone

ranger either. That's a fair

point. Did Hendy work for

pr? They are supported by other

people in business. It's OK for

Kevin Rudd to criticism him and

we know he worked for pr, but

business is full of people who

worked for previous

governments. Before we go to

Talking Pictures, have a look

at one of the ads the business

community have been running,

the three trade unionists turn

up and walk into a workplace.

The one on the left and right

have criminal records according

to the Age. It's a victory for

casting agents internationally

isn't it? I'm sure the business

coalition would have gone and

said we want three people to

play union leaders, can you

make them look as criminal as

possible. It's fair to say

advertisements on all sides

have had chequered records up

until now. You have to admire

the trade unions dirt unit for

coming up with the private

criminal records of these two

people. I would play it

quietly! The bloke in the red

braises is OK. Annabel Crabb,

Malcolm Farr, and Gerard

Henderson will be back in a few

minutes. Time for Mike Bowers

and his regular segment,

Talking Pictures.

I'm powers powers powers.

I'm talking pictures with Sean

Leahy who cartoons for the

'Courier Mail' in Brisbane.

Welcome to the program. Thanks,

mic. A lot of sign language going on in Government this

week. It's great the picture

can run and if you understand

it, you have an obscene

mind. Having shot this, the PM

does do this a lot by pushing

his glasses back on.

I can't comprehensively say

that's not purposefully

done. Costello is copying

Howard more than Rudd is

copying Howard! If you listen

to Costello there was nothing

of the kind going on. Were you

giving Kevin Rudd the bird? I

don't know what the bird is. I normally scratch my head with

my fingers. As strange as that

may sound, I don't bang it on concrete or rub it against sand

paper. This is a photo where

they are playing up

Vaudevillestyle. They are effervescent and full of

themselves, hubris in imminent

defeat. I love Matt Price's

comment about the Liberals

being drunk on failure. That's

it. They are pissed! Revelations that Malcolm

Turnbull put out a newsletter

without any mention of anyone

but himself. Should we be

shocked by that!? Remember

when he made his maiden speech

in Parliament, he bussed in his

supporters from Sydney! A

favourite trick is to look for

the exit sign when someone is

in trouble. This is one of the

better ones. The PM visited a

bus company in Queanbeyan. This

does work pretty well. It'sage

emergency hatch he may need to

u. Sh He doesn't seem to know

how to use it! He can't get

hold of it! I don't think any

prospective PM should be

allowed to get their leavers on

the country if they can't

operate one power tool. Well,

OK! That counts me out! You've

had a long history of drawing

the PM as a duck. That's right.

I drew him as Howard the duck

from the movie that went

straight to video, back in the

days with Peacock. I thought

that's what he was back then. I

was proven wrong. He's been a

spectacularly successful duck.

He's gone through a met amore

foesis with this one.

Watch this evolution of the

duck! Run us through this.

This excessive ink. Whenever a

squid is trouble, they squirt

this trouble. It's transparent

ink. It is not hiding much. A

particularly nice Warren with the prospective PM, Kevin

the prospective PM, Kevin Rudd,

carrying off what is for all

intense purposes the dead

carcass of the PM with a ping

coming out. It's a beautiful cart Aboriginal. Brings the eye

right to that little

punchline. And a particularly

funny row this week. The brutal

and intimidating Alexander

Downer bullying a stuffed doll.

It's reminiscent of a scene

from a movie.

It sums it up. Bouncing back to back.

I don't

The co-joined twins, it will

be a painful operation. So,

it's Costello's spine! Thanks

for taking the time. It's been

a pleasure. The feeling is

mutual. Well done. Another

lesson for politicians to avoid

dinners with journalists during

the week, Alexander Downer went

to din we are a journalist and

emerged as the next Premier of

SA? It's odd. The Foreign

Minister gave a long speech

about what I would do if I was

the Premier of SA. He had

really quite a detailed

program. And I think the

journalist in question, Mark

Kenny from the Advertiser, a

great journo, ask the Foreign

Minister on the spot, I would

like to write this. Yes.

Checked again the day before

publication and I think perhaps

the Foreign Minister wasn't

quite prepared for it to look

the way it did on the page. It

looked like a plan rather than

a thought bubble which is what

I think he intended it to

be. In other words, it's not

going to happen? If the

Government loses, I think it is

difficult to understand that

Alexander Downer would stay in

Federal politics, let alone go

to state politics. Th