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Good morning. Another strong

aftershock has rocked the earthquake

zone in China as the official death

toll reaches 29,000 but the final

toll could be as high as 50,000. The

six magnitude aftershock occurred on

Sichuan's border with Gansu province.

The Chinese Government has released

statistics revealing the scale of

damage and misery caused by the

earthquake which struck last Monday.

Apart from those who have died, more

than 116,000 people have been

hospitalised, almost 16 million

have been seriously damaged and more hospitalised, almost 16 million homes

than 3 million have been flattened.

The former fugitive Tony Mokbel will

face court this week on murder and

drugs charges after being extradited

from Athens. The 42-year-old was

yesterday escorted back to Melbourne

by Australian police officers.

will serve at least nine years in by Australian police officers. Mokbel

jail for cocaine importation and is

expected to face murder charge. In a

rare moment in the limelight, two of

the lesser-known English club sides

played in the FA cup final last

night. Portsmouth has held off a

determined challenge from

side Cardiff City to win one-nil at determined challenge from second-tier

Wembley Stadium. The only goal was

scored by Nigerian striker, Kanu,

late in the first half. Portsmouth's

only other cup victory was in 1939.

I'll have more news at 11:00, but

Cassidy. now it's 'Insiders' with Barrie I'll have more news at 11:00, but for

CC

Good morning. Welcome to

Insiders. Now there is meat on

the bones. Six months after the

election of the Rudd Labor

Government, their first budget

has laid bare their priorities,

their values and their future

directions. They've launched a

moderate assault on middle

class welfare, delivered on the

tax cuts, banked $41 billion to

spend down the track on

education, health and

infrastructure and along the

way managed a surplus of almost

$22 billion. Even then some

judged it didn't match the

pre-budget rhetoric and came up

light on inflation. But by the

time Wayne Swan faced the Press

Club on Wednesday he was

aggressive ly touting budget. A

treasurer's first budget is

usually his toughest. If so

that implies your future

budgets will be less tough. Is

that belief right? (LAUGHTER)

You shouldn't confuse tough

with stupid. (LAUGHTER) If we

took some of the advice we are

being given to cut spending and

to rein in demand, you could

slam the economy into a wall.

Yet for all the budget

initiatives by the end of the

week the tax on al alcopops

was the talk point white the

Opposition Leader promised to

block the measure in the Senate

while he still has the numbers.

Alcopops and petrol

prices. Watching petrol prices

does not bring them

down. (LAUGHTER) (APPLAUSE) So

tonight I propose a cut in the

fuel excise of 5 cents a litre.

This is not a review. It's not a committee. It's not a summit. (LAUGHTER) It's not an

idea to have a meeting. It's a

decision. It's decisive

Brendan Nelson will be our action. Hear, hear! And

program guest this morning. But

right after we check out the Sunday papers around the

country. An knell crab, a bit

of attention given this morning

to the new New South Wales Liberal Party State

director? G'day Barrie. A

little bit of attention. Page

85 of the 'Sunday Telegraph'.

This new chap who has arrived

and back the Liberal Party

director. You may remember him

as the West Australian Liberal

Party director. He has vacated

his seat over there, presumably

so someone can savour it. He is

33-year-old Mark Nim. Yesterday

his old job in Western

Australia has advertised. There

is the ad there. But check out

where they've placed the ad. On

a page that's otherwise fully

devoted to the debacle in

Victoria and the meltdown in

the Victorian State branch. I

think you get a full wrap there

of the Liberal Party experience

across Australia. The debacle

in Victoria now belongs to Tony

Nutt who used to work for John

Howard. Who must be thrilled to

arrive in Victoria, just as

it's going berserk! Wayne Swan

was already in a bit of trouble

on the meld care surcharge. He

was asked about the impact on

the number of people who'd

leave private health insurance

because of their medical

surcharge changes. Are you

expecting 400,000 will go? No,

I don't accept their

figures. Treasury analysis

shows that the changes you're

making to the Medicare

surcharge levy thresholds will

see 485,000 people dumping

their private health cover. I

can confirm the Treasury

analysis, yes. So we confirmed

the Treasury analysis of just

500,000, but it just got a

whole lot worse? The Sunday

papers today are running a

report from

PriceWaterhouseCooper, a very

distinguished auditor firm, on

behalf of the Australian health

insurance association, which

puts the figure of people who

would either drop out or not

join into health insurance at

close to a million. Now,

figures are always unclear and

it's possible the Treasury at

around 500,000 is right. It's

possible that PWC at around a

million is right. Either way,

it's a very big figure of

people who will be put onto the

public system because of this

change. The new figure, as PriceWaterhouseCooper came up

with it, was put to Wayne Swan

on Meet the Press this

morning. Which don't accept the

assessment of the private

health insurance industry that

that this will necessarily have

this impacts. The Treasury has

done its modelling. We're

satisfied they've got the

figures correct. That's the best he could do at short

notice, would you imagine? He

doesn't want to be pretending

there nor estimates either way,

'cause he didn't think 400,000

was crash hot. 500,000, he will

accept. A million he won't go

for. Interesting. Two things I

want to raise here. (1) the private health insurance lobby

is doing a pretty good job in

frameing this debate about the

health system as opposed to a

tax cut, which is what this is

private health insurance in the first place. We now have

described almost as a public

good. It's a bit of a

contradiction in terms here

which I still can't get my head

around. The government wanted

to present this as a tax cut

and doesn't have its back up on

what it wants to do with the

public health system. Malcolm

Turnbull was arguing this

morning that it is in the

public good because it takes

the pressure off the public

system. Yes but if you are

injured you probably turn up to

a public hospital. A lot of

operations of an elective kind

are undertaken in the private

system. It's a big debate for

Rudd. He didn't do it

piecemeal. He now has to think

big picture. But the waiting

lists are very long. In

Victoria here, I saw today,

very long waiting lists. It's

going to make the waiting list

in the public hospitals

longer. You'd have to think it

would become a cause of early

tension between the States and

the Rudd Government. You can't

see the States taking this

lying down. There is a lot of

money involved. Thursday

night's budget in reply speech

took on more significance than

normal because of Brendan

Nelson's poor performance in

the polls. It was a feisty

performance. Were you pleased with your performance on

Thursday night? I think

importantly, it was able to

point out to the Australian people that the Labor

Government has increased taxes,

increased spending. It's

targetted people it doesn't

like, including those people

with private health insurance.

And also I think it was important to say to

Australians, look, you have to

ask yourself, sbuth going to

make it easier to feed, clothe

and house my kids, pay interest

rates, put petrol in the car

and buy groceries? They're the

key issues. I also have

identified that we stand for

lower taxes, including lower

fuel excise. What sort of feed

Pack did you get from your

colleagues? Has it taken the

leadership monkey off your back

(eye won't talk about any of

that sort of thing. My

colleagues but more importantly most Australians were quite

pleased to see we've been able

to came who is increasing ly

the fraudulent media spin

driven nature of the new government. Also that

Australians know they're facing

close to $20 billion in new

taxes over the next five years.

And they are they're the

thaings really count. It's a

big call to oppose a budget

measure in the Senate but

you're going to do that with

the tax on alcopops? Yeah,

look, this is an alco-con. All

of us were told through one of

the Sunday papers a few weeks

ago that this would deal with so-called binge drinking

amongst young people. As a

matter of principle most Australians at the time said

"If that's the problem and this

will fix t we'll give in-principle support to it."

You were one of them? And I

also said on the day "But I

want to see the evidence upon

which the decision is based."

We've seen the evidence. The

evidence is that this $3

billion increased tax on

ready-to-drinks which is not

just those coloured fizzy

drinks that are about one

quarter of the market but also

bundy and bourbon mixs that are

consumed by adult men, what

we've discovered is that binge

drinking by young people,

according to all of the studies

we've seen has actually

declined over the last six

years. Further to that the

proportion of young women that

are binge drinking has

declined. Also the very tudy Mr

Rudd himself is so fonding of

the quoting, the King study by

the Department of Health,

actually found of those high

risk drinkers and keep in mind

there is a lower proportion of

them, young women, they're

actually consuming fewer of

those so-called alcopops than they were in the year 2000. So

all in all, we consider this is

an act of deception. It's a tax

increase that will take $3

billion out of the pockets of predominantly everyday Australians and for that

reason, we will be opposing it.

It's also - it's not an

integrated approach to dealing

with a problem such such as

alcohol abuse. I have spent

much of my life fighting for

these kind of things. What you

must have is education,

prevention, policing, parenting, you use price

signals as a part of it, but

shifting kids in this case off

red-to-drinks on to other forms

of alcoholic beverages is not

only sensible, I think it's

counter productive. Kevin

Rudd's office has put out a

long list of health

professionals who support the

initiative, including the drugs

council. They all disagree with

your position. Well, there are

a couple of things there. Most,

if not all of those same groups

are advocating a 300% increase

in beer and wine tooks. In

other words to see there is an

equal alcohol tax applied

across-the-board. Most of those

organisations were also led to

believe the additional money

raised would be spent on drug

and alcohol treatment programs.

That's clearly not going to be

the case. And I will be very

happy to take up this debate in

the Parliament on behalf of

Australian people. If Mr Rudd

on the other hand had said look

he can't balance the budget, he

wants to increase taxes, at

least he would've been more

honest about it. John Herron, former coalition minister,

wrote a letter of

congratulations to Kevin Rudd

on budget night. John is a good

friend. He is chairman of the

government's National Council

on Drugs. And if you increase

the tax, in this case by 70%,

on one alcoholic product alone,

in the absence of other

significant measures to deal

with alcohol abuse, when the

evidence in fact is that the

so-called target group is

actually reducing its level of

bin drinking, you will see

displacement of alcohol

consumption from in this case

so-called alcopops on to other

products. For example, alcopops

have 3 to 5% alcohol in them.

Wine-based products which will

be much, much cheaper now, have

at least 8%, up to 22%. So from

our perspective, we want to

make sure there is a fully

integrated well-targetted

approach to alcohol abuse which

significantly involves in part

by the way law enforcement and

this is nothing more than $3

billion of an alco-con which is

falsely misleading people into

believing that this will deal

with the problem. It most

certainly won't and arguably it will make it worse. Just before

we leave this issue of binge drinking, the Australian

cricket team wore beer caps in

their first game in West Indies

rather than the baggy green.

What sort of message does that

send to a country that says it

has a bin drinking

problem? Well, I think at times

we need to say that values are

more important than value. The

baggy green cap is the iconic

cap worn by our Australian

cricket team, and whoever made

the decision for them to use

another kind of hat,

particularly one that promoting

another product, in this case

alcohol, I think that's

something that people should

have a look at. We'll move on

now to your petrol excise and

you're proposing a cut of 5

cents a litre. You're a big

wrap for John Howard's economic

credentials, yet this is

something he always

resisted. He acted decisively

in 2001 to stop fuel indexation

on excise. John Howard and

Peter Costello also argued

strongly for lower taxes.

That's what we believe in as

Liberals. Six out of the last eight budgets delivered income

tax cuts. Wayne Swan delivered

Peter Costello last income tax

cuts on Tuesday night. Petrol

is now around $1570 a litre.

Watching petrol prices will not

bring them down and the one

decisive thing that the

government can do is to

actually reduce the excise. So

that's about 5.5 cents a litre

off at the bowser, and at the

moment, as you know I've been

on a listening tour. Your

people sit on the couch on a Sunday morning and talk about

it, not always in a

complimentary way. But what's

the point of having a listening

tour if you're not actually

hearing anything? In is the

single most important pressing

issue that's burdening most

Australians at the moment.

You've just punched a $2

billion hole in the budget,

though. How do you intend to

make up the lost revenue? You

won't duck this, will you? You will come up with a list of

savings? Well, as is always the

case with us as Liberals and

Nationals, all of our policies

are and will be fully costed

and budgeted. This is the

policy that we will take to the

next federal election and as

the RACV observed, there is now

a clear policy differentiation

between the two major political

parties. We believe in lower

petrol prices for Australians

and the Labor Party believes in

just basically watching it and

not doing anything ... Let me

be clear. You will come up with

the savings, you will spell out precisely where you will make

up the difference? We will make it absolutely clear what our

budgetary forecast is. We'll

make it absolutely clear where

this $1.8 billion will be

coming from that we will be putting back into the pocketses

of the everyday Australians who

are at breaking point when it

comes to the price of

petrol. Because you feel that's

your obligation as an

opposition, to spem out where the savings must come

from? Unlike the Labor Party,

you will recall just before the

election last year they had $10

billion worth of so-called promises that they did not

submit to Treasury and finance

for costing. Unlike them, all

of our policies, all of our

costings will be put up for

analysis well before the next

federal election. Australia is,

as a result of strong economic

management over the last 10.5

years, generally in a strong economic position,

notwithstanding the fact that

we have a nervous treasurer who

appears not to know what he's

doing, but we're determined to

make sure we continue to be

party of lower taxes. Now, on

pensions, there seemed to be

some confusion as to whether

you're supporting an increase

in pensions or you're

not. Well, we've done over the

last 11.5 years, we improved

the indexation model for

pensions. We brought in the

lump-sum payment for

pensioners. We extended the

telephone allowance, utilities allowance and a variety of

things. It is absolutely clear

at the moment, two things. The

first is that it is approaching

impossible for the men and

women whose sacrifices made the

country what it is to live on

the base aged pension as it

currently is. The second thing

that's obvious is that Mr Rudd

in his apparent focus on

working families not only

ignores pensioners and retirees

and carers and many others in

this community, but has delivered absolutely nothing

for them in the budget. I'm

very strongly of the view that

it is time now for us to

further strengthen the

financial position of

Australian pensioners. And I

will - we're in the process of developing policy at the moment

and I can assure you that we

will release that policy once

it's been fully concluded.

Would you do that by raising

the base rate of the pension or

in some other way? It's too

soon to look at that, but I

think there is a very strong

argument for raising the base

rate of the pension, but again,

we're closely following this

inquiry that's been conducted

into it. But I do very strongly

believe that pensioners deserve

a hell of a lot better than

they've received from Mr Rudd

and Mr Swan and I think - look,

Kevin Rudd found the time to go

and visit Cate Blanchett's new

baby. If he has the time to do

that, he has the time to meet

pensioners and seniors organisations including those

people protesting in Melbourne

and actually listen to what

they have to say. The whole

debate on welfare and what is

welfare and what is not welfare

- you look at the decision the

government took on solar panels

and the subsidy there, that's

means tested now at $100,000.

Is that subsidy welfare or does

it have a social purpose? Well,

this is economic and

environmental madness, Barrie.

Firstly, by the way, we

generally speaking as Liberals,

we get a bit concerned about

means tests in a number of

areas. The second thing is

that, how do you means test an

environmental footprint? People

on higher incomes generally

have a larger carbon footprint

than those who don't. The idea

that if you're a policeman and

your wife's a teacher and

you're ineligible for an $8,000

rebate to put solar panels on

your house which are still

going to cost you another 8 to

$10,000 out of pocket, is in my

view absolute madness. It's

also destructive of small

business. This is a growing, an

emerging industry in Australia

that needs more investment in

research and development, and it's generally been

higher-income people and when I

say higher income, I mean 100

to $250,000 a years, the people

that are actually putting these

things on. So this is something

that I really urge Mr Rudd to

have a look at. I know Peter

Garrett doesn't really know

what he's doing when it comes

to economics but I think Mr

Rudd seriously needs to

re-examine this measure. It is

contrary to all of the rhetoric

and hot air we've had from him

on the environment. Just

finally on the Medicare

surcharge changes, this report

this morning that it might mean that perhaps a million people

drop out of the system - what

are you going to do about

that? We will be opposing this

measure, as I set out on

Thursday night. What you've got

is 485,000 taxpayers that are

budgeted to leave private

health insurance. I don't know

what world Wayne Swan is's

living in but it's different

from the rest of us. Each

taxpayer carries about 1.4 people people in their private health insurance cover. So what the government is doing is taking close to a million people out of private health insurance, adding them to public hospital queues, putting an inflationary impact on the premiums for families, pensioners and retirees that will be left with their private health insurance because they think they're going to need it and as I suspected would be the case this whole thing is driven firstly by the Labor Party's general opposition to people having private health insurance or private education, they don't like people that want to get on and look after themselves, but the second reason they're doing it is it saves them money because they will be paying less money in the private health insurance rebate of 30%. So higher premiums, higher public hospital queues and unfortunately, considerably less money going to Australian hospitals and it's consistent with the confused, inconsistent way in which in government has approached its budget. It's completely failed Australia in my view. Brendan Nelson, thanks for joining the program. Thanks, Barrie.

I'm a Miss Universe

contestant from Sydney. I'd

like to see the Rudd Government

spend more money on raising awareness about mental

illness. Good evening. My name

is Laura. I'm from Sydney, New

South Wales.

SONG: # Hot chilli woman #

It's hard watching families and

not be able to go to the beach

because petrol prices are too because petrol prices are too

ex expensive. If pressure is

taken off families, that would

be great. I support the

government's plan to means test

the baby bonus. On the

condition that with this money,

like from middle class families

being taken away, as long as

that actually does go to the

lower-class families. Wealthy

people, I believe, should also

have the opportunity to receive

a lump sum of $5,000 for the

baby bonus. I believe any child

that is brought into the world

deserves the best of

everything. Even familys with

high financial security would

also feel privileged to receive

another $5,000 to help upbring

their child. What if those

people can already afford it,

though? I think wealthy people

should get the baby should get the baby bonus,

maybe on a lower school, $2,000

instead of $5,000. They are

earning in a higher bracket. In

terms of the Rudd Government's

new taxes on alcopops, I think

they're targetting the wrong

group there. They're failing to

take into account that those

who are drinking heavily tend

to drink concentrated spirits,

vodka, rum, not your Bacardi

Breezers or Smirnoffs. I don't

agree with this tax. The Kevin

Rudd government needs to

support young people on a much

stronger level in regards to

first home ownership I I can't

understand why you have to live

in a house for the first year,

because people like me who

would love to take advantage of

the grant while I'm still

living at home pay off my mortgage,

mortgage, I can't do that. I

think Kevin Rudd is actually

going down at the start, and I

think he's trying all his

changes and that's why it's

putting a lot of pressure on

families. A lot of politicians

make these promises that look

nice and bright in the

beginning. So hopefully he can

follow through and hopefully he

focuses on the young people of focuses on the young people of

Australia who are our future

leaders, including children and

empowering young women. Are

you decided that alcopops was

the one that the government

pulled out of the - the

opposition pulled out of the

pack and decided to make the issue. Both sides are effectively fraudulent on this

issue. If the government is serious about

serious about this being all

about a health measure, maybe

they'll tip the $3 billion

they're making into the health

system. It's hard not to see it

as a cash grab on some level.

The opposition is kind of

fraudulent on it. Their face of

alcopops is not the 15-year-old

girl, it's the 45-year-old

ute-driving bloke. If you

listen to Brendan Nelson it's

all about Jim Beam. If you listen to the listen to the government it's

all about back --

Bacardi Breezers. They're not

both right. Brendan Nelson

actually supported it when they

first trotted it out. You can

say that of many things! The

weakness in the government's

case is that there is a

substitute to available. What

they're arguing is that the tax

rate should be the same across rate should be the same across

all alcohol products. But

still ... If that's the only

reason you did it, they

could've won that argument

hands down. It's the single

biggest revenue measure in the government. That is what makes you suspicious of the

motivation for it. Sure you

could pluck out a tax administration reason to do it. There is a binge drinking administration reason to do it.

aspect to it. You could knock

back those faster than you

could a flask of chardonnay.

But because it's the single

biggest revenue measure, when I

looked at the budget numbers,

that's what made me most

suspicious of it. It's a

rational decision in a tax

sense. Where it doesn't make

much sense, the Liberals have

gone back to this old problem

legislation in the Senate. It's of trying to block budget

most unwise. It will cause problems. As George said, it's

a lot of money in this budget.

And they have to fund it. We'll

get some background and

analysis now from Paul Kelly,

political commentator with the

'Australian'. Five days now to

digest the budget. How do you

rate it as an economic

document? I think five days

out, you look back, the budget

looks a very cautious looks a very cautious document.

The sense of safety has given

Wayne Swan a lot of confidence.

It puts a lot of benefits into

Australian hose holds. The pain

is very limited and very

targetted. The biggest single

savings measure is the alcopops

tax, and Wayne Swan said on

budget night the toughest

decision for him was means

testing it at $150,000 a year.

Well, I mean, frankly, there

caught up in aren't all that many people

caught up in that. So I think -

I don't think it's a Robin Hood

budget. I think the danger for

the government is to a certain

extent with private health

insurance, the questions are,

did it get the policy right and

has it judged the politics

insurance? On the economy there right on private health

are a couple of points to make.

The budget won't have much

impact on the economy. Wayne

Swan called it a mildly

deflation ree budget. We

shouldn't overlook the big

picture. This budget is about

trying to control inflation at

the same time it puts $50

billion into Australian

households. The question is

whether those two objectives at

the end of the day will be sustainable. Cautious on the economy, but what about the

nation-building exercise? The

nation-building exercise is

very interesting. Here, I think

the budget is both ambitious

and radical. We've got these

new funds being set up. $40

billion worth of funds in

infrastructure, health and

education . That's a big deal.

These are very powerful

vehicles in both a financial

and political sense. They're

different to Future Fund of the

Howard Government. The Future

was locked Fund of the Howard Government

was locked up. With the funds

of the Rudd Government, the

government can draw upon the

capital. The other interesting

decision relates to

immigration. It goes up to

300,000 people next year. This

stamps Kevin Rudd as a stamps Kevin Rudd as a strong

immigration Prime Minister and

the very strong message is that

the government will use

immigration to plug labour

shortages and address the

resource s boom. This is the

right thing to do, but it could

lead to quite significant

political problems. What did

you make of Brendan Nelson's

speech on Thursday night?

Brendan Nelson had to give his

own backbench some red

own backbench some red meat. He to put the government under pressure. I understand what he

was trying to do. He had to

give his own side some fresh

heart. This is a classic

situation here. We have a weak

Opposition Leader fighting to

save his job, resorting to

populist tactics, attempting

populist tactics, attempting to

block measures in the Senate,

to threaten these measures. We

need to bear in mind that these days, as far as the Liberal Party is concerned they have

one great asset going for them

and that is the economic policy

credentials of the Howard

Government. Those economic

policy credentials based on 11

years of growth. The great risk

that Brendan Nelson runs is

that he will walk away from

those credentials and that

would be a very serious would be a very serious mistake. Paul Kelly, thank you

for that. Do you think that

they've done that walking away

from John Howard, Peter Costello's credentials, partly

by coming up with this 5 cent a litre reduction in the

excise? I went and watched

Brendan Nelson's budget reply

speech, specifically so that I could watch Peter Costello's

face when that line was

vocalised. He was extremely

good. He had a poker face. Very

disciplined. But you know, it

has to be hard for him has to be hard for him and

particularly difficult for John

Howard as well to hear that

sort of talk when certainly

Costello mill Taited so long

against a cut in the excise.

We'll hear from John Howard

when this issue was raised as

Prime Minister. There is no

simple way of cutting the price

of petrol here in Australia.

possibility of There is, of course, the

possibility of getting excise,

but I have explained before

that to cut excise by a meaningful amount, which would

be about 10 cents a litre,

would cost almost $3 billion.

Isn't it amazing how things

change when suddenly you're in

opposition and you're on 10% in

the opinion polls, desperately

grasping for cheap

popularity? It will be

interesting to see whether - Dr

Nelson said just then this is

their policy, they'll take it

to the next election. I

wouldn't put 10 bucks on that.

I don't know if this is a very

durable undertaking. You can

only assume petrol will be even

more expensive by then and 5

cents will look even sillier

for the cost it entails. This

is an absolutely disastrous

policy. I don't believe John

Howard would've agreed with it,

I don't believe Peter Costello

would agree with it, I don't believe Malcolm believe Malcolm Turnbull would

agree with it. There are only

two people equipped to lead the

Liberal Party at the moment,

one is Costello and apparently

he doesn't want the job, the

other is Malcolm Turnbull. The

Liberal Party can't go on with

these disastrous decisions,

which essentially trash the one

thing they have go on for them,

which is the economic legacy of

the Howard and Costello government. What do you government. What do you find

wrong with the policy? It's

very bad economics. Hillary

Clinton ran with in in the

United States recently and

Barack Obama opposed it. It

didn't work for Hillary

Clinton. It's populist

economics and it doesn't make

any sense. If it had made sense the Howard Government would've

done it over the last couple of

years of as petrol prices rose.

It didn't do it because it

doesn't make sense. It also

leads to the old debate of where is

where is the money coming from,

particularly if the Nelson

opposition will try to block

this in the Senate, which would

be a further disastrous

decision on top of an already

disastrous decision. When John

Howard made the point that you

have to do 10 cents a litre to

be meaningful, he is virtually

saying 5 cents is meaningful.

s risks -- That's the point. It also being

next movement in international s risks being swamped by the

oil. If Brendan Nelson had look

at the trend lines for the

world oil price, it's shooting

through the roof. Let's say he

was Prime Minister tomorrow and

he had cut fuel excise by 5

cents, by the end of the year

it could be up by 10 for

20. Brendan Nelson's objective

is nothing to do with three

years from now, his objective

is to try to save

is to try to save himself.

Effectively, he is a listener.

His strength in the party is

that he listens to people, and

his strength in the community

is that - such as it is - is

that he listening. The danger

is that you end up parroting

whatever somebody said to you

last. The strength of the two

successful Liberal governments

since the formation of the

party, the Menzies and party, the Menzies and the

Howard Governments s that they

didn't listen, they actually

made some decision, some of

them very unpopular, but they

worked. Although to be fair,

John Howard did reverse some of

his own rhetoric on petrol

excise. All politicians make

main nor changes but essentially the Howard and

Costello government took some

unpopular decision and it worked. So did the Menzies

successful governments. The government. They're the two

idea that you can run the Liberal Party, which is

supposed to be party of supposed to be party of

economic management, by being a

populous leader and running

around the country listening to

anyone who talks to you and

then running that back as

policy is ... I'm in full

agreement with you. I'm explaining why he is behaving

the way that he is. When I say

it's a short-term gesture, it

absolutely is. It gives him

something to talk about in the

short term on talkback radio

whatever. Now he can give you

that quick line on, well, Kevin

Rudd's not doing anything about petrol and

petrol and I am, which has a

superficial appeal to people,

until you really do the maths

and work out how effective it

is. On the petrol, by taking

that initiative, he punchs a

hole in the budget. When I put

the questions to him this

morning, Brendan Nelson said

that he would be prepared to

spell out the savings, that he

would go to the next election

and say this is where we will

compensate. The same question

was put to Malcolm Turnbull on

the Sunday show earlier this

morning. This is what he

morning. This is what he

said. What we're saying is if

we were in government and we're

not, and we can't be in

government until the next election, so not for several

years at the very least, if we

are in government or going into

government, we will have that

fully costed. But otherwise we won't. Otherwise he wasn't and

he said in opposition, he

doesn't have that obligation.

So it was a clear split between

the two. One says he will spell

out the savings ... Not just out the savings ... Not just

that. He wants to punch a hole

fwhuth and then leave it to

government to find the savings.

This is the US system. We don't

have the US system where the

Congress tells the President

how to figure out ... Puth

policy. I mean, look this is really quite an interesting

turn of events. Apart from the

fact that the two of them can't

agree with each other on the

same morning they both go on

television. You have to wonder

about the planning there.

Malcolm Turnbull was on about

five minutes before Brendan five minutes before Brendan

Nelson spoke to you. When I

heard about that programming, I

thought that is an incredibly

courageous piece of

programming. But who made the

decision to say that oppositions shouldn't cost

their policies? When did this

decision get made? Both sides

of politics, first rule of

politics f you were going to give something to the

electorate, you had to say

where it was coming from. You're from. You're saying Brendan

Nelson had the better line, but

surely is the problem is they

had different lines? I don't

agree that Brendan Nelson had

better line. I sympathise with

what Mr Turnbull's apparent

position is. He doesn't believe

in the excise decision. I've no

idea. If he doesn't believe in

the alcopop, both of which

would make sense, not believe

in those decision, then he is

caught. It's very difficult. It's very

It's very difficult. I mean, I

don't think anyone of economic

background in the Liberal Party

considered position would support either of those

positions. I would be surprised

if anyone did. Malcolm Fraser

privately used to talk about

and I pub publicised later on,

what I called doing the

hypocrisies. Politicians have to appear to support some things. But deep down, I don't

think he or Mr Howard or Mr

Costello would support those

policies. You think perhaps

there is some sort of time warp

thing going on here where there

may be people within the Liberal Party, Liberal MPs and

senators, who are just happy

with anything that Brendan

Nelson says because they assume

he will not be around for

long? A lot of the Liberals

currently there probably won't

reckon test the next election

and they don't really

care. Some of them not having

lost their seats this time, will not will not lose their seats next

time, so they don't really

care. And Brendan Nelson is very good at dealing with people one to one. He has

brought up a lot of support not

way he --

for the way he manages the

party room. Those who know him,

like him. In terms of

presentation he was very

impressive I thought on Thursday night. I thought it

was a good speech. It was a

well-written speech. He didn't

well-written speech. He didn't

emote. The first 20 minutes I

thought was very strong.

Michelle Grattan said his

leadership was terminal anyway.

Is it sort of like somebody on

the deathbed who raise their

head from the pillow for one

last flourish? There wasn't so

much of this anecdote based

homily that you used to get in

a lot of Brendan Nelson's

addresses and radio interviews, raises raises the hackles of many

people. He seemed to be a lot

tighter and more disciplined

and his rhetoric was a bit

firmer. There was a British

poet once on his deathbed. He

was asked how he health. He

said "I'm caught in this

situation. It's too late for

fruit, too early for flowers."

Do you think that's where Brendan Nelson is right at the

moment? (Laughs) Every time - there's a terrible time there's a terrible time when

Brendan Nelson talks about the

budget, he always says "This

budget is predicated on the

loss of 134,000 jobs." You

can't help but think, 134,001,

Brendan! Go! What I'm

observing here between Brendan

Nelson and Malcolm Turnbull is

the race to see which one of

them can become a politician

first. Because we've had for

the first six months of

opposition for the two of them, this rather

this rather bizarre exercise in

brainstorming where they're

almost thinking out aloud some

lines in media interviews and

the like and even in some of

their speeches. Brendan seems

to have been brought back to

earth a lot quicker than

Malcolm. Malcolm is still

brainstorming, with positions

that if you stop to consider

them would tear each other apart. Joe Hockey

apart. Joe Hockey on Sky TV on

Thursday was asked about this.

He doesn't seem to be too fussed if Brendan Nelson didn't

quite live up to expectations.

Here he is talking about the

potential for the leadership.

He's your best option as

leader, do you think? Malcolm -

look I say Malcolm Turnbull,

Tony Abbott, a whole range of

different people are potential

leaders. Julie Bishop. A whole

range of different people.

That's the beauty of the depth

of the Liberal Party. Joe Hockey as

Hockey as well? Look, mate, I'm

about these things, can I tell

you! Opposition Leaders are

like chocolates, you just can't

stop at one! He is on about

these things, as you call them

the alco-props. I thought he

was going to take another

swig! Something brilliantly

comic about Joe Hockey about

this tiny teeny little bottle. this tiny teeny little bottle.

When he was at the dispatch

box, he would grab his tiny

bottles and flounce back to his

seat. Marvellous! On the

pensioners issue, I get the

sense the government will sniff

the breeze and say they have to

do anything about this. Can

they afford to go another budget without doing anything

about pension rates? I think

them' bring forward whatever

they intend to do in the tax

review for pensioners but I think they'll bring forward to think they'll bring forward to the middle budget, ie next

year's budget. The way the government have set their term

up is quite interesting. This

budget we've just had is

designed to be got past or

overlooked very quickly. It's

designed to a shelf life of

just a couple of weeks. It's

got its fiscal object yifs,

which is not pull too hard on

demand , because the economy

could be going one way or the other, so the other, so the spending cuts of

roughly of an order that

wouldn't outrage the real

economy, but also wouldn't

outrage the punters. Now, the

pensioners have obviously all

jumped up a and said "There was

nothing in it for me." Wayne

Swan might point out that he -

point out there is something in

it for them but he didn't sell

it well enough. Now there is an

expectation that the pensioners

got left behind. It becomes

fact in public opinion so they have to deal with it. I think

they'll deal with it before the

tax review comes out. How did

we get to this stage, though?

Why is there a sense that the

pensioners are left behind when

the pensions are indexed

anyway. Wayne Swan doesn't make a point about this. He doesn't

highlight what they've done for

the pensioners. I think that's

a political error. Otherwise he

has done politically a very good job, but there good job, but there I think he

has made one error. What's the

blind spot that the government

has on pensioners and carers?

They seem to fumble the message

every time. You had the whole

carers debacle. The government

did underplay what it was doing

for pensioners in the budget

speech, with the drth result

that some of the pensioners

didn't seem to be aware of

exactly what was in the budget.

There is only one reason for

that. As Gerrard said, it's Wayne

Wayne Swan's fault fault I

guess. The other area that

there might be a bit of a hook

in the whole thing is the solar

panels subsidies. Now, they put

this in, lumped it in with the

welfare arrangements and means

testing. Is it a welfare

initiative in the first place?

Of course it's not. Welfare is

at its purest supposed to be

aid that's delivered to those

in need. Now, this is sort of

social engineering in a way, and

and very generous social

engineering as it stood when it

was promised by Rudd and Swan

and co before the last

election. They went to

Queanbeyan in March last year.

Here's what Kevin Rudd had to

say when he went to a solar

panel factory in Queanbeyan.

We want to say to the

Australian people, solar energy

is part of Australia's future,

it's part of our future response to climate change. Therefore, let's make Therefore, let's make Labor's

solar home plan one within

practical reach of families

across the country. I think

this is part of a bigger

problem. I think this budget is

very tough on young men and

women with young children and

this is where the means test

comes into the solar panel

issue. If you look at the

surcharge, Wayne Swan is saying

if you're a couple on $150,000,

your income is low and you

shouldn't pay the surcharge. shouldn't pay the surcharge.

But if you're a couple on

$150,000 and you have a baby

and our a single income earner

and you have a baby, #1dz

50,000 is high and shouldn't

get it. This is completely

contradictory. If you go back

to what Kevin Rudd said, I have

the transcript here, at a media

conference on 29 April last

year, he was asked about this

issue in the general sense. It came off the back of the

society lar debate. A

journalist said "Whatever past

journalist said "Whatever past

country you're living in, #2dz

50,000 a year is not a lot of money" and the Prime Minister

replied, our current Prime

Minister replied, "In parts of

Sydney, I'm advised this is not

necessarily the case. It

depends where you live." Which

is what. What Kevin Rudd was

saying in April last year was

that in certain parts of

Sydney, $250,000 is not a lot

of money. Now he is saying in certain parts of Sydney

$150,000 is a lot $150,000 is a lot of money.

Now, this is completely

inconsistent. The 'Sydney

Morning Herald' yesterday did a

very interesting survey of how

this policy will affect 110,000

households in Sydney. Many of

them are now in these areas

that moved to Labor in the last

election and a lot of them

bearingsed on Epping, Maxine

McKew's seat. It's a very

serious error this government

has made. It's targetted young families. Have they really hit families. Have they really hit

people over 150,000, when you

consider who gets hurt here,

stay at home mums lose some

benefits but only people who

are having babies, they will

lose the baby bonus. Beyond

that people over 150,000, about

to have their child care

rebates increased from 30% to

50% and they get tax cuts. You

get the baby bonus back over

the space of about three years

if you're on 150,000. Don't go beyond

beyond that. The point is why

target young Australians with

babies or with a wife or a

husband staying at home? The

question is, why bother on

that? It's discriminatory. It contradict what is Kevin Rudd

said only a year ago. If they

put it at 250,000, there with

would be less of an argument. Why pay somebody

taxpayer funds to do something

they would've done otherwise? This

This is why they sets means

tests at 150,000. They're not

paying people over 150,000 are

rich, they're just saying

that's the point at which

you're not entitled to

welfare. Presumably it's the

point at which you're not

having a baby for the five

grand. That is the point. And

there's an argument that if you

did want to apply a means test

sensibly down the bottom end of

the scale where you might have

the baby for the baby bonus, people want to quarantine

welfare. George, you wouldn't

know whether this was a factor

in people having babies or not.

You'd have no idea. I think it

is a factor in some women

having babies. Not THE factor. Howcome you know? Perhaps I have children

of that kind of age. George

has got children. George, have

you got children in their 20s

and 30s? No. That's my point.

I mean, take it back to the

first principle. If you were going to have

going to have a baby at a

household income of 150,000 and

the government knocked on your

next door and said by the way,

here's five grand or here's a

solar panel, you would say, I

was going to have this baby

anyway. You're a million miles

away from welfare. That's where

we started off. The last word

before we leave the baby bonus

should go to Wilson Tuckey.

I've been in the racing business for

business for many, many years.

And we tend to look at the high

achievers as those that should

have foals. The low achievers ... Poo,! Incidentally the

solar panels just before we

leave the subject, how was

Brendan Nelson just then

talking about the solar panels?

Abolishing that rebate is an

act of economic and

environmental madness. Yes. 5

cents a litre worth of economic

and environmental madness on fuel

fuel excise. It's going to put

some people out of business.

Because the $100,000 means

testing thing, only people over

100,000 can really contemplate doing this anyway and paying

that sort of money. The issue

with the solar panel is that

it's a broken promise. It is.

That's the major issue for the

Rudd Government. The other

point is this budget hasn't

been very friendly to small businesses. This again was the

big error that Brendan Nelson

has made in not focusing enough

on the whole issue of on the whole issue of small

business, linking in to people

on family incomes of 150,000.

The capital gains tax reforms

he mentioned in the speech,

which is a reasonable first

step? We need to go to Talking

Pictures shortly. You might

recall Mark Latham in the

Financial Review during the

week dragged up some material

against Kevin Rudd, as he so

often does. And he says that

Kevin Rudd is fond of telling Kevin Rudd is fond of telling

people that the moment you

cross the Pine Rivers and get

into the back blocks of

Brisbane, you start to hear the

sound of banjos. (B ta, njo

playing in background) It's

very amusing. It's funny. Very

Latham laiths. You have no idea

whether it's true or not. With

so many of his stories, you

have no idea to whack them in

the fiction or non-fiction area To find area To find out whether it's

true or not, Kevin Rudd. They

went to the source, Kevin Rudd, in Brisbane on Friday. This is

the response the media got.

We're not far from the Pine

Rivers here. Apparently Mark

Latham says you're fond of

telling people you can hear the

banjo music playing not far

from here. I don't even know

the reference that he's talking

about. Have you ever said this

is banjo is banjo music playing north of

Pine Rivers. I don't even

understand the reference. The

most overbriefed Prime Minister

in the history of Australia

hasn't read that reference! Why

was he dressed like a member of

the - what's that band? Men at

Work. The Village People. It

was a nice hat! More with

was a nice hat! More with our

panel shortly. But first here's

Mike Bowers and Talking

Pictures.

I'm Michael Bowers,

pictorial editor with the

'Sydney Morning Herald'. I'm

Talking Pictures this morning

with Mark Cornwall, who

cartoons for crikey.com.au.

Welcome to the program. Thanks

for having me. Budget night,

Wayne Swan cut quite a fine Wayne Swan cut quite a fine

figure, but it really wasn't as

big a figure as people thought.

He had scared everyone so much

and then backed off. Was that

good tactics? I think so.

Everyone thought they were

going to get their heads cut

off. All they got instead was a

pretty ordinary haircut that

you would want to hide for a

couple of weeks. A bit of a

trim. This is a great Mark

Knight, who cartoon force the

hertd sun in Melbourne. Wayne

Swan's 2008 horror budget cuts.

Going meekly up to the chopping Going meekly up to the chopping

block. He is just calling them

over to the barber's

chair. Just don't ask for a

Brazilian, whatever you do!

Might slip! A little kicker

saying he is not scared to give

you a No. 1. Run us through

this one. Young people will

have more money on their hands

from the because they will be delivered

from the Medicare surcharge.

I'm pretty sure I know what

they will spend that extra cash

on. I think I would, too.

Wayne's handing the young

people out of the Medicare door

a little bit more cash and you

have the captain of industry

here saying "Sell private

health shares, buy alcohol,

tobacco and junk food." Definitely. Many cartoonists

picked up on the luxury cars.

Losing their drive, the rich,

the poor little rich the poor little rich and Sean

Leahy from the 'Courier-Mail',

tragic, this government is

creating a whole new

underclass. I'm not sure

whether I will be able to take

the Bentley or the Maserati

today. This one is a good one.

The poor little rich eastern

suburbs Sydney girl who's

pregnant, drinking alcopops

saying budget 2008, the saying budget 2008, the real

losers, oh (bleep). It's definitely multiskilling, drinking and driving and being

pregnant. Yep. Will make you

poor. Definitely! Ened and a lovely little convertible there

she is in. Peter Costello put a

notice up on the press gallery

board saying doorstep 9.15 and

then to all the journalists "I

don't have to deal with you lot

any more." Speaking of luxury

cars, Peter of late has become cars, Peter of late has become

the luxury passenger air bag of

the Liberal Party these days.

This photo here is quite

intriguing. Yeah, there he was

sitting on the backbench s.

Must've been a weird budget day

for him. His first one in 11

years where he has sat back and

had nothing to do. Held a press

conference and interviewed

conference and interviewed himself! Meanwhile, Wa